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Los Gatos officials weigh using $3.1 million to cut CalPERS bill or keeping it in 115 trust
Summary
Town officials and the finance commission heard advice from outside fiduciary Mark Shuster on whether to transfer a $3.1 million pension balance to CalPERS or retain it in the town’s 115 trust and pursue alternative investment strategies. Presenters highlighted fee savings and liquidity trade‑offs; staff said an asset‑liability study and RFP decisions are pending.
Mayor Hootis convened a joint study session of the Town Council and the finance commission to review options for the Town of Los Gatos’ investment buckets, including a staff recommendation and outside analysis on whether to transfer a $3.1 million balance to CalPERS or retain it in the town’s 115 trust.
The discussion centered on trade‑offs between using cash to reduce a growing CalPERS amortization charge (the Town’s actuarial amortization is reported at about a 6.8% effective rate) and retaining flexibility by keeping funds invested under a 115 trust or other strategies that could, with higher flexibility and lower fees, potentially earn more over time.
Mark Shuster, the outside fiduciary advising the Town, opened the presentation by stressing local fiduciary duties: “it says that you're the fiduciary of every dollar that you have in this city,” and said his team’s review of the Town’s 457(b) platform showed embedded fees that, compounded over 30 years, could cost participants…
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