p 3 actuaries you can understand 1 response to segal audit of june 30, 2005 actuarial valuation...
TRANSCRIPT
1P3 Actuaries you can
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Response to Segal Audit of June 30, 2005
Actuarial Valuation
August 16, 2006
P
2P3 Actuaries you can
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Overview
• Overall impression
• Areas of Agreement
• Issues for Discussion
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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
4P3 Actuaries you can
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Areas of Agreement
• Mistakes
• Process Refinements
• Reporting and Documentation
5P3 Actuaries you can
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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
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Process Refinements
• Review in next experience analysis– COLA Timing– Salary Increase Timing
• Add to information collected– Temporary Annuity Option Survivor
Continuance
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Reporting and Documentation
• Add to valuation report– Average member contribution rates– Development of member COL contributions
• Reserve allocation• UAAL amortization• Explanation of process
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Reporting and Documentation
• Minimum Amortization under GASB Statement 27– Fixed in June 30, 2005 actuarial valuation
9P3 Actuaries you can
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Issues for Discussion
• Member Contribution Rates
• Cost Allocation
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Member Contribution Rates
• Regular Basic – OK
• Regular COL– Question about UAAL
• Settlement Basic – OK
• Settlement COL– Question about UAAL– Question about estimating UAAL
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Cost Allocation
• Both approaches calculate costs based on current membership
•P3 approach assumes contributions for all
employees there at beginning of each year.
• Segal approach assumes contributions for all employees there at end of each year.
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Questions