CITY COUNCIL STAFF REPORT
DATE: JUNE 24, 2026 CONSENT CALENDAR
SUBJECT: EARLY ANNUAL LUMP SUM PREPAYMENT TOWARDS CALPERS
RETIREE UNFUNDED ACCRUED LIABILITY (UAL)
FROM: Scott C. Stiles, City Manager
BY: Department of Finance and Treasury
SUMMARY:
The City of Palm Springs participates in two CalPERS Retirement Pension Plans and is required to make minimum required contributions towards the unfunded accrued liability (UAL) each fiscal year. CalPERS provides a cost-saving payment option to all contracting agencies if a lump sum prepayment is made no later than July 31 each year. The Director of Finance and Treasurer estimate the lump sum prepayment savings to be approximately $570,466 for FY2026-27.
RECOMMENDATION:
Receive and File.
STAFF ANALYSIS:
The City of Palm Springs participates in two CalPERS Retirement Pension Plans, one for Public Safety employees and one for Miscellaneous employees. Annually, CalPERS performs an actuarial valuation for each plan that sets the minimum required contributions toward UAL. CalPERS provides two options for payment of the minimum required contributions, twelve (12) monthly payments or one (1) annual lump sum prepayment.
For the Public Safety Plan, the FY2026-27 UAL contribution amount is $9,766,959. If twelve (12) monthly payments are selected, payments would be $813,913 per month. If one (1) annual lump sum prepayment is selected, the payment would be $9,450,912, resulting in savings of $316,047.
For the Miscellaneous Plan, the FY2026-27 UAL contribution amount is $7,862,451. If twelve (12) monthly payments are selected, the payments would be $655,204 per month.
If one (1) annual lump sum prepayment is selected, the payment would be $7,608,032, resulting in savings of $254,419.
City Council Staff Report
June 24, 2026 -- Page 2
Early Annual Lump Sum Prepayment CalPERS UAL
The Director of Finance and Treasurer is recommending making the annual lump sum prepayment for both plans totaling $17,058,944 before July 31, 2026, which will result in total savings to the City of $570,466.
ALIGNMENT WITH STRATEGIC PLANNING:
This item aligns with the City Council identified Broad Goal Foundation of Financial and Organizational Well-Being.
FISCAL IMPACT:
The annual lump sum prepayment of $17,058,944 is budgeted throughout the appropriate City Funds.
REVIEWED BY:
Department Director: Kristopher J. Mooney
City Manager: Scott Stiles
ATTACHMENTS:
None.