On Our Level

CalPERS' governing board voted to cut its earnings forecast to 7.5%, the same level assumed in UCRP. There were earlier reports, as readers of this blog will know, that CalPERS would cut below us to 7.25%.

If CalPERS had dropped below UCRP, the Regents might well have reduced their forecast.

As noted in earlier posts, changing the earnings forecast does not change the future actual earnings.  The future will be what it will be. But lowering the forecast increases the estimated unfunded liability and could thus trigger higher contributions or some other adjustment.

We will see at the upcoming Regents meeting if there is any discussion of CalPERS' action.

For an article on that action, see:
http://www.sacbee.com/2012/03/13/4333636/calpers-committee-votes-to-reduce.html

Update: The final action took place 3/14/12:  See:
http://www.sacbee.com/2012/03/14/4336927/calpers-oks-reduction-in-investment.html