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Council adopts revised PSPRS funding policy after staff cites actuarial surplus
Summary
The council adopted R26‑30 to revise the town’s PSPRS pension funding policy after staff reported an actuarial surplus and proposed retaining some excess payments; vote was 7–0.
The Oro Valley Town Council unanimously adopted a revised pension funding policy June 3 that trims planned excess contributions while keeping the town on track to remain fully funded.
Chief Financial Officer Stephen Gephardt presented actuarial results showing an actuarial value of assets of $91.2 million versus an actuarial accrued liability of $90.27 million as of June 30, 2025 — an actuarial surplus of roughly $903,000. Gephardt said the plan’s market performance and the town’s prior issuance of pension obligation bonds have meaningfully improved the funding position.
Actuaries recommended reducing the employer contribution rate from 12.61% to 10.47% for the coming year. Gephardt said the town would not immediately take the full reduction; the proposed policy retains excess contributions equal to the difference (about 2.14% or approximately $214,000) to preserve intergenerational equity and cushion the plan against volatility. "I really don't know. We're going to play this out, see where we are," Gephardt said, noting staff will review results when the new actuarial reports are released.
Councilmembers asked about the pension obligation bond, liability composition and projected savings since the bond issuance; Gephardt estimated roughly $856,000 in annual savings over the first four years (about $3.4 million total) net of debt service. The council approved Resolution R26‑30 on a 7–0 vote.
