HomeMy Public PortalAbout05 May 8, 2019 ExecutiveRIVERSIDE
COUNTY
TRANSPORTATION
COMMISSION
EXECUTIVE COMMITTEE
MEETING AGENDA
TIME: 9:00 a.m.
DATE: Wednesday, May 8, 2019
LOCATION:
MARCH FIELD CONFERENCE ROOM
County of Riverside Administrative Center
4080 Lemon Street, Third Floor, Riverside
� COMMITTEE MEMBERS �
Chuck Washington, County of Riverside, District 3— Chair
Ben J. Benoit, City of Wildomar — Vice Chair
Jan Harnik, City of Palm Desert — Second Vice Chair
Dana Reed, City of Indian Wells — Past Chair
Lloyd White, City of Beaumont
Brian Berkson, City of Jurupa Valley
Lisa Middleton, City of Palm Springs
Michael S. Naggar, City of Temecula
Karen Spiegel, County of Riverside, District 2
V. Manuel Perez, County of Riverside, District 4
Jeff Hewitt, County of Riverside, District 5
k?... AREAS OF RESPONSIBILITY ...,
Reviews and makes final decisions on personnel issues
and office operational matters.
Comments are welcomed by the Committee. If you wish to provide comments to the Committee,
please complete and submit a Speaker Card to the Clerk of the Board.
RIVERSIDE COUNTY TRANSPORTATION COMMISSION
EXECUTIVE COMMITTEE
MEETING AGENDA
9:00 A.M.
WEDNESDAY, MAY 8, 2019
County of Riverside Administrative Center
March Field Conference Room
4080 Lemon Street, Third Floor, Riverside
In compliance with the Brown Act and Government Code Section 54957.5, agenda materials distributed
72 hours prior to the meeting, which are public records relating to open session agenda items, will be
available for inspection by members of the public prior to the meeting at the Commission office, 4080
Lemon Street, Third Floor, Riverside, CA, and on the Commission's website, www.rctc.orq.
In compliance with the Americans with Disabilities Act and Government Code Section 54954.2, if you need
special assistance to participate in an Executive Committee meeting, please contact the Clerk of the Board
at (951) 787-7141. Notification of at least 48 hours prior to meeting will assist staff in assuring that
reasonable arrangements can be made to provide accessibility at the meeting.
1. CALL TO ORDER
2. PUBLIC COMMENTS
3. ADDITIONS/REVISIONS — The Committee may add an item to the Agenda after making a
finding that there is a need to take immediate action on the item and that the item came to
the attention of the Committee subsequent to the posting of the agenda. An action adding
an item to the agenda requires 2/3 vote of the Committee. If there are less than 2/3 of the
Committee members present, adding an item to the agenda requires a unanimous vote.
Added items will be placed for discussion at the end of the agenda.
4. APPROVAL OF THE MINUTES — MARCH 13, 2018
5. CALIFORNIA PUBLIC EMPLOYEES RETIREMENT SYSTEM NET PENSION LIABILITY
Page 1
This item is for the Committee to approve the plan to fund and pay off the Commission's
California Public Employees Retirement System (CaIPERS) net pension liability in
Fiscal Year 2019/20.
6. ADJOURNMENT
AGENDA ITEM 4
MINUTES
RIVERSIDE COUNTY TRANSPORTATION COMMISSION
EXECUTIVE COMMITTEE
SPECIAL MEETING MINUTES
March 13, 2019
1. CALL TO ORDER
The meeting of the Executive Committee was called to order by Chair Chuck Washington
at 8:48 a.m. in the March Field Conference Room at the County of Riverside
Administrative Center, 4080 Lemon Street, Third Floor, Riverside, California, 92501.
ROLL CALL
Commissioners Present Commissioners Absent
Ben J. Benoit
Brian Berkson
Jan Harnik
Jeff Hewitt*
Lisa Middleton
Mike Naggar*
V. Manuel Perez
Dana Reed
Karen Spiegel
Chuck Washington
Lloyd White
*arrived after meeting was called to order
2. PUBLIC COMMENTS
There were no requests to speak from the public.
3. APPROVAL OF MINUTES
M/S/C (Perez/Benoit) to approve the minutes of December 12, 2018 meeting as
submitted.
Abstain: Spiegel
4. ADDITIONS/REVISIONS
There were no additions or revisions to the agenda.
RCTC Executive Committee Special Meeting Minutes
March 13, 2019
Page 2
5. 2019 CLASSIFICATION STUDY RECOMMENDATIONS AND FISCAL YEAR 2019/20
ORGANIZATION RECOMMENDATIONS
Anne Mayer welcomed new Executive Committee Members and provided an overview of
the duties and authority of the Executive Committee.
Anne Mayer provided an overview of the results of the 2019 Classification Study of select
positions performed by Koff & Associates, which recommended the reclassification of
three positions.
At this time, Commissioner Hewitt joined the meeting.
Commissioner Spiegel asked for clarification of the salaries for the reclassified employees,
and Ms. Mayer explained the employees will be moved to the bottom step of the salary
range or given a 5 percent increase.
Commissioner Berkson inquired if the employees currently in the positions being
reclassified were to leave the organization if they would be filled at the reclassified level;
Anne Mayer responded yes, the reclassification is of the position itself, not of the
employee.
Commissioner Spiegel asked how additional new positions would be added if there is a
need, and Ms. Mayer stated new positions would come back to Executive Committee for
approval.
Commissioner Middleton inquired about recruitments for the new positions, and Ms.
Mayer stated the Commission advertises positions using several different avenues such
as through the RCTC.org website, industry websites, and professional associations.
At this time, Commissioner Naggar joined the meeting.
Commissioner Hewitt asked for the total fiscal impact, including PERS costs for
employees. He also inquired about the fee for exiting PERS. Anne Mayer stated the total
employee cost is included in the budget. She noted a presentation on the Commission's
PERS liability was given at the June 2018 Executive Committee and that a copy of that
staff report would be provided to all Executive Committee members.
Anne Mayer discussed adding three new positions with the new budget cycle: An
additional Senior Management Analyst for the Toll Program, an Accounting Supervisor,
and a Financial Analyst. Also with the new budget cycle, Ms. Mayer discussed the
application of a 3.5 percent salary range increase as well as a Consumer Price Index salary
range adjustment structure for future fiscal year budgets. She noted the salary increase
applies to the salary range only and does not result in any immediate or automatic salary
increases. Salary increases must be earned through the current review/merit increase
process.
RCTC Executive Committee Special Meeting Minutes
March 13, 2019
Page 3
Anne Mayer noted if approved, the reclassifications which are recommended actions 1-3
would be effective immediately so as not to have employees working out of class. The
addition of the new positions as well as the salary range adjustments, which are
recommended actions 4-9 will be included with the proposed 19/20 budget and not
effective until July 1, 2019, if approve.
M/S/C (Reed/Harnik) to approve the following actions, with items 1-3 being
effective immediately and items 4-9 being subject to FY 19/20 budget approval:
1) Reclassify Management Analyst — Right of Way on range 35 ($6,211-
$8,385) to Senior Management Analyst — Right of Way on range 43
($7,550-$10,193);
2) Reclassify Management Analyst — Procurement on range 36 ($6,363-
$8,590) to Senior Procurement Analyst on range 43 ($7,550-$10,193);
3) Reclassify Administrative Assistant on range 17 ($4,004-$5,405) to Senior
Administrative Assistant on range 25 ($4,867-$6,570);
4) Approve the addition of a Senior Management Analyst — Toll Program on
range 43 ($7,550-$10,193);
5) Approve the addition of an Accounting Supervisor on range 44 ($7,734-
$10,441);
6) Approve the addition of a Financial Analyst on range 35 ($6,211-$8,385);
7) Apply a 3.5 percent salary range increase in Fiscal Year 2019/20 to all
authorized salary ranges;
8) Approve a Consumer Price Index salary range adjustment structure
subject to Commission approval of future fiscal year budgets; and
9) Direct staff to include these proposed actions in the draft FY 2019/20
operating budget for consideration by the Commission.
Abstain: Hewitt
6. ADJOURNMENT
There being no other items to be considered, the Executive Committee meeting
adjourned at 9:30 a.m.
Respectfully submitted,
Lisa Mobley
Clerk of the Board
AGENDA ITEM 5
RIVERSIDE COUNTY TRANSPORTATION COMMISSION
DATE:
May 8, 2019
TO:
Executive Committee
FROM:
Theresia Trevino, Chief Financial Officer
Michele Cisneros, Deputy Director of Finance
THROUGH:
Anne Mayer, Executive Director
SUBJECT:
California Public Employees Retirement System Net Pension Liability
STAFF RECOMMENDATION:
This item is for the Committee to approve the plan to fund and pay off the Commission's
California Public Employees Retirement System (CaIPERS) net pension liability in
Fiscal Year 2019/20.
BACKGROUND INFORMATION:
In June 2018 staff presented to the Executive Committee a summary report of retirement and
health benefits provided to Commission employees. The summary report provided potential
issues for future consideration and that staff may return to the Executive Committee to present
a strategic plan to fund the Commission's net pension liability.
The Commission's retirement plan contributions are affected by the amortization of the net
pension liability. The amortization over time includes the interest charge on the net pension
liability. Based on the most recent CaIPERS Annual Valuation Report dated June 30, 2017, the
CaIPERS Plan's funded status for Classic and Public Employees' Pension Reform Act (PEPRA)
members are presented below:
PEPRA or New Member
Accrued Liability
$32,776,088
$196,498
Market Value of Assets
24,661,731
186,010
Net Pension Liability
$8,114,357
$10,488
Funded Ratio
75.2%
94.7%
Interest Charge
$7,504,312
$3,181
As a special district, the Commission is not faced with the same financial pressures as its
members, as personnel costs are insignificant to the Commission's overall budget due to lean
staffing, relative to the required tasks and demands. The Commission's CaIPERS plans are
currently funded 75.2 percent and 94.7 percent for Classic and PEPRA members, respectively.
Agenda Item 5
1
Staff recommends the payoff of the aggregate net pension liability balance of $8.1 million for
Classic and PEPRA members in FY 2019/20. The payoff of the $8.1 million net pension liability
results in the interest charge savings of $7.5 million over several years —funding that can be used
for future Commission programs and capital projects. The Commission has available funds for
this disbursement, and staff included this plan in the draft FY 2019/20 budget to be presented to
the Commission at its May meeting. Should the Executive Committee not approve this plan, the
$8.1 million expenditure will be eliminated from the final FY 2019/20 budget to be presented at
the June Commission meeting for adoption.
Financial Information
In Fiscal Year Budget:
Yes
Year:
FY 2019/20
Amount:
$8,125,000
Source of Funds:
2009 Measure A, Transportation
Development Act, Transportation
Uniform Mitigation Fee, and Motorist
Assistance funds and Toll Revenues
Budget Adjustment:
No
GL/Project Accounting No.:
XXX-XX-61001 (various funds and departments)
Fiscal Procedures Approved:
\lfai4,6 ,,14.mnm�O
Date:
04/25/2019
Attachments:
1) Summary of California Public Employee Retirement System Contracts and Related
Benefits —June 2018
2) Actuarial Valuation as of June 30, 2017 for Classic Members
3) Actuarial Valuation as of June 30, 2017 for PEPRA Members
Agenda Item 5
2
ATTACHMENT 1
RIVERSIDE COUNTY TRANSPORTATION COMMISSION
DATE:
June 13, 2018
TO:
Executive Committee
FROM:
Beth Gutierrez, Human Resources Administrator
Theresia Trevino, Chief Financial Officer
THROUGH:
Anne Mayer, Executive Director
SUBJECT:
Summary of California Public Employee Retirement System Contracts and
Related Benefits
STAFF RECOMMENDATION:
This item is for the Committee to receive and file the summary of California Public Employee
Retirement System (CaIPERS) contracts and related benefits.
BACKGROUND INFORMATION:
At the April 11 Executive Committee meeting, staff committed to provide a report regarding the
Commission's retirement benefits. This report is a summary of the retirement benefits under
defined benefit plans, health benefits, and postemployment benefits other than pensions
(OPEB); financial disclosures regarding the funding of these benefits; pending legislation that may
impact these benefits; and potential issues for future consideration.
Attachment 1 provides an overview of the history, governance, and investments and fund
management of and benefits provided by CaIPERS.
Retirement Benefits under Defined Benefit Plans
CaIPERS administers a defined benefit plan that provides public employee retirement benefits
based upon a contractual agreement with the Riverside County Transportation Commission
(RCTC). Under this plan, retirement benefits are calculated using a member's years of service
credit, age at retirement, and final compensation (average salary for a defined period of
employment), and the retirement formulas as outlined in the contract between CaIPERS and
RCTC.
RCTC provides all regular and probationary employees with retirement benefits through CaIPERS.
The California Public Employees' Pension Reform Act (PEPRA), which became effective in January
2013, changed the application of CaIPERS retirement and health benefits. As a result, there are
two types of memberships dependent upon the employee's original hire date:
Agenda Item 5
3
" C l a s s i c M e m b e r s i n c l u d e a n y n e w e m p l o y e e e n r o l l e d i n t o t h e C a I P E R S s y s t e m p r i o r t o
J a n u a r y 1 , 2 0 1 3 , a n d w h o d o e s n o t h a v e m o r e t h a n a 6 - m o n t h b r e a k f r o m m e m b e r s h i p i f
m o v i n g b e t w e e n P E R S e m p l o y e r s .
" P E P R A o r N e w M e m b e r s i n c l u d e a n e w e m p l o y e e b r o u g h t i n t o t h e C a I P E R S s y s t e m f o r
t h e f i r s t t i m e o n o r a f t e r J a n u a r y 1 , 2 0 1 3 , a n d w h o h a s n o p r i o r m e m b e r s h i p i n a n y
C a l i f o r n i a p u b l i c r e t i r e m e n t s y s t e m . A n e w h i r e w o u l d b e c o n s i d e r e d a N e w M e m b e r i f
t h e y h e l d p r i o r C a l i f o r n i a p u b l i c r e t i r e m e n t s y s t e m m e m b e r s h i p b u t h a d a b r e a k i n s e r v i c e
g r e a t e r t h a n s i x m o n t h s .
R C T C h a s c o n t r a c t e d f o r r e t i r e m e n t b e n e f i t s t h r o u g h C a I P E R S s i n c e S e p t e m b e r 3 , 1 9 7 7 . O v e r t h e
y e a r s , t h e C o m m i s s i o n h a s e x e c u t e d m i n o r a m e n d m e n t s t o t h e c o n t r a c t i n o r d e r t o r e m a i n
c u r r e n t w i t h P u b l i c E m p l o y e e R e t i r e m e n t L a w ( P E R L ) a s w e l l a s P E P R A . T h e b e n e f i t s f o r b o t h
m e m b e r s h i p s a r e o u t l i n e d b e l o w :
C l a s s i c M e m b e r B e n e f i t s
P E P R A o r N e w M e m b e r B e n e f i t s
R e t i r e m e n t F o r m u l a
2 . 7 % @ 5 5 ( e a r l i e s t r e t i r e m e n t a t 2 % @ 6 2 ( e a r l i e s t r e t i r e m e n t a t
a g e 5 0 w i t h a p r o r a t e d f o r m u l a ) . a g e 5 7 w i t h a p r o r a t e d f o r m u l a ) .
F i n a l C o m p e n s a t i o n P e r i o d
H i g h e s t a v e r a g e c a l c u l a t i o n o v e r
t h e l a s t 1 2 - m o n t h p e r i o d .
H i g h e s t a v e r a g e c a l c u l a t i o n o v e r
t h e l a s t 3 6 - m o n t h p e r i o d .
C o s t o f L i v i n g A l l o w a n c e
( C O L A )
U p t o a 3 % C O L A : B a s e d u p o n C o n s u m e r P r i c e I n d e x a n d p a i d i n M a y o f
t h e 2 ' y e a r o f r e t i r e m e n t .
P r e - R e t i r e m e n t D e a t h
B e n e f i t
T h e s u r v i v i n g s p o u s e o f a m e m b e r w h o h a s a t t a i n e d t h e m i n i m u m a g e
f o r v o l u n t a r y s e r v i c e r e t i r e m e n t i n h i s o r h e r l a s t e m p l o y m e n t p r e c e d i n g
d e a t h m a y e l e c t t o r e c e i v e a n a l l o w a n c e e q u a l t o t h e a m o u n t t h a t t h e
m e m b e r w o u l d h a v e r e c e i v e d i n r e t i r e m e n t .
1 9 5 9 S u r v i v o r P o s t -
R e t i r e m e n t A l l o w a n c e
( L e v e l T h r e e )
T h e s u r v i v i n g s p o u s e o f a m e m b e r c o n t i n u e s t o r e c e i v e a n a l l o w a n c e
e q u a l t o t h e a m o u n t t h a t t h e m e m b e r r e c e i v e d i n r e t i r e m e n t .
U n u s e d S i c k L e a v e C r e d i t
A m e m b e r m a y c o n v e r t h i s o r h e r u n u s e d s i c k l e a v e t o s e r v i c e c r e d i t a t a
r a t e o f 8 h o u r s p e r d a y .
I n d u s t r i a l D i s a b i l i t y
R e t i r e m e n t
A n y l o c a l m e m b e r i n c a p a c i t a t e d f o r t h e p e r f o r m a n c e o f d u t y a s t h e
r e s u l t o f a n i n d u s t r i a l d i s a b i l i t y s h a l l b e r e t i r e d f o r d i s a b i l i t y r e g a r d l e s s o f
a g e o r a m o u n t o f s e r v i c e .
P E P R A c a p s t h e a n n u a l p e n s i o n a b l e c o m p e n s a t i o n u s e d t o c a l c u l a t e f i n a l c o m p e n s a t i o n f o r N e w
M e m b e r s . T h i s c a p i s t i e d t o a c o m p e n s a t i o n c a p s e t b y t h e I n t e r n a l R e v e n u e S e r v i c e f o r S o c i a l
S e c u r i t y B e n e f i t s , r e f e r r e d t o a s t h e 4 3 0 ( b ) l i m i t . A d j u s t m e n t s t o t h e c a p s a r e p e r m i t t e d a n n u a l l y
b a s e d o n c h a n g e s t o t h e C o n s u m e r P r i c e I n d e x f o r A l l U r b a n C o n s u m e r s . M e m b e r c o n t r i b u t i o n s
w i l l s t o p w h e n t h e m e m b e r ' s a c t u a l e a r n i n g s r e a c h t h e c o n t r i b u t i o n l i m i t s .
M e m b e r R e t i r e m e n t C o n t r i b u t i o n s
M e m b e r c o n t r i b u t i o n r a t e s a r e s e t b y s t a t u t e a n d c a n v a r y b y m e m b e r s h i p c a t e g o r y
( m i s c e l l a n e o u s o r s a f e t y ) a n d b y b e n e f i t f o r m u l a . M e m b e r c o n t r i b u t i o n r a t e s c a n c h a n g e b a s e d
o n l e g i s l a t i v e l a w c h a n g e s ; h o w e v e r , t h e r i s e a n d f a l l o f t h e c o n t r i b u t i o n p e r c e n t a g e s d o e s n o t
A g e n d a I t e m 5
4
affect member -accrued retirement benefits that are guaranteed by law. RCTC employees, as
miscellaneous employees, contribute a percentage of their salary throughout their active
membership. Currently, RCTC Classic Member employees contribute 8 percent of their annual
salary, and PEPRA or New Members contribute 7.25 percent of their annual salary representing
50 percent of the total normal cost of the benefit plan in which they participate.
Employer Retirement Contributions
On average, schools and other public agencies contribute 12.7 percent of payroll for their
employees' retirement benefits; however, the rates can increase if CaIPERS' investments perform
unfavorably and decrease if CaIPERS' investments perform favorably. According to CaIPERS, "The
School Pool contribution rate is affected by the investment return of a given fiscal year in the
second year that follows" and "Local public agency contribution rates are affected by the
investment return of a given fiscal year in the third fiscal year that follows". CaIPERS' earnings
and losses are averaged over 15 years to prevent extreme changes in employers' contribution
rates.
Employers' contributions and stated unfunded liabilities are calculated using the actuarial
present value and an assumption that the fund will continually grow at 7.5 percent. However, if
an employer seeks to leave CaIPERS, it will be required to immediately payoff the undisclosed
current market value of the unfunded liabilities, which only assumes 2.56 percent growth.
The employer normal cost contribution rates as a percentage of annual salaries for Fiscal Year
2016/17 compared to FY 2017/18 are presented in the following table:
Employer Contribution Rates
Classic Members PEPRA or New Members
FY 2016/17
14.012
7.283%
FY 2017/18
14.053
7.262%
FY 2018/19
Pension Plan Financial Disclosures
14.719
7.654%
The Commission's comprehensive annual financial report (CAFR) includes notes to the financial
statements regarding the CaIPERS pension plan.
Annual required contributions consist of (1) normal cost applied to reported payroll and (2) the
employer payment toward the unfunded accrued liability (UAL) based on an amortization
Agenda Item 5
5
schedule; the employer payments toward the UAL includes interest paid on the UAL balance or
principal. The UAL represents the net pension liability', which is calculated as:
Total Pension Liability
Based on an actuarial valuation performed at least every
two years, this represents the present value of projected
benefit payments to be provided by the plan to current
active and inactive employees that is attributed to those
employee's past period of service.
Less: Pension Plan's Fiduciary Net Position Represents plan's market value of assets
Net Pension Liability (or UAL) Represents the plan's unfunded pension liability or
principal balance owed, similar to bonded indebtedness.
Contributions made during FY 2016/17 and the net pension liability as of June 30, 2017, are
presented in the following table:
FY 2016/17
Contributions
$1,238,891 (Employer)
$432,377 (Employee)
Net Pension Liability
$7,639,639
An additional disclosure in the notes to the financial statements is the sensitivity of the
proportionate share of the net pension liability to changes in the discount rate used to measure
the total pension liability. The total pension liability of $7,639,639, based on a June 30, 2015
actuarial valuation, used a discount rate of 7.65 percent. A one percent decrease in the discount
rate to 6.65 percent results in a net pension liability of $11,481,801, while a one percent increase
in the discount rate to 8.65 percent results in a net pension liability of $4,464,283.
The CAFR also includes required supplementary information regarding the Commission's
proportionate share of the net pension liability and pension contributions (Attachment 2). As of
June 30, 2017, the plan is 74 percent funded.
Health Benefits
Since March 1, 1978, RCTC has provided employees access to group health insurance through the
Public Employee's Medical and Hospital Care Act (PEMHCA). The CaIPERS Board of
Administration administers the PEMHCA health benefits program and determines the benefits
design, including any co -pays and deductibles, providers, and premiums. RCTC pays the cost of
1 The net pension liability of employers to employees for the defined benefit plan is now recorded as a liability on
the Commission's government -wide financial statements in accordance with Governmental Accounting Standards
Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions —An Amendment of GASB
Statement No. 27. Prior to the required implementation date for fiscal years beginning after June 15, 2014 (FY
2014/15 for the Commission), government employers did not record this liability but disclosed it in the notes to the
financial statements —creating accountability and transparency issues. As a result of the recession, public awareness
and debate are heightened regarding the underfunding of most public defined benefit pension plans and strain on
government budgets due to increased contribution costs.
Agenda Item 5
6
medical insurance to CaIPERS at the rate approved by the Executive Committee and as set forth
in a resolution adopted in accordance with Government Code Section 22892(a). RCTC has
provided $600 as its monthly employer contribution toward employee's health premiums since
March 2005 (Resolution No. 05-004). At the April meeting, the Executive Committee approved
an increase in the monthly employer contribution to $750 effective September 1, 2018. At the
June Commission meeting, adoption of Resolution No. 18-004 related to the monthly employer
contribution increase is the subject of a recommendation included in the adoption of the
FY 2018/19 budget.
CaIPERS currently offers health maintenance organization (HMO) and preferred provider
organization (PPO) medical plans. RCTC employee participation in the medical plans is
summarized below:
•
•
•
OPEB
71 percent of RCTC employees are enrolled in HMO plans administered by Blue Shield of
California, Anthem Blue Cross, United Healthcare, Health Net, and Kaiser Permanente.
18 percent of RCTC staff are enrolled in PPO plans called "PERS Select," "PERS Care," and
"PERS Choice," which are administered by Anthem Blue Cross.
11 percent of RCTC staff are not enrolled in medical plans through RCTC/CaIPERS.
RCTC provides retirement health benefits based upon the PERL Vesting Schedule G.C. 22893. To
be eligible for retirement health benefits, an employee's retirement from RCTC must be effective
within 120 days of the employee's separation from employment with RCTC and the employee
must be receiving a retirement allowance from CaIPERS resulting from the employee's service
with RCTC. To determine the monthly amount RCTC will pay toward an employee's medical
premium, the retiree must have at least ten years of CaIPERS membership and at least five of
those years of service must have been performed entirely at RCTC. Retired employees who
satisfy the preceding requirements are eligible to continue health coverage offered by CaIPERS.
The level of benefits varies depending upon the employee's date of employment with RCTC.
The benefit for these retirees will be determined, in part, by the retiree's years of service with a
CaIPERS employer and, in part, by a contribution level based on a weighted average of the
premiums of the four largest medical benefit plans offered by CaIPERS. The amount paid by RCTC
toward the employee's monthly health premium is determined by the 100/90 State Annuitant
Contribution schedule as follows:
Agenda Item 5
7
Credited Years Applicable
of PERS Service Percentage
10
50
11
55
12
60
13
65
14
70
15
75
16
80
17 85
18
90
19
95
20 or more
100
For 2018, the 100/90 State Annuitant Contribution towards retiree medical premiums is:
Contribution Rates by Premium Tier
Employee Only
$725
Employee + 1
$1,377
Family
$1,766
Attachment 3 provides a history of the 100/90 State Annuitant Contribution rates and percent
change.
In 2007, the Commission entered into an agreement with the California Employers' Retiree
Benefit Trust (CERBT) administered by CaIPERS to establish a trust to fund the Commission's OPEB
benefits. Previously, the Commission paid OPEB obligations on a pay-as-you-go basis.
OPEB Financial Disclosures
The Commission's CAFR also includes notes to the financial statements regarding RCTC's OPEB.
Annual required contributions are based on an actuarially determined contribution comprised of
normal cost and amortization of the unfunded actuarial accrued liability, or net OPEB liabilityz;
the employer payment toward the net OPEB liability includes interest paid on the liability balance
or principal. The net OPEB liability is calculated as:
z The net OPEB liability of employers to employees for the OPEB plan is now recorded as a liability on the
Commission's government -wide financial statements in accordance with GASB Statement No. 75, Accounting and
Financial Reporting for Postemployment Benefits Other Than Pensions. In FY 2016/17, the Commission early
implemented GASB No. 75 prior to its required implementation date for fiscal years beginning after June 15, 2017.
Before implementation, government employers did not record this liability but disclosed it in the notes to the
financial statements —creating accountability and transparency issues similar to those noted regarding public
pension plans.
Agenda Item 5
8
Total OPEB Liability
Based on an actuarial valuation performed at least every
two years, this represents the present value of projected
benefit payments to be provided by the plan to current
active and inactive employees that is attributed to those
employee's past period of service.
Less: OPEB Plan's Fiduciary Net Position
Represents plan's market value of assets
Net OPEB Liability
Represents the plan's unfunded OPEB liability or principal
balance owed, similar to bonded indebtedness.
Contributions made during FY 2016/17 to the OPEB plan trust and the net OPEB liability as of
June 30, 2017, are presented in the following table:
FY 2016/17
Contributions
Net OPEB Liability
$666,000 (100% Employer
$676,000
An additional disclosure in the notes to the financial statements is the sensitivity of the
proportionate share of the net OPEB liability to changes in the discount rate and the healthcare
cost trend rate used to measure the total OPEB liability. The following table summarizes the
impact of a 1 percent change in these rates.
Discount Rate Healthcare Trend Rate
Net OPEB Liability % Net OPEB Liability
1% Decrease
$1,595,000 5.5%-6.5%
Current Rate 6.00% L $676,000
1% Increase 7.00% ($68,000)
5.00%
6.5%-7.5%
($98,000)
$676,000
7.5%-8.5% $1,623,000
The CAFR also includes required supplementary information regarding the Commission's
proportionate share of the net OPEB liability and OPEB contributions (Attachment 2). As of
June 30, 2017, the plan is 89 percent funded.
Pending Legislation
At the June Commission meeting, staff will provide information on Assembly Bill 1912 (AB 1912).
This bill would make member agencies of a joint powers authority (JPA) jointly and severally liable
for JPA public retirement obligations.
• It would prohibit CaIPERS from contracting with a JPA unless member agencies agree to
be liable.
• It entitles CaIPERS to place a lien on assets of the JPA and member agencies.
• It specifies if the parties do not enter into an agreement, the member agencies would
assume JPA retirement obligations.
Agenda Item 5
9
Due to deep concern over the financial liability AB 1912 poses to the Commission, as well as
potential harmful impacts on the Commission's bond marketability and its credit rating, staff is
recommending an "oppose" position on AB 1912.
These are additional Senate bills (SB) currently under consideration that may impact the
Commission's retirement benefits:
• SB 1031 proposes to permit employers to freeze COLAs for retirees if the plan is not 80
percentfunded3.
o This bill would prohibit a public retirement system from making a COLA to any
allowance payable to, or on behalf of, a person retired under the -system who
becomes a new member on or after January 1, 2019.
o It would eliminate the benefit to any survivor or beneficiary of that retired
member for the unfunded actuarial liability of that system if greater than
20 percent.
o It would require that the determination of unfunded actuarial liability be based on
a specified financial report and would apply the prohibition on COLAs, if any, to
the calendar year following the fiscal year upon which the report is based.
• SB 1032 proposes to make it easier for employers to exit CaIPERS without paying
termination fees4.
o This bill would authorize a contracting agency to terminate its contract with the
board at the agency's will and would not require the contracting agency to fully
fund the board's pension liability upon termination of the contract.
o It would authorize the board to reduce the member's benefits in the terminated
agency pool by the percentage of liability unfunded.
o It would authorize a contracting agency who terminates its contract with the
board to transfer the assets accumulated in the system to a pension provider
designated by the contracting agency.
• SB 1033 proposes to shift the burden of increased pension costs to the last employer that
hired the employees.
o This bill would require that an agency participating in CaIPERS who increases the
compensation of a member previously employed by a different agency bear all
actuarial liability for the action, if it results in an increased actuarial liability beyond
what would have been reasonably expected for the member.
• SB 1149 proposes to offer employees the option of choosing a more portable 401(k) plan
and opt out of Cal PERS'.
o This bill would create a new optional defined contribution plan for new public
employees who first begin employment in a miscellaneous or industrial
3 Karol K. Denniston, "Pension Pain", The Bill is Due: Now What? Infrastructure, Pensions and the Environment,
April 24, 2018
41bid.
s Ibid.
61bid.
Agenda Item 5
10
classification on or afterJanuary 1, 2020, and who were not members of any public
retirement system prior to that date.
The California Rule
Finally, PEPRA represents an initial major effort in California related to pension reform, and it was
primarily limited to new hires with no vested rights. Certain elements related to PEPRA have
been challenged in the state courts. These cases are now pending before the California Supreme
Court, and it is possible that the "California Rule" related to individual vested rights may be
modified.
As a result of various prior state court rulings, including the Long Beach decision in 1955, it has
been the prevalent belief that a pension benefit offered upon hire becomes a vested right that is
protected by contract law. Therefore, it cannot be reduced unless it is offset by a comparable
new benefit that would eliminate any cost savings. This limitation has been an impediment to
legal pension reform urged by many groups in order to mitigate the public pension crisis and
impact on government services. Trial and appellate courts that have heard the cases pending
before the state Supreme Court have found that current employees have a vested right to a
"reasonable pension" and not the one offered upon hire. Should the high court affirm the lower
court decisions, the "California Rule" would likely be reshaped via legislative changes and there
would be no significant pension funding relief in the short-term.
Potential Issues for Future Consideration
As noted earlier, the proposed FY 2018/19 budget will be presented at the June Commission
meeting for adoption. Although the Commission's toll operations are a service, the budget
continues to demonstrate that the Commission is a project -driven agency. Unlike its member
cities and the County of Riverside, personnel costs are insignificant in the FY 2018/19 budget of
approximately $881 million as noted in the table below:
Amount
of Budget % of Personnel Costs
Total Personnel Costs
$10,354,700
1.17%
100
Benefit Costs included in Personnel Costs:
Retirement
1,553,500
0.20%
15.00
Health
635,000
0.07%
6.13%
OPEB
549,000
0.06% 5.30%
As a special district, the Commission is not currently faced with the same financial pressures as
its members; however, staff is keenly aware of the statewide pension sustainability conversation
taking place as well as pending legislative and legal issues as they may have a direct and/or
indirect impact on the Commission in the long-term. Some of the issues that staff is monitoring
and may present to the Executive Committee for strategic planning at a future meeting are as
follows:
Agenda Item 5
11
" T h e 2 0 0 9 M e a s u r e A i s t h e m a j o r s o u r c e o f f u n d i n g f o r t h e C o m m i s s i o n ' s p r o j e c t s a n d
p r o g r a m s , a n d i t e x p i r e s o n J u n e 3 0 , 2 0 3 9 . S h o u l d t h e C o u n t y ' s e l e c t o r a t e n o t a p p r o v e
a n o t h e r t r a n s p o r t a t i o n s a l e s t a x m e a s u r e , t h e C o m m i s s i o n m a y n e e d t o r e d u c e t h e s t a f f
s i z e d u e t o a c h a n g e i n i t s o p e r a t i o n s . H o w e v e r , t h e C o m m i s s i o n ' s o b l i g a t i o n s t o f u n d
r e t i r e m e n t a n d O P E B b e n e f i t s w i l l c o n t i n u e . I n r e c e n t y e a r s t h e r e h a s b e e n i n c r e a s e d
a t t e n t i o n t o s m a l l e r s p e c i a l d i s t r i c t s o r g o v e r n m e n t a l a g e n c i e s t h a t h a v e h a d t o t e r m i n a t e
t h e i r c o n t r a c t s w i t h C a I P E R S a t a v e r y h i g h c o s t . T h e s e t e r m i n a t i o n s h a v e b e e n r e l a t e d t o
l o s s o f f u n d i n g s o u r c e s o r i n a b i l i t y t o s u s t a i n r e q u i r e d c o n t r i b u t i o n s . A s a r e s u l t , r e t i r e e s
r e c e i v i n g r e t i r e m e n t b e n e f i t s h a v e b e e n i m p a c t e d b y r e d u c e d p a y m e n t s .
" A m o n g m a n y f a c t o r s , r e t i r e m e n t p l a n c o n t r i b u t i o n s a r e a f f e c t e d b y t h e a m o r t i z a t i o n o f
t h e U A L o r n e t p e n s i o n l i a b i l i t y . T h e a m o r t i z a t i o n s c h e d u l e o v e r t i m e i n c l u d e s a n i n t e r e s t
c h a r g e o n t h e n e t p e n s i o n l i a b i l i t y ; t h e r e f o r e , t h e s u m o f t h e e m p l o y e r p a y m e n t s t o w a r d
t h e U A L c o n s i s t s o f a m o r t i z a t i o n o f t h e n e t p e n s i o n l i a b i l i t y p r i n c i p a l b a l a n c e a n d t h e
i n t e r e s t o r f i n a n c e c h a r g e . T h e C o m m i s s i o n c o u l d p a y o f f t h e n e t p e n s i o n l i a b i l i t y b a l a n c e
o r i t c a n a p p l y a " f r e s h s t a r t " t o t h e a m o r t i z a t i o n s c h e d u l e f o r t h e U A L r e l a t e d t o t h e
C l a s s i c M e m b e r s p l a n ' . T h i s " f r e s h s t a r t " w o u l d c o l l a p s e a l l t h e a m o r t i z a t i o n b a s e s i n t o
a s i n g l e b a s e t o r e a m o r t i z e t h e U A L . S o m e o f t h e " f r e s h s t a r t " o p t i o n s a r e p r e s e n t e d
b e l o w :
A n n u a l P a y m e n t
1 , 2 9 0 , 0 0 0
1 , 4 0 0 , 4 0 0
I 3 a n , 0 0 0
4 4 Q U 4 U
2 0 4 , 4 0 0
1 3 5 7 9 1 1 1 3 1 5 1 7 1 9 2 1 2 3 2 5 2 7 2 9
t C u r r e n t S c h e d u l e - T o t a l P a y m e r n s = 1 5 , 5 2 5 , 1 1 4
i p - 1 9 Y e a F r e . h S t a r t - T o t a l P a y m e n t s = 1 5 , 5 3 2 , 6 3 7
# 1 4 Y e a F r e s h S t a r t - T o t a l P a y m e r n s = 1 3 , 1 2 1 , 9 9 3
2 1 Y e a L e w e l D o l l a r F r e h S t a r t - T o t a l P a p , m e n t s = 1 5 , 4 6 4 , 5 5 4
P e r t h e 2 0 1 6 a c t u a r i a l v a l u a t i o n , t h e r e a r e 9 3 C l a s s i c M e m b e r s ( c o n s i s t i n g o f a c t i v e , t r a n s f e r r e d , s e p a r a t e d , a n d
r e t i r e d e m p l o y e e s ) c o m p a r e d t o 4 N e w M e m b e r s . T h e a m o r t i z a t i o n o f t h e N e w M e m b e r s ' U A L i s n o t m a t e r i a l t o
t h e a n a l y s i s .
A g e n d a I t e m 5
1 2
Staff will continue to maintain an awareness of matters that impact the Commission's ability to
fulfill its benefit obligations and present updates to the Executive Committee.
Fiscal Impact
This report is intended as a summary of retirement and health benefits provided by the
Commission. Staff is not proposing any actions by the Executive Committee; however, legislative
developments and other issues for future strategic consideration that may have a financial
impact may be presented to the Executive Committee at a later date.
Attachments:
1) PERS Overview
2) Financial Information Related to Net Pension/OPEB Liabilities and Pension/OPEB
contributions
3) 100/90 State Annuitant Contribution Rates
Agenda Item 5
13
ATTACHMENT 2
i
Ca1PERS
August 2018
California Public Employees' Retirement System
Actuarial Office
P.O. Box 942709
Sacramento, CA 94229-2709
TTY: (916) 795-3240
(888) 225-7377 phone — (916) 795-2744 fax
www.calpers.ca.gov
Miscellaneous Plan of the Riverside County Transportation Commission
(Ca1PERS ID: 1431537449)
Annual Valuation Report as of June 30, 2017
Dear Employer,
As an attachment to this letter, you will find a copy of the June 30, 2017 actuarial valuation report of the pension
plan.
Because this plan is in a risk pool, the following valuation report has been separated into two sections:
• Section 1 contains specific information for the plan including the development of the current and projected
employer contributions, and
• Section 2 contains the Risk Pool Actuarial Valuation appropriate to the plan as of June 30, 2017.
Section 2 can be found on the Ca1PERS website at (www.calpers.ca.gov). From the home page, go to "Forms &
Publications" and select "View All'. In the search box, enter "Risk Pool' and from the results list download the
Miscellaneous or Safety Risk Pool Actuarial Valuation Report as appropriate.
Your June 30, 2017 actuarial valuation report contains important actuarial information about your pension plan at
Ca1PERS. Your assigned Ca1PERS staff actuary, whose signature appears in the Actuarial Certification section on page
1, is available to discuss the report with you after August 1, 2018.
The exhibit below displays the minimum employer contributions, before any cost sharing, for Fiscal Year 2019-20
along with estimates of the required contributions for Fiscal Year 2020-21. Member contributions other than cost
sharing (whether paid by the employer or the employee) are in addition to the results shown below. The employer
contributions in this report do not reflect any cost sharing arrangements you may have with your
employees.
Required Contribution
Fiscal Year
Employer Normal Employer Payment of
Cost Rate Unfunded Liability
2019-20 15.388% $776,076
Projected Results
2020-21 16.3 % $587, 000
The actual investment return for Fiscal Year 2017-18 was not known at the time this report was prepared. The
projections above assume the investment return for that year would be 7.25 percent. If the actual investment
return for Fiscal Year 2017-18 differs from Z25 percent, the actual contribution requirements for the
projected years will differ from those shown above.
Moreover, the projected results for Fiscal Year 2020-21 assume that there are no future plan changes, no further
changes in assumptions other than those recently approved, and no liability gains or losses. Such changes can have a
significant impact on required contributions. Since they cannot be predicted in advance, the projected employer
results shown above are estimates. The actual required employer contributions for Fiscal Year 2020-21 will be
provided in next year's report.
For additional details regarding the assumptions and methods used for these projections please refer to the
"Projected Employer Contributions" in the "Highlights and Executive Summary" section.
The "Risk Analysis" section of the valuation report also contains estimated employer contributions in future years
under a variety of investment return scenarios.
14
Miscellaneous Plan of the Riverside County Transportation Commission
(CaIPERS ID: 1431537449)
Annual Valuation Report as of June 30, 2017
Page 2
Changes since the Prior Year's Valuation
At its December 2016 meeting, the CaIPERS Board of Administration lowered the discount rate from 7.50 percent to
7.00 percent using a three-year phase -in beginning with the June 30, 2016 actuarial valuations. The minimum
employer contributions for Fiscal Year 2019-20 determined in this valuation were calculated using a discount rate of
7.25 percent. The projected employer contributions on Page 5 are calculated under the assumption that the discount
rate will be lowered to 7.00 percent next year as adopted by the Board.
On December 19, 2017, the CaIPERS Board of Administration adopted new actuarial assumptions based on the
recommendations in the December 2017 CaIPERS Experience Study and Review of Actuarial Assumptions. This study
reviewed the retirement rates, termination rates, mortality rates, rates of salary increases and inflation assumption
for Public Agencies. These new assumptions are incorporated in your actuarial valuations and will impact the required
contribution for FY 2019-20. In addition, the Board adopted a new asset portfolio as part of its Asset Liability
Management. The new asset mix supports a 7.00 percent discount rate. The reduction of the inflation assumption
will be implemented in two steps in conjunction with the decreases in the discount rate. For the June 30, 2017
valuation an inflation rate of 2.625 percent was used and a rate of 2.50 percent will be used in the following
valuation.
The CaIPERS Board of Administration has adopted a new amortization policy effective with the June 30, 2019
actuarial valuation. The new policy shortens the period over which actuarial gains and losses are amortized from 30
years to 20 years with the payments computed using a level dollar amount. In addition, the new policy removes the
5-year ramp -up and ramp -down on UAL bases attributable to assumption changes and non -investment gains/losses.
The new policy removes the 5-year ramp -down on investment gains/losses. These changes will apply only to new
UAL bases established on or after June 30, 2019.
For inactive employers the new amortization policy imposes a maximum amortization period of 15 years for all
unfunded accrued liabilities effective June 30, 2017. Furthermore, the plan actuary has the ability to shorten the
amortization period on any valuation date based on the life expectancy of plan members and projected cash flow
needs to the plan. The impact of this has been reflected in the current valuation results.
The CaIPERS Board of Administration adopted a Risk Mitigation Policy which is designed to reduce funding risk over
time. This Policy has been temporarily suspended during the period over which the discount rate is being lowered.
More details on the Risk Mitigation Policy can be found on our website.
Besides the above noted changes, there may also be changes specific to the plan such as contract amendments and
funding changes.
Further descriptions of general changes are included in the "Highlights and Executive Summary" section and in
Appendix A, "Statement of Actuarial Data, Methods and Assumptions "of the Section 2 report.
We understand that you might have a number of questions about these results. While we are very interested in
discussing these results with your agency, in the interest of allowing us to give every public agency their results, we
ask that you wait until after August 1 to contact us with actuarial related questions.
If you have other questions, please call our customer contact center at (888) CaIPERS or (888-225-7377).
Sincerely,
SCOTT TERANDO
Chief Actuary
15
Actuarial Valuation
as of June 301 2017
for the
Miscellaneous Plan
of the
Riverside County Transportation
Commission
(CaIPERS ID: 1431537449)
Required Contributions
for Fiscal Year
July 1, 2019 - June 301 2020
Table of Contents
Section 1 - Plan Specific Information
Section 2 - Risk Pool Actuarial Valuation Information
Section 1
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Plan Specific Information
for the
Miscellaneous Plan
of the
Riverside County Transportation
Commission
(CaIPERS ID: 1431537449)
(Rate Plan: 1238)
Table of Contents
Actuarial Certification 1
Highlights and Executive Summary
Introduction 3
Purpose of Section 1 3
Required Employer Contributions 4
Plan's Funded Status 5
Projected Employer Contributions 5
Changes Since the Prior Year's Valuation 6
Subsequent Events 6
Assets and Liabilities
Breakdown of Entry Age Normal Accrued Liability 8
Allocation of Plan's Share of Pool's Experience/Assumption Change 8
Development of Plan's Share of Pool's MVA 8
Schedule of Plan's Amortization Bases 9
Amortization Schedule and Alternatives 10
Employer Contribution History 12
Funding History 12
Risk Analysis
Analysis of Future Investment Return Scenarios 14
Analysis of Discount Rate Sensitivity 15
Volatility Ratios 16
Hypothetical Termination Liability 17
Participant Data 18
List of Class 1 Benefit Provisions 18
Plan's Major Benefit Options 20
(CY) FIN PROCESS CONTROL ID: 523032
(PY) FIN 1P9ROCESS CONTROL ID: 503075
REPORT ID: 114674
CALPERS ACTUARIAL VALUATION - June 30, 2017
Miscellaneous Plan of the Riverside County Transportation Commission
CaIPERS ID: 1431537449
Actuarial Certification
Section 1 of this report is based on the member and financial data contained in our records as of June 30, 2017
which was provided by your agency and the benefit provisions under your contract with CaIPERS. Section 2 of
this report is based on the member and financial data as of June 30, 2017 provided by employers participating
in the Miscellaneous Risk Pool to which the plan belongs and benefit provisions under the CaIPERS contracts for
those agencies.
As set forth in Section 2 of this report, the pool actuaries have certified that, in their opinion, the valuation of
the risk pool containing your Miscellaneous Plan has been performed in accordance with generally accepted
actuarial principles consistent with standards of practice prescribed by the Actuarial Standards Board, and that
the assumptions and methods are internally consistent and reasonable for the risk pool as of the date of this
valuation and as prescribed by the CaIPERS Board of Administration according to provisions set forth in the
California Public Employees' Retirement Law.
Having relied upon the information set forth in Section 2 of this report and based on the census and benefit
provision information for the plan, it is my opinion as the plan actuary that Unfunded Accrued Liability
amortization bases as of June 30, 2017 and employer contribution as of July 1, 2019, have been properly and
accurately determined in accordance with the principles and standards stated above.
The undersigned is an actuary for CaIPERS, a member of both the American Academy of Actuaries and Society
of Actuaries and meets the Qualification Standards of the American Academy of Actuaries to render the
actuarial opinion contained herein.
KURT SCHNEIDER, ASA, EA, FCA, MAAA
Senior Pension Actuary, CaIPERS
Plan Actuary
Rate Plan belonging to the Miscellaneous Risk Pool Page 1
20
Highlights and Executive Summary
• Introduction
• Purpose of Section 1
• Required Employer Contributions
• Plan's Funded Status
• Projected Employer Contributions
• Changes Since the Prior Year's Valuation
• Subsequent Events
CALPERS ACTUARIAL VALUATION - June 30, 2017
Miscellaneous Plan of the Riverside County Transportation Commission
CaIPERS ID: 1431537449
Introduction
This report presents the results of the June 30, 2017 actuarial valuation of the Miscellaneous Plan of the
Riverside County Transportation Commission of the California Public Employees' Retirement System (CaIPERS).
This actuarial valuation sets the required employer contributions for Fiscal Year 2019-20.
Purpose of Section 1
This Section 1 report for the Miscellaneous Plan of the Riverside County Transportation Commission of the
California Public Employees' Retirement System (CaIPERS) was prepared by the plan actuary in order to:
• Set forth the assets and accrued liabilities of this plan as of June 30, 2017;
• Determine the minimum required employer contribution for this plan for the fiscal year July 1, 2019
through June 30, 2020; and
• Provide actuarial information as of June 30, 2017 to the CaIPERS Board of Administration and other
interested parties.
The pension funding information presented in this report should not be used in financial reports subject to
GASB Statement No. 68 for a Cost Sharing Employer Defined Benefit Pension Plan. A separate accounting
valuation report for such purposes is available from CaIPERS and details for ordering are available on our
website.
The measurements shown in this actuarial valuation may not be applicable for other purposes. The employer
should contact their actuary before disseminating any portion of this report for any reason that is not explicitly
described above.
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 (CARP), with the
exception of including the original base amounts of the various components of the unfunded liability in the
Schedule of Amortization Bases shown on page 9.
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.
Rate Plan belonging to the Miscellaneous Risk Pool Page 3
22
CALPERS ACTUARIAL VALUATION - June 30, 2017
Miscellaneous Plan of the Riverside County Transportation Commission
CaIPERS ID: 1431537449
Required Employer Contributions
Fiscal Year
Required Employer Contributions 2019-20
Employer Normal Cost Rate 15.3880/0
Plus, Either
1) Monthly Employer Dollar UAL Payment $ 64,673.00
Or
2) Annual Lump Sum Prepayment Option $ 749,386
The total minimum required employer contribution is the sum of the Plan's Employer Normal Cost Rate
(expressed as a percentage of payroll) plus the Employer Unfunded Accrued Liability (UAL) Contribution
Amount (billed monthly in dollars).
Only the UAL portion of the employer contribution can be prepaid (which must be received in full no
later than July 31). Plan Normal Cost contributions will be made as part of the payroll reporting process.
If there is contractual cost sharing or other change, this amount will change.
In accordance with Sections 20537 and 20572 of the Public Employees' Retirement Law, if a contracting
agency fails to remit the required contributions when due, interest and penalties may apply.
Development of Normal Cost as a Percentage of Payrolll
Base Total Normal Cost for Formula
Surcharge for Class 1 Benefitsz
a) FAC 1
b) PRSA
c) 3% COLA
d) 50% IDR for Miscellaneous
Phase out of Normal Cost Difference3
Plan's Total Normal Cost
Formula's Expected Employee Contribution Rate
Employer Normal Cost Rate
Projected Payroll for the Contribution Fiscal Year
Fiscal Year
2018-19
Fiscal Year
2019-20
19.521% 20.468%
0.643%
0.872%
1.291%
0.344%
0.000%
0.668%
0.763%
1.152%
0.291%
0.000%
22.671% 23.342%
7.952% 7.954%
14.719% 15.388%
$ 5,419,752 $ 5,584,110
Estimated Employer Contributions Based on Projected Payroll
Plan's Estimated Employer Normal Cost $ 797,733 $ 859,283
Plan's Payment on Amortization Bases4 675,638 776,076
of Projected Payroll (illustrative only) 12.466% 13.898%
Estimated Total Employer Contribution
of Projected Payroll (illustrative only)
$ 1,473,371 $ 1,635,359
27.185% 29.286%
' The results shown for Fiscal Year 2018-19 reflect the prior year valuation and may not take into account any lump sum
payment, side fund payoff, or rate adjustment made after June 30, 2017.
2 Section 2 of this report contains a list of Class 1 benefits and corresponding surcharges for each benefit.
3
The normal cost difference is phased out over a five-year period. The phase out of normal cost difference is 100 percent
for the first year of pooling, and is incrementally reduced by 20 percent of the original normal cost difference for each
subsequent year. This is non -zero only for plans that joined a pool within the past 5 years. Most plans joined a pool
June 30, 2003, when risk pooling was implemented.
a See page 9 for a breakdown of the Amortization Bases.
Rate Plan belonging to the Miscellaneous Risk Pool Page 4
23
CALPERS ACTUARIAL VALUATION - June 30, 2017
Miscellaneous Plan of the Riverside County Transportation Commission
CaIPERS ID: 1431537449
Plan's Funded Status
June 30, 2016 June 30, 2017
1. Present Value of Projected Benefits (PVB) $ 38,515,314 $ 41,857,564
2. Entry Age Normal Accrued Liability (AL) 30,406,943 32,776,088
3. Plan's Market Value of Assets (MVA) 22,041,666 24,661,731
4. Unfunded Accrued Liability (UAL) [(2) - (3)] 8,365,277 8,114,357
5. Funded Ratio [(3) / (2)] 72.5% 75.2%
This measure of funded status is an assessment of the need for future employer contributions based on the
selected actuarial cost method used to fund the plan. The UAL is the present value of future employer
contributions for service that has already been earned and is in addition to future normal cost contributions for
active members. For a measure of funded status that is appropriate for assessing the sufficiency of plan assets
to cover estimated termination liabilities, please see "Hypothetical Termination Liability" in the "Risk Analysis"
section.
Projected Employer Contributions
The table below shows projected employer contributions (before cost sharing) for the next six fiscal years.
Projected results reflect the adopted changes to the discount rate described in Appendix A, "Statement of
Actuarial Data, Methods and Assumptions" of the Section 2 report. The projections also assume that all
actuarial assumptions will be realized and that no further changes to assumptions, contributions, benefits, or
funding will occur during the projection period.
Required
Contribution
Projected Future Employer Contributions
(Assumes 7.250/0 Return for Fiscal Year 2017-18)
Fiscal Year
2019-20
2020-21
2021-22
2022-23
2023-24
2024-25
Normal Cost %
15.388%
16.3%
16.3%
16.3%
16.3%
16.3%
UAL Payment
$776,076
$587,000
$677,000
$752,000
$794,000
$839,000
Changes in the UAL due to actuarial gains or losses as well as changes in actuarial assumptions or methods
are amortized using a 5-year ramp up. For more information, please see "Amortization of the Unfunded
Actuarial Accrued Liability" under "Actuarial Methods" in Appendix A of Section 2. This method phases in the
impact of unanticipated changes in UAL over a 5-year period and attempts to minimize employer cost volatility
from year to year. As a result of this methodology, dramatic changes in the required employer contributions in
any one year are less likely. However, required contributions can change gradually and significantly over the
next five years. In years where there is a large increase in UAL the relatively small amortization payments
during the ramp up period could result in a funded ratio that is projected to decrease initially while the
contribution impact of the increase in the UAL is phased in.
Due to the adopted changes in the discount rate for next year's valuation in combination with the 5-year
phase -in ramp, the increases in the required contributions are expected to continue for six years from Fiscal
Year 2019-20 through Fiscal Year 2024-25.
For projected contributions under alternate investment return scenarios, please see the "Analysis of Future
Investment Return Scenarios" in the "Risk Analysis" section.
Rate Plan belonging to the Miscellaneous Risk Pool Page 5
24
CALPERS ACTUARIAL VALUATION - June 30, 2017
Miscellaneous Plan of the Riverside County Transportation Commission
CaIPERS ID: 1431537449
Changes since the Prior Year's Valuation
Benefits
None. This valuation generally reflects plan changes by amendments effective before the date of the report.
Please refer to the "Plan's Major Benefit Options" and Appendix B of Section 2 for a summary of the plan
provisions used in this valuation.
Actuarial Methods and Assumptions
At its December 2016 meeting, the CaIPERS Board of Administration lowered the discount rate from 7.50
percent to 7.00 percent using a three-year phase -in beginning with the June 30, 2016 actuarial valuations.
The minimum employer contributions for Fiscal Year 2019-20 determined in this valuation were calculated
using a discount rate of 7.25 percent. The projected employer contributions on page 5 are calculated
assuming that the discount rate will be lowered to 7.00 percent next year as adopted by the Board. The
decision to reduce the discount rate was primarily based on reduced capital market assumptions provided by
external investment consultants and CaIPERS investment staff. The specific decision adopted by the Board
reflected recommendations from CaIPERS staff and additional input from employer and employee stakeholder
groups. Based on the investment allocation adopted by the Board and capital market assumptions, the
reduced discount rate assumption provides a more realistic assumption for the long-term investment return of
the fund.
On December 19, 2017, the CaIPERS Board of Administration adopted new actuarial assumptions based on the
recommendations in the December 2017 CaIPERS Experience Study and Review of Actuarial Assumptions. This
study reviewed the retirement rates, termination rates, mortality rates, rates of salary increases and inflation
assumption for Public Agencies. These new assumptions are incorporated in this actuarial valuation and will
impact the required contribution for FY 2019-20. In addition, the Board adopted a new asset portfolio as part
of its Asset Liability Management. The new asset mix supports a 7.00 percent discount rate. The reduction of
the inflation assumption will be implemented in two steps in conjunction with the decreases in the discount
rate. For the June 30, 2017 valuation an inflation rate of 2.625 percent will be used and a rate of 2.50 percent
in the following valuation.
Notwithstanding the Board's decision to phase into a 7.0 percent discount rate, subsequent analysis of the
expected investment return of CaIPERS assets or changes to the investment allocation may result in a change
to this three-year discount rate schedule.
Subsequent Events
The CaIPERS Board of Administration has adopted a new amortization policy effective with the June 30, 2019
actuarial valuation. The new policy shortens the period over which actuarial gains and losses are amortized
from 30 years to 20 years with the payments computed using a level dollar amount. In addition, the new
policy removes the 5-year ramp -up and ramp -down on UAL bases attributable to assumption changes and
non -investment gains/losses. The new policy removes the 5-year ramp -down on investment gains/losses.
These changes will apply only to new UAL bases established on or after June 30, 2019.
For inactive employers the new amortization policy imposes a maximum amortization period of 15 years for all
unfunded accrued liabilities effective June 30, 2017. Furthermore, the plan actuary has the ability to shorten
the amortization period on any valuation date based on the life expectancy of plan members and projected
cash flow needs to the plan. The impact of this has been reflected in the current valuation results.
The contribution requirements determined in this actuarial valuation report are based on demographic and
financial information as of June 30, 2017. Changes in the value of assets subsequent to that date are not
reflected. Investment returns below the assumed rate of return will increase the retired contribution, while
investment returns above the assumed rate of return will decrease the retired contribution.
This actuarial valuation report reflects statutory changes, regulatory changes and CaIPERS Board actions
through January 2018. Any subsequent changes or actions are not reflected.
Rate Plan belonging to the Miscellaneous Risk Pool Page 6
25
Assets and Liabilities
• Breakdown of Entry Age Normal Accrued Liability
• Allocation of Plan's Share of Pool's Experience/Assumption Change
• Development of Plan's Share of Pool's MVA
• Schedule of Plan's Amortization Bases
• Amortization Schedule and Alternatives
• Employer Contribution History
• Funding History
26
CALPERS ACTUARIAL VALUATION - June 30, 2017
Miscellaneous Plan of the Riverside County Transportation Commission
CaIPERS ID: 1431537449
Breakdown of Entry Age Normal Accrued Liability
Active Members
Transferred Members
Terminated Members
Members and Beneficiaries Receiving Payments
Total
Allocation of Plan's Share of Pool's
Experience/Assumption Change
17,507,099
1,425,189
646,407
13,197,393
32,776,088
It is the policy of CaIPERS to ensure equity within the risk pools by allocating the pool's experience
gains/losses and assumption changes in a manner that treats each employer equitably and maintains benefit
security for the members of the System while minimizing substantial variations in employer contributions. The
Pool's experience gains/losses and impact of assumption/method changes is allocated to the plan as follows:
1. Plan's Accrued Liability $ 32,776,088
2. Projected UAL balance at 6/30/17 8,467,864
3. Pool's Accrued Liability' $ 15,780,998,593
4. Sum of Pool's Individual Plan UAL Balances at 6/30/171 3,912,002,885
5. Pool's 2016/17 Investment & Asset (Gain)/Loss (413,206,167)
6. Pool's 2016/17 Other (Gain)/Loss (21,126,605)
7. Plan's Share of Pool's Asset (Gain)/Loss [(1) - (2)] / [(3) - (4)] * (5) (846,264)
8. Plan's Share of Pool's Other (Gain)/Loss [(1)] / [(3)] * (6) (43,879)
9. Plan's New (Gain)/Loss as of 6/30/2017 [(7) + (8)] $ (890,143)
10. Increase in Pool's Accrued Liability due to Change in Assumptions' 258,379,047
11. Plan's Share of Pool's Change in Assumptions [(1)] / [(3)] * (10) $ 536,636
' Does not include plans that transferred to Pool on the valuation date.
Development of the Plan's Share of Pool's Market
Value of Assets
12. Plan's UAL [(2) + (9) + (11)]
13. Plan's Share of Pool's MVA [(1) - (12)]
$ 8,114,357
$ 24,661,731
Rate Plan belonging to the Miscellaneous Risk Pool Page 8
27
CALPERS ACTUARIAL VALUATION - June 30, 2017
Miscellaneous Plan of the Riverside County Transportation Commission
CaIPERS ID: 1431537449
Schedule of Plan's Amortization Bases
There is a two-year lag between the valuation date and the start of the contribution fiscal year.
• The assets, liabilities, and funded status of the plan are measured as of the valuation date: June 30, 2017.
• The employer contribution determined by the valuation is for the fiscal year beginning two years after the valuation date: Fiscal Year 2019-20.
This two-year lag is necessary due to the amount of time needed to extract and test the membership and financial data, and the need to provide public agencies
with their employer contribution well in advance of the start of the fiscal year.
The Unfunded Accrued Liability (UAL) is used to determine the employer contribution and therefore must be rolled forward two years from the valuation date to the
first day of the fiscal year for which the contribution is being determined. The UAL is rolled forward each year by subtracting the payment on the UAL for the fiscal
year and adjusting for interest. Additional discretionary payments are reflected in the Expected Payments column in the fiscal year they were made by the agency.
Reason for Base
SIDE FUND
SHARE OF PRE-2013 POOL UAL
ASSET (GAIN)/LOSS
NON -ASSET (GAIN)/LOSS
ASSET(GAIN)/LOSS
NON -ASSET (GAIN)/LOSS
ASSUMPTION CHANGE
ASSET (GAIN/LOSS
NON -ASSET (GAIN)/LOSS 06/30/15
ASSET (GAIN)/LOSS 06/30/16
NON -ASSET (GAIN)/LOSS 06/30/16
ASSUMPTION CHANGE 06/30/16
ASSET (GAIN/LOSS 06/30/17
NON -ASSET (GAIN)/LOSS 06/30/17
ASSUMPTION CHANGE 06/30/17
TOTAL
Ramp
Date Up/Down Amortization Balance Payment Balance
Established 2019-20 Period 6/30/17 2017-18 6/30/18
2013 or Prior No Ramp 1 $700,049 $252,706 $489,096
06/30/13 No Ramp 17 $2,782,641 $217,384 $2,759,256
06/30/13 100% —, 26 $2,447,569 $98,832 $2,522,666
06/30/13 ........_ 100% ......... 26..... $9,871.. $399 $10,173
06/30/14 80% T 27 $(2,076,626) $(56,807) $(2,168,351)
06/30/14 80% T ._....... 27 $2,417 $66 $2,524....
06/30/14 80% 7 17 $1,406,275 $52,352 $1,454,013
06/30/15 60._%..........._..............._........................_28.........................._............................._$1,321,93.3......_....................................._$18,615....._....................._$1,398,49.5....
60%.... T ._....... 28..... $.(112 00.1). $(1.,577) $(118,488)
40% 7....._..................... 29 $1,676,529 $0 _ ........ $1,798,077...
40% T 29 $(210,580) $0 $(225,847)
0
T
40 /0 19 $519,787 22 784 581 067
0
T
20 /0 30 846 264 0 907 619
20% T ._....... 30 $(43,879) $0 $(47,060)
20% T 20 $536,636 $(38,227) $615,130
$8,114,357 $520,959 $8,163,132
Amounts for Fiscal 2019-20
Scheduled
Payment Balance Payment
2018-19 6/30/19 for2019-20
$259,057 $256,272 $265,399
$221,305 $2,730,115 $227,315
$133,761 $2,567,034 $171,777
$539 $10,352 $693
$(86,438) $(2,236,040) $(118,412)
$101..... $2,602 $138
79 992 $1,476,588 $109,557
$37,737....._...................._$1,460,805................................................._$58,161
$(3,197) $(123,768) $(4,928)
$24,951......_....................._$1,902,598....... $51,278
$(3,134) $(238,975) $(6,441)
$10 965 $611 839 $22 530
$0....._........................_$.(973,421.)......................................... $.(13.,492)
$0..... $(50,472)..................................................$(700.)
$(39,326) $700,454 $13,201
$636,313 $8,095,983 $776,076
The (gain)/loss bases are the plan's allocated share of the risk pool's (gain)/loss for the fiscal year as disclosed on the previous page. These (gain)/loss bases will be
amortized according to Board policy over 30 years with a 5-year ramp -up.
If the total Unfunded Liability is negative (i.e., plan has a surplus), the scheduled payment is $0, because the minimum required contribution under PEPRA must be
at least equal to the normal cost.
Rate Plan belonging to the Miscellaneous Risk Pool Page 9
28
CALPERS ACTUARIAL VALUATION - June 30, 2017
Miscellaneous Plan of the Riverside County Transportation Commission
CaIPERS ID: 1431537449
Amortization Schedule and Alternatives
The amortization schedule on the previous page shows the minimum contributions required according to
CaIPERS amortization policy. There has been considerable interest from many agencies in paying off these
unfunded accrued liabilities sooner and the possible savings in doing so. As a result, we have provided
alternate amortization schedules to help analyze the current amortization schedule and illustrate the
advantages of accelerating unfunded liability payments.
Shown on the following page are future year amortization payments based on: 1) the current amortization
schedule reflecting the individual bases and remaining periods shown on the previous page, and 2) alternate
"fresh start" amortization schedules using two sample periods that would both result in interest savings
relative to the current amortization schedule. Note that the payments under each alternate scenario increase
by 2.875 percent for each year into the future. The schedules do not attempt to reflect any experience
after June 30, 2017 that may deviate from the actuarial assumptions. Therefore, future
amortization payments displayed in the Current Amortization Schedule may not match projected
amortization payments shown in connection with Projected Employer Contributions provided
elsewhere in this report.
The Current Amortization Schedule typically contains individual bases that are both positive and negative.
Positive bases result from plan changes, assumption changes or plan experience that result in increases to
unfunded liability. Negative bases result from plan changes, assumption changes or plan experience that result
in decreases to unfunded liability. The combination of positive and negative bases within an amortization
schedule can result in unusual or problematic circumstances in future years such as:
• A positive total unfunded liability with a negative total payment,
• A negative total unfunded liability with a positive total payment, or
• Total payments that completely amortize the unfunded liability over a very short period of time
In any year where one of the above scenarios occurs, the actuary will consider corrective action such as
replacing the existing unfunded liability bases with a single "fresh start' base and amortizing it over a
reasonable period.
The Current Amortization Schedule on the following page may appear to show that, based on the current
amortization bases, one of the above scenarios will occur at some point in the future. It is impossible to know
today whether such a scenario will in fact arise since there will be additional bases added to the amortization
schedule in each future year. Should such a scenario arise in any future year, the actuary will take appropriate
action based on guidelines in the CaIPERS amortization policy.
Rate Plan belonging to the Miscellaneous Risk Pool Page 10
29
CALPERS ACTUARIAL VALUATION - June 30, 2017
Miscellaneous Plan of the Riverside County Transportation Commission
CaIPERS ID: 1431537449
Amortization Schedule and Alternatives
Date
Current Amortization
Schedule
Alternate Schedules
15 Year Amortization 10 Year Amortization
Balance Payment Balance Payment Balance Payment
6/30/2019 8,095,983 776,076 8,095,983 736,175 8,095,983 1,004,058
6/30/2020 7,879,226 575,003 7,920,548 757,340 7,643,123 1,032,925
6/30/2021 7,854,987 644,913 7,710,474 779,114 7,127,537 1,062,622
6/30/2022 7,756,591 699,048 7,462,621 801,513 6,543,815 1,093,172
6/30/2023 7,594,999 718,035 7,173,601 824,557 5,886,136 1,124,601
6/30/2024 7,402,027 738,679 6,839,763 848,263 5,148,227 1,156,933
6/30/2025 7,173,687 759,916 6,457,172 872,650 4,323,335 1,190,195
6/30/2026 6,906,798 781,764 6,021,586 897,739 3,404,192 1,224,413
6/30/2027 6,597,934 804,239 5,528,439 923,549 2,382,975 1,259,615
6/30/2028 6,243,402 827,361 4,972,808 950,101 1,251,264 1,295,829
6/30/2029 5,839,220 851,148 4,349,398 977,416
6/30/2030 5,381,102 875,618 3,652,501 1,005,517
6/30/2031 4,864,427 900,792 2,875,978 1,034,426
6/30/2032 4,284,224 887,098 2,013,219 1,064,166
6/30/2033 3,676,137 871,872 1,057,110 1,094,760
6/30/2034 3,039,733 837,803
6/30/2035 2,392,472 780,279
6/30/2036 1,757,858 350,714
6/30/2037 1,522,097 320,046
6/30/2038 1,301,004 287,325
6/30/2039 1,097,768 272,316
6/30/2040 895,341 280,146
6/30/2041 670,130 223,848
6/30/2042 486,894 220,831
6/30/2043 293,498 182,420
6/30/2044 125,859 96,083
6/30/2045 35,479 34,285
6/30/2046 2,544 2,635
6/30/2047
6/30/2048
Totals 15,600,295 13,567,286 11,444,361
Interest Paid 7,504,312 5,471,303 3,348,378
Estimated Savings 2,033,010 4,155,935
* This schedule does not reflect the impact of adopted discount rate changes that will become effective beyond June 30,
2017. For Projected Employer Contributions, please see page 5.
Rate Plan belonging to the Miscellaneous Risk Pool Page 11
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CALPERS ACTUARIAL VALUATION - June 30, 2017
Miscellaneous Plan of the Riverside County Transportation Commission
CaIPERS ID: 1431537449
Employer Contribution History
The table below provides a recent history of the required employer contributions for the plan, as determined by
the annual actuarial valuation. It does not account for prepayments or benefit changes made during a fiscal
year.
Fiscal
Year
Employer Unfunded Liability
Normal Cost Payment ($)
2016 - 17
2017 - 18
2018 - 19
2019 - 20
Funding History
14.012%
14.053%
14.719%
15.388%
$518,494
$581,969
$675,638
$776,076
The funding history below shows the plan's actuarial accrued liability, share of the pool's market value of
assets, share of the pool's unfunded liability, funded ratio, and annual covered payroll.
Valuation
Date
Accrued
Liability
(AL)
Share of Pool's
Market Value of
Assets (MVA)
Plan's Share of
Pool's Unfunded Funded
Liability Ratio
Annual
Covered
Payroll
06/30/2011
06/30/2012
06/30/2013
06/30/2014
06/30/2015
06/30/2016
06/30/2017
$ 18,593,777
20,016,925
21,922,579
25,315,391
27,488,176
30,406,943
32,776,088
$ 13,091,242
13,453,982
15,789,942
19,752,805
20,971,675
22,041,666
24,661,731
$ 5,502,535
6,562,943
6,132,637
5,562,586
6,516,501
8,365,277
8,114,357
70.4%
67.2%
72.0%
78.0%
76.3%
72.5%
75.2%
$ 3,953,065
3,849,036
4,171,490
4,528,862
4,688,620
4,959,841
5,128,903
Rate Plan belonging to the Miscellaneous Risk Pool Page 12
31
Risk Analysis
• Analysis of Future Investment Return Scenarios
• Analysis of Discount Rate Sensitivity
• Volatility Ratios
• Hypothetical Termination Liability
32
CALPERS ACTUARIAL VALUATION - June 30, 2017
Miscellaneous Plan of the Riverside County Transportation Commission
CaIPERS ID: 1431537449
Analysis of Future Investment Return Scenarios
Analysis was performed to determine the effects of various future investment returns on required employer
contributions. The projections below provide a range of results based on five investment return scenarios
assumed to occur during the next four fiscal years (2017-18, 2018-19, 2019-20 and 2020-21). The projections
also assume that all other actuarial assumptions will be realized and that no further changes to assumptions,
contributions, benefits, or funding will occur.
Each of the five investment return scenarios assumes a return of 7.25 percent for fiscal year 2017-18. For
fiscal years 2018-19, 2019-20, and 2020-21 each scenario assumes an alternate fixed annual return. The fixed
return assumptions for the five scenarios are 1.0 percent, 4.0 percent, 7.0 percent, 9.0 percent and 12.0
percent.
The alternate investment returns were chosen based on stochastic analysis of possible future investment
returns over the four-year period ending June 30, 2021. Using the expected returns and volatility of the asset
classes in which the funds are invested, we produced five thousand stochastic outcomes for this period based
on the recently completed Asset Liability Management process. We then selected annual returns that
approximate the 5tn, 25tn, 50tn, 75tn, and 95tn percentiles for these outcomes. For example, of all the 4-year
outcomes generated in the stochastic analysis, approximately 25 percent of them had an average annual
return of 4.0 percent or less.
Required contributions outside of this range are also possible. In particular, whereas it is unlikely that
investment returns will average less than 1.0 percent or greater than 12.0 percent over this four-year period,
the possibility of a single investment return less than 1.0 percent or greater than 12.0 percent in any given
year is much greater.
Assumed Annual Return From
2018-19through 2020-21
Projected Employer Contributions
2020-21
2021-22
2022-23
2023-24
1.0%
Normal Cost
16.3%
16.3%
16.3%
16.3%
UAL Contribution
$587,000
$702,000
$828,000
$949,000
4.0%
Normal Cost
16.3%
16.3%
16.3%
16.3%
UAL Contribution
$587,000
$690,000
$791,000
$873,000
7.0%
Normal Cost
16.3%
16.3%
16.3%
16.3%
UAL Contribution
$587,000
$677,000
$752,000
$794,000
9.0%
Normal Cost
16.3%
16.6%
16.9%
17.2%
UAL Contribution
$587,000
$670,000
$732,000
$754,000
12.0%
Normal Cost
16.3%
16.6%
16.9%
17.2%
UAL Contribution
$587,000
$658,000
$693,000
$671,000
Given the temporary suspension of the Risk Mitigation Policy during the period over which the discount rate
assumption is being phased down to 7.0 percent, the projections above were performed without reflection of
any possible impact of this Policy for Fiscal Year 2020-21. In addition, the projections above do not reflect the
recent changes to the new amortization policy effective with the June 30, 2019 valuation but the impact on
the results above is expected to be minimal.
Rate Plan belonging to the Miscellaneous Risk Pool Page 14
33
CALPERS ACTUARIAL VALUATION - June 30, 2017
Miscellaneous Plan of the Riverside County Transportation Commission
CaIPERS ID: 1431537449
Analysis of Discount Rate Sensitivity
Shown below are various valuation results as of June 30, 2017 assuming alternate discount rates. Results are
shown using the current discount rate of 7.25 percent as well as alternate discount rates of 6.0 percent, 7.0
percent, and 8.0 percent. The alternate rate of 7.0 percent was selected since the Board has adopted this rate
as the final discount rate at the end of the three-year phase -in of the reduction in this assumption. The rates
of 6.0 percent and 8.0 percent were selected since they illustrate the impact of a 1 percent increase or
decrease to the 7.0 percent assumption. This analysis shows the potential plan impacts if the PERF were to
realize investment returns of 6.0 percent, 7.0 percent, or 8.0 percent over the long-term.
This type of analysis gives the reader a sense of the long-term risk to required contributions. For a measure of
funded status that is appropriate for assessing the sufficiency of plan assets to cover estimated termination
liabilities, please see "Hypothetical Termination Liability" at the end of this section.
Sensitivity Analysis
As of June 30, 2017
Plan's Total
Normal Cost
Accrued
Liability
Unfunded
Accrued Liability
Funded
Status
7.250/0 (current discount rate)
23.3420/0
$32,776,088
$8,114,357
75.20/0
6.0%
30.282%
$38,563,842
$13,902,111
64.0%
7.00/0
24.2730/0
$33,378,957
$8,717,226
73.9%
8.0%
19.676%
$29,161,012
$4,499,281
84.6%
Rate Plan belonging to the Miscellaneous Risk Pool Page 15
34
CALPERS ACTUARIAL VALUATION - June 30, 2017
Miscellaneous Plan of the Riverside County Transportation Commission
CaIPERS ID: 1431537449
Volatility Ratios
Actuarial calculations are based on a number of assumptions about long-term demographic and economic
behavior. Unless these assumptions (terminations, deaths, disabilities, retirements, salary growth, and
investment return) are exactly realized each year, there will be differences on a year-to-year basis. The year-
to-year differences between actual experience and the assumptions are called actuarial gains and losses and
serve to lower or raise required employer contributions from one year to the next. Therefore, employer
contributions will inevitably fluctuate, especially due to the ups and downs of investment returns.
Asset Volatility Ratio (AVR)
Plans that have higher asset -to -payroll ratios experience more volatile employer contributions (as a
percentage of payroll) due to investment return. For example, a plan with an asset -to -payroll ratio of 8 may
experience twice the contribution volatility due to investment return volatility, than a plan with an asset -to -
payroll ratio of 4. Shown below is the asset volatility ratio, a measure of the plan's current contribution
volatility. It should be noted that this ratio is a measure of the current situation. It increases over time but
generally tends to stabilize as the plan matures.
Liability Volatility Ratio (LVR)
Plans that have higher liability -to -payroll ratios experience more volatile employer contributions (as a
percentage of payroll) due to investment return and changes in liability. For example, a plan with a liability -to -
payroll ratio of 8 is expected to have twice the contribution volatility of a plan with a liability -to -payroll ratio of
4. The liability volatility ratio is also shown in the table below. It should be noted that this ratio indicates a
longer -term potential for contribution volatility. The asset volatility ratio, described above, will tend to move
closer to the liability volatility ratio as the plan matures. Since the liability volatility ratio is a long-term
measure, it is shown below at the current discount rate (7.25 percent) as well as the discount rate the Board
has adopted to determine the contribution requirement in the June 30, 2018 actuarial valuation (7.00
percent).
Rate Volatility As of June 30, 2017
1. Market Value of Assets
2. Payroll
3. Asset Volatility Ratio (AVR) [(1) / (2)]
4. Accrued Liability
5. Liability Volatility Ratio (LVR) [(4) / (2)]
6. Accrued Liability (7.00% discount rate)
7. Projected Liability Volatility Ratio [(6) / (2)]
24,661,731
5,128,903
4.8
32,776,088
6.4
33,378,957
6.5
Rate Plan belonging to the Miscellaneous Risk Pool Page 16
35
CALPERS ACTUARIAL VALUATION - June 30, 2017
Miscellaneous Plan of the Riverside County Transportation Commission
CaIPERS ID: 1431537449
Hypothetical Termination Liability
The hypothetical termination liability is an estimate of the financial position of the plan had the contract with
CaIPERS been terminated as of June 30, 2017. The plan liability on a termination basis is calculated differently
compared to the plan's ongoing funding liability. For the hypothetical termination liability calculation, both
compensation and service are frozen as of the valuation date and no future pay increases or service accruals
are assumed. This measure of funded status is not appropriate for assessing the need for future employer
contributions in the case of an ongoing plan, that is, for an employer that continues to provide CaIPERS
retirement benefits to active employees.
A more conservative investment policy and asset allocation strategy was adopted by the CaIPERS Board for
the Terminated Agency Pool. The Terminated Agency Pool has limited funding sources since no future
employer contributions will be made. Therefore, expected benefit payments are secured by risk -free assets
and benefit security for members is increased while funding risk is limited. However, this asset allocation has a
lower expected rate of return than the PERF and consequently, a lower discount rate is assumed. The lower
discount rate for the Terminated Agency Pool results in higher liabilities for terminated plans.
The effective termination discount rate will depend on actual market rates of return for risk -free securities on
the date of termination. As market discount rates are variable, the table below shows a range for the
hypothetical termination liability based on the lowest and highest interest rates observed during an
approximate 2-year period centered around the valuation date.
Market
Value of
Assets (MVA)
$24,661,731
Hypothetical
Termination
Liabilityi,i
@ 1.75%
$61,366,983
Funded
Status
40.2%
Unfunded
Termination
Liability
@ 1.75%
$36,705,253
Hypothetical
Termination
Liabilityi,i
@ 3.00%
$53,094,874
Funded
Status
46.5%
Unfunded
Termination
Liability
@ 3.00%
$28,433,144
' The hypothetical liabilities calculated above include a 5 percent mortality contingency load in accordance with Board policy.
Other actuarial assumptions can be found in Appendix A.
2 The current discount rate assumption used for termination valuations is a weighted average of the 10-year and 30-year
U.S. Treasury yields where the weights are based on matching asset and liability durations as of the termination date. The
discount rates used in the table are based on 20-year Treasury bonds, rounded to the nearest quarter percentage point,
which is a good proxy for most plans. The 20-year Treasury yield was 2.61 percent on June 30, 2017, and was 2.83
percent on January 31, 2018.
In order to terminate the plan, you must first contact our Retirement Services Contract Unit to initiate a
Resolution of Intent to terminate. The completed Resolution will allow the plan actuary to give you a
preliminary termination valuation with a more up-to-date estimate of the plan liabilities. CaIPERS advises you
to consult with the plan actuary before beginning this process.
Rate Plan belonging to the Miscellaneous Risk Pool Page 17
36
CALPERS ACTUARIAL VALUATION - June 30, 2017
Miscellaneous Plan of the Riverside County Transportation Commission
CaIPERS ID: 1431537449
Participant Data
The table below shows a summary of your plan's member data upon which this valuation is based:
Reported Payroll
Projected Payroll for Contribution Purposes
June 30, 2016 June 30, 2017
$ 4,959,841 $ 5,128,903
$ 5,419,752 $ 5,584,110
Number of Members
Active 42 43
Transferred 12 9
Separated 15 19
Retired 24 25
List of Class 1 Benefit Provisions
This plan has the additional Class 1 Benefit Provisions:
• One Year Final Compensation (FAC 1)
• Post -Retirement Survivor Allowance (PRSA)
• 3% Annual Cost -of -Living Allowance Increase (3% COLA)
• IDR For Local Miscellaneous Members (50% IDR)
Rate Plan belonging to the Miscellaneous Risk Pool Page 18
37
Plan's Major Benefit Options
38
SECTION 1 — Plan Specific Information for the Miscellaneous Plan of the Riverside County Transportation Commission
Plan's Major Benefit Options
Shown below is a summary of the major optional benefits for which your agency has contracted. A description of principal standard and optional plan provisions
is in Appendix B within Section 2 of this report.
Contract package
Active
Inactive
Receiving
Misc
Misc
Misc
Benefit Provision
Benefit Formula
2.70/0 @ 55
2.0% @ 55
Social Security Coverage
No
No
Full/Modified
Full
Full
Employee Contribution Rate
8.000/0
Final Average Compensation Period
One Year
One Year
Sick Leave Credit
Yes
Yes
Non -Industrial Disability
Standard
Standard
Industrial Disability
Yes
Yes
Pre -Retirement Death Benefits
Optional Settlement 2
Yes
Yes
1959 Survivor Benefit Level
level 3
level 3
Special
No
No
Alternate (firefighters)
No
No
No
Post -Retirement Death Benefits
Lump Sum
$500
$500
$500
Survivor Allowance (PRSA)
Yes
Yes
Yes
COLA
3%
3%
3%
Rate Plan belonging to the Miscellaneous Risk Pool
Page 20
39
Section 2
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Section 2 may be found on the CaIPERS website
(wwmcalpers.ca.gov) in the Forms and
Publications section
40
ATTACHMENT 3
i
Ca1PERS
August 2018
California Public Employees' Retirement System
Actuarial Office
P.O. Box 942709
Sacramento, CA 94229-2709
TTY: (916) 795-3240
(888) 225-7377 phone — (916) 795-2744 fax
www.calpers.ca.gov
PEPRA Miscellaneous Plan of the Riverside County Transportation Commission
(Ca1PERS ID: 1431537449)
Annual Valuation Report as of June 30, 2017
Dear Employer,
As an attachment to this letter, you will find a copy of the June 30, 2017 actuarial valuation report of the pension
plan.
Because this plan is in a risk pool, the following valuation report has been separated into two sections:
• Section 1 contains specific information for the plan including the development of the current and projected
employer contributions, and
• Section 2 contains the Risk Pool Actuarial Valuation appropriate to the plan as of June 30, 2017.
Section 2 can be found on the Ca1PERS website at (www.calpers.ca.gov). From the home page, go to "Forms &
Publications" and select "View All'. In the search box, enter "Risk Pool' and from the results list download the
Miscellaneous or Safety Risk Pool Actuarial Valuation Report as appropriate.
Your June 30, 2017 actuarial valuation report contains important actuarial information about your pension plan at
Ca1PERS. Your assigned Ca1PERS staff actuary, whose signature appears in the Actuarial Certification section on page
1, is available to discuss the report with you after August 1, 2018.
The exhibit below displays the minimum employer contributions, before any cost sharing, for Fiscal Year 2019-20
along with estimates of the required contributions for Fiscal Year 2020-21. Member contributions other than cost
sharing (whether paid by the employer or the employee) are in addition to the results shown below. The employer
contributions in this report do not reflect any cost sharing arrangements you may have with your
employees.
Required Contribution
Fiscal Year
Employer Normal Employer Payment of
Cost Rate Unfunded Liability
2019-20 8.069% $3,760
Projected Results
2020-21 7.9% $4,100
The actual investment return for Fiscal Year 2017-18 was not known at the time this report was prepared. The
projections above assume the investment return for that year would be 7.25 percent. If the actual investment
return for Fiscal Year 2017-18 differs from Z25 percent, the actual contribution requirements for the
projected years will differ from those shown above.
Moreover, the projected results for Fiscal Year 2020-21 assume that there are no future plan changes, no further
changes in assumptions other than those recently approved, and no liability gains or losses. Such changes can have a
significant impact on required contributions. Since they cannot be predicted in advance, the projected employer
results shown above are estimates. The actual required employer contributions for Fiscal Year 2020-21 will be
provided in next year's report.
For additional details regarding the assumptions and methods used for these projections please refer to the
"Projected Employer Contributions" in the "Highlights and Executive Summary" section.
The "Risk Analysis" section of the valuation report also contains estimated employer contributions in future years
under a variety of investment return scenarios.
41
PEPRA Miscellaneous Plan of the Riverside County Transportation Commission
(CaIPERS ID: 1431537449)
Annual Valuation Report as of June 30, 2017
Page 2
Changes since the Prior Year's Valuation
At its December 2016 meeting, the CaIPERS Board of Administration lowered the discount rate from 7.50 percent to
7.00 percent using a three-year phase -in beginning with the June 30, 2016 actuarial valuations. The minimum
employer contributions for Fiscal Year 2019-20 determined in this valuation were calculated using a discount rate of
7.25 percent. The projected employer contributions on Page 5 are calculated under the assumption that the discount
rate will be lowered to 7.00 percent next year as adopted by the Board.
On December 19, 2017, the CaIPERS Board of Administration adopted new actuarial assumptions based on the
recommendations in the December 2017 CaIPERS Experience Study and Review of Actuarial Assumptions. This study
reviewed the retirement rates, termination rates, mortality rates, rates of salary increases and inflation assumption
for Public Agencies. These new assumptions are incorporated in your actuarial valuations and will impact the required
contribution for FY 2019-20. In addition, the Board adopted a new asset portfolio as part of its Asset Liability
Management. The new asset mix supports a 7.00 percent discount rate. The reduction of the inflation assumption
will be implemented in two steps in conjunction with the decreases in the discount rate. For the June 30, 2017
valuation an inflation rate of 2.625 percent was used and a rate of 2.50 percent will be used in the following
valuation.
The CaIPERS Board of Administration has adopted a new amortization policy effective with the June 30, 2019
actuarial valuation. The new policy shortens the period over which actuarial gains and losses are amortized from 30
years to 20 years with the payments computed using a level dollar amount. In addition, the new policy removes the
5-year ramp -up and ramp -down on UAL bases attributable to assumption changes and non -investment gains/losses.
The new policy removes the 5-year ramp -down on investment gains/losses. These changes will apply only to new
UAL bases established on or after June 30, 2019.
For inactive employers the new amortization policy imposes a maximum amortization period of 15 years for all
unfunded accrued liabilities effective June 30, 2017. Furthermore, the plan actuary has the ability to shorten the
amortization period on any valuation date based on the life expectancy of plan members and projected cash flow
needs to the plan. The impact of this has been reflected in the current valuation results.
The CaIPERS Board of Administration adopted a Risk Mitigation Policy which is designed to reduce funding risk over
time. This Policy has been temporarily suspended during the period over which the discount rate is being lowered.
More details on the Risk Mitigation Policy can be found on our website.
Besides the above noted changes, there may also be changes specific to the plan such as contract amendments and
funding changes.
Further descriptions of general changes are included in the "Highlights and Executive Summary" section and in
Appendix A, "Statement of Actuarial Data, Methods and Assumptions "of the Section 2 report.
We understand that you might have a number of questions about these results. While we are very interested in
discussing these results with your agency, in the interest of allowing us to give every public agency their results, we
ask that you wait until after August 1 to contact us with actuarial related questions.
If you have other questions, please call our customer contact center at (888) CaIPERS or (888-225-7377).
Sincerely,
SCOTT TERANDO
Chief Actuary
42
Actuarial Valuation
as of June 301 2017
for the
PEPRA Miscellaneous Plan
of the
Riverside County Transportation
Commission
(CaIPERS ID: 1431537449)
Required Contributions
for Fiscal Year
July 1, 2019 - June 301 2020
Table of Contents
Section 1 - Plan Specific Information
Section 2 - Risk Pool Actuarial Valuation Information
Section 1
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Plan Specific Information
for the
PEPRA Miscellaneous Plan
of the
Riverside County Transportation
Commission
(CaIPERS ID: 1431537449)
(Rate Plan: 26801)
Table of Contents
Actuarial Certification 1
Highlights and Executive Summary
Introduction 3
Purpose of Section 1 3
Required Employer Contributions 4
Plan's Funded Status 5
Projected Employer Contributions 5
Changes Since the Prior Year's Valuation 6
Subsequent Events 6
Assets and Liabilities
Breakdown of Entry Age Normal Accrued Liability 8
Allocation of Plan's Share of Pool's Experience/Assumption Change 8
Development of Plan's Share of Pool's MVA 8
Schedule of Plan's Amortization Bases 9
Amortization Schedule and Alternatives 10
Employer Contribution History 12
Funding History 12
Risk Analysis
Analysis of Future Investment Return Scenarios 14
Analysis of Discount Rate Sensitivity 15
Volatility Ratios 16
Hypothetical Termination Liability 17
Participant Data 18
List of Class 1 Benefit Provisions 18
Plan's Major Benefit Options 20
(CY) FIN PROCESS CONTROL ID: 523767
(PY) FIN PROCESS CONTROL ID: 503824
46
REPORT ID: 115452
CALPERS ACTUARIAL VALUATION - June 30, 2017
PEPRA Miscellaneous Plan of the Riverside County Transportation Commission
CaIPERS ID: 1431537449
Actuarial Certification
Section 1 of this report is based on the member and financial data contained in our records as of June 30, 2017
which was provided by your agency and the benefit provisions under your contract with CaIPERS. Section 2 of
this report is based on the member and financial data as of June 30, 2017 provided by employers participating
in the Miscellaneous Risk Pool to which the plan belongs and benefit provisions under the CaIPERS contracts for
those agencies.
As set forth in Section 2 of this report, the pool actuaries have certified that, in their opinion, the valuation of
the risk pool containing your PEPRA Miscellaneous Plan has been performed in accordance with generally
accepted actuarial principles consistent with standards of practice prescribed by the Actuarial Standards Board,
and that the assumptions and methods are internally consistent and reasonable for the risk pool as of the date
of this valuation and as prescribed by the CaIPERS Board of Administration according to provisions set forth in
the California Public Employees' Retirement Law.
Having relied upon the information set forth in Section 2 of this report and based on the census and benefit
provision information for the plan, it is my opinion as the plan actuary that Unfunded Accrued Liability
amortization bases as of June 30, 2017 and employer contribution as of July 1, 2019, have been properly and
accurately determined in accordance with the principles and standards stated above.
The undersigned is an actuary for CaIPERS, a member of both the American Academy of Actuaries and Society
of Actuaries and meets the Qualification Standards of the American Academy of Actuaries to render the
actuarial opinion contained herein.
KURT SCHNEIDER, ASA, EA, FCA, MAAA
Senior Pension Actuary, CaIPERS
Plan Actuary
Rate Plan belonging to the Miscellaneous Risk Pool Page 1
47
Highlights and Executive Summary
• Introduction
• Purpose of Section 1
• Required Employer Contributions
• Plan's Funded Status
• Projected Employer Contributions
• Changes Since the Prior Year's Valuation
• Subsequent Events
CALPERS ACTUARIAL VALUATION - June 30, 2017
PEPRA Miscellaneous Plan of the Riverside County Transportation Commission
CaIPERS ID: 1431537449
Introduction
This report presents the results of the June 30, 2017 actuarial valuation of the PEPRA Miscellaneous Plan of
the Riverside County Transportation Commission of the California Public Employees' Retirement System
(CaIPERS). This actuarial valuation sets the required employer contributions for Fiscal Year 2019-20.
Purpose of Section 1
This Section 1 report for the PEPRA Miscellaneous Plan of the Riverside County Transportation Commission of
the California Public Employees' Retirement System (CaIPERS) was prepared by the plan actuary in order to:
• Set forth the assets and accrued liabilities of this plan as of June 30, 2017;
• Determine the minimum required employer contribution for this plan for the fiscal year July 1, 2019
through June 30, 2020; and
• Provide actuarial information as of June 30, 2017 to the CaIPERS Board of Administration and other
interested parties.
The pension funding information presented in this report should not be used in financial reports subject to
GASB Statement No. 68 for a Cost Sharing Employer Defined Benefit Pension Plan. A separate accounting
valuation report for such purposes is available from CaIPERS and details for ordering are available on our
website.
The measurements shown in this actuarial valuation may not be applicable for other purposes. The employer
should contact their actuary before disseminating any portion of this report for any reason that is not explicitly
described above.
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 (CARP), with the
exception of including the original base amounts of the various components of the unfunded liability in the
Schedule of Amortization Bases shown on page 9.
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.
Rate Plan belonging to the Miscellaneous Risk Pool Page 3
49
CALPERS ACTUARIAL VALUATION - June 30, 2017
PEPRA Miscellaneous Plan of the Riverside County Transportation Commission
CaIPERS ID: 1431537449
Required Employer Contributions
Fiscal Year
Required Employer Contributions 2019-20
Employer Normal Cost Rate 8.0690/0
Plus, Either
1) Monthly Employer Dollar UAL Payment $ 313.36
Or
2) Annual Lump Sum Prepayment Option $ 3,631
The total minimum required employer contribution is the sum of the Plan's Employer Normal Cost Rate
(expressed as a percentage of payroll) plus the Employer Unfunded Accrued Liability (UAL) Contribution
Amount (billed monthly in dollars).
Only the UAL portion of the employer contribution can be prepaid (which must be received in full no
later than July 31). Plan Normal Cost contributions will be made as part of the payroll reporting process.
If there is contractual cost sharing or other change, this amount will change.
In accordance with Sections 20537 and 20572 of the Public Employees' Retirement Law, if a contracting
agency fails to remit the required contributions when due, interest and penalties may apply.
Development of Normal Cost as a Percentage of Payrolll
Base Total Normal Cost for Formula
Surcharge for Class 1 Benefitsz
a) PRSA
b) 3% COLA
c) 500/0 IDR for Miscellaneous
Phase out of Normal Cost Difference3
Plan's Total Normal Cost
Plan's Employee Contribution Rate
Employer Normal Cost Rate
Projected Payroll for the Contribution Fiscal Year
Fiscal Year
2018-19
Fiscal Year
2019-20
13.092% 13.735%
0.674%
0.791%
0.347%
0.000%
0.587%
0.706%
0.291%
0.000%
14.904% 15.319%
7.250% 7.250%
7.654% 8.069%
$ 397,031 $ 453,776
Estimated Employer Contributions Based on Projected Payroll
Plan's Estimated Employer Normal Cost $ 30,389 $ 36,615
Plan's Payment on Amortization Bases4 3,724 3,760
of Projected Payroll (illustrative only) 0.938% 0.829%
Estimated Total Employer Contribution
of Projected Payroll (illustrative only)
$ 34,113 $ 40,375
8.592% 8.898%
' The results shown for Fiscal Year 2018-19 reflect the prior year valuation and may not take into account any lump sum
payment, side fund payoff, or rate adjustment made after June 30, 2017.
2 Section 2 of this report contains a list of Class 1 benefits and corresponding surcharges for each benefit.
3
The normal cost difference is phased out over a five-year period. The phase out of normal cost difference is 100 percent
for the first year of pooling, and is incrementally reduced by 20 percent of the original normal cost difference for each
subsequent year. This is non -zero only for plans that joined a pool within the past 5 years. Most plans joined a pool
June 30, 2003, when risk pooling was implemented.
a See page 9 for a breakdown of the Amortization Bases.
Rate Plan belonging to the Miscellaneous Risk Pool Page 4
50
CALPERS ACTUARIAL VALUATION - June 30, 2017
PEPRA Miscellaneous Plan of the Riverside County Transportation Commission
CaIPERS ID: 1431537449
Plan's Funded Status
June 30, 2016 June 30, 2017
1. Present Value of Projected Benefits (PVB) $ 615,595 $ 761,657
2. Entry Age Normal Accrued Liability (AL) 114,761 196,498
3. Plan's Market Value of Assets (MVA) 103,368 186,010
4. Unfunded Accrued Liability (UAL) [(2) - (3)] 11,393 10,488
5. Funded Ratio [(3) / (2)] 90.1% 94.7%
This measure of funded status is an assessment of the need for future employer contributions based on the
selected actuarial cost method used to fund the plan. The UAL is the present value of future employer
contributions for service that has already been earned and is in addition to future normal cost contributions for
active members. For a measure of funded status that is appropriate for assessing the sufficiency of plan assets
to cover estimated termination liabilities, please see "Hypothetical Termination Liability" in the "Risk Analysis"
section.
Projected Employer Contributions
The table below shows projected employer contributions (before cost sharing) for the next six fiscal years.
Projected results reflect the adopted changes to the discount rate described in Appendix A, "Statement of
Actuarial Data, Methods and Assumptions" of the Section 2 report. The projections also assume that all
actuarial assumptions will be realized and that no further changes to assumptions, contributions, benefits, or
funding will occur during the projection period.
Required
Contribution
Projected Future Employer Contributions
(Assumes 7.250/0 Return for Fiscal Year 2017-18)
Fiscal Year
2019-20
2020-21
2021-22
2022-23
2023-24
2024-25
Normal Cost %
8.069%
7.9%
7.9%
7.9%
7.90/0
7.9%
UAL Payment
$3,760
$4,100
$4,400
$4,800
$5,200
$1,300
Changes in the UAL due to actuarial gains or losses as well as changes in actuarial assumptions or methods
are amortized using a 5-year ramp up. For more information, please see "Amortization of the Unfunded
Actuarial Accrued Liability" under "Actuarial Methods" in Appendix A of Section 2. This method phases in the
impact of unanticipated changes in UAL over a 5-year period and attempts to minimize employer cost volatility
from year to year. As a result of this methodology, dramatic changes in the required employer contributions in
any one year are less likely. However, required contributions can change gradually and significantly over the
next five years. In years where there is a large increase in UAL the relatively small amortization payments
during the ramp up period could result in a funded ratio that is projected to decrease initially while the
contribution impact of the increase in the UAL is phased in.
Due to the adopted changes in the discount rate for next year's valuation in combination with the 5-year
phase -in ramp, the increases in the required contributions are expected to continue for six years from Fiscal
Year 2019-20 through Fiscal Year 2024-25.
For projected contributions under alternate investment return scenarios, please see the "Analysis of Future
Investment Return Scenarios" in the "Risk Analysis" section.
Rate Plan belonging to the Miscellaneous Risk Pool Page 5
51
CALPERS ACTUARIAL VALUATION - June 30, 2017
PEPRA Miscellaneous Plan of the Riverside County Transportation Commission
CaIPERS ID: 1431537449
Changes since the Prior Year's Valuation
Benefits
None. This valuation generally reflects plan changes by amendments effective before the date of the report.
Please refer to the "Plan's Major Benefit Options" and Appendix B of Section 2 for a summary of the plan
provisions used in this valuation.
Actuarial Methods and Assumptions
At its December 2016 meeting, the CaIPERS Board of Administration lowered the discount rate from 7.50
percent to 7.00 percent using a three-year phase -in beginning with the June 30, 2016 actuarial valuations.
The minimum employer contributions for Fiscal Year 2019-20 determined in this valuation were calculated
using a discount rate of 7.25 percent. The projected employer contributions on page 5 are calculated
assuming that the discount rate will be lowered to 7.00 percent next year as adopted by the Board. The
decision to reduce the discount rate was primarily based on reduced capital market assumptions provided by
external investment consultants and CaIPERS investment staff. The specific decision adopted by the Board
reflected recommendations from CaIPERS staff and additional input from employer and employee stakeholder
groups. Based on the investment allocation adopted by the Board and capital market assumptions, the
reduced discount rate assumption provides a more realistic assumption for the long-term investment return of
the fund.
On December 19, 2017, the CaIPERS Board of Administration adopted new actuarial assumptions based on the
recommendations in the December 2017 CaIPERS Experience Study and Review of Actuarial Assumptions. This
study reviewed the retirement rates, termination rates, mortality rates, rates of salary increases and inflation
assumption for Public Agencies. These new assumptions are incorporated in this actuarial valuation and will
impact the required contribution for FY 2019-20. In addition, the Board adopted a new asset portfolio as part
of its Asset Liability Management. The new asset mix supports a 7.00 percent discount rate. The reduction of
the inflation assumption will be implemented in two steps in conjunction with the decreases in the discount
rate. For the June 30, 2017 valuation an inflation rate of 2.625 percent will be used and a rate of 2.50 percent
in the following valuation.
Notwithstanding the Board's decision to phase into a 7.0 percent discount rate, subsequent analysis of the
expected investment return of CaIPERS assets or changes to the investment allocation may result in a change
to this three-year discount rate schedule.
Subsequent Events
The CaIPERS Board of Administration has adopted a new amortization policy effective with the June 30, 2019
actuarial valuation. The new policy shortens the period over which actuarial gains and losses are amortized
from 30 years to 20 years with the payments computed using a level dollar amount. In addition, the new
policy removes the 5-year ramp -up and ramp -down on UAL bases attributable to assumption changes and
non -investment gains/losses. The new policy removes the 5-year ramp -down on investment gains/losses.
These changes will apply only to new UAL bases established on or after June 30, 2019.
For inactive employers the new amortization policy imposes a maximum amortization period of 15 years for all
unfunded accrued liabilities effective June 30, 2017. Furthermore, the plan actuary has the ability to shorten
the amortization period on any valuation date based on the life expectancy of plan members and projected
cash flow needs to the plan. The impact of this has been reflected in the current valuation results.
The contribution requirements determined in this actuarial valuation report are based on demographic and
financial information as of June 30, 2017. Changes in the value of assets subsequent to that date are not
reflected. Investment returns below the assumed rate of return will increase the retired contribution, while
investment returns above the assumed rate of return will decrease the retired contribution.
This actuarial valuation report reflects statutory changes, regulatory changes and CaIPERS Board actions
through January 2018. Any subsequent changes or actions are not reflected.
Rate Plan belonging to the Miscellaneous Risk Pool Page 6
52
Assets and Liabilities
• Breakdown of Entry Age Normal Accrued Liability
• Allocation of Plan's Share of Pool's Experience/Assumption Change
• Development of Plan's Share of Pool's MVA
• Schedule of Plan's Amortization Bases
• Amortization Schedule and Alternatives
• Employer Contribution History
• Funding History
53
CALPERS ACTUARIAL VALUATION - June 30, 2017
PEPRA Miscellaneous Plan of the Riverside County Transportation Commission
CaIPERS ID: 1431537449
Breakdown of Entry Age Normal Accrued Liability
Active Members
Transferred Members
Terminated Members
Members and Beneficiaries Receiving Payments
Total
Allocation of Plan's Share of Pool's
Experience/Assumption Change
183,274
0
13,224
0
196,498
It is the policy of CaIPERS to ensure equity within the risk pools by allocating the pool's experience
gains/losses and assumption changes in a manner that treats each employer equitably and maintains benefit
security for the members of the System while minimizing substantial variations in employer contributions. The
Pool's experience gains/losses and impact of assumption/method changes is allocated to the plan as follows:
1. Plan's Accrued Liability $ 196,498
2. Projected UAL balance at 6/30/17 13,891
3. Pool's Accrued Liabilityl $ 15,780,998,593
4. Sum of Pool's Individual Plan UAL Balances at 6/30/171 3,912,002,885
5. Pool's 2016/17 Investment & Asset (Gain)/Loss (413,206,167)
6. Pool's 2016/17 Other (Gain)/Loss (21,126,605)
7. Plan's Share of Pool's Asset (Gain)/Loss [(1) - (2)] / [(3) - (4)] * (5) (6,357)
8. Plan's Share of Pool's Other (Gain)/Loss [(1)] / [(3)] * (6) (263)
9. Plan's New (Gain)/Loss as of 6/30/2017 [(7) + (8)] $ (6,620)
10. Increase in Pool's Accrued Liability due to Change in Assumptions) 258,379,047
11. Plan's Share of Pool's Change in Assumptions [(1)] / [(3)] * (10) $ 3,217
1 Does not include plans that transferred to Pool on the valuation date.
Development of the Plan's Share of Pool's Market
Value of Assets
12. Plan's UAL [(2) + (9) + (11)] $ 10,488
13. Plan's Share of Pool's MVA [(1) - (12)] $ 186,010
Rate Plan belonging to the Miscellaneous Risk Pool Page 8
54
CALPERS ACTUARIAL VALUATION - June 30, 2017
PEPRA Miscellaneous Plan of the Riverside County Transportation Commission
CaIPERS ID: 1431537449
Schedule of Plan's Amortization Bases
There is a two-year lag between the valuation date and the start of the contribution fiscal year.
• The assets, liabilities, and funded status of the plan are measured as of the valuation date: June 30, 2017.
• The employer contribution determined by the valuation is for the fiscal year beginning two years after the valuation date: Fiscal Year 2019-20.
This two-year lag is necessary due to the amount of time needed to extract and test the membership and financial data, and the need to provide public agencies
with their employer contribution well in advance of the start of the fiscal year.
The Unfunded Accrued Liability (UAL) is used to determine the employer contribution and therefore must be rolled forward two years from the valuation date to the
first day of the fiscal year for which the contribution is being determined. The UAL is rolled forward each year by subtracting the payment on the UAL for the fiscal
year and adjusting for interest. Additional discretionary payments are reflected in the Expected Payments column in the fiscal year they were made by the agency.
Amounts for Fiscal 2019-20
Ramp Scheduled
Date Up/Down Amortization Balance Payment Balance Payment Balance Payment
Reason for Base Established 2019-20 Period 6/30/17 2017-18 6/30/18 2018-19 6/30/19 for2019-20
FRESH START 06/30/17 No Ramp 5 $10,488 $(4,696) $16,112 $528 $16,733 $3,760
TOTAL $10,488 $(4,696) $16,112 $528 $16,733 $3,760
The (gain)/loss bases are the plan's allocated share of the risk pool's (gain)/loss for the fiscal year as disclosed on the previous page. These (gain)/loss bases will be
amortized according to Board policy over 30 years with a 5-year ramp -up.
If the total Unfunded Liability is negative (i.e., plan has a surplus), the scheduled payment is $0, because the minimum required contribution under PEPRA must be
at least equal to the normal cost.
Rate Plan belonging to the Miscellaneous Risk Pool Page 9
55
CALPERS ACTUARIAL VALUATION - June 30, 2017
PEPRA Miscellaneous Plan of the Riverside County Transportation Commission
CaIPERS ID: 1431537449
Amortization Schedule and Alternatives
The amortization schedule on the previous page shows the minimum contributions required according to
CaIPERS amortization policy. There has been considerable interest from many agencies in paying off these
unfunded accrued liabilities sooner and the possible savings in doing so. As a result, we have provided
alternate amortization schedules to help analyze the current amortization schedule and illustrate the
advantages of accelerating unfunded liability payments.
Shown on the following page are future year amortization payments based on: 1) the current amortization
schedule reflecting the individual bases and remaining periods shown on the previous page, and 2) alternate
"fresh start" amortization schedules using two sample periods that would both result in interest savings
relative to the current amortization schedule. Note that the payments under each alternate scenario increase
by 2.875 percent for each year into the future. The schedules do not attempt to reflect any experience
after June 30, 2017 that may deviate from the actuarial assumptions. Therefore, future
amortization payments displayed in the Current Amortization Schedule may not match projected
amortization payments shown in connection with Projected Employer Contributions provided
elsewhere in this report.
The Current Amortization Schedule typically contains individual bases that are both positive and negative.
Positive bases result from plan changes, assumption changes or plan experience that result in increases to
unfunded liability. Negative bases result from plan changes, assumption changes or plan experience that result
in decreases to unfunded liability. The combination of positive and negative bases within an amortization
schedule can result in unusual or problematic circumstances in future years such as:
• A positive total unfunded liability with a negative total payment,
• A negative total unfunded liability with a positive total payment, or
• Total payments that completely amortize the unfunded liability over a very short period of time
In any year where one of the above scenarios occurs, the actuary will consider corrective action such as
replacing the existing unfunded liability bases with a single "fresh start" base and amortizing it over a
reasonable period.
The Current Amortization Schedule on the following page may appear to show that, based on the current
amortization bases, one of the above scenarios will occur at some point in the future. It is impossible to know
today whether such a scenario will in fact arise since there will be additional bases added to the amortization
schedule in each future year. Should such a scenario arise in any future year, the actuary will take appropriate
action based on guidelines in the CaIPERS amortization policy.
Rate Plan belonging to the Miscellaneous Risk Pool Page 10
56
CALPERS ACTUARIAL VALUATION - June 30, 2017
PEPRA Miscellaneous Plan of the Riverside County Transportation Commission
CaIPERS ID: 1431537449
Amortization Schedule and Alternatives
Date
Current Amortization
Schedule
Alternate Schedules
0 Year Amortization 0 Year Amortization
Balance Payment Balance Payment Balance Payment
6/30/2019 16,733 3,760 N/A N/A N/A N/A
6/30/2020 14,052 3,869
6/30/2021 11,065 3,980
6/30/2022 7,745 4,094
6/30/2023 4,067 4,212
6/30/2024
6/30/2025
6/30/2026
6/30/2027
6/30/2028
6/30/2029
6/30/2030
6/30/2031
6/30/2032
6/30/2033
6/30/2034
6/30/2035
6/30/2036
6/30/2037
6/30/2038
6/30/2039
6/30/2040
6/30/2041
6/30/2042
6/30/2043
6/30/2044
6/30/2045
6/30/2046
6/30/2047
6/30/2048
Totals 19,915 N/A N/A
Interest Paid 3,181 N/A N/A
Estimated Savings N/A N/A
* This schedule does not reflect the impact of adopted discount rate changes that will become effective beyond June 30,
2017. For Projected Employer Contributions, please see page 5.
Rate Plan belonging to the Miscellaneous Risk Pool Page 11
57
CALPERS ACTUARIAL VALUATION - June 30, 2017
PEPRA Miscellaneous Plan of the Riverside County Transportation Commission
CaIPERS ID: 1431537449
Employer Contribution History
The table below provides a recent history of the required employer contributions for the plan, as determined by
the annual actuarial valuation. It does not account for prepayments or benefit changes made during a fiscal
year.
Fiscal Employer Unfunded Liability
Year Normal Cost Payment ($)
2016 - 17 7.283% $21
2017 - 18 7.262% $79
2018 - 19 7.654% $3,724
2019 - 20 8.069% $3,760
Funding History
The funding history below shows the plan's actuarial accrued liability, share of the pool's market value of
assets, share of the pool's unfunded liability, funded ratio, and annual covered payroll.
Accrued Share of Pool's Plan's Share of Annual
Valuation Liability Market Value of Pool's Unfunded Funded Covered
Date (AL) Assets (MVA) Liability Ratio Payroll
06/30/2014 $ 13,776 $ 14,389 $ (613) 104.5% $ 136,440
06/30/2015 44,688 42,487 2,201 95.1% 246,072
06/30/2016 114,761 103,368 11,393 90.1% 363,340
06/30/2017 196,498 186,010 10,488 94.7% 416,785
Rate Plan belonging to the Miscellaneous Risk Pool Page 12
58
Risk Analysis
• Analysis of Future Investment Return Scenarios
• Analysis of Discount Rate Sensitivity
• Volatility Ratios
• Hypothetical Termination Liability
59
CALPERS ACTUARIAL VALUATION - June 30, 2017
PEPRA Miscellaneous Plan of the Riverside County Transportation Commission
CaIPERS ID: 1431537449
Analysis of Future Investment Return Scenarios
Analysis was performed to determine the effects of various future investment returns on required employer
contributions. The projections below provide a range of results based on five investment return scenarios
assumed to occur during the next four fiscal years (2017-18, 2018-19, 2019-20 and 2020-21). The projections
also assume that all other actuarial assumptions will be realized and that no further changes to assumptions,
contributions, benefits, or funding will occur.
Each of the five investment return scenarios assumes a return of 7.25 percent for fiscal year 2017-18. For
fiscal years 2018-19, 2019-20, and 2020-21 each scenario assumes an alternate fixed annual return. The fixed
return assumptions for the five scenarios are 1.0 percent, 4.0 percent, 7.0 percent, 9.0 percent and 12.0
percent.
The alternate investment returns were chosen based on stochastic analysis of possible future investment
returns over the four-year period ending June 30, 2021. Using the expected returns and volatility of the asset
classes in which the funds are invested, we produced five thousand stochastic outcomes for this period based
on the recently completed Asset Liability Management process. We then selected annual returns that
approximate the 5tn, 25tn, 50tn, 75tn, and 95tn percentiles for these outcomes. For example, of all the 4-year
outcomes generated in the stochastic analysis, approximately 25 percent of them had an average annual
return of 4.0 percent or less.
Required contributions outside of this range are also possible. In particular, whereas it is unlikely that
investment returns will average less than 1.0 percent or greater than 12.0 percent over this four-year period,
the possibility of a single investment return less than 1.0 percent or greater than 12.0 percent in any given
year is much greater.
Assumed Annual Return From
2018-19through 2020-21
Projected Employer Contributions
2020-21
2021-22
2022-23
2023-24
1.0%
Normal Cost
7.90/0
7.9%
7.9%
7.9%
UAL Contribution
$4,100
$4,600
$5,400
$6,400
4.0%
Normal Cost
7.90/0
7.9%
7.9%
7.9%
UAL Contribution
$4,100
$4,500
$5,100
$5,800
7.0%
Normal Cost
7.90/0
7.9%
7.9%
7.9%
UAL Contribution
$4,100
$4,400
$4,800
$5,200
9.0%
Normal Cost
7.90/0
8.10/0
8.30/0
8.5%
UAL Contribution
$4,100
$4,400
$4,700
$1,900
12.0%
Normal Cost
7.9%
8.1%
8.3%
8.5%
UAL Contribution
$4,100
$4,300
$210
$0
Given the temporary suspension of the Risk Mitigation Policy during the period over which the discount rate
assumption is being phased down to 7.0 percent, the projections above were performed without reflection of
any possible impact of this Policy for Fiscal Year 2020-21. In addition, the projections above do not reflect the
recent changes to the new amortization policy effective with the June 30, 2019 valuation but the impact on
the results above is expected to be minimal.
Rate Plan belonging to the Miscellaneous Risk Pool Page 14
60
CALPERS ACTUARIAL VALUATION - June 30, 2017
PEPRA Miscellaneous Plan of the Riverside County Transportation Commission
CaIPERS ID: 1431537449
Analysis of Discount Rate Sensitivity
Shown below are various valuation results as of June 30, 2017 assuming alternate discount rates. Results are
shown using the current discount rate of 7.25 percent as well as alternate discount rates of 6.0 percent, 7.0
percent, and 8.0 percent. The alternate rate of 7.0 percent was selected since the Board has adopted this rate
as the final discount rate at the end of the three-year phase -in of the reduction in this assumption. The rates
of 6.0 percent and 8.0 percent were selected since they illustrate the impact of a 1 percent increase or
decrease to the 7.0 percent assumption. This analysis shows the potential plan impacts if the PERF were to
realize investment returns of 6.0 percent, 7.0 percent, or 8.0 percent over the long-term.
This type of analysis gives the reader a sense of the long-term risk to required contributions. For a measure of
funded status that is appropriate for assessing the sufficiency of plan assets to cover estimated termination
liabilities, please see "Hypothetical Termination Liability" at the end of this section.
Sensitivity Analysis
As of June 30, 2017
Plan's Total
Normal Cost
Accrued
Liability
Unfunded
Accrued Liability
Funded
Status
7.250/0 (current discount rate)
15.319%
$196,498
$10,488
94.70/0
6.0%
19.706%
$233,324
$47,314
79.7%
7.00/0
15.919%
$200,536
$14,526
92.80/0
8.0%
13.012%
$173,849
$(12,161)
107.0%
Rate Plan belonging to the Miscellaneous Risk Pool Page 15
61
CALPERS ACTUARIAL VALUATION - June 30, 2017
PEPRA Miscellaneous Plan of the Riverside County Transportation Commission
CaIPERS ID: 1431537449
Volatility Ratios
Actuarial calculations are based on a number of assumptions about long-term demographic and economic
behavior. Unless these assumptions (terminations, deaths, disabilities, retirements, salary growth, and
investment return) are exactly realized each year, there will be differences on a year-to-year basis. The year-
to-year differences between actual experience and the assumptions are called actuarial gains and losses and
serve to lower or raise required employer contributions from one year to the next. Therefore, employer
contributions will inevitably fluctuate, especially due to the ups and downs of investment returns.
Asset Volatility Ratio (AVR)
Plans that have higher asset -to -payroll ratios experience more volatile employer contributions (as a
percentage of payroll) due to investment return. For example, a plan with an asset -to -payroll ratio of 8 may
experience twice the contribution volatility due to investment return volatility, than a plan with an asset -to -
payroll ratio of 4. Shown below is the asset volatility ratio, a measure of the plan's current contribution
volatility. It should be noted that this ratio is a measure of the current situation. It increases over time but
generally tends to stabilize as the plan matures.
Liability Volatility Ratio (LVR)
Plans that have higher liability -to -payroll ratios experience more volatile employer contributions (as a
percentage of payroll) due to investment return and changes in liability. For example, a plan with a liability -to -
payroll ratio of 8 is expected to have twice the contribution volatility of a plan with a liability -to -payroll ratio of
4. The liability volatility ratio is also shown in the table below. It should be noted that this ratio indicates a
longer -term potential for contribution volatility. The asset volatility ratio, described above, will tend to move
closer to the liability volatility ratio as the plan matures. Since the liability volatility ratio is a long-term
measure, it is shown below at the current discount rate (7.25 percent) as well as the discount rate the Board
has adopted to determine the contribution requirement in the June 30, 2018 actuarial valuation (7.00
percent).
Rate Volatility As of June 30, 2017
1. Market Value of Assets
2. Payroll
3. Asset Volatility Ratio (AVR) [(1) / (2)]
4. Accrued Liability
5. Liability Volatility Ratio (LVR) [(4) / (2)]
6. Accrued Liability (7.00% discount rate)
7. Projected Liability Volatility Ratio [(6) / (2)]
186,010
416,785
0.4
196,498
0.5
200,536
0.5
Rate Plan belonging to the Miscellaneous Risk Pool Page 16
62
CALPERS ACTUARIAL VALUATION - June 30, 2017
PEPRA Miscellaneous Plan of the Riverside County Transportation Commission
CaIPERS ID: 1431537449
Hypothetical Termination Liability
The hypothetical termination liability is an estimate of the financial position of the plan had the contract with
CaIPERS been terminated as of June 30, 2017. The plan liability on a termination basis is calculated differently
compared to the plan's ongoing funding liability. For the hypothetical termination liability calculation, both
compensation and service are frozen as of the valuation date and no future pay increases or service accruals
are assumed. This measure of funded status is not appropriate for assessing the need for future employer
contributions in the case of an ongoing plan, that is, for an employer that continues to provide CaIPERS
retirement benefits to active employees.
A more conservative investment policy and asset allocation strategy was adopted by the CaIPERS Board for
the Terminated Agency Pool. The Terminated Agency Pool has limited funding sources since no future
employer contributions will be made. Therefore, expected benefit payments are secured by risk -free assets
and benefit security for members is increased while funding risk is limited. However, this asset allocation has a
lower expected rate of return than the PERF and consequently, a lower discount rate is assumed. The lower
discount rate for the Terminated Agency Pool results in higher liabilities for terminated plans.
The effective termination discount rate will depend on actual market rates of return for risk -free securities on
the date of termination. As market discount rates are variable, the table below shows a range for the
hypothetical termination liability based on the lowest and highest interest rates observed during an
approximate 2-year period centered around the valuation date.
Market
Value of
Assets (MVA)
$186, 010
Hypothetical
Termination
Liabilityi,i
@ 1.75%
$474,711
Funded
Status
39.2%
Unfunded
Termination
Liability
@ 1.75%
$288,701
Hypothetical
Termination
Liabilityi,i
@ 3.00%
$407,497
Funded
Status
45.7%
Unfunded
Termination
Liability
@ 3.00%
$221,486
' The hypothetical liabilities calculated above include a 5 percent mortality contingency load in accordance with Board policy.
Other actuarial assumptions can be found in Appendix A.
2 The current discount rate assumption used for termination valuations is a weighted average of the 10-year and 30-year
U.S. Treasury yields where the weights are based on matching asset and liability durations as of the termination date. The
discount rates used in the table are based on 20-year Treasury bonds, rounded to the nearest quarter percentage point,
which is a good proxy for most plans. The 20-year Treasury yield was 2.61 percent on June 30, 2017, and was 2.83
percent on January 31, 2018.
In order to terminate the plan, you must first contact our Retirement Services Contract Unit to initiate a
Resolution of Intent to terminate. The completed Resolution will allow the plan actuary to give you a
preliminary termination valuation with a more up-to-date estimate of the plan liabilities. CaIPERS advises you
to consult with the plan actuary before beginning this process.
Rate Plan belonging to the Miscellaneous Risk Pool Page 17
63
CALPERS ACTUARIAL VALUATION - June 30, 2017
PEPRA Miscellaneous Plan of the Riverside County Transportation Commission
CaIPERS ID: 1431537449
Participant Data
The table below shows a summary of your plan's member data upon which this valuation is based:
Reported Payroll
Projected Payroll for Contribution Purposes
June 30, 2016 June 30, 2017
$ 363,340 $ 416,785
$ 397,031 $ 453,776
Number of Members
Active 3 4
Transferred 0 0
Separated 1 1
Retired 0 0
List of Class 1 Benefit Provisions
This plan has the additional Class 1 Benefit Provisions:
• Post -Retirement Survivor Allowance (PRSA)
• 3% Annual Cost -of -Living Allowance Increase (3% COLA)
• IDR For Local Miscellaneous Members (50% IDR)
Rate Plan belonging to the Miscellaneous Risk Pool Page 18
64
Plan's Major Benefit Options
65
SECTION 1 — Plan Specific Information for the PEPRA Miscellaneous Plan of the Riverside County Transportation Commission
Plan's Major Benefit Options
Shown below is a summary of the major optional benefits for which your agency has contracted. A description of principal standard and optional plan provisions
is in Appendix B within Section 2 of this report.
Contract package
Active
Misc
Benefit Provision
Benefit Formula
2.0% @ 62
Social Security Coverage
No
Full/Modified
Full
Employee Contribution Rate
7.25%
Final Average Compensation Period
Three Year
Sick Leave Credit
Yes
Non -Industrial Disability
Standard
Industrial Disability
Yes
Pre -Retirement Death Benefits
Optional Settlement 2
Yes
1959 Survivor Benefit Level
level 3
Special
No
Alternate (firefighters)
No
Post -Retirement Death Benefits
Lump Sum
$500
Survivor Allowance (PRSA)
Yes
COLA
3%
Rate Plan belonging to the Miscellaneous Risk Pool
Page 20
66
Section 2
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Section 2 may be found on the CaIPERS website
(wwmcalpers.ca.gov) in the Forms and
Publications section
67
Tara Bve rl
From: Tara Byerly
Sent: Wednesday, May 01, 2019 11:13 AM
To: Tara Byerly
Cc: Anne Mayer; JOHN STANDIFORD; Lisa Mobley
Subject: ROTC: May Executive Committee - May 8, 2019
Good morning Executive Committee Members,
The May Agenda for the Executive Committee meeting scheduled for Wednesday, May 8 @ 9:00 a.m. is available.
Please copy the link:
http://rctcdev.info/uploads/media items/may-executive-committee-agenda-may-8-2019.original.pdf
Let me know if you have any questions or concerns.
Respectfully,
Tara Byerly
Deputy Clerk of the Board
Riverside County Transportation Commission
951.787.7141 W 1951.787.7906 F
4080 Lemon St. 3rd FI. 1 P.O. Box 12008 Riverside, CA 92502
rctc.org
f in 03
i
RIVERSIDE COUNTY TRANSPORTATION COMMISSION
EXECUTIVE COMMITTEE
ROLL CALL
MAY 8, 2019
County of Riverside, District II
County of Riverside, District III
County of Riverside, District IV
County of Riverside, District V
City of Beaumont
City of Jurupa Valley
City of Indian Wells
City of Palm Desert
City of Palm Springs
City of Temecula
City of Wildomar
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Absent
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RIVERSIDE COUNTY TRANSPORTATION COMMISSION
EXECUTIVE COMMITTEE SIGN -IN SHEET
MAY 8, 2019
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