CITY OF RIVERSIDE
MISCELLANEOUS AND SAFETY PLANS
CalPERS Actuarial Analysis – 6/30/20 Valuation
Preliminary Results
Doug Pryor, Vice President
Bianca Lin, Assistant Vice President
Matthew Childs, Actuarial Analyst
Bartel Associates, LLC
April 20, 2022
Contents
o:\clients\city of riverside\projects\calpers\6-30-20\ba riversideci 22-04-20 calpers misc safety 20.docx Topic Page Background 1
POBs 13
Miscellaneous Plan:
Historical Information 15
Projections 25
Safety Plan:
Historical Information 39
Projections 49
Combined Miscellaneous and Safety 63
2020 POB Impact 63
Additional Scenarios 71
Other:
Leaving CalPERS 73
PEPRA Cost Sharing 75
Actuarial Certification 78
April 20, 2022 1
DEFINITIONS
PVB - Present Value of all Projected
Benefits:
The value now of amounts due to be
paid in the future
Discounted value (at valuation date -
6/30/20), of all future expected benefit
payments based on various (actuarial)
assumptions
Current Normal Cost (NC):
Portion of PVB allocated to (or “earned” during) current year Value of employee and employer current service benefit Actuarial Liability (AAL):
Discounted value (at valuation date) of benefits earned through valuation date [value of past service benefit]
Portion of PVB “earned” at measurement
April 20, 2022 2
DEFINITIONS
Target- Have money in the bank to cover Actuarial Liability (past service) Unfunded Liability (UAAL or UAL) - Money short of target at valuation date If all actuarial assumptions were always exactly met, then the plan assets would always equal AAL
Any difference is the unfunded (or overfunded) AAL
Every year, the actuary calculates the difference between the expected UAAL and Actual UAAL. This is a new layer or amortization base
Each new layer gets amortized (paid off) over a period of time as part of the contribution [rate]
April 20, 2022 3
HOW WE GOT HERE
Investment Losses
CalPERS Contribution Policy
Enhanced Benefits
Demographics
April 20, 2022 4
HOW WE GOT HERE – INVESTMENT RETURN
Returns (after 2001) shown are gross returns, unreduced for administrative expenses, from CalPERS valuation reports, when available. The discount rate is based on expected returns net of administrative expenses. 20-Year and 30-Year
average return rates on
6/30/21 are 6.9% and
8.3%, respectively
April 20, 2022 5
HOW WE GOT HERE – OLD CONTRIBUTION POLICY
Effective with 2003 valuations:
Slow (15 year) recognition of investment losses into funded status Rolling 30 year amortization of all (primarily investment) losses
Designed to:
First smooth rates and
Second pay off UAL
Mitigated contribution volatility
April 20, 2022 6
HOW WE GOT HERE – ENHANCED BENEFITS
At CalPERS, Enhanced Benefits implemented using all (future & prior) service Typically not negotiated with cost sharing
City of Riverside
Tier 1 Tier 2 PEPRA
Miscellaneous 2.7%@55 FAE1 2.7%@55 FAE3 2%@62 FAE3
Safety Police 3%@50 FAE1 3%@50 FAE3 2.7%@57 FAE3
Safety Fire 3%@50 FAE1 3%@55 FAE3 2.7%@57 FAE3
Note:
FAE1 is highest one year (typically final) average earnings FAE3 is highest three years (typically final three) average earnings PEPRA tier implemented for new employees hired after 1/1/13 Employee pays half of total normal cost
2022 Compensation limit
Social Security participants: $134,974
Non-Social Security participants: $161,969
April 20, 2022 7
HOW WE GOT HERE – ENHANCED BENEFITS
Available CalPERS Benefit formulas. City of Riverside formulas shown in red. For any retirement age, chart shows benefit multiplier (% FAE per year of service) Retirement Age
Benefit Multiplier
April 20, 2022 8
HOW WE GOT HERE – ENHANCED BENEFITS
Benefit Multiplier
Retirement Age
April 20, 2022 9
HOW WE GOT HERE – DEMOGRAPHIC
Around the State
Large retiree liability compared to actives
State average: 56% for Miscellaneous, 65% for Safety
Declining active population and increasing number of retirees Higher percentage of retiree liability increases contribution volatility
City of Riverside percentage of liability belonging to retirees:
Miscellaneous 62%
Safety 65%
April 20, 2022 10
CALPERS CHANGES
April 2013: CalPERS adopted new contribution policy
No asset smoothing or rolling amortization
February 2018: New amortization policy for 2021/22 contributions Fixed dollar (level) 20-year amortization rather than % pay (escalating) 5-year ramp up (not down) for investment gains and losses CalPERS Board changed the discount rate to 7%, still phasing in to rates:
Rate Initial Impact Full Impact
6/30/16 valuation 7.375% 18/19 22/23
6/30/17 valuation 7.25% 19/20 23/24
6/30/18 valuation 7.00% 20/21 24/25
In the November 2021 meeting, CalPERS Board adopted new Discount rate and investment allocation
Discount rate: 6.8% for 6/30/2020. UAL impact matches investment gain amortization (5-year ramp-up)
Asset allocation has higher investment risk than current portfolio Experience study (Demographic assumptions)
April 20, 2022 11
CALPERS CHANGES
Risk Mitigation Strategy
Move to more conservative investments over time to reduce volatility Only when investment return is better than expected
Lower discount rate in concert
Essentially use ≈50% of investment gains to pay for cost increases Likely get to 6.0% discount rate over 20+ years
Risk mitigation suspended from 6/30/16 to 6/30/18 valuation Did not trigger for 6/30/19 or 6/30/20 valuations
First trigger for 6/30/21 valuation – 6.8% discount rate
April 20, 2022 12
CALPERS CHANGES
April 20, 2022 13
POB
City issued Pension Obligation Bonds (POB) in 2004, 2017, and 2020:
Initial POB Balance 6/30/21 Pay-off Date
2004 POB $89,540,000 $20,445,000 8/1/2023
2017 POB 31,960,000 20, 040,000 8/1/2027
2020 POB 432,165,000 428,795,000 8/1/2045
POB issued (borrowed) to pay off a portion of the unfunded liability Pension Plan unfunded liability goes down
City still owes money to bond holders
POB debt remains a debt related to pension plan
Similar to if an individual borrows to pay off a portion of a home loan POB is an arbitrage between:
Interest paid to bond holders and
Interest POB proceeds earn in CalPERS (expected, but not guaranteed)
April 20, 2022 14
POB
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April 20, 2022 15
SUMMARY OF DEMOGRAPHIC INFORMATION - MISCELLANEOUS
2000 2010 2019 2020
Actives
Counts 1,299 1,554 1,606 1,559
Average
Age 45 44 45 45
City Service 12 10 11 11
PERSable Wages $ 47,600 $ 68,600 $ 78,700 $ 83,000 Total PERSable Wages 61,8 00,000 106,600,000 126,400,000 129,40 0,000 Inactive Members
Counts
Transferred 1,003 803 698 707
Separated 376 569 713 720
Retired
Service 1,109 1,801 1,787 1,826
Disability 215 201 164 164
Beneficiaries 229 340 301 311
Total 1,553 2,342 2,252 2,301
Average Annual City Provided
Benefit for Service Retirees1 $ 10,400 $ 19,000 $ 33,500 $ 34,600
1 Average City-provided pensions are based on City service & City benefit formula, and are not representative of benefits for long-service employees.
April 20, 2022 16
SUMMARY OF DEMOGRAPHIC INFORMATION - MISCELLANEOUS
Prior to 2012, inactives were counted separately for service with or without social security under different coverage group
April 20, 2022 17
PLAN FUNDED STATUS - MISCELLANEOUS
June 30, 2019 June 30, 2020
Actuarial Accrued Liability
Active $ 469,300,000 $ 480,800,000
Retiree 898,500,000 939,100,000
Inactive 95,200,000 100,600,000
Total 1,463,000,000 1,520,500,000
Assets 1,138,300,000 1,368,600,000
Unfunded Liability 324,700,000 151,900,000
Funded Ratio 77.8% 90.0%
Average funded ratio for
CalPERS Public Agency
Miscellaneous Plans
72.2%
72.3%
April 20, 2022 18
PLAN FUNDED STATUS - MISCELLANEOUS
City CalPERS Assets and Actuarial Liability ($Millions)
April 20, 2022 19
PLAN FUNDED STATUS - MISCELLANEOUS
Discount Rate Sensitivity
June 30, 2020
Discount Rate
7.00% 6.50%2 6.00%
AAL $1,520,500,000 $1,623,600,000 $1,726,600,000
Assets 1,368,600,000 1,368,600,000 1,368,600,000
Unfunded Liability 151,900,000 255,000,000 358,000,000
Funded Ratio 90.0% 84.3% 79.3%
2 Estimated by Bartel Associates.
April 20, 2022 20
PLAN FUNDED STATUS - MISCELLANEOUS
Unfunded Accrued Liability Changes
Unfunded Accrued Liability on 6/30/19 $324,700,000
2020 POB (201,100,000)
Expected 6/30/20 Unfunded Accrued Liability 123,700,000 Other Changes
• Asset Loss (Gain) (4.6% return for FY 2020) 34,300,000 • Contribution & Experience Loss (Gain) (6,100,000)
• Total 28,200,000
Unfunded Accrued Liability on 6/30/20 151,900,000
Projected Unfunded Accrued Liability on 6/30/21 (15,400,000)
April 20, 2022 21
FUNDED RATIO - MISCELLANEOUS
6/30/21 funded status estimated
April 20, 2022 22
FUNDED STATUS (MILLIONS) - MISCELLANEOUS
6/30/21 funded status estimated
April 20, 2022 23
CONTRIBUTION RATES - MISCELLANEOUS
Benefit
Improvement
2.7%@55 from
2%@55
2020 POB
2004 POB
April 20, 2022 24
CONTRIBUTION RATES - MISCELLANEOUS
6/30/19 6/30/20
2021/2022 2022/2023
Total Normal Cost 20.7% 20.4%
Employee Normal Cost 7.9% 7.9%
Employer Normal Cost 12.7% 12.5%
Amortization Payments 8.2% 8.4%3
Total Employer Contribution Rate 20.9% 20.9%
2021/22 Employer Contribution Rate 20.9%
6/30/16 Discount Rate Change (5th Year) 0.4%
Other (Gains)/Losses (0.4%)
2022/23 Employer Contribution Rate 20.9%
3 Equivalent to 7.8% of UAL. On e year, 7% interest on the UAL is 7.6% of payroll. 2022/23 amortization payment exceeds interest on the UAL, so there is no “negative amortization.”
April 20, 2022 25
CONTRIBUTION PROJECTIONS - MISCELLANEOUS
Investment Returns:
21.3%4 June 30, 2021
Future returns based on stochastic analysis using 1,000 trials6 2 5 th Percentile 50th Percentile 75th Percentile
First 10 years -2.1% 5.9% 14.6%
10+ years -0.7% 7.4% 16.4%
Discount Rate:
6.8% effective June 30, 2021
Decreases due to Risk Mitigation policy – ultimate 6.0% discount rate No Other: Gains/Losses, Method/Assumption Changes, Benefit Improvements June 30, 2021 valuation
Combined impact of investment gain and discount rate change amortized over 20 years with 5 year ramp up
4 Gross return based on July 2021 CalPERS press release. 6 Single year returns based on current investment mix, and no Risk Mitigation N th percentile means N percentage of our trials result in returns lower than the indicated rates.
April 20, 2022 26
CONTRIBUTION PROJECTIONS - MISCELLANEOUS
New hire assumptions:
97.5% of 2021/22 new hires are PEPRA members, 2.5% Classic members Percentage of PEPRA member future hires to increase from 97.5% to 100% in last year
6/30/20 employee distribution:
Benefit Tier Count 6/30/20 Payroll
2.7%@55 FAE1 808 $ 75,025,700
2.7%@55 FAE3 155 13,551,300
2%@62 FAE3 (PEPRA) 596 40,824,900
No Employer Paid Member Contributions (EPMC)
April 20, 2022 27
CONTRIBUTION PROJECTIONS - MISCELLANEOUS
Impact of 2020/21 Return
April 20, 2022 28
CONTRIBUTION PROJECTIONS - MISCELLANEOUS
April 20, 2022 29
CONTRIBUTION PROJECTIONS - MISCELLANEOUS
April 20, 2022 30
CONTRIBUTION PROJECTIONS - MISCELLANEOUS
April 20, 2022 31
CONTRIBUTION PROJECTIONS - MISCELLANEOUS
April 20, 2022 32
CONTRIBUTION PROJECTIONS - MISCELLANEOUS
April 20, 2022 33
CONTRIBUTION PROJECTIONS - MISCELLANEOUS
April 20, 2022 34
CONTRIBUTION PROJECTIONS - MISCELLANEOUS
April 20, 2022 35
CONTRIBUTION PROJECTIONS - MISCELLANEOUS
April 20, 2022 36
CONTRIBUTION PROJECTIONS - MISCELLANEOUS
Alternative - 20 Year Level Dollar Amortization Fresh Start
April 20, 2022 37
FUNDED STATUS - MISCELLANEOUS
April 20, 2022 38
FUNDED STATUS - MISCELLANEOUS
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April 20, 2022 39
SUMMARY OF DEMOGRAPHIC INFORMATION - SAFETY
2000 2010 2019 2020
Actives
Counts 482 576 574 583
Average
Age 40 41 41 41
City Service 13 13 13 13
PERSable Wages $ 66,200 $ 107 ,300 $ 125,200 $ 129,100 Total PERSable Wages 31,900,000 61,800,000 71,900,000 75,300,0 00 Inactive Members
Counts
Transferred 77 93 95 95
Separated 38 70 82 79
Retired
Service 173 249 335 352
Disability 210 279 344 343
Beneficiaries 64 81 112 116
Total 447 609 791 811
Average Annual City Provided
Benefit for Service Retirees8 $ 34,400 $ 59,200 $ 78,400 $ 81,000
8 Average City-provided pensions are based on City service & City benefit formula, and are not representative of benefits for long-service employees.
April 20, 2022 40
SUMMARY OF DEMOGRAPHIC INFORMATION - SAFETY
April 20, 2022 41
PLAN FUNDED STATUS - SAFETY
June 30, 2019 June 30, 2020
Actuarial Accrued Liability
Active $ 406,600,000 $ 419,900,000
Retiree 748,400,000 791,000,000
Inactive 15,500,000 13,600,000
Total 1,170,500,000 1,224,500,000
Assets 830,100,000 1,083,900,000
Unfunded Liability 340,400,000 140,600,000
Funded Ratio 70.9% 88.5%
Average funded ratio for
CalPERS Public Agency
Safety Plans
68.6%
69.2%
April 20, 2022 42
PLAN FUNDED STATUS - SAFETY
City CalPERS Assets and Actuarial Liability ($Millions)
April 20, 2022 43
PLAN FUNDED STATUS - SAFETY
Discount Rate Sensitivity
June 30, 2020
Discount Rate
7.00% 6.50%9 6.00%
AAL $1,224,500,000 $1,307,800, 000 $1,391,000,000
Assets 1,083,900,000 1,083,900,000 1,083,900,000
Unfunded Liability 140,600,000 223,900,000 307,100,000
Funded Ratio 88.5% 82.9% 77.9%
9 Estimated by Bartel Associates.
April 20, 2022 44
PLAN FUNDED STATUS - SAFETY
Unfunded Accrued Liability Changes
Unfunded Accrued Liability on 6/30/19 $340,400,000
2020 POB (231,100,000)
Expected 6/30/20 Unfunded Accrued Liability 114,500,000 Other Changes
• Asset Loss (Gain) (4.6% return for FY 2020) 27,700,000 • Contribution & Experience Loss (Gain) (1,600,000)
• Total 26,100,000
Unfunded Accrued Liability on 6/30/20 140,600,000
Projected Unfunded Accrued Liability on 6/30/21 7,200,000
April 20, 2022 45
FUNDED RATIO - SAFETY
6/30/21 funded status estimated
April 20, 2022 46
FUNDED STATUS (MILLIONS) - SAFETY
6/30/21 funded status estimated
April 20, 2022 47
CONTRIBUTION RATES - SAFETY
Benefit
Improvement
3%@55 from
2%@50
Benefit
Improvement
3%@50 from
3%@55
2020 POB
2004 POB
April 20, 2022 48
CONTRIBUTION RATES - SAFETY
6/30/19 6/30/20
2021/2022 2022/2023
Total Normal Cost 31.4% 31.0%
Employee Normal Cost 9.6% 9.8%
Employer Normal Cost 21.8% 21.2%
Amortization Payments 14.3% 15.7%10
Total Employer Contribution Rate 36.0% 37.0%
2021/22 Employer Contribution Rate 36.0%
Payroll > Expected (0.3%)
6/30/16 Discount Rate Change (5th Year) 0.5%
6/30/17 Discount Rate & Inflation (4th Year) 0.2%
Other (Gains)/Losses 0.6%
2022/23 Employer Contribution Rate 37.0%
10 Equivalent to 9.1% of UAL. On e year, 7% interest on the UAL is 12.0% of payroll . 2022/23 amortization payment exceeds interest on the UAL, so there is no “negative amortization”.
April 20, 2022 49
CONTRIBUTION PROJECTIONS - SAFETY
Investment Returns:
21.3%13 June 30, 2021
Future returns based on stochastic analysis using 1,000 trials14 2 5 th Percentile 50th Percentile 75th Percentile
First 10 years -2.1% 5.9% 14.6%
10+ years -0.7% 7.4% 16.4%
Discount Rate:
6.8% effective June 30, 2021
Decreases due to Risk Mitigation policy – ultimate 6.0% discount rate No Other: Gains/Losses, Method/Assumption Changes, Benefit Improvements June 30, 2021 valuation
Combined impact of investment gain and discount rate change amortized over 20 years with 5 year ramp up
13 Gross return based on July 2021 CalPERS press release. 14 Single year returns based on current investment mix, and no Risk Mitigation N th percentile means N percentage of our trials result in returns lower than the indicated rates.
April 20, 2022 50
CONTRIBUTION PROJECTIONS - SAFETY
New hire assumptions:
97.5% of 2021/22 new hires are PEPRA members and 2.5% are Classic members
Percentage of PEPRA member future hires to increase from 97.5% to 100% in last year
6/30/20 employee distribution:
Benefit Tier Count 6/30/20 Payroll
3%@50 FAE1 (Fire) 141 $20,347,600
3%@55 FAE3 (Fire) 16 1,736,600
2.7%@57 FAE3 (Fire PEPRA) 63 5,903,600
3%@50 FAE1 (Police) 221 33,259,400
3%@50 FAE3 (Police) 40 4,680,200
2.7%@57 FAE3 (Police PEPRA) 102 9,360,400
April 20, 2022 51
CONTRIBUTION PROJECTIONS - SAFETY
Tier 1 Employer Paid Member Contributions (EPMC):
9%
Tier 1 Employee Cost Sharing
RPOA, RPOA Supervisory, and RPAA: 4.5%
RCFA: 7% effective 1/1/21 and 8% effective 1/7/22 and thereafter Combined: 5.4% effective 1/1/21 and 5.8% effective 1/7/22 and thereafter
April 20, 2022 52
CONTRIBUTION PROJECTIONS - SAFETY
Impact of 2020/21 Return
Safety
April 20, 2022 53
CONTRIBUTION PROJECTIONS - SAFETY
April 20, 2022 54
CONTRIBUTION PROJECTIONS - SAFETY
April 20, 2022 55
CONTRIBUTION PROJECTIONS - SAFETY
April 20, 2022 56
CONTRIBUTION PROJECTIONS - SAFETY
April 20, 2022 57
CONTRIBUTION PROJECTIONS - SAFETY
April 20, 2022 58
CONTRIBUTION PROJECTIONS - SAFETY
April 20, 2022 59
CONTRIBUTION PROJECTIONS - SAFETY
April 20, 2022 60
CONTRIBUTION PROJECTIONS - SAFETY
April 20, 2022 61
CONTRIBUTION PROJECTIONS - SAFETY
Alternative - 20 Year Level Dollar Amortization Fresh Start
April 20, 2022 62
CONTRIBUTION PROJECTIONS - SAFETY
April 20, 2022 63
COMBINED MISCELLANEOUS AND SAFETY
April 20, 2022 64
COMBINED MISCELLANEOUS AND SAFETY
Funded Status Summary on June 30, 2020
(Amounts in $Millions)
Miscellaneous Safety Total
AAL $ 1,520.5 $ 1,224.5 $ 2,745.0
Assets 1,368.6 1,083.9 2,452.5
Unfunded AAL 151.9 140.6 292.5
Funded Ratio 90.0% 88.6% 89.3%
April 20, 2022 65
2020 POB IMPACT
Miscellaneous
(Amounts in $Millions)
6/30/19
6/30/20
Projected
6/30/21
(1) Actuarial Accrued Liability (AAL) $1,463 $1,521 $1,620 (2) Assets 1,138 1,369 1,635
(3) Unfunded AAL
[(1) - (2)]
325 152 (15)
(4) 2020 POB Balance - 201 198
(5) UAL + POB Balance
[(3) + (5)] 325 353 183
(6) Funding Ratios
a) Assets/AAL
[(2)/(1)]
77.8% 90.0% 100.9%
b) (Assets-POB Balance)/AAL
[((2)-(4))/(1)]
77.8% 76.8% 88.7%
April 20, 2022 66
2020 POB IMPACT
Safety
(Amounts in $Millions)
6/30/19
6/30/20
Projected
6/30/21
(1) Actuarial Accrued Liability (AAL) $1,171 $1,224 $1,307 (2) Assets 830 1,084 1,300
(3) Unfunded AAL
[(1) - (2)]
341 140 7
(4) 2020 POB Balance - 231 231
(5) UAL + POB Balance
[(3) + (5)] 341 371 238
(6) Funding Ratios
a) Assets/AAL
[(2)/(1)]
70.9% 88.6% 99.5%
b) (Assets-POB Balance)/AAL
[((2)-(4))/(1)]
70.9% 69.7% 81.8%
April 20, 2022 67
2020 POB IMPACT
Total
(Amounts in $Millions)
6/30/19
6/30/20
Projected
6/30/21
(1) Actuarial Accrued Liability (AAL) $2,633 $2,745 $2,927 (2) Assets 1,968 2,452 2,935
(3) Unfunded AAL
[(1) - (2)]
665 293 (8)
(4) 2020 POB Balance $0 432 429
(5) UAL + POB Balance
[(3) + (5)] 665 725 421
(6) Funding Ratios
a) Assets/AAL
[(2)/(1)]
74.7% 89.3% 100.3%
b) (Assets-POB Balance)/AAL
[((2)-(4))/(1)]
74.7% 73.6% 85.6%
April 20, 2022 68
2020 POB IMPACT
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April 20, 2022 69
2020 POB IMPACT
Impact of 2020 POB
Miscellaneous
April 20, 2022 70
2020 POB IMPACT
Impact of 2020 POB
Safety
April 20, 2022 71
ADDITIONAL SCENARIOS
6.5% Discount Rate/Future Returns
Miscellaneous
April 20, 2022 72
ADDITIONAL SCENARIOS
6.5% Discount Rate/Future Returns
Safety
April 20, 2022 73
LEAVING CALPERS
Participation in CalPERS is governed by State law and CalPERS rules The following are considered “withdrawing” from CalPERS:
Exclude new hires from CalPERS & giving them a different pension Stop accruing benefits for current employees
“Withdrawal” from CalPERS:
Treated as plan termination
Liability increased for conservative investments
Liability increased for future demographic fluctuations Liability must be funded immediately by withdrawing agency Otherwise, retiree benefits are cut
April 20, 2022 74
LEAVING CALPERS
CalPERS Termination Estimates on June 30, 2020 (Amounts in Millions)
Ongoing Plan Termination Basis
Discount Rate 7.00% 0.75% 2.50%
Miscellaneous
Actuarial Accrued Liability $ 1,520.5 $ 3,299.4 $ 2,495.3 Assets 1,368.6 1,368.6 1,368.6
Unfunded AAL (UAAL) 151.9 1,930.8 1,126.7
Safety
Actuarial Accrued Liability $ 1,224.5 $ 3,002.5 $ 2,229.4 Assets 1,083.9 1,083.9 1,083.9
Unfunded AAL (UAAL) 140.6 1,918.6 1,145.5
Total
Unfunded AAL (UAAL) $ 292.5 $ 3,849.4 $ 2,272.2
Funded Ratio 89.3% 38.9% 51.9%
April 20, 2022 75
PEPRA COST SHARING
Target of 50% of total normal cost paid by all employees PEPRA members must pay greater of 50% of total normal cost or bargained amount if higher
Employer cannot pay any part of PEPRA member required employee contributions
Employer may impose current employees pay 50% of total normal cost (limited to 8% of pay for Miscellaneous and 12% for Safety) if not agreed through collective bargaining
Miscellaneous Plan 2022/23:
Classic Members New Members
Tier 1
2.7%@55 FAE1
Tier 2
2.7%@55 FAE3
PEPRA
2%@62 FAE3
Employer Normal Cost 14.3% 17.4% 7.59%
Member Normal Cost 8.0% 8.0% 7.75%
Total Normal Cost 22.3% 25.4% 15.34%
50% Target 11.2% 12.7% 7.67%
April 20, 2022 76
PEPRA COST SHARING
Police Safety Plan 2022/23:
Classic Members New Members
Tier 1
3%@50 FAE1
Tier 2
3%@50 FAE3
PEPRA
2.7%@57 FAE3
Employer Normal Cost 24.2% 30.3% 13.70%
Member Normal Cost 9.0% 9.0% 12.75%
Total Normal Cost 33.2% 39.3% 26.45%
50% Target 16.6% 19.7% 13.23%
Fire Safety Plan 2022/23:
Classic Members New Members
Tier 1
3%@50 FAE1
Tier 2
3%@55 FAE3
PEPRA
2.7%@57 FAE3
Employer Normal Cost 20.9% 19.8% 11.81%
Member Normal Cost 9.0% 9.0% 12.75%
Total Normal Cost 29.9% 28.8% 24.56%
50% Target 15.0% 14.4% 12.28%
April 20, 2022 77
PEPRA COST SHARING
PEPRA Member Contributions:
2021/22 2022/23
Group
Total
NC
(Basis)
Member
Rate
Total
Normal
Cost
Change
Member
Rate
Method
Miscellaneous 15.29% 7.75% 15.34% 0.05% 7.75% PEPRA
Members
Police Safety 25.51% 12.75% 25.72% 0.21% 12.75% PEPRA
Members
Fire Safety 25.51% 12.75% 25.72% 0.21% 12.75% PEPRA
Members
April 20, 2022 78
ACTUARIAL CERTIFICATION
This report presents analysis of the City of Riverside’s CalPERS pension plans. The purpose of this report is to provide the City:
Historical perspective on the plan investment returns, assets, funded status and contributions. Projections of likely future contributions and the impact of investment volatility
The calculations and projections in this report are based on information contained in the City’s June 30, 2020 and earlier CalPERS actuarial valuation reports. We reviewed this information for reasonableness, but do not make any representation on the accuracy of the CalPERS reports.
Future investment returns and volatility are based on Bartel Associates Capital Market model which results in long term returns summarized on pages 25 and 53.
Future results may differ from our projections due to differences in actual experience as well as changes in plan provisions, CalPERS actuarial assumptions or methodology. Other than variations in investment return, this study does not analyze these.
To the best of our knowledge, this report is complete and accurate and has been conducted using generally accepted actuarial principles and practices. As members of the American Academy of Actuaries meeting the Academy Qualification Standards, we certify the actuarial results and opinions herein.
Respectfully submitted,
Doug Pryor, ASA, EA, MAAA
Vice President
Bartel Associates, LLC
Bianca Lin, FSA, EA, FCA, MAAA
Assistant Vice President
Bartel Associates, LLC