120 likes | 128 Views
P. Response to Segal Audit of June 30, 2005 Actuarial Valuation. August 16, 2006. Overview. Overall impression Areas of Agreement Issues for Discussion. Overall Impression. Audit is a useful part of actuarial process Valuation results were accurate, but not perfect
E N D
P Response to Segal Audit of June 30, 2005Actuarial Valuation August 16, 2006
Overview • Overall impression • Areas of Agreement • Issues for Discussion
Overall Impression • Audit is a useful part of actuarial process • Valuation results were accurate, but not perfect • Assumptions reasonable • Segal methodology produces higher employer contribution • Questions about member contribution rates
Areas of Agreement • Mistakes • Process Refinements • Reporting and Documentation
Mistakes • Recommend adjusting with June 30, 2006 valuation • Safety retirement rates • Safety salary increase assumptions used in calculation of member contribution rates for members with less than 8 years of service • Vested Reciprocal Terminated Members over age 63 (55 for Safety) • Active member death benefit
Process Refinements • Review in next experience analysis • COLA Timing • Salary Increase Timing • Add to information collected • Temporary Annuity Option Survivor Continuance
Reporting and Documentation • Add to valuation report • Average member contribution rates • Development of member COL contributions • Reserve allocation • UAAL amortization • Explanation of process
Reporting and Documentation • Minimum Amortization under GASB Statement 27 • Fixed in June 30, 2005 actuarial valuation
Issues for Discussion • Member Contribution Rates • Cost Allocation
Member Contribution Rates • Regular Basic – OK • Regular COL • Question about UAAL • Settlement Basic – OK • Settlement COL • Question about UAAL • Question about estimating UAAL
Cost Allocation • Both approaches calculate costs based on current membership • P3approach assumes contributions for all employees there at beginning of each year. • Segal approach assumes contributions for all employees there at end of each year.