REQUEST FOR CITY COUNCIL ACTION
DATE: 01/19/2022
TO: Honorable Mayor and City Council Members
FROM: Finance Department
SUBJECT:
Title
Resolution Approving Pension Stabilization Trust Agreement Pursuant to Section 115 of the Internal Revenue Code and Authorize Initial Contribution of $30 Million.
End
EXECUTIVE SUMMARY:
A Section 115 Trust is a pension stabilization trust fund that holds funds set aside by the City for future pension contributions to the California Public Retirement System in order to stabilize the expected pension funding from the City and fund some of the unfunded liability for pension benefits. The Pension Stabilization Trust Agreement identifies the purpose and duration of the Trust Fund and sets forth the terms for administering the Trust Fund by a Board of Trustees. An initial contribution of $30,000,000 is recommended to the Trust Fund from the General Fund and additional contributions will be considered annually based on any General Fund surplus funds remaining upon completion of the fiscal year-end audit.
RECOMMENDED ACTION:
Recommended action
That the City Council:
a. Adopt Resolution No. 2022-005 Approving the Trust Agreement Governing the City of Corona Pension Stabilization Trust Pursuant to Section 115 of the Internal Revenue Code.
b. Authorize the City Manager, or his designee, to execute the Trust Agreement.
c. Authorize the establishment of a new Fiduciary Fund to hold the funds allocated to the Pension Stabilization Trust.
d. Authorize a Fund Transfer of $30,000,000 from the General Fund to the new Fiduciary Fund for the Pension Stabilization Trust.
Body
BACKGROUND & HISTORY:
The City of Corona has been a member of the California Public Employees Retirement System (CalPERS) since 1967. The City and its employees contribute to the CalPERS plan to pay for future retirement benefits. The last time the City's CalPERS plan was fully funded was in Fiscal Year (FY) 2000.
The gap between what the City has con...
Click here for full text