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Home My WebLink AboutFin GASB 45 Report; Bartel 2012arTv Agenda Item No: 6 a. o 44 Meeting Date: May 21, 2012 SAN RAFAEL CITY COUNCIL AGENDA REPORT Department: Management Services Prepared by: Anil Comelo, Human City Manager Approva Resources Director SUBJECT: RESOLUTION ACCEPTING BARTEL ASSOCIATES' GASB 45 COMPLIANCE REPORT AS OF JUNE 30, 2011 RECOMMENDATION: Adopt the attached Resolution accepting Bartel Associates' GASB 45 compliance report for City of San Rafael as of June 30, 2011. BACKGROUND: The Governmental Accounting Standards Board (GASB) establishes financial accounting and reporting standards for state and local governmental entities. Governments and the accounting industry recognize GASB as the official source of generally accepted accounting principles for state and local government. Accounting and reporting standards addressing pension obligations have been in place for many years. Outside of pensions, jurisdictions often offer "Other Post Employment Benefits (OPEBs)," such as medical, dental, vision, life, or other benefits. It should be noted that, in San Rafael, the only OPER offered is medical. In June 2004, GASB issued Statement No. 45, "Accounting and Financial Reporting by Employers for Post -Employment Benefits Other Than Pensions." It was issued "to provide more complete, reliable, and decision -useful financial reporting." GASB 45 requires the City to engage a certified actuary every two years to calculate several actuarial measures estimating the current and future costs and liabilities of our OPEB. The actuary calculates the unfunded liability, normal costs, and annual required contribution (ARC). GASB 45 does not require jurisdictions to fund their OPEBs, but rather meet accounting and financial reporting standards. It is clear, though, that once a full accounting of retiree health liability is available, a jurisdiction has an obligation to their employees and community to plan for these costs and take steps to address them over time. This issue has grown in magnitude due to quickly rising healthcare costs, the rising number of retirees, and retiree longevity. GASB 45 went into effect in three phases based on a jurisdiction's annual revenues. The City of San Rafael fell into the second phase and therefore the new standards went into effect in Fiscal Year 2008-09. This will be the third GASB 45 report for the City. The previous reports were completed using data as of June 30, 2007 and June 30, 2009. -7L- SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 2 ANALYSIS: Staff has been working diligently to control health care costs both for active employees and for retirees. During the 2008 and 2009 labor negotiation cycles, the City instituted a cafeteria plan approach to employee health care which sets a benefit cap for each bargaining unit. In addition, the retiree health benefit was capped for current employees. Lastly, and most importantly from an OPEB perspective, the retiree health benefit for new employees has now been limited to the minimum allowed under our CalPERS health program. These cost reduction measures have a significant impact on our unfunded OPEB liability over the long run. The savings will be realized "over the long run" because as with any substantive change directed at future retirees, it takes time for employees to cycle through the organization. The actuarial valuation presented with this report is as of June 30, 2011, and shows the City of San Rafael's retiree health liability at approximately $36.2 million. The City has a 401(h) fund that is dedicated to retiree medical expenses. As of June 30, 2011, the fund had approximately $10.8 million. Factoring in these assets, the City's liability for retiree health costs is approximately $25.3 million, provided that the City fully funds its annual contribution each year. To fully fund the $25.3 million, the City would need to contribute the total Annual Required Contribution (ARC) which would be about $2.5 million each year. The City's practice has been to pay for the current retiree costs in the year those costs are incurred. This practice is known as the "Pay -As -You -Go" method. The payment has been approximately $2.4 million per year of which $1 million was withdrawn from the 401(h) account. Beginning the current fiscal year (FY 2011-12), the City will cease its practice of withdrawing $1 million from the 401(h). On May 7, 2012, the City Council as part of the Pension Reform resolution, committed to not increasing the retiree medical benefits that are currently capped (the caps vary by employee group.) This will allow the medical trust fund to earn income so that the retiree medical liability shrinks at a faster rate. These three measures, combined with the decreased benefits taking effect, should reduce our OPEB liability to a manageable level over the long run. In the current report there were several significant adjustments made to the calculation methodology which resulted in a change in the actuarially determined liability. These changes include the capping of benefits to current levels and the discontinuance of withdrawals from the 401(h) account. Adopt the recommendation as reflected in the staff report. Request further information. Reject the staff recommendation and choose not to take a position. ACTION REQUIRED: Adopt Resolution as presented. ATTACHMENTS: Resolution Bartel Associates Actuarial Valuation Report RESOLUTION NO. 13348 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL ACCEPTING BARTEL ASSOCIATES' GASB 45 COMPLIANCE REPORT FOR DATA ENDING JUNE 30, 2011 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 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, the City entered into an agreement with Bartel Associates to prepare the GASB 45 required compliance report for data ending June 30, 2011; and WHEREAS, in San Rafael, the only OPEB offered is medical which varies by bargaining unit; and WHEREAS, there has already been a number of significant steps taken to control retiree health costs in San Rafael. NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of San Rafael affirms the policy to not increase the cap on City contributions to retiree medical premiums and hereby accepts the report from Bartel Associates, LLC (attached herein). 1, 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 21 st day of May 2012, by the following vote, to wit: AYES: COUNCIL MEMBERS: Connolly, Heller, Levine, McCullough & Mayor Phillips NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: None ESTHER C. BEIRNE, City Clerk esl �i .;.117 CITY OF SAN RAFAEL RETIREE HEALTHCARE PLAN June 30, 2011 GASB 45 Actuarial Valuation Doug Pryor, Vice President Mary Beth Redding, Actuary Harish Ganesan, Actuarial Analyst Bartel Associates, LLC May 17, 2012 CONTENTS Topic Page Benefit Summary 1 Data Summary 5 Actuarial Assumptions Highlights 7 Actuarial Methods 12 Assets 13 Results 17 Actuarial Certification 30 Exhibits Premiums E— 1 Participant Statistics E — 3 Actuarial Assumptions E-33 Definitions E-37 o:\clients\city of sun rafael\opebl,201 I val\report\ba 12-05-17 sanrafaelci 11-06-30 opeb valuation final results.docx BENEFIT SUMMARY I Actives contribute 50 hours of sick leave to HRA each year (excluded from valuation) 2 Firefighters contribute 2% of salary to HRA (excluded from valuation) May 17; 2012 1 Mw BENEFIT SUMMARY ■ Medicare Elected Officials, All other ■ None Unrepresented Bargaining Units) reimbursement Mid Management & Management ■ Eligibility ■ Retire directly from City: ■ Hired > 4/1/07 None • Age 50 (age 55 if hired > 7/l/11) with 10 years service (including reciprocity) or ■ Other OPEB • 30 years service (Miscellaneous), 20 years service (Safety); or or Life Benefits • Disability retirement ■ Benefit ■ Hired < 1/1/09 Full premium/cap ■ Hired < 1/1/10 Up to cap Trust ■ Hired > 1 /l /09 PEMHCA Min ■ Hired > 1 / 1 / 10 PEMHCA Mine ■ Surviving ■ Benefit continues to surviving spouse Spouse $808,000 Benefit 2009/10 I Actives contribute 50 hours of sick leave to HRA each year (excluded from valuation) 2 Firefighters contribute 2% of salary to HRA (excluded from valuation) May 17; 2012 1 Mw BENEFIT SUMMARY ■ Medicare ■ Hired < 4/1/07 Full ■ None Part B reimbursement j ■ Hired > 4/1/07 None i ■ Other OPEB ■ No Dental, Vision, or Life Benefits ■ Contributions Fiscal Year Pam Trust Total 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 r BENEFIT SUMMARY 4 t 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 1/1/10 San Rafael Firefighters' Association, LATF,, Local $557 I/l/10 1775 San Rafael Police Association $386 I/l/10 San Rafael Police Mid -Management Association $566 I/l/10 SEIU 1021 $752 1/l/10 Public Employees Bargaining Unit (PEU) Local I $659 1/1/10 Unrepresented Management Employees and Council Hired < 4/1/07: Full prem. 1/1/09 City Clerk and Elected Part -Time Cit Attorne Hired > 4/1/07: $600 Western Council of Engineers (WCE) $752 1/l/10 s Employees hired on or after date receive only PEMHCA minimum ($112 in 2012). May 17, 2012 3 BENEFIT SUMMARY This page intentionally blank May 17, 2012 4 `" DATA SUMMARY Actives ' Data as of April 2010. ' Data as of December 2011. May 17, 2012 5 DATA SUMMARY _ Retirees 6/30/07 6/30/094 6/30/115 ■ Count 308 ■ Average • Tier 1 408 377 326 • Tier 2 n/a 4 35 • Total 408 381 361 ■ Average • Age 44.7 44.3 44.6 • City Service 11.6 10.7 10.9 • Pay $ 72,800 $ 77,900 $ 77,000 ■ Total Payroll (in 000's) 29,719 29,689 27,784 ' Data as of April 2010. ' Data as of December 2011. May 17, 2012 5 DATA SUMMARY _ Retirees Data as of April 2010. Data as of December 2011. May 17, 2012 6 6/30/07 6/30/096 6/30/11' ■ Count 247 291 308 ■ Average •Age 66.6 65.9 66.7 ! • Retirement Age 56.6 53.9 54.7 • MonthI r Benefit $ 480 $ 537 $ 573 Data as of April 2010. Data as of December 2011. May 17, 2012 6 ACTUARIAL ASSUMPTIONS HIGHLIGHTS Assumption June 30, 2009 Valuation June 30, 2011 Valuation ■ Valuation . June 30, 2009 • June 30, 2011 Date . 2010/11 & 2011/12 • 2012/13 & 2013/14 ■ Funding • Pay -go with 401(h) account • Pay -go with 401(h) account Policy reimbursements: reimbursement: $1 million in 2008/09, $1 million for 2011/12 2009/10 and 2010/11 None thereafter decreasing by $100,000 each 2015/16+ 7.50% year with no reimbursement in i ■ Payroll 2020/21 • Aggregate increases — 3.25% ■ General . 3.50% • 3.25% Inflation 6/30/2009 MCERA assumptions 6/30/2011 MCERA assumptions ■ 401(h) Asset . 7.75% • 7.50% Return ■ City Return • 4.50% • 4.25% May 17, 2012 7 ACTUARIAL ASSUMPTIONS HIGHLIGHTS Assumption June 30, 2009 Valuation June 30, 2011 Valuation ■ Discount • Select & ultimate discount rates • Select & ultimate discount rates Rate based on funded status: based on funded status: 2009/10 5.40% 2011/12 7.32% 2014/15 5.17% 2012/13 7.28% 1 2019/20 5.16% 2013/14 7.39% 2024/25 5.31% 2014/15 7.47% 1 i 2015/16+ 7.50% 2047/48+ 7.75% i ■ Payroll • Aggregate increases —3. 5 0% • Aggregate increases — 3.25% Increases • Merit Increases — Same as • Merit Increases — Same as 6/30/2009 MCERA assumptions 6/30/2011 MCERA assumptions t May 17, 2012 8 ACTUARIAL ASSUMPTIONS HIGHLIGHTS Assumption June 30, 2009 Valuation June 30, 2011 Valuation ■ Healthcare Increase from Prior Year Non -Medicare Medicare Trend Non -Medicare Medicare Year All Plans Increases Year HMO PPO HMO PPO 2009 n/a ■ Participation 2009 Actual 2009 Premiums 2010 n/a at Retirement 2010 Actual 2010 Premiums 2011 Actual 2011 premiums 2011 Actual 2011 Premiums 2012 Actual 2012 premiums 2012 8.9% 9.5% 9.2% 9.8% 2013 9.0% 9.4% 2013 8.3% 8.8% 8.5% 9.0% 2014 8.5% 8.9% 1 1 1 1 1 2015 8.0% 8.3% 2018+ 5.0% 5.0% 5.0% 5.0% 2016 7.5% 7.8% 2017 7.0% 7.2% 2018 6.5% 6.7% 2019 6.0% 6.1% 2020 5.5% 5.6% 2021 A 5.0% 5.0% ■ Cap Increases • 3.50% • None ■ Actuarial • '/z of 2008-2011 Cap/Premium • 2% (Management benefit Loading gain reserved for future uncapped) increases > expected (6.2%) May 17, 2012 E ACTUARIAL ASSUMPTIONS HIGHLIGHTS F � Assumption June 30, 2009 Valuation June 30, 2011 Valuation ■ PEMHCA • 4.5% after 2011 • 4.5% after 2012 Minimum Increases ■ Participation • Actives: • Actives: at Retirement y Capped benefit: Capped benefit: o Currently covered: 100% o Currently covered: 100% o Currently waived: 80% o Currently waived: 80% PEMHCA minimum: 90% PEMHCA minimum: 60% • Retirees: same as current • Retirees: same as current election election May 17, 2012 10 ACTUARIAL METHODS Method June 30, 2009 Valuation June 30, 2011 Valuation ■ Cost Method ■ Entry Age Normal ■ Same ■ Amortization ■ Level percentage of payroll ■ Same Method ■ Actuarial ■ MCERA 401(h) account ■ MCERA 401(h) account Value of actuarial value projected actuarial value projected Assets forward to 6/30/10 forward to 6/30/12 Method June 30, 2009 Valuation June 30, 2011 Valuation ■ Amortization ■ 28 -year fixed (closed) period ■ 23 -year fixed (closed) period Period for initial UAAL from 6/30/10 for 6/30/12 URAL ■ 20 -year fixed (closed) period for plan changes ■ 15 -year fixed (closed) period for method and assumption changes, and experience and contribution gains and losses ■ Maximum 30 -year combined period ■ Implied■ Employer cost for allowing retirees to participate, irrespective of Subsidy employer contribution ■ Community rated plans not required to value implied subsidy ■ No implied subsidy determined for this valuation May 17, 2012 12 ASSETS Market Value of Plan Assets (000's Omitted) May 17, 2012 13 ASSETS _ E. Actuarial Value of Plan Assets' (000's Omitted) 2007/08 2008/09 2009/10 2010/11 ■MVA (boy) $ 14,525 $ 13,010 $ 10,644 $ 9,585 • Contribution 1,119 - - - • Benefit Payment (1,000) (1,000) (1,000) (1,000) • Investment Return 1,634 1,366 59 2,303 ■ MVA (eoy) 13,010 10,644 9,585 10,888 ■Approximate Return -11.2% -10.5% -0.6% 24.0% May 17, 2012 13 ASSETS _ E. Actuarial Value of Plan Assets' (000's Omitted) Assets projected based on 7.5% annual assumed rate of return. m May 17, 2012 14 Proj Proj 2010/11 2011/12 NAVA (boy) $ 11,008 $ 10,861 • Contribution - - • Benefit Payment (1,000) (1,000) • Credited Return 853 740 NAVA (eoy) 10,861 10,601 I ■Assumed Return ( 7.75°l07.50% Assets projected based on 7.5% annual assumed rate of return. m May 17, 2012 14 401 ASSETS Historical Returns 30% 25% _A 20% 15% 10% 5% 0% (5%) (10%) (15%) (20%) (25%) (30%) 07/08 08/09 09/10 10/11 -11.2% -10.5% -0.6% 24.0% Return 7.75% 7.75% 7.75% 7.75% May 17, 2012 15 r May 17, 2012 16 -`° ASSETS This page intentionally blank WON May 17, 2012 16 -`° May 17, 2012 17�` RESULTS Historical Funded Status (000's Omitted) $60.000 $0,000 $40,000 $30,000 $20,000 $10,000 $0 6/30/07 6/30/09 6/30/11 =Retireepay-go =Retiree AAL less pay -go =ActtveAAL MVA May 17, 2012 6/30/07 6/30/09 6/30/11 ■ Present Value of Benefits • Actives $ 41,880 $ 37,131 $ 14,105 • Retirees 27,714 35,196 25,802 • Total 69,594 72,327 39,907 ■ Actuarial Accrued Liability • Actives 25,053 21,066 9,354 • Retirees 27,714 35,196 25,802 • Total 52,767 56,262 35,156 ■ Assets 14,563 12,773 10,861 ■Unfunded Liabili 38,204 43,489 24,295 ■Normal Cost 2,022 1,805 706 ■Pay -Go Cost 1,686 2,045 2,282 May 17, 2012 17�` RESULTS Historical Funded Status (000's Omitted) $60.000 $0,000 $40,000 $30,000 $20,000 $10,000 $0 6/30/07 6/30/09 6/30/11 =Retireepay-go =Retiree AAL less pay -go =ActtveAAL MVA May 17, 2012 s RESULTS Actuarial Accrued Liability Gain/Loss (000's Omitted) May 17, 2012 19 RESULTS Total Gain/Loss (000's Omitted) AAL Gain ILoss ■ Actual A 6/30/09 $ 56,262 ■ Ex ected 6/30/11 61,142 ■ Changes $ (27,937) • Change in Decrement Assumptions 3,169 • Change in Medical Trend 512 • Premiums/Caps < Expected (3,711) • Actuarial Load (2,370) • Change in Discount Rate Assumed Investment Return 2,093 �, Funding Policy Change (10,727) • Cap Freeze (14,653) • Other (299) • Total 25,986 ■ Actual 6/30111 35,156 May 17, 2012 19 RESULTS Total Gain/Loss (000's Omitted) May 17. 2012 20 6/30/12 Total Gain /Loss ■ Source • Liability $ (27,937) • Asset 1,311 L • Total 26,626 May 17. 2012 20 RESULTS Annual Required Contribution (ARC) (000's Omitted) May 17, 2012 21 RESULTS $2,000 $1,000 $a n 10111 11112 •Normal Cost -_ 1,805 1,869 • Amortization 2,219 2,496 ARC 4,024 4,365 May 17, 2012 22 12/13 13%14 706 699 1,728 1,797 27434 1496 6/30/2009 Val 6/30/2011 Val 2010/11 2011/12 2012/13 2013/14 ■ Annual Required Contribution - $ • Normal Cost $ 1,805 $ 1,869 $ 706 $ 699 • UAAL Amortization 2,219 2,496 1,728 1,797 • Total ARC 4,024 4,365 2,434 2,496 ■ Projected Payroll 30,728 31,727 28,687 29,619 ■ Annual Required Contribution - % • Normal Cost 5.9% 5.9% 2.5% 2.4% • UAAL Amortization 7.2% 7.9% 6.0% 6.1% • Total ARC 13.1% 13.8% 8.5% 8.4% May 17, 2012 21 RESULTS $2,000 $1,000 $a n 10111 11112 •Normal Cost -_ 1,805 1,869 • Amortization 2,219 2,496 ARC 4,024 4,365 May 17, 2012 22 12/13 13%14 706 699 1,728 1,797 27434 1496 RESULTS Amortization Bases (000's Omitted) ,t May 17, 2012 23 RESULTS Amortization Payments (000's Omitted) 6/3012009 Val 6/30/2011 Val 6/30/10 6/30/11 6130/12 6/30/13 ■ Payment ■ Outstanding Balance • Initial UAAL $ 44,417 $ 44,705 $ 44,908 $ 45,034 • (Gain)/Loss 2009 val (4,536) (4,422) (4,287) (4,299) v 2011 val - - (26,626) (26,700) • Contribution (Gain)/Loss 6,265 8,485 11,575 11,788 • Total 46,146 48,768 25,571 25,822 ,t May 17, 2012 23 RESULTS Amortization Payments (000's Omitted) May 17, 2012 24 6/30/2009 Val 6/30/2011 Val 2010/11 2011/12 2012/13 2013/14 ■ Payment • Initial UAAL $ 2,084 $ 2,157 $ 3,035 $ 3,134 j • (Gain)/Loss i 2009 val (357) (369) (290) (299) j I x,2011 val - - (1,800) (1,858) • Contribution (Gain)/Loss 492 707 782 820 • Total 2,219 2,495 1,728 1,797 • Average years 1 27 = ---25 23 22 May 17, 2012 24 RESULTS Estimated Net OPEB Obligation (NOO) (000's Omitted) Based on 6134!09 valuation. 10 Estimated benefit payments for 2011/12, 2012113, & 2013/14 Ji May 17, 2012 25 _ RESULTS NOO Prosection (000's Omitted) (� Fiscal Year CAFR Estimated 2010111 2011/12 2012113 2013114 $ 11,576 ■ Estimated NOO at Beginning of Year $ 6,265 $ 8,485 $ 11,576 $ 11,789 ■ Annual OPEB Cost • Annual Required Contribution 4,024 4,3659 2,434 2,496 • Interest on NOO 335 621 843 872 • Adjustment for NOO4( 92)7� 07) (782) 820 • Annual OPEB Cost 3,867 4,279 2,495 2,547 ■ Contributions 2015/16 11,879 2,7981 - 2,798 • Benefit Payments10 2,648 ` 2,188 2,282 2,428 • Trust Pre -Funding (1 000)1( ,000) - - • Total Contribution 1,648 1,188 2,282 2,428 ■ Estimated NOO at End of Year L 8,485 11,576 11,789 11,908 Based on 6134!09 valuation. 10 Estimated benefit payments for 2011/12, 2012113, & 2013/14 Ji May 17, 2012 25 _ RESULTS NOO Prosection (000's Omitted) (� Fiscal Year Beginning of Year Net OPEB Obli gation Contribution'' Benefit Pre- Total Pmts Fund Contrib Annual OPEB Cost AOC Payroll Contribution as % of Pa roll 2012/13 $ 11,576 '$ 2,282 $ - $ 2,282 $ 2,495 $ 28,687 8.0% 2013114 11,789 2,428 - j 2,428 2,547 29,619 8.2% 2014/15 11,908 2,560 ' - 1 2,560 2,591 30,582 8.4% 2014115 11,939 2,681 - 2,681 2,622 31,576 8.5% 2015/16 11,879 2,7981 - 2,798 2,644 32,602 8.6% 2016/17 11,725 2,913 , - 2,913 2,659 33,662 8.7% 2017/18 11,471 3,039 - 3,039 2,664 34,756 8.7% 2018119 11,096 3,143 - 3,143 2,658 35,885 8.8% 2019/20 10,611 3,224 - 3,224 2,648 37,051 1 8.7% 2020121 10,035 3,290 - 31290 2,633 38,256 1 8.6% Based on benefits paid to retirees. . 1 May 17, 2012 26 RESULTS t � Actuarial Obligations June 30, 2011 (000's Omitted) 12 For illustrative purposes, assets allocated on AAL. May 17, 2012 27 RESULTS Annual Required Contribution (ARC) 2012/13 (000's Omitted) Miscellaneous Safety Total ■ PVPB • Actives $ 10,625 $ 3,480 $ 14,105 • Retirees 15,021 10,780 25,802 • Total 25,646 14,260 39,907 ■ AAL 15,779 12,908 28,687 • Actives 7,236 2,118 9,354 • Retirees 15,021 10,780 25,802 • Total 22,257 12,898 35,156 ■ Assets 12 6,876 3,985 10,861 ■ Unfunded Liability 15,381 1 8,913 24,295 ■ Normal Cost (12/13) 516 190 706 ■ Pay Go Costs (12/13) 1,307 975 2,282 12 For illustrative purposes, assets allocated on AAL. May 17, 2012 27 RESULTS Annual Required Contribution (ARC) 2012/13 (000's Omitted) Miscellaneous Safety Total ■ ARC- $ • Normal Cost $ 516 $ 190 $ 706 • UAL Amortization13 1,105 623 1,728 • Total ARC 1,620 814 1434 ■ Projected Payroll 15,779 12,908 28,687 ';■ARC-% E • Normal Cost i j 3.3% 1.5% 2.5% • UAL Amortization 1 7.0% 4.8% 6.0% • Total ARC 10.3% 6.3% 8.5% ' For illustrative purposes, amortization amount allocated on AAL, ;r May 17, 2012 28 RESULTS Actuarial Obligations & Annual Required Contribution Tiers (000's Omitted) 14 All assets allocated to Tier 1. May 17, 2012 29 ACTUARIAL CERTIFICATION This report presents the City of San Rafael Retiree Healthcare Plan ("Plan") June 30, 2011 actuarial valuation. The purpose of this valuation is to: ■ Determine the Governmental Accounting Standards Board Statement Nos. 43 and 45 June 30, 2011 Benefit Obligations, ■ Determine the Plan's June 30, 20 Funded Status, and ■ Calculate the 2012/13 and 2013/14 Annual Required 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 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, t t r' Doug Pryor, ASA, EA, MAAA Mary Elizabeth Redding, FSA, MAAA, EA Vice President Assistant Vice President Bartel Associates, LLC Bartel Associates, LLC May 17, 2012 May 17, 2012 Mav 17, 2012 30 ' Tier 1 Tier 2 Total ■ AAL $ 35,152 $ 4 $ 35,156 ■ Assets 14 10,861 - 10,861 ■ Unfunded Liability 24,291 4 24,295 ■ 2012/13 ARC • Normal Cost 692 14 706 • UAL Amortization 1,727 - 1,728 • Total ARC 2,420 14 2,434 ■ Payroll 26,663 2,024 28,687 ■ ARC % of payroll 9.1% 0.7% 8.5% 14 All assets allocated to Tier 1. May 17, 2012 29 ACTUARIAL CERTIFICATION This report presents the City of San Rafael Retiree Healthcare Plan ("Plan") June 30, 2011 actuarial valuation. The purpose of this valuation is to: ■ Determine the Governmental Accounting Standards Board Statement Nos. 43 and 45 June 30, 2011 Benefit Obligations, ■ Determine the Plan's June 30, 20 Funded Status, and ■ Calculate the 2012/13 and 2013/14 Annual Required 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 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, t t r' Doug Pryor, ASA, EA, MAAA Mary Elizabeth Redding, FSA, MAAA, EA Vice President Assistant Vice President Bartel Associates, LLC Bartel Associates, LLC May 17, 2012 May 17, 2012 Mav 17, 2012 30 ' Medical Plan Non -Medicare Eligible Medicare Eligible Single 2 -Party Family Single 2 -Party Family' Blue Shield $675.51 $1,351.02 $1,756.33 $337.88 $675.76 $1,013.64 Blue Shield NetValue 581.24 1,162.48 1,511.22 337.88 675.76 1,013.64 Kaiser 568.99 1,137.98 1,479.37 282.30 564.601 846.90 PERS Choice 563.40 1,126.80 1,464.84 375.88 751.76 1,127.64 PERS Select 492.68 985.36 1,280.97 375.88 751.76 1,127.64 PERSCare 893.95 1,787.90 2,324.27 433.66 867.32 1,300.98 PORAC 527.00 987.00 1,254.00 418.00 833.00 1,331.00 May 17, 2012 E-1-' PREMIUMS 2012 PEMHCA Monthly Premiums Bay Area Medical Plan Non -Medicare Eligible Medicare Eligible Single 2 -Party Family Single 2 -Party Family Blue Shield Blue Shield NetValue $711.10 611.59 $1,422.20 1,223.18 $1,848.86 1,590.13 $337.99 337.99 $675.98 675.98 $1,013.97 1,013.97 Kaiser PERS Choice 610.44 574.15 1,220.88 1,148.30 1,587.14 1,492.79 277.81 =;; 383.441 555.62 766.88 833.43 1,150.32 PERS Select PERSCare 487.39 1,029.23 974.78 2,058.46 1,267.21 2,676.00 383.44 432.4-11 766.88 864.86 1,150.32 11 1,297.29 PORAC 556.40 1,041.001 1,323.00 ! 418.00 t 833.001 1,331.00 May 17, 2012 E-2 .. PARTICIPANT STATISTICS Participant Statistics June -30. 2011 txcluaes Lx surviving spouses May 17, 2012 E-3Tr PARTICIPANT STATISTICS Participant Statistics .Tune 30.200916 Miscellaneous Police Fire Total ■ Actives • Count 245 59 57 361 • Average Age 46.2 39.8 42.7 44.6 • Average Service 10.3 10.8 13.4 10.9 • Average Pay $ 62,374 $ 103,737 $ 111,962 $ 76,964 • Payroll ($000s) 15,282 6,120 6,382 27,784 ■ Retirees � Count < 65 62 44 49 155 ➢ Count > 65 76 32 45 153 � Total 138 76 94 308 • Average Age 68.6 64.3 66.0 66.7 • Average Ret. E Age 15 58.5 50.4 52.7 54.7 txcluaes Lx surviving spouses May 17, 2012 E-3Tr PARTICIPANT STATISTICS Participant Statistics .Tune 30.200916 16 Data as of Marcli April 2010. June 30, 2009 active counts approximately 5% higher. May 17, 2012 E-4 �" Miscellaneous Police Fire Total ■ Actives • Count 254 66 61 381 • Average Age 46.0 38.7 43.2 44.3 • Average Service 10.2 9.6 14.4 10.7 • Average Pay $ 64,400 $ 103,000 $ 106,900 $ 77,900 • Payroll ($000s) 16,370 6,797 6,522 29,689 ■ Retirees ➢ Count < 65 64 51 49 164 Count > 65 68 24 35 127 Total 132 75 84 291 • Average Age 68.5 62.4 649 65.9 • Average Ret. E j Age" 58.0 49.0 52.q__L 53.9 16 Data as of Marcli April 2010. June 30, 2009 active counts approximately 5% higher. May 17, 2012 E-4 �" Medical Plan Actives Retirees < 65 > 65 Total Blue Shield 21% 26% 20% 23% Blue Shield NetValue 1% 1% 1% 1% Kaiser 67% 49% 41% 45% PERS Choice 3% 7% 9% 8% PERS Select 1% 1% 0% 1% PERS Care 2% 8% 30% 19% PORAC-- 5% 8% 0% 4% Total 100% 100% 100% 100% 17 Excludes 28 surviving spouses May 179 2012 E-5 PARTICIPANT STATISTICS This page intentionally blank May 17, 2012 F-6 PARTICIPANT STATISTICS Active Medical Coverne Medical Plan Single 2 -Party Family Waived Total Blue Shield 25 17 26 - 68 Blue Shield NetValue I - 2 - 3 Kaiser 80 41 91 - 212 PERS Choice 2 3 5 - 10 PERS Select PERSCare I 1 I 2 I 2 - - 3 5 PORAC 5 3 9 - 17 Waived - - - 43 43 rTotal 115 67 136 43 361 May 17, 2012 E-7 PARTICIPANT STATISTICS Retiree Medical Coverage Under AL3e 65 Medical Plan Region Single 2 -Party Family Total Blue Shield/Net Value Ba Area� 18 1 8 11 -- 37 Sacramento =1 I 2 North 2 - - 1 2 Kaiser Bay Area 34 23 16 1 73 Sacramento I - - I South Out of State I PERS Choice- Bay Area 12 1 3 North 2 1 3 Out of State 3 2 5 PERS Select Bay Area 2 PERSCare Bay Area 4 1 2 7 North I - I PORAC Out of State 2 - 2- 8 3 + 4 1-3 IL Total j 74 49 32 155 May 17, 2012 E-8 A40!*j 'jj. PARTICIPANT STATISTICS Retiree Medical Coverage F— Over Age 65 I Medical Plan Region Single 2 -Party Family I Total May 17, 2012 E-9 PARTICIPANT STATISTICS This page intentionally blank May 17, 2012 E-10 Blue Shield/Net Value Bay Area 11 14 25 Sacramento 1 3 North 4 Kaiser South BayArea 25 27 2 54 Sacramento - 2 2 Los�neles I - I South 2 1 Out of State I 1 3 2 PERS Choice Bay Area 6 6 Sacramento I I North - 2 2 Out of State 4 1 5 PERSCare Ba Area 18 13 31 North 2 2 4 South I - I Out of State 8 2 10 Total 77 74 2 153 May 17, 2012 E-9 PARTICIPANT STATISTICS This page intentionally blank May 17, 2012 E-10 PARTICIPANT STATISTICS Actives by Age and City Service Miscellaneous May 17, 2012 E -1I PARTICIPANT STATISTICS City Service Age < 1 1-4 5-9 10-14 15-19 20-24 > 25 Total <25 25-29 6 4 2 6 2 4 - - - - - - - - 10 14 30-34 5 12 4 24 35-39 4 12 8 6 1 - - 31 40-44 - 5 6 4 5 3 - 23 45-49 50-54 3 1 8 6 9 7 9 13 2 3 7 7 6 2 44 39 55-59 - 7 8 10 3 6 4 38 60-64 - - 1 3 2 3 - 9 > 65 1 2 3 3 1 1 2 13 Total 24 60__L52 51 17 27 14 245 May 17, 2012 E -1I PARTICIPANT STATISTICS PARTICIPANT STATISTICS Active Service Distribution Miscellaneous 1vv 90 80 70 60 E 50 Z 40 30 20 10 0 May 17, 201 PARTICIPANT STATISTICS This page intentionally blank May 17, 2012 E-14 PARTICIPANT STATISTICS Actives by Aye and City Service Police May 17, 2012 E-15 PARTICIPANT STATISTICS City Service Age < 1 1-4 5-9 10-14 15-19 20-24 >_ 25 Total <25 - - - - - - - - 25-29 - 3 4 - - - - 7 30-34 - - 7 2 - - - 9 35-39 - 2 9 5 - - - 16 40-44 1 3 2 4 3 - - 13 45-49 50-54 - - - 1 - - 2 1 - - 4 1 - 3 6 6 55-59 - 1 1 - - - - 2 60-64 - - - - - - - - >65 - - - - - - - - To tal 1 10 23 14 3 5 3 59 (-1 Mav 17, 2012 E-16 Active Service Distribution Police Safety 25 20 C36/30/09 Valuation — 06130111 Valuation a� 15 E z 10 5 0 Fh 0-4 5-9 10-14 15-19 20-24 >25 Service � 5 i May 17, 2012 E-17 r PARTICIPANT STATISTICS This page intentionally blank May 17, 2012 E-18 PARTICIPANT STATISTICS Actives by Age and City Service Fire May 17, 2012 E-20 City Service Age < 1 1-4 5-9 10-14 15-19 20-24 > 25 Total <25 - 1 - - - - - 1 25-29 1 3 1 - - - - 5 30-34 2 4 1 1 - - - 8 35-39 - - 3 4 - - - 7 40-44 1 - 4 3 2 - 1 H- 45-49 2� 1 1 �3 2 9 50-54 � 1 I 1 1 = 5 7 15 55-59 - - - 60-64 - - - - - - - - >65 - - - - - - - - Total 4 11 11 11 2 8 10 57 May 17, 2012 E-20 PARTICIPANT STATISTICS Active Service Distribution Fire Safety 16 ❑ 6!30109 Valuation — 14 06130111 Valuation _ 12 10 a E 8 2 6 4 2 F-1 I 0 0-4 5-9 10-14 15-19 20-24 >25 Service May 17, 2012 E-21 PARTICIPANT STATISTICS This page intentionally blank May 17, 2012 E-22 PARTICIPANT STATISTICS Actives by Ate and City Service Total May 17, 2012 E-24 City Service Age < 1 1-4 5-9 10-14 15-19 20-24 >_ 25 Total <25 6 3 2 - - - - 11 25-29 5 12 9 - - - - 26 30-34 7 16 12 6 - - - 41 35-39 4 14 20 15 1 - - 54 40-44 45-49 2 3 8 10 12 10 11 12 10 2 3 14 1 8 47 59 50-54 1 8 8 15 3 13 1 12 60 55-59 - 8 9 11 3 6 4 41 60-64 - - 1 3 2 3 - 9 > 65 1 2 3 3 1 1 2 13 Total 29 81 86 76 22 40 27 361 May 17, 2012 E-24