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6.B.- Page 6of10 <br />Effect on Annual Contribution <br />Rate of Return Amounts <br />0% Increases ranging from $840,000 <br />to $4.2 million annually <br />-4 Increases ranging from $1.3 <br />million to $6.6 million annually <br />-5 Increases ranging from $1.4 <br />million to $7.2 million annually <br />Effect on Total Contributions Effect on Funding <br />(over 20 years) Ratio <br />$75.8 million Decrease from <br />65.5% to 61.2% <br />$119.2 million Decrease from <br />65.5% to 58.7% <br />$130.0 million Decrease from <br />65.5% to 58.1% <br />The chart below compares the funded status of the City's pension plans - assumed rate of return of 7 <br />percent versus a projected rate of return of -4 percent. The initial drop in the funded status of the pension <br />plans would be 6.8 percent, if a negative 4 percent rate of return is realized in FY 2019-20. <br />100.0% <br />95.0% <br />90.0% <br />85.0% <br />80.0% <br />75.0% <br />70.0% <br />65.0% <br />60.0% <br />55.0% <br />Pension Plan Funded Ratio <br />(Misc. & Safety plans modeled in CalPERS Pension Outlook tool) <br />50.0% <br />2019-20 2021-22 2023-24 2025-26 2027-28 2029-30 2031-32 2033-34 2035-36 2037-38 2039-40 <br />Current Funded Status --*--Projected Funded Status <br />(- 4% rate of return) <br />The chart below displays the increase in annual required contribution amounts if a negative 4 percent <br />rate of return is realized. Higher annual contribution amounts would begin in FY 2022-23 at $1.3 million, <br />increasing to $6.6 million in FY 2026-27. This would result in total additional required contributions of <br />$119.2 million over a 20 -year period. <br />Page 6 of 8 <br />AL . <br />City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.ore <br />226 <br />