2021-05-18 CC Agenda Packet - ITEM #10 - PRESENTATION - POB5/19/2021
Based on data over the past 20 years ending June 30, 2020,
for every dollar CalPERS pays in pensions:
55 cents comes from investment earnings
32 cents from employer contributions
13 cents from employee contributions
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5/19/2021
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5/19/2021
m Changes for New Members Only
® Lower Benefit Formulas (2% at 62 for non -safety, 2.7% at 57 for safety)
Limit on total pensionable compensation (currently $140,424)
Required to pay 50% of "Normal Cost"
Currently 13.88% for Safety, 6.75% for Miscellaneous
° Employer Paid Member Contributions (EPMC) are prohibited
Uniform allowances and certain other "Special Pays" are not counted
toward pensionable compensation
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Normal Cost M
Cost to fund the accrual of benefits in the upcoming year for active members
Presented and billed as a percent of payroll
Normal cost % expected to stay level absent unexpected changes
Long-term (on -going) cost of the plan
Note: replacement of Classic members with PEPRA members will result in
lower plan normal costs
Currently, the City's share is about $4.2 million per year
0 Unfunded Actuarial Liability (UAL) Payment
Unfunded pension cost of all vested employees (retired, active, inactive) through June 30
Annual payment toward unfunded liability measured on the valuation date
Billed as a dollar amount
Can be paid monthly or prepaid annually every July
Determined by CalPERS amortization policies
Discount rate
Longevity
Inflation
Currently at $150 million
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5/19/2021
Rl
151,074,420
TIC 2.69%
6/30/2022
$11, 567,182
$10,402,084
$1,165,098
$1,134, 538
5/30/2023
11,964,750
10,398,603
1,566,147
1,485,066
6/30/2024
12,373,738
10,402,078
1,971,660
1820546
6/30/2025
12,804,742
10,396,498
2,408,244
2:165:3431
6/30/2026
13,182,659
10,401,234
2,781,425
2,435,287
6/30/2027
13,536,976
10,400,564
3,136,412
2,674,068
6/30/2028
13,901,038
10,397,353
3,503,686
2,908,847
6/30/2029
14,275,112
10,397,163
3,877,949
3,135,122
6/30/2030
14,659,470
10,402,588
4,256,882
3,351,202
6/30/2031
15,054,404
10,401,366
4,653,038
3,566,991
6/30/2032
15,460,191
10,403,026
5,057,165
3,775,106
6/30/2033
15,877,144
10,401,824
5,475,320
3,980,046
6/30/2034
16,305,557
10,397,106
5,908,451
4,182,238
6/30/2035
16,745,754
10,398,186
6,347,568
4,375,211
6/30/2036
17,131,380
10,399,064
6,732,316
4,518,692
6/30/2037
17,385,463
10,398,827
6,986,636
4,566,389
/30/2038
17,640,793
10,401,517
7,239,276
4,607,40
6/30/2039
17,072,952
10,395,974
6,676,978
4,138,070
6/30/2040
14,554,691
7,976,217
6,578,474
3,970,083
6/30/2041
244,590
$281,738,586
0
$195,271,271
244,590
$86,567,315
143,737'
$62,933,988
OTAL
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. 100% of UALs, using level POB debt service
100% UAL Amortization and Estimated POB Debt Service
$14
$O
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Fiscal Year
0 UALAmortization POB Debt service
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Required Contribution In
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143,520,700 2.69%
t
POB Debt Service
Budget Savings JPV Savings
$10,988,823
$9,885,483
$1,103,340
$1,074,395
11,366,513
9,883,636
11482,876
1,406,093
11,755,051
9,878,668
11876,384
1,732,549
12,164,505
9,880,644
2,283,861
2,053,469
12,523,526
9,879,600
2,643,926
2,314,848
12,860,127
9,878,992
2,981,135
2,541,613
13,205,986
9,877,227
3,328,760
2,763,534
13,561,356
9,879,312
3,682,045
2,976,638
13,926,497
9,883,181
4,043,315
3,182,946
14,301,684
9,881,015
4,420,669
3,388,709
14,687,181
9,882,360
4,804,822
3,586,561
15,083,287
9,881,494
5,201,793
3,781,017
15,490,279
9,882,782
5,607,498
3,968,983
15,908,466
9,885,420
6,23,46
4,151,270
16,274,811
9,878,561
6,396,250
4292,841
16,516,190
9,881,608
6,634,582
4:335,983
16,758,753
9,878,337
6,880,416
4,378,682
16,219,304
9,882,924
6,336,381
3,926671
13,826,956
7,578,697
6,248,260
3,770:4831
232,361
0
232,361
136,538I
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1-' $151.07 million UAL
based on CalPERS June 30, 2019 returns & July 2020 actuarial report
° CalPERS had a 4.7% return on June 30, 2020 that is not
calculated in the current UAL of $151.07 million
4.7% return is below the discount rate (7%)
Results in $6.36 million in new UAL (investment loss) as of July 2020
° CalPERS is projected to end June 30, 2021 at 15%
8% above discount rate
Results is a $23.17 million investment gain
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$151.07 million UAL as of POB issuance
`$6.4 million in new UAL reported on July 2021 actuarial report
$23.2 million investment gain to be reported on July 2022 report
h If POBs are issued at 100%
$16.8 million in stranded assets (over funded) with PERS
Potentially stranded until 2038
Assumes discount rate change from 7% to 6.5%
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$151.07 million UAL as of POB issuance
' POB issued for $143.5 million (@95%)
$6.4 million in new UAL reported on July 2021 actuarial report
$23.2 million investment gain to be reported on July 2022 report
If POBs are issued at 95%
$9.3 million in stranded assets (over funded) with PERS
Potentially stranded until 2034
Assumes discount rate change from 7% to 6.5%
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