To: Board of Supervisors
From: County Administrative Office
Agenda Section: Time Certain Matter
SUBJECT:
title
1:30 p.m. - Pension Rate Stabilization Program Update from Public Agency Retirement Services
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RECOMMENDATION(S):
Recommendation
That the Board of Supervisors:
1. Receive a report on the county's Pension Rate Stabilization Program (PRSP) from Public Agency Retirement Services (PARS) and staff.
Body
SOURCE OF FUNDING:
All County Funds
DISCUSSION:
On Sept. 15, 2015, the Board, via Resolution No. 15-98, authorized the establishment of an irrevocable post-employment benefits trust program, also known as a Section 115 trust, administered by PARS. This trust was created for the purpose of pre-funding pension obligations and/or Other Post Employment Benefit obligations.
The PARS PRSP, established via Internal Revenue Code Section 115 irrevocable trust, is designed to pre-fund pension costs and offset Government Accounting and Standards Board (GASB) 68 Net Pension Liabilities. The primary objective of GASB 68 is to provide more comparable and visible information of pension benefits within the annual accounting and financial reporting by state and local governments. Depicting the unfunded liability (net pension liability) within the annual financial reports provides a clearer picture of pension cost obligations. Inasmuch, the PRSP allows the county to securely set aside funds through a tax-exempt funding mechanism (115 trust account) to mitigate long-term contribution rate volatility.
On March 14, 2017, the Board adopted a Pension Funding Policy. A large portion of the unfunded pension liability is attributed to staff from departments that are not funded by the General Fund, and is therefore accrued by administering state and federal programs on behalf of these governments. Nevertheless, years prior to 2017, the burden of the unfunded pension liability had fallen primarily on the General Fund. To remedy this problem, the Board au...
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