..Title
Adopt a Resolution to Accept the (CY) 2026 Q2 OPEB Trust and Pension Trust Investment Report through June 30, 2026
..Staffreport
SUMMARY
Investment Performance Review of Section 115 OPEB (Other Post-Employment Benefits) Trust and Pension Trust Investment Report for the Quarter Ended June 30, 2026.
RECOMMENDATIONS
Staff recommend the City Council receive and accept the presentation of the Section 115 OPEB Trust and Pension Trust Investment Report for the quarter ended June 30, 2026.
BACKGROUND
OPEB Trust
In 2008-2009, the City established a Section 115 OPEB Trust with Public Agency Retirement Services (PARS). The Trust’s primary purpose is to accumulate resources to generate investment income for funding the City’s future OPEB obligations. The trust account was set up with an initial contribution of $500,000, and the City has been proactively funding the Trust to address future liabilities. Since it was established, the City Council has authorized various contributions into the trust. As of June 30, 2026, assets in the OPEB Trust totaled $25,637,782 including investment earnings. The 3- month investment return is 4.72%, and the inception-to-date investment return is 5.25%.
Due to a change in account status, inception of the fund is measured with a start date of August 1, 2015.
Pension Trust
In 2021, the City Council established the Section 115 Pension Trust with PARS. The goal is to set aside and accumulate investment earnings to be strategically used to offset unfunded CalPERS pension liabilities. At the end of June 2026, assets in the Pension Trust totaled $39,701,204, including contributions since the inception of the fund in September 2021, and investment earnings. The 3-month investment return is
7.24%, and the inception-to-date investment return is 5.49%.
Analysis
QUARTERLY INVESTMENT REPORT
PFM Asset Management has prepared the quarterly investment report for the OPEB Trust and Pension Trust for the period ending June 30, 2026, summarizing investment performance. The asset allocations for both the OPEB Trust and the Pension Trust follow City Council-approved investment policies.
Assets in the OPEB Trust portfolio increased from $24,503,177 in the prior quarter to $25,637,782. Assets in the Pension Trust totaled $37,053,387 at the end of the prior quarter and are now $39,701,204. Investment fluctuations are expected due to changing market conditions. A summary of investment returns is outlined below. Please refer to the attached investment report for details.
Trust 1 Year 3 Years 5 Years 7 Years Inception-to-Date
OPEB 9.69% 8.93% 3.61% 5.25% 5.25%
Pension 13.44% 11.67% N/A N/A 5.49%
Committee Review and Actions
The City Council Finance Committee reviewed and recommended to the full Council acceptance of the Section 115 OPEB Trust and Pension Trust Investment Report on July 22, 2026.
Financial Impacts
There is no fiscal impact as this report is informational only.
ATTACHMENTS:
• A: Draft Resolution to Accept the (CY) 2026 Q2 OPEB Trust and Pension Trust Investment Report CY 2026 Q2 OPEB Trust and Pension Trust Investment Report through June 30, 2026
o Ex A1: OPEB and Pension Trusts Investment Report CY 2026 Q2 PREPARED BY: Felicia Silva, Assistant Finance Director