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Negative CalPERS return raises cityunfunded liability; staff recommends pausing discretionary payment
Summary
Staff reported CalPERS returned -6.1% in FY22, raising the city's combined unfunded pension liability from about $4.3M to roughly $8.3M and lowering the funded ratio; staff outlined options including a $2M discretionary payment to CalPERS (ADP) that could save interest but recommended revisiting the decision in January given market volatility.
City staff told the Financial Review Committee on Oct. 25 that a negative CalPERS return in fiscal year 2022 has materially increased the city’s combined unfunded pension liability and lowered the funded ratio.
Staff said the FY21 CalPERS return of 21.3% previously improved the funded ratio to about 88.2% with a $4.3 million unfunded liability. With CalPERS’ reported negative 6.1% return for FY22, staff used the CalPERS pension outlook tool to estimate the city’s combined…
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