City of Pleasanton
2/11/2020 3:49:10 PM
2/11/2020 3:49:09 PM
CITY CLERK - TYPE
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THE CITY O. F 8 <br /> Rft3pLEASANTON <br /> CITY COUNCIL AGENDA REPORT <br /> February 18, 2020 <br /> Finance <br /> TITLE: APPROVE AMENDMENTS TO THE CITY'S SECTION 115 PENSION <br /> TRUST FUND POLICY GUIDELINES <br /> SUMMARY <br /> The City's CaIPERS unfunded liability is currently approximately $160 million. Based on <br /> CaIPERS Board recent policy decisions, the City's unfunded pension liability and annual <br /> pension contributions are expected to grow through FY 2029/30 and then somewhat <br /> level off through FY 2046/47 when the City's unfunded pension liability is expected to be <br /> fully funded. To help the City fund its growing pension contributions while maintaining <br /> control over its investments, in March and June of 2018 City Council (1) authorized the <br /> City's participation in a Section 115 Pension Trust Fund administered by PARS (PARS <br /> Trust), (2) adopted investment strategies, (3) allocated the initial investment, and (4) <br /> adopted policy guidelines (Section 115 Pension Trust Fund Policy Guidelines) to ensure <br /> there will be sufficient funds in the PARS Trust to help the City fund increased pension <br /> contributions until such time as the City's unfunded CaIPERS liability has been fully <br /> funded. <br /> This item proposes changes to the Section 115 Pension Trust Fund Policy Guidelines to <br /> allow City staff to allocate up to the City's total annual required CaIPERS payment to the <br /> PARS Conservative Investment Portfolio and withdraw up to the total annual required <br /> CaIPERS payment from the PARS Conservative Investment Portfolio. <br /> AUDIT/FINANCE COMMITTEE RECOMMENDATION <br /> The Audit/Finance Committee (Committee) met on January 23, 2020 to review <br /> proposed Section 115 Pension Trust Fund Policy Guidelines and recommended staff <br /> prepare an item for City Council consideration. <br /> RECOMMENDATION <br /> Staff recommends that the City Council approve the proposed amendments to the <br /> Section 115 Pension Trust Fund Policy Guidelines. <br /> FINANCIAL STATEMENT <br /> The PARS Trust Conservative Portfolio earnings were 9.96 percent between July 1, <br /> 2018 and December 31, 2019 and 8.93 percent between January 1, 2019 and <br /> December 31 , 2019. During the same timeframes, the City's investment portfolio <br /> earnings were 2.02 percent and 2.16 percent respectfully. Had the City allocated $15.3 <br />
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