HomeMy WebLinkAboutLetter_1946_August 21_SERS
COATES AND HER~'URTIi
COPiSULTING ACTUARIES
660 PLARKET STREET -~ SAr1 .FRANCISCO 4
CALIFORNIA
August 21, 1946
Board of Administration
State Employees' Retirement System
Sacramento, California
Gentlemen:
In accordance ~,rith the provisions of the State Employees' Retirement Law
and the contract entered into urith the CITY OF SANTA ANA
(Name of Public Agency)
hereinafter referred to as lygency, under date of April 1 19~_,
we have calculated thF approximate contribution which urould be required by the
participation of .Agency in the State Employees' Retirement System. Reference
is made to the State Employees' Retirement Lair, for the benefits provided for
members of the Retirement 5y stem, and for contributions required of members of
the system. The following statement of the results of our calculations, in-
cluding a statement of the approximate. contribution, is based on data about
employees of Agency, whose memberships in the Retirement System a,re contemplated,
furnished by Agency through the Board of Administration:
1 2
Local Local
Firemen Policemen
NI SCELLAi1E0US DATA.
1. Minimum Normal Age of
Voluntary Service Retirement 55 55
2. Number of employees (1-1-4?;
3. Annual Salaries (as being
paidl-l- ~
* Cross out one
44
3 4
Employees
other than
Local Firemen Totals of
and local Columns
Rolicemen 1,2, & 3
60 (1~60)*
45 l96
285
X106,500.00 $109,800.00 X428,598.60 $644,898.60
F119a.-1 11-45 400
~ J
~ • • ~ ~ ~ ~ ~
1 2 3 4
Employees
other than
Local Firemen Totals of
Local Local and local Columns
Firemen Policemen Policemen 1,2, & 3
4. Miscellaneous information
a. Average Age (a.t1-1-4'jl
b . Average Nionthly Salary
c. Average Years of Prior
Service, i.e., Service
Prior tot-1-47
5.t Employees Annual Contri-
butions, based on 30
-:interest, to provide Urith
Agency's contrib~,~tions in
Item (24) , ~1zT.Er.e. Service
Allowance (Serdics Retire-
ment described in Iteri 5
on pages 6 and 7 of Retire-
ment Law Pamphlet)
Percentage of Annual
Salaries
6. Employee s Annual Contri-
butions, based on 21`'o in-
terest, to provide, with
Agerac;~T s Contribution in
Item (24), Future Service
Allo~rance (Service Retire-
ment described in Item 5
on pages 6 and 7 of Retire-
ment LaU~ Pamphlet )
Percentage of Annual
Salaries (Average only -
individuals~ rates depend
on age and sex)
7. Present Value of Future
40.5 44.5 48.6
~201.7U X203.33 ~1t32.23
9.6 10.4 8.9
0 0 0
12,293.28 13,054.56
11.543 11.889
0
39,552.60 64,900.44
9.228 10.064
Salaries 1,198,761.96 1,069,454.04 4,110,579.12 6,378,795.12
F'119a-2 11--45 400
. ~ ~ ,
1 2 3 4
Empl oyees
other than
Local Firemen Totals of
Local Local and local Columns
Firemen Policemen Polic emen 1,2, & 3
8. Present Value of Future
Contributions, based on
22o interest, which will be
credited to employees at
d. Withdrawal from Service X2,94?•80 X2,677.32 x"35,887.44 X41,512.56
e, Ordinary Death 12,513.60 10,746.12 58,382.40 81,642.12
f. Industrial Death 4,086.48 3,491.40 0 7,577.88
g. Ordinary Disability
Retirement 2,778.96 2,345.64 12,806.64 17,931.24
h. Industrial Disability
Retirement 8,212.80 6,938.64 0 15,151.44
i. Service Retirement 103,200.12 90,547.68 249,165.36 442,913.16
~. Total of (d) to(i), inc. 133,?39.76 116,746.80 356,241.84 606,728.40
GROSS PRESENT V:~LL~S OF BENEFITS TO BE
PROVIDED FROP~'I AGEPdCY~ 5 A1dD ENff'LOYEES~ CONTRIBUTIONS
9. Present Value Gross Ordinary
Death Benefits (Includes
Ordinary Death Benefit for
Employees in Column 3, pay-
able at both Ordinary and
Industrial Deaths, which is
not in lieu of weekly indem-
nity under State Compensation
Law. Benefits described in
Item 9 on pages 10 and 11,
Section 21367.5 on page 56
of the Retirement Law Pamphlet.)
k. Death Before Retirement 16,89?•65 14,442.64 82,295.02 113,635.31
Percentage of Present Value
of Future Salaries 1.410 1.350 2.002 1.?81
1. Death after Retirement 3,128.7? 3,186.9? 11,505.19 17,820.93
Percentage of Present Value .261 .298 .280 .279
of Future Salaries
F119a-3 11--45 400
1 2 3 4
Employees
other than
Local Firemen .Totals of
Local Local and local Columns
Firemen Policemen Policemen 1,2, & 3
10. Present Value of Gross Indus-
trial Death Allowances (Bene-
fit described in Item 8 on
pages 8 and 9 of Retirement
Law Pamphlet, which is in Included in
lieu of weekly indemnit~T under preceding
State Compensation Law) $42,626.22 X36,314.40 item 9 $78,940.62
Percentage of Present Value
of Future Salaries 3.556 3.396 1.238
11. Present Value of Gross Ordi-
nary Disability Retirement
Allowances, Current Service,
(Includes Ordinary Disability
Benf~fit for Employees in Col-
umn 3, payable at both Ordinary
and Industrial Disability,
which is not in lieu of weekly
indemnity under State Cornpen-
sa.tion Law. Disability Retire-
ment described in Item 7 on
pages 8 and 9 of Retirement
Law Pamphlet) 4,666.63 4,268.01 26,722.95 35,657.59
Percentage of Present Value
of Future Salaries .389 •399 •650 .559
12. Present Value of Gross Indus-
trial Disability Retirement
Allowances (Disability Retire-
ment described in Item 6 on
pages 8 and 9 of Retirement
Law Pamphlet, which is in lieu Included in
of weekly indemnity under preceding
State Compensation Law) 41,263.32 36,433.62 item 11 ??,696.94
Percentage of Present Value
of Future Salaries 3.442 3.40? 1.218
13. Present Value of Gross Service
Retirement Allowances, Current
Service, (Service Retirement
described in Stem 5 on pages
6 an3 7 of Retirement Law
Pamphlet) 206,400.24 181,095.36 498,330.72 885,826.32
Percentage of Present Value 1?.218 16.933 12.123 13.88?
of Future Salaries
F119a-4 11-45 400
r • ~ . i
' 1 2 3 4
Employees
other than
Local Firemen Totals of
Local Local and local Columns
Firemen Policemen Policemen 1,2, & 3
14. Present Value of Gross Service
Pension, Prior Service, (Service
Retirement described in Ttem 5
on pages 6 and 7 of Retirement
Law Pamphlet ~1~36,108,84 X22?,228.76
Percentage of Present Value
of Future Salaries 15.525 21.24?
15. Present Value of Additional
Guaranteed Pension, Prior
Service, (Service Retirement
described in Section 21258
on page 52 of Retirement
Law Pamphlet) 0 0
w~453.880.40 X86?,218.00
11.04.2
51,960.48
Percentage of Present Value
of ~.iture Salaries 1.2~
16. Present Value of Gross
Ordinary Disability Retire-
ment Allowances, Prior Ser-
vice, (Includes Ordinary
Disability Benefit for em-
ployees in Column 3, payable
at both Ordinary and Indus-
trial Disability, not in lieu
of weekly indemnity under
State Compensation Law. Bene-
fit described in Item 7 on
pages 8 and 9 of Retirement
Law Pamphlet) 2, ?19.13 2,236.83 16,995.33
Percentage of Prese:it Value
of Future Salaries .22? .209 .413
1~TL'T PRESF,1dT VAi,UES OF BENEFImS TO BE PROVIDED FROM;
AGEdCY~S COidTRIBUTIOidS, AND A:y'NUAL CONTRIBUTIONS REQUIRED
OF AGEi3CY TO PROVIDE SAID BEiTEFITS
17.. Present Value of Net Ordi-
nary Death Benefits, i.e.,
Gross B~;nefit from Item 9,
minus Employees Contributions
13.595
51,960,48
.815
21,951.29
.344
F'119a--5 11-45 400
• y r
• R
' 1 2 3 4
Employees
other t~nan
Local Firemen Totals of
Local Local and local Columns
Firemen Policemen Policemen 1,2, & 3
from Item 8 (e}. (Includes
ordinary Death Benefits for
Employees in Column 3, pay-
able at both Ordinary and
Industrial Deaths)
m. Death Before Retirement X4,384.05 X3,696.52 X23,912.62 $31,993.19
Percentage; of Present Value
of Future Salaries .366 .346 •582 .502
n. Death After Retirement 3,128.?? 3,186.9? 11,505.19 1?,820.93
Percentage of Present Value
of Future Salaries .261 .298 .280 .279
18. Present Value of Net Indus-
trial Death Allotilances, i.e.,
Gross Benefit from Item 10, Included fn
minus ~mployees~ Contributions preceding
from Item 8 (f) 38,539.74 32,823.00 item 17 71,362.74
Percentage of Present Value
of Future Salaries 3.215 3.069 1.119
19. Present Value of Net Ordinary
Disability Retirement Allow-
ances, Current Service, i.e.,
Gross Benefit from Item 11,
P~'fimzs Employees Contributions
from Item 8 (g). (Includes
Ordinary Disability Benefit
for.~mployees in Column 3, pay-
able at both Ordinary and In-
dustrial Disability) 1,887.6? 1,922.3? 13,916.31 I?,726.35
.Percentage of Present Value
of Future Salaries •15? .180 .339 .278
20. Present Value of iJet Indus-
trial Disability Retirement
Allowances, i.e., Gross Benefit Included in
from Item 12, minus Employees preceding
Contributions from Item 8 (h)33,050.52 29,494.98 i4,em 19 62,545.50
Percentage of Present Value
of Future Salaries 2,757 2,758 .981
F 119a-6 11-45 400
.~
1 2
Local Local
Firemen Policemen
21. Present Value of Net Service
Retirement ~1.louJances, Current
Service, i.e., Gross Benefit
from Item 13, minus Employees
Contributions from Item 8 (i)
X103,200.12
Percentage of Present Value
of Future Salaries 8.609
22. Present Value of all Itet Benefits,
Current Service, ether than
Service Pension, from Items 17
to ~`, Inc. 80,990.75
Percentage of Present Value
of Future Salaries 6.756
23. Present Value of Pension,
Prior Service, from Items 14,
15, 16 188,827.9?
Percentage of Present Value
of Future Salaries 15,752
24. Annual Contribution required
of Agency to provide Pensions,
Current Service, (Percentage
from Item 21 applied to Annual
Salaries from Item 3) 9,168.5$
Percentage of annual salaries 8.609
25. Annual Contributicns required
of .agency to provide all Net
Benefits, Cuxrs_nt Service,
other that. Serz•ice pension,
Current Service. (Percentage
from Item 22 a.7:~pli ed to Annual
Salaries fror Item 3) ?,195.14
Percentage of ann~zal salaries 6.756
26. Annual Contributions necessary
to liquidate Present Value,
Pension, Prior Service, in
Item 23
o. Over 20 year period 12,112.??
Percentage of Annual Salaries 11.3?3
~3
Employees
other than
Local Firemen
and local
Policemen
4
Totals of
Columns
1,2, & 3
X90,547.68 X249,165.36 X442,913.16
8.46? 6.062 6.944
?1,123.84
6.650
1.200 3.158
229,465.59 522,836.21 941.129.??
21,456 12.719 14.754
9,296.?? 25,981.65 44,447.00
8.46? 6.062 6.892
?,301.70 5,143.18 19,640.02
6.650 1,200 3.045
14,719.56 33,538.44 60,3?0.77
13.406 ?.825 9.361
F 119ar-7 11-45 400
49,334.12 2Q 1,448.71
.~ Y
• ' r
p. Over 25 year period
Percentage of annual
Salaries
q. Over 30 year period
Percentage of annual
Salaries
27. Total Annual Contributions
required of Agency (Items
24, 25, 26), prior service
liquidated
r. Over 20 year period
Percentage of Annual
salaries
s. Over 25 year period
Percentage of Annual
Salaries
t. Over 30 year period
Percentage of Annual
' ~ ,
1 2 3 4
Employees
other than
Local Firemen Totals of
Local Local and local Columns
Firemen Policemen Policemen 1, 2, & 3
X10,248.81 X12,454.46 ~y28,377.42 ~w51,080.69
9.623 11.343 6.621 ?.921
9,021.?5 10,963.32 24,979.88 44,964.95
8.471 9.985
28,476.49 31,318.03
26.738
26,612.53
28.523
29,052.93
24,988
25,385.4?
26.460
27,561.79
5,828 6.972
64,663.2? 124,457.79
15.08? 19.299.
59,502.25 115,167.71
13.883 17.858
56,104.71 109,051.97
Salaries 23.836 25.102 13.090 16.910
In connection with the foregoing data, the following statements are sub-
mitted:
28. Items 24 to 27, both inclusive quote the approximate contribution
which would be required of the. Agency by its participation in the
State Employees Retirement System. The contributions in Items 24 and
25 are based on the annual salaries now being paid. The amount of
these contributions will change, therefore, as the amount of annual
salaries changes. The percentages from Items 21 and 22, ho~rever,
properly may be applied to members° total salaries on each payroll to
determine the amount of the contribution for current service, until
a periodic revaluation determines a different percentage.
29. Item 26 is based on the present value of prior service liabilities,
assumed to be liquidated over various periods. This contribution
is a fixed amount, dependent upon the period selected for liquida-
tion, and does not depend upon salaries being paid currently. The
amounts quoted in Item 26 remain unchanged, except as thF~y are re-
determined in periodic revaluations.
F 119-8 11-45 400
~ ,a ~ v ~
y. ~ w
e
. ~ ~
30. Item 27 gives the total annual contributions at the beginning of
the Agency°s participation in the Retirement System. It will
change in accordance tirith the statements made under Items 28 and
29 immediately preceding.
31. Changes in the number of employees and annual salaries as shown
in Items 2 and 3, gill change directly the amounts givFn in Items
24 to 27, both inclusive. The percentages shown in these items,
however, may be applied to the changed annual salaries, with accu-
racy sufficient for the purposes of the Retirement System, to de-
termine revised annual contributions, except that, after partici-
pation of the A.ge:ncy in thc: Retirement System is effective, only
the contributions in Items 24 a.nd 23 will be affected by changes in
annual salaries.
Yours truly,
COTES AND I-~RFURTH
Is jC~-"-~- ~
BY `~'
F 119a-9 11-45 400
~
,
f30ARD OF ADMINISTRATION
kY~
~ .y'(I'y~ EARL W. CHAPMA~~
..h ILL1l[[~-JJ~J %ECUTIVE SECRETA-Y
'
THOS. E. STA NTO N. PRESIDENT
H. H. BENEDICT Jrt w.. .
~r:+iJk
k, _.__
~
JOHN R
C ~
~ RALPH R. NELSON
~~
.
ORNWELL
JAMES DEAN a ~ --~ -~
ACTUARY
DONALD GALLAGHER
WALTER C. KENNEDY ~ ~ ~® < r ~
EMERY OLSON
HAROLD H. RoelNSON STATE OF CALIFORNIA
~~~S~E ~xlt~,CLt~PE~' ~E~txExttEYi~ ~~JB~E~i
702 STATE OFFICE BUILDING NO. 1
TEN TN AND L STREETS
SACRAMENTO 14
City Council
City o~ Santa Ana Ana sl 21, 1946
Santa Ana, Ca.~ifornia
Gentlemen:
Enclosed is the Consulting Actuaries repart on the investigation into the
employment Experience of Cites of Santa Ana ., hereinafter
(Name of Public Agency)
referred to as Agency and such valuation of the benefits and contributions
provided in the Stag Employeest Retirement Law as was necessar~T to determine the
approximate, as distinguished from the actual, contribution which would be re-
quired by the participation of said Agency in the State Employees Retirement
System. The follo~,~ing commFnts are submitted:
1. The approximate contribution which ~.,ould be required of the Agency by
its participation in said Retirement System, under various assumptions
and segregated according to employee groups, is hereby quoted by the
Board of Administration to said Agency to be-. the amounts and percentages
as given in items 24 to 27 on pa.gPS 7 and 8 of the report. The amounts
and percentages given in these items arF subject to the statements in
items 28 to 31, both inclusive, of the. report, a.nd to the statements
in this latter.
2. As a.n illustration of the approximate contribution shown in thF~ report,
the follo~~Ting amounts are taken from column 4, applying to all employees:
a. Agencyts contribution to provide service pensions,
currant servicF, from itFm 24 $ 44,447.00
b. Agancy~s contribution to provide currant service
death and disability bFnefits, from item 25 $ 19,640.02
c. Total annual contributions to provide benefits based
on current service, i.e., service rendered after the
effective date of participation ~ 64,08?.02
d. AgFncy~s contribution to providF bFnefits based
on prior service, i.e., service rendered prior to
said effFCtivF datF or Aarticipa.tion, liquidated over
a 25 year period, from itFm 26 $ 51,080.69
e . Total appraxim~.tF a.nnua.l contribution as given in item
27 (a) , subject to 2.djustmert as eh-plainecl, and to be
rFducF~d after 25 years by thy: amount in item (d) $ 115.16?.?1
F120a-1 11-45 150
. ~
In the same manner, the approximate anr_ual contribution according to
groups of employees and periods for prior service liquidation, may be
t~.ken from items 24 to 27, inclusive.
3. Ar.,ounts and percE,nta,ges ire items referring to prior service are based
on the assumption that benefits on account of prior service will be
granted to local firemen and loca,.l policemen, and to other employees of
the .Agency, on the scale described in item 5, pages 6 a.nd 7, column 3,
as to l~,ca.l firemen and policemen, and, a.s to local miscellaneous em-
ployees, colurin 5 all of the Retirement Law pamphlet. The
~ r!4Pr or n5rt~
contract finally to be entered into between the Agency ar_d the Board
of Administration, may provide prior service benefits on a lesser scale,
at the ontia~ of the Agency. If the scale is reduced by one-half, the
approximate contribution quoted in the Consulting Actuaries report,
would be reduced bar approximately, but not exactl;T, one-ha.lf of the
amounts and percentages in item 26.
4. The contribution given in the Consulting Actuaries' report is called
approximate beca~,usr it is based on an assumed number of employees who
brill become members of the StiTstem, a.nd upon other assumed factors. The
actu<1 contribution to be fixed by contract ma~T differ from the ap-
proximate contribution, if the facts a.t the consummation of participa-
tion differ from thE- assumptions now made. Additional calculations may
be. necessary, depFnding on the extent of the differences. Reference
is made to Section 20456 of the State Employees' Retirement I~ati~.
5. The actual contribution rFauired of the Agency, by contract betweor_
the Agenc;a arr'~ the Board of Administration, v~~ill bF- subject to adjust-
mF~nt b;~ the Board of Adriinistra,tion on account of experif~nce under the
Retirer.ient System, ~~.s determir_ed by the periodical investiga.tian, valua-
tion and determination provided for by the State Er^ployees~ Retirement I,aw.
6. mhe Board of Administration is authorized by the State Emplc~yees~ Retire-
ment Zaw to inch.~de each year in the contribution reouired of the Agency.
a reasonable amount to cover the costs of administering the System as
it affects the Agencyts employees. The amount so included would be in
addition to the contribution quoted in the Consulting Actuaries report.
Enclosed is a copy of F121b to be used by you if you decide to go ~,n with
the steps necessary for participation in the State Employees Retirement System.
If further infcrma.tion is desired before you make the decision, you should com-
municate directly U~ith the RetirF=ment Office in Sacramento.
Enclosed is a bill fen the compensation stated in the contract executed be-
tt~~een you and the Consultir;.g Actuaries.
Yours truly,
BOARD OF ADP~IDTIS'~'RATION
S"'ATE EPnPLOYEES' RE`^ REP-~PTT SYSTEP~1
By '~~
AC TUAR
Fl 20a-2 11-45 150