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Home My WebLink About04. CCCERA 5-year projection of employer rates and changes based on 2014 valuation40 100 Montgomery Street Suite 500 San Francisco, CA 94104 -4308 T 415.263.8260 www.segalco.com September 2, 2015 Mr. Kurt Schneider Deputy Chief Executive Officer Contra Costa County Employees' Retirement Association 1355 Willow Way, Suite 221 Concord, CA 94520 John W. Monroe, ASA, MAAA, EA Vice President & Actuary jmonroe@segalco.com Re: Contra Costa County Employees' Retirement Association Reconciliations of Employer Contribution Rate and Unfunded Actuarial Accrued Liability Reconciliation by Cost Group & Unfunded Actuarial Accrued Liability by Employers Based on the December 31, 2014 Actuarial Valuation Dear Kurt: As requested, we are providing the following information regarding the December 31, 2014 valuation. Exhibit A — A reconciliation of employer contribution rate changes separately for each of CCCERA's cost groups. Exhibit B — A reconciliation of the Unfunded Actuarial Accrued Liability (UAAL) separately for each of CCCERA's cost groups. Exhibit C — Allocation of the UAAL for each participating employer. RECONCILIATION OF EMPLOYER CONTRIBUTION RATE CHANGES FOR EACH COST GROUP Exhibit A details the changes in the recommended employer contribution rates for each cost group from the December 31, 2013 valuation to the December 31, 2014 valuation. OBSERVATIONS > The average employer rate decreased from 43.58% of payroll as of December 31, 2013 to 40.06% of payroll as of December 31, 2014. As discussed in our December 31, 2014 actuarial valuation report, this decrease is due to an investment return on actuarial value (i.e. after smoothing) greater than the 7.25% assumed rate, lower than expected individual salary increases, lower than expected COLA increases for retirees and beneficiaries, and other experience gains. Lower than expected individual salary increases decreased the average employer contribution rate by 0.46% of payroll and the lower than expected COLA increases for retirees and beneficiaries decreased the average employer contribution rate by 0.27 %. The investment gain decreased the average employer contribution rate by 2.59% of payroll. The investment gain was allocated to each cost group in proportion to the assets for each cost group. The estimated impact of Benefits, Compensation and HR Consulting. Member of The Segal Group. Offices throughoutthe United States and Canada Mr. Kurt Schneider September 2, 2015 Page 2 the investment gain varies by cost group with the Safety cost groups experiencing larger rate decreases. > Note that there were also other various changes shown in Exhibit A including the 18 -month delay in implementation of the contribution rates calculated in the December 31, 2013 valuation, the effect of actual versus expected total payroll growth and the effect of net other experience. RECONCILIATION OF UAAL FOR EACH COST GROUP Exhibit B presents the changes in the UAAL by cost group from the December 31, 2013 valuation to the December 31, 2014 valuation. Note that we have combined the results for Cost Group #1 and #2 and Cost Group #7 and #9 as the UAAL for these cost groups is still pooled. Exhibit B shows that the decrease in UAAL is primarily due to as investment return on actuarial value (i.e. after smoothing) greater than the 7.25% assumed rate, lower than expected individual salary increases and lower than expected COLA increases for retirees and beneficiaries. The investment gain was again generally allocated amongst the cost groups based on the valuation value of assets for each cost group. All other elements of the changes in UAAI, were determined based on the data specific to each separate cost group. ALLOCATION OF UAAL BY EMPLOYER Exhibit C provides an allocation of the UAAL as of December 31, 2014 by employer. Since the depooling action taken by the Board effective December 31, 2009, employers that are now in their own cost group have their UAAL determined separately in the valuation. For employers that do not have their own cost group, there is no UAAL maintained on an employer - by- employer basis in the valuation. In those cases, we develop contributions to fund the UAAL strictly according to projected payroll for each employer. We then use those UAAL contributions to develop a UAAL for each participating employer. Note that the UAAL we calculate for each employer is not necessarily the liability that would be allocated to that employer in the event of a plan termination by that employer. Based on the above method, we have prepared the breakdown of the UAAL for each participating employer as shown in the enclosed Exhibit C. We also show the projected payroll for each participating employer that was used in the detennination of the UAAL. All results shown in this letter are based on the December 31, 2014 actuarial valuation including the participant data and actuarial assumptions on which that valuation was based. That valuation and these calculations were completed under the supervision of John Monroe, ASA, MAAA, Enrolled Actuary. The undersigned is a member of the American Academy of Actuaries and meets the Qualification Standards of the American Academy of Actuaries to render the actuarial opinion herein. 5380722v 1 /05337.002 Mr. Kurt Schneider September 2, 2015 Page 3 Please let us know if you have any questions. Sincerely, pv�' owe--- John Moiu-oe AT /hy Enclosures — W1711.,I nuMw nn'i Reconciliation of Recommended Employer Contribution from December 31, 2013 to December 31, 2014 Valuation Cost Group #i General County and Small Districts EXHIBIT A Cost Group #2 Cost Group #3 Cost Group #4 Cost Group #5 Cost Group #6 General County Central Contra Contra Costa Contra Costa Small Districts and Small Costa Sanitary Housing County Fire Non - enhanced Districts District Authority Protection Recommended Employer Contribution Rate in December 31, 2013 Valuation 35.48% 32.28% 60.51% 43.65% 35.04% 29.13% Effect of investment (gain)/lossM - 1.94 ° /a - 1.94% -2.36% - 2.33% -3.21% -1.81% Effect of additional UAAL contributions from Sanitary District 0.00% 0.00% -1.22% 0.00% 0.00% 0.00% Effect of actual contributions smaller /(larger) than expected contributions due to delay in implementation of contribution 0.06% 0.06% -0.30% 0.53% -0.03% 0.11% rates calculated in 12131/2013 valuation Effect of (lower) /higher than expected individual salary increases -0.40% - 0.40% -0.08% - 0.40% -0.80% -0.67% Effect of amortizing prior year's UAAL over a smalled(larger) than expected projected total payroll 0.10% 0.10% 0.26% 0.61% 1.37% - 0.09% Effect of (lower)/higher than expected COLA increases for retirees and beneficiaries -0.18% -0.18% -0.28% -0.19% -0.34% -0.13% Effect of net other experience (gains)ilosses(Z) 0.01% -0.52% - 0.32% - 0.22% -0.50% 0.18% Effect of changes in actuarial assumptions (3) 0,00% 0.00% 0.00% 0.00% 0.00% 0.00% Effect of including leave cashout assumptions in legacy plan member rates 122i -0.04% - 0.50% 0 UN 0.06% -0.10% Total Change o _2 92% :4.80% -f -n - 3.45% 2 5 1 Recommended Employer Contribution Rate in December 31, 2014 Valuation 33.14% 29.36% 55.71% 41.76% 31.59% 26.62% Note: These rates do not include any employer subvention of member contributions, or member subvention of employer contributions. (l) Return on the valuation value of assets of 11.40% was greater than the 7.25% assumed in the 2013 valuation. �2) Other differences in actual versus expected experience including (but not limited to) disability, withdrawal, retirement and leave cashout experience. (3) The Board approved changes in leave cashout assumption for Cost Group 49. 5380722vl/05337.002 1 SEGAL CONSULTILNG EXHIBIT A Reconciliation of Recommended Employer Contribution from December 31, 2013 to December 31, 2014 Valuation Cost Group 47 Cost Group #8 Cost Group #9 Cost Group #10 Cost Group 911 Cost Group #1.2 Total Average Safety County Contra Costa Safety County Moragn- Orinda San Ramon Rodeo - Hercules Recommended and East Fire Fire District Valley Fire Fire Protection Rate Protection District District Districts ikon- enhanced Recommended Employer Contribution Rate in December 31, 2013 Valuation 80.27% 82.98% 74.50% 70.45% 88.33% 110.23% 43.58% Effect of investment (gain) /loss(') -4.68% -6.81% -4.68% -5.37% - 4.56% -3.02% -2.59% Effect of additional UAAL contributions from Sanitary District 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% -0.05% Effect of actual contributions smaller /(larger) than expected contributions due to delay in implementation of contribution rates calculated in 0.27% 1.05% 0.27% 0.82% 0.63% 4.09% 0.15% 12/31/2013 valuation Effect of (lower)/higher than expected individual salary increases - 0.22% -1.50% -0.22% -1.83% -1.81% 1.31% -0.46% Effect of amortizing prior year's UAAL over a smaller /(larger) than expected projected total payroll 3.44% 3.62% 3.44% 4.92% 1.81% /0 -20.92% 0.33% Effect of (lower) /higher than expected COLA increases for retirees and beneficiaries -0.54% -0.77% -0.54% -0.62% -0.68% -0.43% - 0.27% Effect of net other experience (gains) /lossesf �1 -0.74% 0.44% -2.08% 1.35% 0.42% -1.77% -0.56% Effect of changes in actuarial assumptionP) 0.00% 0.00% -0.06% 0.00% 0.00% 0.00% 0.00% Effect of including leave cashout assumptions in legacy plan member rates -0-03% - 0.08% 0.00% -0.06% - 0.35 °l0 -0.22% -0.07% Total Change -2.5D% -4 5°0 - % - °/ - 4.54% - 2D.960 -15?0 Recommended Employer Contribution Rate in 77.77% 78.93% 70.63% 69.66% 83.79% 89.27% 40.06% December 31, 2014 Valuation Note. These rates do not include any employer subvention of member contributions, or member subvention ofemployer contributions. (') Return on the valuation value of assets of 11.40% was greater than the 7.15% assumed in the 2013 valuation. (2) Other differences in actual versus expected experience including (but not limited to) disability, withdrawal, retirement and leave cashout experience. (31 The Board approved changes in leave cashout assumption for Cost Group 99. 5380722vl/05337.002 2 SEGAL CONSULTILNG EXHIBIT B Reconciliation of Unfunded Actuarial Accrued Liability from December 31, 2013 to December 31, 2014 Valuation Cost Group #1 and 02 Cost Group #3 Cost Group #4 Cost Group #5 Cost Group #6 General County and Central Contra Contra Costa Contra Costa Small Districts Small Costa Sanitary Housing County Fire Non- enhanced Districts District Authority Protection (1,664,444) (336,891) 4. Interest (whole year on (1) plus half year on (2) + (3)) District 1. Unfunded actuarial accrued liability at beginning of year $893,502,723 $120,792,362 $12,590,949 $8,657,894 $785,080 2. Gross Normal cost at middle of year 131,419,354 7,954,722 I.409,066 971,891 234,403 3. Expected employer and member contributions (221,049,130) (19,791,800) (2,783,497) (1,664,444) (336,891) 4. Interest (whole year on (1) plus half year on (2) + (3)) 61,529,867 8,328,352 863,021 602.592 53,203 5. Expected unfunded actuarial accrued liability at end of year 865.4Q2.814 1 j2.283.636 1 7 .567.933 735.795 6. Actuarial (gain) /loss due to all changes: (a) Investment return (137,163,845) (8,952,320) (1,615,096) (1,544,779) (202,611) (b) Gain from additional UAAL contributions by Q 4 (4,644,628) 0 0 0 Sanitary District (c) Actual contributions less/(more) than expected 3,927,648 (1,123,495) 368,016 (12,454) 12,537 (d) (Lower) /higher than expected individual salary increases (27,973,998) (289,346) (278,873) (383,658) (75,604) (e) (Lower)/higher than expected COLA increases for retirees and beneficiaries (12,490,055) (1,046,493) (129,390) (163,150) (14,226) (f) Other experience (gain) /loss {') 1,600,586 (272,166) 297,674 (129,811) 89,829 (g) Changes in actuarial assumptions 0 0 0 0 0 (h) Total changes $(172.099.664) $L16,328,448) $(1.357,6691 S(2.233.852) $(19Q.0 75) 7. Unfunded actuarial accrued liability at end of year $693,303,150 $100,955,188 $10,721,870 $6,334,08I $545,720 Note: Results may not add due to rounding. iU Other differences in actual versus expected experience including (but not limited to) disability, withdrawal, retirement and leave cashout experience. 5380722v 110533 7.002 -3 - SEGAL CONSULTING EXHIBIT B Reconciliation of Unfunded Actuarial Accrued Liability from December 31, 2013 to December 31, 2014 Valuation Cost Group #7 Cost Group 48 Cost Group 410 Cost Group #11 Cost Group #12 Total and #9 Contra Costa Moraga - Orinda San Ramon Rodeo - Hercules Safety County and East Fire Fire District Valley Fire Fire Protection Protection District District Districts 204,123,748 Non- enhanced 1. Unfunded actuarial accrued liability at beginning of year $438,250,383 $202,279,355 $40,103,662 $91,642,651 $15,075,916 $1,823,680,975 2. Gross Normal cost at middle ofvear 36,292,865 14,299,197 3,245,998 7,542,800 753,452 204,123,748 3. Expected employer and member contributions (77,457,670) (31,035,513) (6,353,600) (17,452,581) (2,417,642) (380,342,768) 4. Interest (whole year on (1) plus half year on (2) + (3)) 30.280,929 14,058,562 2,794.865 6,284,863 1,032,677 125,828,931 5. Expected unfunded actuarial accrued liability at end of year 427366.507_ 199,601,601 JLQ 17.73, 14,444,4Q3 1,773,29U.82866 6. Actuarial (gain)/loss due to all changes: (a) Investment return (50,565,524) (28,156,324) (5,091,474) (10,267,870) (902,739) (244,462,582) (b) Gain from additional UAAL contributions by 0 0 0 0 0 (4,644,628) Sanitary District (c) Actual contributions less /(more) than expected 2,868,643 4,337,497 777,230 1,419,061 1,224,576 13,799,259 (d) (Lower)/higher than expected individual salary increases (2,346,194) (6,196,869) (1,736,728) (4,085,132) 390,571 (42,975,831) (e) (Lower)/higher than expected COLA increases for retirees and beneficiaries (5,799,891) (3,186,258) (588,724) (1,537;220) (128,853) (25,084,260) (f) Other experience (gain) /loss(`) (7,511,992) 3,677,993 1,693,072 627,404 (984) 71,605 (g) Changes in actuarial assumptions (52,337) 0 0 0 0 (52,337) (h) 'Total changes $(63,407,295) $(29.523.961) X946.624) $(13,843,757) 5 2 571 $(303.348.7741 7. Unfunded actuarial accrued liability at end of year $363,959,212 $170,077,640 $34,844,301 $74,173,976 $1.5,026,974 $1,469,942,112 Note: Results m v not add due to rounding. tr' Other differences in actual versus expected experience including (but not limited to) disability, withdrawal, retirement and leave cashout experience 5380722v1/05337.002 - 4 - SEGAL CONSULTING EXHIBIT C Contra Costa County Employees' Retirement Association UAAL Breakdown 5380722v1/05337.002 - 5 - Unfunded Employer Actuarial Accrued Liability Projected UAAL Payroll County $1,003,749,000 $568,226,350 Superior Court 29,738,000 22,697,316 Districts: Bethel Island Municipal Improvement District 113,000 56,122 Byron, Brentwood, Knightsen Union Cemetery District 136,000 206,642 Central Contra Costa Sanitary District 100,955,000 28,098,047 First Five - Contra Costa Children & Families Commission 2,326,000 I,869,165 Contra Costa County Employees' Retirement Association 7,184,000 3,570,291 Contra Costa Fire Protection District 151,686,000 31,362,524 Contra Costa Housing Authority 10,722,000 5,121,371 Contra Costa Mosquito and Vector Control District 5,900,000 2,932,098 East Contra Costa Fire Protection District 24,837,000 2,848,482 In -Home Supportive Services Authority 1,250,000 621,066 Local Agency Formation Commission 430,000 213,934 Moraga- Orinda Fire Protection District 35,330,000 7,532,622 Rodeo Sanitary District 410,000 623,087 Rodeo - Hercules Fire Protection District 15,027,000 2,214,817 San Ramon Valley Fire Protection District 80,149,000 19,637,903 Total: $1,469,942,000 $697,831,837 5380722v1/05337.002 - 5 - 100 Montgomery Street Suite 500 San Francisco, CA 94104 -4308 T415.263.8200 www.segalco.com September 2, 2015 Mr. Kurt Schneider Deputy Chief Executive Officer Contra Costa County Employees' Retirement Association 1355 Willow Way, Suite 221 Concord, CA 94520 Meeting Date 09109115 Agenda Item #17 John W. Monroe, ASA, MAAA Vice President & Actuary jmonroe @segalco.com Re: Contra Costa County Employees' Retirement Association Five -Year Projection of Employer Contribution Rate Changes Dear Kurt: As requested, we have updated our five -year projection of estimated employer contribution rate changes for CCCERA. This projection is derived from the December 31, 2014 actuarial valuation results. Key assumptions and methods are detailed below. It is important to understand that these results are entirely dependent on those assumptions. Actual results as determined in future actuarial valuations will differ from these results. In particular, actual investment returns and actual salary levels different than assumed can have a significant impact on future contribution rates. Results The estimated contribution rate changes shown on the next page apply to the recommended average employer contribution rate. For purposes of this projection, the rate changes that are reflected include the asset gains and losses that are funded as a level percentage of the Association's total active payroll base. The changes in contribution rate are due to: (1) deferred gains and losses from the actuarial asset smoothing methodology; (2) gains due to investment income earned on the difference between the Market Value of Assets (MVA) and Actuarial Value of Assets (AVA) (and losses when the opposite occurs); and (3) contribution gains which occur from delaying the implementation of new rates until 18 months after the actuarial valuation date. The following table provides the year -to -year rate changes from each of the above components and the cumulative rate change over the five -year projection period. To obtain the estimated average employer contribution rate at each successive valuation date, these cumulative rate changes should be added to the rates developed from the December 31, 2014 valuation. These rate changes become effective 18 months following the actuarial valuation date shown in the table. Benefits, Compensation and HR Consulting. Member of The Segal Group. Offices throughout the United States and Canada Mr. Kurt Schneider September 2, 2015 Page 2 The rate changes shown below represent the average rate for the aggregate plan. Rate Change Component Valuation Date (12/31) 2015 2016 2017 2018 2019 (1) Deferred (Gains) /Losses - 1.26% -0.92% -0.92% -0.29% 0.10% (2) (Gain)/Loss of From February 23, 2015 Letter - 2.28% -4.32% -5.73% - 7.01% Investment Income on -0.25% -0.15% -0.08% -0.01% 0.01% Difference Between through 12/31/2014, Changes in MVA and AVA Actuarial Assumptions and - 3.52 %1 -5.54% - 6.89% -8.06% (3) 18 -Month Rate Delay -0.51% -0.28% -0.17% -0.14% -0.08% Incremental Rate Change - 2.02% -1.35% -1.17% -0.44% 0.03% Cumulative Rate Change - 2.02% -3.37% -4.54% - 4.98% -4.95% The difference between these cumulative rate changes and those shown in our February 23, 2015 letter (i.e., previous five -year projection) are as follows: These differences are mainly due to the inclusion of actual experience from the December 31, 2014 valuation instead of projected experience that was part of the previous projection. The average employer contribution rate as of the December 31, 2014 Actuarial Valuation is 40.06 %, and based on the cumulative rate changes above is projected to progress as shown below. Valuation Date 12/31 2014 2015 2016 2017 2018 Average Employer Cumulative Rate Change Contribution Rate From February 23, 2015 Letter - 2.28% -4.32% -5.73% - 7.01% - 7.57% Reflecting Actual Experience through 12/31/2014, Changes in Actuarial Assumptions and - 3.52 %1 -5.54% - 6.89% -8.06% -8.50% Changes in Actuarial Method Difference -1.24% -1.22% f - 1.160/, -1.05% These differences are mainly due to the inclusion of actual experience from the December 31, 2014 valuation instead of projected experience that was part of the previous projection. The average employer contribution rate as of the December 31, 2014 Actuarial Valuation is 40.06 %, and based on the cumulative rate changes above is projected to progress as shown below. I Actual change in the average employer contribution rate as shown on page 32 of the December 31, 2014 valuation. 5380670vl/05337.002 Valuation Date 12/31 2015 2016 2017 2018 2019 Average Employer Contribution Rate 38.04% 36.69% 35.52% 35.08% 35.11% I Actual change in the average employer contribution rate as shown on page 32 of the December 31, 2014 valuation. 5380670vl/05337.002 Mr. Kurt Schneider September 2, 2015 Page 3 The rate change for an individual cost group or employer will vary depending primarily on the size of that group's assets and liabilities relative to its payroll. The ratio of the group's assets to payroll is sometimes referred to as the asset volatility index (AVI). A higher AVI results in more volatile contributions and can result from the following factors: > More generous benefits > More retirees > Older workforce > Shorter careers > Issuance of Pension Obligation Bonds (POBs) The attached exhibit shows the AVI for CCCERA's cost groups along with the "relative AVI" which is the AVI for that specific cost group divided by the average AVI for the aggregate plan. Using these ratios we have estimated the rate change due to these generally investment related net gains for each individual cost group by multiplying the rate changes shown above for the aggregate plan by the relative AVI for each cost group. These estimated rate changes for each cost group are shown in the attached exhibit. Note that because we have estimated the allocation of the rate changes across the cost groups, the actual rate changes by group may differ from those shown in the exhibit, even if the plan -wide average rate changes are close to those shown above. Key Assumptions and Methods The projection is based upon the following assumptions and methods: > December 31, 2014 non - economic assumptions remain unchanged. > December 31, 2014 retirement benefit formulas remain unchanged. > December 31, 2014 1937 Act statutes remain unchanged. > UAAL amortization method remains unchanged. > December 31, 2014 economic assumptions remain unchanged, including the 7.25% investment earnings assumption. > We have assumed that returns of 7.25% are actually earned on a market value basis for each of the next four years after 2014. > Active payroll grows at 4.00% per annum. > Deferred investment gains and losses are recognized per the asset smoothing schedule prepared by the Association as of December 31, 2014. They are funded as a level percentage of the Association's total active payroll base. 53806700105337.002 Mr. Kurt Schneider September 2, 2015 Page 4 > Deferred investment gains are all applied directly to reduce the UAAL. Note that this assumption may not be entirely consistent with the details of the Board's Interest Crediting and Excess Earnings Policy. > The AVI used for these projections is based on the December 31, 2014 Actuarial Valuation and is assumed to stay constant during the projection period. > All other actuarial assumptions used in the December 31, 2014 actuarial valuation are realized. > No changes are made to actuarial methodologies, such as adjusting for the contribution rate delay in advance. > The projections do not reflect any changes in the employer contribution rates that could result due to future changes in the demographics of CCCERA's active members or decreases in the employer contribution rates that might result from new hires going into the PEPRA tiers. Finally, we emphasize that projections, by their nature, are not a guarantee of future results. The modeling projections are intended to serve as illustrations of future financial outcomes that are based on the information available to us at the time the modeling is undertaken and completed, and the agreed -upon assumptions and methodologies described herein. Emerging results may differ significantly if the actual experience proves to be different from these assumptions or if alternative methodologies are used. Actual experience may differ due to such variables as demographic experience, the economy, stock market performance and the regulatory environment. Unless otherwise noted, all of the above calculations are based on the December 31, 2014 actuarial valuation results including the participant data and actuarial assumptions on which that valuation was based. That valuation and these projections were completed under the supervision of John Monroe, ASA, MAAA, Enrolled Actuary. The undersigned is a member of the American Academy of Actuaries and meets the Qualification Standards of the American Academy of Actuaries to render the actuarial opinion herein. Please let us know if you have any questions. Sincerely, John Monroe AW /hy Enclosure S ,Aana7n..i mc117 nn,) Exhibit Contra Costa County Employees' Retirement Association Estimated Employer Rate Change by Cost Group (CG) Based on December 31, 2014 Valuation * Excludes Post Retirement Death Benefit reserve. These rates do not include any employer subvention of member contributions or any member subvention of employer contributions. 5380670v1/05337.002 SEGAL CONSULTING CG #1 & CG #2 Combined CG#3 CG#4 CG #5 CG #6 Enhanced Enhanced Enhanced Enhanced Non - Enhanced General CCC Sanitary District Housing Authority CCCFPD District Market Value of Assets (MVA)* $3,868,021,019 5252,455,464 $45,545,717 $43,562,772 $5,713,632 Projected Payroll for 2015 $523,821,353 $28,098,047 55,121,371 53,559,597 5829,729 Asset Volatility Index (AVQ =MVA/Payroll 7.38 8.98 8.89 12.24 6.89 Relative Volatility Index (AVI) = CG AV[ / Total Plan AV) 0.75 0.91 0.90 1.24 0.70 Estimated Incremental Rate Change as of 12/31!2015 -1151% -1.84% -1.82% -2150% -1.41% Estimated Incremental Rate Change as of 12/31/2016 -1.01% -1.23% -1.22% -1.67% -0.94% Estimated Incremental Rate Change as of 12/31/2017 -0.87% -1.06% -1.05% -1.45% - 0.82"/, Estimated Incremental Rate Change as of 12/31/2018 -0.33% -0.40% - 0.40% -0.55% -0.31 Estimated Incremental Rate Change as of 12/31/2019 0.02% 0.03 % 0.03% 0.04% 0.02% Cumulative Rate Change as of 12/31/2015 -1.51% -1.84% -1.92% -2.50% -1.41% Cumulative Rate Change as of 12/31/2016 -2.52% 3.07% -3.04% -4.17% -2.35% Cumulative Rate Change as of 12/312017 -3.39% -4.13% 4.09% -5.62% -3.17% Cumulative Rate Change as of 12/312018 3.72% 4.S3% 4.49•/ -6.17% -3.48% Cumulative Rate Change as of 12!3112019 -3.70% 4.50% -4.46% -6.13% -3.46% * Excludes Post Retirement Death Benefit reserve. These rates do not include any employer subvention of member contributions or any member subvention of employer contributions. 5380670v1/05337.002 SEGAL CONSULTING CG #7 & CG#9 Combined CG #8 CG #10 CG#11 CG #12 Enhanced Enhanced Enhanced Enhanced Non- Enhanced County CCFPD/East CCCFP Mora a- Orinda FD San Ramon Valley FD Rodeo-Hercules FPD Market Value of Assets (MVA)* $1,425,947,997 $794,008,463 $143,579,601 $289,553,978 525,457,256 Projected Payroll for 2015 $79,906,640 $30,5%,130 57,015,592 516,668,561 $2,214,817 Asset Volatility Index (AVI) = MVA/Payroll 11.85 25.95 20.47 17.37 11.49 Relative Volatility Index (AVI) =CG AVI /Total PlanAVl 1.81 2.63 2.07 1.76 1.16 Estimated Incremental Rate Change as of 12/312015 -3.65% -5.31% - 4.18% -3.55% -235% Estimated Incremental Rate Change as of 111312016 -2.44% -3.551/6 -2.80% -2.37% -1.57% Estimated Incremental Rate Change as of 1201/2017 -2.11% -3.07% -2.42% -2.06% -1.36% Estimated Incremental Rate Change as of 120112018 - 0.79% -1.16% -0.9111. -0.77% -0.51% Estimated Incremental Rate Cha a as of 12/3112019 0.05% 0.08% 0.06% 0.05% 0.03% Cumulative Rate Change as of 12/31/2015 3.65% -5.31% -4.18% -3.55% - 2.35% Cumulative Rate Change as of 12/312016 - 6.09 % - 8.86 % -6S8% -5.92% -3.92% Cumulative Rate Change as of 12/31/2017 -8.20% -11-93% -9A0 % - 7.98% - 5.28"/ Cumulative Rate Change as of 12/3120(8 _8.99% - 13.09% -10.31% -3.75% -5.79% Cumulative Rate Change as of 12/3120/9 -9.94% _13.01.1 40625% 430% * Excludes Post Retirement Death Benefit reserve. These rates do not include any employer subvention of member contributions or any member subvention of employer contributions. 5380670v1/05337.002 SEGAL CONSULTING