CalPERS estimates that this discount rate reduction will increase employer rates for miscellaneous employees by 1-to-2 percent and by 2-to-3 percent for public safety starting in FY 2013-14. If the board approves it, the new discount rate would apply to service credit purchases and estimate requests beginning March 15. During today's meeting, CalPERS Actuary Alan Milligan noted that the next scheduled review of the discount rate will be in 2014.
Many public agencies are concerned that this change in the discount rate will cause considerable financial hardship to already financially strapped local budgets.
For more details on CalPERS' actions today, please see its press release.