2023 Actuarial Valuation Results
and Updates
City of San Leandro Miscellaneous
and Safety Plans
Eddie Lee, ASA, EA, FCA, MAAA,
Senior Pension Actuary
January 2025 Finance Committee Meeting
Overview
• Summary of June 30, 2023 Valuation Results
• Required Employer Contributions for FY25/26
• Gain/Loss Analysis & Amortization Policy
• Significant Events Since the June 30, 2023 Valuation Date • Projections of Unfunded Accrued Liability and Funded Status • Projections of UAL Amortization Payments
• Projections of UAL Amortization of UAL Payments (after Fresh Start) • Tools Available to Manage UAL and Payments
• Appendix
2 City of San Leandro Miscellaneous and Safety Plans
• Summary of June 30, 2023 Actuarial
Valuation Results
3 City of San Leandro Miscellaneous and Safety Plans
Summary of June 30, 2023 Participants Census – Misc.
& Safety
4 City of San Leandro Miscellaneous and Safety Plans
Actives
(325,18%)
Transfers
(253, 14%)
Separated
(173, 10%)
Retirees
(1,029, 58%)
Number of Participants (All Plans, 1,780 members)
Actives Transfers Separated Retirees
Summary of June 30, 2023 Participants Census –
Misc. & Safety - (continued)
5 City of San Leandro Miscellaneous and Safety Plans
110
151
34 30
0 20
40 60
80 100
120
140
160
180
200
Classic PEPRA
Active Participant Counts as of June 30, 2023
Miscellaneous Safety
144 (44%) 181 (56%)
Summary of June 30, 2023 Valuation Results - Determining FY25/26 contributions ($mil)
6 Plan
Actuarial
Accrued Liability
Market Value of
Assets
Unfunded
Accrued Liability Funded Ratio
Miscellaneous
(VP 37) $359.5 $236.2 $123.3 65.7%
Safety
(VP 38) pooled 353.1 225.7 127.3 63.9%
PEPRA Safety
(VP 25027) 7.1 6.2 0.9 87.3%
Total $719.7 $468.1 $251.5 65.0%
City of San Leandro Miscellaneous and Safety Plans
Summary of June 30, 2023 Valuation Results – Misc. &
Safety - (continued)
7 City of San Leandro Miscellaneous and Safety Plans
78.2%
74.0%
68.4% 69.8% 68.1% 67.6%
66.1%
75.7%
65.4%
65.0%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
$0
$100
$200
$300
$400
$500
$600
$700
$800
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Millions Acrued Liabilities and Assets
(All Plans Combined)
Accrued Liability Market Value of Assets Funded Ratio
Summary of June 30, 2023 Valuation Results – Misc. &
Safety - (continued)
8 City of San Leandro Miscellaneous and Safety Plans
Compared to
Actives $468.1M MVA
($117.2, 16%)
Retirees
($562.8M, 78%)
Transfers and
Term Vested
($39.7M, 6%)
Actuarial Accrued Liability ($719.7M)
Actives Retirees Transfers and Term Vested
Summary of June 30, 2023 Valuation Results – Misc. &
Safety - (continued)
9 City of San Leandro Miscellaneous and Safety Plans
Actuarial Accrued Liability
$719.7M
FY 25-26 Employer
Normal Cost
$5.8M
Present Value of
Future Normal Costs
$75.8M
Present Value of Benefits ($795.5M)
Actuarial Accrued Liability FY 25-26 Employer Normal Cost Present Value of Future Normal Costs
Summary of June 30, 2023 Valuation Results – Misc. &
Safety - (continued)
10 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%
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Unfunded Liability Ratio% (UAL/Payroll)
(All Plans Combined)
Required Employer Contributions - City of San Leandro
FY25/26 – Normal Cost (as % of Payroll)
11 City of San Leandro Miscellaneous and Safety Plans
Plan Name
Rate
Plan
Total Normal
Cost
Employee
Contributions
Employer
Contributions
Miscellaneous 37 18.41% 7.55% 10.86%($3.1M)
Safety (Pooled) 38 38.34% 8.99% 29.35%($2.1M)
PEPRA Safety 25027 29.46% 14.50% 14.96%($0.6M)
Total 14.5%($5.8M)
Required Employer Contributions - City of San Leandro
FY 25/26 – Total ($mil)
12 City of San Leandro Miscellaneous and Safety Plans
Plan Name
Rate
Plan
Employer
Normal Cost
(est.) UAL Payments
Total
Employer
Contributions
Miscellaneous 37 $3.1 $10.5 $13.6
Safety (Pooled) 38 2.1 10.9 13.0
PEPRA Safety 25027 0.6 0.06 0.66
Total $5.8 $21.5 $27.3*
* 68% of projected payroll
• Gains/Losses Analysis and Amortization
Policy
13 City of San Leandro Miscellaneous and Safety Plans
Gains/Losses
14 City of San Leandro Miscellaneous and Safety Plan
1. Non-Investment related gains/losses
a) Non-Pooled Plans’ non-investment gains/losses are
calculated on an individual plan basis.
b) Pooled Plans’ non-investment gains/losses are allocated by a proportionate share of the Misc./Safety Plan based on the plan’s accrued liabilities.
2. Investment gains/losses are calculated based on actual investment earned during the year compared to the amount expected to be made using 6.80% ROI.
15 Non-Investment Related Gains/Losses Analysis in FY 22/23 – Non-Pooled Plan (VP 37)
Grouped Gain/Loss
City of San Leandro
Miscellaneous Plan
ER CID: 7713051229 Val Rate Plan: 37 Val Date: 6/30/2023 PY Member Type CY Member Type PY Liability Expected AL CY Liability Total (Gain)/Loss Counts Active Active $ 57,638,628 $ 65,337,577 $ 67,882,368 $ 2,544,791 216 Active Transfer $ 4,164,650 $ 4,880,207 $ 3,865,035 $ (1,015,172) 21 Active Separated $ 427,996 $ 546,158 $ 226,750 $ (319,408) 7 Active Retired $ 4,095,120 $ 4,462,365 $ 5,186,333 $ 723,968 7 Transfer Active $ 46,863 $ 50,021 $ 143,853 $ 93,832 1
Transfer Transfer $ 21,282,693 $ 22,659,179 $ 23,131,294 $ 472,115 208 Transfer Separated $ 766,477 $ 815,007 $ 776,099 $ (38,908) 7 Transfer Retired $ 4,566,210 $ 4,815,553 $ 5,511,127 $ 695,574 13 Separated Transfer $ 61,869 $ 61,613 $ 48,530 $ (13,083) 1 Separated Separated $ 4,836,659 $ 4,968,186 $ 5,104,607 $ 136,421 138 Separated Retired $ 322,387 $ 253,065 $ 422,409 $ 169,344 3 Retired Retired $ 245,966,196 $ 242,030,844 $ 244,858,445 $ 2,827,601 669 Active $ 115,705 $ 154,377 $ - $ (154,377) 3
Transfer $ 59,941 $ 63,303 $ - $ (63,303) 3
Separated $ 24,121 $ 20,033 $ - $ (20,033) 5
Retired $ 3,716,493 $ 3,595,773 $ - $ (3,595,773) 12
Active $ - $ - $ 412,793 $ 412,793 44
Transfer $ - $ - $ 184,584 $ 184,584 10
Separated $ - $ - $ 7,715 $ 7,715 2
Retired $ - $ - $ 1,781,874 $ 1,781,874 5
Totals: $ 348,092,008 $ 354,713,261 $ 359,543,816 $ 4,830,555 1375 Each individual member’s liabilities are tracked and compared to their expected values estimated by current assumptions.
City of San Leandro Miscellaneous and Safety Plans
16 The Sources of Non-Investment Gains/Losses
FY 22/23 – Non-Pooled Plan (VP 37) Unexpected changes in liabilities are analyzed..
PY status RET (5) ACT (1) TRA (2) SEP (3) ABSENT (0) Subtotal CY status
retirees retiring retiring retiring retiring
RET $ 2,827,601 $ 723,968 $ 695,574 $ 169,344 $ 1,781,874 $ 6,198,361 RET-Decrement $ 1,722,576 $ 492,224 $ 486,090 $ 1,587 $ 2,702,477 RET-Benefit/Salary $ 1,090,178 $ 1,090,178
RET-Service $ -
RET-Unknown $ 14,847 $ 231,743 $ 209,484 $ 167,757 $ 1,781,874 $ 2,405,705 reinstating actives rehired rehired new hire
ACT $ 2,549,142 $ 93,832 $ 412,793 $ 3,055,767
ACT-Decrement $ 141,426 $ 591 $ 142,017
ACT-Benefit/Salary $ 2,419,505 $ 2,419,505
ACT-Service $ (57,552) $ (57,552)
ACT-Unknown $ 45,763 $ 93,241 $ 412,793 $ 551,797
reinstating transferring transfers sep. to transfer new hire TRA $ (1,015,172) $ 467,764 $ (13,083) $ 184,584 $ (375,907) TRA-Decrement $ 76,313 $ (163,582) $ (61,613) $ (148,882) TRA-Benefit/Salary $ 675,133 $ 675,133
TRA-Service $ (6,089) $ (6,089)
TRA-Unknown $ (1,091,485) $ (37,698) $ 48,530 $ 184,584 $ (896,069) reinstating separating separating separated new hire
SEP $ (319,408) $ (38,908) $ 136,421 $ 7,715 $ (214,180) SEP-Decrement $ (344,074) $ (475,183) $ (170,955) $ (990,212) SEP-Benefit/Salary $ (8,050) $ (8,050)
SEP-Service $ (43) $ (43)
SEP-Unknown $ 24,666 $ 436,275 $ 315,469 $ 7,715 $ 784,125 gone gone gone gone
GONE $ (3,595,773) $ (154,377) $ (63,303) $ (20,033) $ (3,833,486) GONE-Decrement $ (1,935,112) $ (154,377) $ (63,303) $ (20,033) $ (2,172,825) GONE-Benefit/Salary $ -
GONE-Service $ -
GONE-Unknown $ (1,660,661) $ (1,660,661)
Subtotal $ (768,172) $ 1,784,153 $ 1,154,959 $ 272,649 $ 2,386,966 $ 4,830,555 City of San Leandro Miscellaneous and Safety Plans
17 CalPERS Current Amortization Policy
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
Driver
Gain/Loss Source
(Gain)/Loss Assumption/Method
Change Benefit Change Golden Handshake
City of San Leandro Miscellaneous and Safety Plans
Note the 5-year ramping
up period
Significant Events Since the June 30, 2023 Valuation Date • Preliminary investment return for FY23/24 is 9.5% compared to
6.2% (5.8% published) in FY22/23.
• FY23/24 return more than the expected of 6.80% by 2.7%, will reduce UAL balances in the 2024 valuations.
• Asset Liability Management study on economic assumptions and demographic assumptions study are expected to be completed by November of 2025 which may affect discount rate.
• 2025 Experience Study will apply to June 30, 2025 valuations. 18 City of San Leandro Miscellaneous and Safety Plans
• Projections of Unfunded Accrued
Liability and Funded Status
19 City of San Leandro Miscellaneous and Safety Plans
Projections of June 30, 2024 Unfunded Accrued Liability • Investment return of 9.5% in FY 23/24 projected to
decrease UAL balances slightly (by $12.5M) as of June
30, 2024 and decrease the required employer
contributions for fiscal years beginning FY 26/27.
20 City of San Leandro Miscellaneous and Safety Plans
Projections of June 30, 2024 Unfunded Accrued
Liability ($mil)
21 City of San Leandro Miscellaneous and Safety Plans
Plan Name
Rate
Plan
Projected
6/30/2024 UAL
Balance Before
Investment
Gain/Loss
Increase in UAL
balance Due to
FY 23-24 Inv.
Gain
Projected
6/30/2024 UAL
Balance after
Investment Gain
Projected
06/30/2024
Funded Ratio%
Miscellaneous 37 $122.8 ($6.3) $116.5 68.3%
Safety (Pooled) 38 127.3 (6.0) 121.3 66.5%
PEPRA Safety 25027 1.0 (0.2) 0.8 90.2%
Total $251.1 ($12.5) $238.6
Projections of June 30, 2024 Unfunded Accrued Liability (continued)
22 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
280.0 Millions
Amortization of UAL Balances
(Safety & Misc.)
Original UAL Balances
Projected UAL Balances
Projected UAL balances includes FY 23/24
investment gain
Projected to be fully
amortized about 2047
Projections of Amortization of UAL Payments
23 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
Total Expected Payments
of $421.1M over 24 years
from 23-24
Projections of Amortization of UAL Payments after
a Fresh Start Option
24 City of San Leandro Miscellaneous and Safety Plan
• Fresh Start of all amortization bases over a
period of 15 years beginning June 30, 2025
• Provide interest savings of $16.4M.
City of San Leandro – Fresh Start as of June 30, 2025
Unfunded Accrued Liability ($mil)
25 City of San Leandro Miscellaneous and Safety Plans
Plan Name
Rate
Plan
Projected
6/30/2025 UAL
Balance
Fresh Start
Amortization
Period
Fresh Start
Annual
Payment
Total
Projected
Interest
Savings (over
the FS period)
Miscellaneous 37 $114.0 15 $12.7 $9.6
Safety (Pooled) 38 119.5 15 13.2 6.6
PEPRA Safety 25027 0.84 15 0.11 0.2
Total $234.3 $26.0 $16.4
Total UAL payments reduced from $421.1M to $404.8M
Projections of 06/30/2024 Unfunded Accrued Liability
(after Fresh Start as of June 30, 2025)
26 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
280.0 Millions
Amortization of UAL Balances
15 year Fresh Start (Safety & Misc.)
Original UAL Balances
Projected UAL Balances
At least five
years earlier
Level UAL payments
of $24.4M beginning
FY 26-27
City of San Leandro - Projections of Amortization
Payments (after Fresh Start as of June 30, 2025)
27 City of San Leandro Miscellaneous and Safety Plans
-
2 4
6 8
10 12
14 16
18 20
22 24
26 28 Millions
Amortization Payments
15 year Fresh Start (Safety & Misc.)
Original Scheduled
Payments
Projected Payments
Add’l
$4.5M
$16.4M in interest savings
Total Expected Payments
of $404.8M over 24 years
from 23-24
Tools Available to Manage UAL and Payments
28 City of San Leandro Miscellaneous and Safety Plan
• Pension Outlook Online Tool
• Managing Employer Contributions Workbook
(Excel - interactive)
Pension Outlook Tool
• Resides on CalPERS website
• Available for anyone to use
• Updated annually with new valuation results (September) • Projects funded status and employer contribution requirements • User can select plan(s) and various assumptions for future experience
29 City of San Leandro Miscellaneous and Safety Plan
Pension Outlook Tool – Populated With 6/30/23 Valuation Results
30 City of San Leandro Miscellaneous and Safety Plan
Appendix
31 City of San Leandro Miscellaneous and Safety Plan
• Other Funding Alternatives
• Your Peers Funded ratios
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.
32 City of San Leandro Miscellaneous and Safety Plans
Other Funding Alternatives
33 City of San Leandro Miscellaneous and Safety Plans
Your Peers
34 City of San Leandro Miscellaneous and Safety Plans
Bay Area Cities Funded Status as of June 30, 2023
https://www.google.com/maps/d/u/0/edit?mid=1MxQaXF-djSj1JzGw8Wb5X4VbOTqznMA&usp=sharing
36 City of San Leandro
January 2025
Discussions / Q&A
City of San Leandro Miscellaneous and Safety Plans