HomeMy WebLinkAboutStaff Report 14112
City of Palo Alto (ID # 14112)
Finance Committee Staff Report
Meeting Date: 6/7/2022 Report Type: Action Items
City of Palo Alto Page 1
Title: Accept June 30, 2021 Actuarial Valuation of Palo Alto's Retiree
Healthcare and Other Post Employment Benefits, Approve Annual Actuarially
Determined Contributions for Fiscal Years 2023 and 2024, and Affirm
Additional Payments to Employers' Benefit Trust Fund
From: City Manager
Lead Department: Administrative Services
RECOMMENDATION
Staff recommends that the Finance Committee recommend the City Council:
1. Review and accept the June 30, 2021 actuarial valuation of Palo Alto’s Retiree Healthcare
Plan;
2. Approve full funding of the annual Actuarial Determined Contribution (ADC) for Fiscal Year
2023 and Fiscal Year 2024 using the staff recommended adjusted assumptions; and
3. Affirm the continued the practice of transmitting amounts at a lower 6.25 percent
discount rate as an additional discretionary payment to the City’s California Employers’
Retiree Benefit Trust (CERBT) Fund.
EXECUTIVE SUMMARY
In accordance with the Governmental Accounting Standards Board (GASB), the City Council is
required to review and approve the actuarial valuation for retiree healthcare plan on a bi-
annual basis for the upcoming two fiscal years and approve funding of the annual Actuarial
Determined Contribution (ADC). This current study presents the fund’s status as of June 30,
2021 and will be used to inform the FY 2023 and FY 2024 annual operating budgets. This report
was finalized after the development of the FY 2023 Proposed Budget. Therefore, funding levels
in the FY 2023 Proposed Budget reflect the out years of the prior study completed on June 30,
2019 (CMR 11284). Funding levels recommended by the Finance Committee as part of this
discussion will be included as an amendment to the FY 2023 Proposed Budget and included for
City Council adoption of the budget on June 20, 2022.
The City continues to selecta Strategy 1 asset allocation, currently projected at a 6.75 percent
discount rate for the California Employers’ Retirement Benefit Trust (CERBT) Fund, managed by
CalPERS. Beginning with the June 30, 2019, valuation (CMR 11284), the City Council directed
staff to calculate additional discretionary payments (“prefunding”) eq uivalent to a 6.25 percent
discount rate and transmit amounts above payments at a 6.75 percent discount rate to the
3
Packet Pg. 35
City of Palo Alto Page 2
CERBT Fund. Through FY 2022, a total of $3.5 million in additional contributions are expected to
be made to the CERBT.
The June 30, 2021, valuation includes several changes that have favorably impacted the CERBT
fund status, primarily due to healthcare and economic fluctuations resulting from the COVID -19
pandemic and continued proactive funding contributions:
• 2020-21 investment returns of 27.5 percent (6.75 percent target);
• Lower than anticipated healthcare premiums; and
• Accumulated contributions (full ADC payments and prefunding)
These favorable changes are advised to be taken in consideration of an uncertain environment.
Current portfolio earning is not expected to meet target return this year (FY 2022) and it is not
known whether the recent change in healthcare premiums will be ongoing or an anomaly due
to the significant governmental support of healthcare costs over the past two y ears. Because
we do not know whether these favorable changes are the beginning of a trend, or merely a
temporary anomaly, this report includes several options to fund Other Post-Employment
Benefit (OPEB) obligations for Finance Committee review and discussion beyond the typical
recommended “baseline” strategy.
• Recommended Funding: consider alternative assumptions that are intended to better
align with the current economic outlook and proactive funding of long-term liabilities.
• Alternative 1 (“baseline”): reflects the ADC for current City Council approved funding
levels and actuary assumptions.
The below table provides a summary of the options and a comparison of costs to the FY 2023
Proposed Budget in all funds. A more detailed discussion of these options is included in this
report. All options reflect expected savings when compared to assumptions currently built in
the FY 2023 Proposed Budget as reviewed by the Committee in May. Staff recommends that
any savings remain unallocated and fall to respective funds fund balance/reserves based on
standing policies, unless otherwise directed.
Table 1: Funding for the FY 2023 OPEB Obligations
FY 2023 OPEB
Funding
$
Change
FY 2023 Proposed Budget (based on June 30, 2019 valuation) $16.9M -
Recommended
Funding
Adjusted
Assumptions
• Zero percent return 2021-22
• Proactive contribution at lower discount rate of
6.25 in ADC
• Shorten Amortization period
(from 22 to 15 years)
• Additional funding for FY 2023 Proposed staffing
$14.6M ($2.3M)
Alternative:
Baseline
• Current approved funding levels
• Proactive contribution at lower discount rate of
6.25 in ADC
$12.3M ($4.6M)
3
Packet Pg. 36
City of Palo Alto Page 3
*Approximately 65 percent of costs are allocated to the General Fund.
BACKGROUND
The City of Palo Alto offers its employees and retirees a Retiree Healthcare benefit plan which is
managed and administered by the California Public Employees’ Retirement System (CalPERS), a
State of California Retiree Healthcare Trust program. Bi-annually staff contracts with an actuary
firm that provides an actuarial report detailing the latest status of the City of Palo Alto’s Retiree
Healthcare plans for employees and retirees. The actuarial report is used to calculate the
annual ADC to the trust. In addition, updates on the rate of return, funding statu s, and changes
to the trust based on various impacts are detailed in the report. Unlike the pension actuary
reports, this actuary details impacts by Fund, Department, Employee Group, and Healthcare
Plans selected.
There are four groups of benefits within the CalPERS Retiree Healthcare benefit plans. Table 1
below outlines the different benefits levels by Group. These benefit levels are negotiated and
approved as part of the employee contracts. Employees and retirees have an open enrollment
window in October each year in which they can make changes to their healthcare plans that
take effect in January of the following year.
Table 2: City of Palo Alto Retiree Healthcare Benefit Plans and Tiers
Miscellaneous Safety: Fire Safety: Police
Group 1
Retired before January 1, 2007;
eligibility starting at the age 50
and 5 years of service; full
premium up to family coverage
Retired before January 1, 2007;
eligibility starting at the age of 50
and 5 years of service; full
premium up to family coverage
Retired before March 1, 2009;
eligibility starting at the age of 50
and 5 years of service; full premium
up to family coverage
Group 2
Retired between January 1, 2007
and May 1, 2011; eligibility
starting at the age 50 and 5 years
of service; same as Group 1, but
premium limited to 2nd most
expensive medical plan
Retired between January 1, 2007
and December 1, 2011; eligibility
starting at the age 50 and 5 years
of service; same as Group 1, but
premium limited to 2nd most
expensive medical plan
Retired between March 1, 2009 and
April 1, 2015 (POA), between
January 1, 2007 and June 1, 2012
(PMA) ; eligibility starting at the age
50 and 5 years of service; same as
Group 1, but premium limited to 2nd
most expensive medical plan
Group 3
(Retirees) Retired after Group 2, did not elect into Group 4, benefit same as active employees
Group 3
(Active EEs)
Currently active, not in Group 4.
Flat Dollar Caps equal to actives
N/A
(All active Group 3 IAFF & FCA
elected into Group 4)
N/A
(All active Group 3 POA & PMA
elected into Group 4)
Group 4
Vesting Schedule: 10 years gets
50%, 20 years gets 100%,
formula amount
Vesting Schedule: 10 years gets
50%, 20 years gets 100%,
formula amount
Vesting Schedule: 10 years gets
50%, 20 years gets 100%, formula
amount
CalPERS Projected Contribution Levels
The actuary report has two components to the annual billing of the employer portion of
retiree healthcare contributions that comprise the Actuarial Determined Contribution (ADC),
1) the Normal Cost (NC), and 2) the Unfunded Actuarial Accrued Liability (UAAL).
3
Packet Pg. 37
City of Palo Alto Page 4
• NC: This reflects a rate of contribution for the plan of retirement healthcare benefits
provided to current employees based on the current set of assumptions.
• Employer Amortization of UAAL: This is an annual payment calculated to pay down an
agency’s unfunded accrued liability. Assuming every assumption in the actuarial valuation
was accurate, an organization would eliminate its unfunded pension liability if it made these
payments annually for 30 years. The City Council approved a closed period to amortize the
entire net pension liability over a specific timeframe, and 22 years of payments remain as of
June 30, 2021. The total liability will vary from one year to the next because of assumption
changes and actuarial experience that is different from anticipated, such as actual
investment returns that do not meet expectations.
As established by the City Council, the City’s CERBT Fund is invested in a Strategy 1 asset
allocation at a 6.75 percent discount rate. Beginning with the June 30, 2019, valuation (CMR
11284), consistent with the City’s proactive pension funding policy, the City Council approved
the calculation of ADC at a lower 6.25 percent discount rate, transmitting the amounts above a
6.75 percent discount rate as an additional discretionary payment (“prefunding”) to the CERBT
Fund. Other proactive measures to mitigate the increasing costs of healthcare plans for current
and future retirees include cost sharing with employees, capping the plans covere d, and
establishing a flat contribution that can be adjusted with each labor agreement for active
employees.
The City’s CERBT Fund was established in May 2008 at a level of $33 million and it has grown to
$164 million as of March 31, 2022.
DISCUSSION
Summary of Actuarial Report June 30, 2021
Staff contracted with Bartel Associates, LCC (BA) for this retiree healthcare actuarial report
(Attachment A) to determine the City’s retiree healthcare liability and the ADC for Fiscal Years
2023 and 2024. The actuarial analysis is based on current employees’ accrued benefit, and
retired employees as of June 30, 2021.
This updated valuation includes several changes that have favorably impacted the CERBT fund
status, primarily due to healthcare and economic fluctuations resulting from the COVID-19
pandemic. Most notably, investment returns for 2020-21 reached an unprecedented level of
27.5 percent for the period. This level of return had a significant impact on the overall status of
the fund and is not expected to continue in future periods. Healthcare premiums were lower
than anticipated likely due to government funding of pandemic-related healthcare costs,
deferral of individual healthcare visits during the pandemic due to personal safety decisions and
public health orders and use of CalPERS reserves to keep premiums down.
3
Packet Pg. 38
City of Palo Alto Page 5
The full impact on healthcare costs resulting from the pandemic is yet to be determined and is
expected to be factored into future valuation reports based on actual experience in costs. As
an actuarial study, the calculation is based on the information at this time, which reflects this
significantly lower cost. Staff and Bartel Associates are skeptical on the longevity of these lower
costs, versus the immediate result of the variables noted previously.
Beginning with this valuation, based on the favorable changes, baseline projections reflect
accumulated contributions to the CERBT may be used to pay a portion of the annual retiree
medical costs. This is a result of asset growth, where returns generated on higher asset levels
are sufficient to contribute toward a portion of the annual benefit payments. The ability to use
returns for this purpose is a goal of the prefunding strategy and a sign that a good practice is in
place. Achieving this status was anticipated to occur as a result of prefunding, however, has
occurred sooner than anticipated due to the favorable impacts discussed above.
Discount Rate Assumptions
The City Council has taken great interest to ensure long-term liability assumptions and costs
for pension and OPEB are being proactively addressed, including the adoption of a Pension
Policy that assumes a 6.2 percent discount rate for pension costs compared to CalPERS rate of
7.0 percent (CMR 11722) and starting in FY 2023 a potential phased-in reduction to 5.3
percent or alternative rate as designated by Council, to better align with market survey results
included in the most recent CalPERS Asset Liability Management (ALM) study. Additionally,
the City Council has taken actions to invest at an estimated discount rate for OPEB of 6.75
percent and transmit additional contributions to prefund OPEB obligations at the equivalent
of a 6.25 percent discount rate. Through FY 2022, a total of $3.5 million in additional
contributions are expected to be contributed to the CERBT.
Discussed above, the ADC is impacted when actual experience differs from assumptions. One
of the more significant impacts to ADC occurs when actual investment returns do not meet
expectations. The following graph presents historical returns, looking back to 2008-09.
3
Packet Pg. 39
City of Palo Alto Page 6
Figure 1: Historical Returns of the OPEB Trust
(Market Value of Plan Assets (MVA) and Expected Return)
Projected Unfunded Actuarial Accrued Liability
This actuarial report includes the plan’s “Funded Status.” As of June 30, 2021, the CERBT Trust
is funded at 70 percent, up 1,200 basis points from 58 percent in the June 30, 2019 actuarial
valuation.
As of June 30, 2021, the Unfunded Actuarial Accrued Liability (UAAL) was $80.0 million for all
funds and $51.5 million for the General Fund. Beginning with the June 30, 2013 valuations, the
City aligned its actuarial analysis to align with GASB’s rules regarding the “implied subsidy”. The
calculation of implied subsidy requires an agency to recognize that it pays the same medical
premiums for active employees as those that are retired. The implied subsidy identifies and
accounts for the agency paying the same blended premium for both active employees and
retirees, even though the medical cost for active employees is lower than retirees.
Palo Alto had 874 active employees and 1,009 retirees as of June 30, 2021. The calculation
increases the UAAL by $15.1 million or 18.9 percent; without the implied subsidy the UAAL for
all funds would be at $64.9 million.
Table 3: Unfunded Actuarial Accrued Liability (UAAL)
As of
June 30, 2019*
As of
June 30, 2021
Projected
June 30, 2022
Citywide – UAAL $122,972 $80,027 $76,159
General Fund – UAAL $82,624 $51,522 $49,032
Funded Ratio) 49.0% 67.2% 70.0%
Citywide UAAL % Change from prior valuation -35.0% -38.1%
* The June 30, 2019 values are based on a 6.75 percent discount rate. Beginning June 30, 2021, the discount rate
has been reduced from 6.75 to 6.25 percent
Sensitivity Analysis: Discount Rate and Amortization Period
CalPERS recognizes the varying assumptions that may impact a plan’s unfunded actuarial
3
Packet Pg. 40
City of Palo Alto Page 7
accrued liability and therefore a retiree healthcare plan’s funding status, especially the
implications of the discount rate and amortization assumptions. Therefore, in addition to the
actuarial assumptions used to develop this annual evaluation, BA includes a sensitivity
analysis of the retiree healthcare plan. Table 4 below reflects the impact on UAAL resulting
from a reduction in the discount rate. Table 5 reflects the impact on ADC if the UAAL is
amortized over different timeframes. It should be noted that the Council has adopted a
Pension Funding Policy seeking to reach a 90 percent funded level in what remains to be
approximately 14-15 years, a shorter period that the sensitivity scenarios below.
Table 4: Discount Rate Sensitivity
6.25% (Current) 5.75% 5.25%
Citywide – UAAL $80,027 $94,571 $110,567
General Fund – UAAL $51,522 $60,886 $71,184
Funded Ratio 67.2% 63.4% 59.8%
Table 5: Amortization Sensitivity
22 Years (Current) 20 Years 18 Years
Normal Cost $6,316 $6,316 $6,316
UAAL Amortization $5,112 $5,459 $5,887
Total ADC $11,428 $11,775 $12,203
ADC (% of payroll) 10.3% 10.6% 11.0%
* Includes administrative expenses
Funding for the FY 2023 Including Actuarial Determined Contribution (ADC)
This section outlines staff’s recommended funding level for OPEB obligations beginning in FY
2023 for Finance Committee review and discussion and an alternative. Due to the
uncertainties noted previously that are unique to this report and given the limited data on the
impacts of COVID-19, staff recommend alternatives assumptions that are rooted in the City’s
Pension Funding Policy, may be adjusted later in a subsequent fiscal year, and position the
City to smooth potential volatility in projected liabilities. A key result of the recovery period as
the pandemic moves into an endemic is a need to foster and work towards stability as an
organization; this stability helps ensure continued focus on high priority projects, supports
recruitment and retention efforts in a competitive labor market, and ensures a readiness and
nimbleness to adapt to changes. Acknowledging these lessons, staff recommends the Finance
Committee consider an alternative funding approach that adjust s assumptions based on
current data and the principles noted above. Staff have also outlined an alternative, or
“baseline” scenario for consideration. This funding level may be adjusted annually based on
City Council direction, so long as the baseline ADC is met.
Staff Recommended Funding for FY 2023 OPEB Obligations
Staff recommend adjusting funding from the typical b aseline calculation to better align with the
current economic outlook, the current instability in the assumptions used to calculate the
3
Packet Pg. 41
City of Palo Alto Page 8
baseline and continue to proactively fund long-term liabilities. Recommended revisions to
baseline assumptions include:
o Assume a zero percent investment return for the current 2021-22 period:
The most recent March 31, 2022 quarterly report from CERBT reported year -to-date
investment returns of negative 1.39 percent as compared to a 6.75 percent target. This
scenario assumes investment returns of zero percent for the period ending Ju ne 30,
2022 to hedge against returns that may not be realized .
o Exclude proactive contributions at a lower discount rate towards the AD C:
Consistent with the pension proactive funding, this would treat the proactive
contributions assuming a lower discount rate of 6.25 as if in a separate “trust” or “saving
account.” ADC calculations will remain at consistent levels and these proactive
contributions remain additive to baseline calculations of liability.
o Assume a shortened amortization period from 22 to 15 years:
This change in the amortization period will more closely align OPEB with the City’s
Pension Policy goals to reach a 90 percent funded status over 15 years (by FY 2036).
The City Council previously approved a 30-year closed amortization period of which 22
years remain as of June 30, 2021.
o Assume additional normal costs or “pay-go” costs:
Adjust funding to include costs for the recommended additional staffing as approved or
being considered for approval in FY 2023.
This option results in an FY 2023 Proposed ADC of $14.6 million citywide ($9.2 million in the
General Fund), a $2.3 million reduction from the $16.9 million ADC in the FY 2023 Proposed
Operating Budget.
Baseline
The baseline calculation reflects standard actuarial calculations and existing City Council
direction assuming the Strategy 1 asset allocation at a 6.75 percent discount rate, and
additional discretionary payment to the CERBT Fund at the equivalent of a 6.25 percent
discount rate. Unlike the CalPERS pension plan, additional Cit y contributions do not go into a
separate Section 115 trust; instead, they remain in the plan and are included as assets in the
CERBT each subsequent year, impacting the calculation of the ADC. This treatment of
prefunding contributions included in assets and effectively reduce the ADC each future year.
At the request of staff, BA included an adjusted calculation to exclude the additional 6.25
contributions in ADC calculations to ensure consistent treatment as the Pension 115 Trust Fund.
The exclusion of this additional contribution from ADC will ensure that the City maintains
prefunding at consistent levels, similar to how contributions are made to the Pension Trust.
Overall, this baseline reflects an FY 2023 Proposed ADC of $12.3 million citywide ($7.7 million in
the General Fund), a $4.6 million reduction from the $16.9 million ADC in the FY 2023 Proposed
Operating Budget.
FY 2023 Proposed Staffing Additional Normal Cost Contributions
3
Packet Pg. 42
City of Palo Alto Page 9
To be factored in all calculations of funding for FY 2023 is the potential addition of nearly 60
full-time staff since the June 30, 2021 valuation date: 20 full-time positions during FY 2022, and
nearly 40 full-time positions in the FY 2023 Proposed Budget (mostly in the General Fund). As
reported in this valuation, the average salary of active employees is approximately $120,000
and the variable portion of ADC, or normal cost for current employees, is 5.6 percent of payroll.
Under these assumptions, the retiree healthcare cost of the additional staffing is approximate ly
$400,000. Staff recommends that this associated retiree health cost be included in the final
budget for Council consideration for FY 2023 adoption in alignment with the assumptions in the
recommended option above.
Stakeholder Engagement
The transmittal of the actuarial valuation as of June 30, 2021 begins conversations regarding
the fiscal outlook for the City’s OPEB liabilities and the appropriate contribution for the FY 2023
Actuarial Determined Contribution. Public discussion will be held with the Finance Committee
on June 7, 2022, prior to City Council review and adoption of the FY 2023 Budget, currently
scheduled for June 20, 2022.
Resource Impact
The FY 2023 Proposed Budget includes an ADC of $16.9 million, an increase of $0.5 million from
FY 2022 Adopted levels of $16.4 million. Staff recommendations in this report result in funding
levels of $14.6 million, a net savings of $2.3 million from the FY 2023 Proposed Budget in all
funds. Funding levels recommended by the Finance Committee will be included as an
amendment to the FY 2023 Proposed Budget for City Council adoption of the budget on June
20, 2022. Staff will incorporate this direction on an ongoing basis beginning in FY 2024.
Future funding is subject to City Council approval through the annual budget process. The
recent market fluctuations and overall impact of the current pandemic are yet to be fully
realized. These reports are calculated bi-annually and reflect market conditions at that point in
time. This Trust experienced gains in this most recent report, however, will continue to be
closely monitored.
Environmental Review
This report is not considered a project for the purposes of the California Environmental Quality
Act (CEQA). Environmental review is not required.
Attachments:
• Attachment A: OPEB June 30, 2021 Actuarial Valuation
3
Packet Pg. 43
CITY OF PALO ALTO
RETIREE HEALTHCARE PLAN
June 30, 2021 Actuarial Valuation
Contributions for 2022/23 & 2023/24
Mary Beth Redding, Vice President & Actuary
Deanna Van Valer, Assistant Vice President & Actuary
Joseph Herm, Actuarial Analyst
Michelle Shen, Actuarial Analyst
Bartel Associates, LLC
June 2, 2022
CONTENTS
O:\Clients\City of Palo Alto\Projects\OPEB\2021 val\Reports\BA PaloAltoCi 22-06-02 OPEB 6-30-21 Funding Report.docx
Topic Page
Benefit Summary 1
Implied Subsidy 7
Participant Statistics 9
Actuarial Assumptions Highlights 15
Actuarial Methods 21
Assets 23
Results 25
Results – Details 39
Sensitivity Analysis 49
Contribution Basis Results 53
Comparison to Other Agencies 62
Actuarial Certification 65
Exhibits 66
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 44
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 1
BENEFIT SUMMARY
Eligibility Retire directly from the City under CalPERS (age 501 and 5 years
of CalPERS service or disability)
Medical
Provider
CalPERS health plans (PEMHCA)
CalPERS administrative fees paid by City
Retiree Medical
Benefit for
Current
Retirees:
Hired < 1/1/04
(1/1/05 SEIU,
1/1/06 PAPOA)
&
Did Not Elect
into Group 4
GROUP 1 Retirees: Retired < 1/1/07 (3/1/09 for PAPOA)
Benefit = Full premium up to family coverage
GROUP 2 Retirees: Retired after GROUP 1 and before
5/1/11 (12/1/11 IAFF/FCA, 6/1/12 PMA, 4/1/15 POA)
Benefit = Same as above but premium limited to 2nd most
expensive Basic (non-Medicare) medical plan in the Bay Area
Region/Region 1 (PERSCare in 2021, Health Net SmartCare in
2022)
GROUP 3 Retirees: Retired after GROUP 2
Benefit = same amount as active employees, which may change
from time to time and in the future as bargaining agreements
change (see next section for cap amounts)
1 Age 52 for Miscellaneous New Hires under PEPRA
June 2, 2022 2
BENEFIT SUMMARY
Retiree Medical
Benefit for
Current
Actives:
Hired < 1/1/04
(1/1/05 SEIU,
1/1/06 PAPOA)
&
Did Not Elect
into Group 4
GROUP 3 Future Retirees: Currently active and did not elect into
Group 4
No active Group 3 POA, PMA, IAFF or FCA
Only remaining Group 3 actives in MGMT, SEIU, UMPAPA
(69 active members)
Benefit = up to full premium, but limited to flat dollar caps same
as active contribution
SEIU/Mgmt/UMPAPA* Other Groups
2021 & 2022 2021 & 2022
Single $ 871 $ 840
2-Party 1,742 1,680
Family 2,260 2,180
* For UMPAPA only, the 2021 caps are the same as for the
“Other Groups”
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 45
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 3
BENEFIT SUMMARY
Retiree Medical
Benefit for
those:
Hired ≥ 1/1/04
(1/1/05 SEIU,
1/1/06 PAPOA)
&
Employees
Hired Before
These Dates
Electing into
Group 42
GROUP 4 Future Retirees: Government Code §22893 “Vesting
Schedule” (based on all CalPERS Service)3:
Years of Service % Years of Service %
< 10 0% 13 65%
10 50% 14 70%
11 55% ↓ ↓
12 60% > 20 100%
100% vesting for disability retirements
Vesting applies to 100/90 formula amounts, which are the
maximum amounts payable by the City (retirees pay any difference
between these amounts and actual premiums):
2021 2022
Single $ 798 $ 816
2-Party 1,519 1,548
Family 1,937 1,977
If have 20 years City service do not need to retire directly from
City
2 All currently active POA/PMA, IAFF/FCA are Group 4. Some Mgmt/Conf and some SEIU remained in Group 3, and some
elected into Group 4.
3 Minimum 5 years City Service.
June 2, 2022 4
BENEFIT SUMMARY
Dental, Vision
& Medicare
Part B
None
Surviving
Spouse Benefit
100% of retiree benefit continues to surviving spouse if retiree
elects CalPERS pension survivor allowance
Waived Re-
election
Waived retirees/beneficiaries may re-elect coverage at a future
date
Summary of
Changes Since
the Prior
Valuation
None
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 46
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 5
BENEFIT SUMMARY
Pay-As-You-
Go ($000s)
Fiscal
Year Cash
Implied
Subsidy Total
2020/21 $ 10,631 $ 2,346 $ 12,977
2019/20 10,344 2,384 12,728
2018/19 9,960 2,197 12,157
2017/18 9,660 2,444 12,104
2016/17 9,713 2,203 11,916
2015/16 9,681 1,960 11,641
2014/15 8,995 1,916 10,911
2013/14 7,317 - 7,317
2012/13 8,766 - 8,766
2011/12 8,165 - 8,165
2010/11 6,216 - 6,216
2009/10 5,519 - 5,519
June 2, 2022 6
BENEFIT SUMMARY
Monthly Benefit Cap Amounts
2021 2022
Group Single 2-Party Family Single 2-Party Family
Group 14 $1,307.86 $2,615.72 $3,400.44 $1,304.00 $2,608.00 $3,390.40
Group 2 1,294.69 2,589.38 3,366.19 1,153.00 2,306.00 2,997.80
Group 3 SEIU/Mgmt 871.00 1,742.00 2,260.00 871.00 1,742.00 2,260.00
Group 3 UMPAPA 840.00 1,680.00 2,180.00 871.00 1,742.00 2,260.00
Group 3 Others5 840.00 1,680.00 2,180.00 840.00 1,680.00 2,180.00
Group 4 (100% vest) 798.00 1,519.00 1,937.00 816.00 1,548.00 1,977.00
% Decrease from Group 1 (assumes Group 1 is in most expensive plan)
Group 2 1% 1% 1% 12% 12% 12%
Group 3 SEIU/Mgmt 33% 33% 34% 33% 33% 33%
Group 3 UMPAPA 36% 36% 36% 33% 33% 33%
Group 3 Others 36% 36% 36% 36% 36% 36%
Group 4 39% 42% 43% 37% 41% 42%
4 No cap for Group 1. Amount shown is most expensive Non-Medicare Region 1 premium.
5 IAFF, FCA, PMA, and PAPOA.
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 47
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 7
IMPLIED SUBSIDY
For PEMHCA, employer cost for allowing retirees to participate at active rates.
Kaiser 2022 Region 1 plan:
The City included the implied subsidy beginning with the June 30, 2013 valuation.
25 30 35 40 45 50 55 60 64
Premium 857 857 857 857 857 857 857 857 857
Male Cost by Age 347 368 407 469 564 702 932 1,261 1,545
Female Cost by Age 661 691 683 701 736 798 934 1,139 1,326
$-
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$C
o
s
t
/
P
r
e
m
i
u
m
Age
Kaiser 2022 - Single Coverage
June 2, 2022 8
IMPLIED SUBSIDY
This page intentionally blank
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 48
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 9
PARTICIPANT STATISTICS
Participant Statistics
6 Excludes all waived retirees, regardless of age, except as noted.
7 Includes 68 waived retirees over 65.
8 Excludes all waived retirees over 65; includes 38 waived under 65 retirees.
6/30/13 6/30/15 6/30/17 6/30/19 6/30/21
Actives
Count 948 955 967 930 874
Average Age 45.2 45.3 45.6 44.8 45.0
Average City Service 10.8 10.8 10.9 10.8 11.2
Average PERS Service 11.7 11.9 11.9 11.7 12.1
Average Salary $86,271 $91,714 $90,739 $110,969 $120,207
Total Salary (000’s) $81,785 $87,586 $87,745 $103,201 $105,061
Retirees:
Count6 968 1,0077 9598 974 1,009
Average Age 68.2 68.9 68.9 70.0 70.9
Average Retirement Age
o Service 57.8 57.7 57.7 58.0 58.2
o Disability 45.3 45.6 45.9 46.1 46.3
June 2, 2022 10
PARTICIPANT STATISTICS
Historical Active and Retiree Counts9
9 Retiree count is subscribers: retirees and surviving spouses
6/30/09 6/30/11 6/30/13 6/30/15 6/30/17 6/30/19 6/30/21
Active 955 923 948 955 967 930 874
Retired 710 860 968 1,007 959 974 1,009
43%48% 50% 51% 50%51%54%
57%52% 50% 49% 50%49%46%
-
500
1,000
1,500
2,000
2,500
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 49
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 11
PARTICIPANT STATISTICS
Participant Statistics
June 30, 2021
10 Actual 2020/21 PERSable compensation.
11 Excludes retirees who have waived coverage, regardless of age.
Group 1 Group 2 Group 3 Group 4 Total
Actives
Count n/a n/a 69 805 874
Average Age n/a n/a 54.1 44.2 45.0
Average Entry Age n/a n/a 31.5 34.0 33.8
Average City Service n/a n/a 22.6 10.2 11.2
Average PERS Service n/a n/a 22.8 11.2 12.1
Average Salary n/a n/a $114,220 $120,720 $120,207
Total Salary (000’s)10 n/a n/a 7,881 97,180 105,061
Benefitting Retirees11:
Count 429 290 152 138 1,009
Average Age 77.8 68.8 64.0 61.4 70.9
Avg Service Ret Age 57.5 57.9 59.1 59.4 58.2
Avg Disability Ret Age 45.5 46.9 51.2 49.3 46.3
June 2, 2022 12
PARTICIPANT STATISTICS
Participant Statistics
June 30, 2019
12 Actual 2018/19 PERSable compensation.
13 Excludes retirees who have waived coverage, regardless of age.
Group 1 Group 2 Group 3 Group 4 Total
Actives
Count n/a n/a 92 838 930
Average Age n/a n/a 54.2 43.8 44.8
Average Entry Age n/a n/a 32.7 35.9 34.5
Average City Service n/a n/a 21.4 9.7 10.8
Average PERS Service n/a n/a 21.9 10.6 11.7
Average Salary n/a n/a $108,291 $111,263 $110,969
Total Salary (000’s)12 n/a n/a $9,963 $93,238 $103,201
Benefitting Retirees13:
Count 458 292 128 96 974
Average Age 76.3 66.7 62.4 60.3 70.0
Avg Service Ret Age 57.6 57.8 58.8 59.2 58.0
Avg Disability Ret Age 45.5 47.0 51.2 47.1 46.1
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 50
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 13
PARTICIPANT STATISTICS
Data Reconciliation14
6/30/2019 to 6/30/2021
Actives Retirees Disabled Benefic. Total
June 30, 2019 930 754 151 69 1,904
New Hires/Rehires 101 (1) - - 100
Disabled (3) - 3 - -
Terminated15 (75) - - - (75)
Died with Beneficiary16 (1) (9) (3) 13 -
Died, no Beneficiary - (18) (6) (6) (30)
Retired/covered (67) 67 - - -
Retired/waived (11) - - - (11)
Waived Retiree - (10) (3) (1) (14)
Adjustment/Other - 3 2 4 9
June 30, 2021 874 786 144 79 1,883
14 Excludes retirees who have waived coverage.
15 All actives in June 30, 2019 valuation and not in June 30, 2021 valuation assumed terminated.
16 Retirees in the June 30, 2019 valuation not in the June 30, 2021 valuation assumed deceased.
June 2, 2022 14
PARTICIPANT STATISTICS
This page intentionally blank
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 51
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 15
ACTUARIAL ASSUMPTIONS HIGHLIGHTS
June 30, 2019 Valuation June 30, 2021 Valuation
Valuation
Date
June 30, 2019
ADC17 for Fiscal Years
2020/21 & 2021/22
(end of year)
1 year lag
June 30, 2021
ADC for Fiscal Years
2022/23 & 2023/24
(end of year)
1 year lag
Funding
Policy
Full Pre-funding through
CalPERS trust (CERBT)
Strategy #1
Same
City may contribute additional
amounts based on lower
discount rate
Discount Rate 6.75%, net of expenses based on
CERBT Strategy #1
6.25%, net of expenses based
on CERBT Strategy #1
General
Inflation
2.75% 2.50%
17 Actuarially Determined Contribution
June 2, 2022 16
ACTUARIAL ASSUMPTIONS HIGHLIGHTS
June 30, 2019 Valuation June 30, 2021 Valuation
Payroll
Increases
Aggregate Increases: 3.00%
Merit Increases: CalPERS 1997-
2015 Experience Study
Aggregate Increases: 2.75%
Merit Increases: CalPERS
2000-2019 Experience Study
Increase to
Group 3 Flat
Dollar Caps18
½ of Medical Trend, not less
than assumed inflation (2.75%)
½ of Medical Trend, not less
than assumed inflation
(2.50%)
Medical
Trend
Non-Medicare: 7.5% for 2019,
decreasing to an ultimate rate of
4.0% in 2076
Medicare: 6.5% for 2019,
decreasing to an ultimate rate of
4.0% in 2076
Non-Medicare: 6.50% for
2023, decreasing to an
ultimate rate of 3.75% in 2076
Medicare: 5.65% (non-Kaiser)
and 4.60% (Kaiser) for 2023,
decreasing to an ultimate rate
of 3.75% in 2076
ACA Excise
Tax
Remove liability for excise tax
due to December 2019 repeal19
Same
18 Increase is for purposes of financial projection only and does not imply any obligation to increase the cap in the future.
19 Note for GASB 75 purpose, the Total OPEB Liability as of Measurement Date (MD) 6/30/19 will include 2% load, as
legislation passed after the MD may not be taken into account.
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 52
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 17
ACTUARIAL ASSUMPTIONS HIGHLIGHTS
June 30, 2019 Valuation June 30, 2021 Valuation
Participation
at Retirement
Group 3: 98%
Group 4: if eligible for City
contribution: 95%; if not: 0%
Based on Plan experience20
Same
Retirement,
Mortality,
Termination,
Disability
CalPERS 1997-2015 Experience
Study
Society of Actuaries mortality
improvement scale MP-19
CalPERS 2000-2019
Experience Study
Society of Actuaries mortality
improvement scale MP-21
Age-related
Claims Costs
for Medicare
Advantage
Plans
Included Due to age-risk adjusted
federal subsidies, no age-based
claims costs were included for
Medicare Advantage plans
20 Actual participation percentage for Group 3 since 6/30/17 is 100% for Miscellaneous (there are no active Safety members in
Group 3). Actual participation percentage for Group 4 since 6/30/17 who are eligible for a City contribution is 91%. Group 4
still has limited actual experience. We recommend continued monitoring for Group 4.
June 2, 2022 18
ACTUARIAL ASSUMPTIONS HIGHLIGHTS
Basis for
Assumptions
(6/30/21
Valuation)
No experience study performed for this Plan
CalPERS experience study covering 2000 to 2019 experience was
used
Mortality improvement is a Society of Actuaries table
Inflation based on our estimate for the Plan’s long time horizon
Capital market assumptions based on 2021 Bartel Associates
stochastic analysis, taking into account capital market assumptions
of investment advisory firms
Age-based claims costs are based on tables published by the Society
of Actuaries and tables developed by Axene Health Partners based
on demographic data for the CalPERS health plans provided by
CalPERS and Axene’s proprietary AHP Cost Model
Short-term medical trend was developed in consultation with Axene
Health Partners’ healthcare actuaries. Long term medical trend
developed using the Society of Actuaries Getzen Model of Long-
Run Medical Cost Trends
Medical coverage and participation based in part on Plan experience
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 53
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 19
ACTUARIAL ASSUMPTIONS HIGHLIGHTS
CERBT Investment Options
2018 Asset Allocation
Strategy 1 Strategy 2 Strategy 3
Global Equity 59% 40% 22%
Fixed Income 25% 43% 49%
TIPS 5% 5% 16%
Commodities 3% 4% 5%
REITs 8% 8% 8%
Total 100% 100% 100%
2022 Asset Allocation (approved March 14, 2022)
Strategy 1 Strategy 2 Strategy 3
Global Equity 49% 34% 23%
Long US Fixed Income 23% 41% 51%
TIPS 5% 5% 9%
Commodities 3% 3% 3%
Global REITs 20% 17% 14%
Total 100% 100% 100%
CalPERS’ projected 20-year returns21 6.0% 5.5% 5.0%
21 CalPERS assumes 2.25% price inflation.
June 2, 2022 20
ACTUARIAL ASSUMPTIONS HIGHLIGHTS
Discount Rate
Future expected returns
Stochastic simulations of geometric average returns over 20 years – 5,000 trials
2.50% inflation assumption
Projections based on 8 independent Investment Advisors 2021 10-year Capital Market
Assumptions and where available, investment advisors long-term trends
Bartel Associates calculation of confidence levels (based on 2022 asset allocations):
Strategy 1 Strategy 2 Strategy 3
50% Confidence Level 6.25% 5.75% 5.25%
55% Confidence Level 6.00% 5.50% 5.00%
60% Confidence Level 5.75% 5.25% 4.75%
Bartel Associates expected returns, 50th percentile:
Strategy 1 Strategy 2 Strategy 3
Expected Real Rate of Return22 3.90% 3.39% 2.92%
Inflation Assumption 2.50% 2.50% 2.50%
Expenses (Admin. & Invest.) (0.05%) (0.05%) (0.05%)
Nominal Rate of Return 6.35% 5.84% 5.37%
Rounded to nearest 0.25% 6.25% 5.75% 5.25%
City currently in Strategy 1: Recommend 6.25% discount rate
22 Includes investment expenses
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 54
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 21
ACTUARIAL METHODS
Method June 30, 2019 Valuation June 30, 2021 Valuation
Cost Method Entry Age Normal Level %
of Pay
Same
Unfunded Liability
Amortization
24 years closed period
Level % of pay (3% annual
escalation)
Sensitivity analysis:
22 & 20 years
22 years closed period
Level % of pay (2.75%
annual escalation)
Sensitivity analysis:
20 & 18 years
Actuarial Asset Value Market Value of Assets23 Same
Future New Entrants Closed group – no new participants
Implied Subsidy Implied subsidy valued
Plan Continuance For purposes of financial projections, the plan and benefits
are assumed to continue unchanged. The calculation of this
obligation does not imply that there is any legal liability to
provide or continue providing the benefits valued.
23 Using Market Value of Assets to determine the ADC will result in more volatile future ADCs than if a smoothed Market
Value were used. For funding purposes, market value includes accrued contributions made for a previous fiscal year.
June 2, 2022 22
ACTUARIAL METHODS
This page intentionally blank
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 55
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 23
ASSETS
Market Value of Plan Assets (MVA)
Invested in CERBT Strategy 1 Fund
(Amounts in 000’s)
2017/18
2018/19
2019/20
2020/21
Projected
2021/2224
MVA (Beg. of Year) $ 91,170 $107,846 $118,497 $126,520 $164,170
Contributions 9,212 5,723 3,747 2,94625 2,177
Benefit Payments26 - (1,883) - - -
Admin. Expenses (50) (53) (59) (71) (82)
Investment Return27 7,513 6,864 4,335 34,776 10,258
MVA (End of Year) 107,846 118,497 126,520 164,170 176,523
Approx. Annual Return 7.8% 6.3% 3.6% 27.5% 6.25%
24 Projected from actual 6/30/2021 CERBT balance using assumed rate of return for fiscal year 2021/22 and expected City
contribution for FY22, as provided by the City.
25 Includes $1,358 paid on 1/10/2022; MVA shown is not the same as market value for financial reporting purposes.
26 Benefit Payments made outside of trust by City in years other than 2018/19. Refer to Slide 5 for fiscal year amounts.
27 Net of investment expenses.
June 2, 2022 24
ASSETS
Historical Returns28
28 Assumed rate of return for 2021/22 fiscal year.
08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22
Market Value -22.5% 15.1% 24.4% 0.1% 11.2% 18.2% -0.2% 1.1% 10.4% 7.8% 6.3% 3.6% 27.5% 6.25%
Expected Return 7.75% 7.75% 7.75% 7.75% 7.75% 7.75% 7.61% 7.25% 7.25% 6.75% 6.75% 6.75% 6.75% 6.25%
(25%)
(20%)
(15%)
(10%)
(5%)
0%
5%
10%
15%
20%
25%
30%
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 56
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 25
RESULTS
Actuarial Obligations
(Amounts in 000’s)
6/30/19 Valuation 6/30/21 Valuation
6/30/19 Proj.6/30/20 6/30/21 Proj.6/30/22
Discount Rate 6.75% 6.25%
Present Value of Benefits
Actives (future retirees) $141,423 $131,926
Retirees 159,156 169,243
Total 300,579 301,169
Actuarial Accrued Liability
Actives (future retirees) 82,313 74,954
Retirees 159,156 169,243
Total 241,469 $251,389 244,197 $252,682
Market Value of Assets 118,497 134,810 164,170 176,523
Unfunded AAL 122,972 116,579 80,027 76,159
Funded Ratio 49% 54% 67% 70%
Normal Cost29 6,978 6,316
Pay-As-You-Go Cost (Cash) 10,859 11,190
Pay-As-You-Go Cost (IS) 2,346 3,025
29 Includes Administration fees.
June 2, 2022 26
RESULTS
Historical Funded Status
(Amounts in 000’s)
24% 27%
29%
33%
37%
49%
67%
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
1/1/11 6/30/11 6/30/13 6/30/15 6/30/17 6/30/19 6/30/21
Retiree pay-go Retiree AAL less pay-go Active AAL AVA MVA
X% Funded Ratio
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 57
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 27
RESULTS
Actuarial Gain/Loss
(Amounts in $000’s)
AAL (Assets) UAAL
Actual 6/30/19 projected to 6/30/20 $ 251,389 $ (130,276) $ 121,113
Expected 6/30/22 271,645 (148,857) 122,788
Experience (Gains)/Losses
Medicare Advantage plan implied subsidy excluded (2,011) (2,011)
Premiums/Caps lower than expected especially Medicare plans (19,362) (19,362)
Demographic (mainly changing retiree Medicare eligibility) 752 - 752
Assumption Changes increasing/(decreasing) AAL
Medical Plan election percentages changed (723) (723)
Inflation, trend, salary growth & discount rate lowered .25% 645 645
Kaiser medical trend lowered (1,769) (1,769)
Updated demographic assumptions: CalPERS current Experience
Study and current mortality improvement scale (3,639) (3,639)
Discount rate lowered to additional .25% to 6.25% 7,144 7,144
Contribution and Benefit Payment (Gain) (2,897) (2,897)
Investment (Gain) (24,769) (24,769)
Total (Gain)/Loss (18,963) (27,666) (46,629)
Projected 6/30/22 Unfunded Actuarial Accrued Liability 252,682 (176,523) 76,159
June 2, 2022 28
RESULTS
Actuarially Determined Contribution (ADC)
(Amounts in 000’s)
6/30/19 Valuation 6/30/21 Valuation
2020/21 2021/22 2022/23 2023/24
Discount Rate 6.75% 6.25%
ADC - $
Normal Cost $ 6,888 $ 7,099 $ 6,196 $ 6,370
Administrative Expenses30 90 98 120 126
UAAL Amortization 7,588 7,816 5,112 5,253
Total 14,566 15,013 11,428 11,749
Projected Payroll 109,486 112,771 110,919 113,969
ADC – Percent of Pay
Normal Cost 6.3% 6.3% 5.6% 5.6%
Administrative Expenses 0.1% 0.1% 0.1% 0.1%
UAAL Amortization 6.9% 6.9% 4.6% 4.6%
Total 13.3% 13.3% 10.3% 10.3%
30 Includes PEMHCA and CERBT administration fees.
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 58
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 29
RESULTS
Actuarially Determined Contribution (ADC) Payment to Trust
(Amounts in 000’s)
6/30/21 Valuation
2022/23 2023/24
Discount Rate 6.25%
ADC - $
Normal cost $ 6,196 $ 6,370
Administrative expenses31 120 126
UAAL amortization 5,112 5,253
Total 11,428 11,749
Less: Implied subsidy benefit payments 3,025 3,073
Remaining ADC 8,403 8,676
Less: Estimated cash benefit payments 11,190 11,792
Total Trust contribution. Negative amount
indicates a reimbursement for City out-of-
pocket payments may be requested.
(2,787) (3,116)
31 Includes PEMHCA and CERBT administration fees.
June 2, 2022 30
RESULTS
Historical Recommended Funding Contributions
(Amounts in 000’s)
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 59
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 31
RESULTS
Amortization Bases & Payments
(Amounts in 000’s)
6/30/19 Valuation 6/30/21 Valuation
6/30/20 6/30/21 6/30/22 6/30/23
Discount Rate 6.75% 6.25%
Payment Escalator 3.00% 2.75%
UAAL Balance $ 116,579 $ 116,859 $ 76,159 $ 75,807
Amortization Payment 7,588 7,816 5,112 5,253
Amortization Period
(years) 24 23 22 21
June 2, 2022 32
RESULTS
Unfunded Actuarial Accrued Liability (UAAL) – % of Payroll
(Amounts in 000’s)
6/30/13 6/30/15 6/30/17 6/30/19 6/30/21
UAAL/Payroll for year
beginning on valuation date
Miscellaneous 158% 152% 149% 99% 64%
Safety 228% 276% 269% 171% 105%
Total 176% 178% 175% 116% 74%
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 60
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 33
RESULTS
10 Year Contribution Projection
(Amounts in 000’s)
FYE ADC32
Contribution
Payroll
ADC
% of
Pay
Fund
%
Cash
Ben
Pymt
Implied
Subsidy
BP
Trust
Pre-
Funding Total
UAAL,
Beg. Of
FY
202233 $15,013 $10,852 $2,619 $1,542 $15,013 $107,950 13.9% $ 80,027 67%
2023 11,428 11,190 3,025 (2,787) 11,428 110,919 10.3% 76,159 70%
2024 11,749 11,792 3,073 (3,116) 11,749 113,969 10.3% 75,807 71%
2025 12,077 12,313 3,254 (3,490) 12,077 117,103 10.3% 74,558 72%
2026 12,414 12,742 3,326 (3,654) 12,414 120,324 10.3% 73,451 73%
2027 12,759 13,163 3,413 (3,817) 12,759 123,632 10.3% 72,114 74%
2028 13,114 13,557 3,365 (3,808) 13,114 127,032 10.3% 70,531 76%
2029 13,479 14,031 3,468 (4,020) 13,479 130,526 10.3% 68,681 77%
2030 13,854 14,586 3,684 (4,416) 13,854 134,115 10.3% 66,545 78%
2031 14,240 15,037 3,700 (4,497) 14,240 137,803 10.3% 64,098 79%
2032 14,636 15,559 3,837 (4,760) 14,636 141,593 10.3% 61,315 81%
32 Actuarially Determined Contribution
33 Cash benefit payments, Trust pre-funding, Payroll, ADC %, UAAL and Funded percentage updated from 6/30/19 valuation
with more current estimate or actual.
June 2, 2022 34
RESULTS
-$15
-$10
-$5
$0
$5
$10
$15
$20
$25
$30
$
M
i
l
l
i
o
n
s
Net Trust Payment/Reimbursement Benefit Payments Total ADC
ADC, Benefit and Trust Payment/Reimbursement Projection
(6.25% Discount Rate, 22 years level % of pay amortization)
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 61
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 35
RESULTS
0%
20%
40%
60%
80%
100%
120%
$0
$10
$20
$30
$40
$50
$60
$70
$80
Fu
n
d
e
d
R
a
t
i
o
UA
A
L
(
$
M
i
l
l
i
o
n
s
)
UAAL Funded Ratio
UAAL and Funded Ratio Projection
(6.25% Discount Rate, 22 years amortization)
June 2, 2022 36
RESULTS
% of Total Actuarial Accrued Liability for Actives and Retirees
Miscellaneous
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
6/30/2009 6/30/2011 6/30/2013 6/30/2015 6/30/2017 6/30/2019 6/30/2021
Actives Retirees
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 62
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 37
RESULTS
% of Total Actuarial Accrued Liability for Actives and Retirees
Safety
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
6/30/2009 6/30/2011 6/30/2013 6/30/2015 6/30/2017 6/30/2019 6/30/2021
Actives Retirees
June 2, 2022 38
RESULTS
This chart excludes the Implied Subsidy
and is provided for informational purposes only
(Amounts in 000’s)
Cash Benefit
Present Value of Benefits $ 247,479
Funded Status 6/30/21
Actuarial Accrued Liability 198,084
Actuarial Value of Assets 164,170
Unfunded AAL 33,914
Funded Ratio 82.9%
ADC 2022/23
Normal Cost 5,370
Administrative Expenses 120
UAAL Amortization 1,878
Total 7,368
ADC % of Payroll 6.6%
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 63
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 39
RESULTS - DETAILS
Actuarial Obligations
June 30, 2021
(Amounts in 000’s)
Benefits
Paid
Before
Age 65
Benefits
Paid On
or After
Age 65
Total
Present Value of Benefits
Actives (future retirees) $ 70,063 $ 61,863 $ 131,926
Retirees 45,570 123,673 169,243
Total 115,633 185,536 301,169
Actuarial Accrued Liability
Actives (future retirees) 38,191 36,763 74,954
Retirees 45,570 123,673 169,243
Total 83,761 160,436 244,197
Normal Cost 2022/2334 3,394 2,922 6,316
34 Includes Administration fees.
June 2, 2022 40
RESULTS - DETAILS
Actuarial Obligations
June 30, 2021
(Amounts in 000’s)
Group 1 Group 2 Group 3 Group 4 Total
Present Value of Benefits
Actives (future retirees) $ - $ - $13,377 $118,549 $131,926
Retirees 47,988 55,784 33,446 32,024 169,243
Total 47,988 55,784 46,823 150,573 301,169
Actuarial Accrued
Liability
Actives (future retirees) - - 11,034 63,920 74,954
Retirees 47,988 55,784 33,446 32,024 169,243
Total 47,988 55,784 44,480 95,944 244,197
Normal Cost 2022/2335 n/a n/a 437 5,879 6,316
NC as % of Payroll n/a n/a 5.7% 5.7% 5.7%
Active Count n/a n/a 69 805 874
Projected Payroll (000’s) n/a n/a 7,647 103,272 110,919
35 Includes Administration fees.
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 64
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 41
RESULTS - DETAILS
Cash/Implied Subsidy – Actuarial Obligations – June 30, 2021
(Amounts in 000’s)
Cash
Subsidy
Implied
Subsidy Total
Present Value of Benefits
Actives (future retirees) $112,909 $19,017 $131,926
Retirees 134,570 34,673 169,243
Total 247,479 53,690 301,169
Actuarial Accrued Liability
Actives (future retirees) 63,514 11,440 74,954
Retirees 134,570 34,673 169,243
Total 198,084 46,113 244,197
Market Value of Assets36 133,169 31,001 164,170
Unfunded AAL 64,915 15,112 80,027
Normal Cost 2022/2337 5,490 827 6,316
Pay-As-You-Go Cost 2022/23 11,190 3,025 14,215
36 Allocated in proportion to AAL for illustrative purposes.
37 Includes Administration fees.
June 2, 2022 42
RESULTS - DETAILS
Cash/Implied Subsidy – Actuarially Determined Contribution – 2022/23 FY
(Amounts in 000’s)
Cash
Subsidy
Implied
Subsidy Total
ADC - $
Normal Cost $ 5,370 $ 827 $ 6,196
Administrative Expenses 120 - 120
UAAL Amortization 4,137 975 5,112
ADC 9,628 1,802 11,428
Projected Payroll 110,919 110,919 110,919
ADC - % of Payroll
Normal Cost 4.8% 0.7% 5.6%
Administrative Expenses 0.1% 0.0% 0.1%
UAAL Amortization 3.8% 0.9% 4.6%
ADC 8.7% 1.6% 10.3%
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 65
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 43
RESULTS - DETAILS
Actuarial Obligations
June 30, 2021
(Amounts in 000’s)
Misc. Safety Total
Present Value of Benefits
Actives (future retirees) $ 93,601 $ 38,325 $131,926
Retirees 105,970 63,273 169,243
Total 199,571 101,598 301,169
Actuarial Accrued Liability
Actives (future retirees) 54,931 20,022 74,954
Retirees 105,970 63,273 169,243
Total 160,901 83,295 244,197
Market Value of Assets38 108,171 55,998 164,170
Unfunded AAL 52,730 27,297 80,027
Normal Cost 2022/2339 4,397 1,916 6,316
Pay-As-You-Go Cost 2022/23 9,298 4,917 14,215
38 Allocated in proportion to the Actuarial Accrued Liability.
39 Includes Administration fees.
June 2, 2022 44
RESULTS - DETAILS
Actuarially Determined Contribution (ADC)
2022/23 Fiscal Year
(Amounts in 000’s)
Misc Safety Total
ADC - $
Normal Cost $ 4,320 $ 1,876 $ 6,196
Administrative Expenses 79 41 120
UAAL Amortization40 3,378 1,734 5,112
ADC 7,777 3,651 11,428
Projected Payroll 84,095 26,824 110,919
ADC - % of Payroll
Normal Cost 5.1% 7.0% 5.6%
Administrative Expenses 0.1% 0.1% 0.1%
UAAL Amortization 4.0% 6.5% 4.6%
ADC 9.2% 13.6% 10.3%
40 Allocated in proportion to the Actuarial Accrued Liability.
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 66
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 45
RESULTS - DETAILS
Actuarial Obligations – By Bargaining Unit
June 30, 2021
(Amounts in 000’s)
FCA IAFF M/C PAPOA PMA SEIU UMPAPA Total
PVB
Actives $ 1,108 $18,332 $26,116 $16,058 $ 1,601 $60,991 $ 7,720 $131,926
Retirees 2,030 31,905 48,000 20,418 2,267 58,013 6,609 169,243
Total 3,138 50,237 74,116 36,476 3,868 119,004 14,329 301,169
AAL
Actives 747 10,040 15,313 7,327 1,156 34,725 5,645 74,954
Retirees 2,030 31,905 48,000 20,418 2,267 58,013 6,609 169,243
Total 2,777 41,945 63,313 27,745 3,423 92,738 12,254 244,197
MVA41 1,867 28,199 42,564 18,653 2,301 62,346 8,238 164,170
UAAL 910 13,746 20,749 9,092 1,122 30,392 4,016 80,027
NC 22/23 39 810 1,282 883 60 2,854 265 6,196
Pay-Go 183 2,530 3,917 1,581 156 5,192 655 14,215
41 Allocated in proportion to the Actuarial Accrued Liability.
June 2, 2022 46
RESULTS - DETAILS
Actuarially Determined Contribution (ADC) – By Bargaining Unit
2022/23 Fiscal Year
(Amounts in 000’s)
FCA IAFF M/C PAPOA PMA SEIU UMPAPA Total
ADC - $
Normal Cost $ 39 $ 810 $1,282 $ 883 $ 60 $2,854 $ 265 $ 6,196
Admin. Exp. 1 20 31 14 2 46 6 120
UAAL Amort42 57 870 1,315 583 72 1,958 257 5,112
ADC 98 1,700 2,628 1,480 134 4,858 528 11,428
Proj. Payroll 885 12,321 27,665 10,980 1,448 49,597 8,023 110,919
ADC - %
Normal Cost 4.4% 6.6% 4.6% 8.0% 4.1% 5.8% 3.3% 5.6%
Admin. Exp. 0.2% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1%
UAAL Amort 6.4% 7.1% 4.8% 5.4% 5.0% 3.9% 3.2% 4.6%
ADC 11.0% 13.8% 9.5% 13.5% 9.2% 9.8% 6.6% 10.3%
42 Allocated in proportion to the Actuarial Accrued Liability.
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 67
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 47
RESULTS - DETAILS
Actuarially Determined Contribution (ADC) – By Bargaining Unit
2023/24 Fiscal Year
(Amounts in 000’s)
FCA IAFF M/C PAPOA PMA SEIU UMPAPA Total
ADC - $
Normal Cost $ 40 $ 833 $ 1,318 $ 908 $ 62 $ 2,937 $ 272 $ 6,370
Admin. Exp. 1 22 33 14 2 48 6 126
UAAL Amort43 59 894 1,351 599 74 2,012 264 5,253
ADC 100 1,749 2,702 1,522 137 4,998 542 11,749
Proj. Payroll 909 12,659 28,426 11,282 1,488 50,961 8,243 113,969
ADC - %
Normal Cost 4.4% 6.6% 4.6% 8.1% 4.1% 5.8% 3.3% 5.6%
Admin. Exp. 0.2% 0.2% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1%
UAAL Amort 6.4% 7.0% 4.8% 5.3% 5.0% 3.9% 3.2% 4.6%
ADC 11.0% 13.8% 9.5% 13.5% 9.2% 9.8% 6.6% 10.3%
43 Allocated in proportion to the Actuarial Accrued Liability.
June 2, 2022 48
RESULTS - DETAILS
This page intentionally blank
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 68
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 49
SENSITIVITY ANALYSIS
Discount Rate Sensitivity
(Amounts in 000’s)
CERBT Strategy
#1 (Current) #2 #3
Discount Rate 6.25% 5.75% 5.25%
Present Value of Benefits $ 301,169 $ 325,144 $ 352,410
Funded Status 6/30/21
Actuarial Accrued Liability 244,197 258,741 274,737
Assets 164,170 164,170 164,170
Unfunded AAL 80,027 94,571 110,567
Funded Ratio 67.2% 63.4% 59.8%
ADC 2022/23
Normal Cost 6,196 6,899 7,697
Administrative Expenses 120 120 120
UAAL Amortization44 5,112 5,875 6,636
Total 11,428 12,894 14,453
ADC % of Payroll 10.3% 11.6% 13.0%
44 UAAL projected using the same “Current” projected assets for all scenarios. UAAL amortized over 22 years for all
scenarios.
June 2, 2022 50
SENSITIVITY ANALYSIS
Amortization Period Sensitivity
Discount Rate – 6.25%, Level % of Pay with 2.75% Payment Escalation
(Amounts in 000’s)
Amortization Period
Current
22 Years 20 Years 18 Years
Funded Status Projected to
6/30/22
Actuarial Accrued Liability $ 252,682 $ 252,682 $ 252,682
Assets 176,523 176,523 176,523
Unfunded AAL 76,159 76,159 76,159
Total Projected Payroll 2022/23 110,919 110,919 110,919
ADC 2022/23
Normal Cost 6,196 6,196 6,196
Administrative Expenses 120 120 120
UAAL Amortization 5,112 5,459 5,887
Total 11,428 11,775 12,203
ADC % of Payroll 10.3% 10.6% 11.0%
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 69
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 51
SENSITIVITY ANALYSIS
Amortization Period Sensitivity
Discount Rate – 5.75%, Level % of Pay with 2.75% Payment Escalation
(Amounts in 000’s)
Amortization Period
Current
22 Years 20 Years 18 Years
Funded Status Projected to
6/30/22
Actuarial Accrued Liability $ 267,556 $ 267,556 $ 267,556
Assets 175,703 175,703 175,703
Unfunded AAL 91,853 91,853 91,853
Total Projected Payroll 2022/23 110,919 110,919 110,919
ADC 2022/23
Normal Cost 6,899 6,899 6,899
Administrative Expenses 120 120 120
UAAL Amortization 5,875 6,297 6,816
Total 12,894 13,316 13,835
ADC % of Payroll 11.6% 12.0% 12.5%
June 2, 2022 52
SENSITIVITY ANALYSIS
Asset Return Sensitivity – Actuarially Determined Contribution (ADC)
(Amounts in 000’s)
6/30/21 Valuation 6/30/21 Valuation
2022/23 2023/24 2022/23 2023/24
Assumed Return in FY22 6.25% 0%
ADC - $
Normal Cost $ 6,196 $ 6,370 $ 6,196 $ 6,370
Administrative Expenses45 120 126 115 121
UAAL Amortization 5,112 5,253 5,801 5,960
Total 11,428 11,749 12,112 12,452
Projected Payroll 110,919 113,969 110,919 113,969
ADC - % of Payroll
Normal Cost 5.6% 5.6% 5.6% 5.6%
Administrative Expenses 0.1% 0.1% 0.1% 0.1%
UAAL Amortization 4.6% 4.6% 5.2% 5.2%
Total 10.3% 10.3% 10.9% 10.9%
45 Includes PEMHCA and CERBT administration fees.
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 70
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 53
CONTRIBUTION BASIS RESULTS
Contribution Basis
No statutory requirement for contributions to OPEB trust
City is considering contributing to OPEB trust on more conservative basis than the ADC
calculated in this funding valuation (i.e. Baseline Valuation Results)
ADC for FYE 2021 and 2022 was based on 6.75% discount rate. City contributed more than the
ADC (actual payment based on 6.25% discount rate).
Unlike pension plan, additional contributions do not go into a separate Section 115 trust,
instead they remain in the plan, and are included in the assets each year in the calculation of
the ADC. This means additional contributions reduce the ADC each future year.
City has asked to see what contributions would look like if these additional assets are
separated and not included in the traditional asset balance when determining the ADC (show
estimated “Additional Assets” separate from plan assets)
City would also like to see more conservative earnings assumptions
Projected fund earnings in 21/22 assumed to be 0% instead of 6.25%
All future earnings of fund assumed to be 5.25% or 5.75% instead of 6.25% (same discount
rate as if fund were invested in CERBT #3 or CERBT #2, respectively, instead of CERBT #1)
Amortize UAL over 14 or 15 years instead of current period of 22 years
June 2, 2022 54
CONTRIBUTION BASIS RESULTS
Actuarial Obligations as of June 30, 2021 – Contribution Basis
(Amounts in 000’s)
Contribution Basis
Baseline
Exclude Additional
Contributions
Assumed FY22 Return 6.25% 0%
Discount Rate/Future Earnings 6.25% 6.25% 5.25%
Present Value of Benefits $ 301,169 $ 301,169 $ 352,410
Funded Status
Actuarial Accrued Liability 244,197 244,197 274,737
Assets for ADC/alternate
contribution calculation 164,170 162,812 162,812
Unfunded AAL 80,027 81,385 111,925
Funded Ratio – “Alternate” Assets 67.2% 66.7% 59.3%
Funded Ratio – All Assets 67.2% 67.2% 59.8%
Additional Assets46 balance 6/30/21 $ 1,358 $ 1,358 $ 1,358
46 Accumulated additional contributions made by the City as of 6/30/2021 (accrued; actual payment made January 2022).
Baseline results assume all additional contributions are included in assets used in calculation of ADC.
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 71
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 55
CONTRIBUTION BASIS RESULTS
Contribution Basis – Alternate Contributions
22 Year Amortization
(Amounts in 000’s)
Baseline ADC Exclude Additional Contributions
2022/23 2023/24 2022/23 2023/24 2022/23 2023/24
Assumed FY22 Return 6.25% 0% 0%
Discount Rate 6.25% 6.25% 5.25%
Contribution - $
Normal Cost $ 6,196 $ 6,370 $ 6,196 $ 6,370 $7,697 $7,912
Admin. Expenses47 120 126 115 121 115 121
UAAL Amortization 5,112 5,253 5,991 6,168 7,332 7,544
Total 11,428 11,749 12,302 12,659 15,144 15,578
Projected Payroll 110,919 113,969 110,919 113,969 110,919 113,969
Contribution - % of Payroll
Normal Cost 5.6% 5.6% 5.6% 5.6% 6.9% 6.9%
Admin. Expenses 0.1% 0.1% 0.1% 0.1% 0.1% 0.1%
UAAL Amortization 4.6% 4.6% 5.4% 5.4% 6.6% 6.6%
Total 10.3% 10.3% 11.1% 11.1% 13.7% 13.7%
47 Includes PEMHCA and CERBT administration fees.
June 2, 2022 56
CONTRIBUTION BASIS RESULTS
10 Year Projection – Exclude Additional Contributions – 6.25%
22 Year Amortization
(Amounts in 000’s)
FYE
Calcu-
lated
Contri-
bution48
Contribution
Payroll
Contr.
% of
Pay
Fund
%
(All
Assets)
Add’l
Contrib
Balance
(boy)
Cash
Ben Pmt
Implied
Subsidy
Ben Pmt
Trust
Pre-
Funding Total
202249 $15,013 $10,852 $2,619 $1,542 $15,013 $107,950 13.9% 67% $1,358
2023 12,302 11,190 3,025 (1,913) 12,302 110,919 11.1% 66% 2,828
2024 12,659 11,792 3,073 (2,206) 12,659 113,969 11.1% 67% 3,004
2025 13,028 12,313 3,254 (2,539) 13,028 117,103 11.1% 68% 3,192
2026 13,408 12,742 3,326 (2,660) 13,408 120,324 11.1% 70% 3,392
2027 13,800 13,163 3,413 (2,776) 13,800 123,632 11.2% 71% 3,604
2028 14,207 13,557 3,365 (2,715) 14,207 127,032 11.2% 73% 3,829
2029 14,628 14,031 3,468 (2,871) 14,628 130,526 11.2% 74% 4,068
2030 15,067 14,586 3,684 (3,203) 15,067 134,115 11.2% 76% 4,322
2031 15,521 15,037 3,700 (3,216) 15,521 137,803 11.3% 78% 4,593
2032 15,996 15,559 3,837 (3,400) 15,996 141,593 11.3% 79% 4,880
48 Alternate contribution calculation: 0% FY22 return, 22-year amortization of UAAL, 6.25% discount rate
49 Cash benefit payments, Trust pre-funding, Payroll, Contribution % of Pay, and Funded percentage updated from 6/30/19
valuation with more current estimate or actual.
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 72
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 57
CONTRIBUTION BASIS RESULTS
10 Year Projection – Exclude Additional Contributions – 5.25%
22 Year Amortization
(Amounts in 000’s)
FYE
Calcu-
lated
Contri-
bution50
Contribution
Payroll
Contr.
% of
Pay
Fund
%
(All
Assets)
Add’l
Contrib
Balance
(boy)
Cash
Ben Pmt
Implied
Subsidy
Ben Pmt
Trust
Pre-
Funding Total
202251 $15,013 $10,852 $2,619 $1,542 $15,013 $107,950 13.9% 67% $1,358
2023 15,144 11,190 3,025 929 15,144 110,919 13.7% 59% 2,817
2024 15,578 11,792 3,073 713 15,578 113,969 13.7% 60% 2,965
2025 16,024 12,313 3,254 457 16,024 117,103 13.7% 62% 3,121
2026 16,484 12,742 3,326 416 16,484 120,324 13.7% 64% 3,285
2027 16,958 13,163 3,413 382 16,958 123,632 13.7% 65% 3,457
2028 17,449 13,557 3,365 527 17,449 127,032 13.7% 67% 3,639
2029 17,955 14,031 3,468 456 17,955 130,526 13.8% 69% 3,830
2030 18,479 14,586 3,684 209 18,479 134,115 13.8% 71% 4,031
2031 19,022 15,037 3,700 285 19,022 137,803 13.8% 73% 4,243
2032 19,585 15,559 3,837 189 19,585 141,593 13.8% 75% 4,465
50 Alternate contribution calculation: 0% FY22 return, 22-year amortization of UAAL, 5.25% discount rate
51 Cash benefit payments, Trust pre-funding, Payroll, Contribution % of Pay, and Funded percentage updated from 6/30/19
valuation with more current estimate or actual.
June 2, 2022 58
CONTRIBUTION BASIS RESULTS
10 Year Projection – Exclude Additional Contributions – 5.75%
22 Year Amortization
(Amounts in 000’s)
FYE
Calcu-
lated
Contri-
bution52
Contribution
Payroll
Contr.
% of
Pay
Fund
%
(All
Assets)
Add’l
Contrib
Balance
(boy)
Cash
Ben Pmt
Implied
Subsidy
Ben Pmt
Trust
Pre-
Funding Total
202253 $15,013 $10,852 $2,619 $1,542 $15,013 $107,950 13.9% 67% $1,358
2023 13,673 11,190 3,025 (542) 13,673 110,919 12.3% 62% 2,823
2024 14,067 11,792 3,073 (798) 14,067 113,969 12.3% 64% 2,985
2025 14,474 12,313 3,254 (1,093) 14,474 117,103 12.4% 65% 3,156
2026 14,892 12,742 3,326 (1,176) 14,892 120,324 12.4% 67% 3,338
2027 15,324 13,163 3,413 (1,252) 15,324 123,632 12.4% 68% 3,530
2028 15,770 13,557 3,365 (1,152) 15,770 127,032 12.4% 70% 3,733
2029 16,232 14,031 3,468 (1,267) 16,232 130,526 12.4% 72% 3,947
2030 16,712 14,586 3,684 (1,558) 16,712 134,115 12.5% 73% 4,174
2031 17,209 15,037 3,700 (1,528) 17,209 137,803 12.5% 75% 4,414
2032 17,725 15,559 3,837 (1,671) 17,725 141,593 12.5% 77% 4,668
52 Alternate contribution calculation: 0% FY22 return, 22-year amortization of UAAL, 5.75% discount rate
53 Cash benefit payments, Trust pre-funding, Payroll, Contribution % of Pay, and Funded percentage updated from 6/30/19
valuation with more current estimate or actual.
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 73
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 59
CONTRIBUTION BASIS RESULTS
Contribution Basis – Alternate Contributions
14 Year Amortization
(Amounts in 000’s)
Baseline ADC Exclude Additional Contributions
2022/23 2023/24 2022/23 2023/24 2022/23 2023/24
Assumed FY22 Return 6.25% 0% 0%
Discount Rate 6.25% 6.25% 5.75%
Contribution - $
Normal Cost $ 6,196 $ 6,370 $ 6,196 $ 6,370 $6,899 $7,092
Admin. Expenses54 120 126 115 123 115 123
UAAL 5,112 5,253 8,344 8,600 9,419 9,702
Total 11,428 11,749 14,655 15,093 16,433 16,917
Projected Payroll 110,919 113,969 110,919 113,969 110,919 113,969
Contribution - % of Payroll
Normal Cost 5.6% 5.6% 5.6% 5.6% 6.2% 6.2%
Admin. Expenses 0.1% 0.1% 0.1% 0.1% 0.1% 0.1%
UAAL Amortization 4.6% 4.6% 7.5% 7.5% 8.5% 8.5%
Total 10.3% 10.3% 13.2% 13.2% 14.8% 14.8%
54 Includes PEMHCA and CERBT administration fees.
55 Baseline amortized over 22 years, other scenarios over 14 years.
June 2, 2022 60
CONTRIBUTION BASIS RESULTS
Contribution Basis – Alternate Contributions
15 Year Amortization
(Amounts in 000’s)
Baseline ADC Exclude Additional Contributions
2022/23 2023/24 2022/23 2023/24 2022/23 2023/24
Assumed FY22 Return 6.25% 0% 0%
Discount Rate 6.25% 6.25% 5.75%
Contribution - $
Normal Cost $ 6,196 $ 6,370 $ 6,196 $ 6,370 $6,899 $7,092
Admin. Expenses56 120 126 115 122 115 123
UAAL 5,112 5,253 7,909 8,150 8,909 9,176
Total 11,428 11,749 14,220 14,642 15,923 16,391
Projected Payroll 110,919 113,969 110,919 113,969 110,919 113,969
Contribution - % of Payroll
Normal Cost 5.6% 5.6% 5.6% 5.6% 6.2% 6.2%
Admin. Expenses 0.1% 0.1% 0.1% 0.1% 0.1% 0.1%
UAAL Amortization 4.6% 4.6% 7.1% 7.1% 8.1% 8.1%
Total 10.3% 10.3% 12.8% 12.8% 14.4% 14.4%
56 Includes PEMHCA and CERBT administration fees.
57 Baseline amortized over 22 years, other scenarios over 15 years.
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 74
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 61
CONTRIBUTION BASIS RESULTS
10 Year Projection – Exclude Additional Contributions – 5.75%
15 Year Amortization
(Amounts in 000’s)
FYE
Calcu-
lated
Contri-
bution58
Contribution
Payroll
Contr.
% of
Pay
Fund
%
(All
Assets)
Add’l
Contrib
Balance
(boy)
Cash
Ben Pmt
Implied
Subsidy
Ben Pmt
Trust
Pre-
Funding Total
202259 $15,013 $10,852 $2,619 $1,542 $15,013 $107,950 13.9% 67% $1,358
2023 15,923 11,190 3,025 1,708 15,923 110,919 14.4% 62% 2,823
2024 16,391 11,792 3,073 1,526 16,391 113,969 14.4% 64% 2,985
2025 16,874 12,313 3,254 1,307 16,874 117,103 14.4% 67% 3,156
2026 17,376 12,742 3,326 1,308 17,376 120,324 14.4% 69% 3,338
2027 17,897 13,163 3,413 1,321 17,897 123,632 14.5% 72% 3,530
2028 18,443 13,557 3,365 1,521 18,443 127,032 14.5% 74% 3,733
2029 19,016 14,031 3,468 1,517 19,016 130,526 14.6% 77% 3,947
2030 19,622 14,586 3,684 1,352 19,622 134,115 14.6% 80% 4,174
2031 20,268 15,037 3,700 1,531 20,268 137,803 14.7% 83% 4,414
2032 20,970 15,559 3,837 1,574 20,970 141,593 14.8% 86% 4,668
58 Alternate contribution calculation: 0% FY22 return, 15-year amortization of UAAL, 5.75% discount rate
59 Cash benefit payments, Trust pre-funding, Payroll, Contribution % of Pay, and Funded percentage updated from 6/30/19
valuation with more current estimate or actual.
June 2, 2022 62
COMPARISON TO OTHER AGENCIES
50% of 90% of
results results
are are
within within
this this
range range
5th Percentile
75th Percentile
50th Percentile
25th Percentile
Bartel Associates OPEB Database
Sample Percentile Graph
95th Percentile
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
55%
Pe
r
c
e
n
t
o
f
P
a
y
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 75
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 63
COMPARISON TO OTHER AGENCIES
NC ADC NC ADC
95th Percentile 11.6% 25.3%12.6% 29.9%
75th Percentile 6.1% 11.4%5.7% 13.8%
50th Percentile 3.2% 5.8%2.9% 6.8%
25th Percentile 1.8% 2.9%1.7% 3.4%
5th Percentile 0.8% 0.9%0.9% 1.4%
`
Percent of Pay (♦) 5.1% 9.2%7.0% 13.6%
Percentile 70% 70%81% 76%
Miscellaneous Safety
Discount Rate = 6.25%, Average Amortization Period = 22.0 Years
0%
5%
10%
15%
20%
25%
30%
35%
Pe
r
c
e
n
t
o
f
P
a
y
Bartel Associates OPEB Database
Normal Cost & Actuarially Determined Contribution
June 2, 2022 64
COMPARISON TO OTHER AGENCIES
General
Miscellaneous Safety
95th Percentile 319%428%
75th Percentile 174%217%
50th Percentile 92%97%
25th Percentile 40%47%
5th Percentile 14%16%
Percent of Pay (♦) 197%319%
Percentile 80%90%
Discount Rate = 6.25%
0%
50%
100%
150%
200%
250%
300%
350%
400%
450%
Pe
r
c
e
n
t
o
f
P
a
y
Bartel Associates OPEB Database
Actuarial Accrued Liability
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 76
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 65
ACTUARIAL CERTIFICATION
This report presents the City of Palo Alto Retiree Healthcare Plan (“Plan”) June 30, 2021 actuarial valuation. The
purpose of this valuation is to:
Determine the June 30, 2021 Benefit Obligations,
Determine the Plan’s June 30, 2021 Funded Status, and
Calculate the 2022/23 and 2023/24 Actuarially Determined Contributions.
The report provides information intended for funding the City’s Plan, but may not be appropriate for other purposes.
Future actuarial measurements may differ significantly from the current measurements presented in this report due to
such factors as: plan experience differing from that anticipated by the assumptions; changes in assumptions; changes
expected as part of the natural progression of the plan; and changes in plan provisions or applicable law. Actuarial models
necessarily rely on the use of estimates and are sensitive to changes. Small variations in estimates may lead to significant
changes in actuarial measurements. Due to the limited scope of this assignment, we did not perform an analysis of the
potential range of such measurements.
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 principles and practices. As members of the American Academy of Actuaries meeting the Academy
Qualification Standards, we certify the actuarial results and opinions herein.
Respectfully submitted,
Mary Elizabeth Redding, FSA, MAAA, EA
Vice President Bartel Associates, LLC June 2, 2022
Deanna Van Valer, ASA, MAAA, EA, FCA
Assistant Vice President
Bartel Associates, LLC
June 2, 2022
June 2, 2022 66
EXHIBITS
Topic Page
Premiums E- 1
Data Summary E- 4
Additional Actuarial Assumptions E-26
Results by Fund E-34
Results by GF Department E-36
Definitions E-38
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 77
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 E-1
PREMIUMS
2021 PEMHCA Monthly Premiums
Region 1
Non-Medicare Eligible Medicare Eligible
Medical Plan Single 2-Party Family Single 2-Party Family
Anthem Select $925.60 $1,851.20 $2,406.56 $383.37 $766.74 $1,150.11
Anthem Traditional 1,307.86 2,615.72 3,400.44 383.37 766.74 1,150.11
Blue Shield Access+ 1,170.08 2,340.16 3,042.21 n/a n/a n/a
Blue Shield Trio 880.50 1,761.00 2,289.30 n/a n/a n/a
Health Net SmartCare 1,120.21 2,240.42 2,912.55 n/a n/a n/a
Kaiser 813.64 1,627.28 2,115.46 324.48 648.96 973.44
UnitedHealthcare Alliance 941.17 1,882.34 2,447.04 n/a n/a n/a
UnitedHealthcare Group n/a n/a n/a 311.56 623.12 934.68
UnitedHealthcare Edge n/a n/a n/a n/a n/a n/a
Western Health Advantage 757.02 1,514.04 1,968.25 n/a n/a n/a
Anthem EPO Del Norte 935.84 1,871.68 2,433.18 n/a n/a n/a
PERSCare/PERS Platinum 1,294.69 2,589.38 3,366.19 381.25 762.50 1,143.75
PERS Choice/PERS Platinum 935.84 1,871.68 2,433.18 349.97 699.94 1,049.91
PERS Select/PERS Gold 566.67 1,133.34 1,473.34 349.97 699.94 1,049.91
PORAC 799.00 1,725.00 2,199.00 513.00 1,022.00 1,635.00
June 2, 2022 E-2
PREMIUMS
2022 PEMHCA Monthly Premiums
Region 1
Non-Medicare Eligible Medicare Eligible
Medical Plan Single 2-Party Family Single 2-Party Family
Anthem Select $1,015.81 $2,031.62 $2,641.11 $ 360.19 $ 720.38 $ 1,080.57
Anthem Traditional 1,304.00 2,608.00 3,390.40 360.19 720.38 1,080.57
Blue Shield Access+ 1,116.01 2,232.02 2,901.63 353.11 706.22 1,059.33
Blue Shield Trio 898.54 1,797.08 2,336.20 353.11 706.22 1,059.33
Health Net SmartCare 1,153.00 2,306.00 2,997.80 n/a n/a n/a
Kaiser 857.06 1,714.12 2,228.36 302.53 605.06 907.59
UnitedHealthcare Alliance 1,020.28 2,040.56 2,652.73 n/a n/a n/a
UnitedHealthcare Group n/a n/a n/a 294.65 589.30 883.95
UnitedHealthcare Edge n/a n/a n/a 347.21 694.42 1,041.63
Western Health Advantage 741.26 1,482.52 1,927.28 314.94 629.88 944.82
Anthem EPO Del Norte 1,057.01 2,114.02 2,748.23 n/a n/a n/a
PERSCare/PERS Platinum 1,057.01 2,114.02 2,748.23 381.94 763.88 1,145.82
PERS Choice/PERS Platinum 1,057.01 2,114.02 2,748.23 381.94 763.88 1,145.82
PERS Select/PERS Gold 701.23 1,402.46 1,823.20 377.41 754.82 1,132.23
PORAC 799.00 1,725.00 2,219.00 461.00 919.00 1,471.00
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 78
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 E-3
PREMIUMS
PEMHCA Monthly Premium Increases/(Decreases)
Bay Area/Region 1
Non-Medicare Eligible Medicare Eligible
Medical Plan 2021 2022 2021 2022
Anthem Select 6.5% 9.7% (1.2%) (6.0%)
Anthem Traditional 10.4% (0.3%) (1.2%) (6.0%)
Blue Shield Access+ 3.8% (4.6%) n/a n/a
Blue Shield Trio 5.7% 2.0% n/a n/a
Health Net SmartCare 12.0% 2.9% n/a n/a
Kaiser 5.9% 5.3% (4.4%) (6.8%)
UnitedHealthcare Alliance 4.6% 8.4% (4.7%) n/a
UnitedHealthcare Group n/a n/a n/a (5.4%)
Western Health Advantage 3.4% (2.1%) n/a n/a
Anthem EPO Del Norte 8.7% 12.9% n/a n/a
PERSCare/PERS Platinum 8.7% (18.4%) (0.9%) 0.2%
PERS Choice/PERS Platinum 8.9% 12.9% (0.4%) 9.1%
PERS Select/PERS Gold 14.3% 23.7% (0.4%) 7.8%
PORAC 3.2% 0.0% 0.0% (10.1%)
June 2, 2022 E-4
DATA SUMMARY
Participant Statistics by Bargaining Unit
June 30, 2021
FCA IAFF M/C PAPOA PMA SEIU UMPAPA Total
Actives
Count 4 80 195 68 6 477 44 874
Avg Age 42.6 42.5 47.3 39.8 46.9 44.8 49.1 45.0
Avg City Svc 18.1 12.8 10.6 10.2 22.1 10.6 17.3 11.2
Avg PERS Svc 18.1 13.3 12.2 11.2 23.1 11.2 18.1 12.1
Avg Salary $209,498 $145,878 $134,380 $152,938 $228,619 $98,486 $172,711 $120,207
Total Salary60 $838 $11,670 $26,204 $10,400 $1,372 $46,978 $7,599 $105,061
Retirees61:
Count 6 148 307 89 5 430 24 1,009
Avg Age 64.7 71.0 72.0 66.9 57.5 71.6 62.2 70.9
Avg Service
Ret Age 56.7 54.6 58.3 52.3 50.4 59.6 58.8 58.2
Avg Disab Ret
Age 50.1 48.8 50.5 42.0 n/a 48.0 n/a 46.3
60 Amount in 000’s. Actual 2020/21 PERSable compensations.
61 Excludes retirees who have waived coverage.
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 79
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 E-5
DATA SUMMARY
Participant Statistics by Bargaining Unit
June 30, 2019
FCA IAFF M/C PAPOA PMA SEIU UMPAPA Total
Actives
Count 5 85 207 69 7 508 49 930
Avg Age 43.9 42.3 47.2 40.2 44.7 44.4 50.4 44.8
Avg City Svc 17.9 12.4 10.2 9.7 17.8 10.1 18.3 10.8
Avg PERS Svc 17.9 12.9 11.7 11.0 18.6 10.7 19.2 11.7
Avg Salary $176,198 $121,901 $136,149 $143,180 $213,236 $87,088 $166,590 $110,969
Total Salary62 $881 $10,362 $28,183 $9,879 $1,493 $44,241 $8,163 $103,201
Retirees63:
Count 6 143 298 90 6 418 13 974
Avg Age 63.1 70.6 70.7 66.3 55.0 70.8 60.2 70.0
Avg Service
Ret Age 56.8 54.6 58.2 52.0 50.5 59.5 57.1 58.0
Avg Disab Ret
Age 50.1 48.4 50.5 41.4 n/a 48.2 n/a 46.1
62 Amount in 000’s. Actual 2018/19 PERSable compensations.
63 Excludes retirees who have waived coverage.
June 2, 2022 E-6
DATA SUMMARY
Participant Statistics by CalPERS Pension Category
June 30, 2021
64 Actual 2020/21 PERSable compensations.
65 Excludes retirees who have waived coverage.
Miscellaneous Police Fire Total
Actives
Count 711 76 87 874
Average Age 45.7 40.7 42.7 45.0
Average City Service 11.0 11.0 13.2 11.2
Average PERS Service 11.9 12.0 13.7 12.1
Average Salary $112,031 $161,950 $150,562 $120,207
Total Salary (000’s)64 $79,654 $12,308 $13,099 $105,061
Retirees65:
Count 739 105 165 1,009
Average Age 71.6 66.3 70.7 70.9
Avg Service Ret Age 59.2 52.0 54.5 58.2
Avg Disability Ret Age 48.1 42.1 48.9 46.3
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 80
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 E-7
DATA SUMMARY
Participant Statistics by CalPERS Pension Category
June 30, 2019
66 Actual 2018/19 PERSable compensations.
67 Excludes retirees who have waived coverage.
Miscellaneous Police Fire Total
Actives
Count 761 76 93 930
Average Age 45.5 41.2 42.5 44.8
Average City Service 10.6 10.8 12.8 10.8
Average PERS Service 11.5 12.1 13.3 11.7
Average Salary $104,652 $153,105 $128,224 $110,969
Total Salary (000’s)66 $79,640 $11,636 $11,925 $103,201
Retirees67:
Count 707 107 160 974
Average Age 70.7 65.8 70.1 70.0
Avg Service Ret Age 59.1 51.8 54.5 58.0
Avg Disability Ret Age 48.2 41.5 48.5 46.1
June 2, 2022 E-8
DATA SUMMARY
Medical Plan Participation – June 30, 2021
All Retirees
Medical Plan Actives Under 65 65 or Older Total
Miscellaneous/Safety M S M S M S M S
Anthem Select 6% 3% 5% 1% - - 2% -
Anthem Traditional 4% 1% 9% 8% 6% 5% 6% 6%
Blue Shield - - 3% 7% - - 1% 3%
Health Net SmartCare 1% 1% 1% 1% - - - -
Kaiser 65% 51% 40% 36% 30% 23% 32% 29%
UnitedHealthcare - - 1% 2% 18% 13% 14% 8%
Western Health Advantage - - 1% - - - - -
PERSCare - - 4% 9% 25% 37% 20% 25%
PERS Choice 22% 3% 32% 3% 21% 15% 24% 10%
PERS Select 1% 1% 3% - - - 1% -
PORAC - 40% 1% 32% - 8% - 19%
Total 100% 100% 100% 100% 100% 100% 100% 100%
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 81
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 E-9
DATA SUMMARY
Medical Plan Participation – June 30, 2019
All Retirees
Medical Plan Actives Under 65 65 or Older Total
Miscellaneous/Safety M S M S M S M S
Anthem Select 6% 4% 5% 1% 1% 1% 2% 1%
Anthem Traditional 9% 1% 16% 13% 3% 2% 7% 7%
Blue Shield 1% 1% 3% 6% - - 1% 3%
Health Net SmartCare 2% 1% 1% - - - 1% -
Kaiser 62% 50% 33% 20% 29% 25% 30% 23%
UnitedHealthcare - - - 2% 20% 12% 14% 7%
Western Health Advantage - 1% - 0% - - 0% -
PERSCare 1% 1% 7% 12% 26% 36% 21% 25%
PERS Choice 17% 2% 31% 5% 19% 15% 23% 11%
PERS Select 2% - 1% - - - 1% -
PORAC - 40% 1% 42% 1% 8% 1% 23%
Total 100% 100% 100% 100% 100% 100% 100% 100%
June 2, 2022 E-10
DATA SUMMARY
Medical Plan Participation – June 30, 2021
All Retirees
Medical Plan Actives Under 65 65 or Older Total
Miscellaneous/Safety M S M S M S M S
Anthem Select 6% 1% 5% 1% - - 2% -
Anthem Traditional 4% - 9% 8% 6% 5% 6% 6%
Blue Shield - - 3% 7% - - 1% 3%
Health Net SmartCare 1% - 1% 1% - - - -
Kaiser 65% 13% 40% 36% 30% 23% 32% 29%
UnitedHealthcare - - 1% 2% 18% 13% 14% 8%
Western Health Advantage - - 1% - - - - -
PERSCare - - 4% 9% 25% 37% 20% 25%
PERS Choice 22% 1% 32% 3% 21% 15% 24% 10%
PERS Select 1% - 3% - - - 1% -
PORAC - 10% 1% 32% - 8% - 19%
Total 100% 100% 100% 100% 100% 100% 100% 100%
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 82
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 E-11
DATA SUMMARY
Active Medical Coverage – Miscellaneous
Medical Plan Single 2-Party Family Waived Total
Anthem Select 12 10 17 - 39
Anthem Traditional 14 7 5 - 26
Blue Shield 1 - - - 1
Health Net SmartCare 2 1 2 - 5
Kaiser 141 98 185 - 424
Western Health Advantage - - 1 - 1
PERSCare - 1 1 - 2
PERS Choice 36 35 71 - 142
PERS Select 4 3 2 - 9
PORAC - 1 - - 1
Waived - - - 61 61
Total 210 156 284 61 711
% as of June 30, 2021 30% 22% 40% 9% 100%
% as of June 30, 2019 28% 22% 37% 13% 100%
June 2, 2022 E-12
DATA SUMMARY
Active Medical Coverage – Safety
Medical Plan Single 2-Party Family Waived Total
Anthem Select 1 1 3 - 5
Anthem Traditional - 1 - - 1
Blue Shield - - - - -
Health Net SmartCare - - 2 - 2
Kaiser 20 14 48 - 82
Western Health Advantage - - - - -
PERSCare - - - - -
PERS Choice - 1 3 - 4
PERS Select 1 - - - 1
PORAC 11 6 47 - 64
Waived - - - 4 4
Total 33 23 103 4 163
% as of June 30, 2021 20% 14% 63% 2% 100%
% as of June 30, 2019 20% 14% 60% 6% 100%
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 83
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 E-13
DATA SUMMARY
Retiree Medical Coverage68 - Miscellaneous
Medical Plan
Single 2-Party Family Total
<65 65+ <65 65+ <65 65+
Anthem Select 3 1 4 1 3 - 12
Anthem Traditional 10 9 6 16 1 6 48
Blue Shield 2 - 3 - 1 - 6
Health Net SmartCare - - - - 1 - 1
Kaiser 25 90 37 71 12 5 240
UnitedHealthcare - 69 1 32 - - 102
Western Health Advantage - - 1 - - - 1
PERSCare 6 74 2 61 - 2 145
PERS Choice 20 58 32 50 8 6 174
PERS Select 4 - 1 2 1 - 8
PORAC - 1 - - 1 - 2
Total 70 302 87 233 28 19 739
% as of June 30, 2021 9% 41% 12% 32% 4% 2% 100%
% as of June 30, 2019 13% 39% 12% 30% 5% 2% 100%
68 Approximately 78% of retirees have coverage in a region 1 plan. The rest are in other state regions or out of state.
June 2, 2022 E-14
DATA SUMMARY
Retiree Medical Coverage69 - Safety
Medical Plan
Single 2-Party Family Total
<65 65+ <65 65+ <65 65+
Anthem Select - - - - 1 - 1
Anthem Traditional 2 - 4 5 4 2 17
Blue Shield 1 - 4 - 3 - 8
Health Net SmartCare - - 1 - - - 1
Kaiser 6 13 18 21 19 1 78
UnitedHealthcare - 12 1 6 1 1 21
Western Health Advantage - - - - - - -
PERSCare 5 31 2 23 4 2 67
PERS Choice 2 8 1 15 1 - 27
PERS Select - - - - - - -
PORAC 7 4 13 8 18 - 50
Total 23 68 44 78 51 6 270
% as of June 30, 2021 9% 25% 16% 29% 19% 2% 100%
% as of June 30, 2019 8% 25% 14% 29% 22% 1% 100%
69 Approximately 74% of retirees have coverage in a Region 1 plan. The rest are in other state regions or out of state.
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 84
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 E-15
DATA SUMMARY
Retirees Medical Coverage by Age – Miscellaneous
Age Single 2-Party Family Total
Under 50 - 1 1 2
50-54 3 1 3 7
55-59 20 21 15 56
60-64 47 64 9 120
65-69 66 65 13 144
70-74 80 69 3 152
75-79 70 61 3 134
80-84 55 18 - 73
85 & Over 31 20 - 51
Total 372 320 47 739
Average Age 73.3 70.8 63.1 71.6
June 2, 2022 E-16
DATA SUMMARY
Retirees Medical Coverage by Age – Police
Age Single 2-Party Family Total
Under 50 1 2 5 8
50-54 1 - 3 4
55-59 4 3 9 16
60-64 6 8 8 22
65-69 7 9 3 19
70-74 6 10 - 16
75-79 4 4 - 8
80-84 5 2 - 7
85 & Over 3 2 - 5
Total 37 40 28 105
Average Age 70.3 68.8 57.6 66.3
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 85
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 E-17
DATA SUMMARY
Retirees Medical Coverage by Age – Fire
Age Single 2-Party Family Total
Under 50 - - 1 1
50-54 4 3 5 12
55-59 2 9 14 25
60-64 5 19 6 30
65-69 2 6 2 10
70-74 6 15 - 21
75-79 10 9 1 20
80-84 18 12 - 30
85 & Over 7 9 - 16
Total 54 82 29 165
Average Age 75.9 71.3 59.0 70.7
June 2, 2022 E-18
DATA SUMMARY
Retirees Medical Coverage by Age – Total
Age Single 2-Party Family Total
Under 50 1 3 7 11
50-54 8 4 11 23
55-59 26 33 38 97
60-64 58 91 23 172
65-69 75 80 18 173
70-74 92 94 3 189
75-79 84 74 4 162
80-84 78 32 - 110
85 & Over 41 31 - 72
Total 463 442 104 1,009
Average Age 73.4 70.7 60.5 70.9
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 86
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 E-19
DATA SUMMARY
0
20
40
60
80
100
120
140
160
180
200
<50 50-54 55-59 60-64 65-69 70-74 75-79 80-84 ≥85
Nu
m
b
e
r
Age
Retiree Age Distribution
Total
6/30/19 Valuation
6/30/21 Valuation
June 2, 2022 E-20
DATA SUMMARY
Actives by Age and Service – Miscellaneous
City Service
Age < 1 1-4 5-9 10-14 15-19 20-24 ≥ 25 Total
< 25 4 2 - - - - - 6
25-29 9 35 8 - - - - 52
30-34 6 59 30 - - - - 95
35-39 5 23 33 16 2 1 - 80
40-44 4 30 24 27 16 10 - 111
45-49 2 14 20 20 18 18 1 93
50-54 1 8 18 17 16 26 10 96
55-59 3 9 15 21 13 27 16 104
60-64 1 5 10 7 8 12 7 50
≥ 65 - 1 4 4 3 5 7 24
Total 35 186 162 112 76 99 41 711
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 87
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 E-21
DATA SUMMARY
Actives by Age and Service – Police
City Service
Age < 1 1-4 5-9 10-14 15-19 20-24 ≥ 25 Total
< 25 - 1 - - - - - 1
25-29 - 9 2 - - - - 11
30-34 - 3 3 1 - - - 7
35-39 - 5 7 4 1 - - 17
40-44 - 1 4 7 3 1 - 16
45-49 - - 2 2 3 6 1 14
50-54 - - - 1 2 - 1 4
55-59 - 2 - - 1 1 1 5
60-64 - - 1 - - - - 1
≥ 65 - - - - - - - -
Total - 21 19 15 10 8 3 76
June 2, 2022 E-22
DATA SUMMARY
Actives by Age and Service – Fire
City Service
Age < 1 1-4 5-9 10-14 15-19 20-24 ≥ 25 Total
< 25 - - - - - - - -
25-29 - 9 - - - - - 9
30-34 - 5 6 2 - - - 13
35-39 - 3 7 4 1 - - 15
40-44 - 1 2 5 3 1 - 12
45-49 - - 3 3 3 10 1 20
50-54 - - - - 3 5 1 9
55-59 - - - 1 2 4 1 8
60-64 - - - - - - - -
≥ 65 - - - - - - 1 1
Total - 18 18 15 12 20 4 87
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 88
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 E-23
DATA SUMMARY
Actives by Age and Service – Total
City Service
Age < 1 1-4 5-9 10-14 15-19 20-24 ≥ 25 Total
< 25 4 3 - - - - - 7
25-29 9 53 10 - - - - 72
30-34 6 67 39 3 - - - 115
35-39 5 31 47 24 4 1 - 112
40-44 4 32 30 39 22 12 - 139
45-49 2 14 25 25 24 34 3 127
50-54 1 8 18 18 21 31 12 109
55-59 3 11 15 22 16 32 18 117
60-64 1 5 11 7 8 12 7 51
≥ 65 - 1 4 4 3 5 8 25
Total 35 225 199 142 98 127 48 874
June 2, 2022 E-24
DATA SUMMARY
0
20
40
60
80
100
120
140
160
<25 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-65 ≥65
Nu
m
b
e
r
Age
Active Age Distribution
Total
6/30/19 Valuation
6/30/21 Valuation
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 89
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 E-25
DATA SUMMARY
0
50
100
150
200
250
300
350
0-4 5-9 10-14 15-19 20-24 >25
Nu
m
b
e
r
Service
Active Service Distribution
Total
6/30/19 Valuation
6/30/21 Valuation
June 2, 2022 E-26
ADDITIONAL ACTUARIAL ASSUMPTIONS
June 30, 2019 Valuation June 30, 2021 Valuation
Retirement CalPERS 1997-2015
Experience Study- Expected
retirement age for each tier
Misc Fire & Police
Tier 1 2.7%@55 3%@50
Exp. RetAge 60.3 56.4 & 55.2
Tier 2 2%@60 3%@55
Exp. RetAge 60.7 57.4 & 56.6
PEPRA 2.5%@67 2.7%@57
Exp. RetAge 62.4 57.3 & 57.0
CalPERS 2000-2019
Experience Study - Expected
retirement age for each tier
Misc Fire & Police
Tier 1 2.7%@55 3%@50
Exp. RetAge 60.7 56.4 & 54.0
Tier 2 2%@60 3%@55
Exp. RetAge 63.0 57.7 & 56.4
PEPRA 2.5%@67 2.7%@57
Exp. RetAge 62.4 57.1 & 56.7
Spousal
Coverage at
Retirement
70% of covered retirees are
assumed to cover spouses
Based on Plan experience
Same
Waived Retiree
Re-election
0% Same
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 90
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 E-27
ADDITIONAL ACTUARIAL ASSUMPTIONS
June 30, 2019 Valuation June 30, 2021 Valuation
Medical Trend Increase from Prior Year
Year Pre-Medicare
Post-
Medicare
2019-20 Actual Premiums/Claims
2021 7.25% 6.30%
2022 7.00% 6.10%
2023 6.75% 5.90%
2024 6.50% 5.70%
2025 6.25% 5.50%
2026 6.00% 5.30%
2027 5.80% 5.15%
2028 5.60% 5.00%
2029 5.40% 4.85%
2030 5.20% 4.70%
2031-35 5.05% 4.60%
2036-45 4.90% 4.50%
2046-55 4.75% 4.45%
2056-65 4.60% 4.40%
2066-75 4.30% 4.20%
2076+ 4.00% 4.00%
Increase from Prior Year
Calendar
Year
Pre-
Medicare
Post-
Medicare
Kaiser
Post-
Medicare
Other
2019-20 n/a
2021 Actual 2021 Premiums/Claims
2022 Actual 2022 Premiums/Claims
2023 6.50% 5.65% 4.60%
2024 6.25% 5.45% 4.45%
2025 6.00% 5.25% 4.60%
2026 5.75% 5.05% 4.45%
2027 5.55% 4.90% 4.35%
2028 5.35% 4.75% 4.25%
2029 5.15% 4.60% 4.20%
2030 4.95% 4.45% 4.05%
2031-35 4.80% 4.35% 4.00%
2036-45 4.65% 4.25% 3.95%
2046-55 4.50% 4.20% 3.90%
2056-65 4.35% 4.15% 3.85%
2066-75 4.05% 3.95% 3.80%
2076+ 3.75% 3.75% 3.75%
June 2, 2022 E-28
ADDITIONAL ACTUARIAL ASSUMPTIONS
June 30, 2019 Valuation June 30, 2021 Valuation
Medical Plan at
Retirement &
Retirees Attaining
age 65
Miscellaneous: <65 65+
Anthem Tradition 20% 10%
Blue Shield 0% 0%
Kaiser 40% 35%
PERS Choice 30% 25%
PERSCare 10% 15%
United HC 0% 15%
Safety: <65 65+
Anthem Tradition 15% 5%
Blue Shield 5% 0%
Kaiser 35% 25%
PERS Choice 0% 5%
PERSCare 0% 45%
PORAC 45% 15%
United HC 0% 5%
Based on Plan experience
Miscellaneous: <65 65+
Anthem Tradition 10% 5%
Blue Shield 5% 0%
Kaiser 50% 30%
PERS Choice 30% 20%
PERSCare 5% 25%
United HC 0% 20%
Safety: <65 65+
Anthem Tradition 10% 5%
Blue Shield 5% 0%
Kaiser 40% 25%
PERS Choice 0% 15%
PERSCare 10% 35%
PORAC 35% 10%
United HC 0% 10%
Based on Plan experience
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 91
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 E-29
ADDITIONAL ACTUARIAL ASSUMPTIONS
June 30, 2019 Valuation June 30, 2021 Valuation
Family Coverage
at Retirement
(for future
retirees)
Misc: 15% until age 65
5% age 65-75
Safety: 50% until age 65
5% age 65-80
Based on Plan experience
Same
Spouse Age Actives – Males 3 years older
than females
Retirees – Males 3 years
older than females if spouse
birth date not available
Same
Surviving
Spouse
Participation
100% Same
June 2, 2022 E-30
ADDITIONAL ACTUARIAL ASSUMPTIONS
June 30, 2019 Valuation June 30, 2021 Valuation
Medicare
Eligibility
Actives and retirees hired
before 4/1/86:
Miscellaneous – 80%
Safety – 90%
Actives and retirees hired on
or after 4/1/86: 100%
Retirees before 65 with
unknown hire date: 90%
Everyone eligible for
Medicare will elect Part B
coverage
Same
Future New
Participants
None – Closed Group Same
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 92
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 E-31
ADDITIONAL ACTUARIAL ASSUMPTIONS
June 30, 2019 Valuation June 30, 2021 Valuation
Retirees Missing
Fund
Assumed to have the same
fund as the prior valuation
Assumed to be based on
active percentages: 75% GF,
15% Elec, and 10% UTL70
No retirees missing Fund
information.
Retirees Missing
Department
Assumed to have the same
department as the prior
valuation
Liability for retirees assumed
to be 75% GF allocated
proportionately across all
Departments
Same
70 Fewer than 10% retirees have missing Fund or Department. Does not affect results, but does affect internal cost allocations
used by the City.
June 2, 2022 E-32
ADDITIONAL ACTUARIAL ASSUMPTIONS
June 30, 2019 Valuation June 30, 2021 Valuation
Actuarial Models Our valuation was performed using and relying on ProVal, an
actuarial model leased from Wintech. Our use of ProVal is
consistent with its intended purpose. We have reviewed and
understand ProVal and its operation, sensitivities and
dependencies.
Data Quality Our valuation used census data provided by the City and
CalPERS OPEB data extract. We reviewed the data for
reasonableness and resolved any questions with the City. We
believe the resulting data can be relied on for all purposes of this
valuation without limitation.
COVID-19 No adjustments to the assumptions have been made for COVID-
19 since there is not yet enough data to evaluate the future
impacts.
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 93
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 E-33
ADDITIONAL ACTUARIAL ASSUMPTIONS
June 30, 2019 Valuation June 30, 2021 Valuation
Sample Medical
Claims Costs
2022
Sample estimated monthly claims costs:
Region 1 – Non-Medicare Eligible
Kaiser (HMO) PERS Choice (PPO) PORAC
Age M F M F M F
55 $932 $934 $1,031 $1,035 $928 $929
60 1,261 1,139 1,420 1,277 1,278 1,147
65 1,615 1,375 1,829 1,547 1,647 1,391
70 1,963 1,631 2,223 1,835 2,002 1,650
75 2,330 1,905 2,639 2,143 2,377 1,926
80 2,705 2,194 3,063 2,469 2,759 2,219
85 3,266 2,640 3,699 2,970 3,331 2,670
Region 1 – Medicare Eligible
Kaiser (HMO) PERS Choice (PPO) PORAC
Age M F M F M F
65 n/a n/a $378 $329 $436 $377
70 n/a n/a 420 364 484 417
75 n/a n/a 452 393 521 450
80 n/a n/a 468 410 540 470
85 n/a n/a 456 405 526 464
June 2, 2022 E-34
RESULTS BY FUND
Actuarial Obligations – June 30, 2021 – 6.25% Discount Rate
(Amounts in 000’s)
FUND AAL Assets71 UAAL
Airport $ 488 $ 328 $ 160
CIP 3,897 2,620 1,277
Elec72 29,257 19,669 9,588
Gas72 10,800 7,261 3,539
GF 157,214 105,692 51,522
ISF – Technology 4,587 3,084 1,503
ISF – Vehicle 1,704 1,146 558
ISF – Printing & Mailing 91 61 30
ISF – Workers Comp 97 65 32
PARKING 641 431 210
Refuse 4,479 3,011 1,468
Storm Drain 2,174 1,462 713
Water72 10,172 6,838 3,333
WWC72 4,114 2,766 1,348
WWT 14,482 9,736 4,746
Total 244,197 164,170 80,027
71 Assets allocated in proportion to AAL.
72 AAL for UTL employees allocated to Elec, Gas, Water, and WWC in proportion to each Fund’s AAL
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 94
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 E-35
RESULTS BY FUND
Actuarially Determined Contribution (ADC) – 6.25% Discount Rate
(Amounts in 000’s)
FUND 2022/23 2023/24
Airport $ 34 $ 34
CIP 335 346
Elec72 1,227 1,261
Gas72 529 549
GF 7,134 7,332
ISF – Technology 308 313
ISF – Vehicle 111 115
ISF – Printing & Mailing 2 2
ISF – Workers Comp 13 13
PARKING 69 70
Refuse 157 162
Storm Drain 108 111
Water72 478 493
WWC72 218 224
WWT 705 724
Total 11,428 11,749
June 2, 2022 E-36
RESULTS BY GF DEPARTMENT
Actuarial Obligations – June 30, 2021 – 6.25% Discount Rate
(Amounts in 000’s)
GF Department AAL Assets73 UAAL
ASD $ 7,191 $ 4,835 $ 2,356
ATT 2,587 1,739 848
AUD 130 87 43
CLK 625 420 205
COU 1,176 791 385
CSD 14,885 10,007 4,878
DSD 4,271 2,871 1,400
FIR 47,719 32,082 15,637
HRD 2,381 1,600 781
LIB 6,001 4,034 1,967
MGR 2,429 1,633 796
PLA 5,861 3,940 1,921
POL 45,862 30,832 15,030
PWD 16,096 10,821 5,275
Total 157,214 105,692 51,522
73 Assets allocated in proportion to AAL.
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 95
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 E-37
RESULTS BY GF DEPARTMENT
Actuarially Determined Contribution (ADC) – 6.25% Discount Rate
(Amounts in 000’s)
GF Department 2022/23 2023/24
ASD $ 336 $ 345
ATT 99 102
AUD 3 3
CLK 39 40
COU 62 64
CSD 701 721
DSD 335 344
FIR 1,847 1,901
HRD 125 129
LIB 367 375
MGR 102 105
PLA 271 279
POL 2,216 2,279
PWD 631 645
Total 7,134 7,332
June 2, 2022 E-38
DEFINITIONS
Present Value of Benefits
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 96
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l
June 2, 2022 E-39
DEFINITIONS
Actuarially
Determined
Contribution
(ADC)
Contribution for the current period including:
Normal Cost
Administrative expenses
Amortization of:
Initial Unfunded AAL
AAL for plan, assumption, and method changes
Experience gains/losses (difference between expected and actual)
Contribution gains/losses (difference between ADC and actual)
Attachment A: OPEB June 30, 2021 Valuation 3.a
Packet Pg. 97
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
O
P
E
B
J
u
n
e
3
0
,
2
0
2
1
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
(
1
4
1
1
2
:
O
t
h
e
r
P
o
s
t
-
E
m
p
l
o
y
m
e
n
t
B
e
n
e
f
i
t
s
(
O
P
E
B
)
B
i
-
A
n
n
u
a
l
A
c
t
u
a
r
i
a
l