SAN FRANCISCO Jan 3 The California Public
Employees' Retirement System said on Thursday rates for its
member agencies will increase after it posted a net investment
return of 0.1 percent in its core fund for its fiscal year ended
June 30, 2012, compared with a net return of 21.7 percent in the
prior fiscal year.
Agencies using the retirement system to manage pension
accounts have been expecting rate increases after it released a
preliminary report in July on its disappointing 2011-2012 fiscal
That report said the system, best known as Calpers, posted a
1 percent gain for the year due to Europe's debt crisis and
slowing global growth.
Calpers' board last March also put the system's member
agencies on notice of rate increases by voting to lower its
longstanding 7.75 percent assumed rate of return to 7.5 percent.
Calpers, the biggest U.S. public pension system, said on
Thursday in its Comprehensive Annual Financial Report that net
assets in its main fund, the Public Employees' Retirement Fund,
totaled $237.0 billion at the end of its 2011-2012 fiscal year.
The value of Calpers' assets was $251.8 billion as of
Wednesday, according to a spokesman for the retirement system.
Most contribution rates for state agency and school
employers in the 2013-2014 fiscal year and for local government
employers in the 2014-2015 fiscal year are not expected to
increase by more than 2 percent of payroll, Calpers said in
If Calpers earns its assumed 7.5 percent investment return
in its 2012-2013 fiscal year, employer rates for state and
school employers in its 2014-2015 fiscal year and for local
agencies in its 2015-2016 fiscal year are expected to increase
in most cases between 0.2 percent and 0.7 percent of payroll,
the report said.
The rates could increase more if Calpers earns less than 7.5
percent, the report said.
Local governments using the Calpers system keep a close eye
on the rates as pension costs have become a top financial
concern in a time of tight public budgets across the most
populous U.S. state.
San Bernardino, a city of 210,000 east of Los Angeles, has
opted to withhold payments to Calpers while seeking bankruptcy
court protection from its creditors.
A U.S. bankruptcy judge last month ruled against an attempt
by Calpers to collect overdue payments from San Bernardino, the
first city to halt payments to the fund and challenge its
primacy as a creditor.
Stockton, California, also declared bankruptcy last year but
has made payments in full to Calpers. Vallejo, California, also
made its payments to Calpers during the course of its bankruptcy
proceedings. Vallejo emerged from bankruptcy in 2011.