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Westchester Community College Actuarial Valuation of Postretirement Health Care Benefits Determined in Accordance with Statement No. 45 of the Governmental Accounting Standards Board As of September 1, 2012 - Including - Notes to Financial Statements As of August 31, 2013 November 2013 Harbridge Consulting Group, LLC Actuaries and Advisors One Lincoln Center, 12th Floor, Syracuse, NY 13202 Voice: 315.703.8900 | Fax: 315.703.8989
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Westchester Community College · Westchester Community College ... to improve the faithfulness of representations and usefulness of ... benefits during the period when employees render

Apr 28, 2018

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  • Westchester Community College

    Actuarial Valuation of Postretirement Health Care Benefits

    Determined in Accordance with Statement No. 45 of the Governmental Accounting Standards Board As of September 1, 2012

    - Including -

    Notes to Financial Statements

    As of August 31, 2013

    November 2013

    Harbridge Consulting Group, LLC

    Actuaries and Advisors

    One Lincoln Center, 12th Floor, Syracuse, NY 13202 Voice: 315.703.8900 | Fax: 315.703.8989

  • TABLE OF CONTENTS

    Westchester Community College Harbridge Consulting Group, L.L.C. Measurement Date: September 1, 2012

    EXECUTIVE SUMMARY ............................................................................1 Section I: Executive Summary ..................................................................... 1 Section II: Certification .................................................................................. 3

    DETAILS OF CALCULATIONS .................................................................4 Section III: Details of Calculations ................................................................. 4 Section IV: Notes to Financial Statements ..................................................... 6

    DATA AND ASSUMPTIONS..................................................................... .8 Section V: Comparison of Results & Participant Summary ........................... 8 Section VI: Assumptions & Methodology ..................................................... 12 Section VII: Plan Provisions .......................................................................... 15

    SUMMARY OF GASB 45 ......................................................................... 17 Section VIII: Summary of GASB 45 & Referenced Tables.... 17

    The information contained in this report was prepared for the use of Westchester Community College and its auditors in connection with our actuarial valuation. It is not intended or necessarily suitable for other purposes. To avoid misrepresentation, it is intended to be used in its entirety.

  • SECTION I EXECUTIVE SUMMARY

    Westchester Community College 1 Harbridge Consulting Group, L.L.C. Measurement Date: September 1, 2012

    The objective of the Governmental Accounting Standards Board (GASB) Accounting Standard No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions, is to improve the faithfulness of representations and usefulness of information included in the financial reports of employers regarding other postemployment benefits. Postemployment benefits include health care benefits, life insurance benefits, and, in some cases, sick pay accrual. These benefits arise from an exchange of salaries and benefits for employee services rendered and constitute part of the compensation for those services. The goal is to measure and recognize the cost of postemployment benefits during the period when employees render the services and to provide relevant information about obligations and the extent to which progress is being made in funding these obligations. The following exhibit illustrates the Actuarial Accrued Liability, Annual Required Contribution, Annual OPEB Cost, and Net OPEB Obligation. It should be noted that while the Actuarial Accrued Liability impacts the development of the Annual Required Contribution, it is not a component of the balance sheet or accounting liability. It is, however, required to be disclosed on the Notes to Financial Statements. In addition, the Present Value of Total Future Liability is illustrated for informational purposes only; it is not required to be disclosed. Please refer to Section VIII for a description of GASB 45 terminology.

  • SECTION I EXECUTIVE SUMMARY

    Westchester Community College 2 Harbridge Consulting Group, L.L.C. Measurement Date: September 1, 2012

    Westchester Community College

    Postretirement Health Care Benefits Plan As of September 1, 2012

    Investment Rate of Return: 4.50%

    CSEA Management Nurses Teachers Total

    Actuarial Accrued Liability (AAL)

    Retirees & Dependents $20,784,972 $5,138,081 $163,524 $21,453,687 $47,540,264

    Actives Fully Eligible 17,931,588 3,940,349 0 20,395,644 42,267,581

    Actives Not Fully Eligible 24,699,334 2,389,945 0 12,477,927 39,567,206

    Disableds 0 0 0 0 0

    Total Actuarial Accrued Liability 63,415,894 11,468,375 163,524 54,327,258 129,375,051

    Additional Obligation attributable to future service 36,966,765 5,073,512 0 22,627,693 64,667,970

    Present Value of Total Future Liability 100,382,659 16,541,887 163,524 76,954,951 194,043,021

    Annual Required Contribution (ARC)

    Normal Cost for Fiscal Year $2,985,349 $608,521 $0 $2,233,872 $5,827,742

    Amortization of Unfunded Actuarial Accrued Liability 3,893,200 704,061 10,039 3,335,235 7,942,535

    Annual Required Contribution (ARC) 6,878,549 1,312,582 10,039 5,569,107 13,770,277

    Annual OPEB Cost

    Annual Required Contribution (ARC) $6,878,549 $1,312,582 $10,039 $5,569,107 $13,770,277

    Interest on Net OPEB Obligation 623,206 153,888 4,661 677,176 1,458,931

    Adjustment to Annual Required Contribution (850,212) (209,943) (6,359) (923,841) (1,990,355)

    Annual OPEB Cost 6,651,543 1,256,527 8,341 5,322,442 13,238,853

    Net OPEB Obligation

    Net OPEB Obligation - beginning of year $13,849,016 $3,419,733 $103,573 $15,048,350 $32,420,672

    Annual OPEB Cost 6,651,543 1,256,527 8,341 5,322,442 13,238,853

    Actual Employer Contributions (1,426,478) (337,309) (2,206) (1,894,314) (3,660,307)

    Net OPEB Obligation - end of year 19,074,081 4,338,951 109,708 18,476,478 41,999,218

  • SECTION II CERTIFICATION

    Westchester Community College 3 Harbridge Consulting Group, L.L.C. Measurement Date: September 1, 2012

    This valuation has been conducted in accordance with generally accepted actuarial principles and practices. The actuaries involved in this engagement are members of the Society of Actuaries and other professional actuarial organizations and meet the Qualification Standards for Actuaries Issuing Statements of Actuarial Opinion in the United States to render the actuarial opinion outlined herein. In preparing the results presented in this report, we have relied upon information provided to us regarding plan provisions, plan participants, and benefit payments. While the scope of our engagement did not call for us to perform an audit or independent verification of this information, we have reviewed this information for reasonableness, but have not audited it. The accuracy of the results is dependent upon the accuracy and completeness of the underlying information which is the responsibility of those who supply the data. The calculations reported herein have been made on a basis consistent with our understanding of GASB 45. Determinations for purposes other than meeting the Westchester Community Colleges financial accounting requirements may be significantly different from the results reported. Section VI of this report provides a summary of the assumptions and methods used in our valuation. These assumptions represent anticipated future experience under the Plan and were selected based on the Colleges best estimate range with regard to each assumption. We believe the assumptions are reasonable for the purposes for which they are being used. The investment rate of return was selected based on the Colleges expectations. Please note that the results provided are based on uncertain events. If actual experience is significantly different than assumed, significant variations in results may occur. Results that differ from those shown in this report, within a reasonable range, could also be considered appropriate. Respectfully submitted,

    HARBRIDGE CONSULTING GROUP, L.L.C. _____________________________________ ______________________________________ Monica J. Cecilia, F.S.A. Nicholas R. Mark, F.S.A., E.A. Member of the American Academy of Actuaries Member of the American Academy of Actuaries (315) 703-8905 (315) 703-8974 mcecilia@bpas.com nmark@bpas.com MJC:NRM:ami N:\Client\WESCOM0591\HC\2013\Valuation\Report\WCC FY 2013 GASB.doc

  • SECTION III DETAILS OF CALCULATIONS

    Westchester Community College 4 Harbridge Consulting Group, L.L.C. Measurement Date: September 1, 2012

    CSEA Management Nurses Teachers Total

    Calculation of Normal Cost Component

    Normal Cost $2,856,793 $582,317 $0 $2,137,677 $5,576,787

    Interest on Normal Cost 128,556 26,204 0 96,195 250,955

    Normal Cost Component $2,985,349 $608,521 $0 $2,233,872 $5,827,742

    Calculation of Amortization Component

    Actuarial Accrued Liability (AAL) $63,415,894 $11,468,375 $163,524 $54,327,258 $129,375,051

    Actuarial Value of Assets 0 0 0 0 0

    Unfunded Actuarial Accrued Liability 63,415,894 11,468,375 163,524 54,327,258 129,375,051

    Amortization Period Status Open Open Open Open Open

    Amortization Period (years) 30 30 30 30 30

    Investment Rate of Return 4.50% 4.50% 4.50% 4.50% 4.50%

    Amortization Factor 17.0219 17.0219 17.0219 17.0219 17.0219

    Annual Amortization 3,725,550 673,743 9,607 3,191,612 7,600,512

    Interest on Amortization Payment 167,650 30,318 432 143,623 342,023

    Amortization Component $3,893,200 $704,061 $10,039 $3,335,235 $7,942,535

    Calculation of Annual Required Contribution (ARC)

    Normal Cost Component $2,985,349 $608,521 $0 $2,233,872 $5,827,742

    Amortization Component 3,893,200 704,061 10,039 3,335,235 7,942,535

    Annual Required Contribution $6,878,549 $1,312,582 $10,039 $5,569,107 $13,770,277

    Calculation of Interest on Net OPEB Obligation

    Net OPEB Obligation - end of prior year $13,849,016 $3,419,733 $103,573 $15,048,350 $32,420,672

    Investment Rate of Return 4.50% 4.50% 4.50% 4.50% 4.50%

    Interest on Net OPEB Obligation $623,206 $153,888 $4,661 $677,176 $1,458,931

    Calculation of Annual OPEB Cost

    Annual Required Contribution $6,878,549 $1,312,582 $10,039 $5,569,107 $13,770,277

    Interest on Net OPEB Obligation 623,206 153,888 4,661 677,176 1,458,931

    Adjustment to Annual Required Contribution (850,212) (209,943) (6,359) (923,841) (1,990,355)

    Annual OPEB Cost $6,651,543 $1,256,527 $8,341 $5,322,442 $13,238,853

  • SECTION III DETAILS OF CALCULATIONS

    Westchester Community College 5 Harbridge Consulting Group, L.L.C. Measurement Date: September 1, 2012

    Fiscal Year 2013 Expected Cash Flow and Ten Year Projection of Future Cash Flow

    Fiscal Year CSEA Management Nurses Teachers Total

    2013 $1,254,774 $323,803 $6,909 $1,532,444 $3,117,930

    2014 1,432,843 397,996 7,375 1,715,674 3,553,888

    2015 1,588,696 424,838 7,843 1,863,386 3,884,763

    2016 1,775,157 459,523 8,308 2,033,857 4,276,845

    2017 1,912,366 475,953 8,734 2,154,123 4,551,176

    2018 2,690,697 635,509 11,426 3,006,104 6,343,736

    2019 2,938,089 708,545 11,987 3,228,184 6,886,805

    2020 3,174,757 750,977 12,466 3,479,738 7,417,938

    2021 3,412,297 804,466 12,879 3,604,113 7,833,755

    2022 3,614,043 877,132 13,125 3,833,651 8,337,951

    2023 3,794,142 916,134 13,309 4,016,906 8,740,491 The ten year projection of future cash flow is based on a closed group valuation as of September 1, 2012. It does not consider the impact of future new hires.

  • SECTION IV NOTES TO FINANCIAL STATEMENTS

    Westchester Community College 6 Harbridge Consulting Group, L.L.C. Measurement Date: September 1, 2012

    Westchester Community College

    GASB 45 Notes to Financial Statements As of August 31, 2013

    Annual OPEB Cost and Net OPEB Obligation FY 2013 FY 2012 FY 2011

    Annual Required Contribution $13,770,277 $13,990,927 $13,240,591

    Interest on Net OPEB Obligation 1,458,931 1,020,349 575,347

    Adjustment to Annual Required Contribution (1,990,355) (1,392,016) (784,920)

    Annual OPEB Cost 13,238,853 13,619,260 13,031,018

    Contributions made (3,660,307) (3,872,992) (3,142,105)

    Increase in Net OPEB Obligation 9,578,546 9,746,268 9,888,913

    Net OPEB Obligation - beginning of year 32,420,672 22,674,404 12,785,491

    Net OPEB Obligation - end of year $41,999,218 $32,420,672 $22,674,404

    Annual OPEB Cost $13,238,853 $13,619,260 $13,031,018

    Percentage of Annual OPEB Cost contributed 27.65% 28.44% 24.11%

    Net OPEB Obligation at end of year 41,999,218 32,420,672 22,674,404

    Funded Status 08/31/2013 08/31/2012 08/31/2011

    Actuarial Accrued Liability (AAL) $137,836,587 $139,531,862 $130,367,669

    Actuarial Value of Assets 0 0 0

    Unfunded Actuarial Accrued Liability (UAAL) 137,836,587 139,531,862 130,367,669

    Funded Ratio (Assets as a percentage of AAL) 0.00% 0.00% 0.00%

    Annual Covered Payroll $47,230,652 $49,594,362 $49,460,984

    UAAL as a Percentage of Covered Payroll 291.84% 281.35% 263.58%

    Actuarial Methods and Assumptions

    Measurement Date 08/31/2013 08/31/2012 08/31/2011

    Investment Rate of Return 4.50% 4.50% 4.50%

    Expected Return on Plan Assets 0.00% 0.00% 0.00%

    Expected Return on Employer's Assets 4.50% 4.50% 4.50%

    Rate of compensation increase n/a n/a n/a

    Inflation Rate 3.00% 3.00% 3.00%

  • SECTION IV NOTES TO FINANCIAL STATEMENTS

    Westchester Community College 7 Harbridge Consulting Group, L.L.C. Measurement Date: September 1, 2012

    Westchester Community College

    GASB 45 Notes to Financial Statements As of August 31, 2013 (Continued)

    Assumed pre-65 medical trend rates at August 31

    Health care cost trend rate assumed for next fiscal year 8.50%

    Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) 5.00%

    Fiscal year that the rate reaches the ultimate trend rate 2021

    Assumed post-65 medical trend rates at August 31

    Health care cost trend rate assumed for next fiscal year 6.75%

    Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) 5.00%

    Fiscal year that the rate reaches the ultimate trend rate 2021

    Assumed prescription drug trend rates at August 31

    Health care cost trend rate assumed for next fiscal year 6.25%

    Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) 5.00%

    Fiscal year that the rate reaches the ultimate trend rate 2021

    Additional Information

    Actuarial Cost Method Projected Unit Credit

    Amortization Method Level Dollar

    Amortization Period Single Amortization Period

    Amortization Period (in years) 30.00

    Amortization Period Status Open

    Method used to determine Actuarial Value of Assets N/A

  • SECTION V COMPARISON OF RESULTS & PARTICIPANT SUMMARY

    Westchester Community College 8 Harbridge Consulting Group, L.L.C. Measurement Date: September 1, 2012

    $9,135,415

    $9,512,885

    $13,031,018

    $13,619,260

    $13,238,853

    $85,903,180

    $90,964,035

    $122,345,312

    $40,000,000

    $60,000,000

    $80,000,000

    $100,000,000

    $120,000,000

    $140,000,000

    $7,000,000

    $9,000,000

    $11,000,000

    $13,000,000

    $15,000,000

    $17,000,000

    09/01/2008 09/01/2009 09/01/2010 09/01/2011 09/01/2012

    AA

    L

    An

    nu

    al O

    PE

    B C

    ost

    Annual OPEB Cost

    AAL

    Annual OPEB Cost

    AAL

    Annual OPEB Cost

    AAL

    Annual OPEB Cost

    AAL

    $130,367,669

    $129,375,051

    History of Actuarial Accrued Liability (AAL) and Annual OPEB Cost

  • SECTION V COMPARISON OF RESULTS & PARTICIPANT SUMMARY

    Westchester Community College 9 Harbridge Consulting Group, L.L.C. Measurement Date: September 1, 2012

    Change in Liability from September 1, 2011 to August 31, 2013

    Actuarial Accrued Liability

    Reasons for Decrease Benefit payments made to

    current retirees

    Updated Pharmacy trend

    assumption

    Less than expected increase

    in claims costs

    Updated NYS retirement and

    turnover assumptions for TRS

    employees

    Updated dental trend

    assumption

    Demographic changes

    different than those assumed

    Benefit payments made to

    current retirees

    August 31, 2013

    $137,836,587

    September 1, 2011 August 31, 2012 September 1, 2012

    $130,367,669 $139,531,862 $129,375,051

    Accumulation of interest on

    AAL

    Updated mortality

    Updated mortality

    assumption

    Accrual of additional benefits

    for actives not fully eligible

    Accrual of additional benefits

    for actives not fully eligible

    Percent Change

    Reasons for Increase

    6.54%-7.28%7.03%

    Accumulation of interest on

    AAL

    Revised expected increase

    in excise tax limit based on

    actual trend for FEHBP

  • SECTION V COMPARISON OF RESULTS & PARTICIPANT SUMMARY

    Westchester Community College 10 Harbridge Consulting Group, L.L.C. Measurement Date: September 1, 2012

    Reconciliation of Plan Participants Participant data was provided by Westchester Community College. We reviewed the data for reasonableness, but did not independently verify or audit it. The participant data was reconciled with information received in conjunction with prior actuarial studies. In the event that significant changes or discrepancies were found, they were discussed with the College. In some circumstances routine corrections or modifications were made, in part by referencing other source documents. No material defects are believed to exist in the data. A reconciliation of the participant data is detailed below:

    Active

    EmployeesRetirees Dependents Disableds Total

    549 298 119 0 966

    43 0 0 0 43

    (37) (11) (9) 0 (57)

    0 0 0 0 0

    0 0 0 0 0

    (18) 18 9 0 9

    0 0 0 0 0

    0 0 0 0 0

    537 305 119 0 961

    Data adjustments

    Total as of September 1, 2012

    Reconciliation of Medical Plan Participant Data

    Terminations

    To inactive

    From inactive

    Retirements

    Total as of September 1, 2010

    New entrants

    Disablements

  • SECTION V COMPARISON OF RESULTS & PARTICIPANT SUMMARY

    Westchester Community College 11 Harbridge Consulting Group, L.L.C. Measurement Date: September 1, 2012

    Summary of Active Plan Participants

    0-4 5-9 10-14 15-19 20-24 25-29 30+ Total

    Under 25 3 0 0 0 0 0 0 3

    25-29 9 3 0 0 0 0 0 12

    30-34 19 10 6 0 0 0 0 35

    35-39 11 13 6 4 1 0 0 35

    40-44 11 22 12 6 7 1 0 59

    45-49 21 9 22 12 11 6 0 81

    50-54 12 13 10 11 11 5 5 67

    55-59 8 15 13 8 21 8 12 85

    60-64 11 4 13 11 11 8 12 70

    65 and over 6 8 10 15 11 2 38 90

    Total 111 97 92 67 73 30 67 537

    Years of ServiceAge

    Average age 52.2

    Average years of service 15.2

    Number of active employees not fully eligible for

    benefits 314

    Number of active employees fully eligible for

    benefits 223

    Summary of Inactive Plan Participants

    Age Retirees Dependents Disableds Total

    Under 55 2 4 0 6

    55-59 9 6 0 15

    60-64 35 13 0 48

    65-69 75 28 0 103

    70-74 59 22 0 81

    75-79 43 13 0 56

    80-84 46 13 0 59

    85 and over 36 20 0 56

    Total 305 119 0 424

    Medical Inactive Participants

  • SECTION VI ASSUMPTIONS & METHODOLOGY

    Westchester Community College 12 Harbridge Consulting Group, L.L.C. Measurement Date: September 1, 2012

    The valuation of postretirement health care benefits involves estimates and assumptions about the probability of events occurring far into the future. Examples include assumptions about future employment, mortality, and the health care cost trend. Calculations are based on the types of benefits provided under the terms of the substantive plan at the time of the valuation and on the pattern of cost sharing between the employer and plan members. Calculations reflect a long-term perspective, so methods and assumptions used include techniques that are designed to reduce short-term volatility. Below is a description of the actuarial assumptions and methodology used in the actuarial valuation. Actuarial Cost Method: Projected Unit Credit Valuation Date: September 1, 2012 Measurement Date: September 1, 2012 Investment Rate of Return: This rate is based on the projected long-term earning rate of the assets expected to be available to pay benefits. Since Westchester Community College does not currently segregate funding for these benefits, the appropriate rate is the expected return on the employers general assets. Mortality: The RP-2000 Mortality Table for annuitants and non-annuitants with projected mortality improvements using Scale AA; specifically as outlined in IRC Regulation 1.430(h)(3)-1 for 2013 valuations. The static mortality tables are projected from the base table for the year 2000 through 2013 with further projection to reflect the approximate expected duration of liabilities, namely 7 years for annuitants and 15 years for non-annuitants. Disability: Rates of decrement due to disability are assumed to be 0%. Turnover: Rates of turnover are based on the experience under the New York State Employees Retirement System (ERS) and the New York State Teachers Retirement System (TRS) reported by New York State as of April 2010. Please refer to Section VIII for these tables. Retirement Incidence: Rates of retirement are based on the experience under the New York State Employees Retirement System (ERS) and the New York State Teachers Retirement System (TRS) reported by New York State as of April 2010. Please refer to Section VIII for these tables.

    Expected Return on Plan Assets 0.00%

    Expected Return on Employers General Assets 4.50%

    Investment Rate of Return Selected 4.50%

  • SECTION VI ASSUMPTIONS & METHODOLOGY

    Westchester Community College 13 Harbridge Consulting Group, L.L.C. Measurement Date: September 1, 2012

    Election Percentage: It was assumed that 100% of future retirees eligible for coverage will elect postretirement health care benefits. Future retirees were assumed to elect coverage in medical plans at the following rates:

    Union Group

    Medical Plan

    % of Retirees Electing Coverage

    CSEA, Management, Nurses POMCO Health Plan 100%

    Teachers POMCO Teacher Health Plan 100%

    Current retirees were assumed to continue participation in their current plans. Spousal Coverage: 85% of future retirees are assumed to elect spousal coverage upon retirement, with male spouses assumed to be three years older and female spouses assumed to be three years younger than the retiree. Per Capita Costs: Retiree claim cost information for the POMCO Health Plan and POMCO Teacher Health Plan were not sufficiently credible. Therefore, to develop a baseline cost assumption, we used actual experience from other medical studies with similar plan designs and used mathematical smoothing techniques to develop reasonable assumptions for estimating current retiree costs. The following tables present the average expected health care costs, excluding administrative fees for the POMCO Health Plan and POMCO Teacher Health Plan, per capita, for fiscal year 2013:

    Age Male Female

    55-59 $10,354 $12,659

    60-64 $13,223 $14,549

    65-69 $4,011 $4,248

    70-74 $4,517 $4,964

    75-79 $4,917 $5,707

    80-84 $5,261 $6,238

    85-89 $5,469 $6,496

    90-94 $5,551 $6,594

    95-99 $5,551 $6,594

    POMCO Health Plan

    Incurred Annual Claim Cost Per Retiree or Dependent

    Age Male Female

    55-59 $10,863 $13,280

    60-64 $13,873 $15,264

    65-69 $4,294 $4,547

    70-74 $4,836 $5,314

    75-79 $5,264 $6,110

    80-84 $5,632 $6,678

    85-89 $5,855 $6,954

    90-94 $5,943 $7,059

    95-99 $5,943 $7,059

    POMCO Teacher Health Plan

    Incurred Annual Claim Cost Per Retiree or Dependent

    Administrative fees were assumed to be $465 per contract annually.

  • SECTION VI ASSUMPTIONS & METHODOLOGY

    Westchester Community College 14 Harbridge Consulting Group, L.L.C. Measurement Date: September 1, 2012

    Annual Rate of Increase in Health Care Costs: The assumed rates of increase in health care costs are presented in the table below:

    Fiscal Year

    Pre-65 Medical

    Post-65 Medical

    Prescription Drug

    2013 9.00% 7.00% 6.500%

    2014 8.50% 6.75% 6.250%

    2015 8.00% 6.50% 6.000%

    2016 7.50% 6.25% 5.750%

    2017 7.00% 6.00% 5.500%

    2018 6.50% 5.75% 5.375%

    2019 6.00% 5.50% 5.250%

    2020 5.50% 5.25% 5.125%

    2021+ 5.00% 5.00% 5.000%

    Administrative fees were assumed to increase at 3.25% per year. Dental claims were assumed to increase at 4.00% per year.

    Annual Rate of Increase in the Consumer Price Index (CPI): CPI of 2.50% was assumed for purposes of determining future increases in limits corresponding to the excise tax of the Affordable Care Act on high cost employer-sponsored health plans.

  • SECTION VII PLAN PROVISIONS

    Westchester Community College 15 Harbridge Consulting Group, L.L.C. Measurement Date: September 1, 2012

    Plan Eligibility: Age 55 with 5 Years of Service with Westchester County and eligible to receive a pension from the NYS Retirement System. Duration of Coverage: Retiree benefits continue for the life of the retiree. Spousal benefits continue for the life of the spouse. Surviving Spouse Coverage: Surviving spouses are permitted to continue coverage after the death of the retiree, but are responsible for paying 100% of premium (less Part B premium for post-65 surviving spouses). Retiree Contributions: Retirees contribute a portion of medical premiums based on group and years of service at retirement. Those retirees who are members of the Teachers, Management, and Nurses Union groups do not contribute to postretirement health care benefits for single coverage and contribute 20% of the family minus single premium for dependent coverage. CSEA retirees are subject to the following contribution schedule:

    Years of Service at Retirement

    Retiree Contribution

    Dependent Contribution

    5-10 50% of premium 65% of family minus single premium

    10-19 25% of premium 40% of family minus single premium

    20+ 0% of premium 20% of family minus single premium

    Retirees are not required to contribute to the Dental Plan.

    Medicare Part B: Medicare Part B premiums are reimbursed at 100% for post-65 retirees and dependents. Premiums for surviving spouses are not reimbursed, but the contribution rate for surviving spouses is net of Part B premiums. For purposes of this valuation, we have assumed reimbursement at the basic level and that there will be no additional reimbursement due to the income surcharge. Medical Benefits: Retiree medical benefits are provided through the POMCO Health Plan and POMCO Teacher Health Plan. The POMCO Health Plan and the POMCO Teacher Health Plan are self-insured experience rated PPO plans. Monthly premiums for the plan year from January 1, 2012 through December 31, 2012 are presented in the following table:

    POMCO Health and Teacher Plans

    All Retirees

    Single $952.42

    Family $2,381.08

  • SECTION VII PLAN PROVISIONS

    Westchester Community College 16 Harbridge Consulting Group, L.L.C. Measurement Date: September 1, 2012

    Dental Benefits: Dental benefits are provided through the POMCO Dental Plan for retirees only. Dependents and surviving spouses are not eligible for dental coverage. Monthly premiums for the plan year from January 1, 2012 through December 31, 2012 are presented in the following table:

    Dental Plan

    All Retirees

    Single $24.58

    Health Care Reform: The Affordable Care Act has a financial impact on employers who sponsor postretirement health care benefits and therefore certain provisions are reflected in the GASB 45 valuation. The excise tax is reflected starting in 2018. The excise tax is 40% of the excess amount the plans health care cost exceeds limits as defined in the legislation. The 2018 limits are detailed below and are scheduled to increase with the Consumer Price Index (CPI) plus 1% for calendar years beginning before 2020 and with CPI for all years thereafter.

    Active/Retiree Qualified Retiree*

    Single $10,200 $11,850

    Family $27,500 $30,950

    * A qualified retiree is receiving coverage by reason of being a retiree, is over age 55, and not entitled

    to benefits or eligible for enrollment under the Medicare program.

  • SECTION VIII SUMMARY OF GASB 45 & REFERENCED TABLES

    Westchester Community College 17 Harbridge Consulting Group, L.L.C. Measurement Date: September 1, 2012

    SUMMARY OF GASB 45 GASB 45 Statement The Governmental Accounting Standards Board (GASB) Accounting Standard No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions, covers postemployment benefits including health care benefits, life insurance benefits, and, in some cases, sick pay accrual. GASB 45 requires employers to recognize these benefits on an accrual basis rather than pay-as-you-go. Effective Date Statement 45 becomes effective in three phases, based on the annual revenues of the employer. The phase in which an employer should implement GASB 45 is the same as the employers phase for the purpose of implementing Statement No. 34, Basic Financial Statementsand Managements Discussion and Analysis-for State and Local Governments. The total revenue was based on the first fiscal year ending after June 15, 1999. A new revenue calculation is not required.

    Phase Effective for Period Beginning After Total Annual Revenue

    Phase 1 December 15, 2006 $100 million or more

    Phase 2 December 15, 2007 $10 million up to $100

    million

    Phase 3 December 15, 2008 Less than $10 million

    Valuation Frequency For financial reporting purposes, a full actuarial valuation should be performed at the following minimum frequency.

    a. Biennially for plans with a total membership of 200 or more b. Triennially for plans with a total membership of fewer than 200

    Interim valuations, or roll-forwards, may be performed in years in which a full valuation is not required.

  • SECTION VIII SUMMARY OF GASB 45 & REFERENCED TABLES

    Westchester Community College 18 Harbridge Consulting Group, L.L.C. Measurement Date: September 1, 2012

    GASB 45 Terminology: Present Value of Total Future Liability The present value of total future liability represents the total future benefits expected to be paid to current and future retirees as a result of their service through the valuation date as well as any expected future service. The present value of total future liability is the cost to finance benefits payable in the future, discounted to reflect the expected effects of the time value of money and the probabilities of payment. Actuarial Accrued Liability (AAL) - The AAL is the actuarial present value of future benefits based on employees' service rendered to the measurement date using the selected actuarial cost method. Retirees & Dependents former employees who have satisfied the age and service requirement

    and are currently receiving postretirement health care benefits Actives Fully Eligible active employees who have satisfied the age and service requirement for

    postretirement health care benefits. Actives Not Fully Eligible active employees who have not yet satisfied the age and service

    requirement for postretirement health care benefits. Unfunded Actuarial Accrued Liability (UAAL) - The excess of the Actuarial Accrued Liability over the Actuarial Value of Assets. For an unfunded plan, the UAAL is equal to the AAL. Normal Cost The present value of future benefits earned by employees during the current fiscal year. Annual Required Contributions of the Employer (ARC) - If the plan were funded, the ARC would equal the employers periodic required contributions to a defined benefit OPEB plan, calculated in accordance with the GASB #45 parameters. For non-funded plans, this amount is calculated and used to increase the net unfunded OPEB Obligation. Annual OPEB Cost - An accrual-basis measure of the periodic cost of an employers participation in a defined benefit OPEB plan. The Annual OPEB Cost is recorded as an expense and disclosed in the government-wide financial statement. Net OPEB Obligation - The cumulative difference as of the effective date of this Statement between annual OPEB cost and the employers contributions to the plan, including the OPEB liability (asset) at transition, if any, and excluding (a) short-term differences and (b) unpaid contributions that have been converted to OPEB-related debt. The Net OPEB Obligation is represented as a balance sheet liability in the Statement of Net Assets.

  • SECTION VIII SUMMARY OF GASB 45 & REFERENCED TABLES

    Westchester Community College 19 Harbridge Consulting Group, L.L.C. Measurement Date: September 1, 2012

    REFERENCED TABLES Turnover New York State Employees Retirement System (ERS) Turnover Rates

  • SECTION VIII SUMMARY OF GASB 45 & REFERENCED TABLES

    Westchester Community College 20 Harbridge Consulting Group, L.L.C. Measurement Date: September 1, 2012

    New York State Employees Retirement System (ERS) Turnover Rates

  • SECTION VIII SUMMARY OF GASB 45 & REFERENCED TABLES

    Westchester Community College 21 Harbridge Consulting Group, L.L.C Measurement Date: September 1, 2012

    New York State Teachers Retirement System (TRS) Turnover Rates for females

    0 Years of 1 Year of 2 Years of 3 Years of 4 Years of 5 Years of 6 Years of 7 Years of 8 Years of 9 Years of 10 + Years of

    Service Service Service Service Service Service Service Service Service Service Service

  • SECTION VIII SUMMARY OF GASB 45 & REFERENCED TABLES

    Westchester Community College 22 Harbridge Consulting Group, L.L.C Measurement Date: September 1, 2012

    New York State Teachers Retirement System (TRS) Turnover Rates for males

    0 Years of 1 Year of 2 Years of 3 Years of 4 Years of 5 Years of 6 Years of 7 Years of 8 Years of 9 Years of 10 + Years of

    Service Service Service Service Service Service Service Service Service Service Service

  • SECTION VIII SUMMARY OF GASB 45 & REFERENCED TABLES

    Westchester Community College 23 Harbridge Consulting Group, L.L.C. Measurement Date: September 1, 2012

    Retirement New York State Employees Retirement System (ERS) Retirement Rates

    < 20 Years 20-29 Years 30+ Years

  • SECTION VIII SUMMARY OF GASB 45 & REFERENCED TABLES

    Westchester Community College 24 Harbridge Consulting Group, L.L.C. Measurement Date: September 1, 2012

    New York State Teachers Retirement System (TRS) Retirement Rates

    Age Males Females Age Males Females

    55 31.1756% 31.1774% 55 3.4627% 4.2183%

    56 25.4224% 24.9599% 56 2.9994% 3.6835%

    57 18.7021% 16.3685% 57 2.8821% 3.5166%

    58 20.1230% 17.3078% 58 3.7932% 4.0023%

    59 21.7976% 17.7174% 59 3.4563% 4.2266%

    60 22.5532% 19.0579% 60 4.7151% 4.8490%

    61 22.7859% 20.4671% 61 5.3363% 6.2749%

    62 21.1386% 22.1966% 62 21.1386% 22.1966%

    63 17.8082% 18.1851% 63 17.8082% 18.1851%

    64 13.4752% 15.9849% 64 13.4752% 15.9849%

    65 17.4277% 20.0559% 65 17.4277% 20.0559%

    66 19.7891% 18.9809% 66 19.7891% 18.9809%

    67 11.5544% 16.1544% 67 11.5544% 16.1544%

    68 12.6412% 16.9583% 68 12.6412% 16.9583%

    69 9.5163% 15.7879% 69 9.5163% 15.7879%

    70 13.4313% 16.9101% 70 13.4313% 16.9101%

    71 13.2847% 17.3372% 71 13.2847% 17.3372%

    72 8.3523% 12.3957% 72 8.3523% 12.3957%

    73 6.0934% 12.6204% 73 6.0934% 12.6204%

    74 14.0439% 11.8774% 74 14.0439% 11.8774%

    75 16.5500% 15.3458% 75 16.5500% 15.3458%

    76 100.0000% 100.0000% 76 100.0000% 100.0000%

    At least Age 62 or with 30+ Years of Service

    TRS - Tier 1 and Tiers 2, 3, 4

    and Tier 5 and 6 at least Age 62

    TRS - Tiers 2, 3, 4 less than Age 62

    with