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ATTACHMENT 1 Section 115 Pension Trust Fund — Policy Guidelines Policy Objective:: Maintain a balance in the Section 115 Pension Trust Fund(Trust Fund)such that• Formatted:Numbered+Level:1+Numbering Style: there are available monies to help the City make pension contributions when 1,2,3,...+Start at:1+Alignment Left+Aligned at: necessary. To help achieve that objective, the City may withdraw from the Trust 0.25"+Indent at 0.5" Fund under the following conditions: • • Formatted:Font(Default)Arial,12 pt Formatted:Indent:Left: 0.5",Numbered+Level:2+ a. Annual CaIPERS employer pension contribution rate increase(in dollars) is • Numbering Style:a,b,c,...+Start at 1+Alignment greater than the growth rate of the City's General Fund. Left+Aligned at 0.75"+Indent at: 1" ,Example: the pension contribution increases by$2 million from the • Formatted:Indent:Left 0.5" previous year while General Fund growth is$1.5 million. Formatted:Font(Default)Arial,12 pt Formatted:List Paragraph,Bulleted+Level:1+ Aligned at 0.75"+Indent at: 1" Formatted:Indent Left: 0.5", No bullets or b. The General Fund has a structural deficit that needs to be addressed(i.e. Formatted:Font(Default)Arial,12 pt non-discretionary expenditures exceed revenues). - - - - Formatted:Indent Left: 0.69" Formatted:Indent Left: 0.5" c. General Fund reserves have been used and need to be replenished in order • Formatted:Indent Left: 0.5" to maintain a reserve equal to 20%of General Fund expenditures. Paying off specific pension liabilities that will result in interest savings greater • Formatted:Indent Left: 0.5" than interest earnings on the Trust Fund. • • a Formatted:Font:(Default)Arial,12 pt Draw from the initial$6.7 million investment'' plus investment earnings in Formatted:Indent:Left: 0.5", No bullets or the Trust Fund's Conservative Investment Portfolio first, . - --_.---- .,Formatted:Indent:Left: 0.5" 2 Increase the City's annual investment earnings while preserving the principal. To •- Formatted:Font:(Default)Arial,12 pt achieve this objective,the City's Trust Fund—Conservative Investment Portfolio Formatted:Numbered+Level:1+Numbering Style: is an authorized investment instrument. City staff may allocate up to the City's 1,z,3,...+Start at:1+Alignment:Left+Aligned at: 0.25"+Indent at: 0.5" total annual required CaIPERS payment2 to the Conservative Investment Portfolio and may annually withdraw up to the total annual required CaIPERS payment from the Conservative Investment Portfolio to make the City's annual CaIPERS payment. • Formatted:Font(Default)Arial The City made the initial$6.7 million invested into the Trust Fund's Conservative Investment Portfolio in Formatted Font(Default)Arial June 2018. • Beyond the initial$6 7 million invested into the Trust Fund's Conservative Investment Portfolio, -.f Formatted:Font(Default)Arial