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1/15/2026 <br />4 <br />19 <br />City of Sausalito CalPERS Summary <br />City of Sausalito has an $39.8M CalPERS Unfunded Accrued Liability (“UAL”), as <br />of the latest CalPERS valuation for June 30,2023 <br />Miscellaneous Plans: $15.6M | Safety Plans: $24.2M <br />CalPERS FY 2023-24 Final Investment Returns: 9.5%* <br />Projected to decrease City’s UAL to $37.6M (as of 6/30/2024); annual budgetary impact <br />from this change will be seen in FY 2026-27 <br />Continuing to monitor and manage ongoing CalPERS UAL costs will be critical for <br />fiscal resiliency; especially amid potential assumption changes this year by <br />CalPERS <br />Consideration: CalPERS 2025 Asset Liability Management Study <br />Resources: City maintains $4M Section 115 Trust balance for pensions, as of 3/31/2025 <br />*CalPERS’ Money-Weighted Rate of Return, as reported by CalPERS in its FY 2023-24 <br />Annual Comprehensive Financial Report 20 <br />Market Value of <br />CalPERS Assets: <br />$82.6 Million <br />Accrued Liability: <br />$122.4 Million <br />Shortfall (UAL): <br />$39.8 Million <br />$0 <br />$50 <br />$100 <br />$150 <br />Mi <br />l <br />l <br />i <br />o <br />n <br />s <br />City of Sausalito <br />CalPERS Pension Funded Status <br />Background on How CalPERS Works <br />Two Payments Made to CalPERS Annually <br />Source: CalPERS Actuarial Valuation as of June 30, 2023 <br />(1) Normal Cost (“NC”): <br />Annual cost for current <br />employees <br />(2) Unfunded Accrued <br />Liability (“UAL”): Annual <br />payment to amortize the <br />“debt” to CalPERS <br />UAL is amortized over 20 years <br />New UAL is created when <br />CalPERS investment returns <br /><6.80% <br />21 <br />Now … <br />Sluggish investment returns (not meeting <br />assumptions) <br />Assumptions have changed/grown more <br />conservative <br />Discount Rate (assumed rate of investment <br />returns): 8.25% → 7.00% → 6.80% <br />Inflation rate (prices going up) <br />Mortality rates (people living longer) <br />Shorter, more conservative amortizations <br />Why CalPERS Costs Have Trended Higher <br />Then (late 1990s)… <br />Robust investment returns (10%+) <br />Retirement plans were “Super- <br />Funded” through the late 1990s <br />Earnings on funds were more than <br />adequate to cover retirement costs <br />Super-funded status induced <br />widespread retirement benefits <br />enhancements…. <br />Past funding policies led to <br />contribution holidays and “free” <br />benefit improvements <br />Historical PERS <br />Returns <br />5-Year: 6.6% <br />10-Year: 6.2% <br />20-Year: 6.7% <br />30-Year: 7.7% <br />All assumptions are to be revisited by PERS Asset <br />Liability Management (ALM) study in 2025. <br />22 <br />How CalPERS Benefits Get Funded <br />Pre-2008 <br />Investment <br />earnings used to <br />make up a higher <br />percentage of <br />total contributions <br />As investments <br />underperform <br />assumptions, <br />employers must <br />make up the <br />difference, unless <br />the additional <br />costs are <br />negotiated with <br />employees <br />19 20 <br />21 22 <br />Docusign Envelope ID: BB80A86F-2853-4F40-B02D-18F5B9DD615F