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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 />Table 4 - Actuarial Methods and Assumptions AM <br />(Concluded) <br />Spouse Coverage Active employees: 85% are assumed to be married and <br />80% of married employees are assumed to elect <br />medical plan coverage for their spouse in retirement. <br />Surviving spouses are assumed to retain medical plan <br />coverage until their death. Husbands are assumed to be <br />3 years older than their wives. <br />Retired participants: Existing elections for spouse <br />medical plan coverage are assumed to continue until the <br />spouse's death. Actual spouse ages are used, where <br />known; if not, husbands are assumed to be 3 years <br />older than their wives. <br />Dependent Coverage <br />Active employees: 30% are assumed to cover eligible <br />dependents other than a spouse at retirement; eligibility <br />for medical plan coverage for non - spouse dependents is <br />assumed to end at the retiree's age 62. <br />Retired participants covering dependent children are <br />assumed to end such coverage when the youngest <br />currently covered dependent reaches age 26. <br />Changes Since the Prior Valuation: <br />Discount rates <br />Funded rate: decreased from 7.6% to 7.0% <br />Unfunded rate: decreased from 4.5% to 4.0% <br />Demographic assumptions <br />Rates of assumed mortality, termination, disability and <br />retirement rates were updated from those provided in <br />the CalPERS 2002 experience study to those developed <br />from the CalPERS 2007 experience study. Explicit costs <br />for potential disability benefits were included. <br />Healthcare trend <br />Medical plan premiums are assumed to increase at <br />slightly higher rates than were assumed in the prior <br />valuation. <br />Dependent coverage <br />Due to more favorable and longer eligibility for <br />dependent children, this valuation includes projected <br />OPEB costs for dependents of current (and future) <br />retirees. <br />Participation Rate <br />The percentage of non -City Management employees <br />assumed to elect medical plan coverage in retirement <br />was lowered to 85 %, from 100 %. <br />Spouse Coverage <br />The percentage of employees who are assumed to elect <br />medical plan coverage for a spouse in retirement was <br />lowered to 68% (85% times 80 %), from 85 %. <br />Bckmoro 2B <br />