The 2025-26 Budget: Concession Bargaining

May 19, 2025 - The first is payment towards the “normal cost, ” which is the amount of money that actuaries determine (based on actuarial assumptions like expected investment returns on assets) must be contributed to prefund the benefit earned by employees today.
https://lao.ca.gov/Publications/Report/5047

MOU Fiscal Analysis: Bargaining Units 10 (Professional Scientists) and 18 (Psychiatric Technician)

Sep 9, 2025 - These contributions are invested in a trust fund. Under the funding plan, the state may not use the assets of the trust fund to pay benefit costs until 2046 or the benefit is fully funded, whichever comes first.
https://lao.ca.gov/Publications/Report/5073

MOU Fiscal Analysis: Bargaining Unit 16 (Physicians, Dentists, and Podiatrists)

Jul 14, 2025 - The reduced amount of money invested in the trust fund will result in higher unfunded liabilities in the long-run. In most of the agreements, the state ’s contributions towards the benefit would be fully restored in 2027-28.
https://lao.ca.gov/Publications/Report/5064

MOU Fiscal Analysis: Bargaining Unit 8 (Firefighters)

Aug 19, 2025 - As such, if the state were to incorporate a DROP as part of its compensation package to Uni t 8 members, the state would bear the risks associated with the program (for example, if actual investment returns fell short of the interest rate applied to funds in a DROP account).
https://lao.ca.gov/Publications/Report/5066

MOU Fiscal Analysis: Bargaining Unit 6 (Corrections)

Jun 23, 2025 - If the agreement is not ratified, that $206.8  million would be invested in the prefunding trust fund and given the next two decades to grow. If the fund averaged an annual return of 5  percent over the next 20 years, the $206.8  million would more than double to nearly $550  million.
https://lao.ca.gov/Publications/Report/5058