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Laguna Woods treasurer reports strong cash position; pension plans described as "super funded"
Summary
City treasurer reported $14.35 million in total cash and investments as of Aug. 31 and staff said CalPERS valuations show the city's pension plans are currently "super funded" with no unfunded accrued liability; council received the report and voted to file it.
City Treasurer and city staff told the Laguna Woods City Council on Tuesday that the city—s cash and investment position was strong at the end of August and that recent pension management decisions have left the city—s CalPERS plans "super funded." The council voted unanimously to receive and file the treasurer—s report.
The city treasurer reported total cash and investments as of Aug. 31 at $14,352,111 and said general fund reserves increased to $4,651,600 from $3,753,700. Staff reported special revenue funds and certificates of deposit balances and provided trust fund figures for other post-employment benefits and pension liability accounts.
City Manager Chris and staff summarized an actuarial presentation on the city—s two CalPERS plans (the pre-2013 "classic" plan and the PEPRA plan for newer hires). Chris said that since May 2017 the council has approved just under $1.2 million in lump-sum payments intended to reduce unfunded liabilities and smooth future cost volatility. He told the council the actuary estimated those payments produced measurable savings.
Chris told the council the key takeaways from the most recent CalPERS valuation (as of June 30, 2024) were that the city currently has no unfunded accrued pension liabilities and that employer contribution rates will decrease slightly in the coming fiscal year (staff cited a change from about 13.08% to 13.06% for the classic plan and from 8.24% to 8.21% for the PEPRA plan). Chris said CalPERS reported a preliminary net investment return of about 11.6% for the last fiscal year versus a 6.8% discount-rate assumption, which contributed positively to funding status.
Staff also said the city expects to reach its initial pension pre-funding trust goal of $670,000 by December if current revenue performance holds; the council adopted a policy that directs a percentage of year-end revenues over expenditures to that fund. The city manager and treasurer made the financial reports and answered council questions about the history and frequency of the lump-sum payments.
A council motion to receive and file the treasurer—s report carried by unanimous vote of members present.
