The California Public Employees' Retirement System chose Wednesday to leave its assumed rate of investment return unchanged at 7.75%. That was against its own actuary's recommendation to lower it to 7.5%.

The move will please strapped local governments. A cut would have caused the system's liabilities to rise, deepening its funding hole and requiring increased contributions from states and municipalities with staff covered by the system. For the state of California alone, this could have meant $400m a year more in contributions.