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47 Pension Expense. The City’s total pension expense for the Plans for fiscal years 2014-15, 2015-16 and 2016-17 was as follows: Miscellaneous and Safety Plans Fiscal Year Total Pension Expense 2014-15 $2,169,095 2015-16 4,707,418 2016-17 8,187,300 Source: City of San Leandro Comprehensive Annual Financial Report for fiscal years ended June 30, 2015, 2016 and 2017. Statement No. 68, Accounting and Financial Reporting for Pensions, promulgated by the Governmental Accounting Standards Board, revises and establishes new financial reporting requirements for most state and local governments that provide their employees with pension benefits. Statement 68 replaces the requirements of Statement No. 27, Accounting for Pensions by State and Local Governmental Employers and Statement No. 50, Pension Disclosures, as they relate to governments that provide pensions through pension plans administered as trusts or similar arrangements that meet certain criteria. Among other things, Statement 68 requires governments providing defined benefit pensions to recognize their long-term obligation for pension benefits as a liability for the first time, and to more comprehensively and comparably measure the annual costs of pension benefits. Statement 68 took effect for governments (including the City) in Fiscal Years beginning after June 15, 2014 (that is, for fiscal years ended June 30, 2015 or later). The City’s total pension expense for the Plans for Fiscal Years 2014-15 through 2017-18 as shown in the previous table was calculated in accordance with Statement No. 68. Recent CalPERS Actions. On November 18, 2015, the CalPERS’ Board of Administration (the “Board of Administration”) adopted a funding risk mitigation policy intended to incrementally lower its discount rate – its assumed rate of investment return – in years of good investment returns, help pay down the pension fund's unfunded liability, and provide greater predictability and less volatility in contribution rates for employers. The policy establishes a mechanism to reduce the discount rate by a minimum of 0.05 percentage points to a maximum of 0.25 percentage points in years when investment returns outperform the existing discount rate, currently 7.5%, by at least four percentage points. CalPERS staff modeling anticipates the policy will result in a lowering of the discount rate to 6.5% in about 21 years, improve funding levels gradually over time and cut risk in the pension system by lowering the volatility of investment returns. More information about the funding risk mitigation policy can be accessed through CalPERS’ web site at the following website address: https://www.calpers.ca.gov/page/newsroom/calpers-news/2015/adopts-funding-risk-mitigation-policy. The reference to this Internet website is provided for reference and convenience only. The information contained within the website may not be current, has not been reviewed by the City and is not incorporated in this Official Statement by reference.