PISMO BEACH CITY COUNCIL STAFF REPORT
Agenda Item #9.G
Meeting Date: April 2, 2024
TITLE:
California Public Employees’ Retirement System (CalPERS) Additional Payment of $1.0 Million to Reduce the City’s Unfunded Pension Liability RECOMMENDATION:
Adopt a Resolution appropriating $1.0 million from the General Fund unassigned fund balance to provide additional discretionary payments of $500,000 to each of the City’s CalPERS Miscellaneous and Safety Police Tier 1 plans to reduce the City’s unfunded pension liability in Fiscal Year 2024.
DISCUSSION:
The City of Pismo Beach provides retirement benefits for full-time employees through the California Public Employees' Retirement System (CalPERS). Due to past investment earnings that did not achieve targeted earnings, as of June 30, 2022, CalPERS only has an estimated 70.3% of the funds required to pay estimated retirement benefits due to retirees. Although the funded rate is a moving target depending on the amount of contributions into CalPERS and the market value of CalPERS investments, an 85% to 90% funded rate would better allow CalPERS to support current and future retirement benefits, while a 50% funded rate could mean that the pension system may not be able to deliver promised benefits. As a result of past losses, increases in life span, retirement enhancements, and other factors, public agencies are now having to pay this unfunded amount, at a 6.8% interest rate.
Staff recognizes the City Council’s past decisions that demonstrated fiscal discipline to use the prior fiscal years’ personnel cost savings to fund additional discretionary payments to CalPERS. This action, if continued, will reduce the City’s interest costs on its outstanding debt and help manage increasing unfunded accrued liability (UAL) payments in the future.
Staff reviewed the benefit of contributing $1.0 million from the General Fund CalPERS prepayment set-aside (General Fund available fund balance set aside from the FY 2022 through FY 2023 personnel cost savings) towards the UAL in one lump sum. Based on this review and the projected savings, staff recommends that the Council adopt a Resolution (Attachment 1) to contribute $1.0 million directly to CalPERS to prefund its UAL for the Tier 1 retirement plans for Miscellaneous and Safety Police, including related budget adjustments.
Background
CalPERS retirement plans provide a defined benefit to each retired employee based on a set percentage of an employee’s salary multiplied by the number of years that the employee contributed to the CalPERS system, starting at the stated retirement age of each Plan tier. The City has three main retirement plans, each with two or three benefit tiers, as illustrated in Chart 1:
9.G-1Council Agenda 4-2-2024
Chart 1: City’s CalPERS Retirement Plans
Each tier within each plan calls for a different Employer and Employee cost, with the 1st tier costing the most and the 3rd tier costing the least to the employer.
How are Employee Pensions Funded?
Normal (Current) Costs
Individual employee contributions make up about 11% of their retirement benefits. City employees contribute a percentage of their salary depending on their plan and fiscal year. Miscellaneous employees currently contribute 8.0% of their salary to their retirement for tiers 1 and 2, and 9.5% for tier 3 employees. Safety Police employees contribute 12.0% of their salary to their retirement for tiers 1 and 2, and 14.25% for tier 3 employees. Safety Fire employees contribute 9.0% for tier 1 employees and
12.0% for tier 3 employees.
Employer contributions make up 33% of employees’ retirement. The City contributes a percentage of the employees’ salary towards the employees’ retirement benefits, ranging from 5.93% for the tier 3 miscellaneous employees to 24.11% for a Sworn police officer in tier 1.
Table 1 illustrates the City and Employee contributions for the current fiscal year, FY 2024.
Miscellaneous Plan (All
Employees except
Sworn Police Officers)
• First tier provides a
benefit of 2.5% at age
55 • Second tier provides a
benefit of 2.0% at age
60 • Third tier provides a
benefit of 2.0% at age
62 Safety Police Plan (for
Sworn Police Officers)
• First tier provides a
benefit of 3.0% at age
50 • Second tier provides a
benefit of 3.0% at age
55 • Third tier provides a
benefit of 2.7% at age
57 Safety Fire Plan
• First tier provides a
benefit of 2.0% at age
50 • Third tier provides a
benefit of 2.7% at age
57 9.G-2Council Agenda 4-2-2024
Table 1: City and Employee Contributions to CalPERS
CalPERS investments fund 56% of the employees’ retirement. CalPERS investments have varied every year, largely dependent on the overall economy. Including the most recent FY 2023 investment earnings of 5.8%, earnings have averaged: 7.1% per year over the past 10 years, 7.0% per year over the past 20 years, and 7.5% per year for the past 30 years.
In total, 67% of the pension costs are funded by CalPERS investment earnings and employee contributions, leaving 33% funded by the City. The following graphic illustrates the percentages, or cents per dollar, of contributions per each dollar of public employee pension costs.
Unfunded Pension Costs (Recovering from Past Investment Earnings Lower than Target) In addition to paying the normal or current pensions costs for the year, the City also contributes an amount each year (UAL payment) to help make up for past years where the above three factors did not meet its target earnings rate. Although, on average, the CalPERS has met its target investment earnings, CalPERS experience significant losses during the recession in 2000 and 2001 of 7.2% and 6.1%, respectively, in investment Plan
City
Rate
Employee
Rate
Miscellaneous - T1 14.06% 8.00%
Miscellaneous - T2 9.10% 8.00%
Miscellaneous - T3 (PEPRA)5.93% 9.50%
Police - T1 24.11% 12.00%
Police - T2 19.83% 12.00%
Police - T3 (PEPRA)13.04% 14.25%
Fire - T1 0.00% 9.00%
Fire - T3 (PEPRA)0.00% 12.00%
9.G-3Council Agenda 4-2-2024
earnings; during the Great Recession in 2008 and 2009 of 5.1% and 24.0%, respectively, of investment earnings; and in FY 2022 with a loss of 6.1% of investment earnings.
Consequently, CalPERS has large unfunded pension costs that it cannot earn its way out using just investment earnings. In order to manage the past investment earnings lower than target and still provide its promised benefits, CalPERS has amortized these payments across 20 to 30 years to be paid back by public agency contributions. As a result, these unfunded pension costs are significant.
Impact of the Normal Cost and UAL cost on Annual Budgets The normal pensions costs that are paid by the City and the employee to pay for retirement benefits were approximately $926 thousand in FY 2023. The UAL payment (catching up for earnings not achieved in prior years) was $1.6 million in FY 2023. To put this into context with the City’s all funds operating costs, the City pays 2% of its operating budget to normal or current pension costs. The City pays 4% of its operating budget for unfunded liability payments. Table 2 shows these normal costs, unfunded liability payments, all funds operating budget, and the percentage of the pension costs compared to the operating budget.
Table 2: FY 2021 to FY 2025 Pension Costs Compared to Operating Budgets The unfunded liability payments are increasing significantly and, based on the latest CalPERS valuation, they will continue to increase and peak in FY 2031, then start decreasing (assuming no additional retirement benefit enhancements) after that. Chart 2 illustrates the City’s UAL payments projected from FY 2024 to FY 2043 based on the June 30, 2022 CalPERS actuarial valuation.
Fiscal
Year
Normal
(current)
Pension
Costs
Unfunded
Liability
Payment
(Principal and
Interest)
All Funds
Operating
Budget
Normal
Pension
as % of
Operating
Budget
CalPERS
Unfunded
Liability as
% of
Operating
Budget
FY 2021 823,816$ 1,288,444$ 34,816,106$ 2% 4% FY 2022 845,851 1,481,671 41,030,496 2% 4% FY 2023 925,642 1,603,821 42,008,617 2% 4% FY 2024 1,136,083 1,429,749 51,646,934 2% 3% FY 2025 1,170,627 1,852,773 50,717,338 2% 4%
9.G-4Council Agenda 4-2-2024
Funded Status and Total Unfunded Accrued Liability
Funded Status as of June 30, 2022 Valuation: 74%
The funded status of the City’s retirement plans are determined by comparing the assets it needs to cover all its long-term obligations using various actuarial assumptions compared to the market value of its existing assets. As of the most recent, June 30, 2022, CalPERS actuarial valuation, the funded status of each retirement plan is 74% for all three plans. The tier 1 plans range from 70.8% to 74.1% funded, while the tier 2 and 3 (PEPRA) plans range from 84.8% to 90.3% funded status. The unfunded portion of the City’s retirement plans, or the Unfunded Accrued Liability (UAL), as of June 30, 2022 for all funds is $22.3 million, including $11.0 million for the Miscellaneous Plan tier 1 and $9.0 million for the Safety Police Plan tier 1. The City also has a Safety Fire Plan for former fire employees which have a total UAL of $1.5 million as of June 30, 2022. The following Table 3 illustrates the funded status of the eight retirement plans, including the total UAL.
Taking the weighted average of all plans, the funded status of all the City’s plans is 74%. $-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
Chart 2: CalPERS Unfunded Accrued Liability Payments
POA Tier 1 POA Tier 2 POA Tier 3 Misc Tier 1
Misc Tier 2 Misc Tier 3 Fire Tier 1 Fire Tier 3
9.G-5Council Agenda 4-2-2024
Table 3: Funded Status of Each Retirement Plan
Future Projected Funded Status over Next Decade: Better Positioned Due to various uncertain economic factors including global unrest, preliminary investment earnings, longer projected lifespans, and other market impacts, there will likely be more volatility over the next decade in its investment earnings, which would impact the funded status. Looking at CalPERS current investments for FY 2024 through September 30, 2023, investments earnings were -2.5%, which may signal that CalPERS will not achieve the 6.8% earnings rate it is expected to meet, potential reducing its funded status for FY 2024. Fortunately, despite these upcoming uncertain projections, CalPERS and public agencies are better positioned to weather some economic downturns through various strategies implemented after the last two economic downturns experienced double digit lost earnings in multiple years. These strategies included pension reform in 2013 that established new tier 3 retirements with reduced benefits and lower costs, CalPERS implemented additional policies to help reduce its earnings target from 7.5% per year to
6.8%, shifting its investment strategy from higher earning riskier investments to more stable and conservative investments to avoid large drops due to market pressures, and public agencies increasing contributions to CalPERS.
Funded Status, One Measure Reflecting Health of the Retirement Plans Although the funded rate is a moving target depending on the amount of contributions into CalPERS and the market value of CalPERS investments, an 85% to 90% funded rate would allow CalPERS to support current and future retirement benefits, while a 50% funded rate would mean that the pension system would likely not be able to earn sufficient amounts to deliver promised benefits. Since the City is currently at approximately 74% funding as of the June 30, 2022 valuation, and CalPERS earnings were 5.8% in FY 2023, the City’s funded status should improve in the next valuation.
Still Large Unfunded Liability Payments Due to CalPERS, Peaking in FY 2031 There still remain large unfunded accrued liabilities (UAL) from promised defined benefits compared to the fiscal health of the CalPERS system. This UAL for the City is $22.3 Plan
Funded
Status % as
of 6/30/22
Unfunded
Accrued Liability
(UAL) as of
6/30/22
% of
total
UAL
% funded
all plans
Miscellaneous - T1 72.50% 11,009,226 49% 35.8% Miscellaneous - T2 90.30%166,627 1% 0.7%
Miscellaneous - T3 (PEPRA)89.30%259,275 1% 1.0%
Police - T1 74.10% 8,982,338 40% 29.9%
Police - T2 88.70%101,684 0% 0.4%
Police - T3 (PEPRA)85.60%224,682 1% 0.9%
Fire - T1 70.80% 1,526,524 7% 4.9%
Fire - T3 (PEPRA)84.80%12,232 0% 0.0%
22,282,588 74%
9.G-6Council Agenda 4-2-2024
million as of the June 30, 2022 valuation. In order to pay down this UAL, public agencies have been making payments amortized over 20 to 30 years. As the valuation and funded status assumes a 6.8% earnings rate, these payments reflect a 6.8% interest rate, a high interest rate compared to all the other City’s debt obligations. As shown in Chart 1, these UAL payments are only expected to increase and finally peak in FY 2031. So instead of paying 4% of the City’s operating costs to CalPERS, this percentage will increase. Other than CalPERS consistently exceeding its earnings target to make up for its past investment losses, the best most cost-effective way to help manage these costs is to pay down this debt. Paying down the unfunded liability earlier than the current amortization schedule not only reduces the City’s unfunded liability and the high interest costs, but also reduces the City’s operating costs over that period.
In other words, although the plans are potentially reaching a more sustainable funded status, the City still has increasingly large debt payments, reflecting a 6.8% interest rates.
As such, it is in the best interest of the City’s financial portfolio to pay this down to reduce this interest cost. In fact, several public agencies, including the City of Pismo Beach, have made additional discretionary payments to reduce the high interest costs and pay down this debt. To date, Pismo Beach has paid $4.0 million toward its UAL ($1.0 million in 2015, $2.0 million in 2018, and $1.0 million in 2022), saving hundreds of thousands in interest costs, negotiated new retirement tiers, and increased employee contributions.
Strategies to Pay Down UAL Debt
There are multiple proactive strategies that staff has explored over the past few years to help minimize this high interest debt burden, including direct CalPERS additional discretionary payments, setting aside funds in an irrevocable IRS Section 115 Trust for pension stabilization, reduce the City’s plan to a shorter amortization period, or issue pension obligation bonds. The most direct way to reduce the City’s interest costs are to make direct CalPERS additional discretionary payments.
Section 115 Trust: City staff could establish an Irrevocable Pension Trust under Internal Revenue Service Section 115 to prefund future CalPERS contributions and help the City stabilize its contributions to CalPERS. The City could transfer the same CalPERS prepayment set-aside from the General Fund unassigned fund balance into this Trust account. The $1.0 million plus earnings could be drawn upon in future years, likely around the peak years in FY 2031 and FY 2032, to support CalPERS pension costs, but cannot be used for any other purposes. This option does not directly reduce CalPERS interest cost savings and therefore does not provide direct CalPERS UAL payment savings in the first five years. If this was implemented, staff could draw from this account in future years to offset future rate spikes and pension costs increases, while still maintaining operations and earning a better rate of return than in the City’s managed portfolio. As the funds are placed in a trust where the funds can only be used for pension costs, these would show up as an asset on the City’s balance sheet.
The benefit of establishing a Trust could allow the City to earn a greater rate of return on the $1.0 million than the City’s investment policy allows per California Government Code. However, like any higher-yielding investment, this Trust is subject to the same
9.G-7Council Agenda 4-2-2024
economic downturns as CalPERS investments. The benefit of investing in the Trust is achieving a greater rate of return than the 6.8% interest cost on the UAL, but that also means that it could lose even more. Looking at historic earnings rates offset by administrative fees, a 4.9% earnings would be the City’s most likely investment strategy. As such, based on past investment earnings history, it is more beneficial to pay down the City’s debt/UAL with 6.8% interest costs rather than invest in the market earning 4.9%. Further, in the event of an economic downturn, the CalPERS pension costs would increase, which is when the City would want to draw funds from this account to offset those spikes. However, it is likely that the Trust would experience the same economic impact as evidenced by historic losses, which would reduce the amount the City would have to offset those spikes in costs.
At this point, staff does not recommend this option. Staff views this option as beneficial to prefund future CalPERS payments to help stabilize future cost increases. Once the City’s retirement plans are closer to fully funded and do not have significant increasing UAL payments, then this would be a good investment option. Amortize the City’s plans to a 20-year amortization period: The City has the option to change some or all of the retirement plans’ tiers from its current amortization schedule to a shorter amortization period. This option could take the $1.0 million and spread it across the various plans to reduce interest costs and the City’s UAL payment in the long term. However, in the short-term, the City’s UAL payments would increase. As the City is trying to reduce its CalPERS UAL payments from now until FY 2031, this option is not in line with the City’s resources.
Pension obligation bonds (POBs): POBs are taxable bonds (debt) issued by a public agency to fund all or a portion of the unfunded actuarially accrued liability for pension costs at that point in time. An agency would issue POBs to eliminate their unfunded liability to a retirement plan at that specific point in time. However, future new retirement benefits and other actuarial dynamics can create a new UAL or even produce an actuarial surplus. In the long run, the actual investment performance of the retirement plan will determine the final financial consequences of issuing the POB.
Issuing a POB will usually produce near-term savings in contributions to the retirement plan. However, it is difficult to predict in advance whether the POB will produce any long-term savings. This will be a function of CalPERS performance and future changes to benefit obligations, which could result in either an additional UAL or an actuarial funding surplus. Since POBs involve considerable investment risk, this strategy is still speculative. In recent years, that has been a renewed focus on POBs due to the previously lower interest rate environment and increasing pension costs.
However, due to numerous past issues running up to 2015 where public agencies issued POBs at the wrong time, public agencies have had to pay not only the POB debt service, but all the UAL when the retirement fund did not perform as anticipated.
As the City is currently interested in reducing its 6.8% interest costs and not seeking to issue more speculative debt at this time, staff does not recommend this approach.
9.G-8Council Agenda 4-2-2024
Direct CalPERS Additional Discretionary Payment (ADP): Providing an additional discretionary payment (ADP) to CalPERS provides a direct benefit to reducing the City’s interest on its unfunded liability and helps to reduce the City’s UAL payments over time. Staff worked with its CalPERS Actuary to determine the results of contributing $500 thousand to each of the tier 1 Miscellaneous and Public Safety Police plans.
Maximize Savings in Next 10 Years to decrease UAL Payments Staff used the CalPERS Managing ER Contributions tool to determine how to best allocate the $1.0 million across the various plans. Staff’s focus in previous years was to maximize interest cost savings overall. However, based on the projected UAL payments exceeding $2.4 million in FY 2029 through FY 2035, staff’s goal is to reduce the total payments due in the peak years.
Accordingly, staff applied the $500 thousand for each plan to the shortest amortization period to achieve the greatest reduction in upcoming payments. Based on this review, the total $1.0 million prepayment to CalPERS will reduce the City’s UAL payments in the next 10 years by $1,261,151 and save the City $453,002 in interest costs from FY 2025 to FY 2044. The average annual savings in total UAL payments for both plans is $72,650 during FY 2025 to FY 2044, reducing the City’s operating costs. Table 4 includes the proposed option and corresponding savings.
Table 4: CalPERS Prepayment Projected Savings to Maximize Costs Savings during FY 2027 to FY 2023
Plan Prepayment
FY 2025 to
FY 2034 UAL
Payment
Savings
Total Interest
Savings
FY 2025 to
FY 2044
Police Safety
Plan Tier 1 $500,000 $655,941 $205,342 $35,267
Miscellaneous
Plan Tier 1 $500,000 $605,210 $247,660 $37,383
TOTAL $1,000,000 $1,261,151 $453,002 $72,650
The annual payments by year are reflected in the Safety Police Plan Prepayment (Attachment 2) and Miscellaneous Plan Prepayment (Attachment 3). The following charts illustrate the savings to the City for the Police Safety Plan tier 1 (Chart 3) and the Miscellaneous Plan tier 1 (Chart 4).
9.G-9Council Agenda 4-2-2024
Chart 3: Police Safety Plan Tier 1 Annual Payments
Before and After $500,000 Prepayment
Chart 4: Miscellaneous Plan Tier 1 Annual Payments
Before and After $500,000 Prepayment
$‐
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
Police Tier 1 Current Schedule Police Tier 1 Schedule with $500K ADP $-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
Misc Tier 1 Current Schedule Misc Tier 1 Schedule with $500K ADP
9.G-10Council Agenda 4-2-2024
Alternatives
Alternatives to staff’s recommendation have been analyzed in the Strategies section above.
Conclusion and Recommendation
Staff recommends that the Council adopt a Resolution (Attachment 1) appropriating $1.0 million from the General Fund unassigned fund balance to provide additional discretionary payments of $500,000 to each of the City’s CalPERS Miscellaneous and Safety Police Tier 1 plans to reduce the City’s unfunded pension liability in FY 2024.
FISCAL IMPACT:
The fiscal impact of adopting the attached Resolution is an initial cost of $1.0 million in FY 2024, which will reduce the General Fund available fund balance and deplete the CalPERS prepayment set-aside. The total $1.0 million prepayment to CalPERS will reduce the City’s UAL payments in the next 10 years by $1,261,151 and save the City $453,002 in interest costs from FY 2025 to FY 2044. The average annual savings in total UAL payments for both plans is $72,650 during FY 2025 to FY 2044, reducing the City’s operating costs.
In order to implement this payment, staff recommends that Council appropriate $1.0 million from the General Fund to pay an additional discretionary payment in FY 2024 and remove the CalPERS Prepayment Set-Aside in FY 2024.
Table 5: CalPERS Prepayment Projected Savings
Plan Prepayment
FY 2025 to
FY 2034 UAL
Payment Savings
Total
Interest
Savings
FY 2025 to FY
2044
Average Annual
Savings
Police Safety
Plan Tier 1 $500,000 $655,941 $205,342 $35,267
Miscellaneous
Plan Tier 1 500,000 $605,210 247,660 $37,383
TOTAL $1,000,000 $1,261,151 $453,002 $72,650
ATTACHMENTS:
1. Resolution
2. Annual Savings for Safety Police Plan Prepayment
3. Annual Savings for Miscellaneous Plan Prepayment
Submitted by: Nadia Feeser, Administrative Services Director City Manager Approval:
9.G-11Council Agenda 4-2-2024
RESOLUTION NO. R-2024-XXX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PISMO BEACH, CALIFORNIA APPROPRIATING $1.0 MILLION FROM THE GENERAL FUND
UNASSIGNED FUND BALANCE TO PROVIDE ADDITIONAL DISCRETIONARY PAYMENTS OF $500,000 TO EACH OF THE CITY’S CALPERS MISCELLANEOUS AND SAFETY POLICE TIER 1 PLANS TO REDUCE THE CITY’S UNFUNDED
PENSION LIABILITY
WHEREAS, the City of Pismo Beach provides retirement benefits for full-time employees through the California Public Employees' Retirement System (CalPERS); and WHEREAS, during the recession in 2000 and 2001, CalPERS had losses of 7.2% and
6.1%, respectively, in investment earnings and during the Great Recession in 2008 and 2009, CalPERS suffered losses of 5.1% and 24.0%, respectively, of investment earnings and since then, has been struggling to recover those losses; and WHEREAS, as a result of past investment losses, increases in retiree life span, retirement enhancements, and other factors, public agencies now have to pay this unfunded amount, at a 6.8% interest rate, which costs the City of Pismo Beach over $1.9 million per year and growing; and
WHEREAS, in order to help reduce the impact of the increasing unfunded accrued liability (UAL) costs, the City may contribute an additional discretionary payment of $500,000 from the General Fund unassigned fund balance CalPERS Prepayment set-aside toward the Miscellaneous Plan Tier 1 UAL and $500,000 from the General Fund unassigned fund balance CalPERS Prepayment set-aside towards the Safety Police Plan Tier 1 UAL for a projected combined $1,261,151 of the total projected savings to be realized in the first 10 years from FY 2025 and FY 2034 as a reduction in the City’s UAL and ongoing operating costs, $453,002 in CalPERS interest savings, averaging $72,650 of savings per year, and an improvement of the City’s retirement plans’ funded status.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Pismo Beach hereby appropriates $500,000 from the General Fund unassigned fund balance CalPERS Prepayment set-aside to prepay the Safety Police Plan Tier 1 UAL and $500,000 from the General Fund unassigned fund balance CalPERS Prepayment set-aside to prepay the Miscellaneous Plan Tier 1 UAL in FY 2024.
UPON MOTION OF Council Member , seconded by Council Member , the foregoing resolution was adopted by the City Council of the City of Pismo Beach this 2nd day of April 2024, by the following vote:
AYES:
NOES:
ABSENT:
9.G-12Council Agenda 4-2-2024
Attachment 1
ABSTAIN:
RECUSED:
Approved: Attest:
________________________ ________________________
Ed Waage, Mayor Erica Inderlied, City Clerk
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Pismo Beach, California, on _______________________. ________________________
Erica Inderlied, City Clerk
9.G-13Council Agenda 4-2-2024
Attachment 1
Safety Police Plan Tier 1 Unfunded Accrued Liability Payments with $500,000 Additional Discretionary Payment (ADP)
Fiscal
Year
Police Tier 1
Current Schedule
Police Tier 1
Schedule with
$500K ADP Net Savings
Projected
Funded Ratio
2025 721,510$ 659,609$ (61,901)$ 77.5% 2026 782,808 719,173 (63,635) 78.5% 2027 841,740 776,324 (65,416) 79.7% 2028 887,421 820,172 (67,249) 81.0% 2029 1,004,624 935,492 (69,132) 82.5% 2030 1,024,317 953,251 (71,066) 84.1% 2031 1,044,561 971,504 (73,057) 85.8% 2032 1,065,372 990,270 (75,102) 87.5% 2033 1,050,189 988,426 (61,763) 89.2% 2034 1,033,560 985,940 (47,620) 91.0% 2035 1,001,937 969,302 (32,635) 92.7% 2036 950,087 933,313 (16,774) 94.3% 2037 860,639 860,639 (0) 95.9% 2038 537,573 537,576 3 96.8% 2039 473,637 473,637 (0) 97.6% 2040 421,394 421,394 (0) 98.3% 2041 386,622 386,623 1 98.9% 2042 298,644 298,644 (0) 99.4% 2043 203,063 203,063 0 99.7% 2044 171,756 171,761 5 100.0% 14,761,454$ 14,056,112$ (705,342)$
Total Savings (205,342)$
Avgerage Annual savings (35,267)$
10 Year Savings (655,941)$
9.G-14Council Agenda 4-2-2024
Attachment 2
Miscellaneous Plan Tier 1 Unfunded Accrued Liability Payments with $500,000 Additional Discretionary Payment (ADP)
Fiscal
Year
Misc Tier 1
Current
Schedule
Misc Tier 1
Schedule with
$500K ADP Net Savings
Projected
Funded Ratio
2025 904,510$ 851,229$ (53,281)$ 76.6% 2026 977,345 922,572 (54,773) 77.9% 2027 1,047,574 991,268 (56,306) 79.3% 2028 1,102,649 1,044,767 (57,882) 80.8% 2029 1,237,800 1,178,296 (59,504) 82.6% 2030 1,263,147 1,201,976 (61,171) 84.4% 2031 1,289,199 1,226,315 (62,884) 86.3% 2032 1,315,982 1,251,338 (64,644) 88.2% 2033 1,301,459 1,235,006 (66,453) 90.0% 2034 1,285,351 1,217,038 (68,313) 91.8% 2035 1,251,914 1,181,688 (70,226) 93.6% 2036 1,197,496 1,125,302 (72,194) 95.2% 2037 686,728 686,727 (1) 96.2% 2038 620,120 620,122 2 97.0% 2039 549,515 549,516 1 97.8% 2040 492,713 492,715 2 98.4% 2041 453,653 453,652 (1) 99.0% 2042 351,706 351,705 (1) 99.4% 2043 243,064 243,063 (1) 99.7% 2044 249,170 249,140 (30) 100.0% 17,821,095$ 17,073,435$ (747,660)$
Total Savings (247,660)$
Avgerage Annual savings (37,383)$
10 Year Savings (605,210)$
9.G-15Council Agenda 4-2-2024
Attachment 3