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Conejo Recreation & Park District GENERAL MANAGER Jim Friedl DATE: June 6, 2019 TO: Board of Directors FROM: Jim Friedl, General Manager BOARD OF DIRECTORS Chuck Huffer, Chair George M. Lange, Vice Chair Susan L. Holt, Director Nellie Cusworth, Director Doug Nickles, Director GENERAL MANAGER EMERITUS Tex Ward SUBJECT: Transfer to and invest $6.0 Million of Pension Rate Stabilization Reserves in the PARS Post -Employment Benefits Trust RECOMMENDATION Authorize transfer of $6.0 million of Pension Rate Stabilization Reserve Funds to the Public Agency Retirement Services (PARS) Post -Employment Benefits Trust. Authorize investment in HighMark Capital Management's Active Moderate Portfolio, dollar -cost - averaging in over a six-month period. DISCUSSION Over the last several years, the District has been focused on addressing its unfunded retiree liabilities. On June 7, 2018, the Board authorized transfer of $4.0 million to the Amended and Restated Pension Plan 401(a) trust at PARS for the part-time pension and retiree stipend liabilities. On November 1, 2018, the Board authorized transfer of $4.5 million to the PARS Post -Employment Benefits Trust for Other Post -Employment Benefits (OPEB), which addresses CRPD's retiree medical liabilities. Funds in both trusts are invested in HighMark Capital Management's Active Moderate Portfolio. In addition to the liabilities above, as of June 30, 2017 (the most recent information available) the District has a CalPERS pension liability $62.5 million of which $13.5 million is unfunded. The Board has set aside Pension Rate Stabilization reserves of approximately $8.0 million towards this liability (see Pension Stabilization column on attached Reserve Funds spreadsheet). The District has several options regarding management of these Pension Rate Stabilization Funds: Option #1 — Leave the Pension Rate Stabilization Funds in the State/County investment pools The District could keep the funds in the State (LAIF) and County investment pools. While this provides flexibility, the long-term nature of the funds argues that they be invested in a manner that provides for greater returns than can be achieved under the District's existing investment policies and State law for general public funds. ADMINISTRATIVE OFFICES 403 West Hillcrest Drive - Thousand Oaks, CA 91360-4223 (805) 495-6471 • FAX: (805) 497-3199 - Email: parks@crpd.org • Website: www.crpd.org