Like most cities in California, Belvedere offers employee retirement benefits through CalPERS. These plans are defined-benefit in nature and funded. Both the City and its employees make annual contributions, comprising the cost of service accrual for the upcoming year and payment toward any unfunded accrued liability (UAL) for past service not covered by plan assets.
CalPERS assumes an ambitious 6.8% discount rate/investment return in calculating funded status. Unfortunately, investment returns have not lived up to these expectations, and mounting required UAL payments are stretching many agencies' finances.
Belvedere works hard to stay ahead of its pension risk. Above and beyond our required CalPERS payments, we make annual payments into a Section 115 Trust based on a lower discount rate/investment return assumption (currently 5.8%). We review our pension assumptions every 3-5 years and adjust our Section 115 contributions accordingly.
*In 2006, Belvedere began offering long-term city workers a modest Retirement Enhancement Plan through PARS to supplement CalPERS. The plan was closed to new employees on January 1, 2012. Contributions to the PARS plan are paid entirely by the City.
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