Pension costs to dip for PERS members

In a short but decisive meeting today, the Pension Funding Council accepted State Actuary Matt Smith's recommended changes to funding the state's retirement systems.

The bottom line for state workers is a lower contribution rate, to 4.61 percent of salary from 5.45 percent.

Behind those simple numbers was a whole lot of crunching of actual data on when state workers retired, how they retired, how long they lived and how much they were paid. The experience study pointed to two assumptions that needed changing: state workers live longer, and their salaries go up more slowly, than expected.

While the longer life spans increase costs, lower salaries decrease it, leaving the Public Employees Retirement System with lower overall rates. The teachers system, however, increases in cost to the workers, to 4.93 percent of salary from 4.26 percent.

Final word on the rates rests with the Legislature when it writes the 09-11 budget next year. The cost to the general fund would be an extra $19.7 million.