Next week, CalPERS Board of Administration will consider lowering its investment return expectations from the current 7.75 percent to 7.25 percent.
If that happens, pension costs would increase for state and local governments -- and employees would have to pay significantly more for air time after Mar. 15.
CalPERS Pension and Health Benefits Committee will take up the issue on Tuesday. If it accepts Chief Actuary Alan Milligan's recommendation, "The cost for service credit purchases under the present value method is expected to increase between 5 percent and 13 percent when looking at the most common ages at which members currently buy service. Note that the actual increase for some members would be more."
CalPERS members who buy air time before the deadline will get the benefit of the higher rate of return assumption. So will members with a request for an official air time cost estimate submitted to the fund before Friday.
Members have 60 days to purchase air time after receiving a price quote from CalPERS.
"No one (with cost esitimates in the queue) needs to worry," CalPERS spokesman Brad Pacheco told us Friday afternoon. "Those (prices) will be honored."
The benefit costs thousands of dollars. If you're thinking about buying air time, we recommend you start with CalPERS' online service credit calculator before contacting the fund for an official estimate. Click here for more details about how to get a quick ballpark idea of what air time would cost you.
We've embedded the return assumption rate item below. Scroll down to "Impact on Member Calculations," for the discussion of service credit costs.