1 SECOND AMENDMENT TO THE AGREEMENT BETWEEN THE CITY OF EMERYVILLE AND THE ALAMEDA
COUNTY FIRE DEPARTMENT REGARDING FIRE AND EMERGENCY SERVICES This is the Second Amendment to that certain agreement effective June 30, 2018 between the ALAMEDA COUNTY FIRE DEPARTMENT, a dependent fire district formed under the Fire Protection District Law of 1987 (Health and Safety Code Sections 13800 et. seq.) and governed by the Board of Supervisors of the County of Alameda as its Board of Directors (ACFD) and the CITY OF EMERYVILLE (City), a municipal corporation (the Parties).
RECITALS
WHEREAS ACFD and the City previously entered into a contract for fire and emergency response services on or about July 1, 2012 and extended that contract through June 30, 2018; and WHEREAS on or about June 30, 2018 ACFD and the City entered into a new two-year contract for fire and emergency response services (the 2018 Agreement); and WHEREAS Section 9(a) of the 2018 Agreement provides that it may be extended for up to two successive two-year terms by mutual written agreement of the parties, provided the extension is executed at least nine months before the then-effective expiration date unless the parties agree otherwise; and WHEREAS on or about May 6, 2020, the parties executed First Amendment to the 2018 Agreement to extend the contact for two years, through June 30, 3022, on the same terms and conditions as set forth therein; and
WHEREAS ACFD and the City both wish to extend the 2018 Agreement for another two-year term through June 30, 2024 on the same terms and conditions as set forth therein; and WHEREAS the parties acknowledge and accept the validity of the extension, despite the execution of the amendment occurring after the nine-month period otherwise required by that section.
AMENDMENTS TO 2018 AGREEMENT
In consideration of the mutual promises contained in the 2018 Agreement, as amended, and herein, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. Section 9 (a) Term, is hereby amended to read, in its entirety, as follows:
This agreement is for a term of six ( 6 ) years, from 12:00a.m. on July 1, 2018 until 11:59p.m. on June 30, 2024.
2. Exhibit 5, Five Year Cost Projection Provided by ACFD is deleted and replaced with the version of Exhibit 5, amended as attached to this Amendment.
3. Exhibit 6, GASB 45 Actuarial Valuation is deleted and replaced with the version of Exhibit 6, amended as attached to this Amendment.
DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F 2 In witness hereof, the City by Resolution duly adopted by its City Council has approved the execution of this Second Amendment and the Board of Directors of the Alameda County Fire District delegated authority to the Fire Chief to execute this Second Amendment as of this day of this __ day of January 2022.
ALAMEDA COUNTY FIRE DEPARTMENT, a dependent fire protection district ________________
By: William McDonald
Fire Chief
CITY OF EMERYVILLE
By: _______________
City Manager
Approved as to Form:
Donna R. Ziegler, County Counsel
By: ____________________________
Heather Littlejohn Goodman
Deputy County Counsel
DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F Approved As To Form:
___________________
City Attorney
DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 5
DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 5
DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 5
DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 5
ALAMEDA COUNTY FIRE DEPARTMENT
RETIREE HEALTHCARE PLAN
June 30, 2019 Actuarial Valuation
Bartel Associates, LLC
Doug Pryor, Vice President
Catherine Wandro, Assistant Vice President & Actuary
Daniel Park, Actuarial Analyst
Katherine Moore, Associate Actuary
May 25, 2020
o:\clients\alameda county fire department\projects\opeb\2019 val\report\ba alamedacofd 20-05-25 opeb 19-06-30 results.docx
CONTENTS
Topic Page
Benefit Summary 1
Implied Subsidy 5
Data Summary 7
Actuarial Assumption Highlights 9
Actuarial Methods 15
Assets 17
Results 21
Side Fund Calculations 29
Actuarial Certification 41
Exhibits
Premiums E - 1
Participant Statistics E - 3
Actuarial Assumptions E - 14
Definitions E - 24
DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 6
May 25, 2020 1
BENEFIT SUMMARY
Eligibility Service or disability retirement under CalPERS Medical
Benefit
Full monthly premium up to cap1:
Hire Date Cap
Vesting
Schedule
< 4/1/09 100% of Kaiser
Bay Area Premium –
Single, 2-Party, or Family
No
4/1/09-1/31/15
Yes
> 2/1/152
90% of Kaiser
Bay Area Premium –
Single or 2-Party
Kaiser premium cap varies by:
•Medical coverage
•Medicare eligibility
1 For special Safety group of retirees cap is $164.94/mo. single or $250.85/mo. 2-Party. 2 MOUs indicate 1/1/15, but date adopted by CalPERS was 2/1/15.
May 25, 2020 2
BENEFIT SUMMARY
Vesting
Schedule
Vesting % based on CalPERS service, minimum 5 years ACFD service:
CalPERS
Service
Vesting
Percent
CalPERS
Service
Vesting
Percent
<10 PEMHCA Min 15 75%
10 50% 16 80%
11 55% 17 85%
12 60% 18 90%
13 65% 19 95%
14 70% 20+ 100%
100% vesting with disability retirement.
Surviving
Spouse
100% of retiree benefit continues to surviving spouse if retiree elects survivor annuity under CalPERS retirement plan
Other
Benefits
No dental, vision, life, or Medicare Part B reimbursements.
DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 6
May 25, 2020 3
BENEFIT SUMMARY
Employee
Contrib.
Per current MOUs: Effective 1/1/14 (7/1/14 to unrepresented) employees are required to contribute a percent of pay to the OPEB Plan:
Year Fire Misc
2019 4.468151% 5.233606%
2020 5.251237% 5.923652%
Pay-AsYou-Go
Costs
Fiscal Year Cash PayGo Implied Subsidy Total
2018/19 $4,115,286 $817,000 $4,932,286
2017/18 $3,867,448 $759,000 $4,626,448
2016/17 $3,545,260 $685,000 $4,230,260
2015/16 $3,171,111 n/a $3,171,111
2014/15 $2,807,121 n/a $2,807,121
2013/14 $2,452,762 n/a $2,452,762
Contract
Agencies
Costs allocated to contract agencies based on agencies’ cost allocation percentage with ACFD
May 25, 2020 4
BENEFIT SUMMARY
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May 25, 2020 5
IMPLIED SUBSIDY
For PEMHCA, employer cost for allowing retirees to participate at active rates. • General trend:
• Sample assuming one active employee age 40 and one retiree age 60:
Premiums PEMHCA Cost of
Benefits
$600 Active
$1,200
$500 Active
$600 Retiree $700 Retiree
25 30 35 40 45 50 55 60 64
Blended Premium 600 600 600 600 600 600 600 600 600
Cost by Age 400 420 460 500 550 600 640 700 800
$300
$400
$500
$600
$700
$800
May 25, 2020 6
IMPLIED SUBSIDY
GASB defers to actuarial standards of practice.
Prior Actuarial Standards of Practice No. 63 (ASOP 6) allowed community rated plans to value liability using premiums, resulting in no implied subsidy. In May 2014, Actuarial Standards Board released revised ASOP 6:
• Requires implied subsidy valued for community rated plans such as PEMHCA. • Timing: effective with all valuations on or after March 31, 2015 with earlier implementation encouraged
June 30, 2015 and later valuations include the PEMHCA implied subsidy.
3 Measuring Retiree Group Benefits Obligations and Determining Retiree Group Benefits Plan Costs or Contributions.
DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 6
May 25, 2020 7
DATA SUMMARY
Historical Participant Statistics
6/30/11 6/30/13 6/30/15 6/30/17 6/30/19
Actives:
• Count 410 417 421 419 426
• Average Age 42.0 43.5 42.6 41.7 41.7
• Average Service
ACFD 7.7 8.6 8.3 8.6 9.3
CalPERS 12.3 13.6 13.0 12.1 12.3
• Average Salary $118,000 $111,700 $115,500 $120,600 $130,300 • Total Salary (000s) 48,377 46,590 48,607 50,541 55,516 Retirees:
• Count 191 208 246 292 308
• Average Age 63.6 64.0 64.1 63.9 64.1
• Average Retirement Age
Service Retirement 54.4 54.3 54.4 54.6 54.6
Disability Retirement 52.2 52.2 52.5 53.1 53.3
May 25, 2020 8
DATA SUMMARY
Participant Reconciliation
Actives Retirees Disabled
Surviving
Spouses Total
June 30, 2017 Valuation 419 181 87 24 711
• New Hires 49 - - - 49
• Terminations (15) - - - (15)
• New Service Retirements (19) 19 - - -
• New Disability Retirements (11) - 11 - -
• Death with Survivor - (2) - 2 -
• Death w/o Survivor or Cancelled - (5) (7) (2) (14)
• Data Adjustments 3 (1) 1 - 3
June 30, 2019 Valuation 426 192 92 24 734
DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 6
May 25, 2020 9
ACTUARIAL ASSUMPTIONS HIGHLIGHTS
Discount Rate
CERBT Investment Options
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%
ACFD currently in Strategy 1.
Separate sub-accounts for each contracting agency.
May 25, 2020 10
ACTUARIAL ASSUMPTIONS HIGHLIGHTS
Discount Rate
Future expected returns
Stochastic simulations of geometric average returns over 20 years 5,000 trials
2.75% inflation assumption
Projections based on 5 independent Investment Advisors 2017 10-year Capital Market Assumptions and where available, investment advisors anticipated long-term trends:
Confidence levels:
Strategy 1 Strategy 2 Strategy 3
50% Confidence Level 6.75% 6.25% 5.50%
55% Confidence Level 6.50% 6.00% 5.25%
60% Confidence Level 6.00% 5.75% 5.25%
DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 6
May 25, 2020 11
ACTUARIAL ASSUMPTIONS HIGHLIGHTS
June 30, 2017 Valuation June 30, 2019 Valuation
Valuation
Date
June 30, 2017
2018/19 and 2019/20 ADC
June 30, 2019
2020/21 and 2021/22 ADC
General
Inflation
2.75%
Used for economic assumptions
Same
Payroll
Increases
Aggregate Increases – 3.00%
Merit Increases – CalPERS
1997-2015 Experience Study
Same
Mortality,
Termination,
Disability,
Retirement
CalPERS 1997-2015 Experience
Study
Pre-retirement mortality
projected with 15-year 90%
Scale MP-2016
Post-retirement mortality
projected with Scale MP-2017
CalPERS 1997-2015 Experience
Study
Mortality projected with Scale
MP-2019
May 25, 2020 12
ACTUARIAL ASSUMPTIONS HIGHLIGHTS
June 30, 2017 Valuation June 30, 2019 Valuation
Discount Rate 4.84% - approx. blended rate
determined by allocating
liabilities to agencies based on
estimated pre-funding policies:
6.75% - full pre-funding rate
used for Dispatch and City of
Dublin
5.00% - partial pre-funding
rate (35% of ADC less
paygo) used for ALCO, City
of Newark, and Union City
4.00% - employee
contributions only for
remaining agencies
6.75% - side fund calculations,
CERBT Strategy #1
4.90% - approx. blended rate
determined by allocating
liabilities to agencies based on
estimated pre-funding policies:
6.75% - full pre-funding rate
used for Dispatch and City of
Dublin
5.00% - partial pre-funding
rate (35% to 50% of ADC less
paygo) used for ALCO, City
of Newark, City of Emeryville,
Union City, and LBNL
4.00% - employee
contributions only for
remaining agencies
6.75% - side fund calculations,
CERBT Strategy #1
DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 6
May 25, 2020 13
ACTUARIAL ASSUMPTIONS HIGHLIGHTS
June 30, 2017 Valuation June 30, 2019 Valuation
Medical
Trend
Increase from Prior Year
Year Non-Medicare Medicare
2017 Actual 2017 Premiums
2018 Actual 2018 Premiums
2019 7.50% 6.50%
2020 7.50% 6.50%
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
Year Non-Medicare Medicare
2017 n/a
2018 n/a
2019 Actual 2019 Premiums
2020 Actual 2020 Premiums
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%
May 25, 2020 14
ACTUARIAL ASSUMPTIONS HIGHLIGHTS
June 30, 2017 Valuation June 30, 2019 Valuation
Dependents at
Retirement
% electing family coverage at
retirement
• Misc: 10%
• Safety: 20%
No family coverage ≥ 65
% electing family coverage at
retirement
• Misc: 10%
• Safety: 30%
No family coverage ≥ 65
Waived
Retirees
Pre 65: 40% re-elect at age 65
Post 65: 0% re-elect
Pre 65: 10% re-elect at age 65
Post 65: 0% re-elect
Affordable
Care Act
(ACA) Excise
Tax
2.0% liability load on cash
subsidy to estimate impact
Not Valued
Administrative
Expenses
0.33% of retiree PEMHCA
premiums
Added to Normal Cost
0.27% of retiree PEMHCA
premiums
0.05% of CERBT Assets
Added to Normal Cost
DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 6
May 25, 2020 15
ACTUARIAL METHODS
June 30, 2017 Valuation June 30, 2019 Valuation
Cost Method • Entry Age Normal
• Normal Cost is a level percent
of payroll
• Same
Funding
Policy
• Partial pre-funding, varies by
agency
• Same
Amortization
Method
• Level percent of payroll • Same
Amortization
Periods
• 15-year, 20-year, and 30-year
UAAL amortization shown for
unfunded side fund liabilities
• Same
May 25, 2020 16
ACTUARIAL METHODS
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May 25, 2020 17
ASSETS
Market Value of Plan Assets (MVA)
(Amounts in $000’s)
2017/18 2018/19
Projected
2019/204
MVA (Beginning of Year) $ 17,420 $ 22,505 $ 28,042
Contributions – Employer 2,041 1,997 1,443
Contributions – Employee 1,631 2,030 2,018
Disbursements - - -
Investment Return 1,429 1,530 -
Administrative Expenses (10) (12) (15)
Investment Expense (7) (8) (11)
MVA (End of Year) 22,505 28,042 31,478
Approximate Annual Return 7.3% 6.2% 0.0%
4 Assets projected from 6/30/19 to 6/30/20 using actual contributions through 12/31/19 from the CERBT statements, expected contributions from 1/1/20 through 6/30/20 provided by ACFD, and an estimated 0% investment return for 2019/20.
May 25, 2020 18
ASSETS
Actuarial Value of Plan Assets (AVA)
(Amounts in $000’s)
2017/18 2018/19
Projected
2019/20
AVA (Beginning of Year) $ 17,434 $ 22,426 $ 28,091
Employer Contribution 3,672 4,027 3,462
Benefit Payment/Disbursements - - -
Expected Investment Return 1,301 1,650 2,013
Expected AVA (End of Year) 22,407 28,103 33,566
MVA (End of Year) 22,505 28,042 31,478
1/5 of (MVA - Expected AVA) 19 (12) (418)
Preliminary AVA 22,426 28,091 33,148
Minimum AVA (80% of MVA) 18,004 22,434 25,182
Maximum AVA (120% of MVA) 27,006 33,650 37,774
AVA (End of Year) 22,426 28,091 33,148
Approximate AVA return 6.9% 6.7% 5.3%
DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 6
May 25, 2020 19
ASSETS
Historical Asset Changes
(Amounts in $000’s)
13/14 14/15 15/16 16/17 17/18 18/19
Net Return - 22 229 1,460 1,413 1,510
ER Contributions - 2,563 9,200 1,171 2,041 1,997
EE Contributions 326 526 682 1,241 1,631 2,030
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
$11,000
May 25, 2020 20
ASSETS
Annualized Asset Returns
14/15 15/16 16/17 17/18 18/19
MVA 1.2% 2.9% 10.2% 7.3% 6.2%
Expected Return 7.25% 7.25% 7.25% 6.75% 6.75%
AVA 6.0% 6.1% 7.2% 6.9% 6.7%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
9.00%
10.00%
11.00%
DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 6
May 25, 2020 21
RESULTS
Actuarial Obligations
(Amounts in $000’s)
6/30/17
Valuation
6/30/19
Valuation
Present Value of Benefits
•Actives $144,444 $140,736
•Retirees 71,857 79,795
•Total 216,301 220,531
Actuarial Accrued Liability
•Actives 65,381 65,358
•Retirees 71,857 79,795
•Total 137,238 145,153
Actuarial Value of Assets (17,434) (28,091)
Unfunded AAL 119,804 117,062
Funded Ratio 12.7% 19.4%
Pay-As-You-Go 4,268 5,200
May 25, 2020 22
RESULTS
Historical Actuarial Accrued Liability
(Amounts in $000’s)
0% 0% 0% 0% 3%
13%
19%
$0
$25,000
$50,000
$75,000
$100,000
$125,000
$150,000
1/1/08 1/1/10 6/30/11 6/30/13 6/30/15 6/30/17 6/30/19
Retiree pay-go Retiree AAL less pay-go
Active AAL AVA
MVA X% Funded Ratio
DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 6
May 25, 2020 23
RESULTS
Actuarial Gains & Losses
(Amounts in $000’s)
AAL
6/30/17 Actual $137,238
6/30/19 Expected 154,987
Experience (Gains)/Losses:
• Premiums/Claims less than Expected (11,924)
• Demographic & Other 6,136
Assumption Changes:
• Mortality Improvement (992)
• Remove ACA Excise Tax (2,420)
• Waived Retiree Re-Election (148)
• Family Coverage at Retirement 626
• Discount Rate (1,112)
Total Changes (9,834)
6/30/19 Actual 145,153
May 25, 2020 24
RESULTS
Actuarial Obligations by Pre/Post Medicare
(Amounts in $000’s)
6/30/19 Valuation
Pre
Medicare
Results
Post
Medicare
Results Total
Present Value of Benefits
•Actives $ 83,406 $ 57,330 $140,736
•Retirees 34,467 45,328 79,795
•Total 117,873 102,658 220,531
Actuarial Accrued Liability
•Actives 37,776 27,582 65,358
•Retirees 34,467 45,328 79,795
•Total 72,243 72,910 145,153
Actuarial Value of Assets5 (13,981) (14,110) (28,091) Unfunded AAL 58,262 58,800 117,062
Funded Ratio 19.4% 19.4% 19.4%
5 Assets allocated to Pre/Post Medicare based on AAL.
DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 6
May 25, 2020 25
RESULTS
Schedule of Funding Progress
(Amounts in $000’s)
Actuarial
Valuation
Date
Actuarial
Value of
Assets
(a)
Entry Age
Actuarial
Accrued
Liability
(b)
Unfunded
Actuarial
Accrued
Liability
(b-a)
Funded
Ratio
(a/b)
Payroll
(c)
UAAL as
Percentage
of Payroll
((b-a)/c)
1/1/08 $ 0 $ 60,663 $ 60,663 0.0% $ 46,446 130.6%
1/1/10 0 77,388 77,388 0.0% 46,942 164.9%
6/30/11 0 91,574 91,574 0.0% 48,377 189.3%
6/30/13 0 111,712 111,712 0.0% 50,708 220.3%
6/30/15 3,528 126,879 123,351 2.8% 50,186 245.8%
6/30/17 17,434 137,238 119,804 12.7% 52,057 230.1%
6/30/19 28,091 145,153 117,062 19.4% 55,516 210.9%
May 25, 2020 26
RESULTS
Actuarial Obligations by Agency
(Amounts in $000’s)
Dispatch ALCO San
Leandro Dublin LBNL LLNL Newark
Union
City
Emeryville Total
Discount Rate 6.75% 5.00% 4.00% 6.75% 5.00% 4.00% 5.00% 5.00% 5.00% Blended PVB 6/30/19
•Actives $3,340 $58,035 $43,551 $10,180 $2,474 $3,203 $7,137 $8,592 $4,224 $140,736 •Retirees 505 34,339 22,572 7,449 1,464 1,660 4,223 5,084 2,499 79,795 •Total 3,845 92,374 66,123 17,629 3,938 4,863 11,360 13,676 6,723 220,531 AAL 6/30/19
•Actives 1,331 27,531 18,960 5,501 1,174 1,395 3,386 4,076 2,004 65,358 •Retirees 505 34,339 22,572 7,449 1,464 1,660 4,223 5,084 2,499 79,795 •Total 1,836 61,870 41,532 12,950 2,638 3,055 7,609 9,160 4,503 145,153 AVA 6/30/19 (2,001) (7,971) (1,382) (11,744) (263) (658) (2,310) (1,283) (479) (28,091) UAAL 6/30/19 (165) 53,899 40,150 1,206 2,375 2,397 5,299 7,877 4,024 117,062 Funded Ratio 109.0% 12.9% 3.3% 90.7% 10.0% 21.5% 30.4% 14.0% 10.6% 19.4% DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 6
May 25, 2020 27
RESULTS
Benefit Payment Projection by Cash/Implied Subsidy
(Amounts in $000’s)
Fiscal
Year
Cash
Subsidy
Implied
Subsidy Total
2020/21 $ 4,422 $ 1,225 $ 5,647
2021/22 4,785 1,329 6,114
2022/23 5,156 1,452 6,608
2023/24 5,453 1,464 6,917
2024/25 5,762 1,515 7,277
2025/26 6,103 1,579 7,682
2026/27 6,526 1,731 8,257
2027/28 6,827 1,725 8,552
2028/29 7,216 1,799 9,015
2029/30 7,603 1,839 9,442
May 25, 2020 28
RESULTS
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May 25, 2020 29
SIDE FUND CALCULATIONS
Side Funds – Purpose
Allow each agency in ACFD the choice of pre-funding their OPEB benefit independent of the pre-funding choice of other agencies in ACFD Side Funds are established for each agency within ACFD based on the full prefunding discount rate They represent the amount of unfunded liability for each agency due to past service, based on ACFD retiree medical benefit
Each agency decides how much, if any, of its own side fund to pre-fund If paid off would fully pre-fund past-service liability for agency
May 25, 2020 30
SIDE FUND CALCULATIONS
Side Funds – Methodology
Initial side fund determined as of 6/30/08, or when joining ACFD if later, for each agency in ACFD.
Yearly side fund calculation:
Allocate year’s full pre-funding Normal Cost to each participating agency based on FTE, remaining is allocated based on allocation % of shared positions. Each agency side fund will change:
(Beginning of year side fund with interest to end of year) + (Allocated portion of full pre-funding NC)
– (Allocated benefit payments with interest to end of year) Difference between total side fund amount and full pre-funding AAL is allocated to each agency based on FTE, remaining based on allocation % of shared positions. Each agency determines whether to make a pre-funding contribution to their CERBT sub-account or not, agency side fund is adjusted by any assets in sub-account:
(End of year side fund)
– (End of year assets in CERBT sub-account)
DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 6
May 25, 2020 31
SIDE FUND CALCULATIONS
Actuarial Obligations for Side Fund Calculations
Full Funding Discount Rate
(Amounts in $000’s)
6/30/17 Valuation 6/30/19 Valuation
6/30/17
Projected
6/30/18 6/30/19
Projected
6/30/20
Full Funding Discount Rate 6.75% 6.75%
Present Value of Benefits $150,345 $156,145
Actuarial Accrued Liability
• Safety 101,410 $107,792 108,432 114,338
• Misc Non Dispatch 3,091 3,539 3,442 3,889
• Misc Dispatch 1,852 2,124 1,836 2,066
• Total 106,353 113,455 113,710 120,293
Actuarial Value of Assets (17,434) (21,438) (28,091) (33,148) Unfunded AAL 88,919 92,017 85,619 87,145
Normal Cost n/a 4,463 n/a 4,438
Pay-As-You-Go 4,268 4,792 5,200 5,647
May 25, 2020 32
SIDE FUND CALCULATIONS
Actuarially Determined Contribution (ADC) for Side Fund Calculations 6/30/17 Valuation 6/30/19 Valuation
2018/19 2019/20 2020/21 2021/22
Full Funding Discount Rate 6.75% 6.75%
ADC - $
• Normal Cost $4,463 $4,597 $4,438 $4,572
• UAAL Amortization6 7,611 7,840 6,396 6,588
• Total ADC 12,074 12,437 10,834 11,160
• Employee Contributions7 (2,054) (2,115) (2,564) (3,036) • Total 10,021 10,322 8,270 8,124
Projected Payroll 53,619 55,228 58,897 60,664
ADC - %Pay
• Normal Cost 8.3% 8.3% 7.5% 7.5%
• UAAL Amortization 14.2% 14.2% 10.9% 10.9%
• Total ADC 22.5% 22.5% 18.4% 18.4%
• Employee Contributions (3.8%) (3.8%) (4.4%) (5.0%)
• Total 18.7% 18.7% 14.0% 13.4%
6 Based on valuation amortization periods. 7
Estimated employee contributions based on employee contribution rates and projected payroll.
DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 6
May 25, 2020 33
SIDE FUND CALCULATIONS
CERBT Sub-Accounts and AVA Calculation
Fiscal Year 2017/18
(Amounts in $000’s)
Dispatch ALCO San
Leandro Dublin LBNL LLNL Newark
Union
City
Emeryville Total
MVA 6/30/17 $1,540 $3,764 $569 $9,581 $108 $271 $921 $503 $163 $17,420 • Contributions 97 1,448 304 174 58 145 1,010 316 121 3,672 • Disbursements - - - - - - - - - -
• Inv. Earnings 125 312 50 769 10 24 82 44 14 1,429
• Admin. Exp. (1) (2) - (5) - - (1) - - (10)
• Invest. Exp. (1) (2) - (4) - - - - - (7)
MVA 6/30/18 1,760 5,521 922 10,515 176 439 2,011 863 298 22,505 • AVA Ratio 8 99.65%
AVA 6/30/18 1,754 5,501 919 10,478 175 438 2,004 860 297 22,426
8 Ratio of valuation 6/30/18 Actuarial Value of Assets ($22,426) to Market Value of Assets ($22,505) = 99.65%.
May 25, 2020 34
SIDE FUND CALCULATIONS
CERBT Sub-Accounts and AVA Calculation
Fiscal Year 2018/19
(Amounts in $000’s)
Dispatch ALCO San
Leandro Dublin LBNL LLNL Newark
Union
City
Emeryville Total
MVA 6/30/18 $1,760 $5,521 $922 $10,515 $176 $439 $2,011 $863 $298 $22,505 • Contributions 123 2,063 381 537 73 182 163 351 154 4,027 • Disbursements - - - - - - - - - -
• Inv. Earnings 116 379 77 681 15 36 133 67 26 1,530
• Admin. Exp. (1) (3) (1) (5) - - (1) - - (12)
• Invest. Exp. (1) (2) - (4) - - (1) - - (8)
MVA 6/30/19 1,997 7,958 1,380 11,723 263 657 2,306 1,281 478 28,042 • AVA Ratio 9 100.17%
AVA 6/30/19 2,001 7,971 1,382 11,744 263 658 2,310 1,283 479 28,091
9 Ratio of valuation 6/30/19 Actuarial Value of Assets ($28,091) to Market Value of Assets ($28,042) = 100.17%.
DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 6
May 25, 2020 35
SIDE FUND CALCULATIONS
Side Fund Calculations
2017/18 Fiscal Year – 6.75% Discount Rate
(Amounts in $000’s)
Dispatch ALCO San
Leandro Dublin LBNL LLNL Newark
Union
City
Emeryville Total
Allocation % 0.00% 29.53% 20.00% 11.43% 3.81% 9.52% 8.57% 11.43% 5.71% 100.00% Side Fund BOY $1,852 $45,013 $26,357 $12,093 $2,093 $2,471 $5,853 $7,125 $3,496 $106,353 • Pool NC10 191 1,170 750 436 139 349 331 436 227 4,029 • BP (50) (1,346) (917) (524) (174) (436) (393) (524) (262) (4,626) • Interest 123 2,994 1,749 799 135 152 382 464 227 7,025 Side Fund EOY 2,116 47,831 27,939 12,804 2,193 2,536 6,173 7,501 3,688 112,781 Balance EOY10 8 198 132 76 25 62 58 76 39 674
AAL EOY 2,124 48,029 28,071 12,880 2,218 2,598 6,231 7,577 3,727 113,455 AVA EOY (1,754) (5,501) (919) (10,478) (175) (438) (2,004) (860) (297) (22,426) UAAL EOY 370 42,528 27,152 2,402 2,043 2,160 4,227 6,717 3,430 91,029
10 Allocated based on FTE first, and then allocation % of shared positions, except for Dispatch which is based on actual Dispatch valuation results.
May 25, 2020 36
SIDE FUND CALCULATIONS
Side Fund Calculations
2018/19 Fiscal Year – 6.75% Discount Rate
(Amounts in $000’s)
Dispatch ALCO San
Leandro Dublin LBNL LLNL Newark
Union
City
Emeryville Total
Allocation % 0.00% 29.53% 20.00% 11.43% 3.81% 9.52% 8.57% 11.43% 5.71% 100.00% Side Fund BOY $2,124 $48,029 $28,071 $12,880 $2,218 $2,598 $6,231 $7,577 $3,727 $113,455 • Pool NC11 208 1,308 827 482 154 384 367 482 251 4,463 • BP (49) (1,447) (972) (556) (185) (463) (417) (556) (277) (4,922) • Interest 142 3,194 1,863 851 143 160 407 493 242 7,495 Side Fund EOY 2,425 51,084 29,789 13,657 2,330 2,679 6,588 7,996 3,943 120,491 Balance EOY (588) (1,851) (1,226) (707) (231) (578) (533) (707) (360) (6,781) AAL EOY11 1,836 49,234 28,563 12,950 2,099 2,101 6,055 7,289 3,583 113,710 AVA EOY (2,001) (7,971) (1,382) (11,744) (263) (658) (2,310) (1,283) (479) (28,091) UAAL EOY (165) 41,263 27,181 1,206 1,836 1,443 3,745 6,006 3,104 85,619
11 Allocated based on FTE first, and then allocation % of shared positions, except for Dispatch which is based on actual Dispatch valuation results.
DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 6
May 25, 2020 37
SIDE FUND CALCULATIONS
Side Fund Balances (AAL)
(Amounts in millions)
$0
$10
$20
$30
$40
$50
$60
6/30/17 Side Fund Balance
6/30/18 Side Fund Balance
6/30/19 Side Fund Balance
May 25, 2020 38
SIDE FUND CALCULATIONS
CERBT Sub-Account Assets (AVA)
(Amounts in millions)
$0
$2
$4
$6
$8
$10
$12
$14
6/30/17 CERBT Sub-Account Assets
6/30/18 CERBT Sub-Account Assets
6/30/19 CERBT Sub-Account Assets
DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 6
May 25, 2020 39
SIDE FUND CALCULATIONS
Unfunded Side Fund Balances (UAAL)
Side Fund Balance less CERBT Sub-Account Assets
(Amounts in millions)
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
6/30/17 Unfunded Side Fund Balance
6/30/18 Unfunded Side Fund Balance
6/30/19 Unfunded Side Fund Balance
May 25, 2020 40
SIDE FUND CALCULATIONS
Sample 2020/21 ADCs at Varying UAAL Amortization Periods12
6.75% Discount Rate
(Amounts in $000’s)
Dispatch ALCO San
Leandro Dublin LBNL LLNL Newark
Union
City
Emeryville Total
15-Year UAAL Amortization
2020/21 ADC
• Normal Cost $175 $1,350 $852 $495 $159 $397 $376 $377 $257 $4,438 • UAAL Amort (16) 3,816 2,563 101 142 111 340 537 278 7,872 • Total 159 5,166 3,415 596 301 508 716 914 535 12,310
20-Year UAAL Amortization
2020/21 ADC
• Normal Cost $175 $1,350 $852 $495 $159 $397 $376 $377 $257 $4,438 • UAAL Amort (13) 3,101 2,083 82 115 90 276 436 226 6,396 • Total 162 4,451 2,935 577 274 487 652 813 483 10,834
30-Year UAAL Amortization
2020/21 ADC
• Normal Cost $175 $1,350 $852 $495 $159 $397 $376 $377 $257 $4,438 • UAAL Amort (10) 2,408 1,617 63 90 70 214 339 176 4,967 • Total 165 3,758 2,469 558 249 467 590 716 433 9,405
12 2020/21 Normal Costs reflect the new allocation %’s effective 7/1/20.
DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 6
May 25, 2020 41
ACTUARIAL CERTIFICATION
This report presents the Alameda County Fire Department Retiree Healthcare Plan (“Plan”) June 30, 2019 actuarial valuation. The purpose of this valuation is to:
Determine the June 30, 2019 Benefit Obligations,
Determine the Plan’s June 30, 2019 Funded Status, and Calculate the 2020/21 and 2021/22 Actuarially Determined Contributions.
Information provided in this report may be useful to the Department for the Plan’s financial management. Future valuations may differ significantly if the Plan’s experience differs from our assumptions or if there are changes in Plan design, actuarial methods or actuarial assumptions. The project scope did not include an analysis of this potential variation.
The valuation is based on Plan provisions, participant data, and asset information provided by the Department 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,
Doug Pryor, ASA, EA, MAAA
Vice President
Bartel Associates, LLC
May 25, 2020
Catherine A. Wandro, ASA, MAAA, FCA
Assistant Vice President
Bartel Associates, LLC
May 25, 2020
May 25, 2020 42
ACTUARIAL CERTIFICATION
This page intentionally blank
DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 6
May 25, 2020 E-1
EXHIBITS - PREMIUMS
2019 PEMHCA Monthly Premiums
Bay Area
Non-Medicare Eligible Medicare Eligible
Plan Single 2-Party Family Single 2-Party Family
Anthem Select $ 831.44 $ 1,662.88 $ 2,161.74 n/a n/a n/a Anthem Traditional 1,111.13 2,222.26 2,888.94 $ 357.44 $ 714.88 $ 1,072.32 Blue Shield Access+ 970.90 1,941.80 2,524.34 n/a n/a n/a Health Net SmartCare 901.55 1,803.10 2,344.03 n/a n/a n/a Kaiser 768.25 1,536.50 1,997.45 323.74 647.48 971.22
UnitedHealthcare n/a n/a n/a 299.37 598.74 898.11
Western Health Advantage 767.01 1,534.02 1,994.23 n/a n/a n/a PERS Choice 866.27 1,732.54 2,252.30 360.41 720.82 1,081.23 PERS Select 543.19 1,086.38 1,412.29 360.41 720.82 1,081.23 PERSCare 1,131.68 2,263.36 2,942.37 394.83 789.66 1,184.49 PORAC 774.00 1,623.00 2,076.00 513.00 1,022.00 1,635.00
May 25, 2020 E-2
EXHIBITS - PREMIUMS
2020 PEMHCA Monthly Premiums
Region 1
Non-Medicare Eligible Medicare Eligible
Medical Plan Single 2-Party Family Single 2-Party Family Anthem Select $ 868.98 $ 1,737.96 $ 2,259.35 $ 388.15 $ 776.30 $1,164.45 Anthem Traditional 1,184.84 2,369.68 3,080.58 388.15 776.30 1,164.45 Blue Shield Access+ 1,127.77 2,255.54 2,932.20 n/a n/a n/a Blue Shield Trio 833.00 1,666.00 2,165.80 n/a n/a n/a
Health Net SmartCare 1,000.52 2,001.04 2,601.35 n/a n/a n/a Kaiser 768.49 1,536.98 1,998.07 339.43 678.86 1,018.29
UnitedHealthcare 899.94 1,799.88 2,339.84 327.03 654.06 981.09 Western Health Advantage 731.96 1,463.92 1,903.10 n/a n/a n/a PERS Choice 861.18 1,722.36 2,239.07 351.39 702.78 1,054.17 PERS Select 520.29 1,040.58 1,352.75 351.39 702.78 1,054.17 PERSCare 1,133.14 2,266.28 2,946.16 384.78 769.56 1,154.34 PORAC 774.00 1,699.00 2,199.00 513.00 1,022.00 1,635.00 DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 6
May 25, 2020 E-3
EXHIBITS – PARTICIPANT STATISTICS
Participant Statistics
June 30, 2019
Miscellaneous
Safety Non-Dispatch Dispatch Total
Actives:
• Count 350 45 31 426
• Average Age 41.5 46.1 37.6 41.7
• Average Service
ACFD 9.8 7.0 6.0 9.3
CalPERS 13.2 8.7 7.6 12.3
• Average 18/19 Salary $139,000 $89,700 $91,300 $130,300 • Total 18/19 Salary (000s) 48,652 4,035 2,829 55,516
Retirees:
• Count 293 9 6 30813
• Average Age 64.1 65.9 63.6 64.1
• Average Retirement Age
Service Retirement 54.1 60.6 59.2 54.6
Disability Retirement 53.3 54.2 n/a 53.3
13 Includes 18 retirees who waive medical coverage.
May 25, 2020 E-4
EXHIBITS – PARTICIPANT STATISTICS
Participant Statistics
June 30, 2017
Miscellaneous
Safety Non-Dispatch Dispatch Total
Actives:
• Count 346 41 32 419
• Average Age 41.6 45.5 37.6 41.7
• Average Service
ACFD 9.2 6.2 5.1 8.6
CalPERS 13.0 8.8 7.3 12.1
• Average 16/17 Salary $127,300 $91,600 $85,500 $120,600 • Total 16/17 Salary (000s) 44,047 3,757 2,737 50,541
Retirees:
• Count 278 8 6 29214
• Average Age 64.0 64.9 61.6 63.9
• Average Retirement Age
Service Retirement 54.2 61.0 59.2 54.6
Disability Retirement 53.1 54.2 n/a 53.1
14 Includes 16 retirees who waive medical coverage.
DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 6
May 25, 2020 E-5
EXHIBITS – PARTICIPANT STATISTICS
Medical Plan Participation
Medical Plan Actives
Retirees
Pre-65 Post-65 Total
Anthem Select 1% 3% 0% 2%
Anthem Traditional 2% 2% 3% 2%
Blue Shield Access+ 3% 5% 0% 3%
Health Net SmartCare 2% 5% 0% 3%
Kaiser 63% 36% 51% 43%
UnitedHealthcare 1% 1% 8% 4%
PERS Choice 2% 5% 19% 11%
PERSCare 1% 4% 7% 5%
PERS Select 1% 0% 0% 0%
PORAC 24% 39% 12% 27%
Total 100% 100% 100% 100%
May 25, 2020 E-6
EXHIBITS – PARTICIPANT STATISTICS
Current Active Medical Plan Coverage
Medical Plan Single 2-Party Family Waived Total
Anthem Select 3 - 3 - 6
Anthem Traditional 2 - 6 - 8
Blue Shield Access+ 1 3 7 - 11
Health Net SmartCare - 1 6 - 7
Kaiser 76 32 150 - 258
UnitedHealthcare - - 2 - 2
PERS Choice 4 2 3 - 9
PERSCare 1 1 1 - 3
PERS Select 1 - 1 - 2
PORAC 12 19 67 - 98
Waived - - - 22 22
Total 100 58 246 22 426
DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 6
May 25, 2020 E-7
EXHIBITS – PARTICIPANT STATISTICS
Retiree Medical Plan Coverage - Pre 65
Medical Plan Single 2-Party Family Waived Total
Anthem Select - 2 3 - 5
Anthem Traditional 1 2 - - 3
Blue ShieldAccess+ 2 3 3 - 8
Health Net SmartCare 3 1 4 - 8
Kaiser 11 22 28 - 61
UnitedHealthcare 1 - - - 1
PERS Choice 4 - 4 - 8
PERSCare 1 6 - - 7
PERS Select - - - - -
PORAC 8 31 27 - 66
Waived - - - 9 9
Total 31 67 69 9 176
May 25, 2020 E-8
EXHIBITS – PARTICIPANT STATISTICS
Retiree Medical Plan Coverage - Post 65
Medical Plan Single 2-Party Family Waived Total
Anthem Select - - - - -
Anthem Traditional - 2 2 - 4
Kaiser 24 36 3 - 63
UnitedHealthcare 5 5 - - 10
PERS Choice 6 16 1 - 23
PERSCare 5 4 - - 9
PERS Select - - - - -
PORAC 1 11 2 - 14
Waived - - - 9 9
Total 41 74 8 9 132
DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 6
May 25, 2020 E-9
EXHIBITS – PARTICIPANT STATISTICS
Retirees Medical Plan Coverage by Age
Medical Coverage
Age Single 2-Party Family Waived Total
Under 50 - 2 3 3 8
50-54 - 7 20 - 27
55-59 7 23 31 5 66
60-64 24 35 15 1 75
65-69 16 31 6 5 58
70-74 11 34 1 2 48
75-79 6 7 1 1 15
80-84 2 2 - - 4
85 & Over 6 - - 1 7
Total 72 141 77 18 308
Average Age 68.5 65.4 58.1 63.2 64.1
May 25, 2020 E-10
EXHIBITS – PARTICIPANT STATISTICS
Actives by Age and Service – Safety
ACFD Service
Age < 1 1-4 5-9 10-14 15-19 20-24 ≥ 25 Total
< 25 2 2 - - - - - 4
25-29 11 20 3 - - - - 34
30-34 5 33 20 2 - - - 60
35-39 3 15 16 26 11 - - 71
40-44 - 5 14 20 19 - - 58
45-49 - 3 23 10 15 2 - 53
50-54 - 1 14 5 6 7 1 34
55-59 - 1 11 5 1 13 - 31
60-64 - - 1 1 - 1 1 4
≥ 65 - - - 1 - - - 1
Total 21 80 102 70 52 23 2 350
DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 6
May 25, 2020 E-11
EXHIBITS – PARTICIPANT STATISTICS
Actives by Age and Service – Miscellaneous (Non-Dispatch) ACFD Service
Age < 1 1-4 5-9 10-14 15-19 20-24 ≥ 25 Total
< 25 - - - - - - - -
25-29 - 3 - - - - - 3
30-34 - 2 - - - - - 2
35-39 1 6 1 - - - - 8
40-44 - 5 2 1 1 - - 9
45-49 - 6 1 2 - - - 9
50-54 - 2 - 1 - 1 - 4
55-59 - - 3 2 1 1 - 7
60-64 - - 1 - 1 - - 2
≥ 65 - - - - - 1 - 1
Total 1 24 8 6 3 3 - 45
May 25, 2020 E-12
EXHIBITS – PARTICIPANT STATISTICS
Actives by Age and Service – Miscellaneous (Dispatch)
ACFD Service
Age < 1 1-4 5-9 10-14 15-19 20-24 ≥ 25 Total
< 25 1 1 - - - - - 2
25-29 - 3 - - - - - 3
30-34 - 2 3 - - - - 5
35-39 - 4 8 2 - - - 14
40-44 - - - 1 - - - 1
45-49 - - 1 2 - - - 3
50-54 - 1 - 2 - - - 3
55-59 - - - - - - - -
60-64 - - - - - - - -
≥ 65 - - - - - - - -
Total 1 11 12 7 - - - 31
DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 6
May 25, 2020 E-13
EXHIBITS – PARTICIPANT STATISTICS
Actives by Age and Service – Total
ACFD Service
Age < 1 1-4 5-9 10-14 15-19 20-24 ≥ 25 Total
< 25 3 3 - - - - - 6
25-29 11 26 3 - - - - 40
30-34 5 37 23 2 - - - 67
35-39 4 25 25 28 11 - - 93
40-44 - 10 16 22 20 - - 68
45-49 - 9 25 14 15 2 - 65
50-54 - 4 14 8 6 8 1 41
55-59 - 1 14 7 2 14 - 38
60-64 - - 2 1 1 1 1 6
≥ 65 - - - 1 - 1 - 2
Total 23 115 122 83 55 26 2 426
May 25, 2020 E-14
EXHIBITS - ACTUARIAL ASSUMPTIONS
June 30, 2017 Valuation June 30, 2019 Valuation
Valuation
Date
June 30, 2017
2018/19 and 2019/20 ADC
June 30, 2019
2020/21 and 2021/22 ADC
General
Inflation
2.75%
Used for economic assumptions
Same
DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 6
May 25, 2020 E-15
EXHIBITS - ACTUARIAL ASSUMPTIONS
June 30, 2017 Valuation June 30, 2019 Valuation
Discount
Rate
4.84% - approx. blended rate
determined by allocating
liabilities to agencies based on
estimated
pre-funding policies:
6.75% - full pre-funding rate
used for Dispatch and City of
Newark
5.00% - partial pre-funding
rate (30% of ACC less paygo)
used for ALCO
4.00% - employee
contributions only for
remaining agencies
6.75% - side fund calculations,
CERBT Strategy #1
4.90% - approx. blended rate
determined by allocating
liabilities to agencies based on
estimated pre-funding policies:
6.75% - full pre-funding rate
used for Dispatch and City of
Dublin
5.00% - partial pre-funding rate
(35% to 50% of ADC less
paygo) used for ALCO, City of
Newark, City of Emeryville,
Union City, and LBNL
4.00% - employee
contributions only for
remaining agencies
6.75% - side fund calculations,
CERBT Strategy #1
May 25, 2020 E-16
EXHIBITS - ACTUARIAL ASSUMPTIONS
June 30, 2017 Valuation June 30, 2019 Valuation
Payroll
Increases
Aggregate Increases – 3.00%
Merit Increases – CalPERS 1997-
2015 Experience Study
Same
Affordable
Care Act
(ACA)
Excise Tax
2.0% liability load on cash
subsidy to estimate impact
Not Valued
Admin.
Expenses
0.33% of retiree PEMHCA
premiums
Added to Normal Cost
0.27% of retiree PEMHCA
premiums
0.05% of CERBT Assets
Added to Normal Cost
PEMHCA
Minimum
Increases
Year PEMHCA Min
2017 $128.00
2018 $133.00
2019+ 4.25%/yr. increase
Year PEMHCA Min
2019 $136.00
2020 $139.00
2021+ 4.25%/yr. increase
DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 6
May 25, 2020 E-17
EXHIBITS - ACTUARIAL ASSUMPTIONS
June 30, 2017 Valuation June 30, 2019 Valuation
Medical
Trend
Increase from Prior Year
Year Non-Medicare Medicare
2017 Actual 2017 Premiums
2018 Actual 2018 Premiums
2019 7.50% 6.50%
2020 7.50% 6.50%
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
Year Non-Medicare Medicare
2017 n/a
2018 n/a
2019 Actual 2019 Premiums
2020 Actual 2020 Premiums
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%
May 25, 2020 E-18
EXHIBITS - ACTUARIAL ASSUMPTIONS
June 30, 2017 Valuation June 30, 2019 Valuation
Unit 002
Cap Incr.
0% Same
Mortality,
Termination,
Disability,
Retirement
CalPERS 1997-2015 Experience
Study
Pre-retirement mortality projected
with 15-year 90% Scale MP-2016
(CalPERS assumption)
Post-retirement mortality
projected with Scale MP-2017
CalPERS 1997-2015 Experience
Study
Mortality projected with Scale
MP-2019
Waived
Retirees
Pre 65: 40% re-elect at age 65
Post 65: 0% re-elect
Pre 65: 10% re-elect at age 65
Post 65: 0% re-elect
Medical
Plan at
Retirement
Currently covered: same as
current medical plan
Currently waived: Kaiser Bay
Area
Same
DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 6
May 25, 2020 E-19
EXHIBITS - ACTUARIAL ASSUMPTIONS
June 30, 2017 Valuation June 30, 2019 Valuation
Participation
at
Retirement
Hired before 4/1/09:
Currently covered - 100%
Currently waived - 90%
Hired on or after 4/1/09:
Service Participation
< 10 60%
10-14 90%
15-19 95%
≥ 20 100%
Same
Medicare
Eligibility
Actives and pre-65 retirees: 100%
Post-65 retirees: Current
Medicare status
Everyone eligible for Medicare
will elect Part B coverage
Same
May 25, 2020 E-20
EXHIBITS - ACTUARIAL ASSUMPTIONS
June 30, 2017 Valuation June 30, 2019 Valuation
Marital
Status at
Retirement
Actives:
• Currently covered - current
marital status
• Currently waived - 80%
married
Retirees - current marital status
Same
Spouse Age Actives: Males 3 years older than
females
Retirees: Males 3 years older
than females if spouse birth date
not available
Same
Dependents
at
Retirement
% electing family coverage at
retirement
• Misc: 10%
• Safety: 20%
No family coverage ≥ 65
% electing family coverage at
retirement
• Misc: 10%
• Safety: 30%
No family coverage ≥ 65
DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 6
May 25, 2020 E-21
EXHIBITS - ACTUARIAL ASSUMPTIONS
June 30, 2019 Valuation
HMO
Medical
Claims Cost
2020
Sample estimated monthly claims costs:
Bay Area Region - Medicare Eligible
Anthem
Select
Anthem
Traditional
Blue Shield
Access+ Kaiser
United
Healthcare
Age M F M F M F M F M F
25 $322 $564 $429 $751 $375 $657 $281 $492 $337 $591
35 410 696 547 928 479 812 358 607 430 730
45 586 854 781 1,139 684 997 512 745 614 896
55 973 1,132 1,296 1,511 1,135 1,322 849 988 1,020 1,188 60 1,227 1,287 1,635 1,716 1,431 1,502 1,071 1,122 1,286 1,350 64 1,367 1,374 1,822 1,832 1,595 1,604 1,194 1,198 1,433 1,441 65 351 349 351 349 n/a n/a 308 309 303 300
70 374 369 374 369 n/a n/a 328 327 322 318
75 393 388 393 388 n/a n/a 345 344 339 334
80 413 408 413 408 n/a n/a 362 361 356 351
85 452 446 452 446 n/a n/a 396 395 389 384
May 25, 2020 E-22
EXHIBITS - ACTUARIAL ASSUMPTIONS
June 30, 2019 Valuation
PPO
Medical
Claims Cost
2020
Sample estimated monthly claims costs:
Bay Area Region - Medicare Eligible
PERS Choice PERS Select PERSCare PORAC
Age M F M F M F M F
25 $252 $471 $175 $341 $326 $596 $308 $557
35 332 592 235 432 425 746 399 694
45 495 738 359 545 625 925 582 860
55 861 1,001 642 747 1,072 1,245 987 1,154
60 1,105 1,149 831 862 1,369 1,424 1,256 1,317
64 1,241 1,234 937 929 1,533 1,526 1,405 1,410
65 282 344 282 344 293 358 404 489
70 307 376 307 376 319 391 439 533
75 322 394 322 394 334 410 461 560
80 337 413 337 413 351 430 483 588
85 368 451 368 451 382 469 527 642
DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 6
May 25, 2020 E-23
EXHIBITS - ACTUARIAL ASSUMPTIONS
June 30, 2019 Valuation
Basis for
Assumptions
CalPERS January 2017 experience study based on 1997 to 2015 demographic experience
Mortality improvement based on most recent Society of Actuaries table Inflation based on our estimate for the Plan’s very long time horizon Discount rate based on 2017 Bartel Associates stochastic analysis, taking into account capital market assumptions of investment advisory firms Age-based claims were developed by Axene Health Partners based on demographic data for the CalPERS health plans provided by CalPERS and Axene’s proprietary AHP cost model.
Participation and coverage assumptions based in part on Plan experience Medical Trend:
Short-term trend was developed in consultation with Axene Health Partners’ healthcare actuaries
Long-term trend was developed using Society of Actuaries’ Getzen Model of Long-Run Medical Cost Trends
May 25, 2020 E-24
EXHIBITS - DEFINITIONS
OPEB
Actuarial
Valuation
Project future employer-provided benefit cash flows for current active employees and current retirees
Discount projected cash flow to valuation date using discount rate (assumed return on assets used to pay benefits) and other actuarial assumptions to determine present value of projected future benefits (PVB) Allocate PVB to past, current, and future periods using the actuarial cost method
Actuarial cost method used for this valuation is the Entry Age Normal Cost method which determines Normal Cost as a level percentage of payroll (same method used by CalPERS)
Normal Cost is amount allocated to current fiscal year Actuarial Accrued Liability (AAL) is amount allocated to prior service with employer
Unfunded AAL (UAAL) is AAL less plan assets pre-funded in a segregated and restricted trust
PayGo Cost Cash subsidy is the pay-as-you-go employer benefit payments for retirees Implied subsidy is the difference between the actual cost of retiree benefits and retiree premiums subsidized by active employee premiums DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 6
May 25, 2020 E-25
EXHIBITS - DEFINITIONS
Present Value of Benefits
May 25, 2020 E-26
EXHIBITS - DEFINITIONS
Acroynms
Used in
Report
• AAL - Actuarial Accrued Liability
• ADC - Actuarially Determined Contribution
• AVA - Actuarial Value of Assets
• EAN - Entry Age Normal Cost Method
• GASBS 75 - Governmental Accounting Standards Board Statement No. 75
• NC - Normal cost
• OPEB - Other (than pensions) Post Employment Benefits • PVB - Present Value of Projected Benefits
• UAAL - Unfunded Actuarial Accrued Liability
DocuSign Envelope ID: 1EF4CBF9-D840-4E74-A7ED-2D3ACE51F62F EXHIBIT 6