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HomeMy WebLinkAbout96.OCERS_ReturnRate 07-09-14 Admin CommDebt Reduction Options Prepaying Pension Liability 0 -25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% 19 9 3 19 9 4 19 9 5 19 9 6 19 9 7 19 9 8 19 9 9 20 0 0 20 0 1 20 0 2 20 0 3 20 0 4 20 0 5 20 0 6 20 0 7 20 0 8 20 0 9 20 1 0 20 1 1 20 1 2 OCERS Historic Rate of Return Historic Average Benefit from prepaying pension liability will depend on actual rate of return on OCERS pension assets OCERS has delivered an average rate of return of 8.85% over past 20 years By comparison, current 10-and 30-year Treasury yields are 2.59% and 3.40%, respectively Even with enhancements (discussed on previous pages), the total return is significantly less than the OCERS average rate of return Debt Reduction Options Unfunded Actuarial Accrued Liability (UAAL) History IR W D OC S D Or o Lo m a Fr e s n o Sa c r a m e n t o Ea s t B a y M U D Un i o n S a n i t a r y Ce n t r a l C o n t r a C o s t a Du b l i n Ci t y o f L A Va l l e j o Sa n F r a n c i s c o Sa n D i e g o LA C S D $123 $135 $169 $215 $198 $100 $120 $140 $160 $180 $200 $220 $240 2009 2010 2011 2012 2013 9% 26% 27% -8%