CalPERS' board on Wednesday voted to reduce the retirement system's assumed investment return to 7.5% from 7.75%, on July 1.
The board of the $233.4 billion California Public Employees' Retirement System directed staff to come back within the next few months to phase in increased payments for employers, said Wayne Davis, spokesman for the Sacramento-based plan. No timetable was set, he said.
The recommendation was approved by a voice vote of the board, so it was not known how each board member actually voted, Mr. Davis confirmed.
The discount rate cut was recommended Tuesday by the retirement system's pension and health benefits committee.
CalPERS board member J.J. Jelincic, also a committee member, said at Tuesday's committee meeting that he would vote against the proposal, which also lowered the price inflation rate assumption to 2.75% from 3%. He explained that with governments around the world flooding money into their economies, “I'm not sure that it is reasonable to expect that the low-inflation environment will continue.”
