Regular Agenda Item 14AAttachment 1
Pension Subcommittee Update
September 4, 2013
Bill Kampe, MayorRudy Fischer, CouncilmemberCasey Lucius, Councilmember
The subcommittee has reviewed the action plan elements as endorsed by council and set about gaining a deeper understanding of our situation with pensions. A number of early discoveries willhelp guide us in our continuing efforts.We have reviewed the actuarial reports for the 3%@50 risk pool overall and for a number of citiesin our pool. There are over 200 small cities combined into this pool to manage the statisticalvariations that a small city may experience. We have also completed a comparative look at othercities in Monterey County, plus Hollister. We find the public safety unions participate in 4 different plans, at varying costs to the employer. A few key observations:1.
Pacific Grove is comparable in our payments to other cities, and better off than many onseveral comparative measures. Charts follow.2.
PG pays only slightly more on an annual basis than comparable cities on the 2@50 plan.3.
The effect of shifting to 3@50 accounts for less than a third of the $19M in our pensionobligation bond.Our first reading of the actuarial reports is counter to what we have presumed over the past severalyears:
The impact of 3@50 on our overall CalPERS contributions is much less thancommonly assumed. Pensions are still very much an issue, but not simply becauseof 3@50.
We need to understand and focus on the whole of our pension exposures, not just the3@50 portion. We are committed to this course.
This report includes the following topics:
Comparison of status in selected cities for selected public safety plans
Next steps planned by the subcommittee
Questions needing answers
Needed changes in state law