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1/15/2026 <br />1 <br />CITY OF SANTA ROSA <br />CALPERS PENSION PROGRAM REVIEW & <br />COST MANAGEMENT STRATEGY ASSESSMENT <br />NOVEMBER 2025 <br />2 <br />Today’s Discussion <br />I.Background on CalPERS Costs <br />II.Historical and Projected CalPERS Costs (General Fund) <br />III.Cost Management Strategy Overview <br />IV.Cost Management Strategy Analysis (General Fund) <br />V.Conclusion <br />BACKGROUND ON CALPERS COSTS <br />4 <br />City of Santa Rosa CalPERS Summary <br />City of Santa Rosa has a Citywide $482M CalPERS Unfunded Accrued Liability <br />(“UAL”), as of the latest CalPERS valuation for 6/30/2024 <br />Miscellaneous Plan: $235M | Safety Plans: $247M <br />55% of Miscellaneous is attributable to the General Fund ➔ $376M General Fund <br />UAL <br />CalPERS FY 2024-25 Final Investment Returns: 12.1%* <br />Projected to decrease Citywide UAL to $411M (as of 6/30/2025); General Fund UAL to $324M <br />Projected benefit may be partially offset by CalPERS’ non-investment adjustments resulting <br />from CalPERS’ 2025 Asset Liability Management (ALM) Study <br />City’s Section 115 Pension Trust has a ~$16M General Fund balance as of September <br />2025 <br />Strategies to utilize the Trust – together with other UAL management strategies such <br />as a Fresh Start and ADP – for near-term General Fund budgetary relief are analyzed <br />in this presentation <br />*CalPERS’ Money-Weighted Rate of Return, as reported by CalPERS <br />5 <br />Normal Cost = Annual Cost for Current Employees <br />Amount needed to fund <br />future retirement benefits <br />based on actuarial <br />calculations (life expectancy, <br />payroll increases, etc.) <br />Benefits are funded as they <br />are earned <br />Maintains the long-term <br />stability of the pension <br />system <br />Normal <br />Cost <br />Calculation <br />Employer <br />Contributions <br />Employee <br />Contributions <br />Assumptions <br />Used <br />6 <br />Unfunded Accrued Liability (UAL) – Citywide <br />Shortfall between the promised <br />pension benefits and the funds <br />currently available in the CalPERS <br />system to pay for those benefits <br />Increases or decreases based on <br />CalPERS investment returns <br />Impacts amortized over 20 years <br />Irregular payment shape as UAL <br />comprised of over 30 layers; each <br />with its own term/shape <br />Funded Ratio <br />𝐿𝑎𝑟𝑘𝑎𝑟 𝑉𝑎𝑘𝑟𝑎 𝑜𝑎 𝐴𝑟𝑟𝑎𝑟𝑟 <br />𝐴𝑎𝑎𝑟𝑟𝑎𝑎 𝐿𝑖𝑎𝑎𝑖𝑘𝑖𝑟𝑦=71.1% <br />Source: CalPERS Actuarial Valuation as of June 30, 2024 <br />Market Value of <br />CalPERS Assets: <br />$1,188 Million <br />Accrued Liability: <br />$1,670 Million <br />Shortfall (UAL): <br />$482 Million <br />$0 <br />$200 <br />$400 <br />$600 <br />$800 <br />$1,000 <br />$1,200 <br />$1,400 <br />$1,600 <br />$1,800 <br />Mi <br />l <br />l <br />i <br />o <br />n <br />s <br />City of Santa Rosa <br />CalPERS Pension Funded Status <br />1 2 <br />3 4 <br />5 6 <br />Docusign Envelope ID: BB80A86F-2853-4F40-B02D-18F5B9DD615F