Finance, Economic Development and Jobs Committee
March 25, 2024

Section 2: GASB 74/75 Information
City of Bakersfield GASB 74/75 Valuation Measured at June 30, 2022, for Employer Reporting for Period Ending June 30, 202313 Determination of discount rate and investment rates of returnThe long-term expected rate of return on OPEB plan investments was determined using a building block method in which expected future rates of return (expected returns, net of inflation) are developed for each major asset class. These returns are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation and subtracting expected investment expenses and a risk margin. The target allocation and projected arithmetic real rates of return for each major asset class, after deducting inflation, but before investment expenses, are summarized in the following table. These values were used in the derivation of the long-term expected investment rate of return assumption that was used in the actuarial valuation as of June 30, 2022. Asset Class Target Allocation Long-Term Expected Arithmetic Real Rate of Return1Domestic equity22.47% 6.91% Developed International equity 2.78% 7.21% Emerging Markets Equity1.80%8.71% Core Fixed Income 68.48% 1.61% Real Estate1.53% 3.61% Short Term Money Market 2.94% 0.71% Total100.00%Discount rate. The discount rate used to measure the TOL was 4.75% as of June 30, 2022 and June 30, 2021. The projection of cash flows used to determine the discount rate assumed employer contributions will be made at rates equal to the actuarially determined contribution rates. For this purpose, only employer contributions that are intended to fund benefits for current plan members and their beneficiaries are included. Projected employer contributions that are intended to fund the service costs for future plan members and their beneficiaries are not included. Based on those assumptions, the OPEB Plan’s Plan Fiduciary Net Position was projected to be available to make all projected future benefit payments for current plan members. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the TOL as of both June 30, 2022 and June 30, 2021. 1Long-term nominal rate of return less investment advisor’s inflation assumption of 2.40%.

Section 2: GASB 74/75 Information
City of Bakersfield GASB 74/75 Valuation Measured at June 30, 2022, for Employer Reporting for Period Ending June 30, 202314 SensitivityThe following presents the NOL of the City as well as what the City’s NOL would be if it were calculated using a discount rate that is 1-percentage-point lower (3.75%) or 1-percentage-point higher (5.75%) than the current rate. Also, shown is the NOL as if it were calculated using healthcare cost trend rates that were 1-percentage-point lower or 1-percentage-point higher than the current healthcare trend rates. 1% Decrease (3.75%) CurrentDiscount Rate (4.75%) 1% Increase (5.75%) Net OPEB Liability (Asset) as of June 30, 2022$40,122,752$22,882,795$9,124,9881% Decrease inHealth Care Cost Trend Rates Current Health Care Cost Trend Rates 1% Increase in Health Care Cost Trend Rates Net OPEB Liability (Asset) as of June 30, 2022$8,903,487$22,882,795$40,338,238

Section 2: GASB 74/75 Information
City of Bakersfield GASB 74/75 Valuation Measured at June 30, 2022, for Employer Reporting for Period Ending June 30, 202315 Schedule of changes in Net OPEB Liability – Last two fiscal yearsReporting Date for Employer under GASB 75 June 30, 2023 June 30, 2022Measurement Date June 30, 2022 June 30, 2021 Total OPEB LiabilityService cost $1,093,753 $1,303,741 Interest5,065,7545,765,058Change of benefit terms 0 0Differences between expected and actual experience251,076-10,056,063Changes of assumptions -3,211,518 -1,005,648Benefit payments, including refunds of member contributions-4,640,002-4,263,425Net change in Total OPEB Liability -$1,440,937 -$8,256,337Total OPEB Liability – beginning107,846,786116,103,123Total OPEB Liability – ending $106,405,849$107,846,786Plan Fiduciary Net PositionContributions – employer1 $6,207,752 $6,852,674Contributions – employee00Net investment income -10,063,094 10,311,017Benefit payments, including refunds of member contributions-4,640,002-4,263,425Administrative expense -241,565 -231,118Other00Net change in Plan Fiduciary Net Position -$8,736,909 $12,669,148Plan Fiduciary Net Position – beginning92,259,96379,590,815Plan Fiduciary Net Position – ending $83,523,054 $92,259,963Net OPEB Liability – ending $22,882,795$15,586,823Plan Fiduciary Net Position as a percentage of the Total OPEB Liability 78.49% 85.55%Covered payroll2 $35,014,171$39,698,602Plan Net OPEB Liability as percentage of covered payroll 65.35% 39.26%1The employer contributions of $6,207,752 consists of $4,640,002 in trust contributions plus $1,567,750 of benefits paid by the City with its own assets ($4,640,002 in total benefit payments paid by the City minus trust reimbursements of $3,072,252). 2Payroll for measurement date June 30, 2022 was based on the salaries provided for the June 30, 2021 valuation. Payroll for measurement date June 30, 2021 was based on the payroll provided by the City for the June 30, 2019 measurement date, increased by the payroll growth assumption, offset by the anticipated decline in the active group.

Section 2: GASB 74/75 Information
City of Bakersfield GASB 74/75 Valuation Measured at June 30, 2022, for Employer Reporting for Period Ending June 30, 202316 Notes to Schedule:For 2023 Reporting Benefit changes: None Changes of assumptions: The trends on health costs were updated based on actual premium renewals effective January 1, 2023.

Section 2: GASB 74/75 Information
City of Bakersfield GASB 74/75 Valuation Measured at June 30, 2022, for Employer Reporting for Period Ending June 30, 202317 Deferred outflows of resources and deferred inflows of resourcesReporting Date for Employer under GASB 75 June 30, 2023 June 30, 2022Measurement Date June 30, 2022 June 30, 2021 Deferred Outflows of ResourcesChanges of assumptions or other inputs $156,715 $1,078,572Net difference between projected and actual earnings on OPEB plan investments 7,048,1660Difference between expected and actual experience in the Total OPEB Liability 174,2940Total Deferred Outflows of Resources $7,379,175$1,078,572Contributions subsequent to the measurement date1 $2,815,008 $6,207,752Deferred Inflows of ResourcesChanges of assumptions or other inputs $3,646,211 $3,256,046Net difference between projected and actual earnings on OPEB plan investments 06,079,147Difference between expected and actual experience in the Total OPEB Liability 6,879,52818,084,700Total Deferred Inflows of Resources $10,525,739$27,419,893Deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized as follows:Reporting Date for Employer under GASB 75 Year Ended June 30: 2023 N/A -$13,668,3132024-$7,008,613-8,998,6672025 -389,397 -2,379,45120261,356,058-1,294,8902027 2,895,388 0202800Thereafter 0 01The employer contribution of $2,815,008 consists of $1,480,250 in trust contributions plus $1,334,758 of benefits paid by the City with its own assets ($3,398,008 in total benefit payments paid by the City minus trust reimbursements of $2,063,250).

Section 2: GASB 74/75 Information
City of Bakersfield GASB 74/75 Valuation Measured at June 30, 2022, for Employer Reporting for Period Ending June 30, 202318 Schedule of recognition of change in total Net OPEB LiabilityIncrease (Decrease) in OPEB Expense Arising from the Recognition of the Effects of Differences between Expected and Actual Experience on Total OPEB Liability Reporting Date for Employer under GASB 75 Year Ended June 30 Differences between Expected and Actual Experience Recognition Period (Years) 2022 2023 2024 2025 2026 2027 2028 & Thereafter 2018-$6,042,3454.73-$932,541$0$0$0$0$0$02019 -762,025 4.17 -182,740 -31,065 0 0 0 0 0 2020-20,451,9484.17-4,904,544-4,904,544-833,7720 0 0 0 2021 -11,723,133 3.67 -3,194,314 -3,194,314 -2,140,191 0 0 0 0 2022-10,056,0633.27-3,075,249-3,075,249-3,075,249-830,3160 0 0 2023 251,076 3.27 N/A76,78276,78276,78220,7300 0 Net increase (decrease) in OPEB expense-$12,289,388-$11,128,390-$5,972,430-$753,534$20,730$0$0

Section 2: GASB 74/75 Information
City of Bakersfield GASB 74/75 Valuation Measured at June 30, 2022, for Employer Reporting for Period Ending June 30, 202319 Increase (Decrease) in OPEB Expense Arising from the Recognition of the Effects of Assumption Changes Reporting Date for Employer under GASB 75 Year Ended June 30 Assumption Changes Recognition Period (Years) 2022 2023 2024 2025 2026 2027 2028 & Thereafter 2018 -$5,330,662 4.73 -$822,702 $0 $0 $0 $0 $0 $0 2019 0 4.17 0 0 0 0 0 0 0 2020 3,844,143 4.17 921,857 921,857 156,715 0 0 0 0 2021 -5,621,334 3.67 -1,531,699 -1,531,699 -1,026,237 0 0 0 0 2022 -1,005,648 3.27 -307,538 -307,538 -307,538 -83,034 0 0 0 2023 -3,211,518 3.27 N/A -982,116 -982,116 -982,116 -265,170 0 0 Net increase (decrease) in OPEB expense -$1,740,082 -$1,899,496 -$2,159,176 -$1,065,150 -$265,170 $0 $0

Section 2: GASB 74/75 Information
City of Bakersfield GASB 74/75 Valuation Measured at June 30, 2022, for Employer Reporting for Period Ending June 30, 202320 Increase (Decrease) in OPEB Expense Arising from the Recognition of the Effects of Differences between Projected and Actual Earnings on OPEB Plan Investments Reporting Date for Employer under GASB 75 Year Ended June 30 Differences between Projected and Actual Earnings Recognition Period (Years) 2022 2023 2024 2025 2026 2027 2028 & Thereafter 2018 -$77,269 5.00 -$15,453 $0 $0 $0 $0 $0 $0 2019 1,133,160 5.00 226,632 226,632 0 0 0 0 0 2020 -153,467 5.00 -306,293 -306,293 -306,295 0 0 0 0 2021 -856,051 5.00 -171,210 -171,210 -171,210 -171,211 0 0 0 2022 -6,474,448 5.00 -1,294,888 -1,294,890 -1,294,890 -1,294,890 -1,294,890 0 0 2023 14,476,939 5.00 N/A 2,895,387 2,895,388 2,895,388 2,895,388 2,895,388 0 Net increase (decrease) in OPEB expense -$1,561,212 $1,349,626 $1,122,993 $1,429,287 $1,600,498 $2,895,388 $0

Section 2: GASB 74/75 Information
City of Bakersfield GASB 74/75 Valuation Measured at June 30, 2022, for Employer Reporting for Period Ending June 30, 202321 Total Increase (Decrease) in OPEB ExpenseReporting Date for Employer under GASB 75 Year Ended June 30 Total Increase (Decrease) in OPEB Expense 2022 2023 2024 2025 2026 2027 2028 & Thereafter 2018-$11,450,276-$1,770,696$0$0$0$0$0$02019 371,135 43,892 195,567 0 0 0 0 0 2020-16,761,272-4,288,980-4,288,980-983,3520 0 0 0 2021 -18,200,518 -4,897,223 -4,897,223 -3,337,638 -171,211 0 0 0 2022-17,536,159-4,677,675-4,677,677-4,677,677-2,208,240-1,294,8900 0 2023 11,516,497 N/A1,990,0531,990,0541,990,0542,650,9482,895,3880 Net increase (decrease) in OPEB expense-$15,590,682-$11,678,260-$7,008,613-$389,397$1,356,058$2,895,388$0

Section 2: GASB 74/75 Information
City of Bakersfield GASB 74/75 Valuation Measured at June 30, 2022, for Employer Reporting for Period Ending June 30, 202322 OPEB expense Reporting Date for Employer under GASB 75 June 30, 2023 June 30, 2022Measurement Date June 30, 2022 June 30, 2021 Components of OPEB ExpenseService cost $1,093,753 $1,303,741Interest on the Total OPEB Liability5,065,7545,765,058Expensed portion of current-period changes in proportion and differences between employer's contributions and proportionate share of contributions 0 0 Current-period benefit changes0 0 Expensed portion of current-period difference between expected and actual experience in the Total OPEB Liability 76,782 -3,075,249Expensed portion of current-period changes of assumptions or other inputs -982,116 -307,538 Member contributions 0 0 Projected earnings on plan investments -4,413,845 -3,836,569 Expensed portion of current-period differences between actual and projected earnings on plan investments 2,895,387 -1,294,888 Administrative expense241,565231,118Other 0 0 Recognition of beginning of year deferred outflows of resources as OPEB expense1,148,4891,148,489Recognition of beginning of year deferred inflows of resources as OPEB expense -14,816,802 -12,061,496Net amortization of deferred amounts from changes in proportion and differences between employer’s contributions and proportionate share of contributions0 0 OPEB Expense -$9,691,033 -$12,127,334

Section 2: GASB 74/75 Information
City of Bakersfield GASB 74/75 Valuation Measured at June 30, 2022, for Employer Reporting for Period Ending June 30, 202323 Schedule of reconciliation of Net OPEB Liability Reporting Date for Employer under GASB 75 June 30, 2023 June 30, 2022Measurement Date June 30, 2022 June 30, 2021 Beginning Net OPEB Liability$15,586,823$36,512,308OPEB expense -9,691,033 -12,127,334Employer contributions-6,207,752-6,852,674New net deferred inflows/outflows 9,526,444 -12,858,484Change in allocation of prior deferred inflows/outflows0 0 New net deferred inflows/outflows due to change in proportion 0 0 Recognition of prior deferred inflows/outflows13,668,31310,913,007Recognition of prior deferred inflows/outflows due to change in proportion 0 0 Ending Net OPEB Liability$22,882,795$15,586,823

Section 2: GASB 74/75 Information
City of Bakersfield GASB 74/75 Valuation Measured at June 30, 2022, for Employer Reporting for Period Ending June 30, 202324 Schedule of contributions – Last ten fiscal yearsYear Ended June 30 Actuarially Determined Contributions1,2Contributions in Relation to the Actuarially Determined Contributions Contribution Deficiency / (Excess) Covered Payroll Contributions as a Percentage of Covered Payroll 20146,539,2996,950,125-410,82653,368,98613.02%2015 6,539,299 8,038,622 -1,499,323 50,985,920 15.77%20167,530,0315,645,8391,884,19244,930,76112.57%2017 7,530,031 5,050,000 2,480,031 44,930,761 11.24%20186,973,7117,527,447-553,73646,166,35716.31%2019 6,973,711 7,940,057 -966,346 39,698,602 20.00%20204,636,6476,826,986-2,190,33939,698,602317.20%2021 4,636,647 6,852,674 -2,216,027 39,698,602317.26%20222,661,0166,207,7524-3,546,73635,014,171517.73%2023 2,661,016 2,815,0086-153,992 35,014,17178.04% See accompanying notes to this schedule on next page.1Includes an interest adjustment to the middle of the year. 2The calculation consists of adding the Normal Cost of the plan to an amortization payment. The amortization payment is included.3Payroll for measurement dates June 30, 2021 and June 30, 2020 were estimated based on the payroll for the June 30, 2019 measurement date provided by the City, increased by the payroll growth assumption, offset by the anticipated decline in the active group. 4The employer contributions of $6,207,752 consists of $4,640,002 in trust contributions plus $1,567,750 of benefits paid by the City with its own assets ($4,640,002 in total benefit payments paid by the City minus trust reimbursements of $3,072,252). 5Payroll for measurement date June 30, 2022 was estimated based on salaries provided for the June 30, 2021 valuation. 6The employer contributions of $2,815,008 consists of $1,480,250 in trust contributions plus $1,334,758 of benefits paid by the City with its own assets ($3,398,008 in total benefit payments paid by the City minus trust reimbursements of $2,063,250). 7Payroll for measurement date June 30, 2023 was estimated based on the salaries provided for the June 30, 2021 valuation. Because the plan is closed to new entrants, the same covered payroll is used during roll forward measurements.

Section 2: GASB 74/75 Information
City of Bakersfield GASB 74/75 Valuation Measured at June 30, 2022, for Employer Reporting for Period Ending June 30, 202325 Notes to Schedule: Methods and assumptions used to establish “actuarially determined contribution” rates: Valuation date:Actuarially determined contributions are based on the beginning of the applicable period. For example, the ADC for period ended June 30, 2022 was based on unfunded actuarial accrued liability and normal cost calculated as of July 1, 2021. Once calculated, the same ADC is used for two consecutive reporting periods. Actuarial cost method: Projected Unit Credit Amortization method: 30-year closed, level dollar payment Remaining amortization period: 15 years (declining) for outstanding balance as of June 30, 2022 unfunded OPEB liability. Asset valuation method: Market value. Actuarial Assumptions: Discount rate 4.75% Other assumptions Same as those used in the June 30, 2021 GASB 74/75 actuarial valuation dated October 13, 2022.

Section 2: GASB 74/75 Information
City of Bakersfield GASB 74/75 Valuation Measured at June 30, 2022, for Employer Reporting for Period Ending June 30, 202326 Actuarially Determined Contribution (ADC)Fiscal Year Ending June 30, 2022 and June 30, 2023 Fiscal Year Ending June 30, 2020 and June 30, 2021 Discount Rate4.75% 5.00% 1. Normal Cost$721,211 $793,166 2. Actuarial Accrued Liability111,294,315 123,750,336 3. Assets92,259,963 79,590,815 4. Unfunded Actuarial Accrued Liability (3) – (2)19,034,352 44,159,521 Years Remaining on Amortization Schedule116 18 5. Amortization of Unfunded Actuarial Accrued Liability1,646,954 3,730,392 6. Expected administrative expense2231,118 N/A 7. Adjustment for timing to the middle of fiscal year 61,733 113,089 8. Total Actuarially Determined Contribution (1) + (5) + (6) + (7)$2,661,016 $4,636,647 The Actuarially Determined Contribution is equal to the sum of (1) the Normal Cost and administrative expenses of the plan, plus (2) the amortization payment related to the Unfunded Actuarial Accrued Liability. The normal cost is the annual contribution related to benefits being earned by the active employees and the UAAL amortization is designed to fund benefits attributable to past service. The ADC is determined during each full valuation and is used for two consecutive reporting periods. 116 years for outstanding balance as of June 30, 2021 unfunded OPEB liability; 18 years for outstanding balance as of June 30, 2019 unfunded OPEB liability. 2Beginning July 1, 2021, administrative expenses were included in the calculation of the ADC.

City of Bakersfield GASB 74/75 Valuation Measured at June 30, 2022, for Employer Reporting for Period Ending June 30, 202327 Section 3: Supporting InformationExhibit I: Summary of Participant Data As of June 30, 20211Number of retirees 524 Average age of retirees 67.38 Number of spouses 162 Average age of spouses 64.74 Number of surviving spouses 68 Average age 76.37 Number of actives 428 Average age 50.17 Average service 20.73 1The June 30, 2022 measurement was based on the June 30, 2021 valuation rolled forward to June 30, 2022.

Section 3: Supporting Information
City of Bakersfield GASB 74/75 Valuation Measured at June 30, 2022, for Employer Reporting for Period Ending June 30, 202328 Exhibit II: Actuarial Assumptions and Actuarial Cost MethodData:Detailed census data, premium data and/or claim experience, and summary plan descriptions for OPEB were provided by the employer. Roll Forward Techniques:The results as of June 30, 2022 were based on the results for the City in the GASB Statement 75 ActuarialValuation Review of OPEB as of June 30, 2021, dated October 13, 2022, completed by Segal, adjusted forward using standard actuarial techniques and also adjusted for the changes in assumptions described below. Actuarial Cost Method:Entry Age NormalAsset Valuation Method: Market Value Measurement Date:June 30, 2022Actuarial Valuation Date:June 30, 2021Discount Rate: 4.75% Inflation Rate2.30%Payroll Growth2.80%Salary Increases: Wage inflation rate (2.80%) plus merit and promotional increases. Rate (%) Service Miscellaneous Rate* Safety Police Rate Safety Fire Rate0 9.0113.3118.293 6.61 7.65 8.935 5.555.706.1110 4.06 4.35 4.23153.824.304.0420 3.63 4.25 3.88253.474.213.7430 3.34 4.16 3.62* Based on an average entry age of 32.

Section 3: Supporting Information
City of Bakersfield GASB 74/75 Valuation Measured at June 30, 2022, for Employer Reporting for Period Ending June 30, 202329 Demographic Assumptions:Mortality, Turnover, Disability, Retirement, Inflation Rate and Salary Scale assumptions are based on the December 2021 experience study performed by the CalPERS actuary derived from the data collected during fiscal years 2000 to 2019. A review of the demographic assumptions is beyond the scope of this assignment; however, we have no reason to doubt the reasonableness of the assumptions. The remaining demographic assumptions, such as enrollment elections, percent married, and relative age of spouses, were based on the experience of the Plan and professional judgment. Post-retirement Mortality Rates: Rate (%) Applied to Healthy and Disabled Lives Age Male Female 500.270.1955 0.38 0.32600.580.4665 0.86 0.61701.330.9775 2.35 1.73804.293.3485 8.14 6.109014.3711.0295 24.40 20.2210035.7731.34105 51.80 44.45110100.00100.00The mortality rates reflect a 2017 base table, using experience described above from the CalPERS experience study, and then were projected generationally with 80% of the Scale MP2020 to the measurement date. The resulting tables above reasonably reflect the projected mortality experience of the Plan as of the measurement date. The mortality tables were then adjusted to future years using generational projection and 80% of the Scale MP2020 to reflect future mortality improvement between the measurement date and those years.

Section 3: Supporting Information
City of Bakersfield GASB 74/75 Valuation Measured at June 30, 2022, for Employer Reporting for Period Ending June 30, 202330 Pre-retirement Mortality Rates: Rate (%)GeneralSafetyAge Male Female Male Female 20 0.04 0.01 0.00 0.00 25 0.04 0.01 0.00 0.00 300.050.020.010.0035 0.07 0.03 0.01 0.00400.080.040.010.0145 0.10 0.05 0.01 0.01500.130.080.010.0155 0.19 0.12 0.01 0.01600.290.180.030.0265 0.41 0.25 0.04 0.02700.590.390.070.0475 0.91 0.67 0.12 0.08801.481.130.220.15The mortality rates reflect a 2017 base table, using experience described above from the CalPERS experience study, and then were projected generationally with 80% of the Scale MP2020 to the measurement date. The resulting tables above reasonably reflect the projected mortality experience of the Plan as of the measurement date. The mortality tables were then adjusted to future years using generational projection and 80% of the Scale MP2020 to reflect future mortality improvement between the measurement date and those years.

Section 3: Supporting Information
City of Bakersfield GASB 74/75 Valuation Measured at June 30, 2022, for Employer Reporting for Period Ending June 30, 202331 Disability Rates: Rate (%)GeneralSafety PoliceSafety FireAttained Age Male Female Male Female Male Female 20 0.01 0.00 0.00 0.00 0.00 0.00 30 0.02 0.03 0.48 0.48 0.06 0.06 400.100.121.101.100.230.2350 0.16 0.19 1.85 1.85 2.08 2.08600.120.096.026.024.384.3870 0.10 0.05 8.55 8.55 8.22 8.22

Section 3: Supporting Information
City of Bakersfield GASB 74/75 Valuation Measured at June 30, 2022, for Employer Reporting for Period Ending June 30, 202332 Termination Rates before Retirement:Rate (%) for General EmployeesMale*FemaleService With RefundWith Vested Benefit Total With RefundWith Vested Benefit Total0 15.76 0.00 15.76 17.94 0.00 17.94 1 12.00 0.00 12.00 14.37 0.00 14.37 2 9.08 0.00 9.08 11.33 0.00 11.33 3 6.77 0.00 6.77 8.69 0.00 8.69 4 4.87 0.00 4.87 6.37 0.00 6.37 5 3.31 3.48 6.80 4.38 4.40 8.79 6 2.15 3.34 5.49 2.87 4.33 7.20 7 1.40 3.14 4.54 1.90 4.13 6.02 8 1.00 2.92 3.92 1.38 3.84 5.22 9 0.83 2.71 3.54 1.15 3.53 4.69 10 0.76 2.50 3.26 1.04 3.23 4.28 15 0.00 1.60 1.60 0.00 1.97 1.97 200.000.970.970.001.131.1325 0.00 0.56 0.56 0.00 0.63 0.63300.000.330.330.000.390.3935 0.00 0.38 0.38 0.00 0.41 0.41* Based on an average entry age of 32.

Section 3: Supporting Information
City of Bakersfield GASB 74/75 Valuation Measured at June 30, 2022, for Employer Reporting for Period Ending June 30, 202333 Termination Rates before Retirement (continued):Rate (%) for Safety Police EmployeesMale*FemaleService With RefundWith Vested Benefit Total With RefundWith Vested Benefit Total0 12.98 0.00 12.98 13.89 0.00 13.89 1 7.89 0.00 7.89 9.04 0.00 9.04 2 4.64 0.00 4.64 5.66 0.00 5.66 3 2.74 0.00 2.74 3.43 0.00 3.43 4 1.70 0.00 1.70 2.06 0.00 2.06 5 1.13 1.56 2.69 1.28 2.72 4.00 6 0.80 1.46 2.26 0.87 2.56 3.43 7 0.60 1.37 1.97 0.68 2.40 3.08 8 0.47 1.29 1.76 0.59 2.25 2.84 9 0.38 1.21 1.59 0.53 2.11 2.65 10 0.32 1.13 1.45 0.47 1.98 2.46 15 0.00 0.83 0.83 0.00 1.44 1.44 200.000.600.600.001.051.0525 0.00 0.42 0.42 0.00 0.73 0.73300.000.210.210.000.370.3735 0.00 0.00 0.00 0.00 0.00 0.00* Based on an average entry age of 32.

Section 3: Supporting Information
City of Bakersfield GASB 74/75 Valuation Measured at June 30, 2022, for Employer Reporting for Period Ending June 30, 202334 Termination Rates before Retirement (continued):Rate (%) for Safety Fire EmployeesMale*FemaleService With RefundWith Vested Benefit Total With RefundWith Vested Benefit Total0 10.22 0.00 10.22 13.17 0.00 13.17 1 6.86 0.00 6.86 10.07 0.00 10.07 2 4.41 0.00 4.41 7.43 0.00 7.43 3 2.72 0.00 2.72 5.24 0.00 5.24 4 1.61 0.00 1.61 3.49 0.00 3.49 5 0.92 0.89 1.81 2.14 2.24 4.38 6 0.52 0.84 1.36 1.17 2.10 3.27 7 0.32 0.79 1.11 0.52 1.97 2.49 8 0.22 0.74 0.96 0.14 1.86 2.00 9 0.17 0.70 0.87 0.00 1.74 1.74 10 0.15 0.66 0.81 0.00 1.64 1.64 15 0.00 0.48 0.48 0.00 1.20 1.20 200.000.350.350.000.880.8825 0.00 0.24 0.24 0.00 0.61 0.61300.000.120.120.000.310.3135 0.00 0.00 0.00 0.00 0.00 0.00* Based on an average entry age of 32.

Section 3: Supporting Information
City of Bakersfield GASB 74/75 Valuation Measured at June 30, 2022, for Employer Reporting for Period Ending June 30, 202335 Retirement Rates:Rate (%) for General Employees (CalPERS Public Agency Miscellaneous 3% @ 60)Attained AgeYears of Service5 10 15 20 25 30 35501.502.002.503.904.004.404.4051 4.10 3.40 3.20 4.10 3.60 3.70 3.7052 2.40 2.00 2.20 3.90 4.00 4.104.1053 1.80 2.40 3.20 4.70 4.80 5.70 5.7054 3.30 3.30 3.50 5.10 4.90 5.205.2055 13.70 4.30 5.10 6.50 7.60 10.80 13.605617.303.805.407.508.5011.7013.9057 1.90 3.50 5.90 8.80 11.10 13.40 14.70581.104.007.0010.5013.3016.2017.8059 19.40 5.60 6.40 8.10 11.30 16.30 19.0060 8.10 8.50 13.30 21.50 28.00 33.3037.8061 8.00 9.00 13.40 17.00 22.30 29.20 32.706213.7015.3020.1025.0027.8028.8030.6063 12.80 14.00 18.30 22.70 25.10 26.00 27.506417.4014.7017.3022.4023.9026.4031.0065 15.20 20.10 26.20 29.90 32.30 32.30 32.306627.2027.3031.7035.5038.0038.0038.0067 21.80 23.70 26.80 27.40 28.40 28.40 28.406820.0022.8026.9028.5029.9029.9029.9069 25.00 25.00 25.00 25.00 25.00 25.00 25.007024.5024.5024.5024.5024.5024.5024.5071 24.50 24.50 24.50 24.50 24.50 24.50 24.507224.5024.5024.5024.5024.5024.5024.5073 24.50 24.50 24.50 24.50 24.50 24.50 24.507424.5024.5024.5024.5024.5024.5024.5075 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Section 3: Supporting Information
City of Bakersfield GASB 74/75 Valuation Measured at June 30, 2022, for Employer Reporting for Period Ending June 30, 202336 Retirement Rates (continued):Safety Employees (CalPERS Public Agency Police 3% @ 50)Attained AgeYears of Service5 10 15 20 25 30 355012.4010.3011.3014.3024.4037.6043.8051 6.00 8.10 8.70 12.50 20.70 29.40 34.1052 1.60 5.50 11.10 14.80 19.20 23.5026.0053 7.20 7.40 9.80 14.20 18.90 23.70 26.4054 1.80 4.90 10.50 12.30 18.70 27.1029.6055 6.90 7.40 8.10 11.30 20.90 30.50 33.60566.4010.8011.3012.5019.0028.8034.7057 5.60 10.90 16.00 18.20 21.00 21.00 21.005810.8012.9017.3018.9021.4021.4021.4059 9.30 14.40 20.40 22.90 26.20 26.20 26.2060 34.30 18.00 15.90 18.80 24.70 24.7024.7061 22.10 22.10 22.10 22.10 22.10 22.10 22.106221.3021.3021.3021.3021.3021.3021.3063 23.30 23.30 23.30 23.30 23.30 23.30 23.306423.4023.4023.4023.4023.4023.4023.4065 100.00 100.00 100.00 100.00 100.00 100.00 100.0066100.00100.00100.00100.00100.00100.00100.0067 100.00 100.00 100.00 100.00 100.00 100.00 100.0068100.00100.00100.00100.00100.00100.00100.0069 100.00 100.00 100.00 100.00 100.00 100.00 100.0070100.00100.00100.00100.00100.00100.00100.0071 100.00 100.00 100.00 100.00 100.00 100.00 100.0072100.00100.00100.00100.00100.00100.00100.0073 100.00 100.00 100.00 100.00 100.00 100.00 100.0074100.00100.00100.00100.00100.00100.00100.0075 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Section 3: Supporting Information
City of Bakersfield GASB 74/75 Valuation Measured at June 30, 2022, for Employer Reporting for Period Ending June 30, 202337 Retirement Rates (continued):Safety Employees (CalPERS Public Agency Fire 3% @ 50)Attained AgeYears of Service5 10 15 20 25 30 35509.504.805.309.3013.4017.5019.6051 1.60 3.20 5.30 8.50 11.70 14.90 16.5052 1.30 3.20 5.40 8.70 12.00 15.4017.0053 8.50 4.40 4.90 8.90 12.90 17.00 19.0054 3.80 6.50 7.40 10.50 13.60 16.7018.2055 4.20 4.30 4.90 8.50 13.20 21.50 27.205613.3010.307.5011.3015.1020.9026.1057 6.20 4.80 6.00 12.40 17.20 21.30 23.805812.409.709.2015.3019.4022.7025.0059 9.20 7.10 7.80 14.40 19.20 23.30 25.9060 5.60 4.40 6.10 13.10 18.60 23.3026.2061 28.20 21.90 15.80 19.80 23.30 26.00 28.106229.2022.7016.4020.5024.1026.9029.1063 19.60 19.60 19.60 19.60 19.60 19.60 19.606419.7019.7019.7019.7019.7019.7019.7065 100.00 100.00 100.00 100.00 100.00 100.00 100.0066100.00100.00100.00100.00100.00100.00100.0067 100.00 100.00 100.00 100.00 100.00 100.00 100.0068100.00100.00100.00100.00100.00100.00100.0069 100.00 100.00 100.00 100.00 100.00 100.00 100.0070100.00100.00100.00100.00100.00100.00100.0071 100.00 100.00 100.00 100.00 100.00 100.00 100.0072100.00100.00100.00100.00100.00100.00100.0073 100.00 100.00 100.00 100.00 100.00 100.00 100.0074100.00100.00100.00100.00100.00100.00100.0075 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Section 3: Supporting Information
City of Bakersfield GASB 74/75 Valuation Measured at June 30, 2022, for Employer Reporting for Period Ending June 30, 202338 Unknown Data for Participants:Same as those exhibited by members with similar known characteristics. If not specified, members are assumed to be male. Participation and Coverage Election:75% of employees eligible to retire and receive subsidized postretirement welfare coverage are assumed to elect medical coverage. We assume actives will stay with their current carrier upon retirement, and all retirees will receive the maximum subsidy to which they are entitled. When an active or current non-Medicare retiree becomes eligible for Medicare, we assume the following: Retirees under age 65 on valuation date and active employees Medical Plan Assumed Election Percent at Age 65 Blue Shield PPO60%Kaiser Senior Advantage 40%Blue Shield Medicare Advantage0%Dependents:For future retirees, husbands are assumed to be three years older than their wives. For future retirees who elect to continue their health coverage at retirement, 35% are assumed to have an eligible spouse who also opts for health coverage at that time. Implicit Subsidy: Premiums are underwritten for retirees only. Therefore, no implicit subsidy cost exists. Per Capita Cost Development for Special Contribution: Per capita costs were based on 42% of the PPO premium. Actuarial factors were applied to the premium to estimate individual retiree and spouse costs by age, gender and Medicare integration. Per Capita Costs for Special Contribution:The annual per capita Special Contribution costs, are shown in the table below for retirees and for spouses at selected ages. RetireesSpouseAge Male Female Male Female50$4,963$5,654$3,467$4,53955 5,895 6,086 4,639 5,254 607,000 6,560 6,211 6,094 64 8,031 6,959 7,840 6,859 653,067 2,607 3,067 2,607 70 3,555 2,809 3,555 2,809 753,831 3,024 3,831 3,024 80 4,125 3,260 4,125 3,260

Section 3: Supporting Information
City of Bakersfield GASB 74/75 Valuation Measured at June 30, 2022, for Employer Reporting for Period Ending June 30, 202339 Health Care Subsidy Trend Rates:Health care subsidy trend measures the anticipated overall rate at which health plan subsidy are expected to increase in future years. The rates shown below are “net” and are applied to the net per capita subsidies shown above. The trend shown for a particular plan year is the rate that is applied to that year’s subsidies to yield the next year’s projected subsidies. Rate (%) 42% Special ContributionFiscal Year City “Years of Service” Formula Non-Medicare Medicare 2022 2.25 5.45 6.28 2023 8.31 8.98 5.6120247.007.006.502025 6.75 6.75 6.25 20266.506.506.002027 6.25 6.25 5.752028 6.00 6.00 5.50 2029 5.75 5.75 5.2520305.505.505.002031 5.25 5.25 4.752032 5.00 5.00 4.502033 4.75 4.75 4.502034 & Later 4.50 4.50 4.50The trend rate assumptions were developed using Segal’s internal guidelines, which are established each year using data sources such as the Segal Health Trend Survey, internal client results, trends from other published surveys prepared by the S&P Dow Jones Indices, consulting firms and brokers, and CPI statistics published by the Bureau of Labor Statistics. The trend assumptions shown above for 2021-2022 and 2022-2023 were based on known calendar year 2022 and 2023 premiums. Medicare Part D Subsidy Assumption:GASB guidelines prohibit the offset of OPEB obligations by the future value of Medicare Part D subsidies. Therefore, these calculations do not include an estimate for retiree prescription drug plan federal subsidies that the Plan's Full Name may be eligible to receive for plan years beginning in 2006. Administrative Expenses:No administrative expense load is added in developing the benefit obligations.

Section 3: Supporting Information
City of Bakersfield GASB 74/75 Valuation Measured at June 30, 2022, for Employer Reporting for Period Ending June 30, 202340 Plan Design:Development of plan liabilities was based on the substantive plan of benefits in effect as described in Exhibit III.Models:Segal accounting results are based on proprietary actuarial modeling software. The accounting valuation models generate a comprehensive set of liability and cost calculations that are presented to meet accounting standards and client requirements. Our Actuarial Technology and Systems unit, comprising both actuaries and programmers, is responsible for the initial development and maintenance of these models. The models have a modular structure that allows for a high degree of accuracy, flexibility and user control. The client team programs the assumptions and the plan provisions, validates the models, and reviews test lives and results, under the supervision of the responsible actuary. The blended discount rate used for calculating total pension liability is based on a model developed by our Actuarial Technology and Systems unit, comprised of both actuaries and programmers. The model allows the client team, under the supervision of the responsible actuary, control over the entry of future expected contribution income, benefit payments and administrative expenses. The projection of fiduciary net position and the discounting of benefits is part of the model. Our claims costs assumptions are based on proprietary modeling software as well as models that were developed by others. These models generate per capita claims cost calculations that are used in our valuation software. Our Health Technical Services Unit, comprised of actuaries and programmers, is responsible for the initial development and maintenance of our health models. They are also responsible for testing models that we purchase from other vendors for reasonableness. The client team inputs the paid claims, enrollments, plan provisions and assumptions into these models and reviews the results for reasonableness, under the supervision of the responsible actuary. Health Care Reform Assumption:The valuation does not reflect the potential impact of any future changes due to prior or pending legislation.Assumption Changes:The first and second year trend rates for health costs were updated based on actual premium renewals.

Section 3: Supporting Information
City of Bakersfield GASB 74/75 Valuation Measured at June 30, 2022, for Employer Reporting for Period Ending June 30, 202341 Exhibit III: Summary of PlanThis exhibit summarizes the major benefit provisions as included in the valuation. To the best of our knowledge, the summary represents the substantive plans as of the measurement date. It is not intended to be, nor should it be interpreted as, a complete statement of all benefit provisions. Eligibility:Employees who are at least age 50 and retired with a minimum of 15 or 20 years of service, depending on the date of hire as noted below are eligible for benefits, unless retirement is due to disability (in which case the minimum age requirement does not apply). Safety hired prior to April 1, 1998 and all other employees hired prior to April 1, 1996 require a minimum of 15 years of service. Safety hired between April 1, 1998 and May 24, 2006 and all other hired between April 1, 1996 and February 22, 2006 require a minimum of 20 years of service to qualify for coverage. New hires starting after February 22, 2006 (May 24, 2006 for police and May 5, 2006 for fire) are not eligible to participate in retiree health program. Benefit Types: Non-Medicare retirees have three medical plan options to choose from – Blue Shield PPO, Kaiser HMO and Kaiser High Deductible Health Plan. Retirees enrolled in Kaiser receive vision benefits through Medical Eye Services (MES). Medicare eligible retirees have two Medicare Advantage options – Blue Shield Medicare Advantage HMO and Kaiser Senior Advantage HMO and are also eligible to participate in the Blue Shield PPO plan. In addition, retirees are eligible for dental benefits from United Concordia at full cost to the retiree. Since these benefits are fully paid by the retirees, they have been excluded from this valuation. Duration of Coverage:Lifetime, subject to continuing support by the City Council.Dependent Benefits:Same as retirees.Dependent Coverage:Benefits are available for dependents. However, the City does not subsidize coverage for dependents unless they are eligible for the Special Contribution for the Blue Shield PPO plan.

Section 3: Supporting Information
City of Bakersfield GASB 74/75 Valuation Measured at June 30, 2022, for Employer Reporting for Period Ending June 30, 202342 Retiree Contributions:Contribution formulas and conditions for participation in the City’s retiree medical plans may vary depending on the employee bargaining unit and the employee labor agreements. In general, City contributes a minimum of the single employer rate for the active HMO (currently Kaiser HDHP) multiplied by 3% times the number of years of service up to maximum contribution of 90% of the single employee rate for the active HMO or the actual contract rate for medical vision, and mental health. In addition, retirees who elect the Blue Shield PPO plan are eligible to receive a Special Contribution of 42% of the PPO rate tier selected by the retiree. This additional subsidy does not apply to Safety hired after April 1, 1998 and others hired after April 1, 1996. Miscellaneous hired after February 22, 2006, Fire hired after May 5, 2006, and Safety hired after May 24, 2006 are not eligible for 3% per year of service subsidy. Maximum Medicare Part B premium reimbursement per eligible person of $42.50 for any excess of the 3% per year service subsidy over the Kaiser Senior Advantage or Blue Shield Medicare Advantage premiums. Premiums: Non – Medicare Retiree: Monthly Single Medical PremiumsCalendar Year Blue Shield PPO including Mental Health Kaiser HMO Under 65 MES Vision Total Kaiser + MES Kaiser Deductible MES Vision Total Kaiser Ded + MES 2022 $1,051.48$1,647.01$2.30$1,649.31$1,421.65$2.30$1,423.952023 $1,166.09 $1,805.72 $3.13 $1,808.85 $1,558.65 $3.13 $1,561.78Medicare Retiree: Monthly Single Medical PremiumsCalendar Year Blue Shield Medicare Plan Kaiser Senior Advantage 2022$355.11$208.842023 $370.78 $184.84

Section 3: Supporting Information
City of Bakersfield GASB 74/75 Valuation Measured at June 30, 2022, for Employer Reporting for Period Ending June 30, 202343 Employer Subsidy Costs: Maximum Monthly City SubsidyCalendar Year Special Contribution Single Party Coverage* Special Contribution Two Party Coverage City Formula** (30 years) Medicare Part B Premium Maximum Reimbursement (Per Person)*** 2022$441.62$883.19$267.60$42.502023 $465.69 $979.46 $293.95 $42.50* Special Contribution Represents 42% of the PPO rate. Not applicable to Miscellaneous employees hired after April 1, 1996, or Safety employees hired after April 1, 1998. ** Formula for those employees eligible for the years of service contributions: 3% of the sum of the lowest Active HMO rate and vision rate to a maximum of 30 years. The credit per year of service was $8.92 in 2022 and is $9.80 for 2023. ***Medicare part B premium reimbursement will pay for excess, if any, of City Formula amount over Medicare Risk Plan premium. Medicare Integration Rule for PPO Plan: Full coordination of benefits method in which the plan benefit is defined as the lesser of that determined without regard to Medicare, and the excess of health charges over the amounts paid by Medicare. Plan Changes Since Prior Valuation:None

Section 3: Supporting Information
City of Bakersfield GASB 74/75 Valuation Measured at June 30, 2022, for Employer Reporting for Period Ending June 30, 202344 Appendix A: Definition of TermsDefinitions of certain terms as they are used in Statement 75. The terms may have different meanings in other contexts. Actuarially Determined Contribution: A target or recommended contribution to an OPEB plan for the reporting period based on the most recent measurement available. Assumptions or Actuarial Assumptions:The estimates on which the cost of the Plan is calculated including:a) Investment return — the rate of investment yield that the Plan will earn over the long-term future; b) Mortality rates — the death rates of employees and pensioners; life expectancy is based on these rates; c) Retirement rates — the rate or probability of retirement at a given age; d) Turnover rates — the rates at which employees of various ages are expected to leave employment for reasons other than death, disability, or retirement. Covered Payroll:The payroll of the employees that are provided OPEB benefitsDiscount Rate:The single rate of return, that when applied to all projected benefit payments results in an actuarial present value that is the sum of the following: 1) the actuarial present value of projected benefit payments projected to be funded by plan assets using a long term rate of return, and 2) the actuarial present value of projected benefit payments that are not included in (1) using a yield or index rate for 20 year tax exempt general obligation municipal bonds with an average rating of AA/Aa or higher Entry Age Actuarial Cost Method:An actuarial cost method where the present value of the projected benefits for an individual is allocated on a level basis over the earnings or service of the individual between entry age and assumed exit age Healthcare Cost Trend Rates:The rate of change in per capita health costs over timeNet OPEB Liability:The Total OPEB Liability less the Plan Fiduciary Net PositionPlan Fiduciary Net Position:Market Value of AssetsReal Rate of Return:The rate of return on an investment after removing inflationService Cost:The amount of contributions required to fund the benefit allocated to the current year of service.Total OPEB Liability:Present value of all future benefit payments for current retirees and active employees taking into account assumptions about demographics, turnover, mortality, disability, retirement, health care trends, and other actuarial assumptions. Valuation Date:The date at which the actuarial valuation is performed

Section 3: Supporting Information
City of Bakersfield GASB 74/75 Valuation Measured at June 30, 2022, for Employer Reporting for Period Ending June 30, 202345 Appendix B: Accounting RequirementsThe Governmental Accounting Standards Board (GASB) issued Statement Number 74 – Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, and Statement Number 75 – Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. Under these statements, all state and local government entities that provide other post-employment benefits are required to report the cost of these benefits on their financial statements. The accounting standards supplement cash accounting, under which the expense for postemployment benefits is equal to benefit and administrative costs paid on behalf of retirees and their dependents (i.e., a pay-as-you-go basis). The statements cover postemployment benefits of medical, prescription drugs, dental, vision and life insurance coverage for retirees; long-term care coverage, life insurance and death benefits that are not offered as part of a pension plan; and long-term disability insurance for employees. The benefits valued in this report are limited to those described in Exhibit III of Section 4, which are based on those provided under the terms of the substantive plan in effect at the time of the valuation and on the pattern of sharing costs between the employer and plan members. The projection of benefits is not limited by legal or contractual limits on funding the plan unless those limits clearly translate into benefit limits on the substantive plan being valued. The new standards prescribe an accrual-basis accounting requirement, thereby recognizing the employer cost of postemployment benefits over an employee’s career. The standards also prescribe a consistent accounting requirement for both pension and non-pension benefits. The total cost of providing postemployment benefits is projected, taking into account assumptions about demographics, turnover, mortality, disability, retirement, health care trends, and other actuarial assumptions. These assumptions are summarized in Exhibit II of Section 3. This amount is then discounted to determine the Total OPEB Liability. The Net OPEB Liability (NOL) is the difference between the Total OPEB Liability and market value of assets in the Plan, called the Plan Fiduciary Net Position. Once the NOL is determined, the Annual OPEB Expense is determined as the change in NOL from the prior year with deferred recognition of certain elements. In addition, Required Supplementary Information (RSI) must be reported, including historical information about the Net OPEB Liability and the contributions made to the Plan. Appendix A of Section 3 contains a definition of terms. The calculation of an accounting obligation does not, in and of itself, imply that there is any legal liability to provide the benefits valued, nor is there any implication that the Employer is required to implement a funding policy to satisfy the projected expense. Actuarial calculations reflect a long-term perspective, and the methods and assumptions use techniques designed to reduce short-term volatility in accrued liabilities and the actuarial value of assets, if any. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future, and the actuarially determined amounts are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. 5793263v2/10632.016

California Public Employees’ Retirement System
Actuarial Office
400 Q Street, Sacramento, CA 95811 | Phone: (916) 795 -3000 | Fax: (916) 795-2744 888 CalPERS (or 888-225-7377) | TTY: (877) 249-7442 | www.calpers.ca.gov

July 2023

Miscellaneous Plan of the City of Bakersfield (CalPERS ID: 3050192847 ) Annual Valuation Report as of June 30, 2022

Dear Employer,

Attached to this letter is the June 30, 2022 actuarial valuation report for the rate plan noted above. Provided in this report is the determination of the minimum required employer contributions for fiscal year (FY) 2024-25. In addition, the report contains important information regarding the current financial status of the plan as well as projections and risk measures to aid in planning for the future.

Actuarial valuations are based on assumptions regarding future plan experience including investment return and payroll growth, eligibility for the types of benefits provided, and longevity among retirees. The CalPERS Board of Administration (board) adopts these assumptions after considering the advice of CalPERS actuarial and investment teams and other professionals. Each actuarial valuation reflects all prior differences between actual and assumed experience and adjusts the contribution r equirements as needed. This valuation is based on an investment return assumption of 6.8%, which was adopted by the board in November 2021. Other assumptions used in this report are those recommended in the CalPERS Experience Study and Review of Actuarial Assumptions report from November 2021.

Required Contributions

The table below shows the minimum required employer contributions and the PEPRA member rate for FY 2024-25 along with an estimate of the required employer contribution for FY 2025-26. Employee contributions other than cost sharing (whether paid by the employer or the employee) are in addition to the results shown below. The required employer contributions in this report do not reflect any cost sharing arrangement between the agency and the employees.

Fiscal Year Employer Normal
Cost Rate
Employer Amortization of
Unfunded Accrued Liability
PEPRA Member
Contribution Rate
2024-25 10.84% $17,805,119 7.25%

Projected Results
2025-26 10.6% $18,054,000 TBD

The actual investment return for FY 2022-23 was not known at the time this report was prepared. The projections abov e assume the investment return for that year would be 6.8%. To the extent the actual investment return for FY 2022- 23 differs from 6.8%, the actual contribution requirements for FY 2025-26 will differ from those shown above.

For additional details regarding the assumptions and methods used for these projections , please refer to the “Projected Employer Contributions” in the “Highlights and Executive Summary” section. This section also contains projected required contributions through FY 2029-30.

Changes from Previous Year’s Valuations

There are no significant changes in actuarial assumptions or policies in the 2022 actuarial valuation. T here may be changes specific to the plan such as contract amendments and funding changes.

Further descriptions of general changes are included in the “Highlights and Executive Summary” section and in Appendix A, “Actuarial Methods a nd Assumptions.” The effects of any changes on the required contributions are included in the “Reconciliation of Required Employer Contributions” section.

Miscellaneous Plan of the City of Bakersfield
(CalPERS ID: 3050192847 )
Annual Valuation Report as of June 30, 2022

Questions

A CalPERS actuary is available to answer questions about this report . Other questions may be directed to the Customer Contact Center at (888)-CalPERS or (888-225-7377).

Sincerely,

SCOTT TERANDO, ASA, EA, MAAA, FCA, CFA
Chief Actuary, CalPERS

RANDALL DZIUBEK, ASA, MAAA
Deputy Chief Actuary, Valuation Services , CalPERS

Actuarial Valuation
as of June 30, 2022

for the
Miscellaneous Plan
of the
City of Bakersfield
(CalPERS ID: 3050192847)
(Rate Plan ID: 24)

Required Contributions
for Fiscal Year
July 1, 2024 – June 30, 2025

Table of Contents

Actuarial Certification 1

Highlights and Executive Summary
Introduction 3
Purpose 3
Required Contribution s 4
Additional Discretionary Employer Contributions 5
Funded Status – Funding Policy Basis 6
Projected Employer Contributions 7
Cost 8
Changes Since the Prior Year’s Valuation 9
Subsequent Events 9
Assets
Reconciliation of the Market Value of Assets 11
Asset Allocation 12
CalPERS History of Investment Returns 13

Liabilities and Contributions
Development of Accrued and Unfunded Liabilities 15
(Gain) / Loss Analysis 6/30/21 - 6/30/22 16
Schedule of Amortization Bases 17
Amortization Schedule and Alternatives 19
Reconciliation of Required Employer Contributions 21
Employer Contribution History 22
Funding History 22
Normal Cost by Benefit Group 23
PEPRA Member Contribution Rates 24

Risk Analysis
Future Investment Return Scenarios 26
Discount Rate Sensitivity 27
Mortality Rate Sensitivity 27
Maturity Measures 28
Maturity Measures History 29
Funded Status – Termination Basis 30

Plan’s Major Benefit Provisions
Plan’s Major Benefit Options 32

Appendix A – Actuarial Methods and Assumptions
Actuarial Data A-1
Actuarial Methods A-1
Actuarial Assumptions A-4
Miscellaneous A-24

Appendix B – Principal Plan Provisions B-1

Appendix C – Participant Data
Summary of Valuation Data C-1
Active Members C-2
Transferred and Separated Members C-3
Retired Members and Beneficiaries C-4

Appendix D – Glossary D-1

(CY) FIN JOB INSTANCE ID : 421826 (PY) FIN JOB INSTANCE ID : 398976 REPORT ID: 421827

CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Bakersfield
CalPERS ID: 3050192847

Actuarial Certification

To the best of my knowledge, this report is complete and accurate and contains sufficient information to disclose, fully and fairly, the funded condition of the Miscellaneous Plan of the City of Bakersfield and satisfies the actuarial valuation requirements of Government Code section 7504 . This valuation and related validation work was performed by the CalPERS Actuarial Office and is based on the member and financial data as of June 30, 2022 provided by the various CalPERS databases and the benefits under this plan with CalPERS as of the date this report was produced.

It is my opinion that the valuation has been perform ed in accordance with generally accepted actuarial principles, in accordance with standards of practice prescribed by the Actuarial Standards Board, and that the assumptions and methods, as prescribed by the CalPERS Board of Administration , are internally consistent and reasonable for this plan .

The undersigned is an actuary who satisfies the Qualification Standards for Actuaries Issuing Statements of Actuarial Opinion in the United States with regard to pensions.

KURT SCHNEIDER, MPA, ASA, EA, MAAA
Supervising Actuary , CalPERS

Highlights and Executive Summary

• Introduction

• Purpose

• Required Contributions

• Additional Discretionary Employer Contributions

• Funded S tatus – Funding Policy Basis

• Projected Employer C ontributions

• Cost

• Changes Since the Prior Year ’s Valuation

• Subsequent Events

CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Bakersfield
CalPERS ID: 3050192847

Introduction

This report presents the results of the June 30, 2022 actuarial valuation of the Miscellaneous Plan of the City of Bakersfield of the California Public Employees’ Retirement System (CalPERS). This actuarial valuation sets the minimum required contributions for fiscal year (FY) 2024-25.

Purpose

This report documents the results of the actuarial valuation prepared by the CalPERS Actuarial Office using data as of June 30, 2022. The purpose of the valuation is to:

• Set forth the assets and accrued liabilities of this rate plan as of June 30, 2022; • Determine the minimum required employer contributions for this rate plan for FY July 1, 2024 through June 30, 2025;
• Determine the required member contribution rate for FY July 1, 2024 through June 30, 2025 for employees subject to the California Public Employees' Pension Reform Act of 2013 (PEPRA); and • Provide actuarial information as of June 30, 2022 to the CalPERS Board of Administration (board) and other interested parties.

The pension funding information presented in this report should not be used in financial reports subject to Governmental Accounting Standards Board (GASB) Statement No. 68 for an Agent Employer Defined Benefit Pension Plan. A separate accounting valuation report for such purposes is available from CalPERS and details for ordering are available on the CalPERS website (www.calpers.ca.gov).

The measurements shown in this actuarial valuation may not be applicable for other purposes. The agency should contact t he plan actuary before disseminating any portion of this report for any reason that is not explicitly described above.

Future actuarial measurements may differ significantly from the current measurements presented in this report due to such factors as the following: plan experience differing from that anticipated by the economic or demographic assumptions; changes in economic or demographic assumptions; changes in actuarial policies; changes in plan provisions or applicable law; and differences between the required contributions determined by the valuation and the actual contributions made by the agency.

Assessment and Disclosure of Risk

This report includes the following risk disclosures consistent with the guidance of Actuarial Standards of Practice No. 51 and recommended by the California Actuarial Advisory Panel (CAAP) in the Model Disclosure Elements document:

• A “Scenario Test,” projecting future results under different investment income returns. • A “Sensitivity Analysis,” showing the impact on current valuation results using alternative discount rates 5.8% and 7.8%.
• A “Sensitivity Analysis,” showing the impact on current valuation results assuming rates of mortality are 10% lower or 10% higher than our current post-retirement mortality assumptions adopted in 2021.
• Plan maturity measures indicating how sensitive a plan may be to the risks noted above.

CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Bakersfield
CalPERS ID: 3050192847

Required Contributions

Fiscal Year
Required Employer Contributions 2024-25
Employer Normal Cost Rate 10.84%
Plus
Required Payment on Amortization Bases $17,805,119
Paid either as
1) Monthly Payment $1,483,760
Or
2) Annual Prepayment Option* $17,228,968

Required PEPRA Member Contribution Rate

7.25%
The total minimum required employer contribution is the sum of the Plan’s Employer Normal Cost Rate (expressed as a percentage of payroll and paid as payroll is reported) plus the Employer Unfunded Accrued Liability (UAL) Contribution Amount (billed monthly (1) or prepaid annually (2) in dollars). * Only the UAL portion of the employer contribution can be prepaid (which must be received in full no later than July 31).

For additional detail regarding the determination of the required contribution for PEPRA members, see ”PEPRA Member Contribution Rates” in the “Liabilities and Contributions” section. Required member contributions for Classic members can be found in Appendix B.

Fiscal Year Fiscal Year
2023-24 2024-25
Normal Cost Contribution as a Percentage of Payroll
Total Normal Cost 18.81% 18.46%
Employee Contribution 1 7.67% 7.62%
Employer Normal Cost 2 11.14% 10.84%

Projected Annual Payroll for Contribution Year $68,745,379 $74,023,108

Estimated Employer Contributions Based On
Projected Payroll
Total Normal Cost $12,931,006 $13,664,666
Offset Due to Employee Contribution s 5,272,771 5,640,561 Employer Normal Cost 7,658,235 8,024,105
Unfunded Liability Contribution 16,119,434 17,805,119 % of Projected Payroll (illustrative only) 23.45% 24.05% Estimated Total Employer Contributio n $23,777,669 $25,829,224 % of Projected Payroll (illustrative only) 34.59% 34.89%

1 For classic members, this is the percentage specified in the Public Employees’ Retirement Law , net of any reduction from the use of a modified formula or other factors. For PEPRA members, the member contribution rate is based on 50% of the normal cost. A development of PEPRA member contribution rates can be found in the “Liabilities and Contributions” section. Employee cost sharing is not show n in this report.

2 The Employer Normal Cost is a blended rate for all benefit groups in the plan. For a breakout of normal cost by benefit group, see “Normal Cost by Benefit Group” in the “Liabilities and Contributions” section.

CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Bakersfield
CalPERS ID: 3050192847

Additional Discretionary Employer Contributions

The minimum required employer contribution towards the Unfunded Accrued Liability (UAL) for this rate plan for FY 2024-25 is $17,805,119 . CalPERS allows agencies to make additional discretionary payments (ADPs) at any time and in any amount. These optional payments serve to reduce the UAL and future required contributions and can result in significant long -term savings. Agencies can also use ADPs to stabilize annual contributions as a fixed dollar amount, percent of payroll or percent of revenue.

Provided below are select ADP options for consideration. Making such an ADP during FY 2024-25 does not require an ADP be made in any future year, nor does it change the remaining amortization period of any portion of unfunded liability. For information on permanent changes to amortization periods, see the “Amortization Schedule and Alternatives” section of the report.

Agencies considering making an ADP should contact CalPERS for additional information.

Minimum Required Employer Contribution for Fiscal Year 2024-25

Estimated
Normal Cost
Minimum UAL
Payment
ADP Total UAL
Contribution
Estimated Total
Contribution
$8,024,105 $17,805,119 $0 $17,805,119 $25,829,224

Alternative Fiscal Year 2024-25 Employer Contributions for Greater UAL Reduction

Funding
Horizon
Estimated
Normal Cost
Minimum UAL
Payment
ADP1 Total UAL
Contribution
Estimated Total
Contribution
20 years $8,024,105 $17,805,119 $879,697 $18,684,816 $26,708,921 15 years $8,024,105 $17,805,119 $3,992,349 $21,797,468 $29,821,573 10 years $8,024,105 $17,805,119 $10,557,490 $28,362,609 $36,386,714 5 years $8,024,105 $17,805,119 $30,969,695 $48,774,814 $56,798,919

1 The ADP amounts are assumed to be made in the middle of the fiscal year. A payment made earlier or later in the fiscal year w ould have to be less or more than the amount show n to have the same effect on the UAL amortization.

Note that the calculations above are based on the projected Unfunded Accrued Liability as of June 30, 2024 as determined in the June 30, 2022 actuarial valuation. New unfunded liabilities can emerge in future years due to assumption or method changes, changes in plan provisions , and actuarial experience different than assumed. Making an ADP illustrated above for the indicated number of years wi ll not result in a plan that is exactly 100% funded in the indicated number of years. Valuation results will vary from one year to the next and can diverge significantly from projections over a period of several years.

CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Bakersfield
CalPERS ID: 3050192847

Funded Status – Funding Policy Basis

The table below provides information on the current funded status of the plan under the funding policy . The funded status for this purpose is based on the market value of assets relative to the funding target produced by the entry age actuarial cost method and actuarial assumptions adopted by the board. The actuarial cost method allocates the total expected cost of a member’s projected benefit ( Present Value of Benefits ) to individual years of service (the Normal Cost). The value of the projected benefit that is not allocated to future service is referred to as the Accrued Liability and is the plan’s funding target on the valuation date. The Unfunded Accrued Liability (UAL) equals the funding target minus the assets. The UAL is an absolute measure of funded status and can be viewed as employer debt. The funded ratio equals the assets divided by the funding target. The funded ratio is a relative measure of the funded status and allows for comparisons between plans of different sizes.

A funded ratio of 100% (UAL of $0) impl ies that the funding of the plan is on target and that future contributions equal to the normal cost of the active plan members will be sufficient to fully fund all retirement benefits if future experience matches the actuarial assumptions. A funded ratio of less than 100% (positive UAL) implies that in addition to normal costs, payments toward the UAL will be required . Plans with a funded ratio greater than 100% have a negative UAL (or surplus) but are required under current law to continue contributing the normal cost in most cases, preserving the surplus for future contingencies.

Calculations for the funding target reflect the expected long -term investment return of 6.8%. If it were known on the valuation date that future investment returns will average something greater/less than the expected return, calculated normal costs and accrued liabilities provided in this report would be less/greater than the results shown. Therefore, for example, if actual average future returns are less than the expected return, calculated normal costs and UAL contributions will not be sufficient to fully fund all retirement benefits. Under this scenario, required future normal cost contributions will need to increase from those provided in this report, and the plan will develop unfunded liabilities that will also add to required future contributions. For illustrativ e purposes, funded stat uses based on a 1% lower and higher average future investment return (discount rate) are as follows:

The “Risk Analysis” section of the report provides additional information regarding the sensitivity of valuation results to the expected investment return and other factors. Also provided in that section are measures of funded status that are appropriate for assessing the sufficiency of plan assets to cover estimated termination liabilities.

June 30, 2021 June 30, 2022

1. Present Value of Benefits $775,810,046 $806,946,621

2. Entry Age Accrued Liability 665,362,425 689,195,155

3. Market Value of Assets (MVA) 525,737,308 477,892,198

4. Unfunded Accrued Liability (UAL) [(2) – (3)] $139,625,117 $211,302,957

5. Funded Ratio [(3) / (2)] 79.0% 69.3%
1% Lower
Average Return
Current
Assumption
1% Higher
Average Return
Discount Rate 5.8% 6.8% 7.8%

1. Present Value of Benefits $947,114,100 $806,946,621 $698,104,834

2. Entry Age Accrued Liability 782,082,854 689,195,155 612,582,994

3. Market Value of Assets (MVA) 477,892,198 477,892,198 477,892,198

4. Unfunded Accrued Liability (UAL) [(2) – (3)] $304,190,656 $211,302,957 $134,690,796

5. Funded Ratio [(3) / (2)] 61.1% 69.3% 78.0%

CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Bakersfield
CalPERS ID: 3050192847

Projected Employer Contributions

The table below shows the required and projected employer contributions (before cost sharing) for the next six fiscal years. The projection assumes that all actuarial assumptions will be realized and that no further changes to assumptions, contributions, benefits, or funding will occur during the projection period. In particular, the investment return beginning with FY 2022-23 is assumed to be 6.80% per year, net of investment and administrative expenses. The projected normal cost percentages below reflect that the normal cost is expected to continue to decline over time as new employees are hired into lower cost benefit tiers. Future contribution requirements may differ significantly from those shown below. The actual long-term cost of the plan will depend on the actual benefits and expenses paid and the actual investment experience of the fund.

Required
Contribution
Projected Future Employer Contributions
(Assumes 6.80% Return for Fiscal Year 2022-23 and Beyond) Fiscal Year 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 Normal Cost % 10.84% 10.6% 10.4% 10.2% 10.1% 9.9%
UAL Payment $17,805,119 $18,054,000 $19,489,000 $20,549,000 $22,902,000 $23,232,000

Total as a % of Payroll* 34.89% 34.4% 35.3% 35.8% 37.8% 37.2% Projected Payroll $74,023,108 $76,095,754 $78,226,436 $80,416,776 $82,668,446 $84,983,162

*Illustrative only and based on the projected payroll show n.

For ongoing plans, investment gains and losses are amortized using a 5-year ramp up. For more information, please see “Amortization of Unfunded Actuarial Accrued Liability” under “Actuarial Methods” in Appendix A.

This method phases in the impact of the change in UAL over a 5-year period in order to reduce employer cost volatility from year to year. As a result of this methodology, dramatic changes in the required employ er contributions in any one year are less likely. However, required contributions can change gradually and significantly over the next fiv e years. In years when there is a large investment loss , the relatively small amortization payments during the ramp up period could result in contributions that are less than interest on the UAL (i.e. negative amortization) while the contribution impact of the increase in the UAL is phased in.

For projected contributions under alternate investment return scenarios, please see the “Fut ure Investment Return Scenarios” in the “Risk Analysis” section. Our online pension plan projection tool, Pension Outlook, is available in the Employers section of the CalPERS website. Pension Outlook can help plan and budget pension costs under various sc enarios.

CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Bakersfield
CalPERS ID: 3050192847

Cost

Actuarial Determination of Plan Cost

Contributions to fund the plan are comprised of two components:

• Normal Cost, expressed as a percentage of total active payroll • Amortization of the Unfunded Accrued Liability (UAL), expressed as a dollar amount

For fiscal years prior to 2017-18, the Amortization of UAL component was expressed as a percentage of total active payroll. Starting with FY 2017-18, the Amortization of UAL component is expressed as a dollar amount and invoiced on a monthly basis. There is an option to prepay this amount during July of each fiscal year.

The Normal Cost component is expressed as a percentage of active payroll with employer and employ ee contributions payable as part of the regular payroll reporting process.

The determination of both components requires complex actuarial calculations. The calculations are based on a set of actuarial assumptions which can be divided into two categories:

• Demographic assumptions (e.g., mortality rates, retirement rates, employment termination rates, disability rates)
• Economic assumptions (e.g., future investment earnings, inflation, salary growth rates)

These assumptions reflect CalPERS’ best estimate of future experience of the plan and are long term in nature.

We recognize that all assumptions will not be realized in any given year. For example, the investment earnings at CalPERS have averaged 6.9% over the 20 years ending June 30, 2022 , yet individual fiscal year returns have ranged from -23.6% to +21.3%. In addition, CalPERS reviews all actuarial assumptions by conducting in-depth experience studies every four years, with the most recent experience study completed in 2021.

CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Bakersfield
CalPERS ID: 3050192847

Changes Since the Prior Year’s Valuation

Benefits

The standard actuarial practice at CalPERS is to recognize mandated legislative benefit changes in the first annual valuation following the effective date of the legislation. Voluntary benefit changes by plan amendment are generally included in the first valuation that is prepared after the amendment becomes effective, even if the valuation date is prior to the effective date of the amendment.

This valuation generally reflects plan changes by amendments effective before the date of the report. Please refer to the “Plan’s Major Benefit Options” and Appendix B for a summary of the plan provisions used in this valuation. The effect of any mandate d benefit changes or plan amendments on the unfunded liability is shown in the “(Gain) / Loss Analysis 6/30/21 – 6/30/22” and the effect on the employer contribution is sho wn in the “Reconciliation of Required Employer Contributions.” It should be noted that no change in liability or contribution is shown for any plan changes which were already included in the prior year’s valuation.

In 2022, SB 1168 increased the standard retiree lump sum death benefit from $500 to $2,000 for any death occurring on or after July 1, 2023. The impact, if any, is included in plan changes in the “(Gain) / Loss Analy sis 6/30/21 – 6/30/22” and the “Reconciliation of Required Employer Contribution s.”

Actuarial Methods and Assumptions

There are no significant changes to the actuarial methods or assumptions for the June 30, 2022 actuarial valuation.

Subsequent Events

This actuarial valuation report reflects fund investment return through June 30, 2022 and statutory/regulatory changes and board actions through January 2023.

During the time period between the valuation date and the publication of this report, inflation has been significantly higher than the expected inflation of 2.3% per annum. Since inflation influences cost -of-liv ing increases for retirees and beneficiaries and active member pay increases, higher inflation is likely to put at least some upward pressure on contribution requirements and downward pressure on the funded status in the June 30, 2023 valuation. The actual impact of higher inflation on future valuation results will depend on, among other factors, how long higher inflation persists. At this time, we continue to believe the long-term inflation assumption of 2.3% is appropriate.

To the best of our knowledge, there have been no other subsequent events that could materially affect current or future certifications rendered in this report.

Assets

• Reconciliation of the Market Value of Assets

• Asset Allocation

• CalPERS History of Investment Returns

CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Bakersfield
CalPERS ID: 3050192847

Reconciliation of the Market Value of Assets

1. Market Value of Assets as of 6/30/21 including Receivables $525,737,308

2. Change in Receivables for Service Buybacks 25,629

3. Employer Contributions 20,877,107

4. Employee Contributions 4,734,327

5. Benefit Payments to Retirees and Beneficiaries (33,074,853)

6. Refunds (442,438)

7. Transfers 0

8. Service Credit Purchase (SCP) Payments and Interest 160,364

9. Administrative Expenses (412,241)

10. Miscellaneous Adjustments 0

11. Investment Return (Net of Investment Expenses) (39,713,005)

12. Market Value of Assets as of 6/30/22 including Receivables $477,892,198

CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Bakersfield
CalPERS ID: 3050192847

Asset Allocation

CalPERS adheres to an Asset Allocation Strategy which establishes asset class allocation policy targets and ranges and manages those asset class allocations within their policy ranges. CalPERS Investment Belief No. 6 recognizes that strategic asset allocation is the dominant determinant of portfolio risk and return.

The asset allocation shown below reflect s the allocation of the Public Employees’ Retirement Fund (PERF) in its entirety. The assets for City of Bakersfield Miscellaneous Plan are a subset of the PERF and are invested accordingly.

On November 17, 2021, the board adopted changes to the strategic asset allocation . The new allocation was effective July 1, 2022, and is shown below , expressed as a percentage of total assets.

Strategic Asset Allocation Policy Targets

Asset Class

Actual
Allocation
9/30/2022
Policy Target
Allocation
effective
7/1/2022
Global Public Equity
Market Capitalization Weighted 33.7% 30.0%
Factor Weighted 12.6% 12.0%
Private Equity 11.6% 13.0%
Income
Treasuries 3.9% 5.0%
Mortgage-backed Securities 5.6% 5.0%
Investment Grade Corporates 5.8% 10.0%
High Yield Bonds 4.6% 5.0%
Emerging Market Sovereign Bonds 2.1% 5.0%
Total Fund Income 1.5% -
Real Assets 17.1% 15.0%
Private Debt 1.8% 5.0%
Other Trust Level 3.8% -
Leverage
Strategic (0.3%) (5.0%)
Active (3.8%) -
Total Fund 100.00% 100.0%

CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Bakersfield
CalPERS ID: 3050192847

CalPERS History of Investment Returns

The following is a chart with the 20 -year historical annual returns of the PERF for each fiscal year ending on June 30 as reported by the Investment Office. Investment returns reported are net of investment expenses but without reduction for administrative expenses. The assumed rate of return, however, is net of both investment and administrative expenses. Also, the Investment Office uses a three-month lag on private equity and real assets for investment performance reporting purposes. This can lead to a timing difference in the returns below and those used for financial reporting purposes. The investment gain or loss calculation in this report relies on final assets that have been au dited and are appropriate for financial reporting. Because of these differences, the effective investment return for funding purposes can be higher or lower than the return reported by the Investment Office shown here.

* As reported by the Investment Office w ith a 3-month lag on private equity and real assets.

The table below shows annualized investment returns of the PERF for various time periods ending on June 30, 2022 (figures reported are net of investment expenses but without reduction for administrative expenses).

These returns are the annual rates that if compounded over the indicated number of years would equate to the actual time-weighted investment performance of the PERF. It should be recognized that in any given year the rate of return is volatile. The portfolio has an expected volatility of 12. 1% per year based on the most recent Asset Liability Management study. The realized volatility is a measure of the ris k of the portfolio expressed as the standard deviation of the fund’s total monthly return distribution, expressed as an annual percentage. Due to their volatile nature, when looking at investment returns, it is more instructive to look at returns over longer time horizons.

History of CalPERS Compound Annual Rates of Return and Volatilities 1 year 5 year 10 year 20 year 30 year
Compound Annual Return -6.1% 6.7% 7.7% 6.9% 7.7%
Realized Volatility – 8.3% 7.1% 8.5% 8.6%

Liabilities and Contributions

• Development of Accrued and Unfunded Liabilities

• (Gain) / Loss Analysis 6/30/ 21 - 6/30/22

• Schedule of Amortization Bases

• Amortization Schedule and Alternatives

• Reconciliation of Required Employer Contributions

• Employer Contribution History

• Funding History

• Normal Cost by Benefit Group

• PEPRA Member Contribution Rates

CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Bakersfield
CalPERS ID: 3050192847

Development of Accrued and Unfunded Liabilities

June 30, 2021 June 30, 2022

1. Present Value of Projected Benefits
a) Active Members $333,790,136 $342,069 ,997
b) Transferred Members 18,196,282 21,636,586
c) Separated Members 13,327,730 15,665,638
d) Members and Beneficiaries Receiving Payments 410,495,898 427,574,400 e) Total $775,810,046 $806,946,621

2. Present Value of Future Employer Normal Costs $65,859,901 $66,070,218

3. Present Value of Future Employee Contributions $44,587,720 $51,681,248

4. Entry Age Accrued Liability
a) Active Members [(1a) - (2) - (3)] $223,342,515 $224,318,531 b) Transferred Members (1b) 18,196,282 21,636,586
c) Separated Members (1c) 13,327,730 15,665,638
d) Members and Beneficiaries Receiving Payments (1d) 410,495,898 427,574,400 e) Total $665,362,425 $689,195,155

5. Market Value of Assets (MVA) $525,737,308 $477,892,198

6. Unfunded Accrued Liability (UAL) [(4e) - (5)] $139,625,117 $211,302,957

7. Funded Ratio [(5) / (4e)] 79.0% 69.3%

CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Bakersfield
CalPERS ID: 3050192847

(Gain)/Loss Analysis 6/30/ 21 – 6/30/22

To calculate the cost requirements of the plan, assumptions are made about future events that affect the amount and timing of benefits to be paid and assets to be accumulated. Each year , actual experience is compared to the expected experience based on the actuarial assumptions. This results in actuarial gains or losse s, as shown below.

1. Total (Gain)/Loss for the Year
a) Unfunded Accrued Liability (UAL) as of 6/30/21 $139,625,117 b) Expected payment on the UAL during 2021-22 13,267,669 c) Interest through 6/30/22 [.068 x (1a) - ((1.068)½ - 1) x (1b)] 9,050,826 d) Expected UAL before all other changes [(1a) - (1b) + (1c)] 135,408,274 e) Change due to plan changes 1 649,034
f) Change due to AL Significant Increase 0
g) Change due to assumption change 0
h) Change due to method change 0
i) Change due to discount rate change with Funding Risk Mitigation 0 j) Expected UAL after all other changes [(1d) + (1e) + (1f) + (1g) + (1h) + (1i)] 136,057,308 k) Actual UAL as of 6/30/22 211,302,957
l) Total (Gain)/Loss for 2021-22 [(1k) - (1j)] $75,245,649

2. Investment (Gain)/Loss for the Year
a) Market Value of Assets as of 6/30/21 $525,737,308
b) Prior fiscal year receivables (619,884)
c) Current fiscal year receivables 645,513
d) Contributions received 25,611,434
e) Benefits and refunds paid (33,517,292)
f) Transfers, SCP payments and interest, and miscellaneous adjustments 160,364 g) Expected return at 6.8% per year 35,935,268
h) Expected assets as of 6/30/22 [(2a) + (2b) + (2c) + (2d) + (2e) + (2f) + (2g)] 553,952,712 i) Actual Market Value of Assets as of 6/30/22 477,892,198 j) Investment (Gain)/Loss [(2h) - (2i)] $76,060,514

3. Non-Investment (Gain)/Loss for the Year
a) Total (Gain)/Loss ( 1l) $75,245,649
b) Investment (Gain)/Loss ( 2j) 76,060,514
c) Non-Investment (Gain)/Loss [(3a) - (3b)] ($814,865)

1 Includes the effect, if any, of SB 1168, w hich increased the standard post-retirement lump sum death benefit from $500 to $2,000 for deaths occurring on or after July 1, 2023.

CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Bakersfield
CalPERS ID: 3050192847

Schedule of Amortization Bases

Below is the schedule of the plan’s amortization bases. Note that there is a two-year lag between the valuation date and the start of the contribution year.

• The assets, liabilities, and funded status of the plan are measured as of the valuation date: June 30, 2022. • The required employer contributions determined by the valuation are for the fiscal year beginning two years after the valuation date: FY 2024-25.

This two-year lag is necessary due to the amount of time needed to extract and test the membership and financial data, and the need to provide public agencies with their required employer contribution well in advance of the start of the fiscal year.

The Unfunded Accrued Liability (UAL) is used to determine the employer contribution and therefore must be rolled forward two years from the valuation date to the first day of the fiscal year for which the contribution is being determined. The UAL is rolled forward each year by subtracting the expected payment on the UAL for the fiscal year and adjusting for interest. The expected payment on the UAL for a fiscal year is equal to the Expected Employer Contribution for the fiscal year minus the Expected Normal Cost for the year. The Employer Contribution for the first fiscal year is determined by the actuarial valuation two years ago and the contribution for the second year is from the actuarial valuation one year ago. Additional discretionary payments are reflected in the Expected Payments column in the fiscal year they were made by the agency.

Reason for Base
Date
Est.

Ramp
Level
2024-25
Ramp
Shape
Escala-
tion
Rate
Amort.

Period
Balance
6/30/22
Expected
Payment
2022-23
Balance
6/30/23
Expected
Payment
2023-24
Balance
6/30/24
Minimum
Required
Payment
2024-25
Assumption Change 6/30/07 No Ramp 2.80% 1 2,891,650 1,040,016 2,013,487 1,060,265 1,054,683 1,089,953 Method Change 6/30/07 No Ramp 2.80% 2 (452,444) (124,474) (354,574) (126,835) (247,609) (130,386) Benefit Change 6/30/08 No Ramp 2.80% 5 853,246 142,210 764,301 144,518 666,923 148,564 Assumption Change 6/30/09 No Ramp 2.80% 7 11,337,926 1,527,154 10,530,682 1,548,873 9,646,100 1,592,241 Special (Gain)/Loss 6/30/09 No Ramp 2.80% 17 16,283,460 1,248,239 16,100,754 1,253,978 15,899,693 1,289,090 Special (Gain)/Loss 6/30/10 No Ramp 2.80% 18 (672,463) (49,842) (666,682) (50,027) (660,316) (51,428) Assumption Change 6/30/11 No Ramp 2.80% 9 7,287,196 834,003 6,920,833 844,186 6,519,033 867,824 Special (Gain)/Loss 6/30/11 No Ramp 2.80% 19 (2,313,618) (166,198) (2,299,188) (166,668) (2,283,291) (171,335) (Gain)/Loss 6/30/12 No Ramp 2.80% 20 21,682,241 1,512,766 21,593,279 1,515,745 21,495,189 1,558,186 Payment (Gain)/Loss 6/30/12 No Ramp 2.80% 20 32,422 2,262 32,289 2,267 32,142 2,330 (Gain)/Loss 6/30/13 100% Up/Dow n 2.80% 21 66,138,211 4,756,829 65,719,708 4,770,089 65,259,043 4,903,651 (Gain)/Loss 6/30/14 100% Up/Dow n 2.80% 22 (42,177,200) (2,946,059) (42,000,672) (2,951,747) (41,806,262) (3,034,395) Assumption Change 6/30/14 100% Up/Dow n 2.80% 12 31,091,741 3,332,125 29,762,425 3,369,050 28,304,556 3,463,383 (Gain)/Loss 6/30/15 100% Up/Dow n 2.80% 23 22,655,589 1,539,863 22,604,812 1,541,538 22,548,851 1,584,701 (Gain)/Loss 6/30/16 100% Up/Dow n 2.80% 24 22,898,513 1,517,119 22,887,759 1,517,530 22,875,849 1,560,021 Assumption Change 6/30/16 100% Up/Dow n 2.80% 14 10,335,387 984,695 10,020,569 993,732 9,675,004 1,021,556 (Gain)/Loss 6/30/17 100% Up/Dow n 2.80% 25 (24,275,240) (1,272,119) (24,611,297) (1,589,363) (24,642,353) (1,633,865) Assumption Change 6/30/17 100% Up/Dow n 2.80% 15 12,079,074 890,522 11,980,149 1,122,394 11,634,871 1,153,821 Assumption Change 6/30/18 100% Up/Dow n 2.80% 16 20,153,306 1,099,336 20,387,632 1,476,282 20,248,341 1,897,023 Method Change 6/30/18 100% Up/Dow n 2.80% 16 4,860,801 265,150 4,917,319 356,066 4,883,724 457,545

CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Bakersfield
CalPERS ID: 3050192847

Schedule of Amortization Bases (continued)
Reason for Base
Date
Est.

Ramp
Level
2024-25
Ramp
Shape
Escala-
tion
Rate
Amort.

Period
Balance
6/30/22
Expected
Payment
2022-23
Balance
6/30/23
Expected
Payment
2023-24
Balance
6/30/24
Minimum
Required
Payment
2024-25
(Gain)/Loss 6/30/18 100% Up/Dow n 2.80% 26 (8,619,551) (339,379) (8,854,952) (451,808) (8,990,172) (580,573) Investment (Gain)/Loss 6/30/19 80% Up Only 0.00% 17 2,635,230 110,228 2,700,512 162,372 2,716,345 216,497 Non-Investment (Gain)/Loss 6/30/19 No Ramp 0.00% 17 (1,539,138) (144,245) (1,494,731) (141,718) (1,449,916) (141,718) Investment (Gain)/Loss 6/30/20 60% Up Only 0.00% 18 11,761,822 257,642 12,295,368 505,429 12,609,122 758,143 Non-Investment (Gain)/Loss 6/30/20 No Ramp 0.00% 18 3,673,059 335,806 3,575,791 329,769 3,478,148 329,769 Assumption Change 6/30/21 No Ramp 0.00% 19 5,204,626 (775,727) 6,360,209 571,933 6,201,644 571,933 Net Investment (Gain) 6/30/21 40% Up Only 0.00% 19 (55,677,593) 0 (59,463,669) (1,278,153) (62,186,303) (2,556,307) Non-Investment (Gain)/Loss 6/30/21 No Ramp 0.00% 19 (2,189,364) 0 (2,338,241) (210,263) (2,279,947) (210,263) Risk Mitigation 6/30/21 No Ramp 0.00% 0 17,221,707 (548,358) 18,959,479 19,593,500 0 0 Risk Mitigation Offset 6/30/21 No Ramp 0.00% 0 (17,752,322) 0 (18,959,479) (19,593,500) 0 0 Benefit Change 6/30/22 No Ramp 0.00% 20 649,034 (7,005) 700,408 (7,201) 755,478 67,935 Investment (Gain)/Loss 6/30/22 20% Up Only 0.00% 20 76,060,514 0 81,232,629 0 86,756,448 1,864,803 Non-Investment (Gain)/Loss 6/30/22 No Ramp 0.00% 20 (814,865) 0 (870,276) 0 (929,455) (83,580) Total 211,302,957 15,022,559 210,146,633 16,112,233 207,785,563 17,805,119

CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Bakersfield
CalPERS ID: 3050192847

Amortization Schedule and Alternatives

The amortization schedule on the previous page shows the minimum contributions required according to the CalPERS amortization policy. Many agencies have expressed a desire for a more stable pattern of payments or have indicated interest in paying off the unfunded accrued liabilities more quickly than required. As such, we have provided alternative amortization schedules to help analyze the current amortization schedule and illustrate the potential savings of accelerating unfunded liability payments.

Shown on the following page are future year amortization payments based on 1) the current amortization schedule reflecting the individual bases and remaining periods shown on the previous page, and 2) alternativ e “fresh start” amortization schedules using two sample periods that would both result in interest savings relativ e to the current amortization schedule. To initiate a fresh start, please contact the plan actuary.

The current amortization schedule typically contains both positive and negative bases. Positive bases result from plan changes, assumption changes, method changes or plan experience that increase unfunded liability .

Negative bases result from plan changes, assumptio n changes, method changes, or plan experience that decrease unfunded liability. The combination of positive and negative bases within an amortization schedule can result in unusual or problematic circumstances in future years, such as:

• When a negative payment would be required on a positive unfunded actuarial liability; or • When the payment would completely amortize the total unfunded liability in a very short time period, and results in a large change in the employer contribution requirement.

In any year when one of the above scenarios occurs, the actuary will consider corrective action such as replacing the existing unfunded liability bases with a single “fresh start” base and amortizing it over an appropriate period.

The current amortization schedule o n the following page may appear to show that, based on the current amortization bases, one of the above scenarios will occur at some point in the future. It is impossible to know today whether such a scenario will in fact arise since there will be addition al bases added to the amortization schedule in each future year. Should such a scenario arise in any future year, the actuary will take appropriate action based on guidelines in the CalPERS amortization policy.

CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Bakersfield
CalPERS ID: 3050192847

Amortization Schedule and Alternatives (continued)

Alternative Schedules
Current Amortization
Schedule 15 Year Amortization 10 Year Amortization
Date Balance Payment Balance Payment Balance Payment
6/30/2024 207,785,563 17,805,119 207,785,563 21,797,468 207,785,563 28,362,609 6/30/2025 203,514,445 18,053,799 199,388,587 21,797,468 192,603,902 28,362,609 6/30/2026 198,695,894 19,488,554 190,420,617 21,797,468 176,389,888 28,362,609 6/30/2027 192,066,949 20,549,484 180,842,825 21,797,468 159,073,321 28,362,609 6/30/2028 183,890,825 22,901,848 170,613,743 21,797,467 140,579,228 28,362,609 6/30/2029 172,727,695 23,232,496 159,689,085 21,797,468 120,827,537 28,362,609 6/30/2030 160,463,768 23,742,960 148,021,549 21,797,468 99,732,731 28,362,609 6/30/2031 146,838,360 22,335,932 135,560,620 21,797,467 77,203,478 28,362,608 6/30/2032 133,740,502 21,957,367 122,252,349 21,797,467 53,142,237 28,362,609 6/30/2033 120,143,215 20,431,341 108,039,116 21,797,468 27,444,830 28,362,609 6/30/2034 107,198,372 19,681,104 92,859,382 21,797,467 6/30/2035 94,148,606 18,564,081 76,647,427 21,797,468 6/30/2036 81,365,832 16,717,067 59,333,058 21,797,467 6/30/2037 69,622,607 15,747,819 40,841,313 21,797,468 6/30/2038 58,082,506 14,715,115 21,092,128 21,797,467 6/30/2039 46,824,917 13,925,316
6/30/2040 35,618,024 13,442,643
6/30/2041 24,147,871 9,920,361
6/30/2042 15,537,820 7,938,325
6/30/2043 8,390,602 8,671,191
6/30/2044
6/30/2045
6/30/2046
6/30/2047
6/30/2048
6/30/2049

Total 349,821,922 326,962,014 283,626,089
Interest Paid 142,036,359 119,176,451 75,840,526
Estimated Savings 22,859,908 66,195,833

CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Bakersfield
CalPERS ID: 3050192847

Reconciliation of Required Employer Contributions

Normal Cost (% of Payroll)

1. For Period 7/1/23 – 6/30/24
a) Employer Normal Cost 11.14%
b) Employee contribution 7.67%
c) Total Normal Cost 18.81%

2. Changes since the prior year annual valuation
a) Effect of demographic experience (0.36%)
b) Effect of plan changes 0.01%
c) Effect of discount rate change due to Funding Risk Mitigation 0.00% d) Effect of assumption changes 0.00%
e) Effect of method changes 0.00%
f) Net effect of the changes above [sum of (a) through (e)] (0.35%)

3. For Period 7/1/24 – 6/30/25
a) Employer Normal Cost 10.84%
b) Employee contribution 7.62%
c) Total Normal Cost 18.46%

Employer Normal Cost Change [(3a) – (1a)] (0.30%)
Employee Contribution Change [(3b) – (1b)] (0.05%)

Unfunded Liability Contribution ($)

1. For Period 7/1/23 – 6/30/24 16,119,434

2. Changes since the prior year annual valuation
a) Effect of adjustments to prior year’s amortization schedule 0 b) Effect of elimination of amortization bases 0
c) Effect of progression of amortization bases 1 (163,473) d) Effect of investment (gain) /loss during prior year2 1,864,803 e) Effect of non-investment (gain)/loss during prior year (83,580) f) Effect of re-amortizing existing bases due to Funding Risk Mitigation 0 g) Effect of Golden Handshake 0
h) Effect of plan changes 67,935
i) Effect of AL Significant Increase (Government Code section 20791) 0 j) Effect of assumption changes 0
k) Effect of adjustments to the amortization schedule (e.g., Fresh Start) 0 l) Effect of method change 0
m) Net effect of the changes above [sum of (a) through (l)] 1,685,685

3. For Period 7/1/24 – 6/30/25 [(1) + (2m)] 17,805,119

The amounts shown for the period 7/1/ 23 – 6/30/24 may be different if a prepayment of unfunded actuarial liability is made or a plan change became effective after the prior year’s actuarial valuation was performed.

1 Includes scheduled escalation in individual amortization base payments due to the 5 -year ramp and payroll growth assumption used in the pre-2019 amortization policy.
2 The unfunded liability contribution for the investment (gain)/loss during the year prior to the valuation date is 20% of the “full” annual requirement due to the 5 -year ramp. Increases to this amount that occur during the ramp period w ill be included in line c) for each of the next four years.

CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Bakersfield
CalPERS ID: 3050192847

Employer Contribution History

The table below provides a recent history of the required and discretionary employer contributions for the plan.

The required amounts are based on the actuarial valuation from two years prior without subsequent adjustments, if any . Additional discretionary payments before July 1, 201 8 or after June 30, 2023 are not included.

Fiscal
Year
Employer
Normal Cost

Unfunded Rate
Unfunded Liability
Payment ($)
Additional Discretionary
Payments
2015 - 16 9.102% 10.341% N/A N/A
2016 - 17 9.186% 11.376% N/A N/A
2017 - 18 9.122% N/A 8,289,188 N/A
2018 - 19 9.449% N/A 10,108,184 0
2019 - 20 10.218% N/A 12,009,696 0
2020 - 21 10.726% N/A 13,253,925 0
2021 - 22 10.23% N/A 14,555,689 0
2022 - 23 10.07% N/A 16,353,649 0
2023 - 24 11.14% N/A 16,119,434
2024 - 25 10.84% N/A 17,805,119

Funding History

The table below shows the recent history of actuarial accrued liability, market value of assets, unfunded accrued liability, funded ratio and annual covered payroll.

[]

Valuation
Date

Accrued
Liability
(AL)
Market Value of
Assets (MVA)
Unfunded
Accrued
Liability (UAL)

Funded
Ratio

Annual
Covered
Payroll
6/30/2013 $422,087,276 $307,949,621 $114,137,655 73.0% $51,509,037 6/30/2014 470,140,117 356,698,855 113,441,262 75.9% 55,403,517 6/30/2015 491,765,392 358,310,500 133,454,892 72.9% 55,182,026 6/30/2016 515,016,683 352,860,476 162,156,207 68.5% 54,746,272 6/30/2017 540,033,380 382,764,885 157,268,495 70.9% 53,821,324 6/30/2018 579,061,879 405,562,691 173,499,188 70.0% 54,437,421 6/30/2019 599,878,791 422,798,896 177,079,895 70.5% 54,091,556 6/30/2020 625,088,082 434,071,678 191,016,404 69.4% 57,843,959 6/30/2021 665,362,425 525,737,308 139,625,117 79.0% 63,279,664 6/30/2022 689,195,155 477,892,198 211,302,957 69.3% 68,137,779

CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Bakersfield
CalPERS ID: 3050192847

Normal Cost by Benefit Group

The table below displays the Total Normal Cost broken out by benefit group for FY 2024-25. The Total Normal Cost is the annual cost of service accrual for the fiscal year for active employees and can be viewed as the long-term contribution rate for the benefits contracted. Generally, the normal c ost for a benefit group subject to more generous benefit provisions will exceed the normal cost for a group with less generous benefits.

However, based on the characteristics of the members (particularly when the number of actives is small), this may not be the case. Future measurements of the Total Normal Cost for each group may differ significantly from the current values due to such factors as: changes in the demographics of the group, changes in economic and demographic assumptions, changes in plan bene fits or applicable law.

Plan
Identifier Benefit Group Name
Total Normal
Cost
FY 2024-25
Number of
Actives
Payroll on
6/30/2022
24 Miscellaneous First Level 22.01% 386 $28,111,998
26012 Miscellaneous PEPRA Level 14.82% 666 $33,849,173 30162 Miscellaneous Second Level 22.58% 88 $6,176,608 Plan Total 18.46% 1,140 $68,137,779

Note that if a Benefit Group above has multiple bargaining units, each of which has separately contracted for different benefits such as Employer Paid Member Contributions, then the Normal Cost shown for the respective benefit level does not reflect those differences. Additionally, if a Second Level Benefit Group amended to the same benefit formula as a First Level Benefit Group, their Normal Costs may be dissimilar due to demographic or other population differences. For questions in these situations, please contact the plan actuary.

CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Bakersfield
CalPERS ID: 3050192847

PEPRA Member Contribution Rates

The California Public Employees’ Pension Reform Act of 2013 (“PEPRA”) established new benefit formulas, final compensation period, and contribution requirements for “new” employees (generally those first hired into a CalPERS -covered position on or after January 1, 2013). In accordance with Government Code section 7522.30(b), “new members … shall have an initial contribution rate of at l east 50% of the normal cost rate.” The normal cost for the plan is dependent on the benefit levels, actuarial assumptions , and demographics of the plan, particularly members’ entry age into the plan. Should the total normal cost of the plan change by more than 1% from the base total normal cost established for the plan, the new member rate shall be 50% of the new normal cost rounded to the nearest quarter percent .

The table below shows the determination of the PEPRA member contribution rates effective July 1, 2024, based on 50% of the total normal cost rate for each respective plan as of the June 30, 2022 valuation.

Basis for Current Rate Rates Effective July 1, 2024 Plan
Identifier Benefit Group Name
Total
Normal
Cost
Member
Rate
Total
Normal
Cost Change
Change
Needed
Member
Rate
26012 Miscellaneous PEPRA
Level 14.540% 7.25% 14.82% 0.280% No 7.25%

For purposes of setting member rates, it is preferable to determine total normal cost using a large active population so that the rate remains relatively stable. While each CalPERS non -pooled plan has a sufficiently large active population for this purpose, the PEPRA active popul ation by itself may not be sufficiently large.

The total PEPRA normal cost will be determined based on the plan’s PEPRA membership only if the number of members covered under the PEPRA formula meets either:

1. 50% of the active population, or

2. 25% of the active population and 100 or more PEPRA members

Until one of these conditions is met, the plan’s total PEPRA normal cost will be determined using the entire active plan population (both PEPRA and Classic) based on the PEPRA benefit provisions. For this reason, the PEPRA member contribution rate determined in the table above may not equal 50% of the total normal cost of the PEPRA group shown on the “Normal Cost by Benefit Group” page.

Risk Analysis

• Future Investment Return Scenarios

• Discount Rate Sensitivity

• Mortality Rate Sensitivity

• Maturity Measures

• Maturity Measures History

• Funded Status – Termination Basis

CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Bakersfield
CalPERS ID: 3050192847

Future Investment Return Scenarios

Analysis using the investment return scenarios from the Asset Liability Management process completed in 2021 was performed to determine the effects of various future investment returns on required employ er contributions. The projections below reflect the impact of the CalPERS Funding Risk Mitigation policy . The projected normal cost rates reflect that the rates are anticipated to decline over time as new employees are hired into lower -cost benefit tiers. The projections also assume that all other actuarial assumptions will be realized and that no further changes in assumptions, contributions, benefits, or funding will occur.

The first table shows projected contribution requirements if the fund were to earn either 3.0% or 10.8% annually. These alternate investment returns were chosen because 90% of long -term average returns are expected to fall between them over the 20-year period ending June 30, 2042.

Assumed Annual Return
FY 2022-23
through FY 2041-42
Projected Employer Contributions
FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30

3.0% (5th percentile)
Normal Cost Rate 10.6% 10.4% 10.2% 10.1% 9.9%
UAL Contribution $18,496,000 $20,822,000 $23,234,000 $27,405,000 $30,034,000

10.8% (95th percentile)
Normal Cost Rate 10.9% 10.9% 11.0% 11.1% 11.1%
UAL Contribution $17,638,000 $18,263,000 $18,080,000 $18,680,000 $16,747,000

Required contributions outside of this range are also possible. In particular, whereas it is unlikely that investment returns will average less than 3.0% or greater than 10.8% over a 20-year period, the likelihood of a single investment return less than 3.0% or greater than 10.8% in any given year is much greater. The following analysis illustrates the effect of an extreme, single year investment return.

The portfolio has an expected volatility (or standard deviation) of 12.0% per year. Accordingly, in any given year there is a 16% probability that the annual return will be -5.2% or less and a 2.5% probability that the annual return will be -17.2% or less. These returns represent one and two standard deviations below the expected return of 6.8%.

The following table shows the effect of a one or two standard deviation investment loss in FY 2022-23 on the FY 2025-26 contribution requirements. Note that a single-year investment gain or loss decreases or increases the required UAL contribution amount incrementally for each of the next five years, not just one, due to the 5- year ramp in the amortization policy. However, the contribution requirements beyond the first year are also impacted by investment returns beyond the first year. Historically, significant downturns in the market are often followed by higher than average returns. Such investment gains would offset the impact of these single year negative returns in years beyond FY 2025-26.

Assumed Annual Return for
Fiscal Year 2022-23
Required
Employer
Contributions
Projected
Employer
Contributions
FY 2024-25 FY 2025-26
(17.2% ) (2 standard deviation loss)
Normal Cost Rate 10.84% 10.6%
UAL Contribution $17,805,119 $20,844,000
(5.2% ) (1 standard deviation loss)
Normal Cost Rate 10.84% 10.6%
UAL Contribution $17,805,119 $19,449,000

• Without investment gains (returns higher than 6.8%) in year FY 2023-24 or later, projected contributions rates would continue to rise over the next four years due to the continued phase -in of the impact of the illustrated investment loss in FY 2022-23. • The Pension Outlook Tool can be used to model projected contributions for these scen arios bey ond FY 2025-26 as well as to model other investment return scenarios .

CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Bakersfield
CalPERS ID: 3050192847

Discount Rate Sensitivity

The discount rate assumption is calculated as the sum of the assumed real rate of return and the assumed annual price inflation, currently 4.5% and 2.3%, respectively. Changing either the price inflation assumption or the real rate of return assumption will change the discount rate. The sensitivity of the valuation results to the discount rate assumption depends on which component of the discount rate is changed. Shown below are various valuation results as of June 30, 2022 assuming alternate discount rates by changing the two components independently. Results are shown using the current discount rate of 6.8% as well as alternate discount rates of 5.8% and 7.8%. The rates of 5.8% and 7.8% were selected since they illustrate the impact of a 1.0% increase or decrease to the 6.8% assumption.

Sensitivity to the Real Rate of Return Assumption

As of June 30, 2022
1% Lower
Real Return Rate
Current
Assumptions
1% Higher
Real Return Rate
Discount Rate 5.8% 6.8% 7.8%
Price Inflation 2.3% 2.3% 2.3%
Real Rate of Return 3.5% 4.5% 5.5%
a) Total Normal Cost 23.70% 18.46% 14.55%
b) Accrued Liability $782,082,854 $689,195,155 $612,582,994 c) Market Value of Assets $477,892,198 $477,892,198 $477,892,198 d) Unfunded Liability/(Surplus) [(b) - (c)] $304,190,656 $211,302,957 $134,690,796 e) Funded Ratio 61.1% 69.3% 78.0%

Sensitivity to the Price Inflation Assumption

As of June 30, 2022
1% Lower
Price Inflation
Current
Assumptions
1% Higher
Price Inflation
Discount Rate 5.8% 6.8% 7.8%
Price Inflation 1.3% 2.3% 3.3%
Real Rate of Return 4.5% 4.5% 4.5%
a) Total Normal Cost 19.50% 18.46% 16.72%
b) Accrued Liability $712,299,192 $689,195,155 $635,209,593 c) Market Value of Assets $477,892,198 $477,892,198 $477,892,198 d) Unfunded Liability/(Surplus) [(b) - (c)] $234,406,994 $211,302,957 $157,317,395 e) Funded Ratio 67.1% 69.3% 75.2%

Mortality Rate Sensitivity

The following table looks at the change in the June 30, 2022 plan costs and funded status under two different longevity scenarios, namely assuming rates of post-retirement mortality are 10% lower or 10% higher than our current mortality assumptions adopted in 2021. This type of analysis highlights the impact on the plan of a change in the mortality assumption .

As of June 30, 2022
10% Lower
Mortality Rates
Current
Assumptions
10% Higher
Mortality Rates
a) Total Normal Cost 18.77% 18.46% 18.18%
b) Accrued Liability $703,815,316 $689,195,155 $675,753,829 c) Market Value of Assets $477,892,198 $477,892,198 $477,892,198 d) Unfunded Liability/(Surplus) [(b) - (c)] $225,923,118 $211,302,957 $197,861,631 e) Funded Ratio 67.9% 69.3% 70.7%

CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Bakersfield
CalPERS ID: 3050192847

Maturity Measures

As pension plans mature they become more sensitive to risks. Understanding plan maturity and how it affects the ability of a pension plan sponsor to tolerate risk is important in understanding how the pension plan is impacted by investment return volatility, other economic variables and changes in longevity or other demographic assumptions. One way to look at the maturity level of CalPERS and its plans is to look at the ratio of a plan’s retiree liability to its total liability. A pension plan in its infancy will have a very low ratio of retiree liability to total liability. As the plan matures, the ratio increases. A mature plan will often have a ratio above 60%-65%.

Ratio of Retiree Accrued Liability to
Total Accrued Liability June 30, 2021 June 30, 2022

1. Retiree Accrued Liability 410,495,898 427,574,400

2. Total Accrued Liability 665,362,425 689,195,155

3. Ratio of Retiree AL to Total AL [(1) / (2)] 62% 62%
Another measure of the maturity level of CalPERS and its plans is the ratio of actives to retirees, also called the support ratio. A pension plan in its infancy will have a very high ratio of active to retired members. As the plan matures and members retir e, the ratio declines. A mature plan will often have a ratio near or below one.

To calculate the support ratio for the rate plan, retirees and beneficiaries receiving a continuance are each counted as one, even though they may have only worked a portion of their careers as an active member of this rate plan. For this reason, the support ratio, while intuitive, may be less informative than the ratio of retiree liability to total accrued liability above.

For comparison, t he support ratio for all CalPERS public agency plans as of June 30, 2021, is 0.78 and was calculated consistently with how it is for the individual rate plan . Note that to calculate the support ratio for all public agency plans , a retiree with service from more than one CalPERS agency is counted as a retiree more than once.

Support Ratio June 30, 2021 June 30, 2022

1. Number of Actives 1,064 1,140

2. Number of Retirees 1,031 1,053

3. Support Ratio [(1) / (2)] 1.03 1.08

The actuarial calculations supplied in this communication are based on various assumptions about long -term demographic and economic behavior. Unless these assumptions (e.g., terminations, deaths, disabilities, retirements, salary growth, investment return) are exactly realized each year, there will be differences on a year-to-year basis. The year -to-year differences between actual experience and the assumptions are called actuarial gains and losses and serve to lower or raise required employer contributions from one year to the next. Therefore, employer contributions will inevitably fluctuate, especially due to the ups and downs of investment returns.

CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Bakersfield
CalPERS ID: 3050192847

Maturity Measures (continued)

Asset Volatility Ratio

Shown in the table below is the asset volatility ratio (AVR), which is the ratio of market value of assets to payroll. Plans that have a higher AVR experience more volatile employer contributions (as a percentage of payroll) due to invest ment return. For example, a plan with AVR of 8 may experience twice the contribution volatility due to investment return volatility than a plan with AVR of 4. It should be noted that this ratio is a measure of the current situation. It increases over time but generally tends to stabilize as a plan matures.

Liability Volatility Ratio

Also shown in the table below is the liability volatility ratio (LVR), which is the ratio of accrued liability to payroll.

Plans that have a higher LVR experience more volatil e employer contributions (as a percentage of payroll) due to changes in liability. For example, a plan with LVR of 8 is expected to have twice the contribution volatility of a plan with LVR of 4 when there is a change in accrued liability, such as when there is a change in actuarial assumptions . It should be noted that this ratio indicates a longer-term potential for contribution volatility, since the AVR, described above, will tend to move closer to the LVR as the funded ratio approaches 10 0%.

Contribution Volatility June 30, 2021 June 30, 2022

1. Market Value of Assets without Receivables $525,117,424 $477,246,685

2. Payroll 63,279,664 68,137,779

3. Asset Volatility Ratio (AVR) [(1) / (2)] 8.3 7.0

4. Accrued Liability $665,362,425 $689,195,155

5. Liability Volatility Ratio (LVR) [(4) / (2)] 10.5 10.1

Maturity Measures History

Valuation Date
Ratio of
Retiree Accrued Liability
to
Total Accrued Liability Support Ratio
Asset
Volatility
Ratio
Liability
Volatility
Ratio

6/30/2017

58%

1.06 7.1

10.0 6/30/2018

59%

1.04 7.4

10.6 6/30/2019

62%

0.99 7.8

11.1 6/30/2020

61%

0.99 7.5

10.8 6/30/2021

62%

1.03 8.3

10.5 6/30/2022

62%

1.08 7.0

10.1

CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Bakersfield
CalPERS ID: 3050192847

Funded Status – Termination Basis

The funded status measured on a termination basis is an estimate of the financial position of the plan had the contract with CalPERS been terminated as of June 30, 2022 . The accrued liability on a termination basis (termination liability) is calculated diff erently from the plan’s ongoing funding liability. For th e termination liability calculation, both compensation and service are frozen as of the valuation date and no future pay increases or service accruals are assumed. This measure of funded status is no t appropriate for assessing the need for future employer contributions in the case of an ongoing plan, that is, for an employer that continues to provide CalPERS retirement benefits to active employees. Unlike the actuarial cost method used for ongoing pla ns, the termination liability is the present value of the benefits earned through the valuation date.

A more conservative investment policy and asset allocation strategy was adopted by the board for the Terminated Agency Pool. The Terminated Agency Pool has limited funding sources since no future employ er contributions will be made. Therefore, expected benefit payments are secured by risk-free assets and benefit security for members is increased while limiting the funding risk. However, this asset allocati on has a lower expected rate of return than the remainder of the PERF and consequently, a lower discount rate assumption.

The lower discount rate for the Terminated Agency Pool results in higher liabilities for terminated plans.

The effective termination discount rate will depend on actual market rates of return for risk -free securities on the date of termination. As market discount rates are variable , the table below shows a range for the termination liability based on the lowest and highest interest rates observed during an approximate 19-month period from 12 months before the valuation date to seven months after.

Discount Rate: 1.75%
Price Inflation: 2.50%
Discount Rate: 4.50%
Price Inflation: 2.75%
Market
Value of
Assets (MVA)
Termination
Liability1,2
Funded
Ratio
Unfunded
Termination
Liability
Termination
Liability1,2
Funded
Ratio
Unfunded
Termination
Liability
$477,892,198 $1,359,061,969 35.2% $881,169,771 $876,387,406 54.5% $398,495,208

1 The termination liabilities calculated above include a 5% contingency load. The contingency load and other actuarial assumptions can be found in Appendix A.

2 The discount rate used for termination valuations is a w eighted average of the 10-year and 30-year U.S. Treasury yields w here the weights are based on matching asset and liability durations as of the termination date. The discount rates used in the table are based on 20-year Treasury bonds, rounded to the nearest quarter percentage point, which is a good proxy for most plans. The 20-year Treasury yield w as 3.38% on June 30, 2022, the valuation date.

In order to terminate the plan, first contact our Pension Contract Services unit to initiate a Resolution of Intent to Terminate. The completed Resolution will allow the plan actuary to provide a preliminary termination valuation with a more up-to-date estimate of the plan liabilities. Before beginning this process, please consult with the plan actuary.

Plan’s Major Benefit Provisions

CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Bakersfield
CalPERS ID: 3050192847

Plan’s Major Benefit Options
Shown below is a summary of the major optional benefits for which the agency has contracted. A description of principal standard and optional plan provisions is in Appendix B.

Benefit Group
Member Category Misc Misc Misc Misc Misc Misc
Demographics
Actives No Yes Yes Yes No No
Transfers/Separated Yes Yes Yes Yes No No
Receiving Yes Yes Yes Yes Yes Yes
Benefit Group Key 102357 102359 102360 110436 200153 200154 Benefit Provision

Benefit Formula 2% @ 55 3% @ 60 2.7% @ 55 2% @ 62
Social Security Coverage No No No No
Full/Modified Full Full Full Full

Employee Contribution Rate 8.00% 8.00% 7.25%

Final Average Compensation Period One Year One Year Three Year Three Year

Sick Leave Credit No No No No

Non-Industrial Disability Standard Standard Standard Standard

Industrial Disability No No No No

Pre-Retirement Death Benefits
Optional Settlement 2 Yes Yes Yes Yes
1959 Survivor Benefit Level Level 4 Level 4 Level 4 Level 4 Special No No No No
Alternate (firefighters) No No No No

Post-Retirement Death Benefits
Lump Sum $2000 $2000 $2000 $2000 $2000 $2000
Survivor Allowance (PRSA) No No No No No No

COLA 2% 2% 2% 2% 2% 2%

Appendices

• Appendix A – Actuarial Methods and Assumptions

• Appendix B – Principal Plan Provisions

• Appendix C – Participant Data

• Appendix D – Glossary

Appendix A

Actuarial Methods and Assumptions

• Actuarial Data
• Actuarial Methods
• Actuarial Assumptions
• Miscellaneous

CalPERS Actuarial Valuation – June 30, 2022 Appendix A Actuarial Methods and Assumptions

A-1

Actuarial Data

As stated in the Actuarial Certification, the data which serves as the basis of this valuation has been obtained from the various CalPERS databases. We have reviewed the valuation data and believe that it is reasonable and appropriate in aggregate. We are unaware of any potential data issues that would have a material effect on the results of this valuation, except that data does not always contain the latest salary information for former members no w in reciprocal systems and does not recognize the potential for unusually large salary deviation in certain cases such as elected officials. Therefore, salary information in these cases may not be accurate.

These situations are relatively infrequent, howe ver, and generally do not have a material impact on the required employer contributions.

Actuarial Methods

Actuarial Cost Method

The actuarial cost method used is the Entry Age Actuarial Cost Method. Under this method, projected benefits are determined for all members and the associated liabilities are spread in a manner that produces level annual cost as a percentage of pay in each year from the member’s entry age to their assumed retirement age on the valuation date. The cost allocated to the current fiscal year is called the normal cost.

The actuarial accrued liability for active members is then calculated as the portion of the total cost of the plan allocated to prior years. The actuarial accrued liability for members currently receiving benefits and for members entitled to deferred benef its is equal to the present value of the benefits expected to be paid. No normal costs are applicable for these participants.

CalPERS uses an in-house proprietary actuarial model for calculating plan costs. We believe this model is fit for its intended pu rpose and meets all applicable Actuarial Standards of Practice. Furthermore, the actuarial results of our model are independently confirmed periodically by outside auditing actuaries. The actuarial assumptions used are internally consistent and the generat ed results are reasonable.

Amortization of Unfunded Actuarial Accrued Liability

The excess of the total actuarial accrued liability over the market value of plan assets is called the unfunded actuarial accrued liability (UAL). Funding requirements are d etermined by adding the normal cost and a payment toward the UAL. The UAL payment is equal to the sum of individual amortization payments, each representing a different source of UAL for a given measurement period.

Amortization payments are determined acc ording to the CalPERS amortization policy. The board adopted a new policy effective for the June 30, 2019 actuarial valuation. The new policy applies prospectively only; amortization bases (sources of UAL) established prior to the June 30, 2019 valuation w ill continue to be amortized according to the prior policy.

Prior Policy (Bases Established prior to June 30, 2019)

Amortization payments are determined as a level percentage of payroll whereby the payment increases each year at an escalation rate. Gains or losses are amortized over a fixed 30-year period with a 5-year ramp up at the beginning and a 5-year ramp down at the end of the amortization period. All changes in liability due to plan amendments (other than golden handshakes) are amortized over a 20-year period with no ramp. Changes in actuarial assumptions or changes in actuarial methodology are amortized over a 20-year period with a 5-year ramp up at the beginning and a 5-year ramp down at the end of the amortization period. Changes in unfunded accrued liability due to a Golden Handshake will be amortized over a period of five years. Bases established prior to June 30, 2013 may be amortized differently. A summary is provided in the following table:

CalPERS Actuarial Valuation – June 30, 2022 Appendix A Actuarial Methods and Assumptions

A-2

Driver
Source
(Gain)/Loss
Assumption/Method
Change
Benefit
Change
Golden
Handshake Investment
Non-
investment
Amortization
Period 30 Years 30 Years 20 Years 20 Years 5 Years
Escalation Rate
- Active Plans
- Inactive Plans

2.80%
0%

2.80%
0%

2.80%
0%

2.80%
0%

2.80%
0%
Ramp Up 5 5 5 0 0
Ramp Dow n 5 5 5 0 0

The 5-year ramp up means that the payments in the first four years of the amortization period are 20%, 40%, 60% and 80% of the “full” payment which begins in year five. The 5 -year ramp down means that the reverse is true in the final four years of the amortization period.

Current Policy (Bases Established on or after June 30, 2019)

Amortization payments are determined as a level dollar amount. Investment gains or losses are amortiz ed over a fixed 20-year period with a 5-year ramp up at the beginning of the amortization period. Non-investment gains or losses are amortized over a fixed 20 -year period with no ramps. All changes in liability due to plan amendments (other than golden handshakes) are amortized over a 20 -year period with no ramps. Changes in actuarial assumptions or changes in actuarial methodology are amortized over a 20 -year period with no ramps. Changes in unfunded accrued liability due to a Golden Handshake are amortized over a period of five years. A summary is provide d in the table below:

Source
(Gain)/Loss
Assumption/
Method
Change
Benefit
Change
Golden
Handshake Investment
Non-
investment
Amortization Period 20 Years 20 Years 20 Years 20 Years 5 Years Escalation Rate 0% 0% 0% 0% 0%
Ramp Up 5 0 0 0 0
Ramp Dow n 0 0 0 0 0

Exceptions for Inconsistencies

An exception to the amortization rules above is used whenever their application results in inconsistencies. In these cases, a “fresh start” approach is used. This means that the current unfunded actuarial liability is projected and amortized over a set number of years. For example, a fresh start is needed in the following situations:

• When a negative payment would be required on a positive unfunded actuarial liability; or • When the payment would completely amortize the total unfunded liability in a very short time period, and results in a large change in the employer contribution requirement .

It should be noted that the actuary may determine that a fresh start is necessary under other circumstances.

In all cases of a fresh start, the period is set by the actuary at what is deemed appropriate; however, the period will not be greater than 20 years.

CalPERS Actuarial Valuation – June 30, 2022 Appendix A Actuarial Methods and Assumptions

A-3
Exceptions for Plans in Surplus

If a surplus exists (i.e. , the Market Value of Assets exceeds the plan’s acc rued liability) any prior amortization layers shall be considered fully amortized, and the surplus shall not be amortized.

In the event of any subsequent unfunded liability, a Fresh Start shall be used with an amortization period of 20 years or less.

Exceptions for Small Amounts

Where small unfunded liabilities are identified in annual valuations which result in small payment amounts, the actuary may shorten the remaining period for these bases.

• When the balance of a single amortization base has an abso lute value less than $250, the amortization period is reduced to one year.
• When the entire unfunded liability is a small amount , the actuary may perform a Fresh Start and use an appropriate amortization period.

Exceptions for Inactive Plans

The following exceptions apply to plans classified as Inactive. These plans have no active members and no expectation to have active members in the future.

• Amortization of the unfunded liability is on a “level dollar” basis rather than a “level percent of pay” basis. For amortization layers, which utilize a ramp up and ramp down, the “ultimate” payment is constant.
• Actuarial judgment will be used to shorten amortization periods for Inactive plans with existing periods that are deemed too long given the duration of the liability. The specific demographics of the plan will be used to determine if shorter periods may be more appropriate.

Exceptions for Inactive Agencies

For a public agency with no active members in any CalPERS rate plan, the unfunded liability shall be amortized over a closed amortization period of no more than 15 years.

Asset Valuation Method

The Actuarial Value of Assets is set equal to the market value of assets. Asset values include accounts receivable.

PEPRA Normal Cost Rate Methodology

Per Government Code section 7522.30(b), the “normal cost rate” shall mean the annual actuarially determined normal cost for the plan of retirement benefits provided to the new member and shall be established based on actuarial assumptions used to determine the liabilities and costs as part of the annual actuarial valuation. The plan of retirement benefits shall include any elements that would impact the actuarial determination of the normal cost, including, but not limited to, the retirement formula, eligibility and vesting criteria, ancillary benefit provisions, and any automatic cost -of-living adjustments as determined by the public retirement system.

For purposes of setting member rates, it is preferable to determine total normal cost using a large activ e population so that the rate remains relatively stable. While each CalPERS non -pooled plan has a sufficiently large active population for this purpose, the PEPRA active population by itself may not be sufficiently large.

The total PEPRA normal cost will be determined based on the plan’s PEPRA membership only if the number of members covered under the PEPRA formula meets either:

1. 50% of the active population, or

2. 25% of the active population and 100 or more PEPRA members

Until one of these conditions is met, the plan’s total PEPRA normal cost will be determined using the entire active plan population (both PEPRA and Classic) based on the PEPRA benefit provisions.

CalPERS Actuarial Valuation – June 30, 2022 Appendix A Actuarial Methods and Assumptions

A-4

Actuarial Assumptions

In 2021, CalPERS completed its most recent asset liability management study incorporating actuarial assumptions and strategic asset allocation. In November 2021, the board adopted changes to the asset allocation that increased the expected volatility of returns. The adopted asset allocation was expected to have a long -term blended return that continued to support a discount rate assumption of 6.80%. The board also approved several changes to the demographic assumptions that more closely aligned with actual experience.

For more details a nd additional rationale for the selection of the actuarial assumptions, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from November 2021 that can be found on the CalPERS website under: Forms and Publications. Click on “View All” and search for Experience Study.

All actuarial assumptions (except the discount rates used for the accrued liability on a termination basis ) represent an estimate of future experience rather than observations of the estimates inherent in ma rket data.

Economic Assumptions

Discount Rate
The prescribed discount rate assumption, adopted by the board on November 17, 2021, is 6.80% compounded annually (net of investment and administrative expenses) as of June 30, 2022.

Termination Liability Discount Rate
The current discount rate assumption used for termination valuations is a weighted average of the 10-year and 30-year U.S. Treasury yields where the weights are based on matching asset and liability durations as of the termination date.

The accrued liabilities on a termination basis in this report are calculated using an observed range of market interest rates. This range is based on the lowest and highest 20-year Treasury bond observ ed during an approximate 19-month period from 12 months before the valuation date to seven months after. The 20-year Treasury bond has a similar duration to most plan liabilities and serves as a good proxy for the termination discount rate. The 20-year Treasury yield was 3.38% on June 30, 2022.

CalPERS Actuarial Valuation – June 30, 2022 Appendix A Actuarial Methods and Assumptions

A-5
Salary Growth
Annual increases vary by category, entry age, and duration of service. A sample of assumed increases are shown below. Wage inflation assumption in the valuation year (2. 80% for 2022) is added to these factors for total salary growth.

Public Agency Miscellaneous
Duration of Service (Entry Age 20) (Entry Age 30) (Entry Age 40) 0 0.0764 0.0621 0.0521
1 0.0663 0.0528 0.0424
2 0.0576 0.0449 0.0346
3 0.0501 0.0381 0.0282
4 0.0435 0.0324 0.0229
5 0.0378 0.0276 0.0187
10 0.0201 0.0126 0.0108
15 0.0155 0.0102 0.0071
20 0.0119 0.0083 0.0047
25 0.0091 0.0067 0.0031
30 0.0070 0.0054 0.0020

Public Agency Fire
Duration of Service (Entry Age 20) (Entry Age 30) (Entry Age 40) 0 0.1517 0.1549 0.0631
1 0.1191 0.1138 0.0517
2 0.0936 0.0835 0.0423
3 0.0735 0.0613 0.0346
4 0.0577 0.0451 0.0284
5 0.0453 0.0331 0.0232
10 0.0188 0.0143 0.0077
15 0.0165 0.0124 0.0088
20 0.0145 0.0108 0.0101
25 0.0127 0.0094 0.0115
30 0.0112 0.0082 0.0132

Public Agency Police
Duration of Service (Entry Age 20) (Entry Age 30) (Entry Age 40) 0 0.1181 0.1051 0.0653
1 0.0934 0.0812 0.0532
2 0.0738 0.0628 0.0434
3 0.0584 0.0485 0.0353
4 0.0462 0.0375 0.0288
5 0.0365 0.0290 0.0235
10 0.0185 0.0155 0.0118
15 0.0183 0.0150 0.0131
20 0.0181 0.0145 0.0145
25 0.0179 0.0141 0.0161
30 0.0178 0.0136 0.0179

CalPERS Actuarial Valuation – June 30, 2022 Appendix A Actuarial Methods and Assumptions

A-6
Salary Growth (continued)
Public Agency County Peace Officers
Duration of Service (Entry Age 20) (Entry Age 30) (Entry Age 40) 0 0.1238 0.1053 0.0890
1 0.0941 0.0805 0.0674
2 0.0715 0.0616 0.0510
3 0.0544 0.0471 0.0387
4 0.0413 0.0360 0.0293
5 0.0314 0.0276 0.0222
10 0.0184 0.0142 0.0072
15 0.0174 0.0124 0.0073
20 0.0164 0.0108 0.0074
25 0.0155 0.0094 0.0075
30 0.0147 0.0083 0.0077

Schools
Duration of Service (Entry Age 20) (Entry Age 30) (Entry Age 40) 0 0.0275 0.0275 0.0200
1 0.0422 0.0373 0.0298
2 0.0422 0.0373 0.0298
3 0.0422 0.0373 0.0298
4 0.0388 0.0314 0.0245
5 0.0308 0.0239 0.0179
10 0.0236 0.0160 0.0121
15 0.0182 0.0135 0.0103
20 0.0145 0.0109 0.0085
25 0.0124 0.0102 0.0058
30 0.0075 0.0053 0.0019

• The Miscellaneous salary scale is used for Local Prosecutors. • The Police salary scale is used for Other Safety, Local Sheriff, and School Police.

Price Inflation

2.30% compounded annually.

Wage Inflation

2.80% compounded annually (used in projecting individual salary increases).

Payroll Growth

2.80% compounded annually (used in projecting the payroll over which the unfunded liability is amortized for level percent of payroll bases ). This assumption is used for all plans with active members.

Non-valued Potential Additional Liabilities
The potential liability loss for a cost-of-living increase exceeding the 2.30% price inflation assumption and any potential liability loss from future member service purchases that are not reflected in the valuation.

Miscellaneous Loading Factors

Credit for Unused Sick Leave
Total years of service is increased by 1% for those plans that have adopted the provision of providing Credit for Unused Sick Leave.

CalPERS Actuarial Valuation – June 30, 2022 Appendix A Actuarial Methods and Assumptions

A-7
Conversion of Employer Paid Member Contributions (EPMC) Total years of service is increased by the Employee Contribution Rate for those plans with the provision providing for the Conv ersion of Employer Paid Member Contributions (EPMC) during the final compensation period.

Norris Decision (Best Factors)
Employees hired prior to July 1, 1982 have projected benefit amounts increased in order to reflect the use of “Best Factors” in the calculation of optional benefit forms. This is due to a 1983 Supreme Court decision, known as the Norris decision, which required males and females to be treated equally in the determination of benefit amounts. Consequently, anyone already employed at that time is giv en the best possible conversion factor when optional benefits are determined. No loading is necessary for employees hired after July 1, 1982.

Termination Liability
The termination liabilities include a 5% contingency load. This load is for unfor eseen improvements in mortality.

Demographic Assumptions

Pre-Retirement Mortality
The mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board in November 2021. For purposes of the mortality rates, the rates incorporate generational mortality to capture on -going mor tality improvement.

Generational mortality explicitly assumes that members born more recently will live longer than the members born before them thereby capturing t he mortality improvement seen in the past and expected continued improvement. For more details, please refer to the 2021 experience study report that can be found on the CalPERS website .

Rates vary by age and gender are shown in the table below. This table only contains a sample of the 2017 base table rates for illustrative purposes. The non -industrial death rates are used for all plans.

The industrial death rates are used for Safety plans (except for local Safety members described in Section 20423.6 where the agency has not specifically contracted for industrial death benefits.)

Miscellaneous Safety
Non-Industrial Death Non-Industrial Death Industrial Death (Not Job-Related) (Not Job-Related) (Job-Related)
Age Male Female Male Female Male Female
20 0.00039 0.00014 0.00038 0.00014 0.00004 0.00002
25 0.00033 0.00013 0.00034 0.00018 0.00004 0.00002
30 0.00044 0.00019 0.00042 0.00025 0.00005 0.00003
35 0.00058 0.00029 0.00048 0.00034 0.00005 0.00004
40 0.00075 0.00039 0.00055 0.00042 0.00006 0.00005
45 0.00093 0.00054 0.00066 0.00053 0.00007 0.00006
50 0.00134 0.00081 0.00092 0.00073 0.00010 0.00008
55 0.00198 0.00123 0.00138 0.00106 0.00015 0.00012
60 0.00287 0.00179 0.00221 0.00151 0.00025 0.00017
65 0.00403 0.00250 0.00346 0.00194 0.00038 0.00022
70 0.00594 0.00404 0.00606 0.00358 0.00067 0.00040
75 0.00933 0.00688 0.01099 0.00699 0.00122 0.00078
80 0.01515 0.01149 0.02027 0.01410 0.00225 0.00157

• The pre-retirement mortality rates above are for 2017 and are projected generationally for future years using 80% of the Society of Actuaries’ Scale MP-2020. • Miscellaneous plans usually have industrial death rates set to zero unless the agency has specifically contracted for industrial death benefits. If so, each non -industria l death rate shown above will be split into two components : 99% will become the non-industrial death rate and 1% will become the industrial death rate.

CalPERS Actuarial Valuation – June 30, 2022 Appendix A Actuarial Methods and Assumptions

A-8
Post-Retirement Mortality
Rates vary by age, type of retirement, and gender. See sample rates in table below. These rates are used for all plans.

Service Retirement
Non-Industrial Disability Industrial Disability
(Not Job-Related) (Job-Related)
Age Male Female Male Female Male Female
50 0.00267 0.00199 0.01701 0.01439 0.00430 0.00311 55 0.00390 0.00325 0.02210 0.01734 0.00621 0.00550 60 0.00578 0.00455 0.02708 0.01962 0.00944 0.00868 65 0.00857 0.00612 0.03334 0.02276 0.01394 0.01190 70 0.01333 0.00996 0.04001 0.02910 0.02163 0.01858 75 0.02391 0.01783 0.05376 0.04160 0.03446 0.03134 80 0.04371 0.03403 0.07936 0.06112 0.05853 0.05183 85 0.08274 0.06166 0.11561 0.09385 0.10137 0.08045 90 0.14539 0.11086 0.16608 0.14396 0.16584 0.12434 95 0.24665 0.20364 0.24665 0.20364 0.24665 0.20364 100 0.36198 0.31582 0.36198 0.31582 0.36198 0.31582 105 0.52229 0.44679 0.52229 0.44679 0.52229 0.44679 110 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000

The post -retirement mortality rates above are for 2017 and are projected generationally for future years using 80% of the Society of Actuaries’ Scale MP-2020.

Marital Status
For active members, a percentage who are married upon retirement is assumed according to the member category as shown in the following table.

Member Category Percent Married
Miscellaneous Member 70%
Local Police 85%
Local Fire 85%
Other Local Safety 70%
School Police 85%
Local County Peace Officers 75%

Age of Spouse
It is assumed that female spouses are 3 years younger than male spouses. This assumption is used for all plans.

Separated Members
It is assumed that separ ated members refund immediately if non-vested. Separated members who are vested are assumed to retire at age 59 for Miscellaneous members and age 54 for Safety members.

CalPERS Actuarial Valuation – June 30, 2022 Appendix A Actuarial Methods and Assumptions

A-9
Termination with Refund
Rates vary by entry age and service for Miscellaneous plans. Rates vary by service for Safety plans.

See sample rates in tables below.

Public Agency Miscellaneous
Duration of
Service Entry Age 20 Entry Age 25 Entry Age 30 Entry Age 35 Entry Age 40 Entry Age 45 Male Female Male Female Male Female Male Female Male Female Male Female 0 0.1851 0.1944 0.1769 0.1899 0.1631 0.1824 0.1493 0.1749 0.1490 0.1731 0.1487 0.1713 1 0.1531 0.1673 0.1432 0.1602 0.1266 0.1484 0.1101 0.1366 0.1069 0.1323 0.1037 0.1280 2 0.1218 0.1381 0.1125 0.1307 0.0970 0.1183 0.0815 0.1058 0.0771 0.0998 0.0726 0.0938 3 0.0927 0.1085 0.0852 0.1020 0.0727 0.0912 0.0601 0.0804 0.0556 0.0737 0.0511 0.0669 4 0.0672 0.0801 0.0616 0.0752 0.0524 0.0670 0.0431 0.0587 0.0392 0.0523 0.0352 0.0459 5 0.0463 0.0551 0.0423 0.0517 0.0358 0.0461 0.0292 0.0404 0.0261 0.0350 0.0230 0.0296 10 0.0112 0.0140 0.0101 0.0129 0.0083 0.0112 0.0064 0.0094 0.0048 0.0071 0.0033 0.0049 15 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 20 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 25 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 30 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 35 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000

• The police termination and refund rates are also used for Public Agency Local Prosecutors, Other Safety, Local Sheriff, and School Police.

Public Agency Safety
Duration of
Service Fire Police County Peace Officer
Male Female Male Female Male Female
0 0.1022 0.1317 0.1298 0.1389 0.1086 0.1284
1 0.0686 0.1007 0.0789 0.0904 0.0777 0.0998
2 0.0441 0.0743 0.0464 0.0566 0.0549 0.0759
3 0.0272 0.0524 0.0274 0.0343 0.0385 0.0562
4 0.0161 0.0349 0.0170 0.0206 0.0268 0.0402
5 0.0092 0.0214 0.0113 0.0128 0.0186 0.0276
10 0.0015 0.0000 0.0032 0.0047 0.0046 0.0038
15 0.0000 0.0000 0.0000 0.0000 0.0023 0.0036
20 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
25 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
30 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
35 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000

CalPERS Actuarial Valuation – June 30, 2022 Appendix A Actuarial Methods and Assumptions

A-10
Termination with Refund (continued)

Schools
Duration of
Service Entry Age 20 Entry Age 25 Entry Age 30 Entry Age 35 Entry Age 40 Entry Age 45 Male Female Male Female Male Female Male Female Male Female Male Female 0 0.2054 0.2120 0.1933 0.1952 0.1730 0.1672 0.1527 0.1392 0.1423 0.1212 0.1318 0.1032 1 0.1922 0.2069 0.1778 0.1883 0.1539 0.1573 0.1300 0.1264 0.1191 0.1087 0.1083 0.0910 2 0.1678 0.1859 0.1536 0.1681 0.1298 0.1383 0.1060 0.1086 0.0957 0.0934 0.0853 0.0782 3 0.1384 0.1575 0.1256 0.1417 0.1042 0.1155 0.0829 0.0893 0.0736 0.0774 0.0643 0.0656 4 0.1085 0.1274 0.0978 0.1143 0.0800 0.0925 0.0622 0.0707 0.0542 0.0620 0.0462 0.0533 5 0.0816 0.0991 0.0732 0.0887 0.0590 0.0713 0.0449 0.0539 0.0383 0.0476 0.0317 0.0413 10 0.0222 0.0248 0.0200 0.0221 0.0163 0.0174 0.0125 0.0128 0.0094 0.0100 0.0063 0.0072 15 0.0106 0.0132 0.0095 0.0113 0.0077 0.0083 0.0058 0.0052 0.0040 0.0039 0.0021 0.0026 20 0.0059 0.0065 0.0050 0.0054 0.0035 0.0036 0.0021 0.0019 0.0010 0.0009 0.0000 0.0000 25 0.0029 0.0034 0.0025 0.0029 0.0018 0.0020 0.0010 0.0012 0.0005 0.0006 0.0000 0.0000 30 0.0012 0.0015 0.0011 0.0013 0.0011 0.0011 0.0010 0.0009 0.0005 0.0005 0.0000 0.0000 35 0.0006 0.0007 0.0006 0.0007 0.0005 0.0006 0.0005 0.0005 0.0003 0.0002 0.0000 0.0000

CalPERS Actuarial Valuation – June 30, 2022 Appendix A Actuarial Methods and Assumptions

A-11
Termination with Vested Benefits
Rates vary by entry age and service for Miscellaneous plans. Rates vary by service for Safety plans.

See sample rates in tables below.

Public Agency Miscellaneous
Duration of
Service Entry Age 20 Entry Age 25 Entry Age 30 Entry Age 35 Entry Age 40 Male Female Male Female Male Female Male Female Male Female 5 0.0381 0.0524 0.0381 0.0524 0.0358 0.0464 0.0334 0.0405 0.0301 0.0380 10 0.0265 0.0362 0.0265 0.0362 0.0254 0.0334 0.0244 0.0307 0.0197 0.0236 15 0.0180 0.0252 0.0180 0.0252 0.0166 0.0213 0.0152 0.0174 0.0119 0.0132 20 0.0141 0.0175 0.0141 0.0175 0.0110 0.0131 0.0079 0.0087 0.0000 0.0000 25 0.0084 0.0108 0.0084 0.0108 0.0064 0.0076 0.0000 0.0000 0.0000 0.0000 30 0.0047 0.0056 0.0047 0.0056 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 35 0.0038 0.0041 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000

• After termination with vested benefits, a Miscellaneous member is assumed to retire at age 59 and a Safety member at age 54.
• The Police termination with vested benefits rates are also used for Public Agency Local Prosecutors, Other Safety, Local Sheriff, and School Police.

Schools
Duration of
Service Entry Age 20 Entry Age 25 Entry Age 30 Entry Age 35 Entry Age 40 Male Female Male Female Male Female Male Female Male Female 5 0.0359 0.0501 0.0359 0.0501 0.0332 0.0402 0.0305 0.0304 0.0266 0.0272 10 0.0311 0.0417 0.0311 0.0417 0.0269 0.0341 0.0228 0.0265 0.0193 0.0233 15 0.0193 0.0264 0.0193 0.0264 0.0172 0.0220 0.0151 0.0175 0.0123 0.0142 20 0.0145 0.0185 0.0145 0.0185 0.0113 0.0141 0.0080 0.0097 0.0000 0.0000 25 0.0089 0.0123 0.0089 0.0123 0.0074 0.0093 0.0000 0.0000 0.0000 0.0000 30 0.0057 0.0064 0.0057 0.0064 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 35 0.0040 0.0049 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000

Public Agency Safety
Duration of
Service Fire Police County Peace Officer
Male Female Male Female Male Female
5 0.0089 0.0224 0.0156 0.0272 0.0177 0.0266
10 0.0066 0.0164 0.0113 0.0198 0.0126 0.0189
15 0.0048 0.0120 0.0083 0.0144 0.0089 0.0134
20 0.0035 0.0088 0.0060 0.0105 0.0063 0.0095
25 0.0024 0.0061 0.0042 0.0073 0.0042 0.0063
30 0.0012 0.0031 0.0021 0.0037 0.0021 0.0031
35 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000

CalPERS Actuarial Valuation – June 30, 2022 Appendix A Actuarial Methods and Assumptions

A-12
Non-Industrial (Not Job-Related) Disability
Rates vary by age and gender for Miscellaneous plans. Rates vary by age and category for Safety plans.

Miscellaneous Fire Police County Peace Officer Schools
Ag
e Male Female
Male and
Female
Male and
Female Male and Female Male Female
20 0.0001 0.0000 0.0001 0.0001 0.0001 0.0000 0.0002
25 0.0001 0.0001 0.0001 0.0001 0.0001 0.0000 0.0002
30 0.0002 0.0003 0.0001 0.0001 0.0001 0.0002 0.0002
35 0.0004 0.0007 0.0001 0.0002 0.0003 0.0005 0.0004
40 0.0009 0.0012 0.0001 0.0002 0.0006 0.0010 0.0008
45 0.0015 0.0019 0.0002 0.0003 0.0011 0.0019 0.0015
50 0.0015 0.0019 0.0004 0.0005 0.0016 0.0027 0.0021
55 0.0014 0.0013 0.0006 0.0007 0.0009 0.0024 0.0017
60 0.0012 0.0009 0.0006 0.0011 0.0005 0.0020 0.0010

• The Miscellaneous non -industrial disability rates are used for Local Prosecutors. • The police non-industrial disability rates are also used for Other Safety, Local Sheriff, and School Police.

Industrial (Job-Related) Disability
Rates vary by age and category.

Age Fire Police County Peace Officer
20 0.0001 0.0000 0.0004
25 0.0002 0.0017 0.0013
30 0.0006 0.0048 0.0025
35 0.0012 0.0079 0.0037
40 0.0023 0.0110 0.0051
45 0.0040 0.0141 0.0067
50 0.0208 0.0185 0.0092
55 0.0307 0.0479 0.0151
60 0.0438 0.0602 0.0174

• The police industrial disability rates are also used for Local Sheriff and Other Safety. • 50% of the police industrial disability rates are used for School Police. • 1% of the police industrial disability rates are used for Local Prosecutors. • Normally, rates are zero for Miscellaneous plans unless the agency has specifically contracted for industrial disability benefits. If so, each Miscellaneous non -industrial disability rate will be split into two components: 50% will become the non -industrial disability rate and 50% will become the industrial disability rate.

CalPERS Actuarial Valuation – June 30, 2022 Appendix A Actuarial Methods and Assumptions

A-13
Service Retirement
Retirement rates vary by age, service, and formula, except for the Safety Half Pay at 55 and 2% at 55 formulas, where retirement rates vary by age only.

Public Agency Miscellaneous 1.5% at 65
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.008 0.011 0.013 0.015 0.017 0.019
51 0.007 0.010 0.012 0.013 0.015 0.017
52 0.010 0.014 0.017 0.019 0.021 0.024
53 0.008 0.012 0.015 0.017 0.019 0.022
54 0.012 0.016 0.019 0.022 0.025 0.028
55 0.018 0.025 0.031 0.035 0.038 0.043
56 0.015 0.021 0.025 0.029 0.032 0.036
57 0.020 0.028 0.033 0.038 0.043 0.048
58 0.024 0.033 0.040 0.046 0.052 0.058
59 0.028 0.039 0.048 0.054 0.060 0.067
60 0.049 0.069 0.083 0.094 0.105 0.118
61 0.062 0.087 0.106 0.120 0.133 0.150
62 0.104 0.146 0.177 0.200 0.223 0.251
63 0.099 0.139 0.169 0.191 0.213 0.239
64 0.097 0.136 0.165 0.186 0.209 0.233
65 0.140 0.197 0.240 0.271 0.302 0.339
66 0.092 0.130 0.157 0.177 0.198 0.222
67 0.129 0.181 0.220 0.249 0.277 0.311
68 0.092 0.129 0.156 0.177 0.197 0.221
69 0.092 0.130 0.158 0.178 0.199 0.224
70 0.103 0.144 0.175 0.198 0.221 0.248

Public Agency Miscellaneous 2% at 60
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.010 0.011 0.014 0.014 0.017 0.017
51 0.017 0.013 0.014 0.010 0.010 0.010
52 0.014 0.014 0.018 0.015 0.016 0.016
53 0.015 0.012 0.013 0.010 0.011 0.011
54 0.006 0.010 0.017 0.016 0.018 0.018
55 0.012 0.016 0.024 0.032 0.036 0.036
56 0.010 0.014 0.023 0.030 0.034 0.034
57 0.006 0.018 0.030 0.040 0.044 0.044
58 0.022 0.023 0.033 0.042 0.046 0.046
59 0.039 0.033 0.040 0.047 0.050 0.050
60 0.063 0.069 0.074 0.090 0.137 0.116
61 0.044 0.058 0.066 0.083 0.131 0.113
62 0.084 0.107 0.121 0.153 0.238 0.205
63 0.173 0.166 0.165 0.191 0.283 0.235
64 0.120 0.145 0.164 0.147 0.160 0.172
65 0.138 0.160 0.214 0.216 0.237 0.283
66 0.198 0.228 0.249 0.216 0.228 0.239
67 0.207 0.242 0.230 0.233 0.233 0.233
68 0.201 0.234 0.225 0.231 0.231 0.231
69 0.152 0.173 0.164 0.166 0.166 0.166
70 0.200 0.200 0.200 0.200 0.200 0.200

CalPERS Actuarial Valuation – June 30, 2022 Appendix A Actuarial Methods and Assumptions

A-14
Service Retirement

Public Agency Miscellaneous 2% at 55
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.014 0.014 0.017 0.021 0.023 0.024
51 0.013 0.017 0.017 0.018 0.018 0.019
52 0.013 0.018 0.018 0.020 0.020 0.021
53 0.013 0.019 0.021 0.024 0.025 0.026
54 0.017 0.025 0.028 0.032 0.033 0.035
55 0.045 0.042 0.053 0.086 0.098 0.123
56 0.018 0.036 0.056 0.086 0.102 0.119
57 0.041 0.046 0.056 0.076 0.094 0.120
58 0.052 0.044 0.048 0.074 0.106 0.123
59 0.043 0.058 0.073 0.092 0.105 0.126
60 0.059 0.064 0.083 0.115 0.154 0.170
61 0.087 0.074 0.087 0.107 0.147 0.168
62 0.115 0.123 0.151 0.180 0.227 0.237
63 0.116 0.127 0.164 0.202 0.252 0.261
64 0.084 0.138 0.153 0.190 0.227 0.228
65 0.167 0.187 0.210 0.262 0.288 0.291
66 0.187 0.258 0.280 0.308 0.318 0.319
67 0.195 0.235 0.244 0.277 0.269 0.280
68 0.228 0.248 0.250 0.241 0.245 0.245
69 0.188 0.201 0.209 0.219 0.231 0.231
70 0.229 0.229 0.229 0.229 0.229 0.229

Public Agency Miscellaneous 2.5% at 55
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.014 0.017 0.027 0.035 0.046 0.050
51 0.019 0.021 0.025 0.030 0.038 0.040
52 0.018 0.020 0.026 0.034 0.038 0.037
53 0.013 0.021 0.031 0.045 0.052 0.053
54 0.025 0.025 0.030 0.046 0.057 0.068
55 0.029 0.042 0.064 0.109 0.150 0.225
56 0.036 0.047 0.068 0.106 0.134 0.194
57 0.051 0.047 0.060 0.092 0.116 0.166
58 0.035 0.046 0.062 0.093 0.119 0.170
59 0.029 0.053 0.072 0.112 0.139 0.165
60 0.039 0.069 0.094 0.157 0.177 0.221
61 0.080 0.077 0.086 0.140 0.167 0.205
62 0.086 0.131 0.149 0.220 0.244 0.284
63 0.135 0.135 0.147 0.214 0.222 0.262
64 0.114 0.128 0.158 0.177 0.233 0.229
65 0.112 0.174 0.222 0.209 0.268 0.273
66 0.235 0.254 0.297 0.289 0.321 0.337
67 0.237 0.240 0.267 0.249 0.267 0.277
68 0.258 0.271 0.275 0.207 0.210 0.212
69 0.117 0.208 0.266 0.219 0.250 0.270
70 0.229 0.229 0.229 0.229 0.229 0.229

CalPERS Actuarial Valuation – June 30, 2022 Appendix A Actuarial Methods and Assumptions

A-15
Service Retirement

Public Agency Miscellaneous 2.7% at 55
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.011 0.016 0.022 0.033 0.034 0.038
51 0.018 0.019 0.023 0.032 0.031 0.031
52 0.019 0.020 0.026 0.035 0.034 0.037
53 0.020 0.020 0.025 0.043 0.048 0.053
54 0.018 0.030 0.040 0.052 0.053 0.070
55 0.045 0.058 0.082 0.138 0.208 0.278
56 0.057 0.062 0.080 0.121 0.178 0.222
57 0.045 0.052 0.071 0.106 0.147 0.182
58 0.074 0.060 0.074 0.118 0.163 0.182
59 0.058 0.067 0.086 0.123 0.158 0.187
60 0.087 0.084 0.096 0.142 0.165 0.198
61 0.073 0.084 0.101 0.138 0.173 0.218
62 0.130 0.133 0.146 0.187 0.214 0.249
63 0.122 0.140 0.160 0.204 0.209 0.243
64 0.104 0.124 0.154 0.202 0.214 0.230
65 0.182 0.201 0.242 0.264 0.293 0.293
66 0.272 0.249 0.273 0.285 0.312 0.312
67 0.182 0.217 0.254 0.249 0.264 0.264
68 0.223 0.197 0.218 0.242 0.273 0.273
69 0.217 0.217 0.217 0.217 0.217 0.217
70 0.227 0.227 0.227 0.227 0.227 0.227

Public Agency Miscellaneous 3% at 60
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.015 0.020 0.025 0.039 0.040 0.044
51 0.041 0.034 0.032 0.041 0.036 0.037
52 0.024 0.020 0.022 0.039 0.040 0.041
53 0.018 0.024 0.032 0.047 0.048 0.057
54 0.033 0.033 0.035 0.051 0.049 0.052
55 0.137 0.043 0.051 0.065 0.076 0.108
56 0.173 0.038 0.054 0.075 0.085 0.117
57 0.019 0.035 0.059 0.088 0.111 0.134
58 0.011 0.040 0.070 0.105 0.133 0.162
59 0.194 0.056 0.064 0.081 0.113 0.163
60 0.081 0.085 0.133 0.215 0.280 0.333
61 0.080 0.090 0.134 0.170 0.223 0.292
62 0.137 0.153 0.201 0.250 0.278 0.288
63 0.128 0.140 0.183 0.227 0.251 0.260
64 0.174 0.147 0.173 0.224 0.239 0.264
65 0.152 0.201 0.262 0.299 0.323 0.323
66 0.272 0.273 0.317 0.355 0.380 0.380
67 0.218 0.237 0.268 0.274 0.284 0.284
68 0.200 0.228 0.269 0.285 0.299 0.299
69 0.250 0.250 0.250 0.250 0.250 0.250
70 0.245 0.245 0.245 0.245 0.245 0.245

CalPERS Actuarial Valuation – June 30, 2022 Appendix A Actuarial Methods and Assumptions

A-16
Service Retirement

Public Agency Miscellaneous 2% at 62
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.000 0.000 0.000 0.000 0.000 0.000
51 0.000 0.000 0.000 0.000 0.000 0.000
52 0.005 0.008 0.012 0.015 0.019 0.031
53 0.007 0.011 0.014 0.018 0.021 0.032
54 0.007 0.011 0.015 0.019 0.023 0.034
55 0.010 0.019 0.028 0.036 0.061 0.096
56 0.014 0.026 0.038 0.050 0.075 0.108
57 0.018 0.029 0.039 0.050 0.074 0.107
58 0.023 0.035 0.048 0.060 0.073 0.099
59 0.025 0.038 0.051 0.065 0.092 0.128
60 0.031 0.051 0.071 0.091 0.111 0.138
61 0.038 0.058 0.079 0.100 0.121 0.167
62 0.044 0.074 0.104 0.134 0.164 0.214
63 0.077 0.105 0.134 0.163 0.192 0.237
64 0.072 0.101 0.129 0.158 0.187 0.242
65 0.108 0.141 0.173 0.206 0.239 0.300
66 0.132 0.172 0.212 0.252 0.292 0.366
67 0.132 0.172 0.212 0.252 0.292 0.366
68 0.120 0.156 0.193 0.229 0.265 0.333
69 0.120 0.156 0.193 0.229 0.265 0.333
70 0.120 0.156 0.193 0.229 0.265 0.333

Service Retirement

Public Agency Fire Half Pay at 55 and 2% at 55
Age Rate

Age Rate
50 0.016 56 0.111
51 0.000 57 0.000
52 0.034 58 0.095
53 0.020 59 0.044
54 0.041 60 1.000
55 0.075

Public Agency Police Half Pay at 55 and 2% at 55
Age Rate

Age Rate
50 0.026 56 0.069
51 0.000 57 0.051
52 0.016 58 0.072
53 0.027 59 0.070
54 0.010 60 0.300
55 0.167

CalPERS Actuarial Valuation – June 30, 2022 Appendix A Actuarial Methods and Assumptions

A-17
Service Retirement

Public Agency Police 2% at 50
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.018 0.077 0.056 0.046 0.043 0.046
51 0.022 0.087 0.060 0.048 0.044 0.047
52 0.020 0.102 0.081 0.071 0.069 0.075
53 0.016 0.072 0.053 0.045 0.042 0.046
54 0.006 0.071 0.071 0.069 0.072 0.080
55 0.009 0.040 0.099 0.157 0.186 0.186
56 0.020 0.051 0.108 0.165 0.194 0.194
57 0.036 0.072 0.106 0.139 0.156 0.156
58 0.001 0.046 0.089 0.130 0.152 0.152
59 0.066 0.094 0.119 0.143 0.155 0.155
60 0.177 0.177 0.177 0.177 0.177 0.177
61 0.134 0.134 0.134 0.134 0.134 0.134
62 0.184 0.184 0.184 0.184 0.184 0.184
63 0.250 0.250 0.250 0.250 0.250 0.250
64 0.177 0.177 0.177 0.177 0.177 0.177
65 1.000 1.000 1.000 1.000 1.000 1.000

• These rates also apply to County Peace officers, Local Prosecutors, Local Sheriff, School Police, and Other Safety.

Service Retirement

Public Agency Fire 2% at 50
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.054 0.054 0.056 0.080 0.064 0.066
51 0.020 0.020 0.021 0.030 0.024 0.024
52 0.037 0.037 0.038 0.054 0.043 0.045
53 0.051 0.051 0.053 0.076 0.061 0.063
54 0.082 0.082 0.085 0.121 0.097 0.100
55 0.139 0.139 0.139 0.139 0.139 0.139
56 0.129 0.129 0.129 0.129 0.129 0.129
57 0.085 0.085 0.085 0.085 0.085 0.085
58 0.119 0.119 0.119 0.119 0.119 0.119
59 0.167 0.167 0.167 0.167 0.167 0.167
60 0.152 0.152 0.152 0.152 0.152 0.152
61 0.179 0.179 0.179 0.179 0.179 0.179
62 0.179 0.179 0.179 0.179 0.179 0.179
63 0.179 0.179 0.179 0.179 0.179 0.179
64 0.179 0.179 0.179 0.179 0.179 0.179
65 1.000 1.000 1.000 1.000 1.000 1.000

CalPERS Actuarial Valuation – June 30, 2022 Appendix A Actuarial Methods and Assumptions

A-18
Service Retirement

Public Agency Police 3% at 55
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.019 0.053 0.045 0.054 0.057 0.061
51 0.002 0.017 0.028 0.044 0.053 0.060
52 0.002 0.031 0.037 0.051 0.059 0.066
53 0.026 0.049 0.049 0.080 0.099 0.114
54 0.019 0.034 0.047 0.091 0.121 0.142
55 0.006 0.115 0.141 0.199 0.231 0.259
56 0.017 0.188 0.121 0.173 0.199 0.199
57 0.008 0.137 0.093 0.136 0.157 0.157
58 0.017 0.126 0.105 0.164 0.194 0.194
59 0.026 0.146 0.110 0.167 0.195 0.195
60 0.155 0.155 0.155 0.155 0.155 0.155
61 0.210 0.210 0.210 0.210 0.210 0.210
62 0.262 0.262 0.262 0.262 0.262 0.262
63 0.172 0.172 0.172 0.172 0.172 0.172
64 0.227 0.227 0.227 0.227 0.227 0.227
65 1.000 1.000 1.000 1.000 1.000 1.000

• These rates also apply to County Peace officers, Local Prosecutors, Local Sheriff, School Police, and Other Safety.

Service Retirement

Public Agency Fire 3% at 55
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.003 0.006 0.013 0.019 0.025 0.028
51 0.004 0.008 0.017 0.026 0.034 0.038
52 0.005 0.011 0.022 0.033 0.044 0.049
53 0.005 0.034 0.024 0.038 0.069 0.138
54 0.007 0.047 0.032 0.051 0.094 0.187
55 0.010 0.067 0.046 0.073 0.134 0.266
56 0.010 0.063 0.044 0.069 0.127 0.253
57 0.135 0.100 0.148 0.196 0.220 0.220
58 0.083 0.062 0.091 0.120 0.135 0.135
59 0.137 0.053 0.084 0.146 0.177 0.177
60 0.162 0.063 0.099 0.172 0.208 0.208
61 0.598 0.231 0.231 0.231 0.231 0.231
62 0.621 0.240 0.240 0.240 0.240 0.240
63 0.236 0.236 0.236 0.236 0.236 0.236
64 0.236 0.236 0.236 0.236 0.236 0.236
65 1.000 1.000 1.000 1.000 1.000 1.000

CalPERS Actuarial Valuation – June 30, 2022 Appendix A Actuarial Methods and Assumptions

A-19
Service Retirement

Public Agency Police 3% at 50
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.124 0.103 0.113 0.143 0.244 0.376
51 0.060 0.081 0.087 0.125 0.207 0.294
52 0.016 0.055 0.111 0.148 0.192 0.235
53 0.072 0.074 0.098 0.142 0.189 0.237
54 0.018 0.049 0.105 0.123 0.187 0.271
55 0.069 0.074 0.081 0.113 0.209 0.305
56 0.064 0.108 0.113 0.125 0.190 0.288
57 0.056 0.109 0.160 0.182 0.210 0.210
58 0.108 0.129 0.173 0.189 0.214 0.214
59 0.093 0.144 0.204 0.229 0.262 0.262
60 0.343 0.180 0.159 0.188 0.247 0.247
61 0.221 0.221 0.221 0.221 0.221 0.221
62 0.213 0.213 0.213 0.213 0.213 0.213
63 0.233 0.233 0.233 0.233 0.233 0.233
64 0.234 0.234 0.234 0.234 0.234 0.234
65 1.000 1.000 1.000 1.000 1.000 1.000

• These rates also apply to County Peace officers, Local Prosecutors, Local Sheriff, School Police, and Other Safety.

Service Retirement

Public Agency Fire 3% at 50
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.095 0.048 0.053 0.093 0.134 0.175
51 0.016 0.032 0.053 0.085 0.117 0.149
52 0.013 0.032 0.054 0.087 0.120 0.154
53 0.085 0.044 0.049 0.089 0.129 0.170
54 0.038 0.065 0.074 0.105 0.136 0.167
55 0.042 0.043 0.049 0.085 0.132 0.215
56 0.133 0.103 0.075 0.113 0.151 0.209
57 0.062 0.048 0.060 0.124 0.172 0.213
58 0.124 0.097 0.092 0.153 0.194 0.227
59 0.092 0.071 0.078 0.144 0.192 0.233
60 0.056 0.044 0.061 0.131 0.186 0.233
61 0.282 0.219 0.158 0.198 0.233 0.260
62 0.292 0.227 0.164 0.205 0.241 0.269
63 0.196 0.196 0.196 0.196 0.196 0.196
64 0.197 0.197 0.197 0.197 0.197 0.197
65 1.000 1.000 1.000 1.000 1.000 1.000

CalPERS Actuarial Valuation – June 30, 2022 Appendix A Actuarial Methods and Assumptions

A-20
Service Retirement

Public Agency Police 2% at 57
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.040 0.040 0.040 0.040 0.040 0.080
51 0.028 0.028 0.028 0.028 0.040 0.066
52 0.028 0.028 0.028 0.028 0.043 0.061
53 0.028 0.028 0.028 0.028 0.057 0.086
54 0.028 0.028 0.028 0.032 0.069 0.110
55 0.050 0.050 0.050 0.067 0.099 0.179
56 0.046 0.046 0.046 0.062 0.090 0.160
57 0.054 0.054 0.054 0.072 0.106 0.191
58 0.060 0.060 0.060 0.066 0.103 0.171
59 0.060 0.060 0.060 0.069 0.105 0.171
60 0.113 0.113 0.113 0.113 0.113 0.171
61 0.108 0.108 0.108 0.108 0.108 0.128
62 0.113 0.113 0.113 0.113 0.113 0.159
63 0.113 0.113 0.113 0.113 0.113 0.159
64 0.113 0.113 0.113 0.113 0.113 0.239
65 1.000 1.000 1.000 1.000 1.000 1.000

• These rates also apply to County Peace officers, Local Prosecutors, Local Sheriff, School Police, and Other Safety.

Service Retirement

Public Agency Fire 2% at 57
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.005 0.005 0.005 0.005 0.008 0.012
51 0.006 0.006 0.006 0.006 0.009 0.013
52 0.012 0.012 0.012 0.012 0.019 0.028
53 0.033 0.033 0.033 0.033 0.050 0.075
54 0.045 0.045 0.045 0.045 0.069 0.103
55 0.061 0.061 0.061 0.061 0.094 0.140
56 0.055 0.055 0.055 0.055 0.084 0.126
57 0.081 0.081 0.081 0.081 0.125 0.187
58 0.059 0.059 0.059 0.059 0.091 0.137
59 0.055 0.055 0.055 0.055 0.084 0.126
60 0.085 0.085 0.085 0.085 0.131 0.196
61 0.085 0.085 0.085 0.085 0.131 0.196
62 0.085 0.085 0.085 0.085 0.131 0.196
63 0.085 0.085 0.085 0.085 0.131 0.196
64 0.085 0.085 0.085 0.085 0.131 0.196
65 1.000 1.000 1.000 1.000 1.000 1.000

CalPERS Actuarial Valuation – June 30, 2022 Appendix A Actuarial Methods and Assumptions

A-21
Service Retirement

Public Agency Police 2.5% at 57
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.050 0.050 0.050 0.050 0.050 0.100
51 0.038 0.038 0.038 0.038 0.055 0.089
52 0.038 0.038 0.038 0.038 0.058 0.082
53 0.036 0.036 0.036 0.036 0.073 0.111
54 0.036 0.036 0.036 0.041 0.088 0.142
55 0.061 0.061 0.061 0.082 0.120 0.217
56 0.056 0.056 0.056 0.075 0.110 0.194
57 0.060 0.060 0.060 0.080 0.118 0.213
58 0.072 0.072 0.072 0.079 0.124 0.205
59 0.072 0.072 0.072 0.083 0.126 0.205
60 0.135 0.135 0.135 0.135 0.135 0.205
61 0.130 0.130 0.130 0.130 0.130 0.153
62 0.135 0.135 0.135 0.135 0.135 0.191
63 0.135 0.135 0.135 0.135 0.135 0.191
64 0.135 0.135 0.135 0.135 0.135 0.287
65 1.000 1.000 1.000 1.000 1.000 1.000

• These rates also apply to County Peace officers, Local Prosecutors, Local Sheriff, School Police, and Other Safety.

Service Retirement

Public Agency Fire 2.5% at 57
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.007 0.007 0.007 0.007 0.010 0.015
51 0.008 0.008 0.008 0.008 0.012 0.018
52 0.016 0.016 0.016 0.016 0.025 0.038
53 0.042 0.042 0.042 0.042 0.064 0.096
54 0.057 0.057 0.057 0.057 0.088 0.132
55 0.074 0.074 0.074 0.074 0.114 0.170
56 0.066 0.066 0.066 0.066 0.102 0.153
57 0.090 0.090 0.090 0.090 0.139 0.208
58 0.071 0.071 0.071 0.071 0.110 0.164
59 0.066 0.066 0.066 0.066 0.101 0.151
60 0.102 0.102 0.102 0.102 0.157 0.235
61 0.102 0.102 0.102 0.102 0.157 0.236
62 0.102 0.102 0.102 0.102 0.157 0.236
63 0.102 0.102 0.102 0.102 0.157 0.236
64 0.102 0.102 0.102 0.102 0.157 0.236
65 1.000 1.000 1.000 1.000 1.000 1.000

CalPERS Actuarial Valuation – June 30, 2022 Appendix A Actuarial Methods and Assumptions

A-22
Service Retirement

Public Agency Police 2.7% at 57
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.050 0.050 0.050 0.050 0.050 0.100
51 0.040 0.040 0.040 0.040 0.058 0.094
52 0.038 0.038 0.038 0.038 0.058 0.083
53 0.038 0.038 0.038 0.038 0.077 0.117
54 0.038 0.038 0.038 0.044 0.093 0.150
55 0.068 0.068 0.068 0.091 0.134 0.242
56 0.063 0.063 0.063 0.084 0.123 0.217
57 0.060 0.060 0.060 0.080 0.118 0.213
58 0.080 0.080 0.080 0.088 0.138 0.228
59 0.080 0.080 0.080 0.092 0.140 0.228
60 0.150 0.150 0.150 0.150 0.150 0.228
61 0.144 0.144 0.144 0.144 0.144 0.170
62 0.150 0.150 0.150 0.150 0.150 0.213
63 0.150 0.150 0.150 0.150 0.150 0.213
64 0.150 0.150 0.150 0.150 0.150 0.319
65 1.000 1.000 1.000 1.000 1.000 1.000

• These rates also apply to County Peace officers, Local Prosecutors, Local Sheriff, School Police, and Other Safety.

Service Retirement

Public Agency Fire 2.7% at 57
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.007 0.007 0.007 0.007 0.010 0.015
51 0.008 0.008 0.008 0.008 0.013 0.019
52 0.016 0.016 0.016 0.016 0.025 0.038
53 0.044 0.044 0.044 0.044 0.068 0.102
54 0.061 0.061 0.061 0.061 0.093 0.140
55 0.083 0.083 0.083 0.083 0.127 0.190
56 0.074 0.074 0.074 0.074 0.114 0.171
57 0.090 0.090 0.090 0.090 0.139 0.208
58 0.079 0.079 0.079 0.079 0.122 0.182
59 0.073 0.073 0.073 0.073 0.112 0.168
60 0.114 0.114 0.114 0.114 0.175 0.262
61 0.114 0.114 0.114 0.114 0.175 0.262
62 0.114 0.114 0.114 0.114 0.175 0.262
63 0.114 0.114 0.114 0.114 0.175 0.262
64 0.114 0.114 0.114 0.114 0.175 0.262
65 1.000 1.000 1.000 1.000 1.000 1.000

CalPERS Actuarial Valuation – June 30, 2022 Appendix A Actuarial Methods and Assumptions

A-23
Service Retirement

Schools 2% at 55
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.003 0.004 0.006 0.007 0.010 0.010
51 0.004 0.005 0.007 0.008 0.011 0.011
52 0.005 0.007 0.008 0.009 0.012 0.012
53 0.007 0.008 0.010 0.012 0.015 0.015
54 0.006 0.009 0.012 0.015 0.020 0.021
55 0.011 0.023 0.034 0.057 0.070 0.090
56 0.012 0.027 0.036 0.056 0.073 0.095
57 0.016 0.027 0.036 0.055 0.068 0.087
58 0.019 0.030 0.040 0.062 0.078 0.103
59 0.023 0.034 0.046 0.070 0.085 0.109
60 0.022 0.043 0.062 0.095 0.113 0.141
61 0.030 0.051 0.071 0.103 0.124 0.154
62 0.065 0.098 0.128 0.188 0.216 0.248
63 0.075 0.112 0.144 0.197 0.222 0.268
64 0.091 0.116 0.138 0.180 0.196 0.231
65 0.163 0.164 0.197 0.232 0.250 0.271
66 0.208 0.204 0.243 0.282 0.301 0.315
67 0.189 0.185 0.221 0.257 0.274 0.287
68 0.127 0.158 0.200 0.227 0.241 0.244
69 0.168 0.162 0.189 0.217 0.229 0.238
70 0.191 0.190 0.237 0.250 0.246 0.254

Schools 2% at 62
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.000 0.000 0.000 0.000 0.000 0.000
51 0.000 0.000 0.000 0.000 0.000 0.000
52 0.004 0.007 0.010 0.011 0.013 0.015
53 0.004 0.008 0.010 0.013 0.014 0.016
54 0.005 0.011 0.015 0.018 0.020 0.022
55 0.014 0.027 0.038 0.045 0.050 0.056
56 0.013 0.026 0.037 0.043 0.048 0.055
57 0.013 0.027 0.038 0.045 0.050 0.055
58 0.017 0.034 0.047 0.056 0.062 0.069
59 0.019 0.037 0.052 0.062 0.068 0.076
60 0.026 0.053 0.074 0.087 0.097 0.108
61 0.030 0.058 0.081 0.095 0.106 0.119
62 0.053 0.105 0.147 0.174 0.194 0.217
63 0.054 0.107 0.151 0.178 0.198 0.222
64 0.053 0.105 0.147 0.174 0.194 0.216
65 0.072 0.142 0.199 0.235 0.262 0.293
66 0.077 0.152 0.213 0.252 0.281 0.314
67 0.070 0.139 0.194 0.229 0.255 0.286
68 0.063 0.124 0.173 0.205 0.228 0.255
69 0.066 0.130 0.183 0.216 0.241 0.270
70 0.071 0.140 0.196 0.231 0.258 0.289

CalPERS Actuarial Valuation – June 30, 2022 Appendix A Actuarial Methods and Assumptions

A-24

Miscellaneous

Internal Revenue Code Section 415

The limitations on benefits imposed by Internal Revenue Code Section 415 are taken into account in this valuation. Each year the impact of any changes in this limitation since the prior valuation is included and amortized as part of the actuarial gain or loss base. This results in lower contributions for those employ ers contributing to the Replaceme nt Benefit Fund and protects CalPERS from prefunding expected benefits in excess of limits imposed by federal tax law. The Section 415(b) dollar limit for the 2022 calendar year is $245,000.

Internal Revenue Code Section 401(a)(17)

The limitations on compensation imposed by Internal Revenue Code Section 401(a)(17) are taken into account in this valuation. Each year, the impact of any changes in the compensation limitation since the prior valuation is included and amortized as part of the actuarial gain or loss base. The compensation limit for classic members for the 2022 calendar year is $305,000.

Appendix B

Principal Plan Provisions

CalPERS Actuarial Valuation – June 30, 2022 Appendix B Miscellaneous Plan of the City of Bakersfield
Principal Plan Provisions

B-1

The following is a description of the principal plan provisions used in calculating costs and liabilities. We have indicated whether a plan provision is standard or optional. Standard benefits are applicable to all members while optional benefits vary amon g employers. Optional benefits that apply to a single period of time, such as Golden Handshakes, have not been included. Many of the statements in this summary are general in nature, and are intended to provide an easily understood summary of the Public Em ployees’ Retirement Law and the California Public Employees’ Pension Reform Act of 2013. The law itself governs in all situations.

Service Retirement

Eligibility

A classic CalPERS member or PEPRA Safety member becomes eligible for Service Retirement upon attainment of age 50 with at least 5 years of credited service (total service across all CalPERS employers, and with certain other retirement systems with which Ca lPERS has reciprocity agreements). For employees hired into a plan with the 1.5% at age 65 formula, eligibility for service retirement is age 55 with at least 5 years of service. PEPRA Miscellaneous members become eligible for service retirement upon attainment of age 52 with at least 5 years of service.

Benefit

The service retirement benefit is a monthly allowance equal to the product of the benefit factor , years of service , and final compensation.

· The benefit factor depends on the benefit formula spe cified in the agency’s contract. The table below shows the factors for each of the available formulas. Factors vary by the member’s age at retirement. Listed are the factors for retirement at whole year ages:

Miscellaneous Plan Formulas

Retirement
Age 1.5% at 65 2% at 60 2% at 55 2.5% at 55 2.7% at 55 3% at 60 PEPRA 2% at 62
50 0.5000% 1.092% 1.426% 2.000% 2.000% 2.000% N/A
51 0.5667% 1.156% 1.522% 2.100% 2.140% 2.100% N/A
52 0.6334% 1.224% 1.628% 2.200% 2.280% 2.200% 1.000%
53 0.7000% 1.296% 1.742% 2.300% 2.420% 2.300% 1.100%
54 0.7667% 1.376% 1.866% 2.400% 2.560% 2.400% 1.200%
55 0.8334% 1.460% 2.000% 2.500% 2.700% 2.500% 1.300%
56 0.9000% 1.552% 2.052% 2.500% 2.700% 2.600% 1.400%
57 0.9667% 1.650% 2.104% 2.500% 2.700% 2.700% 1.500%
58 1.0334% 1.758% 2.156% 2.500% 2.700% 2.800% 1.600%
59 1.1000% 1.874% 2.210% 2.500% 2.700% 2.900% 1.700%
60 1.1667% 2.000% 2.262% 2.500% 2.700% 3.000% 1.800%
61 1.2334% 2.134% 2.314% 2.500% 2.700% 3.000% 1.900%
62 1.3000% 2.272% 2.366% 2.500% 2.700% 3.000% 2.000%
63 1.3667% 2.418% 2.418% 2.500% 2.700% 3.000% 2.100%
64 1.4334% 2.418% 2.418% 2.500% 2.700% 3.000% 2.200%
65 1.5000% 2.418% 2.418% 2.500% 2.700% 3.000% 2.300%
66 1.5000% 2.418% 2.418% 2.500% 2.700% 3.000% 2.400%
67 & up 1.5000% 2.418% 2.418% 2.500% 2.700% 3.000% 2.500%

CalPERS Actuarial Valuation – June 30, 2022 Appendix B Miscellaneous Plan of the City of Bakersfield
Principal Plan Provisions

B-2

Safety Plan Formulas

Retirement Age Half Pay at 55* 2% at 55 2% at 50 3% at 55 3% at 50 50 1.783% 1.426% 2.000% 2.400% 3.000%
51 1.903% 1.522% 2.140% 2.520% 3.000%
52 2.035% 1.628% 2.280% 2.640% 3.000%
53 2.178% 1.742% 2.420% 2.760% 3.000%
54 2.333% 1.866% 2.560% 2.880% 3.000%
55 & Up 2.500% 2.000% 2.700% 3.000% 3.000%

* For this formula, the benefit factor also varies by entry age. The factors shown are for members with an entry age of 35 or greater. If entry age is less than 35, then the age 55 benefit factor is 50% divided by the difference between age 55 and entry ag e. The benefit factor for ages prior to age 55 is the same proportion of the age 55 benefit factor as in the above table.

PEPRA Safety Plan Formulas

Retirement Age 2% at 57 2.5% at 57 2.7% at 57
50 1.426% 2.000% 2.000%
51 1.508% 2.071% 2.100%
52 1.590% 2.143% 2.200%
53 1.672% 2.214% 2.300%
54 1.754% 2.286% 2.400%
55 1.836% 2.357% 2.500%
56 1.918% 2.429% 2.600%
57 & Up 2.000% 2.500% 2.700%

• The years of service is the amount credited by CalPERS to a member while he or she is employed in this group (or for other periods that are recognized under the employer’s contract with CalPERS). For a member who has earned service with multiple CalPERS employers, the benefit from each employer is calculated separately according to each employer’s contract, and then added together for the total allowance. An agency may contract for an optional benefit where any unused sick leave accumulated at the time of retirement will be co nverted to credited service at a rate of 0.004 years of service for each day of sick leave.

• The final compensation is the monthly average of the member’s highest 36 or 12 consecutive months’ full -time equivalent monthly pay (no matter which CalPERS emplo yer paid this compensation). The standard benefit is 36 months. Employers had the option of providing a final compensation equal to the highest 12 consecutive months for classic plans only. Final compensation must be defined by the highest 36 consecutive m onths’ pay under the

1.5% at 65 formula. PEPRA members have a cap on the annual salary that can be used to calculate final compensation for all new members based on the Social Security contribution and benefit base. For employ ees that participate in Social Security this cap is $134,974 for 2022 and for those employees that do not participate in Social Security the cap for 2022 is $161,969 . Adjustments to the caps are permitted ann ually based on changes to the CPI for all urban consumers.

• PEPRA benefit formulas have no Social Security offsets and Social Security coverage is optional . For Classic benefit formulas, e mployees must be covered by Social Security with the 1.5% at 65 form ula. Social Security is optional for all other Classic benefit formulas. For employees covered by Social Security, the modified formula is the standard benefit. Under this type of formula, the final compensation is offset by $133.33 (or by one third if the final compensation is less than $400). Employers may contract for the full benefit with Social Security that will eliminate the offset applicable to the final compensation. For employees not covered by Social Security, the full

CalPERS Actuarial Valuation – June 30, 2022 Appendix B Miscellaneous Plan of the City of Bakersfield
Principal Plan Provisions

B-3
benefit is paid with no off sets. Auxiliary organizations of the CSUC system may elect reduced contribution rates, in which case the offset is $317 if members are not covered by Social Security or $513 if members are covered by Social Security.

• The Miscellaneous and PEPRA Safety service retirement benefit is not capped. The Classic Safety service retirement benefit is capped at 90% of final compensation.

Vested Deferred Retirement

Eligibility for Deferred Status

A CalPERS member becomes eligi ble for a deferred vested retirement benefit when he or she leaves employment, keeps his or her contribution account balance on deposit with CalPERS, and has earned at least 5 years of credited service (total service across all CalPERS employers, and with certain other retirement systems with which CalPERS has reciprocity agreements).

Eligibility to Start Receiving Benefits

The CalPERS classic members and PEPRA Safety members become eligible to receive the deferred retirement benefit upon satisfying the eligibility requirements for deferred status and upon attainment of age 50 (55 for employees hired into a 1.5% at 65 plan). PEPRA Miscellaneous members become eligible to receive the deferred retirement benefit upon satisfying the eligibility requirements for deferred status and upon attainment of age 52.

Benefit

The vested deferred retirement benefit is the same as the service retirement benefit, where the benefit factor is based on the member’s age at allowance commencement. For members who have earned service with multiple CalPERS employers, the benefit from each employer is calculated separately according to each employer’s contract, and then added together for the total allowance.

Non-Industrial (Non-Job Related) Disability Retirement

Eligibility

A CalPERS member is eligible for Non -Industrial Disability Retirement if he or she becomes disabled and has at least 5 years of credited service (total service across all CalPERS employers, and with certain other retirement systems with which CalPERS has r eciprocity agreements). There is no special age requirement. Disabled means the member is unable to perform his or her job because of an illness or injury, which is expected to be permanent or to last indefinitely .

The illness or injury does not have to be job related. A CalPERS member must be actively employed by any CalPERS employer at the time of disability in order to be eligible for this benefit.

Standard Benefit

The standard Non -Industrial Disability Retirement benefit is a monthly allowance equal to 1.8% of final compensation, multiplied by service, which is determined as follows:

• Service is CalPERS credited service, for members with less than 10 years of service or greater than 18.518 years of service; or

• Service is CalPERS credited service plus the additional number of years that the member would have worked until age 60, for members with at least 10 years but not more than 18.518 years of service. The maximum benefit in this case is 33⅓% of final compensation.

CalPERS Actuarial Valuation – June 30, 2022 Appendix B Miscellaneous Plan of the City of Bakersfield
Principal Plan Provisions

B-4

Improved Benefit

Employers have the option of providing the improved Non-Industrial Disability Retirement benefit. This benefit provides a monthly allowance equal to 30% of final compensation for the first 5 years of service, plus 1% for each additional year of service to a maximum of 50% of final compensation.

Members who are eligible for a larger service retirement benefit may choose to receive that benefit in lieu of a disability benefit. Members eligible to retire, and who have attai ned the normal retirement age determined by their service retirement benefit formula, will receive the same dollar amount for disability retirement as that payable for service retirement. For members who have earned service with multiple CalPERS employers, the benefit attributed to each employer is the total disability allowance multiplied by the ratio of service with a particular employer to the total CalPERS service.

Industrial (Job Related) Disability Retirement

This is a standard benefit for Safety m embers except those described in Section 20423.6. For excluded Safety members and all Miscellaneous members, employers have the option of providing this benefit. An employer may choose to provide the increased benefit option or the improved benefit option.

Eligibility

An employee is eligible for Industrial Disability Retirement if he or she becomes disabled while working, where disabled means the member is unable to perform the duties of the job because of a work -related illness or injury, which is expected to be permanent or to last indefinitely. A CalPERS member who has left active employment within this group is not eligible for this benefit, except to the extent described below.

Standard Benefit

The standard Industrial Disability Retirement benefit is a monthly allowance equal to 50% of final compensation.

Increased Benefit (75% of Final Compensation)

The increased Industrial Disability Retirement benefit is a monthly allowance equal to 75% of final compensation for total disability.

Improved Benefit (50% to 90% of Final Compensation)

The improved Industrial Disability Retirement benefit is a monthly allowance equal to the Workman’s Co mpensation Appeals Board permanent disability rate percentage (if 50% or greater, with a maximum of 90%) times the final compensation.

For a CalPERS member not actively employed in this group who became disabled while employed by some other CalPERS employ er, the benefit is a return of accumulated member contributions with respect to employment in this group. With the standard or increased benefit, a member may also choose to receive the annuitization of the accumulated member contributions.

If a member is eligible for service retirement and if the service retirement benefit is more than the industrial disability retirement benefit, the member may choose to receive the larger benefit.

CalPERS Actuarial Valuation – June 30, 2022 Appendix B Miscellaneous Plan of the City of Bakersfield
Principal Plan Provisions

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Post-Retirement Death Benefit

Standard Lump Sum Payment

Upon the death of a retiree, a one-time lump sum payment of $500 will be made to the retiree’s designated survivor(s), or to the retiree’s estate. The lump sum payment amount increases to $2,000 for any death occurring on or after July 1, 2023 due to SB 1168.

Optional Lump Sum Payment

In lieu of the standard lump sum death benefit, e mployers have the option of providing a lump sum death benefit of $600, $3,000, $4,000 or $5,000.

Form of Payment for Retirement Allowance

Standard Form of Payment

Generally, the retirement allowance is paid to the retiree in the form of an annuity for as long as he or she is alive. The retiree may choose to provide for a portion of his or her allowance to be paid to any designated beneficiary after the retiree’s death. CalPERS provides for a variety of such benefit options, which the retiree pays for by taking a reduction in his or her retirement allowance. Such reduction takes into account the amount to be provided to the beneficiary and the probable duration of payments (based on the ages of the member and beneficiary) made subsequent to the member’s death.

Improved Form of Payment (Post-Retirement Survivor Allowance)

Employers have the option to contract for the post-retirement survivor allowance.

For retirement allowances with respect to service subject to a modified Classic formula, 25% of the retirement allowance will automatically be continued to certain statutory beneficiaries upon the death of the retiree, without a reduction in the retiree’s allowance. For retirement allowances with respect to service subject to a PEPRA formula or a full or supplemental Classic formula, 50% of the retirement allowance will automatically be continued to certain statutory beneficiaries upon the death of the retiree, without a reduction in the retiree’s allowance. This additional benefit is referred to as post -retirement survivor allowance (PRSA) or simply as survivor continuance.

In other words, 25% or 50% of the allowance, the continuance portion, is paid to the retiree for as long as he or she is alive, and that same amount is continued to the retiree’s spouse (or if no eligible spouse, to unmarried child(ren) until they attain age 18; or, if no eligible child(ren), to a qualifying dependent parent) for the rest of his or her lifetime. Thi s benefit will not be discontinued in the event the spouse remarries.

The remaining 75% or 50% of the retirement allowance, which may be referred to as the option portion of the benefit, is paid to the retiree as an annuity for as long as he or she is alive. Or, the retiree may choose to provide for som e of this option portion to be paid to any designated beneficiary after the retiree’s death. Benefit options applicable to the option portion are the same as those offered with the standard form. The reduction is calculated in the same manner but is applie d only to the option portion.

CalPERS Actuarial Valuation – June 30, 2022 Appendix B Miscellaneous Plan of the City of Bakersfield
Principal Plan Provisions

B-6

Pre-Retirement Death Benefits

Basic Death Benefit

This is a standard benefit.

Eligibility

An employee’s beneficiary (or estate) may receive the basic death benefit if the member dies while actively employed.

A CalPERS member must be actively employed with the CalPERS employer providing this benefit to be eligible for this benefit. A member’s survivor who is eligible for any other pre-retirement death benefit may choose to receive that death benefit instead of this basic death benefit.

Benefit

The basic death benefit is a lump sum in the amount of the member’s accumulated contributions, where interest is credited annually at the greater of 6% or the prevailing discount rate through the date of death, plus a lump sum in the amount of one month's salary for each completed year of current service, up to a maximum of six months' salary. For purposes of this benefit, one month's salary is defined as the member's average monthly full-time rate of compensation during the 12 months preceding death.

1957 Survivor Benefit

This is a standard benefit.

Eligibility

An employee’s eligible survivor(s) may receive the 1957 Survivor benefit if the member dies while actively employed, has attained at least age 50 for classic and PEPRA Safety members and age 52 for PEPRA Miscellaneous members, and has at least 5 years of credited service (total service across all CalPERS employers and with certain other retirement systems with which CalPERS has reciprocity agreements) . A CalPERS member must be actively employ ed with the CalPERS employer providing this benefit to be eligible for this benefit. An eligible survivor means the surviving spouse to whom the member was married at least one year before death or, if there is no eligible spouse, to the member's unmarried child(ren) under age 18. A member’s survivor who is eligible for any other pre -retirement death benefit may choose to receive that death benefit instead of this 1957 Survivor benefit.

Benefit

The 1957 Survivor b enefit is a monthly allowance equal to one -half of the unmodified service retirement benefit that the member would have been entitled to receive if the member had retired on the date of his or her death. If the benefit is payable to the spouse, the benefit is discontinued upon the death of the spouse. If the benefit is payable to dependent child(ren), the benefit will be discontinued upon death or attainment of age 18, unless the child(ren) is disabled. The total amount paid will be at least equal to the basic death benefit.

CalPERS Actuarial Valuation – June 30, 2022 Appendix B Miscellaneous Plan of the City of Bakersfield
Principal Plan Provisions

B-7

Optional Settlement 2 Death Benefit

This is an optional benefit.

Eligibility

An employee’s eligible survivor may receive the Optional Settlement 2 Death benefit if the member dies while actively employed, has attained at least age 50 for classic and PEPRA Safety members and age 52 for PEPRA Miscellaneous members, and has at least 5 years of credited service (tot al service across all CalPERS employers and with certain other retirement systems with which CalPERS has reciprocity agreements). A CalPERS member who is no longer actively employed with any CalPERS employer is not eligible for this benefit. An eligible su rvivor means the surviving spouse to whom the member was married at least one year before death. A member’s survivor who is eligible for any other pre-retirement death benefit may choose to receive that death benefit instead of this Optional Settlement 2 Death benefit.

Benefit

The Optional Settlement 2 Death benefit is a monthly allowance equal to the service retirement benefit that the member would have received had the member retired on the date of his or her death and elected 100% to continue to the eligible survivor after the member’s death. The allowance is payable as long as the surviving spouse lives, at which time it is continued to any unmarried child(ren) under age 18, if applicable. The total amount paid will be at least equal to the basic death benefit.

Special Death Benefit

This is a standard benefit for Safety members except those described in Section 20423.6. For excluded Safety members and all Miscellaneous members, employers have the option of providing this benefit.

Eligibility

An employee’s eligible survivor(s) may receive the special death benefit if the member dies while actively employ ed and the death is job -related. A CalPERS member who is no longer actively employed with any CalPERS employer is not eligible for this benefit. An eligible survivor means the surviving spouse to whom the member was married prior to the onset of the injury or illness that resulted in death. If there is no eligible spouse, an eligible survivor mean s the member's unmarried child(ren) under age 22. An eligible survivor who chooses to receive this benefit will not receive any other death benefit.

Benefit

The special death benefit is a monthly allowance equal to 50 % of final compensation and will be increased whenev er the compensation paid to active employees is increased but ceasing to increase when the member would have attained age 50. The allowance is payable to the surviving spouse until death at which time the allowance is continued to any unma rried child(ren) under age 22. There is a guarantee that the total amount paid will at least equal the basic death benefit.

If the member’s death is the result of an accident or injury caused by external violence or physical force incurred in the performa nce of the member’s duty, and there are eligible surviving child(ren) (eligible means unmarried child(ren) under age 22) in addition to an eligible spouse, then an additional monthly allowance is paid equal to the following:

• if 1 eligible child: 12.5% of final compensation
• if 2 eligible children: 20.0% of final compensation • if 3 or more eligible children: 25.0% of final compensation

CalPERS Actuarial Valuation – June 30, 2022 Appendix B Miscellaneous Plan of the City of Bakersfield
Principal Plan Provisions

B-8

Alternate Death Benefit for Local Fire Members

This is an optional benefit available only to local fire members.

Eligibility

An employee’s eligible survivor(s) may receive the alternate death benefit in lieu of the basic death benefit or the 1957 Survivor benefit if the member dies while actively employed and has at least 20 years of total CalPERS service. A CalPERS member who is no longer actively employed with any CalPERS employer is not eligible for this benefit. An eligible survivor means the surviving spouse to whom the member was married prior to the onset of the injury or illness that resulted in death. If there is no eligible spouse, an eligible survivor means the member's unmarried child(ren) under age 18.

Benefit

The Alternate Death benefit is a monthly allowance equal to the service retirement benefit that the member would hav e received had the member retired on the date of his or her death and elect ed Optional Settlement 2. (A retiree who elects Optional Settlement 2 receives an allowance that has been reduced so that it will continue to be paid after his or her death to a surviving beneficiary.) If the member has not yet attained age 50, the benefit is equal to that which would be payable if the member had retired at age 50, based on service credited at the time of death. The allowance is payable as long as the surviving spouse lives, at which time it is continued to any unmarried child(ren) under age 18, if applicable. The total amount paid will be at least equal to the basic death benefit.

Cost-of-Living Adjustments (COLA)

Standard Benefit

Retirement and survivor allowances are adjusted each year in May for cost of living, beginning the second calendar year after the year of retirement. The standard cost -of-living adjustment (COLA) is 2%. Annual adjustments are calculated by first determinin g the lesser of 1) 2% compounded from the end of the year of retirement or 2) actual rate of price inflation. The resulting increase is divided by the total increase provided in prior years. For any given year, the COLA adjustment may be less than 2% (when the rate of price inflation is low), may be greater than the rate of price inflation (when the rate of price inflation is low after several years of high price inflation) or may even be greater than 2% (when price inflation is high after several years of low price inflation).

Improved Benefit

Employers have the option of providing a COLA of 3%, 4%, or 5%, determined in the same manner as described abov e for the standard 2% COLA. An improved COLA is not available with the 1.5% at 65 formula.

Purchasing Power Protection Allowance (PPPA)

Retirement and survivor allowances are protected against price inflation by PPPA. PPPA benefits are cost -of-living adjustments that are intended to maintain an individual’s allowance at 80% of the initial allowance at retirement adjusted for price inflation since retirement. The PPPA benefit will be coordinated with other cost-of-living adjustments provided under the plan.

CalPERS Actuarial Valuation – June 30, 2022 Appendix B Miscellaneous Plan of the City of Bakersfield
Principal Plan Provisions

B-9

Employee Contributions

Each employee contributes toward his or her retirement based upon the retirement formula. The standard employ ee contribution is as described below.

• The percent contributed below the monthly compensation breakpoint is 0 %.

• The monthly compensation breakpoint is $0 for full and supplemental formula members and $133.33 for employees covered by the modified formula.

• The percent contributed above the monthly compensation breakpoint depends upon the benefit formula, as shown in the table below.

Benefit Formula Percent Contributed above the
Breakpoint
Miscellaneous, 1.5% at 65 2%
Miscellaneous, 2% at 60 7%
Miscellaneous, 2% at 55 7%
Miscellaneous, 2.5% at 55 8%
Miscellaneous, 2.7% at 55 8%
Miscellaneous, 3% at 60 8%
Miscellaneous, 2% at 62 50% of the Total Normal Cost
Miscellaneous, 1.5% at 65 50% of the Total Normal Cost
Safety, Half Pay at 55 Varies by entry age
Safety, 2% at 55 7%
Safety, 2% at 50 9%
Safety, 3% at 55 9%
Safety, 3% at 50 9%
Safety, 2% at 57 50% of the Total Normal Cost
Safety, 2.5% at 57 50% of the Total Normal Cost
Safety, 2.7% at 57 50% of the Total Normal Cost

The employer may choose to “pick-up” these contributions for classic members (Employer Paid Member Contributions or EPMC). EPMC is prohibited for new PEPRA members.

An employer may also include Employee Cost Sharing in the contract, where employees agree to share the cost of the employer contribution. These contrib utions are paid in addition to the member contribution.

Auxiliary organizations of the CSU system may elect reduced contribution rates, in which case the offset is $317 and the contribution rate is 6% if members are not covered by Social Security. If memb ers are covered by Social Security, the offset is $513 and the contribution rate is 5%.

Refund of Employee Contributions

If the member’s service with the employer ends, and if the member does not satisfy the eligibility conditions for any of the retirement benefits above, the member may elect to receive a refund of his or her employee contributions, which are credited with 6% interest compounded annually.

CalPERS Actuarial Valuation – June 30, 2022 Appendix B Miscellaneous Plan of the City of Bakersfield
Principal Plan Provisions

B-10

1959 Survivor Benefit

This is a pre -retirement death benefit available only to members not covered by Social Security. Any agency joining CalPERS subsequent to 1993 is required to provide this benefit if the members are not covered by Social Security. The benefit is optional for agencies joining CalPERS prior to 1994. Levels 1, 2 , and 3 are now closed. Any new agency or any agency wishing to add this benefit or increase the current level may only choose the 4th or Indexed Level.

This benefit is not included in the results presented in this valuation. More information on this benefit is available on the CalPERS website.

Appendix C

Participant Data

• Summary of Valuation Data

• Active Members

• Transferred and Separ ated Members

• Retired Members and Beneficiaries

CalPERS Actuarial Valuation – June 30, 2022 Appendix C Miscellaneous Plan of the City of Bakersfield
Participant Data

C-1

Summary of Valuation Data

June 30, 2021 June 30, 2022

1. Active Members
a) Counts 1,064 1,140
b) Average Attained Age

42.21 41.64
c) Average Entry Age to Rate Plan 32.53 32.59
d) Average Years of Credited Service 9.65 8.96
e) Average Annual Covered Pay $59,473 $59,770
f) Annual Covered Payroll 63,279,664 68,137,779
g) Projected Annual Payroll for Contribution Year 68,745,379 74,023,108 h) Present Value of Future Payroll 630,414,938 684,442,200

2. Transferred Members
a) Counts 543 581
b) Average Attained Age 38.37 38.34
c) Average Years of Credited Service 1.57 1.61
d) Average Annual Covered Pay $86,746 $89,667

3. Separated Members
a) Counts 573 655
b) Average Attained Age 41.94 41.50
c) Average Years of Credited Service 2.08 2.30
d) Average Annual Covered Pay $44,141 $45,333

4. Retired Members and Beneficiaries
a) Counts 1,031 1,053
b) Average Attained Age 67.74 68.00
c) Average Annual Benefits $31,366 $32,332
d) Total Annual Benefits $32,338,209 $34,046,082

5. Active to Retired Ratio [(1a) / (4a)] 1.03 1.08

Counts of members included in the valuation are counts of the records processed by the valuation. Multiple records may exist for those who have service in more than one valuation group. This does not result in double counting of liabilities.

Average Annual Benefits represents benefit amounts payable by this plan only. Some members may have service with another agency and would therefore have a larger total benefit than would be included as part of the average shown here.

CalPERS Actuarial Valuation – June 30, 2022 Appendix C Miscellaneous Plan of the City of Bakersfield
Participant Data

C-2

Active Members

Counts of members included in the valuation are counts of the records processed by the valuation. Multiple records may exist for those who have service in more than one valuation group. This does not result in double counting of liabilities.

Distribution of Active Members by Age and Service

Years of Service at Valuation Date
Attained
Age 0-4 5-9 10-14 15-19 20-24 25+ Total
15-24 61 0 0 0 0 0 61
25-29 130 22 1 0 0 0 153
30-34 114 41 10 3 0 0 168
35-39 71 40 23 28 2 0 164
40-44 62 38 23 40 13 0 176
45-49 25 19 14 32 23 6 119
50-54 24 15 13 27 25 15 119
55-59 15 8 10 27 19 10 89
60-64 10 7 6 20 13 11 67
65 and Over 3 4 1 9 2 5 24
All Ages 515 194 101 186 97 47 1,140

Distribution of Average Annual Salaries by Age and Service

Years of Service at Valuation Date
Attained
Age 0-4 5-9 10-14 15-19 20-24 25+
Average
Salary
15-24 $40,625 $0 $0 $0 $0 $0 $40,625
25-29 44,650 55,565 95,783 0 0 0 46,554
30-34 46,212 60,158 61,631 63,665 0 0 50,845
35-39 51,838 68,727 65,514 64,513 77,633 0 60,354
40-44 55,804 62,801 64,120 73,990 82,342 0 64,495
45-49 55,749 67,874 76,189 78,222 83,296 93,815 73,376
50-54 46,596 57,756 69,332 70,944 72,190 92,344 67,154
55-59 73,084 64,555 75,730 61,707 73,978 100,411 72,424 60-64 53,477 59,567 58,300 68,892 66,360 79,885 65,982
65 and Over 28,259 35,838 35,000 51,123 56,863 63,853 48,176 Average $48,386 $62,150 $67,364 $69,245 $75,549 $88,301 $59,770

CalPERS Actuarial Valuation – June 30, 2022 Appendix C Miscellaneous Plan of the City of Bakersfield
Participant Data

C-3

Transferred and Separated Members

Distribution of Transfers to Other CalPERS Plans by Age, Service, and average Salary

Years of Service at Valuation Date
Attained
Age 0-4 5-9 10-14 15-19 20-24 25+ Total
Average
Salary
15-24 22 0 0 0 0 0 22 $59,941
25-29 110 3 0 0 0 0 113 67,517
30-34 117 5 0 0 0 0 122 76,198
35-39 81 2 2 0 0 0 85 88,471
40-44 86 8 0 1 1 0 96 107,665
45-49 57 4 1 2 2 0 66 112,246
50-54 37 4 2 0 1 0 44 121,526
55-59 16 2 0 1 0 0 19 101,926
60-64 5 3 2 0 0 0 10 98,868
65 and Over 3 1 0 0 0 0 4 78,903
All Ages 534 32 7 4 4 0 581 $89,667

Distribution of Separated Participants with Funds on Deposit by Age, Service, and average Salary

Years of Service at Valuation Date
Attained Age 0-4 5-9 10-14 15-19 20-24 25+ Total
Average
Salary
15-24 17 0 0 0 0 0 17 $43,083
25-29 77 1 0 0 0 0 78 40,771
30-34 117 7 1 0 0 0 125 43,740
35-39 96 9 2 3 0 0 110 44,877
40-44 79 12 7 5 2 0 105 53,276
45-49 58 13 3 4 0 0 78 47,874
50-54 38 6 1 3 1 0 49 47,633
55-59 31 10 0 0 1 0 42 42,530
60-64 22 5 3 0 0 0 30 47,837
65 and Over 19 1 1 0 0 0 21 23,462
All Ages 554 64 18 15 4 0 655 $45,333

CalPERS Actuarial Valuation – June 30, 2022 Appendix C Miscellaneous Plan of the City of Bakersfield
Participant Data

C-4

Retired Members and Beneficiaries

Distribution of Retirees and Beneficiaries by Age and Retirement Type*

Attained Age
Service
Retirement
Non-
Industrial
Disability
Industrial
Disability
Non-
Industrial
Death
Industrial
Death
Death After
Retirement Total
Under 30 0 0 1 0 0 0 1
30-34 0 0 7 0 0 0 7
35-39 0 0 4 0 0 0 4
40-44 0 2 13 0 0 0 15
45-49 0 0 21 0 0 2 23
50-54 16 4 14 1 0 1 36
55-59 74 10 17 1 0 6 108
60-64 154 9 14 0 1 10 188
65-69 209 11 3 4 0 9 236
70-74 152 12 1 1 0 17 183
75-79 114 5 1 0 1 15 136
80-84 48 7 1 0 0 13 69
85 and Over 28 0 1 1 0 17 47
All Ages 795 60 98 8 2 90 1,053

Distribution of Average Annual Disbursements to Retirees and Beneficiaries by Age and Retirement Type*

Attained
Age
Service
Retirement
Non-
Industrial
Disability
Industrial
Disability
Non-
Industrial
Death
Industrial
Death
Death After
Retirement Average
Under 30 $0 $0 $120 $0 $0 $0 $120
30-34 0 0 112 0 0 0 112
35-39 0 0 78 0 0 0 78
40-44 0 10,883 300 0 0 0 1,711
45-49 0 0 189 0 0 12,764 1,283
50-54 9,207 12,462 1,279 389 0 20,769 6,562
55-59 20,326 16,145 403 36 0 18,586 16,519
60-64 40,307 11,544 2,869 0 57 26,293 35,183
65-69 43,143 16,026 203 29,620 0 31,104 40,644
70-74 41,785 12,367 127 12,220 0 50,414 40,269
75-79 36,466 21,445 7,607 0 22 28,763 34,584
80-84 38,144 22,185 753 0 0 33,377 35,085
85 and Over 25,315 0 12,727 28,445 0 30,560 27,011
All Ages $37,640 $15,403 $978 $19,946 $40 $32,695 $32,332

CalPERS Actuarial Valuation – June 30, 2022 Appendix C Miscellaneous Plan of the City of Bakersfield
Participant Data

C-5

Retired Members and Beneficiaries (continued)

Distribution of Retirees and Beneficiaries by Years Retired and Retirement Type*

Years
Retired
Service
Retirement
Non-
Industrial
Disability
Industrial
Disability
Non-
Industrial
Death
Industrial
Death
Death After
Retirement Total
Under 5 Yrs 205 9 32 2 0 31 279
5-9 234 3 20 3 0 24 284
10-14 164 3 17 2 0 13 199
15-19 111 7 4 0 0 11 133
20-24 49 23 13 0 1 5 91
25-29 24 7 10 0 0 5 46
30 and Over 8 8 2 1 1 1 21
All Years 795 60 98 8 2 90 1,053

Distribution of Average Annual Disbursements to Retirees and Beneficiaries by Years Retired and Retirement Type*

Years
Retired
Service
Retirement
Non-
Industrial
Disability
Industrial
Disability
Non-
Industrial
Death
Industrial
Death
Death After
Retirement Average
Under 5 Yrs $38,059 $13,520 $1,124 $213 $0 $40,842 $33,069 5-9 38,063 16,112 866 39,424 0 35,908 35,044
10-14 40,304 23,256 826 6,214 0 21,452 35,101
15-19 41,456 10,189 313 0 0 32,620 37,842
20-24 26,483 17,110 892 0 57 21,083 19,871
25-29 25,905 9,643 218 0 0 11,135 16,241
30 and Over 10,493 19,005 6,740 28,445 22 15,922 13,993 All Years $37,640 $15,403 $978 $19,946 $40 $32,695 $32,332

* Counts of members do not include alternate payees receiving benefits while the member is still working. Therefore, the total counts may not match information on C -1 of the report. Multiple records may exist for those who have service in more than one coverage group. This does not result in double counting of liabilities .

Appendix D

Glossary

CalPERS Actuarial Valuation – June 30, 2022 Appendix D Miscellaneous Plan of the City of Bakersfield
Glossary

D-1
Glossary

Accrued Liability (Actuarial Accrued Liability)
The Present Value of Benefits minus the present value of future Normal Cost or the Present Value of Benefits allocated to prior years. Different actuarial cost methods and different assumptions will lead to different measures of Accrued Liability.

Actuarial Assumptions
Assumptions made about certain events that will affect pension costs. Assumptions generally can be broken down into two categories: demographic and economic. Demographic assumptions include such things as mortality, disability , and retirement rates. Economic assumptio ns include discount rate, wage inflation , and price inflation.

Actuarial Methods
Procedures employed by actuaries to achieve certain funding goals of a pension plan. Actuarial methods include an actuarial cost method, an amortization policy, and an asset valuation method.

Actuarial Valuation
The determination as of a valuation date of the Normal Cost, Accrued Liability, and related actuarial present values for a pension plan. These valuations are performed annually or when an employer is contemplating a change in plan provisions.

Actuary
A business professional proficient in mathematics and statistics who measures and manages risk . A public retirement system actuary in California perform s actuarial valuation s necessary to properly fund a pension plan and disclose its liabilities and must satisfy the Qualification Standards for Actuaries Issuing Statements of Actuarial Opinion in the United States with regard to pensions.

Amortization Bases
Separate payment schedules for different portions of the Unfunded Accrued Liability (UAL). The total UAL of a rate plan can be segregated by cause. The impact of such individual causes on the UAL are quantified at the time of their occurrence, resulting in new amortization bases. Each base is separately amortized and pa id for over a specific period of time. Generally, in an actuarial valuation, the separate bases consist of changes in UAL due to contract amendments, actuarial assumption changes, method changes, and/or gains and losses.

Amortization Period
The number of years required to pay off an Amortization Base.

Classic Member (under PEPRA)
A member who joined a public retirement system prior to January 1, 2013 and who is not defined as a new member under PEPRA. (See definition of New Member below.)

Discount Rate
This is the rate used to discount the expected future benefit payments to the valuation date to determine the Projected Value of Benefits. Different discount rates will produce different measures of the Projected Value of Benefits. The discount rate for funding purposes is based on the assumed long-term rate of return on plan assets, net of investment and administrative expenses. This rate is called the “actuarial interest rate” in Section 20014 of the California Public Employees’ Retirement Law.

Entry Age
The earliest age at which a plan member begins to accrue benefits under a defined benefit pension plan. In most cases, this is the age of the member on their date of hire.

Entry Age Actuarial Cost Method
An actuarial cost method that allocates the cost of the projected benefits on an individual basis as a level percent of earnings for the individual between entry age and retirement age. This method yields a total normal cost rate, expressed as a percentage of payroll, which is des igned to remain level throughout the member’s career.

Fresh Start
A Fresh Start is when multiple amortization bases are combined into a single base and amortized over a new Amortization Period.

CalPERS Actuarial Valuation – June 30, 2022 Appendix D Miscellaneous Plan of the City of Bakersfield
Glossary

D-2
Glossary (continued)

Funded Ratio
Defined as the Market Value of Assets divided by the Accrued Liability. Different actuarial cost methods and different assumptions will lead to different measures of Funded Ratio. The Funded Ratio with the Accrued Liability equal to the funding target is a measure of how well funded a rate plan is. A ratio greater than 100% means the rate plan has more assets than the funding target and the employer need only contribute the Normal Cost . A ratio less than 100% means assets are less than the funding target and contributions in addition to Normal Cost are required.

Funded Status
Any comparison of a particular measure of plan assets to a particular measure of pension obligations. The methods and assumptions used to calculate a funded status should be consistent with the purpose of the measurement.

Funding Target
The Accrued Liability measure upon which the funding requirements are based. The funding target is the Accrued Liability under the Entry Age Actuarial Cost Method using the assumptions adopted by the board.

GASB 68
Statement No. 68 of the Governmental Accounting Standards Board. The accounting standard governing a state or local governmental employer’s accounting and financial reporting for pensions.

New Member (under PEPRA)
A new member includes an individual who becomes a member of a public retirement system for the first time on or after January 1, 2013, and who was not a member of another public retirement system prior to that date, and who is not subject to reciprocity with another public retirem ent system.

Normal Cost
The portion of the Present Value of Benefits allocated to the upcoming fiscal year for active employees. Different actuarial cost methods and different assumptions will lead to different measures of Normal Cost. The Normal Cost under the Entry Age Actuarial Cost Method , using the assumptions adopted by the board , plus the required amortization of the UAL, if any, make up the required contributions.

PEPRA
The California Public Employees’ Pension Reform Act of 2013.

Present Value of Benefits (PVB)
The total dollars needed as of the valuation date to fund all benefits earned in the past or expected to be earned in the future for current members.

Traditional Unit Credit Actuarial Cost Method
An actuarial cost method that sets the Accrued Liability equal to the Present Value of Benefits assuming no future pay increases or service accruals. The Traditional Unit Credit Cost Method is used to measure the accrued liability on a termination basis .

Unfunded Accrued Liability (UAL)
The Accrued Liability minus the Market Value of Assets. If the UAL for a rate plan is positive, the employer is required to make contributions in excess of the Normal Cost.

California Public Employees’ Retirement System
Actuarial Office
400 Q Street, Sacramento, CA 95811 | Phone: (916) 795 -3000 | Fax: (916) 795-2744 888 CalPERS (or 888-225-7377) | TTY: (877) 249-7442 | www.calpers.ca.gov

July 2023

Safety Police Plan of the City of Bakersfield (CalPERS ID: 3050192847 ) Annual Valuation Report as of June 30, 2022

Dear Employer,

Attached to this letter is the June 30, 2022 actuarial valuation report for the rate plan noted above. Provided in this report is the determination of the minimum required employer contributions for fiscal year (FY) 2024-25. In addition, the report contains important information regarding the current financial status of the plan as well as projections and risk measures to aid in planning for the future.

Actuarial valuations are based on assumptions regarding future plan experience including investment return and payroll growth, eligibility for the types of benefits provided, and longevity among retirees. The CalPERS Board of Administration (board) adopts these assumptions after considering the advice of CalPERS actuarial and investment teams and other professionals. Each actuarial valuation reflects all prior differences between actual and assumed experience and adjusts the contribution r equirements as needed. This valuation is based on an investment return assumption of 6.8%, which was adopted by the board in November 2021. Other assumptions used in this report are those recommended in the CalPERS Experience Study and Review of Actuarial Assumptions report from November 2021.

Required Contributions

The table below shows the minimum required employer contributions and the PEPRA member rate for FY 2024-25 along with an estimate of the required employer contribution for FY 2025-26. Employee contributions other than cost sharing (whether paid by the employer or the employee) are in addition to the results shown below. The required employer contributions in this report do not reflect any cost sharing arrangement between the agency and the employees.

Fiscal Year Employer Normal
Cost Rate
Employer Amortization of
Unfunded Accrued Liability
PEPRA Member
Contribution Rate
2024-25 21.39% $20,756,482 14.75%

Projected Results
2025-26 21.0% $22,059,000 TBD

The actual investment return for FY 2022-23 was not known at the time this report was prepared. The projections abov e assume the investment return for that year would be 6.8%. To the extent the actual investment return for FY 2022- 23 differs from 6.8%, the actual contribution requirements for FY 2025-26 will differ from those shown above.

For additional details regarding the assumptions and methods used for these projections , please refer to the “Projected Employer Contributions” in the “Highlights and Executive Summary” section. This section also contains projected required contributions through FY 2029-30.

Changes from Previous Year’s Valuations

There are no significant changes in actuarial assumptions or policies in the 2022 actuarial valuation. T here may be changes specific to the plan such as contract amendments and funding changes.

Further descriptions of general changes are included in the “Highlights and Executive Summary” section and in Appendix A, “Actuarial Methods a nd Assumptions.” The effects of any changes on the required contributions are included in the “Reconciliation of Required Employer Contributions” section.

Safety Police Plan of the City of Bakersfield
(CalPERS ID: 3050192847 )
Annual Valuation Report as of June 30, 2022

Questions

A CalPERS actuary is available to answer questions about this report . Other questions may be directed to the Customer Contact Center at (888)-CalPERS or (888-225-7377).

Sincerely,

SCOTT TERANDO, ASA, EA, MAAA, FCA, CFA
Chief Actuary, CalPERS

RANDALL DZIUBEK, ASA, MAAA
Deputy Chief Actuary, Valuation Services , CalPERS

Actuarial Valuation
as of June 30, 2022

for the
Safety Police Plan
of the
City of Bakersfield
(CalPERS ID: 3050192847)
(Rate Plan ID: 26)

Required Contributions
for Fiscal Year
July 1, 2024 – June 30, 2025

Table of Contents

Actuarial Certification 1

Highlights and Executive Summary
Introduction 3
Purpose 3
Required Contribution s 4
Additional Discretionary Employer Contributions 5
Funded Status – Funding Policy Basis 6
Projected Employer Contributions 7
Cost 8
Changes Since the Prior Year’s Valuation 9
Subsequent Events 9
Assets
Reconciliation of the Market Value of Assets 11
Asset Allocation 12
CalPERS History of Investment Returns 13

Liabilities and Contributions
Development of Accrued and Unfunded Liabilities 15
(Gain) / Loss Analysis 6/30/21 - 6/30/22 16
Schedule of Amortization Bases 17
Amortization Schedule and Alternatives 19
Reconciliation of Required Employer Contributions 21
Employer Contribution History 22
Funding History 22
Normal Cost by Benefit Group 23
PEPRA Member Contribution Rates 24

Risk Analysis
Future Investment Return Scenarios 26
Discount Rate Sensitivity 27
Mortality Rate Sensitivity 27
Maturity Measures 28
Maturity Measures History 29
Funded Status – Termination Basis 30

Plan’s Major Benefit Provisions
Plan’s Major Benefit Options 32

Appendix A – Actuarial Methods and Assumptions
Actuarial Data A-1
Actuarial Methods A-1
Actuarial Assumptions A-4
Miscellaneous A-24

Appendix B – Principal Plan Provisions B-1

Appendix C – Participant Data
Summary of Valuation Data C-1
Active Members C-2
Transferred and Separated Members C-3
Retired Members and Beneficiaries C-4

Appendix D – Glossary D-1

(CY) FIN JOB INSTANCE ID : 421821 (PY) FIN JOB INSTANCE ID : 398598 REPORT ID: 421822

CalPERS Actuarial Valuation - June 30, 2022
Safety Police Plan of the City of Bakersfield
CalPERS ID: 3050192847

Actuarial Certification

To the best of my knowledge, this report is complete and accurate and contains sufficient information to disclose, fully and fairly, the funded condition of the Safety Police Plan of the City of Bakersfield and satisfies the actuarial valuation requirements of Government Code section 7504 . This valuation and related validation work was performed by the CalPERS Actuarial Office and is based on the member and financial data as of June 30, 2022 provided by the various CalPERS databases and the benefits under this plan with CalPERS as of the date this report was produced.

It is my opinion that the valuation has been perform ed in accordance with generally accepted actuarial principles, in accordance with standards of practice prescribed by the Actuarial Standards Board, and that the assumptions and methods, as prescribed by the CalPERS Board of Administration , are internally consistent and reasonable for this plan .

The undersigned is an actuary who satisfies the Qualification Standards for Actuaries Issuing Statements of Actuarial Opinion in the United States with regard to pensions.

KURT SCHNEIDER, MPA, ASA, EA, MAAA
Supervising Actuary , CalPERS

Highlights and Executive Summary

• Introduction

• Purpose

• Required Contributions

• Additional Discretionary Employer Contributions

• Funded S tatus – Funding Policy Basis

• Projected Employer C ontributions

• Cost

• Changes Since the Prior Year ’s Valuation

• Subsequent Events

CalPERS Actuarial Valuation - June 30, 2022
Safety Police Plan of the City of Bakersfield
CalPERS ID: 3050192847

Introduction

This report presents the results of the June 30, 2022 actuarial valuation of the Safety Police Plan of the City of Bakersfield of the California Public Employees’ Retirement System (CalPERS). This actuarial valuation sets the minimum required contributions for fiscal year (FY) 2024-25.

Purpose

This report documents the results of the actuarial valuation prepared by the CalPERS Actuarial Office using data as of June 30, 2022. The purpose of the valuation is to:

• Set forth the assets and accrued liabilities of this rate plan as of June 30, 2022; • Determine the minimum required employer contributions for this rate plan for FY July 1, 2024 through June 30, 2025;
• Determine the required member contribution rate for FY July 1, 2024 through June 30, 2025 for employees subject to the California Public Employees' Pension Reform Act of 2013 (PEPRA); and • Provide actuarial information as of June 30, 2022 to the CalPERS Board of Administration (board) and other interested parties.

The pension funding information presented in this report should not be used in financial reports subject to Governmental Accounting Standards Board (GASB) Statement No. 68 for an Agent Employer Defined Benefit Pension Plan. A separate accounting valuation report for such purposes is available from CalPERS and details for ordering are available on the CalPERS website (www.calpers.ca.gov).

The measurements shown in this actuarial valuation may not be applicable for other purposes. The agency should contact t he plan actuary before disseminating any portion of this report for any reason that is not explicitly described above.

Future actuarial measurements may differ significantly from the current measurements presented in this report due to such factors as the following: plan experience differing from that anticipated by the economic or demographic assumptions; changes in economic or demographic assumptions; changes in actuarial policies; changes in plan provisions or applicable law; and differences between the required contributions determined by the valuation and the actual contributions made by the agency.

Assessment and Disclosure of Risk

This report includes the following risk disclosures consistent with the guidance of Actuarial Standards of Practice No. 51 and recommended by the California Actuarial Advisory Panel (CAAP) in the Model Disclosure Elements document:

• A “Scenario Test,” projecting future results under different investment income returns. • A “Sensitivity Analysis,” showing the impact on current valuation results using alternative discount rates 5.8% and 7.8%.
• A “Sensitivity Analysis,” showing the impact on current valuation results assuming rates of mortality are 10% lower or 10% higher than our current post-retirement mortality assumptions adopted in 2021.
• Plan maturity measures indicating how sensitive a plan may be to the risks noted above.

CalPERS Actuarial Valuation - June 30, 2022
Safety Police Plan of the City of Bakersfield
CalPERS ID: 3050192847

Required Contributions

Fiscal Year
Required Employer Contributions 2024-25
Employer Normal Cost Rate 21.39%
Plus
Required Payment on Amortization Bases $20,756,482
Paid either as
1) Monthly Payment $1,729,707
Or
2) Annual Prepayment Option* $20,084,828

Required PEPRA Member Contribution Rate

14.75%
The total minimum required employer contribution is the sum of the Plan’s Employer Normal Cost Rate (expressed as a percentage of payroll and paid as payroll is reported) plus the Employer Unfunded Accrued Liability (UAL) Contribution Amount (billed monthly (1) or prepaid annually (2) in dollars). * Only the UAL portion of the employer contribution can be prepaid (which must be received in full no later than July 31).

For additional detail regarding the determination of the required contribution for PEPRA members, see ”PEPRA Member Contribution Rates” in the “Liabilities and Contributions” section. Required member contributions for Classic members can be found in Appendix B.

Fiscal Year Fiscal Year
2023-24 2024-25
Normal Cost Contribution as a Percentage of Payroll
Total Normal Cost 33.06% 33.08%
Employee Contribution 1 11.50% 11.69%
Employer Normal Cost 2 21.56% 21.39%

Projected Annual Payroll for Contribution Year $42,455,339 $47,160,902

Estimated Employer Contributions Based On
Projected Payroll
Total Normal Cost $14,035,735 $15,600,826
Offset Due to Employee Contribution s 4,882,364 5,513,109 Employer Normal Cost 9,153,371 10,087,717
Unfunded Liability Contribution 17,644,097 20,756,482 % of Projected Payroll (illustrative only) 41.56% 44.01% Estimated Total Employer Contributio n $26,797,468 $30,844,199 % of Projected Payroll (illustrative only) 63.12% 65.40%

1 For classic members, this is the percentage specified in the Public Employees’ Retirement Law , net of any reduction from the use of a modified formula or other factors. For PEPRA members, the member contribution rate is based on 50% of the normal cost. A development of PEPRA member contribution rates can be found in the “Liabilities and Contributions” section. Employee cost sharing is not show n in this report.

2 The Employer Normal Cost is a blended rate for all benefit groups in the plan. For a breakout of normal cost by benefit group, see “Normal Cost by Benefit Group” in the “Liabilities and Contributions” section.

CalPERS Actuarial Valuation - June 30, 2022
Safety Police Plan of the City of Bakersfield
CalPERS ID: 3050192847

Additional Discretionary Employer Contributions

The minimum required employer contribution towards the Unfunded Accrued Liability (UAL) for this rate plan for FY 2024-25 is $20,756,482 . CalPERS allows agencies to make additional discretionary payments (ADPs) at any time and in any amount. These optional payments serve to reduce the UAL and future required contributions and can result in significant long -term savings. Agencies can also use ADPs to stabilize annual contributions as a fixed dollar amount, percent of payroll or percent of revenue.

Provided below are select ADP options for consideration. Making such an ADP during FY 2024-25 does not require an ADP be made in any future year, nor does it change the remaining amortization period of any portion of unfunded liability. For information on permanent changes to amortization periods, see the “Amortization Schedule and Alternatives” section of the report.

Agencies considering making an ADP should contact CalPERS for additional information.

Minimum Required Employer Contribution for Fiscal Year 2024-25

Estimated
Normal Cost
Minimum UAL
Payment
ADP Total UAL
Contribution
Estimated Total
Contribution
$10,087,717 $20,756,482 $0 $20,756,482 $30,844,199

Alternative Fiscal Year 2024-25 Employer Contributions for Greater UAL Reduction

Funding
Horizon
Estimated
Normal Cost
Minimum UAL
Payment
ADP1 Total UAL
Contribution
Estimated Total
Contribution
20 years $10,087,717 $20,756,482 $2,735,661 $23,492,143 $33,579,860 15 years $10,087,717 $20,756,482 $6,649,152 $27,405,634 $37,493,351 10 years $10,087,717 $20,756,482 $14,903,407 $35,659,889 $45,747,606 5 years $10,087,717 $20,756,482 $40,567,369 $61,323,851 $71,411,568

1 The ADP amounts are assumed to be made in the middle of the fiscal year. A payment made earlier or later in the fiscal year w ould have to be less or more than the amount show n to have the same effect on the UAL amortization.

Note that the calculations above are based on the projected Unfunded Accrued Liability as of June 30, 2024 as determined in the June 30, 2022 actuarial valuation. New unfunded liabilities can emerge in future years due to assumption or method changes, changes in plan provisions , and actuarial experience different than assumed. Making an ADP illustrated above for the indicated number of years wi ll not result in a plan that is exactly 100% funded in the indicated number of years. Valuation results will vary from one year to the next and can diverge significantly from projections over a period of several years.

CalPERS Actuarial Valuation - June 30, 2022
Safety Police Plan of the City of Bakersfield
CalPERS ID: 3050192847

Funded Status – Funding Policy Basis

The table below provides information on the current funded status of the plan under the funding policy . The funded status for this purpose is based on the market value of assets relative to the funding target produced by the entry age actuarial cost method and actuarial assumptions adopted by the board. The actuarial cost method allocates the total expected cost of a member’s projected benefit ( Present Value of Benefits ) to individual years of service (the Normal Cost). The value of the projected benefit that is not allocated to future service is referred to as the Accrued Liability and is the plan’s funding target on the valuation date. The Unfunded Accrued Liability (UAL) equals the funding target minus the assets. The UAL is an absolute measure of funded status and can be viewed as employer debt. The funded ratio equals the assets divided by the funding target. The funded ratio is a relative measure of the funded status and allows for comparisons between plans of different sizes.

A funded ratio of 100% (UAL of $0) impl ies that the funding of the plan is on target and that future contributions equal to the normal cost of the active plan members will be sufficient to fully fund all retirement benefits if future experience matches the actuarial assumptions. A funded ratio of less than 100% (positive UAL) implies that in addition to normal costs, payments toward the UAL will be required . Plans with a funded ratio greater than 100% have a negative UAL (or surplus) but are required under current law to continue contributing the normal cost in most cases, preserving the surplus for future contingencies.

Calculations for the funding target reflect the expected long -term investment return of 6.8%. If it were known on the valuation date that future investment returns will average something greater/less than the expected return, calculated normal costs and accrued liabilities provided in this report would be less/greater than the results shown. Therefore, for example, if actual average future returns are less than the expected return, calculated normal costs and UAL contributions will not be sufficient to fully fund all retirement benefits. Under this scenario, required future normal cost contributions will need to increase from those provided in this report, and the plan will develop unfunded liabilities that will also add to required future contributions. For illustrativ e purposes, funded stat uses based on a 1% lower and higher average future investment return (discount rate) are as follows:

The “Risk Analysis” section of the report provides additional information regarding the sensitivity of valuation results to the expected investment return and other factors. Also provided in that section are measures of funded status that are appropriate for assessing the sufficiency of plan assets to cover estimated termination liabilities.

June 30, 2021 June 30, 2022

1. Present Value of Benefits $751,090,090 $805,600,352

2. Entry Age Accrued Liability 612,032,995 653,467,123

3. Market Value of Assets (MVA) 427,728,310 393,391,438

4. Unfunded Accrued Liability (UAL) [(2) – (3)] $184,304,685 $260,075,685

5. Funded Ratio [(3) / (2)] 69.9% 60.2%
1% Lower
Average Return
Current
Assumption
1% Higher
Average Return
Discount Rate 5.8% 6.8% 7.8%

1. Present Value of Benefits $961,889,334 $805,600,352 $686,570,358

2. Entry Age Accrued Liability 749,800,310 653,467,123 575,506,093

3. Market Value of Assets (MVA) 393,391,438 393,391,438 393,391,438

4. Unfunded Accrued Liability (UAL) [(2) – (3)] $356,408,872 $260,075,685 $182,114,655

5. Funded Ratio [(3) / (2)] 52.5% 60.2% 68.4%

CalPERS Actuarial Valuation - June 30, 2022
Safety Police Plan of the City of Bakersfield
CalPERS ID: 3050192847

Projected Employer Contributions

The table below shows the required and projected employer contributions (before cost sharing) for the next six fiscal years. The projection assumes that all actuarial assumptions will be realized and that no further changes to assumptions, contributions, benefits, or funding will occur during the projection period. In particular, the investment return beginning with FY 2022-23 is assumed to be 6.80% per year, net of investment and administrative expenses. The projected normal cost percentages below reflect that the normal cost is expected to continue to decline over time as new employees are hired into lower cost benefit tiers. Future contribution requirements may differ significantly from those shown below. The actual long-term cost of the plan will depend on the actual benefits and expenses paid and the actual investment experience of the fund.

Required
Contribution
Projected Future Employer Contributions
(Assumes 6.80% Return for Fiscal Year 2022-23 and Beyond) Fiscal Year 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 Normal Cost % 21.39% 21.0% 20.6% 20.3% 19.9% 19.6%
UAL Payment $20,756,482 $22,059,000 $23,329,000 $24,414,000 $26,480,000 $27,025,000

Total as a % of Payroll* 65.40% 66.5% 67.4% 67.9% 70.2% 69.5% Projected Payroll $47,160,902 $48,481,407 $49,838,887 $51,234,375 $52,668,939 $54,143,669

*Illustrative only and based on the projected payroll show n.

For ongoing plans, investment gains and losses are amortized using a 5-year ramp up. For more information, please see “Amortization of Unfunded Actuarial Accrued Liability” under “Actuarial Methods” in Appendix A.

This method phases in the impact of the change in UAL over a 5-year period in order to reduce employer cost volatility from year to year. As a result of this methodology, dramatic changes in the required employ er contributions in any one year are less likely. However, required contributions can change gradually and significantly over the next fiv e years. In years when there is a large investment loss , the relatively small amortization payments during the ramp up period could result in contributions that are less than interest on the UAL (i.e. negative amortization) while the contribution impact of the increase in the UAL is phased in.

For projected contributions under alternate investment return scenarios, please see the “Fut ure Investment Return Scenarios” in the “Risk Analysis” section. Our online pension plan projection tool, Pension Outlook, is available in the Employers section of the CalPERS website. Pension Outlook can help plan and budget pension costs under various sc enarios.

CalPERS Actuarial Valuation - June 30, 2022
Safety Police Plan of the City of Bakersfield
CalPERS ID: 3050192847

Cost

Actuarial Determination of Plan Cost

Contributions to fund the plan are comprised of two components:

• Normal Cost, expressed as a percentage of total active payroll • Amortization of the Unfunded Accrued Liability (UAL), expressed as a dollar amount

For fiscal years prior to 2017-18, the Amortization of UAL component was expressed as a percentage of total active payroll. Starting with FY 2017-18, the Amortization of UAL component is expressed as a dollar amount and invoiced on a monthly basis. There is an option to prepay this amount during July of each fiscal year.

The Normal Cost component is expressed as a percentage of active payroll with employer and employ ee contributions payable as part of the regular payroll reporting process.

The determination of both components requires complex actuarial calculations. The calculations are based on a set of actuarial assumptions which can be divided into two categories:

• Demographic assumptions (e.g., mortality rates, retirement rates, employment termination rates, disability rates)
• Economic assumptions (e.g., future investment earnings, inflation, salary growth rates)

These assumptions reflect CalPERS’ best estimate of future experience of the plan and are long term in nature.

We recognize that all assumptions will not be realized in any given year. For example, the investment earnings at CalPERS have averaged 6.9% over the 20 years ending June 30, 2022 , yet individual fiscal year returns have ranged from -23.6% to +21.3%. In addition, CalPERS reviews all actuarial assumptions by conducting in-depth experience studies every four years, with the most recent experience study completed in 2021.

CalPERS Actuarial Valuation - June 30, 2022
Safety Police Plan of the City of Bakersfield
CalPERS ID: 3050192847

Changes Since the Prior Year’s Valuation

Benefits

The standard actuarial practice at CalPERS is to recognize mandated legislative benefit changes in the first annual valuation following the effective date of the legislation. Voluntary benefit changes by plan amendment are generally included in the first valuation that is prepared after the amendment becomes effective, even if the valuation date is prior to the effective date of the amendment.

This valuation generally reflects plan changes by amendments effective before the date of the report. Please refer to the “Plan’s Major Benefit Options” and Appendix B for a summary of the plan provisions used in this valuation. The effect of any mandate d benefit changes or plan amendments on the unfunded liability is shown in the “(Gain) / Loss Analysis 6/30/21 – 6/30/22” and the effect on the employer contribution is sho wn in the “Reconciliation of Required Employer Contributions.” It should be noted that no change in liability or contribution is shown for any plan changes which were already included in the prior year’s valuation.

In 2022, SB 1168 increased the standard retiree lump sum death benefit from $500 to $2,000 for any death occurring on or after July 1, 2023. The impact, if any, is included in plan changes in the “(Gain) / Loss Analy sis 6/30/21 – 6/30/22” and the “Reconciliation of Required Employer Contribution s.”

Actuarial Methods and Assumptions

There are no significant changes to the actuarial methods or assumptions for the June 30, 2022 actuarial valuation.

Subsequent Events

This actuarial valuation report reflects fund investment return through June 30, 2022 and statutory/regulatory changes and board actions through January 2023.

During the time period between the valuation date and the publication of this report, inflation has been significantly higher than the expected inflation of 2.3% per annum. Since inflation influences cost -of-liv ing increases for retirees and beneficiaries and active member pay increases, higher inflation is likely to put at least some upward pressure on contribution requirements and downward pressure on the funded status in the June 30, 2023 valuation. The actual impact of higher inflation on future valuation results will depend on, among other factors, how long higher inflation persists. At this time, we continue to believe the long-term inflation assumption of 2.3% is appropriate.

To the best of our knowledge, there have been no other subsequent events that could materially affect current or future certifications rendered in this report.

Assets

• Reconciliation of the Market Value of Assets

• Asset Allocation

• CalPERS History of Investment Returns

CalPERS Actuarial Valuation - June 30, 2022
Safety Police Plan of the City of Bakersfield
CalPERS ID: 3050192847

Reconciliation of the Market Value of Assets

1. Market Value of Assets as of 6/30/21 including Receivables $427,728,310

2. Change in Receivables for Service Buybacks (38,083)

3. Employer Contributions 22,990,827

4. Employee Contributions 4,852,613

5. Benefit Payments to Retirees and Beneficiaries (28,817,828)

6. Refunds (301,851)

7. Transfers 0

8. Service Credit Purchase (SCP) Payments and Interest 59,128

9. Administrative Expenses (335,501)

10. Miscellaneous Adjustments 0

11. Investment Return (Net of Investment Expenses) (32,746,177)

12. Market Value of Assets as of 6/30/22 including Receivables $393,391,438

CalPERS Actuarial Valuation - June 30, 2022
Safety Police Plan of the City of Bakersfield
CalPERS ID: 3050192847

Asset Allocation

CalPERS adheres to an Asset Allocation Strategy which establishes asset class allocation policy targets and ranges and manages those asset class allocations within their policy ranges. CalPERS Investment Belief No. 6 recognizes that strategic asset allocation is the dominant determinant of portfolio risk and return.

The asset allocation shown below reflect s the allocation of the Public Employees’ Retirement Fund (PERF) in its entirety. The assets for City of Bakersfield Safety Police Plan are a subset of the PERF and are invested accordingly.

On November 17, 2021, the board adopted changes to the strategic asset allocation . The new allocation was effective July 1, 2022, and is shown below , expressed as a percentage of total assets.

Strategic Asset Allocation Policy Targets

Asset Class

Actual
Allocation
9/30/2022
Policy Target
Allocation
effective
7/1/2022
Global Public Equity
Market Capitalization Weighted 33.7% 30.0%
Factor Weighted 12.6% 12.0%
Private Equity 11.6% 13.0%
Income
Treasuries 3.9% 5.0%
Mortgage-backed Securities 5.6% 5.0%
Investment Grade Corporates 5.8% 10.0%
High Yield Bonds 4.6% 5.0%
Emerging Market Sovereign Bonds 2.1% 5.0%
Total Fund Income 1.5% -
Real Assets 17.1% 15.0%
Private Debt 1.8% 5.0%
Other Trust Level 3.8% -
Leverage
Strategic (0.3%) (5.0%)
Active (3.8%) -
Total Fund 100.00% 100.0%

CalPERS Actuarial Valuation - June 30, 2022
Safety Police Plan of the City of Bakersfield
CalPERS ID: 3050192847

CalPERS History of Investment Returns

The following is a chart with the 20 -year historical annual returns of the PERF for each fiscal year ending on June 30 as reported by the Investment Office. Investment returns reported are net of investment expenses but without reduction for administrative expenses. The assumed rate of return, however, is net of both investment and administrative expenses. Also, the Investment Office uses a three-month lag on private equity and real assets for investment performance reporting purposes. This can lead to a timing difference in the returns below and those used for financial reporting purposes. The investment gain or loss calculation in this report relies on final assets that have been au dited and are appropriate for financial reporting. Because of these differences, the effective investment return for funding purposes can be higher or lower than the return reported by the Investment Office shown here.

* As reported by the Investment Office w ith a 3-month lag on private equity and real assets.

The table below shows annualized investment returns of the PERF for various time periods ending on June 30, 2022 (figures reported are net of investment expenses but without reduction for administrative expenses).

These returns are the annual rates that if compounded over the indicated number of years would equate to the actual time-weighted investment performance of the PERF. It should be recognized that in any given year the rate of return is volatile. The portfolio has an expected volatility of 12. 1% per year based on the most recent Asset Liability Management study. The realized volatility is a measure of the ris k of the portfolio expressed as the standard deviation of the fund’s total monthly return distribution, expressed as an annual percentage. Due to their volatile nature, when looking at investment returns, it is more instructive to look at returns over longer time horizons.

History of CalPERS Compound Annual Rates of Return and Volatilities 1 year 5 year 10 year 20 year 30 year
Compound Annual Return -6.1% 6.7% 7.7% 6.9% 7.7%
Realized Volatility – 8.3% 7.1% 8.5% 8.6%

Liabilities and Contributions

• Development of Accrued and Unfunded Liabilities

• (Gain) / Loss Analysis 6/30/ 21 - 6/30/22

• Schedule of Amortization Bases

• Amortization Schedule and Alternatives

• Reconciliation of Required Employer Contributions

• Employer Contribution History

• Funding History

• Normal Cost by Benefit Group

• PEPRA Member Contribution Rates

CalPERS Actuarial Valuation - June 30, 2022
Safety Police Plan of the City of Bakersfield
CalPERS ID: 3050192847

Development of Accrued and Unfunded Liabilities

June 30, 2021 June 30, 2022

1. Present Value of Projected Benefits
a) Active Members $312,979,792 $349,875,184
b) Transferred Members 10,378,825 11,106,040
c) Separated Members 5,761,388 5,935,755
d) Members and Beneficiaries Receiving Payments 421,970,085 438,683,373 e) Total $751,090 ,090 $805,600,352

2. Present Value of Future Employer Normal Costs $88,553,484 $91,404,844

3. Present Value of Future Employee Contributions $50,503,611 $60,728,385

4. Entry Age Accrued Liability
a) Active Members [(1a) - (2) - (3)] $173,922,697 $197,741,955 b) Transferred Members (1b) 10,378,825 11,106,040
c) Separated Members (1c) 5,761,388 5,935,755
d) Members and Beneficiaries Receiving Payments (1d) 421,970,085 438,683,373 e) Total $612,032,995 $653,467,123

5. Market Value of Assets (MVA) $427,728,310 $393,391,438

6. Unfunded Accrued Liability (UAL) [(4e) - (5)] $184,304,685 $260,075,685

7. Funded Ratio [(5) / (4e)] 69.9% 60.2%

CalPERS Actuarial Valuation - June 30, 2022
Safety Police Plan of the City of Bakersfield
CalPERS ID: 3050192847

(Gain)/Loss Analysis 6/30/ 21 – 6/30/22

To calculate the cost requirements of the plan, assumptions are made about future events that affect the amount and timing of benefits to be paid and assets to be accumulated. Each year , actual experience is compared to the expected experience based on the actuarial assumptions. This results in actuarial gains or losse s, as shown below.

1. Total (Gain)/Loss for the Year
a) Unfunded Accrued Liability (UAL) as of 6/30/21 $184,304,685 b) Expected payment on the UAL during 2021-22 13,462,658 c) Interest through 6/30/22 [.068 x (1a) - ((1.068)½ - 1) x (1b)] 12,082,518 d) Expected UAL before all other changes [(1a) - (1b) + (1c)] 182,924,545 e) Change due to plan changes 1 247,178
f) Change due to AL Significant Increase 0
g) Change due to assumption change 0
h) Change due to method change 0
i) Change due to discount rate change with Funding Risk Mitigation 0 j) Expected UAL after all other changes [(1d) + (1e) + (1f) + (1g) + (1h) + (1i)] 183,171,723 k) Actual UAL as of 6/30/22 260,075,685
l) Total (Gain)/Loss for 2021-22 [(1k) - (1j)] $76,903,962

2. Investment (Gain)/Loss for the Year
a) Market Value of Assets as of 6/30/21 $427,728,310
b) Prior fiscal year receivables (332,143)
c) Current fiscal year receivables 294,060
d) Contributions received 27,843,441
e) Benefits and refunds paid (29,119,679)
f) Transfers, SCP payments and interest, and miscellaneous adjustments 59,128 g) Expected return at 6.8% per year 29,518,057
h) Expected assets as of 6/30/22 [(2a) + (2b) + (2c) + (2d) + (2e) + (2f) + (2g)] 455,991,173 i) Actual Market Value of Assets as of 6/30/22 393,391,438 j) Investment (Gain)/Loss [(2h) - (2i)] $62,599,735

3. Non-Investment (Gain)/Loss for the Year
a) Total (Gain)/Loss ( 1l) $76,903,962
b) Investment (Gain)/Loss ( 2j) 62,599,735
c) Non-Investment (Gain)/Loss [(3a) - (3b)] $14,304,227

1 Includes the effect, if any, of SB 1168, w hich increased the standard post-retirement lump sum death benefit from $500 to $2,000 for deaths occurring on or after July 1, 2023.

CalPERS Actuarial Valuation - June 30, 2022
Safety Police Plan of the City of Bakersfield
CalPERS ID: 3050192847

Schedule of Amortization Bases

Below is the schedule of the plan’s amortization bases. Note that there is a two-year lag between the valuation date and the start of the contribution year.

• The assets, liabilities, and funded status of the plan are measured as of the valuation date: June 30, 2022. • The required employer contributions determined by the valuation are for the fiscal year beginning two years after the valuation date: FY 2024-25.

This two-year lag is necessary due to the amount of time needed to extract and test the membership and financial data, and the need to provide public agencies with their required employer contribution well in advance of the start of the fiscal year.

The Unfunded Accrued Liability (UAL) is used to determine the employer contribution and therefore must be rolled forward two years from the valuation date to the first day of the fiscal year for which the contribution is being determined. The UAL is rolled forward each year by subtracting the expected payment on the UAL for the fiscal year and adjusting for interest. The expected payment on the UAL for a fiscal year is equal to the Expected Employer Contribution for the fiscal year minus the Expected Normal Cost for the year. The Employer Contribution for the first fiscal year is determined by the actuarial valuation two years ago and the contribution for the second year is from the actuarial valuation one year ago. Additional discretionary payments are reflected in the Expected Payments column in the fiscal year they were made by the agency.

Reason for Base
Date
Est.

Ramp
Level
2024-25
Ramp
Shape
Escala-
tion
Rate
Amort.

Period
Balance
6/30/22
Expected
Payment
2022-23
Balance
6/30/23
Expected
Payment
2023-24
Balance
6/30/24
Minimum
Required
Payment
2024-25
Forced FS Old Method 6/30/09 No Ramp 2.80% 16 75,349,929 5,989,697 74,283,727 6,022,657 73,110,961 6,191,291 Special (Gain)/Loss 6/30/10 No Ramp 2.80% 18 (452,312) (33,525) (448,423) (33,649) (444,142) (34,591) Assumption Change 6/30/11 No Ramp 2.80% 9 6,316,209 722,876 5,998,662 731,702 5,650,400 752,190 Special (Gain)/Loss 6/30/11 No Ramp 2.80% 19 1,371,302 98,507 1,362,749 98,786 1,353,326 101,552 (Gain)/Loss 6/30/12 No Ramp 2.80% 20 4,023,025 280,686 4,006,518 281,238 3,988,318 289,113 Payment (Gain)/Loss 6/30/12 No Ramp 2.80% 20 71,470 4,986 71,177 4,996 70,854 5,136 (Gain)/Loss 6/30/13 100% Up/Dow n 2.80% 21 53,861,215 3,873,837 53,520,396 3,884,635 53,145,242 3,993,404 (Gain)/Loss 6/30/14 100% Up/Dow n 2.80% 22 (28,851,613) (2,015,273) (28,730,857) (2,019,163) (28,597,870) (2,075,700) Assumption Change 6/30/14 100% Up/Dow n 2.80% 12 22,925,751 2,456,970 21,945,569 2,484,197 20,870,597 2,553,754 (Gain)/Loss 6/30/15 100% Up/Dow n 2.80% 23 20,919,073 1,421,835 20,872,188 1,423,381 20,820,517 1,463,236 (Gain)/Loss 6/30/16 100% Up/Dow n 2.80% 24 19,953,788 1,322,019 19,944,417 1,322,377 19,934,039 1,359,404 Assumption Change 6/30/16 100% Up/Dow n 2.80% 14 9,772,793 931,094 9,475,112 939,639 9,148,358 965,949 (Gain)/Loss 6/30/17 100% Up/Dow n 2.80% 25 (12,321,659) (645,704) (12,492,235) (806,731) (12,507,998) (829,319) Assumption Change 6/30/17 100% Up/Dow n 2.80% 15 10,546,625 777,543 10,460,251 979,998 10,158,778 1,007,438 (Gain)/Loss 6/30/18 100% Up/Dow n 2.80% 26 (7,200,658) (283,513) (7,397,309) (377,434) (7,510,270) (485,003) Assumption Change 6/30/18 100% Up/Dow n 2.80% 16 19,816,006 1,080,937 20,046,410 1,451,574 19,909,450 1,865,273 Method Change 6/30/18 100% Up/Dow n 2.80% 16 3,403,354 185,648 3,442,926 249,305 3,419,403 320,356 Investment (Gain)/Loss 6/30/19 80% Up Only 0.00% 17 2,206,541 92,297 2,261,202 135,958 2,274,459 181,278 Non-Investment (Gain)/Loss 6/30/19 No Ramp 0.00% 17 (1,620,193) (151,842) (1,573,446) (149,181) (1,526,271) (149,181) Non-Investment (Gain)/Loss 6/30/20 No Ramp 0.00% 18 7,209,561 659,127 7,018,642 647,278 6,826,986 647,278

CalPERS Actuarial Valuation - June 30, 2022
Safety Police Plan of the City of Bakersfield
CalPERS ID: 3050192847

Schedule of Amortization Bases (continued)
Reason for Base
Date
Est.

Ramp
Level
2024-25
Ramp
Shape
Escala-
tion
Rate
Amort.

Period
Balance
6/30/22
Expected
Payment
2022-23
Balance
6/30/23
Expected
Payment
2023-24
Balance
6/30/24
Minimum
Required
Payment
2024-25
Investment (Gain)/Loss 6/30/20 60% Up Only 0.00% 18 9,301,435 203,747 9,723,372 399,701 9,971,494 599,551 Assumption Change 6/30/21 No Ramp 0.00% 19 7,139,499 (817,720) 8,470,050 761,657 8,258,886 761,657 Net Investment (Gain) 6/30/21 40% Up Only 0.00% 19 (42,082,643) 0 (44,944,263) (966,063) (47,002,104) (1,932,126) Non-Investment (Gain)/Loss 6/30/21 No Ramp 0.00% 19 1,845,504 0 1,970,998 177,239 1,921,860 177,239 Risk Mitigation 6/30/21 No Ramp 0.00% 0 17,177,035 (598,835) 18,963,934 19,598,104 0 0 Risk Mitigation Offset 6/30/21 No Ramp 0.00% 0 (17,756,492) 0 (18,963,934) (19,598,104) 0 0 Benefit Change 6/30/22 No Ramp 0.00% 20 247,178 0 263,986 0 281,937 25,353 Investment (Gain)/Loss 6/30/22 20% Up Only 0.00% 20 62,599,735 0 66,856,517 0 71,402,760 1,534,780 Non-Investment (Gain)/Loss 6/30/22 No Ramp 0.00% 20 14,304,227 0 15,276,914 0 16,315,744 1,467,170 Total 260,075,685 15,555,394 261,685,250 17,644,097 261,245,714 20,756,482

CalPERS Actuarial Valuation - June 30, 2022
Safety Police Plan of the City of Bakersfield
CalPERS ID: 3050192847

Amortization Schedule and Alternatives

The amortization schedule on the previous page shows the minimum contributions required according to the CalPERS amortization policy. Many agencies have expressed a desire for a more stable pattern of payments or have indicated interest in paying off the unfunded accrued liabilities more quickly than required. As such, we have provided alternative amortization schedules to help analyze the current amortization schedule and illustrate the potential savings of accelerating unfunded liability payments.

Shown on the following page are future year amortization payments based on 1) the current amortization schedule reflecting the individual bases and remaining periods shown on the previous page, and 2) alternativ e “fresh start” amortization schedules using two sample periods that would both result in interest savings relativ e to the current amortization schedule. To initiate a fresh start, please contact the plan actuary.

The current amortization schedule typically contains both positive and negative bases. Positive bases result from plan changes, assumption changes, method changes or plan experience that increase unfunded liability .

Negative bases result from plan changes, assumptio n changes, method changes, or plan experience that decrease unfunded liability. The combination of positive and negative bases within an amortization schedule can result in unusual or problematic circumstances in future years, such as:

• When a negative payment would be required on a positive unfunded actuarial liability; or • When the payment would completely amortize the total unfunded liability in a very short time period, and results in a large change in the employer contribution requirement.

In any year when one of the above scenarios occurs, the actuary will consider corrective action such as replacing the existing unfunded liability bases with a single “fresh start” base and amortizing it over an appropriate period.

The current amortization schedule o n the following page may appear to show that, based on the current amortization bases, one of the above scenarios will occur at some point in the future. It is impossible to know today whether such a scenario will in fact arise since there will be addition al bases added to the amortization schedule in each future year. Should such a scenario arise in any future year, the actuary will take appropriate action based on guidelines in the CalPERS amortization policy.

CalPERS Actuarial Valuation - June 30, 2022
Safety Police Plan of the City of Bakersfield
CalPERS ID: 3050192847

Amortization Schedule and Alternatives (continued)

Alternative Schedules
Current Amortization
Schedule 15 Year Amortization 10 Year Amortization
Date Balance Payment Balance Payment Balance Payment
6/30/2024 261,245,714 20,756,482 261,245,714 27,405,634 261,245,714 35,659,889 6/30/2025 257,559,823 22,058,785 250,688,321 27,405,634 242,158,036 35,659,888 6/30/2026 252,277,442 23,329,447 239,413,025 27,405,634 221,772,397 35,659,888 6/30/2027 245,322,704 24,414,317 227,371,009 27,405,634 200,000,535 35,659,889 6/30/2028 236,773,897 26,479,702 214,510,136 27,405,633 176,748,185 35,659,888 6/30/2029 225,509,319 27,025,161 200,774,724 27,405,633 151,914,676 35,659,888 6/30/2030 212,915,048 27,585,894 186,105,304 27,405,633 125,392,489 35,659,889 6/30/2031 198,884,883 28,162,331 170,438,364 27,405,634 97,066,792 35,659,888 6/30/2032 183,304 ,950 28,117,884 153,706,071 27,405,634 66,814,949 35,659,889 6/30/2033 166,711,516 27,089,937 135,835,982 27,405,633 34,505,979 35,659,888 6/30/2034 150,052,052 26,724,658 116,750,728 27,405,634 6/30/2035 132,637,241 26,050,165 96,367,676 27,405,633 6/30/2036 114,735,267 24,713,569 74,598,577 27,405,634 6/30/2037 96,997,254 24,018,522 51,349,178 27,405,633 6/30/2038 78,771,345 23,270,667 26,518,821 27,405,633 6/30/2039 60,078,939 22,759,927
6/30/2040 40,643,269 12,890,260
6/30/2041 30,085,690 11,700,611
6/30/2042 20,039,628 9,614,253
6/30/2043 11,466,559 11,850,011
6/30/2044
6/30/2045
6/30/2046
6/30/2047
6/30/2048
6/30/2049

Total 448,612,583 411,084,503 356,598,884
Interest Paid 187,366,869 149,838,789 95,353,170
Estimated Savings 37,528,080 92,013,699

CalPERS Actuarial Valuation - June 30, 2022
Safety Police Plan of the City of Bakersfield
CalPERS ID: 3050192847

Reconciliation of Required Employer Contributions

Normal Cost (% of Payroll)

1. For Period 7/1/23 – 6/30/24
a) Employer Normal Cost 21.56%
b) Employee contribution 11.50%
c) Total Normal Cost 33.06%

2. Changes since the prior year annual valuation
a) Effect of demographic experience 0.02%
b) Effect of plan changes 0.00%
c) Effect of discount rate change due to Funding Risk Mitigation 0.00% d) Effect of assumption changes 0.00%
e) Effect of method changes 0.00%
f) Net effect of the changes above [sum of (a) through (e)] 0.02%

3. For Period 7/1/24 – 6/30/25
a) Employer Normal Cost 21.39%
b) Employee contribution 11.69%
c) Total Normal Cost 33.08%

Employer Normal Cost Change [(3a) – (1a)] (0.17%)
Employee Contribution Change [(3b) – (1b)] 0.19%

Unfunded Liability Contribution ($)

1. For Period 7/1/23 – 6/30/24 17,644,097

2. Changes since the prior year annual valuation
a) Effect of adjustments to prior year’s amortization schedule 0 b) Effect of elimination of amortization bases 0
c) Effect of progression of amortization bases 1 85,082 d) Effect of investment (gain) /loss during prior year2 1,534,780 e) Effect of non-investment (gain)/loss during prior year 1,467,170 f) Effect of re-amortizing existing bases due to Funding Risk Mitigation 0 g) Effect of Golden Handshake 0
h) Effect of plan changes 25,353
i) Effect of AL Significant Increase (Government Code section 20791) 0 j) Effect of assumption changes 0
k) Effect of adjustments to the amortization schedule (e.g., Fresh Start) 0 l) Effect of method change 0
m) Net effect of the changes above [sum of (a) through (l)] 3,112,385

3. For Period 7/1/24 – 6/30/25 [(1) + (2m)] 20,756,482

The amounts shown for the period 7/1/ 23 – 6/30/24 may be different if a prepayment of unfunded actuarial liability is made or a plan change became effective after the prior year’s actuarial valuation was performed.

1 Includes scheduled escalation in individual amortization base payments due to the 5 -year ramp and payroll growth assumption used in the pre-2019 amortization policy.
2 The unfunded liability contribution for the investment (gain)/loss during the year prior to the valuation date is 20% of the “full” annual requirement due to the 5 -year ramp. Increases to this amount that occur during the ramp period w ill be included in line c) for each of the next four years.

CalPERS Actuarial Valuation - June 30, 2022
Safety Police Plan of the City of Bakersfield
CalPERS ID: 3050192847

Employer Contribution History

The table below provides a recent history of the required and discretionary employer contributions for the plan.

The required amounts are based on the actuarial valuation from two years prior without subsequent adjustments, if any . Additional discretionary payments before July 1, 201 8 or after June 30, 2023 are not included.

Fiscal
Year
Employer
Normal Cost

Unfunded Rate
Unfunded Liability
Payment ($)
Additional Discretionary
Payments
2015 - 16 18.395% 20.445% N/A N/A
2016 - 17 19.364% 23.111% N/A N/A
2017 - 18 18.465% N/A 8,815,778 N/A
2018 - 19 18.939% N/A 10,415,641 0
2019 - 20 19.525% N/A 12,223,977 0
2020 - 21 20.362% N/A 13,508,523 0
2021 - 22 19.65% N/A 14,840,629 0
2022 - 23 19.20% N/A 16,971,949 0
2023 - 24 21.56% N/A 17,644,097
2024 - 25 21.39% N/A 20,756,482

Funding History

The table below shows the recent history of actuarial accrued liability, market value of assets, unfunded accrued liability, funded ratio and annual covered payroll.

[]

Valuation
Date

Accrued
Liability
(AL)
Market Value of
Assets (MVA)
Unfunded
Accrued
Liability (UAL)

Funded
Ratio

Annual
Covered
Payroll
6/30/2013 $363,563,770 $236,109,546 $127,454,224 64.9% $29,607,871 6/30/2014 401,742,076 273,167,844 128,574,232 68.0% 29,943,802 6/30/2015 425,377,002 275,410,370 149,966,632 64.7% 34,025,548 6/30/2016 450,026,836 273,847,625 176,179,211 60.9% 34,199,427 6/30/2017 479,082,677 300,098,869 178,983,808 62.6% 33,630,876 6/30/2018 515,892,493 320,278,865 195,613,628 62.1% 34,415,961 6/30/2019 536,616,430 336,870,602 199,745,828 62.8% 35,346,061 6/30/2020 565,386,324 349,363,657 216,022,667 61.8% 38,321,083 6/30/2021 612,032,995 427,728,310 184,304,685 69.9% 39,079,857 6/30/2022 653,467,123 393,391,438 260,075,685 60.2% 43,411,297

CalPERS Actuarial Valuation - June 30, 2022
Safety Police Plan of the City of Bakersfield
CalPERS ID: 3050192847

Normal Cost by Benefit Group

The table below displays the Total Normal Cost broken out by benefit group for FY 2024-25. The Total Normal Cost is the annual cost of service accrual for the fiscal year for active employees and can be viewed as the long-term contribution rate for the benefits contracted. Generally, the normal c ost for a benefit group subject to more generous benefit provisions will exceed the normal cost for a group with less generous benefits.

However, based on the characteristics of the members (particularly when the number of actives is small), this may not be the case. Future measurements of the Total Normal Cost for each group may differ significantly from the current values due to such factors as: changes in the demographics of the group, changes in economic and demographic assumptions, changes in plan bene fits or applicable law.

Plan
Identifier Benefit Group Name
Total Normal
Cost
FY 2024-25
Number of
Actives
Payroll on
6/30/2022
26 Safety Police First Level 36.99% 150 $20,151,521
25019 Safety Police PEPRA Level 29.75% 241 $19,815,286 30164 Safety Police Second Level 30.39% 35 $3,444,490
Plan Total 33.08% 426 $43,411,297

Note that if a Benefit Group above has multiple bargaining units, each of which has separately contracted for different benefits such as Employer Paid Member Contributions, then the Normal Cost shown for the respective benefit level does not reflect those differences. Additionally, if a Second Level Benefit Group amended to the same benefit formula as a First Level Benefit Group, their Normal Costs may be dissimilar due to demographic or other population differences. For questions in these situations, please contact the plan actuary.

CalPERS Actuarial Valuation - June 30, 2022
Safety Police Plan of the City of Bakersfield
CalPERS ID: 3050192847

PEPRA Member Contribution Rates

The California Public Employees’ Pension Reform Act of 2013 (“PEPRA”) established new benefit formulas, final compensation period, and contribution requirements for “new” employees (generally those first hired into a CalPERS -covered position on or after January 1, 2013). In accordance with Government Code section 7522.30(b), “new members … shall have an initial contribution rate of at l east 50% of the normal cost rate.” The normal cost for the plan is dependent on the benefit levels, actuarial assumptions , and demographics of the plan, particularly members’ entry age into the plan. Should the total normal cost of the plan change by more than 1% from the base total normal cost established for the plan, the new member rate shall be 50% of the new normal cost rounded to the nearest quarter percent .

The table below shows the determination of the PEPRA member contribution rates effective July 1, 2024, based on 50% of the total normal cost rate for each respective plan as of the June 30, 2022 valuation.

Basis for Current Rate Rates Effective July 1, 2024 Plan
Identifier Benefit Group Name
Total
Normal
Cost
Member
Rate
Total
Normal
Cost Change
Change
Needed
Member
Rate
25019 Safety Police PEPRA
Level 29.340% 14.75% 29.75% 0.410% No 14.75%

For purposes of setting member rates, it is preferable to determine total normal cost using a large active population so that the rate remains relatively stable. While each CalPERS non -pooled plan has a sufficiently large active population for this purpose, the PEPRA active popul ation by itself may not be sufficiently large.

The total PEPRA normal cost will be determined based on the plan’s PEPRA membership only if the number of members covered under the PEPRA formula meets either:

1. 50% of the active population, or

2. 25% of the active population and 100 or more PEPRA members

Until one of these conditions is met, the plan’s total PEPRA normal cost will be determined using the entire active plan population (both PEPRA and Classic) based on the PEPRA benefit provisions. For this reason, the PEPRA member contribution rate determined in the table above may not equal 50% of the total normal cost of the PEPRA group shown on the “Normal Cost by Benefit Group” page.

Risk Analysis

• Future Investment Return Scenarios

• Discount Rate Sensitivity

• Mortality Rate Sensitivity

• Maturity Measures

• Maturity Measures History

• Funded Status – Termination Basis

CalPERS Actuarial Valuation - June 30, 2022
Safety Police Plan of the City of Bakersfield
CalPERS ID: 3050192847

Future Investment Return Scenarios

Analysis using the investment return scenarios from the Asset Liability Management process completed in 2021 was performed to determine the effects of various future investment returns on required employ er contributions. The projections below reflect the impact of the CalPERS Funding Risk Mitigation policy . The projected normal cost rates reflect that the rates are anticipated to decline over time as new employees are hired into lower -cost benefit tiers. The projections also assume that all other actuarial assumptions will be realized and that no further changes in assumptions, contributions, benefits, or funding will occur.

The first table shows projected contribution requirements if the fund were to earn either 3.0% or 10.8% annually. These alternate investment returns were chosen because 90% of long -term average returns are expected to fall between them over the 20-year period ending June 30, 2042.

Assumed Annual Return
FY 2022-23
through FY 2041-42
Projected Employer Contributions
FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30

3.0% (5th percentile)
Normal Cost Rate 21.0% 20.6% 20.3% 19.9% 19.6%
UAL Contribution $22,425,000 $24,442,000 $26,666,000 $30,283,000 $32,811,000

10.8% (95th percentile)
Normal Cost Rate 21.5% 21.6% 21.7% 21.8% 21.9%
UAL Contribution $21,706,000 $22,319,000 $22,401,000 $23,051,000 $21,753,000

Required contributions outside of this range are also possible. In particular, whereas it is unlikely that investment returns will average less than 3.0% or greater than 10.8% over a 20-year period, the likelihood of a single investment return less than 3.0% or greater than 10.8% in any given year is much greater. The following analysis illustrates the effect of an extreme, single year investment return.

The portfolio has an expected volatility (or standard deviation) of 12.0% per year. Accordingly, in any given year there is a 16% probability that the annual return will be -5.2% or less and a 2.5% probability that the annual return will be -17.2% or less. These returns represent one and two standard deviations below the expected return of 6.8%.

The following table shows the effect of a one or two standard deviation investment loss in FY 2022-23 on the FY 2025-26 contribution requirements. Note that a single-year investment gain or loss decreases or increases the required UAL contribution amount incrementally for each of the next five years, not just one, due to the 5- year ramp in the amortization policy. However, the contribution requirements beyond the first year are also impacted by investment returns beyond the first year. Historically, significant downturns in the market are often followed by higher than average returns. Such investment gains would offset the impact of these single year negative returns in years beyond FY 2025-26.

Assumed Annual Return for
Fiscal Year 2022-23
Required
Employer
Contributions
Projected
Employer
Contributions
FY 2024-25 FY 2025-26
(17.2% ) (2 standard deviation loss)
Normal Cost Rate 21.39% 21.0%
UAL Contribution $20,756,482 $24,374,000
(5.2% ) (1 standard deviation loss)
Normal Cost Rate 21.39% 21.0%
UAL Contribution $20,756,482 $23,216,000

• Without investment gains (returns higher than 6.8%) in year FY 2023-24 or later, projected contributions rates would continue to rise over the next four years due to the continued phase -in of the impact of the illustrated investment loss in FY 2022-23. • The Pension Outlook Tool can be used to model projected contributions for these scen arios bey ond FY 2025-26 as well as to model other investment return scenarios .

CalPERS Actuarial Valuation - June 30, 2022
Safety Police Plan of the City of Bakersfield
CalPERS ID: 3050192847

Discount Rate Sensitivity

The discount rate assumption is calculated as the sum of the assumed real rate of return and the assumed annual price inflation, currently 4.5% and 2.3%, respectively. Changing either the price inflation assumption or the real rate of return assumption will change the discount rate. The sensitivity of the valuation results to the discount rate assumption depends on which component of the discount rate is changed. Shown below are various valuation results as of June 30, 2022 assuming alternate discount rates by changing the two components independently. Results are shown using the current discount rate of 6.8% as well as alternate discount rates of 5.8% and 7.8%. The rates of 5.8% and 7.8% were selected since they illustrate the impact of a 1.0% increase or decrease to the 6.8% assumption.

Sensitivity to the Real Rate of Return Assumption

As of June 30, 2022
1% Lower
Real Return Rate
Current
Assumptions
1% Higher
Real Return Rate
Discount Rate 5.8% 6.8% 7.8%
Price Inflation 2.3% 2.3% 2.3%
Real Rate of Return 3.5% 4.5% 5.5%
a) Total Normal Cost 42.47% 33.08% 26.09%
b) Accrued Liability $749,800,310 $653,467,123 $575,506,093 c) Market Value of Assets $393,391,438 $393,391,438 $393,391,438 d) Unfunded Liability/(Surplus) [(b) - (c)] $356,408,872 $260,075,685 $182,114,655 e) Funded Ratio 52.5% 60.2% 68.4%

Sensitivity to the Price Inflation Assumption

As of June 30, 2022
1% Lower
Price Inflation
Current
Assumptions
1% Higher
Price Inflation
Discount Rate 5.8% 6.8% 7.8%
Price Inflation 1.3% 2.3% 3.3%
Real Rate of Return 4.5% 4.5% 4.5%
a) Total Normal Cost 34.97% 33.08% 29.85%
b) Accrued Liability $677,624,847 $653,467,123 $600,265,969 c) Market Value of Assets $393,391,438 $393,391,438 $393,391,438 d) Unfunded Liability/(Surplus) [(b) - (c)] $284,233,409 $260,075,685 $206,874,531 e) Funded Ratio 58.1% 60.2% 65.5%

Mortality Rate Sensitivity

The following table looks at the change in the June 30, 2022 plan costs and funded status under two different longevity scenarios, namely assuming rates of post-retirement mortality are 10% lower or 10% higher than our current mortality assumptions adopted in 2021. This type of analysis highlights the impact on the plan of a change in the mortality assumption .

As of June 30, 2022
10% Lower
Mortality Rates
Current
Assumptions
10% Higher
Mortality Rates
a) Total Normal Cost 33.42% 33.08% 32.75%
b) Accrued Liability $663,219,480 $653,467,123 $644,426,284 c) Market Value of Assets $393,391,438 $393,391,438 $393,391,438 d) Unfunded Liability/(Surplus) [(b) - (c)] $269,828,042 $260,075,685 $251,034,846 e) Funded Ratio 59.3% 60.2% 61.0%

CalPERS Actuarial Valuation - June 30, 2022
Safety Police Plan of the City of Bakersfield
CalPERS ID: 3050192847

Maturity Measures

As pension plans mature they become more sensitive to risks. Understanding plan maturity and how it affects the ability of a pension plan sponsor to tolerate risk is important in understanding how the pension plan is impacted by investment return volatility, other economic variables and changes in longevity or other demographic assumptions. One way to look at the maturity level of CalPERS and its plans is to look at the ratio of a plan’s retiree liability to its total liability. A pension plan in its infancy will have a very low ratio of retiree liability to total liability. As the plan matures, the ratio increases. A mature plan will often have a ratio above 60%-65%.

Ratio of Retiree Accrued Liability to
Total Accrued Liability June 30, 2021 June 30, 2022

1. Retiree Accrued Liability 421,970,085 438,683,373

2. Total Accrued Liability 612,032,995 653,467,123

3. Ratio of Retiree AL to Total AL [(1) / (2)] 69% 67%
Another measure of the maturity level of CalPERS and its plans is the ratio of actives to retirees, also called the support ratio. A pension plan in its infancy will have a very high ratio of active to retired members. As the plan matures and members retir e, the ratio declines. A mature plan will often have a ratio near or below one.

To calculate the support ratio for the rate plan, retirees and beneficiaries receiving a continuance are each counted as one, even though they may have only worked a portion of their careers as an active member of this rate plan. For this reason, the support ratio, while intuitive, may be less informative than the ratio of retiree liability to total accrued liability above.

For comparison, t he support ratio for all CalPERS public agency plans as of June 30, 2021, is 0.78 and was calculated consistently with how it is for the individual rate plan . Note that to calculate the support ratio for all public agency plans , a retiree with service from more than one CalPERS agency is counted as a retiree more than once.

Support Ratio June 30, 2021 June 30, 2022

1. Number of Actives 399 426

2. Number of Retirees 479 491

3. Support Ratio [(1) / (2)] 0.83 0.87

The actuarial calculations supplied in this communication are based on various assumptions about long -term demographic and economic behavior. Unless these assumptions (e.g., terminations, deaths, disabilities, retirements, salary growth, investment return) are exactly realized each year, there will be differences on a year-to-year basis. The year -to-year differences between actual experience and the assumptions are called actuarial gains and losses and serve to lower or raise required employer contributions from one year to the next. Therefore, employer contributions will inevitably fluctuate, especially due to the ups and downs of investment returns.

CalPERS Actuarial Valuation - June 30, 2022
Safety Police Plan of the City of Bakersfield
CalPERS ID: 3050192847

Maturity Measures (continued)

Asset Volatility Ratio

Shown in the table below is the asset volatility ratio (AVR), which is the ratio of market value of assets to payroll. Plans that have a higher AVR experience more volatile employer contributions (as a percentage of payroll) due to invest ment return. For example, a plan with AVR of 8 may experience twice the contribution volatility due to investment return volatility than a plan with AVR of 4. It should be noted that this ratio is a measure of the current situation. It increases over time but generally tends to stabilize as a plan matures.

Liability Volatility Ratio

Also shown in the table below is the liability volatility ratio (LVR), which is the ratio of accrued liability to payroll.

Plans that have a higher LVR experience more volatil e employer contributions (as a percentage of payroll) due to changes in liability. For example, a plan with LVR of 8 is expected to have twice the contribution volatility of a plan with LVR of 4 when there is a change in accrued liability, such as when there is a change in actuarial assumptions . It should be noted that this ratio indicates a longer-term potential for contribution volatility, since the AVR, described above, will tend to move closer to the LVR as the funded ratio approaches 10 0%.

Contribution Volatility June 30, 2021 June 30, 2022

1. Market Value of Assets without Receivables $427,396,167 $393,097,378

2. Payroll 39,079,857 43,411,297

3. Asset Volatility Ratio (AVR) [(1) / (2)] 10.9 9.1

4. Accrued Liability $612,032,995 $653,467,123

5. Liability Volatility Ratio (LVR) [(4) / (2)] 15.7 15.1

Maturity Measures History

Valuation Date
Ratio of
Retiree Accrued Liability
to
Total Accrued Liability Support Ratio
Asset
Volatility
Ratio
Liability
Volatility
Ratio

6/30/2017

69%

0.87 8.9

14.2 6/30/2018

69%

0.86 9.3

15.0 6/30/2019

69%

0.87 9.5

15.2 6/30/2020

69%

0.89 9.1

14.8 6/30/2021

69%

0.83 10.9

15.7 6/30/2022

67%

0.87 9.1

15.1

CalPERS Actuarial Valuation - June 30, 2022
Safety Police Plan of the City of Bakersfield
CalPERS ID: 3050192847

Funded Status – Termination Basis

The funded status measured on a termination basis is an estimate of the financial position of the plan had the contract with CalPERS been terminated as of June 30, 2022 . The accrued liability on a termination basis (termination liability) is calculated diff erently from the plan’s ongoing funding liability. For th e termination liability calculation, both compensation and service are frozen as of the valuation date and no future pay increases or service accruals are assumed. This measure of funded status is no t appropriate for assessing the need for future employer contributions in the case of an ongoing plan, that is, for an employer that continues to provide CalPERS retirement benefits to active employees. Unlike the actuarial cost method used for ongoing pla ns, the termination liability is the present value of the benefits earned through the valuation date.

A more conservative investment policy and asset allocation strategy was adopted by the board for the Terminated Agency Pool. The Terminated Agency Pool has limited funding sources since no future employ er contributions will be made. Therefore, expected benefit payments are secured by risk-free assets and benefit security for members is increased while limiting the funding risk. However, this asset allocati on has a lower expected rate of return than the remainder of the PERF and consequently, a lower discount rate assumption.

The lower discount rate for the Terminated Agency Pool results in higher liabilities for terminated plans.

The effective termination discount rate will depend on actual market rates of return for risk -free securities on the date of termination. As market discount rates are variable , the table below shows a range for the termination liability based on the lowest and highest interest rates observed during an approximate 19-month period from 12 months before the valuation date to seven months after.

Discount Rate: 1.75%
Price Inflation: 2.50%
Discount Rate: 4.50%
Price Inflation: 2.75%
Market
Value of
Assets (MVA)
Termination
Liability1,2
Funded
Ratio
Unfunded
Termination
Liability
Termination
Liability1,2
Funded
Ratio
Unfunded
Termination
Liability
$393,391,438 $1,423,521,490 27.6% $1,030,130,052 $861,488,142 45.7% $468,096,704

1 The termination liabilities calculated above include a 5% contingency load. The contingency load and other actuarial assumptions can be found in Appendix A.

2 The discount rate used for termination valuations is a w eighted average of the 10-year and 30-year U.S. Treasury yields w here the weights are based on matching asset and liability durations as of the termination date. The discount rates used in the table are based on 20-year Treasury bonds, rounded to the nearest quarter percentage point, which is a good proxy for most plans. The 20-year Treasury yield w as 3.38% on June 30, 2022, the valuation date.

In order to terminate the plan, first contact our Pension Contract Services unit to initiate a Resolution of Intent to Terminate. The completed Resolution will allow the plan actuary to provide a preliminary termination valuation with a more up-to-date estimate of the plan liabilities. Before beginning this process, please consult with the plan actuary.