HomeMy WebLinkAboutAGENDA REPORT 2017 0920 CCSA REG ITEM 09B ITEM 9.B..
MOORPARK CITY COUNCIL CITY OFMOORPARK,CALIFORNIA
AGENDA REPORT City Council Meeting
9-ao-aorj —
ACTION:
TO: Honorable City Council
FROM: Ron Ahlers, Finance Director FROM: (u"
DATE: August 31, 2017 (City Council Meeting of September 20, 2017)
SUBJECT: Consider Resolution Amending the Fiscal Year 2017-18 Budget to
Appropriate Funding to Pay Down the City's California Public
Employee Retirement System (CaIPERS) Pension Plan Unfunded
Accrued Liability
BACKGROUND
The City contracts with the California Public Employees Retirement System (CaIPERS)
to provide pension benefits to City employees. CaIPERS recently issued the actuarial
report for June 30, 2016 for the City of Moorpark for both the "classic" and Public
Employee's Pension Reform Act ("PEPRA") plans. The PEPRA plan was established
on January 1, 2013 and currently has twelve city employees. CaIPERS designed the
PEPRA plan to have stable contributions so as to greatly reduce the risk of unfunded
actuarial liabilities. This report only addresses the "classic" plan. The actuarial report
details the City's unfunded accrued liability (UAL) for pensions at $4,043,992 as of June
30, 2016. Staff contacted the actuary at CaIPERS to discuss paying off the UAL. Due
to the December 2016 decision by the CaIPERS board to lower the discount rate from
7.5% to 7.0%, it is estimated that the UAL will increase approximately $1.0 million by
June 30, 2018. CaIPERS preliminary investment return calculation for fiscal year (FY)
2016-17 is 11.2%. Staff is requesting the City Council consider paying down the UAL in
the pension system by making a contribution of $4 million to CaIPERS.
DISCUSSION
CaIPERS changed the collection of pension contributions beginning in FY 2015-16.
The employee pension contribution remains at 7% of pay for "classic" members. The
employer cost for FY 2017-18 is split into two parts: normal cost, expressed as a
percentage of pay; and UAL contribution, expressed as a dollar amount. In total, the
pension contribution will experience an increase of less than 0.5% of pay. The FY
2017-18 employer rate is 8.418% of pay, while for FY 2018-19 the rate is 8.892%. The
"pensionable compensation" is approximately $4.7 million; therefore the normal cost is
expected to cost $417,924 in FY 2018-19; an increase of about $5,000. The
"pensionable compensation" for the Classic Plan is slowly decreasing as employees
retire and are replaced by new employees who are enrolled in the PEPRA plan.
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Honorable City Council
September 20, 2017
Page 2
Funded Status
The UAL on June 30, 2014 was $4.0 million. The City contributed $3.6 million in
January 2015 which reduced the UAL to $0.4 million. However, the investment return
assumption of 7.5% was not realized; CaIPERS earned 2.4% in FY 2014-15. The June
30, 2015, funded status of the plan using the market value of assets was 93.7%. The
normal accrued liability of $28.5 million; market value of assets of $26.7 million;
therefore an UAL of $1.8 million. The UAL increased in FY 2015-16 since CaIPERS
earned only 0.6%. The June 30, 2016 funded status is 86.8%. There is $30.5 million
for normal accrued liability and assets of $26.5 million; therefore an UAL of $4.0 million
as of June 30, 2016.
CaIPERS is reducing the discount rate from 7.5% to 7.0% over a three year period. The
June 30, 2016 report reflects a partial reduction in the discount rate. Over the next two
years, the reduction in the discount rate will further increase the UAL by an estimated
$1 million. Therefore, the UAL on June 30, 2018 is estimated to exceed $5 million.
Staff recommends making a contribution of $4 million to reduce the UAL to about $1
million. This will keep the classic plan over 90% funded.
Employer Normal Cost
The FY 2017-18 "normal cost" employer rate is 8.418% while the FY 2018-19 rate is
8.892%; an increase of 0.474%. Recall that in December 2016, CaIPERS lowered the
discount rate from 7.5% to 7.0% over a three year period. Therefore, CaIPERS expects
the normal cost to increase to 9.3% in FY 2019-20 and to 10.2% in FY 2020-21 and
remain at 10.2% for the ensuing four years. If (when?) CaIPERS lowers the discount
rate again, the normal cost would increase again. The City cannot prepay the normal
cost contributions. CaIPERS requires the City to pay the normal cost with each payroll.
This has been our practice for the past seven years.
Unfunded Accrued Liability (UAL) Contribution
CaIPERS requires the City to pay the UAL contribution in dollars, not as a percent of
pay. The FY 2017-18 UAL contribution is $112,327 while the FY 2018-19 cost is
$181,640; an increase of $69,313. The following table details these amounts and
estimated increases into the future:
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Honorable City Council
September 20, 2017
Page 3
UAL Annual Contribution
FY Amount Increase
2017-18 $ 112,327
2018-19 $ 181,640 $ 69,313
2019-20 $ 253,000 $ 71,360
2020-21 $ 348,000 $ 95,000
2021-22 $ 446,000 $ 98,000
2022-23 $ 538,000 $ 92,000
2023-24 $ 579,000 $ 41,000
2024-25 $ 623,000 $44,000
The City has the option to prepay the FY 2018-19 UAL amount at $175,291 in July
2018; saving $6,349. The City prepaid the past two years and should continue to
prepay to take advantage of the savings.
The total increase for the classic plan for FY 2018-19 is $74,313 ($5,000 plus $69,313).
Ventura County governmental pension plans (non-safety)
As of June 30, 2016, the City's pension plan is funded at 87%. By way of comparison,
the table below shows the funded status of other Ventura County governmental plans
(non-safety) as of June 30, 2016.
FY 2018-19 Employer FY 2018-19
Annual Payroll Total Funded Normal Annual UAL
City (estimate) UAL Status Cost Contribution
Moorpark $4,968,200 $4,043,992 87 % 8.892 % $ 181,640
Santa Paula 2@55 * $ 1,441,094 $471,691 82 % 9.409 % $21,159
Ventura $ 30,278,405 $64,589,778 75 % 7.858 % $4,148,564
Thousand Oaks $ 31,044,074 $ 73,431,915 73 % 8.274 % $4,748,326
Oxnard $ 52,384,045 $ 118,486,814 73 % 8.039 % $ 7,344,982
Fillmore $ 982,627 $4,665,165 72 % 10.411 % $ 354,601
Port Hueneme $4,591,598 $ 18,184,615 70% 12.119 % $ 1,086,671
Camarillo $ 11,935,072 $ 31,842,382 69 % 9.274 % $2,066,810
Simi Valley $ 30,389,863 $ 87,265,547 68 % 8.710 % $5,367,207
Santa Paula 2.5@55 ** $ 1,752,619 $ 12,368,748 67 % 10.609 % $ 976,832
Ventura County $ 705,999,680 $ 1,011,919,000 81 % 18.790 % General
55.500 % Safety
* Santa Paula employees hired between 3-20-2006 and 12-31-2012
** Santa Paula employees hired before 3-20-2006
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Honorable City Council
September 20, 2017
Page 4
Changes since the June 30, 2016 actuarial report
CaIPERS recorded investment earnings of 11.2% in FY 2016-17; therefore the UAL has
decreased since June 30, 2016 since the actual investment returns of 11.2% is greater
than the assumption of 7.0%.
Even if the current UAL is completely paid off, the City could have an UAL in the future
based on unknown and unpredictable events such as: CaIPERS investment losses,
changes in demographic assumptions, changes in City employee demographics and
other events.
The table below shows the UAL contributions required by CaIPERS over the next seven
years (page 18 of actuarial report). If the City pays down the UAL by $4 million, then
the City will substantially reduce the UAL contributions in the future. Over the next
seven years the City would save about $2.1 million (estimate). The City would not
receive interest earnings of about $0.56 million (estimate 2% interest). The net
estimated savings is about $1.6 million. The General Fund savings is about $1.2 million
and all the other funds is about $0.4 million. The return calculation is based on the City
paying off$4 million of the unfunded liability.
(1) (2) (1)-(2) (3) (2)-(3)
Original Less Revised City Interest
UAL UAL UAL on Net
Year Contribution Reduction Contribution $4,000,000 Savings
2018-19 $ 181,640 $ 130,000 $ 51,640 $ 80,000 $ 50,000
2019-20 $ 253,000 $ 180,000 $ 73,000 $ 80,000 $ 100,000
2020-21 $ 348,000 $ 248,000 $ 100,000 $ 80,000 $ 168,000
2021-22 $ 446,000 $ 318,000 $ 128,000 $ 80,000 $ 238,000
2022-23 $ 538,000 $ 384,000 $ 154,000 $ 80,000 $ 304,000
2023-24 $ 579,000 $ 413,000 $ 166,000 $ 80,000 $ 333,000
2024-25 $ 623,000 $ 444,000 $ 179,000 $ 80,000 $ 364,000
Note: Assumes CaIPERS meets all their actuarial and investment assumptions.
RISK
The main risk to the payoff is the investment return assumption by CaIPERS of 7.0%.
Staff feels confident any future UAL would be demographic. With the contribution of
$4,000,000, plus investment earnings, the City's market value of assets is estimated to
increase to $33 million as of June 30, 2018. If there is a significant decrease in the
investment markets, similar to 2007-09, then the City could be facing the same UAL in
the millions of dollars in the future. However, the City is currently earning about 2.0%
on the investment portfolio, which is significantly less than that earned by CaIPERS.
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Honorable City Council
September 20, 2017
Page 5
PEPRA
The Public Employees' Pension Reform Act of 2013 (PEPRA) requires all "new"
employees to contribute one-half of the normal costs. The City currently has twelve
PEPRA employees, who currently contribute 6.25% of pay. The City contributes
6.842%, which equates to a total contribution of 13.1%. The UAL for the City's
"PEPRA" employees is $5,597 as of June 30, 2016.
Conclusion
Each year CaIPERS will produce an actuarial report for the City's pension plan. The
report will show either a shortfall (UAL) or a surplus (excess reserves). Each year the
City can decide to pay off any UAL, if one develops. City staff will monitor the UAL and
funded status each year with the goal of maintaining a minimum of 90% funding. If the
funded status drops below 90% the City Council will be asked to consider making
another contribution to the classic plan.
FISCAL IMPACT
The $4,000,000 in appropriation will pay down the City's pension plan UAL. The cost to
the General Fund reserves is $3,198,230; which would entail a transfer from the Special
Projects Fund. This is about 12% of the current Special Projects Fund balance,
estimated at $26.8 million for June 30, 2017. The cost to the other funds is $801,770.
The savings to the budget in FY 2018-19 is about $38,000 for the General Fund and
$12,000 for all other funds. Total savings of about $50,000 in FY 2018-19. Over the
next six years the General Fund cumulative projected savings is about $1,168,000 and
all the other funds is about $389,000.
In addition, the City shall instruct CaIPERS to amortize the remaining UAL over a period
not to exceed 12 years. This will ensure that the UAL is paid off as quickly as the
remaining working life of the city employees.
STAFF RECOMMENDATION (Roll Call Vote)
Adopt Resolution No. 2017 - .
Attachment:
• 1. Resolution No. 2017-
2. CaIPERS — Miscellaneous Plan of the City of Moorpark, Annual Valuation Report
as of June 30, 2016
141
Attachment 1
RESOLUTION NO. 2017 -
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
MOORPARK, CALIFORNIA, AMENDING THE FISCAL YEAR
2017-18 BUDGET TO APPROVE CERTAIN
APPROPRIATIONS REQUIRED TO PAY DOWN THE CITY'S
CALIFORNIA PUBLIC EMPLOYEES RETIREMENT SYSTEM
(CALPERS) PENSION PLAN UNFUNDED LIABILITY
WHEREAS, on June 21, 2017, the City Council adopted the Budget for fiscal year
2017-18; and
WHEREAS, on September 20, 2017, a staff report has been presented to the City
Council discussing the City's pension plan and the cost to pay down the City's CaIPERS
Miscellaneous pension plan unfunded liability by $4,000,000 for classic members; and
WHEREAS, on September 20, 2017 a staff report has been presented to the City
Council requesting an aggregate appropriation increase of$4,000,000; and
WHEREAS, Exhibit "A", attached hereto and made a part hereof, describes said
budget amendments and its resultant impacts to the budget line item(s).
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MOORPARK DOES
HEREBY RESOLVE AS FOLLOWS:
SECTION 1. That a Budget Amendment in the aggregate increase of
$3,600,000, as more particularly described in Exhibit "A", is hereby approved.
SECTION 2. The City Clerk shall certify to the adoption of this resolution and
shall cause a certified resolution to be filed in the book of original resolutions.
PASSED AND ADOPTED this 20th day of September 2017.
Janice S. Parvin, Mayor
ATTEST:
Maureen Benson, City Clerk
Attachment: Exhibit 'A': Budget Appropriation
142
Resolution No. 2017-
Exhibit A
Budget Amendment to
General Fund and Other Funds
To Pay Down the City's Pension Plan Unfunded Liability
FY 2017/18
A. Fund Allocation to pay down pension unfunded liability
Fund Account Amount
General Fund 1000-33990 $ 2,360,111.
Library Fund 1010-33990 $ 30,665
Traffic Safety Fund 2000-33990 $ 90,938
Traffic System Maint Fund 2001-33990 $ 20,444
Crossing Guard Fund 2003-33990 $ 13,114
Art in Public Places Fund 2007-33990 $ 10,222
City Affordable Housing Fund 2121-33990 $ 95,747
Community Development Fund 2200-33990 $ 402,569
Engineering/Public Works Fund 2205-33990 $ 96,095
2300-LMD 2300-33990 $ 7,794
2301-LMD 2301-33990 $ 1,156
2302-LMD 2302-33990 $ 3,012
2303-LMD 2303-33990 $ 70
2304-LMD 2304-33990 $ 409
2305-LMD 2305-33990 $ 3,992
2306-LMD 2306-33990 $ 9
2307-LMD 2307-33990 $ 645
2308-LMD 2308-33990 $ 1,156
2309-LMD 2309-33990 $ 330
2310-LMD 2310-33990 $ 17,487
2311-LMD 2311-33990 $ 70
2312-LMD 2312-33990 $ 10,008
143
Resolution No. 2017-
Fund Account Amount
2314-LMD 2314-33990 $ 241
2315-LMD 2315-33990 $ 7,567
2316-LMD 2316-33990 $ 330
2318-LMD 2318-33990 $ 409
2320-LMD 2320-33990 $ 20,792
2321-LMD 2321-33990 $ 167
2322-LMD 2322-33990 $ 49,350
Parks Maintenance Fund 2390-33990 $ 332,116
Solid Waste Fund 2410-33990 $ 54,939
TDA 8A Fund 2412-33990 $ 143,384
TDA 8C Fund 2414-33990 $ 92,549
Gas Tax Fund 2415-33990 $ 132,113
TOTAL $ 4,000,000
B. Distribution of Appropriation to Expenditure Accounts
Account Number Current Revision Amended
Budget Budget •
1000-111-00000-50300 $ 6,401 $ 29,713 $ 36,114
1000-120-00000-50300 $ 48,328 $ 224,342 $ 272,670
1000-131-00000-50300 $ 15,586 $ 72,351 $ 87,937
1000-132-00000-50300 $ 48,262 $ 224,035 $ 272,297
1000-133-00000-50300 $ 50,025 $ 232,219 $ 282,244
1000-134-00000-50300 $ 47,926 $ 222,475 $ 270,401
1000-151-00000-50300 $ 91,471 $ 424,614 $ 516,085
1000-160-00000-50300 $ 9,208 $ 42,744 $ 51,952
1000-171-00000-50300 $ 24,705 $ 114,682 $ 139,387
1000-172-00000-50300 $ 2,202 $ 10,222 $ 12,424
1000-212-00000-50300 $ 11,108 $ 51,564 $ 62,672
1000-231-00000-50300 $ 4,439 $ 20,606 $ 25,045
1000-310-00000-50300 $ 6,844 $ 31,770 $_38,614
144
Resolution No. 2017-
Account Number Current Revision Amended
Budget Budget
1000-411-00000-50300 $ 28,558 $ 132,568 $ 161,126
1000-441-00000-50300 $ 15,297 $ 71,010 $ 86,307
1000-441-P0001-50300 $ 15,297 $ 71,010 $ 86,307
1000-510-00000-50300 $ 11,764 $ 54,609 $ 66,373
1000-521-00000-50300 $ 52,409 $ 243,286 $ 295,695
1000-621-00000-50300 $ 18,589 $ 86,291 $ 104,880
1010-530-00000-50300 $ 6,606 $ 30,665 $ 37,271
2000-213-00000-50300 $ 4,259 $ 19,771 $ 24,030
2000-214-00000-50300 $ 15,331 $ 71,167 $ 86,498
2001-172-00000-50300 $ 4,404 $ 20,444 $ 24,848
2003-213-00000-50300 $ 2,825 $ 13,114 $ 15,939
2007-510-00000-50300 $ 2,202 $ 10,222 $ 12,424
2121-222-00000-50300 $ 927 $ 4,303 $ 5,230
2121-422-00000-50300 $ 19,699 $ 91,444 $ 111,143
2200-160-00000-50300 $ 18,467 $ 85,725 $ 104,192
2200-161-00000-50300 $ 55,901 $ 259,496 $ 315,397
2200-222-00000-50300 $ 12,354 $ 57,348 $ 69,702
2205-223-00000-50300 $ 20,701 $ 96,095 $ 116,796
2300-542-P0004-50300 $ 1,679 $ 7,794 $ 9,473
2301-542-P0004-50300 $ 249 $ 1,156 $ 1,405
2302-231-P0007-50300 $ 63 $ 292 $ 355
2302-542-P0004-50300 $ 586 $ 2,720 $ 3,306
2303-542-P0004-50300 $ 15 $ 70 $ 85
2304-542-P0004-50300 $ 88 $ 409 $ 497
2305-231-P0007-50300 $ 63 $ 292 $ 355
2305-542-P0004-50300 $ 797 $ 3,700 $ 4,497
2306-542-P0004-50300 $ 2 $ 9 $ 11
2307-542-P0004-50300 $ 139 $ 645 $ 784
2308-542-P0004-50300 $ 249 $ 1,156 $ 1,405
145
Resolution No. 2017-
Account Number Current Revision Amended
Budget Budget
2309-542-P0004-50300 $ 71 $ 330 $ 401
2310-231-P0007-50300 $ 757 $ 3,514 $ 4,271
2310-542-P0004-50300 $ 3,010 $ 13,973 $ 16,983
2311-542-P0004-50300 $ 15 $ 70 $ 85
2312-542-P0004-50300 $ 2,156 $ 10,008 $ 12,164
2314-542-P0004-50300 $ 52 $ 241 $ 293
2315-542-P0004-50300 $ 1,630 $ 7,567 $ 9,197
2316-542-P0004-50300 $ 71 $ 330 $ 401
2318-542-P0004-50300 $ 88 $ 409 $ 497
2320-542-P0004-50300 $ 4,479 $ 20,792 $ 25,271
2321-542-L0071-50300 $ 36 $ 167 $ 203
2322-542-P0004-50300 $ 10,631 $ 49,350 $ 59,981
2390-541-00000-50300 $ 71,545 $ 332,116 $ 403,661
2410-445-P0002-50300 $ 11,835 $ 54,939 $ 66,774
2412-311-00000-50300 $ 30,888 $ 143,384 $ 174,272
2414-430-00000-50300 $ 19,937 $ 92,549 $ 112,486
2415-311-00000-50300 $ 28,460 $ 132,113 $ 160,573
TOTAL $ 861,686 $ 4,000,000 . $ 4,861,686
146
Resolution No. 2017-
C. Fund Allocation for Transfers
Fund Account Amount
General Fund 1000-33990 ($ 2,360,111)
Community Development Fund 2200-33990 ($ 402,569)
Engineering/Public Works Fund 2205-33990 ($ 96,095)
Parks Maintenance Fund 2390-33990 ($ 332,116)
City Wide LMD 2300-33990 ($ 7,794)
2301-LMD 2301-33990 ($ 1,156)
2305-LMD 2305-33990 ($ 3,992)
2306-LMD 2306-33990 ($ 9)
2308-LMD 2308-33990 ($ 1,156)
2309-LMD 2309-33990 ($ 330)
2314-LMD 2314-33990 ($ 241)
2415-LMD 2415-33990 $ 7,339
Special Projects Fund 3004-33990 $ 3,198,230
TOTAL $ 0
D. Distribution of Appropriation to Expenditure Accounts for Transfers
Account Number Current Revision Amended
Budget Budget
1000-160-00000-59010 $ 829,188 $ 402,569 $ 1,231,757
1000-223-00000-59010 $ 165,949 $ 96,095 $ 262,044
1000-541-00000-59010 $ 1,935,441 $ 332,116 $ 2,267,557
1000-542-00000-59010 $ 94,453 $ 7,339 $ 101,792
2415-542-00000-59010 $ 94,453 $ 7,339 $ 101,792
3004-000-00000-59010 $ 0 $ 3,198,230 $ 3,198,230
TOTAL $ 3,119,484 $ 4,043,688 $ 7,163,172
147
Resolution No. 2017-
E. Distribution of Appropriation to Revenue Accounts for Transfers
Account Number Current Revision Amended
Budget Budget
1000-49010 $ 0 $ 3,198,230 $ 3,198,230
2200-49010 $ 165,949 $ 402,569 $ 568,518
2205-49010 $ 165,949 $ 96,095 $ 262,044
2390-49010 $ 1,935,441 , $ 332,116 $ 2,267,557
2300-49010 $ 244,817 $ 7,794 $ 252,611
2301-49010 $ 11,186 $ 1,156 $ 12,342
2305-49010 $ 57,510 $ 3,992 $ 61,502
2306-49010 $ 606 $ 9 $ 615
2308-49010 $ 6,172 $ 1,156 $ 7,328
2309-49010 $ 6,034 $ 330 $ 6,364
2314-49010 $ 4,465 $ 241 $ 4,706
TOTAL $ 2,598,129 $ 4,043,688 $ 6,641,817
Finance Approval: ', •
148
California Public Employees' Retirement System
Actuarial Office
P.O.
Sacramento, CA 94229-2709
TTY: (916)795-3240
CaIPERS (888)225-7377 phone—(916)795-2744 fax
www.calpers.ca.gov
August 2017
MISCELLANEOUS PLAN OF THE CITY OF MOORPARK
(CaIPERS ID: 4690157978)
Annual Valuation Report as of June 30, 2016
Dear Employer,
As an attachment to this letter, you will find a copy of the June 30, 2016 actuarial valuation report of the pension
plan.
Because this plan is in a risk pool,the following valuation report has been separated into two sections:
• Section 1 contains specific information for the plan including the development of the current and projected
employer contributions, and
• Section 2 contains the Risk Pool Actuarial Valuation appropriate to the plan as of June 30, 2016.
Section 2 can be found on the CaIPERS website at (www.calpers.ca.gov). From the home page, go to "Forms&
Publication?and select"View All'. In the search box, enter"Risk Pool Report"and from the results list download the
Miscellaneous or Safety Risk Pool Actuarial Valuation Report as appropriate.
Your June 30, 2016 actuarial valuation report contains important actuarial information about your pension plan at
CaIPERS. Your assigned CaIPERS staff actuary, whose signature appears in the Actuarial Certification section on page
1, is available to discuss the report with you after August 31, 2017.
The exhibit below displays the minimum employer contributions, before any cost sharing, for Fiscal Year 2018-19
along with estimates of the required contributions for Fiscal Years 2019-20 and 2020-21. Member contributions other
than cost sharing (whether paid by the employer or the employee) are in addition to the results shown below. The
employer contributions in this report do not reflect any cost sharing arrangements you may have with
your employees.
Required Contribution
Fiscal Year Employer Normal Employer Payment of
Cost Rate Unfunded Liability
2018-19 8.892% $181,640
Projected Results
2019-20 9.3% $253,000
2020-21 10.2% $348,000
The actual investment return for Fiscal Year 2016-17 was not known at the time this report was prepared. The
projections above assume the investment return for that year would be 7.375 percent. If the actual investment
return for Fiscal Year 2016-17 differs from 7,375 percentg, the actual contribution requirements for the
projected years will differ from those shown above.
Moreover, the projected results for Fiscal Years 2019-20 and 2020-21 also assume that there are no future plan
changes, no further changes in assumptions other than those recently approved,and no liability gains or losses. Such
changes can have a significant impact on required contributions. Since they cannot be predicted in advance, the
projected employer results shown above are estimates. The actual required employer contributions for Fiscal Year
2019-20 will be provided in next year's report.
For additional details regarding the assumptions and methods used for these projections please refer to the
"Projected Employer Contributions"in the"Highlights and Executive Summary"section.
The "Risk Analysis" section of the valuation report also contains estimated employer contributions in future years
under a variety of investment return scenarios.
149
MISCELLANEOUS PLAN OF THE LI I Y OF MOORPARK
(CaIPERS ID: 4690157978)
Annual Valuation Report as of June 30, 2016
Page 2
Changes since the Prior Year's Valuation
On December 21, 2016, the CaIPERS Board of Administration lowered the discount rate from 7.50 percent to 7.00
percent using a three year phase-in beginning with the June 30, 2016 actuarial valuations. The minimum employer
contributions for Fiscal Year 2018-19 determined in this valuation were calculated using a discount rate of 7.375
percent. The projected employer contributions on Page 5 are calculated assuming that the discount rate will be
lowered to 7.25 percent next year and to 7.00 percent the following year as adopted by the Board.
The CaIPERS Board of Administration adopted a Risk Mitigation Policy which is designed to reduce funding risk over
time. This Policy has been temporarily suspended during the period over which the discount rate is being lowered.
More details on the Risk Mitigation Policy can be found on our website.
Besides the above noted changes, there may also be changes specific to the plan such as contract amendments and
funding changes.
Further descriptions of general changes are included in the "Highlights and Executive Summary"section and in
Appendix A,"Statement of Actuarial Data, Methods and Assumptions"of the Section 2 report.
We understand that you might have a number of questions about these results. While we are very interested in
discussing these results with your agency, in the interest of allowing us to give every public agency their results, we
ask that you wait until after August 31 to contact us with actuarial related questions.
If you have other questions, please call our customer contact center at(888)CaIPERS or(888-225-7377).
Sincerely,
SCOTT TERANDO
Chief Actuary
150
Ca1PERS
ACTUARIAL VALUATION
as of June 30, 2016
for the
MISCELLANEOUS PLAN
of the
CITY OF MOORPARK
(CaIPERS ID: 4690157978)
REQUIRED CONTRIBUTIONS
FOR FISCAL YEAR
July 1, 2018 - June 30, 2019
151
TABLE
SECTION 1 - PLAN SPECIFIC INFORMATION
SECTION 2 - RISK POOL ACTUARIAL VALUATION INFORMATION
152
Section 1
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Plan Specific Information
for the
MISCELLANEOUS PLAN
of the
CITY OF MOORPARK
(CaIPERS ID: 4690157978)
(Rate Plan: 1460)
153
TABLE OF CONTENTS
ACTUARIAL CERTIFICATION 1
HIGHLIGHTS AND EXECUTIVE SUMMARY
Introduction 3
Purpose of Section 1 3
Required Employer Contribution 4
Plan's Funded Status 5
Projected Employer Contributions 5
Changes Since the Prior Year's Valuation 6
Subsequent Events 6
ASSETS AND LIABILITIES
Breakdown of Entry Age Normal Accrued Liability 8
Allocation of Plan's Share of Pool's Experience/Assumption Change 8
Development of Plan's Share of Pool's MVA 8
Schedule of Plan's Amortization Bases 9
30-Year Amortization Schedule and Alternatives 10
Employer Contribution History 12
Funding History 12
RISK ANALYSIS
Analysis of Future Investment Return Scenarios 14
Analysis of Discount Rate Sensitivity 15
Volatility Ratios 16
Hypothetical Termination Liability 17
PARTICIPANT DATA 18
LIST OF CLASS 1 BENEFIT PROVISIONS 18
PLAN'S MAJOR BENEFIT OPTIONS 20
(CY)FIN PROCESS CONTROL ID:502746 (PY)FIN PROCESS CONTROL ID:483802 REPORT ID: 107351
154
CALPERS ACTUARIAL VALUATION -June 30, 2016 •
MISCELLANEOUS PLAN OF THE Ci I Y OF MOORPARK •
CaIPERS ID: 4690157978
ACTUARIAL CERTIFICATION
Section 1 of this report is based on the member and financial data contained in our records as of June 30, 2016
which was provided by your agency and the benefit provisions under your contract with CaIPERS. Section 2 of
this report is based on the member and financial data as of June 30, 2016 provided by employers participating
in the Miscellaneous Risk Pool to which the plan belongs and benefit provisions under the CaIPERS contracts for
those agencies.
As set forth in Section 2 of this report, the pool actuary has certified that, in their opinion, the valuation of the
risk pool containing your MISCELLANEOUS PLAN has been performed in accordance with generally accepted
actuarial principles consistent with standards of practice prescribed by the Actuarial Standards Board, and that
the assumptions and methods are internally consistent and reasonable for the risk pool as of the date of this
valuation and as prescribed by the CaIPERS Board of Administration according to provisions set forth in the
California Public Employees'Retirement Law.
Having relied upon the information set forth in Section 2 of this report and based on the census and benefit
provision information for the plan, it is my opinion as the plan actuary that Unfunded Accrued Liability
amortization bases as of June 30, 2016 and employer contribution as of July 1, 2018, have been properly and
accurately determined in accordance with the principles and standards stated above.
The undersigned is an actuary for CaIPERS, a member of both the American Academy of Actuaries and Society
of Actuaries and meets the Qualification Standards of the American Academy of Actuaries to render the
actuarial opinion contained herein.
BILL KARCH,ASA, MAAA
Supervising Pension Actuary, CaIPERS
Plan Actuary
Rate Plan belonging to the Miscellaneous Risk Pool Page 1
155
HIGHLIGHTS AND Xz C .g . V E SUMMARY
• INTRODUCTION
• PURPOSE OF SECTION 1
• REQUIRED EMPLOYER CONTRIBUTION
• PLAN'S FUNDED STATUS
• PROJECTED EMPLOYER CONTRIBUTIONS
• CHANGES SINCE THE PRIOR YEAR'S VALUATION
• SUBSEQUENT EVENTS
156
CALPERS ACTUARIAL VALUATION -June 30, 2016
MISCELLANEOUS PLAN OF THE Li I Y OF MOORPARK
CaIPERS ID: 4690157978
Ir ion
This report presents the results of the June 30, 2016 actuarial valuation of the MISCELLANEOUS PLAN of the
CITY OF MOORPARK of the California Public Employees'Retirement System (CaIPERS). This actuarial valuation
sets the required employer contributions for Fiscal Year 2018-19.
Purpose of Section I
This Section 1 report for the MISCELLANEOUS PLAN of the CITY OF MOORPARK of the California Public
Employees'Retirement System (CaIPERS)was prepared by the plan actuary in order to:
• Set forth the assets and accrued liabilities of this plan as of June 30, 2016;
• Determine the required employer contribution for this plan for the fiscal year July 1, 2018 through June
30, 2019; and
• Provide actuarial information as of June 30, 2016 to the CaIPERS Board of Administration and other
interested parties.
The pension funding information presented in this report should not be used in financial reports subject to
GASB Statement No. 68 for a Cost Sharing Employer Defined Benefit Pension Plan. A separate accounting
valuation report for such purposes is available from CaIPERS and details for ordering are available on our
website.
The measurements shown in this actuarial valuation may not be applicable for other purposes. The employer
should contact their actuary before disseminating any portion of this report for any reason that is not explicitly
described above.
Future actuarial measurements may differ significantly from the current measurements presented in this,
report due to such factorsas the following: plan experience differing from that anticipated by the economic or
demographic assumptions; changes in economic or demographic assumptions; changes in actuarial policies;
and changes in plan provisions or applicable law. •
California Actuarial Advisory Panel Recommendations
This report includes all the basic disclosure elements as described in the Model Disclosure Elements for
Actuarial Valuation Reports recommended in 2011 by the California Actuarial Advisory Panel (CAAP), with the
exception of including the original base amounts of the various components of the unfunded liability in the
Schedule of Amortization Bases shown on page 9.
Additionally, this report includes the following"Enhanced Risk Disclosures"also recommended by the CAAP in
the Model Disclosure Elements document:
• A"Deterministic Stress Test,"projecting future results under different investment income scenarios
• A "Sensitivity Analysis,"showing the impact on current valuation results using alternative discount
rates of 6.0 percent, 7.0 percent and 8.0 percent.
Rate Plan belonging to the Miscellaneous Risk Pool Page 3
157
CALPERS ACTUARIAL VALUATION -June 30, 2016
MISCELLANEOUS PLAN OF THE UI Y OF MOORPARK
CaIPERS ID: 4690157978
Required Employer Contribution
Fiscal Year
•
Required Employer Contribution 2018-19
Employer Normal Cost Rate 8.892%
Plus Either
1) Monthly Employer Dollar UAL Payment $ 15,136.65
Or
2) Annual Lump Sum Prepayment Option $ 175,291
The total minimum required employer contribution is the sum of the Plan's Employer Normal Cost Rate
(expressed as a percentage of payroll)plus the Employer Unfunded Accrued Liability(UAL) Contribution
Amount(billed monthly in dollars).
Only the UAL portion of the employer contribution can be prepaid(which must be received in full no
later than July 31). Plan Normal Cost contributions will be made as part of the payroll reporting process.
If there is contractual cost sharing or other change, this amount will change.
,¢20572 of the Public Employees'Retirement Law assesses interest at an annual rate of 10 percent if a
contracting agency fails to remit the required contributions when due.
Fiscal Year Fiscal Year
2017-18 2018-19
Development of Normal Cost as a Percentage of Payroll'
Base Total Normal Cost for Formula 15.314% 15.794%
Surcharge for Class 1 Benefits2
None 0.000% 0.000%
Phase out of Normal Cost Difference3 0.000% 0.000%
Plan's Total Normal Cost 15.314% 15.794%
Formula's Expected Employee Contribution Rate 6.896% 6.902%
Employer Normal Cost Rate 8.418% 8.892%
Projected Payroll for the Contribution Fiscal Year $ 5,297,753 $ 4,968,200
Estimated Employer Contributions Based on Projected Payroll
Plan's Estimated Employer Normal Cost $ 445,965 $ 441,772
Plan's Payment on Amortization Bases4 112,327 181,640
of Projected Payroll (illustrative only) 2.120% 3.656%
Estimated Total Employer Contribution $ 558,292 $ 623,412
0/0 of Projected Payroll (illustrative only) 10.538% 12.548%
1 The results shown for Fiscal Year 2017-18 reflect the prior year valuation and may not take into account any lump sum
payment,side fund payoff,or rate adjustment made after June 30,2016.
2 Section 2 of this report contains a list of Class 1 benefits and corresponding surcharges for each benefit.
3 The normal cost difference is phased out over a five year period.The phase out of normal cost difference is 100 percent
for the first year of pooling, and is incrementally reduced by 20 percent of the original normal cost difference for each
subsequent year. This is non-zero only for plans that joined a pool within the past 5 years. Most plans joined a pool
June 30,2003,when risk pooling was implemented.
4 See page 9 for a breakdown of the Amortization Bases.
Rate Plan belonging to the Miscellaneous Risk Pool Page 4
158
CALPERS ACTUARIAL VALUATION -June 30, 2016
MISCELLANEOUS PLAN OF THE CITY OF MOORPARK
CaIPERS ID: 4690157978
Man's Funded Status
June 30, 2015 June 30, 2016
1. Present Value of Projected Benefits(PVB) $ 33,889,081 $ 35,508,598
2. Entry Age Normal Accrued Liability(AL) 28,517,137 30,559,966
3. Plan's Market Value of Assets(MVA) 26,734,451 26,515,974
4. Unfunded Accrued Liability(UAL) [(2)- (3)] 1,782,686 4,043,992
5. Funded Ratio [(3)/(2)] 93.7% 86.8%
This measure of funded status is an assessment of the need for future employer contributions based on the
selected actuarial cost method used to fund the plan. The UAL is the present value of future employer
contributions for service that has already been earned and is in addition to future normal cost contributions for
active members. For a measure of funded status that is appropriate for assessing the sufficiency of plan assets
to cover estimated termination liabilities, please see"Hypothetical Termination Liability" in the "Risk Analysis"
section.
Projected Employer Contributions
The table below shows projected employer contributions (before cost sharing) for the next six fiscal years.
Projected results reflect the adopted changes to the discount rate described in Appendix A, "Statement of
Actuarial Data, Methods and Assumptions" of the Section 2 report. The projections also assume that all
actuarial assumptions will be realized and that no further changes to assumptions, contributions, benefits, or
funding will occur during the projection period.
Required Projected Future Employer Contributions
Contribution (Assumes 7.375% Return for Fiscal Year 2016-17)
Fiscal Year 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25
Normal Cost% 8.892% 9.3% 10.2% 10.2% 10.2% 10.2% 10.2%
UAL Payment $181,640 $253,000 $348,000 $446,000 $538,000 $579,000 $623,000
Changes in the UAL due to actuarial gains or losses as well as changes in actuarial assumptions or methods
are amortized using a 5-year ramp up. For more information, please see "Amortization of the Unfunded
Actuarial Accrued Liability" under"Actuarial Methods" in Appendix A of Section 2. This method phases in the
impact of unanticipated changes in UAL over a 5-year period and attempts to minimize employer cost volatility
from year to year. As a result of this methodology, dramatic changes in the required employer contributions in
any one year are less likely. However, required contributions can change gradually and significantly over the
next five years. In years where there is a large increase in UAL the relatively small amortization payments
during the ramp up period could result in a funded ratio that is projected to decrease initially while the
contribution impact of the increase in the UAL is phased in.
Due to the adopted changes in the discount rate for the next two valuations in combination with the 5-year
phase-in ramp, the increases in the required contributions are expected to continue for seven years from
Fiscal Year 2018-19 through Fiscal Year 2024-25.
For projected contributions under alternate investment return scenarios, please see the "Analysis of Future
Investment Return Scenarios"in the"Risk Analysis"section.
Rate Plan belonging to the Miscellaneous Risk Pool Page 5
159
CALPERS ACTUARIAL VALUATION -June 30, 2016
MISCELLANEOUS PLAN OF THE CITY OF MOORPARK
CaIPERS ID: 4690157978
Changes since the Prior Year's Valuation
Benefits
None. This valuation generally reflects plan changes by amendments effective before the date of the report.
Please refer to the "Plan's Major Benefit Options" and Appendix B of Section 2 for a summary of the plan
provisions used in this valuation.
Actuarial Methods and Assumptions
On December 21, 2016, the CaIPERS Board of Administration lowered the discount rate from 7.50 percent to
7.00 percent using a three year phase-in beginning with the June 30, 2016 actuarial valuations. The minimum
employer contributions for Fiscal Year 2018-19 determined in this valuation were calculated using a discount
rate of 7.375 percent. The projected employer contributions on Page 5 are calculated assuming that the
discount rate will be lowered to 7.25 percent next year and 7.00 percent the following year as adopted by the
Board. The decision to reduce the discount rate was primarily based on reduced capital market assumptions
provided by external investment consultants and CaIPERS investment staff. The specific decision adopted by
the Board reflected recommendations from CaIPERS staff and additional input from employer and employee
stakeholder groups. Based on the investment allocation adopted by the Board and capital market assumptions,
the reduced discount rate assumption provides a more realistic assumption for the long term investment
return of the fund.
Notwithstanding the Board's decision to phase into a 7.0 percent discount rate, subsequent analysis of the
expected investment return of CaIPERS assets or changes to the investment allocation may result in a change
to this three year discount rate schedule. A comprehensive analysis of all actuarial assumptions and methods
including the discount rate will be conducted in 2017.
Subsequent Events
The contribution requirements determined in this actuarial valuation report are based on demographic and
financial information as of June 30, 2016. Changes in the value of assets subsequent to that date are not
reflected. Declines in asset values will increase the required contribution, while investment returns above the
assumed rate of return will decrease the actuarial cost of the plan.
This actuarial valuation report reflects statutory changes, regulatory changes and CaIPERS Board actions
through January 2017. Any subsequent changes or actions are not reflected.
Rate Plan belonging to the Miscellaneous Risk Pool Page 6
160
ASSETS AND LIABILITIES
• BREAKDOWN OF ENTRY AGE NORMAL ACCRUED LIABILITY
• ALLOCATION OF PLAN'S SHARE OF POOL'S EXPERIENCE/ASSUMPTION CHANGE
• DEVELOPMENT OF PLAN'S SHARE OF POOL'S MVA
• SCHEDULE OF PLAN'S AMORTIZATION BASES
• 30-YEAR AMORTIZATION SCHEDULE AND ALTERNATIVES
• EMPLOYER CONTRIBUTION HISTORY
• FUNDING HISTORY
161
CALPERS ACTUARIAL VALUATION -June 30, 2016
MISCELLANEOUS PLAN OF THE CITY OF MOORPARK
CaIPERS ID: 4690157978
Breakdown Entry Age Normal Accrued Liability
1. Active Members $ 15,742,630
2. Transferred Members 2,599,029
3. Terminated Members 1,089,494
4. Members and Beneficiaries Receiving Payments 11,128,813
5. Total $ 30,559,966
ExperiericeiAssumption Change
It is the policy of CaIPERS to ensure equity within the risk pools by allocating the pool's experience
gains/losses and assumption changes in a manner that treats each employer equitably and maintains benefit
security for the members of the System while minimizing substantial variations in employer contributions. The
Pool's experience gains/losses and impact of assumption/method changes is allocated to the plan as follows:
1. Plan's Accrued Liability $ 30,559,966
2. Projected UAL balance at 6/30/16 1,901,396
3. Pool's Accrued Liability $ 14,775,287,594
4. Sum of Pool's Individual Plan UAL Balances at 6/30/16 2,987,498,021
5. Pool's 2015/16 Investment&Asset(Gain)/Loss 771,070,186
6. Pool's 2015/16 Other(Gain)/Loss (95,296,686)
7. Plan's Share of Pool's Asset(Gain)/Loss [(1)-(2)]/[(3)-(4)] *(5) 1,874,632
8. Plan's Share of Pool's Other(Gain)/Loss [(1)]/[(3)] * (6) (197,104)
9. Plan's New(Gain)/Loss as of 6/30/2016 [(7)+(8)] $ 1,677,528
10. Increase in Pool's Accrued Liability due to Change in Assumptions 224,853,121
11. Plan's Share of Pool's Change in Assumptions [(1)]/[(3)] * (10) $ 465,067
Development of the Pun's of Pool's Market
Value of Assets
1. Plan's Accrued Liability $ 30,559,966
2. Plan's UAL $ 4,043,992
3. Plan's Share of Pool's MVA [(1)-(2)] $ 26,515,974
Rate Plan belonging to the Miscellaneous Risk Pool Page 8
162
CALPERS ACTUARIAL VALUATION -June 30, 2016
MISCELLANEOUS PLAN OF THE CITY OF MOORPARK
CaIPERS ID: 4690157978
•
Schedule of Plan's Side Fund and Other Amortization Bases
There is a two-year lag between the valuation date and the start of the contribution fiscal year.
• The assets, liabilities,and funded status of the plan are measured as of the valuation date: June 30, 2016.
• The employer contribution determined by the valuation is for the fiscal year beginning two years after the valuation date: Fiscal Year 2018-19.
This two-year lag is•necessary due to the amount of time needed to extract and test the membership and financial data, and the need to provide public agencies
with their employer contribution well in advance of the start of the fiscal year.
The Unfunded Accrued Liability(UAL) is used to determine the employer contribution and therefore must be rolled forward two years from the valuation date to the
first day of the fiscal year for which the contribution is being determined. The UAL is rolled forward each year by subtracting the payment on the UAL for the fiscal
year and adjusting for interest.
Amounts for Fiscal 2018-19
Scheduled
Date Amortization Balance Payment Balance Payment Balance Payment
Reason for Base Established Period 6/30/16 2016-17 6/30/17 2017-18 6/30/18 for 2018-19
GOLDEN HANDSHAKE 06/30/13 17 $60,531 $4,723 $60,101 $4,865 $59,492 $4,955
NON-ASSET(GAIN)/LOSS 06/30/13 27 $(28,607) $(782) $(29,906) $(1,208) $(30,860) $(1,634)
SHARE OF PRE-2013 POOL UAL 06/30/13 19 $1,130,267 $82,778 $1,127,848 $85,262 $1,122,677 $86,762
NON-ASSET(GAIN)/LOSS 06/30/14 28 $2,377 $33 $2,518 $69 $2,632 $105
ASSET(GAIN)/LOSS 06/30/14 28 $(2,210,481) $(31,090) $(2,341,288) $(64,046) $(2,447,592) $(97,454)
GOLDEN HANDSHAKE 06/30/14 3 $45,703 $10,304 $38,396 $10,614 $30,229 $10,879
ASSUMPTION CHANGE 06/30/14 18 $1,392,980 $26,533 $1,468,218 $54,658 $1,519,861 $83,515
ASSET(GAIN)/LOSS 06/30/15 29 $1,570,797 $0 $1,686,643 $23,750 $1,786,423 $48,148
NON-ASSET(GAIN)/LOSS 06/30/15 29 $(108,213) $0 $(116,194) $(1,636) $(123,068) $(3,317)
GOLDEN HANDSHAKE 06/30/16 5 $46,042 $0 $49,438 $0 $53,084 $11,935
ASSET(GAIN)/LOSS 06/30/16 30 $1,874,632 $0 $2,012,886 $0 $2,161,337 $29,957
NON-ASSET(GAIN)/LOSS 06/30/16 30 $(197,104) $0 $(211,640) $0 $(227,249) $(3,150)
ASSUMPTION CHANGE 06/30/16 20 $465,067 $(20,277) $520,377 $(20,885) $580,397 $10,940
TOTAL $4,043,991 $72,222 $4,267,397 $91,443 $4,487,363 $181,641
The(gain)/loss bases are the plan's allocated share of the risk pool's (gain)/loss for the fiscal year as disclosed on the previous page.These(gain)/loss bases will be
amortized according to Board policy over 30 years with a 5-year ramp-up.
If the total Unfunded Liability is negative (i.e., plan has a surplus),.the scheduled payment is$0, because the minimum required contribution under PEPRA must be
at least equal to the normal cost.
Rate Plan belonging to the Miscellaneous Risk Pool Page 9
r-1
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CALPERS ACTUARIAL VALUATION -June 30, 2016
MISCELLANEOUS PLAN OF THE CITY OF MOORPARK
CaIPERS ID: 4690157978
30-Year Amortization Schedule and Alternatives
The amortization schedule on the previous page shows the minimum contributions required according to
CaIPERS amortization policy. There has been considerable interest from many agencies in paying off these
unfunded accrued liabilities sooner and the possible savings in doing so. As a result, we have provided
alternate amortization schedules to help analyze the current amortization schedule and illustrate the
advantages of accelerating unfunded liability payments.
Shown on the following page are future year amortization payments based on: 1) the current amortization
schedule reflecting the individual bases and remaining periods shown on the previous page, and 2) alternate
"fresh start" amortization schedules using two sample periods that would both result in interest savings
relative to the current amortization schedule. Note that the payments under each alternate scenario increase
by 3 percent for each year into the future. The schedules do not attempt to reflect any experience
after June 30, 2016 that may deviate from the actuarial assumptions. Therefore, future
amortization payments displayed in the Current Amortization Schedule may not match projected
amortization payments shown in connection with Projected Employer Contributions provided
elsewhere in this report.
The Current Amortization Schedule typically contains individual bases that are both positive and negative.
Positive bases result from plan changes, assumption changes or plan experience that result in increases to
unfunded liability. Negative bases result from plan changes, assumption changes or plan experience that
result in decreases to unfunded liability. The combination of positive and negative bases within an
amortization schedule can result in unusual or problematic circumstances in future years such as:
• A positive total unfunded liability with a negative total payment,
• A negative total unfunded liability with a positive total payment,or
• Total payments that completely amortize the unfunded liability over a very short period of time
In any year where one of the above scenarios occurs, the actuary will consider corrective action such as
replacing the existing unfunded liability bases with a single "fresh start" base and amortizing it over a
reasonable period.
The Current Amortization Schedule on the following page may appear to show that, based on the current
amortization bases, one of the above scenarios will occur at some point in the future. It is impossible to know
today whether such a scenario will in fact arise since there will be additional bases added to the amortization
schedule in each future year. Should such a scenario arise in any future year, the actuary will take
appropriate action based on guidelines in the CaIPERS amortization policy. For purposes of this display, total
payments include any negative payments. Therefore,the amount of estimated savings may be understated to
the extent that negative payments appear in the current schedule.
Rate Plan belonging to the Miscellaneous Risk Pool Page 10
164
CALPERS ACTUARIAL VALUATION -June 30, 2016
MISCELLANEOUS PLAN OF THE LI I Y OF MOORPARK
CaIPERS ID: 4690157978
30-Year Amortization Schedule nd Aiternatives
Alternate Schedules
Current Amortization 20 Year Amortization 15 Year Amortization
Schedule
Date Balance Payment Balance Payment Balance Payment
6/30/2018 4,487,363 181,640 4,487,363 335,442 4,487,363 408,152
6/30/2019 4,630,087 243,886 4,470,715 345,505 4,395,371 420,396
6/30/2020 4,718,837 310,136 4,442,411 355,870 4,283,907 433,008
6/30/2021 4,745,482 373,295 4,401,280 366,546 4,151,153 445,999
6/30/2022 4,708,646 426,978 4,346,052 377,542 3,995,149 459,378
6/30/2023 4,613,466 425,951 4,275,357 388,869 3,813,774 473,160
6/30/2024 4,512,330 438,730 4,187,711 400,535 3,604,743 487,355
6/30/2025 4,390,494 451,892 4,081,513 412,551 3,365,586 501,975
6/30/2026 4,246,034 465,449 3,955,032 424,927 3,093,642 517,035
6/30/2027 4,076,872 479,412 3,806,398 437,675 2,786,037 532,546
6/30/2028 3,880,765 493,794 3,633,592 450,805 2,439,674 548,522
6/30/2029 3,655,292 508,608 3,434,437 464,330 2,051,211 564,978
6/30/2030 3,397,841 523,867 3,206,579 478,259 1,617,047 581,927
6/30/2031 3,105,591 539,583 2,947,483 492,607 1,133,300 599,385
6/30/2032 2,775,502 513,662 2,654,411 507,385 595,787 617,366
6/30/2033 2,447,929 485,701 2,324,411 522,607
6/30/2034 2,125,172 438,044 1,954,301 538,285
6/30/2035 1,827,994 378,902 1,540,649 554,434
6/30/2036 1,570,183 324,252 1,079,758 571,067
6/30/2037 1,349,987 162,658 567,639 588,199
6/30/2038 1,281,000 147,780
6/30/2039 1,222,341 15 2,213
6/30/2040 1,154,763 156,779
6/30/2041 1,077,469 162,289
6/30/2042 988,765 233,952
6/30/2043 819,260 262,836
6/30/2044 607,325 235,430
6/30/2045 408,158 206,143
6/30/2046 224,650 173,952
6/30/2047 60,965 63,174
Totals 9,960,988 9,013,440 7,591,181
Interest Paid 5,473,626 4,526,078 3,103,818
Estimated Savings 947,549 2,369,809
* This schedule does not reflect the impact of adopted discount rate changes that will become effective beyond June 30,
2016. For Projected Employer Contributions, please see Page 5.
Rate Plan belonging to the Miscellaneous Risk Pool Page 11
165
CALPERS ACTUARIAL VALUATION -June 30, 2016
MISCELLANEOUS PLAN OF THE CITY OF MOORPARK
CaIPERS ID: 4690157978
Employer Contribution History
The table below provides a recent history of the required employer contributions for the plan,as determined by
the annual actuarial valuation. It does not account for prepayments or benefit changes made during a fiscal
year.
Fiscal Employer Unfunded Liability
Year Normal Cost Payment($)
2016- 17 8.377% $92,500
•
2017- 18 8.418% $112,327
2018- 19 8.892% $181,640
Funding History
The funding history below shows the plan's actuarial accrued liability, share of the pool's market value of
assets, share of the pool's unfunded liability, funded ratio,and annual covered payroll.
Accrued Share of Pool's Plan's Share of Annual
Valuation Liability Market Value of Pool's Unfunded Funded Covered
Date (AL) Assets(MVA) Liability Ratio Payroll
06/30/2011 $ 20,711,269 $ 16,903,108 $ 3,808,161 81.6% $ 4,861,780
06/30/2012 21,855,414 16,821,769 5,033,645 77.0% 4,908,990
06/30/2013 23,722,988 19,236,918 4,486,070 81.1% 4,936,568
06/30/2014 26,357,176 22,366,418 3,990,758 84.9% 5,075,269
06/30/2015 28,517,137 26,734,451 1,782,686 93.7% 4,848,195
06/30/2016 30,559,966 26,515,974 4,043,992 86.8% 4,546,607
Rate Plan belonging to the Miscellaneous Risk Pool Page 12
166
RISK ANAL'
• ANALYSIS OF FUTURE INVESTMENT RETURN SCENARIOS
• ANALYSIS OF DISCOUNT RATE SENSITIVITY
• VOLATILITY RATIOS
• HYPOTHETICAL TERMINATION LIABILITY
167
CALPERS ACTUARIAL VALUATION -June 30, 2016
MISCELLANEOUS PLAN OF THE CITY OF MOORPARK
CaIPERS ID: 4690157978
Analysis of Future Investment Return Scenarios
Analysis was performed to determine the effects of various future investment returns on required employer
contributions. The projections below provide a range of results based on five investment return scenarios
assumed to occur during the next four fiscal years(2016-17, 2017-18, 2018-19 and 2019-20). The projections
also assume that all other actuarial assumptions will be realized and that no further changes to assumptions,
contributions, benefits,or funding will occur.
Each of the five investment return scenarios assumes a return of 7.375 percent for fiscal year 2016-17. For
fiscal years 2017-18, 2018-19, and 2019-20 each scenario assumes an alternate fixed annual return. The fixed
return assumptions for the five scenarios are -3.0 percent, 3.0 percent, 7.0 percent (7.25 percent for 2017-
18), 11.0 percent and 17.0 percent.
Alternate investment returns were chosen based on stochastic analysis of possible future investment returns
over the four year period ending June 30, 2020. Using the expected returns and volatility of the asset classes
in which the funds are invested, we produced ten thousand stochastic outcomes for this period. We then
selected annual returns that approximate the 5" 25th50tH 75tH and 95th percentiles for these outcomes. For
example, of all of the 4-year outcomes generated in the stochastic analysis, approximately 25 percent of them
had an average annual return of 3.0 percent or less.
Required contributions outside of this range are also possible. In particular, while it is unlikely that investment
returns will average less than -3.0 percent or greater than 17.0 percent over this four year period, the
possibility of a single investment return less than -3.0 percent or greater than 17.0 percent in any given year
is much greater.
Assumed Annual Return From Projected Employer Contributions
2017-18 through 2019-20
2019-20 2020-21 2021-22 2022-23
(3.0%)
Normal Cost 9.3% 10.2% 10.2% 10.2%
UAL Contribution $253,000 $391,000 $578,000 $803,000
3.0%
Normal Cost 9.3% 10.2% 10.2% 10.2%
UAL Contribution $253,000 $366,000 $501,000 $650,000
Assumed Discount Rate
Normal Cost 9.3% 10.2% 10.2% 10.2%
UAL Contribution $253,000 $348,000 $446,000 $538,000
11.0%
Normal Cost 9.3% 10.2% 10.4% 10.6%
UAL Contribution $253,000 $332,000 $397,000 $436,000
17.0%
Normal Cost 9.3% 10.2% 10.8% 11.5%
UAL Contribution $253,000 $306,000 $320,000 $0
Given the temporary suspension of the Risk Mitigation Policy during the period over which the discount rate
assumption is being phased down to 7.0 percent, the projections above were performed without reflection of
any possible impact of this Policy for Fiscal Years 2019-20 and 2020-21.
Rate Plan belonging to the Miscellaneous Risk Pool Page 14
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CALPERS ACTUARIAL VALUATION -June 30, 2016
MISCELLANEOUS PLAN OF THE CITY OF MOORPARK
CaIPERS ID: 4690157978
iys s of Discount Rate Sensitivity
Shown below are various valuation results as of June 30, 2016 assuming alternate discount rates. Results are
shown using the current discount rate of 7.375 percent as well as alternate discount rates of 6.0 percent, 7.0
percent, and 8.0 percent.The alternate rate of 7.0 percent was selected since the Board has adopted this rate
as the final discount rate at the end of the three year phase-in of the reduction in this assumption. The rates
of 6.0 percent and 8.0 percent were selected since they illustrate the impact of a 1 percent increase or
decrease to the 7.0 percent assumption. This analysis shows the potential plan impacts if the PERF were to
realize investment returns of 6.0 percent,7.0 percent, or 8.0 percent over the long-term.
This type of analysis gives the reader a sense of the long-term risk to required contributions. For a measure of
funded status that is appropriate for assessing the sufficiency of plan assets to cover estimated termination
liabilities, please see"Hypothetical Termination Liability"in the"Risk Analysis"section.
Sensitivity Analysis
As of June 30,2016 Plan's Total Accrued Unfunded Funded
Normal Cost Liability Accrued Liability Status
7.375% (current discount rate) 15.794% $30,559,966 $4,943,992 86.8%
6.0% 21.320% $36,839,823 $10,323,849 72.0%
7.0% 17.103% $32,106,491 $5,590,517 82.6%
8.0% 13.881% $28,218,991 $1,703,017 94.0%
Rate Plan belonging to the Miscellaneous Risk Pool Page 15
169
CALPERS ACTUARIAL VALUATION -June 30, 2016
MISCELLANEOUS PLAN OF THE LII Y OF MOORPARK
CaIPERS ID: 4690157978
Volatility Ratios
Actuarial calculations are based on a number of assumptions about long-term demographic and economic
behavior. Unless these assumptions (terminations, deaths, disabilities, retirements, salary growth, and
investment return) are exactly realized each year, there will be differences on a year-to-year basis. The year-
to-year differences between actual experience and the assumptions are called actuarial gains and losses and
serve to lower or raise required employer contributions from one year to the next. Therefore, employer
contributions will inevitably fluctuate,especially due to the ups and downs of investment returns.
Asset Volatility,Ratio(AVR)
Plans that have higher asset-to-payroll ratios experience more volatile employer contributions (as a
percentage of payroll) due to investment return. For example, a plan with an asset-to-payroll ratio of 8 may
experience twice the contribution volatility due to investment return volatility, than a plan with an asset-to-
payroll ratio of 4. Shown below is the asset volatility ratio, a measure of the plan's current contribution
volatility. It should be noted that this ratio is a measure of the current situation. It increases over time but
generally tends to stabilize as the plan matures.
Liability Volatility Ratio(LVR)
Plans that have higher liability-to-payroll ratios experience more volatile employer contributions (as a
percentage of payroll) due to investment return and changes in liability. For example, a plan with a liability-to-
payroll ratio of 8 is expected to have twice the contribution volatility of a plan with a liability-to-payroll ratio of
4. The liability volatility ratio is also shown in the table below. It should be noted that this ratio indicates a
longer-term potential for contribution volatility. The asset volatility ratio, described above, will tend to move
closer to the liability volatility ratio as the plan matures. Since the liability volatility ratio is a long-term
measure, it is shown below at the current discount rate(7.375 percent)as well as the discount rate the Board
has adopted to determine the contribution requirement in the June 30, 2018 actuarial valuation (7.00
percent).
Rate Volatility As of June 30,2016
1. Market Value of Assets $ 26,515,974
2. Payroll 4,546,607
3. Asset Volatility Ratio(AVR) [(1)/(2)] 5.8
4.Accrued Liability $ 30,559,966
5. Liability Volatility Ratio(LVR) [(4)/(2)] 6.7
6.Accrued Liability(7.00%discount rate) 32,106,491
7. Projected Liability Volatility Ratio [(6)/ (2)] 7.1
Rate Plan belonging to the Miscellaneous Risk Pool Page 16
170
CALPERS ACTUARIAL VALUATION -June 30, 2016
MISCELLANEOUS PLAN OF THE u I Y OF MOORPARK
CaIPERS ID: 4690157978
Hypothetical e'er atdon Liattihty
The hypothetical termination liability is an estimate of the financial position of the plan had the contract with
CaIPERS been terminated as of June 30, 2016.The plan liability on a termination basis is calculated differently
compared to the plan's ongoing funding liability. For the hypothetical termination liability calculation, both
compensation and service are frozen as of the valuation date and no future pay increases or service accruals
are assumed. This measure of funded status is not appropriate for assessing the need for future employer
contributions in the case of an ongoing plan, that is, for an employer that continues to provide CaIPERS
retirement benefits to active employees.
A more conservative investment policy and asset allocation strategy was adopted by the CaIPERS Board for
the Terminated Agency Pool. The Terminated Agency Pool has limited funding sources since no future
employer contributions will be made. Therefore, expected benefit payments are secured by risk-free assets
and benefit security for members is increased while funding risk is limited. However, this asset allocation has a
lower expected rate of return than the PERF and consequently, a lower discount rate is assumed. The lower
discount rate for the Terminated Agency Pool results in higher liabilities for terminated plans.
The effective termination discount rate will depend on actual market rates of return for risk-free securities on
the date of termination. As market discount rates are variable, the table below shows a range for the
hypothetical termination liability based on the lowest and highest interest rates observed during an
approximate 2-year period centered around the valuation date.
Hypothetical Unfunded Hypothetical Unfunded
Market Termination Funded Termination Termination Funded Termination
Value of Liability1'2 Status Liability Liability1'2 Status Liability
Assets(MVA) @ 1.75% @ 1.75% @ 3.00% @ 3.00%
$26,515,974 $62,105,351 42.7% $35,589,377 $52,444,908 50.6% $25,928,934
1 The hypothetical liabilities calculated above include a 7 percent mortality contingency load in accordance with Board policy.
Other actuarial assumptions can be found in Appendix A.
2 The current discount rate assumption used for termination valuations is a weighted average of the 10-year and 30-year
U.S.Treasury yields where the weights are based on matching asset and liability durations as of the termination date.The
discount rates used in the table are based on 20-year Treasury bonds, rounded to the nearest quarter percentage point,
which is a good proxy for most plans. The 20-year Treasury yield was 1.75 percent on June 30, 2016, and was 2.75
percent on January 31,2017.
In order to terminate the plan, you must first contact our Retirement Services Contract Unit to initiate a
Resolution of Intent to terminate. The completed Resolution will allow the plan actuary to give you a
preliminary termination valuation with a more up-to-date estimate of the plan liabilities. CaIPERS advises you
to consult with the plan actuary before beginning this process.
Rate Plan belonging to the Miscellaneous Risk Pool Page 17 Q
171
CALPERS ACTUARIAL VALUATION -June 30, 2016
MISCELLANEOUS PLAN OF THE CITY OF MOORPARK
CalPERS ID: 4690157978
Participant Data
The table below shows a summary of your plan's member data upon which this valuation is based:
June 30, 2015 June 30, 2016
Reported Payroll $ 4,848,195 $ 4,546,607
Projected Payroll for Contribution Purposes $ 5,297,753 $ 4,968,200
Number of Members
Active 56 51
Transferred 29 33
Separated 36 38
Retired 54 56
List of Mss I Benefit Provisions
This plan has the additional Class 1 Benefit Provisions:
• None
Rate Plan belonging to the Miscellaneous Risk Pool Page 18
172
PLAN'S MAJOR BENEFIT OPTIONS
173
SECTION 1-PLAN SPECIFIC INFORMATION FOR THE MISCELLANEOUS PLAN OF THE CITY OF MOORPARK
Plan's Major Benefit Options
Shown below is a summary of the major optional benefits for which your agency has contracted. A description of principal standard and optional plan provisions
is in Appendix B within Section 2 of this report.
Contract package
Active Receiving
Misc Misc
Benefit Provision
Benefit Formula 2.0% @ 55
Social Security Coverage No
Full/Modified Full
Employee Contribution Rate 7.00%
Final Average Compensation Period Three Year
Sick Leave Credit Yes
Non-Industrial Disability Standard
Industrial Disability No
Pre-Retirement Death Benefits
Optional Settlement 2W Yes
1959 Survivor Benefit Level level 4
Special No
Alternate (firefighters) No No
Post-Retirement Death Benefits
Lump Sum $5000 $5000
Survivor Allowance(PRSA) No No
COLA 2% 2%
Rate Plan belonging to the Miscellaneous Risk Pool Page 20
Section 2
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Section 2 may be found on the Ca1PERS website
(www.calpers.ca.gov) in the Forms and
Publications section
175