HomeMy WebLinkAboutItem 5g. Authorization to form a Section 115 Trust Fund with CalPERS Prefunding Trust Item 5g
Department: Finance
Cost Center: 2001
For Agenda of: 9/20/2022
Placement: Consent
Estimated Time: N/A
FROM: Brigitte Elke, Finance Director
SUBJECT: AUTHORIZATION TO FORM A SECTION 115 TRUST FUND WITH THE
CALIFORNIA EMPLOYERS’ PENSION PREFUNDING TRUST
RECOMMENDATION
1. Approve an agreement to establish and fund a Section 115 Trust Fund with the
California Employers’ Pension Prefunding Trust administered by CalPERS ; and
2. Adopt a Draft Resolution entitled, “A Resolution of the City Council of the City of San
Luis Obispo, California, delegating the authority to request disbursements from the
California Employers’ Pension Prefunding Trust.”
POLICY CONTEXT
In Fiscal Year 2018-19, the City implemented the Fiscal Health Response Plan (FHRP)
to address the City’s unfunded pension liability (UFL) and the change in funding
requirements. The plan put in motion a strategy to pay the current UFL over a 20 -year
horizon and establish a Section 115 Trust fund to assis t with the needed payments in the
outer years when funding levels might be insufficient to make the additional required
annual payment under the FHRP strategy. To that end, the City Council approved the
release of the Request for Proposals (RFP), which was made available publicly and sent
directly to the four companies known to offer these types of trust funds. With the review
of the FY2021-22 Mid-Year Budget, the City Council reaffirmed its commitment to the
trust fund and an initial funding of $2,428,052. The Council will receive the unaudited FY
2021-22 year-end results on October 4th and staff will likely propose additional funding to
the Section 115 Trust to position the City for any future economic volatility and if these
funds are not needed in the future, to then accelerate the paydown of unfunded liabilities
consistent with adopted Council policies related to unappropriated year-end savings.
DISCUSSION
Background
With the introduction of the City’s Fiscal Health Response Plan with the FY2018-19
Budget Supplement, staff brought forth a comprehensive strategy to pay-down the City’s
current UFL over a 20-year timeframe instead of the CalPERS prescribed 30 years while
keeping the City on a fiscally sustainable path to provide the services the community
expects. This strategy is anticipated to save the City approximately $20 million in
otherwise applicable interest cost by paying down the unfunded liability earlier than
required.
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Item 5g
Part of the strategy were additional annual payments as well as the creation of a Section
115 Trust Fund to assist the payment schedule during years when the annual City budget
would not be able to accommodate the additional payments required by the strategy. The
City already holds a similar trust fund for its other post-employment benefits (OPEB) with
CalPERS’ California Employers’ Retiree Benefit Trust (CERBT) program that has seen
solid return on investment. The fund contemplated here would be specifically for pension
obligations, be it as part of the unfunded liability or the annual normal cost for the City’s
pension plan. After the 30-year window to pay off the current UFL, the annual normal cost
should be sufficient to pay the obligations under the pension plan, but a certain UFL will
likely remain a part of the retirement benefit environment. It is therefore prudent to
establish a safeguard that will assist with the obligations when budgetary constraints
would otherwise jeopardize the annual payments and require operating austerity
measures. A Section 115 Trust fund offers that tool with flexibility as to the use of the
funds to offset pension obligations.
Together with the strategy, the City Council approved the release of a request for
proposals which was made publicly available and sent directly to the companies known
to be active in this specialized investment space. It was ultimately responded to by three
companies:
1. Public Agency Retirement Services (PARS). They were the first to offer a Section
115 Trust fund for pensions in 2005 and today administer 252 accounts.
2. PFM. They are a smaller player in the space but have administered a pool of
customers commissioning Section 115 Trust Funds since 2014.
3. California Employers’ Pension Prefunding Trust (CEPPT) through CalPERS
(Attachment A). Though CalPERS has offered OPEB related trust funds through
the CERBT program since 2007, their program for pension funds is relatively new.
It was established in 2019 and has attracted 57 public employers since.
Proposal and Vendor Evaluation
A team of four members, representing the CSG group (Business Services and
Administrative Manager), Utilities (Business Manager), Human Resources (Human
Resources Manager), and Finance (Finance Director) reviewed the proposals and rated
them based on a series of pre-determined criteria. The criteria concentrated on rating the
understanding of the City’s pension strategy and the proposed solutions, the approach to
and incorporation of ESG (Environmental, Social and Governance) considerations, the
experience of the investment team, proposed interaction with City staff, reports and
analytics including access to those tools, and the administrative proposed cost structure.
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Item 5g
After the review of the submitted proposals, the ratings showed the following results:
Rating based on evaluation criteria
Evaluator / Firm PFM PARS CEPPT
CSG Group 57 55 52
Human Resources 68 59 71
Utilities 64 56 74
Finance 67 62 70
Total 256 232 267
Given the small pool of applicants, the evaluation team decided to invite all three to an
interview which was held via the Teams online platform. After the interview, which was
structured around several questions the applicants could prepare for and follow-up
clarifications and inquiries from the evaluation team, the results revealed the following
rating and a preferred vendor in CalPERS’ CEPPT program.
Ranking after oral presentations
Evaluator / Firm PFM PARS CEPPT
CSG Group 2 3 1
Human Resources 2 3 1
Utilities 2 3 1
Finance 2 3 1
The main value propositions of the CEPPT program are the ease of administration, the
attractive low-cost formula, the demonstrated investment return (based on CERBT), and
the program’s direct access to and interaction with the CalPERS actuarial valuations. This
connection will also assist with the modeling of Additional Discretionary Payments (ADPs)
utilizing the CalPERS pension calculator tool and support the City’s evaluation of its long-
term payment strategy in collaboration with CEPPT.
Time Delay
Though the RFP process had been approved by the City Council in connection with the
first deliverables of the Fiscal Health Response Plan, the actual process was ultimately
delayed by the implementation of the City’s Human Capital Management system and with
the onset of the COVID-19 pandemic. In an effort to protect the City from any adverse
effects the pandemic might yield, the funding was held, together with scheduled ADPs, in
the assigned fund balance. Given the City’s fiscal standing, the City Council reaffirmed
the investment in the Section 115 Trust Fund with the FY 2021-22 Mid-Year Budget
Review. All documents to establish and fund the Trust Fund are now ready for execution.
Previous Council or Advisory Body Action
The City Council with the implementation of the Fiscal Health Response Plan and re-
affirmed the funding with the 2021-22 mid-year report in February of 2022 by Resolution
11307.
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Item 5g
Public Engagement
The item will be considered by the City Council during the public meeting on September
20, 2022. All required notifications have been provided and the public can address the
item prior to the meeting or during the public comment period.
CONCURRENCE
Through their participation in the evaluation process, the Community Services Group, the
Utilities Department, and Human Resources concur with this recommendation.
ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) does not apply to the recommended
actions in this report because the actions do not constitute a “Project” under CEQA
Guidelines Section 15378. Once a draft Strategic Plan is created, it will be evaluated to
determine if the plan or any of its components require enviro nmental review under CEQA
prior to adoption.
FISCAL IMPACT
Budgeted: Yes Budget Year: 2022-23
Funding Identified: Yes
Fiscal Analysis:
Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund $ 2,000,000 $ $ $
State
Federal
Fees
Other: Various
Funds
$ 428,052
Total $ 2,428,052 $ $ $
FISCAL IMPACT
With the FY2021-22 Mid-Year Budget Review, the City Council reaffirmed the initial
funding for the Section 115 Trust fund of $2,428,052 with $2 million coming from General
Fund and $428,052 coming from three of the City’s four Enterprise Funds, Whale Rock ,
and the Tourism Business Improvement District (TBID) Fund as outlined in the table
below. The Transit Fund cannot partake in the Trust Fund since federal and state funding
can only be used to cover actual expenditures.
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Item 5g
General Fund $2,000,000
Water Fund $166,317
Sewer Fund $170,896
Parking Fund $61,446
Whale Rock $21,417
TBID $7,976
Total $2,428,052
The current strategy considers contributions the fund over the next few years up to $6
million so it can then grow over the time period allotted to pay-off the UFL. The funding
will be used to offset UFL payments during years that would require reductions in
operating or capital improvement plan budgets due to the annual UFL cost required for a
20-year paydown, or at the end of the 20 -year period to pay for the final payment under
the UFL plan. The strategy will have to be revisited throughout the years to determine the
best and most advantageous use of the funding as well as the City’s over all fiscal health
and sustainability.
Since the funding in the Section 115 Trust fund can be activated for pension related
expenditures at any time through Council action, the available balance is considered a
restricted fund balance.
ALTERNATIVES
1. The City Council could decide to use a different vendor for the Section 115 Trust
Fund. This is not recommended since the recommendation is based on a thorough
evaluation process of both, the written proposals, and the interview presentations from
all three vendors.
2. The City Council could decide not to enter into an agreement with CEPPT and
not create the Section 115 Trust Fund. This is not recommended as the Section
115 Trust fund is an important and integral part of the overall strategy to pay-off the
City’s unfunded pension liability over a 20-year timeframe.
ATTACHMENTS
A - Draft CEPPT Agreement
B - Draft Resolution assigning CEPPT Delegation of Disbursement Authority
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CALIFORNIA EMPLOYERS’ PENSION PREFUNDING TRUST PROGRAM
AGREEMENT AND ELECTION
OF
(NAME OF EMPLOYER)
to Prefund Employer Contributions to a Defined Benefit
Pension Plan
WHEREAS (1) Government Code (GC) Section 21711(a) establishes in the State
Treasury the California Employers’ Pension Prefunding Trust Fund (CEPPT), a special
trust fund for the purpose of allowing eligible employers to prefund their required
pension contributions to a defined benefit pension plan (each an Employer Pension
Plan) by receiving and holding in the CEPPT amounts that are intended to be
contributed to an Employer Pension Plan at a later date; and
WHEREAS (2) GC Section 21711(b) provides that the California Public Employees'
Retirement System (CalPERS) Board of Administration (Board) has sole and exclusive
control of the administration and investment of the CEPPT, the purposes of which
include, but are not limited to (i) receiving contributions from participating employers; (ii)
investing contributed amounts and income thereon, if any, in order to receive yield on
the funds; and (iii) disbursing contributed amounts and income thereon, if any, to pay for
costs of administration of the CEPPT and to deposit employer contributions into
Employer Pension Plans in accordance with their terms; and
WHEREAS (3) _____________________________________________________
(NAME OF EMPLOYER)
(Employer) desires to participate in the CEPPT upon the terms and conditions set by
the Board and as set forth herein; and
WHEREAS (4) Employer may participate in the CEPPT upon (i) approval by the Board
and (ii) filing a duly adopted and executed Agreement and Election to Prefund Employer
Contributions to a Defined Benefit Pension Plan (Agreement) as provided in the terms
and conditions of the Agreement; and
WHEREAS (5) The CEPPT is a trust fund that is intended to perform an essential
governmental function (that is, the investment of funds by a State, political subdivision
or 115 entity ) within the meaning of Internal Revenue Code (Code) Section 115 and
Internal Revenue Service Revenue Ruling 77-261, and as an Investment Trust Fund, as
defined in Governmental Accounting Standards Board (GASB) Statem ent No. 84,
Paragraph 16, for accounting and f inancial reporting of fiduciary activities from the
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City of San Luis Obispo
City of San Luis Obispo
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external portion of investment pools and individual investment accounts that are held in
a trust that meets the criteria in Paragraph 11c(1).
WHEREAS (6) The CEPPT is not a Code Section 401(a) qualified trust and the assets
held in the CEPPT are not assets of any Employer Pension Plan or any plan qualified
under Code Section 401(a).
NOW, THEREFORE, BE IT RESOLVED THAT EMPLOYER HEREBY MAKES THE
FOLLOWING REPRESENTATION AND WARRANTY AND THAT THE BOARD AND
EMPLOYER AGREE TO THE FOLLOWING TERMS AND CONDITIONS:
A. Employer Representation and Warranty
Employer hereby represents and warrants that it is the State of California or a political
subdivision thereof , or an entity whose income is excluded from gross income under
Code Section 115(1).
B. Adoption and Approval of the Agreement; Effec tive Date; Amendment
(1) Employer's governing body shall elect to participate in the CEPPT by adopting this
Agreement and filing with the Board a true and correct original or certified copy of this
Agreement as follows:
Filing by mail, send to: CalPERS
CEPPT
P.O. Box 1494
Sacramento, CA 95812-1494
Filing in person, deliver to: CalPERS Mailroom
CEPPT
400 Q Street
Sacramento, CA 95811
(2) Upon receipt of the executed Agreement, and after approval by the Board, the
Board shall fix an effective date and shall promptly notify Employer of the effective date
of the Agreement. Employer shall provide the Board such other documents as the
Boar d may request, including, but not limited to a certified copy of the resolution(s) of
the governing body of Employer authorizing the adoption of the Agreement and
documentation naming Employer’s successor entity in the event that Employer ceases
to exist prior to termination of this Agreement.
(3) The terms of this Agreement may be amended only in writing upon the agreement
of both the Board and Employer, except as otherwise prov ided herein. Any such
amendment or modification to this Agreement shall be adopted and executed in the
same manner as required for the Agreement. Upon receipt of the executed amendment
or modification, the Board shall fix the effective date of the amendment or modification.
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(4) The Board shall institute such procedures and processes as it deems necessary to
administer the CEPPT, to carry out the purposes of this Agreement, and to maintain the
tax -exempt status of the CEPPT. Employer agrees to follow such procedures and
processes.
C. Employer Reports Provided for the Board’s Use in Trust Administration and
Financial Reporting and Employer Contributions
(1) Employer shall provide to the Board a defined benefit pension plan cost report on
the basis of the actuarial assumptions and m ethods prescribed by Actuarial Standards
of Practice (ASOP) or prescribed by GASB. Such report shall be for the Board’s use in
trust administration and financial reporting and shall be prepared at least as often as the
minimum frequency required by applicable GASB Standards. This defined benefit
pension plan cost report may be prepared as an actuarial valuation report or as a GASB
compliant financial report. Such report shall be:
1) prepared and signed by a Fellow or Associate of the Society of
Actuaries who is also a Member of the American Academy of
Actuaries or a person with equivalent qualifications acceptable to the
Board;
2) prepared in accordance with ASOP or with GASB; and
3) provided to the Board prior to the Board's acceptance of contributions
for the reporting period or as otherwise required by the Board.
(2) In the event that the Board determines, in its sole discretion, that Employer’s cost
report is not suitable for the Board’s purposes and use or if Employer fails to provide a
required report, the Board may obtain, at Employer's expense, a report that meets the
Board’s trust administration and financial reporting needs. At the Board’s option, the
Board may recover the costs of obtaining the report either by billing and collecting such
amount from Employer or through a deduction from Employer's Prefunding Account (as
defined in Paragraph D(2) below).
(3) Employer shall notify the Board in writing of the amount and tim ing of contributions
to the CEPPT, which contributions shall be made in the manner established by the
Board and in accordance with the terms of this Agreement and any procedures adopted
by the Board.
(4) The Board may limit Employer’s contributions to the CEPPT to the amount
necessary to fully fund the actuarial present value of total projected benefit payments
not otherwise prefunded through the applicable Employer Pension Plan (Unfunded
PVFB), as set forth in Employer’s cost report for the applicable period. If Employer’s
contribution would cause the assets in Employer’s Prefunding Account to exceed the
Unfunded PVFB, the Board may refuse to accept the contribution. If Employer’s cost
report for the applicable period does not set forth the Unfunded PVFB, the Board may
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refuse to accept a contribution from Employer if the contribution would cause the assets
in Employer’s Prefunding Account to exceed Employer’s total pension liability, as set
forth in Employer’s cost report.
(5) No contributions are required. Contributions can be made at any time following the
eff ective date of this Agreement if Employer has first complied with the requirements of
this Agreement, including Paragraph C .
(6) Employer acknowledges and agrees that assets held in the CEPPT are not assets
of any Employer Pension Plan or any plan qualified under Code Section 401(a), and will
not become assets of such a plan unless and until such time as they are distributed
from the CEPPT and deposited into an Employer Pension Plan.
D. Administration of Accounts; Investments; Allocation of Income
(1) The Board has established the CEPPT as a trust fund consisting of an aggregation
of separate single-employer accounts, with pooled administrative and investment
functions.
(2) All Employer contributions and assets attributable to Employer contributions shall be
separately accounted for in the CEPPT (Employer’s Prefunding Account). Assets in
Employer’s Prefunding Account will be held for the exclusive purpose of funding
Employer’s contributions to its Employer Pension Plan(s) and defraying the
administrative expenses of the CEPPT.
(3) The assets in Employer’s Prefunding Account may be aggregated with the assets of
other participating employers and may be co-invested by the Board in any asset classes
appropriate for a Code Section 115 trust, subject to any additional requirements set
forth in applicable law , including, but not limited to, subdivision (d) of GC Section 21711.
Employer shall select between available investment strategies in accordance with
applicable Board procedures.
(4) The Board may deduct the costs of administration of the CEPPT from the
investment income of the CEPPT or from Employer’s Prefunding Account in a manner
determined by the Board.
(5) Investment income earned shall be allocated among participating employers and
posted to Employer’s Prefunding Account daily Monday through Friday , except on
holidays, when the allocation will be posted the following business day.
(6) If, at the Board’s sole discretion and in compliance with accounting and legal
requirements applicable to an Investment Trust Fund and to a Code Section 115
compliant trust, the Board determines to its satisfaction that all obligations to pay
defined benefit pension plan benefits in accordance with the applicable Employer
Pension Plan terms have been satisfied by payment or by defeasance with no
remaining risk regarding the amounts to be paid or the value of assets held in the
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CEPPT, then the residual Employer assets held in Employer’s Prefunding Account may
be returned to Employer.
E. Reports and Statements
(1) Employer shall submit with each contribution a contribution report in the form and
containing the information prescribed by the Board.
(2) The Board, at its discretion but at least annually, shall prepare and provide a
statement of Employer’s Prefunding Account reflecting the balance in Employer's
Prefunding Account, contributions made during the period covered by the statement,
investment income allocated during such period, and such other information as the
Board may determine.
F. Disbursements
(1) Employer may receive disbursements from the CEPPT not to exceed, on an annual
basis, the amount of the total annual Employer contributions to Employer’s Pension
Plan for such year.
(2) Employer shall notify the Board in writing in the manner specified by the Board of
the persons authorized to request disbursements from the CEPPT on behalf of
Employer.
(3) Employer's request for disbursement shall be in writing signed by Employer's
authorized representative, in accordance with procedures established by the Board, and
the Board may rely conclusively upon such writing. The Board may, but is not required
to, require that Employer certify or otherwise demonstrate that amounts disbursed from
Employer’s Prefunding Account will be used solely for the purposes of the CEPPT.
However, in no event shall the Board have any responsibility regarding the application
of distributions from Employer’s Prefunding Account.
(4) No disbursement shall be made from the CEPPT which exceeds the balance in
Employer’s Prefunding Account.
(5) Requests for disbursements that satisfy the above requirements will be processed
on at least a monthly basis.
(6) The Board shall not be liable for amounts disbursed in error if it has acted upon the
written instruction of an individual authorized by Employer to request disbursements, and
is under no duty to make any investigation or inquiry about the correctness of such
instruction. In the event of any other erroneous disbursement, the extent of the Board’s
liability shall be the actual dollar amount of the disbursement, plus interest at the actual
earnings rate but not less than zero.
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G. Costs of Administration
Employer shall pay its share of the costs of administration of the CEPPT, as determined
by the Board and in accordance with Paragraph D .
H. Termination of Employer ’s Participation in the CEPPT
(1) The Board may terminate Employer’s participation in the CEPPT if:
(a) Employer’s governing body gives written notice to the Board of its election
to terminate; or
(b) The Board determines, in its sole discretion, that Employer has failed to
satisfy the terms and conditions of applicable law, this Agreement or the
Board's rules, regulations or procedures.
(2) If Employer’s participation in the CEPPT terminates for either of the foregoing
reasons, all assets in Employer’s Prefunding Account shall remain in the CEPPT,
except as otherwise provided below, and shall continue to be invested and accrue
income as provided in Paragraph D, and Employer shall remain subject to the terms of
this Agreement with respect to such assets.
(3) After Employer’s participation in the CEPPT terminates, Employer may not make
further contributions to the CEPPT.
(4) After Employer’s participation in the CEPPT terminates, disbursements from
Employer’s Prefunding Account may continue upon Employer’s instruction or otherwise
in accordance with the terms of this Agreement.
(5) After Employer’s participation in the CEPPT terminates, the governing body of
Employer may request either:
(a) A trustee to trustee transfer of the assets in Employer’s Prefunding
Account to a trust dedicated to prefunding Employer’s required pension
contributions; provided that the Board shall have no obligation to make
such transfer unless the Board determines that the transfer will satisfy
applicable requirements of the Code, other law and accounting standards,
and the Board’s fiduciary duties. If the Board determines that the transfer
will satisfy these requirements, the Board shall then have one hundred fifty
(150) days from the date of such determination to effect the transfer. The
amount to be transferred shall be the amount in Employer's Prefunding
Account as of the date of the transfer (the “transfer date”) and shall
include investment earnings up to an investment earnings allocation date
preceding the transfer date. In no event shall the investment earnings
allocation date precede the transfer date by more than 150 days.
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(b) A disbursement of the assets in Employer’s Prefunding Account; provided
that the Board shall have no obligation to make such disbursement unless
the Board determines that, in compliance with the Code, other law and
accounting standards, and the Board’s fiduciary duties, all of Employer's
obligations for payment of defined benefit pension plan benefits and
reasonable administrative costs of the Board have been satisfied. If the
Board determines that the disbursement will satisfy these requirements,
the Board shall then have one hundred fifty (150) days from the date of
such determination to effect the disbursement. The amount to be
disbursed shall be the amount in Employer’s Prefunding Account as of the
date of the disbursement (the “disbursement date”) and shall include
investment earnings up to an investment earnings allocation date
preceding the disbursement date. In no event shall the investment
earnings allocation date precede the disbursement date by more than 150
days.
(6) After Employer’s participation in the CEPPT terminates and at such time that no
assets remain in Employer’s Prefunding Account, this Agreement shall terminate. To the
extent that assets remain in Employer’s Prefunding Account, this Agreement shall
remain in full force and effect.
(7) If, for any reason, the Board terminates the CEPPT, the assets in Employer’s
Prefunding Account shall be paid to Employer to the extent permitted by law and Code
Section 115 after retention of (i) an amount sufficient to pay the Unfunded PVFB as set
forth in a current defined benefit pension plan(s) cost report prepared in compliance with
ASOP and the requirements of Paragraph C(1), and (ii) amounts sufficient to pay
reasonable administrative costs of the Board. Amounts retained by the Board to pay the
Unfunded PVFB shall be transferred to (i) another Code Section 115 trust dedicated to
prefunding Employer’s required pension contributions, subject to the Board’s
determination that such transfer will satisfy applicable requirements of the Code, other
law and accounting standards, and the Board’s fiduciary duties or (ii) Employer’s
Pension Plan, subject to acceptance by Employer’s Pension Plan.
(8) If Employer ceases to exist but Employer’s Prefunding Account continues to exist,
and if no provision has been made to the Board’s satisfaction by Employer with respect
to Employer’s Prefunding Account, the Board shall be permitted to identify and appoint
a successor to Employer under this Agreement, provided that the Board first
determines, in its sole discretion, that there is a reasonable basis upon which to identify
and appoint such a successor and provided further that such successor agrees in
writing to be bound by the terms of this Agreement. If the Board is unable to identify or
appoint a successor as provided in the preceding sentence, then the Board is
authorized to appoint a third-party administrator or other successor to act on behalf of
Employer under this Agreement and to otherwise carry out the intent of this Agreement
with respect to Employer’s Prefunding Account. Any and all costs associated with such
appointment shall be paid from the assets attributable to Employer’s Prefunding
Account. At the Board’s option, and subject to acceptance by Employer’s Pension Plan,
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the Board may instead transfer the assets in Employer’s Prefunding Ac count to
Employer’s Pension Plan and terminate this Agreement.
(9) If the Board determines, in its sole discretion, that Employer has breached the
representation and warranty set forth in Paragraph A., the Board shall take whatever
action it deems necessary to preserve the tax -exempt status of the CEPPT.
I. Indemnification
Employer shall indemnify, defend, and hold harmless CalPERS, the Board, the CEPPT,
and all of the officers, trustees, agents and employees of the foregoing from and against
any loss, liability, claims, causes of action, suits, or expense (including reasonable
attorneys’ fees and defense costs, lien fees, judgments, fines, penalties, expert witness
fees, appeals, and claims for damages of any nature whatsoever) not charged to the
CEPPT and imposed as a result of, arising out of, related to or in connection with (1) the
performance of the Board’s duties or responsibilities under this Agreement, except to
the extent that such loss, liability, suit or expense results or arises from the Board's own
gross negligence, willful misconduct or material breach of this Agreement, or (2) without
limiting the scope of Paragraph F(6) of this Agreement, any acts taken or transactions
effected in accordance with written directions from Employer or any of its authorized
representatives or any failure of the Board to act in the absence of such written
directions to the extent the Board is authorized to act only at the direction of Employer.
J. General Provisions
(1) Books and Records
Employer shall keep accurate books and records connected with the performance of
this Agreement. Such books and records shall be kept in a secure location at
Employer's office(s) and shall be available for inspection and copying by the Board and
its representatives.
(2) Notice
(a) Any notice or other written communication pursuant to this Agreement will be
deemed effective immediately upon personal delivery, or if mailed, three (3) days
after the date of mailing, or if delivered by express mail or e-mail, immediately
upon the date of confirmed delivery , to the following:
For the Board:
Filing by mail, send to:
CalPERS
CEPPT
P.O. Box 1494
Sacramento, CA 95812-1494
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Filing in person, deliver to:
CalPERS Mailroom
CEPPT
400 Q Street
Sacramento, CA 95811
For Employer:
(b) Either party to this Agreement may, from tim e to tim e by notic e in writing
serv ed upon the other, designate a different m ailing address to which, or a
different person to whom, all such notices therea fter are to be addressed.
(3) Survival
All representations, warranties, and covenants contained in this Agreement, or in any
instrument, certificate, exhibit, or other writing intended by the parties to be a part of this
Agreement shall survive the termination of this Agreement.
(4) Waiver
No waiver of a breach, failure of any condition, or any right or remedy contained in or
granted by the provisions of this Agreement shall be effective unless it is in writing and
signed by the party waiving the breach, failure, right, or remedy. No waiver of any
breach, failure, right, or remedy shall be deemed a waiver of any other breach, failure,
right, or remedy, whether or not similar, nor shall any waiver constitute a continuing
waiver unless the writing so specifies.
(5) Necessary Acts; Further Assurances
The parties shall at their own cost and expense execute and deliver such further
documents and instruments and shall take such other actions as may be reasonably
required or appropriate to evidence or carry out the intent and purposes of this
Agreement.
(6)Incorporation of Amendments to Applicable Laws and Accounting Standards
Any references to sections of federal or state statutes or regulations or accounting
standards shall be deemed to include a reference to any amendments thereof and any
successor provisions thereto.
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Page 10 of 11
(7) Days
Wherever in this Agreement a set number of days is stated or allowed for a particular
event to occur, the days are understood to include all calendar days, including
weekends and holidays, unless otherwise stated.
(8) No Third Party Beneficiaries
Except as expressly provided herein, this Agreement is for the sole benefit of the parties
hereto and their permitted successors and assignees, and nothing herein, expressed or
implied, will give or be construed to give any other person any legal or equitable rights
hereunder. Notwithstanding the foregoing, CalPERS, the CEPPT, and all of the
officers, trustees, agents and employees of CalPERS, the CEPPT and the Board shall
be considered third party beneficiaries of this Agreement with respect to Paragraph I
above.
(9) Counterparts
This Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
A majority vote of Employer’s Governing Body at a public meeting held on the ______
day of the month of __________________ in the year _________, authorized entering
into this Agreement.
Signature of the Presiding Officer: ________________________________________
Printed Name of the Presiding Officer : _____________________________________
Name of Governing Body: ______________________________________________
Name of Employer: ___________________________________________________
Date: _______________________________
20th
September 2022
Erica A. Stewart
City Council of San Luis Obispo
City of San Luis Obispo
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Page 11 of 11
BOARD OF ADMINISTRATION
CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
BY_____________________________________
MELODY BENAVIDES
DIVISION CHIEF, PENSION CONTRACTS AND PREFUNDING PROGRAMS
CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
To be completed by CalPERS
The effective date of this Agreement is: _________________________
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R ______
RESOLUTION NO. _____ (2022 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, DELEGATING THE AUTHORITY TO REQUEST
DISBURSEMENTS FROM THE CALIFORNIA EMPLOYERS’ PENSION
PREFUNDING TRUST (CEPPT)
WHEREAS, on September 20, 2022, the City Council approved the formation of a
Section 115 Trust fund for pension obligations with the California Employers’ Pension
Prefunding Trust (CEPPT); and
WHEREAS, the funding deposited can only be used to pay for pension obligations
and will be used strategically to pay off the City’s pension cost and unfunded liability; and
WHEREAS, in order to request disbursement of the funds in the Trust and certify
the purpose for which the disbursed funds will be used, the City Council has to delegate
authority to certain staff via a Council Resolution.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis
Obispo as follows:
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Resolution No. _____ (2022 Series) Page 2
R ______
SECTION 1. Authority to request, on behalf of the City of San Luis Obispo
(employer), disbursement from the Pension Prefunding Trust and to certify as to the
purpose for which the disbursed funds will be used , is delegated to the incumbents in the
position of:
– City Manager
– Director of Finance
– Accounting Manager/Controller
Upon motion of _______________________, seconded by
_______________________, and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this _____ day of _____________________ 2022.
___________________________
Mayor Erica A. Stewart
ATTEST:
__________________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
_________________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the
City of San Luis Obispo, California, on ______________________.
___________________________
Teresa Purrington
City Clerk
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