2025 Pension
Liability Update
December 9, 2025
Municipal Advisory | Pension Optimization | Financial Planning City of Cotati – 2025 Pension Liability Update 12/09/2025 2 CalPERS UAL Refunding Overview
• Jan 2022 – City closed on Pension Obligation and Street Improvement Loans • The closing took place right before interest rates run up and locked in low rates for the City • Loan proceeds provided funds (incl. freed up reserves) to pay down CalPERS UAL by $6M and saved the City ≈ $2.25M
• Recent CalPERS Performance:
• FYE 2023 investment gain of 5.8% (1% below 6.8% discount rate) • FYE 2024 investment gain of 9.3% (2.5% above 6.8% discount rate) • FYE 2025 estimated investment gain of 11.6% (4.8% above 6.8% discount rate) City of Cotati – 2025 Pension Liability Update 12/09/2025 3 06/30/2024 Pension Plans Overview
Source: 06/30/2024
CalPERS Actuarial
Reports
Pension Plan Total Accrued
Liability
Market Value
of Assets
Unfunded
Accrued
Liability
%
Funded
Safety - Police $21,078,060 $17,824,084 $3,253,976 84.6% Miscellaneous $26,425,977 $22,609,348 $3,816,629 85.6%
TOTAL $47,504,037 $40,433,432 $7,070,605 85.1%
Definitions:
Total Accrued Liability = What You Need
Market Value of Assets = What You Have
Unfunded Accrued Liability = What You Owe
City of Cotati – 2025 Pension Liability Update 12/09/2025 4 2025 Funded Level Estimate (Rounded)
All 2025 numbers are
estimates and may vary
Source: 06/30/2024
CalPERS Actuarial
Reports
Description Misc Plans Safety Plans Total
Market Value of Assets
2024 Balance $22,609,000 $17,824,000 $40,433,000
Normal Cost Contribution $504,000 $332,000 $836,000
UAL Payment $247,000 $230,000 $477,000
ADP $218,000 $180,000 $398,000
Investment Gain / (Loss) $2,623,000 $2,068,000 $4,691,000 Benefit Payments ($1,310,000) ($1,100,000) ($2,410,000) Estimated 2025 Balance $24,891,000 $19,534,000 $44,425,000 Unfunded Accrued Liability
2024 Balance $3,817,000 $3,254,000 $7,071,000
UAL Payment ($247,000) ($230,000) ($477,000)
Interest $260,000 $221,000 $481,000
ADP ($218,000) ($180,000) ($398,000)
Investment (Gain) / Loss ($1,085,000) ($856,000) ($1,941,000) Estimated 2025 Balance $2,527,000 $2,209,000 $4,736,000 Pension Plan 2025 Funded Level 90.8% 89.8% 90.4%
City of Cotati – 2025 Pension Liability Update 12/09/2025 5 2024 UAL + POB Amortization Schedule
Historical Payments
Sources: 06/30/2024
CalPERS Actuarial Reports
and Loan Amortization
Schedules
UAL and Debt Service
Payments only – no
normal cost
City of Cotati – 2025 Pension Liability Update 12/09/2025 6 2025 CalPERS Performance
• Estimated gain of 11.6% (Aug 2025)
• Funding surplus of 4.6% (after discount rate)
• FY2026 results are too early to tell
UAL reduction is estimated based on CalPERS preliminary returns (11.6% gain) and does not include any other possible adjustments. Actual UAL change may vary.
Pension Plan Estimated 2025
UAL Change
Safety - Police ($856,000)
Miscellaneous ($1,085,000)
TOTAL ($1,941,000)
City of Cotati – 2025 Pension Liability Update 12/09/2025 7 2025 Investment Impact Estimate
Historical Payments
Sources: 06/30/2024 CalPERS
Actuarial Reports, Loan
Amortization Schedules,
CalPERS, and UAL estimates
UAL and Debt Service
Payments only – no
normal cost
City of Cotati – 2025 Pension Liability Update 12/09/2025 8 UAL Policy Implementation:
• FYE 2024: ≈$290,000 ADP (negative amortization)
• FYE 2025: ≈$400,000 ADP (negative amortization)
• With ADPs and market performance, FYE 2025 pension plan funded level is estimated at ≈90% => no new ADPs are needed at this time 12/09/2025 9
Questions?
Dmitry Semenov
Ridgeline Municipal Strategies, LLC
(916) 250-1590
[email protected]
RidgelineMuni.com