Calif. Considers Major Public Pension Changes

Would cost municipalities billions but would pay down currently unfunded obligations

State and local governments would pay billions of dollars more to the California Public Employees' Retirement System over the next few years under new policies approved by a key CalPERS committee Tuesday.

The policy changes would require the nation's biggest public pension fund to spread its gains and losses over five years instead of its current 15-year "smoothing" period, and to figure its obligations on a fixed 30-year payoff schedule. For several years, CalPERS has rolled those liabilities forward instead of setting a date to pay them off.

The policies go today to CalPERS' full board of administration, which will likely approve them.

The new accounting methods would force CalPERS, which has $87 billion in unfunded liabilities, to send bigger bills to the 2,200 state, local governments and school districts in the system to pay down those obligations.