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METROPOLITAN ST. LOUIS SEWER DISTRICT
EMPLOYEES' PENSION PLAN
Actuarial Valuation as of December 31, 2016
Plan Year: January 1, 2017 to December 31, 2017
Prepared by
Michael Zwiener, FSA, MAAA
Consulting Actuary
William Winningham, EA, MAAA
Actuary
Milliman, Inc.
500 North Broadway, Suite 1750
St. Louis, MO 63102 USA
Tel +1 314 231 3031
Fax +1 314 231 0249
milliman.com
May 16, 2017
.
Metropolitan St. Louis Sewer District
Employees’ Pension Plan
December 31, 2016 Actuarial Valuation
Contents
Page
Introduction and Purpose 1
Actuarial Certification 2
Discussion of Valuation Results 4
Summary of Valuation Results 6
Statement of Assets as of December 31, 2016 7
Statement of Income and Disbursements 8
Development of Actuarial Value of Assets 9
Actuarial Balance Sheet 10
Development of Recommended Contribution 11
Determination of Amortization Charges for the
Recommended Contribution 12
Determination of (Gain)/Loss for Plan Year Ending 13
December 31, 2016
Actuarial Assumptions and Methods 14
Summary of Plan Provisions 17
Summary of Member Data 22
Historical Trends 26
This work product was prepared solely for the Metropolitan St. Louis Sewer District for the purposes described herein and may not be appropriate
to use for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties who receive this work. Milliman
recommends that third parties be aided by their own actuary or other qualified professional when reviewing the Milliman work product. 1
Metropolitan St. Louis Sewer District
Employees’ Pension Plan
December 31, 2016 Actuarial Valuation
Introduction and Purpose
In this report, we present the results of the December 31, 2016 actuarial valuation for the
Metropolitan St. Louis Sewer District Employees’ Pension Plan. The report has been prepared at
the request of the District’s Board for the sole use of the Board and the Metropolitan St. Louis
Sewer District as the contributing plan sponsor.
PURPOSES OF THE VALUATION
The actuarial valuation of the Plan is intended to accomplish several purposes:
• The determination of the recommended level of employer contributions for the 2017
calendar year
• Assessment of the relative funded position of the plan on an ongoing basis, i.e.,
through a comparison of plan assets and projected plan liabilities
This work product was prepared solely for the Metropolitan St. Louis Sewer District for the purposes described herein and may not be appropriate
to use for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties who receive this work. Milliman
recommends that third parties be aided by their own actuary or other qualified professional when reviewing the Milliman work product. 2
Metropolitan St. Louis Sewer District
Employees’ Pension Plan
December 31, 2016 Actuarial Valuation
Actuarial Certification
As requested, we have performed an actuarial valuation of the Metropolitan St. Louis Sewer
District Employees’ Pension Plan as of December 31, 2016 for determining contributions for the
calendar year ending December 31, 2017. Our findings are set forth in this actuary’s report. This
report reflects the benefit provisions in effect on December 31, 2016.
In preparing this report, we relied, without audit, on information (some oral and some in writing)
supplied by the District and U.S. Bank. This information includes, but is not limited to, statutory
provisions, employee data, and financial information. We found this information to be
reasonably consistent and comparable with information used for other purposes. The valuation
results depend on the integrity of this information. If any of this information is inaccurate or
incomplete, our results may be different, and our calculations may need to be revised.
Actuarial assumptions, including discount rates, mortality tables, and others identified in this
report, and actuarial cost methods are prescribed by the District. The District is responsible for
selecting the plan’s funding policy, actuarial valuation methods, asset valuation methods, and
assumptions. The policies methods and assumptions used in this valuation are those that have
been so prescribed and are described in the Actuarial Basis of this report.
This valuation report is only an estimate of the Plan’s financial condition as of a single date. It
can neither predict the Plan’s future condition nor guarantee future financial soundness.
Actuarial valuations do not affect the ultimate cost of Plan benefits, only the timing of Plan
contributions. While the valuation is based on an array of individually reasonable assumptions,
other assumption sets may also be reasonable and valuation results based on those assumptions
would be different. No one set of assumptions is uniquely correct. Determining results using
alternative assumptions is outside the scope of our engagement.
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; increases or decreases expected as part of the natural operation of the methodology
used for these measurements (such as the end of an amortization period or additional cost or
contribution requirements based on the plan’s funded status); and changes in plan provisions or
applicable law. Due to the limited scope of our assignment, we did not perform an analysis of
the potential range of future measurements. The District has the final decision regarding the
appropriateness of the assumptions and adopted them as indicated in this report.
Actuarial computations presented in this report are for purposes of determining the recommended
funding amounts for the District. The calculations in the enclosed report have been made on a
This work product was prepared solely for the Metropolitan St. Louis Sewer District for the purposes described herein and may not be appropriate
to use for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties who receive this work. Milliman
recommends that third parties be aided by their own actuary or other qualified professional when reviewing the Milliman work product. 3
basis consistent with our understanding of the District’s funding requirements and goals as well
as our understanding of the plan provisions described on pages 17-21 of this report.
Determinations for purposes other than meeting these requirements may be significantly different
from the results contained in this report. Accordingly, additional determinations may be needed
for other purposes.
Milliman’s work is prepared solely for the internal business use of the Metropolitan St. Louis
Sewer District. To the extent that Milliman’s work is not subject to disclosure under applicable
public records laws, Milliman’s work may not be provided to third parties without Milliman’s
prior written consent. Milliman does not intend to benefit or create a legal duty to any third party
recipient of its work product. Milliman’s consent to release its work product to any third party
may be conditioned on the third party signing a Release, subject to the following exceptions:
(a) The District may provide a copy of Milliman’s work, in its entirety, to the Plan’s
professional service advisors who are subject to a duty of confidentiality and who
agree to not use Milliman’s work for any purpose other than to benefit the Plan.
(b) The District may provide a copy of Milliman’s work, in its entirety, to other
governmental entities, as required by law.
No third party recipient of Milliman’s work product should rely upon Milliman’s work product.
Such recipients should engage qualified professionals for advice appropriate to their own specific
needs.
The consultants who worked on this assignment are pension actuaries. Milliman’s advice is not
intended to be a substitute for qualified legal or accounting counsel.
The signing actuaries are independent of the plan sponsor. We are not aware of any relationship
that would impair the objectivity of our work.
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. We are members of the American Academy of
Actuaries and meet the Qualification Standards to render the actuarial opinion contained herein.
We respectfully submit the following report, and we look forward to discussing it with you.
Respectfully submitted,
Michael J. Zwiener, FSA William D. Winningham, EA
Consulting Actuary Actuary
Joint Board Enrollment #17-03686 Joint Board Enrollment #17-06367
This work product was prepared solely for the Metropolitan St. Louis Sewer District for the purposes described herein and may not be appropriate
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recommends that third parties be aided by their own actuary or other qualified professional when reviewing the Milliman work product. 4
Metropolitan St. Louis Sewer District
Employees’ Pension Plan
December 31, 2016 Actuarial Valuation
Discussion of Valuation Results
1. Contribution Recommendation
The results of this valuation are used to determine recommended contribution rates to the
Plan for the 2017 calendar year. A comparison of recommended contribution rates for the
current and immediately preceding valuations is shown below:
Actuarial Valuation as of
December 31, 2015 December 31, 2016
Applies to Calendar Year 01/01/16-12/31/16 01/01/17-12/31/17
Recommended Contribution (end of year) $10,145,562 $12,328,093
Actual Contribution 10,145,562 N/A
There was an increase in the recommended contribution as compared to the preceding
year. The primary reasons for the increase were the updated mortality assumption and
return on the actuarial value of assets below the assumed rate of 7%.
2. Plan Assets
The market value of plan assets increased from $244,212,239 at December 31, 2015 to
$251,010,031 at December 31, 2016. A balance sheet and statement of income and
disbursements are presented on pages 7 and 8, respectively. The net market rate of return
was 4.9% for the period.
The actuarial value of assets increased from $259,774,260 at December 31, 2015 to
$260,826,650 at December 31, 2016. The development of the December 31, 2016
actuarial value of assets is presented on page 9. The net actuarial rate of return for the
period was 2.4% vs. the assumed rate of 7%.
Due to the asset smoothing method used, there are $9,816,619 of net investment losses
that have not yet been recognized in the Actuarial Value of Assets (see page 9).
3. Actuarial Assumptions, Methods and Plan Provisions
The mortality assumption was updated to reflect the RP-2014 mortality tables with
generational projection based on the MP-2016 mortality improvement scale.
All other actuarial assumptions, methods and plan provisions remained the same as the
prior year. Descriptions of these can be found on pages 14-21.
The funding method is the Entry Age Normal method where Normal Costs are computed as
a level percent of pay. The Unfunded Accrued Liability is amortized over a period of 20
This work product was prepared solely for the Metropolitan St. Louis Sewer District for the purposes described herein and may not be appropriate
to use for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties who receive this work. Milliman
recommends that third parties be aided by their own actuary or other qualified professional when reviewing the Milliman work product. 5
years. The annual amortization payment is calculated as a level dollar amount. The
amortization period was reset to 20 years for all outstanding bases effective December 31,
2008.
4. Plan Population
The number of active members included in the valuation decreased from 665 in the
previous valuation to 626 in the current valuation. The number of retired members,
disabled members and beneficiaries increased from 691 to 717. The number of deferred
vested members decreased from 175 to 174. A detailed reconciliation can be found on
page 25.
5. Actuarial Experience
The Plan experienced an overall net actuarial loss for the Plan year ending December 31,
2016. The major components of the loss are summarized below.
(Gain)/Loss
Loss on Actuarial Assets $11,767,000)
Salary Increases Lower than Expected (974,000)
Mortality and COLAs 530,000)
Retirements (275,000)
Turnover (186,000)
Other 22,000)
Net Actuarial Loss $10,884,000)
6. GASB Statements 67 and 68 Disclosures
GASB Statements 67 and 68 disclosures will be presented in a separate report.
Metropolitan St. Louis Sewer District
Employees' Pension Plan
December 31, 2016 Actuarial Valuation
Summary of Valuation Results
Valuation Date Valuation Date
December 31, 2015 December 31, 2016
Number of Members:
Active 665 626
Retired Members 556 575
Disabled Members 20 21
Beneficiaries 115 121
Terminated Vested Members 175 174
Total 1,531 1,517
Market Value of Assets $244,212,239 $251,010,031
Actuarial Value of Assets 259,774,260 260,826,650
Present Value of Future Benefits 340,380,288 361,206,402
Entry Age Normal Accrued Liability 296,812,242 318,049,216
Unfunded Entry Age Normal Accrued Liability 37,037,982 57,222,566
Recommended Contribution 10,145,562 12,328,093
Covered Payroll 43,344,502 42,054,815
Recommended Contribution as a Percentage of Covered Payroll 23.41%29.31%
Present Value of Accrued Benefits 261,439,370 281,644,036
6
This work product was prepared solely for the Metropolitan St. Louis Sewer District for the purposes described herein and may
not be appropriate to use for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties
who receive this work. Milliman recommends that third parties be aided by their own actuary or other qualified professional
when reviewing the Milliman work product.
Metropolitan St. Louis Sewer District
Employees' Pension Plan
December 31, 2016 Actuarial Valuation
Statement of Assets as of December 31, 2016
Assets Market Value
1.Mutual Funds $85,978,099
2.Corporate Obligations 21,073,241
3.Collective Investment Fund 101,371,693
4.Domestic Common Stocks 17,264,512
5.US Treasury and Agency Obligations 12,165,384
6.Money Markets 11,399,948
7.Foreign Stocks 681,166
8.Municipal Obligations 872,406
9.Valuation Accrual: Entrust - Collective Investment Fund 12/31 vs. 11/30 107,129
10.Interest and Dividends Receivable 245,903
Total Assets 251,159,481
Liabilities
1.Accrued Expenses 149,450
Total Liabilities 149,450
Net Assets $251,010,031
7
This work product was prepared solely for the Metropolitan St. Louis Sewer District for the purposes described herein and may
not be appropriate to use for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties
who receive this work. Milliman recommends that third parties be aided by their own actuary or other qualified professional
when reviewing the Milliman work product.
Metropolitan St. Louis Sewer District
Employees' Pension Plan
December 31, 2016 Actuarial Valuation
Statement of Income and Disbursements
1.Market Value of Assets as of January 1, 2016 $244,212,239
2.Income
a.Employer Contributions 10,145,562
b.Investment Income (Including Realized
and Unrealized Capital Gains/Losses)12,808,007
c.Total Income 22,953,569
3.Disbursements
a.Employee Benefit Distributions 15,260,904
b.Expenses 894,873
c.Total Disbursements 16,155,777
4.Net Increase / (Decrease)6,797,792
= (2c) - (3c)
5.Market Value of Assets as of December 31, 2016 $251,010,031
= (1) + (4)
6.Rate of Return 4.9%
8
This work product was prepared solely for the Metropolitan St. Louis Sewer District for the purposes described herein and may
not be appropriate to use for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties
who receive this work. Milliman recommends that third parties be aided by their own actuary or other qualified professional
when reviewing the Milliman work product.
Metropolitan St. Louis Sewer District
Employees' Pension Plan
December 31, 2016 Actuarial Valuation
Development of Actuarial Value of Assets
2016 2015
Plan Year Plan Year
Prior Year Actuarial Value of Assets $259,774,260 $253,771,605
Contributions 10,145,562 10,059,004
Benefit Payments (15,260,904)(14,474,566)
Expenses (894,873)(954,556)
Expected Return 18,184,198 17,764,012
Net Adjustment 12,173,983 12,393,894
12/31/2016 12/31/2015 12/31/2014
Market Value $251,010,031 $244,212,239 $250,515,821
2016 Adjustment N/A 12,173,983 12,173,983
2015 Adjustment N/A N/A 12,393,894
Adjusted Market Value 251,010,031 256,386,222 275,083,698
Actuarial Value of Assets 260,826,650
(Average of Adjusted Market Values)
Return on Actuarial Value 6,167,732
Rate of Return on Actuarial Value 2.4%
9
This work product was prepared solely for the Metropolitan St. Louis Sewer District for the purposes described herein and may
not be appropriate to use for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other
parties who receive this work. Milliman recommends that third parties be aided by their own actuary or other qualified
professional when reviewing the Milliman work product.
Metropolitan St. Louis Sewer District
Employees' Pension Plan
December 31, 2016 Actuarial Valuation
Actuarial Balance Sheet
The key elements of the actuarial funding process are illustrated in the Actuarial Balance Sheet.
The format of the balance sheet captures the essential purpose of an actuarial cost method - the
determination of assets sufficient to provide for pension benefits.
The Actuarial Present Value of Current and Prospective Plan Benefits is the liability that must be
balanced by Current and Prospective assets. The Present Value of Future Normal Cost
Contributions represents the prospective assets from contributions that will be made for costs
allocated to the future.
December 31, 2016
Liabilities
1.Actuarial Present Value of Future Benefits
a.Active Members $187,948,680
b.Terminated Vested Members 6,140,100
c.Retired Members 146,611,317
d.Disabled Members 4,069,912
e.Beneficiaries 16,436,393
f.Total 361,206,402
Assets
1.Current Valuation Assets
a.Actuarial Value of Assets 260,826,650
2.Prospective Valuation Assets
a.Unfunded Actuarial Accrued Liability 57,222,566
b.Present Value of Future Normal Cost Contributions 43,157,186
3.Total 361,206,402
10
This work product was prepared solely for the Metropolitan St. Louis Sewer District for the purposes described herein and may
not be appropriate to use for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other
parties who receive this work. Milliman recommends that third parties be aided by their own actuary or other qualified
professional when reviewing the Milliman work product.
Metropolitan St. Louis Sewer District
Employees' Pension Plan
December 31, 2016 Actuarial Valuation
Development of Recommended Contribution
December 31, 2016
1.Present Value of Future Benefits
a.Active Members $187,948,680
b.Terminated Vested Members 6,140,100
c.Retired Members 146,611,317
d.Disabled Members 4,069,912
e.Beneficiaries 16,436,393
f.Total 361,206,402
2.Present Value of Future Normal Costs 43,157,186
3.Entry Age Accrued Liability: (1f) - (2)318,049,216
4.Actuarial Value of Assets 260,826,650
5.Entry Age Unfunded Accrued Liability: (3) - (4)57,222,566
6.Entry Age Normal Cost 5,157,148
7.Covered Payroll 42,054,815
8.Amortization of Unfunded Actuarial Accrued Liability 6,364,434
9.Recommended Contribution at Beginning of Year: (6) + (8)11,521,582
10.Recommended Contribution at End of Year 12,328,093
11.Recommended Contribution as a Percentage of Payroll
Normal Cost 13.12%
Amortization Payment 16.19%
Total 29.31%
11
This work product was prepared solely for the Metropolitan St. Louis Sewer District for the purposes described herein and may
not be appropriate to use for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties
who receive this work. Milliman recommends that third parties be aided by their own actuary or other qualified professional
when reviewing the Milliman work product.
Metropolitan St. Louis Sewer District
Employees' Pension Plan
December 31, 2016 Actuarial Valuation
Determination of Amortization Charges for the Recommended Contribution
Initial Unamortized Unamortized
Date Initial Amortization Base Contribution Base Amortization
Incurred Description Balance Period December 31, 2015 To Base December 31, 2016 Payment
12/31/2008 Amortization Restarted 28,387,059 20 20,753,858 2,902,800 19,303,828 2,562,044
12/31/2009 Experience Loss 9,801,628 20 7,634,131 1,000,895 7,167,625 883,401
12/31/2010 Experience Loss 6,504,951 20 5,349,360 663,877 5,059,938 585,945
03/31/2011 Plan Change (374,381)20 (312,108)(38,189)(295,766)(33,706)
12/31/2011 Experience Gain (5,769,079)20 (4,977,427)(588,141)(4,737,706)(519,100)
12/31/2011 Assumption Changes 14,265,441 20 12,307,889 1,454,319 11,715,122 1,283,599
12/31/2012 Experience Gain (2,111,370)20 (1,900,274)(215,097)(1,818,196)(189,847)
12/31/2013 Assumption Change (269,285)20 (251,527)(27,405)(241,729)(24,188)
12/31/2013 Experience Gain (4,827,108)20 (4,508,783)(491,247)(4,333,150)(433,580)
12/31/2014 Experience Gain (6,122,993)20 (5,933,770)(611,998)(5,737,136)(540,156)
12/31/2014 Assumption Changes 6,500,227 20 6,299,345 649,703 6,090,596 573,435
12/31/2015 Experience Loss 2,577,288 20 2,577,288 257,601 2,500,097 227,362
12/31/2016 Experience Loss 10,884,162 20 N/A N/A 10,884,162 960,176
12/31/2016 Assumption Changes 11,664,881 20 N/A N/A 11,664,881 1,029,049
Total 71,111,421 37,037,982 4,957,118 57,222,566 6,364,434
12
This work product was prepared solely for the Metropolitan St. Louis Sewer District for the purposes described herein and may not be appropriate to use for other purposes. Milliman
does not intend to benefit and assumes no duty or liability to other parties who receive this work. Milliman recommends that third parties be aided by their own actuary or other
qualified professional when reviewing the Milliman work product.
Metropolitan St. Louis Sewer District
Employees' Pension Plan
December 31, 2016 Actuarial Valuation
Determination of (Gain)/Loss for Plan Year Ending December 31, 2016
1.Unfunded Accrued Liability as of December 31, 2015 $37,037,982
2.Normal Cost due December 31, 2015 5,106,625
3.Interest on (1) and (2) at 7.00%2,950,123
4.Employer Contributions for the Prior Plan Year 10,145,562
5.Interest on (4) at 7.00%275,645
6.Change in Unfunded Accrued Liability due to Actuarial Assumption Change 11,664,881
7.Change in Unfunded Accrued Liability due to Plan Amendment 0
8.Expected Unfunded Actuarial Accrued Liability as of December 31, 2016 46,338,404
= (1) + (2) + (3) - (4) - (5) + (6) + (7)
9.Entry Age Accrued Liability as of December 31, 2016 318,049,216
10.Actuarial Value of Assets as of December 31, 2016 260,826,650
11.Unfunded Actuarial Accrued Liability as of December 31, 2016: (9) - (10)57,222,566
12.(Gain)/Loss for Plan Year Ending December 31, 2016: (11) - (8)10,884,162
13
This work product was prepared solely for the Metropolitan St. Louis Sewer District for the purposes described herein and may
not be appropriate to use for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties
who receive this work. Milliman recommends that third parties be aided by their own actuary or other qualified professional
when reviewing the Milliman work product.
This work product was prepared solely for the Metropolitan St. Louis Sewer District for the purposes described herein and may not be appropriate
to use for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties who receive this work. Milliman
recommends that third parties be aided by their own actuary or other qualified professional when reviewing the Milliman work product. 14
Metropolitan St. Louis Sewer District
Employees' Pension Plan
December 31, 2016 Actuarial Valuation
Actuarial Assumptions and Methods
Interest
7.00%, compounded annually
Salary Increases
4.25% per annum
Social Security Wage Base
Assumed to increase at a rate of 3.5% per annum
Inflation
2.50% per annum
Mortality (Effective December 31, 2016)
Healthy Lives, pre-retirement: RP-2014 Employees Mortality Table, male and female rates, with
generational projection from 2006 based on the MP-2016 improvement scale. For the previous
valuation, the assumption was the RP-2000 Employees Mortality Table, male and female rates,
projected 5 years from the valuation date using Scale AA.
Healthy Lives, post-retirement: RP-2014 Healthy Annuitant Mortality Table, male and female
rates, with generational projection from 2006 based on the MP-2016 improvement scale. For the
previous valuation, the assumption was the RP-2000 Healthy Annuitant Mortality Table, male
and female rates, projected 5 years from the valuation date using Scale AA.
Disabled Lives: RP-2014 Disabled Mortality Table, male and female rates. For the previous
valuation, the assumption was the RP-2000 Disabled Mortality Table, male and female rates.
This work product was prepared solely for the Metropolitan St. Louis Sewer District for the purposes described herein and may not be appropriate
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recommends that third parties be aided by their own actuary or other qualified professional when reviewing the Milliman work product. 15
Withdrawal
Select rates based on service, ultimate rates based on attained age. Ultimate rates are from the
Sarason T-1 Table. Rates at selected ages are:
Select Rates Ultimate Rates
Years of Service
Percent
Terminating
Age
Percent
Terminating
0 20 20 5.5
1 12 30 3.7
2 7.5 40 1.1
50 & over 0.0
Retirement
Rates vary by age as follows:
Percent Retiring
Age
Before
75 Points
After
75 Points
55 1% 10%
56 2 10
57 2 10
58 2 10
59 3 10
60 4 15
61 5 15
62 20 35
63 10 25
64 20 25
65 100 100
Disability
Rates at selected ages are:
Age
Percent
Becoming
Disabled
20 0.056
30 0.064
40 0.102
50 0.311
This work product was prepared solely for the Metropolitan St. Louis Sewer District for the purposes described herein and may not be appropriate
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Expenses
None assumed
Marriage
80% of members are assumed to be married at the time of withdrawal, retirement, death or
disability. Males are assumed to be 3 years older than their spouses.
Form of Payment
All members are assumed to elect the 5 Year Certain and Life Annuity.
Actuarial Cost Method
The Entry Age Normal Cost Method on a closed group basis was used. Normal costs are
computed as a level percent of pay. Changes in the Entry Age Normal Unfunded Accrued
Liability (UAL) are amortized on a level dollar basis over layered 20 year periods. For the
12/31/2008 valuation, the amortization period for outstanding bases was reset to 20 years.
Asset Valuation Method
The Actuarial Value of Assets is equal to the average of the Adjusted Market Values for the
current and two previous valuation dates. The Adjusted Market Value for the current valuation
date is equal to the Market Value of Assets. The Adjusted Market Values for the two previous
valuation dates are equal to the Market Values as of the respective valuation dates increased for
contributions and expected return on Actuarial Assets and decreased for benefit payments and
expenses.
This work product was prepared solely for the Metropolitan St. Louis Sewer District for the purposes described herein and may not be appropriate
to use for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties who receive this work. Milliman
recommends that third parties be aided by their own actuary or other qualified professional when reviewing the Milliman work product. 17
Metropolitan St. Louis Sewer District
Employees' Pension Plan
December 31, 2016 Actuarial Valuation
Summary of Plan Provisions
A summary of the current primary provisions of the Plan is presented below. A complete
description of the provisions can be found in Ordinance 13796.
Effective Date
Originally effective November 1, 1967; most recently restated effective January 1, 2014.
Eligibility
Members become eligible after their first hour of employment. The plan was closed to new
entrants effective January 1, 2011.
Employee
Employed on a regular, full-time permanent basis; 1,000 hours deemed full-time. Does not
include technical personnel employed on special occasions.
Earnings
Base pay excluding unpaid leaves of absence (other than on account of military service),
bonuses, overtime and any other additional compensation, determined without regard to salary
reductions under Sections 125, 132, or 457. Does not include unused sick leave.
Final Average Earnings (FAE)
Prior to August 1, 2004, the sum of A and B divided by 3:
A. Highest 78 consecutive pay periods out of the last 260 pay periods,
B. 1.25% of the cash amount paid to a member with respect to unused sick leave,
multiplied by the member’s years of Credited Service.
After August 1, 2004, the average of the highest 78 consecutive pay periods out of the last 260
pay periods.
If a member has less than 78 pay periods, FAE is calculated by dividing the total pay by the
actual number of pay periods and then multiplying by 26.
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to use for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties who receive this work. Milliman
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Continuous Service
Elapsed time from date of hire to date of termination including authorized leaves of absence, the
imputed employment period solely for determining early retirement reductions, military leave
and other absences that do not constitute a termination of employment under the District’s Civil
Service Rules
Credited Service
Elapsed time from date of hire to date of termination including military leave but not including
leaves of absence
Vesting
A member becomes 100% vested upon completion of 60 months of Continuous Service.
Normal Retirement Date (NRD)
First of the month coincident with or next following age 65 and 60 months of Continuous
Service
Normal Retirement Benefit
Prior to August 1, 2004:
1.45% of FAE multiplied by years and complete months Credited Service, plus 0.4% of
FAE in excess of Covered Compensation multiplied by years and complete months of
Credited Service, with a maximum of 35 years
After August 1, 2004:
1.7% of FAE multiplied by years and complete months Credited Service, plus 0.4% of
FAE in excess of Covered Compensation multiplied by years and complete months of
Credited Service, with a maximum of 35 years
The formula in effect prior to August 1, 2004 based on service, earning and sick leave as of June
1, 2009 is protected as a minimum benefit for certain members for which the prior formula
produced higher benefit as of June 1, 2009.
Alternate Retirement Date (ARD)
Attainment of 80 points upon Separation from Service where points are defined as the sum of the
member’s age and Continuous Service. For early retirement reduction, ARD is the date 80 points
would have been achieved if service continued to ARD.
This work product was prepared solely for the Metropolitan St. Louis Sewer District for the purposes described herein and may not be appropriate
to use for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties who receive this work. Milliman
recommends that third parties be aided by their own actuary or other qualified professional when reviewing the Milliman work product. 19
Early Retirement Date (ERD)
First of the month coincident with or next following age 55 and 60 months of Continuous
Service
Early Retirement Benefit
1. The benefit is unreduced if the member has 75 points as of Separation from Service.
2. If the member does not have 75 points as of Separation from Service, the benefit is
reduced 1% per year between ages 60 and 65 and 2% per year between ages 55 and 60
from the earlier of the member’s Normal Retirement Date or Alternate Retirement Date.
Postponed Retirement Date (PRD)
First of the month coincident with or next following Separation from Service after Normal
Retirement Date
Postponed Retirement Benefit
The greater of:
1. Accrued Benefit calculated at Postponed Retirement Date, or
2. Normal Retirement Benefit plus the Actuarial Equivalent of the amount that would have
been paid from NRD to PRD accumulated at 4.0%
Disability Benefit
If a member becomes disabled while in employment after completing three years of service and
qualifies for disability under Social Security, an immediate monthly benefit will be payable equal
to the greater of:
1. Accrued Benefit calculated at disability date, or
2. 25% of monthly earnings
The disability benefit may not exceed the projected Normal Retirement Benefit calculated using
average earnings at the disability date. The disability benefit is payable to age 65 as long as the
member remains disabled.
This work product was prepared solely for the Metropolitan St. Louis Sewer District for the purposes described herein and may not be appropriate
to use for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties who receive this work. Milliman
recommends that third parties be aided by their own actuary or other qualified professional when reviewing the Milliman work product. 20
Death Benefit
If a member dies while in employment after completing five years of service, an immediate
monthly benefit will be payable to his or her beneficiary equal to the greatest of:
1. 50% of the Accrued Benefit calculated at the date of death, or
2. 15% of monthly earnings, or
3. Accrued Benefit payable in a reduced amount under the 100% Contingent Annuitant
Option
If the beneficiary is the member’s surviving spouse, the benefit will be payable for the spouse’s
lifetime. Otherwise, the benefit will be payable to the beneficiary for a period of sixty months
without the adjustment for the Contingent Annuitant Option.
Lump Sum Death Benefit
If a member dies after early or normal retirement, there is a $5,000 death benefit payable to the
member’s beneficiary from the Plan only if no life insurance has been paid from another District
program. This death benefit is in addition to any monthly survivor benefits that would be
payable to the member’s beneficiary under the payment option elected at the time of the
member’s retirement.
Post Retirement Medical Coverage
The District provides individual medical coverage under the same terms as active employees for
members who retire after attaining 75 points or age 62. Such coverage shall continue until the
member becomes eligible for Medicare or becomes covered under another group medical plan.
This benefit is not paid from the Pension Trust, and no liabilities or costs for this benefit are
included in this report.
Cost-of-Living Adjustment (COLA)
For years after January 1, 2001, an annual COLA based on the Consumer Price Index with a
maximum annual increase of the lesser of 3% or $50/month, and a lifetime maximum of the
lesser of 45% or $750/month. Retirees, beneficiaries and disabled members first become eligible
for the COLA on the third January 1st following retirement.
Normal Form of Payment
Five-Year Certain and Life Annuity
This work product was prepared solely for the Metropolitan St. Louis Sewer District for the purposes described herein and may not be appropriate
to use for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties who receive this work. Milliman
recommends that third parties be aided by their own actuary or other qualified professional when reviewing the Milliman work product. 21
Optional Forms of Payment
Ten-Year Certain and Life Option
Life Annuity Option
Social Security Option
Contingent Annuitant Options (100%, 75%, 66 2/23% or 50%)
Contingent Annuitant Options with “Pop-up” (100%, 75%, 66 2/23% or 50%)
A member may elect to take 10% of the value of his or her monthly benefit as a lump sum
payment with the balance of the benefit payable in one of the forms described above. The lump
sum is based on the Plan’s definition of Actuarial Equivalence.
Summary of Member Data
December 31, 2015 December 31, 2016
1.Active Members (Including Postponed Retirees)
a.Count 665 626
b.Plan Compensation $44,992,370 $43,914,466
c.Average Compensation $67,658 $70,151
d.Average Age 50.5 51.1
e.Average Service 17.7 18.2
2.Retired Members
a.Count 556 575
b.Total Monthly Benefits $1,016,634 $1,088,886
c.Average Monthly Benefits $1,828 $1,894
3.Disabled Members
a.Count 20 21
b.Total Monthly Benefits $31,125 $32,135
c.Average Monthly Benefits $1,556 $1,530
4.Beneficiaries
a.Count 115 121
b.Total Monthly Benefits $134,458 $144,447
c.Average Monthly Benefits $1,169 $1,194
5.Terminated Vested Members
a.Count 175 174
b.Total Monthly Benefits $86,752 $87,328
c.Average Monthly Benefits $496 $502
22
Metropolitan St. Louis Sewer District
Employees' Pension Plan
December 31, 2016 Actuarial Valuation
This work product was prepared solely for the Metropolitan St. Louis Sewer District for the purposes described herein and may
not be appropriate to use for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other
parties who receive this work. Milliman recommends that third parties be aided by their own actuary or other qualified
professional when reviewing the Milliman work product.
Metropolitan St. Louis Sewer District
Employees' Pension Plan
December 31, 2016 Actuarial Valuation
Distribution of Active Members by Age and by Years of Service
(as of December 31, 2016)
YEARS OF CREDITED SERVICE
Attained Under 1 1 to 4 5 to 9 10 to 14 15 to 19 20 to 24 25 to 29 30 to 34 35 to 39 40 and up
Age No.No.No.No.No.No.No.No.No.No.Total
Under 25 0 0 0 0 0 0 0 0 0 0 0
25 to 29 0 0 4 1 0 0 0 0 0 0 5
30 to 34 0 0 26 10 0 0 0 0 0 0 36
35 to 39 0 0 43 15 0 0 0 0 0 0 58
40 to 44 0 0 27 20 14 2 0 0 0 0 63
45 to 49 0 0 22 21 20 19 3 1 0 0 86
50 to 54 0 0 24 24 23 20 20 13 0 0 124
55 to 59 0 0 16 15 28 22 24 23 14 0 142
60 to 64 0 0 10 16 6 14 10 9 22 4 91
65 to 69 0 0 2 3 2 1 3 3 3 3 20
70 and up 0 0 0 1 0 0 0 0 0 0 1
Total *0 0 174 126 93 78 60 49 39 7 626
* Includes 21 Postponed Retirees
23
This work product was prepared solely for the Metropolitan St. Louis Sewer District for the purposes described herein and may not be appropriate to use for other
purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties who receive this work. Milliman recommends that third parties be aided
by their own actuary or other qualified professional when reviewing the Milliman work product.
Metropolitan St. Louis Sewer District
Employees' Pension Plan
December 31, 2016 Actuarial Valuation
Distribution of Inactive Members by Age and Average Monthly Benefit
Terminated Vested Members
Average
Monthly
Age Number Pension
Under 30 0 $0
30 - 34 5 487
35 - 39 4 431
40 - 44 12 762
45 - 49 28 448
50 - 54 43 659
55 - 59 49 509
60 - 64 20 276
65 +13 207
Total 174 502
Retirees and Beneficiaries
Average
Monthly
Age Number Pension
Under 55 25 $1,508
55 – 59 72 1,979
60 – 64 127 1,696
65 – 69 206 1,922
70 – 74 103 1,987
75 – 79 81 1,661
80 – 84 53 1,725
85 – 89 35 1,011
90 +15 531
Total 717 1,765
24
This work product was prepared solely for the Metropolitan St. Louis Sewer District for the purposes described herein and
may not be appropriate to use for other purposes. Milliman does not intend to benefit and assumes no duty or liability to
other parties who receive this work. Milliman recommends that third parties be aided by their own actuary or other
qualified professional when reviewing the Milliman work product.
Metropolitan St. Louis Sewer District
Employees' Pension Plan
December 31, 2016 Actuarial Valuation
Summary of Changes in Member Data
Terminated
Active Postponed Retired Vested
Members Retirees Members Members Total
Count as of January 1, 2016 647 18 691 175 1,531
New Entrants 0 0 0 0 0
Moved to Postponed Retirees (7)7 0 0 0
Retired (28)(4)37 (5)0
Became Disabled (1)0 1 0 0
Lump Sum Payouts 0 0 0 0 0
Died with Beneficiary 0 0 (6)(1)(7)
New Beneficiaries 0 0 7 0 7
Died without Beneficiary (1)0 (13)0 (14)
Terminated with Vesting (5)0 0 5 0
Terminated without Vesting 0 0 0 0 0
Rehired 0 0 0 0 0
Certain Period Expired 0 0 0 0 0
No Longer Due Benefits 0 0 (1)0 (1)
Data Corrections 0 0 1 0 1
Total Changes (42)3 26 (1)(14)
Count as of December 31, 2016 605 21 717 174 1,517
25
This work product was prepared solely for the Metropolitan St. Louis Sewer District for the purposes described herein
and may not be appropriate to use for other purposes. Milliman does not intend to benefit and assumes no duty or
liability to other parties who receive this work. Milliman recommends that third parties be aided by their own actuary or
other qualified professional when reviewing the Milliman work product.
Metropolitan St. Louis Sewer District
Employees' Pension Plan
Valuation Date 12/31/2012 12/31/2013 12/31/2014 12/31/2015 12/31/2016
Active Members 794 743 689 647 605
Postponed Retirees 9 18 21 18 21
Terminated Vested Members 179 179 180 175 174
Retired Members 500 517 534 556 575
Disabled Members 21 21 22 20 21
Beneficiaries 93 98 104 115 121
Total 1,596 1,576 1,550 1,531 1,517
26
This work product was prepared solely for the Metropolitan St. Louis Sewer District for the purposes described herein and may
not be appropriate to use for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other
parties who receive this work. Milliman recommends that third parties be aided by their own actuary or other qualified
professional when reviewing the Milliman work product.
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
12/31/2012 12/31/2013 12/31/2014 12/31/2015 12/31/2016Participants Member Data
Active Members Postponed Retirees Terminated Vested Members
Retired Members Disabled Members Beneficiaries
Metropolitan St. Louis Sewer District
Employees' Pension Plan
Valuation Date Market Value Actuarial Value
12/31/2012 $223,684,202 $221,144,274
12/31/2013 $246,429,986 $237,432,706
12/31/2014 $250,515,821 $253,771,605
12/31/2015 $244,212,239 $259,774,260
12/31/2016 $251,010,031 $260,826,650
27
This work product was prepared solely for the Metropolitan St. Louis Sewer District for the purposes described herein and may not
be appropriate to use for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties who
receive this work. Milliman recommends that third parties be aided by their own actuary or other qualified professional when
reviewing the Milliman work product.
$0
$25,000,000
$50,000,000
$75,000,000
$100,000,000
$125,000,000
$150,000,000
$175,000,000
$200,000,000
$225,000,000
$250,000,000
$275,000,000
12/31/2012 12/31/2013 12/31/2014 12/31/2015 12/31/2016
Total Assets
Market Value Actuarial Value
Metropolitan St. Louis Sewer District
Employees' Pension Plan
Valuation Date Market Value Actuarial Value
12/31/2012 11.9%7.8%
12/31/2013 10.9%8.1%
12/31/2014 3.0%8.3%
12/31/2015 -0.8%4.1%
12/31/2016 4.9%2.4%
28
This work product was prepared solely for the Metropolitan St. Louis Sewer District for the purposes described herein and may not
be appropriate to use for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties who
receive this work. Milliman recommends that third parties be aided by their own actuary or other qualified professional when
reviewing the Milliman work product.
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
12/31/2012 12/31/2013 12/31/2014 12/31/2015 12/31/2016
Rate of Return (%) on Total Assets
Market Value Actuarial Value
Metropolitan St. Louis Sewer District
Employees' Pension Plan
Valuation Date AVA/AAL
12/31/2012 83.0%
12/31/2013 86.1%
12/31/2014 87.4%
12/31/2015 87.5%
12/31/2016 82.0%
29
This work product was prepared solely for the Metropolitan St. Louis Sewer District for the purposes described herein and may
not be appropriate to use for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties
who receive this work. Milliman recommends that third parties be aided by their own actuary or other qualified professional
when reviewing the Milliman work product.
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
12/31/2012 12/31/2013 12/31/2014 12/31/2015 12/31/2016
Funded Ratio: Actuarial Value of Assets (AVA)
vs. Actuarial Accrued Liability (AAL)
Metropolitan St. Louis Sewer District
Employees' Pension Plan
Valuation Date Normal Cost
12/31/2012 $6,062,646 **
12/31/2013 $5,852,375 **
12/31/2014 $5,253,091
12/31/2015 $5,106,625
12/31/2016 $5,157,148
** Includes $475,000 load for expenses
30
This work product was prepared solely for the Metropolitan St. Louis Sewer District for the purposes described herein and may
not be appropriate to use for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties
who receive this work. Milliman recommends that third parties be aided by their own actuary or other qualified professional
when reviewing the Milliman work product.
$4,000,000
$4,500,000
$5,000,000
$5,500,000
$6,000,000
$6,500,000
12/31/2012 12/31/2013 12/31/2014 12/31/2015 12/31/2016
Normal Cost
Metropolitan St. Louis Sewer District
Employees' Pension Plan
Valuation Recommended
Date Contribution
12/31/2012 $11,391,287 **
12/31/2013 $10,675,321 **
12/31/2014 $10,059,004
12/31/2015 $10,145,562
12/31/2016 $12,328,093
** Includes $475,000 load for expenses
31
This work product was prepared solely for the Metropolitan St. Louis Sewer District for the purposes described herein and may
not be appropriate to use for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties
who receive this work. Milliman recommends that third parties be aided by their own actuary or other qualified professional
when reviewing the Milliman work product.
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
12/31/2012 12/31/2013 12/31/2014 12/31/2015 12/31/2016
Recommended Contribution