CalPERS lowers its projected district contribution rates over next five years
With inflation accelerating costs in most areas, school districts received some good news from CalPERS, the pension fund serving school employees other than teachers and administrators.
CalPERS has lowered its projected contribution rates for districts significantly for the five-year period starting in 2022-23. Contributions next year will still be a record high, jumping from 22.92% of an employee’s salary in 2021-22 to 25.40%, but that will be 0.7% less than had been forecast. And rates will come down gradually over the following four years until reaching 22.5% of salary in 2026-27. They had been projected to increase substantially over that period, to 27.60%.
The new rates reflect the huge investment gains in 2020-21, which added $11.1 billion to the CalPERS portfolio. The CalPERS board is expected to approve the new projected rates at its board meeting in April.
Meanwhile, the contribution rate of employees hired after Jan. 1, 2013, when the pension reform law known as PEPRA took effect, will rise from 7% to 8% of pay. Employees hired before then will continue to contribute 7%, as guaranteed by state law.