FROM: Amy McInerny, Chief Financial Officer
SUBJECT: Informational: Burial Benefit
RECOMMENDATION:
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Expected expiration of the $250 Supplemental Burial Benefit funded by non-valuation reserve.
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BACKGROUND:
SBCERA currently provides a Burial Benefit of $1,000. The benefit consists of two components with separate funding sources.
Government Code section 31789 provides for a vested Burial Benefit of $750, funded through Employer contributions. The liability associated with this vested benefit is included in the actuarial valuation and is accounted for in the Employer Current Service reserve.
On March 7, 1985, the Board of Retirement approved a supplemental burial allowance of $250, increasing the total benefit to $1,000. The supplemental allowance was established pursuant to Government Code section 31789.13 and funded with approximately $2 million in excess earnings. Those funds were placed in a separate, non-valuation reserve designated as the Burial reserve. Unlike the $750 vested benefit, the supplemental $250 allowance depends upon the availability of funds in this reserve.
As of June 30, 2026, the Burial reserve had a balance of $89,191, after $108,300 in supplemental burial benefits were paid during Fiscal Year 2025-26. Based on the current rate of benefit payments, the remaining reserve is expected to be depleted before the end of Fiscal Year 2026-27. While staff has kept a watchful eye on the reserve levels in recent years, the work of the Survivor Benefits Unit to reach out to survivors and ensure that benefits are paid properly has accelerated the reductions in the reserve levels.
There are no excess earnings from which to replenish the Burial reserve supplemental account at this time, and staff does not anticipate that will change given other potential demands under SBCERA’s Actuary & Audit Policy No. 002 “Interest Crediting Procedures and Undesignated Excess Earnings Allocation”.
Upon depletion of the Burial reserve, the supplemental $250 allowance will no longer be available. The Burial Benefit will therefore return to the vested amount of $750 provided under Government Code section 31789, which remains fully funded through Employer contributions.
Staff is working to update SBCERA’s website and survivor benefit communications to clearly communicate that the benefit level will be lower moving forward, once the reserve has been depleted.
BUDGET IMPACT:
None.
STRATEGIC PLANNING GOAL/OBJECTIVE:
Prudent Fiscal Management
STAFF CONTACT:
Amy McInerny
Barbara Hannah
ATTACHMENTS:
None.