5A Public Hearings 2019 0603 - Laserfiche WebLink

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MULTI-YEAR FORECAST ASSUMPTIONS – ALL FUNDS Fund is a payment to the OPEB Trust in the amount of $750,000 annually for 2019-20 through 2028-29. Retirement Plan Costs (CalPERS) Retirement rates continue to represent one of the most significant citywide budgetary pressures. The California Public Employees’ Retirement System (CalPERS) is a defined benefit pension plan funded by a combination of employee contributions that are set by statute and employer contributions that fluctuate from year to year based on an annual actuarial valuation performed by CalPERS. An outside actuary has reviewed the City’s rates and advises the City on the funded status of the plans and projects employer rates for future years. On January 1, 2013 the Public Employees’ Pension Reform Act of 2013 (PEPRA) took effect. In addition to creating new retirement formulas for newly hired members PEPRA also effectively closed all existing active risk pools to new employees. The forecast for pension costs include this new requirement. In June 2012, Governmental Accounting Standards Board (GASB) issued pronouncements for pension plan financial reporting in GASB 67 and GASB 68. The City of San Leandro complies with the new GASB 68 reporting requirements. Beginning in fiscal year 2013-14, all City staff agreed to contribute to the CalPERS employee’s portion of the pension plan. Safety plan staff fully pay the employee’s portion of 9% as of July 1, 2015 and Non-safety staff fully pay the employee’s portion of 8% as of July 1, 2015, as per the labor agreements. Additionally, Safety plan staff contributes to the employer’s portion of 1% in 2017-18, 2% in 2018-19 and 3% per year for subsequent years, with an increase in wage rates to offset this contribution. In August 2018, the City received its CalPERS employer contribution rates for fiscal years 2019-20 through 2024-25, effective July 1, 2019. Rates have increased due to prior year portfolio losses and a change in actuarial assumptions by CalPERS. The CalPERS circular updates rates based on revised discount rates. The new rates went into effect July 1, 2018. Therefore, the adopted rates for the City’s Miscellaneous plan (all non- sworn employees) increased by 8.9% in 2017-18 and the City’s Safety plan rates increased by 13.2% in 2017-18. Starting in 2019-20 the budget includes the pre-paid adjusted PERS rates applied to the classic plans for Miscellaneous and Safety, as well as the Safety PEPRA plan. The pre-paid PERS rates are used in the forecast models. 43 65