© 2023 GovInvest Inc.
Pension Funding
City of Patterson
May 30, 2023
© 2023 GovInvest Inc.
Changes Since Prior
Valuation
2 © 2023 GovInvest Inc.
CalPERS Investment Return:
21.3% in 2020/21
-6.1% in 2021/22
Strong return in 2020/21 followed by weak return in 21/22 3 © 2023 GovInvest Inc.
-3.1%
35.4%
24.6%
13.8%
3.9%
15.7%
9.7%
6.5%
12.5%
14.5%
2.0%
16.3%
15.3%
20.1%
19.5%
12.5%
10.5%
-7.2% -6.1%
3.7%
16.6%
12.3%
11.8%
19.1%
-5.1%
-24.0%
13.3%
21.7%
0.1%
13.2%
18.4%
2.4%
0.6%
11.2%
8.6%
6.7%
4.7%
21.3%
-6.1%
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
198419851986198719881989199019911992199319941995199619971998199920002001200220032004200520062007200820092010201120122013201420152016201720182019202020212022 Plan Year Ending June 30
Investment Return Discount Rate 5 per. Mov. Avg. (Investment Return) Dot Com Crash
Great Recession
CalPERS Actual Investment Returns versus
Assumed Investment Return
4 Discount Rate = Assumed Investment Return Rate
© 2023 GovInvest Inc.
Less Money from Investment Return means
More Money Required from Contributions
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© 2023 GovInvest Inc.
What is the Impact of those
Changes?
6 © 2023 GovInvest Inc.
Unfunded Accrued Liability (without 115 Trust)
7 © 2023 GovInvest Inc.
Funded Percentage (without 115 Trust)
8 © 2023 GovInvest Inc.
Total Required Employer Contributions
9 © 2023 GovInvest Inc.
115 Pension Trust
10 © 2023 GovInvest Inc.
Section 115 Pension Trust –
Contributions Into Trust
• At Discretion of City Council
• Begin funding - one-time contribution of $1.5 Million • Additional funding - approximately $250 thousand per year when revenue from the recent Sales Tax increase by 15% from prior year 11 © 2023 GovInvest Inc.
Contributions to 115 Trust
12 © 2023 GovInvest Inc.
Balance of 115 Trust
13 © 2023 GovInvest Inc.
Unfunded Accrued Liability (Including 115 Trust)
14 © 2023 GovInvest Inc.
Funded Percentage (Including 115 Trust)
15 © 2023 GovInvest Inc.
Questions
16 © 2023 GovInvest Inc.
While tested against actuarial valuation results, the software results will not necessarily match actuarial valuation results, as no two actuarial models are identical. The software offers financially sound projections and analysis; however, outputs do not guarantee compliance with standards under the Government Accounting Standards Board or Generally Accepted Accounting Principles. The software and this presentation are not prepared in accordance with standards as promulgated by the American Academy of Actuaries, nor do outputs or this presentation constitute Statements of Actuarial Opinion. GovInvest has used census data, plan provisions, and actuarial assumptions provided by Customer and/or Customer’s actuary to develop the software for Customer. GovInvest has relied on this information without audit.
Disclaimer
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