What’s did the PERS board do? And how does it impact me?
The PERS Board voted on July 24 to reduce the assumed rate of return for the pension fund, a decision that will increase required contributions to the fund from public employers and reduce benefits for some employees who have yet to retire.
Who will see their benefits reduced? Lowering the rate reduces benefit calculations for employees who expect to retire under the system’s money match formula, as well as those who choose a beneficiary under its full formula retirement method because the rate is built in those calculations.
What’s the assumed rate of return? It is an estimate of how much money the pension will earn from its investments. When the rate is lowered, the board is saying it expects the investment returns to be lower in the future.
Why will employers have to pay more? The pension must be funded at certain level. The two sources of funding are investment returns and contributions from employers. If one source of funding goes down (investment returns), the other must go up (employer contributions).
What impact does this have on the PERS unfunded liability? The Board believes that this move will increase the security and stability of the fund, however it will increase the unfunded liability.
I may be impacted, where can I get details on the impact? For information on how this would impact you specifically, please Call 888-320-7377 to talk with a PERS Member Services representative (M-F, 8:30 a.m. – 5 p.m.).