2022 Actuarial Valuation Results
and Updates
City of San Leandro Miscellaneous
and Safety Plans
Eddie Lee, ASA, EA, FCA, MAAA,
Senior Pension Actuary
Julius Sphabmixay
Senior Actuarial Analyst
October 2023
Overview
• Summary of June 30, 2022 Valuation Results
• Employer Contributions for FY24/25
• Significant Events Since the June 30, 2022 Valuation Date • Projections of June 30, 2022 Unfunded Accrued Liability and Funded Status
• Projections of UAL Amortization Payments
• Projections of UAL Amortization Payments (after Fresh Start) • Other Funding Alternatives
2 City of San Leandro Miscellaneous and Safety Plans
Summary of June 30, 2022 Participant Counts – Misc.
& Safety - (continued)
3 City of San Leandro Miscellaneous and Safety Plans
Actives
(321,18%)
Transfers
(241, 14%)
Separated
(168, 10%)
Retirees
(1,012, 58%)
Number of Participants (All Plans, 1,742 members)
Actives Transfers Separated Retirees
Summary of June 30, 2022 Participant Counts – Misc.
& Safety
4 City of San Leandro Miscellaneous and Safety Plans
122 132
37 30
0 20
40 60
80 100
120
140
160
180
Classic PEPRA
Active Participant Counts as of June 30, 2022
Miscellaneous Safety
159 (49%) 162 (51%)
Summary of June 30, 2022 Valuation Results -
determining FY24/25 contributions ($mil)
5 Plan
Actuarial
Accrued
Liability
Market Value of
Assets
Unfunded
Accrued
Liability Funded Ratio
Miscellaneous
(VP 37) $348.1 $229.3 $118.8 65.9%
Safety
(VP 38) pooled 343.6 222.2 121.4 64.7%
PEPRA Safety
(VP 25027) 4.8 4.1 0.7 85.7%
Total $696.6 $455.6 $240.9 65.4%
City of San Leandro Miscellaneous and Safety Plans
Summary of June 30, 2022 Valuation Results – Misc.
& Safety - (continued)
6 City of San Leandro Miscellaneous and Safety Plans
74.3%
78.2%
74.0%
68.4%
69.8%
68.1% 67.6%
66.1%
75.7%
65.4%
55.00%
60.00%
65.00%
70.00%
75.00%
80.00%
$0
$100
$200
$300
$400
$500
$600
$700
$800
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Millions
Acrued Liabilities and Assets
(All Plans Combined)
Accrued Liability Market Value of Assets Funded Ratio
Summary of June 30, 2022 Valuation Results – Misc.
& Safety - (continued)
7 City of San Leandro Miscellaneous and Safety Plans
Compared to
Excludes Safety $451.5M MVA
PEPRA
Summary of June 30, 2022 Valuation Results – Misc.
& Safety – (continued)
8 City of San Leandro Miscellaneous and Safety Plans
Actuarial Accrued Liability
$691.7M
Employer Normal Cost
$4.9M
Present Value of
Future Normal Costs
$55.7M
Present Value of Benefits ($747.4M)
Actuarial Accrued Liability Employer Normal Cost Present Value of Future Normal Costs Exclude Safety
PEPRA
Summary of June 30, 2022 Valuation Results – Misc.
& Safety - (continued)
9 City of San Leandro Miscellaneous and Safety Plans
0.0%
100.0%
200.0%
300.0%
400.0%
500.0%
600.0%
700.0%
800.0%
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Unfunded Liability Ratio% (UAL/Payroll)
(All Plans Combined)
Employer Contributions - City of San Leandro FY24/25–
Normal Cost (as % of Payroll)
10 City of San Leandro Miscellaneous and Safety Plans
Plan Name
Rate
Plan
Total Normal
Cost
Employee
Contributions
Employer
Contributions
Miscellaneous 37 18.70% 7.59% 11.11%($2.9M)
Safety (Pooled) 38 38.29% 8.99% 29.30%($2.0M)
PEPRA Safety 25027 29.22% 14.50% 14.72%($0.7M)
Total $5.6M
Employer Contributions - City of San Leandro FY24/25–
Total ($mil)
11 City of San Leandro Miscellaneous and Safety Plans
Plan Name
Rate
Plan
Employer
Normal Cost
(est.) UAL Payments
Total
Projected
Employer
Contributions
Miscellaneous 37 $2.9 $10.0 $12.9
Safety (Pooled) 38 2.0 9.7 11.7
PEPRA Safety 25027 0.70 0.04 0.74
Total $5.6 $19.7 $25.3*
* 70% of projected payroll
Significant Events Since the June 30, 2022 Valuation
Date
• Preliminary investment return for FY22/23 is 6.2%
compared to -6.1% in FY21/22.
• FY22/23 return less than expected of 6.80%, add
investment loss base in 2023 valuation.
• Next Asset Liability Management study on economic
assumptions is expected to be completed by November of 2025 which may affect discount rate.
12 City of San Leandro Miscellaneous and Safety Plans
Projections of June 30, 2022 Unfunded Accrued
Liability
• Investment return of 6.2% in FY2022/23 projected to increase UAL balances slightly as of June 30, 2023 and increase the required employer contributions for fiscal year beginning 2025/26 to 2029/30.
13 City of San Leandro Miscellaneous and Safety Plans
Projections of June 30, 2022 Unfunded Accrued
Liability ($mil)
14 City of San Leandro Miscellaneous and Safety Plans
Plan Name
Rate
Plan
Projected
6/30/2023 UAL
Balance Before
Investment
Loss
Increase in
UAL balance
Due to FY 22-
23 Inv. Loss
Projected
6/30/2023 UAL
Balance After
Investment
Loss
Projected
06/30/2023
Funded Ratio%
Miscellaneous 37 $117.5 $1.3 $118.8 66.6%
Safety (Pooled) 38 121.2 1.3 122.5 65.2%
PEPRA Safety 25027 0.81 0.02 0.83 86.0%
Total $239.5 $2.6 $242.1
Projections of June 30, 2022 Unfunded Accrued
Liability (continued)
15 City of San Leandro Miscellaneous and Safety Plans
0.0 20.0
40.0 60.0
80.0 100.0
120.0
140.0
160.0
180.0
200.0
220.0
240.0
260.0
Millions
Amortization of UAL Balances
(Safety & Misc.)
Original UAL Balances
Projected UAL Balances
Projected to be fully
amortized about 2047
Projected balance includes FY 22/23
investment loss
Projections of Amortization of UAL Payments
16 City of San Leandro Miscellaneous and Safety Plan
-
2 4
6 8
10 12
14 16
18 20
22 24
26 28
30 Millions
Amortization Payments
(Safety & Misc.)
Original Scheduled
Payments
Projected Payments
Projected to be Fully
Amortized in over 25
years
Projections of Amortization of UAL Payments
17 City of San Leandro Miscellaneous and Safety Plan
• Fresh Start of all amortization bases over a
period of 15 years beginning June 30, 2024
• Provide interest savings
Projections of June 30, 2022 Unfunded Accrued
Liability (after Fresh Start as of June 30, 2024)
18 City of San Leandro Miscellaneous and Safety Plans
0.0 20.0
40.0 60.0
80.0 100.0
120.0
140.0
160.0
180.0
200.0
220.0
240.0
260.0
Millions
Amortization of UAL Balances
15 year Fresh Start (Safety & Misc.)
Original UAL Balances
Projected UAL Balances
At least six
years faster
Level UAL payments
of $25.3M beginning
FY 25-26
City of San Leandro - Projections of Amortization
Payments (after Fresh Start as of June 30, 2024)
19 City of San Leandro Miscellaneous and Safety Plans
-
2 4
6 8
10 12
14 16
18 20
22 24
26 28
30 Millions
Amortization Payments
15 year Fresh Start (Safety & Misc.)
Original Scheduled
Payments
Projected Payments
$32.8M in interest savings
Add’l
$5M
City of San Leandro – Fresh Start as of June 30, 2024
Unfunded Accrued Liability ($mil)
20 City of San Leandro Miscellaneous and Safety Plans
Plan Name
Rate
Plan
Projected
6/30/2024 UAL
Balance
Fresh Start
Amortization
Period
Fresh Start
Annual
Payment
Total
Projected
Interest
Savings (over
FS period)
Miscellaneous 37 $117.9 15 $12.2 $17.6
Safety (Pooled) 38 122.2 15 12.7 14.9
PEPRA Safety 25027 0.87 15 0.09 0.3
Total $241.0 $25.0 $32.8
Total UAL payments reduced from $446.5M to $413.7M
Other Funding Alternatives
• Annual additional discretionary payments (ADPs), i.e. Soft Fresh Start.
• Contributions to a pension 115 Trust (e.g. CEPPT, PARS) - Short term funding vehicle, hence lower expected returns. - Reduce market volatility.
- ER choices of assets allocation
• Funding an OPEB 115 trust? Making ADCs to reduce NOL. • Paid-to-do-nothing. Keep money in general account?
• Pension Obligation Bond – may not be a good time.
• CalPERS modeling tools are available.
21 City of San Leandro Miscellaneous and Safety Plans
Funding Alternatives
22 City of San Leandro Miscellaneous and Safety Plans
Appendix :- Your Peers
23 City of San Leandro Miscellaneous and Safety Plans
Bay Area Cities Funded Status as of June 30, 2022
24 City of San Leandro Miscellaneous and Safety Plans
25 City of San Leandro
October 2023
Discussions / Q&A
City of San Leandro Miscellaneous and Safety Plans