By Krista Daly
CalPERS has undergone changes since the city of San Marino entered into an agreement with them in 1950, the most recent of which is that the state and its schools would increase funding of employee pension funds by 6 percent. Due to these increases, city staff added an extra $1.5 million to the 2015-16 budget for these payments.
Although the budget was already approved by the San Marino City Council, Councilmember Dennis Kneier had requested a full presentation on CalPERS, which was given at the July 8 meeting. He wanted to know if the city could move away from CalPERS and be part of a defined benefits plan.
The short answer is no.
The city’s unfunded liability is at approximately $20 million right now, said San Marino Finance Director Lisa Bailey. CalPERS would require an upfront payment to pay off all the unfunded liability. It would be too costly to do so, Bailey said.
So instead, the city plans to pay out that $20 million over 20 years rather than the maximum 30 years. This has a cost savings of $10 million, Bailey said.
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