Title
Fiscal Year (FY) 2022/23 Sacramento City Employees’ Retirement System Annual Financial Report
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FileID
File ID: 2024-00990
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Location
Location: Citywide
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Recommendation
Recommendation: Pass a Motion accepting and forwarding to City Council the Fiscal Year (FY) 2022/23 Sacramento City Employees’ Retirement System Annual Financial Report.
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Contact
Contact: Osvaldo Lopez, Finance Manager, (916) 808-4740, olopez@cityofsacramento.org; Peter Coletto, Finance Director, (916) 808-5416, pcoletto@cityofsacramento.org, Department of Finance
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Presenter
Presenter: None
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Attachments
Attachments:
1-Description/Analysis
2-FY2022/23 SCERS Annual Financial Report
3-FY2022/23 SCERS Report to AIFM Board and City Council
4-FY2022/23 SCERS Independent Auditor’s Report on Internal Control Over Financial Reporting
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Description/Analysis
IssueDetail
Issue Detail: The Sacramento City Employees’ Retirement System (SCERS) Annual Financial Report for the fiscal year that ended June 30, 2023 was prepared by the Department of Finance, Accounting Division and audited by external auditors, to present the SCERS financial results. The June 30, 2023, Auditor’s Report to the Administration, Investment, and Fiscal Management Board (AIFM Board) and Members of Council provides additional information about the FY2022/23 SCERS audit (Attachment 3).
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PolicyConsiderations
Policy Considerations: This report is consistent with the City’s fiscal transparency and accountability principles and is required by the AIFM Board Policy Statement.
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EconomicImpacts
Economic Impacts: None.
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EnvironmentalConsiderations
Environmental Considerations:
California Environmental Quality Act (CEQA): This action is not a project subject to CEQA because it involves only organizational or administrative activities that will not result in direct or indirect physical changes in the environment (CEQA Guidelines §15378(b)(5)).
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Sustainability
Sustainability: Not applicable.
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Commission/CommitteeAction
Commission/Committee Action: None.
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RationaleforRecommendation
Rationale for Recommendation: It is in the best interest of the Council to review the FY2022/23 SCERS Annual Financial Report, Auditor's Report to the AIFM Board and Members of Council and the Independent Auditor’s Report on Internal Control Over Financial Reporting to understand the structure, obligations, and liabilities of the City’s SCERS retirement program:
• SCERS is a defined benefit plan in which retirement benefits for members (applicable City employees) are based upon age, final compensation, and length of service. In 1977, with the passage of Measure E, SCERS became a closed system. Since that time, all the City’s full-time and eligible part-time employees participate in the California Public Employees’ Retirement System (PERS) rather than SCERS.
• As of June 30, 2023, the SCERS plan had 780 participants (one active) with an average age of 68.5 and an average of 46.3 years of service with the City.
• As of June 30, 2023, SCERS is 95.5% funded representing an unfunded pension liability of $11.8 million for the plan.
• Assets for SCERS are held in trust. Trust monies are used to pay benefits to plan participants and their beneficiaries. The trust is managed pursuant to the City Charter under the direction of the AIFM Board.
The public accounting firm of Macias Gini & O’Connell LLP audited the SCERS FY2022/23 financial statements and rendered its unmodified opinion that the financial statements are fairly presented in accordance with generally accepted accounting principles. The Auditor’s Report to the AIFM Board and Members of Council provides communication required by audit standards and include statements specifying that there were no significant audit adjustments or disagreements with management in connection with this year’s audit.
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FinancialConsiderations
Financial Considerations: The FY2023/24 Approved Budget included the City’s annual required contribution of $1.4 million to the SCERS plan.
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LocalBusinessEnterprise(LBE)
Local Business Enterprise (LBE): No goods or services are being purchased under this report.
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