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City of Redwood City
<br />Notes to the Basic Financial Statements (Continued)
<br />For the Year Ended June 30, 2025
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<br />Note 13 – Other Postemployment Benefits (Continued)
<br />
<br />B. City Plan (Continued)
<br />
<br />Actuarial Assumptions
<br />
<br />The net OPEB liability in the June 30, 2023 actuarial valuation was determined using the following actuarial
<br />assumptions, applied to all periods included in the measurement, unless otherwise specified:
<br />
<br />Actuarial Cost Method Entry-Age Normal Cost, Level % of pay
<br />Asset Valuation Method Market Value
<br />Inflation 2.50%
<br />Payroll Growth 2.50%
<br />Salary Increases Aggregate - 2.75% annually
<br />Merit - CalPERS 2021 Experience Study
<br />Contribution Policy Contributes full ADC
<br />Discount Rate 6.25%
<br />Mortality, Retirement, Disability, Termination
<br />Mortality Improvement
<br />Medical Trend Non-Medicare - 7.90% for 2026, decreasting to an ultimate rate
<br />of 3.45 % in 2076. Medicare (Non-Kaiser) - 6.90% for 2026,
<br />decreasing to an ultimate rate of 3.45% in 2076. Medicare
<br />(Kaiser) - 5.65% for 2026, decreasing to an ultimate rate of
<br />3.45% in 2076
<br />CalPERS 2021 Experience Study
<br />MacLeod Watts Scale 2022
<br />
<br />
<br />Discount Rate
<br />
<br />The discount rate used to measure the net OPEB liability was 6.25% percent. This discount rate is the mid-point,
<br />rounded to five basis points, of the range of 3-20 year municipal bond rate indices; S&P Municipal bond 20 Year
<br />High Grade Rate Index, Bond Buyer 20-Bond GO Index, and Fidelity GO AA 20 Year Bond Index.
<br />
<br />Change in the Net OPEB Liability
<br />
<br />The changes in the net OPEB liability for the OPEB Plan are as follows:
<br />
<br />Total Plan Net
<br />OPEB Fiduciary OPEB
<br />Liability Net Position Liability
<br />Balance at June 30, 2023 114,430,030$ 61,761,060$ 52,668,970$
<br />Changes Recognized for the Measurement Period:
<br />Service Cost 4,519,553 - 4,519,553
<br />Interest on the total OPEB liability 7,282,228 - 7,282,228
<br />Difference between expected and actual experience - - -
<br />Changes in assumptions - - -
<br />Contribution from the employer - 4,884,566 (4,884,566)
<br />Net investment income - 6,781,903 (6,781,903)
<br />Administrative expenses - (36,821) 36,821
<br />Benefit payments (4,867,876) (4,867,876) -
<br />Net changes during July 1, 2023 to June 30, 2024 6,933,905 6,761,772 172,133
<br />Balance at June 30, 2024 121,363,935$ 68,522,832$ 52,841,103$
<br />7.C. - Page 146 of 269
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