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Actuarial Valuation of Other Post- Employment Benefit Programs as of <br />April 1, 2012 for the City of Sample City <br />Basic Valuation Results <br />(Concluded) <br />In comparing results shown in the exhibit on the prior page, we can see that the Actuarial <br />Accrued Liability (AAL) increased by approximately $14,051,000 over the two year period <br />between April 1, 2010 and April 1, 2012. We expected the AAL to increase by $4,414,000 <br />from new costs accrued and the passage of time, reduced by benefits expected to be paid <br />to retirees during that two year period. The additional liability of $9,637,000 Is attributable to <br />plan experience other than expected and the assumption changes described below: <br />• Updates in employee and premium data, i.e., actual plan experience relative to prior <br />assumptions: ($5,360,000 decrease in AAL); <br />• Change in discount rates used to develop the OPEB liability, from 7.6% to 4.47 %, <br />reflecting both a slight decrease in the expected level of future trust earnings as well <br />as a change in the level of OPEB funding ($15,164,000 increase in AAL); <br />• A change in how we evaluated the potential cost of dependent benefits for retirees, <br />reflecting the extension of healthcare coverage of children until age 26 ($1,003,000 <br />increase in AAL); <br />• More direct recognition of the cost associated with disability retirement ($1,025,000 <br />Increase in AAL); <br />• Revised assumptions about the likelihood that a retiree will retain medical plan <br />coverage for themselves in retirement, based on the City's recent experience <br />($1,228,000 decrease in AAL); <br />• Revised assumptions about the likelihood that a retiree will be married and continue <br />medical plan coverage for their spouse in retirement, based on the City's recent <br />experience ($980,000 decrease in AAL); <br />• Revised assumptions for mortality, termination and retirement, based on the most <br />recent CalPERS retirement plan experience study covering City employees ($54,000 <br />decrease in AAL); and <br />• An increase in assumed future increase in medical premium levels between 2013 <br />and 2019 ($67,000 increase in AAL). <br />ffickmore <br />