PRESENTATION
FAIRFAX TOWN COUNCIL MEETING
STAFF REPORT
MEETING DATE February 4, 2026
PREPARED FOR Mayor and Town Council
PREPARED BY Michael Vivrette, Finance Director
SUBJECT Presentation of the Actuarial Valuation of Other Post Employment Benefits (OPEB) as of June 30, 2024
RECOMMENDATION
Accept and file reports.
BACKGROUND
Government Accounting Standards Board Statement 75 (GASB 75) requires that public agencies report on the cost of Other Post Employment Benefits (OPEB) such as medical, prescription drug, dental, vision and life insurance benefits for which the agency provides a contribution. For the Town of Fairfax, OPEB is primarily medical benefits. GASB 75 requires the cost for OPEB to be actuarially calculated and reported in the City’s audited annual financial statements.
Fairfax retiree health benefits (the Plan) are provided through MOU contract provisions and the Town’s obligation through California's Public Employees' Medical and Hospital Care Act (PEMHCA). The Town provides retiree medical to employees who retire at age 50 or later with at least 5 years of service (age 52 with 5 years of service if hired on or after January 1, 2013). The Plan also provides retiree medical for ordinary disability with 5 years of service and line of duty disability with no age or service requirement. The Town subsidizes either the PEMHCA minimum or a percentage of Region 1 Kaiser Permanente single premium (or Kaiser Senior Advantage for Medicare-eligible retirees) or the lowest cost plan. The Town subsidy varies by bargaining unit and years of Town service at retirement.
Staff retained Nicolay Consulting Group to complete this actuarial valuation of the Town’s OPEB program as of June 30, 2024 measurement date compliant under GASB 75. The purpose of this valuation is to determine the value of the expected postretirement benefits for current and future retirees and the Net OPEB Liability and OPEB Benefit Cost for the fiscal year ending June 30, 2025.
An OPEB valuation considers various assumptions such as active employee and retiree demographics, turnover, mortality, disability, retirement, and health care trends to determine an estimate of the total cost presented to the Town by this benefit obligation. This amount is discounted using an interest rate assumption to determine the Actuarial Accrued Liability (AAL). This is compared to the Actuarial Value of Assets (AVA) – the value of assets that have been set aside by the City solely to fund future OPEB costs. The difference is the Unfunded Actuarial Accrued Liability (UAAL). Once the UAAL is determined, the Actuarially Determined Contributions (ADC) is calculated in order to amortize these costs over benefit period.
The Town historically adopted a funding practice where the direct health care costs for current retirees are expensed annually and, in addition, the Town made annual funding contributions to an "Irrevocable Trust" (CalPERS CERBT) to partially address future funding obligations. The Trust funds are restricted in use to the payment of future OPEB costs.
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PRESENTATION
DISCUSSION
The June 30, 2025 report reflects a significant improvement in the Unfunded AAL (UAAL). It reflects decisions made by the Town in 2013 revising the OPEB plans for new employees. As indicated in the report, assets of the trust slightly exceed the liabilities (104%) at June 30, 2024. By comparison, in 2017 the assets of the plan were 31% of the liabilities. This is subject to many variables and is based on multiple assumptions which change periodically. Nevertheless it is promising news.
Representatives of Nicolay Consulting Group will be attending the meeting via ZOOM to answer any questions.
CONCLUSION
Past practices and actions regarding OPEB, AAL valuations and OPEB Trust funding and investment strategies have served the Town well. The current valuation is an encouraging report on the funding status of this benefit liability.
ATTACHMENTS
Town of Fairfax GASB 75 Report FYE June 30, 2025.
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Town of Fairfax
January 14, 2026
Governmental Accounting Standards Board
(GASB) Statement 75
Actuarial Valuation Date: June 30, 2023
Measurement Date: June 30, 2024
Fiscal Year End: June 30, 2025
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Nicolay Consulting Group
January 14, 2026 OPEB CONSULTANTS AND ACTUARIES
231 SANSOME STREET, SUITE 300
SAN FRANCISCO, CALIFORNIA 94104
TEL: 415-512-5300
FAX: 415-512-5314
Town of Fairfax
GASB75 Measurement Date June 30, 2024
Michael Vivrette
Finance Director
Town of Fairfax
142 Bolinas Rd.
Fairfax, CA 94930
Re: Town of Fairfax GASB 75 Report for FYE June 30, 2025 Dear Mr. Vivrette,
Town of Fairfax (Town) has retained Nicolay Consulting Group to complete this valuation of the Town’s postemployment medical program (the “Plan”) as of June 30, 2024 measurement date compliant under Governmental Accounting Standards Board (GASB) Statement 75.
The purpose of this valuation is to determine the value of the expected postretirement benefits for current and future retirees and the Net OPEB Liability and OPEB Benefit Cost for the fiscal year ending June 30, 2025. The amounts reported herein are not necessarily appropriate for use for a different fiscal year without adjustment.
Based on the foregoing, the cost results and actuarial exhibits presented in this report were determined on a consistent and objective basis in accordance with applicable Actuarial Standards of Practice and generally accepted actuarial procedures. We believe they fully and fairly disclose the actuarial position of the Plan based on the plan provisions, employee and plan cost data submitted.
The actuarial calculations were completed under the supervision of Tina Haugbro and Sue Simon They are members of the American Academy of Actuaries who meet the Qualification Standards of the American Academy of Actuaries to render the actuarial opinion herein. To the best of our knowledge, the information supplied in the actuarial valuation is complete and accurate. In our opinion, assumptions as approved by the plan sponsor are reasonably related to the experience of and expectations for the Plan.
We would be pleased to answer any questions on the material contained in this report or to provide further explanation or detail as may be appropriate.
Respectfully submitted,
NICOLAY CONSULTING GROUP
Tina D. Haugbro EA, MAAA Sue Simon ASA, MAAA, EA, FCA
Consulting Actuary Vice President & Senior Actuary
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Town of Fairfax
GASB75 Measurement Date June 30, 2024
TABLE OF CONTENTS
Executive Summary ..................................................................................................... 1 Key Valuation Results .............................................................................................. 1 Gap Analysis ............................................................................................................ 2 10 – Year Projection of Employer’s Benefit Payments ............................................. 3 Breakdown of Explicit and Implicit Liabilities ............................................................ 4 Funding Progress ..................................................................................................... 5 GASB 75 Exhibits ........................................................................................................ 6 Schedule of Change in Net OPEB Liability .............................................................. 6 Summary of Change in Net OPEB Liability .............................................................. 7 Derivation of Significant Actuarial Assumptions ....................................................... 8 Sensitivity Analysis ................................................................................................... 9 Schedule of OPEB Expense .................................................................................. 10 Interest on the Total OPEB Liability ........................................................................ 11 Projected Earnings on OPEB Plan Investments .................................................... 11 Schedule of Contributions ...................................................................................... 12 Deferred Inflows/Outflows of Resources ................................................................ 13 Schedule of Deferred Inflows/Outflows of Resources ............................................ 15 Reconciliation of the Net Position........................................................................... 17 Data ........................................................................................................................... 18 Summary of Demographic Information ................................................................... 18 Distribution of Participants by Age and Service ...................................................... 19 Plan Provisions Summary .......................................................................................... 20 Eligibility and Contribution Requirements ............................................................... 20 Plan Description ..................................................................................................... 21 Actuarial Assumptions, Methods & Considerations.................................................... 22 Actuarial Assumptions ............................................................................................ 22 Actuarial Methods .................................................................................................. 25 Key Terms .................................................................................................................. 26 5 of 31
MANAGEMENTSUMMARY
Town of Fairfax
GASB75 Measurement Date June 30, 2024
Executive Summary
Key Valuation Results
Total Change in TOL 2024 2023
Present Value of Future Benefits:
Active $1,687,070 $1,730,092
Retired 1,008,129 1,119,408
Total $2,695,199 $2,849,500
Actuarial Accrued Liability or Total OPEB Liability (TOL):
Active $926,154 $837,907
Retired 1,008,129 1,119,408
Total $1,934,283 $1,957,315
Plan Fiduciary Net Position (i.e. Fair Value of Assets) 2,020,824 1,686,104 Net OPEB Liability (NOL) ($86,541) $271,211
Plan Fiduciary Net Position as a percentage of the TOL 104% 86% Aggregate OPEB Expense/ (Income) ($118,059) ($69,419)
Covered Payroll $3,748,438 $2,889,863
Schedule of Contributions for measurement period ending June 30:
Actuarially determined contributions $123,059 $123,059
Actual contributions 290,121 113,434
Contribution deficiency/(excess) ($167,062) $9,625
Employer’s Share of Benefit Payments $140,121 $113,434
Demographic data for measurement period ending June 30:
Number of active members 35 35
Number of retired members and beneficiaries 12 12
Number of inactives with deferred benefits 17 17
Total Participants 64 64
Key assumptions as of the Measurement Date:
Discount rate 6.40% 6.00%
Initial Trend Rate
Pre-65 6.50% 6.50%
Post-65 5.75% 5.75%
Ultimate Rate 3.94% 3.94%
Year Ultimate Rate is Reached 2075 2075
PEMHCA Trend 3.50% 3.50%
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MANAGEMENTSUMMARY
Town of Fairfax
GASB75 Measurement Date June 30, 2024
Gap Analysis
The Total OPEB Liability has decreased $23,032 from $1,957,315 as of June 30, 2023 to $1,934,283 as of June 30, 2024.
Interim Valuation
This report presents liabilities as of the measurement date that are based on an interim valuation.
GASB 75 allows plan sponsors to perform valuations biennially, meaning the results for a valuation can be used for up to two GASB 75 measurement dates, one of which can be ‘rolled forward’. The valuation date can precede a GASB 75 measurement date as long as the results would not be materially different had an updated census been collected as of the measurement date. Therefore, if there was a significant shift in participant demographics between the valuation date and a GASB 75 measurement date, an updated census must be collected and a full valuation performed.
When a full valuation is performed the inputs to the valuation (participant census, plan provisions, assets, and actuarial assumptions and methods) are reviewed and updated.
When an interim valuation is performed, neither the census data nor the assumptions and methods need to be updated. In an interim valuation, updates are made to the assets, plan provisions that have not changed materially, and the discount rate to the extent that it is based on a yield or index rate.
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MANAGEMENTSUMMARY
Town of Fairfax
GASB75 Measurement Date June 30, 2024
10 – Year Projection of Employer’s Benefit Payments
In this table we show the projected pay-as-you-go costs (employer’s share of premiums), the implicit subsidy, and total expected benefit payments. The implicit subsidy reflects the shortfall of premiums versus the true cost of coverage. The shortfall exists because claims for active employees are combined with claims of retirees (who generally are older and cost more) to develop a single flat premium paid by both groups.
Measurement
Date
June 30
Employer’s
Share of
Premiums
Implicit Subsidy Total
2024 $97,752 $53,038 $150,790
2025 $103,938 $57,705 $161,643
2026 $97,626 $50,393 $148,019
2027 $92,659 $38,438 $131,097
2028 $89,729 $34,741 $124,470
2029 $96,465 $38,724 $135,189
2030 $103,055 $37,988 $141,043
2031 $98,673 $23,787 $122,460
2032 $104,653 $22,978 $127,631
2033 $110,785 $23,532 $134,317
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
10-Year Projection of Employer Benefit Payments
Premiums Implicit Subsidy Total
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MANAGEMENTSUMMARY
Town of Fairfax
GASB75 Measurement Date June 30, 2024
Breakdown of Explicit and Implicit Liabilities
Explicit Implicit Total
Present Value of Future Benefits
Actives $1,216,625 $470,445 $1,687,070
Retirees 680,102 328,027 1,008,129
Total $1,896,727 $798,472 $2,695,199
Actuarial Accrued Liability
Actives $721,652 $204,502 $926,154
Retirees 680,102 328,027 1,008,129
Total $1,401,754 $532,529 $1,934,283
Normal Cost $52,993 $23,803 $76,796
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MANAGEMENTSUMMARY
Town of Fairfax
GASB75 Measurement Date June 30, 2024
Funding Progress
Below is an illustration of the funded status of the Plan for the past 8 years:
31%
34%
40%
48% 40%
86% 80% 86%
104%
0 500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
2017 2018 2019 2020 2021 2022 2023 2024 2025
Total OPEB Liability Plan Fudiciary Net Position % Funded Status 10 of 31
GASB 75 EXHIBITS
Town of Fairfax
GASB75 Measurement Date June 30, 2024
GASB 75 Exhibits
Schedule of Change in Net OPEB Liability
2024 2023
Total OPEB Liability
Service Cost $81,207 $84,350
Interest 118,169 121,156
Change of benefit terms 0 0
Differences between expected and actual experience 0 255,364 Changes in assumptions (82,287) (380,923)
Benefit payments (140,121) (113,434)
Net change in Total OPEB Liability ($23,032) ($33,487)
Total OPEB Liability – beginning (a) $1,957,315 $1,990,802 Total OPEB Liability - ending (b) $1,934,283 $1,957,315 Plan Fiduciary Net Position
Contributions – employer $290,121 $113,434
Contributions – employee 0 0
Net investment income 185,272 101,774
Benefit payments (140,121) (113,434)
Administrative expense (552) (460)
Other 0 0
Net change in Plan Fiduciary Net Position $334,720 $101,314 Plan Fiduciary Net Position – beginning (c) $1,686,104 $1,584,790 Plan Fiduciary Net Position – ending (d) $2,020,824 $1,686,104 Net OPEB Liability – beginning (a) - (c) $271,211 $406,012 Net OPEB Liability – ending (b) - (d) ($86,541) $271,211 Plan Fiduciary Net Position as a percentage of the TOL: 104% 86% Covered employee payroll $3,748,438 $2,889,863
NOL as percentage of covered employee payroll (2%) (9%) 11 of 31
GASB 75 EXHIBITS
Town of Fairfax
GASB75 Measurement Date June 30, 2024
Summary of Change in Net OPEB Liability
Total OPEB
Liability
(a)
Plan
Fiduciary
Net Position
(b)
Net OPEB
Liability
(a)– (b)
Measurement as of June 30, 2023 $1,957,315 $1,686,104 $271,211 Recognized Changes Resulting from:
Service cost $81,207 0 $81,207
Interest cost 118,169 0 118,169
Diff. between exp and actual experience 0 0 0
Assumption changes (82,287) 0 (82,287)
Net investment income 0 185,272 (185,272)
Benefit payments (140,121) (140,121) 0
Contributions – employer 0 290,121 (290,121)
Contributions – employee 0 0 0
Administrative expense 0 (552) 552
Change of benefit terms 0 0 0
Net Changes ($23,032) $334,720 ($357,752)
Measurement as of June 30, 2024 $1,934,283 $2,020,824 ($86,541) 12 of 31
GASB 75 EXHIBITS
Town of Fairfax
GASB75 Measurement Date June 30, 2024
Derivation of Significant Actuarial Assumptions
Long-term Expected Rate of Return – As of June 30, 2024, the long-term expected rates of return for each major investment class in the Plan’s portfolio are as follows:
The above table shows the target asset allocation in the CERBT Strategy 1 investment policy.
The discount rate for CERBT Strategies are set by CalPERS and can be found on their website.
Discount rate – The discount rate is based on a blend of the long-term expected rate of return on assets for benefits covered by plan assets and a yield or index for 20-year, tax-exempt general obligation municipal bonds with an average rating of AA/Aa or better for benefits not covered by plan assets.
Long-Term Expected Rates of Return are cited in CalPERS Investment Committee’s March 2022 Agenda Item 7b. CalPERS expected inflation is 2.50% The District’s OPEB assets projected at the Strategy 1 CERBT discount rate is sufficient to cover future benefit payments.
June 30, 2024 June 30, 2023
Discount Rate 6.40% 6.00%
Fidelity 20 - year Bond GO Index 3.97% 3.86%
Investment Class Target
Allocation
Long-Term
Expected Real
Rate of Return
Global Equity 49.00% 6.80%
Fixed Income 23.00% 3.70%
TIPS 5.00% 2.80%
REITs 20.00% 6.00%
Others (Commodities) 3.00% 3.40%
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GASB 75 EXHIBITS
Town of Fairfax
GASB75 Measurement Date June 30, 2024
Sensitivity Analysis
The Net OPEB Liability (NOL) is sensitive to changes in key actuarial assumptions. The following analysis illustrates the impact of a 1 percentage point change in both the discount rate and the healthcare cost trend rates on the NOL as of the June 30, 2024 measurement date.
Discount Rate Sensitivity
The table below shows the NOL calculated using a discount rate 1 percentage point lower (5.40%) and 1 percentage point higher (7.40%) than the current rate of (6.40%):
Assumed Discount Rate Net OPEB Liability
7.40% ($269,521)
6.40% (Current) ($86,541)
5.40% $130,426
Healthcare Trend Rate Sensitivity
The table below shows the NOL calculated using healthcare cost trend rates that are 1 percentage point lower and 1 percentage point higher than the current assumption:
Healthcare Trend Assumption Net OPEB Liability
1% Decrease ($310,353)
Current Trend ($86,541)
1% Increase $187,039
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GASB 75 EXHIBITS
Town of Fairfax
GASB75 Measurement Date June 30, 2024
Schedule of OPEB Expense
Measurement Period Ending June 30: 2024 2023
Components of OPEB Expense:
Service Cost $81,207 $84,350
Interest on the Total OPEB Liability 118,169 121,156
Projected Earnings on OPEB Plan Investments (105,584) (95,074) Employee Contributions 0 0
Administrative Expense 552 460
Changes in Benefit Terms 0 0
Recognition of Deferred Resources Due to:
Differences Between Expected and Actual Experience (102,263) (102,263) Assumptions Changes (113,132) (99,417)
Difference: Expected & Actual Investment Earnings 2,992 21,369 Aggregate OPEB Expense/(Income) ($118,059) ($69,419)
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GASB 75 EXHIBITS
Town of Fairfax
GASB75 Measurement Date June 30, 2024
Interest on the Total OPEB Liability
Amount for
Period
(a)
Portion of
Period
(b)
Interest
Rate
(c)
Interest on
the Total
OPEB
Liability
(a) x (b) x (c)
Beginning Total OPEB Liability $1,957,315 100% 6.00% $117,439 Service Cost $81,207 100% 6.00% 4,872
Benefit Payments ($140,121) 50% 6.00% (4,142)
Total Interest on the TOL $118,169
Projected Earnings on OPEB Plan Investments
Amount for
Period
(a)
Portion of
Period
(b)
Projected
Rate of
Return
(c)
Projected
Earnings
(a) x (b) x (c)
Beginning Plan Fiduciary Net Position 1,686,104 100% 6.00% $101,166 Employer Contributions $290,121 50% 6.00% 8,577
Employee Contributions 0 50% 6.00% 0
Benefit Payments ($140,121) 50% 6.00% (4,142)
Administrative Expense and Other ($552) 50% 6.00% (17)
Total Projected Earnings $105,584
Comparison of Projected and Actual Investment Earnings
Total Projected Earnings $105,584
Actual 185,272
Difference Between Projected and Actual Earnings on Assets ($79,688) 16 of 31
GASB 75 EXHIBITS
Town of Fairfax
GASB75 Measurement Date June 30, 2024
Schedule of Contributions
Fiscal Year Ending June 30: 2025 2024
Actuarially Determined Contribution (ADC) $123,059 $129,401 Contributions to the Trust 150,000 150,000
Pay-go Payments by Employer Unreimbursed by the Trust 84,761 86,946 Active Implicit Rate Subsidy Transferred to OPEB 55,360 55,360 Total OPEB Contributions $290,121 $292,306
Covered-employee payroll $3,748,438 $2,899,863
Total OPEB contributions as a percentage of covered-employee payroll 8% 10%
1. Employers who set a discount rate based on the assumption that assets will cover all future benefit payments under the plan are assumed to make annual contributions equal to the ADC.
Annual contributions that are substantially less than the ADC require additional justification for using a discount rate equal to the long-term expected return on trust assets.
2. Covered-Employee Payroll, as defined by GASB 75, is the total payroll of employees eligible for benefits under the OPEB Plan.
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GASB 75 EXHIBITS
Town of Fairfax
GASB75 Measurement Date June 30, 2024
Deferred Inflows/Outflows of Resources
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Unrecognized Deferred Resources due to:
Differences between expected and actual experience $172,579 $235,303 Changes in assumptions 114,268 554,263
Net difference between projected and actual earnings 17,091 0 Contribution to OPEB plan after measurement date1 292,901 0 Total $596,839 $789,566
1 Determined as of the fiscal year ending June 30, 2025 Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB Expense as follows:
Fiscal Year Ending June 30
Recognized Deferred
Outflows/(Inflows) of
resources
2025 ($187,206)
2026 (183,157)
2027 (101,049)
2028 (504)
2029 (13,712)
Thereafter 0
Total Deferred Resources ($485,628)
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GASB 75 EXHIBITS
Town of Fairfax
GASB75 Measurement Date June 30, 2024
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GASB 75 EXHIBITS
Town of Fairfax
GASB75 Measurement Date June 30, 2024
Schedule of Deferred Inflows/Outflows of Resources
Fiscal Year Initial Initial Years
Amount
Recognized
in FYE
Deferred Balances as of FYE
2025
Established Amount Years Left 2025 Outflows Inflows
Difference Between Expected and Actual Plan Experience
2020 ($238,657) 6.1 0.1 ($39,124) $0 ($3,909)
2021 12,962 6.1 1.1 2,125 2,337 0
2022 (552,481) 6.0 2.0 (92,080) 0 (184,161)
2023 (94,468) 6.0 3.0 (15,745) 0 (47,233)
2024 255,364 6.0 4.0 42,561 170,242 0
2025 0 6.0 5.0 0 0 0
Total ($617,280) ($102,263) $172,579 ($235,303)
Changes in Assumptions
2020 $32,801 6.1 0.1 $5,377 $535 $0
2021 353,019 6.1 1.1 57,872 63,659 0
2022 (695,226) 6.0 2.0 (115,871) 0 (231,742)
2023 100,150 6.0 3.0 16,692 50,074 0
2024 (380,923) 6.0 4.0 (63,487) 0 (253,949)
2025 (82,287) 6.0 5.0 (13,715) 0 (68,572)
Total ($672,466) ($113,132) $114,268 ($554,263)
Net Difference Between Projected and Actual Investment earnings Investments 2021 $25,897 5.0 0.0 $5,178 $0 $0
2022 (273,383) 5.0 1.0 (54,677) 0 (54,675)
2023 348,843 5.0 2.0 69,769 139,536 0
2024 (6,700) 5.0 3.0 (1,340) 0 (4,020)
2025 (79,688) 5.0 4.0 (15,938) 0 (63,750)
Total $14,969 2,992 $139,536 ($122,445)
Sub-Total $17,091
Totals ($212,403) $303,938 ($789,566)
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GASB 75 EXHIBITS
Town of Fairfax
GASB75 Measurement Date June 30, 2024
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GASB 75 EXHIBITS
Town of Fairfax
GASB75 Measurement Date June 30, 2024
Reconciliation of the Net Position
Measurement as of June 30: 2024 2023
Total OPEB Liability (TOL) $1,934,283 $1,957,315
Plan Fiduciary Net Position 2,020,824 1,686,104
Net OPEB Liability (NOL) ($86,541) $271,211
Deferred Inflows of resources (CR):
Differences between expected and actual experience $235,303 $382,252 Assumption Changes 554,263 665,049
Net differences between projected and actual earnings 0 0 Deferred Outflows of resources (DR):
Differences between expected and actual experience 172,579 217,265 Assumption Changes 114,268 194,209
Net differences between projected and actual earnings 17,091 99,771 Est. contributions post measurement date 292,901 292,306 Net Position $106,184 $514,959
Reconciliation of Net Position
Net Position at June 30, 2023 $514,959
Aggregate OPEB Expense/(Income) (118,059)
Total OPEB Contribution (290,121)
Difference in Post-Measurement Contributions (595)
Net Position at June 30, 2024 $106,184
Post-Measurement Date Contributions Breakdown 7/1/2024- 6/30/2025
7/1/2023-
6/30/2024
Direct Contributions to the Trust $150,000 $150,000
Employer Share of Retiree Premiums Unreimbursed by the Trust 89,863 86,946 Implied Subsidy Unreimbursed by the Trust 53,038 55,360 Total Post-Measurement Date Contributions $292,901 $292,306 22 of 31
DATA
Town of Fairfax
GASB75 Measurement Date June 30, 2024
Data
Summary of Demographic Information
The participant data used in the valuation was provided by the Town as of June 30, 2024.
While the participant data was checked for reasonableness, the data was not audited.
The valuation results presented in this report are dependent upon the accuracy of the participant data provided. The table below represents a summary of the basic participant information for the active and retired participants covered under the terms of the Plan. 2024
Actives
Count 35
Average Age 45.2
Average Service 8.6
Retirees & Surviving Spouses
Under age 65 4
Age 65 and over 7
Total 11
Average Age 69.9
Retirees who waived coverage 17
Total Participants 63
Covered Dependents of Retirees
Spouses/Domestic Partners 2
Children 0
Total 2
Total Participants and Covered Dependents 65
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DATA
Town of Fairfax
GASB75 Measurement Date June 30, 2024
Distribution of Participants by Age and Service
Active Participants – Years of Service
Age
Group
Retired
Participants* 0 – 4 5 – 9 10 – 14 15 – 19 20 – 24 25+ Total <25 0 2 0 0 0 0 0 2
25 – 29 0 7 1 0 0 0 0 8
30 – 34 0 4 1 0 0 0 0 5
35 – 39 0 1 0 1 0 0 0 2
40 – 44 0 0 0 0 1 0 0 1
45 – 49 0 0 0 0 0 0 0 0
50 – 54 1 6 0 0 0 0 0 6
55 – 59 2 0 1 1 1 0 1 4
60 – 64 5 0 0 0 1 0 2 3
65 – 69 8 0 0 0 1 0 0 1
>70 12 1 0 1 1 0 0 3
Total 28 21 3 3 5 0 3 35
*Includes retirees, disabled and beneficiaries as well as retirees who have waived coverage. Does not include covered beneficiaries.
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PLAN PROVISIONS SUMMARY
Town of Fairfax
GASB75 Measurement Date June 30, 2024
Plan Provisions Summary
Eligibility and Contribution Requirements
The Plan provides retiree medical to employees who retire at age 50 or later with at least 5 years of service (age 52 with 5 years of service if hired on or after January 1, 2013). The Plan also provides retiree medical for ordinary disability with 5 years of service and line of duty disability with no age or service requirement.
Spouses are covered during the lifetime of retiree and after death of retiree. Upon death of retiree surviving spouse is eligible for PEMHCA minimum only.
The Town subsidizes either the PEMHCA minimum or a percentage of Region 1 Kaiser Permanente single premium (or Kaiser Senior Advantage for Medicare-eligible retirees) or the lowest cost plan. The Town subsidy varies by bargaining unit and years of Town service at retirement as shown below.
Bargaining Unit Hire Date Service Town Subsidy
Management and
Confidential
Before 7/1/2013 5 - 9 PEMHCA Minimum
10 - 14 50% of premium
15 - 19 75% of premium
20+ 100% of premium
On/after 7/1/2013 5+ PEMHCA Minimum
SEIU
Before 7/1/2013 5 – 9 PEMHCA Minimum
10 – 14 25% of premium
15 – 19 50% of premium
20 – 24 75% of premium
25+ 100% of premium
On/after 7/1/2013 5+ PEMHCA Minimum
Police Officer’s
Association
Before 7/1/2013 5 – 9 PEMHCA Minimum
10 – 14 25% of premium
15 – 19 50% of premium
20 – 24 75% of premium
25+ 100% of premium
On/after 7/1/2013 5 – 9 PEMHCA Minimum
10 – 19 25% of premium
20+ 50% of premium
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PLAN PROVISIONS SUMMARY
Town of Fairfax
GASB75 Measurement Date June 30, 2024
Plan Description
Health premium rates:
CalPERS Region 1
2023 Rates 2024 Rates
EE EE+1 Family EE EE+1 Family
Pre-Medicare
Anthem HMO Trad $1,210.71 $2,421.42 $3,147.85 $1,339.70 $2,679.40 $3,483.22 Kaiser $913.74 $1,827.48 $2,375.72 $1,021.41 $2,042.82 $2,655.67 PERS Platinum $1,200.12 $2,400.24 $3,120.31 $1,314.27 $2,628.54 $3,417.10 PORAC $825.00 $1,875.00 $2,300.00 $931.00 $2,117.00 $2,651.00 United Healthcare $1,044.07 $2,088.14 $2,714.58 $1,091.13 $2,182.26 $2,836.94 Post-Medicare
Anthem Select $413.59 $827.18 $1,240.77 $405.83 $811.66 $1,217.49 Kaiser Sr. Advantage $283.25 $566.50 $849.75 $324.79 $649.58 $974.37 PERS Platinum $420.02 $840.04 $1,260.06 $448.15 $896.30 $1,344.45 PORAC $465.00 $1,030.00 $1,395.00 $465.00 $1,030.00 $1,395.00 United HC Edge $357.70 $715.40 $1,073.10 $366.01 $732.02 $1,098.03 PEMHCA Minimum $151.00 $157.00
Plan Provision Changes
There have been no plan amendments since the last measurement date. 26 of 31
ACTUARIAL ASSUMPTIONS, METHODS & CONSIDERATIONS
Town of Fairfax
GASB75 Measurement Date June 30, 2024
Actuarial Assumptions, Methods & Considerations
Actuarial Assumptions
Discount Rate 6.40% on 6/30/2024,
6.00% on 6/30/2023
Net Investment Return 6.00%, based on the CERBT Strategy 1 investment policy
Inflation 2.50% annual inflation.
Payroll increases 2.80% annual increases.
Administrative Expenses The administrative expense was $552 for the measurement period ending June 30, 2024.
Health Care Trend Year Increase in Premium Rates
Beginning Pre-65 Post-65
2024 6.50% 5.75%
2025 6.20% 5.50%
2026 5.60% 5.40%
2027 5.46% 5.30%
…. … …
2075+ 3.94% 3.94%
PEMHCA Minimum All years 3.50%
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ACTUARIAL ASSUMPTIONS, METHODS & CONSIDERATIONS
Town of Fairfax
GASB75 Measurement Date June 30, 2024
Average Per Capita Claims Cost
(Baseline Cost)
$11,196 Pre 65 Active Members
$10,968 Pre 65 Retired Members
$3,444 Post 65 Active Members
$4,296 Post 65 Retired Members
Medicare Coverage All future retirees will be eligible for Medicare when they reach age 65.
Morbidity Factors CalPERS 2021 Experience Study
Population for Curving CalPERS 2021 Experience Study
Age-Weighted Monthly Claims Active Employees Retired Employees Age Male Female Male Female
45 $7,817 $9,854 $7,654 $9,648
50 $10,455 $11,460 $10,236 $11,221
55 $13,675 $13,287 $13,389 $13,009
60 $17,295 $15,606 $16,933 $15,279
64 $19,237 $16,833
3 $18,834 $16,481
Health Plan Participation 99% of eligible participants that will receive 100% of premiums will participate,
95% of eligible participants with 75% of premium
coverage will participant and
90% of those with 50% or less of premium coverage
will participate in the medical.
5% of existing retirees who currently waived coverage are assumed to re-elect coverage with the Town in the
coming year
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ACTUARIAL ASSUMPTIONS, METHODS & CONSIDERATIONS
Town of Fairfax
GASB75 Measurement Date June 30, 2024
Mortality* Pre-Retirement: CalPERS 2021 Mortality pre-retirement Post-Retirement: CalPERS 2021 Mortality post-retirement Disability* CalPERS 2021 Non-Industrial
Retirement CalPERS 2021 Experience Study
Withdrawal CalPERS 2021 Experience Study for Miscellaneous Percent Married 25% of eligible retirees will cover their spouse. Male spouses are 3 years older than female spouses
* Source: NCG has not performed an experience study to select these assumptions.
NCG has not observed materially consistent gains or consistent losses associated with these assumptions.
Assumption Changes
The discount rate has been updated from 6.00% as of June 30, 2023 to 6.40% as of June 30, 2024.
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ACTUARIAL ASSUMPTIONS, METHODS & CONSIDERATIONS
Town of Fairfax
GASB75 Measurement Date June 30, 2024
Actuarial Methods
Actuarial Cost Method Entry Age Normal
An actuarial cost method under which the Actuarial Present Value of the Projected Benefits of each individual included in the valuation is allocated on a level basis over the earnings or service of the individual between entry age and assumed exit age(s). The portion of this Actuarial Present Value allocated to a valuation year is called the Normal Cost.
Amortization Methodology Straight-line amortization over the Average Future Working Lifetime for assumption changes and experience
gains/losses. Asset gains/losses are amortized over 5 years.
Financial and Census Data The plan sponsor provided the participant data, financial information and plan descriptions used in this valuation. We reviewed the data for reasonableness but have not
independently audited the data. We have no reason to believe the data is incomplete and/or inaccurate and we are unaware of any additional information that is essential to the
preparation of the actuarial valuation.
Plan Fiduciary Net Position Market value of assets as of the measurement date Measurement Date June 30, 2024
Valuation Date June 30, 2023
Funding Policy The Town intends to make annual contributions of $150,000 to the trust while continuing to pay explicit benefit payments plus implicit subsidies outside the trust.
Valuation Model Results in this report were calculated using ProVal actuarial valuation software in accordance with its intended purpose and have not identified any material inconsistencies in ProVal’s assumptions nor outputs that would affect this valuation. ProVal was developed in 1994 and maintained by WinTech, a company that provides valuation and projection software for both pension and other postemployment benefit plans.
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KEY TERMS
Town of Fairfax
GASB75 Measurement Date June 30, 2024
Key Terms
Actuarial Accrued Liability
(AAL)
The portion of the actuarial present value of
projected benefit payments that is attributed to
past service as defined by the Actuarial Cost
Method.
Actuarially Determined Contribution
(ADC)
The annual contribution amount required to fund
the plan based on the Actuarial Cost Method,
calculated to ensure sufficient assets are set
aside during the working careers of participants
to fully pay all future benefits after participants
retire.
Covered Payroll Aggregate annual compensation paid (or
expected to be paid) to active employees
covered by an OPEB plan.
Implicit Subsidy Subsidy generated by blending active and preMedicare retirees to develop a single flat premium for both groups, with active employees
subsidizing the premiums for retirees.
Normal Cost (or Service Cost) The portion of the PVB attributed to employee service during the current fiscal year.
Other Postemployment Benefits (OPEB) Post-employment benefits (excluding termination and severance benefits) not covered by a
pension plan
Present Value of Future Benefits
(PVB)
The value, as of the valuation date, of the
projected benefits payable to all members for
their accrued service and their expected future
service, discounted to reflect the time value of
money and adjusted for the probabilities of
retirement, withdrawal, death and disability
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