CalPERS Reduces Amortization Period with Impacts to Employer Contribution Rates

This post was authored by Stephanie J. Lowe and Frances Rogers. The California Public Employees’ Retirement System (CalPERS) recently decided to change its Actuarial Amortization Policy (“Amortization Policy”), which will impact employer contribution rates for contracting agencies. The revised Amortization Policy will go into effect for public agencies in the 2021-2022 fiscal year, which will be based on the June 30, 2019 actuarial valuations.  The policy changes include: Shorter amortization periods from 30 years to 20 years. Level dollar amortization payments for unfunded accrued liability (“UAL”) bases Elimination of 5-year ramp-up and ramp-down on UAL bases attributed to assumption changes and non-investment gains and losses that occur on or after the effective date of the policy change. Elimination of 5-year ramp-down on investment gains and losses occurring on or after the effective date of the policy change. A 15-year maximum…

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