Title
Adopt a Resolution to Accept the 2022-2023 Section 115 Other Post-Employment Benefits (OPEB) Trust and Pension Trust Investment Report for the Quarter Ended September 30, 2023
Staffreport
SUMMARY AND RECOMMENDATION
Staff recommends that the City Council accept the City's Section 115 Other Post-Employment Benefits (OPEB) and Pension Trust Investment Report for the quarter ended September 30, 2023.
DISCUSSION
OPEB Trust
In 2008-2009, the City established the Section 115 OPEB Trust with PARS. The Trust's primary purpose is accumulating resources generating investment income to fund 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. Over the years, the City Council has authorized various contributions into the trust. At the end of September 2023, assets in the OPEB Trust total $19,373,800, including contributions and investment earnings. The inception-to-date investment return is 4.89%.
Pension Trust
In 2021, the City Council established a Section 115 Pension Trust with PARS. The goal is setting aside funds and accumulating investment earnings to buy down the City's unfunded CalPERS pension liabilities. At the beginning of the third quarter of 2023, assets in the Pension Trust totaled $14,850,000, including both contributions (since inception of the fund in 2021-2022) and investment earnings. On September 13, 2023, the City transferred an additional $3,608,500 to the Pension Trust from the General Fund. On September 30, 2023, assets in the Pension Trust totaled $17,909,100. The 3-month investment return is -2.94%, and the inception-to-date investment return is -4.80%. The stock market has been volatile due to high inflation, recession fears, and global instability.
Quarterly Investment Report
HighMark Capital has prepared the quarterly investment report for the OPEB Trust and Pension Trust for the period ending Septembe...
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