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Los Gatos reviews CalPERS actuarial valuation, schedules joint study session on transferring funds
Summary
At its Sept. 2 meeting, the Los Gatos Town Pension and OPEB Trust Oversight Committee received CalPERS actuarial valuation reports showing modest funded-ratio increases, heard staff estimates of next year’s employer contribution, and agreed to a joint finance-commission study session and later council consideration on whether to move funds to CalPERS; no action was taken.
The Los Gatos Town Pension and OPEB Trust Oversight Committee on Sept. 2 received CalPERS actuarial valuation reports as of June 30, 2024, that show modest increases in funded ratios for the town’s retirement plans and list next year’s employer contribution obligation.
Finance Director Gitangwari presented the two CalPERS valuation reports — for the miscellaneous plan and the safety plan — saying they determine the minimum required contribution and provide projections and risk analysis. Gitangwari said the miscellaneous plan’s funded ratio rose to about 77.2% from 75.3% year over year, and the safety plan rose to about 70.3% from 68.4%.
"The assumed long term investment return is 6.8%," Gitangwari said, noting that a 1 percentage-point reduction in the discount rate can change the funded-ratio by roughly 10 percentage points. She summarized plan maturity, saying about 64% of the miscellaneous plan’s liabilities and 75% of the safety plan’s liabilities are for retirees rather than active members. Gitangwari also told the committee staff holds roughly $3,000,000 in the pension trust and over $30,000,000 in the OPEB trust.
The report lists the town’s next-year employer contribution as approximately $6.7 million (reported in the presentation as "6 point, $7,000,000"). Gitangwari said the town typically pays the lump-sum employer contribution rather than monthly to avoid interest costs and noted the report contains multiple sensitivity analyses tied to investment returns and inflation.
Mayor Hootis asked whether the finance commission normally sees the report before council. Staff said timing and availability created a scheduling issue: if taken first to the finance commission, the council would likely see it in December. Staff and council agreed instead to schedule a joint study session with the finance commission and an outside consultant in October, with council action most likely at the first meeting in November to consider the commission’s recommendation about moving funds currently held into CalPERS.
Gitangwari emphasized the report was provided for receipt — there was no formal action on the valuation at the meeting. Council member Badami thanked staff and Gitangwari for their work on the presentation.
Next steps: staff will pursue a joint finance-commission/council study session with the consultant in October (tentative) and return a recommendation to the council for possible action in early November.
