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Home My WebLink AboutMINUTES - 11042014 - C.72RECOMMENDATION(S): ADOPT Resolution No. 2014/412 authorizing the Contra Costa Local Agency Formation Commission to participate in the County’s Post Retirement Health Benefits Plan and Trust Agreement and as a subaccount to the County’s Account in the Public Agencies Post Retirement Health Care Plan Trust, as recommended by the Post Retirement Health Benefits Trust Agreement Advisory Body. FISCAL IMPACT: There is no negative impact on the County associated with the Contra Costa Local Agency Formation Commission (Commission) participating with Contra Costa County in the PARS Public Agencies Post-Retirement Health Care Plan Trust. The Commission will pay a share of trust administrative fees based upon the Commission's assets. The small administrative costs of joining the trust, such as completing an actuarial valuation, were paid by the Commission. BACKGROUND: In May 2011, the Contra Costa Local Agency Formation Commission (LAFCO) began exploring options for holding its assets to fund post-retirement benefits including participation in the County's Public Agency Post-Retirement Health Care Plan trust. The Commission's Executive Officer attended several Post Retirement Health Benefit Trust Agreement Advisory Body meetings and discussed the pros and cons of joining the trust. Additionally, the Advisory Body discussed the administrative and fiscal impact of the Commission's participation in the trust. APPROVE OTHER RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE Action of Board On: 11/04/2014 APPROVED AS RECOMMENDED OTHER Clerks Notes: VOTE OF SUPERVISORS AYE:John Gioia, District I Supervisor Candace Andersen, District II Supervisor Mary N. Piepho, District III Supervisor Karen Mitchoff, District IV Supervisor Federal D. Glover, District V Supervisor Contact: Lisa Driscoll, County Finance Director (925) 335-1023 I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown. ATTESTED: November 4, 2014 David Twa, County Administrator and Clerk of the Board of Supervisors By: Chris Heck, Deputy cc: Lou Ann Texeira, LAFCO Executive Officer, Mary Ann McNett Mason, Assistant County Counsel C. 72 To:Board of Supervisors From:POST-RETIREMENT HEALTH BENEFITS TRUST AGREEMENT ADVISORY BODY Date:November 4, 2014 Contra Costa County Subject:LAFCO's Participation in the Public Agencies Post-Retirement Health Care Plan Trust BACKGROUND: (CONT'D) > Attached is the Commission's October 8, 2014 agenda item (#12) presenting recommendations regarding a post retirement medical benefits trust agreement. In summary: In order to fund “Other Post-Employment Benefits (OPEB)” and reduce long-term liability, the Commission initiated a plan to fund future costs associated with this benefit. Since 2011-12, LAFCO has included in its budget $10,000 to fund its OPEB liability. To date, the Commission has set aside a total of $40,000 for this purpose. The funds are currently in the LAFCO fund balance account. LAFCO staff has explored trust options for holding LAFCO’s assets to fund post-retirement benefits. The preferred option is to participate with the County in the Public Agencies Post-Retirement Health Care Plan Trust (“Trust”) administered by Public Agency Retirement Services (PARS). PARS is a direct trust administrative provider, and not a broker, and offers significant economies of scale as a multiple-employer trust serving various types of public agencies for combined asset growth without risk-sharing. PARS has over 30 years as a trust administrator and nearly 20 years in OPEB administration. PARS is one of the three largest and most qualified firms that provide OPEB trust services for California counties and municipalities. Others include California Public Employees Retirement System and International City/County Management Association. After reviewing all plans to determine the best return on investment, security and flexibility, the County selected PARS. PARS provides the security of a Private Letter Ruling from the IRS that assures participating employers the tax-exempt status of their investments. While PARS is a multi-employer trust, it allows the County flexibility in selecting investment strategies for its funds. Further, there is no sharing of either liability or investment earnings among agency participants; separate employer accounts are maintained. Contributions made to the program are held and invested by a trustee, which is U.S. Bank, N.A. HighMark Capital Management, the investment management subsidiary of MUFG Union Bank, N.A., serves as the Investment Manager. The County Treasurer-Tax Collector serves as the County’s PARS Plan Administrator. PARS serves as the administrator for the trust and performs the following duties: 1) establishes the master trust and prepares plan documents, 2) monitors the receipt of contributions, 3) processes reimbursements of OPEB premiums and expenses, 4) prepares monthly activity reports, 5) coordinates actuarial studies, 6) responds to auditor requests, and 7) keeps the County informed about legal and regulatory requirements. Per annum investment management fees for the County’s account are based on the following sliding scale: .35% on the first $5,000,000; .25% on the next $5,000,000; .20% on the next $5,000,000; .15% on the next $35,000,000; .10% on the next $50,000,000; and .05% on all assets over $100,000,000. LAFCO's annual investment management fee would be applied proportionately based on total assets in the County’s PARS Trust program. Per annum trust administration fees for the County’s account are based on the following sliding scale: .25% on the first $10,000,000; .20% on the next $5,000,000; .15% on the next $35,000,000; .10% on the next $50,000,000; and .05% on all assets over $100,000,000. LAFCO’s annual trust administration fee would be applied proportionately based on total assets in the County’s PARS Trust program. As of June 30, 2014, the annual blended asset based fee for both investment management services and trust administration was approximately 0.22%. Because the County pays for one-third of the Commission's budget, the County benefits from the Commission choosing a plan with low administrative costs and experience. There are no measurable negative impacts with the Commission participating in the County trust. In anticipation of joining the trust, the Commission's Executive Officer contracted for and completed the attached actuarial valuation in March 2014. Subsequently, on October 8, 2014, the Commission adopted the attached resolution authorizing participation in the PARS Trust as adopted by Contra Costa County, and directed Commission staff to forward to the County a request to accept Contra Costa Local Agency Formation Commission in the County's Post Retirement Health Benefits Plan and trust. Because the Trust Agreement for the County's plan contemplates that other employers may participate, the administrative actions required for participation are few. The Board of Supervisors need only adopt Resolution No. 2014/412 authorizing the Contra Costa Local Agency Formation Commission to participate with Contra Costa County in the Public Agencies Post-Retirement Health Care Plan. The Plan specifically states that it provides retirement health benefits for employees of the County “and certain other Employers.” The Plan defines “Employer” as “the County and such other public agencies that participate in this Plan pursuant to a resolution or other action taken by both the governing body of the other agency and the Board.” (Plan, Section 2 'Definitions.') The Commission will have a subaccount of the County's trust account. All post-retirement benefits provided through the trust to LAFCO employees will be paid from assets contributed to the PARS Trust by the Commission. (Plan, Section 4, 'Contributions' (c).) For the reasons detailed above, the Post Retirement Health Benefit Trust Agreement Advisory Body recommends that the Board of Supervisors adopt the attached resolution. CONSEQUENCE OF NEGATIVE ACTION: The Contra Costa Local Agency Formation Commission will not be able to participate as a subaccount to Contra Costa County in the PARS Public Agencies Post-Retirement Health Care Plan Trust. Should the Commission participate in a separate trust, the costs are likely to be higher for both the Commission and the County (County pays one-third of the Commission's costs by statute). CHILDREN'S IMPACT STATEMENT: Not applicable. ATTACHMENTS Resolution No. 2014/412 LAFCO Staff Report - OPEB 10-8-2014 LAFCO Resolution 2014-2 LAFCO OPEB Valuation October 8, 2014 Contra Costa Local Agency Formation Commission 651 Pine Street, Sixth Floor Martinez, CA 94553 Post Retirement Medical Benefits Trust Agreement Dear Members of the Commission: BACKGROUND: Contra Costa LAFCO provides post retirement health benefits for its retired employees and their spouses and dependents. Currently, LAFCO has three retirees and two active employees. In order to fund “Other Post-Employment Benefits (OPEB)” and reduce long-term liability to LAFCO, the Commission initiated a plan to fund future costs associated with this benefit. Since 2011-12, LAFCO has included in its budget an annual expense of $10,000 to fund its OPEB liability. To date, the Commission has set aside a total of $40,000 for this purpose. The funds are currently in the LAFCO fund balance account. LAFCO staff has explored trust options for holding LAFCO’s assets to fund post-retirement benefits. The preferred option is to participate with the County in the Public Agencies Post-Retirement Health Care Plan Trust (“Trust”) administered by Public Agency Retirement Services (PARS). PARS is a direct trust administrative provider, and not a broker, and offers significant economies of scale as a multiple-employer trust serving various types of public agencies for combined asset growth without risk-sharing. PARS has over 30 years as a trust administrator and nearly 20 years in OPEB administration. According to the County, PARS is one of the three largest and most qualified firms that provide OPEB trust services for California counties and municipalities. Others include California Public Employees Retirement System and International City/County Management Association. After reviewing all plans to determine the best return on investment, security and flexibility, the County selected PARS. PARS provides the security of a Private Letter Ruling from the IRS that assures participating employers the tax-exempt status of their investments. While PARS is a multi-employer trust, it allows the County flexibility in selecting investment strategies for its funds. Further, there is no sharing of either liability or investment earnings among agency participants; separate employer accounts are maintained. Contributions made to the program are held and invested by a trustee, which is U.S. Bank, N.A. HighMark Capital Management, the investment management subsidiary of MUFG Union Bank, N.A., serves as the Investment Manager. The County Treasurer-Tax Collector serves as the County’s PARS Plan Administrator. PARS serves as the administrator for the trust and performs the following duties: 1) establishes the master trust and prepares plan documents, 2) monitors the receipt of contributions, 3) processes reimbursements of OPEB premiums and expenses, 4) prepares monthly activity reports, 5) coordinates actuarial studies, 6) responds to auditor requests, and 7) keeps the County informed about legal and regulatory requirements. DISCUSSION: County and LAFCO staff discussed the option of allowing LAFCO to become a subaccount under the County’s PARS Trust agreement. LAFCO's subaccount would be aggregated with the County's account for investment and administration purposes. LAFCO's annual asset fee would be .05% of LAFCO assets invested with PARS; there would be no other fees for LAFCO. 1 The County’s Advisory Committee discussed LAFCO’s participation in the County’s plan and next steps. The Committee is composed of the County Administrator, County Finance Director, Treasurer-Tax Collector, Auditor-Controller, and Health Services Finance Director. The Committee was supportive of allowing LAFCO to participate in the PARS Trust program as a subaccount under the County’s plan. In order to participate in the PARS Trust program, LAFCO must first conduct an actuarial valuation to calculate the future liability for retiree healthcare and other post-employment benefits. The calculations project the liability for active employees during their retirement, and for any retired employees who elect to receive post-employment benefits. In March 2014, LAFCO completed an actuarial valuation prepared by Demsey, Filliger & Associates, LLC through a consortium with the California Special Districts Association and the California School Boards Association. The actuarial information will also be used in preparing LAFCO’s annual financial audit. In accordance with Government Accounting Standard Board (GASB 45), LAFCO is required to disclose any unfunded post-employment benefits in its annual audits. Government accounting rules allow employers that prefund to use a higher “discount rate” assumption, which reduces future OBEP liabilities on financial statements. LAFCO’s actuarial valuation shows an Employer-Paid Accrued Liability of $516,522 and an annual contribution of $52,278 (see Attachment 1) which would fully fund the liability over a period of 30 1 Per annum investment management fees for the County’s account are based on the following sliding scale: .35% on the first $5,000,000; .25% on the next $5,000,000; .20% on the next $5,000,000; .15% on the next $35,000,000; .10% on the next $50,000,000; and .05% on all assets over $100,000,000. LAFCO's annual investment management fee would be applied proportionately based on total assets in the County’s PARS Trust program. Per annum trust administration fees for the County’s account are based on the following sliding scale: .25% on the first $10,000,000; .20% on the next $5,000,000; .15% on the next $35,000,000; .10% on the next $50,000,000; and .05% on all assets over $100,000,000. LAFCO’s annual trust administration fee would be applied proportionately based on total assets in the County’s PARS Trust program. As of June 30, 2014, the annual blended asset based fee for both investment management services and trust administration was approximately 0.22%. years. LAFCO does not currently have sufficient revenues to fully fund the obligation. As noted above, in 2011-12, LAFCO began funding the OPEB liability and has accrued $40,000 for this purpose. The $40,000 will be placed in the trust account once established. In addition to the actuarial valuation, LAFCO will also need to adopt a resolution to join the PARS Trust as adopted by Contra Costa County (attached). Following LAFCO’s approval, the County Board of Supervisors will need to adopt a resolution accepting Contra Costa LAFCO into its plan. RECOMMENDATIONS: 1) Adopt the attached resolution authorizing participation in the PARS Trust as adopted by Contra Costa County; and 2) forward the LAFCO documents to Contra Costa County with a request to the County to accept Contra Costa LAFCO in the County’s plan. Sincerely, LOU ANN TEXEIRA EXECUTIVE OFFICER c: Lisa Driscoll, County Finance Director Attachments 1 - LAFCO Actuarial Valuation - Summary of Results 2 - LAFCO Resolution Authorizing Participation in the PARS Public Agencies Post-Retirement Health Care Plan Trust 3 - PARS Public Agencies Post-Retirement Health Care Plan Trust RESOLUTION NO. 2014-2 AUTHORIZING PARTICIPATION IN THE CONTRA COSTA COUNTY PARS PUBLIC AGENCIES POST-RETIREMENT HEALTH CARE PLAN TRUST WHEREAS, the Contra Costa Local Agency Formation Commission (LAFCO) is an independent regulatory agency created by the State Legislature; and WHEREAS, pursuant to Government Code §56385, LAFCO may provide benefits, including retirement, health and medical, to its employees; and WHEREAS, Contra Costa LAFCO provides health benefits to its retired employees, their spouses and dependents; and WHEREAS, it is determined to be in the best interest of Contra Costa LAFCO to participate with Contra Costa County in the PARS Public Agencies Post-Retirement Health Care Plan Trust (the “Program”) to fund post- employment benefits for its employees and retirees; and WHEREAS, Contra Costa LAFCO is eligible to participate in the Program, a tax exempt trust and plan performing an essential governmental function within the meaning of Section 115 of the Internal Revenue Code, as amended, and the regulations issued thereunder, and a tax-exempt trust under the relevant statutory provision of the State of California; and WHEREAS, Contra Costa LAFCO desires to participate in the program as a subaccount of Contra Costa County and subject to approval by the Contra Costa County Board of Supervisors; and WHEREAS, the assets in the subaccount shall be held in the Program for the exclusive purpose of funding health benefits for Contra Costa LAFCO retired employees, their spouses and dependents, and shal l not be used for or diverted to any other purpose. NOW, THEREFORE, BE IT RESOLVED that Contra Costa LAFCO hereby approves participating in the Public Agencies Post-Retirement Health Care Plan Trust (Exhibit A), as adopted by the County of Contra Costa, subject to approval of LAFCO’s participation in Contra Costa County’s Post-Retirement Health Benefits Trust by the Contra Costa County Board of Supervisors. BE IT FURTHER RESOLVED, that the Contra Costa County Treasurer-Tax Collector, or his or her successor or his or her designee, is the Plan Administrator for the Program; and, upon approval by the Contra Costa County’s Board of Supervisors to add LAFCO as a subaccount to the Program, is authorized to execute any PARS legal and administrative documents related to LAFCO’s participation as a subaccount in the Program, and to take whatever additional actions as necessary to maintain compliance of any relevant regulation issued or as may be issued, therefore authorizing the Plan Administrator to take whatever additional actions as required to administer the Program. * * * * * * * * * * * * * * * * * * * * * * * PASSED AND ADOPTED THIS 8TH day of October 2014, by the following vote: AYES: NOES: ABSTENTIONS: ABSENT: ROB SCHRODER, VICE CHAIR, CONTRA COSTA LAFCO I hereby certify that this is a correct copy of a resolution passed and adopted by this Commission on the date stated above. Dated: October 10, 2014 ____________ Lou Ann Texeira, Executive Officer NB1:679999.4 EXHIBIT “A” TO PUBLIC AGENCIES POST-RETIREMENT HEALTH CARE PLAN TRUST AGREEMENT ADOPTION AGREEMENT TO THE PUBLIC AGENCIES POST-RETIREMENT HEALTH CARE PLAN NB1:679999.4 EXHIBIT “A” TO PUBLIC AGENCIES POST-RETIREMENT HEALTH CARE PLAN TRUST AGREEMENT No guaranty that payments or reimbursements to employees, former employees or retirees will be tax-free. The Trust has obtained a ruling from the Internal Revenue Service concerning only the federal tax treatment of the Trust’s income. That ruling may not be cited or relied upon by the Employer whatsoever as precedent concerning any matter relating to the Employer’s health plan(s) (including post-retirement health plans). In particular, that ruling has no effect on whether contributions to the Employer’s health plan(s) or payments from the Employer’s health plan(s) (including reimbursements of medical expenses) are excludable from the gross income of employees, former emplo yees or retirees, under the Internal Revenue Code. The federal income tax consequences to employees, former employees and retirees depend on the terms and operation of the Employer’s health plan(s). Introduction By executing this Adoption Agreement, the Employer specified in Section II of this Adoption Agreement adopts the Public Agencies Post-Retirement Health Care Plan Document (the “Trust Agreement”). Defined terms shall have the meanings attributed to such terms of the Trust Agreement. The Employer hereby selects the following Plan specifications: Section I Plan and Trust Information A.1.1 FULL NAME OF TRUST: Public Agencies Post-Retirement Health Care Plan Trust A.1.2 FULL NAME OF PLAN: County of Contra Costa Post-Retirement Health Benefits Plan A.1.3 EFFECTIVE DATE OF PLAN: If this is a restatement of an existing plan, the restatement became effective: __________n/a__________________________. Section II Employer Information A.2.1 EMPLOYER INFORMATION: NAME OF AGENCY: Contra Costa Local Agency Formation Commission (LAFCO) ADDRESS: (Street): 651 Pine Street, Sixth Floor (City, State Zip code): Martinez, CA 94553 (Phone Number): (925) 335-1094 NB1:679999.4 EXHIBIT “A” TO PUBLIC AGENCIES POST-RETIREMENT HEALTH CARE PLAN TRUST AGREEMENT A.2.2 EMPLOYER’S PLAN ADMINISTRATOR: LAFCO Executive Officer A.2.3 EMPLOYER’S TAX IDENTIFICATION NUMBER: 94-6000509 A.2.4 EMPLOYER’S FISCAL YEAR means the 12 consecutive month period: Commencing on (month, day) July 1 and Ending on (month, day) June 30 Section III (Reserved) Section IV Investment A.4.1 INVESTMENT APPROACH: The Employer shall select either a discretionary or a directed approach to investment. _____ a. Discretionary Investment Approach If the Discretionary Investment Approach is selected, the Employer hereby directs the Trustee to invest the Assets of the Employer’s Agency Account pursuant to one of the investment strategies listed on the accompanying Investment Strategy Selection and Disclosure Form or another investment strategy as mutually agreed upon by the Employer and the Trustee. _____ b. Directed Investment Approach If the Directed Investment Approach is selected, the Employer must attach its investment policy and retain its own Registered Investment Advisor. The Employer shall be permitted to direct investments of its Agency Account pursuant to the terms of the Trust Agreement. *** SIGNATURE PAGE FOLLOWS *** GASB 45 SOLUTIONS AcTUArIAL revIew GASB 45 Alternative Measurement Method GASB 45 Alternative Measurement Method -1- Contra Costa Local Agency Formation Commission (LAFCO) Actuarial Review GASB 45 Alternative Measurement Method Contents I. Actuarial Review ........................................................................................ Page 2 II. Summary of Results ................................................................................. Page 3 III. Summary of Client Data ........................................................................... Page 4 IV. Census Data ............................................................................................. Page 5 V. Actuarial Assumptions .............................................................................. Page 6 GASB 45 Alternative Measurement Method -2- Actuarial Review We have reviewed the attached report for the Contra Costa LAFCO. The results show an Employer-Paid Accrued Liability (AL) of $516,522 and an Annual Required Contribution (ARC) of $52,278. These results are based on a valuation date of 7/1/2013. Our review is limited in scope - we are attesting to the formulas having worked properly given the input and assumptions provided by the client. Different census data and actuarial assumptions could result in significantly different results. If the client believes that the liabilities are material in light of its overall financial reporting requirements, we recommend a full actuarial valuation and certification rather than reliance on the contents of this report. Attested by Louis Filliger, Fellow, Society of Actuaries Demsey, Filliger & Associates lfilliger@demseyfilliger.com GASB 45 Alternative Measurement Method -3- Summary of Results for GASB 45 Alternative Measurement Method as of 7/1/2013 According to the results listed in the table below, Contra Costa LAFCO has an Accrued Liability (AL) of $516,522. Because Contra Costa LAFCO does not have an irrevocable trust for the pre- funding of retiree benefits, the Unfunded Accrued Liability (UAL) is also $516,522. This report also determines that the Annual Required Contributions (ARC) under GASB 45 is $52,278. This is comprised of the present value of benefits accruing in the current year (called the “Service Cost”) and a 30-year amortization of the UAL. Total as of Actives Retirees Valuation Date Total PVB $588,323 $178,806 $767,129 Total PUC AL 406,384 178,806 585,190 Total PUC SC 25,991 0 25,991 Retiree-Paid PVB 66,536 33,254 99,790 Retiree-Paid PUC AL 35,414 33,254 68,668 Retiree-Paid PUC SC 4,446 0 4,446 Employer PVB 521,787 145,552 667,339 Employer PUC AL 370,970 145,552 516,522 Employer PUC SC 21,545 0 21,545 Accrued Liability 516,522 Assets (from client input) 0 Unfunded Accrued Liability 516,522 Annual Required Contributions (ARC) for year ending 6/30/2014 Service Cost at end of year $22,407 30 year Amortization of UAL 29,871 Total ARC $52,278 Key Definitions: PVB = Present Value of Benefits: this is the present value of all projected benefits AL= Accrued Liability: this is the present value of benefits that are attributed to past service only UAL = Unfunded Accrued Liability: this is equal to the AL minus assets ARC = Annual Required Contribution: this is the amount Contra Costa LAFCO would be required to report as an expense for the upcoming fiscal year under GASB 45 which Present Value of Benefits is apportioned into Accrued Liability and Service Cost SC = Service Cost: this is the proportion of the actuarial present value of plan benefits and expenses which is allocated to a valuation year by the actuarial cost method used in the valuation PUC = Projected Unit Credit: this is an actuarial cost method (one of 6 permitted by GASB 45) under which Present Value of Benefits is apportioned into Accrued Liability and Service Cost GASB 45 Alternative Measurement Method -4- Summary of Client Data The actuarial review was based on the client data outlined below furnished to us by the Contra Costa LAFCO. General Information Number of Active Employees: 2 Number of Retirees: 3 GASB 45 compliant irrevocable trust: $0 Plan Information Subscriber group Benefit Duration Benefit eligibility age Assumed (average) retirement age Minimum years of service required All plan members Lifetime 50 62 0 Subscriber group Benefits pro-rated for FTE less than 1.0 Minimum FTE 0f 0.5 required Dental Benefits Vision Benefits Spousal benefits Survivor benefits All plan members No Yes Lifetime None Yes None Monthly Premiums This table represents weighted average of the full uncapped monthly tiered rate premiums. Premium group Subscriber group Composite Retiree only Retiree + 1 Effective date Medical for retirees under age 65 (pre-Medicare eligible) 1 $603.71 $1,438.38 1/1/2013 2 $953.04 $2,337.88 1/1/2013 Medical for retirees age 65 & over (Medicare eligible) 1 $275.10 $1,210.61 1/1/2013 2 $498.17 $996.34 1/1/2013 3 $872.81 $1,745.63 1/1/2013 4 $268.94 $726.30 1/1/2013 Dental All plan members $36.52 $81.09 1/1/2013 Vision N/A Monthly Caps Subscriber group Employer-paid amount: Medical Employer-paid amount: Dental 1 98% 98% 2 80% 78% 3 66% 77% 4 100% 74% 5 0% 98% GASB 45 Alternative Measurement Method -5- Census Data The actuarial review was based on the client data listed below furnished to us by Contra Costa LAFCO. Active Employees Record # Name/ID Date of Birth Date of Hire Gender Subscriber Group FTE 1 62375 7/21/1949 5/1/2008 F 1 1 2 70147 3/10/1958 9/26/2005 F 2 1 Retirees Record # Name/ID Date of Birth Gender Subscriber Group Employer-paid Percentage 1 34479 11/26/1928 M 3 66%* 2 44491 3/27/1934 F 4 100%* 3 42496 10/9/1944 F 5 0%* *See page 4 for more information on employer-paid percentages. GASB 45 Alternative Measurement Method -6- Actuarial Assumptions The liabilities set forth in this report are based on the actuarial assumptions listed in this section. Valuation Date 7/1/2013 Discount Rate 0.04 Ultimate Trend Rate 0.05 HealthCare trend rates 2013 0.08 2014 0.07 2015 0.06 2016 0.05 2017 0.05 2018 0.05 2019 0.05 2020 0.05 2021 0.05 2022 0.05 Dental 0.04 Vision (tied to dental) 0.04 Other (tied to dental) 0.04 Age-adjustment factor 0.03 Cap inflator (full inflation) -0.01 Percent of Retirees with Spouses 0.50