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Administrative Services Finance Unfunded Liabilities Explained - The City and CalPERS
The City and CalPERS - Unfunded Liabilities

Over the past several years, the City has implemented a number of measures that will go a long way toward reducing future unfunded liabilities, including:

  • Two-tier, lower cost pension system for new public safety employees;
  • Change from a “defined benefit” to a more predictable “defined contribution” system for health benefits for all new employees;
  • Alternative Retiree Medical Program (ARMP) for current employees;
  • Additional contributions from available funds to further reduce unfunded liabilities;
  • Public Employee Pension Reduction Act (PEPRA), adopted by the State of California in 2012, which mandated a lower cost pension plan for all public employees new to CalPERS after January 1, 2013.
  • The PERS actuarial report for June 30, 2013 (latest report available) shows that the City had an unfunded liability, which is the future amount owed to fully fund employee pensions through the PERS system, of $191.7 million. This is a decrease in the City’s unfunded liability of $21.2 million from the previous year’s report. The percentage of the liability that was funded by assets on hand at that time increased from 67.2% in 2012 to 71.4% in 2013. This information is summarized in the chart below, which also breaks out the safety employee’s portion of the pension unfunded liability from the non-safety (“Misc”) employees portion.

 

Unfunded Pension Liabilities

As of June 30, 3013

(millions) 

Unfunded Liabilities August 2015

 

 
Information on CalPERS financial performance can be found in CalPERS Facts.