Policy makers at the California Public Employees’ Retirement System voted this week to disregard the advice of their chief actuary and keep the retirement system’s assumed annual rate of investment return at 7.75%.

Chief actuary Alan Milligan had recommended that the pension fund adopt a lower discount rate at 7.5%. However, according to a CalPERS news release, he told the system’s benefits and program administration committee Monday that they can justify keeping the 7.75% discount rate as prudent before the panel voted to leave the rate unchanged.

“The discount rate adopted is reasonable and achievable, and appropriate for funding the promised benefits,” Milligan said.

By retaining the more ambitious investment assumptions, CalPERS will charge less to its member agencies, including the California state government and many local governments and agencies, for their annual contributions to the pension system.

“Given the current economic environment, we believe keeping our discount rate unchanged is in the best interest of our members, employers, and taxpayers,” said CalPERS board president Rob Feckner.

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