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6.1.G. - Page 20 G. Retirement Pension 'Be�efits (GaIPERS and SarnCERA} AlI 2Q cities participate in CaIPER�, for f�nding pension obligations. Actua�ial calcu3ations determine an amount each participatzng city must contr�bu�e annually, based on its labor contracts and commitments, its praportiona� share of the state pool, and actua� earned and assumed earn rates on the fund's assets over the next 30 years. San Mateo County has its own defined pension (and disability and death benefit) plan, (SamCERA). The County Ernployees' Retirement Law of 19�7 (the 1937 Act} established the basic obligations for �rnployers and members to contribute to the pensian �rust fund. Statutes require partieipating employers to cantribute the actuarially determined amounts necessary to fund the estimated benefits accruing to SamCERA rrrernb�rs not athervvise funded by member contributians or investment eamings. A1120 cities and tl�e County made theiz annual requixed contrib�tions to Ca1PERS and SamCERA respectively between 2006 and 24l 0. They �iave met their obiigations through the normal budgeting process while maintaining reserves at minimum GASB 34 recommended levels or higher. What cannot be de�ermined from these examined reports is the magnitude af fu�ure annual pensian co.�ts, wh�ck� will vary ba�ed on updated actuarial vaIuations, inves�rnent p�rformance, the char�ging number of city employees participating in the various plans, and new Iabor agreements with changes in benefits negotiatec� aver time. What is clear, and what has heen reported widely, is that pension costs will rise significai�tly over time and that czties and the Caunty are concez abaut the aznpacts. They are taking steps, some rnore aggressively than others, to be ab�e to manage those costs for the long terrn. Those who cam� out of the recession in positions of relative strength rather than weakness are better able ta manage this ne�t transition with reduced impact on services provided to its citizens. H. Other Pas� Employment Benefits �QPEB} - Health Care Until fairly recently, most eities paid for their retiree's contracted health insurance benefts directly as expenses were incurred. The OPEB tn�st fund, which operates similarly to CaIPERS for pensions, came into effect in 2fl08-9. Most cities joined this paol. As in the case of Ca1PERS foz pensions, cities contribute to a pool and the trusE invests the funds. The trust communacates to participating governments the actuarially determined annual payments needed for the�n to be f�lly fun�ed. Unlike far pension financing, however, cities are not contractually required to make annual OPEB payments in fiall. 5ome participating cities have chosen to make their annual OPEB payments in full while athers have made varying partial contr�butions. Failure to keep curr�nt on OpEB payments p�ts cities at risk that their accumulated obligation ra�ay eventually graw too large for ihem to be able to "make up" tk�e difference withou� szgnificantly impacting city sez�ices ar jobs. 15