San Jose Federated board holds economic assumptions steady, approves contracts and personnel moves

The San Jose Federated City Employees Retirement System voted Thursday to keep the pension plan's key economic assumptions unchanged and approved a set of administrative and contracting actions, the board said at the conclusion of its October meeting.

The board unanimously voted to maintain the retirement plan's core economic assumptions used for the 2025 valuation: price inflation at 2.5 percent, wage inflation at 3.0 percent, the amortization payment increase rate at 2.75 percent and the pension discount rate at 6.625 percent. Trustees discussed market valuations, interest-rate trends and the risk of changing the discount rate now but decided to hold the assumptions for the coming valuation cycle.

Why it matters: the discount rate and inflation assumptions set the actuarial foundation for contribution rates and long-term funding projections. Keeping the assumptions steady preserves the current budgeting path for employer and…