HomeMy WebLinkAboutOCERS Presentation ORANGE COUNTY
a] E IZ*SS
EMPLOYEES RETIREMENT SYSTEM
OCERS - Governance
• Governed by nine member Board (and one safety
member alternate)
• Board has plenary authority over administration
— Determining benefit eligibility
— Defining compensation earnable
— Setting funding policy
— Investing trust assets
• Plan Sponsors and employee representatives
negotiate retirement benefits
ORANGE COL ..
CICE1ZS
Public Employees Pension Reform Act
( PEPRA)
• Enacted in August 2012, effective 1- 1- 13
• Changed retirement formulas for all new
employees/new members of OCERS hired as
of 1- 1- 13
• Changed new employee pensionable
compensation — limited to 120% of Social
Security limits, excluded cash outs of leave,
excluded allowances
ORANGE COUNTY
CCEIZS
PEPRA — Legacy Members
• No change to legacy member benefit formulas
or calculation inputs
• Ability to impose employee payment of % the
normal cost contribution as of 2018
• Clarified pensionable compensation for legacy
members
• No change to OCERS' treatment of
pensionable compensation for legacy
members
ORANGE COL ..
CCE1ZS
OCERS — Benefit Cost
• Employers are categorized into Rate Groups,
depending on benefit formulas
• Sanitation District is Rate Group 3, with Public
Law Library
• Benefits are funded from employer/employee
contributions and investment earnings
— Earnings — approximately 60%
— Contributions — approximately 40%
ORANGE COUNTY
OCERS
Sanitation District Benefits
• 2 . 5% @ 55 plan
— All employees except SPMT Bargaining unit hired on
or after 10/2010; Local 501 hired on or after 7/1/11;
and OCEA on or after 8/1/11
• 1 . 64% @ 57 plan
— Employees in the SPMT Bargaining unit hired on or
after 10/2010; Local 501 hired on or after 7/1/11; and
OCEA on or after 8/1/11
• 2 . 5% @ 67 plan ( PEPRA)
— Employees hired on or after 1-1-13 unless coming
from another public agency in California with public
retirement system membership within 180 days
ORPNGE COVA ' ,
OCER5
Sanitation District — Benefit Cost through
June 30, 2013
• District's unfunded liability - $ 169, 140, 000,
63 . 22% funded ( OCERS is 67 .03%) as of
12/31/11 valuation
• Employer contribution ( 2 . 5% at 55 plan ) -
27 .47% ( 10 . 92% normal and 16 . 55% UAAL)
• Employer contribution ( 1 . 64% at 57 plan ) -
26 . 69% ( 10 . 14% normal and 16 . 55% UAAL)
• Employer contribution ( 2 . 5% @67 plan ) —
24 . 89% (8 . 34% normal and 16 . 552% UAAL)
ORANGE COL ..
CCE1ZS
Sanitation District — Benefit Cost
beginning July 1, 2013
• Employer contribution ( 2 . 5% at 55 plan ) —
31 . 95% ( 11 . 29% normal and 20 . 66% UAAL)
• Employer contribution ( 1 . 64% at 57 plan ) -
30 . 77% ( 10 . 11% normal and 20 . 66 % UAAL)
• Employer contribution ( 2 . 5% @67 plan ) —
29 . 36% (8 . 70% normal and 20 . 66 % UAAL)
OCERS
OCERS — Funding Policy
• The Board, with system actuary, sets
assumptions, amortization periods and
smoothing method
• The earnings assumption is 7 . 25%
• It was carefully considered in 2012 and
lowered from 7 . 75% to 7 . 25%
• The new assumption will be used in the
December 31, 2012 valuation which sets the
FY ` 14/15 rates
ORANGE COUNTY
OCERS
OCERS- Funding Policy
• The board is currently discussing the
amortization ( payment) period for future
liabilities arising from assumption changes
— Considering whether to lower it from 30 to 25
years
• Some stakeholders are asking the board to
consider resetting the amortization period for
current liabilities ( at 22 years as of 12/31/12 )
to 30 years
ORANGE CCUNTv
OCEIZS