This page provides general information regarding the City's pension obligation bonds.
|Background and Purpose of Pension Obligation Bonds (POBs)|
Question: What are Pension Obligation Bonds (POBs)?
Answer: POBs are debt (bonds) issued by a public agency to fund all or a portion of the unfunded actuarially accrued liability for pension and/or other post employment benefits.
Question: What is the purpose or reason an agency would issue POBs?
An agency would issue POBs to eliminate their unfunded liability to a retirement plan (such as CalPERS). By issuing POBs, the agency may be able to realize interest savings due to issuing the bonds at a lower rate than what the retirement plan charges.
For example, when the City issued POBs in 2006, CalPERS charged 7.75% interest on Novato's unfunded accrued liability. The city issued POBs at a rate not to exceed 6.5%. By financing the liability with POBs, the City reduced the interest charge it paid on the liability from 7.75% to around 6% for 30 years.
|Novato POB Reports and Schedules|
Staff Report and Analysis for 2006 Pension Obligation Bonds
The staff report and financial analysis for the issuance of the POBs can be viewed here.
Pension Obligation Bond Maturity Schedule
The POB maturity schedule is available here.
Pension Obligation Debt Service Schedule
The POB debt service schedule is available at this link.