HomeMy WebLinkAbout05.a. Receive Other Post Employment Benefit (OPEB) actuarial valuation as of July 1, 2020 Page 1 of 46 Item 5.a. ,orVIOIN SAN April 27, 2021 TO: FINANCE COMMITTEE FROM: KEVIN MIZUNO, FINANCE MANAGER REVIEWED BY: TEJI O'MALLEY HUMAN RESOURCES & ORGANIZATIONAL DEVELOPMENT MANAGER PHILIP LEIBER, DIRECTOR OF FINANCE AND ADMINISTRATION ROGER S. BAILEY GENERAL MANAGER SUBJECT: RECEIVE OTHER POST EMPLOYMENT BENEFIT (OPEB)ACTUARIAL VALUATION AS OF JULY 1, 2020 On April 7, 2021, Central San's OPEB actuary, Bartel Associates, LLC (Bartel), issued their July 1, 2020 Actuarial Valuation on the OPEB Plan funding forthe upcoming fiscal years (FY) ending June 30, 2022 (FY2021-22) and June 30, 2023 (FY2022-23). Central San employs the services an independent qualified consultant to prepare this "funding" actuarial valuation every two years, which is necessary in assessing the current and projected OPEB Plan funded status as well as determining the Actuarially Determined Contribution (ADC) requirements for the next two budget years. Differences Between Report Types Similar to the actuarial reports obtained from the Contra Costa County Employees' Retirement Association (CCCERA)for Central San's pension plan, two types of actuarial reports are also issued for the OPEB Plan. While the attached "funding" actuarial valuation is obtained every two years and also assesses the OPEB Plan's funded position, it is largely a forward looking document that helps determine minimum future Plan contribution requirements necessary to ensure the Plan remains sufficiently funded and gradually pays down the unfunded actuarial accrued liability (UAAL). In contrast, Central San also obtains an annual "reporting" actuarial valuation pursuant to Government Accounting Standards Board Statement 75 (GASBS 75)that is necessary for compilation of the independently audited annual financial statements. The annual GASBS 75 Report"reporting" valuation is largely a backwards looking document, providing the UAAL on a market basis and eliminates the use of smoothing on investment gains and losses, as well as other differences. OPEB Plan's Funded Status The attached OPEB valuation report demonstrates that Central San's OPEB Plan is healthy and has been improving in funded status since the transition to CalPERS Healthcare effective July 1, 2019. The valuation shows that the Plan's funded position on a valuation basis is projected to increase by 3.7% to a funded status of 85.7% as of July 1, 2021. The ADC amounts for April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 167 of 217 Page 2 of 46 FY 2021-22 and FY 2022-23 are projected to be $3.324 million and $3.331 million respectively. With a closed amortization period of fourteen years, the OPEB Plan's UAAL is projected to be paid off in FY 2034-35. This differs from the eighteen year rolling amortization period utilized in the CCCERA pension plan actuarial report, which has an average of about 7 years remaining overall. The actuarial valuation also reported a UAAL of$15.238 million as of July 1, 2020, which is a sharp decline from a UAAL of $48.779 million reported in the last actuarial valuation dated July 1, 2018, reflecting the Plan prior to the transition to CalPERS Healthcare. FY 2021-22 Budget Impacts Given the relatively healthy status of Central San's OPEB Plan following the transition to CalPERS Healthcare along with favorable investment returns over recent years, the OPEB Plan's FY 2021-22 estimated cost of retiree healthcare premiums, referred to as "PayGo" costs in the actuarial valuation, are projected to significantly exceed the ADC. Attachment 2 provides a chart illustrating the historical trend of the ADC compared to PayGo costs using actual prior fiscal year retiree healthcare premium costs. As indicated by the chart, following the transition to CaIPERS Healthcare on July 1, 2019, projected retiree PayGo costs started to exceed the ADC. In prior years, when projected PayGo costs fell short of the ADC, the practice was to make a contribution to the OPEB trust equal to the difference to ensure the OPEB Plan continues to receive sufficient funding. Looking towards FY 2021-22, PayGo costs are projected to exceed the ADC by approximately$1.036 million. Given this significant difference, and as the ADC estimate for FY 2022-23 suggests this gap may continue to grow in the near future, the FY 2021-22 budget limits OPEB costs at the ADC, assuming that the difference is reimbursable (and will be reimbursed)from the OPEB trust. Capping the budgeted OPEB cost at the ADC in this manner is a prudent approach given Central San's strategic plan objective of striving to maintain fiscal stability and sustainability balancing the needs of conflicting priorities with limited available resources. Capping budgeted OPEB costs at the ADC will not result in an increase to the UAAL, but will slightly slow the pace at which the UAAL is eliminated. Capping annual budgeted OPEB costs at the ADC will still result in the UAAL decreasing overtime as the ADC contains both a provision for current costs (the "Normal Cost") as well as the UAAL. As noted previously, in this latest actuarial valuation, UAAL is projected to be fully paid off in fourteen years, or FY 2034-35. Furthermore, the Board can still direct additional payments towards the OPEB trust utilizing year-end favorable budgetary variances which has been past practice. Bartel will review a a presentation on the results of their actuarial valuation dated July 1, 2020 and be available to answer any questions of the Finance Committee. The presentation primarily focuses on the results of the latest actuarial valuation; however, it will also briefly cover the concept of reimbursing costs in excess of the ADC from the OPEB trust. Strategic Plan Tie-In GOAL THREE: Fiscal Responsibility Strategy 1—Maintain financial stability and sustainability,, Strategy 2—Ensure integrity and transparency in financial management ATTACHMENTS: 1. July 1, 2020 OPEB Actuarial Funding Valuation 2.ADC to PayGo Trend Chart 3. Bartel Presentation April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 168 of 217 Page 3 of 46 gef% CENTRAL CONTRA COSTA SANITARY DISTRICT RT E L RETIREE HEALTHCARE PLAN ISSOCIATF.S. f_.F.0 July 1, 2020 Actuarial Valuation Plan Funding for 2021/22 and 2022/23 Preliminary Report - Revised Bartel Associates, LLC Doug Pryor, Vice President Catherine Wandro, Assistant Vice President Daniel Park, Actuarial Analyst April 21, 2021 CONTENTS Topic Page Benefit Summary 1 Participant Statistics 7 Actuarial Assumptions Highlights 9 Assets 11 Results 17 Bartel Associates OPEB Database 37 Actuarial Certification 39 Exhibits Premiums E- 1 Data Summary E- 5 Other Actuarial Assumptions E-16 Actuarial Methods E-28 Definitions E-29 Ap�fP ;°2t��°f"1 �ta 0'fir° Rfif��;1 Z�� i�Rilf��i"I � iF�` °A�' h° Zia°� �;"a d0tIcbf 217 Page 4 of 46 BENEFIT SUMMARY General Employees, Management Support/ Confidential MSCG , Management & Unre . Tier I Tier II Tier III Board of fired<5/1/85 Hired 5/1/85-6/30/09 Hired>6/30/09 Directors ■ Eligibility ■ Retire directly from the District under CCCERA (service/disability) ■ Rule of 65 — ■ Same as Tier I ■ Rule of 70— ■ No age or age plus except MSCG & age plus service District svc at Mgmt hired District svc at requirement least 65 between 4/19/03 least 70 ■ Minimum - and 6/30/09 - ■ Minimum - age age 50 & 10 Minimum age 55 55 & 10 years ears svc & 10 years svc svc ■ Change to ■ District joined PEMHCA effective 7/1/19 Medical Plans ■ PEMHCA mimimum, unequal method' ■ Participants retiring directly from the District but not meeting age and service eligibility requirements will receive the PEMHCA minimum 1 PEMHCA minimum for retirees is$6.80/month in 2020,$13.90/month in 2021. (BOA'-)Apri1 21,2021 1 BENEFIT SUMMARY General Employees, Management Support/ Confidential MSCG , Management & Unre . Tier I Tier II Tier III Board of Hired<5/1/85 Hired 5/1/85-6/30/09 Hired>6/30/09 Directors ■ Medical ■ District pays % of medical premium up to highest cost "Core Plan" Benefit ■ Medical "Core Plans": • Pre 65: Kaiser and Health Net SmartCare • Post 65: Kaiser Senior Advantage and UnitedHealthcare ■ Dental & ■ District pays % of dental and vision premiums Vision Benefit ■ % of ■ Pre 65: 100% ■ Pre 65: 100% ■ Pre 65: 50%2 ■ Medical: Premiums for ■ Post 65: 100% ■ Post 65: 50% ■ Post 65: 50% PEMHCA Medical, ■ Retiree and ■ Retiree and ■ Retiree and Minimum Dental & dependents dependents spouse ■ Dental & Vision Vision: Self-pay z Tier III General and MCSG employees hired between 6/30/09 and 4/18/13 will have 100%of the dental premium paid by the District until age 65 for the retiree and qualified dependents. (B-/1) April 21,2021 2 April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 170 of 217 Page 5 of 46 BENEFIT SUMMARY General Employees, Management Support/ Confidential MSCG , Manage ent & Unre . Tier I Tier II Tier III Board of fired<5/1/85 Hired 5/1/85-6/30/09 Hired>6/30/09 Directors ■ Life Insurance ■ 50% of active ■ $10,000 ■ None ■Tier I - coverage $25,000 ■Tier II-$10,00 ■ Elected >1/1/95 $10,000 self- pay ■ Medicare ■ 100% District paid for retiree and ■ None ■ None Part B eligible dependent Premiums ■ Surviving ■ Benefits continue to qualified surviving dependents of active Spouse & employees or retirees Dependents April 21,2021 3 BENEFIT SUMMARY ■ Pay-As-You- Cash Benefits Implied Go Costs Medical Dental Life Subsidy Total 2019/20 $3,119,542 $303,337 $114,981 $607,795 $4,145,654 2018/19 4,440,116 326,085 116,239 815,000 5,697,440 2017/18 4,463,803 334,003 25,943 748,000 5,571,750 2016/17 4,372,618 350,058 25,951 656,000 5,404,628 2015/16 4,192,063 375,784 28,032 564,000 5,159,879 2014/15 4,306,105 384,769 28,212 595,000 5,314,087 2013/14 3,991,877 378,939 42,824 556,000 4,969,641 2012/13 3,867,854 375,913 43,329 536,000 4,823,096 (B-A) April 21,2021 4 JfiffiL April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 171 of 217 Page 6 of 46 BENEFIT SUMMARY ■ For PEMHCA, employer cost for allowing retirees to participate at active rates. • General trend: $800 $700 $600 $500 $400 $300 25 30 1 35 1 40 1 45 50 55 1 60 1 64 *Blended Premium 600 600 600 600 600 600 600 600 600 -WCOSOyAge 400 420 460 500 1 550 1 600 1640 700 800 • Sample active age 40, retire age 60: Premiums PEMHCA Cost of Benefits $600 Active --___ -► $500 Active $600 Retiree --' --'-. $700 Retiree April 21,2021 5 BENEFIT SUMMARY ■ GASB defers to actuarial standards of practice. ■ 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 ■ Valuation includes the implied subsidy. 3 Measuring Retiree Group Benefits Obligations and Determining Retiree Group Benefits Plan Costs or Contributions. (B-A� April 21,2021 6 April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 172 of 217 PARTICIPANT STATISTICS Page 7 of6 Actives 7/1/10 7/1/12 7/1/14 7/1/16 7/1/18 7/1/20 ■ Counts • Tier I 19 4 2 2 1 1 • Tier II 219 197 174 163 135 113 • Tier III 14 41 83 114 138 157 • Total 252 242 259 279 274 271 ■ Average • Age 47.0 46.2 46.0 46.5 46.1 46.5 • District Service 11.1 10.2 9.6 10.2 10.3 10.5 • CCCERA 12.5 11.2 10.2 11.3 11.5 12.4 Service • Pay $87,900 $87,300 $98,900 $110,100 $115,500 $128,200 ■ Total Payroll 22,159 21,116 25,625 30,715 31,635 34,750 ($000 s) B April 21,2021 7 PARTICIPANT STATISTICS Retirees 7/1/10 7/1/12 7/1/14 7/1/16 7/1/18 7/1/20 ■ Counts • Tier 1 172 177 171 161 154 148 • Tier II 44 64 78 87 111 130 • Tier III - - - - - - • Total 216 241 249 248 265 278 ■ Average • Age 67.5 67.3 68.1 69.4 70.0 70.8 • Retirement Age ➢ Service 57.1 57.1 57.0 57.2 57.6 57.6 ➢Disability 52.6 52.6 52.5 52.5 53.1 53.1 (P-Q April 21,2021 8 April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 173 of 217 ACTUARIAL ASSUMPTIONS HIGHLIGHTS Page 8 of6 Assumption July 1, 2018 Valuation July 1, 2020 Valuation ■ Valuation Date ■ July 1, 2018 ■ July 1, 2020 ■ Fiscal Years 2019/20 & 2020/21 ■ Fiscal Years 2021/22 & 2022/23 ■ Funding Policy ■ Pre-fund full ADC with PARS ■ Same Moderate Portfolio ■ General ■ 2.75% annually ■ 2.75% annually Inflation ■ Same as CCCERA 12/31/17 ■ Same as CCCERA 12/31/19 valuation assumption valuation assumption ■ Discount Rate ■ 5.75% ■ Same ■ 55% confidence level ■ Retirement, ■ CCCERA 12/31/17 valuation ■ CCCERA 12/31/19 valuation Termination, assumption assumption Disability, (2012-14 Experience Study) (2015-17 Experience Study) Mortality (*BAApril 21,2021 9 ACTUARIAL ASSUMPTIONS HIGHLIGHTS Assumption July 1, 2018 Valuation July 1, 2020 Valuation ■ Marital Status ■ CCCERA 12/31/17 valuation ■ CCCERA 12/31/19 valuation at Retirement assumption assumption (2012-14 Experience Study) (2015-17 Experience Study) • Males- 75% married • Males-65% married • Females- 50% married • Females- 50% married ■ Medical Trend Increase from Prior Year Increase from Prior Year Post- Post- Pre- Post- Calendar Pre- Medicare Medicare Fiscal Year Medicare Medicare Year Medicare Kaiser Other 2018/19 Actual 2018/19 Premiums 2019 n/a 2019/20 7.50% 6.50% 2020 Actual 2020 Premiums 2020/21 7.25% 6.30% 2021 Actual 2021 Premiums 2021/22 7.00% 6.10% 2022 7.00% 5.00% 6.10% 2022/23 6.75% 5.90% 2023 6.75% 4.85% 5.90% 2023/24 6.50% 5.70% 2024 6.50% 4.70% 5.70% 2024/25 6.25% 5.50% 2025 6.25% 4.60% 5.50% 2025/26 6.00% 5.30% 2026 6.00% 4.50% 5.30% 1 1 1 1 1 1 1 2075/76+ 4.00% 4.00% 2076+ 4.00% 4.00% 4.00% B �'� April 21,2021 10 April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 174 of 217 ASSETS Page 9 of 16 Asset Allocation June 30, 2020 PARS Moderate Investment Policy Asset Class Target Range ■ Equity 50% 40% - 60% ■ Fixed Income 45% 40% - 60% ■ Cash 5% 0% - 20% ■ Total 100% ('BAApril 21,2021 11 ASSETS Discount Rate Development PARS Moderate Allocation 50% 55% 60% Confidence Confidence Confidence Limit Limit Limit ■ Expected Return 6.27% 6.00% 5.72% ■ Investment Expenses 0� 30%) 0� 30%) 0( 30%) ■ Net Return 5.97% 5.70% 5.42% Recommended ■ Assumption 6.00% 5.75% 5.50% (B-A) April 21,2021 12 April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 175 of 217 ASSETS Page10 o146 Market Value of Plan Assets (Amounts in 000's) Projected 2018/19 2019/20 2020/214 ■Market Value $ 59,597 $ 65,926 $ 69,849 (Beginning of Year • Employer Contributions 1,583 1,250 - • Benefit Payments6 - - - • Investment Earnings 4,921 2,995 10,245 • Adjustment - (139) • Expenses (174) (183) (199) ■Market Value 65,926 69,849 79,895 (End of Year ■Approximate Annual Return 8.1% 4.5% 14.7% a Actual assets at 2/28/21 of$80,102,483 projected to 6/30/21 assuming additional estimated expenses,but no additional contributions or investment earnings,from 2/28/21 to 6/30/21. s District contributes ADC less expected benefit payments to the trust. 6 Benefit payments made outside of trust. ('PA) April 21,2021 13 ASSETS Actuarial Value of Plan Assets (Amounts in 000's) 2018/19 2019/20 2020/21 ■Actuarial Value $ 59,356 $ 64,703 $ 69,623 (Beginning of Year • Employer Contribution 1,583 1,250 - • Benefit Payments/Adjustments - (139) - • Expected Investment Return 3,458 3,752 4,003 ■Expected AVA(End of Year) 64,397 69,566 73,626 ■MVA (End of Year) 65,926 69,849 79,895 ■Preliminary AVA7 64,703 69,623 74,880 • Minimum AVA (80% of MVA) 52,741 55,880 63,916 • Maximum AVA (120% of MVA) 79,111 83,819 95,874 ■Actuarial Value 64,703 69,623 74,880 End of Year ■Approximate Annual Return 6.3% 5.8% 7.6% 7(f;�ted AVA plus 20%of the difference between the MVA and expected AVA. April 21,2021 14 April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 176 of 217 ASSETS Page 11 of 46 Historical Asset Changes (Amounts in 000's) $11,000 $10,000 ..... ..... ... ..... ........................ .............................. ..... ..... - $9,000 ----------------------------- - ------------------------------- $8.000 $7,000 $6,000 -------- $5,000 $4,000 $3,000 $2,000 $1,000 $- ❑Contributions ❑Net Return ❑Benefits Paid (B—A)April 21,2021 15 ASSETS Fw Historical Annalized Asset Returns 20% 18% ..... ................................................................................. 16% ..... ................................................... 14% 12% 10% 8% ..... ��` .>-._. .- 6/0 ..... ............................................ '- 4% ..... ................................................. ...................................................... 2% ..... ...................................................... 0% ..... ................................................... (2%) 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20 fMVA 4.3% 17.5% 2.5% 10.7% 13.5% 2.8% 0.5%110.6%16.4%18.1% 14.5% —Expected Return 6.5% 6.5% 6.5% 6.250 o 6.25%6.25%6.25%6.25%6.25%5.75%5.75% -f•AVA 6.0% 8.8% 6.8% 6.3% 8.3% 7.7% 5.6%16.5%16.4%16.3% 15.8% B A al v April 21,2021 16 April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 177 of 217 Page12 of 46 RESULTS Actuarial Obligations Amounts in 000's 7/1/20 Valuation 7/1/18 Projected Valuation 7/1/20 to 7/1/21 ■ Present Value of Benefits • Actives $ 60,675 $ 44,623 • Retirees 64,886 52,678 • Total 125,561 97,301 ■ Actuarial Accrued Liability • Actives 43,249 32,183 • Retirees 64,886 52,678 • Total 108,135 84,861 $ 87,336 ■ Actuarial Value of Assets (59,356) 7� 4,880) ■ Unfunded AAL 48,779 15,238 12,456 ■ AVA Funded Percent 54.9% 82.0% 85.7% ■ Normal Cost8 2,670 2,004 2,011 ■ Expected Pay-Go Cost 5,418 4,360 4,642 a Normal Cost includes estimated PARS and PEMHCA administrative fees,if applicable. J 1� April 21,2021 17 RESULTS Historical Plan Funded Status (Amounts in 000's) $120,000 $100,000 - - $80,000 82% ss°i $60,000 ........... 44% $40,000 ....................... 320//o ._.. .... ....................... ........................ 2% $20,000 10% 3% $0 7/1/07 6/30/09 7/1/10 7/1/12 7/1/14 7/1/16 7/1/18 7/1/20 Retiree pay-go o Retiree AAL less pay-go o Active AAL -a-•AVA —A—MVA X%Funded Ratio B � April 21,2021 18 April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 178 of 217 Page13 of 46 RESULTS Estimated Actuarial Gains & Losses (Amounts in 000's) IAAL I AVA UAAL ■ 7/1/18 Actual $108,135 $59,356 $48,779 ■ 7/1/20 Expected 114,442 69,300 45,142 ■ Experience Gains/Losses: • Asset Gain' - 323 (323) • Demographic & Other Loss 2,158 - 2,158 ■ Plan Changes: • PEMHCA Medical Plans (28,321) - (28,321) ■ Assumption Changes: • CCCERA 2015 to 2017 Experience Study10 (1,436) - (1,436) • Kaiser Senior Advantage Trend (1,982) - (1,982) ■ Total Changes (29,581) 323 (29,904) ■ 7/1/20 Actual 84,861 69,623 15,238 v Mainly due to overall investment return slightly higher than expected between 7/1/18 and 6/30/20. 10 $284 gain from change to retirement rates,$170 loss from change to termination rates,$512 loss from changes to mortality assumption,and$1,834 gain due to change in assumption for marital status at retirement. 1' April 21,2021 19 RESULTS This page intentionally blank V• • t' B � April 21,2021 20 April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 179 of 217 Page14 of 46 RESULTS -j Actuarially Determined Contribution (ADC) (Amounts in 000's) 7/1/18 Valuation" 7/1/20 Valuation 2019/20 2020/21 2021/22 2022/23 ■ ADC - $ • Normal CoSt12 $ 2,672 $ 2,682 $ 2,004 $ 2,011 • UAAL Amortization 4,641 4,641 1,320 1,320 • Total 7,313 7,323 3,324 3,331 ■ UAAL Amortization Years 16 15 14 13 11 2019/20 and 2020/21 ADCs were subsequently revised to reflect the July 1,2019 move to the PEMHCA medical program. The 2019/20 ADC was reduced to$3.906 million and the 2020/21 ADC was reduced to$3.917 million. 12 2021/22 and 2022/23 Normal Cost include estimated PARS and PEMHCA administrative fees of$169,000 and$176,000 r(P—Q, spectively. April 21,2021 21 RESULTS Historical Actuarially Determined Contributions13 (Amounts in 000's) $9,000 $3,000 $7,000 $6,000 ss.000 $4,000 $3,000 $2,000 $1,000 $a Iti •••I I•• 11,11 11 1' I'I: ,:Ea 11 1 I 1ool1 '1 1!'1 i.-1 1.-4 '-1: '.'1: '.1:.1 '_.1¢l _.}', _.i�i '.d4i] 34.1U �r•-' ' '�' '.. .4 '!IE I ■Axnnctiuium 3,a5 i ;I%7 [,Ilii7 ])!Pl 5,',•i .�4 1 ..��l 5.1111 5.49J a 1,4 1 4,11 E i_ 1 AM I......... ...—.. _... I i i fi.22516.976ifi.976�8.3DD�&:�U�S.lU3�8.111% '�L�, '.x��n ...-]-1 7.524 13 2019/20 and 2020/21 ADCs were subsequently revised to reflect the July 1,2019 move to the PEMHCA medical program. The 2019/20 ADC was reduced to$3.906 million and the 2020/21 ADC was reduced to$3.917 million. (B-,j) April 21,2021 22 April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 180 of 217 Page15 of 46 RESULTS Proiected Benefit Payments (Amounts in 000's) Fiscal Cash Implied Year Subsidy Subsidy 2021/22 $ 3,762 $ 598 $ 4,360 2022/23 3,978 664 4,642 2023/24 4,124 660 4,784 2024/25 4,399 785 5,184 2025/26 4,554 841 5,395 2026/27 4,616 817 5,433 2027/28 4,771 917 5,688 2028/29 4,816 930 5,746 2029/30 4,921 974 5,895 2030/31 4,987 1,012 5,999 April 21,2021 23 RESULTS Estimated 10-Year Full ADC Pre-Funding Illustration (Amounts in 000's) Contribution Trust Fiscal Benefit Pre-Funding/ Total Year ADC14 Payments Disbursement Contribution 2021/22 $ 3,324 $ 4,360 $ (1,036) $ 3,324 2022/23 3,331 4,642 (1,311) 3,331 2023/24 3,338 4,784 (1,446) 3,338 2024/25 3,346 5,184 (1,838) 3,346 2025/26 3,353 5,395 (2,042) 3,353 2026/27 3,359 5,433 (2,074) 3,359 2027/28 3,367 5,688 (2,321) 3,367 2028/29 3,374 5,746 (2,372) 3,374 2029/30 3,381 5,895 (2,514) 3,381 2030/31 3,388 5,999 2,611 3,388 14(B_A� Includes estimated administrative fees. April 21,2021 24 April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 181 of 217 Page 16 of 46 RESULTS Actuarial Obligations by Cash/Implied Subsidy July 1, 2020 (Amounts in 000's) Implied Cash Subsidy Total ■Present Value of Benefits • Actives $ 33,408 $ 11,215 $ 44,623 • Retirees 45,572 7,106 52,678 • Total 78,980 18,321 97,301 ■Actuarial Accrued Liability • Actives 24,766 7,417 32,183 • Retirees 45,572 7,106 52,678 • Total 70,338 14,523 84,861 ■Actuarial Value of Assets15 (57,708) (11,915) (69,623) ■Unfunded AAL 12,630 2,608 15,238 ■Normal Cost 2021/22 16 1,411 593 2,004 ■Pa Go Costs 2021/22 3,762 598 4,360 1s Assets allocated in proportion to Actuarial Accrued Liability. 16 Includes estimated PARS and PEMHCA administrative fees. (J)April 21,2021 25 RESULTS Actuarially Determined Contribution (ADC) by Cash/Implied Subsidy FY 2021/22 (Amounts in 000's) Implied Cash Subsidy Total ■ADC - $ • Normal Cost17 $ 1,411 $ 593 $ 2,004 • UAAL Amortization 1,087 233 1,320 • Total 2,498 826 3,324 ■PayGo Costs 3,762 598 4,360 17 Includes estimated PARS and PEMHCA administrative fees. (B-A� April 21,2021 26 April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 182 of 217 Page17 of 46 RESULTS Actuarial Obligations by Tier July 1, 2020 (Amounts in 000's) Tier I Tier II Tier III Total ■Present Value of Benefits • Actives $ 393 $ 30,317 $ 13,913 $ 44,623 • Retirees 26,486 26,192 - 52,678 • Total 26,879 56,509 13,913 97,301 ■Actuarial Accrued Liability • Actives 386 25,675 6,122 32,183 • Retirees 26,486 26,192 - 52,678 • Total 26,872 51,867 6,122 84,861 ■Actuarial Value of Assets18 (26,689) (39,711) (3,223) (69,623) ■Unfunded AAL 183 12,156 2,899 15,238 ■Normal Cost (2021/22)19 53 910 1,041 2,004 ■Pa Go Costs 2021/22) 1,877 2,449 34 4,360 18 Assets were first allocated to retiree AAL with the remainder allocated based on active AAL. i9 Includes estimated PARS and PEMHCA administrative fees. (B J 1� April 21,2021 27 RESULTS Actuarially Determined Contribution (ADC) by Tier FY 2021/22 (Amounts in 000's) Tier I Tier II Tier III Total ■ADC - $ • Normal Cost20 $ 53 $ 910 $ 1,041 $ 2,004 • UAAL Amortization - Actives 15 1,028 277 1,320 • Subtotal-Active ADC 68 1,938 1,318 3,324 • UAAL Amortization - Retirees - - - - • Total ADC 68 1,938 1,318 3,324 ■Number of Actives 1 113 157 271 ■Active ADC Per Capita 68 17 8 12 ■PayGo Costs 1,877 2,449 34 4,360 21 Includes estimated PARS and PEMHCA administrative fees. (B- , 1' April 21,2021 28 April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 183 of 217 Page18 of 46 RESULTS Actuarial Obligations by Benefit Type - July 1, 2020 (Amounts in 000's) Implied Medical21 Dental Life Subsidy Total ■Present Value of Benefits • Actives $ 30,880 $ 2,347 $ 181 $ 11,215 $ 44,623 • Retirees 38,983 3,874 2,715 7,106 52,678 • Total 69,863 6,221 2,896 18,321 97,301 ■Actuarial Accrued Liability • Actives 22,928 1,676 162 7,417 32,183 • Retirees 38,983 3,874 2,715 7,106 52,678 • Total 61,911 5,550 2,877 14,523 84,861 ■Actuarial Value of Assets22 (50,7941 (4,553) (2,361) (11,915) (69,623) ■Unfunded AAL 11,117 997 516 2,608 15,238 ■Normal Cost 2021/22 23 1,294 108 9 593 2,004 ■Pa Go Costs (2021/22) 3,297 312 153 598 4,360 21 Includes vision. 2' Assets allocated in proportion to Actuarial Accrued Liability. 23 Includes estimated PARS and PEMHCA administrative fees. (PPAprit 21,2021 29 RESULTS Actuarially Determined Contribution (ADC) by Benefit Type24 (Amounts in 000's) FY 2021/22 Implied Medical Dental Life Subsidy TOM ■ADC - $ • Normal Cost $ 1,294 $ 108 $ 9 $ 593 $ 2,004 • UAAL Amortization 958 85 44 233 1,320 • Total 2,252 193 53 826 3,324 ■Pa Go Costs 3,297 312 153 598 4,360 FY 2022/23 Implied Medical I Dental Life Subsidy Total ■ADC - $ • Normal Cost $ 1,300 $ 108 $ 9 $ 594 $ 2,011 • UAAL Amortization 958 85 44 233 1,320 • Total 2,258 193 53 827 3,331 ■Pa Go Costs 3,493 325 160 664 4,642 ' Normal Cost includes estimated PARS and PEMHCA administrative fees. Medical includes vision. (B-A� April 21,2021 30 April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 184 of 217 Page19 of 46 RESULTS Actuarial Cost Method Sensitivity Discount Rate 5.75% Amounts in 000's EAN Cost Method Valuation Sensitivity Level Dollar Level % of Pa ■Present Value of Benefits 7/1/20 $ 97,301 $ 97,301 ■Funded Status 7/1/20 • Actuarial Accrued Liability 84,861 80,810 • Assets (69,623) 69 623 • Unfunded AAL 15,238 11,187 ■2021/22 ADC - $ • Normal Cost25 2,004 2,319 • UAAL Amortization 1,320 751 . Total 3,324 3,070 ■Projected 2021/22 Payroll 35,793 35,793 ■2021/22 ADC - % of Payroll 9.3% 8.6% 25 Includes estimated PARS and PEMHCA administrative fees. (BOAD April 21,2021 31 RESULTS This page intentionally blank V• • t' B � April 21,2021 32 April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 185 of 217 Page 20 of 46 RESULTS Generic Actuarial Cost Method Comparison ADC as a $ Amount Level - 0 o --- ------------------------------------------ Level $ --------------------------------------------------------------------------------------------------------------------------------- Years April 21,2021 33 RESULTS Generic Actuarial Cost Method Comparison ADC as a % of Pay Level $ ----------- ------------------------------------------------------------------------------------------------------------------- 4* Level % 0 0 ------------------------------------------------------------------- ----------------------------------------------------------- Years 17� April 21,2021 34 April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 186 of 217 Page 21 of 46 RESULTS Discount Rate Sensitivity (Amounts in 000's) Discount Rate Valuation 5.50% 5.75% 6.00% ■Present Value of Benefits 7/1/20 $ 101,092 $ 97,301 $ 93,741 ■Funded Status 7/1/20 • Actuarial Accrued Liability 87,657 84,861 82,210 • Assets (69,623) (69,623) (69,623) • Unfunded AAL 18,034 15,238 12,587 ■2021/22 ADC - $ • Normal Cost26 2,113 2,004 1,902 • UAAL Amortization 1,622 1,320 1,033 • Total 3,735 3,324 2,935 ■Projected 2021/22 Payroll 35,793 35,793 35,793 ■2021/22 ADC - % of Payroll 10.4% 9.3% 8.2% 26 Includes estimated PARS and PEMHCA administrative fees. (BOAD April 21,2021 35 RESULTS Medical Trend Sensitivity (Amounts in 000's) +1% Current Medical Trend Valuation All Years ■Present Value of Benefits 7/1/20 $ 97,301 $ 113,177 ■Funded Status 7/1/20 • Actuarial Accrued Liability 84,861 97,230 • Assets (69,623) (69,623) • Unfunded AAL 15,238 27,607 ■2021/22 ADC - $ • Normal Cost27 2,004 2,456 • UAAL Amortization 1,320 2,753 • Total 3,324 5,209 ■Projected 2021/22 Payroll 35,793 35,793 ■2021/22 ADC - % of Payroll 9.3% 14.6% 21 Includes estimated PARS and PEMHCA administrative fees. (B-A� April 21,2021 36 JfiffiL April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 187 of 217 Page 22 of 46 BARTEL ASSOCIATES OPEB DATABASE Bartel Associates OPEB Database Sample Percentile Graph 55 50% — 95th Percentile 45% 40% — 75th Percentile 35% 50%of 90%of 0. results results are are q 30% —50th Percentile within within this this p., range range 25 20% 25th Percentile 15% 10% 5th Percentile 5% April 21,2021 37 BARTEL ASSOCIATES OPEB DATABASE Bartel Associates OPEB Database Funded% 140% 120% ------------------------------ ------------------------- -------------------------- 100% -------------------------------------- ------------------------------ ------------------------------------------- 80% -----__---__ -__ -__ -__-- ---------------------- ------------------------------------- a 60% 40% 20% ..—.—..—.—..—.—.._..._........_..—.—.—.—.—.—.—.—.._..._... 0% MVA AVA 95th Percentile 124% 125% 75thPercentile 78% 78% 50thPercentile 55% 55% 25thPercentile 34% 33% 5th Percentile 8% 8% Funded Ratio 82% 82% Percentile 79% 77% Discount Rate=5.75% B � April 21,2021 38 April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 188 of 217 Page 23 of 46 ACTUARIAL CERTIFICATION This report presents the Central Contra Costa Sanitary District Retiree Healthcare Plan("Plan")July 1,2020 actuarial valuation. The purpose of this valuation is to: ■ Determine the Plan's July 1,2020 Funded Status,and ■ Calculate the 2021/22 and 2022/23 Actuarially Determined Contributions. Information provided in this report may be useful to the District 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 District 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, DRAFT DRAFT Doug Pryor,ASA,EA,MAAA Catherine A.Wandro,ASA,MAAA,FCA Vice President Assistant Vice President Bartel Associates,LLC Bartel Associates,LLC April 21,2021 April 21,2021 (B' )April 21 2021 39 ACTUARIAL CERTIFICATION This page intentionally blank April O�Ar#%dW FINANCE Committee Meeting9Qgenda Packet- Page 189 of 217 Page 24 of 46 EXHIBITS-PREMIUMS 2020 PEMHCA Monthly Medical Premiums Region 1 Non-Medicare Eli ible 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 (B' )April 21 2021 E-1 EXHIBITS-PREMIUMS 2021 PEMHCA Monthly Medical Premiums Region 1 Non-Medicare Eli ible Medicare Eligible Medical Plan Single 2-Party Family Single 2-Party Family Anthem Select $ 925.60 $ 1,851.20 $ 2,406.56 $ 383.37 $ 766.74 $ 1,150.11 Anthem Traditional 1,307.86 2,615.72 3,400.44 383.37 766.74 1,150.11 Blue Shield Access+ 1,170.08 2,340.16 3,042.21 n/a n/a n/a Blue Shield Trio 880.50 1,761.00 2,289.30 n/a n/a n/a Health Net SmartCare 1,120.21 2,240.42 2,912.55 n/a n/a n/a Kaiser 813.64 1,627.28 2,115.46 324.48 648.96 973.44 UnitedHealthcare 941.17 1,882.34 2,447.04 311.56 623.12 934.68 Western Health Advantage 757.02 1,514.04 1,968.25 n/a n/a n/a PERS Choice 935.84 1,871.68 2,433.18 349.97 699.94 1,049.91 PERS Select 566.67 1,133.34 1,473.34 349.97 699.94 1,049.91 PERSCare 1,294.69 2,589.38 3,366.19 381.25 762.50 1,143.75 A ril'L� O�ArI� �fd FINANCE Committee Meetin E enda Packet- Page 190 of 217 p � 9 � g Page 25 of 46 EXHIBITS-PREMIUMS Retiree Dental, Vision & Life Premiums Effective January 1, 2020 Plan Single 2-Party Family Delta Dental $66.40 $116.60 $186.10 Vision 7.70 13.60 15.70 Life $0.315 per $1,000 of coverage Effective January 1, 2021 1 Plan Single 2-Party Family Delta Dental $65.70 $115.40 $182.20 Vision 7.70 13.60 15.70 Life $0.315 per $1,000 of coverage B April 21,2021 E-3 EXHIBITS-PREMIUMS This page intentionally blank April O�Ar#%dW FINANCE Committee Meeting%enda Packet- Page 191 of 217 Page 26 of 46 EXHIBIT—DATA SUMMARY Active Participant Statistics July 1, 2020 Valuation General MSCG Mgmt Board28 Total ■ Count • Tier I - 1 - - 1 • Tier II 62 44 5 2 113 • Tier III 89 55 11 2 157 • Total 151 100 16 4 271 ■ Average: • Age29 46.0 46.4 48.1 66.8 46.5 • District Service 9.7 11.9 8.9 13.6 10.5 • CCCERA Service 10.9 14.0 15.8 13.6 12.4 • Pay $113,198 $141,997 $214,983 $4,40030 $128,229 ■ Total Payroll (OOO's) 17,093 14,200 3,440 18 34,750 28 One Board member is a retiree receiving retiree healthcare benefits. The remaining four Board members in the data were elected after 1/1/95 and retiree healthcare benefits are self-pay only. 29 Average age by Tier: Tier I—54.6,Tier II—50.3,and Tier III—43.8. 3o Assumed 24 board meetings at$185 per meeting. (B)April 21,2021 E-5 EXHIBIT—DATA SUMMARY Active Participant Statistics July 1, 2018 Valuation General MSCG Mgmt Board31 Total ■ Count • Tier I - 1 - - 1 • Tier II 79 48 6 2 135 • Tier III 78 47 11 2 138 • Total 157 96 17 4 274 ■ Average Age32 45.7 45.6 47.9 64.8 46.1 ■ Average District Service 9.8 11.5 8.0 11.6 10.3 ■ Average CCCERA Service 10.5 12.9 12.7 11.6 11.5 ■ Average Pay $102,500 $127,300 $194,100 $4,40033 $115,500 ■ Total Payroll (OOO's) 16,095 12,223 3,299 18 31,635 31 One Board member is a current retiree receiving retiree healthcare benefits. The remaining four Board members were elected after 1/1/95 and retiree healthcare benefits are self-pay only. 32 Average age by Tier: Tier 1—52.6,Tier 2—49.6,and Tier 3—42.6. 33 Assumed 24 board meetings at$185 per meeting. Affmi A riI 0nr# @W FINANCE Committee Meetin enda Packet- Pa p E e 192 of 217� 9 � g Page 27 of 46 EXHIBIT—DATA SUMMARY Retiree Participant Statistics July 1, 2020 Valuation General MSCG M mt Board Total ■ Count • Tier I 82 50 16 - 148 • Tier II 76 42 11 1 130 • Tier III - - - - - • Total 158 92 27 1 278 ■ Average Age 71.5 69.0 72.1 72.8 70.8 ■ Average Retirement Age • Service 57.3 58.0 57.7 65.2 57.6 • Disability 53.8 51.7 n/a n/a 53.1 (B' )April 21 2021 E-7 EXHIBIT—DATA SUMMARY Retiree Participant Statistics July 1, 2018 Valuation General MSCG M mt Board Total ■ Count • Tier I 87 51 16 - 154 • Tier 11 63 37 10 1 111 • Tier III - - - - - • Total 150 88 26 1 265 ■ Average Age 71.2 67.8 70.7 70.8 70.0 ■ Average Retirement Age • Service 57.1 58.1 57.8 65.2 57.6 • Disability 53.8 51.7 n/a n/a 53.1 Ap ril'L� O�ArI� �fd FINANCE Committee Meetin g �E e 193 of 217 enda Packet- Page g Page 28 of 46 EXHIBIT—DATA SUMMARY Medical Plan Participation Non-Waived Participants Retirees Medical Plan Actives < 65 > 65 Anthem Select 1% 0% 0% Anthem Traditional 1% 0% 3% Health Net SmartCare 30% 32% 0% Kaiser 66% 55% 54% UnitedHealthcare 0% 0% 29% PERS Choice 2% 2% 9% PERS Select 0% 2% 0% PERSCare 0% 9% 5% Total 100% 100% 100% (B' )April 21 2021 E-9 EXHIBIT—DATA SUMMARY Active Medical Coverage Medical Plan Region Single 2-Party Family Waived Total Anthem Select 1 - 1 1 - 2 Anthem Traditional 1 1 - 1 - 2 Health Net SmartCare 1 18 15 46 - 79 Kaiser 1 23 44 107 - 174 UnitedHealthcare 1 - - 1 - 1 PERS Choice 1 - 1 5 - 6 Waived - - - 7 7 Total 42 61 161 7 271 April FINANCE Committee Meetin�-A@enda Packet- Page 194 of 217 Page 29 of 46 EXHIBIT—DATA SUMMARY Retiree Medical Coverage Under Age 65 Medical Plan Region Single 2-Party Family Waived Total Health Net SmartCare 1 5 12 3 - 20 3 - 1 - - 1 Kaiser 1 7 16 13 - 36 PERS Choice 1 1 - - - 1 PERS Select 1 - 1 - - 1 PERSCare OOS 2 3 1 - 6 Waived - - - 5 5 Total 15 33 17 5 70 (B' )April 21 2021 E-11 EXHIBIT—DATA SUMMARY Retiree Medical Coverage Age 65 and Over Medical Plan Region Single 2-Party Family Waived Total Anthem Traditional 1 2 1 2 - 5 Kaiser 1 42 49 7 - 98 2 2 1 - - 3 OOS 1 - 1 - 2 UnitedHealthcare 1 25 19 - - 44 2 - 1 - - 1 3 - - 1 - 1 OOS 7 3 - - 10 PERS Choice 1 9 5 2 - 16 OOS - 1 1 - 2 PERSCare 1 2 2 - - 4 OOS 1 3 2 - 6 Waived - - - 16 16 Total 91 85 16 16 208 April(, FINANCE Committee Meetin�Qenda Packet- Page 195 of 217 Page 30 of 46 EXHIBIT—DATA SUMMARY Dental Coverage Delta Dental Single 2-Party Family Waived Total Actives 39 63 166 3 271 Retirees 95 145 32 6 278 Vision Coverage VSP Single 2-Party Family Waived Total Actives 39 62 167 3 271 Retirees 84 127 23 44 278 (B' )April 21 2021 E-13 EXHIBIT—DATA SUMMARY Actives by Age and District Service District Service Age < 1 1-4 5-9 10-14 15-19 20-24 >25 Total <25 1 - - - - - - 1 25-29 1 7 1 - - - - 9 30-34 1 8 10 1 1 - - 21 35-39 2 16 16 14 2 - - 50 40-44 2 18 10 7 10 - - 47 45-49 3 9 11 5 6 4 1 39 50-54 1 7 9 10 15 2 4 48 55-59 - 1 11 9 5 3 6 35 60-64 - - 5 1 2 2 3 13 > 65 - - 4 1 3 - - 8 Total 11 66 77 48 44 11 14 271 April FINANCE Committee Meetin�-A6enda Packet- Page 196 of 217 Page 31 of 46 EXHIBIT-DATA SUMMARY Retiree Healthcare Coverage by Age Group Age Single 2-Party Family Waived Total Under 50 1 - - - 1 50-54 1 - 1 - 2 55-59 6 7 8 3 24 60-64 7 26 8 2 43 65-69 22 29 13 5 69 70-74 28 20 3 4 55 75-79 13 20 - 4 37 80-85 17 10 - 2 29 85 & Over 11 6 - 1 18 Total 106 118 33 21 278 Average Age 73.4 70.5 63.6 70.7 70.8 (B' )April 21 2021 E-15 EXHIBIT- OTHER ACTUARIAL ASSUMPTIONS Assumption July 1, 2018 Valuation July 1, 2020 Valuation ■ Medical Trend Increase from Prior Year Increase from Prior Year Post- Post- Fiscal Pre- Post- Calendar Pre- Medicare Medicare Year Medicare Medicare Year Medicare Kaiser Other 2018/19 Actual 18/19 Premiums 2019 n/a 2019/20 7.50% 6.50% 2020 Actual 2020 Premiums 2020/21 7.25% 6.30% 2021 Actual 2021 Premiums 2021/22 7.00% 6.10% 2022 7.00% 5.00% 6.10% 2022/23 6.75% 5.90% 2023 6.75% 4.85% 5.90% 2023/24 6.50% 5.70% 2024 6.50% 4.70% 5.70% 2024/25 6.25% 5.50% 2025 6.25% 4.60% 5.50% 2025/26 6.00% 5.30% 2026 6.00% 4.50% 5.30% 2026/27 5.80% 5.15% 2027 5.80% 4.45% 5.15% 2027/28 5.60% 5.00% 2028 5.60% 4.40% 5.00% 2028/29 5.40% 4.85% 2029 5.40% 4.35% 4.85% 2029/30 5.20% 4.70% 2030 5.20% 4.30% 4.70% 30/31-34/35 5.05% 4.60% 2031-35 5.05% 4.25% 4.60% 35/36-44/45 4.90% 4.50% 2036-45 4.90% 4.20% 4.50% 45/46-54/55 4.75% 4.45% 2046-55 4.75% 4.15% 4.45% 55/56-64/65 4.60% 4.40% 2056-65 4.60% 4.10% 4.40% 65/66-74/75 4.30% 4.20% 2066-75 4.30% 4.05% 4.20% 2075/76+ 4.00% 4.00% 2076+ 4.00% 4.00% 4.00% April,O�Ar'I��g�f�d FINANCE Committee Meetin�-Abenda Packet- Page 197 of 217 Page 32 of 46 EXHIBIT- OTHER ACTUARIAL ASSUMPTIONS Assumption July 1, 2018 Valuation July 1, 2020 Valuation ■ Medicare Fiscal Fiscal Part B Year Increase from Prior Year Year Increase from Prior Year Premiums 2018/19 Actual Premiums 2019 n/a 2019/20 3.70% 2020 Actual Premiums 2020/21 4.40% 2021 Actual Premiums 2021/22 5.10% 2022 5.10% 2022/23+ Same as Medicare 2023+ Same as Medicare Medical Trend Medical Trend ■ Dental and ■ 3.75% ■ Same Vision Trend ■ Life Insurance ■ 0% ■ Same Trend ■ PARS ■ 0.20% of beginning of year ■ Same Administrative Market Value of Assets added Fee to Normal Cost (B' )April 21 2021 E-17 EXHIBIT- OTHER ACTUARIAL ASSUMPTIONS Assumption July 1, 2018 Valuation July 1, 2020 Valuation ■ PEMHCA ■ N/A ■ 0.24% of PEMHCA Premiums Administrative ■ Added to Normal Cost Fee ■ 2018/19 ■ Sample monthly claims costs used in 2018 valuation: Age-Related Health Net Health Net Claims Costs— Plan Kaiser HMO HMO PPO Implied Age M F M F M F Subsidy 30 $301 $646 $535 $1,148 $653 $1,148 Estimate 40 450 654 799 1,162 1,024 1,312 50 741 812 1,317 1,443 1,623 1,634 60 1,229 1,159 2,186 2,060 2,321 2,163 64 1,495 1,366 2,658 2,429 2,773 2,501 April FINANCE Committee Meetin�-A6enda Packet- Page 198 of 217 Page 33 of 46 EXHIBIT- OTHER ACTUARIAL ASSUMPTIONS Assumption July 1, 2018 Valuation July 1, 2020 Valuation ■ 2021 ■ Sample monthly claims costs used in 2020 valuation: Age-Related PEMHCA Region 1 Claims Costs— HMO HealthNet United PEMHCA Plan Kaiser SmartCare Healthcare Implied Age M F M F M F Subsidy 30 $330 $590 $419 $751 $380 $680 Estimate 40 449 712 572 907 518 821 50 682 891 867 1,136 786 1,029 60 1,138 1,192 1,447 1,519 1,311 1,376 64 1,346 1,334 1,713 1,700 1,552 1,540 PPO Plan PERS Choice PERS Select PERSCare Age M F M F M F 30 $300 $570 $220 $437 $389 $726 40 425 700 321 540 545 887 50 674 891 522 695 853 1,123 60 1,173 1,220 928 963 1,466 1,525 64 1,399 1,373 1,110 1,086 1,743 1,713 (B' )April 21 2021 E-19 EXHIBIT- OTHER ACTUARIAL ASSUMPTIONS Assumption July 1, 2018 Valuation July 1, 2020 Valuation ■ Mortality ■ CCCERA 12/31/17 valuation ■ CCCERA 12/31/19 valuation assumption (2012-14 assumption (2015-17 Experience Study) Experience Study) ■ Service Retirees & ■ Pre-Retirement: PUB-2010 Beneficiaries: RP-2014 General Employee Amount- ■ Disabled Retirees: RP-2014, +8 Weighted Above-Median ■ Service Retirees: PUB-2010 General Healthy Retiree Amount-Weighted Above- Median ■ Beneficiaries: PUB-2010 Contingent Survivor Amount- Weighted Above-Median (105%) ■ Disabled Retirees: PUB-2010 Non-Safety Disabled Retiree Amount-Weighted (105% M, 100% F) April(, FINANCE Committee Meetin�-A@enda Packet- Page 199 of 217 Page 34 of 46 EXHIBIT- OTHER ACTUARIAL ASSUMPTIONS Assumption July 1, 2018 Valuation July 1, 2020 Valuation ■ Mortality ■ Projected generationally with ■ Projected generationally with Improvement the two-dimensional MP-2015 the two-dimensional MP-2018 Scale projection scale projection scale ■ Termination ■ CCCERA 12/31/17 valuation ■ CCCERA 12/31/19 valuation assumption (2012-14 assumption (2015-17 Experience Study) Experience Study) ■ Based on Service: ■ Based on Service: Service General Service General 0 13.50% 0 14.00% 1 9.25% 1 9.50% 2 9.00% 2 9.25% 3 6.00% 3 6.50% 4 4.50% 4 5.25% 5 4.25% 5 5.00% 10 2.75% 10 3.25% 15 2.10% 15 2.25% 20+ 1.50% 20+ 1.25% (B' )April 21 2021 E-21 EXHIBIT- OTHER ACTUARIAL ASSUMPTIONS Assumption July 1, 2018 Valuation July 1, 2020 Valuation ■ Disability ■ CCCERA 12/31/17 valuation ■ CCCERA 12/31/19 valuation Retirement assumption (2012-14 Experience assumption (2015-17 Experience Study) Study) CCCERA General ■ No change Age Tiers 1 and PEPRA 20 0.01% 25 0.02% 30 0.04% 35 0.08% 40 0.22% 45 0.36% 50 0.52% 55 0.60% 60 0.60% 65 0.60% 70 0.60% April FINANCE Committee Meetin�-Qenda Packet- Page 200 of 217 Page 35 of 46 EXHIBIT- OTHER ACTUARIAL ASSUMPTIONS Assumption July 1, 2018 Valuation July 1, 2020 Valuation ■ Service ■ CCCERA 12/31/17 valuation ■ CCCERA 12/31/19 valuation Retirement assumption (2012-14 assumption (2015-17 Experience Study) Experience Study) Tier 1 Tier 1(Enhanced) Age (Enhanced) PEPRA Age <30 Yrs >30 Yrs PEPRA 50 5% 0% 50 5% 9.0% 0% 51 4% 0% 51 4% 7.2% 0% 52 5% 2% 52 4% 7.2% 2% 53 5% 3% 53 4% 7.2% 3% 54 14% 3% 54 12% 21.6% 3% 55 20% 5% 55 15% 27.0% 5% 60 28% 10% 60 25% 30.0% 8% 65 35% 25% 65 35% 35.0% 25% 70 50% 50% 70 35% 35.0% 40% 75 100% 100% 75 100% 100% 100% ■ Expected Retirement Age: ■ Expected Retirement Age: General Tier 1 (Enh.) z 56.6 General Tier 1 (Enh.) z 58.6 General PEPRA z 61.4 General PEPRA z 61.9 (B' )April 21 2021 E-23 EXHIBIT- OTHER ACTUARIAL ASSUMPTIONS Assumption July 1, 2018 Valuation July 1, 2020 Valuation ■ Participation at ■ Currently Covered— 100% ■ Same Retirement ■ Currently Waived—95% ■ Self-pay Board members— 50% ■ Medical Plan ■ Currently Covered— current ■ Same at Retirement plan election ■ Currently Waived—Kaiser ■ Waived ■ N/A ■ None will re-elect medical Retirees coverage in the future ■ Medicare ■ 100% ■ Same Eligibility ■ Everyone eligible for Medicare will elect Part B coverage ■ Marital Status ■ CCCERA 12/31/17 valuation ■ CCCERA 12/31/19 valuation at Retirement assumption (2012-14 assumption (2015-17 Experience Study) Experience Study) . Males—75% married . Males—65% married . Females— 50% married . Females— 50% married A"t April(, FINANCE Committee Meetin�-A6enda Packet- Page 201 of 217 Page 36 of 46 EXHIBIT- OTHER ACTUARIAL ASSUMPTIONS Assumption July 1, 2018 Valuation July 1, 2020 Valuation ■ Spouse Age ■ Actives: ■ Same . Males 3 years older than spouse . Females 2 years younger than spouse ■ Retirees - spouse birth date provided ■ Dependents at ■ 25% have family coverage until ■ Same Retirement age 65 ■ Aggregate ■ N/A for Level Dollar results ■ N/A for Level Dollar results Payroll ■ 3.00% for Level % of Pay ■ 3.00% for Level % of Pay Increases for sensitivity results, inflation plus sensitivity results, inflation plus Sensitivity 0.25% 0.25% ■ CCCERA 12/31/17 valuation ■ CCCERA 12/31/19 valuation assumption is 3.25%, inflation assumption is 3.25%, inflation plus 0.50% plus 0.50% (B' )April 21 2021 E-25 ago& EXHIBIT- OTHER ACTUARIAL ASSUMPTIONS Assumption July 1, 2018 Valuation July 1, 2020 Valuation ■ Merit Payroll ■ N/A for Level Dollar results ■ N/A for Level Dollar results Increases for ■ CCCERA 12/31/17 valuation ■ CCCERA 12/31/19 valuation Sensitivity assumption (2012-14 assumption (2015-17 Experience Study) Experience Study) Service General Service General Service General Service General 0 10.00% 8 1.25% 0 12.00% 11 1.10% 1 7.25% 9 1.20% 1 7.00% 12 1.00% 2 5.25% 10 1.15% 2 5.25% 13 0.90% 3 3.75% 11 1.10% 3 3.75% 14 0.80% 4 2.75% 12 1.00% 4 2.75% 15 0.75% 5 2.25% 13 0.90% 5 2.25% 16 0.70% 6 1.75% 14 0.80% 6 1.75% 17 0.65% 7 1.50% 15+ 0.75% 7 1.50% 18 0.60% ■ Added to aggregate payroll 8 1.40% 19 0.55% increase assumption for Level 9 1.300 0 20+ 0.50% % of Pay of sensitivity results 10 1.20/o ■ Added to aggregate payroll increase assumption for Level % of Pay of sensitivity results A"t April(, FINANCE Committee Meetin�-Abenda Packet- Page 202 of 217 Page 37 of 46 EXHIBIT- OTHER ACTUARIAL ASSUMPTIONS Assumption July 1, 2020 Valuation ■ Basis for ■ CCCERA 2015 to 2017 experience study was used since covered Assumptions employees are in CCCERA plan ■ Inflation based on our estimate for the Plan's long-term time horizon ■ Short-term medical trend was developed in consultation with Axene Health Partners' healthcare actuaries. ■ Long-term medical trend developed using Society of Actuaries' Getzen Model of Long-Run Medical Cost Trends. ■ Age-based claims are based on tables published by the Society of Actuaries and tables developed by Axene Health Partners based on demographic data for the CalPERS health plans provided by CalPERS and Axene's proprietary AHP Cost Model ■ Participation and coverage based in part on Plan experience ■ Capital market assumptions for the recommended discount rate are based on our study of investment advisor 10-year 2017 capital market assumptions adjusted in some cases to reflect anticipated long-term trends (B' )April 21 2021 E-27 EXHIBIT-ACTUARIAL METHODS Method July 1, 2018 Valuation July 1, 2020 Valuation ■ Cost Method ■ Entry Age Normal, Level Dollar ■ Sensitivity—Level % of Pay ■ Actuarial Value of ■ Investment gains and losses spread over a 5-year rolling Assets period ■ Not less than 80% nor more than 120% of market value ■ Amortization Method ■ Level dollar ■ Sensitivity—Level % of pay ■ Amortization Period ■ 16-year fixed (closed) ■ 14-year fixed (closed) period for projected 7/1/19 period for projected 7/l/21 UAAL UAAL ■ Implied Subsidy ■ Employer cost for allowing non-Medicare eligible retirees to participate at active rates ■ Implied subsidy valued for employee and spouse coverage ■ Future New Entrants ■ Valuation Results—closed group, no new hires April(, FINANCE Committee Meetin�-Abenda Packet- Page 203 of 217 Page 38 of 46 EXHIBIT-DEFINITIONS ■ OPEB ■ Project future employer-provided benefit cash flows for current active Actuarial employees and current retirees Valuation ■ 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 dollar amount ■ Normal Cost(NC) is amount allocated to current fiscal year for active employees ■ 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 (B' )April 21 2021 E-29 EXHIBIT-DEFINITIONS Present Value of Benefits Present Value of Benefits Present Value of Benefits (Without Plan Assets) (With Plan Assets) Future Future Normal Normal Costs Costs 1 Normal Cost Normal Cost Unfunded Actuarial Unfunded Actuarial Accrued Liability Accrued Liability Assets April QOAr#%6W FINANCE Committee Meetin�A@ enda Packet- Page 204 of 217 Attachment 2 Actuarially Determined Contribution (ADC) to Retiree Premium Cost (PayGo) Trend $8,000,000 $7,524,000 $7,500,000 $7,865,000 $7,524,000 $7,000,000 $6,500,000 $6,000,000 $5,500,000 $5,573,753 $5,697,440 $5,404,627 $5,000,000 $4,500,000 $4,642,000 $3,967,334 $4,092,000 $4,360,000 $4,000,000 $3,906,000 / $3,500,000 $3,917,000 $3,000,000 $3,324,000 $3,331,000 2017 2018 2019 2020 2021* 2022** 2023** Fiscal Year Ending June 30 tRetiree Premium Costs Actuarially Determined Contribution (ADC) *Per FY 2020-21 Budget,using revised ADC estimates from Bartel **Per 7/1/20 actuarial valuation April 27, 2021 Regular FINANCE Committee Meeting Agenda Packet- Page 205 of 217 Page 40 of 46 CENTRAL CONTRA COSTA SANITARY DISTRICT $ KT E L RETIREE HEALTHCARE PLAN SSOCIAI 1:5. l_Lf Valuation Summary July 1, 2020 Actuarial Valuation Doug Pryor, Vice President Bartel Associates, LLC April 27, 2021 VALUATION SUMMARY Benefits ■ Eligibility ■Retire directly from the District under CCCERA (service/disability) ■Additional OPEB eligibility which varies by hire date ■Medical ■District pays % of medical premium up to highest cost "Core Plan" 1 Benefit (family coverage for Tier I & II; dual coverage Tier III) ■ Tiers vary by hi her date. Tier I Tier II Tier III < 5/1/85 5/1/85 - 6/30/09 > 6/30/09 • Pre-65 100% 100% 50% • Pre-65 100% 50% 50% ■ Other ■ Tier I-III: District pays % of dental and vision ■ Tier I-II: District pays life insurance and Medicare Part B ■Directors benefits differ (e.g. PEMHCA minimum for medical Pre 65: Kaiser and Health Net SmartCare Post 65: Kaiser Senior Advantage and UnitedHealtheare April 27, 2� 12Regular FINANCE Committee Meeting Agenda Packet- Page 206 of 217 Page 41 of 46 VALUATION SUMMARY Historical Participant Counts 600 527 -39 549 508 500 468 483 454 434 400 248 265 249 216 300 200 260 266 252 242 259 279 274 271 100 0 2007 2009 2010 2012 2014 2016 2018 2020 ■Actives ■Retirees April 27,2021 2 VALUATION SUMMARY Historical cash Benefit Payments $5.0 (in Millions) $4.7 $4.6 $4.7 $4.3 — $4.0 $3.7 $3.5 $3.2 $3.0 — $2.6 $2.4 $2.2 $2.0 $1.0 ■Medical ❑Dental ❑Life Aril l 2021 3 April 27, 21 �egular FINANCE Committee Meeting Agenda Packet- Page 207 of 217 Page 42 of 46 VALUATION SUMMARY District's PARS OPEB Trust ■ Initiated 2008/09 ■ Moderate Portfolio • 50% equity/45% fixed income/5% cash • Approximately $70 million at June 30, 2020 ■ Actuarially Determined Contribution (ADC) paid annually • District has been contributing ADC less benefit payments to Trust April 27,2021 4 VALUATION SUMMARY Historical Trust Changes $10 (in Millions) $9 - - - - $S - - - $7 --- $6 - - - $5 - --------- ----------------------------- ---------------------------------------— $4 --------- --------- -------- - --- $3 - -- - - - $2 - - - -- $1 ......... ......... ........ --------- --------- ------- W Net Return ❑Contributions (t) AA rill 2021 5 April 27, 2�21 �egular FINANCE Committee Meeting Agenda Packet- Page 208 of 217 Page 43 of 46 VALUATION SUMMARY Historical Funded Status $120 (in Millions) $1as S104 $100 MOO 5100 S85 $80 - ............................................................. ................... 56R S69 'i) $60 S60 1Z $40 .................. S43.................. ................... ---- ti i6 $20 ti�3 S9 s0 $ Ll - 2007 2009 2010 2012 2014 2016 2018 2020 f =Retiree Accrued Liability DActive Accrued Liability —Market Value of Assets April 27,2021 6 VALUATION SUMMARY Changes Since 2018 Valuation ■ Unfunded Actuarial Accrued Liability changes ($29.9 million less than expected) • $28.3 million decrease from move to Ca1PERS Medical Program • $2.0 million decrease from medical trend change • $1.8 million increase from plan experience different than expected • $1.4 million decrease from new CCCERA Experience Study 1 A ril l 2021 7 April 27, 2�21 �egular FINANCE Committee Meeting Agenda Packet- Page 209 of 217 Page 44 of 46 VALUATION SUMMARY Historical Actuarially Determined Contributions (ADC) $9 $8.3 $8.3 (in Millions) 58.1 58.1 $S ------ -------- ---------$7-8 -$7 2---------------------------- 57.5 $7.5 $7.3 $7.3 $7 $7.0 $7.0 $6.2 $5 3 $5.4 $5.6 $5 7 ga s --------- --------- ------- $a i'------- -------- -------- -------- $3.6 $3.3 $3.3 $3 -------- - ----- --------- -------- -------- --------- --------- --------- -------- -------- -------- --------- ---- $2.6' $2 4 f $2 - - - - -- - -- - $o N" � 65 =Normal Cost =UAAL Amortization —Benefit Payments(Cash+Implied Subsidy) April 27,2021 8 VALUATION SUMMARY ■ District has contributed ADC less benefit payments into PARS Trust ■ Benefit payments currently exceed ADC ■ District can request reimbursement for benefit payments > ADC ■ ADC is effectively still being contributed 117 A rill 2021 9 April 27, 2�21 �egular FINANCE Committee Meeting Agenda Packet- Page 210 of 217 Page 45 of 46 VALUATION SUMMARY 2021/22 Contribution (Amounts in 000's) 2021/22 Traditional Equivalent Approach Alternative ■ Trust Contribution • ADC (to Trust) $ 3,324 - • Benefit Payments (from Trust) (4,360) (1,0361 • Net Trust In/(Out) Flow (1,036) (1,036) ■ District Payments • Trust $ 3,324 (1,036) • Benefit Payments - 4,360 • Total $ 3,324 $ 3,324 April 27,2021 10 VALUATION SUMMARY Protected 10-Year Full ADC Pre-Funding (Amounts in 000's) Contribution Trust Fiscal Benefit Pre-Funding/ Total Year ADCZ Payments Disbursement Contribution 2021/22 $ 3,324 $ 4,360 $ (1,036) $ 3,324 2022/23 3,331 4,642 (1,311) 3,331 2023/24 3,338 4,784 (1,446) 3,338 2024/25 3,346 5,184 (1,838) 3,346 2025/26 3,353 5,395 (2,042) 3,353 2026/27 3,359 5,433 (2,074) 3,359 2027/28 3,367 5,688 (2,321) 3,367 2028/29 3,374 5,746 (2,372) 3,374 2029/30 3,381 5,895 (2,514) 3,381 2030/31 3,388 5,999 2,611 3,388 2 Includes estimated administrative fees. 1 A ril l 2021 11 April 27, 2�21 �egular FINANCE Committee Meeting Agenda Packet- Page 211 of 217 Page 46 of 46 BARTEL ASSOCIATES OPEB DATABASE Ba[tel Associates OPEB Database Funded% 120% 100% !0% a E K +0% 20% tl°a M"A A►'A 95th Pe[ren[ile 124% 125% 751h Perrea[[le 78% 78% 50thPercea[ile 55% 55% 25th Percentile 34% 33% 3th Percentile 8% 90/0 Funded Ratio 8244 82ai PezcentilP 794 774 Discount Rate=5,75% April 27,2021 12 VALUATION SUMMARY � tt� Questions? A rill 2021 13 April 27, 2621 �egular FINANCE Committee Meeting Agenda Packet- Page 212 of 217