HomeMy WebLinkAbout2023-08-24; Cal PERS Update (District s - All); Rocha, LauraTo the members of the:
CITY COUNCIL .
Date~CA~CC /
t M~Cl'~t-..:_voii_ DCM (3 )~
Council Memorandum
August 24, 2023
To:
From:
Via:
Re:
Honorable Mayor Blackburn and Members of the ~ity Council
Laura Rocha, Deputy City Manager of Administrative Services
Zach Korach, Finance Director
Geoff Patnoe, Assistant City Manager~
Cal PERS Update (Districts -All)
{city of
Carlsbad
Memo ID# 2023091
This memorandum provides information related to the city's pension plan with California Public
Employment Retirement System (CalPERS) and their updated actuarial valuation reports as of
June 2022 (iss·ued in August 2023). Compared to the previous year, there was a significant
decrease in the funded ratio and was primarily driven by CalPERS' fiscal year 2021-22 investment
loss of -6.1%.
Background
The city provides a defined benefit pension to its employees through CalPERS. Each year, around
the August timeframe, Cal PERS issues actuarial valuation reports to participating agencies. These
comprehensive reports include the most current information related to Cal PERS' investment
performance, actuarial assumptions as well as the city's required contributions for the upcoming_
year. Due to the length of time it takes Cal PERS to compile the information and ultimately
publish the reports, they are issued over one year in arrears. For example, reports received in
August 2023 are measured as of June 30, 2022. This means any investment performance,
changes in actuarial assumptions and changes to the composition of the pension plan
subsequent to June 30, 2022, are not factored into the reports.
The'se reports are particularly critical to the city's budget process. Depending on CalPERS'
investment performance from the previous fiscal year and any potential changes to the actuarial
assumptions they use, the amount required to be contributed by the city in the following fiscal
year may be subject to increased.volatility. It is important to note that these reports are issued as
of a point-in-time and can change significantly from one year to the next. While one year's
reports may indicate the city's required contributions are set to be higher or lower compared to
previous fiscal years, the following year's report may include significantly different projections.
As of Cal PERS' actuarial reports for the year ending June 30, 2022, the city's miscellaneous
pension plan had assets of $369.4 million, liabilities of $481.4 million and a funded ratio of
76. 7%. The city's safety pension plan has assets of $282.5 million, liabilities of $393.0 million and
a funded ratio of 71.9%. The unfunded liability is the difference between assets and liabilities,
while the funded ratio is the ratio of assets to liabilities. In total, the city's funded ratio was
74.6%, representing a shortfall of approximately $47.5 million from the city's 80% policy target.
Administrative Services Branch
Finance Department
1635 Faraday I Carlsbad, CA 92008 I 442-339-2127 t
Council Memo -Cal PERS Update (Districts -All)
August 24, 2023
Page 2
Discussion
CalPERS
The city provides a defined benefit pension to its employees through Cal PERS. Retirement
benefits are calculated using a formula based on an employee's age, earnings, and years of
service. The retirement benefits are funded by:
• Investment earnings (60%)
• Employer contributions (29%)
• Employee contributions (11%)
Each year, CalPERS determines an employer's contributions based on actual investment returns
and actuarial assumptions including:
• Expected investment returns (discount rates)
• Inflation rates
• Salaries
• Retirement ages
• Life expectancies
Contributions to fund the pension plan are comprised of two components:
• The normal cost (the cost of the benefits earned in a respective year)
• The amortization of the unfunded accrued liability (UAL)
CalPERS Discount Rate
Defined benefit plans are highly sensitive to the discount rate assumption. The discount rate is
the expected rate of return of the plan's assets over the long term. The discount rate will depend
on the plan's size, asset allocation, time horizon, and other considerations.
From the city's perspective, the discount rate is important as it is used to determine the city's
annual contributions to the plan, the plan's unfunded liability, and the plan's funded status. In
other words, the discount rate is used to determine whether a plan has enough assets to meet its
future obligations. The discount rate must be realistic to allow the city to foresee funding issues
that may impact future operating budgets and future generations of retirees and plan members.
If the discount rate assumption is too high and investments earn less than expected, a funding
shortfall may result, requiring the city or CalPERS members to make greater contributions than
expected.
CalPERS Investment Earnings
Since investment earnings fund nearly 60% of retirement benefits, the city's pension plan is
sensitive to the investment returns of Cal PERS. Investment returns affect how much of the
retirement benefits can be funded by investment earnings rather than contributions. If
investment returns are lower than the discount rate, contributions must increase to make up the
difference. As a result, pension plans need accurate rate of return assumptions to ensure fiscal
sustainability.
Currently Cal PERS assumes it will earn investment returns of 6.8% each year. As illustrated in the
following chart, over the last 20 years, Cal PERS has earned investment returns below the
Council Memo -Cal PERS Update (Districts -All)
August 24, 2023
Page 3
discount rate assumption approximately half of the time. Individual fiscal year investment
returns have ranged between -24.0% and +21.7%. Specifically, CalPERS earned negative
investment returns in 2001 and 2002 due to the dot-com crash and 2008 and 2009 due to the
Great Recession.
CalPERS Historical Investment Returns
i i~1~.-I-
I
For fiscal year 2021-22, CalPERS reported an investment loss of -6.1%, 12.7 percentage points
lower than the 6.8% discount rate. The average investment return is 7% for a 5-year period, 8%
for a 10-year period, and 7.5% for a 20-year period. As returns in a given year are volatile, it can
be more instructive to look at returns over longer time horizons.
Funding Risk Mitigation Policy
Time Period Total Investment Return
1 Year -6.1%
5 Year
10 Year
20 Year
7.0%
8.0%
7.5%
Under Cal PERS' Funding Risk Mitigation Policy, the 21.3% return in fiscal year 2020-21 triggered a
reduction in the discount rate from 7% to 6.8%. The Funding Risk Mitigation Policy, approved by
the Cal PERS Board in 2005, lowers the discount rate in years of good investment returns to
reduce risk in the portfolio. The Risk Mitigation Policy and the resulting impacts from fiscal year
2020-21 affect contributions starting in fiscal year 2023-24.
Asset Liability Management Process
In November 2021, CalPERS completed its quadrennial Asset Liability Management (ALM)
process, which reviewed investment strategies and actuarial assumptions. At the
November 15-17, 2021, meetings, the CalPERS Board approved a 6.8% discount rate, selected a
new asset allocation for the fund's investment portfolio, and adopted new actuarial assumptions.'
Council Memo -Cal PERS Update (Districts -All)
August 24, 2023
Page 4
Asset Class
Global Equity
Fixed Income
Real Assets
Private Equity
Private Debt
Previous
Allocation
50%
28%
13%
8%
0%
Current
Allocation
42%
30%
15%
13%
5%
Liquidity 1% 0%
Total 100% 105%
*Includes a 5% allocation to leverage.
CalPERS Plan Status
As of the most recent actuarial valuation on June 30, 2022, the city's miscellaneous pension plan
had assets of $369.4 million, liabilities of $481.4 million and a funded ratio of 76.7%. The city's
safety pension plan has assets of $282.5 million, liabilities of $393.0 million and a funded ratio of
71.9%. The unfunded liability is the difference between assets and liabilities, while the funded
ratio is the ratio of assets to liabilities.
City Council's Pension Funding Policy (No. 86) strives to maintain an 80% funded ratio. As of
CalPERS' June 30, 2022, actuarial valuation, the city's combined funded status was 74.6%.
Significantly lower than the previous year's funded status of 86% and driven by poor investment
performance in fiscal year 2021-22, this represents a shortfall below the city's 80% target of
approximately $47.5 million.
CalPERS Miscellaneous Plan Status
June 30, 2021 June 30, 2022
Present Value of Projected Benefits $ 530,619,478 $ 559,893,293
Entry Age Normal Accrued Liability $ 456,814,169 $ 481,393,865
MarketValueofAssets $ 404,515,911 $ 369,436,837
Unfunded Accrued Liability $ 52,298,258 $ 111,957,028
Funded Ratio 88.6% 76.7%
CalPERS Safety Plan Status
June 30, 2021 June 30, 2022
Present Value of Projected Benefits $ 458,282,303 $ 485,436,500
Entry Age Normal Accrued Liability $ 372,017,358 $ 393,017,010
Market Value of Assets $ 308,342,667 $ 282,537,994
Unfunded Accrued Liability $ 63,674,691 $ 110,479,016
Funded Ratio 82.9%
CalPERS Miscellaneous & Safety Plan Status
71.9%
Present Value of Projected Benefits
Entry Age Normal Accrued Liability
Market Value of Assets
Unfunded Accrued Liability
Funded Ratio
June 30, 2021 June 30, 2022
$ 988,901,781 $ 1,045,329,793
$ 828,831,527 $ 874,410,875
$ 712,858,578 $ 651,974,831
$ 115,972,949 $ 222,436,044
86.0% 74.6%
Council Memo -Cal PERS Update {Districts -All)
. August 24, 2023
Page 5
Below is a 10-year history of the city's unfunded liability and funded ratio:
CalPERS -Unfunded Liability and Funded Ratio
S250,000,000
S200,000,000 ------------~-~ ---S150,000,000
S100,000,000
550,000,000
s-
2013 2014 2015 2016 2017 2018 2019 2020 2021
-Unfunded Liabilit\• Funded Status
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2022
Over this ten-year period, the cities unfunded liability has ranged between $102 million and $222
million. The funded ratio has ranged from 70% to 86%. These ranges represent a high level of
volatility which were driven primarily by Cal PERS' investment performance as well as changes in
their actuarial assumptions. Since fiscal year 2016-17, and in an effort to stabilize the city's
required contributions; $56.4 million in additional discretionary payments to CalPERS have been
made.
Impact of CalPERS Investments Returns
Cal PERS assumes it will earn investment returns of 6.8% each year. If investment returns are
higher than 6.8%, the city's contributions decrease. Conversely, if investment returns are lower
than 6.8%, the city's contributions increase.
In fiscal year 2020-21, CalPERS earned 21.3% and as a result, the city's required pension
contributions will decrease effective in fiscal year 2023~24. In fiscal year 2021-22, CalPERS
experienced an investment loss of -6.1% and as a result, the city's required pension contributions
will increase effective in fiscal year 2024-25.
Impact of CalPERS Discount Rate Changes
Since the early 2000's, CalPERS has reduced their discount rate from 8.25% to 6.8%. While this
makes it easier for Cal PERS to meet their target, it also represents a significant increase in costs
for the city.
Due to lower-than-historical interest rates and economic growth, market experts project lower
returns for the next several decades. The Pew Research Center forecasts a long-term investment
return of 6.5% for typical pension fund portfolios.
Council Memo -Cal PERS Update (Districts -All)
August 24, 2023
Page 6
During its Asset Management Liability Process, Cal PERS considered discount rates between
6.25% and 7%. Ultimately, CalPERS approved a discount rate of 6.8%, a decrease from the
previous discount rate of 7%.
The discount rate has a significant effect on the city's Cal PERS contributions. If the discount rate
is reduced, the city's required contributions will increase. For example, if Cal PERS reduced their
discount rate from 6.8% to 5.8%, the city's unfunded liability would increase by $119 million or
53%.
City Strategies
In recent years, unfunded liabilities, or pension debt, have caused cities in California to cut back
on public services. Three cities have declared bankruptcy. Pension debt is the difference between
how much money is available to pay for the pensions city employees receive when they retire,
and the money needed to pay for the actual benefits. Pension debt is an estimate because it is
not possible to know exactly how well the pension fund investments will perform nor how many
employees will retire, at what age they will retire and how long they will live.
The City of Carlsbad has long recognized the financial uncertainty caused by the state's pension
system. That's why Carlsbad was one of the first cities in the region t6 enact pension reform, pre-
dating state reforms in 2013. This and other strategies have reduced the city's pension debt
considerably compared to most other cities in the state.
600
500
400
300
200
100
0
Number of Employees by Benefit Tier
Tierl -Tier2
■ 2014 2022
-Tier3
In 2019, the City Council adopted a Pension Funding Policy {City Council Policy Statement No. 86).
This policy states that the city will strive to maintain an 80% funded status. Said another way, the
goal of this policy is to keep Carlsbad's pension debt at no more than 20%.
Since fiscal year 2016-17, the city has contributed $56.4 million to CalPERS to reduce the city's
unfunded liability and thereby achieve interest savings. These contributions were in addition to
the annual required contributions set by CalPERS.
Council Memo -Cal PERS Update (Districts -All)
August 24, 2023 .
Page 7
Even though CalPERS is continuing to take prudent measures to manage the pension liability for
its participants, the annual costs paid by participating members will continue to increase. And,
while Cal PERS has outperformed its assumed rate of return on investments over the last
10-years, future economic uncertainty is likely to have a profound impact on its investment
performance, which will impact the city's annual required contributions.
An additional strategy that has been implemented by a number of municipalities throughout the
state is the establishment of a Section 115 Trust for purposes of prefunding pension obligations.
These trusts allow agencies to maintain local control over their assets, dictate the timing of
contributions and withdrawals to and from the trust and have full discretion as to how the
dollars are invested.
Next Steps
Information included in CalPERS' most recent actuarial reports will not affect the city's
contributions until fiscal year 2024-25. The appropriate data will be incorporated in the fiscal
year 2024-25 budget process and presented to the City Council in May 2024.
As part of the city's 5-year Strategic Plan, staff have researched Section 115 Trusts and presented
information to the City Council about options for potentially establishing a trust. Further
direction to pursue the potential establishment of a trust was provided by the City Council on
June 6, 2023. Staff will return to the City Council on September 12, 2023, to provide an update on
the city's pension plan status and recommendations for the establishment of a Section 115 Trust.
Attachment: A. CalPERS Miscellaneous Actuarial Valuation Report
(Due to the size of Attachment A, a hard copy is on file in the Office of the
City Council, as reference)
B. CalPERS Safety Actuarial Valuation Report
(Due to the size of Attachment B, a hardcopy is on file in the Office of the
City Council, as reference)
cc: Scott Chadwick, City Manager
Cindie McMahon, City Attorney
Gary Barberio, Deputy City Manager, Community Services
Paz Gomez, Deputy City Manager, Public Works
Mickey Williams, Police Chief
Michael Calderwood, Fire Chief
Sheila Cobian, Legislative & Constituent Affairs Director
Roxanne Muhlmeister, Assistant Finance Director
Brigid Drury, Budget Manager
Craig Lindholm, City Treasurer
California Public Employees’ Retirement System
Actuarial Office
400 Q Street, Sacramento, CA 95811 | Phone: (916) 795-3000 | Fax: (916) 795-2744
888 CalPERS (or 888-225-7377) | TTY: (877) 249-7442 | www.calpers.ca.gov
July 2023
Miscellaneous Plan of the City of Carlsbad (CalPERS ID: 3747905882)
Annual Valuation Report as of June 30, 2022
Dear Employer,
Attached to this letter is the June 30, 2022 actuarial valuation report for the rate plan noted above. Provided in this
report is the determination of the minimum required employer contributions for fiscal year (FY) 2024-25. In
addition, the report contains important information regarding the current financial status of the plan as well as projections
and risk measures to aid in planning for the future.
Actuarial valuations are based on assumptions regarding future plan experience including investment return and payroll
growth, eligibility for the types of benefits provided, and longevity among retirees. The CalPERS Board of Administration
(board) adopts these assumptions after considering the advice of CalPERS actuarial and investment teams and other
professionals. Each actuarial valuation reflects all prior differences between actual and assumed experience and adjusts
the contribution requirements as needed. This valuation is based on an investment return assumption of 6.8%, which was adopted by the board in November 2021. Other assumptions used in this report are those recommended in the
CalPERS Experience Study and Review of Actuarial Assumptions report from November 2021.
Required Contributions
The table below shows the minimum required employer contributions and the PEPRA member rate for FY 2024-25 along
with an estimate of the required employer contribution for FY 2025-26. Employee contributions other than cost sharing
(whether paid by the employer or the employee) are in addition to the results shown below. The required employer
contributions in this report do not reflect any cost sharing arrangement between the agency and the employees.
Fiscal Year Employer Normal
Cost Rate
Employer Amortization of
Unfunded Accrued Liability
PEPRA Member
Contribution Rate
2024-25 12.13% $8,103,356 8.50%
Projected Results
2025-26 11.8% $8,933,000 TBD
The actual investment return for FY 2022-23 was not known at the time this report was prepared. The projections above
assume the investment return for that year would be 6.8%. To the extent the actual investment return for FY 2022-
23 differs from 6.8%, the actual contribution requirements for FY 2025-26 will differ from those shown above.
For additional details regarding the assumptions and methods used for these projections, please refer to the “Projected Employer Contributions” in the “Highlights and Executive Summary” section. This section also contains projected required
contributions through FY 2029-30.
Changes from Previous Year’s Valuations
There are no significant changes in actuarial assumptions or policies in the 2022 actuarial valuation. There may be
changes specific to the plan such as contract amendments and funding changes.
Further descriptions of general changes are included in the “Highlights and Executive Summary” section and in Appendix
A, “Actuarial Methods and Assumptions.” The effects of any changes on the required contributions are included in the
“Reconciliation of Required Employer Contributions” section.
Attachment A
Miscellaneous Plan of the City of Carlsbad
(CalPERS ID: 3747905882)
Annual Valuation Report as of June 30, 2022
Page 2
Questions
A CalPERS actuary is available to answer questions about this report. Other questions may be directed to the Customer
Contact Center at (888)-CalPERS or (888-225-7377).
Sincerely,
SCOTT TERANDO, ASA, EA, MAAA, FCA, CFA
Chief Actuary, CalPERS
RANDALL DZIUBEK, ASA, MAAA
Deputy Chief Actuary, CalPERS
Actuarial Valuation
as of June 30, 2022
for the
Miscellaneous Plan
of the
City of Carlsbad
(CalPERS ID: 3747905882)
(Rate Plan ID: 316)
Required Contributions
for Fiscal Year
July 1, 2024 – June 30, 2025
Table of Contents
Actuarial Certification 1
Highlights and Executive Summary
Introduction 3
Purpose 3
Required Contributions 4
Additional Discretionary Employer Contributions 5
Funded Status – Funding Policy Basis 6
Projected Employer Contributions 7
Cost 8
Changes Since the Prior Year’s Valuation 9
Subsequent Events 9
Assets
Reconciliation of the Market Value of Assets 11
Asset Allocation 12
CalPERS History of Investment Returns 13
Liabilities and Contributions
Development of Accrued and Unfunded Liabilities 15
(Gain) / Loss Analysis 6/30/21 - 6/30/22 16
Schedule of Amortization Bases 17
Amortization Schedule and Alternatives 19
Reconciliation of Required Employer Contributions 21
Employer Contribution History 22
Funding History 22
Normal Cost by Benefit Group 23
PEPRA Member Contribution Rates 24
Risk Analysis
Future Investment Return Scenarios 26
Discount Rate Sensitivity 27
Mortality Rate Sensitivity 27
Maturity Measures 28
Maturity Measures History 29
Funded Status – Termination Basis 30
Plan’s Major Benefit Provisions
Plan’s Major Benefit Options 32
Appendix A – Actuarial Methods and Assumptions
Actuarial Data A-1
Actuarial Methods A-1
Actuarial Assumptions A-4
Miscellaneous A-24
Appendix B – Principal Plan Provisions B-1
Appendix C – Participant Data
Summary of Valuation Data C-1
Active Members C-2
Transferred and Separated Members C-3
Retired Members and Beneficiaries C-4
Appendix D – Glossary D-1
(CY) FIN JOB INSTANCE ID: 415584 (PY) FIN JOB INSTANCE ID: 404363 REPORT ID: 416127
CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 1
Actuarial Certification
To the best of my knowledge, this report is complete and accurate and contains sufficient information to
disclose, fully and fairly, the funded condition of the Miscellaneous Plan of the City of Carlsbad and satisfies
the actuarial valuation requirements of Government Code section 7504. This valuation and related validation
work was performed by the CalPERS Actuarial Office and is based on the member and financial data as of
June 30, 2022 provided by the various CalPERS databases and the benefits under this plan with CalPERS
as of the date this report was produced.
It is my opinion that the valuation has been performed in accordance with generally accepted actuarial principles, in accordance with standards of practice prescribed by the Actuarial Standards Board, and that the
assumptions and methods, as prescribed by the CalPERS Board of Administration, are internally consistent
and reasonable for this plan.
The undersigned is an actuary who satisfies the Qualification Standards for Actuaries Issuing Statements of
Actuarial Opinion in the United States with regard to pensions.
NINA RAMSEY, ASA, MAAA
Actuary, CalPERS
Highlights and Executive Summary
• Introduction
• Purpose
• Required Contributions
• Additional Discretionary Employer Contributions
• Funded Status – Funding Policy Basis
• Projected Employer Contributions
• Cost
• Changes Since the Prior Year’s Valuation
• Subsequent Events
CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 3
Introduction
This report presents the results of the June 30, 2022 actuarial valuation of the Miscellaneous Plan of the City
of Carlsbad of the California Public Employees’ Retirement System (CalPERS). This actuarial valuation sets
the minimum required contributions for fiscal year (FY) 2024-25.
Purpose
This report documents the results of the actuarial valuation prepared by the CalPERS Actuarial Office using
data as of June 30, 2022. The purpose of the valuation is to:
• Set forth the assets and accrued liabilities of this rate plan as of June 30, 2022;
• Determine the minimum required employer contributions for this rate plan for FY July 1, 2024 through
June 30, 2025;
• Determine the required member contribution rate for FY July 1, 2024 through June 30, 2025 for
employees subject to the California Public Employees' Pension Reform Act of 2013 (PEPRA); and
• Provide actuarial information as of June 30, 2022 to the CalPERS Board of Administration (board)
and other interested parties.
The pension funding information presented in this report should not be used in financial reports subject to
Governmental Accounting Standards Board (GASB) Statement No. 68 for an Agent Employer Defined Benefit
Pension Plan. A separate accounting valuation report for such purposes is available from CalPERS and details
for ordering are available on the CalPERS website (www.calpers.ca.gov).
The measurements shown in this actuarial valuation may not be applicable for other purposes. The agency
should contact the plan actuary before disseminating any portion of this report for any reason that is not
explicitly described above.
Future actuarial measurements may differ significantly from the current measurements presented in this report
due to such factors as the following: plan experience differing from that anticipated by the economic or
demographic assumptions; changes in economic or demographic assumptions; changes in actuarial policies;
changes in plan provisions or applicable law; and differences between the required contributions determined
by the valuation and the actual contributions made by the agency.
Assessment and Disclosure of Risk
This report includes the following risk disclosures consistent with the guidance of Actuarial Standards of
Practice No. 51 and recommended by the California Actuarial Advisory Panel (CAAP) in the Model Disclosure
Elements document:
• A “Scenario Test,” projecting future results under different investment income returns.
• A “Sensitivity Analysis,” showing the impact on current valuation results using alternative discount
rates 5.8% and 7.8%.
• A “Sensitivity Analysis,” showing the impact on current valuation results assuming rates of mortality
are 10% lower or 10% higher than our current post-retirement mortality assumptions adopted in
2021.
• Plan maturity measures indicating how sensitive a plan may be to the risks noted above.
CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 4
Required Contributions
Fiscal Year
Required Employer Contributions 2024-25
Employer Normal Cost Rate 12.13%
Plus
Required Payment on Amortization Bases $8,103,356
Paid either as
1) Monthly Payment $675,280
Or
2) Annual Prepayment Option* $7,841,142
Required PEPRA Member Contribution Rate
8.50%
The total minimum required employer contribution is the sum of the Plan’s Employer Normal Cost Rate
(expressed as a percentage of payroll and paid as payroll is reported) plus the Employer Unfunded Accrued
Liability (UAL) Contribution Amount (billed monthly (1) or prepaid annually (2) in dollars).
* Only the UAL portion of the employer contribution can be prepaid (which must be received in full no
later than July 31).
For additional detail regarding the determination of the required contribution for PEPRA members, see
”PEPRA Member Contribution Rates” in the “Liabilities and Contributions” section. Required member
contributions for Classic members can be found in Appendix B.
Fiscal Year Fiscal Year
2023-24 2024-25
Normal Cost Contribution as a Percentage of Payroll
Total Normal Cost 20.60% 20.23%
Employee Contribution1 8.09% 8.10%
Employer Normal Cost2 12.51% 12.13%
Projected Annual Payroll for Contribution Year $46,895,969 $50,136,262
Estimated Employer Contributions Based On
Projected Payroll
Total Normal Cost $9,660,570 $10,142,566
Offset Due to Employee Contributions 3,793,884 4,061,037
Employer Normal Cost 5,866,686 6,081,529
Unfunded Liability Contribution 6,360,246 8,103,356
% of Projected Payroll (illustrative only) 13.56% 16.16%
Estimated Total Employer Contribution $12,226,932 $14,184,885
% of Projected Payroll (illustrative only) 26.07% 28.29%
1 For classic members, this is the percentage specified in the Public Employees’ Retirement Law, net of any reduction from
the use of a modified formula or other factors. For PEPRA members, the member contribution rate is based on 50% of the normal cost. A development of PEPRA member contribution rates can be found in the “Liabilities and Contributions” section. Employee cost sharing is not shown in this report.
2 The Employer Normal Cost is a blended rate for all benefit groups in the plan. For a breakout of normal cost by benefit group, see “Normal Cost by Benefit Group” in the “Liabilities and Contributions” section.
CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 5
Additional Discretionary Employer Contributions
The minimum required employer contribution towards the Unfunded Accrued Liability (UAL) for this rate plan
for FY 2024-25 is $8,103,356. CalPERS allows agencies to make additional discretionary payments (ADPs)
at any time and in any amount. These optional payments serve to reduce the UAL and future required
contributions and can result in significant long-term savings. Agencies can also use ADPs to stabilize annual
contributions as a fixed dollar amount, percent of payroll or percent of revenue.
Provided below are select ADP options for consideration. Making such an ADP during FY 2024-25 does not
require an ADP be made in any future year, nor does it change the remaining amortization period of any
portion of unfunded liability. For information on permanent changes to amortization periods, see the “Amortization Schedule and Alternatives” section of the report.
Agencies considering making an ADP should contact CalPERS for additional information.
Minimum Required Employer Contribution for Fiscal Year 2024-25
Estimated
Normal Cost
Minimum UAL
Payment
ADP Total UAL
Contribution
Estimated Total
Contribution
$6,081,529 $8,103,356 $0 $8,103,356 $14,184,885
Alternative Fiscal Year 2024-25 Employer Contributions for Greater UAL Reduction
Funding
Horizon
Estimated
Normal Cost
Minimum UAL
Payment
ADP1 Total UAL
Contribution
Estimated Total
Contribution
20 years $6,081,529 $8,103,356 $2,162,870 $10,266,226 $16,347,755
15 years $6,081,529 $8,103,356 $3,873,092 $11,976,448 $18,057,977
10 years $6,081,529 $8,103,356 $7,480,258 $15,583,614 $21,665,143
5 years $6,081,529 $8,103,356 $18,695,584 $26,798,940 $32,880,469
1 The ADP amounts are assumed to be made in the middle of the fiscal year. A payment made earlier or later in the fiscal year would have to be less or more than the amount shown to have the same effect on the UAL amortization.
Note that the calculations above are based on the projected Unfunded Accrued Liability as of June 30, 2024
as determined in the June 30, 2022 actuarial valuation. New unfunded liabilities can emerge in future years due to assumption or method changes, changes in plan provisions, and actuarial experience different than
assumed. Making an ADP illustrated above for the indicated number of years will not result in a plan that is
exactly 100% funded in the indicated number of years. Valuation results will vary from one year to the next
and can diverge significantly from projections over a period of several years.
CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 6
Funded Status – Funding Policy Basis
The table below provides information on the current funded status of the plan under the funding policy. The
funded status for this purpose is based on the market value of assets relative to the funding target produced
by the entry age actuarial cost method and actuarial assumptions adopted by the board. The actuarial cost
method allocates the total expected cost of a member’s projected benefit (Present Value of Benefits) to
individual years of service (the Normal Cost). The value of the projected benefit that is not allocated to future
service is referred to as the Accrued Liability and is the plan’s funding target on the valuation date. The
Unfunded Accrued Liability (UAL) equals the funding target minus the assets. The UAL is an absolute
measure of funded status and can be viewed as employer debt. The funded ratio equals the assets divided
by the funding target. The funded ratio is a relative measure of the funded status and allows for comparisons
between plans of different sizes.
A funded ratio of 100% (UAL of $0) implies that the funding of the plan is on target and that future contributions
equal to the normal cost of the active plan members will be sufficient to fully fund all retirement benefits if
future experience matches the actuarial assumptions. A funded ratio of less than 100% (positive UAL) implies
that in addition to normal costs, payments toward the UAL will be required. Plans with a funded ratio greater
than 100% have a negative UAL (or surplus) but are required under current law to continue contributing the
normal cost in most cases, preserving the surplus for future contingencies.
Calculations for the funding target reflect the expected long-term investment return of 6.8%. If it were known
on the valuation date that future investment returns will average something greater/less than the expected return, calculated normal costs and accrued liabilities provided in this report would be less/greater than the
results shown. Therefore, for example, if actual average future returns are less than the expected return,
calculated normal costs and UAL contributions will not be sufficient to fully fund all retirement benefits. Under
this scenario, required future normal cost contributions will need to increase from those provided in this report,
and the plan will develop unfunded liabilities that will also add to required future contributions. For illustrative purposes, funded statuses based on a 1% lower and higher average future investment return (discount rate)
are as follows:
The “Risk Analysis” section of the report provides additional information regarding the sensitivity of valuation
results to the expected investment return and other factors. Also provided in that section are measures of
funded status that are appropriate for assessing the sufficiency of plan assets to cover estimated termination
liabilities.
June 30, 2021 June 30, 2022
1. Present Value of Benefits $530,619,478 $559,893,293
2. Entry Age Accrued Liability 456,814,169 481,393,865
3. Market Value of Assets (MVA) 404,515,911 369,436,837
4. Unfunded Accrued Liability (UAL) [(2) – (3)] $52,298,258 $111,957,028
5. Funded Ratio [(3) / (2)] 88.6% 76.7%
1% Lower
Average Return
Current
Assumption
1% Higher
Average Return
Discount Rate 5.8% 6.8% 7.8%
1. Present Value of Benefits $651,603,793 $559,893,293 $487,833,747
2. Entry Age Accrued Liability 544,339,305 481,393,865 429,351,648
3. Market Value of Assets (MVA) 369,436,837 369,436,837 369,436,837
4. Unfunded Accrued Liability (UAL) [(2) – (3)] $174,902,468 $111,957,028 $59,914,811
5. Funded Ratio [(3) / (2)] 67.9% 76.7% 86.0%
CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 7
Projected Employer Contributions
The table below shows the required and projected employer contributions (before cost sharing) for the next
six fiscal years. The projection assumes that all actuarial assumptions will be realized and that no further
changes to assumptions, contributions, benefits, or funding will occur during the projection period. In particular,
the investment return beginning with FY 2022-23 is assumed to be 6.80% per year, net of investment and
administrative expenses. The projected normal cost percentages below reflect that the normal cost is expected
to continue to decline over time as new employees are hired into lower cost benefit tiers. Future contribution
requirements may differ significantly from those shown below. The actual long-term cost of the plan will depend
on the actual benefits and expenses paid and the actual investment experience of the fund.
Required
Contribution
Projected Future Employer Contributions
(Assumes 6.80% Return for Fiscal Year 2022-23 and Beyond)
Fiscal Year 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30
Normal Cost % 12.13% 11.8% 11.6% 11.3% 11.1% 10.9%
UAL Payment $8,103,356 $8,933,000 $9,847,000 $10,495,000 $12,146,000 $12,373,000
Total as a % of Payroll* 28.29% 29.2% 30.2% 30.6% 32.8% 32.4%
Projected Payroll $50,136,262 $51,540,077 $52,983,199 $54,466,729 $55,991,797 $57,559,567
*Illustrative only and based on the projected payroll shown.
For ongoing plans, investment gains and losses are amortized using a 5-year ramp up. For more information,
please see “Amortization of Unfunded Actuarial Accrued Liability” under “Actuarial Methods” in Appendix A.
This method phases in the impact of the change in UAL over a 5-year period in order to reduce employer cost
volatility from year to year. As a result of this methodology, dramatic changes in the required employer
contributions in any one year are less likely. However, required contributions can change gradually and
significantly over the next five years. In years when there is a large investment loss, the relatively small
amortization payments during the ramp up period could result in contributions that are less than interest on
the UAL (i.e. negative amortization) while the contribution impact of the increase in the UAL is phased in.
For projected contributions under alternate investment return scenarios, please see the “Future Investment Return Scenarios” in the “Risk Analysis” section. Our online pension plan projection tool, Pension Outlook, is
available in the Employers section of the CalPERS website. Pension Outlook can help plan and budget
pension costs under various scenarios.
CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 8
Cost
Actuarial Determination of Plan Cost
Contributions to fund the plan are comprised of two components:
• Normal Cost, expressed as a percentage of total active payroll
• Amortization of the Unfunded Accrued Liability (UAL), expressed as a dollar amount
For fiscal years prior to 2017-18, the Amortization of UAL component was expressed as a percentage of total
active payroll. Starting with FY 2017-18, the Amortization of UAL component is expressed as a dollar amount
and invoiced on a monthly basis. There is an option to prepay this amount during July of each fiscal year.
The Normal Cost component is expressed as a percentage of active payroll with employer and employee
contributions payable as part of the regular payroll reporting process.
The determination of both components requires complex actuarial calculations. The calculations are based on a set of actuarial assumptions which can be divided into two categories:
• Demographic assumptions (e.g., mortality rates, retirement rates, employment termination rates,
disability rates)
• Economic assumptions (e.g., future investment earnings, inflation, salary growth rates)
These assumptions reflect CalPERS’ best estimate of future experience of the plan and are long term in nature.
We recognize that all assumptions will not be realized in any given year. For example, the investment earnings
at CalPERS have averaged 6.9% over the 20 years ending June 30, 2022, yet individual fiscal year returns have ranged from -23.6% to +21.3%. In addition, CalPERS reviews all actuarial assumptions by conducting
in-depth experience studies every four years, with the most recent experience study completed in 2021.
CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 9
Changes Since the Prior Year’s Valuation
Benefits
The standard actuarial practice at CalPERS is to recognize mandated legislative benefit changes in the first
annual valuation following the effective date of the legislation. Voluntary benefit changes by plan amendment
are generally included in the first valuation that is prepared after the amendment becomes effective, even if the
valuation date is prior to the effective date of the amendment.
This valuation generally reflects plan changes by amendments effective before the date of the report. Please refer to the “Plan’s Major Benefit Options” and Appendix B for a summary of the plan provisions used in this
valuation. The effect of any mandated benefit changes or plan amendments on the unfunded liability is shown
in the “(Gain) / Loss Analysis 6/30/21 – 6/30/22” and the effect on the employer contribution is shown in the
“Reconciliation of Required Employer Contributions.” It should be noted that no change in liability or contribution
is shown for any plan changes which were already included in the prior year’s valuation.
In 2022, SB 1168 increased the standard retiree lump sum death benefit from $500 to $2,000 for any de ath
occurring on or after July 1, 2023. The impact, if any, is included in plan changes in the “(Gain) / Loss Analysis
6/30/21 – 6/30/22” and the “Reconciliation of Required Employer Contributions.”
Actuarial Methods and Assumptions
There are no significant changes to the actuarial methods or assumptions for the June 30, 2022 actuarial
valuation.
Subsequent Events
This actuarial valuation report reflects fund investment return through June 30, 2022 and statutory/regulatory
changes and board actions through January 2023.
During the time period between the valuation date and the publication of this report, inflation has been
significantly higher than the expected inflation of 2.3% per annum. Since inflation influences cost-of-living
increases for retirees and beneficiaries and active member pay increases, higher inflation is likely to put at least
some upward pressure on contribution requirements and downward pressure on the funded status in the June
30, 2023 valuation. The actual impact of higher inflation on future valuation results will depend on, among other
factors, how long higher inflation persists. At this time, we continue to believe the long-term inflation assumption
of 2.3% is appropriate.
To the best of our knowledge, there have been no other subsequent events that could materially affect current
or future certifications rendered in this report.
Assets
• Reconciliation of the Market Value of Assets
• Asset Allocation
• CalPERS History of Investment Returns
CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 11
Reconciliation of the Market Value of Assets
1. Market Value of Assets as of 6/30/21 including Receivables $404,515,911
2. Change in Receivables for Service Buybacks 130,332
3. Employer Contributions 14,517,690
4. Employee Contributions 3,442,418
5. Benefit Payments to Retirees and Beneficiaries (22,475,245)
6. Refunds (96,875)
7. Transfers 0
8. Service Credit Purchase (SCP) Payments and Interest 184,248
9. Administrative Expenses (317,279)
10. Miscellaneous Adjustments 0
11. Investment Return (Net of Investment Expenses) (30,464,365)
12. Market Value of Assets as of 6/30/22 including Receivables $369,436,837
CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 12
Asset Allocation
CalPERS adheres to an Asset Allocation Strategy which establishes asset class allocation policy targets and
ranges and manages those asset class allocations within their policy ranges. CalPERS Investment Belief No.
6 recognizes that strategic asset allocation is the dominant determinant of portfolio risk and return.
The asset allocation shown below reflects the allocation of the Public Employees’ Retirement Fund (PERF) in
its entirety. The assets for City of Carlsbad Miscellaneous Plan are a subset of the PERF and are invested
accordingly.
On November 17, 2021, the board adopted changes to the strategic asset allocation. The new allocation was
effective July 1, 2022, and is shown below, expressed as a percentage of total assets.
Strategic Asset Allocation Policy Targets
Asset Class
Actual
Allocation
9/30/2022
Policy Target
Allocation
effective
7/1/2022
Global Public Equity
Market Capitalization Weighted 33.7% 30.0%
Factor Weighted 12.6% 12.0%
Private Equity 11.6% 13.0%
Income
Treasuries 3.9% 5.0%
Mortgage-backed Securities 5.6% 5.0%
Investment Grade Corporates 5.8% 10.0%
High Yield Bonds 4.6% 5.0%
Emerging Market Sovereign Bonds 2.1% 5.0%
Total Fund Income 1.5% -
Real Assets 17.1% 15.0%
Private Debt 1.8% 5.0%
Other Trust Level 3.8% -
Leverage
Strategic (0.3%) (5.0%)
Active (3.8%) -
Total Fund 100.00% 100.0%
CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 13
CalPERS History of Investment Returns
The following is a chart with the 20-year historical annual returns of the PERF for each fiscal year ending on
June 30 as reported by the Investment Office. Investment returns reported are net of investment expenses
but without reduction for administrative expenses. The assumed rate of return, however, is net of both
investment and administrative expenses. Also, the Investment Office uses a three-month lag on private equity
and real assets for investment performance reporting purposes. This can lead to a timing difference in the
returns below and those used for financial reporting purposes. The investment gain or loss calculation in this
report relies on final assets that have been audited and are appropriate for financial reporting. Because of
these differences, the effective investment return for funding purposes can be higher or lower than the return reported by the Investment Office shown here.
* As reported by the Investment Office with a 3-month lag on private equity and real assets.
The table below shows annualized investment returns of the PERF for various time periods ending on June
30, 2022 (figures reported are net of investment expenses but without reduction for administrative expenses).
These returns are the annual rates that if compounded over the indicated number of years would equate to the actual time-weighted investment performance of the PERF. It should be recognized that in any given year
the rate of return is volatile. The portfolio has an expected volatility of 12.1% per year based on the most
recent Asset Liability Management study. The realized volatility is a measure of the ris k of the portfolio
expressed as the standard deviation of the fund’s total monthly return distribution, expressed as an annual
percentage. Due to their volatile nature, when looking at investment returns, it is more instructive to look at returns over longer time horizons.
History of CalPERS Compound Annual Rates of Return and Volatilities
1 year 5 year 10 year 20 year 30 year
Compound Annual Return -6.1% 6.7% 7.7% 6.9% 7.7%
Realized Volatility – 8.3% 7.1% 8.5% 8.6%
Liabilities and Contributions
• Development of Accrued and Unfunded Liabilities
• (Gain) / Loss Analysis 6/30/21 - 6/30/22
• Schedule of Amortization Bases
• Amortization Schedule and Alternatives
• Reconciliation of Required Employer Contributions
• Employer Contribution History
• Funding History
• Normal Cost by Benefit Group
• PEPRA Member Contribution Rates
CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 15
Development of Accrued and Unfunded Liabilities
June 30, 2021 June 30, 2022
1. Present Value of Projected Benefits
a) Active Members $216,997,185 $223,007,605
b) Transferred Members 28,805,961 28,585,995
c) Separated Members 9,478,646 11,859,539
d) Members and Beneficiaries Receiving Payments 275,337,686 296,440,154
e) Total $530,619,478 $559,893,293
2. Present Value of Future Employer Normal Costs $44,558,700 $44,511,346
3. Present Value of Future Employee Contributions $29,246,609 $33,988,082
4. Entry Age Accrued Liability
a) Active Members [(1a) - (2) - (3)] $143,191,876 $144,508,177
b) Transferred Members (1b) 28,805,961 28,585,995
c) Separated Members (1c) 9,478,646 11,859,539
d) Members and Beneficiaries Receiving Payments (1d) 275,337,686 296,440,154
e) Total $456,814,169 $481,393,865
5. Market Value of Assets (MVA) $404,515,911 $369,436,837
6. Unfunded Accrued Liability (UAL) [(4e) - (5)] $52,298,258 $111,957,028
7. Funded Ratio [(5) / (4e)] 88.6% 76.7%
CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 16
(Gain)/Loss Analysis 6/30/21 – 6/30/22
To calculate the cost requirements of the plan, assumptions are made about future events that affect the
amount and timing of benefits to be paid and assets to be accumulated. Each year , actual experience is
compared to the expected experience based on the actuarial assumptions. This results in actuarial gains or
losses, as shown below.
1. Total (Gain)/Loss for the Year
a) Unfunded Accrued Liability (UAL) as of 6/30/21 $52,298,258
b) Expected payment on the UAL during 2021-22 8,521,159
c) Interest through 6/30/22 [.068 x (1a) - ((1.068)½ - 1) x (1b)] 3,271,328
d) Expected UAL before all other changes [(1a) - (1b) + (1c)] 47,048,427
e) Change due to plan changes1 493,430
f) Change due to AL Significant Increase 0
g) Change due to assumption change 0
h) Change due to method change 0
i) Change due to discount rate change with Funding Risk Mitigation 0
j) Expected UAL after all other changes [(1d) + (1e) + (1f) + (1g) + (1h) + (1i)] 47,541,857
k) Actual UAL as of 6/30/22 111,957,028
l) Total (Gain)/Loss for 2021-22 [(1k) - (1j)] $64,415,171
2. Investment (Gain)/Loss for the Year
a) Market Value of Assets as of 6/30/21 $404,515,911
b) Prior fiscal year receivables (331,271)
c) Current fiscal year receivables 461,603
d) Contributions received 17,960,108
e) Benefits and refunds paid (22,572,119)
f) Transfers, SCP payments and interest, and miscellaneous adjustments 184,248
g) Expected return at 6.8% per year 27,583,927
h) Expected assets as of 6/30/22 [(2a) + (2b) + (2c) + (2d) + (2e) + (2f) + (2g)] 427,802,407
i) Actual Market Value of Assets as of 6/30/22 369,436,837
j) Investment (Gain)/Loss [(2h) - (2i)] $58,365,571
3. Non-Investment (Gain)/Loss for the Year
a) Total (Gain)/Loss (1l) $64,415,171
b) Investment (Gain)/Loss (2j) 58,365,571
c) Non-Investment (Gain)/Loss [(3a) - (3b)] $6,049,600
1 Includes the effect, if any, of SB 1168, which increased the standard post-retirement lump sum death benefit from $500
to $2,000 for deaths occurring on or after July 1, 2023.
CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 17
Schedule of Amortization Bases
Below is the schedule of the plan’s amortization bases. Note that there is a two-year lag between the valuation date and the start of the contribution year.
• The assets, liabilities, and funded status of the plan are measured as of the valuation date: June 30, 2022. • The required employer contributions determined by the valuation are for the fiscal year beginning two years after the valuati on date: FY 2024-25.
This two-year lag is necessary due to the amount of time needed to extract and test the membership and financial data, and the need to provide public agencies with their
required employer contribution well in advance of the start of the fiscal year.
The Unfunded Accrued Liability (UAL) is used to determine the employer contribution and therefore must be rolled forward two years from the valuation date to the first
day of the fiscal year for which the contribution is being determined. The UAL is rolled forward each year by subtracting the expected payment on the UAL for the fiscal
year and adjusting for interest. The expected payment on the UAL for a fiscal year is equal to the Expected Employer Contrib ution for the fiscal year minus the Expected
Normal Cost for the year. The Employer Contribution for the first fiscal year is determined by the actuarial valuation two ye ars ago and the contribution for the second year
is from the actuarial valuation one year ago. Additional discretionary payments are reflected in the Expected Payments column in the fiscal year they were made by the
agency.
Reason for Base Date Est.
Ramp
Level 2024-25 Ramp Shape
Escala-
tion Rate Amort. Period Balance 6/30/22
Expected
Payment 2022-23 Balance 6/30/23
Expected
Payment 2023-24 Balance 6/30/24
Minimum
Required
Payment 2024-25
Method Change 6/30/04 No Ramp 2.80% 2 (257,288) (70,784) (201,633) (72,126) (140,806) (74,146)
Special (Gain)/Loss 6/30/09 No Ramp 2.80% 17 2,154,555 165,161 2,130,381 165,921 2,103,777 170,567
Special (Gain)/Loss 6/30/10 No Ramp 2.80% 18 485,495 35,984 481,321 36,118 476,725 37,129
Special (Gain)/Loss 6/30/11 No Ramp 2.80% 19 (1,220,362) (87,664) (1,212,751) (87,912) (1,204,366) (90,374)
(Gain)/Loss 6/30/12 No Ramp 2.80% 20 10,060,975 701,952 10,019,695 703,335 9,974,179 723,028
Payment (Gain)/Loss 6/30/12 No Ramp 2.80% 20 424,204 29,597 422,463 29,655 420,544 30,485
(Gain)/Loss 6/30/13 100% Up/Down 2.80% 21 35,057,124 2,521,398 34,835,293 2,528,426 34,591,114 2,599,222
(Gain)/Loss 6/30/14 100% Up/Down 2.80% 22 (25,766,850) (1,799,803) (25,659,006) (1,803,278) (25,540,237) (1,853,770)
Assumption Change 6/30/14 100% Up/Down 2.80% 12 18,917,896 2,027,445 18,109,068 2,049,912 17,222,022 2,107,310
(Gain)/Loss 6/30/15 100% Up/Down 2.80% 23 13,260,000 901,260 13,230,281 902,240 13,197,528 927,503
(Gain)/Loss 6/30/16 100% Up/Down 2.80% 24 16,160,595 1,070,830 16,152,876 1,070,986 16,144,471 1,100,974
Assumption Change 6/30/16 100% Up/Down 2.80% 14 6,992,309 666,186 6,779,322 672,300 6,545,534 691,124
(Gain)/Loss 6/30/17 100% Up/Down 2.80% 25 (14,448,072) (757,136) (14,648,086) (945,953) (14,666,569) (972,440)
Assumption Change 6/30/17 100% Up/Down 2.80% 15 5,456,552 402,281 5,411,864 507,026 5,255,889 521,222
(Gain)/Loss 6/30/18 100% Up/Down 2.80% 26 (4,079,537) (160,625) (4,190,949) (213,835) (4,254,948) (274,779)
Assumption Change 6/30/18 100% Up/Down 2.80% 16 13,777,033 751,519 13,937,221 1,009,204 13,841,999 1,296,827
Method Change 6/30/18 100% Up/Down 2.80% 16 2,625,068 143,194 2,655,590 192,293 2,637,447 247,097
Non-Investment (Gain)/Loss 6/30/19 No Ramp 0.00% 17 210,634 19,740 204,557 19,394 198,424 19,394
Investment (Gain)/Loss 6/30/20 60% Up Only 0.00% 18 9,093,656 199,196 9,506,167 390,772 9,748,747 586,158
Non-Investment (Gain)/Loss 6/30/20 No Ramp 0.00% 18 3,289,659 300,754 3,202,544 295,347 3,115,093 295,347
CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 18
Schedule of Amortization Bases (continued)
Reason for Base Date Est.
Ramp Level 2024-25 Ramp Shape
Escala-tion Rate Amort. Period Balance 6/30/22
Expected Payment 2022-23 Balance 6/30/23
Expected Payment 2023-24 Balance 6/30/24
Minimum Required Payment 2024-25
Assumption Change 6/30/21 No Ramp 0.00% 19 1,276,585 (351,263) 1,726,402 155,244 1,683,362 155,244
Net Investment (Gain) 6/30/21 40% Up Only 0.00% 19 (43,471,592) 0 (46,427,660) (997,948) (48,553,421) (1,995,897)
Non-Investment (Gain)/Loss 6/30/21 No Ramp 0.00% 19 (2,570,586) 0 (2,745,386) (246,875) (2,676,942) (246,875)
Risk Mitigation 6/30/21 No Ramp 0.00% 0 11,659,418 (392,321) 12,857,699 13,287,671 0 0
Risk Mitigation Offset 6/30/21 No Ramp 0.00% 0 (12,039,044) 0 (12,857,699) (13,287,671) 0 0
Benefit Change 6/30/22 No Ramp 0.00% 20 493,430 (4,746) 531,888 (4,879) 573,099 51,535
Investment (Gain)/Loss 6/30/22 20% Up Only 0.00% 20 58,365,571 0 62,334,430 0 66,573,171 1,430,970
Non-Investment (Gain)/Loss 6/30/22 No Ramp 0.00% 20 6,049,600 0 6,460,973 0 6,900,319 620,501
Total 111,957,028 6,312,155 113,046,865 6,355,367 114,166,155 8,103,356
CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 20 Page 19
Amortization Schedule and Alternatives
The amortization schedule on the previous page shows the minimum contributions required according to the
CalPERS amortization policy. Many agencies have expressed a desire for a more stable pattern of payments
or have indicated interest in paying off the unfunded accrued liabilities more quickly than required. As such,
we have provided alternative amortization schedules to help analyze the current amortization schedule and
illustrate the potential savings of accelerating unfunded liability payments.
Shown on the following page are future year amortization payments based on 1) the current amortization
schedule reflecting the individual bases and remaining periods shown on the previous page, and 2) alternative
“fresh start” amortization schedules using two sample periods that would both result in interest savings relative
to the current amortization schedule. To initiate a fresh start, please contact the plan actuary.
The current amortization schedule typically contains both positive and negative bases. Positive bases result
from plan changes, assumption changes, method changes or plan experience that increase unfunded liability.
Negative bases result from plan changes, assumption changes, method changes, or plan experience that
decrease unfunded liability. The combination of positive and negative bases within an amortization schedule
can result in unusual or problematic circumstances in future years, such as:
• When a negative payment would be required on a positive unfunded actuarial liability; or • When the payment would completely amortize the total unfunded liability in a very short time period,
and results in a large change in the employer contribution requirement.
In any year when one of the above scenarios occurs, the actuary will consider corrective action such as
replacing the existing unfunded liability bases with a single “fresh start” base and amortizing it over an
appropriate period.
The current amortization schedule on the following page may appear to show that, based on the current
amortization bases, one of the above scenarios will occur at some point in the future. It is impossible to know
today whether such a scenario will in fact arise since there will be additional bases added to the amortization schedule in each future year. Should such a scenario arise in any future year, the actuary will take appropriate
action based on guidelines in the CalPERS amortization policy.
CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 20
Amortization Schedule and Alternatives (continued)
Alternative Schedules
Current Amortization
Schedule 15 Year Amortization 10 Year Amortization
Date Balance Payment Balance Payment Balance Payment
6/30/2024 114,166,155 8,103,356 114,166,155 11,976,448 114,166,155 15,583,614
6/30/2025 113,555,116 8,933,002 109,552,503 11,976,448 105,824,710 15,583,614
6/30/2026 112,045,136 9,846,635 104,625,123 11,976,449 96,916,047 15,583,614
6/30/2027 109,488,291 10,494,514 99,362,680 11,976,449 87,401,595 15,583,614
6/30/2028 106,088,035 12,146,357 93,742,391 11,976,449 77,240,160 15,583,614
6/30/2029 100,749,480 12,373,412 87,739,922 11,976,449 66,387,748 15,583,614
6/30/2030 94,813,254 12,606,828 81,329,285 11,976,448 54,797,371 15,583,614
6/30/2031 88,232,144 12,846,777 74,482,726 11,976,449 42,418,849 15,583,614
6/30/2032 80,955,546 12,567,790 67,170,600 11,976,449 29,198,587 15,583,614
6/30/2033 73,472,456 12,266,271 59,361,249 11,976,448 15,079,348 15,583,614
6/30/2034 65,792,119 11,758,990 51,020,863 11,976,448
6/30/2035 58,113,760 11,075,605 42,113,331 11,976,449
6/30/2036 50,619,513 9,917,793 32,600,086 11,976,448
6/30/2037 43,812,187 9,293,114 22,439,941 11,976,449
6/30/2038 37,187,532 8,628,839 11,588,905 11,976,448
6/30/2039 30,798,888 8,132,412
6/30/2040 24,488,847 7,766,741
6/30/2041 18,127,622 6,747,718
6/30/2042 12,386,931 5,245,754
6/30/2043 7,808,067 8,069,175
6/30/2044
6/30/2045
6/30/2046
6/30/2047
6/30/2048
6/30/2049
Total 198,821,083 179,646,728 155,836,140
Interest Paid 84,654,928 65,480,573 41,669,985
Estimated Savings 19,174,355 42,984,943
CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 21
Reconciliation of Required Employer Contributions
Normal Cost (% of Payroll)
1. For Period 7/1/23 – 6/30/24
a) Employer Normal Cost 12.51%
b) Employee contribution 8.09%
c) Total Normal Cost 20.60%
2. Changes since the prior year annual valuation
a) Effect of demographic experience (0.38%)
b) Effect of plan changes 0.01%
c) Effect of discount rate change due to Funding Risk Mitigation 0.00%
d) Effect of assumption changes 0.00%
e) Effect of method changes 0.00%
f) Net effect of the changes above [sum of (a) through (e)] (0.37%)
3. For Period 7/1/24 – 6/30/25
a) Employer Normal Cost 12.13%
b) Employee contribution 8.10%
c) Total Normal Cost 20.23%
Employer Normal Cost Change [(3a) – (1a)] (0.38%)
Employee Contribution Change [(3b) – (1b)] 0.01%
Unfunded Liability Contribution ($)
1. For Period 7/1/23 – 6/30/24 6,360,246
2. Changes since the prior year annual valuation
a) Effect of adjustments to prior year’s amortization schedule 0
b) Effect of elimination of amortization bases 0
c) Effect of progression of amortization bases1 (359,896)
d) Effect of investment (gain)/loss during prior year2 1,430,970
e) Effect of non-investment (gain)/loss during prior year 620,501
f) Effect of re-amortizing existing bases due to Funding Risk Mitigation 0
g) Effect of Golden Handshake 0
h) Effect of plan changes 51,535
i) Effect of AL Significant Increase (Government Code section 20791) 0
j) Effect of assumption changes 0
k) Effect of adjustments to the amortization schedule (e.g., Fresh Start) 0
l) Effect of method change 0
m) Net effect of the changes above [sum of (a) through (l)] 1,743,110
3. For Period 7/1/24 – 6/30/25 [(1) + (2m)] 8,103,356
The amounts shown for the period 7/1/23 – 6/30/24 may be different if a prepayment of unfunded actuarial
liability is made or a plan change became effective after the prior year’s actuarial valuation was performed.
1 Includes scheduled escalation in individual amortization base payments due to the 5-year ramp and payroll growth assumption used in the pre-2019 amortization policy. 2 The unfunded liability contribution for the investment (gain)/loss during the year prior to the valuation date is 20% of the
“full” annual requirement due to the 5-year ramp. Increases to this amount that occur during the ramp period will be included in line c) for each of the next four years.
CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 22
Employer Contribution History
The table below provides a recent history of the required and discretionary employer contributions for the plan.
The required amounts are based on the actuarial valuation from two years prior without subsequent
adjustments, if any. Additional discretionary payments before July 1, 2018 or after June 30, 2023 are not
included.
Fiscal
Year
Employer
Normal Cost
Unfunded Rate
Unfunded Liability
Payment ($)
Additional Discretionary
Payments
2015 - 16 12.344% 14.869% N/A N/A
2016 - 17 12.598% 16.259% N/A N/A
2017 - 18 12.255% N/A 6,649,209 N/A
2018 - 19 12.343% N/A 7,126,004 5,779,350
2019 - 20 12.410% N/A 5,596,719 0
2020 - 21 12.787% N/A 5,675,255 5,403,140
2021 - 22 12.15% N/A 6,577,258 3,200,000
2022 - 23 11.72% N/A 7,227,710 0
2023 - 24 12.51% N/A 6,360,246
2024 - 25 12.13% N/A 8,103,356
Funding History
The table below shows the recent history of actuarial accrued liability, market value of assets, unfunded accrued liability, funded ratio and annual covered payroll.
[]
Valuation
Date
Accrued
Liability
(AL)
Market Value of
Assets (MVA)
Unfunded
Accrued
Liability (UAL)
Funded
Ratio
Annual
Covered
Payroll
6/30/2013 $278,126,175 $203,942,992 $74,183,183 73.3% $31,899,049
6/30/2014 311,318,547 238,912,202 72,406,345 76.7% 32,748,320
6/30/2015 325,919,906 242,072,220 83,847,686 74.3% 34,274,855
6/30/2016 344,920,666 241,133,786 103,786,880 69.9% 36,249,206
6/30/2017 363,173,103 269,810,408 93,362,695 74.3% 36,940,152
6/30/2018 392,462,997 300,350,224 92,112,773 76.5% 36,242,013
6/30/2019 410,200,348 322,146,603 88,053,745 78.5% 39,277,286
6/30/2020 430,502,885 330,903,112 99,599,773 76.9% 42,888,826
6/30/2021 456,814,169 404,515,911 52,298,258 88.6% 43,167,428
6/30/2022 481,393,865 369,436,837 111,957,028 76.7% 46,150,095
CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 23
Normal Cost by Benefit Group
The table below displays the Total Normal Cost broken out by benefit group for FY 2024-25. The Total Normal
Cost is the annual cost of service accrual for the fiscal year for active employees and can be viewed as the
long-term contribution rate for the benefits contracted. Generally, the normal cost for a benefit group subject
to more generous benefit provisions will exceed the normal cost for a group with less generous benefits.
However, based on the characteristics of the members (particularly when the number of actives is small), this
may not be the case. Future measurements of the Total Normal Cost for each group may differ significantly
from the current values due to such factors as: changes in the demographics of the group, changes in
economic and demographic assumptions, changes in plan benefits or applicable law.
Plan
Identifier Benefit Group Name
Total Normal
Cost
FY 2024-25
Number of
Actives
Payroll on
6/30/2022
316 Miscellaneous First Level 24.34% 186 $17,001,496
26260 Miscellaneous PEPRA Level 16.92% 301 $22,422,657
30365 Miscellaneous Second Level 21.21% 61 $6,725,942
Plan Total 20.23% 548 $46,150,095
Note that if a Benefit Group above has multiple bargaining units, each of which has separately contracted for
different benefits such as Employer Paid Member Contributions, then the Normal Cost shown for the
respective benefit level does not reflect those differences. Additionally, if a Second Level Benefit Group
amended to the same benefit formula as a First Level Benefit Group, their Normal Costs may be dissimilar
due to demographic or other population differences. For questions in these situations, please contact the plan
actuary.
CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 24
PEPRA Member Contribution Rates
The California Public Employees’ Pension Reform Act of 2013 (“PEPRA”) established new benefit formulas,
final compensation period, and contribution requirements for “new” employees (generally tho se first hired into
a CalPERS-covered position on or after January 1, 2013). In accordance with Government Code section
7522.30(b), “new members … shall have an initial contribution rate of at least 50% of the normal cost rate.”
The normal cost for the plan is dependent on the benefit levels, actuarial assumptions, and demographics of
the plan, particularly members’ entry age into the plan. Should the total normal cost of the plan change by
more than 1% from the base total normal cost established for the plan, the new member rate shall be 50% of
the new normal cost rounded to the nearest quarter percent.
The table below shows the determination of the PEPRA member contribution rates effective July 1, 2024,
based on 50% of the total normal cost rate for each respective plan as of the June 30, 2022 valuation.
Basis for Current Rate Rates Effective July 1, 2024
Plan
Identifier Benefit Group Name
Total
Normal
Cost Member
Rate
Total
Normal
Cost Change
Change
Needed
Member
Rate
26260 Miscellaneous PEPRA
Level 16.980% 8.50% 16.92% (0.060%) No 8.50%
For purposes of setting member rates, it is preferable to determine total normal cost using a large active
population so that the rate remains relatively stable. While each CalPERS non -pooled plan has a sufficiently
large active population for this purpose, the PEPRA active population by itself may not be sufficiently large.
The total PEPRA normal cost will be determined based on the plan’s PEPRA membership only if the number
of members covered under the PEPRA formula meets either:
1. 50% of the active population, or
2. 25% of the active population and 100 or more PEPRA members
Until one of these conditions is met, the plan’s total PEPRA normal cost will be determined using the entire
active plan population (both PEPRA and Classic) based on the PEPRA benefit provisions. For this reason,
the PEPRA member contribution rate determined in the table above may not equal 50% of the total normal
cost of the PEPRA group shown on the “Normal Cost by Benefit Group” page.
Risk Analysis
• Future Investment Return Scenarios
• Discount Rate Sensitivity
• Mortality Rate Sensitivity
• Maturity Measures
• Maturity Measures History
• Funded Status – Termination Basis
CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 26
Future Investment Return Scenarios
Analysis using the investment return scenarios from the Asset Liability Management process completed in 2021 was performed to determine the effects of various future investment returns on required employer
contributions. The projections below reflect the impact of the CalPERS Funding Risk Mitigation policy. The
projected normal cost rates reflect that the rates are anticipated to decline over time as new employees are
hired into lower-cost benefit tiers. The projections also assume that all other actuarial assumptions will be
realized and that no further changes in assumptions, contributions, benefits, or funding will occur.
The first table shows projected contribution requirements if the fund were to earn either 3.0% or 10.8%
annually. These alternate investment returns were chosen because 90% of long-term average returns are
expected to fall between them over the 20-year period ending June 30, 2042.
Assumed Annual Return
FY 2022-23
through FY 2041-42
Projected Employer Contributions
FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30
3.0% (5th percentile)
Normal Cost Rate 11.8% 11.6% 11.3% 11.1% 10.9%
UAL Contribution $9,274,000 $10,872,000 $12,554,000 $15,593,000 $17,567,000
10.8% (95th percentile)
Normal Cost Rate 12.1% 12.1% 12.1% 12.1% 12.1%
UAL Contribution $8,619,000 $8,905,000 $8,585,000 $8,872,000 $7,336,000
Required contributions outside of this range are also possible. In particular, whereas it is unlikely that
investment returns will average less than 3.0% or greater than 10.8% over a 20 -year period, the likelihood of
a single investment return less than 3.0% or greater than 10.8% in any given year is much greater. The
following analysis illustrates the effect of an extreme, single year investment return.
The portfolio has an expected volatility (or standard deviation) of 12.0% per year. Accordingly, in any given
year there is a 16% probability that the annual return will be -5.2% or less and a 2.5% probability that the
annual return will be -17.2% or less. These returns represent one and two standard deviations below the
expected return of 6.8%.
The following table shows the effect of a one or two standard deviation investment loss in FY 2022-23 on the
FY 2025-26 contribution requirements. Note that a single-year investment gain or loss decreases or increases
the required UAL contribution amount incrementally for each of the next five years, not just one, due to the 5-
year ramp in the amortization policy. However, the contribution requirements beyond the first year are also
impacted by investment returns beyond the first year. Historically, significant downturns in the market are often
followed by higher than average returns. Such investment gains would offset the impact of these single year
negative returns in years beyond FY 2025-26.
Assumed Annual Return for
Fiscal Year 2022-23
Required
Employer
Contributions
Projected
Employer
Contributions
FY 2024-25 FY 2025-26
(17.2%) (2 standard deviation loss)
Normal Cost Rate 12.13% 11.8%
UAL Contribution $8,103,356 $11,083,000
(5.2%) (1 standard deviation loss)
Normal Cost Rate 12.13% 11.8%
UAL Contribution $8,103,356 $10,008,000
• Without investment gains (returns higher than 6.8%) in year FY 2023-24 or later, projected
contributions rates would continue to rise over the next four years due to the continued phase-in of
the impact of the illustrated investment loss in FY 2022-23.
• The Pension Outlook Tool can be used to model projected contributions for these scenarios beyond
FY 2025-26 as well as to model other investment return scenarios.
CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 27
Discount Rate Sensitivity
The discount rate assumption is calculated as the sum of the assumed real rate of return and the assumed
annual price inflation, currently 4.5% and 2.3%, respectively. Changing either the price infla tion assumption
or the real rate of return assumption will change the discount rate. The sensitivity of the valuation results to
the discount rate assumption depends on which component of the discount rate is changed. Shown below are
various valuation results as of June 30, 2022 assuming alternate discount rates by changing the two
components independently. Results are shown using the current discount rate of 6.8% as well as alternate
discount rates of 5.8% and 7.8%. The rates of 5.8% and 7.8% were selected since they illustrate the impact
of a 1.0% increase or decrease to the 6.8% assumption.
Sensitivity to the Real Rate of Return Assumption
As of June 30, 2022
1% Lower
Real Return Rate
Current
Assumptions
1% Higher
Real Return Rate
Discount Rate 5.8% 6.8% 7.8%
Price Inflation 2.3% 2.3% 2.3%
Real Rate of Return 3.5% 4.5% 5.5%
a) Total Normal Cost 25.53% 20.23% 16.23%
b) Accrued Liability $544,339,305 $481,393,865 $429,351,648
c) Market Value of Assets $369,436,837 $369,436,837 $369,436,837
d) Unfunded Liability/(Surplus) [(b) - (c)] $174,902,468 $111,957,028 $59,914,811
e) Funded Ratio 67.9% 76.7% 86.0%
Sensitivity to the Price Inflation Assumption
As of June 30, 2022
1% Lower
Inflation Rate
Current
Assumptions
1% Higher
Inflation Rate
Discount Rate 5.8% 6.8% 7.8%
Price Inflation 1.3% 2.3% 3.3%
Real Rate of Return 4.5% 4.5% 4.5%
a) Total Normal Cost 21.34% 20.23% 18.32%
b) Accrued Liability $497,557,969 $481,393,865 $443,468,874
c) Market Value of Assets $369,436,837 $369,436,837 $369,436,837 d) Unfunded Liability/(Surplus) [(b) - (c)] $128,121,132 $111,957,028 $74,032,037
e) Funded Ratio 74.3% 76.7% 83.3%
Mortality Rate Sensitivity
The following table looks at the change in the June 30, 2022 plan costs and funded status under two different
longevity scenarios, namely assuming rates of post-retirement mortality are 10% lower or 10% higher than our current mortality assumptions adopted in 2021. This type of analysis highlights the impact on the plan of
a change in the mortality assumption.
As of June 30, 2022 10% Lower
Mortality Rates
Current
Assumptions
10% Higher
Mortality Rates
a) Total Normal Cost 20.55% 20.23% 19.94%
b) Accrued Liability $491,200,829 $481,393,865 $472,374,850
c) Market Value of Assets $369,436,837 $369,436,837 $369,436,837
d) Unfunded Liability/(Surplus) [(b) - (c)] $121,763,992 $111,957,028 $102,938,013
e) Funded Ratio 75.2% 76.7% 78.2%
CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 28
Maturity Measures
As pension plans mature they become more sensitive to risks. Understanding plan maturity and how it affects
the ability of a pension plan sponsor to tolerate risk is important in understanding how the pension plan is
impacted by investment return volatility, other economic variables and changes in longevity or other
demographic assumptions. One way to look at the maturity level of CalPERS and its plans is to look at the
ratio of a plan’s retiree liability to its total liability. A pension plan in its infanc y will have a very low ratio of
retiree liability to total liability. As the plan matures, the ratio increases. A mature plan will often have a ratio
above 60%-65%.
Ratio of Retiree Accrued Liability to
Total Accrued Liability June 30, 2021 June 30, 2022
1. Retiree Accrued Liability 275,337,686 296,440,154
2. Total Accrued Liability 456,814,169 481,393,865
3. Ratio of Retiree AL to Total AL [(1) / (2)] 60% 62%
Another measure of the maturity level of CalPERS and its plans is the ratio of actives to retirees, also called
the support ratio. A pension plan in its infancy will have a very high ratio of active to retired members. As the plan matures and members retire, the ratio declines. A mature plan will often have a ratio near or below one.
To calculate the support ratio for the rate plan, retirees and beneficiaries receiving a continuance are each
counted as one, even though they may have only worked a portion of their careers as an active member of
this rate plan. For this reason, the support ratio, while intuitive, may be less informative than the ratio of retiree liability to total accrued liability above. For comparison, the support ratio for all CalPERS public agency plans
is 0.82 and is calculated consistently with how it is for the individual rate plan. Note that to calculate the support
ratio for all public agency plans , a retiree with service from more than one CalPERS agency is counted as a
retiree more than once.
Support Ratio June 30, 2021 June 30, 2022
1. Number of Actives 528 548
2. Number of Retirees 645 678
3. Support Ratio [(1) / (2)] 0.82 0.81
The actuarial calculations supplied in this communication are based on various assumptions about long-term
demographic and economic behavior. Unless these assumptions (e.g., terminations, deaths, disabilities,
retirements, salary growth, investment return) are exactly realized each year, there will be differences on a
year-to-year basis. The year-to-year differences between actual experience and the assumptions are called
actuarial gains and losses and serve to lower or raise required employer contributions from one year to the
next. Therefore, employer contributions will inevitably fluctuate, especially due to the ups and downs of
investment returns.
CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 29
Maturity Measures (continued)
Asset Volatility Ratio
Shown in the table below is the asset volatility ratio (AVR), which is the ratio of market value of assets to
payroll. Plans that have a higher AVR experience more volatile employer contributions (as a percentage of
payroll) due to investment return. For example, a plan with AVR of 8 may experience twice the contribution
volatility due to investment return volatility than a plan with AVR of 4. It should be noted that this ratio is a
measure of the current situation. It increases over time but generally tends to stabilize as a plan matures.
Liability Volatility Ratio
Also shown in the table below is the liability volatility ratio (LVR), which is the ratio of accrued liability to payroll.
Plans that have a higher LVR experience more volatile employer contributions (as a percentage of payroll) due to changes in liability. For example, a plan with LVR of 8 is expected to have twice the contribution volatility
of a plan with LVR of 4 when there is a change in accrued liability, such as when there is a change in actuarial
assumptions. It should be noted that this ratio indicates a longer-term potential for contribution volatility, since
the AVR, described above, will tend to move closer to the LVR as the funded ratio approaches 100%.
Contribution Volatility June 30, 2021 June 30, 2022
1. Market Value of Assets without Receivables $404,184,640 $368,975,233
2. Payroll 43,167,428 46,150,095
3. Asset Volatility Ratio (AVR) [(1) / (2)] 9.4 8.0
4. Accrued Liability $456,814,169 $481,393,865
5. Liability Volatility Ratio (LVR) [(4) / (2)] 10.6 10.4
Maturity Measures History
Valuation Date
Ratio of
Retiree Accrued Liability
to
Total Accrued Liability Support Ratio
Asset
Volatility
Ratio
Liability
Volatility
Ratio
6/30/2017
56%
0.98
7.3
9.8
6/30/2018
58%
0.88
8.3
10.8
6/30/2019
59%
0.89
8.2
10.4
6/30/2020
59%
0.89
7.7
10.0
6/30/2021
60%
0.82
9.4
10.6
6/30/2022
62%
0.81
8.0
10.4
CalPERS Actuarial Valuation - June 30, 2022
Miscellaneous Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 30
Funded Status – Termination Basis
The funded status measured on a termination basis is an estimate of the financial position of the plan had the
contract with CalPERS been terminated as of June 30, 2022. The accrued liability on a termination basis
(termination liability) is calculated differently from the plan’s ongoing funding liability. For the termination
liability calculation, both compensation and service are frozen as of the valuation date and no future pay
increases or service accruals are assumed. This measure of funded status is not appropriate for assessing
the need for future employer contributions in the case of an ongoing plan, that is, for an employer that
continues to provide CalPERS retirement benefits to active employees. Unlike the actuarial cost method used
for ongoing plans, the termination liability is the present value of the benefits earned through the valuation
date.
A more conservative investment policy and asset allocation strategy was adopted by the board for the
Terminated Agency Pool. The Terminated Agency Pool has limited funding sources since no future employer
contributions will be made. Therefore, expected benefit payments are secured by risk-free assets and benefit
security for members is increased while limiting the funding risk. However, this asset allocation has a lower
expected rate of return than the remainder of the PERF and consequently, a lower discount rate assumption.
The lower discount rate for the Terminated Agency Pool results in higher liabilities for terminated plans.
The effective termination discount rate will depend on actual market rates of return for risk-free securities on
the date of termination. As market discount rates are variable, the table below shows a range for the
termination liability based on the lowest and highest interest rates observed during an approximate 19-month period from 12 months before the valuation date to seven months after.
Discount Rate: 1.75%
Price Inflation: 2.50%
Discount Rate: 4.50%
Price Inflation: 2.75%
Market
Value of
Assets (MVA)
Termination
Liability1,2
Funded
Ratio
Unfunded
Termination
Liability
Termination
Liability1,2
Funded
Ratio
Unfunded
Termination
Liability
$369,436,837 $965,423,956 38.3% $595,987,119 $630,754,184 58.6% $261,317,347
1 The termination liabilities calculated above include a 5% contingency load. The contingency load and other actuarial
assumptions can be found in Appendix A.
2 The discount rate used for termination valuations is a weighted average of the 10-year and 30-year U.S. Treasury yields
where the weights are based on matching asset and liability durations as of the termination date. The discount rates used
in the table are based on 20-year Treasury bonds, rounded to the nearest quarter percentage point, which is a good
proxy for most plans. The 20-year Treasury yield was 3.38% on June 30, 2022, the valuation date.
In order to terminate the plan, first contact our Pension Contract Services unit to initiate a Resolution of Intent
to Terminate. The completed Resolution will allow the plan actuary to provide a preliminary termination
valuation with a more up-to-date estimate of the plan liabilities. Before beginning this process, please consult
with the plan actuary.
Plan’s Major Benefit Provisions
CalPERS Actuarial Valuation - June 30, 2022 Miscellaneous Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 32
Plan’s Major Benefit Options
Shown below is a summary of the major optional benefits for which the agency has contracted. A description of principal standard and optional plan provisions is
in Appendix B.
Benefit Group
Member Category Misc Misc Misc Misc Misc Misc Misc
Demographics
Actives No No No Yes Yes Yes No Transfers/Separated Yes Yes No Yes Yes Yes Yes
Receiving Yes Yes Yes Yes Yes Yes Yes
Benefit Group Key 103026 103027 103029 103030 108500 110624 110625
Benefit Provision
Benefit Formula 2% @ 55 2% @ 55 3% @ 60 2% @ 60 2% @ 62 2% @ 55
Social Security Coverage Yes No No No No No
Full/Modified Modified Full Full Full Full Full
Employee Contribution Rate 8.00% 7.00% 8.50%
Final Average Compensation Period One Year One Year One Year Three Year Three Year One Year
Sick Leave Credit Yes Yes Yes Yes Yes No
Non-Industrial Disability Improved Improved Improved Improved Improved Standard
Industrial Disability No No No No No No
Pre-Retirement Death Benefits
Optional Settlement 2 No No No No No No
1959 Survivor Benefit Level No Level 3 Level 3 Level 3 Level 3 Level 3
Special No No No No No No
Alternate (firefighters) No No No No No No
Post-Retirement Death Benefits
Lump Sum $2000 $2000 $2000 $2000 $2000 $2000 $2000
Survivor Allowance (PRSA) Yes Yes Yes Yes Yes Yes No
COLA 2% 2% 2% 2% 2% 2% 2%
CalPERS Actuarial Valuation - June 30, 2022 Miscellaneous Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 33
Plan’s Major Benefit Options (continued)
Shown below is a summary of the major optional benefits for which the agency has contracted. A description of principal standard and optional plan provisions is
in Appendix B.
Benefit Group
Member Category Misc Misc Misc Misc Misc Misc Misc
Demographics
Actives No No No No No No No
Transfers/Separated No No No No No No No
Receiving Yes Yes Yes Yes Yes Yes Yes
Benefit Group Key 112323 202156 202162 202163 202164 202165 202166
Benefit Provision
Benefit Formula
Social Security Coverage
Full/Modified
Employee Contribution Rate
Final Average Compensation Period
Sick Leave Credit
Non-Industrial Disability
Industrial Disability
Pre-Retirement Death Benefits
Optional Settlement 2
1959 Survivor Benefit Level
Special
Alternate (firefighters)
Post-Retirement Death Benefits
Lump Sum $2000 $2000 $2000 $2000 $2000 $2000 $2000
Survivor Allowance (PRSA) No No Yes Yes Yes Yes Yes
COLA 2% 2% 2% 2% 2% 2% 2%
CalPERS Actuarial Valuation - June 30, 2022 Miscellaneous Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 34
Plan’s Major Benefit Options (continued)
Shown below is a summary of the major optional benefits for which the agency has contracted. A description of principal standard and optional plan provisions is
in Appendix B.
Benefit Group
Member Category Misc Misc
Demographics
Actives No No
Transfers/Separated No No
Receiving Yes Yes
Benefit Group Key 202167 202169
Benefit Provision
Benefit Formula
Social Security Coverage
Full/Modified
Employee Contribution Rate
Final Average Compensation Period
Sick Leave Credit
Non-Industrial Disability
Industrial Disability
Pre-Retirement Death Benefits
Optional Settlement 2
1959 Survivor Benefit Level
Special
Alternate (firefighters)
Post-Retirement Death Benefits
Lump Sum $2000 $2000
Survivor Allowance (PRSA) Yes Yes
COLA 2% 2%
Appendices
• Appendix A – Actuarial Methods and Assumptions
• Appendix B – Principal Plan Provisions
• Appendix C – Participant Data
• Appendix D – Glossary
Appendix A
Actuarial Methods and Assumptions
• Actuarial Data
• Actuarial Methods
• Actuarial Assumptions
• Miscellaneous
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-1
Actuarial Data
As stated in the Actuarial Certification, the data which serves as the basis of this valuation has been obtained
from the various CalPERS databases. We have reviewed the valuation data and believe that it is reasonable
and appropriate in aggregate. We are unaware of any potential data issues that would have a material effect
on the results of this valuation, except that data does not always contain the latest salary information for former
members now in reciprocal systems and does not recognize the potential for unusually large salary deviation
in certain cases such as elected officials. Therefore, salary information in these cases may not be accurate.
These situations are relatively infrequent, however, and generally do not have a material impact on the
required employer contributions.
Actuarial Methods
Actuarial Cost Method
The actuarial cost method used is the Entry Age Actuarial Cost Method. Under this method, projected benefits
are determined for all members and the associated liabilities are spread in a manner that produces level
annual cost as a percentage of pay in each year from the member’s entry age to their assumed retirement
age on the valuation date. The cost allocated to the current fiscal year is called the normal cost.
The actuarial accrued liability for active members is then calculated as the portion of the total cost of the plan
allocated to prior years. The actuarial accrued liability for members currently receiving benefits and for
members entitled to deferred benefits is equal to the present value of the benefits expected to be paid. No
normal costs are applicable for these participants.
CalPERS uses an in-house proprietary actuarial model for calculating plan costs. We believe this model is fit
for its intended purpose and meets all applicable Actuarial Standards of Practice. Furthermore, the actuarial
results of our model are independently confirmed periodically by outside auditing actuaries. The actuarial
assumptions used are internally consistent and the generated results are reasonable.
Amortization of Unfunded Actuarial Accrued Liability
The excess of the total actuarial accrued liability over the market value of plan assets is called the unfunded
actuarial accrued liability (UAL). Funding requirements are determined by adding the normal cost and a
payment toward the UAL. The UAL payment is equal to the sum of individual amortization payments, each
representing a different source of UAL for a given measurement period.
Amortization payments are determined according to the CalPERS amortization policy. The board adopted a
new policy effective for the June 30, 2019 actuarial valuation. The new policy applies prospectively only;
amortization bases (sources of UAL) established prior to the June 30, 2019 valuation w ill continue to be
amortized according to the prior policy.
Prior Policy (Bases Established prior to June 30, 2019)
Amortization payments are determined as a level percentage of payroll whereby the payment increases each
year at an escalation rate. Gains or losses are amortized over a fixed 30-year period with a 5-year ramp up at
the beginning and a 5-year ramp down at the end of the amortization period. All changes in liability due to plan
amendments (other than golden handshakes) are amortized over a 20-year period with no ramp. Changes in
actuarial assumptions or changes in actuarial methodology are amortized over a 20-year period with a 5-year
ramp up at the beginning and a 5-year ramp down at the end of the amortization period. Changes in unfunded accrued liability due to a Golden Handshake will be amortized over a period of five years. Bases established
prior to June 30, 2013 may be amortized differently. A summary is provided in the following table:
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-2
Driver
Source
(Gain)/Loss
Assumption/Method
Change
Benefit
Change
Golden
Handshake Investment
Non-
investment
Amortization
Period 30 Years 30 Years 20 Years 20 Years 5 Years
Escalation Rate
- Active Plans
- Inactive Plans
2.80%
0%
2.80%
0%
2.80%
0%
2.80%
0%
2.80%
0%
Ramp Up 5 5 5 0 0
Ramp Down 5 5 5 0 0
The 5-year ramp up means that the payments in the first four years of the amortization period are 20%, 40%,
60% and 80% of the “full” payment which begins in year five. The 5-year ramp down means that the reverse
is true in the final four years of the amortization period.
Current Policy (Bases Established on or after June 30, 2019)
Amortization payments are determined as a level dollar amount. Investment gains or losses are amortized
over a fixed 20-year period with a 5-year ramp up at the beginning of the amortization period. Non-investment
gains or losses are amortized over a fixed 20-year period with no ramps. All changes in liability due to plan
amendments (other than golden handshakes) are amortized over a 20-year period with no ramps. Changes
in actuarial assumptions or changes in actuarial methodology are amortized over a 20-year period with no ramps. Changes in unfunded accrued liability due to a Golden Handshake are amortized over a period of five
years. A summary is provided in the table below:
Source
(Gain)/Loss
Assumption/
Method
Change
Benefit
Change
Golden
Handshake Investment
Non-
investment
Amortization Period 20 Years 20 Years 20 Years 20 Years 5 Years
Escalation Rate 0% 0% 0% 0% 0%
Ramp Up 5 0 0 0 0
Ramp Down 0 0 0 0 0
Exceptions for Inconsistencies
An exception to the amortization rules above is used whenever their application results in inconsistencies. In
these cases, a “fresh start” approach is used. This means that the current unfunded actuarial liability is
projected and amortized over a set number of years. For example, a fresh start is needed in the following
situations:
• When a negative payment would be required on a positive unfunded actuarial liability; or • When the payment would completely amortize the total unfunded liability in a very short time period,
and results in a large change in the employer contribution requirement.
It should be noted that the actuary may determine that a fresh start is necessary under other circumstances.
In all cases of a fresh start, the period is set by the actuary at what is deemed appropriate; however, the period
will not be greater than 20 years.
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-3
Exceptions for Plans in Surplus
If a surplus exists (i.e., the Market Value of Assets exceeds the plan’s accrued liability) any prior
amortization layers shall be considered fully amortized, and the surplus shall not be amortized.
In the event of any subsequent unfunded liability, a Fresh Start shall be used with an amortization period of
20 years or less.
Exceptions for Small Amounts
Where small unfunded liabilities are identified in annual valuations which result in small payment amounts,
the actuary may shorten the remaining period for these bases.
• When the balance of a single amortization base has an absolute value less than $250, the
amortization period is reduced to one year.
• When the entire unfunded liability is a small amount, the actuary may perform a Fresh Start and
use an appropriate amortization period.
Exceptions for Inactive Plans
The following exceptions apply to plans classified as Inactive. These plans have no active members and no
expectation to have active members in the future.
• Amortization of the unfunded liability is on a “level dollar” basis rather than a “level percent of pay”
basis. For amortization layers, which utilize a ramp up and ramp down, the “ultimate” payment is
constant. • Actuarial judgment will be used to shorten amortization periods for Inactive plans with existing periods
that are deemed too long given the duration of the liability. The specific demographics of the plan will
be used to determine if shorter periods may be more appropriate.
Exceptions for Inactive Agencies
For a public agency with no active members in any CalPERS rate plan, the unfunded liability shall be
amortized over a closed amortization period of no more than 15 years.
Asset Valuation Method
The Actuarial Value of Assets is set equal to the market value of assets. Asset values include accounts
receivable.
PEPRA Normal Cost Rate Methodology
Per Government Code section 7522.30(b), the “normal cost rate” shall mean the annual actuarially determined
normal cost for the plan of retirement benefits provided to the new member and shall be established based on
actuarial assumptions used to determine the liabilities and costs as part of the annual actuarial valuation. The
plan of retirement benefits shall include any elements that would impact the actuarial determination of the
normal cost, including, but not limited to, the retirement formula, eligibility and vesting criteria, ancillary benefit
provisions, and any automatic cost-of-living adjustments as determined by the public retirement system.
For purposes of setting member rates, it is preferable to determine total normal cost using a large active
population so that the rate remains relatively stable. While each CalPERS non -pooled plan has a sufficiently
large active population for this purpose, the PEPRA active population by itself may not be sufficiently large.
The total PEPRA normal cost will be determined based on the plan’s PEPRA membership only if the number
of members covered under the PEPRA formula meets either:
1. 50% of the active population, or
2. 25% of the active population and 100 or more PEPRA members
Until one of these conditions is met, the plan’s total PEPRA normal cost will be determined using the entire
active plan population (both PEPRA and Classic) based on the PEPRA benefit provisions.
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-4
Actuarial Assumptions
In 2021, CalPERS completed its most recent asset liability management study incorporating actuarial
assumptions and strategic asset allocation. In November 2021, the board adopted changes to the asset
allocation that increased the expected volatility of returns. The adopted asset alloca tion was expected to have
a long-term blended return that continued to support a discount rate assumption of 6.80%. The board also
approved several changes to the demographic assumptions that more closely aligned with actual experience.
For more details and additional rationale for the selection of the actuarial assumptions, please refer to the
CalPERS Experience Study and Review of Actuarial Assumptions report from November 2021 that can be
found on the CalPERS website under: Forms and Publications. Click on “View All” and search for Experience
Study.
All actuarial assumptions (except the discount rates used for the accrued liability on a termination basis)
represent an estimate of future experience rather than observations of the estimates inherent in market data.
Economic Assumptions
Discount Rate The prescribed discount rate assumption, adopted by the board on November 17, 2021, is 6.80%
compounded annually (net of investment and administrative expenses) as of June 30, 2022.
Termination Liability Discount Rate
The current discount rate assumption used for termination valuations is a weighted average of the 10-year and 30-year U.S. Treasury yields where the weights are based on matching asset and liability
durations as of the termination date.
The accrued liabilities on a termination basis in this report are calculated using an observed range of
market interest rates. This range is based on the lowest and highest 20-year Treasury bond observed
during an approximate 19-month period from 12 months before the valuation date to seven months
after. The 20-year Treasury bond has a similar duration to most plan liabilities and serves as a good
proxy for the termination discount rate. The 20-year Treasury yield was 3.38% on June 30, 2022.
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-5
Salary Growth
Annual increases vary by category, entry age, and duration of service. A sample of assumed
increases are shown below. Wage inflation assumption in the valuation year (2.80% for 2022) is
added to these factors for total salary growth.
Public Agency Miscellaneous
Duration of Service (Entry Age 20) (Entry Age 30) (Entry Age 40)
0 0.0764 0.0621 0.0521
1 0.0663 0.0528 0.0424
2 0.0576 0.0449 0.0346
3 0.0501 0.0381 0.0282
4 0.0435 0.0324 0.0229
5 0.0378 0.0276 0.0187
10 0.0201 0.0126 0.0108
15 0.0155 0.0102 0.0071
20 0.0119 0.0083 0.0047
25 0.0091 0.0067 0.0031
30 0.0070 0.0054 0.0020
Public Agency Fire
Duration of Service (Entry Age 20) (Entry Age 30) (Entry Age 40)
0 0.1517 0.1549 0.0631
1 0.1191 0.1138 0.0517
2 0.0936 0.0835 0.0423
3 0.0735 0.0613 0.0346
4 0.0577 0.0451 0.0284
5 0.0453 0.0331 0.0232
10 0.0188 0.0143 0.0077
15 0.0165 0.0124 0.0088
20 0.0145 0.0108 0.0101
25 0.0127 0.0094 0.0115
30 0.0112 0.0082 0.0132
Public Agency Police
Duration of Service (Entry Age 20) (Entry Age 30) (Entry Age 40)
0 0.1181 0.1051 0.0653
1 0.0934 0.0812 0.0532
2 0.0738 0.0628 0.0434
3 0.0584 0.0485 0.0353
4 0.0462 0.0375 0.0288
5 0.0365 0.0290 0.0235
10 0.0185 0.0155 0.0118
15 0.0183 0.0150 0.0131
20 0.0181 0.0145 0.0145
25 0.0179 0.0141 0.0161
30 0.0178 0.0136 0.0179
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-6
Salary Growth (continued)
Public Agency County Peace Officers
Duration of Service (Entry Age 20) (Entry Age 30) (Entry Age 40)
0 0.1238 0.1053 0.0890
1 0.0941 0.0805 0.0674
2 0.0715 0.0616 0.0510
3 0.0544 0.0471 0.0387
4 0.0413 0.0360 0.0293
5 0.0314 0.0276 0.0222
10 0.0184 0.0142 0.0072
15 0.0174 0.0124 0.0073
20 0.0164 0.0108 0.0074
25 0.0155 0.0094 0.0075
30 0.0147 0.0083 0.0077
Schools
Duration of Service (Entry Age 20) (Entry Age 30) (Entry Age 40)
0 0.0275 0.0275 0.0200
1 0.0422 0.0373 0.0298
2 0.0422 0.0373 0.0298
3 0.0422 0.0373 0.0298
4 0.0388 0.0314 0.0245
5 0.0308 0.0239 0.0179
10 0.0236 0.0160 0.0121
15 0.0182 0.0135 0.0103
20 0.0145 0.0109 0.0085
25 0.0124 0.0102 0.0058
30 0.0075 0.0053 0.0019
• The Miscellaneous salary scale is used for Local Prosecutors.
• The Police salary scale is used for Other Safety, Local Sheriff, and School Police.
Price Inflation
2.30% compounded annually.
Wage Inflation
2.80% compounded annually (used in projecting individual salary increases).
Payroll Growth
2.80% compounded annually (used in projecting the payroll over which the unfunded liability is
amortized for level percent of payroll bases). This assumption is used for all plans with active
members.
Non-valued Potential Additional Liabilities
The potential liability loss for a cost-of-living increase exceeding the 2.30% price inflation assumption
and any potential liability loss from future member service purchases that are not reflected in the
valuation.
Miscellaneous Loading Factors
Credit for Unused Sick Leave Total years of service is increased by 1% for those plans that have adopted the provision of providing
Credit for Unused Sick Leave.
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-7
Conversion of Employer Paid Member Contributions (EPMC)
Total years of service is increased by the Employee Contribution Rate for those plans with the
provision providing for the Conversion of Employer Paid Member Contributions (EPMC) during the
final compensation period.
Norris Decision (Best Factors)
Employees hired prior to July 1, 1982 have projected benefit amounts increased in order to reflect
the use of “Best Factors” in the calculation of optional benefit forms. This is due to a 1983 Supreme
Court decision, known as the Norris decision, which required males and females to be treated equally
in the determination of benefit amounts. Consequently, anyone already employed at that time is given
the best possible conversion factor when optional benefits are determined. No loading is necessary
for employees hired after July 1, 1982.
Termination Liability The termination liabilities include a 5% contingency load. This load is for unforeseen improvements
in mortality.
Demographic Assumptions
Pre-Retirement Mortality
The mortality assumptions are based on mortality rates resulting from the most recent CalPERS
Experience Study adopted by the CalPERS Board in November 2021. For purposes of the mortality
rates, the rates incorporate generational mortality to capture on-going mortality improvement.
Generational mortality explicitly assumes that members born more recently will live longer than the
members born before them thereby capturing the mortality improvement seen in the past and
expected continued improvement. For more details, please refer to the 2021 experience study report
that can be found on the CalPERS website.
Rates vary by age and gender are shown in the table below. This table only contains a sample of the
2017 base table rates for illustrative purposes. The non-industrial death rates are used for all plans.
The industrial death rates are used for Safety plans (except for local Safety members described in
Section 20423.6 where the agency has not specifically contracted for industrial death benefits.)
Miscellaneous Safety
Non-Industrial Death Non-Industrial Death Industrial Death (Not Job-Related) (Not Job-Related) (Job-Related)
Age Male Female Male Female Male Female
20 0.00039 0.00014 0.00038 0.00014 0.00004 0.00002
25 0.00033 0.00013 0.00034 0.00018 0.00004 0.00002
30 0.00044 0.00019 0.00042 0.00025 0.00005 0.00003
35 0.00058 0.00029 0.00048 0.00034 0.00005 0.00004
40 0.00075 0.00039 0.00055 0.00042 0.00006 0.00005
45 0.00093 0.00054 0.00066 0.00053 0.00007 0.00006
50 0.00134 0.00081 0.00092 0.00073 0.00010 0.00008
55 0.00198 0.00123 0.00138 0.00106 0.00015 0.00012
60 0.00287 0.00179 0.00221 0.00151 0.00025 0.00017
65 0.00403 0.00250 0.00346 0.00194 0.00038 0.00022
70 0.00594 0.00404 0.00606 0.00358 0.00067 0.00040
75 0.00933 0.00688 0.01099 0.00699 0.00122 0.00078
80 0.01515 0.01149 0.02027 0.01410 0.00225 0.00157
• The pre-retirement mortality rates above are for 2017 and are projected generationally for future
years using 80% of the Society of Actuaries’ Scale MP-2020.
• Miscellaneous plans usually have industrial death rates set to zero unless the agency has
specifically contracted for industrial death benefits. If so, each non-industrial death rate shown
above will be split into two components: 99% will become the non-industrial death rate and 1%
will become the industrial death rate.
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-8
Post-Retirement Mortality
Rates vary by age, type of retirement, and gender. See sample rates in table below. These rates are
used for all plans.
Service Retirement
Non-Industrial Disability Industrial Disability
(Not Job-Related) (Job-Related)
Age Male Female Male Female Male Female
50 0.00267 0.00199 0.01701 0.01439 0.00430 0.00311
55 0.00390 0.00325 0.02210 0.01734 0.00621 0.00550
60 0.00578 0.00455 0.02708 0.01962 0.00944 0.00868
65 0.00857 0.00612 0.03334 0.02276 0.01394 0.01190 70 0.01333 0.00996 0.04001 0.02910 0.02163 0.01858
75 0.02391 0.01783 0.05376 0.04160 0.03446 0.03134
80 0.04371 0.03403 0.07936 0.06112 0.05853 0.05183
85 0.08274 0.06166 0.11561 0.09385 0.10137 0.08045
90 0.14539 0.11086 0.16608 0.14396 0.16584 0.12434
95 0.24665 0.20364 0.24665 0.20364 0.24665 0.20364
100 0.36198 0.31582 0.36198 0.31582 0.36198 0.31582
105 0.52229 0.44679 0.52229 0.44679 0.52229 0.44679
110 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000
The post-retirement mortality rates above are for 2017 and are projected generationally for future
years using 80% of the Society of Actuaries’ Scale MP-2020.
Marital Status For active members, a percentage who are married upon retirement is assumed according to the
member category as shown in the following table.
Member Category Percent Married
Miscellaneous Member 70% Local Police 85%
Local Fire 85%
Other Local Safety 70%
School Police 85%
Local County Peace Officers 75%
Age of Spouse
It is assumed that female spouses are 3 years younger than male spouses. This assumption is used
for all plans.
Separated Members
It is assumed that separated members refund immediately if non-vested. Separated members who
are vested are assumed to retire at age 59 for Miscellaneous members and age 54 for Safety
members.
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-9
Termination with Refund
Rates vary by entry age and service for Miscellaneous plans. Rates vary by service for Safety plans.
See sample rates in tables below.
Public Agency Miscellaneous
Duration of
Service Entry Age 20 Entry Age 25 Entry Age 30 Entry Age 35 Entry Age 40 Entry Age 45
Male Female Male Female Male Female Male Female Male Female Male Female
0 0.1851 0.1944 0.1769 0.1899 0.1631 0.1824 0.1493 0.1749 0.1490 0.1731 0.1487 0.1713
1 0.1531 0.1673 0.1432 0.1602 0.1266 0.1484 0.1101 0.1366 0.1069 0.1323 0.1037 0.1280
2 0.1218 0.1381 0.1125 0.1307 0.0970 0.1183 0.0815 0.1058 0.0771 0.0998 0.0726 0.0938
3 0.0927 0.1085 0.0852 0.1020 0.0727 0.0912 0.0601 0.0804 0.0556 0.0737 0.0511 0.0669
4 0.0672 0.0801 0.0616 0.0752 0.0524 0.0670 0.0431 0.0587 0.0392 0.0523 0.0352 0.0459
5 0.0463 0.0551 0.0423 0.0517 0.0358 0.0461 0.0292 0.0404 0.0261 0.0350 0.0230 0.0296
10 0.0112 0.0140 0.0101 0.0129 0.0083 0.0112 0.0064 0.0094 0.0048 0.0071 0.0033 0.0049
15 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
20 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
25 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
30 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
35 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
• The police termination and refund rates are also used for Public Agency Local Prosecutors, Other Safety, Local Sheriff, and School Police.
Public Agency Safety
Duration of
Service Fire Police County Peace Officer
Male Female Male Female Male Female
0 0.1022 0.1317 0.1298 0.1389 0.1086 0.1284
1 0.0686 0.1007 0.0789 0.0904 0.0777 0.0998
2 0.0441 0.0743 0.0464 0.0566 0.0549 0.0759
3 0.0272 0.0524 0.0274 0.0343 0.0385 0.0562
4 0.0161 0.0349 0.0170 0.0206 0.0268 0.0402
5 0.0092 0.0214 0.0113 0.0128 0.0186 0.0276
10 0.0015 0.0000 0.0032 0.0047 0.0046 0.0038
15 0.0000 0.0000 0.0000 0.0000 0.0023 0.0036
20 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
25 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
30 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
35 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-10
Termination with Refund (continued)
Schools
Duration of
Service Entry Age 20 Entry Age 25 Entry Age 30 Entry Age 35 Entry Age 40 Entry Age 45
Male Female Male Female Male Female Male Female Male Female Male Female
0 0.2054 0.2120 0.1933 0.1952 0.1730 0.1672 0.1527 0.1392 0.1423 0.1212 0.1318 0.1032
1 0.1922 0.2069 0.1778 0.1883 0.1539 0.1573 0.1300 0.1264 0.1191 0.1087 0.1083 0.0910
2 0.1678 0.1859 0.1536 0.1681 0.1298 0.1383 0.1060 0.1086 0.0957 0.0934 0.0853 0.0782
3 0.1384 0.1575 0.1256 0.1417 0.1042 0.1155 0.0829 0.0893 0.0736 0.0774 0.0643 0.0656
4 0.1085 0.1274 0.0978 0.1143 0.0800 0.0925 0.0622 0.0707 0.0542 0.0620 0.0462 0.0533
5 0.0816 0.0991 0.0732 0.0887 0.0590 0.0713 0.0449 0.0539 0.0383 0.0476 0.0317 0.0413
10 0.0222 0.0248 0.0200 0.0221 0.0163 0.0174 0.0125 0.0128 0.0094 0.0100 0.0063 0.0072
15 0.0106 0.0132 0.0095 0.0113 0.0077 0.0083 0.0058 0.0052 0.0040 0.0039 0.0021 0.0026
20 0.0059 0.0065 0.0050 0.0054 0.0035 0.0036 0.0021 0.0019 0.0010 0.0009 0.0000 0.0000
25 0.0029 0.0034 0.0025 0.0029 0.0018 0.0020 0.0010 0.0012 0.0005 0.0006 0.0000 0.0000
30 0.0012 0.0015 0.0011 0.0013 0.0011 0.0011 0.0010 0.0009 0.0005 0.0005 0.0000 0.0000
35 0.0006 0.0007 0.0006 0.0007 0.0005 0.0006 0.0005 0.0005 0.0003 0.0002 0.0000 0.0000
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-11
Termination with Vested Benefits
Rates vary by entry age and service for Miscellaneous plans. Rates vary by service for Safety plans.
See sample rates in tables below.
Public Agency Miscellaneous
Duration of
Service Entry Age 20 Entry Age 25 Entry Age 30 Entry Age 35 Entry Age 40
Male Female Male Female Male Female Male Female Male Female
5 0.0381 0.0524 0.0381 0.0524 0.0358 0.0464 0.0334 0.0405 0.0301 0.0380
10 0.0265 0.0362 0.0265 0.0362 0.0254 0.0334 0.0244 0.0307 0.0197 0.0236
15 0.0180 0.0252 0.0180 0.0252 0.0166 0.0213 0.0152 0.0174 0.0119 0.0132
20 0.0141 0.0175 0.0141 0.0175 0.0110 0.0131 0.0079 0.0087 0.0000 0.0000
25 0.0084 0.0108 0.0084 0.0108 0.0064 0.0076 0.0000 0.0000 0.0000 0.0000
30 0.0047 0.0056 0.0047 0.0056 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
35 0.0038 0.0041 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
• After termination with vested benefits, a Miscellaneous member is assumed to retire at age 59
and a Safety member at age 54. • The Police termination with vested benefits rates are also used for Public Agency Local
Prosecutors, Other Safety, Local Sheriff, and School Police.
Schools
Duration of
Service Entry Age 20 Entry Age 25 Entry Age 30 Entry Age 35 Entry Age 40
Male Female Male Female Male Female Male Female Male Female
5 0.0359 0.0501 0.0359 0.0501 0.0332 0.0402 0.0305 0.0304 0.0266 0.0272
10 0.0311 0.0417 0.0311 0.0417 0.0269 0.0341 0.0228 0.0265 0.0193 0.0233
15 0.0193 0.0264 0.0193 0.0264 0.0172 0.0220 0.0151 0.0175 0.0123 0.0142
20 0.0145 0.0185 0.0145 0.0185 0.0113 0.0141 0.0080 0.0097 0.0000 0.0000
25 0.0089 0.0123 0.0089 0.0123 0.0074 0.0093 0.0000 0.0000 0.0000 0.0000
30 0.0057 0.0064 0.0057 0.0064 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
35 0.0040 0.0049 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
Public Agency Safety
Duration of
Service Fire Police County Peace Officer
Male Female Male Female Male Female
5 0.0089 0.0224 0.0156 0.0272 0.0177 0.0266
10 0.0066 0.0164 0.0113 0.0198 0.0126 0.0189
15 0.0048 0.0120 0.0083 0.0144 0.0089 0.0134
20 0.0035 0.0088 0.0060 0.0105 0.0063 0.0095
25 0.0024 0.0061 0.0042 0.0073 0.0042 0.0063
30 0.0012 0.0031 0.0021 0.0037 0.0021 0.0031
35 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-12
Non-Industrial (Not Job-Related) Disability
Rates vary by age and gender for Miscellaneous plans. Rates vary by age and category for Safety
plans.
Miscellaneous Fire Police County Peace Officer Schools
Ag
e Male Female
Male and
Female
Male and
Female Male and Female Male Female
20 0.0001 0.0000 0.0001 0.0001 0.0001 0.0000 0.0002
25 0.0001 0.0001 0.0001 0.0001 0.0001 0.0000 0.0002
30 0.0002 0.0003 0.0001 0.0001 0.0001 0.0002 0.0002
35 0.0004 0.0007 0.0001 0.0002 0.0003 0.0005 0.0004
40 0.0009 0.0012 0.0001 0.0002 0.0006 0.0010 0.0008
45 0.0015 0.0019 0.0002 0.0003 0.0011 0.0019 0.0015
50 0.0015 0.0019 0.0004 0.0005 0.0016 0.0027 0.0021
55 0.0014 0.0013 0.0006 0.0007 0.0009 0.0024 0.0017
60 0.0012 0.0009 0.0006 0.0011 0.0005 0.0020 0.0010
• The Miscellaneous non-industrial disability rates are used for Local Prosecutors. • The police non-industrial disability rates are also used for Other Safety, Local Sheriff, and School
Police.
Industrial (Job-Related) Disability
Rates vary by age and category.
Age Fire Police County Peace Officer
20 0.0001 0.0000 0.0004
25 0.0002 0.0017 0.0013
30 0.0006 0.0048 0.0025
35 0.0012 0.0079 0.0037
40 0.0023 0.0110 0.0051
45 0.0040 0.0141 0.0067
50 0.0208 0.0185 0.0092
55 0.0307 0.0479 0.0151
60 0.0438 0.0602 0.0174
• The police industrial disability rates are also used for Local Sheriff and Other Safety.
• 50% of the police industrial disability rates are used for School Police. • 1% of the police industrial disability rates are used for Local Prosecutors.
• Normally, rates are zero for Miscellaneous plans unless the agency has specifically contracted
for industrial disability benefits. If so, each Miscellaneous non-industrial disability rate will be split
into two components: 50% will become the non-industrial disability rate and 50% will become the industrial disability rate.
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-13
Service Retirement
Retirement rates vary by age, service, and formula, except for the Safety Half Pay at 55 and 2% at
55 formulas, where retirement rates vary by age only.
Public Agency Miscellaneous 1.5% at 65
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.008 0.011 0.013 0.015 0.017 0.019
51 0.007 0.010 0.012 0.013 0.015 0.017
52 0.010 0.014 0.017 0.019 0.021 0.024
53 0.008 0.012 0.015 0.017 0.019 0.022
54 0.012 0.016 0.019 0.022 0.025 0.028
55 0.018 0.025 0.031 0.035 0.038 0.043
56 0.015 0.021 0.025 0.029 0.032 0.036
57 0.020 0.028 0.033 0.038 0.043 0.048
58 0.024 0.033 0.040 0.046 0.052 0.058
59 0.028 0.039 0.048 0.054 0.060 0.067
60 0.049 0.069 0.083 0.094 0.105 0.118
61 0.062 0.087 0.106 0.120 0.133 0.150
62 0.104 0.146 0.177 0.200 0.223 0.251
63 0.099 0.139 0.169 0.191 0.213 0.239
64 0.097 0.136 0.165 0.186 0.209 0.233
65 0.140 0.197 0.240 0.271 0.302 0.339
66 0.092 0.130 0.157 0.177 0.198 0.222
67 0.129 0.181 0.220 0.249 0.277 0.311
68 0.092 0.129 0.156 0.177 0.197 0.221
69 0.092 0.130 0.158 0.178 0.199 0.224
70 0.103 0.144 0.175 0.198 0.221 0.248
Public Agency Miscellaneous 2% at 60
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.010 0.011 0.014 0.014 0.017 0.017
51 0.017 0.013 0.014 0.010 0.010 0.010
52 0.014 0.014 0.018 0.015 0.016 0.016
53 0.015 0.012 0.013 0.010 0.011 0.011
54 0.006 0.010 0.017 0.016 0.018 0.018
55 0.012 0.016 0.024 0.032 0.036 0.036
56 0.010 0.014 0.023 0.030 0.034 0.034
57 0.006 0.018 0.030 0.040 0.044 0.044
58 0.022 0.023 0.033 0.042 0.046 0.046
59 0.039 0.033 0.040 0.047 0.050 0.050
60 0.063 0.069 0.074 0.090 0.137 0.116
61 0.044 0.058 0.066 0.083 0.131 0.113
62 0.084 0.107 0.121 0.153 0.238 0.205
63 0.173 0.166 0.165 0.191 0.283 0.235
64 0.120 0.145 0.164 0.147 0.160 0.172
65 0.138 0.160 0.214 0.216 0.237 0.283
66 0.198 0.228 0.249 0.216 0.228 0.239
67 0.207 0.242 0.230 0.233 0.233 0.233
68 0.201 0.234 0.225 0.231 0.231 0.231
69 0.152 0.173 0.164 0.166 0.166 0.166
70 0.200 0.200 0.200 0.200 0.200 0.200
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-14
Service Retirement
Public Agency Miscellaneous 2% at 55
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.014 0.014 0.017 0.021 0.023 0.024
51 0.013 0.017 0.017 0.018 0.018 0.019
52 0.013 0.018 0.018 0.020 0.020 0.021
53 0.013 0.019 0.021 0.024 0.025 0.026
54 0.017 0.025 0.028 0.032 0.033 0.035
55 0.045 0.042 0.053 0.086 0.098 0.123
56 0.018 0.036 0.056 0.086 0.102 0.119
57 0.041 0.046 0.056 0.076 0.094 0.120
58 0.052 0.044 0.048 0.074 0.106 0.123
59 0.043 0.058 0.073 0.092 0.105 0.126
60 0.059 0.064 0.083 0.115 0.154 0.170
61 0.087 0.074 0.087 0.107 0.147 0.168
62 0.115 0.123 0.151 0.180 0.227 0.237
63 0.116 0.127 0.164 0.202 0.252 0.261
64 0.084 0.138 0.153 0.190 0.227 0.228
65 0.167 0.187 0.210 0.262 0.288 0.291
66 0.187 0.258 0.280 0.308 0.318 0.319
67 0.195 0.235 0.244 0.277 0.269 0.280
68 0.228 0.248 0.250 0.241 0.245 0.245
69 0.188 0.201 0.209 0.219 0.231 0.231
70 0.229 0.229 0.229 0.229 0.229 0.229
Public Agency Miscellaneous 2.5% at 55
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.014 0.017 0.027 0.035 0.046 0.050
51 0.019 0.021 0.025 0.030 0.038 0.040
52 0.018 0.020 0.026 0.034 0.038 0.037
53 0.013 0.021 0.031 0.045 0.052 0.053
54 0.025 0.025 0.030 0.046 0.057 0.068
55 0.029 0.042 0.064 0.109 0.150 0.225
56 0.036 0.047 0.068 0.106 0.134 0.194
57 0.051 0.047 0.060 0.092 0.116 0.166
58 0.035 0.046 0.062 0.093 0.119 0.170
59 0.029 0.053 0.072 0.112 0.139 0.165
60 0.039 0.069 0.094 0.157 0.177 0.221
61 0.080 0.077 0.086 0.140 0.167 0.205
62 0.086 0.131 0.149 0.220 0.244 0.284
63 0.135 0.135 0.147 0.214 0.222 0.262
64 0.114 0.128 0.158 0.177 0.233 0.229
65 0.112 0.174 0.222 0.209 0.268 0.273
66 0.235 0.254 0.297 0.289 0.321 0.337
67 0.237 0.240 0.267 0.249 0.267 0.277
68 0.258 0.271 0.275 0.207 0.210 0.212
69 0.117 0.208 0.266 0.219 0.250 0.270
70 0.229 0.229 0.229 0.229 0.229 0.229
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-15
Service Retirement
Public Agency Miscellaneous 2.7% at 55
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.011 0.016 0.022 0.033 0.034 0.038
51 0.018 0.019 0.023 0.032 0.031 0.031
52 0.019 0.020 0.026 0.035 0.034 0.037
53 0.020 0.020 0.025 0.043 0.048 0.053
54 0.018 0.030 0.040 0.052 0.053 0.070
55 0.045 0.058 0.082 0.138 0.208 0.278
56 0.057 0.062 0.080 0.121 0.178 0.222
57 0.045 0.052 0.071 0.106 0.147 0.182
58 0.074 0.060 0.074 0.118 0.163 0.182
59 0.058 0.067 0.086 0.123 0.158 0.187
60 0.087 0.084 0.096 0.142 0.165 0.198
61 0.073 0.084 0.101 0.138 0.173 0.218
62 0.130 0.133 0.146 0.187 0.214 0.249
63 0.122 0.140 0.160 0.204 0.209 0.243
64 0.104 0.124 0.154 0.202 0.214 0.230
65 0.182 0.201 0.242 0.264 0.293 0.293
66 0.272 0.249 0.273 0.285 0.312 0.312
67 0.182 0.217 0.254 0.249 0.264 0.264
68 0.223 0.197 0.218 0.242 0.273 0.273
69 0.217 0.217 0.217 0.217 0.217 0.217
70 0.227 0.227 0.227 0.227 0.227 0.227
Public Agency Miscellaneous 3% at 60
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.015 0.020 0.025 0.039 0.040 0.044
51 0.041 0.034 0.032 0.041 0.036 0.037
52 0.024 0.020 0.022 0.039 0.040 0.041
53 0.018 0.024 0.032 0.047 0.048 0.057
54 0.033 0.033 0.035 0.051 0.049 0.052
55 0.137 0.043 0.051 0.065 0.076 0.108
56 0.173 0.038 0.054 0.075 0.085 0.117
57 0.019 0.035 0.059 0.088 0.111 0.134
58 0.011 0.040 0.070 0.105 0.133 0.162
59 0.194 0.056 0.064 0.081 0.113 0.163
60 0.081 0.085 0.133 0.215 0.280 0.333
61 0.080 0.090 0.134 0.170 0.223 0.292
62 0.137 0.153 0.201 0.250 0.278 0.288
63 0.128 0.140 0.183 0.227 0.251 0.260
64 0.174 0.147 0.173 0.224 0.239 0.264
65 0.152 0.201 0.262 0.299 0.323 0.323
66 0.272 0.273 0.317 0.355 0.380 0.380
67 0.218 0.237 0.268 0.274 0.284 0.284
68 0.200 0.228 0.269 0.285 0.299 0.299
69 0.250 0.250 0.250 0.250 0.250 0.250
70 0.245 0.245 0.245 0.245 0.245 0.245
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-16
Service Retirement
Public Agency Miscellaneous 2% at 62
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.000 0.000 0.000 0.000 0.000 0.000
51 0.000 0.000 0.000 0.000 0.000 0.000
52 0.005 0.008 0.012 0.015 0.019 0.031
53 0.007 0.011 0.014 0.018 0.021 0.032
54 0.007 0.011 0.015 0.019 0.023 0.034
55 0.010 0.019 0.028 0.036 0.061 0.096
56 0.014 0.026 0.038 0.050 0.075 0.108
57 0.018 0.029 0.039 0.050 0.074 0.107
58 0.023 0.035 0.048 0.060 0.073 0.099
59 0.025 0.038 0.051 0.065 0.092 0.128
60 0.031 0.051 0.071 0.091 0.111 0.138
61 0.038 0.058 0.079 0.100 0.121 0.167
62 0.044 0.074 0.104 0.134 0.164 0.214
63 0.077 0.105 0.134 0.163 0.192 0.237
64 0.072 0.101 0.129 0.158 0.187 0.242
65 0.108 0.141 0.173 0.206 0.239 0.300
66 0.132 0.172 0.212 0.252 0.292 0.366
67 0.132 0.172 0.212 0.252 0.292 0.366
68 0.120 0.156 0.193 0.229 0.265 0.333
69 0.120 0.156 0.193 0.229 0.265 0.333
70 0.120 0.156 0.193 0.229 0.265 0.333
Service Retirement
Public Agency Fire Half Pay at 55 and 2% at 55
Age Rate
Age Rate
50 0.016 56 0.111
51 0.000 57 0.000
52 0.034 58 0.095
53 0.020 59 0.044
54 0.041 60 1.000
55 0.075
Public Agency Police Half Pay at 55 and 2% at 55
Age Rate
Age Rate
50 0.026 56 0.069
51 0.000 57 0.051
52 0.016 58 0.072
53 0.027 59 0.070
54 0.010 60 0.300
55 0.167
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-17
Service Retirement
Public Agency Police 2% at 50
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.018 0.077 0.056 0.046 0.043 0.046
51 0.022 0.087 0.060 0.048 0.044 0.047
52 0.020 0.102 0.081 0.071 0.069 0.075
53 0.016 0.072 0.053 0.045 0.042 0.046
54 0.006 0.071 0.071 0.069 0.072 0.080
55 0.009 0.040 0.099 0.157 0.186 0.186
56 0.020 0.051 0.108 0.165 0.194 0.194
57 0.036 0.072 0.106 0.139 0.156 0.156
58 0.001 0.046 0.089 0.130 0.152 0.152
59 0.066 0.094 0.119 0.143 0.155 0.155
60 0.177 0.177 0.177 0.177 0.177 0.177
61 0.134 0.134 0.134 0.134 0.134 0.134
62 0.184 0.184 0.184 0.184 0.184 0.184
63 0.250 0.250 0.250 0.250 0.250 0.250
64 0.177 0.177 0.177 0.177 0.177 0.177
65 1.000 1.000 1.000 1.000 1.000 1.000
• These rates also apply to County Peace officers, Local Prosecutors, Local Sheriff, School Police,
and Other Safety.
Service Retirement
Public Agency Fire 2% at 50
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.054 0.054 0.056 0.080 0.064 0.066
51 0.020 0.020 0.021 0.030 0.024 0.024
52 0.037 0.037 0.038 0.054 0.043 0.045
53 0.051 0.051 0.053 0.076 0.061 0.063
54 0.082 0.082 0.085 0.121 0.097 0.100
55 0.139 0.139 0.139 0.139 0.139 0.139
56 0.129 0.129 0.129 0.129 0.129 0.129
57 0.085 0.085 0.085 0.085 0.085 0.085
58 0.119 0.119 0.119 0.119 0.119 0.119
59 0.167 0.167 0.167 0.167 0.167 0.167
60 0.152 0.152 0.152 0.152 0.152 0.152
61 0.179 0.179 0.179 0.179 0.179 0.179
62 0.179 0.179 0.179 0.179 0.179 0.179
63 0.179 0.179 0.179 0.179 0.179 0.179
64 0.179 0.179 0.179 0.179 0.179 0.179
65 1.000 1.000 1.000 1.000 1.000 1.000
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-18
Service Retirement
Public Agency Police 3% at 55
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.019 0.053 0.045 0.054 0.057 0.061
51 0.002 0.017 0.028 0.044 0.053 0.060
52 0.002 0.031 0.037 0.051 0.059 0.066
53 0.026 0.049 0.049 0.080 0.099 0.114
54 0.019 0.034 0.047 0.091 0.121 0.142
55 0.006 0.115 0.141 0.199 0.231 0.259
56 0.017 0.188 0.121 0.173 0.199 0.199
57 0.008 0.137 0.093 0.136 0.157 0.157
58 0.017 0.126 0.105 0.164 0.194 0.194
59 0.026 0.146 0.110 0.167 0.195 0.195
60 0.155 0.155 0.155 0.155 0.155 0.155
61 0.210 0.210 0.210 0.210 0.210 0.210
62 0.262 0.262 0.262 0.262 0.262 0.262
63 0.172 0.172 0.172 0.172 0.172 0.172
64 0.227 0.227 0.227 0.227 0.227 0.227
65 1.000 1.000 1.000 1.000 1.000 1.000
• These rates also apply to County Peace officers, Local Prosecutors, Local Sheriff, School
Police, and Other Safety.
Service Retirement
Public Agency Fire 3% at 55
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.003 0.006 0.013 0.019 0.025 0.028
51 0.004 0.008 0.017 0.026 0.034 0.038
52 0.005 0.011 0.022 0.033 0.044 0.049
53 0.005 0.034 0.024 0.038 0.069 0.138
54 0.007 0.047 0.032 0.051 0.094 0.187
55 0.010 0.067 0.046 0.073 0.134 0.266
56 0.010 0.063 0.044 0.069 0.127 0.253
57 0.135 0.100 0.148 0.196 0.220 0.220
58 0.083 0.062 0.091 0.120 0.135 0.135
59 0.137 0.053 0.084 0.146 0.177 0.177
60 0.162 0.063 0.099 0.172 0.208 0.208
61 0.598 0.231 0.231 0.231 0.231 0.231
62 0.621 0.240 0.240 0.240 0.240 0.240
63 0.236 0.236 0.236 0.236 0.236 0.236
64 0.236 0.236 0.236 0.236 0.236 0.236
65 1.000 1.000 1.000 1.000 1.000 1.000
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-19
Service Retirement
Public Agency Police 3% at 50
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.124 0.103 0.113 0.143 0.244 0.376
51 0.060 0.081 0.087 0.125 0.207 0.294
52 0.016 0.055 0.111 0.148 0.192 0.235
53 0.072 0.074 0.098 0.142 0.189 0.237
54 0.018 0.049 0.105 0.123 0.187 0.271
55 0.069 0.074 0.081 0.113 0.209 0.305
56 0.064 0.108 0.113 0.125 0.190 0.288
57 0.056 0.109 0.160 0.182 0.210 0.210
58 0.108 0.129 0.173 0.189 0.214 0.214
59 0.093 0.144 0.204 0.229 0.262 0.262
60 0.343 0.180 0.159 0.188 0.247 0.247
61 0.221 0.221 0.221 0.221 0.221 0.221
62 0.213 0.213 0.213 0.213 0.213 0.213
63 0.233 0.233 0.233 0.233 0.233 0.233
64 0.234 0.234 0.234 0.234 0.234 0.234
65 1.000 1.000 1.000 1.000 1.000 1.000
• These rates also apply to County Peace officers, Local Prosecutors, Local Sheriff, School
Police, and Other Safety.
Service Retirement
Public Agency Fire 3% at 50
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.095 0.048 0.053 0.093 0.134 0.175
51 0.016 0.032 0.053 0.085 0.117 0.149
52 0.013 0.032 0.054 0.087 0.120 0.154
53 0.085 0.044 0.049 0.089 0.129 0.170
54 0.038 0.065 0.074 0.105 0.136 0.167
55 0.042 0.043 0.049 0.085 0.132 0.215
56 0.133 0.103 0.075 0.113 0.151 0.209
57 0.062 0.048 0.060 0.124 0.172 0.213
58 0.124 0.097 0.092 0.153 0.194 0.227
59 0.092 0.071 0.078 0.144 0.192 0.233
60 0.056 0.044 0.061 0.131 0.186 0.233
61 0.282 0.219 0.158 0.198 0.233 0.260
62 0.292 0.227 0.164 0.205 0.241 0.269
63 0.196 0.196 0.196 0.196 0.196 0.196
64 0.197 0.197 0.197 0.197 0.197 0.197
65 1.000 1.000 1.000 1.000 1.000 1.000
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-20
Service Retirement
Public Agency Police 2% at 57
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.040 0.040 0.040 0.040 0.040 0.080
51 0.028 0.028 0.028 0.028 0.040 0.066
52 0.028 0.028 0.028 0.028 0.043 0.061
53 0.028 0.028 0.028 0.028 0.057 0.086
54 0.028 0.028 0.028 0.032 0.069 0.110
55 0.050 0.050 0.050 0.067 0.099 0.179
56 0.046 0.046 0.046 0.062 0.090 0.160
57 0.054 0.054 0.054 0.072 0.106 0.191
58 0.060 0.060 0.060 0.066 0.103 0.171
59 0.060 0.060 0.060 0.069 0.105 0.171
60 0.113 0.113 0.113 0.113 0.113 0.171
61 0.108 0.108 0.108 0.108 0.108 0.128
62 0.113 0.113 0.113 0.113 0.113 0.159
63 0.113 0.113 0.113 0.113 0.113 0.159
64 0.113 0.113 0.113 0.113 0.113 0.239
65 1.000 1.000 1.000 1.000 1.000 1.000
• These rates also apply to County Peace officers, Local Prosecutors, Local Sheriff, School
Police, and Other Safety.
Service Retirement
Public Agency Fire 2% at 57
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.005 0.005 0.005 0.005 0.008 0.012
51 0.006 0.006 0.006 0.006 0.009 0.013
52 0.012 0.012 0.012 0.012 0.019 0.028
53 0.033 0.033 0.033 0.033 0.050 0.075
54 0.045 0.045 0.045 0.045 0.069 0.103
55 0.061 0.061 0.061 0.061 0.094 0.140
56 0.055 0.055 0.055 0.055 0.084 0.126
57 0.081 0.081 0.081 0.081 0.125 0.187
58 0.059 0.059 0.059 0.059 0.091 0.137
59 0.055 0.055 0.055 0.055 0.084 0.126
60 0.085 0.085 0.085 0.085 0.131 0.196
61 0.085 0.085 0.085 0.085 0.131 0.196
62 0.085 0.085 0.085 0.085 0.131 0.196
63 0.085 0.085 0.085 0.085 0.131 0.196
64 0.085 0.085 0.085 0.085 0.131 0.196
65 1.000 1.000 1.000 1.000 1.000 1.000
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-21
Service Retirement
Public Agency Police 2.5% at 57
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.050 0.050 0.050 0.050 0.050 0.100
51 0.038 0.038 0.038 0.038 0.055 0.089
52 0.038 0.038 0.038 0.038 0.058 0.082
53 0.036 0.036 0.036 0.036 0.073 0.111
54 0.036 0.036 0.036 0.041 0.088 0.142
55 0.061 0.061 0.061 0.082 0.120 0.217
56 0.056 0.056 0.056 0.075 0.110 0.194
57 0.060 0.060 0.060 0.080 0.118 0.213
58 0.072 0.072 0.072 0.079 0.124 0.205
59 0.072 0.072 0.072 0.083 0.126 0.205
60 0.135 0.135 0.135 0.135 0.135 0.205
61 0.130 0.130 0.130 0.130 0.130 0.153
62 0.135 0.135 0.135 0.135 0.135 0.191
63 0.135 0.135 0.135 0.135 0.135 0.191
64 0.135 0.135 0.135 0.135 0.135 0.287
65 1.000 1.000 1.000 1.000 1.000 1.000
• These rates also apply to County Peace officers, Local Prosecutors, Local Sheriff, School
Police, and Other Safety.
Service Retirement
Public Agency Fire 2.5% at 57
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.007 0.007 0.007 0.007 0.010 0.015
51 0.008 0.008 0.008 0.008 0.012 0.018
52 0.016 0.016 0.016 0.016 0.025 0.038
53 0.042 0.042 0.042 0.042 0.064 0.096
54 0.057 0.057 0.057 0.057 0.088 0.132
55 0.074 0.074 0.074 0.074 0.114 0.170
56 0.066 0.066 0.066 0.066 0.102 0.153
57 0.090 0.090 0.090 0.090 0.139 0.208
58 0.071 0.071 0.071 0.071 0.110 0.164
59 0.066 0.066 0.066 0.066 0.101 0.151
60 0.102 0.102 0.102 0.102 0.157 0.235
61 0.102 0.102 0.102 0.102 0.157 0.236
62 0.102 0.102 0.102 0.102 0.157 0.236
63 0.102 0.102 0.102 0.102 0.157 0.236
64 0.102 0.102 0.102 0.102 0.157 0.236
65 1.000 1.000 1.000 1.000 1.000 1.000
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-22
Service Retirement
Public Agency Police 2.7% at 57
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.050 0.050 0.050 0.050 0.050 0.100
51 0.040 0.040 0.040 0.040 0.058 0.094
52 0.038 0.038 0.038 0.038 0.058 0.083
53 0.038 0.038 0.038 0.038 0.077 0.117
54 0.038 0.038 0.038 0.044 0.093 0.150
55 0.068 0.068 0.068 0.091 0.134 0.242
56 0.063 0.063 0.063 0.084 0.123 0.217
57 0.060 0.060 0.060 0.080 0.118 0.213
58 0.080 0.080 0.080 0.088 0.138 0.228
59 0.080 0.080 0.080 0.092 0.140 0.228
60 0.150 0.150 0.150 0.150 0.150 0.228
61 0.144 0.144 0.144 0.144 0.144 0.170
62 0.150 0.150 0.150 0.150 0.150 0.213
63 0.150 0.150 0.150 0.150 0.150 0.213
64 0.150 0.150 0.150 0.150 0.150 0.319
65 1.000 1.000 1.000 1.000 1.000 1.000
• These rates also apply to County Peace officers, Local Prosecutors, Local Sheriff, School
Police, and Other Safety.
Service Retirement
Public Agency Fire 2.7% at 57
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.007 0.007 0.007 0.007 0.010 0.015
51 0.008 0.008 0.008 0.008 0.013 0.019
52 0.016 0.016 0.016 0.016 0.025 0.038
53 0.044 0.044 0.044 0.044 0.068 0.102
54 0.061 0.061 0.061 0.061 0.093 0.140
55 0.083 0.083 0.083 0.083 0.127 0.190
56 0.074 0.074 0.074 0.074 0.114 0.171
57 0.090 0.090 0.090 0.090 0.139 0.208
58 0.079 0.079 0.079 0.079 0.122 0.182
59 0.073 0.073 0.073 0.073 0.112 0.168
60 0.114 0.114 0.114 0.114 0.175 0.262
61 0.114 0.114 0.114 0.114 0.175 0.262
62 0.114 0.114 0.114 0.114 0.175 0.262
63 0.114 0.114 0.114 0.114 0.175 0.262
64 0.114 0.114 0.114 0.114 0.175 0.262
65 1.000 1.000 1.000 1.000 1.000 1.000
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-23
Service Retirement
Schools 2% at 55
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.003 0.004 0.006 0.007 0.010 0.010
51 0.004 0.005 0.007 0.008 0.011 0.011
52 0.005 0.007 0.008 0.009 0.012 0.012
53 0.007 0.008 0.010 0.012 0.015 0.015
54 0.006 0.009 0.012 0.015 0.020 0.021
55 0.011 0.023 0.034 0.057 0.070 0.090
56 0.012 0.027 0.036 0.056 0.073 0.095
57 0.016 0.027 0.036 0.055 0.068 0.087
58 0.019 0.030 0.040 0.062 0.078 0.103
59 0.023 0.034 0.046 0.070 0.085 0.109
60 0.022 0.043 0.062 0.095 0.113 0.141
61 0.030 0.051 0.071 0.103 0.124 0.154
62 0.065 0.098 0.128 0.188 0.216 0.248
63 0.075 0.112 0.144 0.197 0.222 0.268
64 0.091 0.116 0.138 0.180 0.196 0.231
65 0.163 0.164 0.197 0.232 0.250 0.271
66 0.208 0.204 0.243 0.282 0.301 0.315
67 0.189 0.185 0.221 0.257 0.274 0.287
68 0.127 0.158 0.200 0.227 0.241 0.244
69 0.168 0.162 0.189 0.217 0.229 0.238
70 0.191 0.190 0.237 0.250 0.246 0.254
Schools 2% at 62
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.000 0.000 0.000 0.000 0.000 0.000
51 0.000 0.000 0.000 0.000 0.000 0.000
52 0.004 0.007 0.010 0.011 0.013 0.015
53 0.004 0.008 0.010 0.013 0.014 0.016
54 0.005 0.011 0.015 0.018 0.020 0.022
55 0.014 0.027 0.038 0.045 0.050 0.056
56 0.013 0.026 0.037 0.043 0.048 0.055
57 0.013 0.027 0.038 0.045 0.050 0.055
58 0.017 0.034 0.047 0.056 0.062 0.069
59 0.019 0.037 0.052 0.062 0.068 0.076
60 0.026 0.053 0.074 0.087 0.097 0.108
61 0.030 0.058 0.081 0.095 0.106 0.119
62 0.053 0.105 0.147 0.174 0.194 0.217
63 0.054 0.107 0.151 0.178 0.198 0.222
64 0.053 0.105 0.147 0.174 0.194 0.216
65 0.072 0.142 0.199 0.235 0.262 0.293
66 0.077 0.152 0.213 0.252 0.281 0.314
67 0.070 0.139 0.194 0.229 0.255 0.286
68 0.063 0.124 0.173 0.205 0.228 0.255
69 0.066 0.130 0.183 0.216 0.241 0.270
70 0.071 0.140 0.196 0.231 0.258 0.289
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-24
Miscellaneous
Internal Revenue Code Section 415
The limitations on benefits imposed by Internal Revenue Code Section 415 are taken into account in this
valuation. Each year the impact of any changes in this limitation since the prior valuation is included and
amortized as part of the actuarial gain or loss base. This results in lower contributions for those employers
contributing to the Replacement Benefit Fund and protects CalPERS from prefunding expected benefits in
excess of limits imposed by federal tax law. The Section 415(b) dollar limit for the 2022 calendar year is
$245,000.
Internal Revenue Code Section 401(a)(17)
The limitations on compensation imposed by Internal Revenue Code Section 401(a)(17) are taken into
account in this valuation. Each year, the impact of any changes in the compensation limitation since the prior
valuation is included and amortized as part of the actuarial gain or loss base. The compensation limit for
classic members for the 2022 calendar year is $305,000.
Appendix B
Principal Plan Provisions
CalPERS Actuarial Valuation – June 30, 2022 Appendix B
Miscellaneous Plan of the City of Carlsbad
Principal Plan Provisions
B-1
The following is a description of the principal plan provisions used in calculating costs and liabilities. We have indicated
whether a plan provision is standard or optional. Standard benefits are applicable to all members while optional benefits
vary among employers. Optional benefits that apply to a single period of time, such as Golden Handshakes, have not
been included. Many of the statements in this summary are general in nature, and are intended to provide an easily understood summary of the Public Employees’ Retirement Law and the California Public Employees’ Pension Reform
Act of 2013. The law itself governs in all situations.
Service Retirement
Eligibility
A classic CalPERS member or PEPRA Safety member becomes eligible for Service Retirement upon attainment of
age 50 with at least 5 years of credited service (total service across all CalPERS employers, and with certain other
retirement systems with which CalPERS has reciprocity agreements). For employees hired into a plan with the 1.5%
at age 65 formula, eligibility for service retirement is age 55 with at least 5 years of service. PEPRA Miscellaneous
members become eligible for service retirement upon attainment of age 52 with at least 5 years of service.
Benefit
The service retirement benefit is a monthly allowance equal to the product of the benefit factor, years of service, and
final compensation.
· The benefit factor depends on the benefit formula specified in the agency’s contract. The table below shows the
factors for each of the available formulas. Factors vary by the member’s age at retirement. Listed are the factors
for retirement at whole year ages:
Miscellaneous Plan Formulas
Retirement
Age 1.5% at 65 2% at 60 2% at 55 2.5% at 55 2.7% at 55 3% at 60 PEPRA
2% at 62
50 0.5000% 1.092% 1.426% 2.000% 2.000% 2.000% N/A
51 0.5667% 1.156% 1.522% 2.100% 2.140% 2.100% N/A
52 0.6334% 1.224% 1.628% 2.200% 2.280% 2.200% 1.000%
53 0.7000% 1.296% 1.742% 2.300% 2.420% 2.300% 1.100%
54 0.7667% 1.376% 1.866% 2.400% 2.560% 2.400% 1.200%
55 0.8334% 1.460% 2.000% 2.500% 2.700% 2.500% 1.300%
56 0.9000% 1.552% 2.052% 2.500% 2.700% 2.600% 1.400%
57 0.9667% 1.650% 2.104% 2.500% 2.700% 2.700% 1.500%
58 1.0334% 1.758% 2.156% 2.500% 2.700% 2.800% 1.600%
59 1.1000% 1.874% 2.210% 2.500% 2.700% 2.900% 1.700%
60 1.1667% 2.000% 2.262% 2.500% 2.700% 3.000% 1.800%
61 1.2334% 2.134% 2.314% 2.500% 2.700% 3.000% 1.900%
62 1.3000% 2.272% 2.366% 2.500% 2.700% 3.000% 2.000%
63 1.3667% 2.418% 2.418% 2.500% 2.700% 3.000% 2.100%
64 1.4334% 2.418% 2.418% 2.500% 2.700% 3.000% 2.200%
65 1.5000% 2.418% 2.418% 2.500% 2.700% 3.000% 2.300%
66 1.5000% 2.418% 2.418% 2.500% 2.700% 3.000% 2.400%
67 & up 1.5000% 2.418% 2.418% 2.500% 2.700% 3.000% 2.500%
CalPERS Actuarial Valuation – June 30, 2022 Appendix B
Miscellaneous Plan of the City of Carlsbad
Principal Plan Provisions
B-2
Safety Plan Formulas
Retirement Age Half Pay at 55* 2% at 55 2% at 50 3% at 55 3% at 50
50 1.783% 1.426% 2.000% 2.400% 3.000%
51 1.903% 1.522% 2.140% 2.520% 3.000%
52 2.035% 1.628% 2.280% 2.640% 3.000%
53 2.178% 1.742% 2.420% 2.760% 3.000%
54 2.333% 1.866% 2.560% 2.880% 3.000%
55 & Up 2.500% 2.000% 2.700% 3.000% 3.000%
* For this formula, the benefit factor also varies by entry age. The factors shown are for members with an entry age of
35 or greater. If entry age is less than 35, then the age 55 benefit factor is 50% divided by the difference between age
55 and entry age. The benefit factor for ages prior to age 55 is the same proportion of the age 55 benefit factor as in
the above table.
PEPRA Safety Plan Formulas
Retirement Age 2% at 57 2.5% at 57 2.7% at 57
50 1.426% 2.000% 2.000%
51 1.508% 2.071% 2.100%
52 1.590% 2.143% 2.200%
53 1.672% 2.214% 2.300%
54 1.754% 2.286% 2.400%
55 1.836% 2.357% 2.500%
56 1.918% 2.429% 2.600%
57 & Up 2.000% 2.500% 2.700%
• The years of service is the amount credited by CalPERS to a member while he or she is employed in this group
(or for other periods that are recognized under the employer’s contract with CalPERS). For a member who has
earned service with multiple CalPERS employers, the benefit from each employer is calculated separately
according to each employer’s contract, and then added together for the total allowance. An agency may contract
for an optional benefit where any unused sick leave accumulated at the time of retirement will be co nverted to
credited service at a rate of 0.004 years of service for each day of sick leave.
• The final compensation is the monthly average of the member’s highest 36 or 12 consecutive months’ full-time
equivalent monthly pay (no matter which CalPERS employer paid this compensation). The standard benefit is 36
months. Employers had the option of providing a final compensation equal to the highest 12 consecutive months
for classic plans only. Final compensation must be defined by the highest 36 consecutive months’ pay under the
1.5% at 65 formula. PEPRA members have a cap on the annual salary that can be used to calculate final
compensation for all new members based on the Social Security contribution and benefit base. For employees
that participate in Social Security this cap is $134,974 for 2022 and for those employees that do not participate in
Social Security the cap for 2022 is $161,969. Adjustments to the caps are permitted annually based on changes to the CPI for all urban consumers.
• PEPRA benefit formulas have no Social Security offsets and Social Security coverage is optional. For Classic
benefit formulas, employees must be covered by Social Security with the 1.5% at 65 form ula. Social Security is
optional for all other Classic benefit formulas. For employees covered by Social Security, the modified formula is
the standard benefit. Under this type of formula, the final compensation is offset by $133.33 (or by one third if the
final compensation is less than $400). Employers may contract for the full benefit with Social Security that will
eliminate the offset applicable to the final compensation. For employees not covered by Social Security, the full
CalPERS Actuarial Valuation – June 30, 2022 Appendix B
Miscellaneous Plan of the City of Carlsbad
Principal Plan Provisions
B-3
benefit is paid with no offsets. Auxiliary organizations of the CSUC system may elect reduced contribution rates, in which case the offset is $317 if members are not covered by Social Security or $513 if members are covered by
Social Security.
• The Miscellaneous and PEPRA Safety service retirement benefit is not capped. The Classic Safety service retirement benefit is capped at 90% of final compensation.
Vested Deferred Retirement
Eligibility for Deferred Status
A CalPERS member becomes eligible for a deferred vested retirement benefit when he or she leaves employment,
keeps his or her contribution account balance on deposit with CalPERS, and has earned at least 5 years of credited
service (total service across all CalPERS employers, and with certain other retirement systems with which CalPERS
has reciprocity agreements).
Eligibility to Start Receiving Benefits
The CalPERS classic members and PEPRA Safety members become eligible to receive the deferred retirement benefit
upon satisfying the eligibility requirements for deferred status and upon attainment of age 50 (55 for employees hired
into a 1.5% at 65 plan). PEPRA Miscellaneous members become eligible to receive the deferred retirement benefit
upon satisfying the eligibility requirements for deferred status and upon attainment of age 52.
Benefit
The vested deferred retirement benefit is the same as the service retirement benefit, where the benefit factor is based
on the member’s age at allowance commencement. For members who have earned service with multiple CalPERS employers, the benefit from each employer is calculated separately according to each employer’s contract, and then
added together for the total allowance.
Non-Industrial (Non-Job Related) Disability Retirement
Eligibility
A CalPERS member is eligible for Non-Industrial Disability Retirement if he or she becomes disabled and has at least
5 years of credited service (total service across all CalPERS employers, and with certain other retirement systems with
which CalPERS has reciprocity agreements). There is no special age requirement. Disabled means the member is
unable to perform his or her job because of an illness or injury, which is expected to be permanent or to last indefinitely.
The illness or injury does not have to be job related. A CalPERS member must be actively employed by any CalPERS
employer at the time of disability in order to be eligible for this benefit.
Standard Benefit
The standard Non-Industrial Disability Retirement benefit is a monthly allowance equal to 1.8% of final compensation,
multiplied by service, which is determined as follows:
• Service is CalPERS credited service, for members with less than 10 years of service or greater than 18.518 years
of service; or
• Service is CalPERS credited service plus the additional number of years that the member would have worked until
age 60, for members with at least 10 years but not more than 18.518 years of service. The maximum benefit in
this case is 33⅓% of final compensation.
CalPERS Actuarial Valuation – June 30, 2022 Appendix B
Miscellaneous Plan of the City of Carlsbad
Principal Plan Provisions
B-4
Improved Benefit
Employers have the option of providing the improved Non-Industrial Disability Retirement benefit. This benefit provides
a monthly allowance equal to 30% of final compensation for the first 5 years of service, plus 1% for each additional year of service to a maximum of 50% of final compensation.
Members who are eligible for a larger service retirement benefit may choose to receive that benefit in lieu of a disability
benefit. Members eligible to retire, and who have attained the normal retirement age determined by their service
retirement benefit formula, will receive the same dollar amount for disability retirement as that payable for service
retirement. For members who have earned service with multiple CalPERS employers, the benefit attributed to each
employer is the total disability allowance multiplied by the ratio of service with a particular employer to the total CalPERS
service.
Industrial (Job Related) Disability Retirement
This is a standard benefit for Safety members except those described in Section 20423.6. For excluded Safety
members and all Miscellaneous members, employers have the option of providing this benefit. An employer may choose to provide the increased benefit option or the improved benefit option.
Eligibility
An employee is eligible for Industrial Disability Retirement if he or she becomes disabled while working, where disabled means the member is unable to perform the duties of the job because of a work-related illness or injury, which is
expected to be permanent or to last indefinitely. A CalPERS member who has left active employment within this group
is not eligible for this benefit, except to the extent described below.
Standard Benefit
The standard Industrial Disability Retirement benefit is a monthly allowance equal to 50% of final compensation.
Increased Benefit (75% of Final Compensation)
The increased Industrial Disability Retirement benefit is a monthly allowance equal to 75% of final compensation for
total disability.
Improved Benefit (50% to 90% of Final Compensation)
The improved Industrial Disability Retirement benefit is a monthly allowance equal to the Workman’s Compensation
Appeals Board permanent disability rate percentage (if 50% or greater, with a maximum of 90%) time s the final
compensation.
For a CalPERS member not actively employed in this group who became disabled while employed by some other CalPERS employer, the benefit is a return of accumulated member contributions with respect to employment in this
group. With the standard or increased benefit, a member may also choose to receive the annuitization of the
accumulated member contributions.
If a member is eligible for service retirement and if the service retirement benefit is more than the industrial disability retirement benefit, the member may choose to receive the larger benefit.
CalPERS Actuarial Valuation – June 30, 2022 Appendix B
Miscellaneous Plan of the City of Carlsbad
Principal Plan Provisions
B-5
Post-Retirement Death Benefit
Standard Lump Sum Payment
Upon the death of a retiree, a one-time lump sum payment of $500 will be made to the retiree’s designated survivor(s),
or to the retiree’s estate. The lump sum payment amount increases to $2,000 for any death occurring on or after
July 1, 2023 due to SB 1168.
Optional Lump Sum Payment
In lieu of the standard lump sum death benefit, employers have the option of providing a lump sum death benefit of
$600, $3,000, $4,000 or $5,000.
Form of Payment for Retirement Allowance
Standard Form of Payment
Generally, the retirement allowance is paid to the retiree in the form of an annuity for as long as he or she is alive. The
retiree may choose to provide for a portion of his or her allowance to be paid to any designated beneficiary after the
retiree’s death. CalPERS provides for a variety of such benefit options, which the retiree pays for by taking a reduction
in his or her retirement allowance. Such reduction takes into account the amount to be provided to the beneficiary and
the probable duration of payments (based on the ages of the member and beneficiary) made subsequent to the
member’s death.
Improved Form of Payment (Post-Retirement Survivor Allowance)
Employers have the option to contract for the post-retirement survivor allowance.
For retirement allowances with respect to service subject to a modified Classic formula, 25% of the retirement allowance
will automatically be continued to certain statutory beneficiaries upon the death of the retiree, without a reduction in the
retiree’s allowance. For retirement allowances with respect to service subject to a PEPRA formula or a full or
supplemental Classic formula, 50% of the retirement allowance will automatically be continued to certain statutory
beneficiaries upon the death of the retiree, without a reduction in the retiree’s allowance. This additional benefit is
referred to as post-retirement survivor allowance (PRSA) or simply as survivor continuance.
In other words, 25% or 50% of the allowance, the continuance portion, is paid to the retiree for as long as he or she is
alive, and that same amount is continued to the retiree’s spouse (or if no eligible spouse, to unmarried child(ren) until
they attain age 18; or, if no eligible child(ren), to a qualifying dependent parent) for the rest of his or her lifetime. This
benefit will not be discontinued in the event the spouse remarries.
The remaining 75% or 50% of the retirement allowance, which may be referred to as the option portion of the benefit,
is paid to the retiree as an annuity for as long as he or she is alive. Or, the retiree may choose to provide for som e of
this option portion to be paid to any designated beneficiary after the retiree’s death. Benefit options applicable to the
option portion are the same as those offered with the standard form. The reduction is calculated in the same manner
but is applied only to the option portion.
CalPERS Actuarial Valuation – June 30, 2022 Appendix B
Miscellaneous Plan of the City of Carlsbad
Principal Plan Provisions
B-6
Pre-Retirement Death Benefits
Basic Death Benefit
This is a standard benefit.
Eligibility
An employee’s beneficiary (or estate) may receive the basic death benefit if the member dies while actively employed.
A CalPERS member must be actively employed with the CalPERS employer providing this benefit to be eligible for this
benefit. A member’s survivor who is eligible for any other pre-retirement death benefit may choose to receive that death
benefit instead of this basic death benefit.
Benefit
The basic death benefit is a lump sum in the amount of the member’s accumulated contributions, where interest is
credited annually at the greater of 6% or the prevailing discount rate through the date of death, plus a lump sum in the
amount of one month's salary for each completed year of current service, up to a maximum of six months' salary. For purposes of this benefit, one month's salary is defined as the member's average monthly full-time rate of compensation
during the 12 months preceding death.
1957 Survivor Benefit
This is a standard benefit.
Eligibility
An employee’s eligible survivor(s) may receive the 1957 Survivor benefit if the member dies while actively employed,
has attained at least age 50 for classic and PEPRA Safety members and age 52 for PEPRA Miscellaneous members,
and has at least 5 years of credited service (total service across all CalPERS employers and with certain other
retirement systems with which CalPERS has reciprocity agreements). A CalPERS member must be actively employed
with the CalPERS employer providing this benefit to be eligible for this benefit. An eligible survivor means the surviving
spouse to whom the member was married at least one year before death or, if there is no eligible spouse, to the
member's unmarried child(ren) under age 18. A member’s survivor who is eligible for any other pre-retirement death
benefit may choose to receive that death benefit instead of this 1957 Survivor benefit.
Benefit
The 1957 Survivor benefit is a monthly allowance equal to one-half of the unmodified service retirement benefit that the member would have been entitled to receive if the member had retired on the date of his or her death. If the benefit
is payable to the spouse, the benefit is discontinued upon the death of the spouse. If the benefit is payable to dependent
child(ren), the benefit will be discontinued upon death or attainment of age 18, unless the child(ren) is disabled. The
total amount paid will be at least equal to the basic death benefit.
CalPERS Actuarial Valuation – June 30, 2022 Appendix B
Miscellaneous Plan of the City of Carlsbad
Principal Plan Provisions
B-7
Optional Settlement 2 Death Benefit
This is an optional benefit.
Eligibility
An employee’s eligible survivor may receive the Optional Settlement 2 Death benefit if the member dies while actively
employed, has attained at least age 50 for classic and PEPRA Safety members and age 52 for PEPRA Miscellaneous
members, and has at least 5 years of credited service (total service across all CalPERS employers and with certain
other retirement systems with which CalPERS has reciprocity agreements). A CalPERS member who is no longer
actively employed with any CalPERS employer is not eligible for this benefit. An eligible survivor means the surviving
spouse to whom the member was married at least one year before death. A member’s survivor who is eligible for any
other pre-retirement death benefit may choose to receive that death benefit instead of this Optional Settlement 2 D eath
benefit.
Benefit
The Optional Settlement 2 Death benefit is a monthly allowance equal to the service retirement benefit that the member
would have received had the member retired on the date of his or her death and elected 100% to continue to the el igible
survivor after the member’s death. The allowance is payable as long as the surviving spouse lives, at which time it is
continued to any unmarried child(ren) under age 18, if applicable. The total amount paid will be at least equal to the
basic death benefit.
Special Death Benefit
This is a standard benefit for Safety members except those described in Section 20423.6. For excluded Safety
members and all Miscellaneous members, employers have the option of providing this benefit.
Eligibility
An employee’s eligible survivor(s) may receive the special death benefit if the member dies while actively employed
and the death is job-related. A CalPERS member who is no longer actively employed with any CalPERS employer is
not eligible for this benefit. An eligible survivor means the surviving spouse to whom the member was married prior to
the onset of the injury or illness that resulted in death. If there is no eligible spouse, an eligible survivor means the
member's unmarried child(ren) under age 22. An eligible survivor who chooses to receive this benefit will not receive
any other death benefit.
Benefit
The special death benefit is a monthly allowance equal to 50% of final compensation and will be increased whenever the compensation paid to active employees is increased but ceasing to increase when the member would have attained
age 50. The allowance is payable to the surviving spouse until death at which time the allowance is continued to any
unmarried child(ren) under age 22. There is a guarantee that the total amount paid will at least equal the basic death
benefit.
If the member’s death is the result of an accident or injury caused by external violence or physical force incurred in the
performance of the member’s duty, and there are eligible surviving child(ren) (eligible means unmarried child(ren) under
age 22) in addition to an eligible spouse, then an additional monthly allowance is paid equal to the following:
• if 1 eligible child: 12.5% of final compensation
• if 2 eligible children: 20.0% of final compensation
• if 3 or more eligible children: 25.0% of final compensation
CalPERS Actuarial Valuation – June 30, 2022 Appendix B
Miscellaneous Plan of the City of Carlsbad
Principal Plan Provisions
B-8
Alternate Death Benefit for Local Fire Members
This is an optional benefit available only to local fire members.
Eligibility
An employee’s eligible survivor(s) may receive the alternate death benefit in lieu of the basic death benefit or the 1957
Survivor benefit if the member dies while actively employed and has at least 20 years of total CalPERS service. A
CalPERS member who is no longer actively employed with any CalPERS employer is not eligible for this benefit. An
eligible survivor means the surviving spouse to whom the member was married prior to the onset of the injury or illness
that resulted in death. If there is no eligible spouse, an eligible survivor means the member's unmarried child(ren) under
age 18.
Benefit
The Alternate Death benefit is a monthly allowance equal to the service retirement benefit that the member would have
received had the member retired on the date of his or her death and elected Optional Settlement 2. (A retiree who
elects Optional Settlement 2 receives an allowance that has been reduced so that it will continue to be paid after his or
her death to a surviving beneficiary.) If the member has not yet attained age 50, the benefit is equal to that which would
be payable if the member had retired at age 50, based on service credited at the time of death. The allowance is
payable as long as the surviving spouse lives, at which time it is continued to any unmarried child(ren) under age 18, if
applicable. The total amount paid will be at least equal to the basic death benefit.
Cost-of-Living Adjustments (COLA)
Standard Benefit
Retirement and survivor allowances are adjusted each year in May for cost of living, beginning the second calendar
year after the year of retirement. The standard cost-of-living adjustment (COLA) is 2%. Annual adjustments are calculated by first determining the lesser of 1) 2% compounded from the end of the year of retirement or 2) actual rate
of price inflation. The resulting increase is divided by the total increase provided in prior years. For any given year, the
COLA adjustment may be less than 2% (when the rate of price inflation is low), may be greater than the rate of price
inflation (when the rate of price inflation is low after several years of high price inflation) or may even be greater than
2% (when price inflation is high after several years of low price inflation).
Improved Benefit
Employers have the option of providing a COLA of 3%, 4%, or 5%, determined in the same manner as described above
for the standard 2% COLA. An improved COLA is not available with the 1.5% at 65 formula.
Purchasing Power Protection Allowance (PPPA)
Retirement and survivor allowances are protected against price inflation by PPPA. PPPA benefits are cost-of-living
adjustments that are intended to maintain an individual’s allowance at 80% of the initial allowance at retirement adjusted for price inflation since retirement. The PPPA benefit will be coordinated with other cost-of-living adjustments provided
under the plan.
CalPERS Actuarial Valuation – June 30, 2022 Appendix B
Miscellaneous Plan of the City of Carlsbad
Principal Plan Provisions
B-9
Employee Contributions
Each employee contributes toward his or her retirement based upon the retirement formula. The standard employee
contribution is as described below.
• The percent contributed below the monthly compensation breakpoint is 0%.
• The monthly compensation breakpoint is $0 for full and supplemental formula members and $133.33 for
employees covered by the modified formula.
• The percent contributed above the monthly compensation breakpoint depends upon the benefit formula, as
shown in the table below.
Benefit Formula Percent Contributed above the
Breakpoint
Miscellaneous, 1.5% at 65 2%
Miscellaneous, 2% at 60 7%
Miscellaneous, 2% at 55 7% Miscellaneous, 2.5% at 55 8%
Miscellaneous, 2.7% at 55 8%
Miscellaneous, 3% at 60 8%
Miscellaneous, 2% at 62 50% of the Total Normal Cost
Miscellaneous, 1.5% at 65 50% of the Total Normal Cost
Safety, Half Pay at 55 Varies by entry age
Safety, 2% at 55 7%
Safety, 2% at 50 9%
Safety, 3% at 55 9%
Safety, 3% at 50 9%
Safety, 2% at 57 50% of the Total Normal Cost
Safety, 2.5% at 57 50% of the Total Normal Cost
Safety, 2.7% at 57 50% of the Total Normal Cost
The employer may choose to “pick-up” these contributions for classic members (Employer Paid Member Contributions
or EPMC). EPMC is prohibited for new PEPRA members.
An employer may also include Employee Cost Sharing in the contract, where employees agree to share the cost of the
employer contribution. These contributions are paid in addition to the member contribution.
Auxiliary organizations of the CSU system may elect reduced contribution rates, in which case the offset is $317 and
the contribution rate is 6% if members are not covered by Social Security. If members are covered by Social Security,
the offset is $513 and the contribution rate is 5%.
Refund of Employee Contributions
If the member’s service with the employer ends, and if the member does not satisfy the eligibility conditions for any of
the retirement benefits above, the member may elect to receive a refund of his or her employee contributions, which
are credited with 6% interest compounded annually.
CalPERS Actuarial Valuation – June 30, 2022 Appendix B
Miscellaneous Plan of the City of Carlsbad
Principal Plan Provisions
B-10
1959 Survivor Benefit
This is a pre-retirement death benefit available only to members not covered by Social Security. Any agency joining
CalPERS subsequent to 1993 is required to provide this benefit if the members are not covered by Social Security. The
benefit is optional for agencies joining CalPERS prior to 1994. Levels 1, 2, and 3 are now closed. Any new agency or
any agency wishing to add this benefit or increase the current level may only choose the 4 th or Indexed Level.
This benefit is not included in the results presented in this valuation. More information on this benefit is available on the
CalPERS website.
Appendix C
Participant Data
• Summary of Valuation Data
• Active Members
• Transferred and Separated Members
• Retired Members and Beneficiaries
CalPERS Actuarial Valuation – June 30, 2022 Appendix C
Miscellaneous Plan of the City of Carlsbad
Participant Data
C-1
Summary of Valuation Data
June 30, 2021 June 30, 2022
1. Active Members
a) Counts 528 548
b) Average Attained Age
46.15 45.41
c) Average Entry Age to Rate Plan 36.66 36.32
d) Average Years of Credited Service 9.18 8.72
e) Average Annual Covered Pay $81,756 $84,216
f) Annual Covered Payroll 43,167,428 46,150,095
g) Projected Annual Payroll for Contribution Year 46,895,969 50,136,262
h) Present Value of Future Payroll 386,315,744 417,971,990
2. Transferred Members
a) Counts 247 249
b) Average Attained Age 47.05 46.88
c) Average Years of Credited Service 3.44 3.48
d) Average Annual Covered Pay $110,301 $112,291
3. Separated Members
a) Counts 281 309
b) Average Attained Age 46.51 47.34
c) Average Years of Credited Service 2.51 2.66
d) Average Annual Covered Pay $57,939 $59,745
4. Retired Members and Beneficiaries
a) Counts 645 678
b) Average Attained Age 69.03 69.44
c) Average Annual Benefits $33,433 $34,655
d) Total Annual Benefits $21,563,990 $23,495,978
5. Active to Retired Ratio [(1a) / (4a)] 0.82 0.81
Counts of members included in the valuation are counts of the records processed by the valuation. Multiple records
may exist for those who have service in more than one valuation group. This does not result in double counting of
liabilities.
Average Annual Benefits represents benefit amounts payable by this plan only. Some members may have service with
another agency and would therefore have a larger total benefit than would be included as part of the average shown
here.
CalPERS Actuarial Valuation – June 30, 2022 Appendix C
Miscellaneous Plan of the City of Carlsbad
Participant Data
C-2
Active Members
Counts of members included in the valuation are counts of the records processed by the valuation. Multiple records may exist for those who have service in more than one valuation group. This does not result in double counting of
liabilities.
Distribution of Active Members by Age and Service
Years of Service at Valuation Date
Attained
Age 0-4 5-9 10-14 15-19 20-24 25+ Total
15-24 13 0 0 0 0 0 13
25-29 49 2 0 0 0 0 51
30-34 42 12 1 1 0 0 56
35-39 48 18 6 7 1 0 80
40-44 33 15 7 8 3 0 66
45-49 24 12 13 12 8 1 70
50-54 26 15 4 13 17 7 82
55-59 18 14 6 11 10 9 68
60-64 11 9 2 7 8 5 42
65 and Over 3 2 2 4 5 4 20
All Ages 267 99 41 63 52 26 548
Distribution of Average Annual Salaries by Age and Service
Years of Service at Valuation Date
Attained Age 0-4 5-9 10-14 15-19 20-24 25+ Average Salary
15-24 $54,060 $0 $0 $0 $0 $0 $54,060
25-29 59,576 64,081 0 0 0 0 59,753
30-34 68,842 80,333 64,383 94,887 0 0 71,690
35-39 75,359 88,809 79,079 72,332 81,463 0 78,475
40-44 93,214 76,636 85,240 93,140 90,747 0 88,480
45-49 96,304 80,931 93,520 90,412 71,228 77,251 89,003
50-54 110,548 86,972 107,186 95,364 101,065 101,499 100,925
55-59 93,882 112,199 90,351 88,344 94,314 125,965 100,756
60-64 87,797 88,347 81,262 96,288 82,248 96,312 88,976
65 and Over 47,215 37,511 35,663 75,375 73,457 54,090 58,657
Average $79,361 $86,434 $86,732 $89,179 $88,655 $100,744 $84,216
CalPERS Actuarial Valuation – June 30, 2022 Appendix C
Miscellaneous Plan of the City of Carlsbad
Participant Data
C-3
Transferred and Separated Members
Distribution of Transfers to Other CalPERS Plans by Age, Service, and average Salary
Years of Service at Valuation Date
Attained
Age 0-4 5-9 10-14 15-19 20-24 25+ Total
Average
Salary
15-24 1 0 0 0 0 0 1 $81,356
25-29 9 0 0 0 0 0 9 68,102
30-34 26 2 0 0 0 0 28 83,684
35-39 27 5 0 0 0 0 32 104,010
40-44 33 5 5 0 0 0 43 106,135
45-49 28 4 0 1 1 0 34 132,731
50-54 24 10 0 2 1 0 37 129,359
55-59 21 6 2 1 0 0 30 133,180
60-64 13 5 3 3 0 0 24 102,130
65 and Over 8 1 2 0 0 0 11 116,851
All Ages 190 38 12 7 2 0 249 $112,291
Distribution of Separated Participants with Funds on Deposit by Age, Service, and average Salary
Years of Service at Valuation Date
Attained Age 0-4 5-9 10-14 15-19 20-24 25+ Total
Average
Salary
15-24 2 0 0 0 0 0 2 $44,228
25-29 15 0 0 0 0 0 15 46,139
30-34 25 1 0 0 0 0 26 50,562
35-39 36 2 1 0 0 0 39 62,955
40-44 39 9 1 0 0 0 49 61,782
45-49 45 8 2 1 0 0 56 62,421
50-54 27 9 2 0 1 0 39 68,843
55-59 22 12 0 1 1 1 37 65,121
60-64 26 3 0 0 0 0 29 47,862
65 and Over 17 0 0 0 0 0 17 53,269
All Ages 254 44 6 2 2 1 309 $59,745
CalPERS Actuarial Valuation – June 30, 2022 Appendix C
Miscellaneous Plan of the City of Carlsbad
Participant Data
C-4
Retired Members and Beneficiaries
Distribution of Retirees and Beneficiaries by Age and Retirement Type*
Attained Age
Service
Retirement
Non-
Industrial
Disability
Industrial
Disability
Non-
Industrial
Death
Industrial
Death
Death After
Retirement Total
Under 30 0 0 0 0 0 0 0
30-34 0 0 0 0 0 0 0
35-39 0 0 0 0 0 0 0
40-44 0 2 1 0 0 0 3
45-49 0 0 6 0 0 0 6
50-54 18 5 4 0 0 1 28
55-59 63 0 1 1 0 1 66
60-64 106 7 1 0 0 4 118
65-69 123 5 0 1 0 9 138
70-74 128 3 2 1 0 7 141
75-79 79 1 0 0 0 7 87
80-84 34 0 0 0 0 11 45
85 and Over 30 2 0 0 0 14 46
All Ages 581 25 15 3 0 54 678
Distribution of Average Annual Disbursements to Retirees and Beneficiaries by Age and Retirement Type*
Attained
Age
Service
Retirement
Non-
Industrial
Disability
Industrial
Disability
Non-
Industrial
Death
Industrial
Death
Death After
Retirement Average
Under 30 $0 $0 $0 $0 $0 $0 $0
30-34 0 0 0 0 0 0 0
35-39 0 0 0 0 0 0 0
40-44 0 25,490 298 0 0 0 17,092
45-49 0 0 1,091 0 0 0 1,091
50-54 9,409 17,244 1,273 0 0 10,707 9,692
55-59 24,698 0 1,184 33,023 0 10,707 24,256
60-64 42,277 13,917 137 0 0 22,484 39,567
65-69 42,502 19,869 0 16,600 0 29,652 40,656
70-74 41,499 18,893 9,633 12,726 0 33,225 39,951
75-79 35,455 288 0 0 0 27,293 34,394
80-84 34,259 0 0 0 0 23,595 31,653
85 and Over 30,892 14,589 0 0 0 20,052 26,884
All Ages $37,244 $16,804 $2,168 $20,783 $0 $24,854 $34,655
CalPERS Actuarial Valuation – June 30, 2022 Appendix C
Miscellaneous Plan of the City of Carlsbad
Participant Data
C-5
Retired Members and Beneficiaries (continued)
Distribution of Retirees and Beneficiaries by Years Retired and Retirement Type*
Years
Retired
Service
Retirement
Non-
Industrial
Disability
Industrial
Disability
Non-
Industrial
Death
Industrial
Death
Death After
Retirement Total
Under 5 Yrs 188 1 6 1 0 19 215
5-9 139 7 2 0 0 8 156
10-14 90 2 3 2 0 13 110
15-19 89 5 3 0 0 9 106
20-24 45 1 0 0 0 5 51
25-29 24 6 0 0 0 0 30
30 and Over 6 3 1 0 0 0 10
All Years 581 25 15 3 0 54 678
Distribution of Average Annual Disbursements to Retirees and Beneficiaries by Years Retired and Retirement
Type*
Years
Retired
Service
Retirement
Non-
Industrial
Disability
Industrial
Disability
Non-
Industrial
Death
Industrial
Death
Death After
Retirement Average
Under 5 Yrs $33,630 $25,085 $1,105 $33,023 $0 $24,953 $31,913
5-9 46,502 18,255 1,849 0 0 39,512 44,304
10-14 38,457 16,874 880 14,663 0 21,013 34,546
15-19 43,363 16,526 6,458 0 0 15,674 38,702
20-24 24,691 27,827 0 0 0 27,534 25,031
25-29 14,759 15,103 0 0 0 0 14,828
30 and Over 11,136 10,806 176 0 0 0 9,941
All Years $37,244 $16,804 $2,168 $20,783 $0 $24,854 $34,655
* Counts of members do not include alternate payees receiving benefits while the member is still working. Therefore,
the total counts may not match information on C-1 of the report. Multiple records may exist for those who have service
in more than one coverage group. This does not result in double counting of liabilities.
Appendix D
Glossary
CalPERS Actuarial Valuation – June 30, 2022 Appendix D
Miscellaneous Plan of the City of Carlsbad
Glossary
D-1
Glossary
Accrued Liability (Actuarial Accrued Liability)
The Present Value of Benefits minus the present value of future Normal Cost or the Present Value of Benefits allocated to prior years. Different actuarial cost methods and different assumptions will lead to different measures
of Accrued Liability.
Actuarial Assumptions
Assumptions made about certain events that will affect pension costs. Assumptions generally can be broken down
into two categories: demographic and economic. Demographic assumptions include such things as mortality,
disability, and retirement rates. Economic assumptions include discount rate, wage inflation, and price inflation.
Actuarial Methods
Procedures employed by actuaries to achieve certain funding goals of a pension plan. Actuarial methods include
an actuarial cost method, an amortization policy, and an asset valuation method.
Actuarial Valuation
The determination as of a valuation date of the Normal Cost, Accrued Liability, and related actuarial present values
for a pension plan. These valuations are performed annually or when an employer is contemplating a change in
plan provisions.
Actuary
A business professional proficient in mathematics and statistics who measures and manages risk. A public
retirement system actuary in California performs actuarial valuations necessary to properly fund a pension plan and disclose its liabilities and must satisfy the Qualification Standards for Actuaries Issuing Statements of Actuarial
Opinion in the United States with regard to pensions.
Amortization Bases
Separate payment schedules for different portions of the Unfunded Accrued Liability (UAL). The total UAL of a rate plan can be segregated by cause. The impact of such individual causes on the UAL are quantified at the time of
their occurrence, resulting in new amortization bases. Each base is separately amortized and paid for over a
specific period of time. Generally, in an actuarial valuation, the separate bases consist of changes in UAL due to
contract amendments, actuarial assumption changes, method changes, and/or gains and losses.
Amortization Period
The number of years required to pay off an Amortization Base.
Classic Member (under PEPRA)
A member who joined a public retirement system prior to January 1, 2013 and who is not defined as a new member
under PEPRA. (See definition of New Member below.)
Discount Rate
This is the rate used to discount the expected future benefit payments to the valuation date to determine the
Projected Value of Benefits. Different discount rates will produce different measures of the Projected Value of
Benefits. The discount rate for funding purposes is based on the assumed long-term rate of return on plan assets,
net of investment and administrative expenses. This rate is called the “actuarial interest rate” in Section 20014 of
the California Public Employees’ Retirement Law.
Entry Age The earliest age at which a plan member begins to accrue benefits under a defined benefit pension plan. In most
cases, this is the age of the member on their date of hire.
Entry Age Actuarial Cost Method
An actuarial cost method that allocates the cost of the projected benefits on an individual basis as a level percent of earnings for the individual between entry age and retirement age. This method yields a total normal cost rate,
expressed as a percentage of payroll, which is designed to remain level throughout the member’s career.
Fresh Start
A Fresh Start is when multiple amortization bases are combined into a single base and amortized over a new
Amortization Period.
CalPERS Actuarial Valuation – June 30, 2022 Appendix D
Miscellaneous Plan of the City of Carlsbad
Glossary
D-2
Glossary (continued)
Funded Ratio
Defined as the Market Value of Assets divided by the Accrued Liability. Different actuarial cost methods and different assumptions will lead to different measures of Funded Ratio. The Funded Ratio with the Accrued Liability
equal to the funding target is a measure of how well funded a rate plan is. A ratio greater than 100% means the
rate plan has more assets than the funding target and the employer need only contribute the Normal Cost. A ratio
less than 100% means assets are less than the funding target and contributions in addition to Normal Cost are
required.
Funded Status
Any comparison of a particular measure of plan assets to a particular measure of pension obligations. The methods
and assumptions used to calculate a funded status should be consistent with the purpose of the measurement.
Funding Target
The Accrued Liability measure upon which the funding requirements are based. The funding target is the Accrued
Liability under the Entry Age Actuarial Cost Method using the assumptions adopted by the board.
GASB 68
Statement No. 68 of the Governmental Accounting Standards Board. The accounting standard governing a state
or local governmental employer’s accounting and financial reporting for pensions.
New Member (under PEPRA)
A new member includes an individual who becomes a member of a public retirement system for the first time on or after January 1, 2013, and who was not a member of another public retirement system prior to that date, and
who is not subject to reciprocity with another public retirement system.
Normal Cost
The portion of the Present Value of Benefits allocated to the upcoming fiscal year for active employees. Different actuarial cost methods and different assumptions will lead to different measures of Normal Cost. The Normal Cost
under the Entry Age Actuarial Cost Method, using the assumptions adopted by the board, plus the required
amortization of the UAL, if any, make up the required contributions.
PEPRA
The California Public Employees’ Pension Reform Act of 2013.
Present Value of Benefits (PVB)
The total dollars needed as of the valuation date to fund all benefits earned in the past or expected to be earned
in the future for current members.
Traditional Unit Credit Actuarial Cost Method
An actuarial cost method that sets the Accrued Liability equal to the Present Value of Benefits assuming no future
pay increases or service accruals. The Traditional Unit Credit Cost Method is used to measure the accrued liability
on a termination basis.
Unfunded Accrued Liability (UAL)
The Accrued Liability minus the Market Value of Assets. If the UAL for a rate plan is positive, the employer is
required to make contributions in excess of the Normal Cost.
California Public Employees’ Retirement System
Actuarial Office
400 Q Street, Sacramento, CA 95811 | Phone: (916) 795-3000 | Fax: (916) 795-2744
888 CalPERS (or 888-225-7377) | TTY: (877) 249-7442 | www.calpers.ca.gov
July 2023
Safety Plan of the City of Carlsbad (CalPERS ID: 3747905882)
Annual Valuation Report as of June 30, 2022
Dear Employer,
Attached to this letter is the June 30, 2022 actuarial valuation report for the rate plan noted above. Provided in this
report is the determination of the minimum required employer contributions for fiscal year (FY) 2024-25. In
addition, the report contains important information regarding the current financial status of the plan as well as projections
and risk measures to aid in planning for the future.
Actuarial valuations are based on assumptions regarding future plan experience including investment return and payroll
growth, eligibility for the types of benefits provided, and longevity among retirees. The CalPERS Board of Administration
(board) adopts these assumptions after considering the advice of CalPERS actuarial and investment teams and other
professionals. Each actuarial valuation reflects all prior differences between actual and assumed experience and adjusts
the contribution requirements as needed. This valuation is based on an investment return assumption of 6.8%, which was adopted by the board in November 2021. Other assumptions used in this report are those recommended in the
CalPERS Experience Study and Review of Actuarial Assumptions report from November 2021.
Required Contributions
The table below shows the minimum required employer contributions and the PEPRA member rate for FY 2024-25 along
with an estimate of the required employer contribution for FY 2025-26. Employee contributions other than cost sharing
(whether paid by the employer or the employee) are in addition to the results shown below. The required employer
contributions in this report do not reflect any cost sharing arrangement between the agency and the employees.
Fiscal Year Employer Normal
Cost Rate
Employer Amortization of
Unfunded Accrued Liability
PEPRA Member
Contribution Rate
2024-25 20.49% $7,360,036 14.00%
Projected Results
2025-26 20.2% $8,520,000 TBD
The actual investment return for FY 2022-23 was not known at the time this report was prepared. The projections above
assume the investment return for that year would be 6.8%. To the extent the actual investment return for FY 2022-
23 differs from 6.8%, the actual contribution requirements for FY 2025-26 will differ from those shown above.
For additional details regarding the assumptions and methods used for these projections, please refer to the “Projected Employer Contributions” in the “Highlights and Executive Summary” section. This section also contains projected required
contributions through FY 2029-30.
Changes from Previous Year’s Valuations
There are no significant changes in actuarial assumptions or policies in the 2022 actuarial valuation. There may be
changes specific to the plan such as contract amendments and funding changes.
Further descriptions of general changes are included in the “Highlights and Executive Summary” section and in Appendix
A, “Actuarial Methods and Assumptions.” The effects of any changes on the required contributions are included in the
“Reconciliation of Required Employer Contributions” section.
Attachment B
Safety Plan of the City of Carlsbad
(CalPERS ID: 3747905882)
Annual Valuation Report as of June 30, 2022
Page 2
Questions
A CalPERS actuary is available to answer questions about this report. Other questions may be directed to the Customer
Contact Center at (888)-CalPERS or (888-225-7377).
Sincerely,
SCOTT TERANDO, ASA, EA, MAAA, FCA, CFA
Chief Actuary, CalPERS
RANDALL DZIUBEK, ASA, MAAA
Deputy Chief Actuary, Valuation Services, CalPERS
Actuarial Valuation
as of June 30, 2022
for the
Safety Plan
of the
City of Carlsbad
(CalPERS ID: 3747905882)
(Rate Plan ID: 317)
Required Contributions
for Fiscal Year
July 1, 2024 – June 30, 2025
Table of Contents
Actuarial Certification 1
Highlights and Executive Summary
Introduction 3
Purpose 3
Required Contributions 4
Additional Discretionary Employer Contributions 5
Funded Status – Funding Policy Basis 6
Projected Employer Contributions 7
Cost 8
Changes Since the Prior Year’s Valuation 9
Subsequent Events 9
Assets
Reconciliation of the Market Value of Assets 11
Asset Allocation 12
CalPERS History of Investment Returns 13
Liabilities and Contributions
Development of Accrued and Unfunded Liabilities 15
(Gain) / Loss Analysis 6/30/21 - 6/30/22 16
Schedule of Amortization Bases 17
Amortization Schedule and Alternatives 19
Reconciliation of Required Employer Contributions 21
Employer Contribution History 22
Funding History 22
Normal Cost by Benefit Group 23
PEPRA Member Contribution Rates 24
Risk Analysis
Future Investment Return Scenarios 26
Discount Rate Sensitivity 27
Mortality Rate Sensitivity 27
Maturity Measures 28
Maturity Measures History 29
Funded Status – Termination Basis 30
Plan’s Major Benefit Provisions
Plan’s Major Benefit Options 32
Appendix A – Actuarial Methods and Assumptions
Actuarial Data A-1
Actuarial Methods A-1
Actuarial Assumptions A-4
Miscellaneous A-24
Appendix B – Principal Plan Provisions B-1
Appendix C – Participant Data
Summary of Valuation Data C-1
Active Members C-2
Transferred and Separated Members C-3
Retired Members and Beneficiaries C-4
Appendix D – Glossary D-1
(CY) FIN JOB INSTANCE ID: 421635 (PY) FIN JOB INSTANCE ID: 403183 REPORT ID: 421637
CalPERS Actuarial Valuation - June 30, 2022
Safety Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 1
Actuarial Certification
To the best of my knowledge, this report is complete and accurate and contains sufficient information to
disclose, fully and fairly, the funded condition of the Safety Plan of the City of Carlsbad and satisfies the
actuarial valuation requirements of Government Code section 7504. This valuation and related validation work
was performed by the CalPERS Actuarial Office and is based on the member and financial data as of June
30, 2022 provided by the various CalPERS databases and the benefits under this plan with CalPERS as of
the date this report was produced.
It is my opinion that the valuation has been performed in accordance with generally accepted actuarial principles, in accordance with standards of practice prescribed by the Actuarial Standards Board, and that the
assumptions and methods, as prescribed by the CalPERS Board of Administration, are internally consistent
and reasonable for this plan.
The undersigned is an actuary who satisfies the Qualification Standards for Actuaries Issuing Statements of
Actuarial Opinion in the United States with regard to pensions.
NINA RAMSEY, ASA, MAAA
Actuary, CalPERS
Highlights and Executive Summary
• Introduction
• Purpose
• Required Contributions
• Additional Discretionary Employer Contributions
• Funded Status – Funding Policy Basis
• Projected Employer Contributions
• Cost
• Changes Since the Prior Year’s Valuation
• Subsequent Events
CalPERS Actuarial Valuation - June 30, 2022
Safety Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 3
Introduction
This report presents the results of the June 30, 2022 actuarial valuation of the Safety Plan of the City of
Carlsbad of the California Public Employees’ Retirement System (CalPERS). This actuarial valuation sets the
minimum required contributions for fiscal year (FY) 2024-25.
Purpose
This report documents the results of the actuarial valuation prepared by the CalPERS Actuarial Office using
data as of June 30, 2022. The purpose of the valuation is to:
• Set forth the assets and accrued liabilities of this rate plan as of June 30, 2022;
• Determine the minimum required employer contributions for this rate plan for FY July 1, 2024 through
June 30, 2025;
• Determine the required member contribution rate for FY July 1, 2024 through June 30, 2025 for
employees subject to the California Public Employees' Pension Reform Act of 2013 (PEPRA); and
• Provide actuarial information as of June 30, 2022 to the CalPERS Board of Administration (board)
and other interested parties.
The pension funding information presented in this report should not be used in financial reports subject to
Governmental Accounting Standards Board (GASB) Statement No. 68 for an Agent Employer Defined Benefit
Pension Plan. A separate accounting valuation report for such purposes is available from CalPERS and details
for ordering are available on the CalPERS website (www.calpers.ca.gov).
The measurements shown in this actuarial valuation may not be applicable for other purposes. The agency
should contact the plan actuary before disseminating any portion of this report for any reason that is not
explicitly described above.
Future actuarial measurements may differ significantly from the current measurements presented in this report
due to such factors as the following: plan experience differing from that anticipated by the economic or
demographic assumptions; changes in economic or demographic assumptions; changes in actuarial policies;
changes in plan provisions or applicable law; and differences between the required contributions determined
by the valuation and the actual contributions made by the agency.
Assessment and Disclosure of Risk
This report includes the following risk disclosures consistent with the guidance of Actuarial Standards of
Practice No. 51 and recommended by the California Actuarial Advisory Panel (CAAP) in the Model Disclosure
Elements document:
• A “Scenario Test,” projecting future results under different investment income returns.
• A “Sensitivity Analysis,” showing the impact on current valuation results using alternative discount
rates 5.8% and 7.8%.
• A “Sensitivity Analysis,” showing the impact on current valuation results assuming rates of mortality
are 10% lower or 10% higher than our current post-retirement mortality assumptions adopted in
2021.
• Plan maturity measures indicating how sensitive a plan may be to the risks noted above.
CalPERS Actuarial Valuation - June 30, 2022
Safety Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 4
Required Contributions
Fiscal Year
Required Employer Contributions 2024-25
Employer Normal Cost Rate 20.49%
Plus
Required Payment on Amortization Bases $7,360,036
Paid either as
1) Monthly Payment $613,336
Or
2) Annual Prepayment Option* $7,121,874
Required PEPRA Member Contribution Rate
14.00%
The total minimum required employer contribution is the sum of the Plan’s Employer Normal Cost Rate
(expressed as a percentage of payroll and paid as payroll is reported) plus the Employer Unfunded Accrued
Liability (UAL) Contribution Amount (billed monthly (1) or prepaid annually (2) in dollars).
* Only the UAL portion of the employer contribution can be prepaid (which must be received in full no
later than July 31).
For additional detail regarding the determination of the required contribution for PEPRA members, see
”PEPRA Member Contribution Rates” in the “Liabilities and Contributions” section. Required member
contributions for Classic members can be found in Appendix B.
Fiscal Year Fiscal Year
2023-24 2024-25
Normal Cost Contribution as a Percentage of Payroll
Total Normal Cost 32.37% 31.77%
Employee Contribution1 10.82% 11.28%
Employer Normal Cost2 21.55% 20.49%
Projected Annual Payroll for Contribution Year $28,065,401 $29,978,865
Estimated Employer Contributions Based On
Projected Payroll
Total Normal Cost $9,084,770 $9,524,285
Offset Due to Employee Contributions 3,036,676 3,381,616
Employer Normal Cost 6,048,094 6,142,669
Unfunded Liability Contribution 5,935,778 7,360,036
% of Projected Payroll (illustrative only) 21.15% 24.55%
Estimated Total Employer Contribution $11,983,872 $13,502,705
% of Projected Payroll (illustrative only) 42.70% 45.04%
1 For classic members, this is the percentage specified in the Public Employees’ Retirement Law, net of any reduction from
the use of a modified formula or other factors. For PEPRA members, the member contribution rate is based on 50% of the normal cost. A development of PEPRA member contribution rates can be found in the “Liabilities and Contributions” section. Employee cost sharing is not shown in this report.
2 The Employer Normal Cost is a blended rate for all benefit groups in the plan. For a breakout of normal cost by benefit group, see “Normal Cost by Benefit Group” in the “Liabilities and Contributions” section.
CalPERS Actuarial Valuation - June 30, 2022
Safety Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 5
Additional Discretionary Employer Contributions
The minimum required employer contribution towards the Unfunded Accrued Liability (UAL) for this rate plan
for FY 2024-25 is $7,360,036. CalPERS allows agencies to make additional discretionary payments (ADPs)
at any time and in any amount. These optional payments serve to reduce the UAL and future required
contributions and can result in significant long-term savings. Agencies can also use ADPs to stabilize annual
contributions as a fixed dollar amount, percent of payroll or percent of revenue.
Provided below are select ADP options for consideration. Making such an ADP during FY 2024-25 does not
require an ADP be made in any future year, nor does it change the remaining amortization period of any
portion of unfunded liability. For information on permanent changes to amortization periods, see the “Amortization Schedule and Alternatives” section of the report.
Agencies considering making an ADP should contact CalPERS for additional information.
Minimum Required Employer Contribution for Fiscal Year 2024-25
Estimated
Normal Cost
Minimum UAL
Payment
ADP Total UAL
Contribution
Estimated Total
Contribution
$6,142,669 $7,360,036 $0 $7,360,036 $13,502,705
The minimum required contribution above is less than interest on the UAL. With no ADP the UAL is projected
to increase over the following year. If the minimum UAL payment were split between interest and principal,
the principal portion would be negative. This situation is referred to as negative amortization. If only the
minimum required contribution is made, contributions are not expected to exceed interest on the UAL until FY
2025-26, as shown in the “Amortization Schedule and Alternatives” section of the report (see columns labelled Current Amortization Schedule).
Fiscal Year 2024-25 Employer Contribution Necessary to Avoid Negative Amortization
Estimated
Normal Cost
Minimum UAL
Payment
ADP1 Total UAL
Contribution
Estimated Total
Contribution
$6,142,669 $7,360,036 $161,296 $7,521,332 $13,664,001
Alternative Fiscal Year 2024-25 Employer Contributions for Greater UAL Reduction
Funding
Horizon
Estimated
Normal Cost
Minimum UAL
Payment
ADP1 Total UAL
Contribution
Estimated Total
Contribution
20 years $6,142,669 $7,360,036 $2,918,824 $10,278,860 $16,421,529
15 years $6,142,669 $7,360,036 $4,631,151 $11,991,187 $18,133,856
10 years $6,142,669 $7,360,036 $8,242,755 $15,602,791 $21,745,460
5 years $6,142,669 $7,360,036 $19,471,884 $26,831,920 $32,974,589
1 The ADP amounts are assumed to be made in the middle of the fiscal year. A payment made earlier or later in the fiscal
year would have to be less or more than the amount shown to have the same effect on the UAL amortization.
Note that the calculations above are based on the projected Unfunded Accrued Liability as of June 30, 2024
as determined in the June 30, 2022 actuarial valuation. New unfunded liabilities can emerge in future years
due to assumption or method changes, changes in plan provisions, and actuarial experience different than
assumed. Making an ADP illustrated above for the indicated number of years will not result in a plan that is
exactly 100% funded in the indicated number of years. Valuation results will vary from one year to the next
and can diverge significantly from projections over a period of several years.
CalPERS Actuarial Valuation - June 30, 2022
Safety Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 6
Funded Status – Funding Policy Basis
The table below provides information on the current funded status of the plan under the funding policy. The
funded status for this purpose is based on the market value of assets relative to the funding target produced
by the entry age actuarial cost method and actuarial assumptions adopted by the board. The actuarial cost
method allocates the total expected cost of a member’s projected benefit (Present Value of Benefits) to
individual years of service (the Normal Cost). The value of the projected benefit that is not allocated to future
service is referred to as the Accrued Liability and is the plan’s funding target on the valuation date. The
Unfunded Accrued Liability (UAL) equals the funding target minus the assets. The UAL is an absolute
measure of funded status and can be viewed as employer debt. The funded ratio equals the assets divided
by the funding target. The funded ratio is a relative measure of the funded status and allows for comparisons
between plans of different sizes.
A funded ratio of 100% (UAL of $0) implies that the funding of the plan is on target and that future contributions
equal to the normal cost of the active plan members will be sufficient to fully fund all retirement benefits if
future experience matches the actuarial assumptions. A funded ratio of less than 100% (positive UAL) implies
that in addition to normal costs, payments toward the UAL will be required. Plans with a funded ratio greater
than 100% have a negative UAL (or surplus) but are required under current law to continue contributing the
normal cost in most cases, preserving the surplus for future contingencies.
Calculations for the funding target reflect the expected long-term investment return of 6.8%. If it were known
on the valuation date that future investment returns will average something greater/less than the expected return, calculated normal costs and accrued liabilities provided in this report would be less/greater than the
results shown. Therefore, for example, if actual average future returns are less than the expected return,
calculated normal costs and UAL contributions will not be sufficient to fully fund all retirement benefits. Under
this scenario, required future normal cost contributions will need to increase from those provided in this report,
and the plan will develop unfunded liabilities that will also add to required future contributions. For illustrative purposes, funded statuses based on a 1% lower and higher average future investment return (discount rate)
are as follows:
The “Risk Analysis” section of the report provides additional information regarding the sensitivity of valuation
results to the expected investment return and other factors. Also provided in that section are measures of
funded status that are appropriate for assessing the sufficiency of plan assets to cover estimated termination
liabilities.
June 30, 2021 June 30, 2022
1. Present Value of Benefits $458,282,303 $485,439,500
2. Entry Age Accrued Liability 372,017,358 393,017,010
3. Market Value of Assets (MVA) 308,342,667 282,537,994
4. Unfunded Accrued Liability (UAL) [(2) – (3)] $63,674,691 $110,479,016
5. Funded Ratio [(3) / (2)] 82.9% 71.9%
1% Lower
Average Return
Current
Assumption
1% Higher
Average Return
Discount Rate 5.8% 6.8% 7.8%
1. Present Value of Benefits $576,376,137 $485,439,500 $415,656,584
2. Entry Age Accrued Liability 448,912,277 393,017,010 347,520,275
3. Market Value of Assets (MVA) 282,537,994 282,537,994 282,537,994
4. Unfunded Accrued Liability (UAL) [(2) – (3)] $166,374,283 $110,479,016 $64,982,281
5. Funded Ratio [(3) / (2)] 62.9% 71.9% 81.3%
CalPERS Actuarial Valuation - June 30, 2022
Safety Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 7
Projected Employer Contributions
The table below shows the required and projected employer contributions (before cost sharing) for the next
six fiscal years. The projection assumes that all actuarial assumptions will be realized and that no further
changes to assumptions, contributions, benefits, or funding will occur during the projection period. In particular,
the investment return beginning with FY 2022-23 is assumed to be 6.80% per year, net of investment and
administrative expenses. The projected normal cost percentages below reflect that the normal cost is expected
to continue to decline over time as new employees are hired into lower cost benefit tiers. Future contribution
requirements may differ significantly from those shown below. The actual long-term cost of the plan will depend
on the actual benefits and expenses paid and the actual investment experience of the fund.
Required
Contribution
Projected Future Employer Contributions
(Assumes 6.80% Return for Fiscal Year 2022-23 and Beyond)
Fiscal Year 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30
Normal Cost % 20.49% 20.2% 19.9% 19.6% 19.3% 18.9%
UAL Payment $7,360,036 $8,520,000 $9,271,000 $9,814,000 $11,088,000 $11,273,000
Total as a % of Payroll* 45.04% 47.9% 49.2% 49.8% 52.4% 51.7%
Projected Payroll $29,978,865 $30,818,274 $31,681,185 $32,568,258 $33,480,169 $34,417,614
*Illustrative only and based on the projected payroll shown.
For ongoing plans, investment gains and losses are amortized using a 5-year ramp up. For more information,
please see “Amortization of Unfunded Actuarial Accrued Liability” under “Actuarial Methods” in Appendix A.
This method phases in the impact of the change in UAL over a 5-year period in order to reduce employer cost
volatility from year to year. As a result of this methodology, dramatic changes in the required employer
contributions in any one year are less likely. However, required contributions can change gradually and
significantly over the next five years. In years when there is a large investment loss, the relatively small
amortization payments during the ramp up period could result in contributions that are less than interest on
the UAL (i.e. negative amortization) while the contribution impact of the increase in the UAL is phased in.
The required contribution for FY 2024-25 is less than interest on the UAL, a situation referred to as negative amortization, as explained in the “Additional Discretionary Employer Contributions” section earlier
in this report. If only the minimum required contribution is made, contributions are not expected to exceed
interest on the UAL until FY 2025-26, as shown in the “Amortization Schedule and Alternatives” section of the
report (see columns labelled “Current Amortization Schedule”).
For projected contributions under alternate investment return scenarios, please see the “Future Investment
Return Scenarios” in the “Risk Analysis” section. Our online pension plan projection tool, Pension Outlook, is
available in the Employers section of the CalPERS website. Pension Outlook can help plan and budget
pension costs under various scenarios.
CalPERS Actuarial Valuation - June 30, 2022
Safety Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 8
Cost
Actuarial Determination of Plan Cost
Contributions to fund the plan are comprised of two components:
• Normal Cost, expressed as a percentage of total active payroll
• Amortization of the Unfunded Accrued Liability (UAL), expressed as a dollar amount
For fiscal years prior to 2017-18, the Amortization of UAL component was expressed as a percentage of total
active payroll. Starting with FY 2017-18, the Amortization of UAL component is expressed as a dollar amount
and invoiced on a monthly basis. There is an option to prepay this amount during July of each fiscal year.
The Normal Cost component is expressed as a percentage of active payroll with employer and employee
contributions payable as part of the regular payroll reporting process.
The determination of both components requires complex actuarial calculations. The calculations are based on a set of actuarial assumptions which can be divided into two categories:
• Demographic assumptions (e.g., mortality rates, retirement rates, employment termination rates,
disability rates)
• Economic assumptions (e.g., future investment earnings, inflation, salary growth rates)
These assumptions reflect CalPERS’ best estimate of future experience of the plan and are long term in nature.
We recognize that all assumptions will not be realized in any given year. For example, the investment earnings
at CalPERS have averaged 6.9% over the 20 years ending June 30, 2022, yet individual fiscal year returns have ranged from -23.6% to +21.3%. In addition, CalPERS reviews all actuarial assumptions by conducting
in-depth experience studies every four years, with the most recent experience study completed in 2021.
CalPERS Actuarial Valuation - June 30, 2022
Safety Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 9
Changes Since the Prior Year’s Valuation
Benefits
The standard actuarial practice at CalPERS is to recognize mandated legislative benefit changes in the first
annual valuation following the effective date of the legislation. Voluntary benefit changes by plan amendment
are generally included in the first valuation that is prepared after the amendment becomes effective, even if the
valuation date is prior to the effective date of the amendment.
This valuation generally reflects plan changes by amendments effective before the date of the report. Please refer to the “Plan’s Major Benefit Options” and Appendix B for a summary of the plan provisions used in this
valuation. The effect of any mandated benefit changes or plan amendments on the unfunded liability is shown
in the “(Gain) / Loss Analysis 6/30/21 – 6/30/22” and the effect on the employer contribution is shown in the
“Reconciliation of Required Employer Contributions.” It should be noted that no change in liability or contribution
is shown for any plan changes which were already included in the prior year’s valuation.
In 2022, SB 1168 increased the standard retiree lump sum death benefit from $500 to $2,000 for any death
occurring on or after July 1, 2023. The impact, if any, is included in plan changes in the “(Gain) / Loss Analysis
6/30/21 – 6/30/22” and the “Reconciliation of Required Employer Contributions.”
Actuarial Methods and Assumptions
There are no significant changes to the actuarial methods or assumptions for the June 30, 2022 actuarial
valuation.
Subsequent Events
This actuarial valuation report reflects fund investment return through June 30, 2022 and statutory/regulatory
changes and board actions through January 2023.
During the time period between the valuation date and the publication of this report, inflation has been
significantly higher than the expected inflation of 2.3% per annum. Since inflation influences cost-of-living
increases for retirees and beneficiaries and active member pay increases, higher inflation is likely to put at least
some upward pressure on contribution requirements and downward pressure on the funded status in the June
30, 2023 valuation. The actual impact of higher inflation on future valuation results will depend on, among other
factors, how long higher inflation persists. At this time, we continue to believe the long-term inflation assumption
of 2.3% is appropriate.
To the best of our knowledge, there have been no other subsequent events that could materially affect current
or future certifications rendered in this report.
Assets
• Reconciliation of the Market Value of Assets
• Asset Allocation
• CalPERS History of Investment Returns
CalPERS Actuarial Valuation - June 30, 2022
Safety Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 11
Reconciliation of the Market Value of Assets
1. Market Value of Assets as of 6/30/21 including Receivables $308,342,667
2. Change in Receivables for Service Buybacks (75,467)
3. Employer Contributions 13,322,734
4. Employee Contributions 2,990,136
5. Benefit Payments to Retirees and Beneficiaries (18,405,992)
6. Refunds (201,156)
7. Transfers 0
8. Service Credit Purchase (SCP) Payments and Interest 105,902
9. Administrative Expenses (241,870)
10. Miscellaneous Adjustments 0
11. Investment Return (Net of Investment Expenses) (23,298,960)
12. Market Value of Assets as of 6/30/22 including Receivables $282,537,994
CalPERS Actuarial Valuation - June 30, 2022
Safety Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 12
Asset Allocation
CalPERS adheres to an Asset Allocation Strategy which establishes asset class allocation policy targets and
ranges and manages those asset class allocations within their policy ranges. CalPERS Investment Belief No.
6 recognizes that strategic asset allocation is the dominant determinant of portfolio risk and return.
The asset allocation shown below reflects the allocation of the Public Employees’ Retirement Fund (PERF) in
its entirety. The assets for City of Carlsbad Safety Plan are a subset of the PERF and are invested accordingly.
On November 17, 2021, the board adopted changes to the strategic asset allocation. The new allocation was effective July 1, 2022, and is shown below, expressed as a percentage of total assets.
Strategic Asset Allocation Policy Targets
Asset Class
Actual
Allocation
9/30/2022
Policy Target
Allocation
effective
7/1/2022
Global Public Equity
Market Capitalization Weighted 33.7% 30.0%
Factor Weighted 12.6% 12.0%
Private Equity 11.6% 13.0%
Income
Treasuries 3.9% 5.0%
Mortgage-backed Securities 5.6% 5.0%
Investment Grade Corporates 5.8% 10.0%
High Yield Bonds 4.6% 5.0%
Emerging Market Sovereign Bonds 2.1% 5.0%
Total Fund Income 1.5% -
Real Assets 17.1% 15.0%
Private Debt 1.8% 5.0%
Other Trust Level 3.8% -
Leverage
Strategic (0.3%) (5.0%)
Active (3.8%) -
Total Fund 100.00% 100.0%
CalPERS Actuarial Valuation - June 30, 2022
Safety Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 13
CalPERS History of Investment Returns
The following is a chart with the 20-year historical annual returns of the PERF for each fiscal year ending on
June 30 as reported by the Investment Office. Investment returns reported are net of investment expenses
but without reduction for administrative expenses. The assumed rate of return, however, is net of both
investment and administrative expenses. Also, the Investment Office uses a three-month lag on private equity
and real assets for investment performance reporting purposes. This can lead to a timing difference in the
returns below and those used for financial reporting purposes. The investment gain or loss calculation in this
report relies on final assets that have been audited and are appropriate for financial reporting. Because of
these differences, the effective investment return for funding purposes can be higher or lower than the return reported by the Investment Office shown here.
* As reported by the Investment Office with a 3-month lag on private equity and real assets.
The table below shows annualized investment returns of the PERF for various time periods ending on June
30, 2022 (figures reported are net of investment expenses but without reduction for administrative expenses).
These returns are the annual rates that if compounded over the indicated number of years would equate to the actual time-weighted investment performance of the PERF. It should be recognized that in any given year
the rate of return is volatile. The portfolio has an expected volatility of 12.1% per year based on the most
recent Asset Liability Management study. The realized volatility is a measure of the ris k of the portfolio
expressed as the standard deviation of the fund’s total monthly return distribution, expressed as an annual
percentage. Due to their volatile nature, when looking at investment returns, it is more instructive to look at returns over longer time horizons.
History of CalPERS Compound Annual Rates of Return and Volatilities
1 year 5 year 10 year 20 year 30 year
Compound Annual Return -6.1% 6.7% 7.7% 6.9% 7.7%
Realized Volatility – 8.3% 7.1% 8.5% 8.6%
Liabilities and Contributions
• Development of Accrued and Unfunded Liabilities
• (Gain) / Loss Analysis 6/30/21 - 6/30/22
• Schedule of Amortization Bases
• Amortization Schedule and Alternatives
• Reconciliation of Required Employer Contributions
• Employer Contribution History
• Funding History
• Normal Cost by Benefit Group
• PEPRA Member Contribution Rates
CalPERS Actuarial Valuation - June 30, 2022
Safety Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 15
Development of Accrued and Unfunded Liabilities
June 30, 2021 June 30, 2022
1. Present Value of Projected Benefits
a) Active Members $191,616,655 $200,906,986
b) Transferred Members 7,842,508 9,160,796
c) Separated Members 2,711,741 2,899,064
d) Members and Beneficiaries Receiving Payments 256,111,399 272,472,654
e) Total $458,282,303 $485,439,500
2. Present Value of Future Employer Normal Costs $54,001,637 $56,284,562
3. Present Value of Future Employee Contributions $32,263,308 $36,137,928
4. Entry Age Accrued Liability
a) Active Members [(1a) - (2) - (3)] $105,351,710 $108,484,496
b) Transferred Members (1b) 7,842,508 9,160,796
c) Separated Members (1c) 2,711,741 2,899,064
d) Members and Beneficiaries Receiving Payments (1d) 256,111,399 272,472,654
e) Total $372,017,358 $393,017,010
5. Market Value of Assets (MVA) $308,342,667 $282,537,994
6. Unfunded Accrued Liability (UAL) [(4e) - (5)] $63,674,691 $110,479,016
7. Funded Ratio [(5) / (4e)] 82.9% 71.9%
CalPERS Actuarial Valuation - June 30, 2022
Safety Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 16
(Gain)/Loss Analysis 6/30/21 – 6/30/22
To calculate the cost requirements of the plan, assumptions are made about future events that affect the
amount and timing of benefits to be paid and assets to be accumulated. Each year , actual experience is
compared to the expected experience based on the actuarial assumptions. This results in actuarial gains or
losses, as shown below.
1. Total (Gain)/Loss for the Year
a) Unfunded Accrued Liability (UAL) as of 6/30/21 $63,674,691
b) Expected payment on the UAL during 2021-22 7,290,167
c) Interest through 6/30/22 [.068 x (1a) - ((1.068)½ - 1) x (1b)] 4,086,274
d) Expected UAL before all other changes [(1a) - (1b) + (1c)] 60,470,798
e) Change due to plan changes1 138,033
f) Change due to AL Significant Increase 0
g) Change due to assumption change 0
h) Change due to method change 0
i) Change due to discount rate change with Funding Risk Mitigation 0
j) Expected UAL after all other changes [(1d) + (1e) + (1f) + (1g) + (1h) + (1i)] 60,608,831
k) Actual UAL as of 6/30/22 110,479,016
l) Total (Gain)/Loss for 2021-22 [(1k) - (1j)] $49,870,185
2. Investment (Gain)/Loss for the Year
a) Market Value of Assets as of 6/30/21 $308,342,667
b) Prior fiscal year receivables (494,268)
c) Current fiscal year receivables 418,802
d) Contributions received 16,312,870
e) Benefits and refunds paid (18,607,148)
f) Transfers, SCP payments and interest, and miscellaneous adjustments 105,902
g) Expected return at 6.8% per year 21,063,951
h) Expected assets as of 6/30/22 [(2a) + (2b) + (2c) + (2d) + (2e) + (2f) + (2g)] 327,142,775
i) Actual Market Value of Assets as of 6/30/22 282,537,994
j) Investment (Gain)/Loss [(2h) - (2i)] $44,604,781
3. Non-Investment (Gain)/Loss for the Year
a) Total (Gain)/Loss (1l) $49,870,185
b) Investment (Gain)/Loss (2j) 44,604,781
c) Non-Investment (Gain)/Loss [(3a) - (3b)] $5,265,404
1 Includes the effect, if any, of SB 1168, which increased the standard post-retirement lump sum death benefit from $500
to $2,000 for deaths occurring on or after July 1, 2023.
CalPERS Actuarial Valuation - June 30, 2022
Safety Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 17
Schedule of Amortization Bases
Below is the schedule of the plan’s amortization bases. Note that there is a two-year lag between the valuation date and the start of the contribution year.
• The assets, liabilities, and funded status of the plan are measured as of the valuation date: June 30, 2022.
• The required employer contributions determined by the valuation are for the fiscal year beginning two years after the valuati on date: FY 2024-25.
This two-year lag is necessary due to the amount of time needed to extract and test the membership and financial data, and the need to provide public agencies
with their required employer contribution well in advance of the start of the fiscal year.
The Unfunded Accrued Liability (UAL) is used to determine the employer contribution and therefore must be rolled forward two years from the valuation date to the
first day of the fiscal year for which the contribution is being determined. The UAL is rolled forward each year by subtracting the expected payment on the UAL for
the fiscal year and adjusting for interest. The expected payment on the UAL for a fiscal year is equal to the Expected Employer Contribution for the fiscal year minus
the Expected Normal Cost for the year. The Employer Contribution for the first fiscal year is determined by the actuarial val uation two years ago and the contribution
for the second year is from the actuarial valuation one year ago. Additional discretionary payments are reflected in the Expected Payments column in the fiscal year
they were made by the agency.
Reason for Base Date Est.
Ramp
Level 2024-25 Ramp Shape
Escala-
tion Rate Amort. Period Balance 6/30/22
Expected
Payment 2022-23 Balance 6/30/23
Expected
Payment 2023-24 Balance 6/30/24
Minimum
Required
Payment 2024-25
Benefit Change 6/30/01 No Ramp 2.80% 0 (37,909) (39,177) 0 0 0 0
Assets Change 6/30/03 No Ramp 2.80% 1 (14,817) (5,329) (10,317) (5,433) (5,404) (5,585)
Assumption Change 6/30/03 No Ramp 2.80% 1 (1,259,184) (452,880) (876,784) (461,698) (459,268) (474,626)
Method Change 6/30/04 No Ramp 2.80% 2 (218,425) (60,092) (171,176) (61,231) (119,537) (62,946)
Special (Gain)/Loss 6/30/09 No Ramp 2.80% 17 4,371,477 335,104 4,322,427 336,644 4,268,450 346,071
Special (Gain)/Loss 6/30/10 No Ramp 2.80% 18 4,134,526 306,445 4,098,981 307,581 4,059,845 316,194
Special (Gain)/Loss 6/30/11 No Ramp 2.80% 19 (3,771,861) (270,950) (3,748,337) (271,717) (3,722,420) (279,325)
(Gain)/Loss 6/30/12 No Ramp 2.80% 20 16,894,518 1,178,727 16,825,201 1,181,048 16,748,771 1,214,118
Payment (Gain)/Loss 6/30/12 No Ramp 2.80% 20 906,015 63,212 902,298 63,337 898,199 65,110
(Gain)/Loss 6/30/13 100% Up/Down 2.80% 21 27,792,577 1,998,913 27,616,714 2,004,485 27,423,134 2,060,611
(Gain)/Loss 6/30/14 100% Up/Down 2.80% 22 (18,965,389) (1,324,724) (18,886,012) (1,327,282) (18,798,593) (1,364,445)
(Gain)/Loss 6/30/15 100% Up/Down 2.80% 23 11,522,479 783,164 11,496,654 784,016 11,468,192 805,968
(Gain)/Loss 6/30/16 100% Up/Down 2.80% 24 13,532,904 896,735 13,526,419 896,844 13,519,380 921,956
Assumption Change 6/30/16 100% Up/Down 2.80% 14 5,562,637 529,975 5,393,198 534,839 5,207,211 549,815
(Gain)/Loss 6/30/17 100% Up/Down 2.80% 25 (7,073,869) (370,699) (7,171,797) (463,145) (7,180,846) (476,113)
Assumption Change 6/30/17 100% Up/Down 2.80% 15 7,157,982 527,717 7,099,360 665,123 6,894,751 683,747
(Gain)/Loss 6/30/18 100% Up/Down 2.80% 26 (2,256,721) (88,854) (2,318,353) (118,290) (2,353,755) (152,002)
Assumption Change 6/30/18 100% Up/Down 2.80% 16 11,529,693 628,929 11,663,751 844,580 11,584,063 1,085,285
Method Change 6/30/18 100% Up/Down 2.80% 16 1,425,847 77,778 1,442,426 104,447 1,432,571 134,214
Non-Investment (Gain)/Loss 6/30/19 No Ramp 0.00% 17 3,254,486 305,005 3,160,586 299,661 3,065,824 299,661
CalPERS Actuarial Valuation - June 30, 2022
Safety Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 18
Schedule of Amortization Bases (continued)
Reason for Base Date Est.
Ramp Level 2024-25 Ramp Shape
Escala-tion Rate Amort. Period Balance 6/30/22
Expected Payment 2022-23 Balance 6/30/23
Expected Payment 2023-24 Balance 6/30/24
Minimum Required Payment 2024-25
Investment (Gain)/Loss 6/30/20 60% Up Only 0.00% 18 6,879,572 150,696 7,191,647 295,629 7,375,164 443,443
Non-Investment (Gain)/Loss 6/30/20 No Ramp 0.00% 18 5,860,903 535,827 5,705,699 526,195 5,549,895 526,195
Assumption Change 6/30/21 No Ramp 0.00% 19 2,419,582 (270,280) 2,863,432 257,490 2,792,045 257,490
Net Investment (Gain) 6/30/21 40% Up Only 0.00% 19 (31,593,522) 0 (33,741,881) (725,271) (35,286,804) (1,450,543)
Non-Investment (Gain)/Loss 6/30/21 No Ramp 0.00% 19 2,789,784 0 2,979,489 267,926 2,905,209 267,926
Risk Mitigation 6/30/21 No Ramp 0.00% 0 10,193,568 (384,944) 11,284,547 11,661,912 0 0
Risk Mitigation Offset 6/30/21 No Ramp 0.00% 0 (10,566,055) 0 (11,284,547) (11,661,912) 0 0
Benefit Change 6/30/22 No Ramp 0.00% 20 138,033 0 147,419 0 157,443 14,158
Investment (Gain)/Loss 6/30/22 20% Up Only 0.00% 20 44,604,781 0 47,637,906 0 50,877,284 1,093,592
Non-Investment (Gain)/Loss 6/30/22 No Ramp 0.00% 20 5,265,404 0 5,623,451 0 6,005,846 540,067
Total 110,479,016 5,050,298 112,772,401 5,935,778 114,306,650 7,360,036
CalPERS Actuarial Valuation - June 30, 2022
Safety Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 20 Page 19
Amortization Schedule and Alternatives
The amortization schedule on the previous page shows the minimum contributions required according to the
CalPERS amortization policy. Many agencies have expressed a desire for a more stable pattern of payments
or have indicated interest in paying off the unfunded accrued liabilities more quickly than required. As such,
we have provided alternative amortization schedules to help analyze the current amortization schedule and
illustrate the potential savings of accelerating unfunded liability payments.
Shown on the following page are future year amortization payments based on 1) the current amortization
schedule reflecting the individual bases and remaining periods shown on the previous page, and 2) alternative
“fresh start” amortization schedules using two sample periods that would both result in interest savings relative
to the current amortization schedule. To initiate a fresh start, please contact the plan actuary.
The current amortization schedule typically contains both positive and negative bases. Positive bases result
from plan changes, assumption changes, method changes or plan experience that increase unfunded liability.
Negative bases result from plan changes, assumption changes, method changes, or plan experience that
decrease unfunded liability. The combination of positive and negative bases within an amortization schedule
can result in unusual or problematic circumstances in future years, such as:
• When a negative payment would be required on a positive unfunded actuarial liability; or • When the payment would completely amortize the total unfunded liability in a very short time period,
and results in a large change in the employer contribution requirement.
In any year when one of the above scenarios occurs, the actuary will consider corrective action such as
replacing the existing unfunded liability bases with a single “fresh start” base and amortizing it over an
appropriate period.
The current amortization schedule on the following page may appear to show that, based on the current
amortization bases, one of the above scenarios will occur at some point in the future. It is impossible to know
today whether such a scenario will in fact arise since there will be additional bases added to the amortization schedule in each future year. Should such a scenario arise in any future year, the actuary will take appropriate
action based on guidelines in the CalPERS amortization policy.
CalPERS Actuarial Valuation - June 30, 2022
Safety Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 20
Amortization Schedule and Alternatives (continued)
Alternative Schedules
Current Amortization
Schedule 20 Year Amortization 15 Year Amortization
Date Balance Payment Balance Payment Balance Payment
6/30/2024 114,306,650 7,360,036 114,306,650 10,278,860 114,306,650 11,991,187
6/30/2025 114,473,341 8,520,130 111,456,908 10,278,860 109,687,320 11,991,187
6/30/2026 113,452,478 9,271,121 108,413,384 10,278,860 104,753,875 11,991,187
6/30/2027 111,586,094 9,814,358 105,162,900 10,278,860 99,484,956 11,991,187
6/30/2028 109,031,391 11,087,759 101,691,383 10,278,860 93,857,750 11,991,187
6/30/2029 104,986,984 11,272,603 97,983,803 10,278,860 87,847,894 11,991,187
6/30/2030 100,476,532 11,462,623 94,024,108 10,278,860 81,429,368 11,991,187
6/30/2031 95,462,994 11,657,963 89,795,153 10,278,860 74,574,382 11,991,186
6/30/2032 89,906,660 11,858,773 85,278,630 10,278,860 67,253,258 11,991,186
6/30/2033 83,764,971 12,065,203 80,454,983 10,278,861 59,434,298 11,991,186
6/30/2034 76,992,316 12,132,479 75,303,327 10,278,860 51,083,649 11,991,187
6/30/2035 69,689,595 12,012,297 69,801,359 10,278,861 42,165,155 11,991,187
6/30/2036 62,014,487 11,539,653 63,925,257 10,278,861 32,640,203 11,991,186
6/30/2037 54,305,925 11,034,654 57,649,580 10,278,861 22,467,555 11,991,187
6/30/2038 46,595,065 10,495,834 50,947,157 10,278,860 11,603,166 11,991,186
6/30/2039 38,916,706 10,088,104 43,788,970 10,278,861
6/30/2040 31,137,582 9,865,556 36,144,025 10,278,861
6/30/2041 23,059,471 8,504,073 27,979,224 10,278,860
6/30/2042 15,839,060 6,611,016 19,259,217 10,278,860
6/30/2043 10,084,024 9,779,615 9,946,250 10,278,861
6/30/2044 663,084 685,258
6/30/2045
6/30/2046
6/30/2047
6/30/2048
6/30/2049
Total 207,119,108 205,577,207 179,867,800
Interest Paid 92,812,458 91,270,557 65,561,150
Estimated Savings 1,541,901 27,251,308
CalPERS Actuarial Valuation - June 30, 2022
Safety Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 21
Reconciliation of Required Employer Contributions
Normal Cost (% of Payroll)
1. For Period 7/1/23 – 6/30/24
a) Employer Normal Cost 21.55%
b) Employee contribution 10.82%
c) Total Normal Cost 32.37%
2. Changes since the prior year annual valuation
a) Effect of demographic experience (0.60%)
b) Effect of plan changes 0.00%
c) Effect of discount rate change due to Funding Risk Mitigation 0.00%
d) Effect of assumption changes 0.00%
e) Effect of method changes 0.00%
f) Net effect of the changes above [sum of (a) through (e)] (0.60%)
3. For Period 7/1/24 – 6/30/25
a) Employer Normal Cost 20.49%
b) Employee contribution 11.28%
c) Total Normal Cost 31.77%
Employer Normal Cost Change [(3a) – (1a)] (1.06%)
Employee Contribution Change [(3b) – (1b)] 0.46%
Unfunded Liability Contribution ($)
1. For Period 7/1/23 – 6/30/24 5,935,778
2. Changes since the prior year annual valuation
a) Effect of adjustments to prior year’s amortization schedule 0
b) Effect of elimination of amortization bases 0
c) Effect of progression of amortization bases1 (223,559)
d) Effect of investment (gain)/loss during prior year2 1,093,592
e) Effect of non-investment (gain)/loss during prior year 540,067
f) Effect of re-amortizing existing bases due to Funding Risk Mitigation 0
g) Effect of Golden Handshake 0
h) Effect of plan changes 14,158
i) Effect of AL Significant Increase (Government Code section 20791) 0
j) Effect of assumption changes 0
k) Effect of adjustments to the amortization schedule (e.g., Fresh Start) 0
l) Effect of method change 0
m) Net effect of the changes above [sum of (a) through (l)] 1,424,258
3. For Period 7/1/24 – 6/30/25 [(1) + (2m)] 7,360,036
The amounts shown for the period 7/1/23 – 6/30/24 may be different if a prepayment of unfunded actuarial
liability is made or a plan change became effective after the prior year’s actuarial valuation was performed.
1 Includes scheduled escalation in individual amortization base payments due to the 5-year ramp and payroll growth assumption used in the pre-2019 amortization policy. 2 The unfunded liability contribution for the investment (gain)/loss during the year prior to the valuation date is 20% of the
“full” annual requirement due to the 5-year ramp. Increases to this amount that occur during the ramp period will be included in line c) for each of the next four years.
CalPERS Actuarial Valuation - June 30, 2022
Safety Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 22
Employer Contribution History
The table below provides a recent history of the required and discretionary employer contributions for the plan.
The required amounts are based on the actuarial valuation from two years prior without subsequent
adjustments, if any. Additional discretionary payments before July 1, 2018 or after June 30, 2023 are not
included.
Fiscal
Year
Employer
Normal Cost
Unfunded Rate
Unfunded Liability
Payment ($)
Additional Discretionary
Payments
2015 - 16 19.217% 17.710% N/A N/A
2016 - 17 19.920% 20.661% N/A N/A
2017 - 18 19.718% N/A 4,564,145 N/A
2018 - 19 19.595% N/A 4,523,960 14,220,650
2019 - 20 20.410% N/A 5,471,488 0
2020 - 21 21.401% N/A 4,146,779 4,596,860
2021 - 22 20.39% N/A 5,146,782 3,200,000
2022 - 23 19.79% N/A 5,881,880 0
2023 - 24 21.55% N/A 5,935,778
2024 - 25 20.49% N/A 7,360,036
Funding History
The table below shows the recent history of actuarial accrued liability, market value of assets, unfunded accrued liability, funded ratio and annual covered payroll.
[]
Valuation
Date
Accrued
Liability
(AL)
Market Value of
Assets (MVA)
Unfunded
Accrued
Liability (UAL)
Funded
Ratio
Annual
Covered
Payroll
6/30/2013 $217,638,091 $160,747,123 $56,890,968 73.9% $18,087,368
6/30/2014 239,979,240 186,190,042 53,789,198 77.6% 17,495,303
6/30/2015 250,753,240 187,057,814 63,695,426 74.6% 18,114,657
6/30/2016 265,900,205 184,355,019 81,545,186 69.3% 18,517,461
6/30/2017 284,296,267 205,720,952 78,575,315 72.4% 19,289,890
6/30/2018 307,725,897 219,697,334 88,028,563 71.4% 20,345,676
6/30/2019 324,351,564 243,980,037 80,371,527 75.2% 21,491,727
6/30/2020 343,243,950 251,416,320 91,827,630 73.2% 24,919,615
6/30/2021 372,017,358 308,342,667 63,674,691 82.9% 25,834,015
6/30/2022 393,017,010 282,537,994 110,479,016 71.9% 27,595,346
CalPERS Actuarial Valuation - June 30, 2022
Safety Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 23
Normal Cost by Benefit Group
The table below displays the Total Normal Cost broken out by benefit group for FY 2024-25. The Total Normal
Cost is the annual cost of service accrual for the fiscal year for active employees and can be viewed as the
long-term contribution rate for the benefits contracted. Generally, the normal cost for a benefit group subject
to more generous benefit provisions will exceed the normal cost for a group with less generous benefits.
However, based on the characteristics of the members (particularly when the number of actives is small), this
may not be the case. Future measurements of the Total Normal Cost for each group may differ significantly
from the current values due to such factors as: changes in the demographics of the group, changes in
economic and demographic assumptions, changes in plan benefits or applicable law.
Plan
Identifier Benefit Group Name
Total Normal
Cost
FY 2024-25
Number of
Actives
Payroll on
6/30/2022
317 Safety Fire Second Level 30.03% 17 $2,050,608
25275 Safety Fire PEPRA Level 25.42% 41 $4,090,715
25276 Safety Police PEPRA Level 29.36% 72 $8,277,821
30366 Safety Police First Level 37.86% 36 $5,699,546
30367 Safety Police Second Level 35.56% 14 $1,849,960
30368 Safety Fire First Level 33.56% 40 $5,626,696
Plan Total 31.77% 220 $27,595,346
Note that if a Benefit Group above has multiple bargaining units, each of which has separately contracted for
different benefits such as Employer Paid Member Contributions, then the Normal Cost shown for the
respective benefit level does not reflect those differences. Additionally, if a Second Level Benefit Group
amended to the same benefit formula as a First Level Benefit Group, their Normal Costs may be dissimilar
due to demographic or other population differences. For questions in these situations, please contact the plan
actuary.
CalPERS Actuarial Valuation - June 30, 2022
Safety Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 24
PEPRA Member Contribution Rates
The California Public Employees’ Pension Reform Act of 2013 (“PEPRA”) established new benefit formulas,
final compensation period, and contribution requirements for “new” employees (generally those first hired into
a CalPERS-covered position on or after January 1, 2013). In accordance with Government Code section
7522.30(b), “new members … shall have an initial contribution rate of at least 50% of the normal cost rate.”
The normal cost for the plan is dependent on the benefit levels, actuarial assumptions, and demographics of
the plan, particularly members’ entry age into the plan. Should the total normal cost of the plan change by
more than 1% from the base total normal cost established for the plan, the new member rate shall be 50% of
the new normal cost rounded to the nearest quarter percent.
The table below shows the determination of the PEPRA member contribution rates effective July 1, 2024,
based on 50% of the total normal cost rate for each respective plan as of the June 30, 2022 valuation.
Basis for Current Rate Rates Effective July 1, 2024
Plan
Identifier Benefit Group Name
Total
Normal
Cost Member
Rate
Total
Normal
Cost Change
Change
Needed
Member
Rate
25275 Safety Fire PEPRA
Level 26.932% 13.50% 28.04% 1.108% Yes 14.00%
25276 Safety Police PEPRA
Level 26.932% 13.50% 28.04% 1.108% Yes 14.00%
For purposes of setting member rates, it is preferable to determine total normal cost using a large active
population so that the rate remains relatively stable. While each CalPERS non -pooled plan has a sufficiently
large active population for this purpose, the PEPRA active population by itself may not be sufficiently large.
The total PEPRA normal cost will be determined based on the plan’s PEPRA membership only if the number
of members covered under the PEPRA formula meets either:
1. 50% of the active population, or
2. 25% of the active population and 100 or more PEPRA members
Until one of these conditions is met, the plan’s total PEPRA normal cost will be determined using the entire
active plan population (both PEPRA and Classic) based on the PEPRA benefit provisions. For this reason,
the PEPRA member contribution rate determined in the table above may not equal 50% of the total normal
cost of the PEPRA group shown on the “Normal Cost by Benefit Group” page.
Risk Analysis
• Future Investment Return Scenarios
• Discount Rate Sensitivity
• Mortality Rate Sensitivity
• Maturity Measures
• Maturity Measures History
• Funded Status – Termination Basis
CalPERS Actuarial Valuation - June 30, 2022
Safety Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 26
Future Investment Return Scenarios
Analysis using the investment return scenarios from the Asset Liability Management process completed in 2021 was performed to determine the effects of various future investment returns on required employer
contributions. The projections below reflect the impact of the CalPERS Funding Risk Mitigation policy. The
projected normal cost rates reflect that the rates are anticipated to decline over time as new employees are
hired into lower-cost benefit tiers. The projections also assume that all other actuarial assumptions will be
realized and that no further changes in assumptions, contributions, benefits, or funding will occur.
The first table shows projected contribution requirements if the fund were to earn either 3.0% or 10.8%
annually. These alternate investment returns were chosen because 90% of long-term average returns are
expected to fall between them over the 20-year period ending June 30, 2042.
Assumed Annual Return
FY 2022-23
through FY 2041-42
Projected Employer Contributions
FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30
3.0% (5th percentile)
Normal Cost Rate 20.2% 19.9% 19.6% 19.3% 18.9%
UAL Contribution $8,781,000 $10,057,000 $11,395,000 $13,739,000 $15,276,000
10.8% (95th percentile)
Normal Cost Rate 20.7% 20.8% 20.9% 21.0% 21.0%
UAL Contribution $8,280,000 $8,561,000 $8,384,000 $8,645,000 $7,520,000
Required contributions outside of this range are also possible. In particular, whereas it is unlikely that
investment returns will average less than 3.0% or greater than 10.8% over a 20-year period, the likelihood of
a single investment return less than 3.0% or greater than 10.8% in any given year is much greater. The
following analysis illustrates the effect of an extreme, single year investment return.
The portfolio has an expected volatility (or standard deviation) of 12.0% per year. Accordingly, in any given
year there is a 16% probability that the annual return will be -5.2% or less and a 2.5% probability that the
annual return will be -17.2% or less. These returns represent one and two standard deviations below the
expected return of 6.8%.
The following table shows the effect of a one or two standard deviation investment loss in FY 2022-23 on the
FY 2025-26 contribution requirements. Note that a single-year investment gain or loss decreases or increases
the required UAL contribution amount incrementally for each of the next five years, not just one, due to the 5-
year ramp in the amortization policy. However, the contribution requirements beyond the first year are also
impacted by investment returns beyond the first year. Historically, significant downturns in the market are often
followed by higher than average returns. Such investment gains would offset the impact of these single year
negative returns in years beyond FY 2025-26.
Assumed Annual Return for
Fiscal Year 2022-23
Required
Employer
Contributions
Projected
Employer
Contributions
FY 2024-25 FY 2025-26
(17.2%) (2 standard deviation loss)
Normal Cost Rate 20.49% 20.2%
UAL Contribution $7,360,036 $10,166,000
(5.2%) (1 standard deviation loss)
Normal Cost Rate 20.49% 20.2%
UAL Contribution $7,360,036 $9,343,000
• Without investment gains (returns higher than 6.8%) in year FY 2023-24 or later, projected
contributions rates would continue to rise over the next four years due to the continued phase-in of
the impact of the illustrated investment loss in FY 2022-23.
• The Pension Outlook Tool can be used to model projected contributions for these scen arios beyond
FY 2025-26 as well as to model other investment return scenarios.
CalPERS Actuarial Valuation - June 30, 2022
Safety Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 27
Discount Rate Sensitivity
The discount rate assumption is calculated as the sum of the assumed real rate of return and the assumed
annual price inflation, currently 4.5% and 2.3%, respectively. Changing either the price inflation assumption
or the real rate of return assumption will change the discount rate. The sensitivity of the valuation results to
the discount rate assumption depends on which component of the discount rate is changed. Shown below are
various valuation results as of June 30, 2022 assuming alternate discount rates by changing the two
components independently. Results are shown using the current discount rate of 6.8% as well as alternate
discount rates of 5.8% and 7.8%. The rates of 5.8% and 7.8% were selected since they illustrate the impact
of a 1.0% increase or decrease to the 6.8% assumption.
Sensitivity to the Real Rate of Return Assumption
As of June 30, 2022
1% Lower
Real Return Rate
Current
Assumptions
1% Higher
Real Return Rate
Discount Rate 5.8% 6.8% 7.8%
Price Inflation 2.3% 2.3% 2.3%
Real Rate of Return 3.5% 4.5% 5.5%
a) Total Normal Cost 40.45% 31.77% 25.25%
b) Accrued Liability $448,912,277 $393,017,010 $347,520,275
c) Market Value of Assets $282,537,994 $282,537,994 $282,537,994
d) Unfunded Liability/(Surplus) [(b) - (c)] $166,374,283 $110,479,016 $64,982,281
e) Funded Ratio 62.9% 71.9% 81.3%
Sensitivity to the Price Inflation Assumption
As of June 30, 2022
1% Lower
Price Inflation
Current
Assumptions
1% Higher
Price Inflation
Discount Rate 5.8% 6.8% 7.8%
Price Inflation 1.3% 2.3% 3.3%
Real Rate of Return 4.5% 4.5% 4.5%
a) Total Normal Cost 33.52% 31.77% 28.70%
b) Accrued Liability $407,059,629 $393,017,010 $361,218,016
c) Market Value of Assets $282,537,994 $282,537,994 $282,537,994 d) Unfunded Liability/(Surplus) [(b) - (c)] $124,521,635 $110,479,016 $78,680,022
e) Funded Ratio 69.4% 71.9% 78.2%
Mortality Rate Sensitivity
The following table looks at the change in the June 30, 2022 plan costs and funded status under two different
longevity scenarios, namely assuming rates of post-retirement mortality are 10% lower or 10% higher than our current mortality assumptions adopted in 2021. This type of analysis highlights the impact on the plan of
a change in the mortality assumption.
As of June 30, 2022 10% Lower
Mortality Rates
Current
Assumptions
10% Higher
Mortality Rates
a) Total Normal Cost 32.13% 31.77% 31.44%
b) Accrued Liability $399,272,766 $393,017,010 $387,227,295
c) Market Value of Assets $282,537,994 $282,537,994 $282,537,994
d) Unfunded Liability/(Surplus) [(b) - (c)] $116,734,772 $110,479,016 $104,689,301
e) Funded Ratio 70.8% 71.9% 73.0%
CalPERS Actuarial Valuation - June 30, 2022
Safety Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 28
Maturity Measures
As pension plans mature they become more sensitive to risks. Understanding plan maturity and how it affects
the ability of a pension plan sponsor to tolerate risk is important in understanding how the pension plan is
impacted by investment return volatility, other economic variables and changes in longevity or other
demographic assumptions. One way to look at the maturity level of CalPERS and its plans is to look at the
ratio of a plan’s retiree liability to its total liability. A pension plan in its infancy will have a very low ratio of
retiree liability to total liability. As the plan matures, the ratio increases. A mature plan will often have a ratio
above 60%-65%.
Ratio of Retiree Accrued Liability to
Total Accrued Liability June 30, 2021 June 30, 2022
1. Retiree Accrued Liability 256,111,399 272,472,654
2. Total Accrued Liability 372,017,358 393,017,010
3. Ratio of Retiree AL to Total AL [(1) / (2)] 69% 69%
Another measure of the maturity level of CalPERS and its plans is the ratio of actives to retirees, also called
the support ratio. A pension plan in its infancy will have a very high ratio of active to retired members. As the plan matures and members retire, the ratio declines. A mature plan will often have a ratio near or below one.
To calculate the support ratio for the rate plan, retirees and beneficiaries receiving a continuance are each
counted as one, even though they may have only worked a portion of their careers as an active member of
this rate plan. For this reason, the support ratio, while intuitive, may be less informative than the ratio of retiree liability to total accrued liability above.
For comparison, the support ratio for all CalPERS public agency plans as of June 30, 2021, is 0.78 and was
calculated consistently with how it is for the individual rate plan. Note that to calculate the support ratio for all
public agency plans, a retiree with service from more than one CalPERS agency is counted as a retiree more
than once.
Support Ratio June 30, 2021 June 30, 2022
1. Number of Actives 212 220
2. Number of Retirees 279 285
3. Support Ratio [(1) / (2)] 0.76 0.77
The actuarial calculations supplied in this communication are based on various assumptions about long-term
demographic and economic behavior. Unless these assumptions (e.g., terminations, deaths, disabilities,
retirements, salary growth, investment return) are exactly realized each year, there will be differences on a
year-to-year basis. The year-to-year differences between actual experience and the assumptions are called
actuarial gains and losses and serve to lower or raise required employer contributions from one year to the
next. Therefore, employer contributions will inevitably fluctuate, especially due to the ups and downs of
investment returns.
CalPERS Actuarial Valuation - June 30, 2022
Safety Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 29
Maturity Measures (continued)
Asset Volatility Ratio
Shown in the table below is the asset volatility ratio (AVR), which is the ratio of market value of assets to
payroll. Plans that have a higher AVR experience more volatile employer contributions (as a percentage of
payroll) due to investment return. For example, a plan with AVR of 8 may experience twice the contribution
volatility due to investment return volatility than a plan with AVR of 4. It should be noted that this ratio is a
measure of the current situation. It increases over time but generally tends to stabilize as a plan matures.
Liability Volatility Ratio
Also shown in the table below is the liability volatility ratio (LVR), which is the ratio of accrued liability to payroll.
Plans that have a higher LVR experience more volatile employer contributions (as a percentage of payroll) due to changes in liability. For example, a plan with LVR of 8 is expected to have twice the contribution volatility
of a plan with LVR of 4 when there is a change in accrued liability, such as when there is a change in actuarial
assumptions. It should be noted that this ratio indicates a longer-term potential for contribution volatility, since
the AVR, described above, will tend to move closer to the LVR as the funded ratio approaches 100%.
Contribution Volatility June 30, 2021 June 30, 2022
1. Market Value of Assets without Receivables $307,848,399 $282,119,193
2. Payroll 25,834,015 27,595,346
3. Asset Volatility Ratio (AVR) [(1) / (2)] 11.9 10.2
4. Accrued Liability $372,017,358 $393,017,010
5. Liability Volatility Ratio (LVR) [(4) / (2)] 14.4 14.2
Maturity Measures History
Valuation Date
Ratio of
Retiree Accrued Liability
to
Total Accrued Liability Support Ratio
Asset
Volatility
Ratio
Liability
Volatility
Ratio
6/30/2017
66%
0.82
10.6
14.7
6/30/2018
67%
0.80
10.8
15.1
6/30/2019
71%
0.77
11.3
15.1
6/30/2020
70%
0.82
10.1
13.8
6/30/2021
69%
0.76
11.9
14.4
6/30/2022
69%
0.77
10.2
14.2
CalPERS Actuarial Valuation - June 30, 2022
Safety Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 30
Funded Status – Termination Basis
The funded status measured on a termination basis is an estimate of the financial position of the plan had the
contract with CalPERS been terminated as of June 30, 2022. The accrued liability on a termination basis
(termination liability) is calculated differently from the plan’s ongoing funding liability. For the termination
liability calculation, both compensation and service are frozen as of the valuation date and no future pay
increases or service accruals are assumed. This measure of funded status is not appropriate for assessing
the need for future employer contributions in the case of an ongoing plan, that is, for an employer that
continues to provide CalPERS retirement benefits to active employees. Unlike the actuarial cost method used
for ongoing plans, the termination liability is the present value of the benefits earned through the valuation
date.
A more conservative investment policy and asset allocation strategy was adopted by the board for the
Terminated Agency Pool. The Terminated Agency Pool has limited funding sources since no future employer
contributions will be made. Therefore, expected benefit payments are secured by risk-free assets and benefit
security for members is increased while limiting the funding risk. However, this asset allocation has a lower
expected rate of return than the remainder of the PERF and consequently, a lower discount rate assumption.
The lower discount rate for the Terminated Agency Pool results in higher liabilities for terminated plans.
The effective termination discount rate will depend on actual market rates of return for risk-free securities on
the date of termination. As market discount rates are variable, the table below shows a range for the
termination liability based on the lowest and highest interest rates observed during an approximate 19-month period from 12 months before the valuation date to seven months after.
Discount Rate: 1.75%
Price Inflation: 2.50%
Discount Rate: 4.50%
Price Inflation: 2.75%
Market
Value of
Assets (MVA)
Termination
Liability1,2
Funded
Ratio
Unfunded
Termination
Liability
Termination
Liability1,2
Funded
Ratio
Unfunded
Termination
Liability
$282,537,994 $845,944,958 33.4% $563,406,964 $521,004,304 54.2% $238,466,310
1 The termination liabilities calculated above include a 5% contingency load. The contingency load and other actuarial
assumptions can be found in Appendix A.
2 The discount rate used for termination valuations is a weighted average of the 10-year and 30-year U.S. Treasury yields
where the weights are based on matching asset and liability durations as of the termination date. The discount rates used
in the table are based on 20-year Treasury bonds, rounded to the nearest quarter percentage point, which is a good
proxy for most plans. The 20-year Treasury yield was 3.38% on June 30, 2022, the valuation date.
In order to terminate the plan, first contact our Pension Contract Services unit to initiate a Resolution of Intent
to Terminate. The completed Resolution will allow the plan actuary to provide a preliminary termination
valuation with a more up-to-date estimate of the plan liabilities. Before beginning this process, please consult
with the plan actuary.
Plan’s Major Benefit Provisions
CalPERS Actuarial Valuation - June 30, 2022 Safety Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 32
Plan’s Major Benefit Options
Shown below is a summary of the major optional benefits for which the agency has contracted. A description of principal standard and optional plan provisions is
in Appendix B.
Benefit Group
Member Category Police Fire Police Fire Fire Police Police
Demographics
Actives Yes Yes Yes Yes Yes Yes No Transfers/Separated Yes Yes Yes Yes Yes Yes No
Receiving Yes Yes Yes Yes No Yes Yes
Benefit Group Key 103033 103035 103037 108501 112321 112322 202170
Benefit Provision
Benefit Formula 2% @ 50 3% @ 50 3% @ 50 2% @ 50 2.7% @ 57 2.7% @ 57
Social Security Coverage No No No No No No
Full/Modified Full Full Full Full Full Full
Employee Contribution Rate 9.00% 9.00% 9.00% 9.00% 13.50% 13.50%
Final Average Compensation Period Three Year One Year One Year Three Year Three Year Three Year
Sick Leave Credit Yes Yes Yes Yes Yes Yes
Non-Industrial Disability Standard Standard Standard Standard Standard Standard
Industrial Disability Standard Standard Standard Standard Standard Standard
Pre-Retirement Death Benefits
Optional Settlement 2 No No No No No No
1959 Survivor Benefit Level Level 3 Level 4 Level 3 Level 4 Level 4 Level 3
Special Yes Yes Yes Yes Yes Yes
Alternate (firefighters) No No No No No No
Post-Retirement Death Benefits
Lump Sum $2000 $2000 $2000 $2000 $2000 $2000 $2000
Survivor Allowance (PRSA) Yes Yes Yes Yes Yes Yes Yes
COLA 2% 2% 2% 2% 2% 2% 2%
CalPERS Actuarial Valuation - June 30, 2022 Safety Plan of the City of Carlsbad
CalPERS ID: 3747905882
Page 33
Plan’s Major Benefit Options (continued)
Shown below is a summary of the major optional benefits for which the agency has contracted. A description of principal standard and optional plan provisions is
in Appendix B.
Benefit Group
Member Category Police Police Fire Fire Fire
Demographics
Actives No No No No No
Transfers/Separated No No No No No
Receiving Yes Yes Yes Yes Yes
Benefit Group Key 202171 202172 202173 202174 202175
Benefit Provision
Benefit Formula
Social Security Coverage
Full/Modified
Employee Contribution Rate
Final Average Compensation Period
Sick Leave Credit
Non-Industrial Disability
Industrial Disability
Pre-Retirement Death Benefits
Optional Settlement 2
1959 Survivor Benefit Level
Special
Alternate (firefighters)
Post-Retirement Death Benefits
Lump Sum $2000 $2000 $2000 $2000 $2000
Survivor Allowance (PRSA) Yes Yes Yes Yes Yes
COLA 2% 2% 2% 2% 2%
Appendices
• Appendix A – Actuarial Methods and Assumptions
• Appendix B – Principal Plan Provisions
• Appendix C – Participant Data
• Appendix D – Glossary
Appendix A
Actuarial Methods and Assumptions
• Actuarial Data
• Actuarial Methods
• Actuarial Assumptions
• Miscellaneous
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-1
Actuarial Data
As stated in the Actuarial Certification, the data which serves as the basis of this valuation has been obtained
from the various CalPERS databases. We have reviewed the valuation data and believe that it is reasonable
and appropriate in aggregate. We are unaware of any potential data issues that would have a material effect
on the results of this valuation, except that data does not always contain the latest salary information for former
members now in reciprocal systems and does not recognize the potential for unusually large salary deviation
in certain cases such as elected officials. Therefore, salary information in these cases may not be accurate.
These situations are relatively infrequent, however, and generally do not have a material impact on the
required employer contributions.
Actuarial Methods
Actuarial Cost Method
The actuarial cost method used is the Entry Age Actuarial Cost Method. Under this method, projected benefits
are determined for all members and the associated liabilities are spread in a manner that produces level
annual cost as a percentage of pay in each year from the member’s entry age to their assumed retirement
age on the valuation date. The cost allocated to the current fiscal year is called the normal cost.
The actuarial accrued liability for active members is then calculated as the portion of the total cost of the plan
allocated to prior years. The actuarial accrued liability for members currently receiving benefits and for
members entitled to deferred benefits is equal to the present value of the benefits expected to be paid. No
normal costs are applicable for these participants.
CalPERS uses an in-house proprietary actuarial model for calculating plan costs. We believe this model is fit
for its intended purpose and meets all applicable Actuarial Standards of Practice. Furthermore, the actuarial
results of our model are independently confirmed periodically by outside auditing actuaries. The actuarial
assumptions used are internally consistent and the generated results are reasonable.
Amortization of Unfunded Actuarial Accrued Liability
The excess of the total actuarial accrued liability over the market value of plan assets is called the unfunded
actuarial accrued liability (UAL). Funding requirements are determined by adding the normal cost and a
payment toward the UAL. The UAL payment is equal to the sum of individual amortization payments, each
representing a different source of UAL for a given measurement period.
Amortization payments are determined according to the CalPERS amortization policy. The board adopted a
new policy effective for the June 30, 2019 actuarial valuation. The new policy applies prospectively only;
amortization bases (sources of UAL) established prior to the June 30, 2019 valuation w ill continue to be
amortized according to the prior policy.
Prior Policy (Bases Established prior to June 30, 2019)
Amortization payments are determined as a level percentage of payroll whereby the payment increases each
year at an escalation rate. Gains or losses are amortized over a fixed 30-year period with a 5-year ramp up at
the beginning and a 5-year ramp down at the end of the amortization period. All changes in liability due to plan
amendments (other than golden handshakes) are amortized over a 20-year period with no ramp. Changes in
actuarial assumptions or changes in actuarial methodology are amortized over a 20-year period with a 5-year
ramp up at the beginning and a 5-year ramp down at the end of the amortization period. Changes in unfunded accrued liability due to a Golden Handshake will be amortized over a period of five years. Bases established
prior to June 30, 2013 may be amortized differently. A summary is provided in the following table:
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-2
Driver
Source
(Gain)/Loss
Assumption/Method
Change
Benefit
Change
Golden
Handshake Investment
Non-
investment
Amortization
Period 30 Years 30 Years 20 Years 20 Years 5 Years
Escalation Rate
- Active Plans
- Inactive Plans
2.80%
0%
2.80%
0%
2.80%
0%
2.80%
0%
2.80%
0%
Ramp Up 5 5 5 0 0
Ramp Down 5 5 5 0 0
The 5-year ramp up means that the payments in the first four years of the amortization period are 20%, 40%,
60% and 80% of the “full” payment which begins in year five. The 5-year ramp down means that the reverse
is true in the final four years of the amortization period.
Current Policy (Bases Established on or after June 30, 2019)
Amortization payments are determined as a level dollar amount. Investment gains or losses are amortized
over a fixed 20-year period with a 5-year ramp up at the beginning of the amortization period. Non-investment
gains or losses are amortized over a fixed 20-year period with no ramps. All changes in liability due to plan
amendments (other than golden handshakes) are amortized over a 20-year period with no ramps. Changes
in actuarial assumptions or changes in actuarial methodology are amortized over a 20-year period with no ramps. Changes in unfunded accrued liability due to a Golden Handshake are amortized over a period of five
years. A summary is provided in the table below:
Source
(Gain)/Loss
Assumption/
Method
Change
Benefit
Change
Golden
Handshake Investment
Non-
investment
Amortization Period 20 Years 20 Years 20 Years 20 Years 5 Years
Escalation Rate 0% 0% 0% 0% 0%
Ramp Up 5 0 0 0 0
Ramp Down 0 0 0 0 0
Exceptions for Inconsistencies
An exception to the amortization rules above is used whenever their application results in inconsistencies. In
these cases, a “fresh start” approach is used. This means that the current unfunded actuarial liability is
projected and amortized over a set number of years. For example, a fresh start is needed in the following
situations:
• When a negative payment would be required on a positive unfunded actuarial liability; or • When the payment would completely amortize the total unfunded liability in a very short time period,
and results in a large change in the employer contribution requirement.
It should be noted that the actuary may determine that a fresh start is necessary under other circumstances.
In all cases of a fresh start, the period is set by the actuary at what is deemed appropriate; however, the period
will not be greater than 20 years.
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-3
Exceptions for Plans in Surplus
If a surplus exists (i.e., the Market Value of Assets exceeds the plan’s accrued liability) any prior
amortization layers shall be considered fully amortized, and the surplus shall not be amortized.
In the event of any subsequent unfunded liability, a Fresh Start shall be used with an amortization period of
20 years or less.
Exceptions for Small Amounts
Where small unfunded liabilities are identified in annual valuations which result in small payment amounts,
the actuary may shorten the remaining period for these bases.
• When the balance of a single amortization base has an absolute value less than $250, the
amortization period is reduced to one year.
• When the entire unfunded liability is a small amount, the actuary may perform a Fresh Start and
use an appropriate amortization period.
Exceptions for Inactive Plans
The following exceptions apply to plans classified as Inactive. These plans have no active members and no
expectation to have active members in the future.
• Amortization of the unfunded liability is on a “level dollar” basis rather than a “level percent of pay”
basis. For amortization layers, which utilize a ramp up and ramp down, the “ultimate” payment is
constant. • Actuarial judgment will be used to shorten amortization periods for Inactive plans with existing periods
that are deemed too long given the duration of the liability. The specific demographics of the plan will
be used to determine if shorter periods may be more appropriate.
Exceptions for Inactive Agencies
For a public agency with no active members in any CalPERS rate plan, the unfunded liability shall be
amortized over a closed amortization period of no more than 15 years.
Asset Valuation Method
The Actuarial Value of Assets is set equal to the market value of assets. Asset values include accounts
receivable.
PEPRA Normal Cost Rate Methodology
Per Government Code section 7522.30(b), the “normal cost rate” shall mean the annual actuarially determined
normal cost for the plan of retirement benefits provided to the new member and shall be established based on
actuarial assumptions used to determine the liabilities and costs as part of the annual actuarial valuation. The
plan of retirement benefits shall include any elements that would impact the actuarial determination of the
normal cost, including, but not limited to, the retirement formula, eligibility and vesting criteria, ancillary benefit
provisions, and any automatic cost-of-living adjustments as determined by the public retirement system.
For purposes of setting member rates, it is preferable to determine total normal cost using a large active
population so that the rate remains relatively stable. While each CalPERS non -pooled plan has a sufficiently
large active population for this purpose, the PEPRA active population by itself may not be sufficiently large.
The total PEPRA normal cost will be determined based on the plan’s PEPRA membership only if the number
of members covered under the PEPRA formula meets either:
1. 50% of the active population, or
2. 25% of the active population and 100 or more PEPRA members
Until one of these conditions is met, the plan’s total PEPRA normal cost will be determined using the entire
active plan population (both PEPRA and Classic) based on the PEPRA benefit provisions.
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-4
Actuarial Assumptions
In 2021, CalPERS completed its most recent asset liability management study incorporating actuarial
assumptions and strategic asset allocation. In November 2021, the board adopted changes to the asset
allocation that increased the expected volatility of returns. The adopted asset alloca tion was expected to have
a long-term blended return that continued to support a discount rate assumption of 6.80%. The board also
approved several changes to the demographic assumptions that more closely aligned with actual experience.
For more details and additional rationale for the selection of the actuarial assumptions, please refer to the
CalPERS Experience Study and Review of Actuarial Assumptions report from November 2021 that can be
found on the CalPERS website under: Forms and Publications. Click on “View All” and search for Experience
Study.
All actuarial assumptions (except the discount rates used for the accrued liability on a termination basis)
represent an estimate of future experience rather than observations of the estimates inherent in market data.
Economic Assumptions
Discount Rate The prescribed discount rate assumption, adopted by the board on November 17, 2021, is 6.80%
compounded annually (net of investment and administrative expenses) as of June 30, 2022.
Termination Liability Discount Rate
The current discount rate assumption used for termination valuations is a weighted average of the 10-year and 30-year U.S. Treasury yields where the weights are based on matching asset and liability
durations as of the termination date.
The accrued liabilities on a termination basis in this report are calculated using an observed range of
market interest rates. This range is based on the lowest and highest 20-year Treasury bond observed
during an approximate 19-month period from 12 months before the valuation date to seven months
after. The 20-year Treasury bond has a similar duration to most plan liabilities and serves as a good
proxy for the termination discount rate. The 20-year Treasury yield was 3.38% on June 30, 2022.
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-5
Salary Growth
Annual increases vary by category, entry age, and duration of service. A sample of assumed
increases are shown below. Wage inflation assumption in the valuation year (2.80% for 2022) is
added to these factors for total salary growth.
Public Agency Miscellaneous
Duration of Service (Entry Age 20) (Entry Age 30) (Entry Age 40)
0 0.0764 0.0621 0.0521
1 0.0663 0.0528 0.0424
2 0.0576 0.0449 0.0346
3 0.0501 0.0381 0.0282
4 0.0435 0.0324 0.0229
5 0.0378 0.0276 0.0187
10 0.0201 0.0126 0.0108
15 0.0155 0.0102 0.0071
20 0.0119 0.0083 0.0047
25 0.0091 0.0067 0.0031
30 0.0070 0.0054 0.0020
Public Agency Fire
Duration of Service (Entry Age 20) (Entry Age 30) (Entry Age 40)
0 0.1517 0.1549 0.0631
1 0.1191 0.1138 0.0517
2 0.0936 0.0835 0.0423
3 0.0735 0.0613 0.0346
4 0.0577 0.0451 0.0284
5 0.0453 0.0331 0.0232
10 0.0188 0.0143 0.0077
15 0.0165 0.0124 0.0088
20 0.0145 0.0108 0.0101
25 0.0127 0.0094 0.0115
30 0.0112 0.0082 0.0132
Public Agency Police
Duration of Service (Entry Age 20) (Entry Age 30) (Entry Age 40)
0 0.1181 0.1051 0.0653
1 0.0934 0.0812 0.0532
2 0.0738 0.0628 0.0434
3 0.0584 0.0485 0.0353
4 0.0462 0.0375 0.0288
5 0.0365 0.0290 0.0235
10 0.0185 0.0155 0.0118
15 0.0183 0.0150 0.0131
20 0.0181 0.0145 0.0145
25 0.0179 0.0141 0.0161
30 0.0178 0.0136 0.0179
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-6
Salary Growth (continued)
Public Agency County Peace Officers
Duration of Service (Entry Age 20) (Entry Age 30) (Entry Age 40)
0 0.1238 0.1053 0.0890
1 0.0941 0.0805 0.0674
2 0.0715 0.0616 0.0510
3 0.0544 0.0471 0.0387
4 0.0413 0.0360 0.0293
5 0.0314 0.0276 0.0222
10 0.0184 0.0142 0.0072
15 0.0174 0.0124 0.0073
20 0.0164 0.0108 0.0074
25 0.0155 0.0094 0.0075
30 0.0147 0.0083 0.0077
Schools
Duration of Service (Entry Age 20) (Entry Age 30) (Entry Age 40)
0 0.0275 0.0275 0.0200
1 0.0422 0.0373 0.0298
2 0.0422 0.0373 0.0298
3 0.0422 0.0373 0.0298
4 0.0388 0.0314 0.0245
5 0.0308 0.0239 0.0179
10 0.0236 0.0160 0.0121
15 0.0182 0.0135 0.0103
20 0.0145 0.0109 0.0085
25 0.0124 0.0102 0.0058
30 0.0075 0.0053 0.0019
• The Miscellaneous salary scale is used for Local Prosecutors.
• The Police salary scale is used for Other Safety, Local Sheriff, and School Police.
Price Inflation
2.30% compounded annually.
Wage Inflation
2.80% compounded annually (used in projecting individual salary increases).
Payroll Growth
2.80% compounded annually (used in projecting the payroll over which the unfunded liability is
amortized for level percent of payroll bases). This assumption is used for all plans with active
members.
Non-valued Potential Additional Liabilities
The potential liability loss for a cost-of-living increase exceeding the 2.30% price inflation assumption
and any potential liability loss from future member service purchases that are not reflected in the
valuation.
Miscellaneous Loading Factors
Credit for Unused Sick Leave Total years of service is increased by 1% for those plans that have adopted the provision of providing
Credit for Unused Sick Leave.
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-7
Conversion of Employer Paid Member Contributions (EPMC)
Total years of service is increased by the Employee Contribution Rate for those plans with the
provision providing for the Conversion of Employer Paid Member Contributions (EPMC) during the
final compensation period.
Norris Decision (Best Factors)
Employees hired prior to July 1, 1982 have projected benefit amounts increased in order to reflect
the use of “Best Factors” in the calculation of optional benefit forms. This is due to a 1983 Supreme
Court decision, known as the Norris decision, which required males and females to be treated equally
in the determination of benefit amounts. Consequently, anyone already employed at that time is given
the best possible conversion factor when optional benefits are determined. No loading is necessary
for employees hired after July 1, 1982.
Termination Liability The termination liabilities include a 5% contingency load. This load is for unforeseen improvements
in mortality.
Demographic Assumptions
Pre-Retirement Mortality
The mortality assumptions are based on mortality rates resulting from the most recent CalPERS
Experience Study adopted by the CalPERS Board in November 2021. For purposes of the mortality
rates, the rates incorporate generational mortality to capture on-going mortality improvement.
Generational mortality explicitly assumes that members born more recently will live longer than the
members born before them thereby capturing the mortality improvement seen in the past and
expected continued improvement. For more details, please refer to the 2021 experience study report
that can be found on the CalPERS website.
Rates vary by age and gender are shown in the table below. This table only contains a sample of the
2017 base table rates for illustrative purposes. The non-industrial death rates are used for all plans.
The industrial death rates are used for Safety plans (except for local Safety members described in
Section 20423.6 where the agency has not specifically contracted for industrial death benefits.)
Miscellaneous Safety
Non-Industrial Death Non-Industrial Death Industrial Death (Not Job-Related) (Not Job-Related) (Job-Related)
Age Male Female Male Female Male Female
20 0.00039 0.00014 0.00038 0.00014 0.00004 0.00002
25 0.00033 0.00013 0.00034 0.00018 0.00004 0.00002
30 0.00044 0.00019 0.00042 0.00025 0.00005 0.00003
35 0.00058 0.00029 0.00048 0.00034 0.00005 0.00004
40 0.00075 0.00039 0.00055 0.00042 0.00006 0.00005
45 0.00093 0.00054 0.00066 0.00053 0.00007 0.00006
50 0.00134 0.00081 0.00092 0.00073 0.00010 0.00008
55 0.00198 0.00123 0.00138 0.00106 0.00015 0.00012
60 0.00287 0.00179 0.00221 0.00151 0.00025 0.00017
65 0.00403 0.00250 0.00346 0.00194 0.00038 0.00022
70 0.00594 0.00404 0.00606 0.00358 0.00067 0.00040
75 0.00933 0.00688 0.01099 0.00699 0.00122 0.00078
80 0.01515 0.01149 0.02027 0.01410 0.00225 0.00157
• The pre-retirement mortality rates above are for 2017 and are projected generationally for future
years using 80% of the Society of Actuaries’ Scale MP-2020.
• Miscellaneous plans usually have industrial death rates set to zero unless the agency has
specifically contracted for industrial death benefits. If so, each non-industrial death rate shown
above will be split into two components: 99% will become the non-industrial death rate and 1%
will become the industrial death rate.
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-8
Post-Retirement Mortality
Rates vary by age, type of retirement, and gender. See sample rates in table below. These rates are
used for all plans.
Service Retirement
Non-Industrial Disability Industrial Disability
(Not Job-Related) (Job-Related)
Age Male Female Male Female Male Female
50 0.00267 0.00199 0.01701 0.01439 0.00430 0.00311
55 0.00390 0.00325 0.02210 0.01734 0.00621 0.00550
60 0.00578 0.00455 0.02708 0.01962 0.00944 0.00868
65 0.00857 0.00612 0.03334 0.02276 0.01394 0.01190 70 0.01333 0.00996 0.04001 0.02910 0.02163 0.01858
75 0.02391 0.01783 0.05376 0.04160 0.03446 0.03134
80 0.04371 0.03403 0.07936 0.06112 0.05853 0.05183
85 0.08274 0.06166 0.11561 0.09385 0.10137 0.08045
90 0.14539 0.11086 0.16608 0.14396 0.16584 0.12434
95 0.24665 0.20364 0.24665 0.20364 0.24665 0.20364
100 0.36198 0.31582 0.36198 0.31582 0.36198 0.31582
105 0.52229 0.44679 0.52229 0.44679 0.52229 0.44679
110 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000
The post-retirement mortality rates above are for 2017 and are projected generationally for future
years using 80% of the Society of Actuaries’ Scale MP-2020.
Marital Status For active members, a percentage who are married upon retirement is assumed according to the
member category as shown in the following table.
Member Category Percent Married
Miscellaneous Member 70% Local Police 85%
Local Fire 85%
Other Local Safety 70%
School Police 85%
Local County Peace Officers 75%
Age of Spouse
It is assumed that female spouses are 3 years younger than male spouses. This assumption is used
for all plans.
Separated Members
It is assumed that separated members refund immediately if non-vested. Separated members who
are vested are assumed to retire at age 59 for Miscellaneous members and age 54 for Safety
members.
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-9
Termination with Refund
Rates vary by entry age and service for Miscellaneous plans. Rates vary by service for Safety plans.
See sample rates in tables below.
Public Agency Miscellaneous
Duration of
Service Entry Age 20 Entry Age 25 Entry Age 30 Entry Age 35 Entry Age 40 Entry Age 45
Male Female Male Female Male Female Male Female Male Female Male Female
0 0.1851 0.1944 0.1769 0.1899 0.1631 0.1824 0.1493 0.1749 0.1490 0.1731 0.1487 0.1713
1 0.1531 0.1673 0.1432 0.1602 0.1266 0.1484 0.1101 0.1366 0.1069 0.1323 0.1037 0.1280
2 0.1218 0.1381 0.1125 0.1307 0.0970 0.1183 0.0815 0.1058 0.0771 0.0998 0.0726 0.0938
3 0.0927 0.1085 0.0852 0.1020 0.0727 0.0912 0.0601 0.0804 0.0556 0.0737 0.0511 0.0669
4 0.0672 0.0801 0.0616 0.0752 0.0524 0.0670 0.0431 0.0587 0.0392 0.0523 0.0352 0.0459
5 0.0463 0.0551 0.0423 0.0517 0.0358 0.0461 0.0292 0.0404 0.0261 0.0350 0.0230 0.0296
10 0.0112 0.0140 0.0101 0.0129 0.0083 0.0112 0.0064 0.0094 0.0048 0.0071 0.0033 0.0049
15 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
20 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
25 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
30 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
35 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
• The police termination and refund rates are also used for Public Agency Local Prosecutors, Other Safety, Local Sheriff, and School Police.
Public Agency Safety
Duration of
Service Fire Police County Peace Officer
Male Female Male Female Male Female
0 0.1022 0.1317 0.1298 0.1389 0.1086 0.1284
1 0.0686 0.1007 0.0789 0.0904 0.0777 0.0998
2 0.0441 0.0743 0.0464 0.0566 0.0549 0.0759
3 0.0272 0.0524 0.0274 0.0343 0.0385 0.0562
4 0.0161 0.0349 0.0170 0.0206 0.0268 0.0402
5 0.0092 0.0214 0.0113 0.0128 0.0186 0.0276
10 0.0015 0.0000 0.0032 0.0047 0.0046 0.0038
15 0.0000 0.0000 0.0000 0.0000 0.0023 0.0036
20 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
25 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
30 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
35 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-10
Termination with Refund (continued)
Schools
Duration of
Service Entry Age 20 Entry Age 25 Entry Age 30 Entry Age 35 Entry Age 40 Entry Age 45
Male Female Male Female Male Female Male Female Male Female Male Female
0 0.2054 0.2120 0.1933 0.1952 0.1730 0.1672 0.1527 0.1392 0.1423 0.1212 0.1318 0.1032
1 0.1922 0.2069 0.1778 0.1883 0.1539 0.1573 0.1300 0.1264 0.1191 0.1087 0.1083 0.0910
2 0.1678 0.1859 0.1536 0.1681 0.1298 0.1383 0.1060 0.1086 0.0957 0.0934 0.0853 0.0782
3 0.1384 0.1575 0.1256 0.1417 0.1042 0.1155 0.0829 0.0893 0.0736 0.0774 0.0643 0.0656
4 0.1085 0.1274 0.0978 0.1143 0.0800 0.0925 0.0622 0.0707 0.0542 0.0620 0.0462 0.0533
5 0.0816 0.0991 0.0732 0.0887 0.0590 0.0713 0.0449 0.0539 0.0383 0.0476 0.0317 0.0413
10 0.0222 0.0248 0.0200 0.0221 0.0163 0.0174 0.0125 0.0128 0.0094 0.0100 0.0063 0.0072
15 0.0106 0.0132 0.0095 0.0113 0.0077 0.0083 0.0058 0.0052 0.0040 0.0039 0.0021 0.0026
20 0.0059 0.0065 0.0050 0.0054 0.0035 0.0036 0.0021 0.0019 0.0010 0.0009 0.0000 0.0000
25 0.0029 0.0034 0.0025 0.0029 0.0018 0.0020 0.0010 0.0012 0.0005 0.0006 0.0000 0.0000
30 0.0012 0.0015 0.0011 0.0013 0.0011 0.0011 0.0010 0.0009 0.0005 0.0005 0.0000 0.0000
35 0.0006 0.0007 0.0006 0.0007 0.0005 0.0006 0.0005 0.0005 0.0003 0.0002 0.0000 0.0000
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-11
Termination with Vested Benefits
Rates vary by entry age and service for Miscellaneous plans. Rates vary by service for Safety plans.
See sample rates in tables below.
Public Agency Miscellaneous
Duration of
Service Entry Age 20 Entry Age 25 Entry Age 30 Entry Age 35 Entry Age 40
Male Female Male Female Male Female Male Female Male Female
5 0.0381 0.0524 0.0381 0.0524 0.0358 0.0464 0.0334 0.0405 0.0301 0.0380
10 0.0265 0.0362 0.0265 0.0362 0.0254 0.0334 0.0244 0.0307 0.0197 0.0236
15 0.0180 0.0252 0.0180 0.0252 0.0166 0.0213 0.0152 0.0174 0.0119 0.0132
20 0.0141 0.0175 0.0141 0.0175 0.0110 0.0131 0.0079 0.0087 0.0000 0.0000
25 0.0084 0.0108 0.0084 0.0108 0.0064 0.0076 0.0000 0.0000 0.0000 0.0000
30 0.0047 0.0056 0.0047 0.0056 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
35 0.0038 0.0041 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
• After termination with vested benefits, a Miscellaneous member is assumed to retire at age 59
and a Safety member at age 54. • The Police termination with vested benefits rates are also used for Public Agency Local
Prosecutors, Other Safety, Local Sheriff, and School Police.
Schools
Duration of
Service Entry Age 20 Entry Age 25 Entry Age 30 Entry Age 35 Entry Age 40
Male Female Male Female Male Female Male Female Male Female
5 0.0359 0.0501 0.0359 0.0501 0.0332 0.0402 0.0305 0.0304 0.0266 0.0272
10 0.0311 0.0417 0.0311 0.0417 0.0269 0.0341 0.0228 0.0265 0.0193 0.0233
15 0.0193 0.0264 0.0193 0.0264 0.0172 0.0220 0.0151 0.0175 0.0123 0.0142
20 0.0145 0.0185 0.0145 0.0185 0.0113 0.0141 0.0080 0.0097 0.0000 0.0000
25 0.0089 0.0123 0.0089 0.0123 0.0074 0.0093 0.0000 0.0000 0.0000 0.0000
30 0.0057 0.0064 0.0057 0.0064 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
35 0.0040 0.0049 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
Public Agency Safety
Duration of
Service Fire Police County Peace Officer
Male Female Male Female Male Female
5 0.0089 0.0224 0.0156 0.0272 0.0177 0.0266
10 0.0066 0.0164 0.0113 0.0198 0.0126 0.0189
15 0.0048 0.0120 0.0083 0.0144 0.0089 0.0134
20 0.0035 0.0088 0.0060 0.0105 0.0063 0.0095
25 0.0024 0.0061 0.0042 0.0073 0.0042 0.0063
30 0.0012 0.0031 0.0021 0.0037 0.0021 0.0031
35 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-12
Non-Industrial (Not Job-Related) Disability
Rates vary by age and gender for Miscellaneous plans. Rates vary by age and category for Safety
plans.
Miscellaneous Fire Police County Peace Officer Schools
Ag
e Male Female
Male and
Female
Male and
Female Male and Female Male Female
20 0.0001 0.0000 0.0001 0.0001 0.0001 0.0000 0.0002
25 0.0001 0.0001 0.0001 0.0001 0.0001 0.0000 0.0002
30 0.0002 0.0003 0.0001 0.0001 0.0001 0.0002 0.0002
35 0.0004 0.0007 0.0001 0.0002 0.0003 0.0005 0.0004
40 0.0009 0.0012 0.0001 0.0002 0.0006 0.0010 0.0008
45 0.0015 0.0019 0.0002 0.0003 0.0011 0.0019 0.0015
50 0.0015 0.0019 0.0004 0.0005 0.0016 0.0027 0.0021
55 0.0014 0.0013 0.0006 0.0007 0.0009 0.0024 0.0017
60 0.0012 0.0009 0.0006 0.0011 0.0005 0.0020 0.0010
• The Miscellaneous non-industrial disability rates are used for Local Prosecutors. • The police non-industrial disability rates are also used for Other Safety, Local Sheriff, and School
Police.
Industrial (Job-Related) Disability
Rates vary by age and category.
Age Fire Police County Peace Officer
20 0.0001 0.0000 0.0004
25 0.0002 0.0017 0.0013
30 0.0006 0.0048 0.0025
35 0.0012 0.0079 0.0037
40 0.0023 0.0110 0.0051
45 0.0040 0.0141 0.0067
50 0.0208 0.0185 0.0092
55 0.0307 0.0479 0.0151
60 0.0438 0.0602 0.0174
• The police industrial disability rates are also used for Local Sheriff and Other Safety.
• 50% of the police industrial disability rates are used for School Police. • 1% of the police industrial disability rates are used for Local Prosecutors.
• Normally, rates are zero for Miscellaneous plans unless the agency has specifically contracted
for industrial disability benefits. If so, each Miscellaneous non-industrial disability rate will be split
into two components: 50% will become the non-industrial disability rate and 50% will become the industrial disability rate.
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-13
Service Retirement
Retirement rates vary by age, service, and formula, except for the Safety Half Pay at 55 and 2% at
55 formulas, where retirement rates vary by age only.
Public Agency Miscellaneous 1.5% at 65
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.008 0.011 0.013 0.015 0.017 0.019
51 0.007 0.010 0.012 0.013 0.015 0.017
52 0.010 0.014 0.017 0.019 0.021 0.024
53 0.008 0.012 0.015 0.017 0.019 0.022
54 0.012 0.016 0.019 0.022 0.025 0.028
55 0.018 0.025 0.031 0.035 0.038 0.043
56 0.015 0.021 0.025 0.029 0.032 0.036
57 0.020 0.028 0.033 0.038 0.043 0.048
58 0.024 0.033 0.040 0.046 0.052 0.058
59 0.028 0.039 0.048 0.054 0.060 0.067
60 0.049 0.069 0.083 0.094 0.105 0.118
61 0.062 0.087 0.106 0.120 0.133 0.150
62 0.104 0.146 0.177 0.200 0.223 0.251
63 0.099 0.139 0.169 0.191 0.213 0.239
64 0.097 0.136 0.165 0.186 0.209 0.233
65 0.140 0.197 0.240 0.271 0.302 0.339
66 0.092 0.130 0.157 0.177 0.198 0.222
67 0.129 0.181 0.220 0.249 0.277 0.311
68 0.092 0.129 0.156 0.177 0.197 0.221
69 0.092 0.130 0.158 0.178 0.199 0.224
70 0.103 0.144 0.175 0.198 0.221 0.248
Public Agency Miscellaneous 2% at 60
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.010 0.011 0.014 0.014 0.017 0.017
51 0.017 0.013 0.014 0.010 0.010 0.010
52 0.014 0.014 0.018 0.015 0.016 0.016
53 0.015 0.012 0.013 0.010 0.011 0.011
54 0.006 0.010 0.017 0.016 0.018 0.018
55 0.012 0.016 0.024 0.032 0.036 0.036
56 0.010 0.014 0.023 0.030 0.034 0.034
57 0.006 0.018 0.030 0.040 0.044 0.044
58 0.022 0.023 0.033 0.042 0.046 0.046
59 0.039 0.033 0.040 0.047 0.050 0.050
60 0.063 0.069 0.074 0.090 0.137 0.116
61 0.044 0.058 0.066 0.083 0.131 0.113
62 0.084 0.107 0.121 0.153 0.238 0.205
63 0.173 0.166 0.165 0.191 0.283 0.235
64 0.120 0.145 0.164 0.147 0.160 0.172
65 0.138 0.160 0.214 0.216 0.237 0.283
66 0.198 0.228 0.249 0.216 0.228 0.239
67 0.207 0.242 0.230 0.233 0.233 0.233
68 0.201 0.234 0.225 0.231 0.231 0.231
69 0.152 0.173 0.164 0.166 0.166 0.166
70 0.200 0.200 0.200 0.200 0.200 0.200
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-14
Service Retirement
Public Agency Miscellaneous 2% at 55
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.014 0.014 0.017 0.021 0.023 0.024
51 0.013 0.017 0.017 0.018 0.018 0.019
52 0.013 0.018 0.018 0.020 0.020 0.021
53 0.013 0.019 0.021 0.024 0.025 0.026
54 0.017 0.025 0.028 0.032 0.033 0.035
55 0.045 0.042 0.053 0.086 0.098 0.123
56 0.018 0.036 0.056 0.086 0.102 0.119
57 0.041 0.046 0.056 0.076 0.094 0.120
58 0.052 0.044 0.048 0.074 0.106 0.123
59 0.043 0.058 0.073 0.092 0.105 0.126
60 0.059 0.064 0.083 0.115 0.154 0.170
61 0.087 0.074 0.087 0.107 0.147 0.168
62 0.115 0.123 0.151 0.180 0.227 0.237
63 0.116 0.127 0.164 0.202 0.252 0.261
64 0.084 0.138 0.153 0.190 0.227 0.228
65 0.167 0.187 0.210 0.262 0.288 0.291
66 0.187 0.258 0.280 0.308 0.318 0.319
67 0.195 0.235 0.244 0.277 0.269 0.280
68 0.228 0.248 0.250 0.241 0.245 0.245
69 0.188 0.201 0.209 0.219 0.231 0.231
70 0.229 0.229 0.229 0.229 0.229 0.229
Public Agency Miscellaneous 2.5% at 55
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.014 0.017 0.027 0.035 0.046 0.050
51 0.019 0.021 0.025 0.030 0.038 0.040
52 0.018 0.020 0.026 0.034 0.038 0.037
53 0.013 0.021 0.031 0.045 0.052 0.053
54 0.025 0.025 0.030 0.046 0.057 0.068
55 0.029 0.042 0.064 0.109 0.150 0.225
56 0.036 0.047 0.068 0.106 0.134 0.194
57 0.051 0.047 0.060 0.092 0.116 0.166
58 0.035 0.046 0.062 0.093 0.119 0.170
59 0.029 0.053 0.072 0.112 0.139 0.165
60 0.039 0.069 0.094 0.157 0.177 0.221
61 0.080 0.077 0.086 0.140 0.167 0.205
62 0.086 0.131 0.149 0.220 0.244 0.284
63 0.135 0.135 0.147 0.214 0.222 0.262
64 0.114 0.128 0.158 0.177 0.233 0.229
65 0.112 0.174 0.222 0.209 0.268 0.273
66 0.235 0.254 0.297 0.289 0.321 0.337
67 0.237 0.240 0.267 0.249 0.267 0.277
68 0.258 0.271 0.275 0.207 0.210 0.212
69 0.117 0.208 0.266 0.219 0.250 0.270
70 0.229 0.229 0.229 0.229 0.229 0.229
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-15
Service Retirement
Public Agency Miscellaneous 2.7% at 55
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.011 0.016 0.022 0.033 0.034 0.038
51 0.018 0.019 0.023 0.032 0.031 0.031
52 0.019 0.020 0.026 0.035 0.034 0.037
53 0.020 0.020 0.025 0.043 0.048 0.053
54 0.018 0.030 0.040 0.052 0.053 0.070
55 0.045 0.058 0.082 0.138 0.208 0.278
56 0.057 0.062 0.080 0.121 0.178 0.222
57 0.045 0.052 0.071 0.106 0.147 0.182
58 0.074 0.060 0.074 0.118 0.163 0.182
59 0.058 0.067 0.086 0.123 0.158 0.187
60 0.087 0.084 0.096 0.142 0.165 0.198
61 0.073 0.084 0.101 0.138 0.173 0.218
62 0.130 0.133 0.146 0.187 0.214 0.249
63 0.122 0.140 0.160 0.204 0.209 0.243
64 0.104 0.124 0.154 0.202 0.214 0.230
65 0.182 0.201 0.242 0.264 0.293 0.293
66 0.272 0.249 0.273 0.285 0.312 0.312
67 0.182 0.217 0.254 0.249 0.264 0.264
68 0.223 0.197 0.218 0.242 0.273 0.273
69 0.217 0.217 0.217 0.217 0.217 0.217
70 0.227 0.227 0.227 0.227 0.227 0.227
Public Agency Miscellaneous 3% at 60
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.015 0.020 0.025 0.039 0.040 0.044
51 0.041 0.034 0.032 0.041 0.036 0.037
52 0.024 0.020 0.022 0.039 0.040 0.041
53 0.018 0.024 0.032 0.047 0.048 0.057
54 0.033 0.033 0.035 0.051 0.049 0.052
55 0.137 0.043 0.051 0.065 0.076 0.108
56 0.173 0.038 0.054 0.075 0.085 0.117
57 0.019 0.035 0.059 0.088 0.111 0.134
58 0.011 0.040 0.070 0.105 0.133 0.162
59 0.194 0.056 0.064 0.081 0.113 0.163
60 0.081 0.085 0.133 0.215 0.280 0.333
61 0.080 0.090 0.134 0.170 0.223 0.292
62 0.137 0.153 0.201 0.250 0.278 0.288
63 0.128 0.140 0.183 0.227 0.251 0.260
64 0.174 0.147 0.173 0.224 0.239 0.264
65 0.152 0.201 0.262 0.299 0.323 0.323
66 0.272 0.273 0.317 0.355 0.380 0.380
67 0.218 0.237 0.268 0.274 0.284 0.284
68 0.200 0.228 0.269 0.285 0.299 0.299
69 0.250 0.250 0.250 0.250 0.250 0.250
70 0.245 0.245 0.245 0.245 0.245 0.245
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-16
Service Retirement
Public Agency Miscellaneous 2% at 62
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.000 0.000 0.000 0.000 0.000 0.000
51 0.000 0.000 0.000 0.000 0.000 0.000
52 0.005 0.008 0.012 0.015 0.019 0.031
53 0.007 0.011 0.014 0.018 0.021 0.032
54 0.007 0.011 0.015 0.019 0.023 0.034
55 0.010 0.019 0.028 0.036 0.061 0.096
56 0.014 0.026 0.038 0.050 0.075 0.108
57 0.018 0.029 0.039 0.050 0.074 0.107
58 0.023 0.035 0.048 0.060 0.073 0.099
59 0.025 0.038 0.051 0.065 0.092 0.128
60 0.031 0.051 0.071 0.091 0.111 0.138
61 0.038 0.058 0.079 0.100 0.121 0.167
62 0.044 0.074 0.104 0.134 0.164 0.214
63 0.077 0.105 0.134 0.163 0.192 0.237
64 0.072 0.101 0.129 0.158 0.187 0.242
65 0.108 0.141 0.173 0.206 0.239 0.300
66 0.132 0.172 0.212 0.252 0.292 0.366
67 0.132 0.172 0.212 0.252 0.292 0.366
68 0.120 0.156 0.193 0.229 0.265 0.333
69 0.120 0.156 0.193 0.229 0.265 0.333
70 0.120 0.156 0.193 0.229 0.265 0.333
Service Retirement
Public Agency Fire Half Pay at 55 and 2% at 55
Age Rate
Age Rate
50 0.016 56 0.111
51 0.000 57 0.000
52 0.034 58 0.095
53 0.020 59 0.044
54 0.041 60 1.000
55 0.075
Public Agency Police Half Pay at 55 and 2% at 55
Age Rate
Age Rate
50 0.026 56 0.069
51 0.000 57 0.051
52 0.016 58 0.072
53 0.027 59 0.070
54 0.010 60 0.300
55 0.167
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-17
Service Retirement
Public Agency Police 2% at 50
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.018 0.077 0.056 0.046 0.043 0.046
51 0.022 0.087 0.060 0.048 0.044 0.047
52 0.020 0.102 0.081 0.071 0.069 0.075
53 0.016 0.072 0.053 0.045 0.042 0.046
54 0.006 0.071 0.071 0.069 0.072 0.080
55 0.009 0.040 0.099 0.157 0.186 0.186
56 0.020 0.051 0.108 0.165 0.194 0.194
57 0.036 0.072 0.106 0.139 0.156 0.156
58 0.001 0.046 0.089 0.130 0.152 0.152
59 0.066 0.094 0.119 0.143 0.155 0.155
60 0.177 0.177 0.177 0.177 0.177 0.177
61 0.134 0.134 0.134 0.134 0.134 0.134
62 0.184 0.184 0.184 0.184 0.184 0.184
63 0.250 0.250 0.250 0.250 0.250 0.250
64 0.177 0.177 0.177 0.177 0.177 0.177
65 1.000 1.000 1.000 1.000 1.000 1.000
• These rates also apply to County Peace officers, Local Prosecutors, Local Sheriff, School Police,
and Other Safety.
Service Retirement
Public Agency Fire 2% at 50
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.054 0.054 0.056 0.080 0.064 0.066
51 0.020 0.020 0.021 0.030 0.024 0.024
52 0.037 0.037 0.038 0.054 0.043 0.045
53 0.051 0.051 0.053 0.076 0.061 0.063
54 0.082 0.082 0.085 0.121 0.097 0.100
55 0.139 0.139 0.139 0.139 0.139 0.139
56 0.129 0.129 0.129 0.129 0.129 0.129
57 0.085 0.085 0.085 0.085 0.085 0.085
58 0.119 0.119 0.119 0.119 0.119 0.119
59 0.167 0.167 0.167 0.167 0.167 0.167
60 0.152 0.152 0.152 0.152 0.152 0.152
61 0.179 0.179 0.179 0.179 0.179 0.179
62 0.179 0.179 0.179 0.179 0.179 0.179
63 0.179 0.179 0.179 0.179 0.179 0.179
64 0.179 0.179 0.179 0.179 0.179 0.179
65 1.000 1.000 1.000 1.000 1.000 1.000
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-18
Service Retirement
Public Agency Police 3% at 55
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.019 0.053 0.045 0.054 0.057 0.061
51 0.002 0.017 0.028 0.044 0.053 0.060
52 0.002 0.031 0.037 0.051 0.059 0.066
53 0.026 0.049 0.049 0.080 0.099 0.114
54 0.019 0.034 0.047 0.091 0.121 0.142
55 0.006 0.115 0.141 0.199 0.231 0.259
56 0.017 0.188 0.121 0.173 0.199 0.199
57 0.008 0.137 0.093 0.136 0.157 0.157
58 0.017 0.126 0.105 0.164 0.194 0.194
59 0.026 0.146 0.110 0.167 0.195 0.195
60 0.155 0.155 0.155 0.155 0.155 0.155
61 0.210 0.210 0.210 0.210 0.210 0.210
62 0.262 0.262 0.262 0.262 0.262 0.262
63 0.172 0.172 0.172 0.172 0.172 0.172
64 0.227 0.227 0.227 0.227 0.227 0.227
65 1.000 1.000 1.000 1.000 1.000 1.000
• These rates also apply to County Peace officers, Local Prosecutors, Local Sheriff, School
Police, and Other Safety.
Service Retirement
Public Agency Fire 3% at 55
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.003 0.006 0.013 0.019 0.025 0.028
51 0.004 0.008 0.017 0.026 0.034 0.038
52 0.005 0.011 0.022 0.033 0.044 0.049
53 0.005 0.034 0.024 0.038 0.069 0.138
54 0.007 0.047 0.032 0.051 0.094 0.187
55 0.010 0.067 0.046 0.073 0.134 0.266
56 0.010 0.063 0.044 0.069 0.127 0.253
57 0.135 0.100 0.148 0.196 0.220 0.220
58 0.083 0.062 0.091 0.120 0.135 0.135
59 0.137 0.053 0.084 0.146 0.177 0.177
60 0.162 0.063 0.099 0.172 0.208 0.208
61 0.598 0.231 0.231 0.231 0.231 0.231
62 0.621 0.240 0.240 0.240 0.240 0.240
63 0.236 0.236 0.236 0.236 0.236 0.236
64 0.236 0.236 0.236 0.236 0.236 0.236
65 1.000 1.000 1.000 1.000 1.000 1.000
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-19
Service Retirement
Public Agency Police 3% at 50
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.124 0.103 0.113 0.143 0.244 0.376
51 0.060 0.081 0.087 0.125 0.207 0.294
52 0.016 0.055 0.111 0.148 0.192 0.235
53 0.072 0.074 0.098 0.142 0.189 0.237
54 0.018 0.049 0.105 0.123 0.187 0.271
55 0.069 0.074 0.081 0.113 0.209 0.305
56 0.064 0.108 0.113 0.125 0.190 0.288
57 0.056 0.109 0.160 0.182 0.210 0.210
58 0.108 0.129 0.173 0.189 0.214 0.214
59 0.093 0.144 0.204 0.229 0.262 0.262
60 0.343 0.180 0.159 0.188 0.247 0.247
61 0.221 0.221 0.221 0.221 0.221 0.221
62 0.213 0.213 0.213 0.213 0.213 0.213
63 0.233 0.233 0.233 0.233 0.233 0.233
64 0.234 0.234 0.234 0.234 0.234 0.234
65 1.000 1.000 1.000 1.000 1.000 1.000
• These rates also apply to County Peace officers, Local Prosecutors, Local Sheriff, School
Police, and Other Safety.
Service Retirement
Public Agency Fire 3% at 50
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.095 0.048 0.053 0.093 0.134 0.175
51 0.016 0.032 0.053 0.085 0.117 0.149
52 0.013 0.032 0.054 0.087 0.120 0.154
53 0.085 0.044 0.049 0.089 0.129 0.170
54 0.038 0.065 0.074 0.105 0.136 0.167
55 0.042 0.043 0.049 0.085 0.132 0.215
56 0.133 0.103 0.075 0.113 0.151 0.209
57 0.062 0.048 0.060 0.124 0.172 0.213
58 0.124 0.097 0.092 0.153 0.194 0.227
59 0.092 0.071 0.078 0.144 0.192 0.233
60 0.056 0.044 0.061 0.131 0.186 0.233
61 0.282 0.219 0.158 0.198 0.233 0.260
62 0.292 0.227 0.164 0.205 0.241 0.269
63 0.196 0.196 0.196 0.196 0.196 0.196
64 0.197 0.197 0.197 0.197 0.197 0.197
65 1.000 1.000 1.000 1.000 1.000 1.000
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-20
Service Retirement
Public Agency Police 2% at 57
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.040 0.040 0.040 0.040 0.040 0.080
51 0.028 0.028 0.028 0.028 0.040 0.066
52 0.028 0.028 0.028 0.028 0.043 0.061
53 0.028 0.028 0.028 0.028 0.057 0.086
54 0.028 0.028 0.028 0.032 0.069 0.110
55 0.050 0.050 0.050 0.067 0.099 0.179
56 0.046 0.046 0.046 0.062 0.090 0.160
57 0.054 0.054 0.054 0.072 0.106 0.191
58 0.060 0.060 0.060 0.066 0.103 0.171
59 0.060 0.060 0.060 0.069 0.105 0.171
60 0.113 0.113 0.113 0.113 0.113 0.171
61 0.108 0.108 0.108 0.108 0.108 0.128
62 0.113 0.113 0.113 0.113 0.113 0.159
63 0.113 0.113 0.113 0.113 0.113 0.159
64 0.113 0.113 0.113 0.113 0.113 0.239
65 1.000 1.000 1.000 1.000 1.000 1.000
• These rates also apply to County Peace officers, Local Prosecutors, Local Sheriff, School
Police, and Other Safety.
Service Retirement
Public Agency Fire 2% at 57
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.005 0.005 0.005 0.005 0.008 0.012
51 0.006 0.006 0.006 0.006 0.009 0.013
52 0.012 0.012 0.012 0.012 0.019 0.028
53 0.033 0.033 0.033 0.033 0.050 0.075
54 0.045 0.045 0.045 0.045 0.069 0.103
55 0.061 0.061 0.061 0.061 0.094 0.140
56 0.055 0.055 0.055 0.055 0.084 0.126
57 0.081 0.081 0.081 0.081 0.125 0.187
58 0.059 0.059 0.059 0.059 0.091 0.137
59 0.055 0.055 0.055 0.055 0.084 0.126
60 0.085 0.085 0.085 0.085 0.131 0.196
61 0.085 0.085 0.085 0.085 0.131 0.196
62 0.085 0.085 0.085 0.085 0.131 0.196
63 0.085 0.085 0.085 0.085 0.131 0.196
64 0.085 0.085 0.085 0.085 0.131 0.196
65 1.000 1.000 1.000 1.000 1.000 1.000
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-21
Service Retirement
Public Agency Police 2.5% at 57
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.050 0.050 0.050 0.050 0.050 0.100
51 0.038 0.038 0.038 0.038 0.055 0.089
52 0.038 0.038 0.038 0.038 0.058 0.082
53 0.036 0.036 0.036 0.036 0.073 0.111
54 0.036 0.036 0.036 0.041 0.088 0.142
55 0.061 0.061 0.061 0.082 0.120 0.217
56 0.056 0.056 0.056 0.075 0.110 0.194
57 0.060 0.060 0.060 0.080 0.118 0.213
58 0.072 0.072 0.072 0.079 0.124 0.205
59 0.072 0.072 0.072 0.083 0.126 0.205
60 0.135 0.135 0.135 0.135 0.135 0.205
61 0.130 0.130 0.130 0.130 0.130 0.153
62 0.135 0.135 0.135 0.135 0.135 0.191
63 0.135 0.135 0.135 0.135 0.135 0.191
64 0.135 0.135 0.135 0.135 0.135 0.287
65 1.000 1.000 1.000 1.000 1.000 1.000
• These rates also apply to County Peace officers, Local Prosecutors, Local Sheriff, School
Police, and Other Safety.
Service Retirement
Public Agency Fire 2.5% at 57
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.007 0.007 0.007 0.007 0.010 0.015
51 0.008 0.008 0.008 0.008 0.012 0.018
52 0.016 0.016 0.016 0.016 0.025 0.038
53 0.042 0.042 0.042 0.042 0.064 0.096
54 0.057 0.057 0.057 0.057 0.088 0.132
55 0.074 0.074 0.074 0.074 0.114 0.170
56 0.066 0.066 0.066 0.066 0.102 0.153
57 0.090 0.090 0.090 0.090 0.139 0.208
58 0.071 0.071 0.071 0.071 0.110 0.164
59 0.066 0.066 0.066 0.066 0.101 0.151
60 0.102 0.102 0.102 0.102 0.157 0.235
61 0.102 0.102 0.102 0.102 0.157 0.236
62 0.102 0.102 0.102 0.102 0.157 0.236
63 0.102 0.102 0.102 0.102 0.157 0.236
64 0.102 0.102 0.102 0.102 0.157 0.236
65 1.000 1.000 1.000 1.000 1.000 1.000
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-22
Service Retirement
Public Agency Police 2.7% at 57
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.050 0.050 0.050 0.050 0.050 0.100
51 0.040 0.040 0.040 0.040 0.058 0.094
52 0.038 0.038 0.038 0.038 0.058 0.083
53 0.038 0.038 0.038 0.038 0.077 0.117
54 0.038 0.038 0.038 0.044 0.093 0.150
55 0.068 0.068 0.068 0.091 0.134 0.242
56 0.063 0.063 0.063 0.084 0.123 0.217
57 0.060 0.060 0.060 0.080 0.118 0.213
58 0.080 0.080 0.080 0.088 0.138 0.228
59 0.080 0.080 0.080 0.092 0.140 0.228
60 0.150 0.150 0.150 0.150 0.150 0.228
61 0.144 0.144 0.144 0.144 0.144 0.170
62 0.150 0.150 0.150 0.150 0.150 0.213
63 0.150 0.150 0.150 0.150 0.150 0.213
64 0.150 0.150 0.150 0.150 0.150 0.319
65 1.000 1.000 1.000 1.000 1.000 1.000
• These rates also apply to County Peace officers, Local Prosecutors, Local Sheriff, School
Police, and Other Safety.
Service Retirement
Public Agency Fire 2.7% at 57
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.007 0.007 0.007 0.007 0.010 0.015
51 0.008 0.008 0.008 0.008 0.013 0.019
52 0.016 0.016 0.016 0.016 0.025 0.038
53 0.044 0.044 0.044 0.044 0.068 0.102
54 0.061 0.061 0.061 0.061 0.093 0.140
55 0.083 0.083 0.083 0.083 0.127 0.190
56 0.074 0.074 0.074 0.074 0.114 0.171
57 0.090 0.090 0.090 0.090 0.139 0.208
58 0.079 0.079 0.079 0.079 0.122 0.182
59 0.073 0.073 0.073 0.073 0.112 0.168
60 0.114 0.114 0.114 0.114 0.175 0.262
61 0.114 0.114 0.114 0.114 0.175 0.262
62 0.114 0.114 0.114 0.114 0.175 0.262
63 0.114 0.114 0.114 0.114 0.175 0.262
64 0.114 0.114 0.114 0.114 0.175 0.262
65 1.000 1.000 1.000 1.000 1.000 1.000
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-23
Service Retirement
Schools 2% at 55
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.003 0.004 0.006 0.007 0.010 0.010
51 0.004 0.005 0.007 0.008 0.011 0.011
52 0.005 0.007 0.008 0.009 0.012 0.012
53 0.007 0.008 0.010 0.012 0.015 0.015
54 0.006 0.009 0.012 0.015 0.020 0.021
55 0.011 0.023 0.034 0.057 0.070 0.090
56 0.012 0.027 0.036 0.056 0.073 0.095
57 0.016 0.027 0.036 0.055 0.068 0.087
58 0.019 0.030 0.040 0.062 0.078 0.103
59 0.023 0.034 0.046 0.070 0.085 0.109
60 0.022 0.043 0.062 0.095 0.113 0.141
61 0.030 0.051 0.071 0.103 0.124 0.154
62 0.065 0.098 0.128 0.188 0.216 0.248
63 0.075 0.112 0.144 0.197 0.222 0.268
64 0.091 0.116 0.138 0.180 0.196 0.231
65 0.163 0.164 0.197 0.232 0.250 0.271
66 0.208 0.204 0.243 0.282 0.301 0.315
67 0.189 0.185 0.221 0.257 0.274 0.287
68 0.127 0.158 0.200 0.227 0.241 0.244
69 0.168 0.162 0.189 0.217 0.229 0.238
70 0.191 0.190 0.237 0.250 0.246 0.254
Schools 2% at 62
Duration of Service
Age 5 Years 10 Years 15 Years 20 Years 25 Years 30 Years
50 0.000 0.000 0.000 0.000 0.000 0.000
51 0.000 0.000 0.000 0.000 0.000 0.000
52 0.004 0.007 0.010 0.011 0.013 0.015
53 0.004 0.008 0.010 0.013 0.014 0.016
54 0.005 0.011 0.015 0.018 0.020 0.022
55 0.014 0.027 0.038 0.045 0.050 0.056
56 0.013 0.026 0.037 0.043 0.048 0.055
57 0.013 0.027 0.038 0.045 0.050 0.055
58 0.017 0.034 0.047 0.056 0.062 0.069
59 0.019 0.037 0.052 0.062 0.068 0.076
60 0.026 0.053 0.074 0.087 0.097 0.108
61 0.030 0.058 0.081 0.095 0.106 0.119
62 0.053 0.105 0.147 0.174 0.194 0.217
63 0.054 0.107 0.151 0.178 0.198 0.222
64 0.053 0.105 0.147 0.174 0.194 0.216
65 0.072 0.142 0.199 0.235 0.262 0.293
66 0.077 0.152 0.213 0.252 0.281 0.314
67 0.070 0.139 0.194 0.229 0.255 0.286
68 0.063 0.124 0.173 0.205 0.228 0.255
69 0.066 0.130 0.183 0.216 0.241 0.270
70 0.071 0.140 0.196 0.231 0.258 0.289
CalPERS Actuarial Valuation – June 30, 2022 Appendix A
Actuarial Methods and Assumptions
A-24
Miscellaneous
Internal Revenue Code Section 415
The limitations on benefits imposed by Internal Revenue Code Section 415 are taken into account in this
valuation. Each year the impact of any changes in this limitation since the prior valuation is included and
amortized as part of the actuarial gain or loss base. This results in lower contributions for those employers
contributing to the Replacement Benefit Fund and protects CalPERS from prefunding expected benefits in
excess of limits imposed by federal tax law. The Section 415(b) dollar limit for the 2022 calendar year is
$245,000.
Internal Revenue Code Section 401(a)(17)
The limitations on compensation imposed by Internal Revenue Code Section 401(a)(17) are taken into
account in this valuation. Each year, the impact of any changes in the compensation limitation since the prior
valuation is included and amortized as part of the actuarial gain or loss base. The compensation limit for
classic members for the 2022 calendar year is $305,000.
Appendix B
Principal Plan Provisions
CalPERS Actuarial Valuation – June 30, 2022 Appendix B
Safety Plan of the City of Carlsbad
Principal Plan Provisions
B-1
The following is a description of the principal plan provisions used in calculating costs and liabilities. We have indicated
whether a plan provision is standard or optional. Standard benefits are applicable to all members while optional benefits
vary among employers. Optional benefits that apply to a single period of time, such as Golden Handshakes, have not
been included. Many of the statements in this summary are general in nature, and are intended to provide an easily understood summary of the Public Em ployees’ Retirement Law and the California Public Employees’ Pension Reform
Act of 2013. The law itself governs in all situations.
Service Retirement
Eligibility
A classic CalPERS member or PEPRA Safety member becomes eligible for Service Retirement upon attainment of
age 50 with at least 5 years of credited service (total service across all CalPERS employers, and with certain other
retirement systems with which CalPERS has reciprocity agreements). For employees hired into a plan with the 1.5%
at age 65 formula, eligibility for service retirement is age 55 with at least 5 years of service. PEPRA Miscellaneous
members become eligible for service retirement upon attainment of age 52 with at least 5 years of service.
Benefit
The service retirement benefit is a monthly allowance equal to the product of the benefit factor, years of service, and
final compensation.
· The benefit factor depends on the benefit formula specified in the agency’s contract. The table below shows the
factors for each of the available formulas. Factors vary by the member’s age at retirement. Listed are the factors
for retirement at whole year ages:
Miscellaneous Plan Formulas
Retirement
Age 1.5% at 65 2% at 60 2% at 55 2.5% at 55 2.7% at 55 3% at 60 PEPRA
2% at 62
50 0.5000% 1.092% 1.426% 2.000% 2.000% 2.000% N/A
51 0.5667% 1.156% 1.522% 2.100% 2.140% 2.100% N/A
52 0.6334% 1.224% 1.628% 2.200% 2.280% 2.200% 1.000%
53 0.7000% 1.296% 1.742% 2.300% 2.420% 2.300% 1.100%
54 0.7667% 1.376% 1.866% 2.400% 2.560% 2.400% 1.200%
55 0.8334% 1.460% 2.000% 2.500% 2.700% 2.500% 1.300%
56 0.9000% 1.552% 2.052% 2.500% 2.700% 2.600% 1.400%
57 0.9667% 1.650% 2.104% 2.500% 2.700% 2.700% 1.500%
58 1.0334% 1.758% 2.156% 2.500% 2.700% 2.800% 1.600%
59 1.1000% 1.874% 2.210% 2.500% 2.700% 2.900% 1.700%
60 1.1667% 2.000% 2.262% 2.500% 2.700% 3.000% 1.800%
61 1.2334% 2.134% 2.314% 2.500% 2.700% 3.000% 1.900%
62 1.3000% 2.272% 2.366% 2.500% 2.700% 3.000% 2.000%
63 1.3667% 2.418% 2.418% 2.500% 2.700% 3.000% 2.100%
64 1.4334% 2.418% 2.418% 2.500% 2.700% 3.000% 2.200%
65 1.5000% 2.418% 2.418% 2.500% 2.700% 3.000% 2.300%
66 1.5000% 2.418% 2.418% 2.500% 2.700% 3.000% 2.400%
67 & up 1.5000% 2.418% 2.418% 2.500% 2.700% 3.000% 2.500%
CalPERS Actuarial Valuation – June 30, 2022 Appendix B
Safety Plan of the City of Carlsbad
Principal Plan Provisions
B-2
Safety Plan Formulas
Retirement Age Half Pay at 55* 2% at 55 2% at 50 3% at 55 3% at 50
50 1.783% 1.426% 2.000% 2.400% 3.000%
51 1.903% 1.522% 2.140% 2.520% 3.000%
52 2.035% 1.628% 2.280% 2.640% 3.000%
53 2.178% 1.742% 2.420% 2.760% 3.000%
54 2.333% 1.866% 2.560% 2.880% 3.000%
55 & Up 2.500% 2.000% 2.700% 3.000% 3.000%
* For this formula, the benefit factor also varies by entry age. The factors shown are for members with an entry age of
35 or greater. If entry age is less than 35, then the age 55 benefit factor is 50% divided by the difference between age
55 and entry age. The benefit factor for ages prior to age 55 is the same proportion of the age 55 benefit factor as in
the above table.
PEPRA Safety Plan Formulas
Retirement Age 2% at 57 2.5% at 57 2.7% at 57
50 1.426% 2.000% 2.000%
51 1.508% 2.071% 2.100%
52 1.590% 2.143% 2.200%
53 1.672% 2.214% 2.300%
54 1.754% 2.286% 2.400%
55 1.836% 2.357% 2.500%
56 1.918% 2.429% 2.600%
57 & Up 2.000% 2.500% 2.700%
• The years of service is the amount credited by CalPERS to a member while he or she is employed in this group
(or for other periods that are recognized under the employer’s contract with CalPERS). For a member who has
earned service with multiple CalPERS employers, the benefit from each employer is calculated separately
according to each employer’s contract, and then added together for the total allowance. An agency may contract
for an optional benefit where any unused sick leave accumulated at the time of retirement will be co nverted to
credited service at a rate of 0.004 years of service for each day of sick leave.
• The final compensation is the monthly average of the member’s highest 36 or 12 consecutive months’ full-time
equivalent monthly pay (no matter which CalPERS employer paid this compensation). The standard benefit is 36
months. Employers had the option of providing a final compensation equal to the highest 12 consecutive months
for classic plans only. Final compensation must be defined by the highest 36 consecutive months’ pay under the
1.5% at 65 formula. PEPRA members have a cap on the annual salary that can be used to calculate final
compensation for all new members based on the Social Security contribution and benefit base. For employees
that participate in Social Security this cap is $134,974 for 2022 and for those employees that do not participate in
Social Security the cap for 2022 is $161,969. Adjustments to the caps are permitted annually based on changes to the CPI for all urban consumers.
• PEPRA benefit formulas have no Social Security offsets and Social Security coverage is optional. For Classic
benefit formulas, employees must be covered by Social Security with the 1.5% at 65 form ula. Social Security is
optional for all other Classic benefit formulas. For employees covered by Social Security, the modified formula is
the standard benefit. Under this type of formula, the final compensation is offset by $133.33 (or by one third if the
final compensation is less than $400). Employers may contract for the full benefit with Social Security that will
eliminate the offset applicable to the final compensation. For employees not covered by Social Security, the full
CalPERS Actuarial Valuation – June 30, 2022 Appendix B
Safety Plan of the City of Carlsbad
Principal Plan Provisions
B-3
benefit is paid with no offsets. Auxiliary organizations of the CSUC system may elect reduced contribution rates, in which case the offset is $317 if members are not covered by Social Security or $513 if members are covered by
Social Security.
• The Miscellaneous and PEPRA Safety service retirement benefit is not capped. The Classic Safety service retirement benefit is capped at 90% of final compensation.
Vested Deferred Retirement
Eligibility for Deferred Status
A CalPERS member becomes eligible for a deferred vested retirement benefit when he or she leaves employment,
keeps his or her contribution account balance on deposit with CalPERS, and has earned at least 5 years of credited
service (total service across all CalPERS employers, and with certain other retirement systems with which CalPERS
has reciprocity agreements).
Eligibility to Start Receiving Benefits
The CalPERS classic members and PEPRA Safety members become eligible to receive the deferred retirement benefit
upon satisfying the eligibility requirements for deferred status and upon attainment of age 50 (55 for employees hired
into a 1.5% at 65 plan). PEPRA Miscellaneous members become eligible to receive the deferred retirement benefit
upon satisfying the eligibility requirements for deferred status and upon attainment of age 52.
Benefit
The vested deferred retirement benefit is the same as the service retirement benefit, where the benefit factor is based
on the member’s age at allowance commencement. For members who have earned service with multiple CalPERS employers, the benefit from each employer is calculated separately according to each employer’s contract, and then
added together for the total allowance.
Non-Industrial (Non-Job Related) Disability Retirement
Eligibility
A CalPERS member is eligible for Non-Industrial Disability Retirement if he or she becomes disabled and has at least
5 years of credited service (total service across all CalPERS employers, and with certain other retirement systems with
which CalPERS has reciprocity agreements). There is no special age requirement. Disabled means the member is
unable to perform his or her job because of an illness or injury, which is expected to be permanent or to last indefinitely.
The illness or injury does not have to be job related. A CalPERS member must be actively employed by any CalPERS
employer at the time of disability in order to be eligible for this benefit.
Standard Benefit
The standard Non-Industrial Disability Retirement benefit is a monthly allowance equal to 1.8% of final compensation,
multiplied by service, which is determined as follows:
• Service is CalPERS credited service, for members with less than 10 years of service or greater than 18.518 years
of service; or
• Service is CalPERS credited service plus the additional number of years that the member would have worked until
age 60, for members with at least 10 years but not more than 18.518 years of service. The maximum benefit in
this case is 33⅓% of final compensation.
CalPERS Actuarial Valuation – June 30, 2022 Appendix B
Safety Plan of the City of Carlsbad
Principal Plan Provisions
B-4
Improved Benefit
Employers have the option of providing the improved Non-Industrial Disability Retirement benefit. This benefit provides
a monthly allowance equal to 30% of final compensation for the first 5 years of service, plus 1% for each additional year of service to a maximum of 50% of final compensation.
Members who are eligible for a larger service retirement benefit may choose to receive that benefit in lieu of a disability
benefit. Members eligible to retire, and who have attained the normal retirement age determined by their service
retirement benefit formula, will receive the same dollar amount for disability retirement as that payable for service
retirement. For members who have earned service with multiple CalPERS employers, the benefit attributed to each
employer is the total disability allowance multiplied by the ratio of service with a particular employer to the total CalPERS
service.
Industrial (Job Related) Disability Retirement
This is a standard benefit for Safety members except those described in Section 20423.6. For excluded Safety
members and all Miscellaneous members, employers have the option of providing this benefit. An employer may choose to provide the increased benefit option or the improved benefit option.
Eligibility
An employee is eligible for Industrial Disability Retirement if he or she becomes disabled while working, where disabled means the member is unable to perform the duties of the job because of a work-related illness or injury, which is
expected to be permanent or to last indefinitely. A CalPERS member who has left active employment within this group
is not eligible for this benefit, except to the extent described below.
Standard Benefit
The standard Industrial Disability Retirement benefit is a monthly allowance equal to 50% of final compensation.
Increased Benefit (75% of Final Compensation)
The increased Industrial Disability Retirement benefit is a monthly allowance equal to 75% of final compensation for
total disability.
Improved Benefit (50% to 90% of Final Compensation)
The improved Industrial Disability Retirement benefit is a monthly allowance equal to the Workman’s Co mpensation
Appeals Board permanent disability rate percentage (if 50% or greater, with a maximum of 90%) times the final
compensation.
For a CalPERS member not actively employed in this group who became disabled while employed by some other CalPERS employer, the benefit is a return of accumulated member contributions with respect to employment in this
group. With the standard or increased benefit, a member may also choose to receive the annuitization of the
accumulated member contributions.
If a member is eligible for service retirement and if the service retirement benefit is more than the industrial disability retirement benefit, the member may choose to receive the larger benefit.
CalPERS Actuarial Valuation – June 30, 2022 Appendix B
Safety Plan of the City of Carlsbad
Principal Plan Provisions
B-5
Post-Retirement Death Benefit
Standard Lump Sum Payment
Upon the death of a retiree, a one-time lump sum payment of $500 will be made to the retiree’s designated survivor(s),
or to the retiree’s estate. The lump sum payment amount increases to $2,000 for any death occurring on or after
July 1, 2023 due to SB 1168.
Optional Lump Sum Payment
In lieu of the standard lump sum death benefit, employers have the option of providing a lump sum death benefit of
$600, $3,000, $4,000 or $5,000.
Form of Payment for Retirement Allowance
Standard Form of Payment
Generally, the retirement allowance is paid to the retiree in the form of an annuity for as long as he or she is alive. The
retiree may choose to provide for a portion of his or her allowance to be paid to any designated beneficiary after the
retiree’s death. CalPERS provides for a variety of such benefit options, which the retiree pays for by taking a reduction
in his or her retirement allowance. Such reduction takes into account the amount to be provided to the beneficiary and
the probable duration of payments (based on the ages of the member and beneficiary) made subsequent to the
member’s death.
Improved Form of Payment (Post-Retirement Survivor Allowance)
Employers have the option to contract for the post-retirement survivor allowance.
For retirement allowances with respect to service subject to a modified Classic formula, 25% of the retirement allowance
will automatically be continued to certain statutory beneficiaries upon the death of the retiree, without a reduction in the
retiree’s allowance. For retirement allowances with respect to service subject to a PEPRA formula or a full or
supplemental Classic formula, 50% of the retirement allowance will automatically be continued to certain statutory
beneficiaries upon the death of the retiree, without a reduction in the retiree’s allowance. This additional benefit is
referred to as post-retirement survivor allowance (PRSA) or simply as survivor continuance.
In other words, 25% or 50% of the allowance, the continuance portion, is paid to the retiree for as long as he or she is
alive, and that same amount is continued to the retiree’s spouse (or if no eligible spouse, to unmarried child(ren) until
they attain age 18; or, if no eligible child(ren), to a qualifying dependent parent) for the rest of his or her lifetime. This
benefit will not be discontinued in the event the spouse remarries.
The remaining 75% or 50% of the retirement allowance, which may be referred to as the option portion of the benefit,
is paid to the retiree as an annuity for as long as he or she is alive. Or, the retiree may choose to provide for som e of
this option portion to be paid to any designated beneficiary after the retiree’s death. Benefit options applicable to the
option portion are the same as those offered with the standard form. The reduction is calculated in the same manner
but is applied only to the option portion.
CalPERS Actuarial Valuation – June 30, 2022 Appendix B
Safety Plan of the City of Carlsbad
Principal Plan Provisions
B-6
Pre-Retirement Death Benefits
Basic Death Benefit
This is a standard benefit.
Eligibility
An employee’s beneficiary (or estate) may receive the basic death benefit if the member dies while actively employed.
A CalPERS member must be actively employed with the CalPERS employer providing this benefit to be eligible for this
benefit. A member’s survivor who is eligible for any other pre-retirement death benefit may choose to receive that death
benefit instead of this basic death benefit.
Benefit
The basic death benefit is a lump sum in the amount of the member’s accumulated contributions, where interest is
credited annually at the greater of 6% or the prevailing discount rate through the date of death, plus a lump sum in the
amount of one month's salary for each completed year of current service, up to a maximum of six months' salary. For purposes of this benefit, one month's salary is defined as the member's average monthly full-time rate of compensation
during the 12 months preceding death.
1957 Survivor Benefit
This is a standard benefit.
Eligibility
An employee’s eligible survivor(s) may receive the 1957 Survivor benefit if the member dies while actively employed,
has attained at least age 50 for classic and PEPRA Safety members and age 52 for PEPRA Miscellaneous members,
and has at least 5 years of credited service (total service across all CalPERS employers and with certain other
retirement systems with which CalPERS has reciprocity agreements). A CalPERS member must be actively employed
with the CalPERS employer providing this benefit to be eligible for this benefit. An eligible survivor means the surviving
spouse to whom the member was married at least one year before death or, if there is no eligible spouse, to the
member's unmarried child(ren) under age 18. A member’s survivor who is eligible for any other pre-retirement death
benefit may choose to receive that death benefit instead of this 1957 Survivor benefit.
Benefit
The 1957 Survivor benefit is a monthly allowance equal to one-half of the unmodified service retirement benefit that the member would have been entitled to receive if the member had retired on the date of his or her death. If the benefit
is payable to the spouse, the benefit is discontinued upon the death of the spouse. If the benefit is payable to dependent
child(ren), the benefit will be discontinued upon death or attainment of age 18, unless the child(ren) is disabled. The
total amount paid will be at least equal to the basic death benefit.
CalPERS Actuarial Valuation – June 30, 2022 Appendix B
Safety Plan of the City of Carlsbad
Principal Plan Provisions
B-7
Optional Settlement 2 Death Benefit
This is an optional benefit.
Eligibility
An employee’s eligible survivor may receive the Optional Settlement 2 Death benefit if the member dies while actively
employed, has attained at least age 50 for classic and PEPRA Safety members and age 52 for PEPRA Miscellaneous
members, and has at least 5 years of credited service (total service across all CalPERS employers and with certain
other retirement systems with which CalPERS has reciprocity agreements). A CalPERS member who is no longer
actively employed with any CalPERS employer is not eligible for this benefit. An eligible survivor means the surviving
spouse to whom the member was married at least one year before death. A member’s survivor who is eligible for any
other pre-retirement death benefit may choose to receive that death benefit instead of this Optional Settlement 2 D eath
benefit.
Benefit
The Optional Settlement 2 Death benefit is a monthly allowance equal to the service retirement benefit that the member
would have received had the member retired on the date of his or her death and elected 100% to continue to the el igible
survivor after the member’s death. The allowance is payable as long as the surviving spouse lives, at which time it is
continued to any unmarried child(ren) under age 18, if applicable. The total amount paid will be at least equal to the
basic death benefit.
Special Death Benefit
This is a standard benefit for Safety members except those described in Section 20423.6. For excluded Safety
members and all Miscellaneous members, employers have the option of providing this benefit.
Eligibility
An employee’s eligible survivor(s) may receive the special death benefit if the member dies while actively employed
and the death is job-related. A CalPERS member who is no longer actively employed with any CalPERS employer is
not eligible for this benefit. An eligible survivor means the surviving spouse to whom the member was married prior to
the onset of the injury or illness that resulted in death. If there is no eligible spouse, an eligible survivor means the
member's unmarried child(ren) under age 22. An eligible survivor who chooses to receive this benefit will not receive
any other death benefit.
Benefit
The special death benefit is a monthly allowance equal to 50% of final compensation and will be increased whenever the compensation paid to active employees is increased but ceasing to increase when the member would have attained
age 50. The allowance is payable to the surviving spouse until death at which time the allowance is continued to any
unmarried child(ren) under age 22. There is a guarantee that the total amount paid will at least equal the basic death
benefit.
If the member’s death is the result of an accident or injury caused by external violence or physical force incurred in the
performance of the member’s duty, and there are eligible surviving child(ren) (eligible means unmarried child(ren) under
age 22) in addition to an eligible spouse, then an additional monthly allowance is paid equal to the following:
• if 1 eligible child: 12.5% of final compensation
• if 2 eligible children: 20.0% of final compensation
• if 3 or more eligible children: 25.0% of final compensation
CalPERS Actuarial Valuation – June 30, 2022 Appendix B
Safety Plan of the City of Carlsbad
Principal Plan Provisions
B-8
Alternate Death Benefit for Local Fire Members
This is an optional benefit available only to local fire members.
Eligibility
An employee’s eligible survivor(s) may receive the alternate death benefit in lieu of the basic death benefit or the 1957
Survivor benefit if the member dies while actively employed and has at least 20 years of total CalPERS service. A
CalPERS member who is no longer actively employed with any CalPERS employer is not eligible for this benefit. An
eligible survivor means the surviving spouse to whom the member was married prior to the onset of the injury or illness
that resulted in death. If there is no eligible spouse, an eligible survivor means the member's unmarried child(ren) under
age 18.
Benefit
The Alternate Death benefit is a monthly allowance equal to the service retirement benefit that the member would have
received had the member retired on the date of his or her death and elected Optional Settlement 2. (A retiree who
elects Optional Settlement 2 receives an allowance that has been reduced so that it will continue to be paid after his or
her death to a surviving beneficiary.) If the member has not yet attained age 50, the benefit is equal to that which would
be payable if the member had retired at age 50, based on service credited at the time of death. The allowance is
payable as long as the surviving spouse lives, at which time it is continued to any unmarried child(ren) under age 18, if
applicable. The total amount paid will be at least equal to the basic death benefit.
Cost-of-Living Adjustments (COLA)
Standard Benefit
Retirement and survivor allowances are adjusted each year in May for cost of living, beginning the second calendar
year after the year of retirement. The standard cost-of-living adjustment (COLA) is 2%. Annual adjustments are calculated by first determining the lesser of 1) 2% compounded from the end of the year of retirement or 2) actual rate
of price inflation. The resulting increase is divided by the total increase provided in prior years. For any given year, the
COLA adjustment may be less than 2% (when the rate of price inflation is low), may be greater than the rate of price
inflation (when the rate of price inflation is low after several years of high price inflation) or may even be greater than
2% (when price inflation is high after several years of low price inflation).
Improved Benefit
Employers have the option of providing a COLA of 3%, 4%, or 5%, determined in the same manner as described above
for the standard 2% COLA. An improved COLA is not available with the 1.5% at 65 formula.
Purchasing Power Protection Allowance (PPPA)
Retirement and survivor allowances are protected against price inflation by PPPA. PPPA benefits are cost-of-living
adjustments that are intended to maintain an individual’s allowance at 80% of the initial allowance at retirement adjusted for price inflation since retirement. The PPPA benefit will be coordinated with other cost-of-living adjustments provided
under the plan.
CalPERS Actuarial Valuation – June 30, 2022 Appendix B
Safety Plan of the City of Carlsbad
Principal Plan Provisions
B-9
Employee Contributions
Each employee contributes toward his or her retirement based upon the retirement formula. The standard employee
contribution is as described below.
• The percent contributed below the monthly compensation breakpoint is 0%.
• The monthly compensation breakpoint is $0 for full and supplemental formula members and $133.33 for
employees covered by the modified formula.
• The percent contributed above the monthly compensation breakpoint depends upon the benefit formula, as
shown in the table below.
Benefit Formula Percent Contributed above the
Breakpoint
Miscellaneous, 1.5% at 65 2%
Miscellaneous, 2% at 60 7%
Miscellaneous, 2% at 55 7% Miscellaneous, 2.5% at 55 8%
Miscellaneous, 2.7% at 55 8%
Miscellaneous, 3% at 60 8%
Miscellaneous, 2% at 62 50% of the Total Normal Cost
Miscellaneous, 1.5% at 65 50% of the Total Normal Cost
Safety, Half Pay at 55 Varies by entry age
Safety, 2% at 55 7%
Safety, 2% at 50 9%
Safety, 3% at 55 9%
Safety, 3% at 50 9%
Safety, 2% at 57 50% of the Total Normal Cost
Safety, 2.5% at 57 50% of the Total Normal Cost
Safety, 2.7% at 57 50% of the Total Normal Cost
The employer may choose to “pick-up” these contributions for classic members (Employer Paid Member Contributions
or EPMC). EPMC is prohibited for new PEPRA members.
An employer may also include Employee Cost Sharing in the contract, where employees agree to share the cost of the
employer contribution. These contributions are paid in addition to the member contribution.
Auxiliary organizations of the CSU system may elect reduced contribution rates, in which case the offset is $317 and
the contribution rate is 6% if members are not covered by Social Security. If members are covered by Social Security,
the offset is $513 and the contribution rate is 5%.
Refund of Employee Contributions
If the member’s service with the employer ends, and if the member does not satisfy the eligibility conditions for any of
the retirement benefits above, the member may elect to receive a refund of his or her employee contributions, which
are credited with 6% interest compounded annually.
CalPERS Actuarial Valuation – June 30, 2022 Appendix B
Safety Plan of the City of Carlsbad
Principal Plan Provisions
B-10
1959 Survivor Benefit
This is a pre-retirement death benefit available only to members not covered by Social Security. Any agency joining
CalPERS subsequent to 1993 is required to provide this benefit if the members are not covered by Social Security. The
benefit is optional for agencies joining CalPERS prior to 1994. Levels 1, 2, and 3 are now closed. Any new agency or
any agency wishing to add this benefit or increase the current level may only choose the 4 th or Indexed Level.
This benefit is not included in the results presented in this valuation. More information on this benefit is available on the
CalPERS website.
Appendix C
Participant Data
• Summary of Valuation Data
• Active Members
• Transferred and Separated Members
• Retired Members and Beneficiaries
CalPERS Actuarial Valuation – June 30, 2022 Appendix C
Safety Plan of the City of Carlsbad
Participant Data
C-1
Summary of Valuation Data
June 30, 2021 June 30, 2022
1. Active Members
a) Counts 212 220
b) Average Attained Age
38.93 38.50
c) Average Entry Age to Rate Plan 29.88 29.76
d) Average Years of Credited Service 9.24 8.92
e) Average Annual Covered Pay $121,859 $125,433
f) Annual Covered Payroll 25,834,015 27,595,346
g) Projected Annual Payroll for Contribution Year 28,065,401 29,978,865
h) Present Value of Future Payroll 284,136,526 310,593,055
2. Transferred Members
a) Counts 57 61
b) Average Attained Age 42.44 41.15
c) Average Years of Credited Service 3.05 3.05
d) Average Annual Covered Pay $111,368 $105,368
3. Separated Members
a) Counts 47 51
b) Average Attained Age 42.49 42.56
c) Average Years of Credited Service 2.30 2.37
d) Average Annual Covered Pay $72,760 $78,417
4. Retired Members and Beneficiaries
a) Counts 279 285
b) Average Attained Age 63.79 64.22
c) Average Annual Benefits $63,776 $66,537
d) Total Annual Benefits $17,793,375 $18,963,034
5. Active to Retired Ratio [(1a) / (4a)] 0.76 0.77
Counts of members included in the valuation are counts of the records processed by the valuation. Multiple records
may exist for those who have service in more than one valuation group. This does not result in double counting of
liabilities.
Average Annual Benefits represents benefit amounts payable by this plan only. Some members may have service with
another agency and would therefore have a larger total benefit than would be included as part of the average shown
here.
CalPERS Actuarial Valuation – June 30, 2022 Appendix C
Safety Plan of the City of Carlsbad
Participant Data
C-2
Active Members
Counts of members included in the valuation are counts of the records processed by the valuation. Multiple records may exist for those who have service in more than one valuation group. This does not result in double counting of
liabilities.
Distribution of Active Members by Age and Service
Years of Service at Valuation Date
Attained
Age 0-4 5-9 10-14 15-19 20-24 25+ Total
15-24 6 0 0 0 0 0 6
25-29 27 1 0 0 0 0 28
30-34 28 14 1 0 0 0 43
35-39 20 16 13 3 0 0 52
40-44 8 10 8 10 5 0 41
45-49 2 3 4 13 10 1 33
50-54 2 2 0 3 5 4 16
55-59 0 0 0 0 0 1 1
60-64 0 0 0 0 0 0 0
65 and Over 0 0 0 0 0 0 0
All Ages 93 46 26 29 20 6 220
Distribution of Average Annual Salaries by Age and Service
Years of Service at Valuation Date
Attained Age 0-4 5-9 10-14 15-19 20-24 25+ Average Salary
15-24 $90,242 $0 $0 $0 $0 $0 $90,242
25-29 99,443 111,600 0 0 0 0 99,877
30-34 110,309 119,794 139,454 0 0 0 114,075
35-39 112,456 124,379 129,013 155,773 0 0 122,763
40-44 111,310 122,920 134,379 147,199 155,465 0 132,781
45-49 116,760 140,531 134,577 148,519 158,248 250,772 150,225
50-54 120,569 150,078 0 148,939 139,625 163,744 146,326
55-59 0 0 0 0 0 225,824 225,824
60-64 0 0 0 0 0 0 0
65 and Over 0 0 0 0 0 0 0
Average $106,767 $124,559 $131,922 $148,857 $152,896 $188,595 $125,433
CalPERS Actuarial Valuation – June 30, 2022 Appendix C
Safety Plan of the City of Carlsbad
Participant Data
C-3
Transferred and Separated Members
Distribution of Transfers to Other CalPERS Plans by Age, Service, and average Salary
Years of Service at Valuation Date
Attained
Age 0-4 5-9 10-14 15-19 20-24 25+ Total
Average
Salary
15-24 0 0 0 0 0 0 0 $0
25-29 4 0 0 0 0 0 4 72,046
30-34 12 1 0 0 0 0 13 92,034
35-39 8 0 0 0 0 0 8 91,396
40-44 12 2 1 0 0 0 15 116,002
45-49 11 2 0 0 0 0 13 107,136
50-54 3 1 0 0 1 0 5 140,130
55-59 0 0 1 1 0 0 2 146,742
60-64 1 0 0 0 0 0 1 84,717
65 and Over 0 0 0 0 0 0 0 0
All Ages 51 6 2 1 1 0 61 $105,368
Distribution of Separated Participants with Funds on Deposit by Age, Service, and average Salary
Years of Service at Valuation Date
Attained Age 0-4 5-9 10-14 15-19 20-24 25+ Total
Average
Salary
15-24 0 0 0 0 0 0 0 $0
25-29 2 0 0 0 0 0 2 81,698
30-34 9 0 0 0 0 0 9 77,635
35-39 10 2 0 0 0 0 12 81,354
40-44 7 1 3 0 0 0 11 94,877
45-49 4 1 1 0 0 0 6 66,310
50-54 4 1 0 0 0 0 5 67,045
55-59 4 0 0 0 0 0 4 67,538
60-64 1 0 0 0 0 0 1 48,831
65 and Over 1 0 0 0 0 0 1 65,203
All Ages 42 5 4 0 0 0 51 $78,417
CalPERS Actuarial Valuation – June 30, 2022 Appendix C
Safety Plan of the City of Carlsbad
Participant Data
C-4
Retired Members and Beneficiaries
Distribution of Retirees and Beneficiaries by Age and Retirement Type*
Attained Age
Service
Retirement
Non-
Industrial
Disability
Industrial
Disability
Non-
Industrial
Death
Industrial
Death
Death After
Retirement Total
Under 30 0 0 0 0 0 0 0
30-34 0 0 0 0 0 0 0
35-39 0 0 1 0 0 0 1
40-44 0 0 5 0 0 0 5
45-49 0 0 11 0 0 0 11
50-54 19 0 14 0 0 0 33
55-59 40 0 18 0 0 1 59
60-64 37 1 13 0 0 1 52
65-69 24 0 11 0 0 2 37
70-74 28 0 15 0 1 4 48
75-79 14 0 9 0 1 2 26
80-84 3 0 0 0 0 1 4
85 and Over 1 0 2 0 0 6 9
All Ages 166 1 99 0 2 17 285
Distribution of Average Annual Disbursements to Retirees and Beneficiaries by Age and Retirement Type*
Attained
Age
Service
Retirement
Non-
Industrial
Disability
Industrial
Disability
Non-
Industrial
Death
Industrial
Death
Death After
Retirement Average
Under 30 $0 $0 $0 $0 $0 $0 $0
30-34 0 0 0 0 0 0 0
35-39 0 0 49,070 0 0 0 49,070
40-44 0 0 56,006 0 0 0 56,006
45-49 0 0 45,854 0 0 0 45,854
50-54 58,667 0 60,318 0 0 0 59,368
55-59 74,769 0 58,724 0 0 63,878 69,689
60-64 79,196 31,432 66,886 0 0 18,689 74,036
65-69 71,639 0 42,174 0 0 50,857 61,756
70-74 77,203 0 57,771 0 41,131 79,099 70,537
75-79 82,861 0 67,095 0 23,769 73,061 74,377
80-84 95,623 0 0 0 0 39,642 81,628
85 and Over 54,852 0 25,829 0 0 28,549 30,867
All Ages $74,810 $31,432 $56,470 $0 $32,450 $50,455 $66,537
CalPERS Actuarial Valuation – June 30, 2022 Appendix C
Safety Plan of the City of Carlsbad
Participant Data
C-5
Retired Members and Beneficiaries (continued)
Distribution of Retirees and Beneficiaries by Years Retired and Retirement Type*
Years
Retired
Service
Retirement
Non-
Industrial
Disability
Industrial
Disability
Non-
Industrial
Death
Industrial
Death
Death After
Retirement Total
Under 5 Yrs 47 0 23 0 0 8 78
5-9 45 0 14 0 0 2 61
10-14 32 0 14 0 0 0 46
15-19 31 0 20 0 0 3 54
20-24 6 0 5 0 0 2 13
25-29 5 1 7 0 0 1 14
30 and Over 0 0 16 0 2 1 19
All Years 166 1 99 0 2 17 285
Distribution of Average Annual Disbursements to Retirees and Beneficiaries by Years Retired and Retirement
Type*
Years
Retired
Service
Retirement
Non-
Industrial
Disability
Industrial
Disability
Non-
Industrial
Death
Industrial
Death
Death After
Retirement Average
Under 5 Yrs $69,822 $0 $62,368 $0 $0 $50,817 $65,675
5-9 73,405 0 72,021 0 0 56,535 72,534
10-14 71,428 0 67,162 0 0 0 70,130
15-19 94,294 0 64,272 0 0 38,427 80,071
20-24 54,531 0 47,873 0 0 62,329 53,170
25-29 59,522 31,432 33,606 0 0 49,575 43,847
30 and Over 0 0 27,963 0 32,450 48,610 29,522
All Years $74,810 $31,432 $56,470 $0 $32,450 $50,455 $66,537
* Counts of members do not include alternate payees receiving benefits while the member is still working. Therefore,
the total counts may not match information on C-1 of the report. Multiple records may exist for those who have service
in more than one coverage group. This does not result in double counting of liabilities.
Appendix D
Glossary
CalPERS Actuarial Valuation – June 30, 2022 Appendix D
Safety Plan of the City of Carlsbad
Glossary
D-1
Glossary
Accrued Liability (Actuarial Accrued Liability)
The Present Value of Benefits minus the present value of future Normal Cost or the Present Value of Benefits allocated to prior years. Different actuarial cost methods and different assumptions will lead to different measures
of Accrued Liability.
Actuarial Assumptions
Assumptions made about certain events that will affect pension costs. Assumptions generally can be broken down
into two categories: demographic and economic. Demographic assumptions include such things as mortality,
disability, and retirement rates. Economic assumptions include discount rate, wage inflation, and price inflation.
Actuarial Methods
Procedures employed by actuaries to achieve certain funding goals of a pension plan. Actuarial methods include
an actuarial cost method, an amortization policy, and an asset valuation method.
Actuarial Valuation
The determination as of a valuation date of the Normal Cost, Accrued Liability, and related actuarial present values
for a pension plan. These valuations are performed annually or when an employer is contemplating a change in
plan provisions.
Actuary
A business professional proficient in mathematics and statistics who measures and manages risk. A public
retirement system actuary in California performs actuarial valuations necessary to properly fund a pension plan and disclose its liabilities and must satisfy the Qualification Standards for Actuaries Issuing Statements of Actuarial
Opinion in the United States with regard to pensions.
Amortization Bases
Separate payment schedules for different portions of the Unfunded Accrued Liability (UAL). The total UAL of a rate plan can be segregated by cause. The impact of such individual causes on the UAL are quantified at the time of
their occurrence, resulting in new amortization bases. Each base is separately amortized and pa id for over a
specific period of time. Generally, in an actuarial valuation, the separate bases consist of changes in UAL due to
contract amendments, actuarial assumption changes, method changes, and/or gains and losses.
Amortization Period
The number of years required to pay off an Amortization Base.
Classic Member (under PEPRA)
A member who joined a public retirement system prior to January 1, 2013 and who is not defined as a new member
under PEPRA. (See definition of New Member below.)
Discount Rate
This is the rate used to discount the expected future benefit payments to the valuation date to determine the
Projected Value of Benefits. Different discount rates will produce different measures of the Projected Value of
Benefits. The discount rate for funding purposes is based on the assumed long-term rate of return on plan assets,
net of investment and administrative expenses. This rate is called the “actuarial interest rate” in Section 20014 of
the California Public Employees’ Retirement Law.
Entry Age The earliest age at which a plan member begins to accrue benefits under a defined benefit pension plan. In most
cases, this is the age of the member on their date of hire.
Entry Age Actuarial Cost Method
An actuarial cost method that allocates the cost of the projected benefits on an individual basis as a level percent of earnings for the individual between entry age and retirement age. This method yields a total normal cost rate,
expressed as a percentage of payroll, which is designed to remain level throughout the member’s career.
Fresh Start
A Fresh Start is when multiple amortization bases are combined into a single base and amortized over a new
Amortization Period.
CalPERS Actuarial Valuation – June 30, 2022 Appendix D
Safety Plan of the City of Carlsbad
Glossary
D-2
Glossary (continued)
Funded Ratio
Defined as the Market Value of Assets divided by the Accrued Liability. Different actuarial cost methods and different assumptions will lead to different measures of Funded Ratio. The Funded Ratio with the Accrued Liability
equal to the funding target is a measure of how well funded a rate plan is. A ratio greater than 100% means the
rate plan has more assets than the funding target and the employer need only contribute the Normal Cost. A ratio
less than 100% means assets are less than the funding target and contributions in addition to Normal Cost are
required.
Funded Status
Any comparison of a particular measure of plan assets to a particular measure of pension obligations. The methods
and assumptions used to calculate a funded status should be consistent with the purpose of the measurement.
Funding Target
The Accrued Liability measure upon which the funding requirements are based. The funding target is the Accrued
Liability under the Entry Age Actuarial Cost Method using the assumptions adopted by the board.
GASB 68
Statement No. 68 of the Governmental Accounting Standards Board. The accounting standard governing a state
or local governmental employer’s accounting and financial reporting for pensions.
New Member (under PEPRA)
A new member includes an individual who becomes a member of a public retirement system for the first time on or after January 1, 2013, and who was not a member of another public retirement system prior to that date, and
who is not subject to reciprocity with another public retirem ent system.
Normal Cost
The portion of the Present Value of Benefits allocated to the upcoming fiscal year for active employees. Different actuarial cost methods and different assumptions will lead to different measures of Normal Cost. The Normal Cost
under the Entry Age Actuarial Cost Method, using the assumptions adopted by the board, plus the required
amortization of the UAL, if any, make up the required contributions.
PEPRA
The California Public Employees’ Pension Reform Act of 2013.
Present Value of Benefits (PVB)
The total dollars needed as of the valuation date to fund all benefits earned in the past or expected to be earned
in the future for current members.
Traditional Unit Credit Actuarial Cost Method
An actuarial cost method that sets the Accrued Liability equal to the Present Value of Benefits assuming no future
pay increases or service accruals. The Traditional Unit Credit Cost Method is used to measure the accrued liability
on a termination basis.
Unfunded Accrued Liability (UAL)
The Accrued Liability minus the Market Value of Assets. If the UAL for a rate plan is positive, the employer is
required to make contributions in excess of the Normal Cost.