Reso 2013-029 - Laserfiche WebLink

Home

City of San Leandro Notes to Basic Financial Statements For the year ended June 30, 2012 85 NOTE 14 - EMPLOYEE RETIREMENT PLANS, continued A. California Public Employees’ Retirement System, continued The safety side fund is distinct from the City’s other CalPERS plans. Side funds are retired over a fixed term with a fixed amortization schedule based on CalPERS actuarial earnings assumption rate (7.75%). The City’s plan fully amortizes the side fund by June 30 2024. The City’s actuary has measured the amortization pay off of the side fund balance to amount to $24,000,000 as of June 30 2011. In March 2012, the City issued $18,305,000 taxable Pension Obligation Bonds to save the City money with lower interest rate significantly less than the interest rate the CalPERS charges to amortize the side fund. These bonds are not tax exempt under Federal regulations. The taxable bonds true interest cost rate was 4.72% which is significantly less than the 7.75% charged by CalPERS, represents an expected savings over the life of the bonds. As of June 30, 2012, the City had deposited $24,971,910 with CalPERS to pay off the side fund. This amount has been recorded as a Prepaid PERS Contribution on the Statement of Assets. The 13- year amortization period for the City’s side fund frames the savings opportunity being considered. The new employer rate for public safety was reduced to 25.821% beginning April 2012. Annual Pension Cost - For fiscal year 2011-12 the City’s annual pension costs of $7,704,456 for CalPERS was equal to the City’s required and actual contribution. The required contribution rate for the fiscal year 2011-12 was determined as a part of the June 30, 2009, actuarial valuation which used the entry age normal actuarial cost method with the contributions determined as a percent of pay. The actuarial assumptions included (a) 7.50% investment rate of return (net of administrative expenses); (b) projected salar y increases that range from 3.30% to 14.20% for miscellaneous members, and from 3.30% to 14.20% for safety members; (c) an inflation component of 2.75%, and (d) 3% per year cost-of-living adjustments for retirees. The actuarial values of the Miscellaneous and Safety Plans’ assets were determined using a technique that smoothes the effect of short-term volatility in the market value of investments over a three-year period. CalPERS unfunded actuarial accrued liability is being amortized at a fixed percentage of projected payroll. The remaining amortization period at June 30, 2012 was 17 years. Annual Percentage Pension Cost of APC Fiscal Year (APC)Contributed 6/30/2010 4,254,064$ 100% 6/30/2011 4,162,075 100% 6/30/2012 4,106,138 100% Annual Percentage Pension Cost of APC Fiscal Year (APC)Contributed 6/30/2010 3,085,779$ 100% 6/30/2011 2,790,203 100% 6/30/2012 3,598,318 100% Three-Year Information for City of San Leandro Safety Plan Three-Year Information for City of San Leandro Miscellaneous Plan