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Committee reviews CalPERS actuarial reports; staff: $3 million ADP lowered next year—s pension costs
Summary
Finance committee members reviewed the town—s CalPERS actuarial valuations and staff briefed the group that a $3 million additional discretionary payment (ADP) made in June will reduce required employer payments next year, though committee members expressed ongoing concern about CalPERS assumptions and long‑term funding dynamics.
The Finance Committee reviewed actuarial reports received from CalPERS for plans with valuation dates of June 30, 2024, and staff reported that the town made a $3,000,000 additional discretionary payment (ADP) toward the public‑safety unfunded actuarial liability in June 2025.
Robert, the town staff member who presented the item, told the committee the ADP was paid in June 2025 and therefore is not reflected in the 06/30/2024 CalPERS valuation documents the committee was reviewing. He said the $3 million payment reduced the town—s public‑safety unfunded actuarial liability (UAL) that otherwise would have been shown in next year—s required contribution tables. Robert summarized staff—s calculations showing a reduction in the public‑safety UAL payment from about $1,196,000 (as shown in the valuation) to roughly $930,000 after the ADP, producing an estimated immediate budgetary savings of about $265,000 for the 2025–26 fiscal year. Staff said the ADP will also trim projected payments in later years and that the town will see additional effect from CalPERS— 24/25 preliminary investment return of 11.6% when that return is reflected in the next valuation.
The committee also heard summary figures from the CalPERS reports: staff quoted combined town liabilities and funding ratios drawn from the valuations and said the townwide combined UAL is in the low‑ to mid‑tens of millions (staff cited roughly $20.6 million combined UAL in the presentation, a modest decrease year over year). Robert noted that the CalPERS reported returns for 23/24 (9.5%) and the preliminary 24/25 returns will influence future employer rates and that the CalPERS funding‑risk mitigation policy and any discount‑rate adjustments remain key drivers of future changes.
Members asked for clarification on why payments for other plans moved when the ADP was applied to public safety. Robert explained that CalPERS offers a prepayment discount for UAL payments paid up front in July and that prepayment timing can produce year‑to‑year differences reflected in the valuation schedules.
A finance committee member raised broader concerns about CalPERS investment performance and long‑term assumption changes, noting the plan—s multi‑year return history and questioning whether different asset strategies would have materially changed local results; that member asked for more data and repeated requests for more detailed census and amortization schedules. Staff said they plan to invite a CalPERS actuary and to provide the committee with the valuation amortization schedules and more detailed underlying census data when available.
The committee also reviewed administrative details including amortization schedules and the staff recommendation to continue monitoring CalPERS updates; staff indicated they will present additional analysis and expect a CalPERS actuary to attend a future meeting.
