CalPERS' governing board voted 9-1 to lower the return to 7.5%, affirming a recommendation by its pension and health benefits committee, The Sacramento Bee reports.
The lowered rate will cost the state an extra $167 million a year, and will also raise costs for the school districts and municipalities that belong to the system. But the CalPERS board told its staff to examine phasing in the dollar impact over two years, according to the Bee.
Labor leaders and local government officials pleaded for the phase-in. The 7.5% rate was recommended by CalPERS’ chief actuary last year, but the board voted against it (see “CalPERS Board Approves 7.75% Discount Rate”).