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THE CITY OF 16 <br /> �!. <br /> t;.7; <br /> CITY COUNCIL AGENDA REPORT <br /> pL£ASANTONo <br /> December 19, 2017 <br /> Finance <br /> TITLE: PRESENTATION AND DISCUSSION OF THE CITY'S UNFUNDED <br /> PENSION LIABILITIES <br /> SUMMARY <br /> The financial collapse in 2008 caused CaIPERS to lose 27% of their investment pool <br /> assets. Despite California's strong recovery from the Great Recession, CaIPERS' <br /> returns since 2008 have not trended with that recovery. In addition, the CaIPERS Board <br /> of Directors recently adopted policies to lower the assumed rate of return on assets <br /> (Discount Rate), revise mortality actuarial assumptions, and implement rate smoothing <br /> policies. All of these factors combined will result in a projected increase in pension costs <br /> for California cities. <br /> Currently, City's CaIPERS unfunded liability stands at approximately $160 million. The <br /> City's unfunded pension liability and annual contributions are expected to continue to <br /> grow over the next 14 years due to the factors described above. To inform the City <br /> Council on the City's unfunded pension liabilities, the City's Actuary, Mr. John Bartel will <br /> make a presentation and facilitate a discussion on the City's projected impacts, the <br /> associated budget vulnerability, and outline options to address this matter. <br /> RECOMMENDATION <br /> Receive and discuss Mr. Bartel's presentation on the City's unfunded pension liabilities <br /> and direct the Council Audit/Finance Committee to work with staff on a recommended <br /> strategy to address the City's short- and long-term financial obligations. <br /> FINANCIAL STATEMENT <br /> There is no fiscal impact associated with tonight's presentation and discussion. Staff <br /> will return to the City Council in early 2018 with a recommended strategy to address the <br /> City's short- and long-term financial obligations. <br />