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Newport Beach council backs $5 million pilot to seed a Section 115 pension trust
Summary
After a study session on CalPERS funding and alternative investment structures, Newport Beach council signaled unanimous support in a straw vote to transfer $5 million of OPEB surplus into a Section 115 pension trust as a limited pilot while continuing aggressive annual pay-downs to CalPERS.
Newport Beach — The City Council on Jan. 27 directed staff to move forward with a limited pilot to place $5 million of surplus funds into a Section 115 pension trust, following a study session that examined whether surplus contributions should continue as additional discretionary payments to CalPERS or be placed in a locally controlled investment trust.
Finance Director Jason Aleman opened the study session with an actuarial snapshot of the city's CalPERS exposure, noting the city's most recent valuation showed a 75.9% funded status as of June 30, 2024, and that projected improvements could raise funded status to 82.4% with an estimated pension liability of $235,000,000. "Today, we'll discuss investment options for pension surplus funds that exceed the required minimum CalPERS contributions," Aleman said.
City staff and outside consultants explained the…
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