Agenda Item 3
May 7, 2013
Introduction
MEMORANDUM
May 3, 2013
TO:
FROM:
County Council
Robert
H.
Drummer, Senior Legislative Attorney
K3
SUBJECT:
Introduction:
Expedited Bill 12-13, Deferred Retirement Option Plans - Group
G - Amendments
Expedited Bill 12-13, Deferred Retirement Option Plans - Group G - Amendments,
sponsored by the Council President at the request of the County Executive, is scheduled to be
introduced on May 7. A public hearing is tentatively scheduled for May 14 at 1:30 p.m.
Background
Under current law, a Group G member who is eligible for normal retirement may enter
the Deferred Retirement Option Plan (DROP). Each employee's participation in the DROP must
end after 3 years or an earlier date chosen by the employee. The pension payment the employee
would have received if the employee had not participated in the DROP is deposited into a DROP
account until the employee leaves County service. The Board of Investment Trustees invests the
funds along with other funds in the Retirement Trust Fund. The member receives a guaranteed
interest rate of 8.25% of the account balance while the employee is in the DROP. Because the
retirement date is the date when the employee began participating in the DROP, no further
County or employee contributions are made to the retirement system. The employee continues
to earn sick and annual leave and can participate in health and life insurance programs. When
the employee leaves County service, the DROP account balance is distributed to the employee
either directly or rolled over to an eligible retirement plan and the employee begins to receive his
or her monthly pension. The Executive and the IAFF recently negotiated changes to the DROP
as part of the new Collective Bargaining Agreement. Bill 12-13 would implement these changes.
Bill 12-13 would amend the DROP for Group G (Fire and Rescue Employees). The Bill
would:
(1)
(2)
(3)
reduce the guaranteed interest rate from 8.25% to 7.5% for all members entering
the DROP on or after July 1,2013;
allow members exiting the DROP to keep their DROP account balance in the
Employee's Retirement System (ERS) with an annual interest rate of 4%; and
require an immediate distribution of the account balance to the beneficiary of a
member who elected to keep the DROP account in the ERS after retirement if the
member dies with a DROP account balance.
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The County's Actuary has estimated that this change to the DROP would reduce the
County's annual contribution to the retirement plan by $46,050. However, some of these savings
would be lost due to an additional administrative cost to implement the changes estimated
between $10,000 and $15,000 each year. The Fiscal Impact Statement is at ©11-12 and the letter
from the actuary is at © 14-18. On April 30, 2013, the Council indicated its intent to approve the
proVISIOn of the IAFF Agreement amending the DROP. This Bill would implement that
decision.
This packet contains:
Expedited Bill 12-13
Legislative Request Report
Executive's Transmittal Letter
Fiscal Impact Statement
Economic Impact Statement
Letter from Actuary
F:\LAW\BILLS\1312 DROP-Group G\Intro Memo.Doc
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Expedited Bill No.
_~12=--..!.:!13~
_ __
Concerning:
Deferred
Retirement
Option Plans - Group G
Amendments
Revised: May 1, 2013
Draft No. 2
Introduced:
May 7, 2013
Expires:
November 7, 2014
Enacted: _____________
Executive: ___________
Effective: _ _ _ _ _ _ _ _---..:_ _
Sunset Date:
-.!N..:.:o::.:.n:..:::e~
_ _ _ _ __
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Council President at the Request of the County Executive
AN EXPEDITED ACT
to:
(1)
amend the Deferred Retirement Option Plan for Group G members; and
(2)
generally amend the law regarding the Employee's Retirement System.
By amending
Montgomery County Code
Chapter 33, Personnel and Human Resources
Section 33-38A
Boldface
Underlining
[Single boldface brackets]
.Dru.tble underlining
[[Double boldface brackets]]
* * *
Heading or defined term.
Added to existing law by original bill.
Deleted from existing law by original bill.
Added by amendment.
Deleted from existing law or the bill by amendment.
Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
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Expedited Bill No. 12-13
Sec.
1.
Section 33-38A is amended as follows:
2
3
4
33-38A.
Deferred Retirement Option Plans.
*
(b)
(1)
*
*
DROP Plan for Group
G
members.
Eligibility.
An
employee who is a member of Group G and who
has met the minimum requirements for a normal retirement may
participate in the DROP Plan.
(2)
5
6
7
8
Application requirements.
An eligible employee must apply at
least 45 days before the employee becomes a participant.
An
employee may withdraw a pending application within 2 weeks
after submitting the application.
9
10
11
12
13
(3)
Employee participation and termination.
(A)
The employee's participation in the DROP Plan must
begin on the first day of a month that begins at least 45
days, but not more than 75 days, after the employee
applied.
(B)
A Group G member may participate in the DROP Plan
for up to 36 months. An employee who elects to stop
participating before the end of the 36-month period must
notify Fire and Rescue Services and the Office of Human
Resources at least 60 days before stopping participation
in the program.
(C)
When the employee's participation in the DROP Plan
ends, the employee must stop working for the County
and receive a pension benefit.
14
15
16
17
18
19
20
21
22
23
24
25
26
27
(4)
Employment status.
A DROP Plan participant must continue to
be a member of the retirement system, earn sick and annual
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Expedited Bill No. 12-13
28
29
30
leave, and remam eligible to participate in health and life
insurance programs
for
employees
while
the
member
participates in the DROP Plan.
(5)
Retirement date, retirement contributions, and credited service.
31
32
33
34
(A)
The retirement date of a member who participates in the
DROP Plan is the date when the employee begins to
participate in the DROP Plan.
35
36
37
(B)
The
member
will
continue
to
make
retirement
contributions to the Optional Plan or Integrated Plan
while participating in the DROP Plan. The County must
not make retirement contributions on behalf of the
member after the date on which the member's DROP
Plan participation begins.
(C)
Sick leave credited towards retirement at the beginning
of the member's participation will not be available for the
member's use after participation in the DROP Plan
begins.
(D)
A member who wishes to purchase prior service must do
so before the member's participation in the DROP Plan
begins.
(6)
Pension benefits.
38
39
40
41
42
43
44
45
46
47
48
49
(A)
Before a member's participation begins, the member
irrevocably must choose a pension payment option under
Section 33-44 for retirement pension payments.
50
51
52
(B)
Pension benefits will not be paid to the member while the
member participates in the DROP Plan. Pension
payments that are deferred while the member participates
53
54
(:)­
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Expedited Bill No. 12-13
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58
59
. III
the DROP Plan must not include cost-of-living
increases under Section 33-44 that were given to retirees
and beneficiaries during the period of the member's
participation in the DROP Plan. The participant will
receive the deferred pension payments when the
member's participation in the DROP Plan ends, or within
60 days after the member gives notice under paragraph
(3)(B), whichever is later.
(C)
After the member's participation ends, the member's
pension benefit will be based on the member's:
(i)
credited service, including credit for unused sick
leave, before the member's participation in the
DROP Plan began, adjusted to include credit for
unused sick leave accrued during the period of
DROP Plan participation; and
(ii)
average final earnings, excluding earnings during
the period of participation in the DROP Plan.
(D)
The pension benefit that a member receives after the
member's participation in the DROP Plan ends must be
adjusted to reflect cost-of-living adjustments under
Section 33-44(c) that occurred during the period of the
member's participation in the DROP Plan, but the
pension
payments
that
are
deferred
during
the
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
participation period must not include cost-of-living
adjustments.
80
(7)
Disability retirement.
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Expedited Bill No. 12-13
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82
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84
85
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94
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96
97
98
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105
106
107
(A)
A member may apply for disability retirement prior to the
termination of the member's participation in the DROP
Plan.
(B)
If the Chief Administrative Officer determines that a
DROP participant is eligible for a service-connected
disability retirement, the participant must elect to receive
either:
(i)
the retirement benefit under subsection (6)(C) and
the DROP Plan payoff; or
(ii)
the service-connected disability retirement benefit
that the member would have received if the
member had continued as an active employee and
not elected to participate in the DROP Plan.
(C)
A member who elects to receive a service-connected
disability retirement must not receive the DROP Plan
payoff.
(D)
If the Chief Administrative Officer determines that a
DROP participant is eligible for a non-service connected
disability retirement, the participant must receive:
(i)
the non-service connected disability retirement
benefit provided under Section 33-43(h), with the
benefit calculated as of the member's DROP entry
date; and
(ii)
the DROP account balance.
(8)
Death benefit.
If a member dies during the member's
participation in the DROP Plan, the member's beneficiary will
receive the greater of:
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Expedited Bill No. 12-13
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124
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128
129
130
131
132
133
134
(A)
the death benefit that the beneficiary would have
received if the member had retired on the date on which
the member began to participate in the DROP Plan,
calculated to reflect cost-of-living adjustments under
Section 33-44(c) that occurred during the period of
DROP Plan participation, and the value of the DROP
Plan payoff, not including retroactive cost-of-living
adjustments to the deferred pension payments; or
(B)
the service-connected death benefit that the beneficiary
would have received if the member had not elected to
participate in the DROP Plan, but not the DROP Plan
payoff.
(9)
DROP Plan payoffand distribution.
(A)
DROP Plan payoff.
The DROP Plan payoff must include
the total of the following, accumulated over the period of
the member's participation in the DROP Plan:
(i)
the member's deferred monthly pension payments,
not including any cost-of-living adjustments;
(ii)
the member's retirement contributions to the
Optional Plan or Integrated Plan treated as picked­
up contributions; and
(iii)
for
~
member beginning DROP Plan participation
before July
.L
2013, 8.25 percent annual interest
rate credited monthly, compounded quarterly [,
credited each calendar quarter] on the amount in
the DROP Plan payoff [at the beginning of each
quarter] during the member's participation in the
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Expedited Bill No. 12-13
135
136
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152
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156
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160
161
DROP Plan. For
f!
member beginning DROP Plan
participation on or after July
L
2013, 7.5 percent
annual interest credited monthly, compounded
quarterly on the amount in the DROP Plan payoff
during the member's participation in the DROP
plan.
(B)
DROP Plan payoffdistribution options.
At the time that a
member's DROP Plan participation ends, the member
must elect to have the DROP Plan payoff:
ill
distributed as a:
[(i)]@}.
[(ii)](hl
[(iii)]!£l.
lump sum payment;
annuity; or
direct
rollover
distribution,
III
compliance with the Internal Revenue Code,
to an eligible retirement plan; or
(ii)
remain in the retirement system in
f!
DROP Plan
Payoff Account and receive interest at a 4.0
percent annual rate, credited monthly, for the
period of time during which the DROP Plan Payoff
Account remains in the retirement system.
©
Distribution
gf
DROP Plan PayoffAccount
ill
A· former member may elect to receIve
f!
distribution of the DROP Plan Payoff Account in
f!
single lump sum payment or
f!
single direct
rollover distribution to an eligible retirement plan
at any time, but must receive
f!
distribution
.hy
the
date required under Internal Revenue Code Section
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Expedited Bill No. 12-13
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167
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170
171
172
40 1(a)(9)k, as amended, and the corresponding
regulations.
(ii)
The Chief Administrative Officer must
~
the
~
balance of the DROP Plan Payoff Account to
designated beneficiary of
~
former member who
dies without receiving the DROP Plan Payoff
Account as soon as practicable after the former
member's death.
Sec. 2. Expedited Effective Date.
The Council declares that this legislation is necessary for the immediate
protection of the public interest. This Act takes effect on June
30, 2013.
173
174
175
176
Approved:
Nancy Navarro, President, County Council
Date
177
178
Approved:
Isiah Leggett, County Executive
Date
179
180
This is a correct copy ofCouncil action.
Linda M. Lauer, Clerk of the Council
Date
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LEGISLATIVE REQUEST REPORT
Expedited Bill
12 -13
Deferred Retirement Option Plans
-
Group
G -
Amendments
DESCRIPTION:
The Bill would amend the Deferred Retirement Option Plan (DROP) for
Group G. The Bill would
(1)
reduce the interest rate from 8.25% to 7.5%
for all members entering DROP on or after July 1, 2013 and (2) allow
members exiting DROP to keep their DROP account balance in the ERS
with an annual interest rate of 4%. The Bill would also require an
immediate distribution of the account balance to the beneficiary of a
member who elected to keep the DROP account in the ERS after
retirement if the member dies with a DROP account balance.
The Bill would implement Appendix VI of the recently negotiated
Memorandum of Agreement between the Montgomery County
Government and the County Career Firefighters Association, International
Association of Firefighters, Local 1664, AFL·CIO (IAFF).
PROBLEM:
GOALS AND
OBJECTIVES:
To implement the terms of Appendix VI of the Agreement recently
negotiated with the IAFF.
COORDINATION:
Office of Human Resources
FISCAL IMPACT:
Office of Management and Budget
ECONOMIC
IMPACT:
EVALUATION:
See OMB Fiscal Impact Statement.
nla
F:\LAW\BILLS\1312 DROP-Group G\LRR.DOc
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OFFICE OF THE COUNTY EXECUTIVE
ROCKVILLE, MARYLAND 20850
Isiah Leggett
County EXecutive
072385
MEMORANDUM
Apri125,2013
.
~:
­
;
,j
..
~
TO:
Nancy Navarro, President
Montgomery County Council
Isiah Leggett, County Executive
,
. .-<,
-,
.
FROM:
SUBJECT:
Expedited Bill - Deferred Retirement Option Plan for Group G Members
(
I am attaching for Council introduction an Expedited Bill which would amend the
County Rettrement Law for the Group G, Deferred Retirement Option Plan (DROP).
This bill would (1) reduce the interest rate from 8.25% to 7.5% for all members
entering DROP on or after July 1, 2013; (2) allow members exiting DROP to elect either (a) to
receive DROP Account balance, or
(b)
to keep DROP account balance in the Employee
Retirement System (ERS) and receive annual interest of 4% on the DROP account balance; and
(3) provide for an immediate distribution to the beneficiary if the individual who elected to keep
the DROP account in the ERS dies with a DROP account balance.
This bill is the outcome from an agreement with the County Career Firefighters
Association, International Association of Firefighters, Local 1664.
Attachments
mOfltgomerycountymd.gov/311
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, .
240~773~3556
TTY
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Fiscal Impact Statement
1. Legislative Summary.
a. The Bill amends the County's retirement law to reduce the interest rate earned on DROP
account balances for employees entering DROP on July 1,2013 or thereafter from 8.25%
to 7.5%. The 8.25% interest rate will continue to be paid to participants who entered
DROP prior to June 30, 2013.
b. The Bill also includes an additional distribution option which allows DROP participants
to have their DROP account balance remain
in
the ERS and earn 4% interest annually
until such time as they request a distribution or have met the mandatory distribution
requirements.
2. An estimate of changes in County revenues and expenditures regardless of whether the
revenues or expenditures are assumed in the recommended or approved budget. Includes
source of information, assumptions, and methodologies used.
a. The ERS will incur lower interest expenses related to those participants who enter DROP
on July 1,2013 or thereafter. GRS, the Plan's actuary, has estimated the impact of both
the reduction in the interest rate paid on the account balance from 8.25% to 7.5%, as well
as the impact of participants leaving their balance in the ERS and earning the 4%
crediting rate, as a reduction of $360,263 in the actuarial accrued liability and $46,050 in
the annual County contribution. However, there will be minimal offsetting costs incurred
in establishing and monitoring the new DROP rate since a new account will need to be
established at the recordkeeper. These costs are estimated to be $10,000 to $15,000
annually. The ERS will incur costs in setting up and transmitting the new file to the
recordkeeper (for those who enter DROP after July 1).
b.
In
addition, the County will need to establish a new Plan account with the recordkeeper to
maintain the DROP distribution balances, those that elect to remain in the Plan and earn
4%, and will incur costs related to the monitoring of those individuals. These costs are
included in the $10,000 to $15,000 noted above.
3. Revenue and expenditure estimates covering at least the next 6 fiscal years.
See response to 2 above. Assuming a reduction of $46,050
in
the annual County
contribution, savings over six years are estimated to be $276,300. Assuming annual
implementation costs of $ 10,000 to $15,000, costs over six years are estimated to be
$60,000 to $90,000. The estimated reduction in the annual contribution will be reflected
in the County's next actuarial valuation and in the FYI5 operating budget.
4. An actuarial analysis through the entire amortization period for each bill that would affect
retiree pension or group insurance costs.
See response to 2 and 3 above.
5. Later actions that may affect future revenue and expenditures if the bill authorizes future
spending.
Not applicable.
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6. An estimate of the staff time needed to implement the bill.
Staff time includes establislunent of the recordkeeping accounts and testing of the setup
with the recordkeeper, estimated at a total of 3 to 4 days for one staff person.
7. An explanation of how the addition of new staff responsibilities would affect other duties.
None.
8. An estimate of costs when an additional appropriation is needed.
Additional recordkeeping costs will be included in future ERS retirement fund budgets.
The administrative budgets of the retirement funds are not appropriated.
9. A description of any variable that could affect revenue and cost estimates.
The cost savings from a reduction to a 7.5% crediting rate relates to new people who
enter DROP after July 1, 2013. GRS made assumptions regarding the financial impact
of this change, as well as the number of participants who would select a distribution
option of leaving their account balance in the ERS to earn the 4% crediting rate, based
on past participation in the DROP. The total dollars saved are dependent on 1) how
many people enter DROP and what their balances are compared to the people who are
currently in DROP and what their balances are and 2) what the ERS investment return
IS.
10. Ranges of revenue or expenditures that are uncertain or difficult to project.
See response to 9 above.
11.
If
a bill is likely to have no fiscal impact, why that is the case.
Not applicable.
12. Other fiscal impacts or comments.
Not applicable.
13. The following contributed to and concurred with this analysis:
Linda Hennan, Executive Director, Montgomery County Employee Retirement Plans;
Lori O'Brien, Office of Management and Budget.
Date
@
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Economic Impact Statement
Expedited Bill- Deferred Retirement Option Plan for Group G Members
Background:
The Bill amends the County's retirement law to reduce the interest rate
earned on DROP account balances for employees entering DROP on or after July
1,
2013,
from
8.25%
to
7.5%.
The Bill also includes an additional distribution option which
allows DROP participants to have their DROP acCO'lmt balance remain in the ERS and
earn
4%
interest annually until they request a distribution or have met the mandatory
distribution requirements. The Bill further provides that there be
an
immediate
distribution to beneficiaries of DROP account balances
in
the ERS for members that have
died.
1. The sources of information, assumptions, and methodologies used.
Section
33·38A
of the County Code.
2. A description of any variable that could affect the economic impact estimates.
1bis
bill has no material economic impact as it only reduces the interest rate earned on
DROP account balances for a limited number ofemployees and makes other technical
changes to the DROP program.
3. The Bill's positive or negative effect,
if
any on employment, spending, saving,
investment, incomes, and property values in the County.
The bill
has
no real effect on employment, spending, saving, investment, incomes or
property values in the County.
4.
If
a Bill
is
likely to have no economic impact, why is that the ease?
The bill
has
no economic impact because it is mostly technical
in
nature, and the interest
rate reduction pertains only to prospective DROP participants entering the program
beginning
in
fiscal year
2014.
5. The following contributed to and concurred with this analysis:
David Platt and
Mike Coveyou, Finance.
~
Jos~ph
F.
'
~1-:
k---0
each, Director
artment of Finance
. 'i
Page
1
of1
@
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GRS
Gabriel Roeder Smirh
&.
Company
Consultants
&.
Actuaries
20
North Clark Street
Suite 2400
Chicago,
n.
60602-5111
312.456.9800 phone
312.456.9801 fax
www.gabrielroeder.com
February 6, 2013
Ms. Linda Herman
Executive Director
Montgomery County Employees' Retirement System
Rockville, Maryland
CONFIDENTIAL
SUbject:
Dear Linda:
Cost Impact of Decreasing the Interest Crediting Rate on the DROP from
8.25 Percent to 7.50 Percent
As requested, we have measured the cost impact to the Montgomery County Employees'
Retirement System (ERS) of decreasing the interest crediting on DROP accounts from 8.25
percent to 7.50 percent for eligible members of Group G (IAFF members).
This change is assumed to impact members that enter the DROP on or after July 1, 2013, and
does not affect current members in DROP.
The main current provisions of the DROP include:
• Members may enter the DROP once minimum age and service requirements have been
met for normal retirement
o
Age 55 with 15 years of credited service or 20 years of credited service at any age
• The following amounts are accumulated
in
the DROP account and are credited with 8.25
percent interest compounded quarterly during participation
in
DROP (7.50 percent
interest under the proposal):
o The accrued benefit frozen at time of DROP
• The DROP account does not collect COLAs granted during the DROP
period
o Member contributions during the DROP period
• The current maximum DROP period is equal to three years.
• Upon exit from DROP, the member receives:
o The monthly benefit amount equal to the frozen accrued benefit at time of DROP
plus the COLA increases granted during the DROP period, plus
o Distribution of the DROP account balance OR
o The member may leave the DROP account balance with ERS (up to the maximum
time allowed by federal law). The account balance after the DROP period will
earn 4.00 percent interest compounded quarterly. (We have not assumed
members will keep their balances with the ERS after the DROP period.)
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Ms. Linda Heman
Montgomery County Employees' Retirement System
Page 2
The illustrated cost impact is shown in Exhibit
I
and includes the following assumptions and
methods:
• The same assumptions and methods as used and disclosed in the actuarial valuation as of
July 1,2012.
• Members will withdraw their DROP account balances at the end of the DROP period.
The data is summarized in Exhibit
II.
All active members of Group G assumed to participate in
the DROP would be impacted by the changes.
Exhibit
III
illustrates the rates of retirement and the DROP assumptions used in this analysis.
Summary of Results
Decreasing the interest crediting on the DROP account would decrease the actuarial liabilities
and contribution requirements of the Plan.
Future actuarial measurements may differ significantly from the current measurements presented
in this cost analysis, 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; and changes in plan provisions, contribution amounts or applicable law.
If any of the provisions, underlying data or assumptions used in this analysis appear to be
incorrect or unreasonable, please let us know as soon as possible so we can update the analysis.
The signing actuaries
are
independent ofthe plan sponsor.
The undersigned are members of the American Academy of Actuaries
(MAAA)
and meet the
Qualification Standards of the American Academy of Actuaries to render the actuarial opinion
herein.
Please let us know ifyou have any questions or would like to discuss the results of this analysis
further.
Sincerely,
~~J:
..­
Lance J.
Senior Consultant
cc:
Weis6.~.,
F.C.A., M.A.A.A.
Amy Williams, A.S.A., M.A.A.A.
Consultant
Mr. Paul Wood, Gabriel, Roeder, Smith, and Company
L:\c3323_MontgomeryCounty\2013\1mpactStatemenl:i\OIJan28\DROPPcriodAnalysis20130130.docx
Gabriel Roeder Smith
&
Company
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Exhibit I
- ­
Valuation liS of JII/:!:,: 111012
Groue G
Total All Plans
Actuarial Accrued Liability
Active Members
DRSl'lDROP Members
Terminated Vested Members
Retired Members
and
Beneficiaries
Total
Actuarial Value of Assets
Unfunded Actuarial Accrued Liability
Funded Ratio (Actuarial Value of Assets)
Annual Gross Normal Cost
Benefits
Expenses of Administration
Total
Tolal ERS
%ofPa:rroll
hnl!ad • DROP Interest Crediting from
8.25~.
to 7.50%
GroupG
TotalERS
% of Payroll
GroupG
Change
Total EitS
%of~roll
$
284,688,964
107,077,222
106,601
$
1,303,031,570
203,738,279
17,468,410
2,244,507,703
3,768,745.962
2,891,435,563
877,310,399
76,7%
$
284,328,701
107,077,222
106,601
$
1,302,671,307
203.738,279
17.468,4\0
2,244,507,703
3.768,385,699
2,891,435,563
876,950,136
76.7%
$
(360,263)
$
(360,263)
(360,263)
(360,263)
O.O"~
$
18,672,743
692,037
19,364,780
$
74,340,043
3,177,300
77,517,343
(21.70%)
(0.93%)
(22.63%)
$
18,650,918
692
1
°37
19,342,955
$
74,3[8,218
3,177,300
77,495,518
(21.70%)
(0.93%)
(22,62%)
$
(21,825)
(21,825)
$
(21,825)
(21,825)
(000"1o)
(000%)
-(0.01%)
Amortization of Unfunded Liability
Annual Contribution Requirement:
County Portion
Employee Portion
Total
County Publ ic Safety Contribution
Amortization
of
Unfunded Liability
Annual Conlribution Requirement
County Portion
Employee Ponion
Total
County Public Safety Contribution
$
20,084,267
$
67,164,489
(19.61%)
Excluding Retirement Incentive
67,140,264
$
20,060,042
$
(19.60%)
$
(24.225)
$
(24,225)
·(0.01%)
$
34,479.250
4,969,797
39,449,047
$
123,224,933
21,456,899
144,681,832
80,528,172
69,161,593
(35,97%)
(6.27".4.)
(42.24%)
$
34,433,200
4,969,797
39,402,997
$
123,178,883
21,456,899
144,635,782
(35.95%)
(6.27%)
(42.22%)
$
(46,050)
$
(46,050)
(46,050)
(46,050)
$
-(0.02%)
(0.00%)
-(0.02%)
$
$
20,084,267
$
(20.19%)
$
80,482,122
Including Retirement IncentIve
$
20,060,042
$
69,137,368
(46,050)
(24,225)
-(0.01%)
(20.18%)
$
(24,225)
$
$
34,479,250
4,969,797
39,449,047
$
125,222,037
21,456,899
146,678,936
80,615,596
(36.56%)
(6.26%)
(42.82%)
S
34,433,200
4,969,797
39,402,997
$
125,175,987
21,456,899
146,632,886
80,569,546
(36.54%)
(6.26%)
(42.80".4.)
$
(46,050)
$
(46,050)
(46,050)
-(0.02%)
(O.OO%)
(46,050)
$
-(0.02%)
$
(46,050)
®
Gabriel Roeder Smith
&:.
Company
 PDF to HTML - Convert PDF files to HTML files
Exhibit II
Non·PuUit Safety
Groul;!A
Goul! H
Valuation as ofJull
J!
2012
PuUit Safe!,r
Groul!E
Grou2F
Goul!G
GRIP
Total
Total All Plans
Active Members
Nu
nil
er
Average Age
Average Service
Total Base Payroll
Contribution Bas
is
PayroR
DRSPIDROP Members
Number
Total Base Payroll
Total Benefits
Terminated Vested Members
Number
Total Benefits
Retired Members and Beneficiaries
Number
Total Benefits
Total Membership
609
55.8
25.3
55,278,025
$
47,681.140
$
963
S5.s
23.1
64,285,054
55,807,312
$
614
43.4
12.1
41,165,673
S
36,461,856
1,040
38.7
13.5
77,946,056
$
72,524,767
8S
8,370,461
S
6,145,388
41
598,299
S
1,036
38.0
12.3
71,842,678
66,872,031
1,102
38.0
8.0
S
69,255,000
63,189,877
$
5,364
46.3
15.0
379,772,487
342,536,983
lOS
10,317,300
6,608,297
20
190
S
S
127
18,687,761
12,7S3,685
413
2,910,410
5,824
203,710,715
11,791
S
S
89
1,011,052
S
109
845,.997
$
27
303,181 $
151,881
S
Gabriel Roeder Smith
&
Company
®
 PDF to HTML - Convert PDF files to HTML files
Exhibit III
Rates of Retirement
Grou~
G
Ultimate
lst Elig. For
Normal Ret
Rate
20.00%
20.00%
20.00%
20.00%
20.00%
20.00%
20.00%
20.00%
30.00%
30.00%
30.00%
40.00%
40.00%
40.00%
40.00%
40.00%
100.00%
3.00%
3.00%
7.00%
7.00%
7.00%
7.00%
10.00%
10.00%
15.00%
15.00%
15.00%
40.00%
40.00%
40.00%
40.00%
40.00%
100.00%
AGe
Under 45
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
Group G DROP Assumptions
Current Provisions Proposed Provisions
70%
70%
Percent Assumed to Participate
8.25%
7.50%
DROP Interest Crediting
Timing ofDROP balance withdrawal End of DROP Period End ofDROP Period
@>
Gabriel Roeder Smith
&
Company