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Note: Missing finding numbers detected:
F3, F4, F5, F6, F7
Findings and Recommendations
3 findings
In Carpinteria, Guadalupe and Solvang, pension solvency risks are minimal to moderate, except in the closed Carpinteria Safety Plan. Pension liquidity risks in those cities are higher, with several years in all three cities having projected negative cash flows under projected CalPERS actuarial returns. Response to Finding 2: Agree. Per the 2016 CalPers Actuarial Valuation reports, the average funded percentage for Classic employees is 76.5%. The average funded percentage for PEPRA employees is 89.9%.
Related Recommendations (1)
That the governments of the cities of Buellton, Carpinteria, Goleta, Guadalupe, Lompoc, Santa Barbara, Santa Maria, and Solvang and of the County of Santa Barbara issue public reports, to be discussed at open sessions of their respective governing bodies, on the potential revenue gain and cost-saving measures that may be necessary to ensure continued adequate funding of their pension plans.
The 12 PEPRA plans in the cities of the County of Santa Barbara have a funded ratio of .90 and the 2 non-PEPRA plans have a funded ratio of 0.68. This is a small, but positive sign that the PEPRA law is having the intended effect of strengthening the security of pension benefits in the County. Response to Finding 8: Response to Grand Jury Report – Pensions in Santa Barbara County Agree. See PEPRA employee funded percentage above.
No recommendations for this finding
Funded ratios of the municipal pension systems in Santa Barbara County are sensitive to the discount rate applied by CalPERS. A cut in that rate to 6 percent, from the 2018-19 rate of 7 percent, would push the funded ratios of several municipal systems close to 0.5 and might impose further increases in the employer's contributions in Lompoc, in the City of Santa Barbara and in Santa Maria. Response to Finding 9: Agree. Per the 2016 CalPers Actuarial Valuation Miscellaneous Plan, a cut in the discount rate to 6 percent would change the City's funded status from 74.5% to 62.3%.
No recommendations for this finding
