February, 2016

In early September 2015, Lemon Grove School District passed a resolution to become the first school district to join the PARS Pension Rate Stabilization Program and can now move money in the general fund over to the trust to be diversified and grown to offset their pension liabilities.

Little noticed at the time, two years ago legislation (AB 1469) gave CalSTRS some long-sought power to raise employer and state rates — a big step toward normalizing the teachers’ pension system and a rare loosening of legislative control over the state budget. In what could be a major change, the legislation lifted a cap that limited the basic CalSTRS state rate to 3.5 percent of pay. Now the CalSTRS board has the new power, beginning next year, to raise the state rate up to 0.50 percent of pay each year.

Are you being charged or quoted too much in OPEB trust investment management fees? Are you getting poor returns in this volatile market? Are you unable to diversify your investments because you don't have enough assets to fund OPEB?

The cities of Coronado and Healdsburg became two of the latest municipalities to join the rapidly growing PARS Pension Rate Stabilization Program (PRSP); where funds can be set aside and invested to reduce liabilities and address pension obligations all while remaining under local control and discretion of the city. This innovative Section 115 multiple-employer trust helps cities prepare for future pension fund rate increases, at a risk tolerance level that aligns with their demographics and investment policies.