City of Cypress to Fully Fund Pensions by 2030
(Cypress, CA) In another proactive step to ensure the City’s long-term financial stability, the Cypress City Council approved a plan to fully offset the City’s pension liability by 2030. The City Council’s action positions Cypress to be one of the few cities with a police department to fund its pension liability without taking on new debt.
The 2030 Goal is a continuation of the City Council’s Pension Funding Strategy, which it initiated in 2017 by establishing a Pension Trust with Public Agency Retirement Services (PARS). The Trust provides the City diversified investment options to honor its commitment to current and retired employees and safeguard the high level of city service residents receive.
In the eight years since the City Council created the Pension Trust, its assets have grown to over $24 million, and its annual earnings have outpaced the City's investment portfolio by 230%.
To achieve its goal of having pension assets equal pension liabilities by 2030, the City Council invested an additional $4.5 million in the Pension Trust. Adding the investment, which was made from savings and surpluses to the Pension Funding Strategy is anticipated to fully offset Cypress’ CalPERS unfunded pension liabilities in less than six years.
The City Council chose to manage its Pension Trust with PARS rather than make additional pension contributions directly to CalPERS to maintain local control of Cypress’ investments. The PARS Pension Trust also guarantees the City can access its investments should the need ever arise.
“Time and again, Cypress’ financial management practices lead the way among California cities,” said Mayor Scott Minikus. “Fully funding our CalPERS pensions demonstrates the City Council’s commitment to Cypress’ long-term success, delivering great services to our residents, and partnering with our employees. Credit is due to the City Councils that came before us for their discipline and vision – especially the Council Members who laid this foundation in 2017. I have every confidence we will meet our 2030 Goal thanks to the commitment and prudent stewardship of our City Manager, Peter Grant, and Finance and Administrative Services Director, Matt Burton.”
The 2030 Goal is part of Cypress’ long-standing commitment to strategic financial management. Currently, the City maintains unrestricted cash reserves exceeding $150 million, allowing the community to make robust investments in its parks, facilities and infrastructure.
“The City of Cypress is setting an example among California cities, mapping a trajectory towards a more stable and secure fiscal landscape for their City and its taxpayers. PARS is thrilled to be part of Cypress’ journey to meet their 2030 target,” said Dennis Yu, Executive Vice President of Public Agency Retirement Services.
