City of Novato Selects PARS to Establish Pension Trust FundCategories: PARS News,Pension Rate Stabilization
Marin Independent Journal, by Will Houston March 3, 2019
Last Tuesday, February 26th, the Novato City Council voted unanimously to select PARS to administer their new Section 115 pension prefunding trust. The move is a first step towards addressing its estimated $30 million in unfunded pension liabilities. “We are the pioneer of this program,” said Mitch Barker, executive vice president of PARS. “We’re the first to introduce this concept three years ago.”
City staff said that creating such a trust fund allows the city to dedicate funds to its defined benefit pension plan under CalPERS, over an extended time and with mroe investment options than is allowed by other funds. PARS was selected by the council to help city staff prepare the investment and funding strategies as well as guidelines for the trust.
“As the council knows, increased pension costs due to the CalPERS reduction discount rate has been something that has affected cities throughout the state and nationally as well, were applicable,” said Michael Antwine, Assistant City Manager.
Antwine said the staff recommended PARS because it had a private letter ruling from the IRS and because it would allow the city to consolidate its existing Other Post-Employment Benefits (OPEB) trust fund.
Barker said over 180 other agencies have adopted a similar trust fund, including Sausalito, Healdsburg and Rohnert Park.