Huntington Beach city officials had a jarring glimpse last year of what their pension contributions would look like over the next seven years.
They bit the bullet again at an April 7 study session, where they learned how much the city's contributions to the California Public Employees' Retirement System (CalPERS) will increase over three decades.
Actuary John Bartel of Bartel Associates explained what it would take the city to pay off its unfunded liabilities — money not currently budgeted to pay toward pensions — by the 2044-45 fiscal year.
As of 2012, Huntington Beach had a total of $334.5 million in unfunded liabilities, $55.5 million more than last year.
Huntington Beach currently contributes 21.4% of non-public safety employees' pension-related wages to CalPERS.
To pay down that liability within 30 years, the contribution rate will have to increase incrementally to about 34% by 2020.
"Now that may not seem like great news, but since I'm a grandfather, what that really means is our grandsons will not be paying for this," Bartel said. "In my opinion, that's a very, very good thing."
Assuming that CalPERS is managing its asset portfolio correctly, Bartel estimates contribution rates dropping to about 31% in 2026 and 21% in 2034.
He added that by the time the city reaches the 2044-2045 fiscal year, it can expect to see its contribution rate drop to 8.5%.
Huntington will see much higher rates for sworn police officers and firefighters over the next three decades. The city will have to contribute 38.4% of their pension-related wages this fiscal year, but Bartel projects the contribution to skyrocket to about 54.6% by 2020.
Bartel added that the rate is expected to decrease to about 42.6% in 2034 and could reach a low of 14.4% by fiscal 2044-45.
City Finance Director Lori Ann Farrell said the full contribution rate for employees under the miscellaneous plan is 8%; the rate for those in the safety plan is 9%.
Farrell said Huntington Beach is being proactive and adopted a higher contribution rate after Bartel spoke to city officials in 2013. She estimates that the city saved about $1 million by contributing more last year.
"These recommendations are much more financially sound and will help ensure that the plans are funded so that all of the benefits that have been promised to retirees can be paid out, but it comes at a cost as well," she said.