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CITY OF SAN LEANDRO NOTES TO BASIC FINANCIAL STATEMENTS For The Year Ended June 30, 2024 NOTE 15 – PENSIONS PLAN (Continued) Contributions – Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on July 1 following notice of a change in the rate. Funding contributions for both Plans are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. For the year ended June 30, 2024, the contributions recognized as part of pension expense for the Plan were as follows: Miscellaneous Safety Total Contributions - employer 11,660,763$ 10,523,532$ 22,184,295$ B. Information Common to the Miscellaneous and Safety Plans The City’s net pension liability for each Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of each of the Plan is measured as of June 30, 2023, using an annual actuarial valuation as of June 30, 2022 rolled forward to June 30, 2023 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is shown below. Actuarial Assumptions – The total pension liabilities in the June 30, 2023 measurement date were determined using the following actuarial assumptions: All Plans Valuation Date June 30, 2022 Measurement Date June 30, 2023 Actuarial Cost Method Entry-Age Normal Cost Method Actuarial Assumptions: Discount Rate 6.90% Inflation 2.30% Payroll Growth 2.80% Projected Salary Increase (1) Investment Rate of Return 6.90% (2) Mortality Derived using CalPERS Membership Data for all Funds (3) Post Retirement Benefit Increase The lesser of COLA or 2.30% until Purchasing Power Protection Allowance Floor on purchasing power applies, 2.30% thereafter (1) Depending on age, service and type of employment. (2) Net of pension plan investment expenses, includes inflation. (3) The mortality table used was developed based on CalPERS' specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study for the period from 2001 to 2019. Pre-retirement and post-retirement mortality rates include generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the 2021 Cal PERS and review of Actuarial Assumptions report from November 2021 that can be found on the CalPERS website. 81