As reported in the Sacramento Bee, last week the CalPERS Board unanimously voted to shorten the amortization period of future gains and losses from 30 years to 20 years. The new policy will become effective as of the June 30, 2019 actuarial valuations, with the first payments due in 2021.
Reducing the amortization period for new debt should increase CalPERS’ average funding ratio, which is currently approximately 71 percent. Furthermore, according to a November 2017 CalPERS presentation, accelerating the debt payments will save about $700,000 in interest on a million-dollar loss. However, the new method of calculation should also lead to increased contributions of public entities participating in CalPERS. CalPERS estimated that small cities and counties will have to pay several hundred thousand dollars more per year.
PartnerNate Kowalski is Chair of the firm’s Public Entity Labor and Employment Practice Group. He is an accomplished litigator who represents employers in both the private and public sectors. Mr. Kowalski has litigated hundreds of ...
PartnerJorge Luna has been practicing law since 1996 in a variety of areas, including employment, construction, business litigation, intellectual property and entertainment. For the past 17 years, Mr. Luna has focused his practice ...
PartnerJoshua Morrison represents California public school districts in all aspects of general education law. His areas of specialty practice include public employee discipline/dismissal, administrative hearings, matters before ...
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