CalPERS Pension Update
Napa, CA
May 20, 2025
1 Attachment 1
Agenda
2 CalPERS
Pension Basics
Changes
to CalPERS &
Their Impact
Potential
Strategies
Comparison to
Other Agencies
CalPERS Pension Basics
3 Money going into CalPERS is equal to
the Money coming out of CalPERS
Major Driver of
Plan Cost
CalPERS Projects Future Benefit Payments using
a Series of Assumptions
5 Economic
• Inflation
• Investment Return
• Salary Growth
Demographic
• Retirement
• Disability
• Death
• Termination
Napa has 4 Benefit Structures within CalPERS for
Miscellaneous Employees
Miscellaneous
Tier 1
Miscellaneous
Tier 2
Miscellaneous
Tier 3
PEPRA
Miscellaneous
Hire Date On or Before
4/19/83
Between 4/20/83
and 12/20/2012
Between
12/21/2012 and
12/31/2012
On or After
01/01/2013
Formula 2.7% @ 55 2.7% @ 55 2% @ 60 2% @ 62
Final Pay Period 12 months 36 months 36 months 36 months COLA 2% per year 2% per year 2% per year 2% per year
Employee Contributions 8% of pay 8% of pay 7% of pay 7.25% of pay (50% of Normal Cost)
Additional
Employee Contributions 4.5% of pay 4.5% of pay 4.5% of pay 4.5% of pay 6 No Additional Employee Contributions for Elected Officials Napa has 3 Benefit Structures within CalPERS for
Police Officers
Safety
Tiers 1 & 2
Safety
Tier 3
PEPRA
Safety
Hire Date On or Before
1/6/2012
Between 1/7/2012
and 12/31/2012
On or After
01/01/2013
Formula 3% @ 50 3% @ 55 2.7% @ 57
Final Pay Period 12 months 36 months 36 months
COLA 2% per year 2% per year 2% per year
Employee Contributions 9% of pay 9% of pay 12.25% of pay (50% of Normal Cost)
Additional
Employee Contributions 5.5% of pay NPOA: 5.5% of pay
PMU: 4% of pay 1.75% of pay
7 Napa has 3 Benefit Structures within CalPERS for
Fire Fighters
Safety
Tiers 1 & 2
Safety
Tier 3
PEPRA
Safety
Hire Date On or Before
8/10/2012
Between 8/11/2012
and 12/31/2012
On or After
01/01/2013
Formula 3% @ 50 3% @ 55 2.7% @ 57
Final Pay Period 12 months 36 months 36 months
COLA 2% per year 2% per year 2% per year
Employee Contributions 9% of pay 9% of pay 12.25% of pay (50% of Normal Cost)
Additional
Employee Contributions
NCFA: 3% of pay
NCFO: 5.5% of pay
NCFA: 3% of pay
NCFO: 5.5% of pay
NCFA: 0% of pay
NCFO: 5.5% of pay
8 Over the Next Few Years,
More Employees will be in the PEPRA Tier
9 54.0%
69.2%
81.3%
91.2%
97.1% 99.0%
0%
20%
40%
60%
80%
100%
120%
$-
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
$140,000,000
$160,000,000
$180,000,000
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
2049
2050
2051
2052
Classic PEPRA % PEPRA
Normal Cost will decrease as a percent of payroll as
the workforce shifts toward PEPRA
10 Comparison to Other
CalPERS Agencies
11 Comparison Metrics
• Funded Percentage
• Plan assets divided by Plan liabilities
• Calculated as of June 30, 2023
• Total Contribution Percentage
• Required Contribution divided by Projected Pensionable Compensation • Payable in Fiscal Year 2025/26
12 Comparison Group
• Miscellaneous results are compared against all the results for CalPERS Miscellaneous Plans that are not in the Risk Pool
• Safety results are compared against all the results for CalPERS Safety Plans that are not in the Risk Pool
13 ≤ 60% (60%, 70%] (70%, 80%] (80%, 90%] (90%, 100%] > 100% 0 20
40 60
80 100
120
140
Miscellaneous Funded Percentage Comparison – 61.2%
14 ≤ 10% (10%, 20%] (20%, 30%] (30%, 40%] (40%, 50%] > 50% 0 20
40 60
80 100
120
Miscellaneous Total Contribution Comparison – 40.2%
15 ≤ 60% (60%, 70%] (70%, 80%] (80%, 90%] > 90%
0 10
20 30
40 50
60 70
Safety Funded Percentage Comparison – 63.0%
16 ≤ 30%
(30%, 40%]
(40%, 50%]
(50%, 60%]
(60%, 70%]
(70%, 80%]
(80%, 90%]
(90%, 100%]
> 100%
0 5
10 15
20 25
30 35
Safety Total Contribution Comparison – 62.3%
17 Changes to CalPERS
18 CalPERS Investment Return:
5.8% in 2022/23
9.3% in 2023/24
Weak return in 2022/23 followed by better return in 23/24 19 CalPERS Actual Investment Returns versus
Assumed Investment Return
20 -3.1%
35.4%
24.6%
13.8%
3.9%
15.7%
9.7%
6.5%
12.5%
14.5%
2.0%
16.3%
15.3%
20.1%
19.5%
12.5%
10.5%
-7.2% -6.1%
3.7%
16.6%
12.3%
11.8%
19.1%
-5.1%
-24.0%
13.3%
21.7%
0.1%
13.2%
18.4%
2.4%
0.6%
11.2%
8.6%
6.7%
4.7%
21.3%
-6.1%
5.8%
9.3%
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Plan Year Ending June 30
Investment Return Discount Rate 5 per. Mov. Avg. (Investment Return) Dot Com Crash
Great Recession
Discount Rate = Assumed Investment Return Rate
More Money from Investment Return means
Less Money Required from Contributions
21 Investment
Return
Contributions
What is the Impact of those
Changes?
How did the above change impact Funded Percentage and
Contribution? Now and in the future?
22 Without 115 Trust
23 Unfunded Actuarial Liability
24 Funded Percentage
25 Employer Required Contributions
26 Employer Required Contributions
27 With 115 Trust
28 Section 115 Pension Trust
• Balance as of June 30:
• 2023: $4,958,363.00
• 2024: $8,309,663.75
• Additional Contributions:
• June 2024: $3,000,000
29 Unfunded Liability: With & Without Trust
30 ($150)
($100)
($50)
$0
$50
$100
$150
$200
$250
$300
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
2049
2050
2051
2052
Millions
As of July 1
Unfunded Liability Without Trust Unfunded Liability With Trust Funded Percentage: With & Without Trust
31 60%
65%
70%
75%
80%
85%
90%
95%
100%
105%
110%
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
2049
2050
2051
2052
As of July 1
Funded Percentage Without Trust Funded Percentage With Trust Addressing Unfunded
Liability
Approaches the City can take to control future Unfunded Liability 32 Why Address Unfunded Liability?
• Most of current Required Contribution is due to payment toward Unfunded Actuarial Liability
• City is effective paying interest to CalPERS for Unfunded Actuarial Liability
• Current interest rate is 6.8%
33 Lower Unfunded Actuarial Liability means
Lower Required Contributions
34 Unfunded Liability
Contributions
Potential Approaches to Addressing UAL
• One-time Additional Contribution
• Additional Annual Contributions
• Budgeted
• Based on Budget Surplus or Other Savings
35 Where Does the Money Go?
• Direct to CalPERS
• Which amortization bases will you pay off?
• 115 Trust
• Internal Reserve
36 Questions
37 While tested against actuarial valuation results, the software results will not necessarily match actuarial valuation results, as no two actuarial models are identical. The software offers financially sound projections and analysis; however, outputs do not guarantee compliance with standards under the Government Accounting Standards Board or Generally Accepted Accounting Principles. The software and this presentation are not prepared in accordance with standards as promulgated by the American Academy of Actuaries, nor do outputs or this presentation constitute Statements of Actuarial Opinion. TrueComp has used census data, plan provisions, and actuarial assumptions provided by Customer and/or Customer’s actuary to develop the software for Customer. TrueComp has relied on this information without audit.
Disclaimer
38