DALLAS – State and local governments in Arkansas could see their pension costs drop in fiscal 2015 due to last year’s 15.6% increase in investments held by Arkansas Public Employees Retirement System.

Investments totaled $6.6 billion at the end of fiscal 2013, up $750 million from 2012’s $5.9 billion. Unfunded liabilities are estimated at $2.12 billion.

System trustees gave preliminary approval Aug. 21 of a drop in the rate charged to local governments as a result of the higher returns in fiscal 2013.

The rate will drop to 14.75% of annual payroll on July 1, 2014, from 14.88% if trustees ratify the rate in November. The shift would be the first drop since the pension system began to raise its rates four years ago to mitigate steep declines in investment values.

Investments totaled $4.3 billion at the end of fiscal 2009.

Retirement system consultant Callan Associates said domestic stock investments had a 21% return in 2013, to $2.7 billion. International stock investments also posted a 21% return, to $1.64 billion.

Bond investments were up 3.5% to $1.15 billion.

The governments put $250.3 million into the retirement system in fiscal 2013, with another $43.2 million contributed by employees.

Arkansas Public Employees Retirement System covers more than 70,000 working and retired members.

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