| | Background Information:
The District’s CalPERS and CalSTRS retirement costs are expected to rise from $3.8 million to $5.9 million by 2024-25. The PARS Trust Program will allow the District to set aside funds into an IRS approved Section 115 irrevocable trust to address this future cost increase. Pension assets in the PARS Trust Program will help address the District’s pension liability and can be accessed at any time to fund District pension plan costs. To date, over 100 public agencies have adopted the PARS Trust Program to prefund their pension costs.
Similarly, in the current budget for 2017-2018, the District has reported a $5.9 million OPEB liability. Beginning this year, the District will have to report this liability on its balance sheet. The PARS Trust Program will also allow the District to set aside funds into this irrevocable trust to address this liability. OPEB assets in the PARS Trust Program will lower the District’s OPEB liability and can be accessed at any time to fund District OPEB costs. To date, over 260 public agencies have adopted PARS OPEB trusts to prefund their OPEB obligations. The California School Boards Association (CSBA) co-sponsors the PARS Trust Program to prefund OPEB obligations.
U.S. Bank serves as trustee for the PARS Trust Program. The District can select either Vanguard or HighMark Capital Management to provide investment management services. |