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 among 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 Employees’ 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 CalPERS 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 specified 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
age 65
2% at
age 60
2% at
age 55
2.5% at
age 55
2.7% at
age 55
3% at
age 60
PEPRA
2% at
age 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% Attachment C
71 of 88
Item A
Attachment C - CalPERS
Safety Valuation as of June
30, 2025
Item A: Staff Report Pg. 169 Packet Pg. 263 of 280
CalPERS Actuarial Valuation - June 30, 2025
Safety Plan of the City of Palo Alto
CalPERS ID: 6373437857
Classic Safety Plan Formulas
Retirement Age Half Pay at
age 55* 2% at age 55 2% at age 50 3% at age 55 3% at age 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 age. 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 age 57 2.5% at age 57 2.7% at age 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 converted 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 employer 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 months’ pay under the 1.5% at age 65 formula. PEPRA members have a limit on the annual compensation that can be used to calculate final compensation. The limits are adjusted annually 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, employees must be covered by Social Security with the 1.5% at age 65 formula. 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 benefit is paid with no offsets. 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.
Attachment C
72 of 88
Item A
Attachment C - CalPERS
Safety Valuation as of June
30, 2025
Item A: Staff Report Pg. 170 Packet Pg. 264 of 280
CalPERS Actuarial Valuation - June 30, 2025
Safety Plan of the City of Palo Alto
CalPERS ID: 6373437857
Vested Deferred Retirement
Eligibility for Deferred Status
CalPERS members becomes eligible for a deferred vested retirement benefit when they leave employment, keep their contribution account balance on deposit with CalPERS, and have 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 age 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 Disability Retirement
Eligibility
A CalPERS member is eligible for Non-Industrial (non-job related) 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 reciprocity agreements). There is no special age requirement. Disabled means the member is unable to perform their 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.
Attachment C
73 of 88
Item A
Attachment C - CalPERS
Safety Valuation as of June
30, 2025
Item A: Staff Report Pg. 171 Packet Pg. 265 of 280
CalPERS Actuarial Valuation - June 30, 2025
Safety Plan of the City of Palo Alto
CalPERS ID: 6373437857
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 attained 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 Disability Retirement
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. An employer may choose to provide the increased benefit option or the improved benefit option.
Eligibility
An employee is eligible for Industrial (job related) 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 Compensation 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 employer, 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.
Attachment C
74 of 88
Item A
Attachment C - CalPERS
Safety Valuation as of June
30, 2025
Item A: Staff Report Pg. 172 Packet Pg. 266 of 280
CalPERS Actuarial Valuation - June 30, 2025
Safety Plan of the City of Palo Alto
CalPERS ID: 6373437857
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, employers 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 their 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 their 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 their lifetime. This 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 some 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 applied only to the option portion.
Attachment C
75 of 88
Item A
Attachment C - CalPERS
Safety Valuation as of June
30, 2025
Item A: Staff Report Pg. 173 Packet Pg. 267 of 280
CalPERS Actuarial Valuation - June 30, 2025
Safety Plan of the City of Palo Alto
CalPERS ID: 6373437857
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 employed 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 benefit 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 their 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.
Attachment C
76 of 88
Item A
Attachment C - CalPERS
Safety Valuation as of June
30, 2025
Item A: Staff Report Pg. 174 Packet Pg. 268 of 280
CalPERS Actuarial Valuation - June 30, 2025
Safety Plan of the City of Palo Alto
CalPERS ID: 6373437857
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 (total 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 survivor 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 their death and elected 100% to continue to the eligible survivor after the member’s death. The allowance is payable to the surviving spouse until death, at which time it is continued to any unmarried child(ren), 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 employed 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 means 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 whenever 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 unmarried 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 performance 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 Attachment C
77 of 88
Item A
Attachment C - CalPERS
Safety Valuation as of June
30, 2025
Item A: Staff Report Pg. 175 Packet Pg. 269 of 280
CalPERS Actuarial Valuation - June 30, 2025
Safety Plan of the City of Palo Alto
CalPERS ID: 6373437857
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 have received had the member retired on the date of their death and elected 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 their 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 to the surviving spouse until death, at which time it is continued to any unmarried child(ren), 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 determining 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 above for the standard 2% COLA. An improved COLA is not available with the 1.5% at age 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.
Attachment C
78 of 88
Item A
Attachment C - CalPERS
Safety Valuation as of June
30, 2025
Item A: Staff Report Pg. 176 Packet Pg. 270 of 280
CalPERS Actuarial Valuation - June 30, 2025
Safety Plan of the City of Palo Alto
CalPERS ID: 6373437857
Employee Contributions
Each employee contributes toward their retirement based upon the retirement formula. The standard employee contribution is as described below.
• The percent contributed below the monthly compensation breakpoint is 0%. • The monthly compensation breakpoint is $0 for all PEPRA members and Classic members covered by a full or supplemental formula and $133.33 for Classic members covered by a 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 age 65 2%
Miscellaneous, 2% at age 60 7%
Miscellaneous, 2% at age 55 7%
Miscellaneous, 2.5% at age 55 8%
Miscellaneous, 2.7% at age 55 8%
Miscellaneous, 3% at age 60 8%
Miscellaneous, 2% at age 62 50% of the Total Normal Cost Miscellaneous, 1.5% at age 65 50% of the Total Normal Cost Safety, Half Pay at age 55 Varies by entry age
Safety, 2% at age 55 7%
Safety, 2% at age 50 9%
Safety, 3% at age 55 9%
Safety, 3% at age 50 9%
Safety, 2% at age 57 50% of the Total Normal Cost
Safety, 2.5% at age 57 50% of the Total Normal Cost
Safety, 2.7% at age 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 contributions 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 members 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 their employee contributions, which are credited with 6% interest compounded annually.
Attachment C
79 of 88
Item A
Attachment C - CalPERS
Safety Valuation as of June
30, 2025
Item A: Staff Report Pg. 177 Packet Pg. 271 of 280
CalPERS Actuarial Valuation - June 30, 2025
Safety Plan of the City of Palo Alto
CalPERS ID: 6373437857
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.
Attachment C
80 of 88
Item A
Attachment C - CalPERS
Safety Valuation as of June
30, 2025
Item A: Staff Report Pg. 178 Packet Pg. 272 of 280
Appendix C - Participant Data
• Active Members 78
• Transferred and Separated Members 79
• Retired Members and Beneficiaries 80
Attachment C
81 of 88
Item A
Attachment C - CalPERS
Safety Valuation as of June
30, 2025
Item A: Staff Report Pg. 179 Packet Pg. 273 of 280
CalPERS Actuarial Valuation - June 30, 2025
Safety Plan of the City of Palo Alto
CalPERS ID: 6373437857
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 3 0 0 0 0 0 3
25-29 24 3 0 0 0 0 27
30-34 21 14 0 0 0 0 35
35-39 10 7 4 3 0 0 24
40-44 4 3 10 6 2 0 25
45-49 3 3 8 8 6 1 29
50-54 1 1 2 2 1 11 18
55-59 0 0 0 1 6 1 8
60-64 0 0 0 1 1 0 2
65 and Over 0 1 0 0 0 0 1
All Ages 66 32 24 21 16 13 172
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 $134,070 $0 $0 $0 $0 $0 $134,070
25-29 149,842 178,243 0 0 0 0 152,998
30-34 150,870 181,553 0 0 0 0 163,143
35-39 156,238 187,167 189,431 213,195 0 0 177,911
40-44 166,785 180,823 195,155 250,465 253,391 0 206,829 45-49 170,813 183,827 237,029 239,532 245,243 311,570 229,636 50-54 156,608 207,465 198,672 231,788 319,911 255,624 242,043 55-59 0 0 0 254,057 239,532 229,160 240,051
60-64 0 0 0 207,087 243,714 0 225,401
65 and Over 0 183,827 0 0 0 0 183,827
Average $152,504 $183,496 $208,452 $237,302 $248,691 $257,892 $193,343 Attachment C
82 of 88
Item A
Attachment C - CalPERS
Safety Valuation as of June
30, 2025
Item A: Staff Report Pg. 180 Packet Pg. 274 of 280
CalPERS Actuarial Valuation - June 30, 2025
Safety Plan of the City of Palo Alto
CalPERS ID: 6373437857
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 0 0 0 0 0 0 0 $0
25-29 0 0 0 0 0 0 0 0
30-34 12 0 0 0 0 0 12 120,323
35-39 11 4 0 0 0 0 15 158,970
40-44 6 4 2 1 0 0 13 182,861
45-49 9 2 0 1 0 0 12 156,773
50-54 8 2 0 0 0 0 10 165,803
55-59 2 1 0 0 0 0 3 140,549
60-64 2 0 0 0 0 0 2 249,731
65 and Over 0 0 0 0 0 0 0 0
All Ages 50 13 2 2 0 0 67 $159,195
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 0 0 0 0 0 0 0 $0
25-29 3 0 0 0 0 0 3 107,836
30-34 3 2 0 0 0 0 5 128,722
35-39 19 0 1 0 0 0 20 105,329
40-44 9 1 1 0 0 0 11 100,792
45-49 11 4 1 0 0 0 16 99,869
50-54 2 1 0 0 0 0 3 90,815
55-59 1 0 0 0 0 0 1 83,666
60-64 5 0 0 0 0 0 5 60,602
65 and Over 1 1 0 0 0 0 2 86,783
All Ages 54 9 3 0 0 0 66 $100,197
Attachment C
83 of 88
Item A
Attachment C - CalPERS
Safety Valuation as of June
30, 2025
Item A: Staff Report Pg. 181 Packet Pg. 275 of 280
CalPERS Actuarial Valuation - June 30, 2025
Safety Plan of the City of Palo Alto
CalPERS ID: 6373437857
Retired Members and Beneficiaries
Distribution of Retirees and Beneficiaries by Age and Retirement Type* Attained Age
Service
Retirement
NonIndustrial
Disability
Industrial
Disability
NonIndustrial
Death
Industrial
Death
Death After
Retirement Total
Under 30 0 0 0 0 0 2 2
30-34 0 0 2 0 0 0 2
35-39 0 0 0 0 0 0 0
40-44 0 0 7 0 0 1 8
45-49 0 0 11 0 0 0 11
50-54 14 0 11 0 0 0 25
55-59 45 1 12 0 0 0 58
60-64 47 0 18 0 1 2 68
65-69 47 2 20 0 2 3 74
70-74 29 0 13 0 0 5 47
75-79 34 1 13 0 0 8 56
80-84 23 0 14 0 0 17 54
85 and Over 23 1 18 0 0 17 59
All Ages 262 5 139 0 3 55 464
Distribution of Average Annual Disbursements to Retirees and Beneficiaries by Age and Retirement Type* Attained
Age
Service
Retirement
NonIndustrial
Disability
Industrial
Disability
NonIndustrial
Death
Industrial
Death
Death After
Retirement Average
Under 30 $0 $0 $0 $0 $0 $34,461 $34,461
30-34 0 0 28,566 0 0 0 28,566
35-39 0 0 0 0 0 0 0
40-44 0 0 79,143 0 0 31,715 73,214
45-49 0 0 68,916 0 0 0 68,916
50-54 90,739 0 73,227 0 0 0 83,034
55-59 72,629 103 83,212 0 0 0 73,568
60-64 100,312 0 91,853 0 62,911 42,544 95,824
65-69 94,635 20,924 83,564 0 45,326 38,587 86,046
70-74 86,435 0 60,206 0 0 41,331 74,382
75-79 84,913 21,567 66,786 0 0 44,402 73,787
80-84 50,585 0 31,300 0 0 50,522 45,565
85 and Over 51,551 18,792 39,809 0 0 33,651 42,256
All Ages $81,847 $16,462 $66,932 $0 $51,188 $41,714 $71,719 * 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.
Attachment C
84 of 88
Item A
Attachment C - CalPERS
Safety Valuation as of June
30, 2025
Item A: Staff Report Pg. 182 Packet Pg. 276 of 280
CalPERS Actuarial Valuation - June 30, 2025
Safety Plan of the City of Palo Alto
CalPERS ID: 6373437857
Retired Members and Beneficiaries (continued)
Distribution of Retirees and Beneficiaries by Years Retired and Retirement Type* Years
Retired
Service
Retirement
NonIndustrial
Disability
Industrial
Disability
NonIndustrial
Death
Industrial
Death
Death After
Retirement Total
Under 5 Yrs 46 0 24 0 0 26 96
5-9 47 0 10 0 0 10 67
10-14 56 1 20 0 0 3 80
15-19 33 1 17 0 0 3 54
20-24 39 0 12 0 1 7 59
25-29 16 1 10 0 1 4 32
30 and Over 25 2 46 0 1 2 76
All Years 262 5 139 0 3 55 464
Distribution of Average Annual Disbursements to Retirees and Beneficiaries by Years Retired and Retirement Type* Years
Retired
Service
Retirement
NonIndustrial
Disability
Industrial
Disability
NonIndustrial
Death
Industrial
Death
Death After
Retirement Average
Under 5 Yrs $82,915 $0 $81,550 $0 $0 $42,055 $71,507
5-9 81,077 0 78,059 0 0 25,524 72,335
10-14 103,616 2,496 93,208 0 0 15,147 96,432
15-19 80,525 103 98,000 0 0 42,143 82,405
20-24 81,607 0 75,269 0 62,911 64,629 77,987
25-29 44,877 39,353 43,121 0 55,694 55,225 45,787
30 and Over 58,352 20,180 36,982 0 34,958 50,223 43,891 All Years $81,847 $16,462 $66,932 $0 $51,188 $41,714 $71,719 * 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.
Attachment C
85 of 88
Item A
Attachment C - CalPERS
Safety Valuation as of June
30, 2025
Item A: Staff Report Pg. 183 Packet Pg. 277 of 280
Appendix D - Glossary
Attachment C
86 of 88
Item A
Attachment C - CalPERS
Safety Valuation as of June
30, 2025
Item A: Staff Report Pg. 184 Packet Pg. 278 of 280
CalPERS Actuarial Valuation - June 30, 2025
Safety Plan of the City of Palo Alto
CalPERS ID: 6373437857
Glossary
Accrued Liability (Actuarial Accrued Liability)
The portion of the Present Value of Benefits allocated to prior years. It can also be expressed as the Present Value of Benefits minus the present value of future Normal Cost. 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 assumptions 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 performs actuarial valuations 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 paid 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 experience 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
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 designed 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.
Attachment C
87 of 88
Item A
Attachment C - CalPERS
Safety Valuation as of June
30, 2025
Item A: Staff Report Pg. 185 Packet Pg. 279 of 280
CalPERS Actuarial Valuation - June 30, 2025
Safety Plan of the City of Palo Alto
CalPERS ID: 6373437857
Glossary (continued)
Funded Ratio
Defined as the Fair 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 retirement 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 Fair 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.
Attachment C
88 of 88
Item A
Attachment C - CalPERS
Safety Valuation as of June
30, 2025
Item A: Staff Report Pg. 186 Packet Pg. 280 of 280