Title
Adopt a Resolution to Accept the Section 115 OPEB (Other Post-Employment Benefits) Trust and Pension Trust Investment Report for the Quarter Ended September 30, 2025
Staffreport
SUMMARY
Resolution accepting the Section 115 OPEB (Other Post-Employment Benefits) Trust and Pension Trust Investment Report for the quarter ended September 30, 2025.
RECOMMENDATIONS
Staff recommend the City Council adopt the resolution (Attachment A) accepting the Section 115 OPEB Trust and Pension Trust Investment Report for the quarter ended September 30, 2025.
BACKGROUND
OPEB Trust
In 2008-2009, the City established the Section 115 OPEB Trust with Public Agency Retirement Services (PARS). The Trust’s primary purpose is to accumulate resources to generate investment income for funding the City’s future OPEB obligations. The trust account was set up with an initial contribution of $500,000, and the City has been proactively funding these future liabilities. Since it was established, the City Council has authorized various contributions into the trust. At the end of September 2025, assets in the OPEB Trust total $24,282,843, including contributions and investment earnings. The 3-month investment return is 3.63%, and the inception-to-date investment return is 5.06%. Due to a change in account status, inception of the fund is measured with a start date of August 1, 2015.
Pension Trust
In 2021, the City Council established the Section 115 Pension Trust with PARS. The goal is to set aside and accumulate investment earnings to be strategically used to offset unfunded CalPERS pension liabilities. At the end of September 2025, assets in the Pension Trust totaled $36,720,378, including contributions since the inception of the fund in September 2021, and investment earnings. The 3-month investment return is 4.65%, and the inception-to-date investment return is 4.63%.
Analysis
QUARTERLY INVESTMENT REPORT
PFM Asset Management has prepared the quarterly investment report for the OPEB Trust and Pension Trust for the period ending September 30, 2025, summarizing investment performance. The asset allocations for both the OPEB Trust and the Pension Trust follow City Council-approved investment policies.
Assets in the OPEB Trust portfolio increased from $23,450,718 in the prior quarter to $24,282,843. Assets in the Pension Trust totaled $34,662,876 at the end of the prior quarter and are now $36,720,378. Investment fluctuations are expected due to changing market conditions, including impacts from geopolitical conditions. A summary of investment returns is outlined below. Please refer to Attachment B for investment report for details.
OPEB Trust
• Year 1 - 6.85%
• Year 3 - 10.12%
• Year 5 - 4.54%
• Year 7 - 5.16%
• Inception-to-Date - 5.06%
Pension Trust
• Year 1 - 9.15%
• Year 3 - 13.57%
• Year 5 - N/A
• Year 7 - N/A
• Inception-to-Date - 4.45%
Committee Review and Actions
The City Council Finance Committee accepted the report and recommended that it be forwarded to the full City Council at the November 19, 2025 Finance Committee meeting.
Financial Impacts
There is no fiscal impact as this report is informational only.
ATTACHMENTS:
• ATTACHMENT A: Draft Resolution - OPEB & Pension Trusts Investment Report for the Quarter Ended September 30, 2025
• ATTACHMENT B: OPEB and Pension Trusts Investment Report CY 2025 Q3
PREPARED BY: Nicole Gonzales, Finance Director