SACRAMENTO — The chief actuary of California's main pension fund is urging it to lower its assumed rate of return on investments. That likely would force the state and 3,000 local agencies to increase their annual contributions.
Actuary Alan Milligan this week recommended that the California Public Employees' Retirement System lower the assumed annual investment return from 7.75 percent to 7.25 percent. The proposed cut will be taken up by a committee Tuesday and the full board on Wednesday.
Last year, the board rejected a more modest recommendation from Milligan to cut the rate of return rate from 7.75 percent to 7.5 percent.
The fund recorded a 20.9 percent increase in the fiscal year that ended June 30, 2011, but just 1.1 percent for the 2011 calendar year.