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CONTRACT AMENDMENT COST ANALYSIS - VALUATION BASIS: NNE 30, 1999 SAFETY PLAN FOR CITY OF SANTA ANA EMPLOYER NUMBER 137 Benefit Description: 21362.2,3% @ 50 Full Formula Note that the change in normal cost in the table above may be much more indicative of the long term change in the employer contribution rate due to the plan amendment. The plan's unfunded liability/excess asset cost shown in the table above is a temporary adjustment to the employer contribution to "get the plan back on schedule". This temporary adjustment to the employer rate varies in duration from plan to plan. For example, a plan with initial excess assets being amortized over a short period of time will typically experience a large rate increase when excess assets are fully amortized. While a plan amendment for such a plan may produce little or no increase in the employer contribution rate now, the change in normal cost due to the plan amendment will become fully reflected in the employer contribution rate as soon as initial excess assets are fully amortized. If your agency is requesting cost information for two or more benefit changes, the cost of adopting more than one of these changes may not be obtained by adding the individual costs. Instead, a separate valuation should be done to provide a cost analysis for the combination of benefit changes. If the proposed plan amendment applies to only some of the employees in the plan, the rate change due to the plan amendment still applies to the entire plan, and is still based on the total plan payroll. Please note that the cost analysis provided in this document may not be relied upon once the CalPERS actuarial staff have completed the next annual valuation, that is, the annual valuation as of June 30, 2000. If you have not taken action to amend your contract, and we have already mailed the June 30, 2000 annual valuation report, you must contact our office for an updated cost analysis, based on the new annual valuation. This actuarial valuation for this proposed plan amendment is based on the participant, benefits, and asset data used in the June 30, 1999 annual valuation, with the benefits modified if necessary to reflect what is currently provided under your contract with CaIPERS, and further modified to reflect the proposed plan amendment. Descriptions of the actuarial methodologies, actuarial assumptions, and plan benefit provisions may be found in the appendices of the June 30, 1999 annual report. Please note that the results shown here are subject to change if any of the data or plan provisions changes from what was used in this study. It is our opinion that the valuation has been performed in accordance with generally accepted actuarial principles, in accordance with standards of practice prescribed by the Actuarial Standards Board, and that the assumptions and methods are internally consistent and reasonable for this plan, as prescribed by the CalPERS Board of Administration according to provisions set forth in the California Public Employees' Retirement Law. fw —tt-,� /4-1-1c/11-01 Kung-pei Hwang, A.S.A., M.A.A.A. Senior Pension Actuary, CalPERS Fin Process Ids: Annual -49488 December 8, 1:19 PM Base -53557 Proposal -53558 3 of 3