With Gov. Gavin Newsom soon to act on 2019–20 state budget legislation that includes an investment of $904 million in non-Proposition 98 money to reduce the system’s long-term liabilities, CalPERS today has released its new projected employer contribution rate for 2019–20 and projections through 2025–26.
The 2019–20 employer contribution rate (as a percentage of payroll) will reduce from 20.733 percent to 19.721 percent, a reduction of 1.01 percentage points.
The projected reduction in the contribution rate for 2020–21 is 0.9 percentage point, from 23.6 percent to 22.7 percent, with rates currently projected to fall by 0.3 percentage points per year thereafter through 2025–26.
In addition to the investment in CalPERS, an investment of $2.246 billion in non-Proposition 98 money is included in the budget for CalSTRS, which is projected to reduce the employer contribution rate to that system by 1.03 percentage points in 2019–20 (from 18.13 percent to 17.1 percent), 0.7 percentage points in 2020-21 (from 19.1 percent to 18.4 percent), and an estimated 0.3 percentage point reduction thereafter (from 18.4 percent to 18.1 percent).
Gov. Newsom has until July 1 to act on the 2019–20 budget legislation, which was passed by the Legislature on June 14.