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HomeMy WebLinkAboutLetter_1945_April 24_SERSBOARD OF ADMINISTRATION ' ,r. ~. -- THOS. E. STANTO N, PFESIDEVT H. H. BENEDICT JOHN R. CORNWELL. DONALD C-ALLAC:HER FORD A. CHATTERS JAMES DEAN WALTER C. KENNEDY JOSEPH H. STEPHENS ~ o STATE OF CALIFORNIA ~~~~~ ~Iti~~Q~1PPS' ~E~tL'PI1i.Pki~ ~~~~EZii 702 STATE OFFICE BUILDING NO. i TENTH AND L STREETS SACRAMENTO 14 Gity Council City of Santa Ana, California Gentlemen: EARL W. CHAPMAN EXECUTIVE SECRETARY RALPH R. NELSON ACTUARY Enclosed is the Consulting Actuaries' report on the investigation into the employment ©xperience of ~ i City of Santa Ana , hereinafter Name of Subdivision referred to as subdivision, arch suc},. valuation of the benefits and contributions provided in the State Employeest Reti.roment Act, as was necessary to determine the approximate, as distinguished frpm the definitive, contribution which would be re- quired by the participation of said subdivision in the State Employees' Retirement System. The following comments axe submitted: 1. The approximate contribution tivhich would be required of the subdivision by its participation in said Retirement System, under various assumptions acid segregated according to employee groups, is hereby quoted by the Board of Administration to said subdi~tision, to be the amounts and percentages as given in items 2Z~. to 27 on pages 7 and 8 of. the report. The amounts and per- centages given in these items are subject to the statements in items 28 to 31, both inclusive, of the report, and to the statements in this letter. 2. As an illustration of the approximate contributign shotivn in th© report, the following amounts are tak@n :from column Z~, applying to all employees: a, Subdivision's contribut~,on to provide service pensions,. current service, from item 2_1a. '~ 27 367.12 b. Subdivision's contribution to provide current service death. anal disability benefits, from item 25 ~Ig 478.65 c. Total annual contributions to provide benefits based on current service, i.e., service rendered after the effective date of participation ~4&,845.77 d. Subdivision's contribution to provide benefits based or_ prior service, i.e., service rendered prior to said effective date of participation, liquidat©d over a 25 year period, from item 26 '.28,835.49 e. Total approximate annual contribution as given in item 27 (o), subject to adjustm~rt as explained, and to be reduced after 25 years by ~:he amount in item (d) `~ 75,681.26 ~~12G-1 5-l~t~ 15G ., • ~„', In the saris manlier, fire approximate a:~irual contribution accordin; to gro~zps o.f aInplO?JP.?S and periods for pr~.or service liquidation, riay be taken :from items ?~~ to 27, inclusive. 3. Amounts <.nd percentages in items r©ferring to prior sczrvice are basal on the assumption that benefits on account of prior service Drill be granted to cit~l firemen and city policemen, and to other employees of ti~ze city, on the same scale as prior service benef~.ts are notiv provided under the Rotirelnent Syster;~ for members of the State Hightivay Patrol and other State employees, respectively. `J'he contract .f:i_nall.y to be entered into between the subdivision and the Board of Administration, may pro- vide prior service berzo.fi~;s on a lesser scale, at the option of the subdivision. If -the SCale is reduced by one-half, the appr©ximate contri- bution quoted in the Consulting; Actuaric~sf report, tivould be reduced by approximately, but not exactly, one-half of the amotmta and percentages in item ~6. 1~.. 'rho cc~tribution given in the Consulting Actuaries' report i.s called ar~proximate because i.t is based nn an assumed number. of employees t-vho will become members of the System, and upon other assumed factors. `1'he definitive contribution to be fixed by contract may differ from the ap- proximate contribution, if t}te facts at the consulmnation of participation diff_or from the assumi~tions meta made. 'Additi oral calculations may be necessary, depending on the extant of the differences. Reference is made to the first paragraph of Section 53 (b~ of the State Employees' Retirement Act. 5. The definitive contribution required of. the subdivision, by contract be- ttv©~n the subdivision and the 1~oard of :ldministration, ti+rill be subject to adjustment by the Board of Administration on account of experience zzndor t;he t~.etirement System, as determined by the periodical investigation, valua- tion and determination provided for by the State Employeest Retirement 1?ct. o. The Board of Administration is authorized by rho State Fmployeost Retirement Act to include each year in the contribution required of the subdivision, a reasonable amount to cover file costs of administering the System as it affects the employees of the subdiviaior.~. The amount so included would be in addition to the contribution quoted in the Consulting Actuaries' report. ,. Ii,nclosed is a copy of F121 to be used by you if you decide to go on tivith the stops necessary for participation in the State :'~~mployaes' Retirement :~ysteln. If further information is desired before ,you make the decision, you should communi- cate directly with the Retirement C)ffice ir. Sacramento. T;nclosed is a bill for the compensation stated in the contract executed be- tween you and the Consultirj; Actuaries. Ycsurs truly, BOA;D OF ADi<:INISTRATION STATh EdlI'LOYE~~S~ RETIREi'~;}sJJT S'iSTED,1 L~~ ~ '~ ~. ~ " a'~ t~°" ACTUARY _ ~ ~ ~~ Fl2C)-2 5-1.~0 150 COFiTES tiP?D ::ERFiIRTH COIdSULTII?G ACTiJAI:IES 660 N:ARIrE`P S'PR~sET -SAN FRANCISCO 4, CAI,IFOR~IIA April 24, 1945 ';'ioard of Administration State Employees' Retirer;.ent System Sacramento, California Gentlemen; ~, ,' In accordance witt; the provisions of the Str~i;e ^,mplo,yees' retirement F_ct and the contract entered into >vith the CITY OF Sta.N1^A ANA ~~Naine of Su division} ~~~ ~~_M hereinafter refF~rred to as subdivision, ander date of October 2? ly 44, we have ealculs.ted the approximate contribution which avould be required uy tie parti eipation of Subdivision in the State I;mi:loyees' ~tetiremer,.t System. reference is made to tre State F~rnployees' Retirement Act, f'or the benefits provided for rne;r,,.- bars of the Retirement System, and foi° contributions required of members of the system. The follovring statement of the results of our calculations, includine; a statement of the approximate contribution, is based on data about emplo~~~ees oi' subdivision, e~rhose memberships in the Retirement System are contemplated, furnished. by subdivision througl-i the Board of Administration; 1 2 3 ~~ City City ){.employees Firemen Policemen Other than 9'otals City Firemen of Cols and City l,2 & 3 Policemen iv:ISCEI,i,ANEOUS Dt~TA 1. ~Qini.3num ~?ge of Voluntary Acc. to Service Fetirement 60 60 ~~et. Act 2. i+lumber of employees ( 1-1- 45j 50 48 154 252 3. annual Salaries (as being paid 1-145) X112,229.40 X113,?94.20 ~~332,4??. 40 w558,501.00 F 119-1 11-44 400 t ~. :~iscnllanecus information a, Average Age (at 1 -1- 45) b. ~wera;~e it~onthly Salary c. 1!.verage Years of Prior Service, i.e., Service Prior to 1~-1-45 5. Employees' Annual Cortri- butions, bas©d on 3~ interest, to provide, with City's Contributions in item (?11), Future Service Allowance ( eS rvice Retire» meat described in item ~ on page 5 of Retirement Act Pamphlet} Percen±age of Annual Salaries ~~ 1 2' 3 Employees City City Obher than Firemen Policemen City Firemen and C ~~.ty Policemen 39.? 43.1 49.9 187.05 197.56 179.91 5.9 0 b. Employees' Annual Contri- butions, based on 2~~ in- terest, to provide, vrith City's Contributicm in item (21,}, Future Service Allowance ( ewe Retire- ment described in item 5 nn page 5 of Retirement Act Pamphlet Percentage of Annual Salaries 7. lies ent Value of Future 4 8.6 9,115.08 10.,404.24 8.122 9.143 6.531 4 Totes Is of Cols. 1,2 and 3 0 41,231.76 7.383 Salaries X1,590,948,60 X1,398,549.24 X3,021,021.00 X6,010,518.84 0 5~•$; 21,712.44 F119-2 12-1.~.~ I~,00 8. Present Value of Pu+.ure 1 2 3 ~~ E'mpl ogees City City Other than 't'otals }'iremer~ }'olicemen C.'t.y I'~.reznen of Gol:?. a.r~ City 1,2 and 3 Policemen Contributions, based ~n z~rL~~ interest, which will be credited to employees at d. 41:it1'idra~~ral from Service 3+06$.2$ X2,772.72 X14,770.80 ~20,6I1,80 e. Ordinary Death 17,539.44 14,407,08 29,691.72 61,638.24 f. Ird~.zstrial Death 5,3?4.68 4,609.32 0 9,984.00 g. Ordinary Disabi.iity Rvtireraer~t 4,3$7.68 3,539.?6 6,513,44 14,540.88 h. Industrial Disability Retirement 13,056.48 10,528.68: 0 23,585.16 i. Sorv~.ce netirvzrzent 87,158.52 76452.48 136,269.48 299,880..48 j. Tntr:Ll of (d) to (i),inc1.130,585.08 X112,310.04 X187,345,44 X430,240.56 C-R06S PR.~SDpdT VAIL~ES Ors b~'I~rEFSl^.> `1'0 ~E PROVIDED F'ROi~~ S t3BD iii IS :OPT t S AIdD EP:~f'?..OYLES' C C)I f`l~;^.~IB ~J`i` 1~ ObS ~). Present `'slue !'cross Ordinary Death 3enefit (Includes Ordinary Dvatrz Benefit for Ernployec3s in Column~3, pay- abla at both Ordinary and. Industrial Deaths, which is not in lieu of weekly indem- nity under State Compensation .Lflw. Fienefit described in item c on pa e 7 0:~~ :~.etiremont Act pamphlet 24,368.87 20,031.48 48,393.65 92,794.00 Percentage of Present Value of Ftiiture Salaries 1.532 1.432 1.602 1.544 10. Present Value of Gross Indus- trial Death Allowances (Ben©- fit described in item 8 erz page ~ of R©tirement Act Pamphl9t, ~rhich is in lieu of Included in ~vAakly ind.euzrzii;y utzder State preceding Compc~nsr~tion Law) 56,486.04 4.8,998.10 item 9 105,484.14 Percentage of Present Value of :~1.zture salaries 3.550 3.503 1.755 r i 19_3 5-!~0 1a00 n L~ z:i. ;.'ros~+~lt 'It11uR oi° Cxrc~sS i.;rdi.- nary i)isaoility ise;:ir~eraent Al}.atv~:ncc~s, Current Service, (Includes Ordinary Disability Benefit ..for ~nployaes in Col- umn, 3, payable at bot?~ Ordinary and Industrial T.~isability, which is not in lieu of vreekly indemnity under State Compen- sation Law. Disability Retire- ment desoribed in item ~ on page h of Retirement Act Pamphlet) rercc:ntage of, present 'Value of r'uture Sslaries 12. Present Value of Gross Indusw trial Disability Retirement Allo:~ances (Disability i~etire- *nent c?4,:,eri?red in item 6 on page 6 0~' Retir~r.~snt Act Pamphlet, which is in luau of weekly indemnity under Str.+.te Compensation Law} Percehtaoe of :tres©nt Value of l~~ture Se.larie s 4,071 3.884 I.98I 1j. Present TTalue of Gros Service Retirement Allowances, Current z;ervic9, (Service Retirement described in itQm ~ on pa,~,e 5 of P.etireMent Act Pamphlets 174,317.04 152,904.96 2?2,538.96 599,760.96 }'ercenta~;e of Present Value of Flaturo Salariea ].!i. Present Value of Gross Service 'erasion, Frior Service, (Servzee R.etir~3r~nnt described in item ~ O.r~ r,^, 6;" 5 of Fr9tiromant _".c;t 's'atnph}.et } Percentage of Present Value o" i~uture Salaries I ~ u~-ployaos City City Otr:c~r than Firemen Policemen City Fir®m~;n 1311(!. Clty P~Iicemen X8,711.38 X6,432.88 •548 .Q60 64,765.38 54=315.48- 10.95? 10.933 99,448,44 159,234.36 6.251 11.3£6 1~ ~ c~tals of ~~ols. 1,2 ar ;. X20,355.42 X35,499,68 •674 .591 I~^:l~uled in preceding ~tt~m 11 119,080.86 9.021 9.979 229,523.?? 488,206.5? 7.598 8.123 • 1 :? City City i+'iramen Policemen 1 ~. :°resent '.Taluo of .r~dc?.itianal Gu~.rantaad t'onsic~, .E'ri.or `service, (Service Retirement described in Sao. SZG on pa~~e~ ~3 0~` T~etirement l~ct Par,~- unlet~ 0 I'srnent~ige o:~ I=i-asdat ±ra?ua of ~~xture Salaries 16. nresant ~Talue of ~3ros.~ Ordinary Disability R~+tire- rient Allovrarices, .Prior Ser- vice, (Includes Ordinary Disability i3enefit for 'r'.si• ployees in Column 3, payal?le at bath Ordinary and Indus- trial r%isability, not in lie~z of «eekly indemnity under State Campensati.on Lztw. B€ane- fit described in item '~ an page b o.f Retire~:ent .F~.et Prmphl.et) 0 X2,879.90 X3,275.48 1'?rcente.ga of ~!~rc~sent Value o£ Future Salaries .181 .234 N'~T FI{~ry,SL"ATT ;VALUES nF ~.~.NEFIT:: TO gB PITOVIDED FltOii •519 S1Tf3DIVISxO?~~S C01~?TRIBUTI~'t~tS, !~T'!) AAT!?ttAi, C~'lN'TIiIBt'TICI~TS i~.T~,GUTfit~li ...r ._..._ ..w_.___ _._..._ _.,...~.,......~...__ '.)F ntiADIVI."i TO?~i Ttl PROV:TAE SAID BIl"tEr ITS 17. :F'resant Value of ?det Ordi~ nary Death Benefit, i.o., Gross Benefit from item 9, minus ~`uiploSroe;,~ Contributions from item S (e;. (Includes Ordinary Death Benefit for ;~:tployeas in Column 3, Fay- atsly tit both Ordin:~.rv e.d Lndustrial 1)en.ths} 6,829.43 5,624.40 ~i ?'•mployess !}thy=r than City Firomer. and City Policemen X21,222.24 . 70~ 'Potals af. Cflls. 1,?_ and ~j X21,222.24 .353 15,691.94 21,847.32 18,701.93 •363 31,155.76 .:a-aontage of rr~ssent Value of iG4xture Salaries .429 .402 .F19 •518 Fll~-Sri-~~0 ~ ~ 1 2 3 ~ Employees City City Other than Totals Firemer. Policemen City Firemen of Cols. and City 1,2 and 3 Policemen 1B. Present Value of Net Indus- trial Death Allowances, i,e., Grose Benefit fr~:r ii.;am. l~, Included in minus Er ployees' Con-~rii~utions preceding from item Fi (f) X51,111.36 ~~44,388.78~ item 17 X95:500.14 Percentage of Present Value of Future Sale~ri©s 1~ Present Valu© of Net Ordinary Disability Retire*~~ent A11ow-" ances, Current Sei~,ice, i.e., Gress Benefit from item 11, minus Employees' Contributions from item 8 (g), (Includes Ordinary Disability Benefit for Employees in Col~unn 3, ~ay- able q.t both Ordinary and In- dustrial Disability) Percentage of Present Value of Future Salaries 3.213 3.174 4,323.70 2893.12 X13,?41,98. :272 ?_G. Present 'Talus of Net Indus- trial Disability Retirement Allowances, i.e., Gross Benefit frcr: item 12, minus Employeest Contributions from item B (h) 51,708,90 Percentage of Present Value of Future Salaries 3.250 21. Present Value of Net Service Retirement Allowances, Current Service, i.®., Gross Benefit fram item 13, minus Employeest Contributions from item II (i) 8?,158.52 Percentage of Present Value of Future Salaries 5,478 22. Present Vallee of all Net Benefits, Current Service, other than Service Pension, from items 17 to 20, incl. 113,9?3.39 .20? .455 Included in preceding 43,786.80 item l9 3.131 76,452.48 I36,?,69.48 5.46? 4.511 96,693.10 32,443,91 1.589 20:958.80 .349 95,495.?0 1.589 299, 880.4.8 4.989 2431110.40 Percentag© of Present Value of Future Salaries X1.164 6.914 1.074 4.045 F119-6 5-tic; I.~c~o • 1 ~ 3 4 City Czty '~rployees Totals rireznert I'alicemen Ui:her than of Gals. City r'irer:~en 1, G ~.~r.d3 u .d City Policemen 23. Prc;sent Value of Pensiazi, t'rior :Service, front ite;rns f4, 1~~, 16 ~I 02,328.34 X162,509,84 X266,437.95 X531,276,13 :'ercenta~e of rresent Vulue of I~'uture Safari©s 6.432 11.620 8.819 8.839 24, rnnual Contributor. required of 5uodivisior. to provide Pensi:>ns, Current Sez•vice, (Pe;r•certa~;a fro.n item 21 ap.. plied to Annual Salaries from item 3) 6,147.93 6,221.13 14,998.06 27,367.12 .'e.-•centage of annual salaries 5.478 5,4E? 4.511 4.900 25. Annual Contributions renuired of Subdivision to pro~Ti~ae a21 vet 2e:~efits, Currezlt JervzCe, other than Service Pension, Current Service. (Pereertage from item 22 applied to Annual Salaries °ratn iteza 5} 8,040.11 ?,867.73 3,570.81 19,478.65 re,rrentage of ezznual sn:-az•ies 7,264 6.914 1.074 3.488 26. Annual Contributions necessary to liquidate ?resent Vo.lue, Pension, i'rioz• Service, in iteia 23 k. Over 2U gear period 6,564,0? 10,424.54 17,091.23 34,079,84 P ercentage of ~~nzzual Salaries 5.849 9.161 5.141 6.102 1. Ov,sr 2'a yQar period 5,553.96 8,820.37 14,461.16 28,835.49 Pe,•centa~;e of anxzunl Salaries 4.949 7,751 4.350 5.163 .^. Over 3U year period 4,889.01 7,764.34 12,729,78 25,383.13 i ~rcentar,e of .'~xzrual Salaries 4.356 6.$23 3.829 4.545 F' Il9-? 7-43 ~rOJ ~ ~ 1 'i L7 Cit,/ Cit,j :;mr:loj~r~~~s ~'ir~~:,~Ien :i'olice?ae.t; Gt;?.er than aznd Gi i;;~ :~lce~Aen 27. Total AIrual Col~tribut:i.a,s r~-aur~U~t of ~~ub;iiv.si.on (tl3T!i5 "" 2u ~ ~~r iar .~.:~rvice i. i.:-111 i. C~ tt f; C~ ~i: ~1'pttilS Di Co1c 1, ~: a: i d 3 n. Ovf3i ::C ,;•e~r pericd X20,?52.11 241513.40 351660.10 801925.61 i'erceritt:~;e of Antiu~~;r ;<.ila.=•w.rs 18,491 21.542 I0,?26 14.490 <). 1vC;r 25 •yr~f:r• r.eri.ad ly,'l4z.VU i:'EI•~^.E';t':fa.::"E; JZ ~i?"_i1L1.11 i.i2ifi1' t':i 1?.591 221909.23 33,030,03 ?51681.26 20.132 9.935 13.551 ,.v'ver ~~ ~,~r~:::r l:erj cad I9.0??.05 211853.20 311298•u5 721228.90 c~rcF~-tra.;~~~ o~' .~;ir~t~ual. Stil~lr~s 1fi.998 19.204 9.4.14 12.933 In carzlsecv.i_on tivit}i t;lie 'ox•er;oin~~• date,, ~;;. .'ollaarir;~° st-,tF:~>.:t;s ~:I•e s ub~~itt sd 2E:. Itea:s 24 to 27, 11!11;}'. i:IC:tusive, cauate~ the ~,.~~^ra~.i;i:Ct: c.~r~~:.t•:ibution wtlich avauld Ue regiz.ir<,ci .~a the Subuiv~i.sicn 'iiy .ts ~)art:.ci=~<-tiori 3n the :it~.:te ~:n~~loy~F:;<:;s ! ~etire:zient Systezr:. 'I'tze contr. i~~ut~.~.ns i n items 2~ ani3 25 Fare bas~;d oI~ t}ie annual salr~r>.r~s no:w bE.irl; p~:id. `1.'iie u:nount of these col~.tri5utior;s Hill cl~)3r..;~:, f:iz~>reiore, .'.s the .zz;;.:~uzlt of aY~nu~al salaries Cf1ELI'tC~C.'S. `~.'}1~' ~:/.'I'CEritA~?'r`•;_ 'YOL1 lt~~"!iS 21 ::!:li %~:.'., :~ra~rnv~;'r•! J~~roperly may be appli~_3d to ;uez;zb%.rs' t:ottil s~il~ries ~~zl ....ach }~r~.;~~r^11 to clet,~r%ine ttze i~zslaurt cif' the coltr i.bzTtion far curr~:~z.t :+tsrV~Ce, '..1:11:11 8 ''j)f,rli)Ci.yC I'i:V;11U£itl'JI'i Ge't' ". -;Ili°.`. A ?ill~f:'i'•i°!'Ilj- ~)p~I+•• C: Ea?t`afi~f?. ~;:a. itel'1 26 :,.s b~.sec:: of the t)rviert Yr;:1.L1.;~ off' ~~I•ic~r ~E~r~~i.ce 1i~i?j 7.ti.ties, L~.:i:it~IRr'.i::. to }~E 11~F.i:LCf:te(i i)VVI' VC.rj.OUS ilEric~ciS. Z'YiiS Cv1itl'.'. ~??,1~:1~C)i: is ,.. L'ixec? [x.,_ouT11, depenfient upon the rr°.:°it~d ^electc~~. i~'~~r 1i~.7ui,:ia- t3.011, Land i~aE;S Ii'Jt depel2(~ U~aTl S1:lEiI':}.uS t)ci.n;, X:C~.lit ('U3"rt-ii:'t:~.~/• `1_I'i+.~ amounts C}UOt+%d In ].tE9lri 2°.~ I'BI;Lri_3.21 LII-1C:hitL2;;eC}! P;LCE'~.>t c1S t~'.E''y` `.T'i~: :'E'-• d.e.'termirled in periodic revalue.tions. i~ 119-3 7..=,3 ~•C1t) ~ ~ 30. Item ?7 gives the totes' annual contributions at thcl bF~ginriing of the Subdivision's participation in the retirement System. It will change in accordance ~Nitri the statements made under items ?3 and ?~ immediately precedin~~. 31. Changes in the number of emloyees and ar_nual salaries «s s.`iown in items %' a.nd 3, will change directly: the emounts given in items ?1~ to 27, both inclusive. The percentaes sho~m in these items, however, may be aprlie~ to the changed annual salaries, Trvith accu- racy s~xfficient for the purposes of the ??etirement System, to determine revised annual contributions, except that, after partici- pat10T1 of the subdivision in the Retirement System is effective, only the contributions in items ?~1 and ?5 swill by a~'flected by changes in annual salaries.. Yours truly, COL~Tf15 L~I~~J HE1~FU'~:TIi