HomeMy WebLinkAboutMINUTES - 04152008 - D.3 Contra •-�
TO: BOARD OF SUPERVISORS r r, -
FROM: John Cullen, County Administrator °' �"' "` ;off
Costa
DATE: April 15, 2008 °Osrq-cbu County
SUBJECT: OPEB—Recommended Subsidy Changes and 2008 Actuarial Update
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)8 BACKGROUND AND JUSTIFICATION
RECOMMENDATIONS:
1. ACCEPT report from the County Administrator regarding recommendations on health care
changes for unrepresented employees and appointed and elected officials and for persons
who retired from positions that were unrepresented, appointed, or elected;
2. DECLARE intent to make health care changes as recommended for unrepresented employees
and appointed and elected officials and for persons who retired from positions that were
unrepresented, appointed, or elected;
3. DIRECT the County Administrator to work with County Counsel to prepare documents to
implement the health care changes and return to the Board on May 6, 2008 for formal action
on the health care changes;
4. ACCEPT update on draft information on 2008 Other Post-Employment Benefits (OPER)
Actuarial Valuation.
FISCAL IMPACT:
The result of the recommendations herein, if implemented, will have significant future impact on
the County's overall fiscal stability and ability to deliver services.
BACKGROUND:
In March 2007, the County's Finance Committee received the County's actuarial report based
upon 2006 data as required by the Governmental Accounting Standards Board (GASB)
statements 43 and 45. The purpose of GASB 45 is, through planning and awareness,to properly
account for costs for retiree health benefits. The original actuary report valued the County's
unfunded liability for retiree medical insurance costs at$2.6 billion based upon a cash discount
rate. This outstanding liability, if fully amortized over the following 30 years, would necessitate an
Annual Required Contribution (ARC)of$216 million. At that point in time, $216 million would
have been six times the amount that the County was paying toward retiree health care premiums
on a"pay-as-you-go"basis. In addition,the report showed that, absent timely intervention; the
dollar amount of the ARC for retiree medical would triple over the next ten years; resulting in a
very real threat to the sustainability of the entire program itself and to vital County services that
compete for the same funding.
CONTINUED ON ATTACHMENT. X YES SIGNATURE:
_RECOMMENDATION OF COUNTY ADMINISTRATOR _RECOMMENDATION OF BOARD COMMITTEE
APPROVE _OTHER
SIGNATURE(S),
ACTION OF BOARD ON Ll APPROVE AS RECOMMENDED_ j OTHER
�It —
VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE AND CORRECT
COPY OF AN ACTION TAKEN AND ENTERED ON THE
UNANIMOUS(ABSENT MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE
A ES: NOES: SHOWN.
ABSENT. ABSTAIN:
ATTESTED+CONTACT:
Lisa Driscoll(335-1023) JOHN CK OF THE BOARD OF SUPERVISORS
AND COSTRATOR
CC. All County Departments
I
BY TY
April 15, 2008
Page 2 of 6
Histo
At the Board of Supervisor's request, County staff hired a benefit design consultant and began
working on a plan to address the County's Other Post Employment Benefits unfunded liability for
retiree medical insurance costs. Since March 2007, the County has taken significant actions to
address GASB 45:
• Specific Goals and Objectives 0
The Board of Supervisors has set four specific goals: 1)to fully comply with GASB Statement
45; 2)to adopt and follow an OPEB financing plan,which balances our requirement to provide
public services with our desire to provide competitive health care benefits for our employees
both now and when they retire; 3)to minimize collateral detrimental impact to the provision of
indigent health care in our County; and 4) pursue and support Federal and State legislation.
• Economic Census Assumptions and Rationales 0
Prior to ordering the first formal OPEB liability valuation, the OPEB task force met with
actuaries from Buck Consultants and developed economic census assumptions and rationales
for the actuarial valuation.
• Funding Strategy 0
While the County has paid for health care costs on a Pay-As-You-Go("Pay-Go") basis for over
forty years, the Board has publicly acknowledged the need to begin to partially pre-fund the
benefit. Due to the size of the liability it is almost impossible for the County to fully pre-fund
the liability; rather partial pre-funding will be phased in over thirty years. It is the Board's intent
to fully pre-fund OPEB benefits over time.
• Funding Levels 0
The Board established an initial pre-funding target for the County of 100% of its retirees, which
currently translates to 40%of the total OPEB liability. This means that during the next 30
years,we will need to incorporate updated demographics and cost information into our
financing plan in order to fully fund our OPEB benefits. In establishing this target level, a
variety of things were considered: 1) specific funding guidelines for financial long-term
obligations; 2)the Government-wide balance sheet impact of various funding levels; 3)the
liability impact of various funding levels; 4)the volatility of the assumptions/risk of funding; and
5)the ability to fund/affordability(for more information see the June 26, 2007 report to the
Board).
• Pre-funding resources 0
As an initial step towards funding the County's OPEB liability,the Board of Supervisors
adopted the allocation of resources(and the future investment income earned)totaling $588
million (plus interest) reserved by the end of fiscal year 2022/23, and $100 million added
annually thereafter.
• Employee Communication Forums and Information Sessions 0
The County Administrator scheduled OPEB informational sessions throughout the County for
our employees. The purpose of the presentations was to provide information regarding
OPEB, to answer employees' questions, and to seek employees input and suggestions on
solutions.
• Establishment of a Trust Fund 0
The Board approved an irrevocable trust(Internal Revenue Code Section 115)for OPEB
funding for Contra Costa County(1/15/08). The purpose of establishing the Trust is to comply
with GASB to establish a mechanism for 1) saving OPEB funds, 2) earning interest, and 3)
discounting our liability.
• Selection of a Benefit Desiqn Consultant 0
County selected and contracted with a Benefit Design consultant—Buck Consultants to help in
identifying cost control options.
Detailed information on the Board's actions, including all of the County's OPEB reports is
available on the County's web-site at www.cccouny.us.
April 15, 2008
Page 3 of 6
County Administrator's Recommendations
The County has ordered its 2008 actuarial evaluation update and has worked with the actuary in
pursuit of the most up-to-date and accurate assumptions possible. One of these assumptions
involves the changes to health care benefits that are recommended for unrepresented employees
and for persons who retired from positions that were unrepresented. In order to include these
assumptions in this valuation, we are asking for the Board of Supervisor to declare its intent to
make the following changes to health care benefits:
A. For current unrepresented employees and appointed and elected officials and for persons
who retired from positions that were unrepresented appointed, or elected
1. Do not allow dual coverage in two County health plans for an employee or retiree or a
dependent of an employee or dependent of a retiree after December 31, 2008. This means
that an individual employee or retiree can only be covered under a single county health plan.
The individual can be covered as either the primary or a dependent. This applies only in the
case of persons who have spouses or partners who are either county employees or who
retired from the county;
2. For individuals who become 65 on or after January 1, 2009, require enrollment in Medicare
Parts A& B; and
3. Beginning January 1, 2010, set the County health care premium subsidy at the 2009 dollar
level.
B. Establish a New Tier of health care coverage for unrepresented employees and officials hired
appointed or elected after December 31, 2008
1. Provide access to health benefits while employed;
2. Do not allow dual coverage in two county health plans for an employee or retiree or a
dependent of an employee or dependent of a retiree;
3. Establish separate rate pools for active and retired employees. This action would separate
the premium rates for retirees and actives to establish a more accurate cost of coverage for
active and retired employees. Over time, as these new hires became a greater percentage of
the work force, this action would eliminate the implied subsidy of retirees' health care rates
which must be recognized by the GASB rules and reduce future OPEB liability; and
4. Provide that upon retirement: 1)the County would make no contribution towards health care
premiums; and 2) eligible retirees would have access to County health plans until age 65,
when they are eligible for Medicare.
C. Establish a Benefit Design Task Force charged with design recommendations for a new
Health Benefit Program
1. Members of the Task Force would include: a) designated members of unrepresented
employee and retiree groups; b) County subject matter experts; c) benefit design, actuary, and
tax consultants;
2. Set specific achievement goals/parameters to recommend options for sound health care
benefits within the County's budgetary limits;
3. Set specific target dates for completion of any plan redesign recommendations before 2010;
and
4. Pursue portability of health care coverage and savings mechanisms for unrepresented County
employees and retirees.
These recommendations will begin the process of reducing our OPEB liability, reducing overall
health care cost growth, and reducing health care cost growth for the County. The
recommendations have no immediate impact, in order to allow the County and individuals time to
plan for the future. The County's goal is to reduce the overall cost growth of benefits prior to 2010
through Benefit Plan design changes that counteract medical cost growth in order to preserve a
balance between providing sound health care coverage for our employees and retirees and
maintaining vital county programs and services.
April 15, 2008
Page 4 of 6
2008 Draft Actuarial Analysis/Assumptions
As was mentioned, the County has ordered the 2008 valuation which will be based on certain
specific assumptions. The assumptions for both the 2006 valuation and the 2008 draft valuation
are included as Attachments A and B respectively. For 2006,we used assumptions common for
government sponsored postretirement medical plans, most of which were based on CalPERS
pension plan assumptions for governmental agencies. For 2008, we used the latest available
assumptions from the Segal pension valuation based on their experience study of Contra Costa
County. These assumptions were adopted by CCCERA for our pension valuations. The only
non-pension assumption used is the rate for retiree health participation. Originally, we used a
100% participation assumption; however, for 2008 we used a 98%assumption, based upon the
behavior of our retiring County employees.
Of the assumption changes between the two valuations, the one with the single most significant
impact was experienced based withdrawal rates. This assumption, by itself, had a 2% impact on
the total liability. Although it did not have a significant impact on the liability, another change in
the two assumptions is in our Actuarial Funding Method,which is used in order to allocate the
benefit accrued by active employees as of the valuation date and the benefit to be accrued in the
next year for accounting purposes. Per the Board of Supervisors direction,we moved to the
CalPERS trust required method of Entry Age Normal.
As a reminder, the 2006 valuation projected a $2.6 billion total liabilitylaccumulated postretirement
benefit obligation (APBO), and a$216 million annually required contribution (ARC)based upon a
4.5%discount rate.
PAYGO
Total APBO $2,571,650,000
Assets 0
Unfunded Actuarial Accrued Liability $2,571,650,000
Annual Required Contribution
Normal Cost 130,604,000
30 Year Amortization of UAAL 85,721,000
ARC $216,325,000
Assuming no changes in benefits and no pre-funding in FY 2008/09, the 2008 draft valuation
projects a$2.6 billion total liability, and a$211 million annually required contribution based upon a
4.5%discount rate.
PAYGO
Total APBO $2,554,226,000
Assets $00
Unfunded Actuarial Accrued Liability $2,554,226,000
Annual Required Contribution
Normal Cost $126,232,000
30 Year Amortization of UAAL $85,141,000
ARC $211,373,000
The 2008 draft liability is less than the 2006 result. Some of the reasons are that we updated
CCCERA pension valuation (experience based) assumptions as required by CalPERS (where
applicable);we had better overall medical and dental plan trend and renewals over the two years
than originally assumed; we had less new retirements than originally assumed, which delayed the
onset of benefits(this is called a demographic gain compared to valuation assumption); and we
had overall cleaner and more complete data than was available in 2006.
April 15, 2008
Page 5 of 6
Impact of Recommendations on Liability
Assuming the Board of Supervisors adopts a FY 2008109 partial pre-funding of$20 million to the
trust in addition to the pay-go cost, a 6.32%discount rate could be used, in which case the 2008
draft valuation projects a$1.9 billion total liability, and a$140 million annually required contribution.
Partial Pre-Funding
Total APBO $1,866,742,000
Assets $0
Unfunded Actuarial Accrued Liability $1,866,742,000
Annual Required Contribution
Normal Cost $77,936,000
30 Year Amortization of UAAL $62,225,000
ARC $140,161,000
Assuming the Board of Supervisors adopts the County Administrator's recommendations
regarding proposed changes as to unrepresented employees and appointed and elected officials
and persons who retired from positions that were unrepresented, appointed, or elected AND the
FY 2008109 recommended budget which includes$20 million in partial pre-funding,the 2008 draft
valuation projects a$1.7 billion total liability, and a$130 million annually required contribution.
Partial Pre-Fundinq
Total APBO $1,736,915,000
Assets 0
Unfunded Actuarial Accrued
Liability $1,736,915,000
Annual Required Contribution
Normal Cost 71,741,000
30 Year Amortization of UAAL 57 897,000
ARC $129,638,000
Summary of OPEB Liability Changes
If adopted,the recommended changes represent an $835 million or 32% reduction to total
liability and an $87 million or 40%reduction in the annually required contribution. At the Board's
adopted 40%funding target,these changes reduce the County's$139 million 'gap'to
approximately$54 million. Continued negotiation towards Countywide health care cost
containment strategies and the redirection of designated future resources are key to resolving the
OPEB dilemma. As is obvious from the information presented, the Board of Supervisors
continues to make progress towards a solution for one of the biggest fiscal challenges the County
is likely to face.
April 15, 2008
Page 6 of 6
Status of California Employer's Retiree Benefit Trust Program(CERBT)
Pursuant to Board of Supervisors direction in January, County staff directed the 2008 valuation to
use the actuarial cost method required by CERBT, and has continued to track the progress of the
trust. Three members of the County's OPEB Trust have attended an informational seminar on the
CERBT and are in communication with CERBT staff. The status of the CERBT fund is:
• 45 agencies have sent in participation agreements;
• Over$260 million has been committed;
• Many more agencies are expected to join by June 30 and assets will be substantially higher by
June 30, 2008;
• Participation in the CERBT has surpassed expectations of CERBT staff; and
• It is now believed that the total fees(including administrative, trust management and
investment costs)will be in the range of 20 to 50 basis points.
Given this information,we have asked CERBT administrative staff to meet with our staff to
address legal and administrative issues/questions. Dependent upon the outcome of this meeting,
staff may revisit with the Board of Supervisors the decision on which trust or trusts to use. We will
keep the Board informed as more information is received.
Next Steps
1. April 15 -Declare Intent to make the recommended changes to health care benefits for
unrepresented employees and appointed and elected officials and for persons who retired
from positions that were unrepresented, appointed or elected;
2. April 22-Adopt FY 08/09 budget that reflects recommended health care benefit changes and
budget reductions;
3. May 6 -Adopt changes to health care benefits for unrepresented employees and appointed
and elected officials and for persons who retired from positions that were unrepresented,
appointed or elected;
4. May 6- Establish Benefit Design Task Force;
5. Report back to the Board regarding recommendations on the CERBT(trust);
6. Continue employee and retiree information sessions;
7. Continue meeting &conferring as labor contracts expire; and
8. Continue community education and outreach on our efforts to achieve our goals.
ADDENDUM TO ITEM D.3
April 15, 2008
On this day,the Board of Supervisors considered accepting a report from the County
Administrator regarding recommendations on health care changes for unrepresented
employees and certain retirees; declaring intent to make health care changes; directing the
County Administrator to work with the County Counsel to prepare documents to
implement health care changes and return to the Board on May 6,2008 for formal action
on health care changes, and accepting update on draft information on 2008 Other Post-
Employment Benefits(OPEB)Actuarial Valuation.
John Cullen, County Administrator, provided an update on the County's Other Post
Employment Benefits (OPEB)unfounded liability for retiree medical insurance costs. He
pointed out the County's Finance Committee received the County's actuarial report as
required by the Governing Accounting Standards Board(GASB), and explained the
purpose of GASB 45 is to account for costs for retiree health benefits. Mr. Cullen went
on to say the actuarial report valued the County's liability for retiree medical insurance at
$2.6 billion, and if fully amortized over 30 years,would require an Annual Required
Contribution (ARC) of$216 million. He noted at that point$216 million would be six
times the amount toward retiree health care premiums as on a"pay-as-you-go"basis. He
said since March 2007,the County has taken significant actions to address GASB 45.
He said detailed information on the Board's actions,which include all of the County's
OPEB reports, is available on the County's web site at www.cccounty-us. Mr. Cullen
noted the County ordered a 2008 actuarial evaluation update and worked with the actuary
to get accurate assumptions, and one of the assumptions involved changes to health care
benefits for unrepresented employees and for persons who retired that were
unrepresented. He requested the Board to declare its intent to make those changes
recommended in the Board Order. Mr. Cullen explained these recommendations would
start the process of reducing the County's OPEB liability, overall health care cost growth
and reducing health care cost growth for the County. He stressed that in order to allow
the County and individuals affected time to plan for the future, the recommendations
would not have immediate impact. He concluded by saying if OPEB Liability Changes
are adopted,the recommended changes represent a$835 million or 32%reduction to total
liability and an $87 million or 40 %reduction in the yearly required contribution. He
said continued negotiation towards Countywide health care cost strategies and redirection
of designated future resources are key elements to resolving the OPEB funding issue.
Mr. Cullen noted California Employer's Retiree Benefit Trust Program (CERBT)would
meet with County staff to address legal and administrative issues/questions.
Chair Glover asked the public for their comment and the following people spoke.
• Maryanne McGliber, Walnut Creek resident, said money on this proposal would
be better spent in cutting waste in departments and urged the Board to audit
certain departments for redundancy;
1
• Barry Schmach,Public Works Department, informed the Board the proposed
freeze would cause an exodus of experienced employees and would cause
recruitment of new employees to suffer and urged the Board to form a Task Force
involving all players and to work in the spirit of cooperation instead of
confrontation;
• Kenny Eng,Moraga resident, informed the Board the proposal undermines
morale. He suggested keeping existing benefits for those employees who spent
their lifetime in their careers before implementing the proposal;
• Bob Britton,Professional and Technical Engineers Local 21, informed the Board
the cuts were draconian, and suggested the Board follow the old practice of
bargaining first with represented employees and then going to the unrepresented
employees and giving them what was negotiated. He concluded by saying this
proposal appeared to be a precursor to cutting benefits for represented
employees;
• Leona Hartmann, Concord resident, informed the Board it is wrong to use
employees as a bargaining tactic with the Unions and wrong to use employees
who have no voice,no union, and no protection to maneuver through the current
negotiation cycle;
• Roylen Stack, Concord resident, questioned Supervisor Uilkema's longevity pay,
and said implementing a Task Force after a decision has already been is made is
not a real gesture;
• Nancy, Martinez resident, submitted speaker card but did not speak;
• Pattie McNamee, Walnut Creek resident, suggested the Task Force be created
first to look at the issues, give the unrepresented employees a chance to be
involved and look at some of the options. She informed the Board that the
unrepresented employees would be happy to work with the County
Administrator's staff;
• Wiley Osborn, El Cerrito resident,urged the Board to form a Task Force before
any action is taken;
• Ed Irwin,Martinez resident, said he has been before the Board several times with
suggestions on how to improve the retiree health care in the County. He voiced
his concern over"freedom of information"and explained fifty percent of the
County retirees take home less than $2500 a month. He urged the Board to delay
this matter and said more time is needed to prepare a real new package on cost of
health care in the County;
• Cece Sellgren,Martinez resident, suggested the Board use representatives from
the Management Council on the Task Force along with Union representatives,
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management employees, retirees and union representatives. She said working
together would find solutions to the fiscal problems and reiterated this must be
done together;
• Linda Best, Contra Costa Council, emphasized the Board should cap their
obligations going forward.;
• Evelyn Launius, Clayton resident, suggested the Board look at the results of a
lawsuit in Orange County against separation of retirees from an active pool and
asked the Board to see the outcome of that lawsuit before the proposal goes into
effect;
• Roland Katz,Business Agent, Local One, said a national universal health care
plan could change everything. He asked the Board to bargain;
• Kris Hunt, Executive Director,Contra Costa Taxpayers Association, urged the
Board to do more to get beyond the County's target of draining 40 percent from
the shortfall;
• Ken Hambrick, Alliance of the Contra Costa Taxpayers, said it is an economic
fact of life and the County can't continue to go on like this with the increased cost
of health care as more services would be cut. He urged the County Administrator
to move forward with this plan.
The following speakers submitted speaker cards but did not wish to speak:
• Carol Raynolds,Martinez resident;
• Peggy Ciccone, Pittsburg resident;
• Victoria Skerritt, Concord resident;
• Shauna Gonzales,Martinez resident;
• Karen Fernandez,Benicia resident.
Chair Glover said the challenge before the Board is to preserve health services for retirees
and active employees and balance that by delivering services for people who need this
within the county. He said this problem is universal and not only for Contra Costa
County.
Supervisor Piepho said the County has no control over heath care costs and an
opportunity exists to redesign benefit plans and work with employees to find ways to
continue a strong effective work force and service provision to communities. Addressing
Mr. Cullen, she asked why the numbers are so important going into 2008-09 and what it
would mean if steps are not taken to address the budget situation.
Mr. Cullen responded absent an updated 2008 evaluation,the County would be faced
with a gap of$139 million,which would have to be closed through addressing health care
cost and changes of design and putting more money into prefanding the health care cost.
He explained with the change in federal, state and local economic changes and budget,
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services would need to be cut. He said it is critical the County use for budget plan
purposes updated actuarial information so that in 2008 attempts would be made to close
that gap. Mr. Cullen said in response to Mr. Katz's question he would recommend$20
million into the OPEB Trust pre-funding pot in the 2008-09. He said the$20m would
result in closing that gap from$139m to $54m.
Supervisor Gioia reasoned the issue before the Bard is to balance fair and comparable
compensation with maintaining vital services, especially to the most vulnerable in the
County. He pointed out a delay would negatively impact further services,whether it's
shortening library hours, less sheriffs deputies on the street, or that more people would
not get health care. He concluded by saying the county's benefits have been generous
compared to others.
In response to some of the speakers, Mr. Cullen reiterated the Benefit Design Task Force
and Work Group effort would be completed before the date the subsidy takes effect in
2010;No dual coverage in two County health plans for an employee or retiree or a
dependent of an employee or dependent of a retiree would be allowed after December 31,
2008; Individuals who become 65 on or after January 1, 2009 would require enrolment
in Medicare Parts A&B; and Beginning January 1, 2010, the County health care
premium subsidy would be set at the 2009 dollar level.
Chair Glover thanked the speakers and said the Board would implement a plan that is
workable and allow the County to provide health services for active employees and
retirees and continue to deliver services to the constituents of Contra Costa County.
Supervisor Bonilla voiced her concerns around the issues of timing and in response to
some of the speakers said there is fear because of a lack of process and inclusion. She
echoed Chair Glover's remarks and said there is an opportunity to take definite steps
around the issues of being inclusive and having open communication. .
Supervisor Piepho emphasized the current level of health benefits in the County as
unsustainable. She said the status-quo is bankrupting services to the County's
constituents and needs a systems overhaul and stressed there needs to be a concerted
effort to participate in that effort. She thanked the speakers for being there and taking
this issue as seriously as the Board.
By an unanimous vote,with none absent,the Board took the following action:
ACCEPTED report from the County Administrator regarding recommendations on
health care changes for unrepresented employees and appointed and elected officials
and for persons who retired from positions that were unrepresented, appointed, or
elected; DECLARED intent to make health care changes as recommended for
unrepresented employees and appointed and elected officials and for persons who
retired from positions that were unrepresented, appointed, or elected; DIRECTED the
County Administrator to work with County Counsel to prepare documents to
4
implement the health care changes and return to the Board on May 6, 2008 for formal
action on the health care changes; and
ACCEPTED update on draft information on 2008 OPEB Actuarial Valuation.
5
Attachment A
2006
Valuation Assumptions
Mortality Rates-1993 Ca1PERS Service Retirement for males and females
Withdrawal Rates—Representative values are shown below
Withdrawals per Withdrawals per 1,000
1,000 Lives for Males Lives for Females with
with less than 5 years less than 5 years of
Year of Service Service
1 70.18 85.32
2 143.5 174.73
3 99.87 136.66
4 87.69 113.72
5 72.44 99.83
Withdrawals per Withdrawals per 1,000
1,000 Lives for Males Lives for Females with
with more than 5 more than 5 years of
ears of Service Service
Age
30 16.33 25.67
35 14.67 22.64
40 13.18 19.97
45 11.84 17.62
50 10.64 15.54
55 9.56 13.71
60 8.59 12.09
New Entrants—None Assumed.
Dependent Assumptions—For active employees, 85% are assumed married at retirement.
Female spouses are assumed to be three (3) years younger than their husbands.
Discount Rates-4.5% and 7.9%.
Participation Assumption-100% active participation assumed upon retirement.
Attachment A
Medical Demographic Information-8,428 active employees,4,856 retirees and 360 surviving
spouses as of 01/01/2006. Because we currently do not know the source of the survivors, we
allocated all of their liability to the general Contra Costa County grouping.
Retirement Rates
Probability of Eligible
Retirements During the Year
Age Males Females
50 2.654%, 3.684%
55 4.81.3% 5.390%
56 3.957% 4.576%
57 4.788% 4.213%
58 5.500% 6.735%
59 6.811% 6.523%
60 12.807% 9.825%
61 12.426% 8.696%
62 23.818%, 18.980%
63 21.037% 17.706%
64 14.311% 12.882%
65 24.399% 23.837%
66 13.820% 14.190%
67 11.208% 14.001%
68 11.736% 10.330%
69 9.036% 12.344%
Probability of retiring at age 70 equals 100% for both male and female.
Health Care Cost and Expense Trend—Annual trend rates are shown below.
Medical Trend Rates
by Calendar Year
CY06 12%
CY07 11%
CY08 10%
CY09 9%
CY10 8%
CY11 7%
CY12 6%
CY13+ 5%
Attachment A
Contra Costa Counri,2006 Rates and Contributions
Current
contributions Rate
Early Retirees(under 65)
Kaiser EE 80% $451.87
EF 80% $1,052.62
Health Net HMO EE 80% $537.65
EF 80% $1,318.87
Health Net PPO EE 61% $656.75
EF 61% $1,560.16
CCHP -A
EE 98% $425.25
EF 98% $1,013.17
CCHP-B EE 90% $469.14
EF 90% $1,114.74
Current
Retirees(over 65) contributions Rate
Kaiser Cost EE 80%+$88.50 $509.28
Retiree EF 80%+$177.00 $1,167.64
Kaiser Senior EE 80%+$88.50 $256.43
Advantage EF 80%+$177.00 $661.94
Health Net Cost EE 80%+$88.50 $366.66
Retiree EF 80%+$177.00 $733.32
Health Net EE 80%+$88.50 $296.40
Seniority Plus EF 80%+$177.00 $592.80
Health Net Flex EE 61% $507.01
Net PPO EF 61% $1,014.03
CCHP-A EE 98%+$88.50 $347.05
Retiree EF 98%+$177.00 $856.77
CCHP-B EE 90%+$88.50 $390.94
Retiree EF 90%+$177.00 $958.34
Attachment A
Ca1PERS Participating Retirees:
For those retirees participating in CAPERS, the County pays the lesser of the actual rate or the
following amounts:
Single - $338.76
Employee+1 Dependent - $677.62
Employee+Family - $880.78
Attachment B
2008 DRAFT
Valuation Assumptions
Mortality Rates—RP-2000 Combined Healthy Mortality Tables set back two years.
Withdrawal Rates—Representative values are shown below
General Safety
Withdrawals per Withdrawals per
1,000 Lives for 1,000 Lives for
employees with less employees with less
than 5 years of than 5 years of
Year Service Service
1 140.00 110.00
2 90.00 70.00
3 80.00 50.00
4 60.00 40.00
5 50.00 30.00
General Safe
Withdrawals per Withdrawals per
1,000 Lives for 1,000 Lives for
employees with more employees with more
than 5 years of than 5 years of
Service Service
Age
30 50.00 30.00
35 49.20 22.00
40 42.30 16.10
45 35.40 10.50
50 16.80 0.00
55 3.70 0.00
60 0.00 0.00
New Entrants—None Assumed.
Dependent Assumptions—For active employees, 80% of males and 550/o of females are
assumed married at retirement. Female spouses are assumed to be three (3) years younger than
their husbands.
Discount Rates-4.5% and 7.8%.
Participation Assumption-98% active participation assumed upon retirement.
Attachment B
Medical Demographic Information-8,563 active employees and 5,813 retirees as of January
1, 2008.
Retirement Rates
Probability of Eligible
Retirements During the Year
Age General Safety
50 3.0% 25.0%
51 3.0% 20.0%
52 3.0% 20.0%
53 3.0% 20.0%
54 5.0% 25.0%
55 10.0% 30.0%
56 10.0% 30.0%
57 10.0% 40.0%
58 10.0% 40.0%
59 10.0% 40.0%
60 15.0% 100.0%
61 20.0% 100.0%
62 25.0% 100.0%
63 25.0% 100.0%
64 30.0% 100.0%
65 35.0% 100.0%
66 35.0% 100.0%
67 35.0% 100.0%
68 35.0% 100.0%
69 35.0% 1 100.0%
Probability of retiring at age 70 equals 100% for both General and Safety.
Health Care Cost and Expense Trend-Annual trend rates are shown below.
Medical Trend Rates
by Calendar Year
CY08 10%
CY09 9%
CY10 8%
CY11 7%
CY12 6%
CY13+ 50/
Attachment B
Contra Costa County 2008 Rates and Contributions
Current
contribution Rate
Early Retirees(under 65)
Kaiser EE 80% $499.70
EF 80% $1,164.29
Health Net HMO EE 80% $598.09
EF 80% $1,467.14
Health Net PPO EE 59% $832.24
EF 59% $1,977.04
CCHP -A
EE 98% $516.42
EF 98% $1,230.38
CCHP-B EE 90% $569.72
EF 90% $1,353.74
Current
Retirees(over 65) contribution Rate
Kaiser Cost EE 80%+$96.40 $551.88
Retiree EF 80%+$192.80 $1,268.65
Kaiser Senior EE 80%+$96.40 $226.97
Advantage EF 80%+$192.80 $618.83
Health Net Cost EE 80%+$96.40 $404.42
Retiree EF 80%+$192.80 $808.86
Health Net EE 80%+$96.40 $296.40
Seniority Plus EF 80%+$192.80 $592.80
Health Net Flex EE 59%+$96.40 $642.48
Net PPO EF 59%+$192.80 $1,284.97
CCHP-A EE 98%+$96.40 $420.02
Retiree EF 98%+$192.80 $1037.58
CCHP-B EE 90%+$96.40 $473.32
Retiree EF 90%+$192.80 $1,160.94
Attachment B
Ca1PERS Participating Retirees:
For those retirees participating in Ca1PERS, the County pays the lesser of the actual rate or the
following amounts:
Single - $409.48
Employee+1 Dependent - $818.97
Employee +Family - $1,064.65