Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Compton workshop weighs using reserves to pay down CalPERS unfunded pension liability; staff says levy could fall about 20%
Summary
At a May workshop, a city consultant laid out scenarios to pay down roughly $75 million of the miscellaneous CalPERS unfunded liability from reserves; staff said that prepaying could save an estimated $42.7 million in interest and reduce the annual pension levy by about $7.2 million (roughly 20%), while residents urged further analysis and no payment decision was made.
Compton City Council members heard a presentation at a workshop about using reserve funds to pay down the city's CalPERS unfunded pension liability but did not vote to make any payment.
Dan Matu Chevich, a consultant engaged to model the liability, told the council that CalPERS sends a supplemental bill when actuarial assumptions and investment returns fall short, and that the system's assumed return (6.8%) is what makes those supplemental amounts grow. "In total, the unfunded component that CalPERS is sending you an extra bill for is $152 million," Chevich said, describing scenarios in which paying down principal now reduces long-term interest costs.
Staff outlined a targeted approach focused on the miscellaneous plan, noting a principal figure of about $75.6 million and a staff scenario of paying roughly 90% of that balance. Under the staff scenario, Chevich said prepaying about $65 million to $68 million (depending on timing) would yield roughly…
Already have an account? Log in
Subscribe to keep reading
Unlock the rest of this article — and every article on Citizen Portal.
- Unlimited articles
- AI-powered breakdowns of topics, speakers, decisions, and budgets
- Instant alerts when your location has a new meeting
- Follow topics and more locations
- 1,000 AI Insights / month, plus AI Chat
