Schools Pool Actuarial Valuation - CalPERS This actuarial valuation was performed by the CalPERS...

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Transcript of Schools Pool Actuarial Valuation - CalPERS This actuarial valuation was performed by the CalPERS...

  • Schools Pool Actuarial

    Valuation As of June 30, 2017

    Required Contributions for Fiscal Year July 1, 2018 through June 30, 2019

  • Table of Contents

    Actuarial Certification .......................................................................................................... 1

    Highlights and Executive Summary .................................................................................... 2 Introduction .................................................................................................................................................................. 3 Purpose of Report ........................................................................................................................................................ 3 Required Contribution Rates ........................................................................................................................................ 4 Projected Future Contribution Rates ............................................................................................................................ 6 Plan’s Funded Status ................................................................................................................................................... 7 Changes Since the Prior Year’s Valuation ................................................................................................................... 8 Subsequent Events ...................................................................................................................................................... 8

    Assets .................................................................................................................................. 9 Reconciliation of the Market Value of Assets ............................................................................................................. 10 Asset Allocation ......................................................................................................................................................... 11 CalPERS History of Investment Returns .................................................................................................................... 12

    Liabilities and Employer Contributions.............................................................................. 13 Development of Accrued and Unfunded Liabilities .................................................................................................... 14 Development of Employer Contributions .................................................................................................................... 15 Schedule of Amortization Bases ................................................................................................................................ 15 (Gain) / Loss Analysis ................................................................................................................................................ 17 Reconciliation of Employer Contributions .................................................................................................................. 17 Employer Contribution Rate History ........................................................................................................................... 18 Funding History .......................................................................................................................................................... 19

    Risk Analysis ..................................................................................................................... 20 Analysis of Future Investment Return Scenarios ....................................................................................................... 21 Analysis of Discount Rate Sensitivity ......................................................................................................................... 22 Volatility Ratios .......................................................................................................................................................... 23

    Appendix A – Statement of Actuarial Methods and Assumptions ................................... A-1

    Appendix B – Principal Plan Provisions ........................................................................... B-1

    Appendix C – Participant Data ......................................................................................... C-1

    Appendix D – Normal Cost Information ........................................................................... D-1

    Appendix E – Glossary of Actuarial Terms ...................................................................... E-1

  • Page | 1 CalPERS Schools Pool Actuarial Valuation – June 30, 2017

    Actuarial Certification

    September 2018

    To the best of our knowledge, this report is complete and accurate and contains sufficient information to fully and fairly disclose the funded condition of the Schools Pool. This valuation is based on the member and financial data as of June 30, 2017 provided by the various CalPERS databases and the benefits under this plan with CalPERS as of the date this report was produced. In our opinion, this valuation has been performed in accordance with generally accepted actuarial principles and in accordance with standards of practice prescribed by the Actuarial Standards Board. The assumptions and methods are internally consistent and reasonable for this plan, as prescribed by the CalPERS Board of Administration according to provisions set forth in the California Public Employees’ Retirement Law.

    The undersigned are actuaries for CalPERS, who are members of the American Academy of Actuaries and the Society of Actuaries and meet the Qualification Standards of the American Academy of Actuaries to render the actuarial opinion contained herein.

    May Yu, ASA, MAAA

    Senior Pension Actuary, CalPERS

    Scott Terando, ASA, EA, MAAA, FCA, CFA

    Chief Actuary, CalPERS

  • Highlights and Executive Summary

    3 Introduction

    3 Purpose of Report

    4 Required Contribution Rates

    6 Projected Future Contribution Rates

    7 Plan’s Funded Status

    8 Changes Since the Prior Year’s Valuation

    8 Subsequent Events

  • Highlights and Executive Summary

    Page | 3 CalPERS Schools Pool Actuarial Valuation – June 30, 2017

    Introduction The Schools Pool provides retirement benefits to members employed by school districts and community college districts in California. It generally does not cover teachers as they are covered by a separate retirement system - the California State Teachers’ Retirement System, also known as CalSTRS.

    This actuarial valuation determines the funded status as of June 30, 2017 and sets forth the schools employer and employee contribution rates for the plan for fiscal year July 1, 2018 through June 30, 2019.

    Purpose of Report This actuarial valuation was performed by the CalPERS Actuarial Office using data as of June 30, 2017. The purpose of the report is to:

    • Set forth the assets and accrued liabilities of the Schools Pool as of June 30, 2017.

    • Determine the required employer contribution rate for Fiscal Year July 1, 2018 through June 30, 2019.

    • Determine the required employee contribution rate for Fiscal Year July 1, 2018 through June 30, 2019 for school employees subject to the Public Employees' Pension Reform Act of 2013 (PEPRA).

    • Provide actuarial information as of June 30, 2017 to the CalPERS Board of Administration and other interested parties.

    The pension funding information presented in this report should not be used in financial reports subject to Governmental Accounting Standards Board (GASB) Statement Number 68 for a Cost-Sharing Multiple-Employer Defined Benefit Pension Plan. The use of this report for any other purposes may be inappropriate. Future actuarial measurements may differ significantly from the current measurements presented in this report due to such factors as 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.” 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.

  • Highlights and Executive Summary

    Page | 4 CalPERS Schools Pool Actuarial Valuation – June 30, 2017

    Required Contribution Rates Required Employer Contribution Rates The actuarially required employer contribution rate for fiscal year July 1, 2018 through June 30, 2019 is shown in the table below. For comparison purposes, the corresponding contribution