TO:
Honorable Mayor and Members of the City Council
THROUGH:
Mark Danaj, City Manager
FROM:
Bruce Moe, Finance Director
Henry Mitzner, Controller
Libby Bretthauer-Long, Financial Analyst
SUBJECT:Title
Presentation of Updated Pension Forecast; Options for Addressing Unfunded Pension Liabilities and Rising Pension Contributions; Establishment of a Pension Stabilization Trust Fund (Finance Director Moe).
RECEIVE REPORTS; ADOPT RESOLUTION
Line
_________________________________________________________
Recommended Action
RECOMMENDATION:
Staff recommends that the City Council receive reports on: a) updated pension forecasts from the independent actuary, and b) options available for addressing unfunded pension liabilities and rising contribution rates.
After receiving the reports, staff recommends that the City Council: a) adopt Resolution No. 17-0062 establishing a Pension Rate Stabilization Trust Fund Administered by Public Agency Retirement Services (PARS) ; b) Appoint the City Manager as the City's Plan Administrator; c) Authorize the City Manager to negotiate and execute the final documents of the Trust; d) authorize the transfer of $500,000 in budgeted General Funds to the Pension Rate Stabilization Trust Fund, and e) assign responsibility and authority to the Finance Subcommittee to develop an investment policy and guidelines, and direct investments in the trust.
EXECUTIVE SUMMARY
Due to a number of factors, including changes in actuarial assumptions and inconsistent/substandard investment returns, the City is facing rapid growth in unfunded pension liabilities and required pension contributions. In an effort to proactively address these issues, the City Council requested information on options that may be available to go beyond the minimum funding requirements for pensions. Staff has identified such options that include: 1) establishing a Pension Rate Stabilization Trust, 2) accelerating amortization of existing unfunded liabilities, 3) paying down selec...
Click here for full text