The City’s unfunded liability is approximately $56.6 million. (latest valuation 6/30/18)
The most recent valuations show the unfunded liabilities for our miscellaneous plan paid off by June 30, 2043 and the safety plan payoff is June 30, 2045. The City makes additional payments of at least $100,000 annually to CalPERS to pay down the unfunded liability sooner. Since 2010, the City Council has authorized over $2.8 million in additional payments to reduce its unfunded liability. These payments have been in addition to the City’s required annual pension contributions.
In 2012, the City adopted a tiered pension system with different pension contributions and retirement formulas based on hire date. The City has a plan for miscellaneous employees and another plan for safety employees. Miscellaneous employees pay 8% towards their retirement pan (maximum amount set for employee contributions set by PERS) and safety employees pay 9% (maximum amount of employee contribution set by PERS is 12%).
Termination of the City’s contract with CalPERS would require the payment of a termination fee to guarantee the payment of pension obligations that have already accrued. This fee would be several times the current unfunded pension liability.($56.6 million)