With the economic ups and downs, many of you may be wondering what will happen to CalPERS employer contribution rates in the near future.

Industry standard reporting times and the structure of CalPERS fiscal year mean that the rate for 2009/2010 is based on a fiscal year ending in 6/30/2007.

Since the most significant  economic downturn started happening June of 2007, it wont be until 2010/2011 that employers will start to be affected by any negative returns.

Also CalPERS own investment smoothing model and double digit gains in the years prior to 2007 will help cushion the impact of the economy downturn in the near future.

In a circular letter to its members CalPERS explains this in greater detail and also gives rate estimates based on hypothetical returns. CalPERS members should read this letter as part of the planning and budgeting process for future rates.