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8.A. - Page 21 of 72 As previously mentioned, the Preliminary Ten -Year Forecast includes a strategy to make annual additional payments to CalPERS of $400,000, and annual contributions of $1.1 million to the City's Section 115 pension trust account (through FY 2022-23), which can be used to fund the City's annual payments in future years when revenues are expected to be insufficient to provide for additional annual payments directly to CalPERS. The Preliminary Ten -Year Forecast also includes the additional annual payments directly to CaIPERS (in the chart above) to fully fund the pension plans within 18 years. Other Post -employment Benefit (OPEB) Liabilities — Retiree Health A second category of retirement -related benefits which impact the City's finances is the City's retiree health program. The City currently provides eligible retirees with reimbursement of their medical insurance premiums, subject to their collective bargaining agreement, which includes a maximum reimbursement amount. In 2010, the City established a Section 115 OPEB trust account through the California Employer's Retiree Benefits Trust (CERBT) program to fund retiree health benefits. As of September 30, 2019, there was a balance of $39.9 million in the trust account. As of the most recent actuarial report, June 30, 2019, the City's unfunded liability for these benefits was $49.5 million. The Preliminary Ten -Year Forecast includes anticipated additional General Fund contributions to the CERBT Section 115 OPEB trust account of $300,000 annually in order to build resources towards paying off the unfunded retiree health liability in future years. This is in addition to $600,000 of FY 2018-19 operating balance that was contributed in January 2020. Industrial Disability Retirements Public safety employees who are injured on the job and are thus unable to perform essential job duties may apply for and receive an industrial disability retirement (IDR). The City currently reimburses safety employees who retire on an IDR the amount of $1,859 per month for health plan premiums, which includes medical coverage for the retiree and their family. The family medical benefit is not offered to safety employees who retire on a service retirement related to the years they have worked; those retirees receive health plan premium reimbursement for the retiree only. The City must pay 15 percent of payroll for sworn Police employees, and 10 percent of payroll for sworn Fire employees, to fund retiree health benefits. Over the last five years, 74 percent of Police Department retirees have retired on an IDR and 53 percent of Fire Department retirees have retired on an IDR. Between 2011 and 2019, Police IDR rates are 215 percent higher than CaIPERS actuarial retiree health projections and Fire IDR rates are 126 percent higher than CaIPERS actuarial retiree health projections. The high IDR rates greatly impact the City's unfunded retiree health liability by increasing the City's costs. In the spring of 2019, the City and affected public safety bargaining units began working together on IDR Committees in an effort to develop alternative solutions to reduce the City's retiree health liability as related to IDRs, and the committee's efforts are still underway. Page 21 of 26 City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.org 256