The City of Mill Valley has been a member of the California Public Employees System (CALPERS) since 1972, aiming to provide retirement pensions for City employees. Mill Valley also extends health insurance to long-serving employees upon their retirement after fifteen years of continuous employment (seven and one-half years for the City Manager and department managers) as an Other Post Employment Benefit (OPEB).
The City Council has implemented various measures over the past thirty-five years to contain and reduce both current and long-term pension costs, including:
- Executing reduced benefit, less costly pension formulas with CALPERS
- Requiring employees pay a portion of the pension costs
- Limiting the available cost-of-living adjustment in pensions
- Establishing the most modest retirement calculation available under the law to prohibit pension calculation spiking
- Issuing a pension obligation bond to pay the unfunded "side-fund" liability and reduce annual premium costs
- Establishing multiple tiers of benefit contracts to implement reduced pension benefits to new employees and reduce costs to the City
- Establishing eleven separate pension formulas or tiers through labor negotiations or by virtue of State legislation in an effort to reduce pension costs
The City currently allocates about 18.0% of the General Fund Operating Budget to pension costs (approx $5,894,171.00) and about 3.7% to OPEB costs (approx $1,219,503.00).