Pension Rate Stabilization

The start of the year brings with it new goals, new ideas, and new CAFR reports. With updated CAFR results now published, local governments can make decisions on how to use potential surplus and/or reserve funds in planning  for the next fiscal year. One highly recommended use of additional money is to set aside funds in a trust to prefund long term liabilities such as pension (Pension Rate Stabilization Program - PRSP) and retiree healthcare (OPEB).

PARS is excited to announce the expansion of its unique, IRS-approved Section 115 Pension Rate Stabilization Program across the country. Designed in 2015, this industry-leading program operates separate and apart from an agency's retirement system, providing local governments with a tool to set aside funds for future pension costs and liabilities.

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.