HomeMy WebLinkAbout3A - PresentationCity of Palm Springs
ESTABLISHING AN ACTION PLAN TO REDUCE THE
CALPERS UNFUNDED ACCRUED LIABILITY (UAL )
AND TO ESTABLISH A POLICY GOING FORWARD TO
ANNUALLY REVIEW THE UAL
NOVEMBER 21, 2024
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City of Palm Springs
CalPERS Action Plan and UAL Policy
•Funding percentage of the Safety Plan is low compared to other plans
•Focus of the Action Plan will be to improve the Safety funding
percentage to 70% or greater, similar to Miscellaneous Plan
Description Miscellaneous Safety Total
6/30/2023 Total Estimated Liability $275,213,507 $363,720,468 $638,933,975
6/30/2023 Market Value of Assets 194,376,554 219,407,606 413,784,160
6/30/2023 Unfunded Liability $80,836,953 $144,312,862 $225,149,815
Changes in FY24 (5,042,201) (4,876,144) (9,918,345)
06/30/24 Unfunded Liability (Est)$75,794,752 $139,436,718 $215,231,470
Funded % as of 06/30/23 70.63%60.32%64.76%
Funded % as of 06/30/24 71.95%61.14%65.78%
CURRENT STATE OF CalPERS
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City of Palm Springs
CalPERS Action Plan and UAL Policy
ACTION PLAN
•At 06/30/2025, the City is projected to have $52.25 million in CalPERS Reserves
•The City recommends to pay CalPERS $29.87 million in a lump sum which immediately
reduces the unfunded liability by that amount.
•City Staff also recommend depositing the remaining $22.37 million into a Section 115
irrevocable trust that can only be used to pay CalPERS for normal costs or UAL Costs.
•Reducing the unfunded liability also results in annual budgetary savings by reducing the
annual CalPERS required payment. The reduction is estimated to be approximately
$3 million annually in the early years.
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City of Palm Springs
CalPERS Action Plan and UAL Policy
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045
COMBINED PLANS ANNUAL CalPERS PAYMENT
Annual Payment Before Annual Payment After
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City of Palm Springs
CalPERS Action Plan and UAL Policy
Description Miscellaneous Safety Total
6/30/2023 Total Estimated Liability $275,213,507 $363,720,468 $638,933,975
6/30/2023 Market Value of Assets 194,376,554 219,407,606 413,784,160
6/30/2023 Unfunded Liability $80,836,953 $144,312,862 $225,149,815
Changes in FY24 & FY25 (6,168,795) (5,525,859) (11,694,654)
06/30/24 Unfunded Liability (Est)$74,668,158 $138,787,003 $213,455,161
Total UAL Bases to Prepay (29,878,000)
06/30/25 Unfunded Liability (Est)$74,668,158 $108,909,003 $183,577,161
Funded % as of 06/30/25 72.90%70.10%71.30%
Section 115 Trust Deposit (22,372,000)
06/30/25 Unfunded Liability (Est)$161,205,161
Funded % as of 06/30/25 74.80%
CalPERS AFTER ACTION PLAN IMPLEMENTED
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City of Palm Springs
CalPERS Action Plan and UAL Policy
FUNDED STATUS AS OF JUNE 30, 2023 - COACHELLA VALLEY CITIES
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City of Palm Springs
CalPERS Action Plan and UAL Policy
Employer Name Plan Name Annual Payroll
Market Value
of Assets Accrued Liability Unfunded Liability Funded Ratio
City of Riverside Miscellaneous Plan 158,518,109 1,517,524,223 1,752,961,359 235,437,136 86.60%
City of Riverside Safety Plan 82,684,615 1,214,358,606 1,415,523,647 201,165,041 85.80%
City of Palm Springs Miscellaneous Plan 29,117,122 194,376,554 275,213,507 80,836,953 70.60%
City of Palm Springs Safety Plan 25,026,637 219,407,606 363,720,468 144,312,862 60.30%
City of Indio Miscellaneous Plan 16,164,295 88,378,466 127,666,607 39,288,141 69.20%
City of Indio Safety Plan 4,336,292 101,916,832 153,470,900 51,554,068 66.40%
City of Beaumont Miscellaneous Plan 5,936,201 36,580,352 49,015,088 12,434,736 74.60%
City of Beaumont Safety Plan 4,552,929 48,188,708 65,131,528 16,942,820 74.00%
City of Corona Miscellaneous Plan 37,370,130 405,944,864 452,809,072 46,864,208 89.70%
City of Corona Safety Fire Plan 9,244,019 201,737,290 222,519,429 20,782,139 90.70%
City of Corona Safety Police Plan 21,291,549 318,044,433 358,121,639 40,077,206 88.80%
City of Coachella City Miscellaneous Plan 2,641,844 51,270,796 56,108,924 4,838,128 91.40%
City of Coachella City Safety Plan - 15,045,749 16,415,938 1,370,189 91.70%
City of Indian Wells Miscellaneous Plan 2,567,004 37,478,359 38,031,336 552,977 98.50%
City of Rancho Mirage Miscellaneous Plan 1,280,823 55,873,396 62,090,507 6,217,111 90.00%
City of Palm Desert Miscellaneous Plan 13,475,260 119,139,091 166,500,771 47,361,680 71.60%
City of Cathedral City Miscellaneous Plan 4,194,884 65,847,408 73,579,962 7,732,554 89.50%
City of Cathedral City Safety Fire Plan 2,474,973 63,374,873 70,610,330 7,235,457 89.80%
City of Cathedral City Safety Police Plan 5,107,033 86,601,660 96,953,372 10,351,712 89.30%
City of La Quinta Miscellaneous Plan 1,912,515 54,216,782 58,124,122 3,907,340 93.30%
City of Desert Hot Springs Safety Plan 413,021 21,635,696 33,117,334 11,481,638 65.30%
City of Desert Hot Springs Miscellaneous Plan 1,043,083 12,107,479 16,764,252 4,656,773 72.20%
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City of Palm Springs
CalPERS Action Plan and UAL Policy
Unfunded Accrued Liability (UAL) Management Policy
•The past several years, between the annual payment and the set aside from Council,
the City appropriates approximately $22 million annually for the CalPERS pension.
•The future annual payment will be approximately $16 million. The remaining $6 million
will either be sent to CalPERS to pay future years liabilities, or deposited in the Section
115 trust in the years there is no liability to pay.
•In theory, the unfunded liability will be reduced each year allowing the funding percentage
to increase each year.
•The policy establishes a goal of achieving 90% funded in 15 years.