HomeMy WebLinkAboutAgmt_1956_April 16_Coates, Herfurth & England Actuariess
-'+ ~ J
April 17, 1956,
i
Clerk of the Council
State ~tployees' Retirement System,
1320 K 8;~.r~:et,
Sacramento, 14, Calif.
Attentian: Dir. '~homae g, Crocker
Assistant Actuary
Qentlemen:
Enclosing l~revith three copies of agreement dated April ~6~th,
1956, between the City of Santa. Ana, an8 the Canau]..~1~e~i~s,
in connection with amending the City of Ssnts Ana's con~..~Xth
the 8tste Eueployees' ~tiremeat System in ar,~°~m.t~ tee a '~
te;ni~nt~ retirement sllavancs Of $100.00 i~,g,ge o ~
$60.00 minimum. his present
agreement has be~s~~~e~oecuted~ t'y r
Courtney R. Chandler.
After the agreement has beea,,eagec by' ~~oper officials,
kindly return ane copy direct~~- °to the"'~~l~rk a,y'`t~,e Council, Roam
303, City Ball, Sams Ana, fo,~' mY recard.~ ,
Thanking you, Z am
~'~.rs vet ,.~rulY,
encls.3 Clerk of the Council
ma
• yy'E ~RL W. CHAPMAN
« f /~.cX F~'iUTIVE OFFICER STATE OF CALIFORNIA LAUREN C. HAIGH7
~ ~ ACTUARY
• cDWAR1YK. COOMBS BOARD OF ADMINISTRATION
ASSISTANT EXECUTIVE OFFICER
~~~~e ~~rt~XD~P~s' ~P#txcmP~~ ~~~#ent
1320 K STREET
SACRAMENTO 14
PLEASE DIRECT YOUR REPLY TO SECTION
REFER TO MEMBER ACCOUNT NUMBER
CONTRACT OF
CITY ffE' SANTA ANA
Name of Pu is Agency
with the
Firm of COATES, HERFUI~TH and ENGLAND, CONSULTING ACTUARIES, for
making an investigation and valuation as stated herein.
1. This AGREEMENT made this day of A?~r .~ , 19 ~~ , ~.Y and between
the CITY COUBICIL of CITY 4F SANTA ANA ~
hereinafter referred to as Agency, and COATES, HERFURTH and ENGLAND,
a co-partnership composed of Carl E. Herfurth and Arthur ~. England,
Consulting Actuaries, hereinafter referred to as Actuaries.
WITNESSETH:
2. Agency herewith engages and retains the services of Actuaries for
the following work:
a. To make as of Jn],y It 1956 , such valuation of assets and
liabilities as may be necessary to determine the contribution
which would be required of Agency if it subjected itself and
its employees to the amendments to the Retirement Law as out-
lined in paragraphs F of Form 559 which is
attached to this contract and made a part thereof. The Actuariesr
reports with respect to said amendments shall be as follows:
One report re: Paragraph FI of Form 55q.
One report re : Paragraph M.. rr n rr
One report re : Paragraph rr rr rr
Ret. Form 1.~2l~ -. 1 9/53 500
. '
a ~. r
t
.r
3. Tt is assumed that the employees of the Agency are of 3 membee claaaiflAatioas
and that there w33.]. be included in the valuation 55 persons who are members or
who are receiving retirement allowances because of service rendered to Agency.
!t. Should Actuaries encounter in the valuation air unusual situation or should
Actuaries be requested by A,geuoy to make #y~~~. valuations of different combina~-
tio~na of benefits and contributiansf which might require as additional axpt~nditure
of time-~ said situation and request shall be brought to the attention of the Board
of A~dm3nistration~ State mnployeesi Retirement System for further consideration.
It is understood that the time expended in connection with said unusual situation
ar~d further valuation, 3s not ~,ncludsd within the fee stated herein.
~. Agency and Aotuari,®a understand that aald Board of Administration wi.Il furnish to
Actuaries, the data relative to persons who are members of said Retirement System
with credit for service rendered as employees of Agency, necessary Par performance
of the work described in paragraph 2. Both parties also understand that said
Board of Administration wi11 make ~railabla to Actuaries; various tables and
schedules of rate8 based on the experieaas under said Retirement System among msm.-
b~r's thereof; as determined in current and previous imestigationa and valuations,
Bath parties understand, further, that in accordance with said Retirement Laws the
work to be performed by Actuaries shall be performed under the direction of the
Actuary of the Retirerrrant System, and that all data in connection with said work,
including work sheets, final results, and reports from Actuaries, shall be the
property of the Hoard of Administration and ah811 be delivered to said Board at
the conolu~sion of said work.
6. For the full performance and completion of said services, Actuaries shall reeeiva
from Agenoy~ the following amounts;
For work provided in subparagraph a. of paragraph 2 hereof $ 25.00
For work provided in $ub.•paragraph b, of paragraph 2 hereof ~
Total ~ 2 app ""
Sub~eat to ad~uetment on account of variation in the number of emplgyees For whom
data are submitted as provided in paragraph 5 hereof, from the number of such em»
ployess stated in paragraph 3, and subject to acp- adjustment made on account of
abp- unusual situation, or on account of further valuations of different combine-.
Lions of benefits and contributions requested by Agency, as hereinbefore provided.
A6s~1- agrees that the sum fined in this paragraph ae compensation for the services
to be performed by Actuaries, shall cover on]y the calculations and conferences
betwt~en the a:ffY.cers sad employees of the Board of Administration and Actuaries,
necessary in the performance of the work, excluding conferences between Agency
and Actuaries. It is understood and agreed that Agency steal]. deal only through
said Board of Administration.
Ret. Form lt214-2 (Revs 9/5~t) 2000
~, ~ '
7
' ! ~.
7. Actuaries hereby agree to render the services herein provided for and to complete
the same in a satisfactory and expeditious manner. Actuaries shall furnish to
the Board of Administration, in addition to data provided herein to be furnished
a written summary in duplicate on the Retirement Systemts form, of the results of
the calculations made under this agreement and the compensation provided for here-
in shall be payable by Agency when such summary is delivered to the Board of
Administration.
8, This contract is made and entered into in accordance with the provisions of
Chapter !~ of the State Employeest Retirement Law, and is subject to the provisior~
of said Law.
WITNESS OUR HANDS the day and year ~:irst above written,
A~,proved by the Board of Administration,
~; TATE EMPLOYEES ~ RETI:REMENT SYSTEM, a t
the meeting held
Date ~~~ ~ ~i ~~~~
~.
~ r
By- --a'C_ ~-~~. _ ~i t .-~ ~~ ~'' ~ C' k
Executive 0 icer
CITY OF SANTA ANA
ame o Agency
BY
,,. ,
"Lci,~r~r
~-~.,
Title
COATES, HERFURTH AND ENGLAND, a co-
partnership composed of:
Carl E. Herfurth
Arthur W. England
G. Frank Waites
..
'~* ,,./mar _ _, ~ ;...~ ) ,,%..._-..
Ret. Form !t2l~-3 (Rev. 9/510 2000
~_ ~~ ~ ~ " i
1 ~
SUP'II~1ARY OF AMENDMENTS TO
THE CALIFORNIA STATE EMPLOYEES RETIREMENT LAW
(which may be elected by a Contracting Public Agency)
A. The amendments to the Retirement Law made in 19115 and 1947 reduced the ages at
which members may be retired and increased the benefits members will receive.
The principal amendments were as follows:
(1) Normal service retirement age for Miscellaneous Members reduced from
65 to 60 and the factor in the service retirement benefit formula in
creased from 1/70 to 1/60 with a guaranteed percentage of final comrpen-
sation for each year of service as a member;
(2) The minimum guaranteed monthly retirement allowance increased from ~p140
to $60 to apply at age 65, or over, with credit for 20 years of service
or at age 70 with prior service credit;
(3) A death benefit of ~D300 provided for retired persons;
(4) The removal of the maximum of X5,000 per annum of compensation to be
included in computations under the Retirement Law;
(5) Normal service retirement age for Local Safety members reduced from
60 to 55 and basis of benefits increased.
B. The amendments to the Retirement Law made in 19.9, which a Public Agency may
elect to apply to its contract, are:
(6) Prior service benefits of Miscellaneous Members equal to one-sixtieth
of final compensation upon service retirement at age 60 or its actuarial
equivalent upon service retirement at ages 55 to 65, and over;
(7) A guaranteed percentage of final compensation for each year of service
as a Local Safety I~Iember.
C. The amendments to the Retirement Law made in 1953, which a PubJ..i.c Agency may
elect to apply to its contract, are in part:
(B) Minimum service retirement age for Local Safety Members reduced from 55
to 50, the allowance to be discounted for ages at retirement under 55;
(9) Retirement Benefits based on highest average monthly compensation earn-
able during three consecutive years of membership;
(10) Death Benefit for retired persons increased from X300 to ~l100.
Ret. Form 559-1 (Rev.9/5!~) 1500
'~ t
• ~
Summary of Amendments (Continued)
D. Other amendments to the Retirement Law made in 1953, which a Public Agency may
elect to apply to its contract are:
(11) Normal and minimum service retirement age for Local Firemen reduced
from 55 to 50 (the allowance not to be discounted);
(12) Continuation of one-half of the Service or Industrial Disability
retirement allowance to certain dependents upon death of a retired
Safety NTember. (This benefit would automatically apply to Safety
tiiembers already retired.)
E. Agency may elect to increase the retirement allowances payable to retired persons
by applying to such persons the provisions of its contract;
(13) As that contract existed on June 30, 195l~, or;
(1!1) As that contract vrould exist if amended as outlined under paragraph
"A" above, or;
(15) As that contract would exist if amended as outlined under paragraphs
"A" and "$" above.
F. X16) Ag®aeies may amend contract to provide for the inclusion in the contract
of Sections 21251.l~~ 21258.1 and 21258.2 of the Retirement Laws providit~
for an increase of retfrnt allo~waaces to members Sao retired before
October 1' 1953 and also providing for a minimum retirement allowance of
~1AC1.00 wader certain conditions:
Ret. Form 559..2 (Rev. 9/5!x) 15C0
~ 4
• BOARD OF ADYIN:STQATION
• ~ EDWARD K. COOMBS
.
DONALD GALLAGHER, PRESIDENT EXECUTIVE OFFICER
6N~ or ry
.~.v
WASTER C. KENNEDY, VICE PRESIDENT ~ ~ LAUREN C. HAIGHT
STANLEY B. FOWLER i~~, ~'~ ACTUARY
ROBERT D. GRAY D
JOHN M. PEIRCE
;,rP . ~
Ror C. PLOSS ~ ~~r aN~
HAROLD H. ROBINSON
THOMAS A. STEAD STATE OF CALIFORNIA
BOARD OF ADMINISTRATION
~~~Q '~~~~~QQ~`' ~Q~YX.E~Q~ ~~~~Q~
C
.
1320 K STREET
SACRAMENTO 14
April 6, 1956
~~
PLEASE DIRECT YOUR REPLY TO SECTION-
Mr`. Carl J. Thornton
~1.~ {,~ V~Mwr.~ REFER TO MEMBER ACCOUNT NUMBER .___
Ci~ ~.
Santa Ana, California
Dear Mr. Thornton:
Eacloaed are the contracts for the work to be performed by Costes~ ~ierfurth
and F.hgland in connection with amending the City of Santa Ana's contract with
this System in order to guarantee a ~ retirenent allowance oY X100 is
place of the present X60 ~.
The Consulting Actuaries fee for their work wi]1 be X25.00. In addition
the charge for work performed in this System will be X58.50 in order t0 recap
cu].ate allowances now being paid tc> 39 of your retired emp7.oyees in accordance
with the proposed x].00 minixusn guarantee.
Please execute and return three copies of the contract to this System. One
fully executed copy ad.11 be returned to you following the next meeting of the
Board of Administration.
Incidentally our legal adviser is not certain whether the proposed
violation checkers should be classified as safety members. We are stop dky ~g
this problem in connection with the following definition of local policemen
quoted from Section 20020 of the Retirement haws "Local policeman" means any
officer or em~-].oy+ee of a police department of a contrasting agencys except one
whose principal duties are tho8e of a telephone operators clerks stenographer
maahixiist~ mechanics or otherwise and, whose functions do not clearly fall within
the scope of active law enforcement service even though such an employee is
subject to occasional calls or is occasionally called nponi to perform duties
within the scope of active lax enforcement seraice~ but not exoepti>ag male
employees assigned to identification or communication duties or
and q~~ ~ patrol>a~en or equal or higher rank irrespective of~the duties
to which they are assigned." We will let you know as soon as we have a definite
decision.
v ~
~~
_ I.
J,~/' ASSIST,AATT ACTU~IRY
_ T
• ..A RL ~~ CHAPMAN ~ r ~~ r~ l '°_y
~ ~'E X~CUTIVE OFFICER '~ STATE OF CALIFORNIA I I e ~ ~ ~ ~~' "*
./ • •.~•
~~~; ~
EDWARD K. COOMBS BOARD OF ADMINISTRATION (~'L.?,
ASSISTANT EXECUTIVE OFFICER
ArJ ? 2 3 1955 .'_J
~~~~~ ~1rt~Xo~er~' ~r~trcniPn~ ~~~s~Pm ~ ~_~<:, ; ~ , ,_, , . _L
_ 7- _,_ i ~l ~~_ ~~ I ~c..~
7320 K STREET ',.,.'' ! Y {~~~~.. SANTA ANp
SACRAMENTO 14
CITY QF SANTA ANA
3'R [?r AND MA t N 5T. 1 37 I
SAN1`A ANAy CqL IF.
4TTN. £VEC.YW E. Cfff L;^I,k
Gentlemen:
PLEASE DIRECT YOUR REPLY TO SECTION
/~ i L R ~MBER ACCOUNT NUMBER
~~ ~` ~ 195Ei
ATrI. "_MIN, PAST ~`~" ~~ M
CLERK CF THE COUNCIL
Enclosed is the Consulting Actuariest abbreviated summary of the valuation re-
sults under the amendments to the contract with this System, as proposed by the
t~bove-named public agency. The following comments are subnu.tted:
1. Reference is made in the heading of the report to Form 559 which is attached
thereto and the report shows the valuation results if the contract is
amended as described on that form.
2. The summary no doubt is largely self-explanatory. It can be said, however,
that the percentage in Item 6 would be applied to members earned salaries
to determine the agency~s future contributions on account of current ser-
vice if the contract is amended as proposed. Application of this percentage
to the annual salaries as of June 30, 195., is shown in Item 8. By compar-
ing this item with the similar item shown on the actuariest report under
the present contract, the agency may estimate the difference in its future
cost.
3. Similarly, Item 7 of the report shows the annual installment on account of
prior service liabilities if the contract is amended as proposed, and a
like comparison can be made with the report under the contract without
amendments.
!t. Item 8 shows the estimated annual cost, based on June 30, 1954, salaries,
under the proposed amendments, Comparison of this item with item 8 of
the report under the contract without amendments, will allow the agency to
estimate the effect on its future contributions to the System should the
contract be amended as proposed.
5. It should be noted that the actuariesf report enclosed will be the basis
use~i~ he con ract is amended effective no later than July 1 1956. Arty
amendments to contracts effective thereafter~w~I` f`irs~ require urtT~er
actuarial study before adoption.
6. A complete summary of the valuation results are on file in the office of the
System. Farther explanation of those results will be given by the System
upon request.
Ret. Form 8$1.-1 6/55 700
~ ~ l ~
f • ~ ' ' ~
. ~
If the agency should decide to amend its contract to adopt any of the proposed
amendments valued, you should send a letter to the Retirement System to that effect,
including the contemplated effective date of the amendment., We will then furnish you
the required forms with instructions.
A bill from the Consulting Actuaries for their fee as stated in the contract
executed between the a~;eray and the Consulting Actuaries wi1J_ be sent upon their
co~r~.~?etien of all the work required. Payment of th:~s fee should be made by each
ag^ncy directly to the Consulting .'actuaries, and should not be sent to the Retirement
System.
Yours truly,
_ ~; r~~.,
,~.
1 ' j ~ ,%
LAUREN C. HAIGHT, AC~'U~RY
~.~
Ret. Form 851-2 6/55 700
`•' ''~+
COATES, H~,RFUR~l'H & ENGLAND
CONSUL~l'ING ACTUARIES
?25 CTYOCKER BUILDING
SAN h'RANCISCO 4, CALIT~'ORNIA
CITY OF SANTA ANA
ACTUARIAL VALUATION AS OF JUNE ~0,
UPdDER AGENCY COiVTRACT An",ENDED AS PER PIYR
D(11) FORM 559
PRESENT VALUES OF BENEFITS TO :8r FUNDED
1. CURRETdT ST?,itVICE F~ENEI~ I`1'S :EXCEPT ORDINARY
LESS AGETVCY CUN'1'RIBU'1'IONS OTC HAN:U
AGENCY N0. 137
1954
AGRA PH
BY 1' GENCY
DEATH $1, 326, 219.92
364, 239. 14
BALATVCE TO BE PROVIDED BY «GENCY TUTJT~E CONTRIBUTIONS $ 961, 980.78
2. ORDINARY DLA"1'H I3~;NEFITS $ 97, 135.02
LESS AGENCY CON`'RiBU1.'IONS ON HAND 44, 020.58
BALANCE TO EE PROVIDED BY AGETVCY FUTURE CONTRIBUTIONS $ 53, 114.44
3. PRIOR SERVICE BENEFITS $1, 438, 116.98
LESS AGENCY CONZ'RIBU`1'IGNS ON HAND 185, 212.39
BALANCE TO BE PRCVIDED BY AGENCY CONTRIBU'T'IONS $1, 252, 904.59
FUTURE COIVTF~IBUTIOTdS RE~UII~ED OF+' AGENCY TO FUND BENEFITS
4. PERCE~;PdTAG~"_; OF MENtBERS SALE".RIES x.1'0 l+'UND BALANCE IN ITEM ~#l 6.586%
5 . PERCENTAGE OF MEMB.~;RS SALARIES TO FUND BALANCE IN ITEM #~2 .364%
6. TOTAL PERCENTAGE OF MEMBERS S~~LARIES ITEM ~4 PLUS ~5
F?FT+'ECTIVE ON CONTRIBUTIONS TO SYSTEM AFTER 6/3 U/55 6.950%
7. ANNUAL CONZ'RIBUT'IOlV TO FUND BALANCE IN ITEM ~``-3 I+'OR
REMAINING PORTION OF PRIOR SERVICE LIQUIDATION Pi~RTOD
EFT+'~~CTIVE ON CONTRIBUTIONS TO SYS`T'EM AFTER 6/30/55 $ 87, 289.96
8. ESTIMATED TOTAL ANNUAL CONT~iIBU`T'ION BASED ON 6/3U/54 SALARIES
CURRENT SERVICE BENEFITS $95,gg0.06
PRIOR SERVICIs BEN~k'~TS 87, 289.96
TOTAL $183, 270.02
COATES,HERFURTH & ENGLAND
CONSULTING ACTUARIES
BY ~~ ~~ ~ .
j Ha~r~ ~ C . Radin
. >~ _~.
•
COATES, HERFURTH & F;NGLAND
CUNSUL~i'ING ACTUARIES
225 CROC.KEFt BUILllING
SAN b'RANCTSCO 4, CALIb'ORNIA
CITY OFSANTA ANA
~i~~~~,
-.
~~ ~,~
AUG 2 ..~ 1955
CITY OF SANTA ANA
AGENCY N0. 137
ACTUARIAL VALUATION AS OF JUNE 30, 1954
UPJDER AGENCY CONTRACT AMEND:fJD AS P1'R PIyRAGRAPH
D (12) FORM 559
PRESETuT VALUES OF BENEFITS TO BE FUNDED BY 1! GENCY
1 • CURRENT SERVICE +BENEF ITS EXCEPT `ORDINARY DEATH r Y
LESS EIGENCY CON`l'RIBU'PIONS Olu HANL $1, 719, 633.30
364, 239. 14
BALANCE TO BE PROVIDED BY AGENCY I+'UTURE CONTRIBUTIONS $1, 355, 394. 16
$ 97, 135.02
44,020.58
BALANCE TO BE PROVIDED BY I'~GENCY FUTURE CONTRIBUTIONS $ 53, 114.44
3. PRIOR SERVICE BENEFITS $1, 577, 942.64
LESS AGEi'VCY CON`i'RIBUTIGNS ON HAND
185,212.39
BALANCE TO BE PROVIDED BY AGENCY CONTRIBUTIONS $1,392,
730,25
2. ORDINARY DEATH BENEFITS
LESS AGENCY CON~i'RTBUlIONS ON HAND
FUTURE CONTRIB_UTIQNS RE~.UIRED OF AGENCY TO FUND_ BENEFITS
4. PERCENTAGE OF MEMBERS^SALT~RIES TO~F'UND'BALANCE IN ITEM #1
5. PERCENTAGE OF MEMBERS SALARIES TO FUPdU BALANCE IN ITEM #2
6. TOTAL PERCENTAGE OF MEMBERS SAI.~ARTES ITEM ~4 PLUS IFS
EFFECTIVE ON COI'1TRIBUZ'IONS TO SYSTEM Ali'TER 6/30/5S
7 • Al`rNUAL COFdTRIBUTION TO FUND BALANCE IN ITEM ~'3 F'OR
REMAINING PORTION OF PRIOR SERVICE LI~UTDATTOIV PERIOD
EFFECTIVE ON CONTRIBUTIONS TO SYSTEM AFTER 6/30/55
9.280%
.364%
9.644%
$ 97, 031, 63
8. ESTIMATED TOTAL ANNUAL CONTRIBU`1'ION BASED ON 6/30154 SALARIES
CURRENT SERVICE BENE'F'ITS $133, 184.41
PRIOR SERVICE BEN~'ITS 97, 031.63
TOTAL $230, 216, 04
COATES,HERFURTH & ENGLAND
CONSULTInTG ACTUARIES
° ~I
BY ~ `~
Her y C . Ra din
ti~
:.~
S ~ '
~ ':
AUG 2~3195~ ~ ~~
....
SUNIl~IARY OF AMENDMENTS TO ~'~~ ~ ~ ~~
THE CALIFORNIA STATE EMPLOYEES= RETIREMENT LAW
(which may be elected by a Contracting Public Agency)
A. The amendments to the Retirement Law made in 19i~5 and 1947 reduced the ages at
which members may be retired and increased the benefits members will receive.
The principal amendments were as follows:
(1) Normal service retirement age for NLiscellaneous Members reduced from
65 to 60 and the factor in the service retirement benefit formula in
creased from 1/70 to 1/60 with a guaranteed percentage of final compen-
sation for each year of service as a member;
(2) The minimum guaranteed monthly retirement allowance increased from ~l~0
to X60 to apply at age 65, or over, with credit for 20 years of service
or at age 70 with prior service credit;
(3) A death benefit of X300 provided for retired persons;
(!.t) The removal of the maximum of X5,000 per annum of compensation to be
included in computations under the Retirement Law;
(5) Normal service retirement age for Local Safety members reduced from
60 to 55 and basis of benefits increased.
B. The amendments to the Retirement Law made in 19l~9, t~rhich a Public Agency may
elect to apply to its contract, are:
(6) Prior service benefits of Miscellaneous Members equal to one-sixtieth
of final compensation upon service retirement at age 60 or its actuarial
equivalent upon service retirement at ages 55 to 65, and over;
(7) A guaranteed percentage of final compensation for each year of service
as a Local Safety Member.
C. The amendments to the :retirement Law made in 1953, which a Public Agency may
elect to apply to its contract, are in part:
(~) Minimum service retirement age for Local Safety Members reduced from 55
to 50, the allowance to be discounted for ages at retirement under 55;
(9) Retirement Benefits based on highest average monthly compensation earn-
able during three consecutive years of membership;
(10) Death Benefit for retired persons increased from X300 to "~It00.
Ret. Form 559-1 (Rev.9/5!~) 1500
"t' 'tA
Summary of Amendments (Continued)
D. Other amendments to the Retirement Law made in 1953, which a Public Agency may
elect to apply to its contract are:
(11) Normal and minimum service retirement age for Local Firemen reduced
from 55 to 50 (the allowance not to be discounted);
(12) Continuation of one--half of the Service or Industrial Disability
retirement allowance to certain dependents upon death of a retired
Safety Member. (This benefit would automatically apply to Safety
i~iembers already retired.)
E. Agency may elect to increase the retirement allowances payable to retired persons
by applying to such persons the provisions of its contract:
(13) As that contract existed on June 30, 1954, or;
(14) As that contract mould exist if amended as outlined under paragraph
"A" above, or;
(15) As that contract would exist if amended as outlined under paragraphs
''A" and "$" above.
Ret. Form 559-2 (Rev. 9/54) 15C0