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AGENDA ITEM REVIEW FORM |
2.A.
Work Session
- Meeting Date:
- 02/03/2021
- Department Head:
- Monica Castro
- Submitted By:
- Monica Castro, Director of Finance, Finance Department
Action Requested:
Discussion Item - No Action to be Taken
ITEM:
Presentation followed by discussion and possible directions to staff on any and all matters regarding the Public Safety Personnel Retirement System (PSPRS) unfunded liability and related options for consideration. (Mark Reader, Managing Director at Stifel)
SUMMARY:
The City of San Luis participates in the Arizona (Public Safety Personnel Retirement System (PSPRS) for its police and fire department employees and those departments' retirees. The police plan is funded below 65% as of the 2019 valuation, while the fire plan is funded at over 86%.
The State Legislature implemented much-needed reforms a few years ago to curb liability growth. However, the legacy costs associated with Tier I and Tier II personnel remain and crowd out other expenses for PSPRS employers, creating budget instability and uncertainty. Funding options to address the legacy unfunded liabilities which are limited. But in light of favorable market conditions, many PSPRS employers are looking at fixed rate pension obligation bonds (“POBs”) as a viable funding option to either reduce or pay off their Unfunded Actuarial Accrued Liabilities (“UAAL”).
The Public Finance Advisors at Stifel will present information on how PBO's can be utilized as a part of an overall strategy to fund the unfunded pension liability by creating debt.
The State Legislature implemented much-needed reforms a few years ago to curb liability growth. However, the legacy costs associated with Tier I and Tier II personnel remain and crowd out other expenses for PSPRS employers, creating budget instability and uncertainty. Funding options to address the legacy unfunded liabilities which are limited. But in light of favorable market conditions, many PSPRS employers are looking at fixed rate pension obligation bonds (“POBs”) as a viable funding option to either reduce or pay off their Unfunded Actuarial Accrued Liabilities (“UAAL”).
The Public Finance Advisors at Stifel will present information on how PBO's can be utilized as a part of an overall strategy to fund the unfunded pension liability by creating debt.
RECOMMENDATION / SUGGESTED MOTION:
Discussion and possible directions to staff only, no action.
Fiscal Impact
- IS THERE FISCAL IMPACT ASSOCIATED WITH THIS ITEM:
- No
- CITY/STATE/FEDERAL FUNDS:
- N/A
- TOTAL:
- N/A
- BUDGETED AMOUNT:
- N/A
- AVAILABLE AMOUNT TO TRANSFER:
- N/A
- ACCT NAME & GL#/REMAINING BALANCE BEFORE PURCHASE:
- N/A
FISCAL IMPACT STATEMENT (IF THIS IS A BUDGET TRANSFER, YOU MUST ATTACH THE BUDGET ADJUSTMENT FORM):
No fiscal impact. Informational presentation.