Town staff briefed the finance committee on CalPERS’ asset‑liability management (ALM) review and its potential implications for the Town’s pension costs.

Robert, Town staff, summarized the 2025 ALM proposal: CalPERS is recommending a shift to a total‑portfolio approach with a reference portfolio near a 75/25 equity‑to‑bond mix and an active risk limit that would permit tactical positioning within 400 basis points of the benchmark. Robert told the committee the ALM review recommends keeping the discount rate at 6.8% for the near term.

"They're going to keep it at 6.8%," Robert said, describing the board's current recommendation. He explained the ALM changes are intended primarily as a governance and risk‑management refinement rather than an immediate change to the discount rate.

Committee members asked whether the total‑portfolio approach would be a "black box" that reduced employers’ ability to assess risk. Staff said the update was informational and emphasized CalPERS’ published sensitivity analyses showing that even a 1‑percentage‑point shift in discount rate materially changes employer liabilities. Robert said the plan’s pooled funded status was reported at roughly 79% in the recent evaluation and that Town contributions in recent years (a $5 million payment in 2021 and a $3 million payment more recently) have reduced the Town’s unfunded actuarial liability (UAL) and amortization expense.

Robert noted the ALM timeline: policy updates and implementation steps would continue through the next year, with some changes becoming effective in a future July and affecting valuation/rating cycles (staff flagged the earliest material effects on employer valuations in 2027–28 under the current schedule).

Members agreed to monitor CalPERS’ formal board actions and to consider the Plan’s published sensitivity analyses when setting multi‑year budget assumptions; no formal changes to the Town’s pension funding policy were adopted at the meeting.