CalPERS Discount Rate Reduction
and the Impacts on Local Public Agencies

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In December 2016, CalPERS (PERS) announced it will lower its discount rate (expected earnings rate) from 7.50% to 7.00%, phasing the change in over a three year period. This NHAlert highlights details on this recent change, including how the reduction will be implemented, the estimated impacts to public agencies, and NHA’s recommended next steps for addressing these impacts.

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Fiscal Impact of the California Drought On Local Public Agencies

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On Thursday, April 2, 2014, the Governor ordered 25% mandatory cutbacks for water usage across the State. With just 5% of normal snowpack present, many predict that this initial mandatory rationing may just be the start of a much more drastic cutback affecting residents and, increasingly, the State’s agriculture and business interests.

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Side Fund Pension Bond Savings
No Longer Guaranteed by CalPERS

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Following extensive discussions with leading pension experts and CalPERS representatives, it has been revealed that the implied savings from issuing side fund pension obligation bonds (“POBs”) are no longer guaranteed. This NHAlert highlights some of the new risks and opportunities for CalPERS participants considering the issuance of POBs to extinguish their Unfunded Actuarial Liability (“UAL”).

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