Consent-General Government # 25.
Board of Supervisors
Financial Services
- Meeting Date:
- 07/22/2025
- Brief Title
- CalPERS Additional Discretionary Contribution
From:
Tom Haynes, Chief Financial Officer, Department of Financial Services
Staff Contact:
Tom Haynes, Chief Financial Officer, Department of Financial Services, x8162
Supervisorial District Impact:
Countywide
Subject
Authorize the Chief Financial Officer to make an additional discretionary contribution to CalPERS in coordination with the Yolo County Superior Court. (No general fund impact) (Haynes)
Recommended Action
Authorize the Chief Financial Officer to make an additional discretionary contribution to CalPERS in coordination with the Yolo County Superior Court.
Strategic Plan Goal(s)
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Operational Excellence |
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In Support of All Goals (Internal Departments Only) |
Reason for Recommended Action/Background
In 2018, the Board of Supervisors approved the Pension Funding Policy (Attachment A). Among other provisions, the Pension Funding Policy established a dedicated Section 115 Trust, which was funded by a supplemental pension charge applied as a percentage of employee payroll. The primary objective of the Section 115 Trust is to safeguard the County’s ability to pay the annual required CalPERS contributions, with a secondary objective of accumulating assets to pay down the County’s unfunded pension liability earlier.
Prior to the adoption of the Pension Funding Policy, the Board considered a number of options to address the County’s unfunded pension liability, including making additional discretionary payments directly to CalPERS. This option was not pursued at the time because the Yolo County Superior Court’s pension plan is blended with the County’s, accounting for approximately 7% of the total Miscellaneous pension plan liability. As a result, any funding contributed to CalPERS solely by the County would subsidize the Superior Court.
However, beginning in fiscal year 2020-21, the County has partnered with the Superior Court each year to make pro rata discretionary contributions to CalPERS to begin paying down the unfunded liability more quickly. Over the last four fiscal years, the Superior Court has contributed approximately $787,000 to these contributions, while the County has paid nearly $12 million. The County has been able to make these contributions while still maintaining or exceeding the target balance in the Section 115 Pension Trust.
Making a discretionary contribution directly to CalPERS is a fiscally prudent action in that it not only pays down the County’s unfunded liability, but also takes advantage of higher investment returns. Over the five-year period ending June 30, 2025, the Section 115 Trust had an annualized investment return of 4.47%, compared to CalPERS annualized investment return of 8.0% over the same period.
Staff recommends that the Board authorize the Chief Financial Officer to make an additional discretionary contribution to CalPERS in an amount not to exceed a total County contribution of $1,502,709 million, based on the Miscellaneous Plan share between the County and the Court as reflected in Attachment B.
Prior to the adoption of the Pension Funding Policy, the Board considered a number of options to address the County’s unfunded pension liability, including making additional discretionary payments directly to CalPERS. This option was not pursued at the time because the Yolo County Superior Court’s pension plan is blended with the County’s, accounting for approximately 7% of the total Miscellaneous pension plan liability. As a result, any funding contributed to CalPERS solely by the County would subsidize the Superior Court.
However, beginning in fiscal year 2020-21, the County has partnered with the Superior Court each year to make pro rata discretionary contributions to CalPERS to begin paying down the unfunded liability more quickly. Over the last four fiscal years, the Superior Court has contributed approximately $787,000 to these contributions, while the County has paid nearly $12 million. The County has been able to make these contributions while still maintaining or exceeding the target balance in the Section 115 Pension Trust.
| Miscellaneous Plan | Safety Plan | Total County Contribution |
||
| Fiscal Year | Court | County | ||
| 2024-25 Proposed | $112,923 | $1,147,546 | $355,164 | $1,502,709 |
Making a discretionary contribution directly to CalPERS is a fiscally prudent action in that it not only pays down the County’s unfunded liability, but also takes advantage of higher investment returns. Over the five-year period ending June 30, 2025, the Section 115 Trust had an annualized investment return of 4.47%, compared to CalPERS annualized investment return of 8.0% over the same period.
Staff recommends that the Board authorize the Chief Financial Officer to make an additional discretionary contribution to CalPERS in an amount not to exceed a total County contribution of $1,502,709 million, based on the Miscellaneous Plan share between the County and the Court as reflected in Attachment B.
For fiscal year 2024-25, the Superior Court again approached the County about making a discretionary contribution to CalPERS. Based on available funding from the Court, the Department of Financial Services has updated the analysis of the County’s proportional contribution (Attachment B). Based on this updated analysis, the County is able to make an additional discretionary contribution of $1,502,709.
Collaborations (including Board advisory groups and external partner agencies)
The Department of Financial Services has worked with the Yolo County Superior Court to gauge the Court's interest in making an additional discretionary contribution. The recommended discretionary contribution was discussed with the Budget Ad Hoc Subcommittee on July 15, 2025.
Competitive Bid Process/Vendor Performance
N/A
Fiscal Impact
Fiscal impact (see budgetary detail below)
Fiscal Impact (Expenditure)
- Total cost of recommended action:
- $ 1,502,709
- Amount budgeted for expenditure:
- $ 1,502,709
- Additional expenditure authority needed:
- $ 0
- One-time commitment:
- Yes
Source of Funds for this Expenditure
- Pension Trust
- $1,502,709
Further explanation as needed:
No general funds are required for this action. Funding for the additional discretionary contribution is available in the Section 115 Pension Trust and the Pension Internal Service Fund.
Attachments
Form Review
| Inbox | Reviewed By | Date |
|---|---|---|
| Tom Haynes | Tom Haynes | 07/14/2025 12:00 PM |
| Financial Services (Originator) | KauXue Thao | 07/14/2025 03:49 PM |
| County Counsel | Hope Welton | 07/16/2025 10:53 AM |
| Yen Nguyen | Yen Nguyen | 07/16/2025 04:15 PM |
- Form Started By:
- Tom Haynes
- Started On:
- 07/07/2025 09:28 AM
- Final Approval Date:
- 07/16/2025