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REV: 04-19-2024 LF <br />Lower expected investment returns initially followed by higher returns <br />thereafter, <br />Investment return volatility, based on model developed by Foster & Foster, <br />including likely ranges for future contributions and funded status, <br />Report will also include a brief summary of historical CalPERS actuarial valuation, <br />including: <br />Summary of historical information, <br />Participant demographics, contribution rates, investment returns, and funded <br />status, <br />Analysis of change in required contributions for next year. <br />The preceding analysis and projections will then be used as framework for <br />developing an overall (including the Supplemental Trust) pension funding policy. <br />Consultant will also provide analysis on how the City’s Section 115 Supplemental <br />trust can be used for rate stabilization, including comparison of sending additional <br />discretionary payments (ADPs) to CalPERS vs. to the Supplemental trust. The <br />analysis will include long-term projections of CalPERS contributions under both <br />scenarios. For payments to CalPERS, 2 basic options (long vs. short base) to <br />apply the ADPs to reduce future contributions will be provided. The 115 trust <br />analysis will analyze the City’s options with regard to the CalPERS unfunded <br />liability, including: <br />Continue making required CalPERS payments as billed. The analysis will <br />include a projection of how funds in the Supplemental Trust can be used to <br />mitigate future CalPERS rate increases assuming no further Supplemental <br />Trust contributions. <br />Compare savings (and present value of savings) and budget <br />flexibility/restrictions of <br />o making ADP’s directly to CalPERS, including present value savings of <br />paying off short and long-period amortization bases <br />o making additional contributions to the Supplemental Trust to mitigate future <br />CalPERS rate increases, and/or to eventually pay down the unfunded <br />liability. <br />ATTY/AGR.2024.053/Foster & Foster (Actuarial Valuation 2024-2026) (Page 12 of 13)