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Home My Public Portal AboutExhibit MSD 62F Milliman 082611 MSD Employees' Pension Plan Cost StatementExhibit MSD 62F Milliman August 26, 2011 Karl Tyminski Metropolitan St. Louis Sewer District 2350 Market Street St. Louis, MO 63103 RE: Metropolitan St. Louis Sewer District Employees' Pension Plan — Section 105.665 Cost Statement Dear Mr. Tyminski: 501 N. Broadway Suite 550 St. Louis, MO 63102 USA Tel +1 314 231 3031 Fax +1 314 231 0249 milliman.com The purpose of this letter is to provide the Metropolitan St. Louis Sewer District with a 10 year projection of contribution requirements. The enclosed exhibit projects the contribution requirements under the current Defined Benefit and Defined Contribution Arrangement as well as under the Defmed Benefit only arrangement as in effect prior to the 2011 plan amendment. Assumptions: 1. Defmed Benefit Assumed Investment Return 7.50% for 2011; 7.25 % for 2012 and later 2. Future aggregate payroll growth — 4.00% 3. Defined Contribution Match Participation — 100% participation 4. Estimate Defined Benefit Market Value of Assets at December 31, 2011 - $192,551,000 All other assumptions are the same as used for the December 31, 2011 Actuarial valuation. In preparing this report, we relied, without audit, on information (some oral and some in writing) supplied by the Metropolitan St. Louis Sewer District. This information includes, but is not limited to, Plan documents and provisions, employee data, and fmancial information. In our examination of these data, we have found them reasonably consistent and comparable with data used for other purposes. Since the valuation results are dependent on the integrity of the data supplied, the results can be expected to differ if the underlying data is incomplete or missing. It should be noted that if any data or other information is inaccurate or incomplete, our calculations may need to be revised. Milliman August 26, 2011 Karl Tyminski Page 2 On the basis of the foregoing, we hereby certify that, to the best of our knowledge and belief, this report is complete and accurate and has been prepared in accordance with generally recognized and accepted actuarial principles and practices which are consistent with the principles prescribed by the Actuarial Standards Board and the Code of Professional Conduct and Qualification Standards for Public Statements of Actuarial Opinion of the American Academy of Actuaries. We are members of the American Academy of Actuaries and meet the Qualification Standards to render the actuarial opinion contained herein. Actuarial computations included in this report are for the exclusive purposes cited in this report. Determinations for purposes other than those specifically referenced in this report may be significantly different. Accordingly, additional determinations may be needed for other purposes, such as judging benefit security on a settlement basis. These cost estimates are subject to the uncertainties of a regular actuarial valuation; the costs are inexact because they are based on assumptions that are themselves necessarily inexact, even though we consider them reasonable. Thus, the emerging costs may vary from those presented in this letter to the extent actual experience differs from that projected by the actuarial assumptions. This report has been prepared for the internal use of and is only to be relied upon by the Metropolitan St. Louis Sewer District and it's auditors; it is not for the use or benefit of any third party for any purpose. No portion of this report may be disclosed to any other party (other than Missouri State regulatory personnel) without Milliman's prior written consent. In the event such consent is given, the report must be provided in its entirety, unless prior written consent is obtained from Milliman. We recommend that any such party have its own actuary or other qualified professional review this report to ensure that the party understands the assumptions and uncertainties inherent in our estimates. We respectfully submit the following exhibits, and we look forward to discussing them with you. We are available to address any questions that you may have. Sincerely, Michael J. Zwiener, FSA William D. Winningham, EA Consulting Actuary Actuary cc: Vicki Taylor -Edwards Jan Zimmerman Enclosure Metropolitan St . Louis Sewer District Employe es' Pensi on Pl an Projection of Annual Required Contributions C ompared to Prior DB only Retirement Pr ogram $17,500,000 $17,000,000 $16,500,000 $16,000,000 $15,500,000 $15,000,000 $14,500,000 $14,000,000 g $13,500,000 $13,000,000 ez $12,500,000 c $12,000,000 Po $11,500,000 $11,000,000 $10,500,000 $10,000,000 3 $9,500,000 $9,000,000 $8,500,000 $8,000,000 $7,500,000 $7,000,000 $6,500,000 $6,000,000 $5,500,000 $5,000,000 2011 2012 2013 2014 2015 2016 Fiscal Year End 2017 2018 2019 2020 2021 it== Current DB and DC plan —A—Prior Defined Benefit Plan 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Total DB Contributio ns 11,100,000 12,100,000 12,800,000 13,800,000 14,100,000 14,500,000 14,900,000 15,200,000 15,600,000 16,100,000 16,500,000 156,700,000 DB/DC Plan Contributions 11,100,000 11,900,000 12,500,000 13,300,000 13,500,000 13,800,000 14,000,000 14,200,000 14,400,000 14,600,000 14,800,000 148,100,000 Difference 0 200,000 300,000 500,000 600,000 700,000 900,000 1,000,000 1,200,000 1,500,000 1,700,000 8,600,000 This work product was prepa red so le ly fo r the MSD for the purposes described he rein and may n ot be appropriate to use for other purposes. Milliman does not inte nd to benefit and assume s no du ty or liability to o ther partie s who re ce iv e this work.