The nation's largest public pension fund said it intends to tap California public employers for more money if its heavy investment losses don't reverse, a sign that more financial pain could be in store for state and local governments.
The California Public Employees' Retirement System, known as Calpers, said its assets have declined by more than 20 percent, or at least $48 billion, from the end of June through Oct. 10.
Unless returns improve, Calpers is poised to impose an estimated increase in employer contributions of 2 percent to 4 percent of payroll starting in July 2010 for about two-thirds of its state-employer members, and in July 2011 for the remaining third. Any decision will be made after Calpers knows its returns for the fiscal year.
A Calpers rate increase would add to a fiscal mess in California, where falling sales-tax and income-tax revenue and a tanking real-estate market have affected government agencies across the state. With budget cuts for state and local governments projected in coming years, an increase from Calpers would be one more burden.
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