By Adam Ashton, Sacramento Bee | California cities struggling with recent hikes in their pension fees will see another one in 2021 because of a decision CalPERS made on Tuesday to speed up the rate of their debt payments.
The change will save cities money over time, but it could squeeze local government budgets over the next few years because it requires them to shore up investment losses on a 20-year schedule instead of 30 years.
The difference probably would be a few hundred thousand dollars a year for small cities and counties, according to a CalPERS presentation describing the change.
Executives at the California Public Employees’ Retirement System have advocated for faster debt payments over the past several months, arguing the speedier schedule decreases risk and saves money.
A parade of city government officials in November, however, asked the CalPERS Board of Administration to stick to the current schedule. They said they were having trouble swallowing successive CalPERS rate hikes since 2013 that they said jeopardized their ability to fund public services.
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