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1/15/2026 <br />1 <br />RiversideCA.gov <br />1 <br />RiversideCA.gov <br />Finance Committee <br />January 8, 2020 <br />CalPERS Pension Cost <br />Management Strategies <br />Introduction to CalPERS UAL Restructuring Concept <br />Finance Department <br />RiversideCA.gov <br />2 <br />•Riverside has a projected $642M Unfunded Accrued Liability (UAL) for <br />6/30/2020 <br />•Rapidly increasing re-payment shape of UAL combined with other debt is <br />causing significant near-term pressure on budget <br />–Projected annual deficits and downsizing of reserves <br />•UAL restructuring can potentially deliver $5M to $20M of annual savings over <br />next 15 years as well as lower/stabilize pension costs as a % of payroll <br />•City’s previous UAL restructurings (Pension Obligation Bonds “POBs”) have <br />created millions in savings for the City <br />•2 to 3-month due diligence process recommended to educate stakeholders <br />and refine/optimize restructuring options <br />•Formal approval of any restructuring would happen after this due diligence process (likely in March or April of 2020) <br />EXECUTIVE SUMMARY <br />RiversideCA.gov <br />3 <br />I.Background on CalPERS Challenge <br />II.General Fund Deficit Strategies <br />III.UAL Restructuring Idea <br />–Benefits and Strategic Approach <br />IV.Recent UAL Restructurings by Other Cities <br />V.Addressing Risks and Concerns <br />VI.Conclusion and Next Steps: How the Process Could Work <br />Appendix: Technical Details of Level vs. Principal Deferral Scenario <br />TABLE OF CONTENTS <br />I. BACKGROUND ON <br />CALPERS (“PERS”) CHALLENGE <br />RiversideCA.gov <br />5 <br />•City has 2 primary plans with CalPERS <br />–Miscellaneous: 5,166 covered members including 1,607 active <br />–Safety: 1,514 covered members including 568 active <br />•Multiple tiers and PEPRA plans within Miscellaneous and Safety <br />CalPERS PENSION 101 <br />Retirement Plan Overview <br />RiversideCA.gov <br />6 <br />•Each year, the City makes two types of payments to PERS: <br />–Normal Cost (NC): Annual cost for current employees <br />–Unfunded Accrued Liability (UAL): Actuarial Liability MINUS Actuarial Value of Assets <br />•“How much we currently have vs. how much we need to have in <br />the future when people actually retire” <br />•Shortfall not repaid all at once; amortized over a longer period of <br />time with the City paying down a portion each year (principal and <br />interest) <br />–CalPERS currently amortizes this debt at a rate of 7% <br />–Various components (layers or bases) of the UAL with amortization <br />periods ranging from 4 to 30 years <br />CalPERS PENSION 101 <br />Payments Made to PERS Annually <br />1 2 <br />3 4 <br />5 6 <br />Docusign Envelope ID: BB80A86F-2853-4F40-B02D-18F5B9DD615F