Pension Crisis

Calif. Considers Major Public Pension Changes

Would cost municipalities billions but would pay down currently unfunded obligations

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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.