Regular Meeting
02/22/22 07:00 PM
Finance
Marc Puckett
Resolution
Doc ID: 4944
AGENDA ITEM
AGENDA MATTER:
PENSION FUNDING POLICY
EXECUTIVE SUMMARY:
DISCUSSION:
On October 4, 2021, City Council approved issuance of Pension Obligation Bonds (POBs) to stabilize pension funding and further reduce the overall cost of pension funding. Issuance of the POBs will result in savings from the existing Unfunded Actuarially Accrued liabilities amortization schedule.
Staff recommends establishing a Pension Funding Policy to set aside 50% of any savings from issuance of the POBs and establish a funding plan for any future UAL which may arise. Staff will also review and consider establishment of a Section 115 Trust should it be in the City's interests and advantageous to do so.
The City has a history of being fiscally conservative and maintaining responsible management and budgeting practices. The City recognizes that unfunded CalPERS liability can cause financial stress on the organization and redirect resources away from program and services vital to City operations. To better address this challenge, the City seeks to stabilize its unfunded CalPERS liability in the most costefficient manner possible. Establishment of a Pension Funding Policy is a practical tool to assist the City in accomplishing this goal.
FISCAL IMPACT:
There is no fiscal impact for this agenda item.
RECOMMENDED ACTION:
Staff recommends adoption of Resolution number 5077-2022 establishing a Pension Funding Policy for the City of Barstow to further reduce the overall cost of pension funding and help stabilize pension funding.