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HomeMy WebLinkAboutStaff Report 2.A 03/23/2015Agenda Item # 2.A IN X85 S CITY OF PETALUMA MISCELLANEOUS AND SAFETY PLANS Ca1PERS Actuarial Issues — 6/30/13 Valuation Preliminary Review Presented by John E. Bartel, President Prepared by Bianca Lin, Assistant Vice President Adam Zimmerer, Actuarial Analyst Bartel Associates, LLC n March 23, 2015 Agenda Topic Pie Pension Terminology I CalPERS History 2 City CalPERS Benefits 4 Actuarial Terminology 7 Recent CalPERS Changes 9 Miscellaneous Plan: Demographic Information 11 Plan Funded Status 13 Plan Maturity 19 Contribution Rates & Projections 21 Safety Plan: Demographic Information 25 Plan Funded Status 27 Plan Maturity 33 Contribution Rates & Projections 35 GASB 68 39 PEPRA Cost Sharing 41 Paying Down the Unfunded Liability 43 Impact of Future Salary Increases 46 m.1"W.n-y........un=11..,121 �."...s, savm I1cmmCd. ,u PENSION TERMINOLOGY M Defined Benefit Plan: Guaranteed annual pension based on retirement age, years of service and salary, for example ® Public Sector—CaIPERS ® Private Sector — Generally only very large employers M Defined Contribution Plan: Employer contribution is a fixed dollar amount: benefit based on contributions and investment earnings net of expenses ® Public Sector — 457 Plan ® Private Sector — 401(k) Plan ® Individual Vested Rights: As determined by CA Supreme Court ® Employee must be eligible to continue earning benefit formula in place when hired. ® Cannot be reduced or eliminated unless traded for something of equal or greater value. ® Individual right, cannot be negotiated away. ® Recent Stockton decision indicates may be set aside in bankruptcy March 23, 2015 1 CALPERS HISTORY is Established in 1932 M Local public agency employees allowed to contract with CaIPERS in 1939 ® City joined CalPERS in 1950 19 Investment strategy ® Initial legislation had tight restrictions on how funds could be invested ® Proposition 21 passed in 1984 allowed CalPERS to invest up to 25% of assets in public equities ® Proposition 162 passed in 1992 allowing board to have absolute and exclusive powers over administration and investment of CalPERS funds March 23, 2015 2 :... I CALPERS HISTORY ® Enhanced pension formulas ® SB 400 passed in 1999 allowed enhanced Safety formulas Before: 2%@55, 2.5%@55, 2%@50 50 Added formulas: 3%@55, 3%@50 AB 616 passed in 2001 allowed enhanced Miscellaneous formulas > Before: 2%@60, 2%@55 Added formulas: 2.5%@55, 2.7%@55, 3%@60 ® Adopting enhanced formulas applied retroactively to all agency service ® CalPERS Retirement formulas ® Options used to vary based on contract between Agency and CalPERS ® New Law (PEPRA) now mandates formulas March 23, 2015 3 CITY CALPERS BENEFITS ® Unlike other agencies, the City: ® Does not pay any portion of the member contribution and • Did not move to an enhanced Miscellaneous formula ® City has 2 different CalPERS contracts: s Miscellaneous: Hired Formula > Tier 1 < 12/28/12 2.0%@ 55 H Tier 2 (Classic) > 12/28/12 2.0% @ 60 Tier 3 (PEPRA) > 1/1/13 2.0% @ 62 ® Safety: > Tier 1 < 12/15/12 3.0% @ 50 > Tier 2 (Classic) > 12/15/12 3.0% @ 55 > Tier 3 (PEPRA) > 1/1/13 2.7% @ 57 ® Benefits tinder each formula are calculated as: (Final Average Earnings) s (City Service) x (Benefit Factor at Retirement Age) n March 23, 2015 4 CITY CALPERS BENEFITS Miscellaneous Benefit Factor Comparison -x 2%@60 ❑ 2%@55 -+-PEPRA 2%@62 3.0% 2.0' I.0% 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 Retirement Age March 23. 2015 5 CITY CALPERS BENEFITS Safety Benefit Factor Comparison -0-3%n,55 03%rt50 fPEPRA2.7%,57 3.O",', 1 0 _0 -0.-. 0 _..o ,O 0.... 0 .0__ 15% 1 .5% 10% 50 51 52 53 n March 23, 2015 54 55 56 Retirement Age 6 57 58 59 60 ❑ ❑ p ❑ x ❑ + ❑ ❑ + :^} ❑ x' p x '" + " ❑ ❑ x_ x""_- ❑ x x x +.,- x x + x + 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 Retirement Age March 23. 2015 5 CITY CALPERS BENEFITS Safety Benefit Factor Comparison -0-3%n,55 03%rt50 fPEPRA2.7%,57 3.O",', 1 0 _0 -0.-. 0 _..o ,O 0.... 0 .0__ 15% 1 .5% 10% 50 51 52 53 n March 23, 2015 54 55 56 Retirement Age 6 57 58 59 60 F--1 ACTUARIAL TERMINOLOGY ® PVB - Present Value of all Projected Benefits: ® Discounted value (at valuation date - 6/30/13), of all future expected benefit payments based on various (actuarial) assumptions ® Actuarial Liability: ® Discounted value (at valuation date) of benefits earned through valuation date [value of past service benefit] ® Portion of PVB "earned" at measurement ® Current Normal Cost: ® Portion of PVB allocated to (or "earned" during) current year ® Value of employee and employer current service benefit ' March 23, 2015 7 F-- ACTUARIAL TERMINOLOGY L'uLlllnl I ia111141 ® Target- Have money in the bank to cover Actuarial Liability (past service) ® Unfunded Liability - Money short of target at valuation date 19 Excess Assets / Surplus: ® Money over and above target at that point in time. ® Doesn't mean you're done contributing. ® Super Funded: ® Assets cover whole pie (PVB) ® If everything goes exactly like PERS calculated; you'll never have to put another (employer or employee) dime in. n March 23. 2015 RECENT CALIPERS CHANCES Is Contribution policy changes: ® No asset smoothing ® 5 -year ramp up ® Included in 6/30/13 valuation (first impact 15/16 rates; full impact 19/20) ® Assumption changes: ® Anticipate future mortality improvement ® Other, less significant, changes ® Included in 6/30/14 valuation (first impact 16/17 rates; frill impact 20/21) ® Risk Pool changes ® All Risk Pools combined into one Miscellaneous & one Safety ® Collect payment on UAL as dollar amount, not as % of pay ® Payments allocated to agencies based on liability & assets rather than payroll ® Included in 6/30/13 valuation (impacts 15/16 rates) n March 23, 2015 9 RECENT CALPERS CHANGES This page intentionally blank n rbc March 23, 2015 10 = SUIIN'IMARY OF DEMOGRAPHIC INFORMATION- MISCELLANEOUS Average City provided pensions are based on City service S City benefit formula, and are not representative of benefits for long service employees. l March 23, 2015 11 I MEMBERS INCLUDED IN VALUATION - MISCELLANEOUS I Vim? ` March 23, 2015 12 1994 2003 2012 2013 Actives ® Counts 167 200 179 171 ® Average Age 44 46 48 49 City Service 10 9 10 11 PERSable Wages $41,600 $55,100 $68,200 $68,200 M Total PERSable Wages (millions) 7.8 12.1 13.3 12.7 Receiving Payments ® Counts Service 93 ] 86 193 U Disablity 13 17 19 Beneficiaries 18 17 19 Total 92 124 220 231 IN Average Annual City Provided Benefit' Service $14,200 $20,800 $21,100 Disability 4,900 4,300 4,000 Service Retirements in last 5 vears 21.900 24,300 23.500 Average City provided pensions are based on City service S City benefit formula, and are not representative of benefits for long service employees. l March 23, 2015 11 I MEMBERS INCLUDED IN VALUATION - MISCELLANEOUS I Vim? ` March 23, 2015 12 PLAN FUNDED STATUS - MISCELLANEOUS 1 n .Ilnm nl. Enr P"'.1 N.0— r.r m,l.m, .1 UI, mi? 1'nlirrnlrJ 1.111 June 30, 2012 Change from actuarial value to market value June 30, 2013 $ 87,000,000 Actuarial Liability $ 90,600,000 74,800,000 Actuarial Asset Value 77,700,000 (12,200,000) (Unfunded Liability) (12,900,000) June 30, 2012 $68,200 June 30, 2013 $ 8700,000 Actuarial Liability $ 90,600,000 62.400,000 Market Asset Value 68,400.000 (24,600,000) (Unfunded Liability) (22,200,000) March 23, 2015 13 PLAN FUNDED STATUS - MISCELLANEOUS ® What happened between 6/30/12 and 6/30/13? Market Value Asset Gain/(Loss) — 3.7 million ® Unfunded Liability (Increase)/Decrease = (10.0) million ® Reasons for Unfunded Liability increase ® Actuarial Asset gain/(loss) ❑ Change from actuarial value to market value z (9.2) million ❑ Investment return = (0.8) million ® Actuarial gain/(loss): z 0.6 million ❑ Average Salary $68,200 $68,200 ❑ Number of Actives 179 171 ❑ Number of Inactives 231 222 ❑ Number of Retirees 220 231 ® Other gain/(loss): ❑ Contributions ❑ Other (expected) n March 23, 2015 14 z (0.6) million INVESTMENT RETURN -MISCELLANEOUS Above assumes contributions, payments, etc. received evenly throughout year. Estimated June 30, 2015 based on CalPERS actual return through 1/31/15 and assumed 7.5% annual return for the remaining 5 months. March 23, 2015 15 ASSET VALUES (MILLIONS) - MISCELLANEOUS 6/30/14 &. 6/30/15 asset Values estimated. AVA is being set equal to MVA and a separate AVA is not available starting 6/30/13. March 23. 2015 16 - - — 15 004 i.. zs0�5 0 um5 _ r.: D 00'5 -15 i2yp ;. ao n0x Ivaera p.x11 11.1 mfi.uF`tv mu IDa"ls. AVA 1 1^ 1Ilu _vwrz t N.I YAI% )lK 5u!)1t SmPm4 5204 GoM1n% i)2 Y V 5!Y4 II)4 I, 11 .111 .I.II!: 11-1 Above assumes contributions, payments, etc. received evenly throughout year. Estimated June 30, 2015 based on CalPERS actual return through 1/31/15 and assumed 7.5% annual return for the remaining 5 months. March 23, 2015 15 ASSET VALUES (MILLIONS) - MISCELLANEOUS 6/30/14 &. 6/30/15 asset Values estimated. AVA is being set equal to MVA and a separate AVA is not available starting 6/30/13. March 23. 2015 16 - FUNDED RATIO - MISCELLANEOUS 6/30/14 & 6/30/15 funded status estimated. AVA is being set equal to MVA and a separate AVA is not available starting 6/30/13. n March 23, 2015 17 II I FUNDED STATUS (MILLIONS) - MISCELLANEOUS r� n March 23. 2015 6/30/14 & 6/30/15 funded status estimated is 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% PLAN MATURITY - MISCELLANEOUS i %of TotaIAAL Line Graph with Actives,VTsand Retirees IV IJ N N IJ IV IJ N IJ N IV N N N VV C C C C C C C C O C C C O C —Actives -- Terms —Retirees n < ' March 23, 2015 19 PLAN MATURITY - MISCELLANEOUS Unfunded Actuarial Aecrued Liability as °/4 of Payroll 300% 250% 200% 150% 100% 50% 0% -50% -100% -150% -200% March 23, 2015 20 �. cy;�•�-� CONTRIBUTION RATES - MISCELLANEOUS March 23. 2015 21 CONTRIBUTION PROJECTIONS - MISCELLANEOUS ® Market Value Investment Return: ® .lune 30. 2012 0.1%2 ® :lune 30, 2013 13.2%2 ® June 30, 2014 18.4%' - Poor Expected Good ® June 30, 20153 (0.7%) 2.2% 5.2% ® June 30, 2016 - 2020 0.2%-4.1% 7.5% 11.3% - 15.1% ® No Other: Gains/Losses, Method/Assumption Changes, Benefit Improvements ® Excludes Employer Paid Member Contributions (EPMC) ® Includes Ca1PERS Board adopted assumption changes, first impact 2016/17 ® Includes Tier 2 2.0%@60 effective December 28, 2012 ® New hire assumptions: ® Assumes 50% of 2013 new hires will be Classic Tier 2 Members (2.0%@60) and 50% will be New Members with PEPRA benefits. ® Assumes Classic Members will decrease from 50% to 0% of new hires over 20 years. Based on CAPERS CAFR. / Based on CaIPERS return of (0.8% through 1/31/15 and assumed annual return for 5 months. 1 1 1.4� �rl March 23. 2015 22 _ CONTRIBUTION PROJECTIONS - MISCELLANEOUS 40% CONTRIBUTION PROJECTIONS - MISCELLANEOUS 33.1% 31.196 30% 5 2 9 b','. 26,59,% 23,6% z- 1,1-. 23.9% 24.1% 1-4.5% 24.4% 11.4% 20.9% 20% 70% 19.4% 20.b% 21.196 21 V,5 15% 16.0% 16,9% 119% 5% 10% o 0% QC CQ z z - - -- - -- - - -- — -- - - 14115 15/16 16/17 17/18 18119 19/20 20/21 21122 22/23 tn:) Rates assuming no Gains/Losses 2015 24 March 23, 2015 23 CONTRIBUTION PROJECTIONS - MISCELLANEOUS 5 z- 1,1-. 30% 20% 15% 10% 5% o QC CQ z z - - -- - -- - - -- — -- - - tn:) March 23, 2015 24 SUMMARY OF DEMOGRAPHIC INFORMATION - SAFETY Average City provided pensions are based on City service & City benefit formula, and are not representative of benefits for long service employees. C) ' March 23, 2015 25 MEMBERS INCLUDED IN VALUATION - SAFETY March 23, 2015 26 1994 2003 2012 2013 Actives 111 Counts 113 122 113 113 is Average m Age 38 38 40 41 o City Service 11 9 11 12 o PERSable Wages $61,100 $70,400 $99,700 $101,400 ® Total PERSable Wages millions 7.7 9.5 12.3 12.5 Receiving Payments ® Counts o Service 34 62 65 Disablity 71 96 95 o Beneficiaries 8 12 12 o Total 77 113 170 172 ® Average Annual City Provided Benefit m Service $32,800 $57,000 $55,900 m Disability 24,800 36,000 36,900 Service Retirements in last 5 years 54,500 61,400 61.900 Average City provided pensions are based on City service & City benefit formula, and are not representative of benefits for long service employees. C) ' March 23, 2015 25 MEMBERS INCLUDED IN VALUATION - SAFETY March 23, 2015 26 .hmr jll. 21112 FLAN FUNDED STATUS - SAFETY .lulu 111.2110 rnli•ii�l.il l'\ 11 June 30, 2012 June 30, 2013 S 144,800,000 Actuarial Liability S 150,600,000 109,200.000 Actuarial Asset Value 112.600,000 (35,600,000) (Unfunded Liability) (38,000,000) .lune 30, 2012 June 30, 2013 S 144,800,000 Actuarial Liability S 150,600,000 91,100,000 Market Asset Value 98,900,000 (53,700,000) (Unfunded Liability) (51,700,000) n March 23, 2015 27 F----, PLAN FUNDED STATUS - SAFETV ® What happened between 6/30/12 and 6/30/13? ® Market Value Asset Gain/(Loss) — 5.4 million ® Unfunded Liability (Increase)/Decrease = (16. 1) million ® Reasons for Unfunded Liability increase ® Actuarial Asset gain/(loss): ❑ Change from actuarial value to market value (13.6) million ❑ Investment return _ (1.1) million ® Actuarial gain/(loss): _ 0.9 million ❑ Average Salary $99,700 —> $101,400 ❑ Number of Actives 113 113 ❑ Number of Inactives 73 > 75 ❑ Number of Retirees 170 172 ® Other gain/(loss): ❑ Contributions ❑ Other (expected) z (2.3) million March 23, 2015 28 _. INVESTMENT RETURN - SAFETY Above assumes contributions, payments, etc. received evenly throughout year. Estimated June 30, 2015 based on CalPERS actual return through 1/31/15 and assumed 7.5% annual return for the remaining 5 months. March 23. 2015 29 ASSET VALUES (MILLIONS) - SAFETY I_I I 6/30/14.8 6/30/15 asset values estimated. AVA is being set equal to MVA and a separate AVA will not be used in future years. <`�eA March 23, 2015 30 _. 15.00% _- 10°'e 7 2 10% -7 -- .IS 011°': 504: au Das: � nxlrz rzcm zmJ 1ws iom ruo] �mP iaw lulu ]oil zul, zon ]nl+ "'° cols n I'!�:`t I1 Nv. I: vv. 5J`t t j�1 >.vft ]y1t P.14 9U`: »`t sJ`t S.P% fiF4 5]1t l.fiy. RI\'n 195v. 125% IN.s% -9.35 Lg: 1114 IM1fi54 IZ.JY 11.9% IXX%-f lAt }J Ih' Il ]M Elly. .11 11.11 IP 49t ! Above assumes contributions, payments, etc. received evenly throughout year. Estimated June 30, 2015 based on CalPERS actual return through 1/31/15 and assumed 7.5% annual return for the remaining 5 months. March 23. 2015 29 ASSET VALUES (MILLIONS) - SAFETY I_I I 6/30/14.8 6/30/15 asset values estimated. AVA is being set equal to MVA and a separate AVA will not be used in future years. <`�eA March 23, 2015 30 _. E= FUNDED RATIO - SAFETY 6/30/14 & 6/30/15 funded status estimated. AVA is being set equal to MVA and a separate AVA will not be used in future years. March 23, 2015 31 _. r� FUNDED STATUS (MILLIONS) - SAFETY 6/30/14 S 6/30/15 funded status estimated March 23, 2015 32 _ PLAN MATURITY - SAFETY yo orTotal AAL Line Graph with Actives,VTs and Retirees 80.0% 70.0% 60.0% i �" --..."/'�-�•"� 50.0% ' I 40.0% 30.0% 20.0% 10.0% 0.0%-- _.. .. N N N N IJ N N N N N N N N N —Actives -- Terms —Retirees tn• ; March 23, 2015 33 PLAN MATURITY - SAFETY Unfunded Actuarial Accrued Liability as %I of Payroll 500% 400% 300% — -- - -------- -- 200% -- - -=- . 100% fT r 0% —_ t� — -100% - --.-.—_ _ -200% — ------._-._._.------ ..__-------._..-__ -300% J N N IJ N N N N N N N J J N March 23, 2015 34 __ CONTRIBUTION RATES - SAFETY March 23, 2015 35 �1 I CONTRIBUTION PROJECTIONS - SAFETY I �� ® Market Value Investment Return: ® June 30, 2012 0.1%5 ® June 30, 2013 13.2%5 ® June 30, 2014 18.4%5 Poor Expected Good ® June 30, 20156 (0.7%) 2.2% 5.2% ® June 30, 2016-2020 0.2'%-4.1% 7.5% 11.3%-15.1% ® No Other: Gains/Losses, Method/Assumption Changes, Benefit Improvements ® Excludes Employer Paid Member Contributions (EPMC) ® Includes Ca1PERS Board adopted assumption changes, first impact 2016/17 ® Includes Tier 2, 3%@55 effective December 15, 2012 New hire assumptions: ® Assumes 50% of 2013 new hires will be Classic Tier 2 Members (3%@55) and 50% will be New Members with PEPRA benefits. ® Assumes Classic Members will decrease from 50% to 0% of new hires over 10 years ' Based on CaIPERS CAFR. Based on CaIPERS return of (0.8%) through 1/31/15 and assumed annual return for 5 months. sum � March 23, 2015 36 CONTRIBUTION PROJECTIONS -SAFETY 30'. _... N L I1, 16 16.17 17:78 18119 19'20 70;21 2122 —_._3 Rates asamiuie no Gaitu�Losses March 23, 2015 37 CONTRIBUTION PROJECTIONS - SAFETY 90 _.... P 40% »l' 2 "". ] nl \ I. Q, Q C L Q C Q QC C Rates assuming no Gains/Losscs March 23. 2015 38 __ 667"ti 63.1'. ° 48.0°.a.... 52.6% 531% 53.490 53.0"i 50°° ___ 50.1% 47.6°l 45.1% 48.290 18.39° y0, 42.5% 400" 39.8% 375°" 30'. _... N L I1, 16 16.17 17:78 18119 19'20 70;21 2122 —_._3 Rates asamiuie no Gaitu�Losses March 23, 2015 37 CONTRIBUTION PROJECTIONS - SAFETY 90 _.... P 40% »l' 2 "". ] nl \ I. Q, Q C L Q C Q QC C Rates assuming no Gains/Losscs March 23. 2015 38 __ 111 91 El GASB 68 Pension Accounting: ® GASB 68, Accounting for Employers, approved June 25, 2012 ® Replaces GASB 27 ® Effective 2014/15 Major Issues: ® Unfunded liability on balance sheet ® Expense calculation disconnected from contribution calculation ® Discount rate is ❑ Expected return on plan assets when assets sufficient to pay benefits ❑ Municipal bond rate when assets not sufficient to pay benefits Likely caused CaIPERS to modify assets smoothing and/or amortization policy to avoid using discount rate lower than expected return (ZS%). June 30. 2014 Unfunded Actuarial Liabilitv (in Millions) Plan Total Pension Liability (AAL Fiduciary Net Net Pension Position (MVA) Liability (UAL) Safety $157.2 $114.7 $42.5 Miscellaneous 94.6 79.0 15.6 Total Net Pension Liability $58.1 March 23, 2015 ® CalPERS: 39 GASB 68 ® Actuaries have approval from CalPERS Board to make necessary system changes & have begun work. ® Intend to provide June 30, 2015 GASB 68 information in spring 2015. ® Expect to provide only upon request. ® Will charge small fee, set in early 2015. Mardi 23, 2015 40 __ PEPRA COST SHARING ® Target of 50% of total normal cost for everyone ® New members must pay greater of 50% of total normal cost or bargained amount if higher ® Employer cannot pay any part of new member required employee contributions ® Employer may impose current employees pay 50% of total normal cost (limited to certain amounts) if not agreed through collective bargaining by ]/1/] 8 ® Miscellaneous Plan: Current Members New Members 20/o .55 2%A60 2°/o(a762 ® Employer Normal Cost 8.7% 7.2% 6.25% ® Member Normal Cost 7.0% 7.0% 6.25% ® Total Normal Cost 15.7% 14.2% 12.50% ® 50% Target 7.85% 7.1% 6.25% March 23, 2015 41 _ PEPRA COST SHARING i ® Safety Plan: Current Members New Members March 23, 2015 42 B' 3% 60 50 3%(a,55 2.7%a,57 ® Employer Normal Cost 19.0% 16.5% 11.55% ® Member Normal Cost 9.0% 9.0% 11.75% ® Total Normal Cost 28.0% 25.5% 23.30% ® 50% Target 14.0% 12.75% 11.65% March 23, 2015 42 B' PAYING DOWN THE UNFUNDED LIABILITY ® Pension Obligation Bond (POB) ® Interest arbitrage between expected Ca1PERS earnings and rate paid on POB ® Not guaranteed ® Borrow from General Fund ® Pay GF back like a loan ® Payments come from all funds ® Request shorter amortization period of CaIPERS ® Higher short term payments ® Less interest and lower long term payments ® One time payment 0 Council resolution to use portion of one time money March 23. 2015 43 L PAYING DOWN THE UNFUNDED LIABILITY r� ® Internal Service Fund vs. Irrevocable Supplemental (§115) Pension Trust ® Internal Service Fund ❑ Restricted investments O Likely low (0.5°/, - 1.0%) investment returns O Short tern/high quality O Designed for preservation of principal ❑ Assets could be used by Council for other purposes ® Irrevocable Supplemental (§115) Pension Trust ❑ One Trust established so far ❑ PARS & PFM ❑ Investments significantly less restricted O Designed for long term returns O Likely much higher (5% - 7%) investment return ❑ Assets could not be used by Council for other purposes ❑ Can only be used to pay O Reimburse City for CaIPERS contributions O Make payments directly to CaIPERS March 23. 2015 44 PAYING DOWN THE UNFUNDED LIABILITY ® Projected funded status with additional $250,000 annual contribution starting in 2014/15 ® Miscellaneous UAAL / Funded Ratio 6/30/15 6/30/20 6/30/25 Current Funding $20.0 m $19.0 m $12.2 In 80% 84% 91% Additional $250K $19.7 In $17.1 m $8.0 m 80% 86% 94% ® Safety UAAL / Funded Ratio 6/30/15 6/30/20 6/30/25 Current Funding $49.0 m $47.7 m $35.6 m 70% 76% 85% Additional $250K $48.7 m $45.9 m $31.4 m 70% 77% 86% n March 23, 2015 45 I IMPACT OF FUTURE SALARY INCREASES ® The City's Actuarial Liability includes a component for future salary increases (000's omitted): b Miscellaneous Plan = $ 7,000 ® Safety Plan ® Total 13,000 20,000 March 23, 2015 46 _.