Finance Committee
October 3, 2022

Assets
• Reconciliation of the Market Value of Assets
• Asset Allocation
• CalPERS History of Investment Returns

CalPERS Actuarial Valuation - June 30, 2020
Safety Plan of the City of Pasadena
CalPERS ID: 6556986602

Reconciliation of the Market Value of Assets

1. Market Value of Assets as of 6/30/19 including Receivables $497,823,672

2. Change in Receivables for Service Buybacks (49,027)

3. Employer Contributions 21,823,026

4. Employee Contributions 4,542,706

5. Benefit Payments to Retirees and Beneficiaries (29,371,895)

6. Refunds (146,145)

7. Transfers 0

8. Service Credit Purchase (SCP) Payments and Interest 123,280

9. Administrative Expenses (387,207)

10. Miscellaneous Adjustments 0

11. Investment Return (Net of Investment Expenses) 22,695,196

12. Market Value of Assets as of 6/30/20 including Receivables $517,053,606

CalPERS Actuarial Valuation - June 30, 2020
Safety Plan of the City of Pasadena
CalPERS ID: 6556986602

Asset Allocation
CalPERS adheres to an Asset Allocation Strategy which establishes asset class allocation policy targets and ranges and manages those asset class allocations within their policy ranges. CalPERS Investment Belief No. 6 recognizes that strategic asset allocat ion is the dominant determinant of portfolio risk and return. On December 19, 2017, the CalPERS Board of Administration adopted changes to the current asset allocation as shown in the Policy Target Allocation below expressed as a percentage of total assets.

The asset allocation shown below reflect the allocation of the Public Employees’ Retirement Fund (PERF) in its entirety as of June 30, 2020. The assets for City of Pasadena Safety Plan are part of the PERF and are invested accordingly.

Asset Class
Actual
Allocation
Policy Target
Allocation
Public Equity 53.0% 50.0%
Private Equity 6.3% 8.0%
Global Fixed Income 28.3% 28.0%
Real Assets 11.3% 13.0%
Liquidity 0.9% 1.0%
Inflation Sensitive Assets 0.0% 0.0%
Trust Level1 0.2% 0.0%
Total Fund 100.0% 100.0%
1 Trust Level includes Multi-Asset Class, Completion Overlay, Risk Mitigation, Absolute Return Strategies, Plan Level Transition and other Total Fund level portfolios.

Strategic Asset Allocation Policy Targets

CalPERS Actuarial Valuation - June 30, 2020
Safety Plan of the City of Pasadena
CalPERS ID: 6556986602

CalPERS History of Investment Returns
The following is a chart with the 20-year historical annual returns of the PERF for each fiscal year ending on June 30. Beginning in 2002, investment returns reported are net of investment expenses and gross of administrative expenses.

The table below shows annual ized investment returns of the PERF for various time periods ending on June 30, 2020 (figures reported are net of investment expenses and gross of administrative expenses). These returns are the annual rates that if compounded over the indicated number of years would equate to the actual performance of the PERF. It should be recognized that in any given year the rate of return is volatile.

The portfolio has an expected volatility of 11.4% per year based on the most recent Asset Liability Modeling study. The realized volatility is a measure of the risk of the portfolio expressed as the standard deviation of the fund’s total monthly return distribution, expressed as an annual percentage. Due to their volatile nature, when looking at investment returns, it is more instructive to look at returns over longer time horizons.

History of CalPERS Compound Annual Rates of Return and Volatilities 1 year 5 year 10 year 20 year 30 year
Compound Annual Return 4.7% 6.3% 8.5% 5.5% 8.0%
Realized Volatility – 7.3% 7.1% 8.6% 8.6%

Liabilities and Contributions
• Development of Accrued and Unfunded Liabilities
• (Gain) / Loss Analysis 6/30/19 - 6/30/20
• Schedule of Amortization Bases
• Amortization Schedule and Alternatives
• Reconciliation of Required Employer Contributions
• Employer Contribution History
• Funding History
• Normal Cost by Benefit Group
• PEPRA Member Contribution Rates

CalPERS Actuarial Valuation - June 30, 2020
Safety Plan of the City of Pasadena
CalPERS ID: 6556986602

Development of Accrued and Unfunded Liabilities
June 30, 2019 June 30, 2020

1. Present Value of Projected Benefits
a) Active Members $377,888,538 $376,027,272
b) Transferred Members 16,997,984 17,762,083
c) Terminated Members 6,667,029 3,440,439
d) Members and Beneficiaries Receiving Payments 410,419,595 446,841,099 e) Total $811,973,146 $844,070,893

2. Present Value of Future Employer Normal Costs $76,617,458 $75,249,214

3. Present Value of Future Employee Contributions $44,115,748 $44,660,242

4. Entry Age Accrued Liability
a) Active Members [(1a) - (2) - (3)] $257,155,332 $256,117,816 b) Transferred Members (1b) 16,997,984 17,762,083
c) Terminated Members (1c) 6,667,029 3,440,439
d) Members and Beneficiaries Receiving Payments (1d) 410,419,595 446,841,099 e) Total $691,239,940 $724,161,437

5. Market Value of Assets (MVA) $497,823,672 $517,053,606

6. Unfunded Accrued Liability (UAL) [(4e) - (5)] $193,416,268 $207,107,831

7. Funded Ratio [(5) / (4e)] 72.0% 71.4%

CalPERS Actuarial Valuation - June 30, 2020
Safety Plan of the City of Pasadena
CalPERS ID: 6556986602

(Gain)/Loss Analysis 6/30/19 – 6/30/20

To calculate the cost requirements of the plan, assumptions are made about future events that affect the amount and timing of benefits to be paid and assets to be accumulated. Each year , actual experience is compared to the expected experience based on the actuarial assumptions. This results in actuarial gains or losses, as shown below.

1. Total (Gain)/Loss for the Year
a) Unfunded Accrued Liability (UAL) as of 6/30/19 $193,416,268 b) Expected Payment on the UAL during 2019-20 12,305,862 c) Interest through 6/30/20 [.07 x (1a) - ((1.07)½ - 1) x (1b)] 13,115,718 d) Expected UAL before all other changes [(1a) - (1b) + (1c)] 194,226,124 e) Change due to plan changes 0
f) Change due to AL Significant Increase 0
g) Change due to assumption change 0
h) Change due to method change 0
i) Expected UAL after all other changes [(1d) + (1e) + (1f) + (1g) + (1h)] 194,226,124 j) Actual UAL as of 6/30/20 207,107,831
k) Total (Gain)/Loss for 2019-20 [(1j) - (1i)] $12,881,707

2. Contribution (Gain)/Loss for the Year
a) Expected Contribution (Employer and Employee) $26,334,332 b) Interest on Expected Contributions 906,113
c) Actual Contributions 26,365,732
d) Interest on Actual Contributions 907,193
e) Expected Contributions with Interest [(2a) + (2b)] 27,240,445 f) Actual Contributions with Interest [(2c) + (2d)] 27,272,925 g) Contribution (Gain)/Loss [(2e) - (2f)] ($32,480)

3. Investment (Gain)/Loss for the Year
a) Market Value of Assets as of 6/30/19 $497,823,672
b) Prior Fiscal Year Receivables (179,759)
c) Current Fiscal Year Receivables 130,732
d) Contributions Received 26,365,732
e) Benefits and Refunds Paid (29,518,039)
f) Transfers, SCP Payments and Interest, and Miscellaneous Adjustments 123,280 g) Expected Return [.07 x (3a + 3b) + ((1.07)½ - 1) x ((3d) + (3e) + (3f))] 34,730,851 h) Expected Assets as of 6/30/20 [(3a) + (3b) + (3c) + (3d) + (3e) + (3f) + (3g)] 529,476,468 i) Actual Market Value of Assets as of 6/30/20 517,053,606 j) Investment (Gain)/Loss [(3h) - (3i)] $12,422,862

4. Liability (Gain)/Loss for the Year
a) Total (Gain)/Loss (1j) $12,881,707
b) Contribution (Gain)/Loss (2g) (32,480)
c) Investment (Gain)/Loss (3j) 12,422,862
d) Liability (Gain)/Loss [(4a) - (4b) - (4c)] $491,325

5. Non-Investment (Gain)/Loss for the Year
a) Contribution (Gain)/Loss (2g) ($32,480)
b) Liability (Gain)/Loss (4d) 491,325
c) Non-Investment (Gain)/Loss [(5a) + (5b)] $458,845

CalPERS Actuarial Valuation - June 30, 2020
Safety Plan of the City of Pasadena
CalPERS ID: 6556986602

Schedule of Amortization Bases
Below is the schedule of the plan’s amortization bases. Note that there is a two-year lag between the valuation date and the start of the contribution fiscal year. • The assets, liabilities, and funded status of the plan are measured as of the valuation date: June 30, 2020. • The required employer contributions determined by the valuation are for the fiscal year beginning two years after the valuation date: fiscal year 2022-23.

This two-year lag is necessary due to the amount of time needed to extract and test the membership and financial data, and the need to provide public agencies with their required employer contribution well in advance of the start of the fiscal year.

The Unfunded Accrued Liability (UAL) is used to determine the employer contribution and therefore must be rolled forward two years from the valuation date to the first day of the fiscal year for which the contribution is being determined. The UAL is rolled forward each year by subtracting the expected payment on the UAL for the fiscal year and adjusting for interest. The expected payment on the UAL for a fiscal year is equal to the Expected Employer Contribution for the fiscal year minus the Expected Normal Cost for the year. The Employer Contribution for the first fiscal year is determined by the actuarial valuation two ye ars ago and the contribution for the second year is from the actuarial valuation one year ago. Additional discretionary payments are reflected in the Expected Payments column in the fiscal year they were made by the agency.

Reason for Base
Date
Est.

Ramp
Level
2022-23
Ramp
Shape
Escala-
tion
Rate
Amort.

Period
Balance
6/30/20
Expected
Payment
2020-21
Balance
6/30/21
Expected
Payment
2021-22
Balance
6/30/22
Minimum
Required
Payment
2022-23
Benefit Change 6/30/99 No Ramp 2.75% 0 11,609 12,008 0 0 0 0 Benefit Change 6/30/00 No Ramp 2.75% 0 649,623 342,795 340,507 352,223 0 0 Benefit Change 6/30/01 No Ramp 2.75% 1 (250,886) (90,035) (175,315) (92,511) (91,893) (95,055) Benefit Change 6/30/02 No Ramp 2.75% 2 4,071,218 1,117,669 3,200,077 1,148,405 2,236,163 1,179,987 Benefit Change 6/30/02 No Ramp 2.75% 2 4,016,041 1,102,522 3,156,706 1,132,841 2,205,856 1,163,994 Benefit Change 6/30/02 No Ramp 2.75% 1 193,948 69,602 135,527 71,515 71,038 73,482 Benefit Change 6/30/03 No Ramp 2.75% 2 6,447,386 1,769,998 5,067,803 1,818,673 3,541,299 1,868,686 Assumption Change 6/30/07 No Ramp 2.75% 3 (6,594,868) (1,477,130) (5,528,554) (1,517,751) (4,345,579) (1,559,490) Arnett Case 6/30/07 No Ramp 2.75% 3 10,217 2,288 8,565 2,351 6,733 2,416 Assets Change 6/30/07 No Ramp 2.75% 3 (70,125) (15,707) (58,786) (16,138) (46,208) (16,583) Method Change 6/30/07 No Ramp 2.75% 4 (563,373) (107,226) (491,894) (110,175) (412,361) (113,205) Benefit Change 6/30/08 No Ramp 2.75% 7 347,210 46,674 323,235 47,957 296,254 49,276 Assumption Change 6/30/09 No Ramp 2.75% 9 6,728,211 768,506 6,404,237 789,640 6,035,724 811,355 Special (Gain)/Loss 6/30/09 No Ramp 2.75% 19 9,231,136 661,830 9,192,713 680,030 9,132,774 698,731 Special (Gain)/Loss 6/30/10 No Ramp 2.75% 20 (4,900,591) (341,252) (4,890,639) (350,636) (4,870,283) (360,279) Assumption Change 6/30/11 No Ramp 2.75% 11 8,489,574 851,655 8,202,885 875,076 7,871,901 899,140 Special (Gain)/Loss 6/30/11 No Ramp 2.75% 21 (3,716,874) (251,872) (3,716,517) (258,799) (3,708,969) (265,916) Payment (Gain)/Loss 6/30/12 No Ramp 2.75% 22 (5,043,241) (333,161) (5,051,643) (342,323) (5,051,156) (351,736) (Gain)/Loss 6/30/12 No Ramp 2.75% 22 47,971,071 3,169,009 48,050,998 3,256,156 48,046,374 3,345,701 (Gain)/Loss 6/30/13 100% Up/Down 2.75% 23 58,828,921 3,990,777 58,818,854 4,100,523 58,694,560 4,213,287

CalPERS Actuarial Valuation - June 30, 2020
Safety Plan of the City of Pasadena
CalPERS ID: 6556986602

Schedule of Amortization Bases (continued)
Reason for Base
Date
Est.

Ramp
Level
2022-23
Ramp
Shape
Escala-
tion
Rate
Amort.

Period
Balance
6/30/20
Expected
Payment
2020-21
Balance
6/30/21
Expected
Payment
2021-22
Balance
6/30/22
Minimum
Required
Payment
2022-23
Assumption Change 6/30/14 100% Up/Down 2.75% 14 30,166,036 2,868,464 29,310,496 2,947,347 28,313,471 3,028,399 (Gain)/Loss 6/30/14 100% Up/Down 2.75% 24 (52,967,257) (3,502,560) (53,051,889) (3,598,880) (53,042,811) (3,697,849) (Gain)/Loss 6/30/15 100% Up/Down 2.75% 25 28,098,480 1,469,665 28,545,140 1,887,601 28,590,750 1,939,510 Assumption Change 6/30/16 100% Up/Down 2.75% 16 12,131,686 660,508 12,297,669 904,896 12,222,474 1,162,225 (Gain)/Loss 6/30/16 100% Up/Down 2.75% 26 26,996,361 1,060,921 27,788,681 1,453,461 28,230,417 1,866,790 Assumption Change 6/30/17 80% Up/Down 2.75% 17 16,481,226 600,995 17,013,238 926,283 17,246,010 1,269,008 (Gain)/Loss 6/30/17 80% Up/Down 2.75% 27 (18,016,641) (478,912) (18,782,415) (738,124) (19,333,663) (1,011,230) Method Change 6/30/18 60% Up/Down 2.75% 18 3,333,185 62,146 3,502,224 127,710 3,615,275 196,833 Assumption Change 6/30/18 60% Up/Down 2.75% 18 23,131,022 431,269 24,304,085 886,259 25,088,618 1,365,946 (Gain)/Loss 6/30/18 60% Up/Down 2.75% 28 (4,513,432) (61,644) (4,765,607) (126,678) (4,968,163) (195,242) Non-Investment (Gain)/Loss 6/30/19 No Ramp 0.00% 19 657,358 0 703,373 64,185 686,216 64,185 Investment (Gain)/Loss 6/30/19 40% Up Only 0.00% 19 2,871,893 0 3,072,926 67,186 3,218,533 134,373 Non-Investment (Gain)/Loss 6/30/20 No Ramp 0.00% 20 458,845 0 490,964 0 525,331 47,938 Investment (Gain)/Loss 6/30/20 20% Up Only 0.00% 20 12,422,862 0 13,292,462 0 14,222,934 310,970 Total 207,107,831 14,399,802 206,710,106 16,388,303 204,227,619 18,025,647

CalPERS Actuarial Valuation - June 30, 2020
Safety Plan of the City of Pasadena
CalPERS ID: 6556986602

Amortization Schedule and Alternatives
The amortization schedule on the previous page shows the minimum contributions required according to the CalPERS amortization policy. Many agencies have expressed a desire for a more stable pattern of payments or have indicated interest in paying off the unfunded accrued liabilities more quickly than required. As such, we have provided alternat ive amortization schedules to help analyze the current amortization sched ule and illustrate the potential savings of accelerating unfunded liability payments.

Shown on the following page are future year amortization payments based on 1) the current amortization schedule reflecting the individual bases and remaining periods shown on the previous page, and 2) alternative “fresh start” amortization schedules using two sample periods that would both result in interest savings relative to the current amortization schedule. To initiate a Fresh Start, please consult with your plan actuary.

The Current Amortization Schedule typically contains both positive and negative bases. Positive bases result from plan changes, assumption changes, method changes or plan experience that increase unfunded liability.

Negative bases result from plan changes, assumption changes , method changes, or plan experience that decrease unfunded liability. The combination of positive and negative bases within an amortization schedule can result in unusual or problematic circumstances in future years, such as:
• When a negative payment would be required on a positive unfunded actuarial liability; or • When the payment would completely amortize the total unfunded liability in a very short time period, and results in a large change in the employer contribution requirement.

In any year whe n one of the above scenarios occurs, the actuary will consider corrective action such as replacing the existing unfunded liability bases with a single “fresh start” base and amortizing it over a reasonable period.

The Current Amortiz ation Schedule on the following page may appear to show that, based on the current amortization bases, one of the above scenarios will occur at some point in the future. It is impossible to know today whether such a scenario will in fact arise since there will be additional bases added to the amortization schedule in each future year. Should such a scenario arise in any future year, the actuary will take appropriate action based on guidelines in the CalPERS amortization policy.

CalPERS Actuarial Valuation - June 30, 2020
Safety Plan of the City of Pasadena
CalPERS ID: 6556986602

Amortization Schedule and Alternatives
(continued)
Alternative Schedules
Current Amortization
Schedule 15 Year Amortization 10 Year Amortization
Date Balance Payment Balance Payment Balance Payment
6/30/2022 204,227,619 18,025,647 204,227,619 21,677,224 204,227,619 28,110,201 6/30/2023 199,877,679 19,440,946 196,100,457 21,677,224 189,446,134 28,110,201 6/30/2024 193,759,244 16,361,710 187,404,394 21,677,224 173,629,945 28,110,201 6/30/2025 190,397,707 18,860,770 178,099,607 21,677,224 156,706,623 28,110,201 6/30/2026 184,215,815 19,770,063 168,143,485 21,677,224 138,598,669 28,110,202 6/30/2027 176,660,608 20,258,662 157,490,434 21,677,224 119,223,157 28,110,202 6/30/2028 168,071,127 20,760,691 146,091,670 21,677,224 98,491,359 28,110,201 6/30/2029 158,361,079 21,216,952 133,894,992 21,677,224 76,308,336 28,110,202 6/30/2030 147,499,370 21,745,338 120,844,547 21,677,224 52,572,500 28,110,201 6/30/2031 135,330,773 21,252,521 106,880,570 21,677,224 27,175,157 28,110,201 6/30/2032 122,820,148 20,987,448 91,939,115 21,677,224
6/30/2033 109,707,973 19,481,441 75,951,758 21,677,224
6/30/2034 97,235,771 18,801,479 58,845,286 21,677,223
6/30/2035 84,593,875 17,619,496 40,541,362 21,677,224
6/30/2036 72,289,699 15,598,211 20,956,162 21,677,223
6/30/2037 61,215,064 14,363,790
6/30/2038 50,642,099 13,051,196
6/30/2039 40,686,782 12,025,707
6/30/2040 31,095,367 11,452,449
6/30/2041 21,425,537 8,731,322
6/30/2042 13,893,576 7,767,048
6/30/2043 6,831,828 7,066,898
6/30/2044
6/30/2045
6/30/2046
6/30/2047
6/30/2048
6/30/2049
6/30/2050
6/30/2051
Total 364,639,785 325,158,358 281,102,013
Interest Paid 160,412,166 120,930,739 76,874,394
Estimated Savings 39,481,427 83,537,772

CalPERS Actuarial Valuation - June 30, 2020
Safety Plan of the City of Pasadena
CalPERS ID: 6556986602

Reconciliation of Required Employer
Contributions
Normal Cost (% of Payroll)

1. For Period 7/1/21 – 6/30/22
a) Employer Normal Cost 19.27%
b) Employee Contribution 9.77%
c) Total Normal Cost 29.04%

2. Changes since the prior year annual valuation
a) Effect of demographic experience (0.12%)
b) Effect of plan changes 0.00%
c) Effect of assumption changes 0.00%
d) Effect of method changes 0.00%
e) Net effect of the changes above [sum of (a) through (d)] (0.12%)

3. For Period 7/1/22 – 6/30/23
a) Employer Normal Cost 19.07%
b) Employee Contribution 9.85%
c) Total Normal Cost 28.92%
Employer Normal Cost Change [(3a) – (1a)] (0.20%)
Employee Contribution Change [(3b) – (1b)] 0.08%
Unfunded Liability Contribution ($)

1. For Period 7/1/21 – 6/30/22 16,388,303

2. Changes since the prior year annual valuation
a) Effect of adjustments to prior year’s amortization schedule 0 b) Effect of investment (gain)/loss during prior year1 310,970 c) Effect of non-investment (gain)/loss during prior year 47,938 d) Effect of plan changes 0
e) Effect of AL Significant Increase 0
f) Effect of assumption changes 0
g) Changes to prior year amortization payments2 1,630,659 h) Effect of changes due to Fresh Start or immediate recognition of small balances 0 i) Effect of elimination of amortization base (352,223) j) Effect of method change 0
k) Net effect of the changes above [sum of (a) through (j)] 1,637,344

3. For Period 7/1/22 – 6/30/23 [(1) + (2k)] 18,025,647
The amounts shown for the period 7/1/21 – 6/30/22 may be different if a prepayment of unfunded actuarial liability is made or a plan change became effective after the prior year’s actuarial valuation was performed. 1 The unfunded liability contribution for the investment (gain)/loss during the year prior to the valuation date is 20% of the “full” annual requirement due to the 5 -year ramp. Increases to this amount that occur during the ramp period will be included in line g) in future years.
2 Includes scheduled escalation in individual amortization base payments due to the 5-year ramp and payroll growth assumption used in the pre-2019 amortization policy.

CalPERS Actuarial Valuation - June 30, 2020
Safety Plan of the City of Pasadena
CalPERS ID: 6556986602

Employer Contribution History
The table below provides a recent history of the required employer contributions for the plan . The amounts are based on the actuarial valuation from two years prior and does not account for prepayments or benefit changes made during a fiscal year. Additional discretionary payments before July 1, 201 8 or after June 30, 2020 are not included.

Fiscal
Year
Employer
Normal Cost Unfunded Rate
Unfunded Liability
Payment ($)
Additional Discretionary
Payments
2013 - 14 16.136% 11.090% N/A N/A
2014 - 15 16.114% 13.207% N/A N/A
2015 - 16 16.187% 15.584% N/A N/A
2016 - 17 17.213% 17.873% N/A N/A
2017 - 18 17.141% N/A 9,230,863 N/A
2018 - 19 17.940% N/A 10,953,259 0
2019 - 20 18.907% N/A 12,900,362 0
2020 - 21 19.864% N/A 14,399,802
2021 - 22 19.27% N/A 16,388,303
2022 - 23 19.07% N/A 18,025,647
Funding History
The table below shows the recent history of actuarial accrued liability, market value of assets, unfunded accrued liability, funded ratio and annual covered payroll. []
Valuation
Date
Accrued
Liability
(AL)
Market Value
of Assets
(MVA)
Unfunded
Accrued
Liability (UAL)
Funded
Ratio
Annual
Covered
Payroll
6/30/2011 $403,625,610 $296,949,510 $106,676,100 73.6% $44,057,632 6/30/2012 429,717,919 298,720,798 130,997,121 69.5% 42,612,407 6/30/2013 457,270,676 338,082,068 119,188,608 73.9% 41,383,174 6/30/2014 501,785,456 395,728,921 106,056,535 78.9% 41,013,701 6/30/2015 530,413,907 400,797,210 129,616,697 75.6% 40,318,379 6/30/2016 561,743,295 398,311,673 163,431,622 70.9% 41,687,863 6/30/2017 604,467,787 438,683,394 165,784,393 72.6% 43,504,868 6/30/2018 658,183,970 470,973,528 187,210,442 71.6% 43,923,808 6/30/2019 691,239,940 497,823,672 193,416,268 72.0% 46,088,633 6/30/2020 724,161,437 517,053,606 207,107,831 71.4% 46,156,603

CalPERS Actuarial Valuation - June 30, 2020
Safety Plan of the City of Pasadena
CalPERS ID: 6556986602

Normal Cost by Benefit Group
The table below displays the Total Normal Cost broken out by benefit group for fiscal year 2022-23. The Total Normal Cost is the annual cost of service accrual for the fiscal year for active employees and can be viewed as the long-term contribution rate for the benefits contracted. Generally, the normal cost for a benefit group subject to more generous benefit provisions will exceed the normal cost for a group with less generous benefits. However, based on the characteristics of the members (particularly when the number of actives is small), this may not be the case. Future measurements of the Total Normal Cost for each group may differ significantly from the current values due to such factors as: changes in the demographics of the group, changes in economic and demographic assumptions, changes in plan benefits or applicable law.

Rate Plan
Identifier Benefit Group Name
Total Normal
Cost
FY 2022-23
Number of
Actives
Payroll on
6/30/2020
75 Safety Fire First Level 24.42% 1 $124,422
25060 Safety Fire PEPRA Level 23.69% 43 $4,248,329
25061 Safety Police PEPRA Level 26.07% 63 $6,413,486
30203 Safety Police Second Level 31.13% 151 $21,507,296 30204 Safety Police First Level N/A 0 $0
30205 Safety Fire Second Level 28.70% 99 $13,863,070
Plan Total 28.92% 357 $46,156,603
Note that if a Benefit Group above has multiple bargaining units, each of which has separately contracted for different benefits such as Employer Paid Member Contributions, then the Normal Cost split does not reflect those differences. Additionally, if a Second Level Benefit Group amended to the same benefit formula as a First Level Benefit Group , their Normal Costs may be dissimilar due to demographic or other population differences. If you have questions in these situations, please consult with your plan actuary.

CalPERS Actuarial Valuation - June 30, 2020
Safety Plan of the City of Pasadena
CalPERS ID: 6556986602

PEPRA Member Contribution Rates
The California Public Employees’ Pension Reform Act of 2013 (“ PEPRA”) established new benefit formulas , final compensation period , and contribution requirements for “new” employees (generally those first hired into a CalPERS-covered position on or after January 1, 2013) . In accordance with Government Code section 7522.30(b), “new members … shall have an initial contribution rate of at least 50% of the normal cost rate.” The normal cost for the plan is dependent on the benefit levels, actuarial assumptions and demographics of the plan, particularly members’ entry age into the plan. Should the total normal cost of the plan change by more than 1% from the base total normal cost establis hed for the plan, the new member rate shall be 50% of the new normal cost rounded to the nearest quarter percent.

The table below shows the determination of the PEPRA member contribution rates effective July 1, 2022, based on 50% of the Total Normal Cost for each respective plan as of the June 30, 2020 valuation.

Basis for Current Rate Rates Effective July 1, 2022
Rate Plan
Identifier Benefit Group Name
Total
Normal
Cost
Member
Rate
Total
Normal
Cost
Change Change
Needed
Member
Rate
25060 Safety Fire PEPRA Level 24.988% 12.50% 25.12% 0.132% No 12.50% 25061 Safety Police PEPRA
Level 24.988% 12.50% 25.12% 0.132% No 12.50%
For purposes of setting member rates, it is preferable to determine total normal cost using a large active population so that the rate remains relatively stable. While each CalPERS non -pooled plan has a sufficiently large active population for this purpose, the PEPRA active population by itself may not be sufficiently large.

The total PEPRA normal cost will be determined based on the plan’s PEPRA membership only if the number of members covered under the PEPRA formula meets either:

1. 50% of the active population, or

2. 25% of the active population and 100 or more PEPRA members Until one of these con ditions is met, the plan’s total PEPRA normal cost will be determined using the entire active plan population (both PEPRA and Classic) based on the PEPRA benefit provisions. For this reason, the PEPRA member contribution rate determined in the table above may not equal 50% of the total normal cost of the PEPRA group shown on the “Normal Cost by Benefit Group” page.

Risk Analysis
• Future Investment Return Scenarios
• Discount Rate Sensitivity
• Mortality Rate Sensitivity
• Maturity Measures
• Maturity Measures History
• Hypothetical Termination Liability

CalPERS Actuarial Valuation - June 30, 2020
Safety Plan of the City of Pasadena
CalPERS ID: 6556986602

Future Investment Return Scenarios
Analysis was performed to determine the effects of various future investment returns on required employer contributions. The projections below provide a range of results based on five investment return scenarios assumed to occur during the next four fiscal years (2020-21, 2021-22, 2022-23 and 2023-24). The projections also assume that all other actuarial assumptions will be realized and that no further changes to assumptions, contributions, benefits, or funding will occur.

For fiscal years 2020-21, 2021-22, 2022-23, and 2023-24 each scenario assumes an alternate fixed annual return. The fixed return assumptions for the five scenarios are 1.0%, 4.0%, 7.0%, 9.0% and 12.0%.

These alternate investment returns were chosen based on stochastic analysis of possi ble future investment returns over the four-year period ending June 30, 2024. Using the expected returns and volatility of the asset classes in which the funds are invested, we produced five thousand stochastic outcomes for this period based on the recently completed Asset Liability Management process. We then selected annual returns that approximate the 5th, 25th, 50th, 75th, and 95th percentiles for these outcomes. For example, of all the four-year outcomes generated in the stochastic analysis, approximately 25% had an average annual return of 4.0% or less.

Required contributions outside of this range are also possible. In particular, whereas it is unlikely that investment returns will average less than 1.0% or greater than 12.0% over a four-year period, the likelihood of a single investment return less than 1.0% or greater than 12.0% in any given year is much greater.

Assumed Annual Return From
2020-21 through 2023-24
Projected Employer Contributions
2023-24 2024-25 2025-26 2026-27

1.0%
Normal Cost 18.6% 18.1% 17.7% 17.3%
UAL Contribution $20,216,000 $18,693,000 $23,539,000 $27,595,000

4.0%
Normal Cost 18.6% 18.1% 17.7% 17.3%
UAL Contribution $19,829,000 $17,539,000 $21,247,000 $23,802,000

7.0%
Normal Cost 18.6% 18.1% 17.7% 17.3%
UAL Contribution $19,441,000 $16,362,000 $18,861,000 $19,770,000

9.0%
Normal Cost 19.0% 19.0% 19.0% 19.2%
UAL Contribution $19,237,000 $15,820,000 $17,792,000 $17,984,000

12.0%
Normal Cost 19.0% 19.0% 19.0% 19.2%
UAL Contribution $18,852,000 $14,616,000 $15,281,000 $13,614,000 These projections reflect changes to the amortization policy effective with the June 30, 2019 valuation as well as the impact of the CalPERS risk mitigation policy (which reduces the discount rate when investment returns exceed specified trigger points). The projected normal cost percentages reflect that normal cost is anticipated to decline over time as new employees are hired into PEPRA or other lower-cost benefit tiers.

CalPERS Actuarial Valuation - June 30, 2020
Safety Plan of the City of Pasadena
CalPERS ID: 6556986602

Discount Rate Sensitivity
The discount rate assumption is calculated as the sum of the assumed real rate of return and the assumed annual price inflation, currently 4.50% and 2.50%, respectively. Changing either the price inflation assumption or the real rate of return assumption will change the discount rate. The sensitivity of the valuation results to the discount rate assumption depends on which component of the discount rate is changed. Shown below are various valuation results as of June 30, 2020 assuming alternate discount rates by changing the two components independently. Results are shown using the current discount rate of 7.0% as well as alternate discount rates of 6.0% and 8.0%. The rates of 6.0% and 8.0% were selected since they illustrate the impact of a 1.0% increase or decrease to the 7.0% assumption.

Sensitivity to the Real Rate of Return Assumption
As of June 30, 2020 1% Lower
Real Return Rate
Current
Assumptions
1% Higher
Real Return Rate
Discount Rate 6.0% 7.0% 8.0%
Inflation 2.5% 2.5% 2.5%
Real Rate of Return 3.5% 4.5% 5.5%
a) Total Normal Cost 37.03% 28.92% 22.83%
b) Accrued Liability $826,089,843 $724,161,437 $640,704,426 c) Market Value of Assets $517,053,606 $517,053,606 $517,053,606 d) Unfunded Liability/(Surplus) [(b) - (c)] $309,036,237 $207,107,831 $123,650,820 e) Funded Status 62.6% 71.4% 80.7%
Sensitivity to the Price Inflation Assumption
As of June 30, 2020 1% Lower
Inflation Rate
Current
Assumptions
1% Higher
Inflation Rate
Discount Rate 6.0% 7.0% 8.0%
Inflation 1.5% 2.5% 3.5%
Real Rate of Return 4.5% 4.5% 4.5%
a) Total Normal Cost 31.08% 28.92% 26.61%
b) Accrued Liability $766,240,650 $724,161,437 $674,791,955 c) Market Value of Assets $517,053,606 $517,053,606 $517,053,606 d) Unfunded Liability/(Surplus) [(b) - (c)] $249,187,044 $207,107,831 $157,738,349 e) Funded Status 67.5% 71.4% 76.6%
Mortality Rate Sensitivity
The following table looks at the change in the June 30, 2020 plan costs and funded status under two different longevity scenarios, namely assuming rates of mortality are 10% lower or 10% higher than our current mortality assumptions. This type of analysis highlights the impact on the plan of improving or worsening mortality over the long term.

As of June 30, 2020 10% Lower
Mortality Rates
Current
Assumptions
10% Higher
Mortality Rates
a) Total Normal Cost 29.26% 28.92% 28.60%
b) Accrued Liability $735,127,687 $724,161,437 $713,962,754 c) Market Value of Assets $517,053,606 $517,053,606 $517,053,606 d) Unfunded Liability/(Surplus) [(b) - (c)] $218,074,081 $207,107,831 $196,909,148 e) Funded Status 70.3% 71.4% 72.4%

CalPERS Actuarial Valuation - June 30, 2020
Safety Plan of the City of Pasadena
CalPERS ID: 6556986602

Maturity Measures
As pension plans mature they become more sensitive to risks. Understanding plan maturity and how it affects the ability of a pension plan sponsor to tolerate risk is important in understanding how the plan is impacted by investment return volatility, other economic variables and changes in longevity or other demographic assumptions. One way to look at the maturity level of CalPERS and its plans is to look at the ratio of a plan’s retiree liability to its total liability. A pension plan in its infancy will have a very low ratio of retiree liability to total liability. As the plan matures, the ratio increases. A mature plan will often have a ratio above 60%-65%.

Ratio of Retiree Accrued Liability to
Total Accrued Liability June 30, 2019 June 30, 2020

1. Retiree Accrued Liability 410,419,595 446,841,099

2. Total Accrued Liability 691,239,940 724,161,437

3. Ratio of Retiree AL to Total AL [(1) / (2)] 59% 62%
Another measure of the maturity level of CalPERS and its plans is the ratio of actives to retirees, also called Support Ratio. A pension plan in its infancy will have a very high ratio of active to retired members. As the plan matures, and members retire, the ratio declines. A mature plan will often have a ratio near or below one.

The average support ratio for CalPERS public agency plans is 1.25.

Support Ratio June 30, 2019 June 30, 2020

1. Number of Actives 376 357

2. Number of Retirees 378 402

3. Support Ratio [(1) / (2)] 0.99 0.89
The actuarial calculations supplied in this communication are based on various assumptions about long-term demographic and economic behavior. Unless these assumptions ( e.g., terminations, deaths, disabilities, retirements, salary growth, investment return) are exactly realized each year, there will be differences on a year-to-year basis. The year -to-year differences between actual experience and the assumptions are called actuarial gains and losses and serve to lower or raise required employer contributions from one year to the next. Therefore, employer contributions will inevitably fluctuate, especially due to the ups and downs of investment returns.

Asset Volatility Ratio
Shown in the table below is the asset volatility ratio (AVR), which is the ratio of market value of assets to payroll. Plans that have a higher AVR experience more volatile employer contributions (as a percentage of payroll) due to investment return. For example, a plan with AVR of 8 may experience twice the contribution volatility due to investment return volatility than a plan with AVR of 4. It should be noted that this ratio is a measure of the current situation. It increases over time but generally tends to stabilize as a plan matures.

Liability Volatility Ratio
Also shown in the table below is t he liability volatility ratio (LVR), which is t he ratio of accrued liability to payroll. Plans that have a higher LVR experience more volatile employer contributions (as a percentage of payroll) due to changes in liability. For example, a plan with LVR of 8 is expected to have twice the contribution volatility of a plan with LVR of 4 when there is a change in accrued liability, such as when there is a change in actuarial assumptions. It should be noted that this ratio indicates a longer -term potential for contribution volatility, since the AVR, described above, will tend to move closer to the LVR as the funded status approaches 100%.

CalPERS Actuarial Valuation - June 30, 2020
Safety Plan of the City of Pasadena
CalPERS ID: 6556986602

Maturity Measures (continued)
Contribution Volatility June 30, 2019 June 30, 2020

1. Market Value of Assets without Receivables $497,643,912 $516,922,874

2. Payroll 46,088,633 46,156,603

3. Asset Volatility Ratio (AVR) [(1) / (2)] 10.8 11.2

4. Accrued Liability $691,239,940 $724,161,437

5. Liability Volatility Ratio (LVR) [(4) / (2)] 15.0 15.7 Maturity Measures History
Valuation Date
Ratio of
Retiree Accrued Liability
to
Total Accrued Liability
Support
Ratio
Asset
Volatility
Ratio
Liability
Volatility
Ratio
6/30/2017 58% 1.10 10.1 13.9
6/30/2018 58% 1.01 10.7 15.0
6/30/2019 59% 0.99 10.8 15.0
6/30/2020 62% 0.89 11.2 15.7

CalPERS Actuarial Valuation - June 30, 2020
Safety Plan of the City of Pasadena
CalPERS ID: 6556986602

Hypothetical Termination Liability
The hypothetical termination liability is an estimate of the financial position of the plan had the contract with CalPERS been terminated as of June 30, 2020. The plan liability on a termination basis is calculated differently from the plan’s ongoing funding liability. For this hypothetical termination liability calculation, both compensation and service are frozen as of the valuation date and no future pay increases or service accruals are assumed. This measure of funded status is not appropriate for assessing the need for future employer contributions in the case of an ongoing plan, that is, for an employer that continues to provide CalPERS retirement benefits to active employees.

A more conservative investment policy and asset allocation strategy was adopted by the CalPERS Board for the Terminated Agency Pool . The Terminated Agency Pool has limited funding sources since no future employer contributions will be made. Therefore, expected benefit payments are secured by risk -free assets and benefit security for members is increased while limiting the funding risk. However, this asset allocation has a lower expected rate of return than the PERF and consequently, a lower discount rate assumption. The lower discount rate for the Terminated Agency Pool results in higher liabilities for terminated plans.

The effective termination discount rate will depend on actual market rates of return for risk-free securities on the date of termination. As market discount rates are variable the table below shows a range for the hypothetical termination liability based on the lowest and highest interest rates observed during an approximate 19-month period from 12 months before the valuation date to 7 months after. [
Market
Value of
Assets (MVA)
Hypothetical
Termination
Liability1,2
at 0.75%
Funded
Status
Unfunded
Termination
Liability
at 0.75%
Hypothetical
Termination
Liability1,2
at 2.50%
Funded
Status
Unfunded
Termination
Liability
at 2.50%
$517,053,606 $1,841,664,918 28.1% $1,324,611,312 $1,362,489,280 37.9% $845,435,674 1 The hypothetical liabilit ies calculated above include a 5% contingency load in accordance with Board policy. Other actuarial assumptions can be found in Appendix A.
2 The current discount rate assumption used for termination valuations is a weighted average of the 10-year and 30-year U.S. Treasury yields where the weights are based on matching asset and liability durations as of the termination date.

The discount rates used in the table are based on 20-year Treasury bonds, rounded to the nearest quarter percentage point, which is a good proxy for most plans. The 20-year Treasury yield was 1.18% on June 30, 2020, and was 1.68% on January 31, 2021.

In order to terminate the plan, you must first contact our Retirement Services Contract Unit to initiate a Resolution of Intent to Terminate. The completed Resolution will allow the plan actuary to give y ou a preliminary termination valuation with a more up-to-date estimate of the plan liabilities. CalPERS advises you to consult with the plan actuary before beginning this process.

Plan’s Major Benefit Provisions

CalPERS Actuarial Valuation - June 30, 2020
Safety Plan of the City of Pasadena
CalPERS ID: 6556986602

Plan’s Major Benefit Options
Shown below is a summary of the major optional benefits for which your agency has contracted. A description of principal standard and optional plan provisions is in Appendix B.

Benefit Group
Member Category Fire Police Police Fire Fire Police Police Demographics
Actives Yes Yes No Yes Yes Yes No
Transfers/Separated No Yes Yes Yes Yes Yes No
Receiving Yes Yes Yes Yes Yes No Yes
Benefit Group Key 105636 105638 105639 105641 112681 112682 200570 Benefit Provision
Benefit Formula 3% @ 55 3% @ 55 3% @ 55 3% @ 55 2.7% @ 57 2.7% @ 57 Social Security Coverage No No No No No No
Full/Modified Full Full Full Full Full Full
Employee Contribution Rate 9.00% 9.00% 9.00% 12.50% 12.50% Final Average Compensation Period One Year One Year One Year One Year Three Year Three Year Sick Leave Credit Yes Yes Yes Yes Yes Yes
Non-Industrial Disability Standard Standard Standard Standard Standard Standard Industrial Disability Standard Standard Standard Standard Standard Standard Pre-Retirement Death Benefits
Optional Settlement 2 Yes Yes Yes Yes Yes Yes
1959 Survivor Benefit Level Level 4 Level 4 Level 4 Level 4 Level 4 Level 4 Special Yes Yes Yes Yes Yes Yes
Alternate (firefighters) No No No No No No
Post-Retirement Death Benefits
Lump Sum $500 $500 $500 $500 $500 $500 $500
Survivor Allowance (PRSA) Yes Yes Yes Yes Yes Yes Yes
COLA 2% 2% 2% 2% 2% 2% 2%

CalPERS Actuarial Valuation - June 30, 2020
Safety Plan of the City of Pasadena
CalPERS ID: 6556986602

Plan’s Major Benefit Options
Shown below is a summary of the major optional benefits for which your agency has contracted. A description of principal standard and optional plan provisions is in Appendix B.

Benefit Group
Member Category Police Police Police Fire Fire
Demographics
Actives No No No No No
Transfers/Separated No No No No No
Receiving Yes Yes Yes Yes Yes
Benefit Group Key 200571 200572 200573 200574 200577
Benefit Provision
Benefit Formula
Social Security Coverage
Full/Modified
Employee Contribution Rate
Final Average Compensation Period
Sick Leave Credit
Non-Industrial Disability
Industrial Disability
Pre-Retirement Death Benefits
Optional Settlement 2
1959 Survivor Benefit Level
Special
Alternate (firefighters)
Post-Retirement Death Benefits
Lump Sum $500 $500 $500 $500 $500
Survivor Allowance (PRSA) Yes Yes Yes Yes Yes
COLA 2% 2% 2% 2% 2%

Appendices
• Appendix A – Actuarial Methods and Assumptions
• Appendix B – Principal Plan Provisions
• Appendix C – Participant Data
• Appendix D – Glossary of Actuarial Terms

Appendix A
Actuarial Methods and Assumptions
• Actuarial Data
• Actuarial Methods
• Actuarial Assumptions
• Miscellaneous

CalPERS Actuarial Valuation – June 30, 2020 Appendix A
Actuarial Methods and Assumptions
A-1
Actuarial Data
As stated in the Actuarial Certification, the data which serves as the basis of this valuation has been obtained from the various CalPERS databases. We have reviewed the valuation data and believe that it is reasonable and appropriate in aggregate. We are unaware of any potential data issues that would have a material effect on the results of this valuation, except that data does not always contain the latest salary information for former members now in reciprocal systems and does not recognize the potential for unusually large salary deviation in certain cases such as elected officials . Therefore, salary information in these cases may not be accurate. These situations are relatively infrequent, however, and generally do not have a material impact on the required employer contributions.

Actuarial Methods
Actuarial Cost Method
The actuarial cost method used is the Entry Age Actuarial Cost Method. Under this method, projected benefits are determined for all members and the associated liabilities are spread in a manner that produces level annual cost as a percent age of pay in each year from the member’s entry age to their assumed retirement age on the valuation date. The cost allocated to the current fiscal year is called the normal cost.

The actuarial accrued liability for active members is then calculated as the portion of the total cost of the plan allocated to prior years. The actuarial accrued liability for membe rs currently receiving benefits and for members entitled to deferred benefits is equal to the present value of the benefits expected to be paid. No normal costs are applicable for these participants.

CalPERS uses an in-house proprietary actuarial model for calculating pension plan costs. We believe this model is fit for its intended purpose and meets all applicable Actuarial Standards of Practice. Furthermore, the actuarial results of o ur model are independently confirmed periodically by outside auditing actuaries. The actuarial assumptions used are internally consistent and the generated results reasonable. A further refinement to the actuarial model will be the introduction of generati onal mortality in the June 30, 2021 actuarial valuation.

Amortization of Unfunded Actuarial Accrued Liability
The excess of the total actuarial accrued liability over the market value of plan assets is called the unfunded actuarial accrued liability (UAL). Funding requirements are determined by adding the normal cost and a payment toward the UAL. The UAL payment is equal to the sum of individual amortization payments, each representing a different source of UAL for a given measurement period.

Amortization payments are determined according to the CalPERS amortization policy. The CalPERS Board adopted a new policy effective for the June 30, 2019 actuarial valuation. The new policy applies prospectively only; amortization bases (sources of UAL) established prior to the June 30, 2019 valuation will continue to be amortized according to the prior policy.

Prior Policy (Bases Established prior to June 30, 2019) Amortization payments are determined as a level percentage of payroll whereby the payment increases each year at an escalation rate. G ains or losses are amortized over a fixed 30 -year period with a 5 -year ramp up at the beginning and a 5-year ramp down at the end of the amortization period. All changes in liability due to plan amendments (other than golden handshakes) are amortized over a 20-year period with no ramp. Changes in actuarial assumptions or changes in actuarial methodology are amortized over a 20 -year period with a 5- year ramp up at the beginning and a 5 -year ramp down at the end of the am ortization period. Changes in unfunded accrued liability due to a Golden Handshake will be amortized over a period of five years. Bases established prior to June 30, 2013 may be amortized differently. A summary is provided in the following table:

CalPERS Actuarial Valuation – June 30, 2020 Appendix A
Actuarial Methods and Assumptions
A-2
Driver
Source
(Gain)/Loss
Assumption/Method
Change
Benefit
Change
Golden
Handshake Investment
Non-
investment
Amortization
Period 30 Years 30 Years 20 Years 20 Years 5 Years
Escalation Rate
- Active Plans
- Inactive Plans

2.75%
0%

2.75%
0%

2.75%
0%

2.75%
0%

2.75%
0%
Ramp Up 5 5 5 0 0
Ramp Down 5 5 5 0 0
The 5-year ramp up means that the payments in the first four years of the amortization period are 20%, 40%, 60% and 80% of the “full” payment which begins in year five. The 5-year ramp down means that the reverse is true in the final four years of the amortization period.

Current Policy (Bases Established on or after June 30, 2019) Amortization payments are determined as a level dollar amount. Investment g ains or losses are amortized over a fixed 20-year period with a 5-year ramp up at the beginning of the amortization period. Non-investment gains or losses are amortized over a fixed 20-year period with no ramps. All changes in liability due to plan amendments (other than golden handshakes) are amortized over a 20 -year period with no ramps. Changes in actuarial assumptions or changes in actuarial methodology are amortized over a 20 -year period with no ramps. Changes in unfunded accrued liability due to a Golden Handshake are amortized over a period of five years. A summary is provided in the table below:

Source
(Gain)/Loss
Assumption/
Method
Change
Benefit
Change
Golden
Handshake Investment
Non-
investment
Amortization Period 20 Years 20 Years 20 Years 20 Years 5 Years Escalation Rate 0% 0% 0% 0% 0%
Ramp Up 5 0 0 0 0
Ramp Down 0 0 0 0 0
Exceptions for Inconsistencies
An exception to the amortization rules above is used whenever their application results in inconsistencies. In these cases, a “fresh start” approach is used. This means that the current unfunded actuarial liability is projected and amortized over a set number of years. For example, a fresh start is needed in the following situations:
• When a negative payment would be required on a positive unfunded actuarial liability; or • When the payment would completely amortize the total unfunded liability in a very short time period, and results in a large change in the employer contribution requirement.

It should be noted that the actuary may determine that a fresh start is necessary under other circumstances.

In all cases of a fresh start, the period is set by the actuary at what is deemed appropriate ; however, the period will not be greater than 20 years.

CalPERS Actuarial Valuation – June 30, 2020 Appendix A
Actuarial Methods and Assumptions
A-3
Exceptions for Plans in Surplus
If a surplus exists (i.e. the Market Value of Assets exceeds the plan’s accrued liability) any prior amortization layers shall be considered fully amortized, and the surplus shall not be amortized.

In the event of any subsequent unfunded liability, a Fresh Start shall be used with an amortization period of 20 years or less.

Exceptions for Small Amounts
Where small unfunded liabilities are identified in annual valuations which result in small payment amounts, the actuary may shorten the remaining period for these bases. • When the balance of a single amortization base has an absolute value less than $250, the amortization period is reduced to one year.
• When the entire unfunded liability is a small amount the actuary may perform a Fresh Start and use an appropriate amortization period.

Exceptions for Inactive Plans
The following exceptions apply to plans classified as Inactive. These plans have no active members and no expectation to have active members in the future.
• Amortization of the unfunded liability is on a “level dollar” basis rather than a “level percent of pay” basis. For amortization layers, which utilize a ramp up and ramp down, the “ultimate” payment is constant.
• Actuarial judgment will be used to shorten amortization periods for Inactive plans with existing periods that are deemed too long given the duration of the liability. The specific demographics of the plan will be used to determine if shorter periods may be more appropriate.

Exceptions for Inactive Agencies
For a public agency with no active members in any CalPERS rate plan, the unfunded liability shall be amortized over a closed amortization period of no more than 15 years.

Asset Valuation Method
The Actuarial Value of Assets is set equal to the market value of assets. Asset values include accounts receivable.

PEPRA Normal Cost Rate Methodology
Per Government Code Section 7522.30(b), the “normal cost rate” shall mean the annual actuarially determined normal cost for the plan of retirement benefits provided to the new member and shall be established based on actuarial assumptions used to determine the liabilities and costs as part of the annual actuarial valuation.

The plan of retirement benefits shall include any elements that would impact the actuarial determination of the normal cost, including, but not limited to, the retirement formula, eligibility and vesting criteria, ancillary benefit provisions, and any automatic cost-of-living adjustments as determined b y the public retirement system.

For purposes of setting member rates, it is preferable to determine total normal cost using a large active population so that the rate remains relatively stable. While each CalPERS non-pooled plan has a sufficiently large active population for this purpose, the PEPRA active population by itself may not be sufficiently large.

The total PEPRA normal cost will be determined based on the plan’s PEPRA membership only if the number of members covered under the PEPRA formula meets either:

1. 50% of the active population, or

2. 25% of the active population and 100 or more PEPRA members Until one of these conditions is met, the plan’s total PEPRA normal cost will be determined using the entire active plan population (both PEPRA and Classic) based on the PEPRA benefit provisions.

CalPERS Actuarial Valuation – June 30, 2020 Appendix A
Actuarial Methods and Assumptions
A-4
Actuarial Assumptions
In 201 7, CalPERS completed its most recent asset liability management study incorporating actuarial assumptions and strategic asset allocation. In December 2017, the CalPERS Board of Administration adopted relatively modest changes to the asset allocation that reduced the expected volatility of returns. The adopted asset allocation was expected to have a long-term blended return that continue d to support a discount rate assumption of 7.00%. The Board also approved several changes to the demographic assumptions that more closely aligned with actual experience.

On December 21, 2016, the CalPERS Board of Administration lowered the discount rate from 7.50% to 7.00% using a three-year phase-in beginning with the June 30, 2016 actuarial valuations. The minimum employer contributions for fiscal year 2022-23 determined in this valuation were calculat ed using a discount rate of

7.00%. The decision to reduce the discount rate was primarily based on reduced capital market assumptions provided by external investment consultants and CalPERS investment staff. The specific decision adopted by the Board reflected recommendations from CalPERS staff and additional input from employer and employee stakeholder groups. Based on the investment allocation adopted by the Board and capital market assumptions, the reduced discount rate schedule provides a more realistic assumption for the long-term investment return of the fund.

Notwithstanding the Board’s decision to phase into a 7.00% discount rate, subsequent analysis of the expected investment return of CalPERS assets or changes to the investment allocation may result in a change to this discount rate schedule.

For more details and additional rationale for the selection of the actuarial assumptions, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from December 2017 that can be found on the CalPERS website under: “Forms and Publications”. Click on “View All” and search for Experience Study.

All actuarial assumptions (except the discount rates used for the hypothetical termination liability) represent an estimate of future experience rather than observations of the estimates inherent in market data.

Economic Assumptions
Discount Rate
The prescribed discount rate assumption, adopted by the Board on December 21, 2016, is 7.00% compounded annually (net of investment and administrative expenses) as of June 30, 2020.

Termination Liability Discount Rate
The current discount rate assumption used for termi nation valuations is a weighted average of the 10-year and 30-year U.S. Treasury yields where the weights are based on matching asset and liability durations as of the termination date.

The hypothetical termination liabilities in this report are calculated using an observed range of market interest rates. This range is based on the lowest and highest 20-year Treasury bond observed during an approximate 19-month period from 12 months before the valuation date to 7 months after . The 20-year Treasury bond has a similar duration to most plan liabilities and serves as a good proxy for the termination discount rate. The 20-year Treasury yield was 1.18% on June 30, 2020.

CalPERS Actuarial Valuation – June 30, 2020 Appendix A
Actuarial Methods and Assumptions
A-5
Salary Growth
Annual increases vary by category, entry age, and duration of service. A sample of assumed increases are shown below . Wage inflation assum ption in the valuation year (2. 75% for 2020) is added to these factors for total salary growth.

Public Agency Miscellaneous
Duration of Service (Entry Age 20) (Entry Age 30) (Entry Age 40) 0 0.0850 0.0775 0.0650
1 0.0690 0.0635 0.0525
2 0.0560 0.0510 0.0410
3 0.0470 0.0425 0.0335
4 0.0400 0.0355 0.0270
5 0.0340 0.0295 0.0215
10 0.0160 0.0135 0.0090
15 0.0120 0.0100 0.0060
20 0.0090 0.0075 0.0045
25 0.0080 0.0065 0.0040
30 0.0080 0.0065 0.0040
Public Agency Fire
Duration of Service (Entry Age 20) (Entry Age 30) (Entry Age 40) 0 0.1700 0.1700 0.1700
1 0.1100 0.1100 0.1100
2 0.0700 0.0700 0.0700
3 0.0580 0.0580 0.0580
4 0.0473 0.0473 0.0473
5 0.0372 0.0372 0.0372
10 0.0165 0.0165 0.0165
15 0.0144 0.0144 0.0144
20 0.0126 0.0126 0.0126
25 0.0111 0.0111 0.0111
30 0.0097 0.0097 0.0097
Public Agency Police
Duration of Service (Entry Age 20) (Entry Age 30) (Entry Age 40) 0 0.1027 0.1027 0.1027
1 0.0803 0.0803 0.0803
2 0.0628 0.0628 0.0628
3 0.0491 0.0491 0.0491
4 0.0384 0.0384 0.0384
5 0.0300 0.0300 0.0300
10 0.0145 0.0145 0.0145
15 0.0150 0.0150 0.0150
20 0.0155 0.0155 0.0155
25 0.0160 0.0160 0.0160
30 0.0165 0.0165 0.0165

CalPERS Actuarial Valuation – June 30, 2020 Appendix A
Actuarial Methods and Assumptions
A-6
Salary Growth (continued)
Public Agency County Peace Officers
Duration of Service (Entry Age 20) (Entry Age 30) (Entry Age 40) 0 0.1320 0.1320 0.1320
1 0.0960 0.0960 0.0960
2 0.0657 0.0657 0.0657
3 0.0525 0.0525 0.0525
4 0.0419 0.0419 0.0419
5 0.0335 0.0335 0.0335
10 0.0170 0.0170 0.0170
15 0.0150 0.0150 0.0150
20 0.0150 0.0150 0.0150
25 0.0175 0.0175 0.0175
30 0.0200 0.0200 0.0200
Schools
Duration of Service (Entry Age 20) (Entry Age 30) (Entry Age 40) 0 0.0428 0.0419 0.0380
1 0.0428 0.0419 0.0380
2 0.0428 0.0419 0.0380
3 0.0354 0.0332 0.0280
4 0.0305 0.0279 0.0224
5 0.0262 0.0234 0.0180
10 0.0171 0.0154 0.0112
15 0.0152 0.0134 0.0098
20 0.0135 0.0117 0.0086
25 0.0120 0.0103 0.0076
30 0.0087 0.0071 0.0048
• The Miscellaneous salary scale is used for Local Prosecutors. • The Police salary scale is used for Other Safety, Local Sheriff, and School Police.

Overall Payroll Growth

2.75% compounded annually (used in projecting the payroll over which the unf unded liability is amortized). This assumption is used for all plans with active members.

Inflation

2.50% compounded annually.

Non-valued Potential Additional Liabilities
The potential liability loss for a cost-of-living increase exceeding the 2.50% inflation assumption and any potential liability loss from future member service purchases are not reflected in the valuation.

Miscellaneous Loading Factors
Credit for Unused Sick Leave
Total years of service is increased by 1% for those plans that have adopted the provision of providing Credit for Unused Sick Leave.

CalPERS Actuarial Valuation – June 30, 2020 Appendix A
Actuarial Methods and Assumptions
A-7
Conversion of Employer Paid Member Contributions (EPMC) Total years of service is increased by the Employee Contribution Rate for those plans with the provision providing for the Conversion of Employer Paid Member Contributions (EPMC) during the final compensation period.

Norris Decision (Best Factors)
Employees hired prior to July 1, 1982 have projected benefit amounts increased in order to reflect the use of “Best Factors” in the calculation of optional benefit forms. This is due to a 1983 Supreme Court decision, known as the Norris decision, which required males and females to be treated equally in the det ermination of benefit amounts. Consequently, anyone already employed at that time is given the best possible conversion factor when op tional benefits are determined. No loading is necessary for employees hired after July 1, 1982.

Termination Liability
The termination liabilities include a 5% contingency load. This load is for unforeseen negative experience.

Demographic Assumptions
Pre-Retirement Mortality
Non-industrial death rates vary by age and gender. Industrial death rates vary by age. See sample rates in table below. The non-industrial death rates are used for all plans. The industrial death rates are used for safety p lans (except for Loca l Prosecutor safety members where the corresponding miscellaneous plan does not have the Industrial Death Benefit).

Non-Industrial Death Industrial Death
(Not Job-Related) (Job-Related)
Age Male Female Male and Female
20 0.00022 0.00007 0.00004
25 0.00029 0.00011 0.00006
30 0.00038 0.00015 0.00007
35 0.00049 0.00027 0.00009
40 0.00064 0.00037 0.00010
45 0.00080 0.00054 0.00012
50 0.00116 0.00079 0.00013
55 0.00172 0.00120 0.00015
60 0.00255 0.00166 0.00016
65 0.00363 0.00233 0.00018
70 0.00623 0.00388 0.00019
75 0.01057 0.00623 0.00021
80 0.01659 0.00939 0.00022
Miscellaneous plans usually have industrial death rates set to zero unless the agency h as specifically contracted for industrial death benefits. If so, each non-industrial death rate shown above will be split into two components ; 99% will become the non -industrial d eath rate and 1 % will become the industrial death rate.

CalPERS Actuarial Valuation – June 30, 2020 Appendix A
Actuarial Methods and Assumptions
A-8
Post-Retirement Mortality
Rates vary by age, type of retirement, and gender. See sample rates in table below. These rates are used for all plans.

Healthy Recipients
Non-Industrially Disabled Industrially Disabled
(Not Job-Related) (Job-Related)
Age Male Female Male Female Male Female
50 0.00372 0.00346 0.01183 0.01083 0.00372 0.00346
55 0.00437 0.00410 0.01613 0.01178 0.00437 0.00410
60 0.00671 0.00476 0.02166 0.01404 0.00671 0.00476
65 0.00928 0.00637 0.02733 0.01757 0.01113 0.00765
70 0.01339 0.00926 0.03358 0.02183 0.01607 0.01111
75 0.02316 0.01635 0.04277 0.02969 0.02779 0.01962
80 0.03977 0.03007 0.06272 0.04641 0.04773 0.03609
85 0.07122 0.05418 0.09793 0.07847 0.08547 0.06501
90 0.13044 0.10089 0.14616 0.13220 0.14348 0.11098
95 0.21658 0.17698 0.21658 0.21015 0.21658 0.17698
100 0.32222 0.28151 0.32222 0.32226 0.32222 0.28151
105 0.46691 0.43491 0.46691 0.43491 0.46691 0.43491
110 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000
The post-retirement mortality rates above include 15 years of projected on -going mortality improvement using 90% of Scale MP 2016 published by the Society of Actuaries.

Marital Status
For active members, a percentage who are married upon retirement is assumed according to member category as shown in the following table.

Member Category Percent Married
Miscellaneous Member 70%
Local Police 85%
Local Fire 90%
Other Local Safety 70%
School Police 85%
Local County Peace Officers 75%
Age of Spouse
It is assumed that female spouses are 3 years younger than male spouses. This assumption is used for all plans.

Terminated Members
It is assumed that terminated members refund immediately if non-vested. Terminated members who are vested are assumed to retire at age 59 for Miscellaneous members and age 54 for safety members.

CalPERS Actuarial Valuation – June 30, 2020 Appendix A
Actuarial Methods and Assumptions
A-9
Termination with Refund
Rates vary by entry age and service for miscellaneous plans. Rates vary by service for safety plans.

See sample rates in tables below.

Public Agency Miscellaneous
Duration of
Service Entry Age 20 Entry Age 25 Entry Age 30 Entry Age 35 Entry Age 40 Entry Age 45 0 0.1742 0.1674 0.1606 0.1537 0.1468 0.1400
1 0.1545 0.1477 0.1409 0.1339 0.1271 0.1203
2 0.1348 0.1280 0.1212 0.1142 0.1074 0.1006
3 0.1151 0.1083 0.1015 0.0945 0.0877 0.0809
4 0.0954 0.0886 0.0818 0.0748 0.0680 0.0612
5 0.0212 0.0193 0.0174 0.0155 0.0136 0.0116
10 0.0138 0.0121 0.0104 0.0088 0.0071 0.0055
15 0.0060 0.0051 0.0042 0.0032 0.0023 0.0014
20 0.0037 0.0029 0.0021 0.0013 0.0005 0.0001
25 0.0017 0.0011 0.0005 0.0001 0.0001 0.0001
30 0.0005 0.0001 0.0001 0.0001 0.0001 0.0001
35 0.0001 0.0001 0.0001 0.0001 0.0001 0.0001
Public Agency Safety
Duration of Service Fire Police County Peace Officer
0 0.1298 0.1013 0.1188
1 0.0674 0.0636 0.0856
2 0.0320 0.0271 0.0617
3 0.0237 0.0258 0.0445
4 0.0087 0.0245 0.0321
5 0.0052 0.0086 0.0121
10 0.0005 0.0053 0.0053
15 0.0004 0.0027 0.0025
20 0.0003 0.0017 0.0012
25 0.0002 0.0012 0.0005
30 0.0002 0.0009 0.0003
35 0.0001 0.0009 0.0002
The police termination and r efund rates are also used for Public Agency Local Prosecutors, Other Safety, Local Sheriff, and School Police.

Schools
Duration of
Service Entry Age 20 Entry Age 25 Entry Age 30 Entry Age 35 Entry Age 40 Entry Age 45 0 0.2107 0.2107 0.1827 0.1546 0.1375 0.1203
1 0.1807 0.1807 0.1526 0.1246 0.1105 0.0963
2 0.1526 0.1526 0.1259 0.0992 0.0878 0.0765
3 0.1266 0.1266 0.1023 0.0780 0.0691 0.0603
4 0.1026 0.1026 0.0815 0.0605 0.0537 0.0469
5 0.0808 0.0808 0.0634 0.0461 0.0409 0.0358
10 0.0202 0.0202 0.0157 0.0112 0.0087 0.0063
15 0.0107 0.0107 0.0077 0.0048 0.0034 0.0021
20 0.0056 0.0056 0.0037 0.0017 0.0016 0.0016
25 0.0026 0.0026 0.0018 0.0009 0.0012 0.0015
30 0.0013 0.0013 0.0011 0.0009 0.0012 0.0015
35 0.0008 0.0008 0.0009 0.0009 0.0012 0.0015

CalPERS Actuarial Valuation – June 30, 2020 Appendix A
Actuarial Methods and Assumptions
A-10
Termination with Vested Benefits
Rates vary by entry age and service for miscellaneous plans. Rates vary by service for safety plans.

See sample rates in tables below.

Public Agency Miscellaneous
Duration of
Service Entry Age 20 Entry Age 25 Entry Age 30 Entry Age 35 Entry Age 40 5 0.0422 0.0422 0.0393 0.0364 0.0344
10 0.0278 0.0278 0.0271 0.0263 0.0215
15 0.0192 0.0192 0.0174 0.0156 0.0120
20 0.0139 0.0139 0.0109 0.0079 0.0047
25 0.0083 0.0083 0.0048 0.0014 0.0007
30 0.0015 0.0015 0.0007 0.0000 0.0000
35 0.0000 0.0000 0.0000 0.0000 0.0000
Public Agency Safety
Duration of
Service Fire Police
County Peace
Officer
5 0.0094 0.0163 0.0187
10 0.0064 0.0126 0.0134
15 0.0048 0.0082 0.0092
20 0.0038 0.0065 0.0064
25 0.0026 0.0058 0.0042
30 0.0014 0.0056 0.0022
35 0.0000 0.0000 0.0000
• After termination with vested benefits, a miscellaneous member is assumed to retire at age 59 and a safety member at age 54.
• The Police t ermination with vested benefits rates are also used for Public Agency Local Prosecutors, Other Safety, Local Sheriff, and School Police.

Schools
Duration of
Service Entry Age 20 Entry Age 25 Entry Age 30 Entry Age 35 Entry Age 40 5 0.0405 0.0405 0.0346 0.0288 0.0264
10 0.0324 0.0324 0.0280 0.0235 0.0211
15 0.0202 0.0202 0.0179 0.0155 0.0126
20 0.0144 0.0144 0.0114 0.0083 0.0042
25 0.0091 0.0091 0.0046 0.0000 0.0000
30 0.0015 0.0015 0.0007 0.0000 0.0000
35 0.0000 0.0000 0.0000 0.0000 0.0000

CalPERS Actuarial Valuation – June 30, 2020 Appendix A
Actuarial Methods and Assumptions
A-11
Non-Industrial (Not Job-Related) Disability
Rates vary by age and gender for miscellaneous plans. Rates vary by age and category for safety plans.

Miscellaneous Fire Police County Peace Officer Schools
Age Male Female Male and Female Male and Female Male and Female Male Female 20 0.0002 0.0001 0.0001 0.0001 0.0001 0.0001 0.0001
25 0.0002 0.0001 0.0001 0.0001 0.0001 0.0001 0.0001
30 0.0002 0.0002 0.0001 0.0002 0.0001 0.0001 0.0002
35 0.0004 0.0007 0.0001 0.0003 0.0004 0.0005 0.0004
40 0.0010 0.0014 0.0001 0.0004 0.0007 0.0012 0.0008
45 0.0015 0.0019 0.0002 0.0005 0.0013 0.0020 0.0017
50 0.0016 0.0020 0.0005 0.0008 0.0018 0.0026 0.0022
55 0.0016 0.0015 0.0007 0.0013 0.0010 0.0025 0.0018
60 0.0015 0.0011 0.0007 0.0020 0.0006 0.0022 0.0011
• The miscellaneous non-industrial disability rates are used for Local Prosecutors. • The police non-industrial disability rates are also used for Other Safety, Local Sheriff, and School Police.

Industrial (Job-Related) Disability
Rates vary by age and category.

Age Fire Police County Peace Officer
20 0.0001 0.0000 0.0004
25 0.0002 0.0017 0.0013
30 0.0006 0.0048 0.0025
35 0.0012 0.0079 0.0037
40 0.0023 0.0110 0.0051
45 0.0040 0.0141 0.0067
50 0.0208 0.0185 0.0092
55 0.0307 0.0479 0.0151
60 0.0438 0.0602 0.0174
• The police industrial disability rates are also used for Local Sheriff and Other Safety. • 50% of the police industrial disability rates are used for School Police. • 1% of the police industrial disability rates are used for Local Prosecutors. • Normally, rates are zero for m iscellaneous plans unless the agency has specifically contracted for industrial disability benefits. If so, each miscellaneous non -industrial disability rate will be split into two components: 50 % will become the non -industrial disability rate and 50% will become the industrial disability rate.

CalPERS Actuarial Valuation – June 30, 2020 Appendix A
Actuarial Methods and Assumptions
A-12
Service Retirement
Retirement rates vary by age, service, and formula, except for the safety ½ @ 55 and 2% @ 55 formulas, where retirement rates vary by age only.

Public Agency Miscellaneous 1.5% @ 65
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.008 0.011 0.013 0.015 0.017 0.019
51 0.007 0.010 0.012 0.013 0.015 0.017
52 0.010 0.014 0.017 0.019 0.021 0.024
53 0.008 0.012 0.015 0.017 0.019 0.022
54 0.012 0.016 0.019 0.022 0.025 0.028
55 0.018 0.025 0.031 0.035 0.038 0.043
56 0.015 0.021 0.025 0.029 0.032 0.036
57 0.020 0.028 0.033 0.038 0.043 0.048
58 0.024 0.033 0.040 0.046 0.052 0.058
59 0.028 0.039 0.048 0.054 0.060 0.067
60 0.049 0.069 0.083 0.094 0.105 0.118
61 0.062 0.087 0.106 0.120 0.133 0.150
62 0.104 0.146 0.177 0.200 0.223 0.251
63 0.099 0.139 0.169 0.191 0.213 0.239
64 0.097 0.136 0.165 0.186 0.209 0.233
65 0.140 0.197 0.240 0.271 0.302 0.339
66 0.092 0.130 0.157 0.177 0.198 0.222
67 0.129 0.181 0.220 0.249 0.277 0.311
68 0.092 0.129 0.156 0.177 0.197 0.221
69 0.092 0.130 0.158 0.178 0.199 0.224
70 0.103 0.144 0.175 0.198 0.221 0.248
Public Agency Miscellaneous 2% @ 60
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.020 0.020 0.020 0.020 0.020 0.150
51 0.006 0.019 0.027 0.031 0.035 0.038
52 0.011 0.024 0.031 0.034 0.037 0.040
53 0.010 0.015 0.021 0.027 0.033 0.040
54 0.025 0.025 0.029 0.035 0.041 0.048
55 0.019 0.026 0.033 0.092 0.136 0.146
56 0.030 0.034 0.038 0.060 0.093 0.127
57 0.030 0.046 0.061 0.076 0.090 0.104
58 0.040 0.044 0.059 0.080 0.101 0.122
59 0.024 0.044 0.063 0.083 0.103 0.122
60 0.070 0.074 0.089 0.113 0.137 0.161
61 0.080 0.086 0.093 0.118 0.156 0.195
62 0.100 0.117 0.133 0.190 0.273 0.357
63 0.140 0.157 0.173 0.208 0.255 0.301
64 0.140 0.153 0.165 0.196 0.239 0.283
65 0.140 0.178 0.215 0.264 0.321 0.377
66 0.140 0.178 0.215 0.264 0.321 0.377
67 0.140 0.178 0.215 0.264 0.321 0.377
68 0.112 0.142 0.172 0.211 0.257 0.302
69 0.112 0.142 0.172 0.211 0.257 0.302
70 0.140 0.178 0.215 0.264 0.321 0.377

CalPERS Actuarial Valuation – June 30, 2020 Appendix A
Actuarial Methods and Assumptions
A-13
Service Retirement
Public Agency Miscellaneous 2% @ 55
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.008 0.013 0.018 0.021 0.022 0.033
51 0.009 0.016 0.020 0.023 0.026 0.036
52 0.015 0.018 0.020 0.021 0.025 0.030
53 0.016 0.020 0.024 0.028 0.031 0.035
54 0.018 0.022 0.026 0.030 0.034 0.038
55 0.040 0.040 0.056 0.093 0.109 0.154
56 0.034 0.050 0.066 0.092 0.107 0.138
57 0.042 0.048 0.058 0.082 0.096 0.127
58 0.046 0.054 0.062 0.090 0.106 0.131
59 0.045 0.055 0.066 0.097 0.115 0.144
60 0.058 0.075 0.093 0.126 0.143 0.169
61 0.065 0.088 0.111 0.146 0.163 0.189
62 0.136 0.118 0.148 0.190 0.213 0.247
63 0.130 0.133 0.174 0.212 0.249 0.285
64 0.113 0.129 0.165 0.196 0.223 0.249
65 0.145 0.173 0.201 0.233 0.266 0.289
66 0.170 0.199 0.229 0.258 0.284 0.306
67 0.250 0.204 0.233 0.250 0.257 0.287
68 0.227 0.175 0.193 0.215 0.240 0.262
69 0.200 0.180 0.180 0.198 0.228 0.246
70 0.150 0.171 0.192 0.239 0.304 0.330
Public Agency Miscellaneous 2.5% @ 55
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.008 0.014 0.020 0.026 0.033 0.050
51 0.008 0.015 0.023 0.030 0.037 0.059
52 0.009 0.016 0.023 0.030 0.037 0.061
53 0.014 0.021 0.028 0.035 0.042 0.063
54 0.014 0.022 0.030 0.039 0.047 0.068
55 0.020 0.038 0.055 0.073 0.122 0.192
56 0.025 0.047 0.069 0.091 0.136 0.196
57 0.030 0.048 0.065 0.083 0.123 0.178
58 0.035 0.054 0.073 0.093 0.112 0.153
59 0.035 0.054 0.073 0.092 0.131 0.183
60 0.044 0.072 0.101 0.130 0.158 0.197
61 0.050 0.078 0.105 0.133 0.161 0.223
62 0.055 0.093 0.130 0.168 0.205 0.268
63 0.090 0.124 0.158 0.192 0.226 0.279
64 0.080 0.112 0.144 0.175 0.207 0.268
65 0.120 0.156 0.193 0.229 0.265 0.333
66 0.132 0.172 0.212 0.252 0.292 0.366
67 0.132 0.172 0.212 0.252 0.292 0.366
68 0.120 0.156 0.193 0.229 0.265 0.333
69 0.120 0.156 0.193 0.229 0.265 0.333
70 0.120 0.156 0.193 0.229 0.265 0.333

CalPERS Actuarial Valuation – June 30, 2020 Appendix A
Actuarial Methods and Assumptions
A-14
Service Retirement
Public Agency Miscellaneous 2.7% @ 55
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.003 0.010 0.016 0.034 0.033 0.045
51 0.009 0.016 0.023 0.042 0.038 0.047
52 0.015 0.019 0.024 0.040 0.036 0.046
53 0.012 0.020 0.028 0.047 0.046 0.060
54 0.020 0.027 0.035 0.054 0.056 0.073
55 0.033 0.055 0.078 0.113 0.156 0.234
56 0.039 0.067 0.095 0.135 0.169 0.227
57 0.050 0.067 0.084 0.113 0.142 0.198
58 0.043 0.066 0.089 0.124 0.151 0.201
59 0.050 0.070 0.090 0.122 0.158 0.224
60 0.060 0.086 0.112 0.150 0.182 0.238
61 0.071 0.094 0.117 0.153 0.184 0.241
62 0.091 0.122 0.152 0.194 0.226 0.279
63 0.143 0.161 0.179 0.209 0.222 0.250
64 0.116 0.147 0.178 0.221 0.254 0.308
65 0.140 0.174 0.208 0.254 0.306 0.389
66 0.170 0.209 0.247 0.298 0.310 0.324
67 0.170 0.199 0.228 0.269 0.296 0.342
68 0.150 0.181 0.212 0.255 0.287 0.339
69 0.150 0.181 0.212 0.255 0.287 0.339
70 0.150 0.181 0.212 0.243 0.291 0.350
Public Agency Miscellaneous 3% @ 60
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.013 0.019 0.026 0.042 0.038 0.064
51 0.035 0.037 0.039 0.052 0.047 0.062
52 0.023 0.030 0.038 0.055 0.051 0.056
53 0.025 0.032 0.040 0.057 0.056 0.066
54 0.035 0.042 0.050 0.067 0.066 0.076
55 0.040 0.052 0.064 0.085 0.095 0.120
56 0.043 0.056 0.070 0.094 0.102 0.150
57 0.045 0.060 0.074 0.099 0.109 0.131
58 0.053 0.056 0.059 0.099 0.126 0.185
59 0.050 0.068 0.085 0.113 0.144 0.202
60 0.089 0.106 0.123 0.180 0.226 0.316
61 0.100 0.117 0.133 0.212 0.230 0.298
62 0.130 0.155 0.180 0.248 0.282 0.335
63 0.120 0.163 0.206 0.270 0.268 0.352
64 0.150 0.150 0.150 0.215 0.277 0.300
65 0.200 0.242 0.283 0.330 0.300 0.342
66 0.220 0.264 0.308 0.352 0.379 0.394
67 0.250 0.279 0.309 0.338 0.371 0.406
68 0.170 0.196 0.223 0.249 0.290 0.340
69 0.220 0.261 0.302 0.344 0.378 0.408
70 0.220 0.255 0.291 0.326 0.358 0.388

CalPERS Actuarial Valuation – June 30, 2020 Appendix A
Actuarial Methods and Assumptions
A-15
Service Retirement
Public Agency Miscellaneous 2% @ 62
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.000 0.000 0.000 0.000 0.000 0.000
51 0.000 0.000 0.000 0.000 0.000 0.000
52 0.005 0.008 0.012 0.015 0.019 0.031
53 0.007 0.011 0.014 0.018 0.021 0.032
54 0.007 0.011 0.015 0.019 0.023 0.034
55 0.010 0.019 0.028 0.036 0.061 0.096
56 0.014 0.026 0.038 0.050 0.075 0.108
57 0.018 0.029 0.039 0.050 0.074 0.107
58 0.023 0.035 0.048 0.060 0.073 0.099
59 0.025 0.038 0.051 0.065 0.092 0.128
60 0.031 0.051 0.071 0.091 0.111 0.138
61 0.038 0.058 0.079 0.100 0.121 0.167
62 0.044 0.074 0.104 0.134 0.164 0.214
63 0.077 0.105 0.134 0.163 0.192 0.237
64 0.072 0.101 0.129 0.158 0.187 0.242
65 0.108 0.141 0.173 0.206 0.239 0.300
66 0.132 0.172 0.212 0.252 0.292 0.366
67 0.132 0.172 0.212 0.252 0.292 0.366
68 0.120 0.156 0.193 0.229 0.265 0.333
69 0.120 0.156 0.193 0.229 0.265 0.333
70 0.120 0.156 0.193 0.229 0.265 0.333
Service Retirement
Public Agency Fire ½ @ 55 and 2% @ 55
Age Rate Age Rate
50 0.0159 56 0.1108
51 0.0000 57 0.0000
52 0.0344 58 0.0950
53 0.0199 59 0.0441
54 0.0413 60 1.00000
55 0.0751
Public Agency Police ½ @ 55 and 2% @ 55
Age Rate Age Rate
50 0.0255 56 0.0692
51 0.0000 57 0.0511
52 0.0164 58 0.0724
53 0.0272 59 0.0704
54 0.0095 60 0.3000
55 0.1667

CalPERS Actuarial Valuation – June 30, 2020 Appendix A
Actuarial Methods and Assumptions
A-16
Service Retirement
Public Agency Police 2% @ 50
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.050 0.050 0.050 0.050 0.050 0.100
51 0.040 0.040 0.040 0.040 0.058 0.094
52 0.040 0.040 0.040 0.040 0.061 0.087
53 0.040 0.040 0.040 0.040 0.082 0.123
54 0.040 0.040 0.040 0.046 0.098 0.158
55 0.072 0.072 0.072 0.096 0.141 0.255
56 0.066 0.066 0.066 0.088 0.129 0.228
57 0.060 0.060 0.060 0.080 0.118 0.213
58 0.080 0.080 0.080 0.088 0.138 0.228
59 0.080 0.080 0.080 0.092 0.140 0.228
60 0.150 0.150 0.150 0.150 0.150 0.228
61 0.144 0.144 0.144 0.144 0.144 0.170
62 0.150 0.150 0.150 0.150 0.150 0.213
63 0.150 0.150 0.150 0.150 0.150 0.213
64 0.150 0.150 0.150 0.150 0.150 0.319
65 1.000 1.000 1.000 1.000 1.000 1.000
• These rates also apply to County Peace officers, Local Prosecutors, Local Sheriff, School Police, and Other Safety.

Service Retirement
Public Agency Fire 2% @ 50
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.009 0.009 0.009 0.009 0.013 0.020
51 0.013 0.013 0.013 0.013 0.020 0.029
52 0.018 0.018 0.018 0.018 0.028 0.042
53 0.052 0.052 0.052 0.052 0.079 0.119
54 0.067 0.067 0.067 0.067 0.103 0.154
55 0.089 0.089 0.089 0.089 0.136 0.204
56 0.083 0.083 0.083 0.083 0.127 0.190
57 0.082 0.082 0.082 0.082 0.126 0.189
58 0.088 0.088 0.088 0.088 0.136 0.204
59 0.074 0.074 0.074 0.074 0.113 0.170
60 0.100 0.100 0.100 0.100 0.154 0.230
61 0.072 0.072 0.072 0.072 0.110 0.165
62 0.099 0.099 0.099 0.099 0.152 0.228
63 0.114 0.114 0.114 0.114 0.175 0.262
64 0.114 0.114 0.114 0.114 0.175 0.262
65 1.000 1.000 1.000 1.000 1.000 1.000

CalPERS Actuarial Valuation – June 30, 2020 Appendix A
Actuarial Methods and Assumptions
A-17
Service Retirement
Public Agency Police 3% @ 55
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.035 0.035 0.035 0.035 0.070 0.090
51 0.028 0.028 0.028 0.029 0.065 0.101
52 0.032 0.032 0.032 0.039 0.066 0.109
53 0.028 0.028 0.028 0.043 0.075 0.132
54 0.038 0.038 0.038 0.074 0.118 0.333
55 0.070 0.070 0.070 0.120 0.175 0.340
56 0.060 0.060 0.060 0.110 0.165 0.330
57 0.060 0.060 0.060 0.110 0.165 0.320
58 0.080 0.080 0.080 0.100 0.185 0.350
59 0.090 0.090 0.095 0.130 0.185 0.350
60 0.150 0.150 0.150 0.150 0.185 0.350
61 0.120 0.120 0.120 0.120 0.160 0.350
62 0.150 0.150 0.150 0.150 0.200 0.350
63 0.150 0.150 0.150 0.150 0.200 0.400
64 0.150 0.150 0.150 0.150 0.175 0.350
65 1.000 1.000 1.000 1.000 1.000 1.000
• These rates also apply to County Peace officers, Local Prosecutors, Local Sheriff, School Police, and Other Safety.

Service Retirement
Public Agency Fire 3% @ 55
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.001 0.001 0.001 0.006 0.016 0.069
51 0.002 0.002 0.002 0.006 0.018 0.071
52 0.012 0.012 0.012 0.021 0.040 0.098
53 0.032 0.032 0.032 0.049 0.085 0.149
54 0.057 0.057 0.057 0.087 0.144 0.217
55 0.073 0.073 0.073 0.109 0.179 0.259
56 0.064 0.064 0.064 0.097 0.161 0.238
57 0.063 0.063 0.063 0.095 0.157 0.233
58 0.065 0.065 0.065 0.099 0.163 0.241
59 0.088 0.088 0.088 0.131 0.213 0.299
60 0.105 0.105 0.105 0.155 0.251 0.344
61 0.118 0.118 0.118 0.175 0.282 0.380
62 0.087 0.087 0.087 0.128 0.210 0.295
63 0.067 0.067 0.067 0.100 0.165 0.243
64 0.067 0.067 0.067 0.100 0.165 0.243
65 1.000 1.000 1.000 1.000 1.000 1.000

CalPERS Actuarial Valuation – June 30, 2020 Appendix A
Actuarial Methods and Assumptions
A-18
Service Retirement
Public Agency Police 3% @ 50
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.050 0.050 0.050 0.100 0.155 0.400
51 0.040 0.040 0.040 0.090 0.140 0.380
52 0.040 0.040 0.040 0.070 0.115 0.350
53 0.040 0.040 0.040 0.080 0.135 0.350
54 0.040 0.040 0.040 0.090 0.145 0.350
55 0.070 0.070 0.070 0.120 0.175 0.340
56 0.060 0.060 0.060 0.110 0.165 0.330
57 0.060 0.060 0.060 0.110 0.165 0.320
58 0.080 0.080 0.080 0.100 0.185 0.350
59 0.090 0.090 0.095 0.130 0.185 0.350
60 0.150 0.150 0.150 0.150 0.185 0.350
61 0.120 0.120 0.120 0.120 0.160 0.350
62 0.150 0.150 0.150 0.150 0.200 0.350
63 0.150 0.150 0.150 0.150 0.200 0.400
64 0.150 0.150 0.150 0.150 0.175 0.350
65 1.000 1.000 1.000 1.000 1.000 1.000
• These rates also apply to County Peace officers, Local Prosecutors, Local Sheriff, School Police, and Other Safety.

Service Retirement
Public Agency Fire 3% @ 50
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.020 0.020 0.020 0.040 0.130 0.192
51 0.008 0.008 0.008 0.023 0.107 0.164
52 0.023 0.023 0.023 0.043 0.136 0.198
53 0.023 0.023 0.023 0.043 0.135 0.198
54 0.027 0.027 0.027 0.048 0.143 0.207
55 0.043 0.043 0.043 0.070 0.174 0.244
56 0.053 0.053 0.053 0.085 0.196 0.269
57 0.054 0.054 0.054 0.086 0.197 0.271
58 0.052 0.052 0.052 0.084 0.193 0.268
59 0.075 0.075 0.075 0.116 0.239 0.321
60 0.065 0.065 0.065 0.102 0.219 0.298
61 0.076 0.076 0.076 0.117 0.241 0.324
62 0.068 0.068 0.068 0.106 0.224 0.304
63 0.027 0.027 0.027 0.049 0.143 0.208
64 0.094 0.094 0.094 0.143 0.277 0.366
65 1.000 1.000 1.000 1.000 1.000 1.000

CalPERS Actuarial Valuation – June 30, 2020 Appendix A
Actuarial Methods and Assumptions
A-19
Service Retirement
Public Agency Police 2% @ 57
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.040 0.040 0.040 0.040 0.040 0.080
51 0.028 0.028 0.028 0.028 0.040 0.066
52 0.028 0.028 0.028 0.028 0.043 0.061
53 0.028 0.028 0.028 0.028 0.057 0.086
54 0.028 0.028 0.028 0.032 0.069 0.110
55 0.050 0.050 0.050 0.067 0.099 0.179
56 0.046 0.046 0.046 0.062 0.090 0.160
57 0.054 0.054 0.054 0.072 0.106 0.191
58 0.060 0.060 0.060 0.066 0.103 0.171
59 0.060 0.060 0.060 0.069 0.105 0.171
60 0.113 0.113 0.113 0.113 0.113 0.171
61 0.108 0.108 0.108 0.108 0.108 0.128
62 0.113 0.113 0.113 0.113 0.113 0.159
63 0.113 0.113 0.113 0.113 0.113 0.159
64 0.113 0.113 0.113 0.113 0.113 0.239
65 1.000 1.000 1.000 1.000 1.000 1.000
• These rates also apply to County Peace officers, Local Prosecutors, Local Sheriff, School Police, and Other Safety.

Service Retirement
Public Agency Fire 2% @ 57
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.005 0.005 0.005 0.005 0.008 0.012
51 0.006 0.006 0.006 0.006 0.009 0.013
52 0.012 0.012 0.012 0.012 0.019 0.028
53 0.033 0.033 0.033 0.033 0.050 0.075
54 0.045 0.045 0.045 0.045 0.069 0.103
55 0.061 0.061 0.061 0.061 0.094 0.140
56 0.055 0.055 0.055 0.055 0.084 0.126
57 0.081 0.081 0.081 0.081 0.125 0.187
58 0.059 0.059 0.059 0.059 0.091 0.137
59 0.055 0.055 0.055 0.055 0.084 0.126
60 0.085 0.085 0.085 0.085 0.131 0.196
61 0.085 0.085 0.085 0.085 0.131 0.196
62 0.085 0.085 0.085 0.085 0.131 0.196
63 0.085 0.085 0.085 0.085 0.131 0.196
64 0.085 0.085 0.085 0.085 0.131 0.196
65 1.000 1.000 1.000 1.000 1.000 1.000

CalPERS Actuarial Valuation – June 30, 2020 Appendix A
Actuarial Methods and Assumptions
A-20
Service Retirement
Public Agency Police 2.5% @ 57
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.050 0.050 0.050 0.050 0.050 0.100
51 0.038 0.038 0.038 0.038 0.055 0.089
52 0.038 0.038 0.038 0.038 0.058 0.082
53 0.036 0.036 0.036 0.036 0.073 0.111
54 0.036 0.036 0.036 0.041 0.088 0.142
55 0.061 0.061 0.061 0.082 0.120 0.217
56 0.056 0.056 0.056 0.075 0.110 0.194
57 0.060 0.060 0.060 0.080 0.118 0.213
58 0.072 0.072 0.072 0.079 0.124 0.205
59 0.072 0.072 0.072 0.083 0.126 0.205
60 0.135 0.135 0.135 0.135 0.135 0.205
61 0.130 0.130 0.130 0.130 0.130 0.153
62 0.135 0.135 0.135 0.135 0.135 0.191
63 0.135 0.135 0.135 0.135 0.135 0.191
64 0.135 0.135 0.135 0.135 0.135 0.287
65 1.000 1.000 1.000 1.000 1.000 1.000
• These rates also apply to County Peace officers, Local Prosecutors, Local Sheriff, School Police, and Other Safety.

Service Retirement
Public Agency Fire 2.5% @ 57
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.007 0.007 0.007 0.007 0.010 0.015
51 0.008 0.008 0.008 0.008 0.012 0.018
52 0.016 0.016 0.016 0.016 0.025 0.038
53 0.042 0.042 0.042 0.042 0.064 0.096
54 0.057 0.057 0.057 0.057 0.088 0.132
55 0.074 0.074 0.074 0.074 0.114 0.170
56 0.066 0.066 0.066 0.066 0.102 0.153
57 0.090 0.090 0.090 0.090 0.139 0.208
58 0.071 0.071 0.071 0.071 0.110 0.164
59 0.066 0.066 0.066 0.066 0.101 0.151
60 0.102 0.102 0.102 0.102 0.157 0.235
61 0.102 0.102 0.102 0.102 0.157 0.236
62 0.102 0.102 0.102 0.102 0.157 0.236
63 0.102 0.102 0.102 0.102 0.157 0.236
64 0.102 0.102 0.102 0.102 0.157 0.236
65 1.000 1.000 1.000 1.000 1.000 1.000

CalPERS Actuarial Valuation – June 30, 2020 Appendix A
Actuarial Methods and Assumptions
A-21
Service Retirement
Public Agency Police 2.7% @ 57
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.0500 0.0500 0.0500 0.0500 0.0500 0.1000
51 0.0400 0.0400 0.0400 0.0400 0.0575 0.0942
52 0.0380 0.0380 0.0380 0.0380 0.0580 0.0825
53 0.0380 0.0380 0.0380 0.0380 0.0774 0.1169
54 0.0380 0.0380 0.0380 0.0437 0.0931 0.1497
55 0.0684 0.0684 0.0684 0.0912 0.1340 0.2423
56 0.0627 0.0627 0.0627 0.0836 0.1228 0.2168
57 0.0600 0.0600 0.0600 0.0800 0.1175 0.2125
58 0.0800 0.0800 0.0800 0.0880 0.1375 0.2275
59 0.0800 0.0800 0.0800 0.0920 0.1400 0.2275
60 0.1500 0.1500 0.1500 0.1500 0.1500 0.2275
61 0.1440 0.1440 0.1440 0.1440 0.1440 0.1700
62 0.1500 0.1500 0.1500 0.1500 0.1500 0.2125
63 0.1500 0.1500 0.1500 0.1500 0.1500 0.2125
64 0.1500 0.1500 0.1500 0.1500 0.1500 0.3188
65 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000
• These rates also apply to County Peace officers, Local Prosecutors, Local Sheriff, School Police, and Other Safety.

Service Retirement
Public Agency Fire 2.7% @ 57
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.0065 0.0065 0.0065 0.0065 0.0101 0.0151
51 0.0081 0.0081 0.0081 0.0081 0.0125 0.0187
52 0.0164 0.0164 0.0164 0.0164 0.0254 0.0380
53 0.0442 0.0442 0.0442 0.0442 0.0680 0.1018
54 0.0606 0.0606 0.0606 0.0606 0.0934 0.1397
55 0.0825 0.0825 0.0825 0.0825 0.1269 0.1900
56 0.0740 0.0740 0.0740 0.0740 0.1140 0.1706
57 0.0901 0.0901 0.0901 0.0901 0.1387 0.2077
58 0.0790 0.0790 0.0790 0.0790 0.1217 0.1821
59 0.0729 0.0729 0.0729 0.0729 0.1123 0.1681
60 0.1135 0.1135 0.1135 0.1135 0.1747 0.2615
61 0.1136 0.1136 0.1136 0.1136 0.1749 0.2618
62 0.1136 0.1136 0.1136 0.1136 0.1749 0.2618
63 0.1136 0.1136 0.1136 0.1136 0.1749 0.2618
64 0.1136 0.1136 0.1136 0.1136 0.1749 0.2618
65 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000

CalPERS Actuarial Valuation – June 30, 2020 Appendix A
Actuarial Methods and Assumptions
A-22
Service Retirement
Schools 2% @ 55
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 50 0.004 0.007 0.011 0.012 0.013 0.015
51 0.004 0.008 0.011 0.014 0.016 0.017
52 0.005 0.010 0.014 0.016 0.018 0.021
53 0.006 0.012 0.016 0.020 0.022 0.025
54 0.008 0.017 0.023 0.027 0.031 0.034
55 0.021 0.042 0.058 0.069 0.077 0.086
56 0.019 0.037 0.053 0.062 0.069 0.078
57 0.019 0.038 0.054 0.064 0.071 0.079
58 0.022 0.045 0.062 0.074 0.082 0.092
59 0.025 0.049 0.069 0.082 0.090 0.101
60 0.033 0.066 0.092 0.109 0.121 0.135
61 0.037 0.072 0.101 0.119 0.133 0.149
62 0.066 0.131 0.184 0.218 0.242 0.271
63 0.064 0.126 0.178 0.209 0.233 0.261
64 0.059 0.117 0.163 0.193 0.215 0.240
65 0.080 0.158 0.221 0.261 0.291 0.326
66 0.081 0.160 0.224 0.265 0.296 0.330
67 0.070 0.139 0.194 0.229 0.255 0.286
68 0.063 0.124 0.173 0.205 0.228 0.255
69 0.066 0.130 0.183 0.216 0.241 0.270
70 0.071 0.140 0.196 0.231 0.258 0.289
Miscellaneous
Internal Revenue Code Section 415
The limitations on benefits imposed by Internal Revenue Code Section 415 are taken into account in this valuation. Each year the impact of any changes in this limitation since the prior valuation is included and amortized as part of the actuarial gain or l oss base. This results in lower contributions for those employers contributing to the Replacement Benefit Fund and protects CalPERS from prefunding expected benefits in excess of limits imposed by federal tax law. The Section 415(b) dollar limit for the 2020 calendar year is $230,000.

Internal Revenue Code Section 401(a)(17)
The limitations on compensation imposed by Internal Revenue Code Section 401(a)(17) are taken into account in this valuation. Each year, the impact of any changes in the compensation limitation since the prior valuation is included and amortized as part of the actuarial gain or loss base. The compensation limit for classic members for the 2020 calendar year is $285,000.

Appendix B
Principal Plan Provisions

CalPERS Actuarial Valuation – June 30, 2020 Appendix B
Safety Plan of the City of Pasadena
Principal Plan Provisions
B-1
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 Hands hakes, have not been included. Many of the statements in this summary are general in nature, and are intended to pr ovide an easily understood summary of the Public Employees’ Retirement Law. 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 your 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
65 2% at 60 2% at 55 2.5% at
55 2.7% at
55 3% at 60 PEPRA
2% at 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%

CalPERS Actuarial Valuation – June 30, 2020 Appendix B
Safety Plan of the City of Pasadena
Principal Plan Provisions
B-2
Safety Plan Formulas
Retirement
Age ½ at 55 * 2% at 55 2% at 50 3% at 55 3% at 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 fa ctor 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 57 2.5% at 57 2.7% at 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 m ultiple 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 accumulate d 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 emp loyer 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 65 formula. PEPRA members have a cap on the annual salary that can be used to calculate final compensation for all new members based on the Social Security contribution and benefit base. For employees that participate in Social Security this cap is $126,291 for 2020 and for those employees that do not participate in Social Security the cap for 2020 is $151,549. Adjustments to the caps are permitted annually based on changes to the CPI for all urban consumers.
• Employees must be covered by Social Security with the 1.5% at 65 formula. Social Security is optional for all other benefit formulas. For employees covered by Social Security, the m odified 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 co mpensation 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.

CalPERS Actuarial Valuation – June 30, 2020 Appendix B
Safety Plan of the City of Pasadena
Principal Plan Provisions
B-3
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.

Vested Deferred Retirement
Eligibility for Deferred Status
A CalPERS member becomes eligible for a deferred vested retirement benefit when he or she leaves employment, keeps his or her contribution account balance on deposit with CalPERS, and has 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% @ 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 (Non-Job Related) Disability Retirement
Eligibility
A CalPERS member is eligible for Non-Industrial Disability Retirement if he or she becomes disabled and has at least 5 years of credited service (total service across all CalPERS emp loyers, and with certain other retirement s ystems with which CalPERS has reciprocity agreements). There is no special age requirement. Disabled means the member is unable to perform his or her job because of an illness or injury, which is expected to be permanent or to last indefinitely. The illness or injury do es 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 tha n 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.

CalPERS Actuarial Valuation – June 30, 2020 Appendix B
Safety Plan of the City of Pasadena
Principal Plan Provisions
B-4
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 f irst 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 p ayable 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 (Job Related) Disability Retirement
All safety members have this benefit. For 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 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 percent 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 respec t to employment in this group. With the standar d 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.

CalPERS Actuarial Valuation – June 30, 2020 Appendix B
Safety Plan of the City of Pasadena
Principal Plan Provisions
B-5
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.

Improved Lump Sum Payment
Employers have the option of providing an improved lump sum death benefit of $600, $2,000, $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 his or her 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 his or her retirement allowance. Such reduction takes into account the amount to be provided to the beneficiary and the probable duration of pay ments (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 the modified formula, 25 % of the retirement allowance will automatically be continued to certain statutory beneficiaries upon the death of the retiree, without a reduct ion in the retiree’s allowance. For retirement allowances with respect to service subject to the full or supplemental 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 all owance. 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 his or her 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.

CalPERS Actuarial Valuation – June 30, 2020 Appendix B
Safety Plan of the City of Pasadena
Principal Plan Provisions
B-6
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 b enefit is a lump sum in the amount of the member’s accumulated contributions, where inter est 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 month ly 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 safety PEPRA members and age 52 for miscellaneous PEPRA members, and has at least 5 years of credited service (total service acr oss all CalPERS employers and with certain other retirement systems with which CalPER S 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 r etirement benefit that the member would have been entitled to recei ve if the member had retired on the date of his or her 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.

CalPERS Actuarial Valuation – June 30, 2020 Appendix B
Safety Plan of the City of Pasadena
Principal Plan Provisions
B-7
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 safety PEPRA members and age 52 for miscellaneous PEPRA members, and has at least 5 years of credited service (total service across all CalPERS employers and with certain other retirement systems with which CalPER S 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 instea d of this Optional Settle ment 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 his or her death and e lected 100% to continue to the eligible survivor after the member’s death. The allowance is payable as long as the surviving spouse lives, at which time it is continued to any unmarried child(ren) under age 18, if applicable. The total amount paid will be at least equal to the basic death benefit.

Special Death Benefit
This is a standa rd benefit for safety members. An employer may elect to provide this benefit for miscellaneous members.

Eligibility
An employee’s eligible survivor(s) may receive the special d eath benefit if the member dies while actively employe d 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 i llness 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

CalPERS Actuarial Valuation – June 30, 2020 Appendix B
Safety Plan of the City of Pasadena
Principal Plan Provisions
B-8
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 r etirement benefit that the member would have received had the member retired on the date of his or her death and elect ed 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 his or her deat h 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 as long as the surviving spouse lives, at which time it is continued to any unmarried child (ren) under age 18, 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 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 inflation is low), may be greater than the rate of inflation (when the rate of inflation is low after several years of high inflation) or may even be greater than 2% (when inflation is high after several years of low 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 65 formula.

Purchasing Power Protection Allowance (PPPA)
Retirement and survivor allowances are protec ted against 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 inflation since retirement. The PPPA benefit will be coordinated with other cost -of-living adjustments provided under the plan.

CalPERS Actuarial Valuation – June 30, 2020 Appendix B
Safety Plan of the City of Pasadena
Principal Plan Provisions
B-9
Employee Contributions
Each employee contributes toward his or her retirement base d 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 full and supplemental formula members and $133.33 for employees covered by the 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 65 2%
Miscellaneous, 2% at 60 7%
Miscellaneous, 2% at 55 7%
Miscellaneous, 2.5% at 55 8%
Miscellaneous, 2.7% at 55 8%
Miscellaneous, 3% at 60 8%
Miscellaneous, 2% at 62 50% of the Total Normal Cost
Miscellaneous, 1.5% at 65 50% of the Total Normal Cost
Safety, 1/2 at 55 Varies by entry age
Safety, 2% at 55 7%
Safety, 2% at 50 9%
Safety, 3% at 55 9%
Safety, 3% at 50 9%
Safety, 2% at 57 50% of the Total Normal Cost
Safety, 2.5% at 57 50% of the Total Normal Cost
Safety, 2.7% at 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 hi s or her employee contributions, which are credited with 6% interest compounded annually.

CalPERS Actuarial Valuation – June 30, 2020 Appendix B
Safety Plan of the City of Pasadena
Principal Plan Provisions
B-10
1959 Survivor Benefit
This is a pre -retirement death benefit available only to members n ot 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 val uation. More information on this benefit is available on the CalPERS website.

Appendix C
Participant Data
• Summary of Valuation Data
• Active Members
• Transferred and Terminated Members
• Retired Members and Beneficiaries

CalPERS Actuarial Valuation – June 30, 2020 Appendix C
Safety Plan of the City of Pasadena
Participant Data
C-1
Summary of Valuation Data
June 30, 2019 June 30, 2020

1. Active Members
a) Counts 376 357
b) Average Attained Age 41.38 41.41
c) Average Entry Age to Rate Plan 27.91 27.82
d) Average Years of Credited Service 13.40 13.52
e) Average Annual Covered Pay $122,576 $129,290
f) Annual Covered Payroll 46,088,633 46,156,603
g) Projected Annual Payroll for Contribution Year 49,996,467 50,070,200 h) Present Value of Future Payroll 431,406,323 432,008,987

2. Transferred Members
a) Counts 81 87
b) Average Attained Age 42.51 42.41
c) Average Years of Credited Service 5.34 5.13
d) Average Annual Covered Pay $102,954 $111,367

3. Terminated Members
a) Cou nts 63 58
b) Average Attained Age 40.53 41.18
c) Average Years of Credited Service 3.52 2.77
d) Average Annual Covered Pay $73,794 $72,307

4. Retired Members and Beneficiaries
a) Counts 378 402
b) Average Attained Age 61.79 62.23
c) Average Annual Benefits $73,370 $75,659

5. Active to Retired Ratio [(1a) / (4a)] 0.99 0.89
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.

Average Annual Benefits represents benefit amounts payable by this plan only. Some members may have service with another agency and would therefore have a larger total benefit than would be included as part of the average shown here.

CalPERS Actuarial Valuation – June 30, 2020 Appendix C
Safety Plan of the City of Pasadena
Participant Data
C-2
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 9 0 0 0 0 0 9
25-29 37 4 0 0 0 0 41
30-34 38 12 7 0 0 0 57
35-39 9 17 24 7 0 0 57
40-44 6 3 19 30 4 0 62
45-49 3 2 7 12 20 5 49
50-54 1 0 4 4 9 36 54
55-59 0 1 0 2 2 13 18
60-64 0 0 0 2 0 6 8
65 and Over 0 0 0 0 0 2 2
All Ages 103 39 61 57 35 62 357
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 $86,825 $0 $0 $0 $0 $0 $86,825
25-29 97,878 110,662 0 0 0 0 99,125
30-34 102,691 115,651 124,933 0 0 0 108,151
35-39 108,534 117,670 130,715 135,436 0 0 123,902
40-44 114,952 113,577 137,483 140,653 161,957 0 137,259 45-49 123,281 109,754 128,159 143,015 138,277 172,989 139,452 50-54 240,203 0 125,982 138,613 141,533 162,260 155,810 55-59 0 107,979 0 126,726 153,892 164,642 156,087
60-64 0 0 0 122,540 0 146,988 140,876
65 and Over 0 0 0 0 0 195,263 195,263
Average $102,735 $115,361 $131,556 $139,243 $142,713 $163,212 $129,290

CalPERS Actuarial Valuation – June 30, 2020 Appendix C
Safety Plan of the City of Pasadena
Participant Data
C-3
Transferred and Terminated 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 7 1 0 0 0 0 8 90,760
30-34 12 2 0 0 0 0 14 98,991
35-39 8 7 4 0 0 0 19 116,611
40-44 6 2 3 0 0 0 11 132,819
45-49 8 4 2 0 0 0 14 129,167
50-54 7 3 1 2 0 0 13 100,711
55-59 3 0 0 0 0 1 4 99,193
60-64 0 1 2 0 0 0 3 108,260
65 and Over 1 0 0 0 0 0 1 61,179
All Ages 52 20 12 2 0 1 87 $111,367
Distribution of Terminated 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 5 0 0 0 0 0 5 54,711
30-34 10 1 0 0 0 0 11 78,359
35-39 10 0 3 1 0 0 14 75,337
40-44 9 3 1 0 0 0 13 84,205
45-49 4 0 0 0 0 0 4 55,786
50-54 4 1 0 0 0 0 5 61,206
55-59 4 1 0 0 0 0 5 54,052
60-64 0 0 1 0 0 0 1 109,473
65 and Over 0 0 0 0 0 0 0 0
All Ages 46 6 5 1 0 0 58 $72,307

CalPERS Actuarial Valuation – June 30, 2020 Appendix C
Safety Plan of the City of Pasadena
Participant Data
C-4
Retired Members and Beneficiaries
Distribution of Retirees and Beneficiaries by Age and Retirement Type* Attained
Age
Service
Retirement
Non-
Industrial
Disability
Industrial
Disability
Non-
Industrial
Death
Industrial
Death
Death
After
Retirement Total
Under 30 0 0 0 0 0 0 0
30-34 0 1 0 0 0 0 1
35-39 0 0 2 0 0 0 2
40-44 0 0 5 0 1 0 6
45-49 0 0 3 1 0 0 4
50-54 13 0 22 0 0 0 35
55-59 66 1 32 1 0 3 103
60-64 69 0 46 0 0 6 121
65-69 48 1 30 0 0 5 84
70-74 17 0 10 0 0 2 29
75-79 5 0 6 0 0 1 12
80-84 3 0 0 0 0 0 3
85 and Over 2 0 0 0 0 0 2
All Ages 223 3 156 2 1 17 402
Distribution of Average Annual Disbursements to Retirees and Beneficiaries by Age and Retirement Type*
Attained
Age
Service
Retirement
Non-
Industrial
Disability
Industrial
Disability
Non-
Industrial
Death
Industrial
Death
Death
After
Retirement Average
Under 30 $0 $0 $0 $0 $0 $0 $0
30-34 0 4,170 0 0 0 0 4,170
35-39 0 0 40,151 0 0 0 40,151
40-44 0 0 39,339 0 59,500 0 42,699
45-49 0 0 53,560 99,188 0 0 64,967
50-54 60,812 0 52,968 0 0 0 55,881
55-59 88,739 24,357 76,053 21,671 0 47,896 82,332
60-64 94,205 0 65,746 0 0 74,006 82,384
65-69 98,176 30,233 61,874 0 0 59,194 82,082
70-74 55,463 0 65,692 0 0 60,415 59,332
75-79 44,159 0 41,112 0 0 86,217 46,141
80-84 65,550 0 0 0 0 0 65,550
85 and Over 25,906 0 0 0 0 0 25,906
All Ages $86,422 $19,587 $62,954 $60,430 $59,500 $64,161 $75,678

CalPERS Actuarial Valuation – June 30, 2020 Appendix C
Safety Plan of the City of Pasadena
Participant Data
C-5
Retired Members and Beneficiaries (continued)
Distribution of Retirees and Beneficiaries by Years Retired and Retirement Type* Years
Retired
Service
Retirement
Non-
Industrial
Disability
Industrial
Disability
Non-
Industrial
Death
Industrial
Death
Death
After
Retirement Total
Under 5 Yrs 75 1 22 0 1 8 107
5-9 74 0 25 2 0 3 104
10-14 47 0 21 0 0 3 71
15-19 16 1 28 0 0 1 46
20-24 8 1 22 0 0 1 32
25-29 2 0 19 0 0 1 22
30 and Over 1 0 19 0 0 0 20
All Years 223 3 156 2 1 17 402
Distribution of Average Annual Disbursements to Retirees and Beneficiaries by Years Retired and Retirement Type*
Years
Retired
Service
Retirement
Non-
Industrial
Disability
Industrial
Disability
Non-
Industrial
Death
Industrial
Death
Death
After
Retirement Average
Under 5 Yrs $88,701 $4,170 $108,030 $0 $59,500 $66,447 $89,948 5-9 104,131 0 84,709 60,430 0 100,674 98,522
10-14 76,129 0 73,647 0 0 47,054 74,167
15-19 51,557 30,233 50,944 0 0 15,742 49,942
20-24 43,233 24,357 43,475 0 0 66,506 43,537
25-29 61,928 0 42,387 0 0 33,734 43,770
30 and Over 41,079 0 31,135 0 0 0 31,633
All Years $86,422 $19,587 $62,954 $60,430 $59,500 $64,161 $75,678 * Counts of members do not include alternate payees receiving benefits whil e 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.

Appendix D
Glossary of Actuarial Terms

CalPERS Actuarial Valuation – June 30, 2020 Appendix D
Safety Plan of the City of Pasadena
Glossary of Actuarial Terms
D-1
Glossary of Actuarial Terms
Accrued Liability (also called Actuarial Accrued Liability or Entry Age Actuarial Accrued Liability) The total dollars needed as of the valuation date to fund all benefits earned in the past for current members.

Actuarial Assumptions
Assumptions made about certain events that will affect pension costs. Assumptions generally can be broken down into two categor ies: demographic and economic. Demographic assumptions include such things as mortality, disability and retirement rates. Economic assumptions include discount rate, salary growth and inflation.

Actuarial Methods
Procedures employed by actuaries to achieve certain f unding goals of a pension plan. Actuarial methods include funding method, setting the length of time to fund the Accrued Liability and determining the Value of Assets.

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 to their plan provisions.

Amortization Bases
Separate payment schedules for different portions of the Unfunded Liability. The total Unfunded Liability of a Risk Pool or non -pooled plan can be segregated by cause, creating “bases ,” and each such base will be separately amortized and paid for over a specific period of time . However, all bases are amortized using investment and payroll assumptions from the current valuation. This can be likened to a home having a first mortgage of 24 years remaining payments and a second mortgage that has 10 years remaining payments. Each base or each mortgage note has its own terms (payment period, principal, etc.).

Generally, in an actuarial valuation, the separ ate bases consist of changes in unfunded liability due to contract amendments, actuarial assumption changes, method changes, and/or gains and losses.

Amortization Period
The number of years required to pay off an Amortization Base.

Classic Member (under PEPRA)
A classic member is a member who joined CalPERS 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 assumed long-term rate of return on plan assets. This is the rate at which projected cash flows are discounted to the valuation date to determine Accrued Liability. This assumption is called “investment return” in earlier CalPERS reports and “actuarial interest rate” in Section 20014 of the California Public Employees’ Retirement Law (PERL).

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 designed to fund a member's total plan benefit over the course of his or her career. This method is designed to yield a rate expressed as a level percentage of payroll. (The assumed retirement age less the entry age is the amount of time required to fund a member’s total benefit.

Generally, the older a member on the date of hire, the greater the entry age normal cost. This is mainly because there is less time to earn investment income to fund the future benefits.)

CalPERS Actuarial Valuation – June 30, 2020 Appendix D
Safety Plan of the City of Pasadena
Glossary of Actuarial Terms
D-2
Fresh Start
A Fresh Start is when multiple amortization bases are collapsed to one base and amortized together over a new funding period.

Funded Status
A measure of how well funded , or how "on track" a plan or risk pool is with respect to assets v ersus accrued liabilities. A ratio greater than 100 % means the plan or risk pool has more assets than liabil ities and a ratio less than 100% means liabilities are greater than assets.

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. GASB 68 replaces GASB 27 effective the first fiscal year beginning after June 15, 2014.

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 annual cost of service accrual for the upcoming fiscal year for active employees. T he normal cost should be viewed as the long-term contribution rate.

Pension Actuary
A business professional that is authorized by the Society of Actuaries and the American Academy of Actuaries to perform the calculations necessary to properly fund a pension plan.

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.

Unfunded Accrued Liability (UAL)
When a plan or pool’s value of assets is less than its Accrued Liability, the difference is the plan or pool’s Unfunded Accrued Liability (or unfunded liability). If the unfunded liability is positive, the plan or pool will have to pay contributions exceeding the Normal Cost.

Review of CalPERS Valuations
Matthew Hawkesworth
Director of Finance
October 3, 2022
Finance Committee Item 4

226
CalPERS Discussion
• In July 2022 CalPERS released their fiscal
year
ended June 30, 2021 valuations and
announced an investment loss of 6.1% for the
fiscal year ended June 30, 2022.
• CalPERS is a long-te
rm investor and reminds
its members that one positive or negative year
should not dictate the long-term strategy.
2

Fiscal Year Ended June 30, 2021
• Fiscal Year 2021 was driven by strong growth
in
virtually all investment sectors.
• CalPERS’ return of 21.3% was 14.3% higher
than
their 7.0% discount rate.
• CalPERS’ policy dictates that a portion of
excess ear
nings in an exceptionally positive
year shall be used to buy down the discount
rate.
> The discount rate was reduced to 6.8%
3

Value of Assets
4

Value of Assets
5

Positive Returns
• Investment returns provided $221.7 million in
tota
l benefits to the City’s two-plans.
• $55.3 million was used in their risk mitigation
str
ategy to reduce the discount rate benefits.
• Non-investment actuals also positively affected
t
he plans.
• Total UAL was reduce d from $550.1 million to
$357.4 million.
6

Positive Returns
7

Fiscal Year Ended June 30, 2022
• Fiscal Year 2022 saw steep declines in the
over
all investment market.
• CalPERS’ return of a negative 6.1% was

12.9%
lower than their 6.8% discount rate.
• The loss is expected to add as much as $200
millio
n to the City’s UAL.
8

Forecasted UAL
9

Discount Rate Change
• A lower discount rate means that less is
expect
ed to be earned in the future
• Lower future earnings means more funds need
to
be set aside today to achieve the same end
result
10

Total CalPERS Forecast
11