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Non-Valuation Benefits Issues and Options

This syllabus discusses the review of reserves, proposed options, present value, cash flow, undistributed earnings, and non-valuation reserves. It also covers current retiree health benefits, non-guaranteed benefits, and options for retiree health. The document provides calculations and projections for benefits and reserves.

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Non-Valuation Benefits Issues and Options

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  1. P Non-Valuation BenefitsIssues and Options June 7, 2006

  2. Syllabus • Review of Reserves • Options Proposed • Present Value • Cash Flow

  3. Undistributed Earnings • AKA Excess Earnings • Earnings available after: • Crediting regular interest • Filling Contingency Reserve • Calculated on smoothed basis • Limited expectations for near future

  4. Non-Valuation Reservesas of June 30, 2005

  5. Non-Valuation Reservesas of June 30, 2005

  6. Non-Valuation Reservesas of June 30, 2005

  7. Current Retiree Health Benefits • Two Pieces • Settlement Section 9 • Non-guaranteed benefits

  8. Settlement Section 9 • $3 per year of service • Guaranteed • Additional amounts when additional undistributed earnings are available

  9. Non-Guaranteed Benefits • If member prior to 1990: • $45 plus • $3.50 per year of service • If member after 1989: • $5 per year of service • Maximum: $150

  10. Current Features • Paid to all annuitants • Paid from the date of retirement • Paid for life of member • Same amount continues to spouse upon member’s death

  11. Options for Retiree Health • Decrease payment to beneficiary not already receiving to 60% of retiree benefit • Split between Current Retirees and Future Retirees

  12. Current Retirees • Proposed cut off dates • June 30, 2006 • June 30, 2007 • June 30, 2008 • June 30, 2009 • June 30, 2010 • No Cut Off

  13. Calculations • Based on data and assumptions from June 30, 2005 Actuarial Valuation of FCERA • All Dollars in Millions

  14. Projected Annual Payout100% Continuance to Spouse

  15. Projected Annual Payout60% Continuance to Spouse

  16. Present Value of Benefits at 8.16%

  17. Retirees Thru June 30, 2006100% Continuance

  18. Retirees Thru June 30, 2007100% Continuance

  19. Retirees Thru June 30, 2008100% Continuance

  20. Retirees Thru June 30, 2009100% Continuance

  21. Retirees Thru June 30, 2010100% Continuance

  22. All Current Members100% Continuance

  23. Years Reserves Expected to Last100% Continuance

  24. Retirees Thru June 30, 200660% Continuance

  25. Retirees Thru June 30, 200760% Continuance

  26. Retirees Thru June 30, 200860% Continuance

  27. Retirees Thru June 30, 200960% Continuance

  28. Retirees Thru June 30, 201060% Continuance

  29. All Current Members60% Continuance

  30. Years Reserves Expected to Last60% Continuance

  31. Where do we go from here?

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