BICKMORE & ASSOCIATES, INC.-2014

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Proposal to Provide Actuarial Valuation of OPEB Liabilities For the City of Santa Ana April 17, 2014 GASB 45. Costs will be shown for the City in total and separately for active and retired participants and, as needed, for various employee groups (i.e., fire, police, miscellaneous). The report will include the results for the City's fiscal year ending June 30, 2015. We will include sufficient documentation and detail to enable the City to evaluate the actuarial methodology we used to develop the financial information described above. The report will begin with an executive summary, followed by text outlining the requirements, general sources of liabilities, our valuation process and options regarding funding policy. Our exhibits follow, presenting the valuation results, calculation of the ARC and illustration of the required GASB 45 disclosure information. Separate tables summarize employee and retiree census information; relevant plan provisions; actuarial methods and assumptions; presentation of projected cash flow and glossary of terms used. We have attached a sample OPEB valuation report as Appendix C.; Please note, however, that while similar in many respects, we customize the content and exhibits in each report to address the information requested by each agencyforwhich we prepare a valuation. > Comment: When an agency participates in the CalPERS retirement system, we often dovetail the "demographic" assumptions (rates of retirement, disability, terminations and mortality) to match those used in the various plans in which the agency's employees participate, unless there is historical information to suggest other assumptions may be more appropriate. Where the agency participates in the CalPERS healthcare program, we look closely at the assumptions for healthcare trend used in the State valuation. Other assumptions, such as discount rate, participation rates, amortization methodology, etc., are unique to each agency. We recognize that most public agencies have undergone many changes over time with regard to the level of OPEB they provide, eligibility to qualify for benefits and how long those benefits will be paid. An important part of the data gathering process is for us to ask and understand the nuances of exactly who gets what, when they get it, and for how long. Bickmore has been called upon in many instances over the past 5 years to assist agencies in the implementation of GASB 45, to prepare analysis of OPEB funding strategies and to work with agencies and their employee bargaining units regarding possible plan redesigns. Bickmore utilizes valuation software provided by WinTech. Focused on pension and OPEB valuation software, Wintech is the dominant independent provider of such software in the United States. Use of this software assures our clients of the combination of our senior actuarial experience with independently developed and regularly improved software. Strengths: We are regularly complimented for the clarity of our actuarial reports and our ability to translate the often confusing terms into understandable and meaningful results. We communicate with each client about what they need to see in the report and customize the exhibits accordingly. Our clients appreciate our assistance in preparing and reviewing the OPEB disclosure information to be presented in financial statements to help avoid any misunderstanding of how report results are intended to be used in the disclosures. We also have an extensive understanding of PEMHCA requirements and the impact on retiree healthcare coverage (eligibility and benefits) for agencies participating in the CalPERS healthcare program. Many of our clients participate in the California Employers' Retiree Benefit Trust (CERBT). The procedures, actuarial methods and assumptions we use will comply with requirements for participation in CERBT and we are very familiar with the filing requirements for agency participation in that trust. Bici£ITIOPe ''