You Don’t Have to Give Up Control When Prefunding Pension

Categories: California Developments,PARS News,Pension Rate Stabilization
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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 PARS Pension Rate Stabilization Program (PRSP), a pioneer of this concept and market leader with over 200 PRSP adoptions, has sustained its value-added differentiation from the competition. With the PARS approach, agencies join a well-established, IRS approved multiple-employer trust, where the agencies maintain complete control over their assets. Agencies choose when to deposit and withdraw assets for pension purposes, can select the risk profile of their investment strategy, and can subaccount for different bargaining groups, cost centers or departments. This immense flexibility comes with no minimum required contribution, no minimum annual fees, no trading or transaction fees, and no start-up costs.

PARS also provides a dedicated portfolio manager who can assist with the investment policy, asset allocation (including fully customizable accounts) and is readily available for both in-person meetings or by cell phone.

As the pioneer in the field of governmental employer trust programs since the early 1990’s, PARS is an experienced, trusted administrator and consultant who has a track record of working with public agencies to develop a prefunding strategy that best fits their needs.