A Message to Our Members
Dear Members,
As your new Chief Executive Officer, along with the CCCERA team, I am honored to present the Popular Annual Financial Report (PAFR) for the Year Ended December 31, 2023. The financial data presented in the PAFR is derived from the Annual Comprehensive Financial Report (ACFR) which is audited and presents a detailed overview of CCCERA’s financial, investment, and actuarial-related results for the year. The goal is to provide a summary of CCCERA’s ACFR that allows members and other interested parties to review the fund’s fiscal information, demographics, and service accomplishments.
CCCERA’s investment portfolio returned 9.0% (net of investment management fees) for the year ending December 31, 2023. This return was lower than the policy index return, which was 9.9% for 2023, reflecting market conditions throughout the year.
As of December 31, 2023, CCCERA’s net fiduciary position, or plan assets, totaled $10.8 billion which is the result of $11.3 billion in assets exceeding $0.5 billion in liabilities. The primary use of plan assets include benefit payments to retirees and their beneficiaries, contribution refunds to terminating employees, and costs for administering the system. The funded ratio is 91.2% per the latest actuarial valuation report as of December 31, 2022.
CCCERA has a net pension liability of $1.60 billion as of December 31, 2023. As of the same date, the plan assets as a percentage to the total pension liability is 87.1% and the net pension liability as a percentage of covered payroll is 145.8%. The associated schedules and further additional information for this requirement are shown in the Financial Section of the ACFR.
This PAFR report is not intended to replace the ACFR. Detailed information on the subjects included here and other important aspects of CCCERA’s administration are located in our ACFR at cccera.org/2023-annual-comprehensive-financial-report.
Chief Executive Officer
Christina Dunn
CCCERA’s Core Values Trust
Trust and Integrity are the foundation of CCCERA. We will treat all with fairness, dignity, and respect.
Innovation
Enhanced and streamlined processes are beneficial for the plan and its stakeholders. CCCERA will engage in continuous improvement to increase efficiencies and effectiveness.
Accountability
Responsibility and reliability are essential. CCCERA will facilitate a professional environment that fosters ownership of work product and services provided to stakeholders.
Christina Dunn Chief Executive Officer
CCCERA’s mission is to effectively and accurately administer pension benefits earned by our members and to be prudent stewards of plan assets.
Major Initiatives and Accomplishments
Pension Administration Project
CCCERA strives to provide excellent customer service, operate the pension plan in an efficient and cost-effective manner, and to maintain member data safely and accurately. To accomplish these principles, a contract was awarded in 2021 for the design and development of a new pension administration system. Over the last two years, design sessions followed by thorough testing have been conducted by staff to build and create the system to provide the excellent customer service CCCERA strives for.
Investment Portfolio Management
As an integral part of the investment policy, CCCERA has an internally developed portfolio construction methodology, known as the Functionally Focused Portfolio, to assign portfolio allocations according to strategic priorities as defined by our Board. The Functionally Focused Portfolio consists of three sub-portfolios; Liquidity, Growth, and Risk Diversifying.
Streamlined Retirement Application and Calculation Process
CCCERA redesigned this process to reduce the time that new retirees wait to receive their first benefit payment. CCCERA committed to retirees who submit completed retirement applications, that their first benefit payment would be no more than 75 days after their last employer paycheck. In 2023, the average processing time was reduced even more to approximately 55 days.
CCCERA continues to fulfill its mission to administer pension benefits earned by our members and to be prudent stewards of plan assets including effective monitoring of the investment portfolio performance. Please refer to the ACFR Investment Section for additional information.
Awards for Excellence in Financial Reporting
For the 14th consecutive year, the Government Finance Officers Association (GFOA) of the United States and Canada presented an award to CCCERA for Outstanding Achievement in Popular Annual Financial Reporting in recognition of its PAFR for the fiscal year ended December 31, 2022. CCCERA also earned the Public Pension Coordinating Council’s Public Standard Award for 2023 which further recognizes CCCERA’s conformance with the highest standards for preparation of state and local government reports.
2023 Service Accomplishments
Approximately 7,000 payees located in Contra Costa County and nearby communities were paid almost $26 million each month through member earned benefit payments.
CCCERA processed monthly retirement payrolls equaling approximately $53 million to 11,000 payees throughout the world.
Fiduciary Net Position Restricted for Benefits
As of December 31, 2023, CCCERA had $10.8 billion in net position restricted for benefits, which means that assets of $11.3 billion exceeded liabilities and deferred inflows of resources of $0.5 billion.
The Statement of Fiduciary Net Position and the Statement of Changes in Fiduciary Net Position report CCCERA’s net position restricted for benefits and is one way to measure the plan’s financial position. Over time, increases and decreases in CCCERA’s net position are indicators of whether its financial position is improving or deteriorating. Other factors, such as market conditions, should be considered in measuring CCCERA’s overall financial position.
As of December 31, 2023, the net position restricted for benefits increased by 7.5% compared to
2022, primarily due to positive investment returns. CCCERA’s total investment portfolio returned 9.0% net of fees for the fiscal year ending December 31, 2023, lower than the policy index return which was 9.9% for 2023. CCCERA’s net of fees annualized rate of return was 3.5% over the last three years, 6.8% over the last five years, and 6.1% over the last 10 years.
Pension Plan Fiduciary Net Position Restricted for Benefits
As of December 31, 2023, and 2022 (Dollars in Thousands)
Pension Plan Fiduciary Net Position Over 10 Years (Dollars in Millions)
Changes in Fiduciary Net Position
The primary sources of funding for CCCERA member benefits are employer contributions, plan member contributions, and net investment income. Total additions to fiduciary net position for the years ended December 31, 2023 and 2022, were $1,389.0 million and $(797.2) million, respectively. The increase in the current year is primarily due to positive investment gains earned compared to previous year. Plan member contributions increases over the prior year were mostly due to an increase in plan member rates. Net investment income for the year ended December 31, 2023 totaled $882.6 million.
CCCERA’s plan assets can only be used to make benefit payments to retirees and beneficiaries, contribution refunds to terminated employees, and pay the cost of administering the system. Total deductions from fiduciary net position for the years ended December 31, 2023 and 2022, were $633.8 million and $602.9 million, respectively. The majority of the increase in deductions is attributed to benefits paid to retirees and beneficiaries which were $594.5 million in 2023, an increase of $30.6 million, or 5.4% over 2022. The growth in benefit payments was due to a combination of the following: (1) the net increase in the number of retirees and beneficiaries for the year, and (2) the increase in average retirement allowances of those added to the retirement payroll.
Pension Plan Changes in Fiduciary Net Position Restricted for Benefits
As of December 31, 2023, and 2022 (Dollars in Thousands)
CCCERA responded to over 20,000 phone calls, almost 3,200 email inquiries, sent over 5,500 member letters, and distributed almost
75,000 newsletters during the year.
Conducted
16 member presentations with over 500 attendees educating members on CCCERA pension benefits including the retirement application process, enrolling in CCCERA, completing retirement service pwrchases, and establishing reciprocal benefits.
Asset Allocation and Investment Results
Asset allocation is an integral part of CCCERA’s investment policy. CCCERA’s Chief Investment Officer and the outside investment consultants (Verus and Stepstone) assist the Board of Retirement in designing strategic diversification strategies to maintain steady, long-term gains, with appropriate risk. Please refer to the ACFR for additional information.
Actuarial Funding Status
In order to determine whether the pension plan’s net position restricted for benefits will be sufficient to meet future obligations, the actuarial funding status needs to be calculated. An actuarial valuation is similar to an inventory process. On the valuation date, the assets available for the payment of retirement benefits are appraised, with gains and losses over the previous five years smoothed to avoid significant swings in the value of assets from one year to the next. These assets are compared to the actuarial accrued liabilities, which are the actuarial present value of future benefits (attributable to service already earned) expected to be paid for each member.
The main investment goal is for the total return to exceed the policy index return, which was 9.9% for 2023. As mentioned, for the year ended December 31, 2023, the total return was 9.0% after fees.
Investment Results Based on Fair
As of December 31, 2023
* Using time-weighted rate of return based on the market rate of return.
The purpose of the valuation is to determine what future contributions by the members and by the employers are needed to pay all expected future benefits. Funded Ratio is a measurement of the funded status of the plan. The Funded Ratio is calculated by dividing the Valuation Assets by the Actuarial Accrued Liability. Funded Ratio
Revenue By Source
Public pension systems like CCCERA have three main funding sources: employee contributions, employer contributions, and investment returns. It is a common misperception that employers pay the bulk of pension expenses. In fact, the largest funding source consistently is investment returns.
CCCERA’s actuarial valuations are performed annually as of December 31 each year. Contribution requirements and rates resulting from such valuations become effective 18 months after the valuation date. For example, the valuation as of December 31, 2022 and resulting rates become effective on July 1, 2023.
Continued with regular updates and latest news and information for our members and employers through our website and social media.
Contribution
What’s in your pension dollar?
(Average over the last ten years.) 53%
Contribution 11%
Average Benefit Payments
The chart below is a broad representation of average benefits paid monthly over 10 years to retirees and beneficiaries. Both general and safety member figures are combined in this calculation, as are all tiers. The chart includes all members who have retired through December 31, 2022.
$5,000
When to Retire
Terminating Your Membership, Reciprocity A Guide To Filling Out Enrollment Forms
Membership
CCCERA’s membership consists of full and part-time employees, members who have left employment service and have deferred their receipt of retirement benefits, and retirees and their beneficiaries from the County of Contra Costa and participating employers and districts. CCCERA’s total membership as of December 31, 2023 is 25,294.
$4,500
$4,000
$3,500
1200 Concord Avenue, Suite 300, Concord, CA 94520
Phone: (925)521-3960 Fax: (925)521-3969 cccera.org
Popular Annual FINANCIAL REPORT FOR MEMBERS
FOR THE YEAR ENDED DECEMBER 31, 2023
2023 Board of Retirement
(As of December 31, 2023)
Scott W. Gordon Chairperson
David J. MacDonald Vice-Chairperson
Jerry R. Holcombe Secretary
Russell Watts County Treasurer
John B. Phillips
Candace Andersen
Samson Wong
Louie Kroll
Dennis Chebotarev
Mike Sloan (Retiree Alternate)
Jay Kwon (Appointed Alternate)
Donnie Finley (Safety Alternate)
• County of Contra Costa
• Bethel Island Municipal Improvement District
• Byron-BrentwoodKnightsen Union Cemetery
• Central Contra Costa Sanitary District
• Contra Costa County Employees’ Retirement Association
CCCERA Participating Employers More About CCCERA
• Contra Costa Fire Protection District
• Contra Costa Mosquito and Vector Control District
• First 5 – Contra Costa Children & Families Commission
• Housing Authority of the County of Contra Costa
• In-Home Supportive Services Public Authority (IHSS)
• Local Agency Formation Commission (LAFCO)
• Moraga-Orinda Fire Protection District
• Rodeo-Hercules Fire Protection District
• Rodeo Sanitary District
• San Ramon Valley Fire Protection District
• Superior Court of California, County of Contra Costa
CCCERA’s website, cccera.org, provides resources for members, employers and the public. In addition to the ACFR, it features forms, handbooks, video tutorials, a calculator to estimate retirement benefits, and more.