California state government’s bill for public employee pensions is set to rise by $676 million.
CalPERS on Tuesday advanced a scheduled increase in employer contribution rates, bringing the state’s total bill for the 2019-2020 budget year to about $7 billion. That money comes out of taxes and fees collected by the state and is part of the compensation promised to state workers.
The state’s pension bill will go up July 1 based on CalPERS’ review of the fiscal year ending June 30. Actuaries provided estimates ahead of Tuesday’s meeting. Most local governments’ pension payments also will go up next year.
The biggest factor in the state’s rising obligation is a $340 million increase in its share of the fund’s outstanding debt, or unfunded liability. The $362 billion pension fund, which currently has about 70 percent of what it would need to pay all its future obligations, is in the process of paying down the liability over 30 years.