On Wednesday, the CalPERS board is expected to vote on a risk-reduction plan that could shift billions of dollars in extra costs to taxpayers, the Los Angeles Times reports (Petersen, Los Angeles Times, 11/17).
CalPERS staff members presented the risk-reduction plan to the fund's board in August. The proposal aims to help mitigate financial risk amid cash shortfalls.
Under the plan, CalPERS would start shifting more money into safer investments, such as bonds (California Healthline, 8/31).
The plan would incrementally reduce the fund's annual investment forecast from 7.5% to 6.5%. The full reduction could take longer than 20 years (Los Angeles Times, 11/17).
According to the Bee, the more conservative investments would shrink CalPERS' future returns. As a result, taxpayers likely would need to cover more of the costs.
On Tuesday, the CalPERS finance and administration committee voted 4-3 to approve the plan (Kasler/Ortiz, Sacramento Bee, 11/17). The full board also is expected to approve it (Los Angeles Times, 11/17).