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Home My WebLink AboutCC Resolution 14097 (Retiree Medical Actuarial Valuation)RESOLUTION NO. 14097 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL ACCEPTING THE RETIREE HEALTHCARE PLAN JUNE 30, 2015 ACTUARIAL VALUATION REPORT WHEREAS, the Governmental Accounting Standards Board (GASB) establishes financial accounting and reporting standards for state and local governmental entities, which recognize GASB as the official source of generally accepted accounting principles for state and local government; and WHEREAS, GASB Statement No. 45 (GASB 45) establishes standards for accounting and financial reporting of "Other Post Employment Benefits" (OPEBs) and requires each public agency to engage a certified actuary to calculate several actuarial measures estimating the current and future costs and liabilities of an agency's OPEBs; and WHEREAS, in San Rafael, the only OPEB offered is medical which varies by bargaining unit; and WHEREAS, the City entered into an agreement with Bartel Associates, LLC to prepare the GASB 45 required compliance report for an OPEB actuarial valuation as of June 30,2015; and WHEREAS, on February 25, 2016, a joint, public meeting of the City Council Finance Committee and the Pension/OPEB Sub -committee was held for the purpose of reviewing the report prepared by Bartel Associates, LLC; NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of San Rafael reaffirms the policy to not increase the cap on City contributions to retiree medical premiums and hereby accepts the June 30, 2015 Actuarial Valuation prepared by Bartel Associates, LLC (attached herein). I, ESTHER C. BEIRNE, Clerk of the City of San Rafael, hereby certify that the foregoing resolution was duly and regularly introduced and adopted at a regular meeting of the City Council of said City held on Monday, the 4th day of April 2016, by the following vote, to wit: AYES: COUNCIL MEMBERS: Bushey, Colin, Gamblin, McCullough & Mayor Phillips NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: None A-- .aLW_r ESTHER C. BEIRNE, City Clerk R15SOOK11S. RTEL // LLL CITY OF SAN RAFAEL RETIREE HEALTHCARE PLAN June 30, 2015 GASB 45 Actuarial Valuation Doug Pryor, Vice President Adam Zimmerer, Actuarial Analyst Tak Frazita, Associate Actuary Bartel Associates, LLC March 15, 2016 CONTENTS Topic Page Benefit Summary 1 Implied Subsidy 5 Data Summary 7 Actuarial Assumptions Highlights 9 Actuarial Methods 11 Assets 13 Results 17 Actuarial Certification 39 Exhibits Premiums E— 1 Participant Statistics E — 3 Actuarial Assumptions E-21 Definitions E-27 o:\clients\city of san rafael\projects\opeb\2015 val\reports\ba 16-03-15 sanrafaelci 15-06-30 opeb valuation final results.docx BENEFIT SUMMARY Elected Officials, All other Unrepresented Bargaining Units Mid Management & Management ■ Eligibility' ■ Retire directly from City: • Age 50 (age 55 if hired > 7/1/11 for Miscellaneous) with 10 years service (including reciprocity) or • 30 years service (Miscellaneous), 20 years service (Safety); or • Age 70 • Disability retirement ■ Benefit ■ Hired < 1/1/09 Full premium/cap ■ Hired < 1/1/10 Up to cap ■ Hired > 1/1/09 PEMHCA Min ■ Hired > 1/1/10 PEMHCA Mina ■ Surviving ■ Benefit continues to surviving spouse Spouse Benefit 1 Annual active conversion of 50 hours of sick leave to HRA (excluded from valuation) 2 Age 52 and 5 or age 70 for Miscellaneous PEPRA members, age 50 and 5 or age 70 for Safety PEPRA members s CR ty match 2% Firefighters salary to HRA (excluded from valuation) March 15, 2016 1 is BENEFIT SUMMARY ■ Medicare ■ Hired < 4/1/07 Full ■ None Part B reimbursement ■ Hired > 4/1/07 None ■ Other OPEB ■ No Dental, Vision, or Life Benefits ■ Contributions Fiscal Year Pav-Go Trust Total 2014/15 $ 2,100,000 $ 150,000 $ 2,250,000 2013/14 2,100,000 500,000 2,600,000 2012/13 2,073,000 500,000 2,573,000 2011/12 2,124,000 - 2,124,000 2010/11 1,808,000 (1,000,000) 808,000 2009/10 1,755,000 (1,000,000) 755,000 2008/09 1,686,000 (1,000,000) 686,000 isMarch 15, 2016 2 BENEFIT SUMMARY Bargaining Unit Monthly Cap Min Date` SEIU Child Care Unit $543 1/l/10 Unrepresented Mid -Management Employees Retired < 12/1/01: $442 Retired > 12/ 1 /01: Full 1 / 1 /09 prem Hired > 4/1/07: $600 San Rafael Fire Chief Officer's Association $557 1/l/10 San Rafael Firefighters' Association, I.A.FF., Local $557 1/1/10 1775 San Rafael Police Association $386 1/l/10 San Rafael Police Mid -Management Association $566 1/l/10 SEIU 1021 $752 1/l/10 Public Employees Bargaining Unit (PEU) Local 1 $659 1/l/10 Unrepresented Management Employees and Council Hired < 4/1/07: Full prem. 1/1/09 City Clerk and Elected Part -Time City Attorney Hired > 4/1/07: $600 Western Council of Engineers (WCE) $752 1/l/10 a Employees hired on or after date receive only PEMHCA minimum ($122 in 2015, $125 in 2016). isMarch 15, 2016 3 (BA March 15, 2016 BENEFIT SUMMARY This page intentionally blank rd • IMPLIED SUBSIDY ■ For PEMHCA, employer cost for allowing retirees to participate at active rates. • General trend: $800 $700 $600 $500 $400 $300 25 30 35 40 45 50 55 60 64 I-AtBlmded Premium 600 600 600 600 600 600 600 600 600 1 ItCostby Age 400 420 460 500 550 600 640 700 800 1 • Sample active age 40, retire age 60: Premiums $600 Active $600 Retiree March 15, 2016 PEMHCA Cost of Benefits —� $1,200 $500 Active ___— ---► $700 Retiree IMPLIED SUBSIDY m ■ GASB 45 defers to actuarial standards of practice. ■ Prior Actuarial Standards of Practice No. 65 (ASOP 6) allowed community rated plans to value liability using premiums, resulting in no implied subsidy. ■ In May 2014, Actuarial Standards Board released revised ASOP 6: • Requires implied subsidy valued for community rated plans such as PEMHCA. • Timing: effective with all valuations on or after March 31, 2015 ■ June 30, 2015 valuation includes the implied subsidy. 5 Measuring Retiree Group Benefits Obligations and Determining Retiree Group Benefits Plan Costs or Contributions. `,0March 15, 2016 6 ■ Count • Cap • PEMHCA Min • Total ■ Average • Age • City Service • Pay ■ Total Pay (000's) 6 Data as of April 2010. Data as of December 2011. $ Data as of October 2013. R March 15, 2016 DATA SUMMARY Actives 6/30/07 6/30/096 6/30/117 6/30/138 6/30/15 408 377 326 294 261 n/a 4 35 76 115 408 381 361 370 376 44.7 44.3 44.6 44.0 44.4 11.6 10.7 10.9 11.1 11.2 $72,800 $77,900 $77,000 $77,900 $ 80,700 29,719 29,689 27,784 28,808 30,346 7 DATA SUMMARY Retirees 6/30/07 6/30/099 6/30/1110 6/30/13" 6/30/15 ■ Count 247 291 308 328 323 ■ Average • Age 66.6 65.9 66.7 67.4 68.7 • Retirement Age 56.6 53.9 54.7 55.2 55.3 • Monthly Benefit $ 480 $ 537 $ 573 $ 554 $ 629 v Data as of April 2010. to Data as of December 2011. " Data as of October 2013. P March 15, 2016 8 ACTUARIAL ASSUMPTIONS HIGHLIGHTS Assumption June 30, 2013 Valuation June 30, 2015 Valuation ■ Valuation • June 30, 2013 • June 30, 2015 Date • 2014/15 & 2015/16 9 2016/17 & 2017/18 ■ Funding Policy ■ General Inflation ■ Discount Rate • Pay -go with no CERBT account • Same reimbursement • Total payment not < ARC • 3.25% • 7.50% (CERBT MFAD 0.11 %) ■ Payroll • Aggregate increases — 3.25% Increases • Merit Increases — Same as 6/30/2011 MCERA assumptions March 15, 2016 9 • 2.75% • 7.25% • Aggregate increases — 3.00% • Merit Increases — Same as 6/30/2014 MCERA assumptions ACTUARIAL ASSUMPTIONS HIGHLIGHTS El ■ PPACA High • n/a • 2.0% cash subsidy load Cost Plan Excise Tax R March 15, 2016 10 Assumption June 30, 2013 Valuation June 30, 2015 Valuation ■ Healthcare Non -Medicare Medicare Non -Medicare Medicare Trend Year All Plans Year All Plans 2013 Actual 2013 premiums 2013 n/a 2014 Actual 2014 premiums 2014 n/a 2015 8.0% 8.3% 2015 Actual 2015 premiums 2016 7.5% 7.8% 2016 Actual 2016 premiums 2017 7.0% 7.2% 2017 6.5% 6.7% 2018 6.5% 6.7% 2018 6.0% 6.2% 2019 6.0% 6.1% 2019 5.5% 5.6% 2020 5.5% 5.6% 2020 5.0% 5.1% 2021+ 5.0% 5.0% 2021+ 4.5% 4.5% ■ Cap Increases • None • Same ■ PPACA High • n/a • 2.0% cash subsidy load Cost Plan Excise Tax R March 15, 2016 10 ACTUARIAL METHODS Method June 30, 2013 Valuation June 30, 2015 Valuation ■ Cost Method ■ Entry Age Normal ■ Same ■ Amortization ■ Level percentage of payroll Method ■ Actuarial ■ Investment gains and losses Value of spread over 5 -year rolling Assets period ■ Not less than 80% nor more than 120% of market value ■ Amortization ■ 21 -year fixed (closed) period Period for 6/30/14 UAAL March 15, 2016 11 ■ Same ■ Investment gains and losses spread over 5 -year rolling period ■ Not less than 80% nor more than 120% of market value ■ 19 -year fixed (closed) period for 6/30/16 UAAL I ACTUARIAL METHODS BA March 15, 2016 This page intentionally blank 12 El • ASSETS Market Value of Plan Assets' (000's Omitted) 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 ■MVA $ 9,568 $ 9,585 $ 10,889 $ 11,178 $ 12,666 $ 15,492 (beginning of year) $ 12,773 $ 11,008 $ 10,861 $ 11,130 $ 12,505 $ 14,253 • Contribution - - - 500 500 150 • Benefit Payments (1,000) (1,000) - - - - • Expenses n/a n/a n/a 0 (19) (16) • Investment 1,017 2,303 289 988 2,346 (19) Return (6.0%) 7.7% 2.5% 7.9% 10.0% 7.7% ■MVA 9,585 10,889 11,178 12,666 15,492 15,608 (end of year) ■ Approximate 10.6% 24.0% 2.7% 8.8% 18.4% -0.2% Return 12 401(h) account transferred to CERBT 6/26/13. Amounts revised from previous valuation based on updated information provided by City. (NDMarch 15, 2016 13 ASSETS Actuarial Value of Plan Assets 13 (000's Omitted) 13 MRA CERA asset smoothing through 6/30/12. Rolling 5 year smoothing starting in 2012/13. March 15, 2016 14 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 NAVA (boy) $ 12,773 $ 11,008 $ 10,861 $ 11,130 $ 12,505 $ 14,253 • Contribution - - - 500 500 150 • Benefit Payments (1,000) (1,000) - - - - • Credited Return (765) 853 269 875 1,248 1,096 NAVA (eoy) 11,008 10,861 11,130 12,505 14,253 15,499 ■ Approximate (6.0%) 7.7% 2.5% 7.9% 10.0% 7.7% Return 13 MRA CERA asset smoothing through 6/30/12. Rolling 5 year smoothing starting in 2012/13. March 15, 2016 14 30% 25% 20% 15% 10% 5% 0% (5%) (10%) (15%) (20%) (25%) ASSETS i Historical Returns 07/08 08/09 09/10 10/11 fMVA -11.4% -18.7% 10.6% 24.0% Expected Return 7.8% 7.8% 7.8% 7.8% -iI-AVA -6.2% -0.1% -6.0% 7.8% March 15, 2016 BA March 15, 2016 15 11/12 12/13 13/14 14/15 2.7% 8.8% 18.4% -0.2% 7.5% 7.5% 7.5% 7.5% 2.6% 7.9% 10.0% 7.7% ASSETS This page intentionally blank 16 El • RESULTS Actuarial Obligations (000's Omitted) 6/30/07 6/30/09 6/30/11 6/30/13 6/30/15 ■ Present Value of Benefits • Actives • Retirees • Total ■ Actuarial Accrued Liability • Actives • Retirees • Total ■ Assets ■ Unfunded Liability ■ Normal Cost ■ Pay -Go Cost nt March 15, 2016 $ 41,880 $ 37,131 $ 14,105 $ 12,988 $ 19,720 27,714 35,196 25,802 24,462 34,358 69,594 72,327 39,907 37,450 54,078 25,053 21,066 9,354 9,087 13,868 27,714 35,196 25,802 24,462 34,358 52,767 56,262 35,156 33,549 48,226 14,563 12,773 9,861 12,505 15,499 38,204 43,489 25,295 21,044 32,727 2,022 1,805 706 580 846 1,686 2,045 2,282 2,256 3,101 17 RESULTS Historical Funded Status (000's Omitted) $60,000 $50,000 $40,000 $30,000 $20,000 H $10,000 $0 6/30/07 6/30/09 6/30/11 6/30/13 6/30/15 � Retiree pay -go =Retiree AAL less pay -go o Active AAL --R-• AVA --MVA (ND March 15, 2016 18 El El RESULTS Actuarial Accrued Liabilitv Gain/Loss (000's Omitted) AAL (Gain)/Loss ■ Actual @ 6/30/13 $ 33,549 ■ Expected @ 6/30/15 35,179 ■ Changes • Premiums < Expected (884) • Updated Actuarial Assumptions (365) • Excise Tax 665 • Discount Rate 891 • Implied Subsidy 13,405 • Demographic/Other (664) • Total 12,157 ■ Actual @ 6/30/15 48,226 March 15, 2016 nB March 15, 2016 19 RESULTS This page intentionally blank 20 El • RESULTS Annual Required Contribution (ARC)14 (000's Omitted) 6/30/2013 Val 6/30/2015 Val 2014/15 2015/16 2016/17 2017/18 ■ Annual Required Contribution - $ • Normal Cost • UAAL Amortization • Total ARC ■ Projected Payroll ■ Annual Required Contribution - % • Normal Cost • UAAL Amortization • Total ARC $ 580 $ 577 $ 846 $ 848 1,532 1,571 2,604 2,682 2,112 2,148 3,450 3,530 29,744 30,711 31,256 32,194 1.9% 1.9% 2.7% 2.6% 5.2% 5.1% 8.3% 8.3% 7.1% 7.0% 11.0% 11.0% 14 Actuarially Determined Contribution (ADC) for 2017/18. �l March 15, 2016 21 RESULTS Annual Required Contribution (ARC) 15 (000's Omitted) $4,000 ' $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 - $500 $0 I2/13 ❑ Normal Cost 706 LI Amortization 1,728 ARC 2,434 13/14 14/15 15/16 16/17 17/18 699 580 577 846 848 1,797 1,532 1,571 2,604 2,692 2,496 2,112 2,148 3,450 3,530 Is Actuarially Determined Contribution (ADC) for 2017/18. 11 March 15, 2016 22 El ■ Outstanding Balance • Initial UAAL • (Gain)/Loss ➢ 2009 val ➢2011 val ➢ 2013 val ➢2015 val • NOO (projected) • Total March 15, 2016 ■ Payment • Initial UAAL • (Gain)/Loss ➢ 2009 val )0- 2011 val ➢ 2013 val ➢ 2015 val • NOO (projected) • Total • Average years nB March 15, 2016 RESULTS Amortization Bases (000's Omitted) 6/30/2013 Val 6/30/2015 Val 6/30/14 6/30/15 6/30/16 6/30/17 $ 45,116 $ 45,143 $ 45,064 $ 44,762 (4,307) (4,310) (4,302) (4,273) (26,749) (26,765) (26,718) (26,539) (2,862) (2,864) (2,859) (2,840) - - 12,608 12,523 9,400 9,262 9,068 9,007 20,598 20,467 32,862 32,640 23 0 RESULTS Amortization Pavments (000's Omitted) 6/30/2013 Val 2014/15 2015/16 $ 3,356 $ 3,465 6/30/2015 Val 2016/17 2017/18 $ 3,569 $ 3,676 (320) (331) (341) (351) (1,990) (2,054) (2,116) (2,180) (213) (220) (226) (233) - - 999 1,029 699 711 719 740 1,532 1,571 2,604 2,682 21.0 20.0 19.0 18.0 24 El RESULTS Actuarial Obligations - June 30, 2015 (000's Omitted) ■ Present Value of Benefits • Actives • Retirees • Total ■ Actuarial Accrued Liability (AAL) • Actives • Retirees • Total ■ Actuarial Value of Assets 16 ■ Unfunded AAL ■ 2016/17 Normal Cost ■ 2016/17 Pay -As -You -Go Cost i6 AVA allocated to cash subsidy. (ND March 15, 2016 Cash Implied Subsidy Subsidy Total $ 13,497 $ 6,223 $ 19,720 25,337 9,021 34,358 38,834 15,244 54,078 9,484 4,384 13,868 25,337 9,021 34,358 34,821 13,405 48,226 15,499 - 15,499 19,322 13,405 32,727 612 234 846 2,319 782 3,101 25 0 RESULTS Annual Required Contribution (ARC) - Fiscal Year 2016/17 (000's Omitted) ■ ARC -$ • Normal Cost • UAAL Amortization • Total ■ Projected Payroll ■ ARC - % • Normal Cost • UAAL Amortization • Total PA March 15, 2016 Cash Implied Subsidy Subsidy Total $ 612 $ 234 $ 846 1,504 11100 2,604 2,116 1,334 3,450 31,256 31,256 31,256 2.0% 0.7% 2.7% 4.8% 3.5% 8.3% 6.8% 4.3% 11.0% 26 0 RESULTS Estimated 2016/17 Implied Subsidv Transfer for Medical Coverage For Illustrative Purposes Only (000's Omitted) Before Implied Subsidy Actives Retirees Total ■ Total Premium 17 $ 5,000 $ 3,000 $ 8,000 ■ Member Contribution' - 681 681 ■ Employer Contribution 5,000 2,319 7,319 After Implied Subsidy Actives Retirees Total ■ Total Premium 5,000 3,000 8,000 ■ Member Contribution - (681) (681) ■ Implied Subsidy Transfer 782 782 - ■ Employer Contribution 4,218 3,101 7,319 17 Estimated premium based on the 6/30/15 participant data, 2016 premiums and estimated 2017 premiums 18 Assumes no member contribution for actives March 15, 2016 27 I RESULTS I Benefit Pavments Proiection (000's Omitted) FYE Benefit Payments June Implied 30, Cash Subsidy Total 2017 $ 2,319 $ 782 $ 3,101 2018 2,418 771 3,189 2019 2,534 806 3,340 2020 2,655 906 3,561 2021 2,754 948 3,702 2022 2,811 921 3,732 2023 2,881 950 3,832 2024 2,967 991 3,958 2025 3,014 1,056 4,070 2026 3,063 1,100 4,163 March 15, 2016 28 0 RESULTS Net OPEB Obligation (NOO) Beginning Contribution 21 (000's Omitted) of Year Actual Estimated Contribution 2014/15 2015/16 2016/17 2017/18 ■ NOO at Beginning of Year $ 9,296 $ 9,164 $ 9,068 $ 9,007 ■ Annual OPEB Cost Pmts Fund Contrib (AOC) • Annual Required Contribution19 2,112 2,148 3,450 3,530 • Interest on NOO 705 687 657 n/a • Adjustment for NOO 699 704 719 n/a • Annual OPEB Cost 2,118 2,131 3,389 n/a ■ Contributions 271 3,611 n/a 33,160 • Cash Benefit Payments 2,100 2,229 2,319 2,418 • Implied Subsidy Benefit Payments20 - - 782 771 • Trust Pre -Funding 150 - 349 341 • Total Contribution 2,250 2,229 3,450 3,530 ■ NOO at End of Year 9,164 9,067 9,007 n/a 19 Actuarially Determined Contribution (ADC) for 2017/18. 21 Cash payments estimated after 2014/15. Implied subsidy payments listed here should be used in CAFR. �l March 15, 2016 29 RESULTS NOO Proiection (000's Omitted) El 21 BR sed on benefits paid to retirees. isMarch 15, 2016 30 Beginning Contribution 21 Annual of Year OPEB Contribution Fiscal Net OPEB Benefit Pre- Total Cost as % of Year Obligation Pmts Fund Contrib (AOC) Payroll Payroll 2016/17 $ 9,068 $ 3,101 $ 349 $ 3,450 $ 3,389 $ 31,256 11.0% 2017/18 9,007 3,189 341 3,530 n/a 32,194 11.0% 2018/19 n/a 3,340 271 3,611 n/a 33,160 10.9% 2019/20 n/a 3,561 132 3,692 n/a 34,155 10.8% 2020/21 n/a 3,702 73 3,775 n/a 35,179 10.7% 2021/22 n/a 3,732 126 3,858 n/a 36,235 10.6% 2022/23 n/a 3,832 114 3,946 n/a 37,322 10.6% 2023/24 n/a 3,958 78 4,036 n/a 38,441 10.5% 2024/25 n/a 4,070 59 4,129 n/a 39,595 10.4% 2025/26 n/a 4,163 62 4,225 n/a 40,782 10.4% 21 BR sed on benefits paid to retirees. isMarch 15, 2016 30 RESULTS Actuarial Obligations - June 30, 2015 (000's Omitted) ■ PVPB • Actives • Retirees • Total ■ AAL • Actives • Retirees • Total ■ Assets22 ■ Unfunded Liability ■ Normal Cost (16/17) ■ Pay Go Costs (16/17) 22 For illustrative purposes, assets allocated on AAL. March 15, 2016 Miscellaneous Safety Total $ 13,517 $ 6,203 $ 19,720 18,371 15,987 34,358 31,888 22,190 54,078 9,807 4,061 13,868 18,371 15,987 34,358 28,178 20,048 48,226 9,056 6,443 15,499 19,122 13,605 32,727 572 273 846 1,725 1,376 3,101 9.0% 7.5% 8.3% 31 12.4% 9.4% RESULTS Annual Required Contribution (ARC) - Fiscal Year 2016/17 (000's Omitted) 23 For illustrative purposes, amortization amount allocated on AAL. PI March 15, 2016 32 Miscellaneous Safety Total ■ ARC- $ • Normal Cost $ 572 $ 273 $ 846 • UAL Amortization 23 1,531 1,073 2,604 • Total ARC 2,104 1,345 3,450 ■ Projected Payroll 16,918 14,339 31,256 ■ ARC - % • Normal Cost 3.4% 1.9% 2.7% • UAL Amortization 9.0% 7.5% 8.3% • Total ARC 12.4% 9.4% 11.0% 23 For illustrative purposes, amortization amount allocated on AAL. PI March 15, 2016 32 RESULTS Parking Fund/SRSD Results Participant Counts" za Counts assigned to groups based upon City research of personnel and financial records for each participant. R March 15, 2016 33 RESULTS Parking Fund/SRSD Results Participant Statistics Parking SRSD Other Total Fund ■ Actives • Averages ➢ Age ➢ Pay • Service ➢ Allocated average ➢ Average in group • Total Pay (000's) ■ Retirees • Average Age �3A1 March 15, 2016 52.2 51.0 43.8 44.4 $58,100 $84,800 $81,500 $80,700 El 9.1 Parking 11.2 11.2 9.6 12.3 11.2 SRSD Other Total $28,785 Fund n/a 67.2 68.8 ■ Counts 34 • Actives 15 15 346 376 • Retirees - 2 321 323 • Total 15 17 667 699 za Counts assigned to groups based upon City research of personnel and financial records for each participant. R March 15, 2016 33 RESULTS Parking Fund/SRSD Results Participant Statistics Parking SRSD Other Total Fund ■ Actives • Averages ➢ Age ➢ Pay • Service ➢ Allocated average ➢ Average in group • Total Pay (000's) ■ Retirees • Average Age �3A1 March 15, 2016 52.2 51.0 43.8 44.4 $58,100 $84,800 $81,500 $80,700 El 9.1 12.8 11.2 11.2 9.6 12.3 11.2 11.2 $744 $817 $28,785 $30,346 n/a 67.2 68.8 68.7 34 RESULTS Parking Fund/SRSD Results Actuarial Obligations — June 30, 2015 (000's Omitted) 25 For illustrative purposes, assets allocated on AAL. March 15, 2016 35 RESULTS Parking Fund/SRSD Results Annual Required Contribution (ARC) — Fiscal Year 2016/17 (000's Omitted) Parking Fund SRSD ■ ARC- $ • Normal Cost • UAL Amortization26 • Total ARC ■ Projected Payroll ■ ARC - % • Normal Cost • UAL Amortization • Total ARC 26 For illustrative purposes, amortization amount allocated on AAL. March 15, 2016 36 $42 $57 28 84 70 142 878 1,341 4.8% Parking Fund SRSD ■ PVPB 7.9% 10.6% • Actives $ 723 $ 1,452 • Retirees - 395 • Total 723 1,847 ■ AAL • Actives 455 1,081 • Retirees - 395 • Total 455 1,476 ■ Assets25 146 474 ■ Unfunded Liability 309 1,002 ■ Pay Go Costs (16/17) 9 39 25 For illustrative purposes, assets allocated on AAL. March 15, 2016 35 RESULTS Parking Fund/SRSD Results Annual Required Contribution (ARC) — Fiscal Year 2016/17 (000's Omitted) Parking Fund SRSD ■ ARC- $ • Normal Cost • UAL Amortization26 • Total ARC ■ Projected Payroll ■ ARC - % • Normal Cost • UAL Amortization • Total ARC 26 For illustrative purposes, amortization amount allocated on AAL. March 15, 2016 36 $42 $57 28 84 70 142 878 1,341 4.8% 4.3% 3.2% 6.3% 7.9% 10.6% RESULTS Discount Rate Sensitivity (000's Omitted) March 15, 2016 nB March 15, 2016 37 RESULTS This page intentionally blank 38 • 6.25% 7.25% 8.25% ■ PVPB on 6/30/15 $ 61,585 54,078 47,996 ■ Funded Status @ 6/30/15 • AAL 53,871 48,226 43,503 • Assets 15,499 15,499 15,499 • Unfunded AAL 38,372 32,727 28,004 ■ 2016/17 ARC • Normal Cost $ 1,035 $ 846 $ 697 • UAAL Amort. 2,812 2,604 2,412 • Total ARC 3,848 3,450 3,108 • ARC as % of Pay 12.3% 11.0% 9.9% March 15, 2016 nB March 15, 2016 37 RESULTS This page intentionally blank 38 • ACTUARIAL CERTIFICATION This report presents the City of San Rafael Retiree Healthcare Plan ("Plan") June 30, 2015 actuarial valuation. The purpose of this valuation is to: ■ Determine the Governmental Accounting Standards Board Statement Nos. 43 and 45 June 30, 2013 Benefit Obligations, ■ Determine the 2016/17 Annual Required Contributions under GASB 45, ■ Determine the Plan's June 30, 2013 Funded Status, and ■ Calculate the 2016/17 and 2017/18 Actuarially Determined Contributions. The report provides information intended for reporting under GASB 43 and 45, but may not be appropriate for other purposes. Information provided in this report may be useful to the City for the Plan's financial management. Future valuations may differ significantly if the Plan's experience differs from our assumptions or if there are changes in Plan design, actuarial methods or actuarial assumptions. The project scope did not include an analysis of this potential variation. The valuation is based on Plan provisions, participant data, and asset information provided by the City as summarized in this report, which we relied on and did not audit. We reviewed the participant data for reasonableness. To the best of our knowledge, this report is complete and accurate and has been conducted using generally accepted actuarial principals and practices. Additionally, in our opinion, actuarial methods and assumptions R March 15, 2016 39 ACTUARIAL CERTIFICATION El comply with GASB 43 and 45. As members of the American Academy of Actuaries meeting the Academy Qualification Standards, we certify the actuarial results and opinions herein. Respectfully submitted, Doug Pryor, ASA, EA, MAAA Vice President Bartel Associates, LLC March 15, 2016 ,A March 15, 2016 40 El PREMIUMS 2015 PEMHCA Monthly Premiums Bay Area R March 15, 2016 E-1 0 PREMIUMS MONEEF- 2016 PEMHCA Monthly Premiums Bay Area Non -Medicare Eligible T Medicare Eligible -7 Medical Plan Single 2 -Party Family Single 2 -Party Family Anthem Select $ 662.41 $ 1,324.82 $ 1,722.27 $ 445.38 $ 890.76 $ 1,336.14 Anthem Traditional 827.57 1,655.14 2,151.68 445.38 890.76 1,336.14 Blue Shield Access+ 928.87 1,857.74 2,415.06 352.63 705.26 1,057.89 Blue Shield NetValue 870.60 1,741.20 2,263.56 352.63 705.26 1,057.89 Kaiser 714.45 1,428.90 1,857.57 295.51 591.02 886.53 UnitedHealthcare 850.67 1,701.34 2,211.74 267.41 534.82 802.23 PERS Choice 700.84 1,401.68 1,822.18 339.47 678.94 1,018.41 PERS Select 690.43 1,380.86 1,795.12 339.47 678.94 1,018.41 PERSCare 775.08 1,550.16 2,015.21 368.76 737.52 1,106.28 PORAC 675.00 1,292.00 1,642.00 402.00 802.00 1,281.00 R March 15, 2016 E-1 0 PREMIUMS MONEEF- 2016 PEMHCA Monthly Premiums Bay Area Non -Medicare Eligible Medicare Eligible Medical Plan Single 2 -Party Family Single 2 -Party Family Anthem Select $ 721.79 $ 1,443.58 $ 1,876.65 n/a n/a n/a Anthem Traditional 855.42 1,710.84 2,224.09 n/a n/a n/a Blue Shield Access+ 1,016.18 2,032.36 2,642.07 n/a n/a n/a Blue Shield NetValue 1,033.86 2,067.72 2,688.04 n/a n/a n/a Health Net SmartCare 808.44 1,616.88 2,101.94 n/a n/a n/a Kaiser 746.47 1,492.94 1,940.82 $ 297.23 $ 594.46 $ 891.69 UnitedHealthcare 955.44 1,910.88 2,484.14 320.98 641.96 962.94 PERS Choice 798.36 1,596.72 2,075.74 366.38 732.76 1,099.14 PERS Select 730.07 1,460.14 1,898.18 366.38 732.76 1,099.14 PERSCare 889.27 1,778.54 2,312.10 408.04 816.08 1,224.12 PORAC 699.00 1,399.00 1,789.00 442.00 881.00 1,408.00 n, 0 March 15, 2016 E-2 PARTICIPANT STATISTICS Participant Statistics June 30, 2015 • Average Age 69.9 • Average Ret. Age 27 58.2 z� Excludes 32 surviving spouses PA March 15, 2016 ■ Actives • Count • Average Age • Average Service • Average Pay • Payroll ($000s) ■ Retirees Count < 65 ➢ Count > 65 )o- Total • Average Age • Average Ret. Age 21 zs Excludes 35 surviving spouses l% 11 March 15, 2016 67.1 67.8 68.7 50.8 53.7 55.4 E-3 PARTICIPANT STATISTICS Participant Statistics June 30, 2013 Miscellaneous Police Fire Total 244 Miscellaneous Police Fire Total ■ Actives 38.6 44.0 11.5 11.4 • Count 248 64 64 376 • Average Age 46.8 40.5 38.9 44.4 • Average Service 11.3 12.2 9.5 11.2 • Average Pay $ 66,200 $ 105,800 $ 111,800 $ 80,700 • Payroll ($000s) 16,425 6,769 7,152 30,346 ■ Retirees 57.9 50.8 53.7 55.2 Count < 65 55 23 44 122 Count > 65 109 39 53 201 Total 164 62 97 323 • Average Age 69.9 • Average Ret. Age 27 58.2 z� Excludes 32 surviving spouses PA March 15, 2016 ■ Actives • Count • Average Age • Average Service • Average Pay • Payroll ($000s) ■ Retirees Count < 65 ➢ Count > 65 )o- Total • Average Age • Average Ret. Age 21 zs Excludes 35 surviving spouses l% 11 March 15, 2016 67.1 67.8 68.7 50.8 53.7 55.4 E-3 PARTICIPANT STATISTICS Participant Statistics June 30, 2013 Miscellaneous Police Fire Total 244 62 64 370 46.5 39.9 38.6 44.0 11.5 11.4 9.4 11.1 $ 64,192 $ 103,374 $ 105,255 $ 77,860 15,663 6,409 6,736 28,808 60 34 49 143 99 32 54 185 159 66 103 328 68.7 65.0 66.8 67.4 57.9 50.8 53.7 55.2 E-4 L PARTICIPANT STATISTICS Medical Plan Participation" Medical Plan Actives 2 -Party Retirees Waived < 65 > 65 Total Anthem Traditional 1% 0% 0% 0% Blue Shield Access+ 13% 20% 19% 19% Blue Shield NetValue 4% 2% 0% 1% Kaiser 72% 54% 45% 48% PERS Choice 3% 2% 11% 8% PERS Select 1% 1% 0% 1 PERS Care 1% 5% 24% 16% PORAC 5% 16% 1% 7% Total 100% 100% 100% 100% 29 EPA cludes waived participants. March 15, 2016 E-5 • PARTICIPANT STATISTICS i Active Medical Coveraue Medical Plan Single 2 -Party Family Waived Total Anthem Traditional - 1 2 - 3 Blue Shield Access+ 16 5 17 - 38 Blue Shield NetValue 5 3 4 - 12 Kaiser 94 39 78 - 211 PERS Choice 3 2 4 - 9 PERS Select - 1 1 - 2 PERSCare 1 1 2 - 4 PORAC 4 2 7 - 13 Waived - - - 84 84 Total 123 54 115 84 376 PA March 15, 2016 E-6 0 PARTICIPANT STATISTICS Retiree Medical Coverage — Under Age 65 Medical Plan Single 2 -Party Family Total Blue Shield Access+ 16 4 4 24 Blue Shield NetValue 1 1 1 3 Kaiser 32 33 1 66 PERS Choice 3 - - 3 PERS Select 1 - - 1 PERSCare 1 4 1 6 PORAC 5 9 5 19 Total 59 51 12 122 Al March 15, 2016 E-7 PARTICIPANT STATISTICS Retiree Medical Coverage — Over Age 65 Medical Plan Single 2 -Party Family Total Blue Shield Access+ 18 20 - 38 Kaiser 44 44 3 91 PERS Choice 11 11 - 22 PERS Select 1 - - 1 PERSCare 32 15 - 47 PORAC - 1 1 2 Total 106 91 4 201 iA 1 March 15, 2016 E-8 El • PARTICIPANT STATISTICS Actives by Age and Citv Service Miscellaneous PARTICIPANT STATISTICS Active Age Distribution Miscellaneous 45 40116/30/13 Valuation -------------------------------- -- ----------------------- ■ 6/30/15 Valuation 35 ----------------- ----- -- -------------------- 30---------------------------------------------------- -- -------------------- 25 ------------------------------ -- -- -- -- -------------------- 20 -------------- -- -- -- -- -- -- -- --------------- 15 —-------- -- -- -- -- -- -- ----- ---------- 10 — -- -- -- -- -- -- -- -- -- - 5 — -- --- -- -- -- -- -- -- --- - 0 <25 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-65 >65 Age March 15, 2016 E-10 '� City Service Age < 1 1-4 5-9 10-14 15-19 20-24 > 25 Total <25 4 6 - - - - - 10 25-29 6 9 5 - - - - 20 30-34 7 7 4 2 1 - - 21 35-39 4 7 10 2 3 - - 26 40-44 2 4 9 10 2 1 - 28 45-49 2 1 8 6 5 6 3 31 50-54 4 7 4 5 7 3 11 41 55-59 1 1 11 6 11 2 7 39 60-64 - 1 3 7 6 2 3 22 >65 - - 2 3 2 1 2 10 Total 30 43 56 41 37 15 26 248 } March 15, 2016 E-9 ' PARTICIPANT STATISTICS Active Age Distribution Miscellaneous 45 40116/30/13 Valuation -------------------------------- -- ----------------------- ■ 6/30/15 Valuation 35 ----------------- ----- -- -------------------- 30---------------------------------------------------- -- -------------------- 25 ------------------------------ -- -- -- -- -------------------- 20 -------------- -- -- -- -- -- -- -- --------------- 15 —-------- -- -- -- -- -- -- ----- ---------- 10 — -- -- -- -- -- -- -- -- -- - 5 — -- --- -- -- -- -- -- -- --- - 0 <25 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-65 >65 Age March 15, 2016 E-10 '� 80 70 ----- 60 ----- 50 ---- 40 ---- 30 ---- 20 ---- 10 --- 0 PARTICIPANT STATISTICS Active Service Distribution Miscellaneous --------------------------------------------------- 0 6/30/13 Valuation ---- -------n--------------------------------------- 06/30/15 Valuation 0-4 5-9 10-14 15-19 20-24 >25 Service PA March 15, 2016 RMarch 15, 2016 E-11 PARTICIPANT STATISTICS This page intentionally blank E-12 • PARTICIPANT STATISTICS Actives by Age and Citv Service Safety PARTICIPANT STATISTICS Active Age Distribution Safety 30 25— ----------------------- ---------- ____ __________________ 0 6/30/13 Valuation F1 I ■ 6/30/15 Valuation 20 ----------- ----- -- ------------- 64 15 ----------- -- -- -- -- - z 10 ----------- -- -- -- -- - 5 --------- 0 <25 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-65 >65 Age March 15, 2016 E-14 City Service Age < 1 1-4 5-9 10-14 15-19 20-24 > 25 Total <25 - 1 - - - - - 1 25-29 3 15 1 - - - - 19 30-34 2 10 11 3 - - - 26 35-39 - 5 8 7 1 - - 21 40-44 - 1 5 11 7 - - 24 45-49 - - 3 6 5 4 1 19 50-54 - 1 1 1 3 - 5 11 55-59 - - 1 - 2 - 3 6 60-64 - - 1 - - - - 1 >65 - - - - - - - - Total 5 33 31 28 18 4 9 128 `i�lis March 15, 2016 E-13 PARTICIPANT STATISTICS Active Age Distribution Safety 30 25— ----------------------- ---------- ____ __________________ 0 6/30/13 Valuation F1 I ■ 6/30/15 Valuation 20 ----------- ----- -- ------------- 64 15 ----------- -- -- -- -- - z 10 ----------- -- -- -- -- - 5 --------- 0 <25 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-65 >65 Age March 15, 2016 E-14 R March 15, 2016 March 15, 2016 PARTICIPANT STATISTICS Active Service Distribution Safety ------------------------------------------------ 116/30/13 Valuation --- ■ 6/30/15 Valuation -------------- ------------------------------------- ------------------------- ------------------------------------- -------------- -------------------------------------- -------- ------- -------- I ------------ 1 5-9 10-14 15-19 20-24 Service E-15 PARTICIPANT STATISTICS This page intentionally blank E-16 >25 'I AM IJ • 40 35 --- 3 0 --- 25 --- a� 20 --- z 15 --- 10 --- 5 ---- 0 - 0-4 R March 15, 2016 March 15, 2016 PARTICIPANT STATISTICS Active Service Distribution Safety ------------------------------------------------ 116/30/13 Valuation --- ■ 6/30/15 Valuation -------------- ------------------------------------- ------------------------- ------------------------------------- -------------- -------------------------------------- -------- ------- -------- I ------------ 1 5-9 10-14 15-19 20-24 Service E-15 PARTICIPANT STATISTICS This page intentionally blank E-16 >25 'I AM IJ • PARTICIPANT STATISTICS Retiree Healthcare Coveraie by Ate Group Miscellaneous Age Single - Family Total Under 50 1 - - 1 50-54 4 2 - 6 55-59 7 6 - 13 60-64 19 13 3 35 65-69 18 17 1 36 70-74 20 10 - 30 75-79 11 7 - 18 80-84 4 5 - 9 Over 85 14 2 1 - 16 164 Total 98 62 4 Average Ace 70.8 68.8 63.7 69.9 iA 1 March 15, 2016 E-17 PARTICIPANT STATISTICS Retiree Age Distribution Miscellaneous 45 6/30/13 Valuation 40 — ----------------------------------------- --------------- ■6/30/15 Valuation 35 ---------------------------------- ---- ------------------------------------------ 3 0 — ------------------------------- ---- ------ -------------------------------- 25 — ------------------------------- ---- ------ -------------------------------- 20 ---------------------- ------ ---- ---- -------------------------------- 15 ------------------------------- 15---------------------- ------ ---- ---- -------------------- - 10 ---------------------- ---- ---- ---- ---- -------------- 5 ------------ ---- --- --- --- --- --- --- - 0 <50 50-54 55-59 60-64 65-69 70-74 75-79 80-84 >85 Age L ; March 15, 2016 E-18 PARTICIPANT STATISTICS Retiree Healthcare Coverage by Age Group Safety Age Under 50 50-54 Single 4 - - 5 Family - Total 4 2 7 4 23 55-59 9 10 60-64 15 15 3 33 65-69 16 21 3 40 70-74 6 12 - 18 75-79 9 7 - 16 80-84 4 8 - 12 Over 85 4 2 - 6 Total 67 80 12 159 Average Age 67.9 68.3 60.6 67.5 iA 1 March 15, 2016 E-19 PARTICIPANT STATISTICS Retiree Age Distribution Safety ❑ 6/30/13 Valuation ■ 6/30/15 Valuation ---' <50 50-54 55-59 60-64 65-69 70-74 75-79 80-84 >85 Age Q, March 15, 2016 E-20 45 40 -------------------------------- ------ 3 5 -------------------------------- ------ 3 0 ----------------------- -- --- --- --- Z20 ------------------------- --- 15 ------------------------- --- 10 ------------------------- --- 5 -- ------ ------- ---- 0 ❑ 6/30/13 Valuation ■ 6/30/15 Valuation ---' <50 50-54 55-59 60-64 65-69 70-74 75-79 80-84 >85 Age Q, March 15, 2016 E-20 ACTUARIAL ASSUMPTIONS Assumption June 30, 2013 Valuation June 30, 2015 Valuation ■ Mortality, • 6/30/11 MCERA valuation • 6/30/14 MCERA valuation Withdrawal, assumptions assumptions Disability • Scale AA for post-retirement • Scale MP -2014 with 15 -year mortality convergence in 2022 for post- retirement mortality PA March 15, 2016 E-21 0 ACTUARIAL ASSUMPTIONS 3' Final Average Pay based on 1 year (FAP 1); 3% COLA " Hired > 7/1/11 based on FAP 3 and 2% COLA 32 PEPRAhired> 1/1/13 March 15, 2016 E-22 is Assumption June 30, 2013 Valuation June 30, 2015 Valuation ■ Service • 6/30/11 MCERA valuation • 6/30/14 MCERA valuation Retirement assumptions assumptions Misc Safejy Misc Safe Benefit 2.7%@55 3%@55 Tier 130 2.7%@55 3%@55 ERA 59.8 53.5 ERA 60.5 55.6 Tier 231 2%@55 3%@55 ERA 60.1 55.5 Tier 332 2%@62 2.7%@57 ERA 59.9 55.0 ■ Part Time • 25% PARS employees become • Same Employment full time eligible 3' Final Average Pay based on 1 year (FAP 1); 3% COLA " Hired > 7/1/11 based on FAP 3 and 2% COLA 32 PEPRAhired> 1/1/13 March 15, 2016 E-22 is ACTUARIAL ASSUMPTIONS Assumption June 30, 2013 Valuation June 30, 2015 Valuation ■ PEMHCA • 4.5% after 2014 Minimum Increases ■ Participation • Actives: at Retirement ➢ Capped benefit: o Currently covered: 100% o Currently waived: 80% ➢ PEMHCA minimum: 60% • Retirees: same as current election ■ Medical Plan . Currently covered: same as at Retirement current elections • Currently waived: weighted premium based on current retiree elections iA 1 March 15, 2016 E-23 • 4.0% after 2016 • Same • Same • Employees enrolled in Anthem & Blue Shield Medicare plans assumed to move to UnitedHealthcare beginning 2016 El ACTUARIAL ASSUMPTIONS Assumption June 30, 2013 Valuation June 30, 2015 Valuation ■ Marital . Covered actives and retirees — • Same Status based on current coverage election • Waived actives — 80% married ■ Spouse Age . Males 3 years older than females • Same ■ Dependents • Pre -65: • Same at Retirement ➢ Actives: 20% ➢ Retirees: same as current coverage • Post -65: 0% R] March 15, 2016 E-24 L` ACTUARIAL ASSUMPTIONS Assumption June 30, 2013 Valuation June 30, 2015 Valuation ■ Medicare • Actives and Retirees under 65: • Same Eligible Rate ➢ Hired < 4/1/86: 80% Misc, 90% Safety ➢ Hired > 4/1/86: 100% • Retirees over 65: current Medicare eligible status ■ Medicare • All eligible elect City • Same Participation reimbursement of Part B `,1 March 15, 2016 E-25 ACTUARIAL ASSUMPTIONS L` Assumption June 30, 2013 Valuation I June 30, 2015 Valuation ■ HMO • Monthly claims costs estimated from Bartel Associates PEMHCA Medical client database and PEMHCA premiums Claims Costs Bay Area Region - Non -Medicare Eligible 2016 Anthem Trad. BS Access+ BS NetValue Kaiser Age M F M F M F M F PEMHCA 25 $251 $494 $298 $587 $328 $645 $246 $483 Implied 35 329 604 391 718 430 789 322 591 Subsidy 45 524 634 623 753 685 828 513 620 Estimate 55 875 885 1,040 1,052 1,143 1,156 856 866 60 1,118 1,045 1,328 1,242 1,460 1,366 1,093 1,023 65 1,412 1,272 1,678 1,510 1,844 1,661 1,381 1,244 70 1,674 1,470 1,988 1,746 2,186 1,920 1,637 1,438 75 2,000 1,729 2,376 2,054 2,612 2,258 1,956 1,691 80 2,322 1,992 2,758 2,366 3,032 2,602 2,271 1,948 Bay Area Region - Medicare Eligible Anthem Trad. BS Access+ BS NetValue Kaiser Age M F M F M F M F 65 n/a n/a n/a n/a n/a n/a $285 $265 70 n/a n/a n/a n/a n/a n/a 268 256 75 n/a n/a n/a n/a n/a n/a 336 301 80 n/a n/a n/a n/a n/a n/a 360 319 0 March 15, 2016 E-26 ACTUARIAL ASSUMPTIONS L I' Assumption June 30, 2013 Valuation June 30, 2015 Valuation ■ PPO Medical • Monthly claims costs estimated from Bartel Associates PEMHCA Claims Costs client database and PEMHCA premiums 2016 Bay Area Region - Non -Medicare Eligible PERS Choice PERS Select PERSCare PORAC PEMHCA Age M F M F M F M F Implied 25 $244 $401 $216 $354 $284 $466 $237 $389 Subsidy 35 363 557 320 492 421 647 351 540 Estimate 45 576 631 508 557 668 732 558 611 55 851 823 752 727 988 955 826 799 60 1,023 946 903 835 1,187 1,097 990 917 65 1,270 1,142 1,121 1,008 1,474 1,325 1,231 1,107 70 1,506 1,320 1,329 1,165 1,747 1,532 1,459 1,279 75 1,799 1,553 1,588 1,371 2,087 1,802 1,743 1,505 80 2,088 1,789 1,844 1,579 2,423 2,076 2,024 1,734 Bay Area Region - Medicare Eligible PERS Choice PERS Select PERSCare PORAC Age M F M F M F M F 65 $346 $362 $346 $362 $385 $403 $435 $456 70 329 351 329 351 367 391 414 441 75 372 387 372 387 414 431 467 486 80 384 399 384 399 428 444 483 501 RMarch0 15, 2016 E-27 DEFINITIONS ■ GASB 45 • Project future employer-provided benefit cash flow for current active Accrual employees and current retirees Accounting • Discount projected cash flow to valuation date using discount rate and actuarial assumptions to determine present value of benefits (PVB) . Discount rate is expected long-term return on plan assets • Allocate PVB to past, current, and future periods • Normal Cost is portion of PVB allocated to current fiscal year • Actuarial cost method used for valuation is Entry Age Normal Cost method which determines Normal Cost as a level percent of payroll . Actuarial Accrued Liability (AAL) is portion of PVB allocated to prior service with the employer • Unfunded AAL (UAAL) is AAL less Plan Assets . Assets must be in segregated and restricted trust to be considered Plan Assets for GASB 45 ■ PayGo Cost • Cash subsidy is employer pay-as-you-go benefit payments for retirees . Implied subsidy is difference between actual cost of retiree benefits and retiree premiums subsidized by active employee premiums �A March 15, 2016 E-28 El DEFINITIONS Present Value of Benefits Present Value of Benefits Present Value of Benefits (Without Plan Assets) (With Plan Assets) F° a Future Mraial Normal Costs Costs Cost! i Normal Cost Unfunded Actuarial ['ofnuded Actuarial Accrued Liability Accrued Liabitity assets March 15, 2016 E-29 DEFINITIONS i VE ■ Annual • GASB 45 contribution is Normal Cost plus amortization o£ Required ➢ Initial UAAL and AAL for plan, assumption, and method changes Contribution ➢ Experience gains and losses (difference between actual experience (ARC) and that expected from assumptions) Contribution gains and losses (difference between ARC and actual contributions) ■ Net OPEB • NOO is accumulated amounts expensed but not funded Obligation . Net OPEB Asset if amounts funded exceed those expensed (NOO) ■ Annual • Expense for current period including: OPEB Cost ➢ ARC (AOC) ➢ Interest on NOO Adjustment of NOO . Adjustment of NOO prevents double counting of expense since ARCS include amortization of prior contribution gains and losses previously expensed PA March 15, 2016 E-30 El