Solano County Joins PARS’ New Pension Rate Stabilization ProgramCategories: California Developments,Hot Sheets,OPEB/GASB 45/75,Pension Rate Stabilization
Situated halfway between the bustling cities of San Francisco and Sacramento, the County of Solano enjoys a close proximity while still maintaining its mix of rural and suburban life. One of the original California counties founded in 1850, Solano County still has 80 percent of its land dedicated to agriculture and open space.
On the economic side, the biggest employer by a large margin is Travis Air Force Base which handles more cargo and passengers than any military air terminal in the United States, and often plays a key role in humanitarian missions worldwide. With only seven incorporated cities within its boundaries, the County’s Board of Supervisors has an active role in events throughout the County and is an important piece in maintaining a viable future for its residents. To remain effective as a leader, the County understands the importance of fiscal responsibility and preparation, especially for its largest liability: CalPERS pension programs.
During a review meeting with PARS for another type of plan, Solano County was introduced to the PARS Pension Rate Stabilization Program (PRSP). This plan creates an irrevocable Section 115 trust where the County can deposit money ear-marked for pension costs to reduce its unfunded liability. With diversified investing, the County can generate additional earnings through a county-controlled trust before the assets are sent to CalPERS. Additionally, any funds in the trust count as pension assets, thus reducing the County’s Net Pension Liability (NPL) for GASB 68, which can be used to offset increasing pension rates.
Other enticing aspects of the PRSP include the flexibility it gives Solano County over the types and risk levels of its investments, and the freedom to choose the amount and timing of its contributions and disbursements from the trust. Once PARS finalized the set-up of the PRSP, the Solano County Board of Supervisors was presented the concept for approval. Unanimously, the Board saw the many benefits of the plan and approved adoption.
If your agency would like to get away from the pay-as-you-go approach to funding pensions, while generating assets and lowering total liabilities, contact PARS at (800) 540-6369 x127 or email@example.com for more information or a complimentary proposal.