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City of Redwood City <br />Notes to the Basic Financial Statements (Continued) <br />For the Year Ended June 30, 2025 <br /> <br /> <br />106 <br />Note 12 – Pension Plans (Continued) <br /> <br />B. City (Continued) <br /> <br />Contributions (Continued) <br /> <br />For the year ended June 30, 2025, the plan’s contributions made for the Plan was as follows: <br /> <br />Miscellaneous Plan Safety Plan <br />Contributions - employer 17,116,743$ 21,309,767$ <br />Net Pension Liability <br /> <br />The City’s net pension liability is measured as the total pension liability, less the pension plan’s fiduciary net <br />position. The net pension liability of the Plan is measured as of June 30, 2024, using an annual actuarial valuation <br />as of June 30, 2023 rolled forward to June 30, 2024 using standard update procedures. A summary of principal <br />assumptions and methods used to determine the net pension liability is shown below. <br /> <br />Actuarial Assumptions <br /> <br />The June 30, 2023 valuation was rolled forward to determine the June 30, 2024 total pension liability, based on <br />following actuarial methods and assumptions: <br /> <br />Actuarial Cost Method <br />Actuarial Assumptions: <br />Discount Rate <br />Inflation <br />Salary Increases <br />Mortalit y Rate Table(1) <br />Post Retirement Benefit Increase <br />Entry Age Normal <br />6.90% <br />2.30% <br />Varies by Entry Age and Service <br />Derived using CalPERS’ Membership Data for all Funds. <br />The lesser of contract COLA or 2.30% until Purchasing Power <br />Protection. Allowance floor on purchasing power applies, 2.30% <br />thereafter. <br />(1)The mortality table used was developed based on CalPERS-specific data. The rates incorporate Generational Mortality to <br />capture ongoing mortality improvement using 80% of Scale MP 2020 published by the Society of Actuaries. For more details, <br />please refer to the 2021 experience study report that can be found on the CalPERS website. <br />Change in Assumptions <br /> <br />There were no changes in assumptions in the measurement period ending June 30, 2024. <br /> <br />Discount Rate <br /> <br />In determining the long-term expected rate of return, CalPERS took into account, both short-term and long-term <br />market return expectations as well as the expected pension fund cash flows. Such cash flows were developed <br />assuming that both members and employers will make their required contributions on time and as scheduled in all <br />future years. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were <br />calculated over the short-term (first 10 years) and the long-term (11-60 years) using a building-block approach. <br />Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated <br />for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived <br />at the same present value of benefits for cash flows as the one calculated using both short-term and long-term <br />returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and <br />rounded down to the nearest one quarter of one percent. <br />7.C. - Page 138 of 269 <br />157