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Rael & Letson <br />CalPERS Actuarial Analysis Fee Letter ◥ City of Pleasanton 6 <br />OUR EXPERTISE <br />Our Team <br />The team assigned to the City has prepared CalPERS analyses for over 50 public agencies. Our <br />team’s CalPERS experience includes: <br /> Contribution rate and funded status projections <br /> Stochastic investment return modelling, including likely contribution/funded status ranges <br /> Supplemental Section 115 Supplemental Trust analysis <br /> Studies allocating CalPERS pension costs between internal agency groups <br /> Additional Discretionary Payments (ADPs) analysis <br /> Pension Obligation Bond risk analysis based on stochastic return modeling <br /> Pension Override Tax analysis certifications <br /> <br />Our reports are distinguished by the following features. We would be happy to provide the City with <br />samples if requested. <br /> Historical Information <br />Includes standard information from CalPERS reports (investment returns, contributions, <br />funded status, etc.), as well as amortization payment shortfalls (amounts required by <br />CalPERS less than interest on unfunded liability), and unfunded liability source summary. <br /> Recent Developments <br />We provide summary of recent developments, for example, the new asset allocation (Total <br />Portfolio Approach) adopted November 2025 (effective July 2026), and 2025 shift in the <br />CalPERS Board’s Risk Mitigation approach. <br /> Benchmarking <br />This is typically provided for the funded ratio and the unfunded liability as a percentage of <br />payroll, with the comparison made to all other CalPERS agency plans, and/or all other <br />agency type (in this case, City) plans. <br /> Annual Investment Model Updates <br />CalPERS updates their capital market assumptions every 4 years. We use investment <br />advisor surveys to update our capital market assumptions annually. <br /> Projections <br />We provide contribution and funded status projections over a 20-year period, utilizing our <br />stochastic investment model to provide both expected and likely ranges due to investment <br />volatility. <br /> Supplemental Pension Trust <br />We provide projections on how the Supplemental Pension Trust can be used to reduce <br />expected future peak contributions. Since there will be significant variability in future <br />investment returns, the projections are provided under the expected scenario, and assuming <br />poor (lower 1/3 percentile) future returns. Funded ratios are then provided for CalPERS <br />assets only, and CalPERS plus Supplemental Pension Trust assets. <br /> <br />Docusign Envelope ID: E561D385-1846-8733-8390-54501B3D0556