Setting aside money (prefunding) into an Internal Revenue Code (IRC) Section 115 trust is a proven, effective way to proactively address growing pension contribution rates and liabilities. The PARS Pension Rate Stabilization Program (PRSP) allows cities to securely set aside funds, separately and apart from their retirement system, in a tax-exempt funding vehicle to mitigate long-term contribution rate volatility.

Offered in partnership with U.S. Bank and Vanguard, PARS offers the nation’s ONLY IRS Section 115 Post Employment Benefits (PEB) trust, that enables municipalities for the first time to set aside funds for both pension and/or OPEB liabilities in one trust.

Public Agency Retirement Services (PARS) can help your district analyze whether it makes it sense to offer an early retirement incentive  for fiscal and budgetary success. We specialize in customized, locally-controlled early retirement incentives that, if properly designed, can be a win-win solution for unions, employees and administrations.

As cities and other public agencies look for ways to address growing pension costs and liabilities, prefunding into an Internal Revenue Service (IRC) Section 115 trust has become a popular option. The basic approach involves setting aside dedicated funds into the trust, which are then diversified with the potential to earn a greater rate of return than the general fund. However, not all 115 trust programs are created equal.

The City of Cedar Park decided to enhance their retiree medical benefits as part of broader strategic goals to attract and retain a qualified workforce. Along with these enhancements, the City planned to create a trust to serve as a funding mechanism to offset the unfunded OPEB liability. Doing their due diligence in researching the best way to create a single-employer OPEB trust, the City was discovering it difficult to find the assistance they needed. It was at this point they learned about the PARS OPEB Trust Program, an IRS-approved multiple-employer trust solution.