I had the opportunity to attend the CalPERS conference last week in Anaheim. As Chair of the Debt, Retirement and Treasury Committee of CSMFO, I thought I would pass along three observations from the conference. First, I appreciate this effort of PERS to provide an educational opportunity regarding the many aspects of PERS. I actually made it through 6 sessions of actuarial information!!! The bottom line is this information is very technical and there are often several answers to the question "How much does this cost?" It will be up to you to interpret the valuations sent to you by PERS. You need to know how they work so you can defend inaccurate interpretations or assessments by your unions. Second, for those agencies which are superfunded in one plan but not another (i.e. superfunded in safety but not misc.) you may request PERS apply proceeds from the superfunded plan to the employee contribution rate IF you city/organization pays the employee rate on behalf of the employee. By this action, you can save the budgeted dollars for the employee rate and use these to pay other bills (including the PERS cost for your other plan which is not superfunded). PERS initiated legislation permitting you do make this application but I'm not sure everyone is aware of it. Again, this only works for superfunded plans where the employer is also paying the employee rate. Third. It remains a crime that the 95% valuation is not available to all agencies unless they opt for a benefit increase. I'm not sure how many agencies are still "stuck at 90%" (to quote PERS staff) but I'd seriously consider banding together (can the League help?) and pursuing litigation to achieve this result. Going from 90% to 95% was a pure political decision and one which was not based in actuarial science. Incidentally, the actuaries recommended all agencies go to 100% valuation. There may also be a "cheap" benefit enhancement you may want to explore in order to receive the 95% valuation which could reduce your PERS rate. What PERS staff could not answer is why actuarial assumptions over the past decade have been overly conservative thereby resulting in the build up of huge surpluses which the PERS Board then gives away unilaterally. This means cities and agencies have paid too much over the past decade in PERS rates. Incidentally, I was offered a $300,000 per year job at PERS if I could guarantee actuarial assumptions would come to pass. When I accepted, the offer was quickly withdrawn! The point is THEIR assumptions have been too conservative resulting in higher than needed PERS rates for employers. Have a great week and enjoy the holiday this Friday. Zane Johnston, City of Tracy --- You are currently subscribed to members as: [email protected] To unsubscribe send a blank email to [EMAIL PROTECTED]
