HomeMy WebLinkAbout12 - Retiree Medical ProgramCC'' aC1L A GfNI A
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CITY OF NEWPORT BEACH 1»
CITY COUNCIL STAFF REPORT
Agenda Item No. 10
February 12, 2008
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Administrative Service Depa t
Dennis Danner, Director
949/644 -3123 or ddannerc @city.nevSporF- beach.ca.us
SUBJECT: Retiree Medical Program
ISSUE:
Should the City fund the remainder of the liability for the former Retiree Medical Program
through the Califomia Employers' Retiree Medical Benefit Trust Fund (CEBRT) offered by
CalPERS.
RECOMMENDATION:
Authorize the Mayor, City Manager and City Clerk to execute the attached documents
initiating participation in CEBRT, with the intention of budgeting sufficient funds to fully
satisfy the remaining liability over a twenty year period.
DISCUSSION:
The City's Retiree Medical Program has been converted from a defined benefit plan to a
defined contribution plan. This new plan is being phased in over a period of several
years. There is virtually no unfunded liability with the new plan. Since no additional
participants are being added to the old plan, the unfunded liability connected with that
plan is essentially fixed. It will slowly decrease over an extended period.
The subject of Other Post Employment Benefits (OPEB) has become a matter of
increased scrutiny over recent years; and appropriately so. The Government Accounting
Standards Board (GASB) has instituted increased OPEB disclosure requirements in the
financial reports of government entities. Many agencies are grappling with significant
unfunded liabilities. For local governments collectively, one of the most significant
aspects of this overall liability is for retiree medical programs. Newport Beach is fortunate
to have been able to sharply limit the growth of this liability by converting its long- standing
program to a defined contribution basis.
The final step in the conversion process; and in the process of complying with the intent
of the GASB reporting requirements, is to provide funding for the remainder of the
existing liability. To the extent an entity is able to do so, the convention is to fund such
liability over the approximate period of time while the employees participating in the plan
are still actively employed by the City. In consultation with the actuary, a 20 year fixed
horizon has been agreed upon as the appropriate time frame. The Actuarially Required
Contribution (ARC) was therefore calculated to fund the liability over that period.
The current proposed action is to establish a Trust Relationship with CalPERS CERBT,
and to open an account which will serve as a repository for these funds. This course of
action offers two distinct advantages.
1. By so doing, the liability takes on a reduced level of significance in the City's financial
structure. If the facilities replacement program moves forward as currently envisioned,
we will be relying on external financing (Certificates of Participation) at a level
unprecedented in the City's history. The cost of the capital needed to accomplish this
program will be significantly impacted by how rating agencies and insurers view our
financial strength, to include the discipline with which we address liabilities of this nature.
This action sets the right precedent and sends exactly the right message in that regard.
2. Compared to other potential external organizations with which we could enter into a
similar contractual arrangement, CalPERS provides the right blend of higher long -term
investment returns, security, and flexibility.
FUNDING AVAILABILITY
There is no up -front administrative cost connected with participating in CEBRT. The
annual cost of the program itself will almost certainly be decreased by this action, as
opposed to holding the funds locally.
Submitted by:
Dennis C. Danner t
Administrative Services Director
City of Newport Beach
RA KT E L Retiree Healthcare Plan
T777rrs. [:i,r.,
Actuarial Valuation as of June 30, 2006
For Fiscal Year 2007/08 GASB 45 Information
October 2007
Bartel Associates, LLC
411 Bortel Avenue, Suite 445
San Mateo, California 94402
Phone: 650/377 -1600
Fax: 650/345 -8057
Email: jbartel(abartel- associates.com
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B/1 U E L
SSOCIATES, LLC
ACTUARIAL VALUATION CERTIFICATION
This report presents the June 30, 2006 actuarial valuation for the City of Newport Beach Retiree
Healthcare Plan ( "Plan's. The purpose of this valuation is to:
• determine the Plan Benefit Obligations as of June 30, 2006 pursuant to Governmental
Accounting Standards Board Statement No. 45 (GASB 45),
• determine the Plan Benefit Obligations as of June 30, 2007 based on an actuarial roll- forward
of the June 30, 2006 valuation results,
• calculate the Annual Required Contribution for the 2007 /08 fiscal year assuming GASB 45 is
adopted for the 2007/08 fiscal year, and
• provide estimated financial disclosure information for the fiscal year ending June 30, 2008.
This report includes the following sections:
• Section 1 presents an executive summary of the GASB 45 valuation results.
• Section 2 provides financial accounting information for the fiscal year ending June 30, 2008.
• Section 3 provides detailed June 30, 2007 results.
• Sections 4, 5, and 6 summarize the census data, Plan provisions, funding methods, and
actuarial assumptions that form the basis for the actuarial valuations.
• Section 7 includes a summary of GASB 45.
This report presents Bartel Associates' best estimate of the City of Newport Beach Retiree
Healthcare Plan liabilities and costs in accordance with accepted actuarial principles and our
understanding of GASB 45.
The undersigned is a member of the American Academy of Actuaries and meets Academy
Qualification Standards to render the actuarial results and opinions in this report.
Respectfully submitted,
Bianca Lin, ASA, MAAA, EA
Assistant Vice President
Bartel Associates, LLC
John E. Bartel, ASA, MAAA, EA
President
Bartel Associates, LLC
October 2007
411 KwO Arenuc, Suite 74S •San .Mates. C:hf..nin 044;)2.
main. G ` 1 -, 1600 •fas: 651!!345 8057
Section
Page
1
Executive Summary
1
2
Accounting Information
3
3
Actuarial Valuation Results
5
4
Demographic Information
11
5
Plan Provisions
17
6
Actuarial Methods and Assumptions
22
7
GASB OPEB Summary
25
• AAL — ActuarialAccruedLiability
• AOC — Annual OPEB Cost
• ARC — Annual Required Contribution
• EAN — Entry Age Normal Cost Method
• GASB 45 — Governmental Accounting Standards Board Statement No. 45
• NOO — Net OPEB Obligation
• OPEB — Other (than pensions) Post Employment Benefits
• PVB — Present Value of Benefits
• UAAL — Unfunded Actuarial Accrued Liability
City of Newport Beach t��
June 30, 2006 Valuation l
SECTION 1_
ExECunw SUMMARY
On June 21, 2004, the Governmental Accounting Standards Board approved Statement No. 45
(GASB 45), Accounting Standards for Other (than Pensions) Post Employment Benefits (OPEB). The
information presented in this report is based on the financial reporting standards established under
GASB 45.
GASB 45 is phased in similar to GASB 34. For Phase 1 governments, GASB 45 is effective for fiscal
years beginning after December 15, 2006. GASB 45 is therefore first effective for the City of Newport
Beach for the fiscal year beginning on July 1, 2007.
The City of Newport Beach provides postretirement healthcare benefits to eligible employees who
retire directly from the City. Effective December 31, 2003 the City established the Medical Expense
Reimbursement Plan ("MERP ). The MERP is an individual account defined contribution plan
established to replace the City's old retiree healthcare defined benefit plan ("Old Plan'). The benefit
provisions, conversion rules and benefits included in the valuation are summarized in the Section 5.
We understand the City will pre-fund the retiree healthcare benefit cash subsidy through Ca1PERS for
the fiscal year 2007 /08. The implied subsidy component will not be pre - funded through an
irrevocable bust. We further understand the City will make the following contributions for its
2007/08 fiscal year:
■ $6.2 million seed money will be transferred to Ca1PERS OPEB trust in the early part of the
fiscal year in order to pre -fund the cash subsidy. This valuation treats the $6.2 million as
plan assets reducing the unfunded actuarial accrued liability and creating a Net OPEB Asset
at July 1, 2007 of the same amount,
■ $2.7 million for the cash subsidy 2007/08 Annual Required Contribution, and
■ Approximately $0.4 million for the 2007/08 implied subsidy cash flow paid through the
medical premiums for the active employees. This valuation assumes the implied subsidy
will not be pre- funded through an irrevocable trust.
Therefore, we prepared the valuation results based on a 7.75% discount rate for the cash subsidy and
5% discount rate for the implied subsidy.
The June 30, 2007 benefit obligations and the 2007/08 plan cost are as follows based on an actuarial
roll - forward of the June 30, 2006 valuation results (amounts in 000's):
June 30, 2007
• Present Value of Benefits (PVB) $69,371
The Present Value of Benefits is a measure of the total City
obligation for expected retiree healthcare benefits due to both past
and future service for current employees and retirees.
• Actuarial Accrued Liability (AAL) $56,048
The Actuarial Accrued Liability is a measure of the City obligation
for benefits earned or allocated to past service.
City of Newport Beach (I
TA) 30, 2006 Valuation 1 ' ITA
The $6.2 million reserve was assumed to be transferred to Ca1PERS OPEB Trust in the early
2007 /08. This valuation treats the $6.2 million as plan assets reducing the unfunded actuarial
liability and creating a Net OPEB Asset at July 1, 2007 of the same amount. The City should
consult with its outside auditor whether this practice is acceptable under GASB 45.
GASB 45 requires agencies with more than 200 members prepare actuarial valuations at least every
two years. If there is a significant change in benefit provisions, participants, or factors that impact
long -term assumptions during this period, a new valuation must be performed.
City of Newport Beach
June 30, 2006 Valuation - 2 " 1 4
SECTION 1
EXECUTIVE SUMMARY
June 30, 2007
•
Plan Assets
$6,200
Plan Assets include funds that have been segregated and restricted
in a trust so that they can only be used to pay plan benefits.
•
Unfunded Actuarial Accrued Liability (UAAL) .
$49,848
Unfunded Actuarial Accrued Liability is the excess of the AAL
over Plan Assets. This represents the amount of the Actuarial
Accrued Liability at the valuation date that must still be funded.
2007 /08 Plan Cost
•
Normal Cost (NC)
The value of employer promised benefits expected to be earned or
$1,339
allocated to the current fiscal year.
•
Annual Required Contribution (ARC)
4,796
The Annual Required Contribution is the sum of the Normal Cost
plus an amortization of the Unfunded Actuarial Accrued Liability
(or less an amortization of excess assets) determined as of the end
of the fiscal year.
•
Annual OPEB Cost (AOC)
4,801
The Annual OPEB Cost is the expense recognized on the City's
income statement for providing post- retirement healthcare benefits.
The AOC will equal the ARC, adjusted for prior differences
between the ARC and actual contributions.
•
Net OPEB Obligation /(Asset) (NOO)
(6,200)
The July 1, 2007 Net OPEB Obligation is the historical difference
between the ARC and actual contributions.
•
Estimated Benefit Payments
$2,639
Benefit Payments, or the Pay- As- You-Go -Cost, are the City-paid
retiree healthcare benefit payments for the current fiscal year.
The $6.2 million reserve was assumed to be transferred to Ca1PERS OPEB Trust in the early
2007 /08. This valuation treats the $6.2 million as plan assets reducing the unfunded actuarial
liability and creating a Net OPEB Asset at July 1, 2007 of the same amount. The City should
consult with its outside auditor whether this practice is acceptable under GASB 45.
GASB 45 requires agencies with more than 200 members prepare actuarial valuations at least every
two years. If there is a significant change in benefit provisions, participants, or factors that impact
long -term assumptions during this period, a new valuation must be performed.
City of Newport Beach
June 30, 2006 Valuation - 2 " 1 4
SECTION 2
ACCOUNTING INFORMATION
GASB 45 is effective for the City for the 2007/08 fiscal year. We have performed a June 30, 2006
actuarial valuation and calculated the fiscal year 2007 /08 ARC. The unfunded actuarial accrued liability at
June 30, 2007 was based on an actuarial roll- forward of the June 30, 2006 valuation results assuming no
demographic and contribution gains/losses. All the gains/losses will reflect in the City's next valuation.
The 2007 /08 ARC, AOC, and the estimated June 30, 2008 NOO are as follows.
Annual Required Contribution (ARC)
The 2007/08 Annual Required Contribution includes the Normal Cost plus a 20 -year amortization of
the Unfunded AAL, both as a level percentage of payroll and determined as of the end of the fiscal year
(amounts in 000's):
Annual OPEB Cost (AOC)
The AOC is equal to the ARC, except when the City has a NOO at the beginning of the year. In that case,
the AOC will equal the ARC adjusted for expected interest on the NOO and reduced by an amortization of
the NOO. The 2007/08 AOC is determined as follows (amounts in 000's):
Cash
Implied
Subsidy
Subsidy
7.75%
5%
Total
• Normal Cost
$311
$1,029
$1,339
• UAAL Amortization
1,837
136.19
3.457
• Total ARC
2,148
2,648
4,796
• ARC as % of Payroll
3.9%
4.89/o
8.8%
• Projected: 2007/08 Payroll
54,748
54,748
54,748
Annual OPEB Cost (AOC)
The AOC is equal to the ARC, except when the City has a NOO at the beginning of the year. In that case,
the AOC will equal the ARC adjusted for expected interest on the NOO and reduced by an amortization of
the NOO. The 2007/08 AOC is determined as follows (amounts in 000's):
Net OPEB Obligation (NOO)
The NOO is the historical difference between the ARC and actual contributions. If the City always
contributes the ARC, then the NOO will equal zero. Benefit payments are considered contributions.
Contributions in excess of benefit payments must be segregated in a trust for the sole purpose of paying
Plan benefits in order to be considered Plan Assets for purposes of GASB 45. The June 30, 2008 NOO is
(amounts in $000's):
City of Newport Beach f>
June 30, 2006 Valuation ' {?
Cash
Imptced
Subsidy
Subsidy
7.75%
5%
Total
• ARC
2,148
2,648
$4,796
• Interest on NOO
(481)
0
(481)
• Amortization of NOO
486
0
486
• Total AOC
2,153
2,648
4,801
• AOC as % of Payroll
3.9%
4.80/0
8.8%
Net OPEB Obligation (NOO)
The NOO is the historical difference between the ARC and actual contributions. If the City always
contributes the ARC, then the NOO will equal zero. Benefit payments are considered contributions.
Contributions in excess of benefit payments must be segregated in a trust for the sole purpose of paying
Plan benefits in order to be considered Plan Assets for purposes of GASB 45. The June 30, 2008 NOO is
(amounts in $000's):
City of Newport Beach f>
June 30, 2006 Valuation ' {?
SECTION 2
ACCOUNTING INFORMATION
The City's actual June 30, 2008 NOO will differ slightly because actual benefit payments and
contributions may differ from those assumed.
The $6.2 million initial asset was assumed to be transferred to irrevocable trust in early 2007108
2 City's budget for the 2007/08 cash subsidy ARC
3 Estimated 2007/08 benefit Payments for implied subsidy
City of Newport Beach f?
June 30, 2006 Valuation - 4 - L) 1
Cash
Implied
Subsidy
Subsidy
7.75%
5%
Total
■ July 1, 2007 NOOI
$ (6,200)
$0
$ (6,200)
■ 2007/08 AOC
2,153
2,648
4,801
■ Contributions/Benefit Payments
(1700
427 )3
3( .127)
■ June 30, 2008 NOO
(6,747)
2,221
(4,526)
The City's actual June 30, 2008 NOO will differ slightly because actual benefit payments and
contributions may differ from those assumed.
The $6.2 million initial asset was assumed to be transferred to irrevocable trust in early 2007108
2 City's budget for the 2007/08 cash subsidy ARC
3 Estimated 2007/08 benefit Payments for implied subsidy
City of Newport Beach f?
June 30, 2006 Valuation - 4 - L) 1
SECTION 3
ACTUARIAL VALUATION RESULTS
Benefit Obligations
The following actuarial definitions are used in this section:
• The Present Value of Benefits (PVB) or Present Value of Projected Benefits is a measure of
the total City obligation for expected retiree healthcare benefits due to both past and future
service for current employees and retirees.
• The Actuarial Accrued Liability (AAL) is a measure of the City obligation for benefits
earned or allocated to past service.
• The Normal Cost is the value of City - provided benefits expected to be earned or allocated to
the current fiscal year determined as of the end of the fiscal year.
• Plan Assets must be segregated in a trust for the sole purpose of paying Plan benefits in order
to be considered Plan Assets for GASB 45.
• The Unfunded Actuarial Accrued Liability (UAAL) is the difference between the AAL and
the Plan Assets.
• Expected Benefit Payments is the cash flow expected for the current year for City promised
retiree healthcare benefits. It includes payments for current retirees and active employees
expected toaetire during the year.
• The Annual Required Contribution is the employer NC plus the amortized UAAL (or less
the amortized excess assets.) For the City's valuation, the UAAL is amortized over 20 years
as a level percent of pay.
• GASB45 requires that the Implied Subsidy for retirees be included in the AAL and the ARC
for plans that are not community rated. An Implied Subsidy exists when the premium for a
group of employees is determined by aggregating the experience of the group. For example,
assume the premium for actives and non - Medicare eligible retirees is $600 per month. The
underlying medical cost varies by age and gender and might actually be $300 per month for a
40 year -old active employee and $900 per month for a 60 year -old retiree. In this case, the
younger employee is subsidizing $300 of the older employee's cost. An Implied Subsidy is
valued for the City's health plans but not the PEMHCA plans as the PEMHCA plans are
considered a community rated for the City.
City of Newport Beach
June 30, 2006 Valuation -5- BA
SECTION 3
ACTUARIAL VALUATION RESULTS
This report develops the AAL and Normal Cost using the Entry Age Normal actuarial cost method.
This method is designed to produce a Normal Cost which, if all assumptions are met, will be a
level percent of payroll. The following charts illustrate the components of the PVB, with the
shaded area representing the unfunded AAL:
Prtaeot Value of Rojected Be nerds
(w1houl 1'ka Assets)
eaear C.t
Present Value of Projected Benefits
(With Plan Asse6)
Normal Cos,
City of Newport Beach
June 30, 2006 Valuation -6-
SECTION 3
ACTUARIAL VALUATION RESULTS
Benefit Obligations - June 30, 2007
(amounts in 000's)
• Present Value of Benefits
• Actives
• Retirees
• Total
• AAL
• Actives
• Retirees
• Total
• Plan Assets
• UAAL
• Normal Cost
• Employee Cost
• Employer Cost
• Total
$8,967
$5,956
$14,923
8,052
9831
17,883
17,019
15,787
32,806
6,846
4,910
11,756
8,052
9,831
17,883
14,898
14,741
29,639
3,116
1084
6200
11,782
11,657
23,439
191
89
280
175
135
311
366
224
591
• Present Value of Benefits
• Actives
• Retirees
• Total
• AAL
• Actives
• Retirees
• Total
• Plan Assets
• UAAL
• Normal Cost
• Employee Cost
• Employer Cost
• Total
• Pay as you go
$14,414
$10,370
$24,784
6.481
5.299
11,780
20,896
15,669
36,565
8,577
6,052
14,629
6,481
5299
1 1,780
15,059
11,351
26,409
0
0
0
15,059
11,351
26,409
0
0
0
610
419
1 029
610
419
1,029
289
137
427
City of Newport Beach
June 30, 2006 Valuation - 7 - l
SECTION 3
ACTUARIAL VALUATION RESULTS
Benefit Obligations — June 30, 2007
(amounts in 000's)
■ Present Value of Benefits
We have used a discount rate of 7.75% to value the cash subsidy and 5% to value the implied
subsidy since it is the City's intent to pre -fund the cash subsidy and not pre-fund the implied
subsidy.
All the plan assets were allocated to the cash subsidy and none to the implied subsidy. Plan asset
were allocated between the Safety and Miscellaneous based its actuarial accrued liability for cash
subsidy.
City of Newport Beach r)�
June 30, 2006 Valuation - 8 - [>
• Actives
$23,381
$16,326
$39,707
• Retirees
14,533
15.130
29.663
• Total
37,914
31,456
69,370
•
AAL
• Actives
15,423
10,962
26,385
• Retirees
14,533
15,130
29,663
• Total
29,956
26,092
56,048
•
Plan Assets
3,116
3,084
6,200
•
UAAL
26,841
23,008
49,849
•
Normal Cost
• Employee Cost
191
89
280
• Employer Cost
785
554
1_,339
• Total
976
643
1,619
•
Pay as you go
1,366
1,272
2,639
We have used a discount rate of 7.75% to value the cash subsidy and 5% to value the implied
subsidy since it is the City's intent to pre -fund the cash subsidy and not pre-fund the implied
subsidy.
All the plan assets were allocated to the cash subsidy and none to the implied subsidy. Plan asset
were allocated between the Safety and Miscellaneous based its actuarial accrued liability for cash
subsidy.
City of Newport Beach r)�
June 30, 2006 Valuation - 8 - [>
SECTION 3
ACTUARIAL VALUATION RESULTS
Annual Required Contribution (ARC) -2007M
• ARC -$
• Normal cost $175 $135 $311
• UAAL Amortization 924 914 1,837
• Total ARC 1,099 1,049 2,148
• ARC -%
• Normal cost 0.5% 0.6% 0.6%
• UAAL Amortization 2.8% 4.1% 3.4%
• Total ARC 3.4% 4.8% 3.9%
■ ARC -$
The UAAL amortization is based on 20 -year level percentage of payroll.
City of Newport Beach p
June 30, 2006 Valuation - 9 - R={
• Normal cost
$610
$419
$1,029
• UAAL Amortization
923
696
1,619
•
Total ARC
1,533
1,115
2,648
•
ARC -%
• Normal cost
1.90/0
1.90/0
1.9%
• UAAL Amortization
2.8%
3.2%
3.0%
•
Total ARC
4.7%
5.1%
4.8%
j; -ey'} N 7't: ire'µ
�"'" .?`���� �,a
�y
`Y�'y� �•
�Y�.' ;�-�'
_
-3 .. ,'F.
•
ARC - $
• Normal cost
$785
$554
$1,339
• UAAL Amortization
1.847
13610
3.457
•
Total ARC
2,632
2,164
4,796
•
Total Payroll
32,677
22,071
54,748
•
ARC -%
• Normal cost
2.4%
2.5%
2.4%
• UAAL Amortization
5.7%
7.3%
6.3%
•
Total ARC
8.1%
9.8%
8.8%
The UAAL amortization is based on 20 -year level percentage of payroll.
City of Newport Beach p
June 30, 2006 Valuation - 9 - R={
SECTION 3
ACTUARIAL VALUATION RESULTS
Cash Flow Proiection
(amounts in 000's)
The following table shows the projected "pay -as- you -go" benefit payments for the next 10 years as
estimated from the June 30, 2006 actuarial valuation. The projection assumes the number of City
employees remains constant.
City of Newport Beach
June 30, 2006 Valuation -10- 4
Cash
Implied
Year
Subsidy
Subsidy
Total
2007/08
$2,212
$427
$2,639
2008109
2,286
517
2,803
2009/10
2,398
607
3,005
2010/11
2,471
716
3,187
2011/12
2,549
803
3,352
2012/13
2,638
923
3,561
2013/14
2,695
1,030
3,725
2014/15
2,746
1,162
3,908
2015/16
2,793
1257
4,050
2016/17
2,835
1,367
4,202 `
City of Newport Beach
June 30, 2006 Valuation -10- 4
SECTION 4
DEMOGRAPHIC INFORMATION
Participant Statistics
6/30/06
Participants by Benefit Types
Actives
• Count
498
262
760
• Average Age
43.7
40.1
42.4
• Average Service
11.0
12.8
11.6
• Average Pay
$63,551
$81,590
$69,769
• Total Payroll (000's)
$31,648
$21,377
$53,025
■ Retirees
39
Waived
0
• Count
178
178
356
• Average Age
68.4
60.7
64.5
• Average Retirement Age
58.1
1 51.0
54.5
Participants by Benefit Types
Actives
Retirees
R
'iY
ss p
{{
J2'F
S
A C'..: 3
PEMECA
0
115
115
139
139
City Plan
0
108
179
0
35
39
Waived
0
55
127
0
18
178
Total
251
498
128_N
Retirees
10 miscellaneous retirees also have MERP account balances.
' 23 safety retirees also have MERP account balances.
City of Newport Beach
June 30, 2006 Valuation I I
P
Tof6i
PEMHCA
0
115
115
0
139
139
City Plan
0
63
63
0
39
39
Total
0
178
178
0
178
178
10 miscellaneous retirees also have MERP account balances.
' 23 safety retirees also have MERP account balances.
City of Newport Beach
June 30, 2006 Valuation I I
P
SECTION 4
DEMOGRAPHIC INFORMATION
Actives Converted to MERP
Under 25
1 100%
100%
1
100%
25-29
100%
1000/0
100%
1000/0
3034
100%
1000/0
97%
1000/0
-
99%
35-39
100%
100%
86%
78%
53%
-
85%
40-44
1000/0
95%
53%
29%
26%
13%
-
45%
4549
1000/0
77%
22%
11%
100/0
4%
5%
-
190/0
50-54
100%
29%
0%
00/0
0%
00/0
00/0
00/0
4%
55 59
-
0%
00/0
0%
0%
00/0
0%
0%
00/0
60-64
00/0
0%
0%
0%
00/0
00/0
00/0
0%
00/0
65 & Over
-
1000/0
-
-
0%
-
-
00/0
33%
Total
98%
92%
61%
32%
19%
3%
2%
0%
50%
City of Newport Beach t?
June 30, 2006 Valuation -12- L)
SECTION 4
DEMOGRAPHIC INFORMATION
Active Employee Coverage
6/30/06
Retiree Coverage — Under 65
6/30/06
�L�ikra°�'Q,�s
lsa a�
f�i if c.^j•u
' T 'z' �"G�7
�IiSip L
�S3`y it
Blue Weld HA40
'
25
17
47
89
Kaiser HA40
41
6
17
6'
PERS Choice PPO
T
41
18
21
iT
PERSCare
1
3
4
1
8
'PORAC
PEMHCA
19
26
9
54
Subtotal
PEMHCA
7
2
0
9
Blue Cross IMO
PEMHCA
13
23
I
48
Blue Cross
46
68
25
139
SubtoW
City
9
9
7
25
Blue Cross POS
City
6
4
4
14
Blue Cross PPO OOS
City
3
4
1
8
Retiree Coverage — Under 65
6/30/06
6 Medicare Risk, Burnham POS, "Thomson POS
City of Newport Beach [)�
June 30, 2006 Valuation -13- L)
13
3
Blue Shield HMO
PEMHCA
4
20
Kaiser HMO
PEMHCA
3
4
1
8
PERS Choice PPO
PEMHCA
19
26
9
54
PERSCare PPO
PEMHCA
7
2
0
9
PORAC
PEMHCA
13
23
12
48
PEMHCA Subtotal
46
68
25
139
Blue Cross HMO
City
9
9
7
25
Blue Cross POS
City
6
4
4
14
Blue Cross PPO OOS
City
3
4
1
8
City Subtotal
1
18
1 17
1 12
47
Other6
0
0
2
2
Total
64
85
39
188
6 Medicare Risk, Burnham POS, "Thomson POS
City of Newport Beach [)�
June 30, 2006 Valuation -13- L)
SECTION 4
DEMOGRAPHIC INFORMATION
Retiree Coverage — Over Age 65
6/30/06
s
Blue Shield HMO
PEMHCA
11
12
0
23
Kaiser HMO
PEMHCA
2
5
0
7
PERS Choice PPO
PEMHCA
18
19
0
37
PERSCare PPO
PEMHCA
26
15
0
41
PORAC
PEMHCA
2
5
0
7
PEMHCA Subtotal
59
56
0
115
Blue Cross HMO Medicare
City
9
12
3
24
Bluff Cross HMO No Medicare
City
1
0
0
1
Blue Cross POS Medicare
City
17
3
0
20
Blue Cross PPO OOS Medicare
City
0
1
0
1
Blue Cross PPO OOS No Medicare
City
1
0
0
1
Blue Cross IND OOS Medicare
City
2
1
0
3
Chy Subtotal
30
17
3
50
Other'
1
2
0
3
Total
90
75
3
168
l Medicare Risk, Burnham POS, Thomson POS
City of Newport Beach
June 30, 2006 Valuation -14- `t
SECTION 4
DEMOGRAPHIC INFORMATION
Age/Service/Pay Distribution
Active Employees - Safety
'96iV0i�
Uuder25
Count
1
5
-
-
Under 1
-'
-
-
6
ISII
-
Averse Pay
54
55,598
Under25
Cmnrt
Average Pay
36,136
55 }93
2529
Count
5
38
6
-
Count
32
-
49
-
Average L&L
62JU
60,510
73,196
Average Pa
49,628
49,201
62,303
Count
1
17
IS
2
Count
24
-
38
3034
Avers Pa
1
76,216
85 462
Avenge Pay
53,426
-
839
35-39
Count
3
8
16
8
8
dio
26
43
7
Avers Pe
030
83,304
85,326
91296
58,597
59,115
VIM
1 64.629
Count
3
11
7
12
2
16
19
35
40 <4
Average Pa
64,159
77 ,364
85,655
94,348
119
50,801
70,980
86,122
4549
Count
-
-
2
3
9
16
13
16
40
20
Average Pa
10
-
81 ,380
93,288
86,938
97 729
98311
68,777
94
50-64
Count
-
-
-
3
3
8
21
4
39
•
Average Pay
7
6
63
124,982
99,398
92,125
100424
89.310
98,622
55-59
Count
-
-
-
-
I
-
5
4
10
9
Avers Pa
8
8
59
86,658
61,012
73
8& 187
67.981
Count
64.=
-
-
-
-
3
I
1
7
Average Pa
3
1
22
Avers Ps
108,879
91052
9 Q52
65 & Over
E
Count
-
-
-
65& er
-
-
I
I
1
Average Pa
-
-
2
Average Pay
42,276
77 58
77,558
39884
Count
to
71
53
23
33
33
129
10
262
Total
Average Pay
65,021
63496
78,446
91,649
90,903
90"
55A10
85636
81.590
Active Employees - Miscellaneous
6130/06
City of Newport Beach t?
June 30, 2006 Valuation I S t
Under 1
-'
- 1-4
-b
t9
Ti -
--
ISII
-
'll 23
25-29 ;1 30 l O_�er
Under25
Cmnrt
Average Pay
36,136
-
_ -
36,788
25-29
Count
32
6
-
-
49
Average Pa
49,628
49,201
4V12
30.34
Count
24
13
3
-
48
Avenge Pay
53,426
56,254
86,989
55,929
35-39
Count
22
26
10
7
-
W-
Average Pa
58,597
59,115
64,301
1 64.629
59,441
4044
Count
16
19
13
26
6
-
83
Average Pay
50,801
70,980
69,820
62,903
64,554
-
63,824
4549
Count
13
16
16
20
11
10
-
89
Average Pay
61,270
68,777
62,W
70,011
60,679
57,387
65,337
Count
7
11
7
10
13
7
6
63
Average Pay
69,791
7032
87,364
67,046
462
72,106
83,867
73,379
55-59
Count
5
12
10
9
7
8
8
59
Average Pa
61,012
73
70.590
67.981
72,975
64.=
93,587
53
60.64
Count
3
3
3
7
1
3
1
22
Avers Ps
108,879
124,687
60,875
71.5
46,618
7&875
107,484
86,615
65& er
Count
1
-
1
-
-
2
Average Pay
42,276
39884
41,080
.I.�
ET:�w
Count
129
106
62
8o
38
28
15
498
Averse Pay
55A10
66,509
69,735
66,387
67,217
65,513
K626
63,551
City of Newport Beach t?
June 30, 2006 Valuation I S t
SECTION 4
DEMOGRAPHIC INFORMATION
Age/Service/Pay Distribution
All Active Employees
6/30/06
City of Newport Beach ?�
June 30, 2006 Valuation 16 -
G
Under 25
Count
10
11
21
Average Pay
38,938
44.992
42,104
25-29
Count
16
70
12
-
-
-
98
Ave Pay
49,894
55,536
61,193
55 ,307
30.34
Count
9
41
31
5
-
86
Average Pay
51,896
59,618
67,945
87,578
-
-
-
63,401
3539
Count
6
30
42
18
15
Ill
Avery e Pay
56,541
62,171
68,330
73,645
78,851
-
68,312
4044
Count
3
19
30
20
38
8
118
Avenge
6k501
52,910
73.321
75,362
72,833
78,293
-
-
70438
45-09
Count
3
13
18
19
29
27
20
129
Average Pay
619TO
70,177
67,670
75,264
82,635
77,849
74X7
50.54 ,
Count
2
7
11
10
13
21
28
10
102
Average La
58,500
69,791
71,332
98,649
72,202
79952
93,370
96,044
83,030
5559
Count
-
5
12
10
10
7
13
12
69
Av Pa
61,012
73,229
70,590
69,849
72,975
75,624
89,934
74,802
60-64
Count
1
3
3
3
7
1
3
2
23
Avery e. Pav
130,780
108,879
124,687
60,875
71,530
46,618
78,875
99;20
86,808
65 & Over
Count
-
1
-
1
1
3
Averse Pa
42,276
-
39,884
77,558
53,239
Total
Count
50
200
159
85
113
64
64
25
760
Average Pay
54,359
58,281
70,488
75,665
73,547
79,593
84
98,630
69,769
City of Newport Beach ?�
June 30, 2006 Valuation 16 -
SECTION 5
PLAN PROVISIONS
The following table summaries medical benefits:
■ Plan Type
• Defined contribution plan
• Defined benefit plan
• Individual accounts
• E8setive 12/31/05
■ Old Plan
• N/A
• CalPERS Service and disability
Eligibility
retirement from the City
• Benefit
• Reimbursement from Employee
• Miscellaneous
Account for retirees and dependents:
> $400 per month
> Medical
• PEA & PMA Ret < 1 /l /06
> Dental
> $450 per month
> Vision
• PEA & PMA Ret> 1/1/06
> Long -term care
> $400 per month
> Miscellaneous medical expenses
• Retiree & surviving spouse
> PEMHCA minimum
• Not less than PEMHCA min if
part. in PEMHCA ($64.60 in
2006)
• Individual MERP account
• Pre Retirement
• Part A - Mandatory contribution of
• $100 per month while active
Employee
1% of pay
• PEA & PMA + $25 for current
Contributions
9 Immediate upon enrollment
retirees
• Pre Retirement
• Part B - City contributes $1.50 per
• N/A
City
month for each year of age + service
Contributions
• Employee 100% vested in City
contributions at 5 years of service
• Leave
• Part C — Mandatory transfer of a portion of accumulated leave at
Conversion
termination
• Amount of sick and vacation/flex leave conversion varies by Association
• Converted to Employee Account value
using cash conversion rates
• Not payable in cash
• Conversion from
• New employees only participate in MERP
Old Plan to
• Certain employees must convert:
ME"
> Sworn Safety: age + service < 45
> Miscellaneous: age + service < 49
• Others allowed to convert
• Conversion
For Employees electing to move from Old Plan to MERP:
Contribution
• $100 x months contributed to prior plan, max 180 months ($18,000)
• Credited to MERP account at retirement
City of Newport Beach �,
June 30, 2006 Valuation -17- i A /
■ Post Retirement
Contributions
SECTION 5
PLAN PROVISIONS
For Employees electing to remain in Old Plan:
• $75 x months contributed to prior plan, max 180 months ($13,500)
• Credited to MERP account at retirement
• No firture Part B contributions
• City - PEMHCA minimum only
when account value exhausted
• Miscellaneous
$400 per month
Retiree & surviving spouse
• PEA & PMA Ret < 1/1/06
➢ 5450 per month
Retiree & surviving spouse
• PEA & PMA Ret> 1 /l /06
D $400 per month
➢ Retiree & surviving spouse
• Contribution goes to individual
■ Forfeitures • Unused Part B account forfeited upon death of retiree and dependents
• Used to offset PEMHCA minimum
City of Newport Beach
June 30, 2006 Valuation
SECTION 5
PLAN PROVISIONS
City of Newport Beach f ��
June 30, 2006 Valuation -19-
SECTION 5
PLAN PROVISIONS
2006 Medical Premiums — Under Age 65
Southern California
2007 Medical Premiums — Under Age 65
Southern Califernia
Blue Shield HMO
PEMiICA
$407.02
$814.04
$1,05825
Kaiser HMO
PEMHCA
360.60
721.20
937.56
PERS Choice PPO
PEM RCA
432.64
865.28
1,124.86
PERSCare PPO
PEMHCA
731.40
1,462.80
1,901.64
PORAC
PEMHCA
439.00
822.00
1,045.00
Blue Cross HMO
City
394.01
772.05
985.10
Blue Cross POS
City
499.45
1,02021
1,220.46
City of Newport Beach
June 30, 2006 Valuation -20- B
SECTION 5
PLAN PROVISIONS
2006 Medical Premiums - Over Age 65
Blue Shield HMO
PEMHCA
Yes
$ 286.49
$ 572.98
$ 859.47
Kaiser HMO
PEMHCA
Yes
218.59
437.18
655.77
PERS Choice PPO
PEMHCA
Yes
322.03
644.06
966.09
PERSCare PPO
PEMHCA
Yes
34720
694.40
1,041.60
PORAC
PEMHCA
Yes
351.00
701.00
1,049.00
Blue Cross HMO
City
Yes
No
351.80
97526
689.32
1,989.18
879.56
N/A
Blue Cross POS
City
Yes
No
445.94
1,365.43
910.90
2,730.66
N/A
N/A
Blue Cross IND OOS
City
Yes
436.48
891.58
1,066.62
Blue Cross PPO OOS
City
No
436.48
891.58
1,066.62
2007 Medical Premiums - Over Age 65
Blue Shield HMO
PEMHCA
Yes
a
$318.95
$637.90
$956.85
Kaiser HMO
PEMHCA
Yes
289.68
57936
869.04
PERS Choice PPO
PEMHCA
Yes
341.75
683.50
1,02525
PERSCare PPO
PEMHCA
Yes
371.68
743.36
1,115.04
PORAC
PEMHCA
Yes
351.00
701.00
1,049.00
Blue Cross HMO
City
Yes
No
394.00
1,09426
772.01
2,231.88
985.06
2,231.88
Blue Cross POS
City
Yes
No
499.44
1,52923
1,020.18
3,058.25
1,020.18
3,05825
Blue Cross IND OOS
City
Yes
488.85
998.55
1,194.60
Blue Cross PPO OOS
City
No
488.85
998.55
1,194.60
City of Newport Beach 21 ��
June 30, 2006 Valuation
SECTION 6
Actuarial Methods and Assumptions
Actuarial Methods
The actuarial cost method used for this valuation is the Entry Age Normal (EAN) cost method-
Under the EAN cost method, the Normal Cost for each participant is determined as a level
percent of payroll throughout the participant's working lifetime.
The Actuarial Accrued Liability (AAL) is the cumulative value, on the valuation date, of prior
Normal Costs. For retirees, the AAL is the present value of all projected benefits. The unfunded
AAL is amortized over 20 years as a level percent of payroll
The Plan is assumed to be ongoing for cost purposes. This does not imply that an obligation to
continue the Plan exists.
Actuarial Assumptions
• Valuation Date
• June 30, 2006
• Roll forward valuation from June 30, 2006 to June 30, 2007 to determine the 2007/08 plan cost.
• Discount-Rate
• 7.75% for cash subsidy, full pre - funding through CalPERS.OPEB Trust
• 5% for im tied subsidy, no pre-fimding, benefits paid from the City's General fund.
• Inflation Rate
• 3.0% per annum.
• Same as CaIPERS assumption.
• Aggregate Payroll Increases
• 3.25% per annum.
• Same as CaIPERS assumption.
• Salary Merit Increases
• CalPERS' 1997 -2002 Experience Study
• Demographic Assumptions (Mortality, Withdrawal, Disability)
• CalPERS' 1997 -2002 Experience Study.
• Retirement
• CalPERS' 1997 -2002 Experience Study
• Miscellaneous: 2° /6@55
• Police Safety: 3 %@50
• Fire Safety: 3% @50 (Currently 3° /u(a),55, will change to 3 %@,,50 by 12/31/07)
City of Newport Beach /n 1
June 30, 2006 Valuation -22- (j ��
SECTION 6
ACTUARIAL METHODS AND ASSUMPTIONS
• Healthcare Cost Inereases
Non- Medicare Medicare Eligible
FY HMO PPO HMO PPO
2007 Actual 2007 premiums
2008 10.40% 11.30% 10.80% 11.70%
2009 9.70% 10.60% 10.10% 10.90%
1 1 1 1 1
2017+ 4.50% 4.50% 4.50% 4.50%
• Old Plan Cap Increase
• 0%
• Participation atRetimment
• Current covered —100%
• Not current Covered — 95%
• MedicalTian at Retirement
Same. proportion as current retirees — 30% elect City Plans
■ Marital:Statas
• Married if EE +l or family coverage
Same proportion 60% for actives waiving coverage
■ Spouse Age
Actives: Males 3 years older than females.
Retirees: actual age
■ Medicare Eligible
• Hired <4 /1/8690%
• Hired >4 /1/86100%
• Everyone eligible for Medicare will elect Part B cov
■ Future New Participants
• Closed Group — no future new participants assumed.
City of Newport Beach j>
June 30, 2006 Valuation " 23 " `?
SECTION 6
ACTUARIAL METHODS AND ASSUMPTIONS
■ Age Based Claim Cost for City's Healtheare Plans
Because early retirees
and Medicare eligible retirees are paying the same premium rates as actives,
an implied subsidy (the difference between expected claims and premiums paid for retirees) is
valued for lifetime.
The following age -based monthly claim costs are used to calculate the implied subsidy for the
City's healthcare plans: (Based on 2007 premium rates)
HMO POS
Age Male
Female Male
Female
30 $155.73
$286.78 $162.24
$296.70
35 193.26
310.46 202.16
323.64
40 235.36
343.01 247.04
359.49
45 293.04
380.27 308.63
399.58
50 379.01
443.51 400.46
466.73
55 527.60
520.05 559.91
548.18
60 719.80
636.43 765.77
671.30
Non Medicare Eligible
65 807.26
952.87 862.81
1,002.08
70 1,055.89
1,091.28 1,127.25
1,150.95
Medicare Eligible
65 458.99
497.93 491.51
521.39
70 655.84
607.92 701.14
639.70
City of Newport Beach 24
June 30, 2006 Valuation
SECTION 7
GASB OPEB SUMMARY
On lure 21, 2004, the Governmental Accounting Standards Board approved Statement No. 45 (GASB
45), accounting standards for other (than pensions) postemploy rent benefits (OPEB). Accounting for
these benefits — primarily postretirement medical — can have significant impact on state and local
government financial statements. This section summarizes GASB 45.
Background
Historically, most public sector entities have accounted for OPEB using a "pay -as- you -go" approach;
very few have prefunded or even accrued for these benefits. This means OPEB costs are ignored while
an employee renders service and recognized only after an employee retires. GASB argues this delayed
recognition shifts "costs" from one taxpaying generation to another. The GASB position is that OPEB,
like pension benefits, are a form of deferred compensation. Accordingly, GASB 45 requires
recognizing OPEB (in the financial statement) as employees render service (and consequently earn the
benefit), rather than when paid.
Effective Dates
GASB 45 effective dates are phased in similar to GASB Statement No. 34:
• Fiscal years beginning after December 15, 2006 for GASB 34 phase l governments (total annual
revenue of $ 100 million or more)
• Fiscal years beginning after December 15, 2007 for GASB 34 phase 2 governments (total annual
revenue of $10 million to $100 million)
• Fiscal years beginning after December 15, 2008 for GASB 34 phase 3 governments (total annual
revenue less than $10 million).
What Benefits are OPEB?
OPEB includes most postemployment benefits, other than pensions, that employees are entitled to after
leaving employment:
• Retiree medical
• Dental
• Prescription drug
• Vision
• Life insurance
• Outside group legal
• Long -term care
• Disability benefits outside a pension plan
OPEB does not include vacation, sick leave, COBRA, or ad hoc early retirement incentives, which fall
under other GASB accounting statements.
City of Newport Beach
June 30, 2006 Valuation -25- t
SECTION 7
GASB OPEB SUMMARY
Accounting Standards
Under GASB 45, pay -as- you -go accounting is replaced with accrual accounting. This is virtually
identical to GASB's approach under Statement No. 27, with the key financial statement components
being an Annual Required Contribution, an Annual OPEB Cost, and a Net OPEB Obligation.
• Annual Required Contribution (ARC): GASB 45 doesn't require an agency to make up any
shortfall (unfunded Acriiarial Liability) immediately, nor does it allow an immediate credit for any
excess Plan Assets. Instead, the difference is amortized over time. An agency's ARC is nothing more
than the employer current Normal Cost (value of benefits being "earned" during a year), plus the
amortized unfunded Actuarial' Liability (or less the amortized excess Plan Assets). Simply put, ARC is
the value of benefits earned during the year plus (or minus) something to move the plan toward being
on track for funding. GASB 45 allows actuaries to amortize the unfunded Actuarial Liability (or
excess Plan Assets) on a level dollar or level percent of payroll basis. We believe most agencies
will want to use a level percent of payroll amortization because it's more consistent with the budget
process and how pension contributions are usually calculated. ARC must be based on the
underlying OPEB promise (as understood by the plan sponsor and employees).
• Annual OPEB Cost (AOC): The first year an agency complies with the new standards, the AOC
equals the ARC. In subsequent years, the AOC will equal the ARC, adjusted for prior differences
between the ARC and AOC.
■ Net OPEB Obligation (NOO): An agency's NOO is the historical difference between actual
contributions made and the ARC. If an agency has always contributed the ARC, the NOO equals zero.
However, an agency has not "made" the contribution unless it has been set aside and cannot legally be
used for any other purpose.
Implementation Process
The implementation process will be relatively straightforward: An agency will hire an actuary to
calculate the ARC. The first time an agency does this, their AOC equals their ARC. The agency then
decides whether to contribute all, none, or part of the ARC into a Trust that cannot legally be used for
any purpose other than paying OPEB.
If an agency always contributes the ARC, then each subsequent year's AOC equals their ARC — and the
NOO is zero. The first year an agency does not contribute the ARC, they must establish an NOO equal
to the difference between their actual l contribution and the ARC. The subsequent year's AOC equals
the ARC, adjusted for interest and amortization of the NOO.
Disclosure Requirements
This may be the most important aspect of GASB 45. When disclosed, some agencies will show large
OPEB unfunded liabilities, while others will show small or no unfunded liabilities. These differences
may require an adjustment in an agency's bond rating. Plan sponsors must disclose in their financial
statement footnotes:
City of Newport Beach
June 30, 2006 Valuation -26- 1.
SECTION 7
GASB OPEB SummARY
• Basic plan information
Plan type
➢ Benefits provided
➢ Authority under which benefits were established
• Plan funding/contribution policy information:
➢ Required contribution rates for active members and employers shown in dollars or as a percent
of payroll
• Plan Funded Status information:
➢ AOC and the dollar contributions actually made
If the employer has a NOO, also
• Components of the AOC
• NOO increase or decrease during the year
• End of year NOO
➢ 3 -year history of
• AOC
• Percent of AOC contributed during the year
• End of year NOO
• Most recent year's plan Funded Status
• Actuarial methods and assumptions used to determine the ARC, AOC, and Funded Status.
In addition, plan sponsors must provide 3 years of historical required supplementary information:
• Valuation dates
• Actuarial asset values
• Actuarial Liability
• Unfunded Actuarial Liability (excess Plan Assets)
• Plan funded ratio
• Annual covered payroll
• Ratio of unfunded Actuarial Liability (excess Plan Assets) to annual covered payroll
• Factors that significantly affect comparing the above information across the years.
City of Newport Beach
June 30, 2006 Valuation -27-
SECTION 7
GASB OPEB SUMMARY
Defining the Plan
GASB 45 refers to the substantive plan as the basis for accounting. It may differ from the written plan
in that it reflects the employer's cost sharing policy based on:
• Past practice or communication of intended changes to a plan's cost sharing provisions, or
• Past practice of cost increases in monetary benefits.
The substantive plan is the basis for allowing recognition of potential future plan changes. This
approach requires entities to acknowledge the underlying promise, not just the written plat[.
What if retirees participate in the active healthcare plan, but are charged a Tate based on composite
active and retiree experience? (This was a contentious issue during the statement drafting, with one of
the seven board members dissenting from Board adoption of the final statement.) In general, GASB 45,
requires recognition of the implied subsidy. However, if benefits are provided through a community
rated plan (premium rates based on experience of multiple employers rather than a single employer),
and the same premium is charged for active and retired participants, it is appropriate to value unadjusted
premiums.
Actuat ial Assumptions and Discount Rate Requirements
Under GASB 45, the actuary must follow current actuarial standards of practice, which generally call
for explicit assumptions — meaning each individual assumption represents the actuary's best estimate.
GASB 45 also requires basing the discount rate on the source of funds used to pay the benefits. This
means the underlying expected long -term rate of return on Plan Assets for funded plans. Since the
source of funds for unfunded plans is usually an agency's general fund, and California and most other
state law restricts what investments agencies can have in their general fund, unfunded plans will need to
use a low (for example, 4% to 5 %) discount rate. If an agency sets up a Trust and diversifies Trust Plan
Assets, however, the discount rate might be much higher (such as 7 %) depending on the Trust fund's
expected long -term investment return.
Transition Issues
Typically, new accounting standards allow transition from old to new requirements. Because historical
ARC calculations will rarely be available, GASB 45 takes a prospective transition approach: there is no
requirement for an initial transition obligation. But if ADCs, before transition, were calculated
consistently with the standard, a NOO at transition can be established at an agency's discretion.
Valuation Frequency Requirements and Small Plans
GASB 45 requires an actuarial valuation at least every two years for plans with more than 200 (active,
inactive, and retired) members. Plans with fewer than 200 members will need a valuation every 3
years. In a significant departure from prior standards, though, GASB 45 allows plans with fewer than
100 members to elect a simplified measurement method not requiring an actuarial certification.
City of Newport Beach [)
June 30, 2006 Valuation -28- 1 4
SUMMARY OF ACTUARIAL INFORMATION REQUIRED FOR CALIPERS FINANCIAL STATEMENTS
As part of your agreement to use CaIPERS to pre -fund OPEB, the following information must be provided to CaIPERS each time
an OPEB actuarial valuation report is delivered to CaIPERS. For actuarial valuations performed once every two or three years,
employers must in addition to first year information, provide additional information for the other years.
This information is extremely important to CalPERS since it will be used to satisfy the requirements of GASB Statement No- 43.
If you have questions, please call (888) CalPERS (225- 7377).
Contact Information for Employer
ER Name: City of Newport Beach
Contact Name: Dan Matusiewicz
Phone Number: (949) 644 -3126
Column (c) applies to employers who file actuarial valuations every year.
Columns (c) and (d) apply to those who file actuarial valuations every two years.
Columns (c), (d) and (e) apply to those who file actuarial valuations every three years.
Contact Information for Actuarial Firm
Name of actuarial Firm: Bartel Associates. LLC
Actuary/Contact Name: John Bartel / Bianca Lin
Phone Number: 650 - 377 -1601 / 650 - 377 -1604
Item No
Item Description
First Year
Second Year
Third Year
Comments
(a)
(b)
(c)
(d)
(e)
(0
1
Actuarial Valuation Date
0 613012 00 6
2
Frequency of Actuarial valuations
biennial
3
Fiscal Year for ARC
2007108
Roll - forward valuation from
6.'30/06'
4
Actuarial Value of Assets
S 6.200,000
5
Market Value of Assets
S 6,200.000
6.0
Actuarial Accrued Liability for Active Members
$ 26,385,000
as of 6/30107
6.1
Actuarial Accrued Liability for Separated /Inactive Members
n/a
6.2
Actuarial Accrued Liability for Recipients
$ 29.663,000
as of 6130/07.
6.3
Total Accrued Liability
S 56 n48,000
as of 6130/07
7
Annual Covered Payroll
S 54,748,000
Projected 2007108 total payroll
S
Present Value of Future Benefits
$ 69.371.000
as of 6130107
Amortization Method (whether its based on closed or open
Open Group.
Level percentage of
Amortization is based on level
9
approach)
pay with fixed
percentage of pay assuming
aggregate payroll growth at
amortization period
3.25 °,b per year. -
10.0
Average Remaining Amortization Period
20
11.0
Annual Required Contribution (ARC) in dollars
S 4,796,000
end of fiscal year
11.1
Annual Required Contribution (ARC) as a percentage of
payroll
8 8%
12.0
Normal Cost in dollars
5 1,339,000
-
end of fiscal year
12.1
Normal Cost as a perceritage of payroll
2.5%
13.0
UAL Amortization in dollars
S 3,457,000
-
end of fiscal year
13.1
UAL Amortization as a percentage of payro ll
6.3%
7.75% for Cash
14
Discount Rate Assumption
Subsidy & 5% for
Only prefunding the cash
Implied Subsidy.
-
subsidy, not implied subsidy
For a partially funded plan, the method used to determine
Only prefunding the
15
the blended discount rate
cash subsidy, not
implied subsidy
Salary Increase Assumption (if relevant to benefit
16
levels)
nia
17
Expected Benefit Payments
5 2,639.000
18
Number of Active Members
760
Select Period
at 6730/06
19
Average Attained Age of Actives
42.4
PPO
Indemnity Plan
at 6130/06
20
Average Years of Service of Actives
11.6
n/a
Actual premium
at 6/30/06
21
Number of Recipients
356
10.4%
11.3%
at 6/30106
22
Average Attained Age of Recipients
64,5
2009
at 6130106
23
Vision Trend Rates (If Applicable)
n!a
10.6°
24
Dental Trend Rates (If Applicable)
n!a
9.1%
9.8°
25
Health Assumptions
FILL IN THE TABLE BELOW WHERE APPLICABLE (for 6130/06 Valuation)
Provide in the table below the select and ultimate medical and pharmacy cost trend rates where applicable.
F:! Uwrs1A0M %$hareMwuncl_agenda_items4008 staff reportslOPEBTrusryBAC7 -08-17 Newport Beach CaIPERB OPEB Trust Required IrdQ.%1aj081a Requirements
Pre - Medicare Eligible
Post- Medicare Eligible
Select Period
HMO
PPO
Indemnity Plan
HMO.
PPO
Indemnity Plan
Pharmacy,
2007
Actual premium
Actual premium
n/a
Actual premium
Actual premium
n1a
Included in medical rate
2008
10.4%
11.3%
10.4%
11.3%
2009
9.7-A
10.6%
9.7%
10.6°
2010
9.1%
9.8%
9.1%
9.8°
2011
&4%
9.0%
8.4%
9.0°
2012
7.8%
8.3%
7.8%
8.3°
2013
7.1%
7.5%
7.1%
7.5°
2014
6.5%
6.8%
6.5%
6.8
2015
5.8%
6.0%
6.8%
6.0
2018
5.2%
5.3%
5.2%
5.3
2017+
Ultimate
Medical
Rates
4.50
4.5°
4.5%
4.5%
F:! Uwrs1A0M %$hareMwuncl_agenda_items4008 staff reportslOPEBTrusryBAC7 -08-17 Newport Beach CaIPERB OPEB Trust Required IrdQ.%1aj081a Requirements
CALIFORNIA EMPLOYER'S RETIREE BENEFIT TRUST PROGRAM ( "CERBT ")
AGREEMENT AND ELECTION
OF
CITY OF NEWPORT BEACH
(NAME OF EMPLOYER)
TO PREFUND OTHER POST EMPLOYMENT
BENEFITS THROUGH CaIPERS
WHEREAS (1) Government Code Section 22940 establishes in.the State Treasury the
Annuitants' Health Care Coverage Fund for the prefunding of health care coverage for
annuitants ( Prefunding Plan); and
WHEREAS (2) The California Public Employees' Retirement System (CaIPERS) Board
of Administration (Board) has sole:and exclusive control and,power over he
administration and investment of the Prefuntling,Plan (sometimes also referred to as
CERBT), the purposes ofi'.which include, buf,aree not limited to (i }:receiving.contributions
from participating employers and establiShing.separate:Employer Prefunding Accounts
in the Prefunding .Plan for the performance of amossential governmental function (ii)
investing contributed amounts andt income thereon, if any, in order to receive yield.on
the funds and (iii) disbursing contributed amounts and income thereon, if any, to.pay for
costs of administration of the Prefunding Plan and to pay for health care costs or other
post employment benefits in accordance with the terms of participating employers'
plans; and
WHEREAS (3) CITY OF NEWPORT BEACH
(NAME OF EMPLOYER)
(Employer) desires to participate in the Prefunding Plan upon the terms and conditions
set by the Board and as set forth herein; and
WHEREAS (4) Employer may participate in the Prefunding Plan upon (i) approval by
the Board and (ii) filing a duly adopted and executed Agreement and Election to Prefund
Other Post Employment Benefits (Agreement) as provided in the terms and conditions
of the Agreement; and
WHEREAS (5) The Prefunding Plan is a trust fund that is intended to perform an
essential governmental function within the meaning of Section 115 of the Internal
Revenue Code as an agent multiple- employer plan as defined in Governmental
Accounting Standards Board (GASB) Statement No. 43 consisting of an aggregation of
single - employer plans, with pooled administrative and investment functions;
Rev. 2/712007: Rev 611812007. Rev 1011012007
NOW, THEREFORE, BE IT RESOLVED THAT EMPLOYER HEREBY MAKES THE
FOLLOWING REPRESENTATION AND WARRANTY AND THAT THE BOARD AND
EMPLOYER AGREE TO THE FOLLOWING TERMS AND CONDITIONS:
A. Representation and Warranty
Employer represents and warrants that it is a political subdivision of the State of
California or an entity whose income is excluded from gross income under Section 115
(1) of the Internal Revenue Code.
B. Adoption and Approval of the Agreement; Effective Date; Amendment
(1) Employer's governing body shall elect to participate in the Prefunding Plan by
adopting this Agreement and filing with the CalPERS Board a true and correct original
or certified copy of this Agreement as follows:
Filing by mail, send to: CalPERS
Constituent Relations Office
CERBT.(OPEB)
P.O. Box 942709
Sacramento, CA 94229 -2709
Filing in person, deliver to:
CalPERS Mailroom
Attn: Employer Services Division
400 Q Street
Sacramento, CA 95814
(2) Upon receipt of the executed Agreement, and after approval by the Board, the
Board shall fix an effective date and shall promptly notify Employer of the effective date
of the Agreement.
(3) The terms of this Agreement may be amended only in writing upon the agreement
of both CalPERS and Employer, except as otherwise provided herein. Any such
amendment or modification to this Agreement shall be adopted and executed in the
same manner as required for the Agreement. Upon receipt of the executed amendment
or modification, the Board shall fix the effective date of the amendment or modification.
(4) The Board shall institute such procedures and processes as it deems necessary to
administer the Prefunding Plan, to carry out the purposes of this Agreement, and to
maintain the tax exempt status of the Prefunding Plan. Employer agrees to follow such
procedures and processes.
Rev 10/10/2007 2
C. Actuarial Valuation and Employer Contributions
(1) Employer shall provide to the Board an actuarial valuation report on the basis of the
actuarial assumptions and methods prescribed by the Board. Such report shall be for
the Board's use in financial reporting, shall be prepared at least as often as the
minimum frequency required by GASB Statement No. 43, and shall be:
(a) prepared and signed by a Fellow or Associate of the Society of Actuaries
who is also a Member of the American Academy of Actuaries or a person
with equivalent qualifications acceptable to the Board;
(b) prepared in accordance with generally accepted actuarial practice and
GASB Statement Nos. 43 and 45; and,
(c) provided to the Board prior to the Board's acceptance of contributions for
the valuation period or as otherwise required by the Board.
(2) The Board may reject any actuarial valuation report submitted to it, but shall not
unreasonably do so. In the event that the Board determines, in its sole discretion, that .
the actuarial valuation report is not suitable for use in the Board's financial statements or
if Employer fails to provide a required actuarial valuation, the Board may obtain, at
Employees expense, an actuarial Valuation that meets the Board's financial reporting
needs. The Board may recover from Employer the cost of obtaining such actuarial
valuation by billing and collecting from Employer or by deducting the amount from
Employer's account in the Prefunding Plan.
(3) Employer shall notify the Board of the amount and time of contributions which
contributions shall be made in the manner established by the Board.
(4) Employer contributions to the Prefunding Plan may be limited to the amount
necessary to fully fund Employer's actuarial present value of total projected benefits, as
supported by the actuarial valuation acceptable to the Board. As used throughout this
document, the meaning of the term "actuarial present value of total projected benefits"
is as defined in GASB Statement No. 45. If Employer's contribution causes its assets in
the Prefunding Plan to exceed the amount required to fully fund the actuarial present
value of total projected benefits, the Board may refuse to accept the contribution.
(5) Any Employer contribution will be at least $5000 or be equal to Employees Annual
Required Contribution as that term is defined in GASB Statement No. 45. Contributions
can be made at any time following the seventh day after the effective date of the
Agreement provided that Employer has first complied with the requirements of
Paragraph C.
Rev 10/1072007 3
D. Administration of Accounts, Investments, Allocation of Income
(1) The Board has established the Prefunding Plan as an agent plan consisting of an
aggregation of single - employer plans, with pooled administrative and investment
functions, under the terms of which separate accounts will be maintained for each
employer so that Employer's assets will provide benefits only under employer's plan.
(2) All Employer contributions and assets attributable to Employer contributions shall be
separately accounted for in the Prefunding Plan (Employer's Prefunding Account).
(3) Employer's Prefunding Account assets may be aggregated with prefunding account
assets of other employers and may be co- invested by the Board in any asset classes
appropriate for a Section 115 Trust.
(4) The Board may deduct the costs of administration of the Prefunding Plan from the
investment income or Employer's Prefunding Account in a manner determined by the
Board.
(5) Investment income shall be allocated among employers and posted to Employer's
Prefunding Account as determined by the Board but no less frequently than annually.
(6) If Employer's assets in the Prefunding Plan exceed the amount required to fully fund
the actuarial present value of total projected benefits, the Board, in compliance with
applicable accounting and legal requirements, may return such excess to Employer.
E. Reports and Statements
(1) Employer shall submit with each contribution a contribution report in the form and
containing the information prescribed by the Board.
(2) The Board shall prepare and provide a statement of Employer's Prefunding Account
at least annually reflecting the balance in Employer's Prefunding Account, contributions
made during the period and income allocated during the period, and such other
information as the Board determines.
F. Disbursements
(1) Employer may receive disbursements not to exceed the annual premium and other
costs of post employment healthcare benefits and other post employment benefits.
(2) Employer shall notify CalPERS in writing in the manner specified by CalPERS of the
persons authorized to request disbursements from the Prefunding Plan on behalf of
Employer.
Rev IQf10f2007 4
(3) Employer's request for disbursement shall be in writing signed by Employer's
authorized representative, in accordance with procedures established by the Board.
The Board may require that Employer certify or otherwise establish that the monies will
be used for the purposes of the Prefunding Plan.
(4) Requests for disbursements that satisfy the requirements of paragraphs (2) and (3)
that are received on or after the first of a month will be processed by the 15th of the
following month. (For example, a disbursement request received on or between March
1st and March 31st will be processed by April 15th; and a disbursement request
received on or between April 1st and April 30th will be processed by May 15th.)
(5) CalPERS shall not be liable for amounts disbursed in error if it has acted upon the
instruction of an individual authorized by Employer to request disbursements. In the
event of any other erroneous disbursement, the extent of CaIPERS' liability shall be the
actual dollar amount of the disbursement, plus interest at the actual earnings rate but
not less than zero.
(6) No disbursement shall be made from the Prefunding Plan which exceeds the
balance in Employer's Prefunding Account.
G. Costs of Administration
Employer shall pay its share of the costs of administration of the Prefunding Plan, as
determined by the- Board.
H. Termination of Employer Participation in Prefunding Plan
(1) The Board may terminate Employer's participation in the Prefunding Plan if:
(a) Employer gives written notice to the Board of its election to terminate;
(b) The Board finds that Employer fails to satisfy the terms and conditions of
this Agreement or of the Board's rules or regulations.
(2) If Employer's participation in the Prefunding Plan terminates for any of the foregoing
reasons, all assets in Employer's Prefunding Account shall remain in the Prefunding
Plan, except as otherwise provided below, and shall continue to be invested and accrue
income as provided in Paragraph D.
(3) After Employer's participation in the Prefunding Plan terminates, Employer may not
make contributions to the Prefunding Plan.
Rev 10/1012007
(4) After Employer's participation in the Prefunding Plan terminates, disbursements
from Employer's Prefunding Account may continue upon Employers instruction or
otherwise in accordance with the terms of this Agreement.
(5) After thirty -six (36) months have elapsed from the effective date of this Agreement:
(a) Employer may request a trustee to trustee transfer of the assets in
Employer's Prefunding Account. Upon satisfactory showing to the Board
that the transfer will satisfy applicable requirements of the Internal
Revenue Code and the Board's fiduciary duties, then the Board shall
effect the transfer within one hundred twenty (120) days. The amount to
be transferred shall be the amount in the Employer's Prefunding Account
as of the disbursement date and shall include investment earnings up to
the investment earnings allocation date immediately preceding the
disbursement date. In no event shall the investment earnings allocation
date precede the transfer by more than 120 days.
(b) Employer may request a disbursement of the assets in Employer's
Prefunding Account. Upon satisfactory showing to the Board that all of
Employer's obligations for payment of post employment health care
benefits and other post employment benefits and reasonable
administrative costs of the Board have been satisfied, then the Board shall
effect the disbursement within one hundred.. twenty (120) days. The
amount to be disbursed shall be the amount in the Employer's Prefunding
Account as of the disbursement date and shall include investment
earnings up to the investment earnings allocation date immediately
preceding the disbursement date. In no event shall the investment
earnings allocation date precede the disbursement by more than 120
days.
(6) After Employer's participation in the Prefunding Plan terminates and at such time
that no assets remain in Employer's Prefunding Account, this Agreement shall
terminate.
(7) If, for any reason, the Board terminates the Prefunding Plan, the assets in
Employer's Prefunding Account shall be paid to Employer after retention of (i) amounts
sufficient to pay post employment health care benefits and other post employment
benefits to annuitants for current and future annuitants, and (ii) amounts sufficient to pay
reasonable administrative costs of the Board.
(8) If Employer ceases to exist but Employer's Prefunding Plan continues to exist and if
no provision has been made by Employer for ongoing payments to pay post
employment health care benefits and other post employment benefits to annuitants for
current and future annuitants, the Board is authorized to and shall appoint a third party
administrator to carry out Employer's Prefunding Plan. Any and all costs associated
Rev 10/ICi2007 6
with such appointment shall be paid from the assets attributable to contributions by
Employer.
(9) If Employer should breach the representation and warranty set forth in Paragraph
A., the Board shall take whatever action it deems necessary to preserve the tax- exempt
status of the Prefunding Plan.
I. General Provisions
(1) Books and Records.
Employer shall keep accurate books and records connected with the performance of
this Agreement. Employer shall ensure that books and records of subcontractors,
suppliers, and other providers shall also be accurately maintained. Such books and
records shall be kept in a secure location at the Employer's office(s) and shall be
available for inspection and copying by CalPERS and its representatives at any time.
(2) Audit.
(a) During and for three years after the term of this Agreement, Employer
shall permit the Bureau. of State Audits, CaIPERS, and its authorized
representatives, and such consultants and specialists as needed, at all
reasonable times during normal business hours to inspect and copy, at the
expense of CaIPERS, books and records of Employer relating to its
performance of this Agreement.
(b) Employer shall be subject to examination and audit by the Bureau of State
Audits, CaIPERS, and its authorized representatives, and such
consultants and specialists as needed, during the term of this Agreement
and for three years after final payment under this Agreement. Any
examination or audit shall be confined to those matters connected with the
performance of this Agreement, including, but not limited to, the costs of
administering this Agreement. Employer shall cooperate fully with the
Bureau of State Audits, CaIPERS, and its authorized representatives, and
such consultants and specialists as needed, in connection with any
examination or audit. All adjustments, payments, and /or reimbursements
determined to be necessary by any examination or audit shall be made
promptly by the appropriate party.
(3) Notice.
(a) Any notice, approval, or other communication required or permitted under
this Agreement will be given in the English language and will be deemed
received as follows:
Rev 10/1=007
Personal delivery. When personally delivered to the recipient.
Notice is effective on delivery.
2. First Class Mail. When mailed first class to the last address of the
recipient known to the parry giving notice. Notice is effective three
delivery days after deposit in a United States Postal Service office
or mailbox.
3. Certified mail. When mailed certified mail, return receipt requested.
Notice is effective on receipt, if delivery is confirmed by a return
receipt.
4. Overnight Delivery. When delivered by an overnight delivery
service, charges prepaid or charged to the senders account, Notice
is effective on delivery, if delivery is confirmed by the delivery
service.
5. Telex or Facsimile Transmission. When sent by telex or fax to the
last telex or fax number of the recipient known to the parry giving
notice. Notice is effective on receipt, provided that (i) a duplicate
copy of the notice is promptly given by first -class or certified mail or
by overnig ht. delivery, or (ii) the receiving party delivers a written
confirmation of receipt. Any notice given by telex or fax shall be
deemed received on the next business day if it is received after
5:00 p.m. (recipients time) or on a nonbusiness day.
6. E -mail transmission. When sent by e-mail using software that
provides unmodifiable proof (i) that the message was sent, (ii) that
the message was delivered to the recipient's information processing
system, and (iii) of the time and date the message was delivered to
the recipient along with a verifiable electronic record of the exact
content of the message sent.
Addresses for the purpose of giving notice are as shown in Paragraph B.(1) of this
Agreement.
(b) Any correctly addressed notice that is refused, unclaimed, or
undeliverable because of an act or omission of the parry to be notified
shall be deemed effective as of the first date that said notice was refused,
unclaimed, or deemed undeliverable by the postal authorities, messenger
or overnight delivery service.
(c) Any parry may change its address,
giving the other parry notice of the
Agreement.
Rev 10/1012007
telex, fax number, or e-mail address by
change in any manner permitted by this
(d) All notices, requests, demands, amendments, modifications or other
communications under this Agreement shall be in writing. Notice shall be
sufficient for all such purposes if personally delivered, sent by first class,
registered or certified mail, return receipt requested, delivery by courier
with receipt of delivery, facsimile transmission with written confirmation of
receipt by recipient, or e-mail delivery with Verifiable and unmodifiable
proof of content and time and date of sending by sender and delivery to
recipient. Notice is effective on confirmed receipt by recipient or 3
business days after sending, whichever is sooner.
(4) Modification
This Agreement may be supplemented, amended, or modified only by the mutual
agreement of the parties. No supplement, amendment, or modification of this
Agreement shall be binding unless it is in writing and signed by the party to be charged
(5) Survival
All representations, warranties, and covenants contained in this Agreement, or in any
instrument: exhibit, or other writing intended by the parties to be a part of
their Agreement shall survive the termination of this Agreement until such time as all
amounts in Employer's Prefunding Account have been disbursed.
(6) Waiver
No waiver of a breach, failure of any condition, or any right or remedy contained in or
granted by the provisions of this Agreement shall be effective unless it is in writing and
signed by the party waiving the breach, failure, right, or remedy. No waiver of any
breach, failure, right, or remedy shall be deemed a waiver of any other breach, failure,
right, or remedy, whether or not similar, nor shall any waiver constitute a continuing
waiver unless the writing so specifies.
(7) Necessary Acts, Further Assurances
The parties shall at their own cost and expense execute and deliver such further
documents and instruments and shall take such other actions as may be reasonably
required or appropriate to evidence or carry out the intent and purposes of this
Agreement.
Rev 10/10120D7 0
A majority vote of Employer's Governing Body at a public meeting held on the
day of the month of
into this Agreement.
Signature of the Presiding Officer:
Printed Name of the Presiding Officer:
Name of Goveming Body:
Name of Employer:
Date:
in the year , authorized entering
BOARD OF ADMINISTRATION
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
BY
KENNETH W. MARZION
ACTUARIAL AND EMPLOYER SERVICES BRANCH
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
To be completed by CalPERS
The effective date of this Agreement is:
Rev 01/09/2008 10
Ca1PERS
DELEGATION OF AUTHORITY
TO REQUEST DISBURSEMENTS
RESOLUTION
OF THE
CITY COUNCIL
(GOVERNING BODY)
OF THE
CITY OF NEWPORT BEACH
(NAME OF EMPLOYER(
The CITY COUNCIL delegates to the incumbents in
(GOVERNING BODY)
the positions of Administrative Services Directorand
(TITLE)
Deputy Director of
Administrative Services authority to request on behalf
(TITLE)
of the Employer disbursements from the Other Post Employment Prefunding
Plan and to certify as to the purpose for which the disbursed funds will be used.
a
Title MAYOR
Witness
Date
OPEB Delegation of Authority (2/07)
�- CERTIFICATION OF OPEB ACTUARIAL
CaIPERS INFORMATION AND FUNDING POLICY
CERTIFICATION OF OPE13 ACTUARIAL INFORMATION
As Actuary for the plan, I certify that the valuation for the City of Newport Beach
upon which the enclosed summary of actuarial information is based, meets the
following criteria:
• The valuation was prepared on the basis of the OPEB assumption model
prescribed by the CalPERS Board and in effect at the time of the
valuation.
• The valuation has been prepared and signed by a Fellow or Associate of the
Society of Actuaries who is also a Member of the American Academy of
Actuaries.'
• The valuation has been prepared in accordance with generally accepted
actuarial principles.
• In the case where the actuarial valuation is to be performed on a biennial
cycle:
• this valuation includes (ARC) information that covers two Fiscal years
other actuariat:information :for the second.fisral year will be provided
after benefit payments and contributions are provided by the agency.
• The valuation has been prepared in accordance with the requirements set
forth in Governmental Accounting Standards Board (GASB) Statements
No. 43 and No. 45.
• If employer assets to pre -fund other post - employment benefits are invested in
an irrevocable OPEB trust other than the California Employers' Retiree
Benefit Trust, the liabilities associated with those assets are not included in
the summary of actuarial Information.
I further certify that the discount rate is consistent with the anticipated level of
funding pursuant to the relevant section of GASB 43, and the employer's
certification.
June 30, 2006
Valuation Date
John E. Bartel, ASA, FCA, EA, MAAA
Printed Name of ctua and Designation]
A,,J i` ,? co-7
Signature Date
'In cases where the actuary performing the work does not meet these criteria, the valuation may be
acceptable If the person has equivalent qualifications that are acceptable to the CaIPERS Board. Please
provide the qualifications of the actuary performing the valuation.
O:UientACity of Newport Bewh%0PEB \06 -30-06 ValuationV2eportABA 07-N-xx Newport Beach CaIPERS OPEB Tnut
Certification.doc
CERTIFICATION OF FUNDING POLICY
As the employer, I certify that our funding policy is to contribute consistently an
amount at least equal to * % of the ARC.
CITY OF NEWPORT BEACH
Name of Employer
Homer L. Bludau, City Manager
Printed Name and Title of Person Signing the Form
Signature Date
* 0% of the ARC related to the implicit subsidy and an
amount greater than:.or equal to 100% of the ARC
related to the cash (explicit) subsidy.
OAClientslCity of Newport Bea0kOPEM -30-06 ValuationkRepor&BA 07 -08 -x Newport Beach CatPERS OPEB Trust
Certificatioa.doc