Albany subcommittee hears pension-funding briefing; UAL projected to peak around $5.1M annual payment

The Audit and Fiscal Sustainability Subcommittee on Oct. 27 received an extended briefing from Finance Director Bridal Schwartz on the city's pension costs, the CalPERS unfunded actuarial liability (UAL) and strategies available to manage those costs.

Schwartz summarized how pension costs are composed of normal costs (a percentage of payroll shared between employees and the employer) and the unfunded actuarial liability, which represents the portion of projected future pension obligations not funded by existing plan assets. She explained that CalPERS amortizes UAL changes over a 20-year period with a five-year ramp, and that the discount rate (CalPERS' assumed investment return) materially affects required employer payments.

Schwartz told the committee that, as of June 30, 2023, the city's UAL was about $45 million and that the city's minimum annual UAL payment had risen over recent years from roughly $1.5 million to about $3.3 million; under current estimates CalPERS'…