This page is designed to answer questions and provide information about Pension Obligation Bonds (POBs).   You will find reference material links below, in date order, starting with the City Council work plan items from July 2019, to Finance Subcommittee public meetings in September 2019, July 2020 (two meetings, July 6, 2020, continued on July 22, 2020),  City Council meeting in October 2020  (two meetings) and November 2020, and an Easy Reader article, October 2020. The materials on this page provide a background to California Public Employees Retirement System (CalPERS), the City’s pension liability, pension policy and the City’s amortized annual payments.  The Frequently Asked Questions document provides answers to general questions.  All staff reports from public meetings will have attached PowerPoint presentations for additional information.   

For questions please reach out by email to: budget@citymb.info

What are City Pension Costs?
The City contracts with CalPERS to offer a defined benefit retirement plan to full-time City employees.  Benefit formulas are based on years of service, age at retirement, and final actual annual compensation. Benefit formulas vary by classification (“Miscellaneous” or “Public Safety”), and by the date an employee entered into CalPERS membership (“Classic” or “PEPRA”, if 2013 or later).

What are Pension Obligation Bonds?
A public finance strategy and tool that state and local governments can use to issue taxable debt that extinguishes some or all of the public agency’s unfunded accrued liability (“UAL”). Pension obligation bond proceeds would be deposited with the City’s pension system, CalPERS, and invested along with other pension system assets. Debt service payments to bondholders would replace the City’s UAL payments to CalPERS.  POBs are only advisable when the all-in interest rate of the bond issue is significantly below the actuarial rate of interest factored into the calculation of the UAL (currently 7%).  Pension Obligation Bonds do involve investment risk. If invested bond proceeds yield high returns, the pension system could be “overfunded”. In that case the City’s normal cost rate would be adjusted downward. However, should the City’s assets ever exceed liabilities, those funds will stay in the City’s CalPERS account and can be used to cover future UAL shortfalls. 

Frequently Asked Questions - FAQ's (PDF)

Proposed New Issue - Publication in The Beach Reporter 4/22/2021 (PDF)

Pension Obligation Bonds Power Point Presentation 4/20/2021 City Council Meeting (PDF)

Resolution Approving a Preliminary Official Statement and Continuing Disclosure Certificate Related to the Issuance of Pension Obligation Bonds 4/20/2021 City Council Meeting (PDF)

Pension Obligation Bonds Financing Structure Options and Pension Policy 3/2/2021 City Council Meeting (PDF)

UAL Pension Obligation - Issuance and Sale of Bonds 12/15/2020 City Council Meeting (PDF) 

UAL Pension Obligation Bond Presentation 11/4/2020 City Council Meeting (PDF)

Easy Reader Article - City of Manhattan Beach - POBs (10/29/2020)

UAL Pension Obligation Bonds 11/4/2020 City Council Meeting (PDF)

UAL Pension Obligation Bonds 10/20/2020 City Council Meeting (PDF)

UAL Pension Obligation Bonds 10/6/2020 City Council Meeting (PDF)

CalPERS Pension Cost & POBs Options 7/22/2020 Finance Subcommittee Meeting (PDF)

CalPERS Pension Cost & POBs Options 7/6/2020 Finance Subcommittee Meeting (PDF)

Funding of CalPERS Pension Contribution 9/26/2019 Finance Subcommittee Meeting (PDF)

City Council Work Plan Fiscal Year 2019 (PDF)