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HomeMy WebLinkAbout08/03/2012 B A K E R S F I E L D Staff: City Council members: Steven Teglia, Asst. to the City Manager Ken Weir, Chair David Couch Harold Hanson SPECIAL MEETING NOTICE PERSONNEL COMMITTEE of the City Council - City of Bakersfield Friday, August 3, 2012 12:00 p.m. City Hall North – Conference Room A 1600 Truxtun Avenue, First Floor Bakersfield, California 93301 A G E N D A 1. ROLL CALL 2. ADOPT APRIL 30, 2012 AGENDA SUMMARY REPORT 3. PUBLIC STATEMENTS 4. NEW BUSINESS A. Discussion regarding the Recent Request for Information (RFI) Process - Teglia B. Presentation of the Updated Actuarial Valuation Report for Retiree Medical - Teglia 5. COMMITTEE COMMENTS 6. ADJOURNMENT ________________________________________________________________ S:\Council Committees\2012\Personnel\April\April 30 Agenda Summary Report.docx Page 1 ST:al B A K E R S F I E L D City Council members: Steven Teglia Ken Weir, Chair Staff: Steven Teglia David Couch Assistant to the City Manager Harold Hanson SPECIAL MEETING OF THE PERSONNEL COMMITTEE Friday, April 30, 2012 12:00 p.m. City Hall North – Conference Room A 1600 Truxtun Avenue Bakersfield, CA 93301 AGENDA SUMMARY REPORT Meeting called to order at 12:00 p.m. 1. ROLL CALL Committee members: Councilmember Ken Weir, Chair Councilmember David Couch Councilmember Harold Hanson City staff: Alan Tandy, City Manager Steven Teglia, Assistant to the City Manager Rhonda Smiley, Assistant to the City Manager/PIO Chris Huot, Administrative Analyst – City Manager’s Office Nelson Smith, Finance Director Virginia Gennaro, City Attorney Christi Tenter, Human Resources Manager Retired employees/BCARE: Fred Baugher and Bill Descary Others present: Johnny Wu and Tom Morrison – Segal Company Chuck Waide, SEIU Members of the media 2. ADOPTION OF SEPTEMBER 30, 2011 AGENDA SUMMARY REPORT Adopted as submitted ________________________________________________________________ S:\Council Committees\2012\Personnel\April\April 30 Agenda Summary Report.docx Page 2 ST:al 3. PUBLIC STATEMENTS None 4. DEFERRED BUSINESS Assistant to the City Manager Teglia reported that all items on the agenda were discussed by the Insurance Committee on March 14, 2012. The Insurance Committee concurred with staff’s recommendation on all of the items. A. Update regarding Request for Information (RFI) Process Human Resources Manager Tenter explained that this item is being heard by the Personnel Committee in response to a request from the City Council to look at options to resolve a dispute that arose in late 2011 between Anthem and GemCare, after which Anthem eliminated GemCare from their HMO provider network. Staff will initiate a Request for Information (RFI) to all medical insurance providers that service Kern County to determine which may be interested in participating in a Request for Proposal (RFP) process. The RFI process is estimated to take two to three weeks. Interested parties will be asked if they can offer similar plans to those that currently exist for City employees and retirees, for a list of their network medical providers, and if they can be competitive with their costs. During the open enrollment process in late 2011, approximately 70 employees made plan changes, either by changing from an HMO to PPO plan, changing physicians, or discontinuing City coverage altogether because they were covered under another plan. It is unknown if the changes were made based on the decision of Anthem to cease affiliations with GemCare. Mr. Teglia stated that employees did not seem troubled about the loss of GemCare, once they learned of it from either Human Resources staff or Union leadership. The Insurance Committee members were also unconcerned. Chuck Waide, SEIU, confirmed that any questions raised were answered to the satisfaction of the Union membership. He thanked the City for their efforts. Committee member Couch asked if two weeks would allow enough time for interested parties to respond to the RFI. Mr. Teglia responded that it is a very streamlined and simple process. Mr. Morrison said that the RFI would be sent to all competitors of Anthem. Once the process reaches the Request for Proposal (RFP) stage, then all those who responded to the RFI, any other firm that provides insurance in Kern County, any ________________________________________________________________ S:\Council Committees\2012\Personnel\April\April 30 Agenda Summary Report.docx Page 3 ST:al firm that had contacted Human Resources staff with interest, plus Anthem, will receive the RFP. It will be released publically, so any firm will be able to submit a proposal. Committee member Couch requested that staff keep the Committee informed as the process progresses, and to include the information in the General Information memorandum so that the remainder of the City Council can be kept informed. B. Update regarding Response Actions to Panama Buena Vista Medical Expense Reimbursement Plan (MERP) Human Resources Manager Tenter reported that last year, staff became aware of negotiations that were taking place between teachers and the Panama Buena Vista School District regarding health coverage. The District is proposing to implement a policy whereby teachers who were covered by their spouse’s or partner’s insurance would be required to elect the alternative coverage, and then be included in a Medical Expense Reimbursement Plan (MERP), whereby they would be reimbursed for certain expenses to help offset costs. Staff proposes to continue to offer City employees healthcare, regardless if they are eligible for coverage under another plan. However, eligibility language would be modified to state that if an employee is enrolled in a MERP, then he or she would not be eligible for City coverage. As this is not a contractual matter, Council approval is not needed. No City employee, nor their dependent, would lose their coverage. No school employee would lose their coverage, either. The District has indicated that if the City moves forward with this policy, they would recognize it; and those employees who might have lost their coverage to a MERP, would be considered ineligible for the MERP. Committee member Hanson asked if this action could save money. Mr. Teglia said that if this action is not taken, there could be an added cost as some school employees would be required to enroll in City coverage. The Insurance Committee and Union membership support staff’s recommendation. In response to a question from Committee Chair Weir, Ms. Tenter reported that the current policy for married couple where one works for a school and one for the City is that they can choose to have coverage through the City, through the school, or both. ________________________________________________________________ S:\Council Committees\2012\Personnel\April\April 30 Agenda Summary Report.docx Page 4 ST:al Mr. Weir asked if the employee has dual coverage, would the City’s costs be less, and Mr. Morrison responded that there is only a benefit when the City is in the secondary position. C. Discussion and Recommendation regarding Segal Contract Extension Assistant to the City Manager Teglia reported that in 2008, the City entered into a four-year agreement with Segal Company for a scope of work related to health care benefits. Services include consulting, cost management, health benefit renewal management, vendor marketing management, and compliance management. The fourth year of the agreement expires in June, 2012. Since 2008, Segal Company has established an excellent working relationship with staff, the Personnel Committee, City Council, and the Insurance Committee. Mr. Teglia then gave an overview of a memorandum previously distributed to the Committee that noted the company’s accomplishments. Included was their role in advising City staff on methods to reduce the unfunded retiree healthcare liability. Staff recommends entering into a second four-year agreement, and the Insurance Committee supports staff’s recommendation. Committee member Hanson acknowledged that the Segal Company has done a good job. Committee member Couch asked that the Segal Company find additional ways to reduce the unfunded liability further. The Committee unanimously approved entering into a second four-year agreement with the Segal Company. 5. COMMITTEE COMMENTS None 6. ADJOURNMENT The meeting was adjourned at 12:37 p.m. Ci t y o f B a k e r s f i e l d Pe r s o n n e l C o m m i t t e e M e e t i n g Au g u s t 3 , 2 0 1 2 Co p y r i g h t © 2 0 1 2 b y T h e S e g a l G r o u p , I n c . , p a r e n t o f T h e S e g a l C o m p a n y . A l l r i g h t s r e s e r v e d . Ci t y o f B a k e r s f i e l d Re q u e s t f o r I n f o r m a t i o n Pr e s e n t a t i o n t o P e r s o n n e l C o m m i t t e e Au g u s t 3 , 2 0 1 2 52 0 2 4 1 1 Th e R e q u e s t f o r I n f o r m a t i o n P r o c e s s  Co m p a n i e s t h a t r e c e i v e d t h e R e q u e s t f o r I n f o r m a t i o n ( R F I )  Ae t n a  Bl u e S h i e l d  Ci g n a  GE M C a r e / M e r c y M e m o r i a l H e a l t h S y s t e m ( G E M C a r e / M e r c y )  Un i t e d H e a l t h c a r e ( U H C )  He a l t h N e t  An t h e m w a s n o t s e n t t h e R F I a s t h e i n c u m b e n t  4 C o m p a n i e s r e s p o n d e d  He a l t h N e t d e c l i n e d d u e t o i t s a s s e s s m e n t t h a t i t s r a t e s w o u l d n o t b e co m p e t i t i v e  Bl u e S h i e l d w a s i n c o m p l e t e i n i t s r e s p o n s e  GE M C a r e / M e r c y p r o p o s e d a c o m b i n a t i o n l e a s e d n e t w o r k w i t h r e i n s u r a n c e pr o v i d e d b y M u n i c h R e i n s u r a n c e a n d t h e A e t n a P P O N e t w o r k a n d a ge o g r a p h i c a l l y l i m i t e d H M O n e t w o r k 1 Ke r n C o u n t y H o s p i t a l a n d P h y s i c i a n N e t w o r k  An t h e m h o s p i t a l n e t w o r k i n K e r n C o u n t y  Ba k e r s f i e l d M e m o r i a l H o s p i t a l  Go o d S a m a r i t a n H o s p i t a l  Ke r n M e d i c a l C e n t e r  Me r c y H e a l t h c a r e B a k e r s f i e l d  Sa n J o a q u i n C o m m u n i t y H o s p i t a l  De l a n o R e g i o n a l M e d i c a l C e n t e r  Ke r n V a l l e y H e a l t h c a r e D i s t r i c t  Ri d g e c r e s t R e g i o n a l H o s p i t a l  Te h a c h a p i H o s p i t a l  An t h e m H M O m e d i c a l g r o u p s i n K e r n C o u n t y  Ba k e r s f i e l d F a m i l y M e d i c a l C e n t e r  He r i t a g e P r o v i d e r N e t w o r k  In d e p e n d e n c e M e d i c a l G r o u p  HM O m e d i c a l g r o u p s e x c l u d e d f r o m A n t h e m  Go l d e n E m p i r e M e d i c a l G r o u p ( G E M C a r e I P A ) 2 Ae t n a R e s p o n s e  No t a b l e e x c e p t i o n s t o t h e c u r r e n t p l a n  HM O – Ho s p i t a l n e t w o r k e x c l u d e s S a n J o a q u i n C o m m u n i t y H o s p i t a l a n d K e r n M e d i c a l C e n t e r – Al l m e d i c a l g r o u p s a r e i n c l u d e d t h a t a r e c u r r en t l y i n A n t h e m , p l u s G E M C a r e M e d i c a l Gr o u p – Th e r e w e r e n o b e n e f i t d i f f e r e n c es i n t h e p r o p o s e d H M O P l a n  PP O – Ho s p i t a l n e t w o r k e x c l u d e s S a n J o a q u i n C o m m u n i t y H o s p i t a l a n d K e r n M e d i c a l C e n t e r – No l i f e t i m e m a x i m u m f o r t h e r e t i r e e p l a n c o m p a r e d t o t h e c u r r e n t m a x i m u m o f $ 5 , 0 0 0 , 0 0 0 – Pe n a l t y f o r n o n - c e r t i f i c a t i o n o f a d m i s s i o n m u st b e a f i x e d d o l l a r ( $ 2 0 0 , $ 5 0 0 ) c o m p a r e d t o cu r r e n t 2 5 % o f c h a r g e s p e n a l t y  Me d i c a r e A d v a n t a g e P l a n f o r R e t i r e e s O v e r 6 5 – Of f i c e a n d s p e c i a l i s t v i s i t i s $ 5 co p a y c o m p a r e d t o c u r r e n t $ 0 c o p a y – Di a g n o s t i c X - R a y a n d l a b o r a t o r y c o p a y i s $ 5 c o m p a r e d t o c u r r e n t $ 0 c o p a y – Pr e s c r i p t i o n D r u g c o p a y f o r r e t a i l i s $5 / $ 3 0 / $ 6 0 c o m p a r e d t o c u r r e n t $ 5 / $ 1 0 c o p a y – Pr e s c r i p t i o n D r u g c o p a y f o r m a i l i s $1 0 / $ 6 0 / $ 1 2 0 c o m p a r e d t o c u r r e n t $ 5 / $ 1 0 c o p a y 3 Bl u e S h i e l d  Bl u e S h i e l d w a s n o t r e s p o n s i v e a n d d i d n o t p r o v i d e n e t w o r k in f o r m a t i o n o r b e n e f i t d e v i a t i o n s f r o m t h e c u r r e n t p l a n d e s i g n . Th e r e f o r e , i t i s e x c l u d e d f r o m t h i s a n a l y s i s . 4 Ci g n a R e s p o n s e  No t a b l e e x c e p t i o n s t o t h e c u r r e n t p l a n  HM O – Ho s p i t a l n e t w o r k e x c l u d e s G o o d S a m a r i t a n H o s p i t a l a n d K e r n M e d i c a l C e n t e r – Ch i r o p r a c t i c c o p a y i s $ 1 5 p e r v i s i t c o m pa r e d t o t h e c u r r e n t $ 2 5 c o p a y p e r v i s i t – Ph y s i c i a n n e t w o r k e x c l u d e s H e r i t a g e P r o v id e r N e t w o r k a n d I n d e p e n d e n c e M e d i c a l G r o u p  PP O – Ho s p i t a l n e t w o r k e x c l u d e s G o o d S a m a r i t a n H o s p i t a l a n d K e r n M e d i c a l C e n t e r – Un l i m i t e d l i f e t i m e m a x i m u m f o r t h e r e t i r e e s c o mp a r e d t o t h e c u r r e n t l i f e t i m e m a x i m u m o f $5 , 0 0 0 , 0 0 0 – Ch i r o p r a c t i c b e n e f i t d o e s n o t h a v e a c o p a y o r b e n e f i t m a x i m u m , bu t i s l i m i t e d t o 2 0 v i s i t s pe r y e a r . T h e c u r r e n t p l a n p a y s u p t o $ 5 0 p e r vi s i t a n d t h e m a x i m u m b e n e f i t i s l i m i t e d t o $7 5 0 a n n u a l l y .  No M e d i c a r e A d v a n t a g e P l a n f o r R e t i r ee s O v e r 6 5 a v a i l a b l e i n C a l i f o r n i a 5 GE M C a r e / M e r c y M e m o r i a l H e a l t h S y s t e m  No t a b l e e x c e p t i o n s t o t h e c u r r e n t p l a n  HM O – Ho s p i t a l n e t w o r k e x c l u d e s S a n J o a q u i n C o mm u n i t y H o s p i t a l , R i d g e c r e s t R e g i o n a l Ho s p i t a l , a n d T e h a c h a p i H o s p i t a l – HM O p h y s i c i a n n e t w o r k o n l y i n c l u d e s G E M C a r e M e d i c a l G r o u p , e x c l u d e s a l l t h e o t h e r gr o u p s – Th e r e w e r e n o b e n e f i t d i f f e r e n c es i n t h e p r o p o s e d H M O P l a n – HM O i s a v a i l a b l e i n K e r n , S a n L u i s O b i s p o , Sa n t a M a r i a , a n d p a r t o f V e n t u r a C o u n t i e s on l y c o m p a r e d t o A n t h e m w h i c h i s a v a i l a b l e t h r o u g h o u t C a l i f o r n i a  PP O – Ho s p i t a l n e t w o r k e x c l u d e s K e r n M e d i c a l C e n t e r – PP O n e t w o r k i s l e a s e d f r o m A e t n a – PP O p l a n w i l l b e a d m i n i s t e r e d b y M C S ( a n af f i l i a t e d c o m p a n y w i t h G E M C a r e / M e r c y Me m o r i a l H e a l t h S y s t e m ) a n d i n s u r e d b y S t e r li n g L i f e I n s u r a n c e , a M u n i c h R e i n s u r a n c e su b s i d i a r y – Re c o g n i t i o n o f t h e i n s u r a n c e p l a n b y h o s p i t a ls a n d p h y s i c i a n s o u t s i d e o f K e r n C o u n t y m a y ca u s e p r o b l e m s f o r p a r t i c i p a n t s w h e n s e e k i n g a d m i s s i o n 6 GE M C a r e / M e r c y M e m o r i a l H e a l t h S y s t e m ( c o n t i n u e d )  PP O – Pr i m a r y b e n e f i t d e v i a t i o n s : » De d u c t i b l e i s $ 5 0 0 / $ 2 , 0 0 0 f o r s i n g l e a n d f a m i l y c o m p a r e d t o t h e c u r r e n t d e d u c t i b l e o f $3 0 0 / $ 1 , 0 5 0 » An n u a l o u t - o f - p o c k e t m a x i m u m i s $ 4 , 0 0 0 / $ 8 , 0 0 0 c o m p a r e d t o c u r r e n t a n n u a l m a x i m u m of $ 1 , 5 0 0 / $ 4 , 5 0 0 f o r i n - n e t w o r k a n d $ 4 , 5 0 0 / $ 9 , 0 0 0 f o r o u t - o f - n e t w o r k » In p a t i e n t h o s p i t a l c o s t f o r t h e p a r t i c i p a n t s is $ 5 0 0 c o p a y p e r a d m i s s i o n p l u s 2 0 % o f t h e co s t c o m p a r e d t o t h e c u r r e n t $ 2 5 0 c o p a y p e r ad m i s s i o n p l u s 1 0 % o f t h e c o s t f o r i n - ne t w o r k » Ou t p a t i e n t h o s p i t a l c o s t f o r t h e p a r t i c i p a n t s i s $ 2 5 0 c o p a y p e r p r oc e d u r e p l u s 2 0 % o f th e c o s t . T h e c u r r e n t c o s t i s 1 0 % f o r i n - n e t w o r k o u t p a t i e n t s e r v i c e s . » Of f i c e v i s i t i s $ 2 5 c o p a y c o m p a r e d t o c u rr e n t 1 0 % o f t h e c o s t f o r i n - n e t w o r k » Pr e s c r i p t i o n c o p a y m e n t s f o r r e t a i l a n d m a il a r e $ 1 0 / $ 3 0 f o r g e n e r i c / b r a n d d r u g w i t h $2 5 0 b r a n d d r u g d e d u c t i b l e . T h e c u r r e n t co p a y i s $ 1 0 / $ 2 0 w i t h n o d e d u c t i b l e . » Em e r g e n c y r o o m d e d u c t i b l e i s $ 1 0 0 + 2 0 % o f th e c o s t c o m p a r e d t o t h e c u r r e n t $ 1 0 0 de d u c t i b l e ( w a i v e d i f a d m i t t e d ) + 1 0 % o f t h e c o s t  Me d i c a r e A d v a n t a g e P l a n f o r R e t i r e e s O v e r 6 5 – Av a i l a b l e o n l y i n K e r n , S a n L u i s O b i s p o , Sa n t a M a r i a , a n d p a r t o f V e n t u r a C o u n t i e s – No p l a n d i s c r e p a n c i e s 7 Un i t e d H e a l t h c a r e R e s p o n s e  No t a b l e e x c e p t i o n s t o t h e c u r r e n t p l a n  HM O – Ho s p i t a l n e t w o r k e x c l u d e s G o o d S a m a r i t a n H o s p i t al , K e r n M e d i c a l C e n t e r , a n d R i d g e c r e s t R e g i o n a l Ho s p i t a l – Al l m e d i c a l g r o u p s a r e i n c l u d e d t h a t a r e c u r r e n t l y i n A n t h e m , p l u s G E M C a r e M e d i c a l G r o u p – An n u a l o u t - o f - p o c k e t m a x i m u m i s $ 8 0 0 / $ 1 , 6 0 0 f o r s i ng l e / f a m i l y c o m p a r e d t o t h e c u r r e n t $ 5 0 0 / $ 1 5 0 0 ou t o f p o c k e t m a x i m u m  PP O – Ho s p i t a l n e t w o r k e x c l u d e s G o o d S a m a r i t a n H o s p i t al , K e r n M e d i c a l C e n t e r , a n d R i d g e c r e s t R e g i o n a l Ho s p i t a l – Th e r e i s n o p e n a l t y f o r u s i n g n o n - p a r t i c i p a t i n g p r o v i d er s f o r i n p a t i e n t h o s p i t a l c o m p a r e d t o c u r r e n t pe n a l t y o f $ 5 0 0 – Th e r e i s n o d e d u c t i b l e f o r a m b u l a t o r y s u r g i c a l c e n t e r f o r n o n - p a r t i c ip a t i n g p r o v i d e r s f o r o u t p a t i e n t se r v i c e s c o m p a r e d t o c u r r e n t d e d u c t i b le o f $ 5 0 0 f o r n o n - p a r t i c i p a t i n g p r o v i d e r s  Me d i c a r e A d v a n t a g e P l a n f o r R e t i r e e s O v e r 6 5 – Pr i m a r y b e n e f i t d e v i a t i o n s : » De d u c t i b l e o f $ 1 , 5 0 0 c o m p a r e d t o t h e c u r r e n t d e d u c t i b l e o f $ 0 » In p a t i e n t h o s p i t a l c o p a y m e n t i s $ 5 0 p e r a d m i s s i o n c o m p a r e d t o t h e c u r r en t c o p a y m e n t o f $ 0 » Ou t p a t i e n t h o s p i t a l c o p a y m e n t i s $ 2 5 p e r v i s i t c o m p a r e d t o c u r r e n t c o p a y m e n t o f $ 0 » Pr e s c r i p t i o n d r u g c o p a y f o r m a i l o r d e r i s $ 1 0 / $ 2 0 f o r g e n e r i c / p r e f e r r e d b r a n d c o mpared to current $5 / $ 1 0 f o r g e n e r i c / b r a n d » Th e e m e r g e n c y s e r v i c e c o p a y i s $ 6 5 ( w a i v e d i f a d m i tt e d ) c o m p a r e d t o c u r r e n t $ 5 0 c o p a y ( w a i v e d i f ad m i t t e d ) 8 Co n s i d e r a t i o n o f I s s u i n g a R e q u e s t f o r P r o p o s a l  Ad v a n t a g e s o f i s s u i n g a m e d i c a l R F P  Ae t n a a n d U H C i n c l u d e G E M C a r e M e d i c a l G r o u p w h i c h i s n o t a p a r t o f t h e A n t h e m H M O n e t w o r k  RF I s h o w e d t h a t p o t e n t i a l l y 4 c o mp a n i e s w o u l d s u b m i t a b i d  An R F P m a y p r o v i d e a m o r e c o m p e t it i v e r a t e t h a n t h e A n t h e m r e n e w a l  Po s s i b l e d o w n s i d e o f i s s u i n g a m e d i c a l R F P  Is s u i n g a n R F P w o u l d b e a n a d d i t i o n a l c o s t t o t h e C i t y  Th i s w o u l d r e q u i r e a d d i t i o n a l t i m e o f a p p r o x i m a t e l y 6 w e e k s f r o m t h e i s s u a n c e o f t h e R F P t o t h e re c o m m e n d a t i o n t o t h e I n s u r a n c e a n d P e r s o n n e l C o m m i t t e e s  Al l c o m p a n i e s i n d i c a t e d c h a n g e s t o b o t h t h e H M O n e t wo r k a n d t h e c u r r e n t l e v e l o f b e n e f i t s . T h e e x a c t pl a n a n d n e t w o r k w a s n o t d u p l i c a t e d  If a n e w c a r r i e r i s s e l e c t e d , t h e r e w i l l b e i m pl e m e n t a t i o n e x p e n s e s a n d e m p l o y e e d i s r u p t i o n  Ex i s t i n g r e t i r e e b e n e f i t s f o r M e d i c a r e e l i g i b l e r e t i r ee s w i l l c h a n g e a n d s o m e b i dd e r s c a n n o t d u p l i c a t e t h e Me d i c a r e s u p p l e m e n t b e n e f i t s  Th e r e i s n o g u a r a n t e e t h a t t h e C i t y w o u l d r e c ei v e b e t t e r r a t e s t h a n t h e A n t h e m r e n e w a l  Ad d i t i o n a l C o n s i d e r a t i o n s  Fu l l i m p l e m e n t a t i o n o f t h e A f f o r d a b l e Ca r e A c t , A C A , w i l l o c c u r J a n u a r y 1 , 2 0 1 4  Im p a c t t o t h e C i t y p l a n s i s v e r y u n c er t a i n a s r e g u l a t i o n s h a v e n o t b e e n i s s u e d  Ca l i f o r n i a w i l l i m p l e m e n t t h e E x c h a n g e s i n 2 0 1 3  So m e e m p l o y e e s m a y r e c e i v e s u b s id i z e d c o v e r a g e f r o m t h e E x c h a n g e 9 RF P T i m e l i n e  RF P p r o c e s s w o u l d r e q u i r e a p p r o x i m a t e l y 6 w e e k s f r o m d a t e o f i s s u e t o su b m i s s i o n , r e s p o n s e a n d a n a l y s i s  RF P p l a n n i n g a n d d r a f t i n g – J u l y 1 3 - 1 9 , 2 0 1 2  RF P r e l e a s e - J u l y 2 0 , 2 0 1 2  Ve n d o r q u e s t i o n s d u e – J u l y 2 6 , 2 0 1 2  RF P d u e – A u g u s t 1 0 , 2 0 1 2  Fi n a l i s t p r e s e n t a t i o n s ( i f n e c e s s a r y ) – w e e k o f A u g u s t 2 0  RF P F i n a l p r e s e n t a t i o n t o C o m m i t t e e – A u g u s t 3 1 , 2 0 1 2 10 Co p y r i g h t © 2 0 1 2 b y T h e S e g a l G r o u p , I n c . , p a r e n t o f T h e S e g a l C o m p a n y . A l l r i g h t s r e s e r v e d . Ap p e n d i x 11 HM O H o s p i t a l N e t w o r k C o m p a r i s o n Ci t y o f B a k e r s f i e l d HM O H o s p i t a l ( A n t h e m ) - N e t w o r k C o m p a r i s o n Cu r r e n t A n t h e m G e n e r a l A c u t e Ho s p i t a l s Ci t y Add r e s s Ae t n a Bl u e S h i e l d Ci g n a GEMCare/MercyUHC 1 B a k e r s f i e l d M e m o r i a l H o s p i t a l B a k e r s f i e l d 42 0 3 4 t h S t Ba k e r s f i e l d , C A 9 3 3 0 1 YY Y Y 2 G o o d S a m a r i t a n H o s p i t a l B a k e r s f i e l d 90 1 O l i v e D r Ba k e r s f i e l d , C A 9 3 3 0 8 YN o N o N o 3 K e r n M e d i c a l C e n t e r B a k e r s f i e l d 17 0 0 M o u n t V e r n o n A v e Ba k e r s f i e l d , C A 9 3 3 0 6 No N o Y N o 4 M e r c y H e a l t h c a r e B a k e r s f i e l d B a k e r s f i e l d 22 1 5 T r u x t u n A v e Ba k e r s f i e l d , C A 9 3 3 0 1 YY Y Y 5 S a n J o a q u i n C o m m u n i t y H o s p i t a l B a k e r s f i e l d 26 1 5 C h e s t e r A v e Ba k e r s f i e l d , C A 9 3 3 0 1 No Y N o Y 6 D e l a n o R e g i o n a l M e d i c a l C e n t e r D e l a n o 14 0 1 G a r c e s H w y De l a n o , C A 9 3 2 1 5 YY Y Y 7 K e r n V a l l e y H e a l t h c a r e D i s t r i c t L a k e I s a b e l l a 64 1 2 L a u r e l A v e La k e I s a b e l l a , C A 9 3 2 4 0 YY Y Y 8 R i d g e c r e s t R e g i o n a l H o s p i t a l R i d g e c r e s t 10 8 1 N C h i n a L a k e B l v d Ri d g e c r e s t , C A 9 3 5 5 5 Y Y N o N o 9 T e h a c h a p i H o s p i t a l T e h a c h a p i 11 5 W E S t Te h a c h a p i , C A 9 3 5 6 1 YY N Y Nu m b e r M a t c h e d : 7 n / a 7 5 6 % M a t c h e d 7 7 . 8 % n / a 7 7 . 8 % 5 5 . 6 % 6 6 . 7 % 12 51 9 3 1 1 0 PP O H o s p i t a l N e t w o r k C o m p a r i s o n Ci t y o f B a k e r s f i e l d PP O H o s p i t a l ( A n t h e m ) - N e t w o r k C o m p a r i s o n Cu r r e n t A n t h e m G e n e r a l A c u t e Ho s p i t a l s Ci t y A d d r e s s Ae t n a Bl u e S h i e l d Ci g n a GEMCare/MercyUHC 1 B a k e r s f i e l d M e m o r i a l H o s p i t a l B a k e r s f i e l d 42 0 3 4 t h S t Ba k e r s f i e l d , C A 9 3 3 0 1 Y Y Y Y 2 G o o d S a m a r i t a n H o s p i t a l B a k e r s f i e l d 90 1 O l i v e D r Ba k e r s f i e l d , C A 9 3 3 0 8 Y N o Y N o 3 K e r n M e d i c a l C e n t e r B a k e r s f i e l d 17 0 0 M o u n t V e r n o n A v e Ba k e r s f i e l d , C A 9 3 3 0 6 N o N o N o N o 4 M e r c y H e a l t h c a r e B a k e r s f i e l d B a k e r s f i e l d 22 1 5 T r u x t u n A v e Ba k e r s f i e l d , C A 9 3 3 0 1 Y Y Y Y 5 S a n J o a q u i n C o m m u n i t y H o s p i t a l B a k e r s f i e l d 26 1 5 C h e s t e r A v e Ba k e r s f i e l d , C A 9 3 3 0 1 N o Y Y Y 6 D e l a n o R e g i o n a l M e d i c a l C e n t e r D e l a n o 14 0 1 G a r c e s H w y De l a n o , C A 9 3 2 1 5 Y Y Y Y 7 K e r n V a l l e y H e a l t h c a r e D i s t r i c t L a k e I s a b e l l a 64 1 2 L a u r e l A v e La k e I s a b e l l a , C A 9 3 2 4 0 Y Y Y Y 8 R i d g e c r e s t R e g i o n a l H o s p i t a l R i d g e c r e s t 10 8 1 N C h i n a L a k e B l v d Ri d g e c r e s t , C A 9 3 5 5 5 Y Y Y N o 9 T e h a c h a p i H o s p i t a l T e h a c h a p i 11 5 W E S t Te h a c h a p i , C A 9 3 5 6 1 Y Y Y Y Nu m b e r M a t c h e d : 7 n / a 7 8 6 % M a t c h e d 7 7 . 8 % n / a 7 7 . 8 % 8 8 . 9 % 6 6 . 7 % 13 51 9 3 1 1 0 HM O M e d i c a l G r o u p C o m p a r i s o n 14 Me d i c a l G r o u p An t h e m Ae t n a Bl u e S h i e l d Ci g n a GEMCare/MercyUHC 1 Ba k e r s f i e l d F a m i l y M e d i c a l Ce n t e r Y Y n / a Y N o Y 2 Go l d e n E m p i r e M a n a g e d Ca r e , A M e d i c a l G r o u p I n c . (G E M C a r e ) N o Y n / a Y Y Y 3 H e r i t a g e P r o v i d e r N e t w o r k Y Y n / a N o N o Y 4 In d e p e n d e n c e M e d i c a l Gr o u p Y Y n / a N o N o Y 51 9 3 1 1 0 HM O D e v i a t i o n s f r o m C u r r e n t P l a n D e s i g n Cu r r e n t H M O A e t n a Bl u e S h i e l d No t P r o v i d e d Ci g n a GE M C a r e - M a t c h e d a l l be n e f i t s United Health Care Ac t i v e O n l y A c t i v e O n l y - L i s t D e v i a t i o n s Li f e t i m e M a x i m u m No n e De d u c t i b l e Sin g l e N o n e Tw o P a r t y N o n e Fa m i l y N o n e An n u a l O u t - o f - P o c k e t M a x i m u m Sin g l e $ 5 0 0 $800 Fa m i l y $ 1 , 5 0 0 $1,600 Ho s p i t a l In p a t i e n t $ 2 5 0 p e r a d m i s s i o n Ou t p a t i e n t $ 0 c o p a y Of f i c e / H o m e V i s i t s In c l u d e s A l l S p e c i a l i s t s $2 5 c o p a y Di a g n o s t i c X - R a y & L a b o r a t o r y $0 c o p a y Pr e s c r i p t i o n D r u g s Re t a i l (u p t o 3 0 - d a y s u p p l y ) $1 0 / $ 2 0 c o p a y f o r ge n e r i c / b r a n d Ma i l O r d e r P r o g r a m (u p t o 9 0 - d a y s u p p l y ) $1 5 / $ 2 5 c o p a y f o r ge n e r i c / b r a n d Em e r g e n c y C a r e / S e r v i c e s $1 0 0 c o p a y (w a i v e d i f a d m i t t e d ) Am b u l a n c e $0 c o p a y Ch i r o p r a c t i c $2 5 c o p a y $ 1 5 c o p a y w h e n o f f e r e d se p a r a t e l y f r o m S h o r t Te r m R e h a b $20 copay Du r a b l e M e d i c a l E q u i p m e n t $0 c o p a y (u p t o $ 5 , 0 0 0 / y e a r ) No b e n e f i t l i m i t p e r y e a r Me n t a l H e a l t h a n d S u b s t a n c e Ab u s e Be n e f i t s t h r o u g h O p t u m W e w o u l d i n c l u d e i n o u r pr o p o s a l . Matches inpatient and office visit benefits.15 51 8 3 7 5 2 PP O D e v i a t i o n s f r o m C u r r e n t P l a n D e s i g n Cu r r e n t P P O In N e t w o r k ( P P O ) 9 0 % Ou t o f N e t w o r k 6 0 % Ae t n a Blu e S h i e l d No t P r o v i d e d Cig n a G E M C a r e U n i t e d H e a l t h C a r e Ac t i v e a n d R e t i r e e * Ac t i v e a n d R e t i r e e * Lis t D e v i a t i o n s Active and Under 65 Retiree List DeviationsOver 65 Retiree List Deviations Lif e t i m e M a x i m u m Ac t i v e : N o n e Re t i r e e : $ 5 , 0 0 0 , 0 0 0 An u n l i m i t e d l i f e t i m e m a x i m u m w i l l a p p l y . P P A C A pro h i b i t s a p p l y i n g p l a n d o l l a r l i f e t i m e m a x i m u m s . No l i f e t i m e m a x f o r r e t i r e e N o n e None De d u c t i b l e Sin g l e $ 3 5 0 $5 0 0 N o n e Tw o P a r t y $ 7 0 0 $2 , 0 0 0 N o n e Fa m i l y $ 1 , 0 5 0 $2 , 0 0 0 N o n e An n u a l O u t - o f - P o c k e t M a x i m u m Sin g l e I n N e t w o r k $ 1 , 5 0 0 Ou t o f N e t w o r k $ 4 , 5 0 0 $4 , 0 0 0 $ 1 , 5 0 0 Fa m i l y I n N e t w o r k $ 4 , 5 0 0 Ou t o f N e t w o r k $ 9 , 0 0 0 $8 , 0 0 0 Ho s p i t a l In p a t i e n t $ 2 5 0 d e d u c t i b l e p l u s In N e t w o r k 9 0 % Ou t o f N e t w o r k 6 0 % We c a n a d m i n i s t e r a n o u t - o f - n e t w o r k p r e c e r t i f i c a t i o n pe n a l t y o f $ 2 0 0 , $ 3 0 0 , $ 4 0 0 , o r $ 5 0 0 p e r o c c u r r e n c e . $5 0 0 P e r A d m i s s i o n p l u s 2 0 % $ 2 5 0 d e d u c t i b l e p l u s In-Network: 90%Out-of-Network: 60%$50 per Admit No n - P a r t i c i p a t i n g P r o v i d e r I n p a t i e n t P e n a l t y : $ 5 0 0 No n - C e r t i f i c a t i o n P e n a l t y a n d D e d u c t i b l e : 2 5 % p l u s $2 5 0 p e r a d m i s s i o n Ou t p a t i e n t I n N e t w o r k 9 0 % Ou t o f N e t w o r k 6 0 % Am b u l a t o r y S u r g i c a l C e n t e r D e d u c t i b l e : $ 5 0 0 f o r n o n - pa r t i c i p a t i n g p r o v i d e r $2 5 0 P e r P r o c e d u r e p l u s 2 0 % I n - N e t w o r k : 9 0 % Out-of-Network: 60%$25 Off i c e / H o m e V i s i t s In c l u d e s A l l S p e c i a l i s t s In N e t w o r k 9 0 % Ou t o f N e t w o r k 6 0 % Off i c e - $ 2 5 Sp e c i a l i s t s - $ 2 5 $10 Di a g n o s t i c X - R a y & L a b o r a t o r y In N e t w o r k 9 0 % Ou t o f N e t w o r k 6 0 % Ro u t i n e L a b p a i d 1 0 0 % Dia g n o s t i c X - R a y 2 0 % $0 Pr e s c r i p t i o n D r u g s Re t a i l (u p t o 3 0 - d a y s u p p l y ) $1 0 / $ 2 0 c o p a y f o r g e n e r i c / b r a n d Fo r m u l a r y G e n e r i c : $ 1 0 Bra n d : $ 2 5 0 D e d - $ 3 0 $5/$10 copay for generic/preferred brand Ma i l O r d e r P r o g r a m (u p t o 9 0 - d a y s u p p l y ) $1 5 / $ 2 5 c o p a y f o r g e n e r i c / b r a n d Fo r m u l a r y G e n e r i c : $ 1 0 Br a n d : $ 2 5 0 D e d - $ 3 0 $10/$20 copay for generic/preferred brand Catastrophic coverage: Greater of 5% or $2.65/$6.60 for generic/brand after out-of-pocket maximum of $4,750 Em e r g e n c y C a r e / S e r v i c e s $1 0 0 d e d u c t i b l e ( w a i v e d i f a d m i t t e d ) p l u s In N e t w o r k 9 0 % Ou t o f N e t w o r k 6 0 % We w i l l c o v e r e m e r g e n c y r o o m c a r e i n a c c o r d a n c e wit h t h e p r u d e n t l a y p e r s o n d e f i n i t i o n a t t h e i n - n e t w o r k co s t s h a r i n g l e v e l . P P A C A r e q u i r e s c o v e r i n g o u t o f ne t w o r k e m e r g e n c y r o o m a t t h e i n n e t w o r k l e v e l . $1 0 0 + 2 0 % $ 6 5 ( w a i v e d i f a d m i t t e d ) Am b u l a n c e 90 % 20 % $ 5 0 Ch i r o p r a c t i c In N e t w o r k 9 0 % Ou t o f N e t w o r k 6 0 % $5 0 p e r v i s i t $7 5 0 m a x / y e a r No p e r v i s i t d o l l a r l i m i t w i l l n o t a p p l y . N o c o p a y a n d n o m a x i m u m p e r ye a r . W i l l b e l i m i t e d t o 2 0 d a y s pe r y e a r Se l f R e f e r r a l 2 0 % p e r v i s i t 12 v i s i t s p e r c a l e n d a r y r . 50% Du r a b l e M e d i c a l E q u i p m e n t In N e t w o r k 9 0 % Ou t o f N e t w o r k 6 0 % 50 % 2 0 % Me n t a l H e a l t h a n d S u b s t a n c e A b u s e Be n e f i t s t h r o u g h O p t u m W e w o u l d i n c l u d e i n o u r p r o p o s a l . Ou t p t $ 2 5 c o p a y Ou t p t S u b s t a n c e A b u s e $ 2 5 Ma t c h e s i n p a t i e n t a n d o f f i c e visit benefits.Inpatient: Inpatient Benefit is applied Out-Patient: $15 (Individual) $10 (Group)16 51 8 3 7 5 2 Me d i c a r e A d v a n t a g e D e v i a t i o n s f r o m C u r r e n t P l a n D e s i g n Cu r r e n t S e n i o r S e c u r e A e t n a Bl u e S h i e l d No t P r o v i d e d Cig n a - N o t a v a i l a b l e i n C A ; He a l t h S p r i n g a v a i l a b l e i n s e l e c t co u n t i e s i n c e r t a i n S t a t e s . GE M C a r e - M a t c h e d a l l be n e f i t s e x c e p t c h i r o - u s e t h e i r ow n n e t w o r k United Health Care Me d i c a r e A d v a n t a g e P l a n Me d i c a r e A d v a n t a g e P l a n Li s t D e v i a t i o n s Lif e t i m e M a x i m u m No n e De d u c t i b l e Si n g l e N o n e $1,500 Tw o P a r t y N o n e Fa m i l y N o n e An n u a l O u t - o f - P o c k e t M a x i m u m Si n g l e $ 3 , 4 0 0 Fa m i l y Ho s p i t a l In p a t i e n t $ 0 c o p a y $50 Per Admit Ou t p a t i e n t $ 0 c o p a y $25 Of f i c e / H o m e V i s i t s In c l u d e s A l l S p e c i a l i s t s $0 c o p a y $ 5 $10 Di a g n o s t i c X - R a y & L a b o r a t o r y $0 c o p a y $ 5 Pr e s c r i p t i o n D r u g s (B e n e f i t s c a n b e c u s t o m i z e d ) Re t a i l (u p t o 3 0 - d a y s u p p l y ) $5 / $ 1 0 c o p a y f o r g e n e r i c / b r a n d $ 5 / $ 3 0 / $ 6 0 Ma i l O r d e r P r o g r a m (u p t o 9 0 - d a y s u p p l y ) $5 / $ 1 0 c o p a y f o r g e n e r i c / b r a n d $ 1 0 / $ 6 0 / $ 1 2 0 $10/$20 copay for generic/preferred brand Ca t a s t r o p h i c C o v e r a g e : G r e a t e r o f 5 % o r $2 . 1 5 / $ 5 . 3 5 f o r g e n e r i c / b r a n d a f t e r o u t - of - p o c k e t m a x o f $ 3 , 8 5 0 Gr e a t e r o f $ 2 . 6 0 o r 5 % ( g e n e r i c ) g r e a t e r of $ 6 . 5 0 o r 5 % ( a l l o t h e r d r u g s ) Greater of 5% or $2.65/$6.60 for generic/brand after out-of-pocket maximum of $4,750 Em e r g e n c y C a r e / S e r v i c e s $5 0 p e r v i s i t (w a i v e d i f a d m i t t e d ) $65 (waived if admitted) Am b u l a n c e $0 c o p a y $50 Ch i r o p r a c t i c $0 c o p a y Fo r A m e r i c a n S p e c i a l t y H e a l t h P l a n s co n t r a c t i n g c h i r o p r a c t o r s : $ 5 c o p a y p e r vis i t . (N o P C P r e f e r r a l r e q u i r e d ) Ap p l i a n c e s l i m i t e d t o $ 5 0 m a x / y e a r $5 Li m i t e d t o M e d i c a r e c o v e r e d b e n e f i t s on l y We u s e o u r o w n C h i r o p r a c t i c ne t w o r k 50% Du r a b l e M e d i c a l E q u i p m e n t $0 c o p a y 20% Me n t a l H e a l t h a nd S u b s t a n c e A b u s e In p a t i e n t h o s p i t a l i z a t i o n : $ 0 c o p a y p e r ad m i s s i o n Ou t p a t i e n t : $ 0 / $ 0 c o p a y f o r in d i v i d u a l / g r o u p v i s i t $5 Inpatient: Inpatient Benefit is applied Out-Patient: $15 (Individual) $10 (Group)17 51 8 3 7 5 2 Qu e s t i o n n a i r e s Ae t n a Bl u e S h i e l d Ci g n a Ge m C a r e UHC 1 I s y o u r P P O n e t w o r k a v a i l a b l e i n a l l 5 0 st a t e s ? Yes . A e t n a ’ s P P O n e t w o r k p l a n p r o v i d e s me m b e r s w i t h a c c e s s t o n e t w o r k a n d no n - n e t w o r k p r o v i d e r s i n a l l 5 0 s t a t e s . Th e r e a r e a p p r o x i m a t e l y o v e r 1 , 0 0 0 P P O ne t w o r k p r o v i d e r s i n K e r n C o u n t y . Yes , t h r o u g h o u r p a r t i c i p a t i o n i n t h e Bl u e C r o s s B l u e S h i e l d A s s o c i a t i o n Blu e C a r d p r o g r a m . Ye s . T h e O p e n A c c e s s P l u s n e t w o r k i s a na t i o n a l n e t w o r k p r o v i d i n g a c c e s s t o me d i c a l c a r e n a t i o n w i d e . Ye s . O u r P P O n e t w o r k i s i n a l l 5 0 s t a t e s Yes. Our UnitedHealthcare Choice Plus POS network serves individuals and families in all 50 states, including the District of Columbia. 2 W h e r e w i l l t h e c u s t o m e r s e r v i c e t e a m f o r th e C i t y o f B a k e r s f i e l d B e n e f i t D e p a r t m e n t be l o c a t e d ? Th e c u s t o m e r s e r v i c e t e a m f o r t h e C i t y o f Ba k e r s f i e l d w i l l b e l o c a t e d i n o u r F r e s n o Me d i c a l S e r v i c e C e n t e r l o c a t e d a t 1 3 8 5 E. S h a w A v e n u e , F r e s n o , C A . M e d i c a l se r v i c e c e n t e r h o u r s o f o p e r a t i o n a r e Mo n d a y t h r o u g h F r i d a y 8 a . m . t o 6 p . m . PT . Ou r c u s t o m e r s e r v i c e t e a m i s l o c a t e d i n Lo d i , C a l i f . Cu s t o m e r s e r v i c e f o r t h e C i t y o f Ba k e r s f i e l d w i l l b e a d m i n i s t e r e d i n o u r Vi s a l i a , C A . s e r v i c e c e n t e r . Th e c u s t o m e r s e r v i c e t e a m w i l l b e lo c a t e d a t 4 5 5 0 C a l i f o r n i a A v e . S u i t e 1 0 0 Ba k e r s f i e l d C A 9 3 3 0 9 UNITEDHEALTHCARE Our customer care centers are located in the following locations: ■Buffalo, New York ■Chico, California ■Green Bay, Wisconsin ■Greensboro, North Carolina■Kingston, New York ■San Antonio, Texas SIGNATUREVALUE Member services will be handled out of our San Antonio, Texas call center. 3 C a n y o u m a t c h t h e p l a n o f b e n e f i t s ex a c t l y ? I f n o t , l i s t t h e e x c e p t i o n s se p a r a t e l y f o r t h e H M O p l a n a n d P P O pla n i n S e c t i o n I I I – C u r r e n t B e n e f i t s . No . P l e a s e r e f e r t o t h e b e n e f i t d e v i a t i o n s . N o t p r o v i d e d . W e l o o k f o r w a r d t o pe r f o r m i n g a b e n e f i t s c o m p a r i s o n d u r i n g th e R F P s t a g e o f t h i s m a r k e t i n g e f f o r t , pr o v i d e d w e r e c e i v e c u r r e n t c o p i e s o f t h e co r r e s p o n d i n g e v i d e n c e o f c o v e r a g e (E O C ) d o c u m e n t s . No . P l e a s e r e f e r t o t h e b e n e f i t d e v i a t i o n s . N o . P l e a s e r e f e r t o t h e b e n e f i t d e v i a t i o n s . We w i l l w o r k t o m a t c h i f n e e d e d . No. Please refer to the benefit deviations. 4 Are y o u a b l e t o p r o v i d e a M e d i c a r e Adv a n t a g e P l a n f o r r e t i r e e s i n C a l i f o r n i a ? Are t h e r e o t h e r l o c a t i o n s , n a t i o n a l l y , wh e r e y o u o f f e r a M A p r o d u c t ? Yes . A e t n a i s a b l e t o p r o v i d e a M e d i c a r e Adv a n t a g e P l a n f o r r e t i r e e s i n C a l i f o r n i a . Aet n a M e d i c a r e S M P l a n ( P P O ) : T h i s pr o d u c t p r o v i d e s a c c e s s t o c o v e r e d se r v i c e s t h r o u g h n e t w o r k o r n o n - n e t w o r k pr o v i d e r s , a n d i s a v a i l a b l e i n 3 9 0 co u n t i e s i n 3 4 s t a t e s a n d W a s h i n g t o n DC . Aet n a M e d i c a r e S M P P O w i t h E x t e n d e d Se r v i c e A r e a ( P P O E S A ) : A e t n a u t i l i z e s th e C M S e m p l o y e r g r o u p w a i v e r t o o f f e r th e M A P P O p r o d u c t t o a l l e l i g i b l e re t i r e e s , i n c l u d i n g t h o s e w h o d o n o t re s i d e i n a n A e t n a M A P P O n e t w o r k se r v i c e a r e a , a s l o n g a s t h e m a j o r i t y o f th e p l a n s p o n s o r ’ s r e t i r e e s r e s i d e w i t h i n th e A e t n a M A P P O n e t w o r k s e r v i c e a r e a . Aet n a r e f e r s t o t h e s e p l a n s a s P P O Ex t e n d e d S e r v i c e A r e a ( P P O E S A ) p l a n s . Aet n a M e d i c a r e S M P l a n ( H M O ) : T h i s pr o d u c t i s s i m i l a r t o o u r P P O p l a n , a s i t i s ne t w o r k - b a s e d a n d o f f e r s p r e d i c t a b l e co p a y s . I t i s a v a i l a b l e i n 3 0 3 c o u n t i e s i n 24 s t a t e s a n d W a s h i n g t o n D C . I n H M O pla n s , r e t i r e e s o n l y a c c e s s c a r e t h r o u g h ou r l a r g e n e t w o r k o f p a r t i c i p a t i n g pr o v i d e r s . I t a l s o p r o v i d e s b e n e f i t s be y o n d t h o s e c o v e r e d b y O r i g i n a l Me d i c a r e , a n d v a l u e a d d e d s e r v i c e s . Yes , o u r S h i e l d 6 5 + M A P D p l a n i s av a i l a b l e f o r M e d i c a r e - e l i g i b l e r e t i r e e s i n Ca l i f o r n i a . No . C i g n a d o e s n o t p r e s e n t l y o f f e r a Me d i c a r e A d v a n t a g e p l a n i n C a l i f o r n i a . Wi t h C i g n a ' s r e c e n t a c q u i s i t i o n o f He a l t h S p r i n g , o n e o f t h e c o u n t r y ’ s l a r g e s t Me d i c a r e A d v a n t a g e c o o r d i n a t e d c a r e pla n s , s e r v i n g a p p r o x i m a t e l y 3 6 5 , 0 0 0 in d i v i d u a l M e d i c a r e A d v a n t a g e c u s t o m e r s an d o v e r 6 5 0 , 0 0 0 s t a n d - a l o n e M e d i c a r e Pa r t D p r e s c r i p t i o n d r u g c u s t o m e r s . He a l t h S p r i n g ’ s i n d i v i d u a l a n d e m p l o y e r gr o u p M e d i c a r e A d v a n t a g e p l a n s a r e av a i l a b l e i n s e l e c t c o u n t i e s i n A l a b a m a , De l a w a r e , F l o r i d a , G e o r g i a , I l l i n o i s , Ma r y l a n d , M i s s i s s i p p i , N e w J e r s e y , Pe n n s y l v a n i a , T e n n e s s e e , T e x a s , W e s t Vi r g i n i a , a n d W a s h i n g t o n , D . C . O u r Se n i o r & R e t i r e e S e r v i c e s e m p l o y e r gr o u p s p e c i a l i s t s a r e a v a i l a b l e t o d i s c u s s av a i l a b l e c o v e r a g e o p t i o n s i n g r e a t e r de t a i l . GE M C a r e H e a l t h P l a n ’ s M e d i c a r e Adv a n t a g e P l a n s a r e a v a i l a b l e t o r e t i r e e s wh o r e s i d e o n l y i n K e r n C o u n t y , S a n L u i s Ob i s p o C o u n t y , S a n t a M a r i a a n d V e n t u r a Co u n t y . Yes. We have both local and national Medicare Advantage (MA) plans available.18 51 9 3 1 1 0 Qu e s t i o n n a i r e s 5 I f p r e s c r i p t i o n s c o n t i n u e t o b e i n c l u d e d i n th e c o n t r a c t o f i n s u r a n c e w i t h y o u r co m p a n y , d o y o u s u b c o n t r a c t t h e P B M ad m i n i s t r a t i o n t o a t h i r d p a r t y P B M ma n a g e r ? I f s o , i n d i c a t e t h e c o m p a n y . No . Me d i c a l Aetn a P h a r m a c y M a n a g e m e n t ( A P M ) i s th e e x c l u s i v e i n t e r n a l p h a r m a c y b e n e f i t ma n a g e r ( P B M ) o f A e t n a . Me d i c a r e Aetn a b e g a n o f f e r i n g o u r M e d i c a r e Pr e s c r i p t i o n D r u g P l a n s ( P D P ’ s ) i n Ja n u a r y 2 0 0 6 ( a t i n c e p t i o n o f t h e P a r t D pr o g r a m ) . O u r P D P f u l l - s e r v i c e ph a r m a c y b e n e f i t p l a n s a r e a v a i l a b l e i n all 5 0 s t a t e s a n d t h e D i s t r i c t o f C o l u m b i a . Th e p l a n s p r o v i d e a c c e s s t o o v e r 6 0 , 0 0 0 ph a r m a c i e s n a t i o n w i d e , a n d i n c l u d e ma j o r c h a i n s a n d i n d e p e n d e n t r e t a i l ph a r m a c i e s . O u r M e d i c a r e s p e c i f i c na t i o n a l p h a r m a c y n e t w o r k i n c l u d e s o u r ma i l o r d e r p h a r m a c y , A e t n a R x H o m e De l i v e r y . No , B l u e S h i e l d a c t s a s o u r o w n P B M . N o . C i g n a o w n s a n d a d m i n i s t e r s o u r o w n ph a r m a c y p r o g r a m a l l o w i n g u s t o o f f e r a tr u l y i n t e g r a t e d m e d i c a l / p h a r m a c y pr o g r a m a i m e d a t h o l i s t i c a l l y i m p r o v i n g he a l t h o u t c o m e s a n d l o w e r i n g o v e r a l l he a l t h c a r e c o s t s . Yes . G E M C a r e H e a l t h P l a n c o n t r a c t s wit h P h a r m a c e u t i c a l T e c h n o l o g i e s I n c . (P T I ) i n O m a h a N e b r a s k a f o r P B M se r v i c e s . UnitedHealthcare's sister company, OptumRx, owns the administrative services and through this relationship, we offer customers and their members increased efficiencies and improved cost and quality control.These advantages support our competitive pricing model and help us deliver enhanced value to our customers and their members. 6 I n d i c a t e t h a t y o u a g r e e t h a t n o co m m i s s i o n s , f i n d e r s f e e s o r a n y o t h e r for m o f r e m u n e r a t i o n w i l l b e p a i d a s a re s u l t o f i n s u r i n g t h e C i t y o f B a k e r s f i e l d ’ s pla n s t o a n y p a r t y o u t s i d e o f y o u r co m p a n y . I f t h e a n s w e r i s t h a t y o u d o n o t ag r e e , p l e a s e p r o v i d e a d e t a i l e d ex p l a n a t i o n . Yes . T h i s i s n o t a p p l i c a b l e f o r a n R F I . W e l o o k for w a r d t o a d d r e s s i n g t h i s d u r i n g t h e RF P s t a g e o f t h i s m a r k e t i n g e f f o r t . Yes . Yes . Y e s . 7 H a v e y o u c o n t a c t e d a n y m e m b e r o f t h e Cit y C o u n c i l p r i o r t o t h e r e l e a s e o f t h i s RF I t o d i s c u s s y o u r C o m p a n y a n d a n y po t e n t i a l b u s i n e s s r e l a t i o n s h i p w i t h t h e Cit y ? No . N o . N o Yes . A s m e m b e r s o f t h e B a k e r s f i e l d Co m m u n i t y w e e n g a g e t h e C i t y C o u n c i l on h e a l t h c a r e i s s u e s f r om t i m e t o t i m e . No. 8 D o e s y o u r c o m p a n y h a v e a n y a f f i l i a t i o n as t o o w n e r s h i p w i t h a n y m e d i c a l pr o v i d e r s , f a c i l i t i e s , b u s i n e s s l o c a t e d i n th e C i t y o f B a k e r s f i e l d , o r C o u n t y o f K e r n , CA ? No . N o . N o . G E M C a r e H e a l t h P l a n , I n c . i s a w h o l l y ow n e d s u b s i d i a r y o f G E M C a r e M e r c y Me m o r i a l H e a l t h S y s t e m w h i c h i s o w n e d by M e r c y a n d M e m o r i a l H o s p i t a l s i n Ba k e r s f i e l d a n d f i f t y-f i v e i n d i v i d u a l sh a r e h o l d e r s o f w h i c h f i f t y t h r e e a r e ph y s i c i a n s - t h e m a j o r i t y o f w h o m pr a c t i c e i n B a k e r s f i e l d / K e r n C o u n t y . No. 9 C a n y o u r c o m p a n y i m p l e m e n t a p l a n o f be n e f i t s f o r t h e H M O a n d o r t h e P P O pla n s o n J a n u a r y 1 , 2 0 1 3 ? I f s o , w h a t i s th e r e q u i r e d a d v a n c e d t i m e t o p e r f o r m th i s t r a n s i t i o n ? Yes . W e r e c o m m e n d a l e a d t i m e o f 9 0 to 1 2 0 d a y s p r i o r t o t h e e f f e c t i v e d a t e . Yes . I m p l e m e n t a t i o n t y p i c a l l y t a k e s 9 0 da y s . We w o u l d l i k e a 9 0 - d a y l e a d t i m e f r o m th e s t a r t d a t e t o e n s u r e s u c c e s s f u l im p l e m e n t a t i o n o f t h e C i t y o f Ba k e r s f i e l d ’ s c o v e r a g e p l a n . Yes . T h e r e q u i r e d a d v a n c e t i m e t o pe r f o r m t h i s t r a n s i t i o n w o u l d b e 6 0 d a y s . Yes. We request an implementation period of45 to 60 days to allow for enough time to perform all the steps necessary to accurately set up a customer’s benefit plan. The actual time needed to perform all the steps varies.19 51 9 3 1 1 0 Co p y r i g h t © 2 0 1 0 b y T h e S e g a l G r o u p , I n c . , p a r e n t o f T h e S e g a l C o m p a n y . A l l r i g h t s r e s e r v e d . Ci t y o f B a k e r s f i e l d Re v i e w o f R e t i r e e M e d i c a l L i a b i l i t i e s a n d An n u a l V a l u a t i o n Au g u s t 3 , 2 0 1 2 5202290v1 Co p y r i g h t © 2 0 1 2 b y T h e S e g a l G r o u p , I n c . , p a r e n t o f T h e S e g a l C o m p a n y . A l l r i g h t s r e s e r v e d . 1. Ba c k g r o u n d o f G A S B S t a t e m e n t 4 5 Ac c o u n t i n g P r i n c i p l e s f o r R e t i r e e M e d i c a l Li a b i l i t i e s 2. Re s u l t s o f t h e F Y E 2 0 1 1 A c t u a r i a l V a l u a t i o n 3. Su p p o r t i n g S u r v e y I n f o r m a t i o n 4. Ac t u a r i a l V a l u a t i o n R e p o r t a n d G A S B St a t e m e n t 4 5 D i s c l o s u r e a s o f Ju n e 3 0 , 2 0 1 1 3 Fi s c a l Y e a r E n d 2 0 1 1 A c t u a r i a l V a l u a t i o n o f R e t i r e e M e d i c a l Li a b i l i t i e s – G A S B S t a t e m e n t 4 5  A v a l u a t i o n m u s t b e p e r f o r m e d o f t h e l i a b i l i t i e s fo r r e t i r e e m e d i c a l b e n e f i t s e v e r y t w o y e a r s a n d si g n e d b y t h e A c t u a r y  Th e l a s t v a l u a t i o n w a s f o r F Y E J u n e 3 0 , 2 0 0 9  Th e v a l u a t i o n p r o v i d e s i n f o r m a t i o n f o r t h e Ci t y t o d i s c l o s e i n i t s f i n a n c i a l r e p o r t  Co m p o n e n t s o f t h e l i a b i l i t y t o b e c a l c u l a t e d i n t h e v a l u a t i o n i n c l u d e :  Ac t u a r i a l A c c r u e d L i a b i l i t y ( A A L ) – T h e p r e s e n t v a l u e o f t h e b e n e f i t t o b e p a i d f o r e l i g i b l e ac t i v e e m p l o y e e s w h e n t h e y r e ti r e a n d f o r e x i s t i n g r e t i r e e s , ba s e d o n t h e s e r v i c e t h a t t h e y ha v e a l r e a d y p r o v i d e d t o t h e C i t y . A l s o r e f e r r e d to a s “ p a s t s e r v i c e l i a b i l i t y ” . T h e g r o u p w a s cl o s e d a s o f J a n u a r y 2 0 0 6 t o ne w l y e l i g i b l e m e m b e r s .  As s e t V a l u e – t h e m a r k e t v a l u e o f t h e i n v e s t m e n t s a s o f t h e d a t e o f t h e v a l u a t i o n ( J u n e 3 0 , 20 1 1 ) d e p o s i t e d b y t h e C i t y i n to a n i r r e v o c a b l e t r u s t  An n u a l R e q u i r e d C o n t r i b u t i o n ( A R C ) – t h e c o n t r i b u t i o n t h a t w o u l d b e n e c e s s a r y f o r t h e Ci t y t o m a k e i n t o t h e t r u s t , i n o r d e r t o f un d a l l o f t h e A c t u a r i a l A c c r u e d L i a b i l i t y o v e r a de c l i n i n g 3 0 y e a r p e r i o d , p l u s p a y f o r t he l i a b i l i t y f o r c u r r e n t y e a r ’ s s e r v i c e . – Re m a i n i n g a m o r t i z a t i o n i s 2 6 y e a r s  Fu n d e d R a t i o – Th e v a l u e o f a s s e t s d i v i d e d b y t h e A c t u a r i a l A c c r u e d L i a b i l i t y ( A A L ) HI G H L I G H T S O F T H E V A L U A T I O N  Th e un f u n d e d a c t u a r i a l a c c r u e d l i a b i l i t y ( U A A L ) as o f J u n e 3 0 , 2 0 1 1 i s $ 8 3 , 6 5 3 , 2 4 1 , a de c r e a s e o f $ 1 7 , 7 7 7 , 4 2 6 , f r o m t h e p r io r v a l u a t i o n U A A L o f $ 1 0 1 , 4 3 0 , 6 6 7 .  As o f J u n e 3 0 , 2 0 1 1 , t h e r a t i o o f a s s e t s t o t h e A A L ( t h e f u n d e d r a t i o ) i s 1 9 . 3 7 % , a n i n c r e a s e fr o m 1 0 . 7 2 % a s o f J u n e 3 0 , 2 0 0 9 .  Th e Ne t O P E B O b l i g a t i o n ( N O O ) de c r e a s e d t o $ 6 8 6 , 7 3 9 f o r t h e ye a r e n d i n g J u n e 3 0 , 2 0 1 2 . Th e N O O g e n e r a l l y i n c r e a s e s i f t h e c o n t r i b u t i o n s in r e l a t i o n t o t h e A R C a r e l e s s t h a n t h e A R C .  Co n t r i b u t i o n s i n r e l a t i o n t o t h e A R C t o t a l e d 21 0 % of t h e A R C i n t h e y e a r e n d i n g J u n e 3 0 , 20 1 2 .  Th e An n u a l R e q u i r e d C o n t r i b u t i o n ( A R C ) de c r e a s e d t o $ 8 , 0 0 6 , 0 5 3 f o r th e y e a r e n d i n g J u n e 30 , 2 0 1 2 . T h e A R C w a s $ 9 , 4 9 5 , 7 6 3 f o r t he f i s c a l y e a r e n d i n g J u n e 3 0 , 2 0 1 0 .  Th e An n u a l O P E B C o s t ( A O C ) de c r e a s e d t o $ 7 , 8 3 6 , 2 2 5 f o r t he f i s c a l y e a r e n d i n g J u n e 3 0 , 20 1 2 . T h e A O C w a s $ 9 , 4 6 2 , 0 3 7 f o r t h e f i s c a l y e a r e n d i n g J u n e 3 0 , 2 0 1 0 .  Th e m o n t h l y S p e c i a l C o n t r i b u t i o n S u b s i d y w a s lo w e r e d . T h e m o n t h l y C i t y F o r m u l a s u b s i d y wa s a l s o l o w e r e d . T h e d e c r e a s e i n t h e s u b s i d y l e v e l s w a s t h e m a i n r e a s o n f o r t h e l o w e r li a b i l i t y , i n c r e a s e d f u n d e d r a t i o , l o w e r A R C a n d A O C w h e n c o m p a r e d t o t h e p r i o r v a l u a t i o n 4 5 Pr o j e c t e d B e n e f i t P a y m e n t s  Be n e f i t p a y m e n t s a r e t h e i n s u r a n c e s u b s i d i e s p a i d b y t h e C i t y fo r i t s s h a r e o f t h e r e t i r e e me d i c a l p r e m i u m s , b a s e d u p o n t w o f o r m u l a  Ye a r s o f s e r v i c e a t r e t i r e m e n t t i m e s 3 % o f th e c o s t o f t h e l o w e s t c o s t a c t i v e H M O , a n d  Fo r A n t h e m P P O p a r t i c i p a n t s , a n a d d i t i o n a l 4 2 % o f t h e c o s t o f t h e A n t h e m R e t i r e e P P O p l a n fo r a n y l e v e l o f c o v e r a g e ( s i ng l e , t w o p a r t y o r f a m i l y ) $6 , 6 1 4 , 8 6 8   $5 , 1 6 6 , 2 6 2   $0 $1 , 0 0 0 , 0 0 0 $2 , 0 0 0 , 0 0 0 $3 , 0 0 0 , 0 0 0 $4 , 0 0 0 , 0 0 0 $5 , 0 0 0 , 0 0 0 $6 , 0 0 0 , 0 0 0 $7 , 0 0 0 , 0 0 0 FY E  20 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 Pr o j e c t e d  Be n e f i t  Pa y m e n t s 06 / 3 0 / 2 0 0 9  Va l u a t i o n 06 / 3 0 / 2 0 1 1  Va l u a t i o n = $1,448,600 Savings due to plan changes 52 0 2 1 9 0 v 1 Li a b i l i t y f o r E a c h o f t h e T w o P i e c e s o f t h e S u b s i d y 6 $4 7 , 7 1 5 , 7 8 0   $4 3 , 5 7 6 , 8 8 0   $6 5 , 8 9 3 , 2 2 0   $6 0 , 1 7 7 , 5 9 7   $0 $2 0 , 0 0 0 , 0 0 0 $4 0 , 0 0 0 , 0 0 0 $6 0 , 0 0 0 , 0 0 0 $8 0 , 0 0 0 , 0 0 0 $1 0 0 , 0 0 0 , 0 0 0 $1 2 0 , 0 0 0 , 0 0 0 06 / 3 0 / 2 0 0 9  Va l u a t i o n 0 6 / 3 0 / 2 0 1 1  Va l u a t i o n 3%  Ye a r s  of  Se r v i c e 42 %  of  PP O  Pr e m i u m To t a l  = $1 1 3 , 6 0 9 , 0 0 0    To t a l  = $1 0 3 , 7 5 4 , 4 7 7 Sa v i n g s  in  AA L d u e  to  ch a n g e s    $9 , 8 5 4 , 5 2 3 52 0 2 1 9 0 v 1 Co p y r i g h t © 2 0 1 0 b y T h e S e g a l G r o u p , I n c . , p a r e n t o f T h e S e g a l C o m p a n y . A l l r i g h t s r e s e r v e d . OP E B L i a b i l i t y S u r v e y Se l e c t e d C a l i f o r n i a C i t i e s 7 An n u a l R e q u i r e d C o n t r i b u t i o n 8 $0 $5 , 0 0 0 , 0 0 0 $1 0 , 0 0 0 , 0 0 0 $1 5 , 0 0 0 , 0 0 0 $2 0 , 0 0 0 , 0 0 0 $2 5 , 0 0 0 , 0 0 0 $3 0 , 0 0 0 , 0 0 0 $3 5 , 0 0 0 , 0 0 0 *P r i o r t o b a n k r u p t c y c ha n g e s . P l a n t e r m i n a t e d 7 / 1 / 2 0 1 3 52 0 2 1 9 0 v 1 An n u a l R e q u i r e d C o n t r i b u t i o n a s a P e r c e n t o f P a y 9 0. 0 0 % 5. 0 0 % 10 . 0 0 % 15 . 0 0 % 20 . 0 0 % 25 . 0 0 % 30 . 0 0 % 35 . 0 0 % 12 . 5 7 % 30 . 8 1 % 2. 1 3 % 1. 9 9 % 8. 2 0 % 4. 7 6 % 8. 1 3 % 16 . 0 5 % 15 . 0 5 % 5. 8 5 % 15 . 0 2 % 3. 0 0 % 12 . 1 1 % 2. 9 0 % 7.71%2.97%0.84% *P r i o r t o b a n k r u p t c y c ha n g e s . P l a n t e r m i n a t e d 7 / 1 / 2 0 1 3 52 0 2 1 9 0 v 1 Un f u n d e d P a s t S e r v i c e L i a b i l i t y 10 $0 $5 0 , 0 0 0 , 0 0 0 $1 0 0 , 0 0 0 , 0 0 0 $1 5 0 , 0 0 0 , 0 0 0 $2 0 0 , 0 0 0 , 0 0 0 $2 5 0 , 0 0 0 , 0 0 0 $3 0 0 , 0 0 0 , 0 0 0 $3 5 0 , 0 0 0 , 0 0 0 $4 0 0 , 0 0 0 , 0 0 0 $4 5 0 , 0 0 0 , 0 0 0 *P r i o r t o b a n k r u p t c y c ha n g e s . P l a n t e r m i n a t e d 7 / 1 / 2 0 1 3 52 0 2 1 9 0 v 1 Fu n d e d R a t i o o f A s s e t s t o L i a b i l i t y 11 0. 0 0 % 2. 0 0 % 4. 0 0 % 6. 0 0 % 8. 0 0 % 10 . 0 0 % 12 . 0 0 % 14 . 0 0 % 16 . 0 0 % 18 . 0 0 % 20 . 0 0 % 19 . 3 7 % 0. 0 0 % 0 . 0 0 % 0 . 0 0 % 0 . 0 0 % 0 . 0 0 % 0. 7 5 % 3. 3 6 % 0. 0 0 % 0 . 0 0 % 0 . 0 0 % 0 . 0 0 % 0 . 00 % 0 . 0 0 % 0 . 0 0 % 0 . 0 0 % 0 . 0 0 % *P r i o r t o b a n k r u p t c y c ha n g e s . P l a n t e r m i n a t e d 7 / 1 / 2 0 1 3 52 0 2 1 9 0 v 1 Da t a F r o m S u r v e y En t i t y A R C % o f P a y r o l l A R C * * Un f u n d e d A c t u a r i a l A c c r u e d Li a b i l i t y Fu n d e d R a t i o Co v e r e d Pa y r o l l Valuation Date Ba k e r s f i e l d * 12 . 5 7 % $ 8 , 0 0 6 , 0 5 3 $ 8 3 , 65 3 , 2 4 1 1 9 . 3 7 % $ 6 3 , 68 5 , 2 0 5 0 6 / 3 0 / 2 0 1 1 St o c k t o n 30 . 8 1 % $ 3 1 , 4 3 6 , 2 5 7 $ 4 1 6 , 73 7 , 5 8 5 0 . 0 0 % $ 1 0 2 , 04 0 , 1 2 0 0 6 / 3 0 / 2 0 1 1 Ch u l a V i s t a 2. 1 3 % $ 1 , 4 7 0 , 0 0 0 $ 1 1 , 8 8 5 , 0 0 0 0. 0 0 % $ 6 9 , 0 8 7 , 0 0 0 0 6 / 3 0 / 2 0 0 9 Fa i r f i e l d 1. 9 9 % $ 7 9 7 , 0 0 0 $ 1 4 , 8 3 1 , 0 0 0 0 . 00 % $ 4 0 , 0 0 0 , 0 0 0 0 6 / 3 0 / 2 0 1 1 Fr e m o n t 8. 2 0 % $ 6 , 0 7 1 , 0 0 0 $ 6 7 , 0 4 9 , 0 0 0 0. 0 0 % $ 7 4 , 0 7 3 , 0 0 0 0 6 / 3 0 / 2 0 1 0 Fr e s n o 4. 7 6 % $ 1 1 , 7 3 4 , 9 9 7 $ 8 4 , 25 2 , 3 8 3 0 . 0 0 % $ 2 4 6 , 46 1 , 4 0 0 0 6 / 3 0 / 2 0 1 0 Ha y w a r d 8. 1 3 % $ 6 , 3 0 2 , 4 3 6 $ 6 8 , 4 3 7 , 6 2 4 0. 7 5 % $ 7 7 , 5 2 0 , 7 3 6 0 6 / 3 0 / 2 0 1 1 Li v e r m o r e 16 . 0 5 % $ 5 , 3 2 7 , 0 0 0 $ 9 2 , 35 9 , 0 0 0 3 . 3 6 % $ 3 3 , 19 6 , 0 0 0 0 6 / 3 0 / 2 0 1 0 Lo d i 15 . 0 5 % $ 1 , 4 1 5 , 9 6 9 $ 1 7 , 71 0 , 4 5 6 0 . 0 0 % $ 9 , 40 9 , 7 8 2 0 1 / 0 1 / 2 0 1 0 Ma n t e c a 5. 8 5 % $ 1 , 5 4 3 , 0 0 0 $ 1 8 , 3 2 0 , 0 0 0 0. 0 0 % $ 2 6 , 3 6 8 , 0 0 0 0 6 / 3 0 / 2 0 1 0 Mo d e s t o 15 . 0 2 % $ 1 2 , 1 7 0 , 8 7 4 $ 1 0 4 , 39 9 , 2 3 1 0 . 0 0 % $ 8 1 , 02 7 , 9 3 4 0 6 / 3 0 / 2 0 1 0 Ri v e r s i d e 3. 0 0 % $ 5 , 6 1 7 , 0 0 0 $ 5 4 , 9 0 0 , 0 0 0 0. 0 0 % $ 1 8 7 , 2 3 3 , 33306/30/2009 Sa c r a m e n t o 12 . 1 1 % $ 3 3 , 3 3 5 , 0 0 0 $ 3 7 6 , 41 7 , 0 0 0 0 . 0 0 % $ 2 7 5 , 25 2 , 0 0 0 0 6 / 3 0 / 2 0 0 9 Sa l i n a s 2. 9 0 % $ 1 , 3 9 7 , 0 0 0 $ 4 5 , 7 0 0 , 0 0 0 0. 0 0 % $ 4 8 , 2 0 0 , 0 0 0 0 6 / 3 0 / 2 0 1 0 Sa n B e r n a r d i n o * 7. 7 1 % $ 6 , 0 8 4 , 0 0 0 $ 6 1 , 3 7 1 , 0 0 0 0. 0 0 % $ 7 8 , 9 5 1 , 0 0 0 0 6 / 3 0 / 2 0 0 9 Sa n J o a q u i n C o u n t y 2. 9 7 % $ 1 0 , 9 2 9 , 0 0 0 $ 1 0 8 , 60 0 , 0 0 0 0 . 0 0 % $ 3 6 7 , 70 0 , 0 0 0 1 2 / 3 1 / 2 0 1 0 Tr a c y 0. 8 4 % $ 3 1 0 , 8 8 3 $ 2 , 2 9 5 , 9 7 9 0 . 00 % $ 3 7 , 1 0 0 , 0 0 0 0 7 / 0 1 / 2 0 0 9 Me d i a n o f C o m p a r i s o n E n t i t i e s 7. 7 1 % 12 *T h e A R C f o r C i t y o f S a n B e r n a r d i n o i s f o r f i s c a l y e a r 2 0 0 9 - 1 0 . T h e A R C f o r C i t y o f B a k e r s f i e l d i s f o r f i s c a l y e a r 2 0 1 1 - 2 0 1 2 . ** T h e a m o u n t f o r A R C f o r a l l C i t i e s / C o u n t i e s e x c e p t C i t y o f S a n B e r n a r d i n o a n d C i t y o f B a k e r s f i e l d i s b a s e d o n F Y 2 0 1 0 - 1 1 . Ci t y o f B a k e r s f i e l d Ac t u a r i a l V a l u a t i o n a nd R e v i e w o f O t h e r Po s t e m p l o y m e n t B e n e f i t s ( O P E B ) a s o f Ju n e 3 0 , 2 0 1 1 I n a c c o r d a n c e w i t h G A S B St a t e m e n t s N o . 4 3 a n d N o . 4 5 Co p y r i g h t © 2 0 1 2 b y T h e S e g a l G r o u p , I n c . , p a r e n t o f T h e S e g a l C o m p a n y . A l l r i g h t s r e s e r v e d . EX E C U T I V E S U M M A R Y VA L U A T I O N R E S U L T S VA L U A T I O N D E T A I L S SU P P O R T I N G I N F O R M A T I O N Pu r p o s e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1   Hi g h l i g h t s o f t h e V a l u a t i o n . . . . . . . . . . 1   Su m m a r y o f V a l u a t i o n R e s u l t s . . . . . 2   Ac t u a r i a l C e r ti f i c a t i o n . . . . . . . . . . . . . . . . . . 3   CH A R T 1   Ac t u a r i a l P r e s e n t V a l u e o f T o t a l Pr o j e c t e d B e n e f i t s ( A P B ) a n d Ac t u a r i a l B a l a n c e S h e e t . . . . . . . . . . . . . . 4 CH A R T 2   Ac t u a r i a l A c c r u e d L i a b i l i t y (A A L ) a n d U n f u n d e d A A L (U A A L ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 CH A R T 3   Ta b l e o f A m o r t i z a t i o n B a s e s . . . . . . 6 CH A R T 4   De t e r m i n a t i o n o f A n n u a l Re q u i r e d C o n t r i b u t i o n ( A R C ) – Pa y a b l e T h r o u g h o u t F i s c a l Y e a r 7 CH A R T 5   Re q u i r e d S u p p l e m e n t a r y In f o r m a t i o n – S c h e d u l e o f Em p l o y e r C o n t r i b u t i o n s . . . . . . . . . . . . . 9 CH A R T 6   Re q u i r e d S u p p l e m e n t a r y In f o r m a t i o n – S c h e d u l e o f Fu n d i n g P r o g r e s s . . . . . . . . . . . . . . . . . . . . . . 1 0 CH A R T 7   Re q u i r e d S u p p l e m e n t a r y In f o r m a t i o n – N e t O P E B Ob l i g a t i o n ( N O O ) . . . . . . . . . . . . . . . . . . . . . 1 1 EX H I B I T A   Su m m a r y o f P a r t i c i p a n t D a t a . . . . 1 2 EX H I B I T B   Ca s h F l o w P r o j e c t i o n s . . . . . . . . . . . . . . 1 3 EX H I B I T I   Su m m a r y o f R e q u i r e d Su p p l e m e n t a r y I n f o r m a t i o n . . . . . . 1 4 EX H I B I T I I   Ac t u a r i a l A s s u m p t i o n s a n d Ac t u a r i a l C o s t M e t h o d . . . . . . . . . . . . . . 1 5 EX H I B I T I I I   Su m m a r y o f P l a n . . . . . . . . . . . . . . . . . . . . . . 2 3 EX H I B I T I V   De f i n i t i o n s o f T e r m s . . . . . . . . . . . . . . . . . 2 9 EX H I B I T V   Ac c o u n t i n g R e q u i r e m e n t s . . . . . . . . 3 1 EX H I B I T V I   GA S B 4 3 / 4 5 C o n c e p t s . . . . . . . . . . . . . . 3 3 SE C T I O N 1 SE C T I O N 2 SE C T I O N 3 SE C T I O N 4 SE C T I O N 1 : E x e c u t i v e S u m m a r y f o r C i t y o f B a k e r s f i el d J u n e 3 0 , 2 0 1 1 M e a s u r e m e n t U n d e r G A S B 4 3 a n d 4 5 1 PU R P O S E Th i s r e p o r t p r e s e n t s t h e r e s u l t s of o u r a c t u a r i a l v a l u a t i o n o f th e C i t y o f B a k e r s f i e l d ( t h e “ E m p l o y e r ” ) O P E B p l a n a s o f Ju n e 3 0 , 2 0 1 1 . T h e r e s u l t s ar e i n a c c o r d a n c e w i t h t h e Go v e r n m e n t a l A c c o u n t i n g S t a n d a r d s , w h i c h p r e s c r i b e a n ac c r u a l m e t h o d o l o g y f o r a c c u m u l a t i n g t h e v a l u e o f o t h e r po s t e m p l o y m e n t b e n e f i t s ( O P E B ) o v e r p a r t i c i p a n t s ’ a c t i v e wo r k i n g l i f e t i m e s . HI G H L I G H T S O F T H E V A L U A T I O N  Th e un f u n d e d a c t u a r i a l a c c r u e d l i a b i l i t y ( U A A L ) a s of J u n e 3 0 , 2 0 1 1 i s $ 83 , 6 5 3 , 2 4 1 , a d e c r e a s e o f $1 7 , 7 7 7 , 4 2 6 , f r o m t h e p r i o r v a l u a t i o n U A A L o f $1 0 1 , 4 3 0 , 6 6 7 .  As o f J u n e 3 0 , 2 0 1 1 , t h e r a t i o o f a s s e t s t o t h e A A L ( t h e fu n d e d r a t i o ) i s 1 9 . 3 7 % , a n i n c r e a s e f r o m 1 0 . 7 2 % a s o f Ju n e 3 0 , 2 0 0 9 .  Th e Ne t O P E B O b l i g a t i o n (N O O ) d e c r e a s e d t o $6 8 6 , 7 3 9 f o r t h e y e a r e n d i n g J u n e 3 0 , 2 0 1 2 . T h e N O O ge n e r a l l y i n c r e a s e s i f t h e c o n t r i b u t i o n s i n r e l a t i o n t o th e A R C a r e l e s s t h a n t h e A R C . C o n t r i b u t i o n s i n re l a t i o n t o t h e A R C t o t a l e d 2 1 0 % o f t h e A R C i n t h e ye a r e n d i n g J u n e 3 0 , 2 0 1 2 . C h a r t 7 s h o w s t h e d e t a i l e d de r i v a t i o n o f t h e N O O o v e r t h e l a s t 5 f i s c a l y e a r s .  Th e An n u a l R e q u i r e d C o n t r i b u t i o n ( A R C ) de c r e a s e d t o $ 8 , 0 0 6 , 0 5 3 f o r t h e y e a r e n d i n g J u n e 3 0 , 20 1 2 . T h e A R C w a s $ 9 , 4 9 5 , 7 6 3 f o r t h e f i s c a l y e a r en d i n g J u n e 3 0 , 2 0 1 0 .  Th e An n u a l O P E B C o s t ( A O C ) decreased to $7 , 8 3 6 , 2 2 5 f o r t h e f i s c a l y ear ending June 30, 2012. Th e A O C w a s $ 9 , 4 6 2 , 0 3 7 f o r t h e f i s c a l y e a r e n d i n g Ju n e 3 0 , 2 0 1 0 .  Th e m o n t h l y S p e c i a l C o n t r i b u t i o n S u b s i d y w a s lo w e r e d . T h e m o n t h l y C i t y F o r m u l a s u b s i d y w a s a l s o lo w e r e d . T h e d e c r e a s e i n t h e s u b s i d y l e v e l s w a s t h e ma i n r e a s o n f o r t h e l o w e r l i a b i l i t y , i n c r e a s e d f u n d e d ra t i o , l o w e r A R C a n d A O C w h e n c o m p a r e d t o t h e pr i o r v a l u a t i o n . SE C T I O N 1 : E x e c u t i v e S u m m a r y f o r C i t y o f B a k e r s f i el d J u n e 3 0 , 2 0 1 1 M e a s u r e m e n t U n d e r G A S B 4 3 a n d 4 5 2 SU M M A R Y O F V A L U A T I O N R E S U L T S As s e t s a n d L i a b i l i t i e s a s o f : Ju n e 3 0 , 2 0 1 1 J u n e 3 0 , 2 0 0 9 Ac t u a r i a l A c c r u e d L i a b i l i t y ( A A L ) $ 1 0 3 , 7 5 4 , 4 7 7 $ 1 1 3 , 6 0 9 , 7 8 4 Ac t u a r i a l V a l u e o f A s s e t s 2 0 , 1 0 1 , 2 3 6 1 2 , 1 7 9 , 1 1 7 Un f u n d e d A c t u a r i a l A c c r u e d L i a b i l i t y 8 3 , 6 5 3 , 2 4 1 1 0 1 , 4 3 0 , 6 6 7 Fu n d e d R a t i o 19 . 3 7 % 1 0 . 7 2 % Ma r k e t V a l u e o f A s s e t s $ 2 0 , 1 0 1 , 2 3 6 $ 1 2 , 1 7 9 , 1 1 7 An n u a l R e q u i r e d C o n t r i b u t i o n ( AR C ) f o r F i s c a l Y e a r E n d i n g : Ju n e 3 0 , 2 0 1 2 J u n e 3 0 , 2 0 1 0 No r m a l c o s t ( b e g i n n i n g o f y e a r ) $ 1 , 6 3 4 , 8 2 8 $ 2 , 1 9 6 , 6 6 0 Am o r t i z a t i o n o f t h e u n f u n d e d a c t u a r i a l a c c r u e d l i a b i l i t y 5 , 9 3 5 , 9 0 8 6 , 7 8 2 , 7 8 5 Ad j u s t m e n t f o r t i m i n g t o e n d o f f i s c a l y e a r 4 3 5 , 3 1 7 516,318 To t a l A n n u a l R e q u i r e d C o n t r i b u t io n , i n c l u d i n g a d j u s t m e n t fo r t i m i n g $ 8 , 0 0 6 , 0 5 3 $ 9 , 4 9 5 , 7 6 3 To t a l P a r t i c i p a n t s 1, 3 7 2 * 1 , 8 8 7 * * An n u a l O P E B C o s t ( A O C ) f o r F i s c a l Y e a r E n d i n g : Ju n e 3 0 , 2 0 1 2 J u n e 3 0 , 2 0 1 0 An n u a l R e q u i r e d C o n t r i b u t i o n s $ 8 , 0 0 6 , 0 5 3 $ 9 , 4 9 5 , 7 6 3 In t e r e s t o n N e t O P E B O b li g a t i o n s 5 5 6 , 7 7 8 1 4 6 , 7 2 9 AR C A d j u s t m e n t s -7 2 6 , 6 0 6 -180,455 To t a l A n n u a l O P E B C o s t $ 7 , 8 3 6 , 2 2 5 $ 9 , 4 6 2 , 0 3 7 * E x c l u d e s S a f e t y e m p l o y e e s h i r e d a f t e r M a y 2 0 0 6 a n d M i s c e l l a n e o u s e m p l o y e e s h i re d a f t e r F e b r u a r y 2 0 0 6 w i t h n o l i a b i l i t y . ** I n c l u d e s S a f e t y e m p l o y e e s h i r e d a f t e r M a y 2 0 0 6 a n d M i s c e l l an e o u s e m p l o y e e s h i r e d a f t e r F e b r u a r y 2 0 0 6 w i t h n o l i a b i l i t y . Th e k e y v a l u a t i o n re s u l t s f o r t h e c u r r e n t an d p r i o r y e a r s a r e sh o w n . SE C T I O N 1 : E x e c u t i v e S u m m a r y f o r C i t y o f B a k e r s f i el d J u n e 3 0 , 2 0 1 1 M e a s u r e m e n t U n d e r G A S B 4 3 a n d 4 5 3 July 11, 2012 AC T U A R I A L C E R T I F I C A T I O N Th i s i s t o c e r t i f y t h a t T h e S e g a l C o m p a n y h a s c o n d u c t e d a n a c t u a ri a l v a l u a t i o n o f c e r t a i n b e n e fi t o b l i g a t i o n s o f C i t y o f Ba k e r s f i e l d ’ s o t h e r p o s t e m p l o y m e n t b e n e f it p r o g r a m s a s o f J u n e 3 0 , 2 0 1 1 , i n a c c o r da n c e w i t h g e n e r a l l y a c c e p t e d a c t u a r i a l pr i n c i p l e s a n d p r a c t i c e s . T h e a c t u a r i a l c a l c u l a t i o n s p r e s e n t e d i n th i s r e p o r t h a v e b e e n m a d e o n a b a s i s c o n s i s t e n t w i t h o u r un d e r s t a n d i n g o f G A S B S t a t e m e n t s 4 3 a n d 4 5 f o r t h e d e t e r m i n a t i o n o f t h e l i a b i l i t y f o r p o s t e m p l o y m e n t b e n e f i t s o t h e r t h a n pe n s i o n s . Th e a c t u a r i a l v a l u a t i o n i s b a s e d o n t h e p l a n of b e n e f i t s v e r i f i e d b y t h e E m p l o y e r a n d r e l i a n c e o n p a r t i c i p a n t , p r e m i u m , c l a i m s an d e x p e n s e d a t a p r o v i d e d b y t h e E m p l o y e r o r f r o m v e n d o r s e m pl o y e d b y t h e E m p l o y e r . T h e S e g a l C o m p a n y d o e s n o t a u d i t th e d a t a p r o v i d e d . T h e a c c u r a c y a n d c o m p r e h e n s i v e n e s s o f t h e d a ta i s t h e r e s p o n s i b i l i t y o f t h o s e s u p p l y i n g t h e d a t a . S e g a l , ho w e v e r , d o e s r e v i e w t h e d a t a f o r r e a s o n a b l e n e s s a n d c o n s i s t e n c y . Th e a c t u a r i a l c o m p u t a t i o n s m a d e a r e f o r p u r p o s e s o f f u l f i l l i n g pl a n a c c o u n t i n g a n d f u n d i n g r e q u ir e m e n t s . D e t e r m i n a t i o n s f o r pu r p o s e s o t h e r t h a n m e e t i n g f i n a n c i a l a c c o u n t i n g a n d f u n d i n g r e qu i r e m e n t s m a y b e s i g n i f i c a n t l y d i f f e r e n t f r o m t h e r e s u l t s re p o r t e d h e r e . A c c o r d i n g l y , a d d i t i o n a l d e t e rm i n a t i o n s m a y b e n e e d e d f o r o t h e r p u r po s e s , s u c h a s j u d g i n g b e n e f i t s e c u r i t y a t te r m i n a t i o n o f t h e p l a n , o r d e t e r m i n i ng s h o r t - t e r m c a s h f l o w r e q u i r e m e n t s . To t h e b e s t o f o u r k n o w l e d g e , t h i s r e p o r t i s c o m p l e t e a nd a c c u r a t e a n d i n o u r o p i n i o n p r e s e n t s t h e i n f o r m a t i o n n e c e s s a r y t o co m p l y w i t h G A S B S t a t e m e n t s 4 3 a n d 4 5 w i t h r e s p e c t t o t h e be n e f i t o b l i g a t i o n s a d d r e s s e d . T h e s i g n i n g a c t u a r i e s a r e m e m b e r s of t h e S o c i e t y o f A c t u a r i e s , t h e A m e r i c a n A c a d e m y o f A c tu a r i e s , a n d o t h e r p r o f e s s i o n a l ac t u a r i a l o r g a n i z a t i o n s a n d co l l e c t i v e l y m e e t t h e i r “ G e n e r a l Q u a l i f i c a t i o n S t a n d a r d s f o r S t a t em e n t s o f A c t u a r i a l O p i n i o n s ” t o r e n d e r t h e a c t u a r i a l o p i n i o n co n t a i n e d h e r e i n . Th o m a s B e r g m a n , M A A A As s i s t a n t A c t u a r y Pa t r i c k T w o m e y , A S A , M A A A As s i s t a n t A c t u a r y SE C T I O N 2 : V a l u a t i o n R e s u l t s f o r t h e C i t y o f B a k e r s f i e l d J u n e 3 0 , 2 0 1 1 M e a s u r e m e n t U n d e r G A S B 4 3 a n d 4 5 4 Th e a c t u a r i a l p r e s e n t v a l u e o f t o t a l p r o j e c t e d b e n e f i t s u s e s th e a c t u a r i a l a s s u m p t i o n s d i s c l o s e d i n S e c t i o n 4 t o ca l c u l a t e t h e v a l u e t o d a y o f a l l b e n e f i t s e x p e c t e d t o b e p a i d to c u r r e n t a c t i v e s a n d r e t i r e d p l a n m e m b e r s . T h e a c t u a r i a l ba l a n c e s h e e t s h o w s t h e e x p e c t e d b r e a k d o w n o f h o w t h e s e be n e f i t s w i l l b e f i n a n c e d . CH A R T 1 Ac t u a r i a l P r e s e n t V a l u e o f T o t a l P r o j e c t e d B e n e f i t s ( A P B ) a n d A c t u a r i a l B a l a n c e S h e e t Ac t u a r i a l P r e s e n t V a l u e of T o t a l P r o j e c t e d B e n e f i t s ( A P B ) 2 0 1 1 2 0 0 9 Pa r t i c i p a n t C a t e g o r y Cu r r e n t r e t i r e e s , b e n e f i c i a r i e s , an d d e p e n d e n t s $ 5 7 , 7 7 6 , 7 1 1 $ 5 2 , 2 6 1 , 3 0 8 Cu r r e n t a c t i v e m e m b e r s 5 9 , 7 6 2 , 9 9 1 79,693,405 To t a l a s o f J u n e 3 0 $ 1 1 7 , 5 3 9 , 7 0 2 $ 1 3 1 , 9 5 4 , 7 1 3 20 1 1 2 0 0 9 Ac t u a r i a l B a l a n c e S h e e t Th e a c t u a r i a l b a l a n c e s h e e t a s o f th e v a l u a t i o n d a t e i s a s f o l l o w s : As s e t s 1. A c t u a r i a l v a l u e o f a s s e t s $ 2 0 , 1 0 1 , 2 3 6 $ 1 2 , 1 7 9 , 1 1 7 2. P r e s e n t v a l u e o f f u t u r e no r m a l c o s t s 1 3 , 7 8 5 , 2 2 5 1 8 , 3 4 4 , 9 2 9 3. U n f u n d e d a c t u a r i a l a c cr u e d l i a b i l i t y 8 3 , 6 5 3 , 2 4 1 101,430,667 4. P r e s e n t v a l u e o f c u r r e n t a n d f u t u r e a s s e t s $ 1 1 7 , 5 3 9 , 7 0 2 $ 1 3 1 , 9 5 4 , 7 1 3 L i a b i l i t i e s 5. A c t u a r i a l P r e s e n t V a l u e o f t o t a l Pr o j e c t e d B e n e f i t s $ 1 1 7 , 5 3 9 , 7 0 2 $ 1 3 1 , 9 5 4 , 7 1 3 SE C T I O N 2 : V a l u a t i o n R e s u l t s f o r t h e C i t y o f B a k e r s f i e l d J u n e 3 0 , 2 0 1 1 M e a s u r e m e n t U n d e r G A S B 4 3 a n d 4 5 5 Th e a c t u a r i a l a c c r u e d l i a b i l i t y s h o w s t h a t p o r t i o n o f t h e AP B ( C h a r t 1 ) a l l o c a t e d t o p e r i o d s p r i o r t o t h e v a l u a t i o n da t e b y t h e a c t u a r i a l c o s t m e t h o d . T h e c h a r t b e l o w s h o w s th e p o r t i o n c o v e r e d b y a c c u m u l a t e d p l a n a s s e t s . CH A R T 2 Ac t u a r i a l A c c r u e d L i a b i l i t y ( A A L ) a n d U n f u n d e d A A L ( U A A L ) J u n e 3 0 , 2 0 1 1 J u l y 1 , 2 0 0 9 Pa r t i c i p a n t C a t e g o r y Cu r r e n t r e t i r e e s , b e n e f i c i a r i e s , an d d e p e n d e n t s $ 5 7 , 7 7 6 , 7 1 1 $ 5 2 , 2 6 1 , 3 0 8 Cu r r e n t a c t i v e m e m b e r s 4 5 , 9 7 7 , 7 6 6 61,348,476 To t a l a c t u a r i a l a c c r u e d l i ab i l i t y $ 1 0 3 , 7 5 4 , 4 7 7 $ 1 1 3 , 6 0 9 , 7 8 4 Ac t u a r i a l v a l u e o f a s s e t s 2 0 , 1 0 1 , 2 3 6 12,179,117 Un f u n d e d a c t u a r i a l a c c r u e d li a b i l i t y $ 8 3 , 6 5 3 , 2 4 1 $ 1 0 1 , 4 3 0 , 6 6 7 SE C T I O N 2 : V a l u a t i o n R e s u l t s f o r t h e C i t y o f B a k e r s f i e l d J u n e 3 0 , 2 0 1 1 M e a s u r e m e n t U n d e r G A S B 4 3 a n d 4 5 6 Th e u n f u n d e d a c t u a r i a l a c c r u e d l i a b i l i t y m a y b e a m o r t i z e d ov e r p e r i o d s o f u p t o 3 0 y e a r s . F o r e m p l o y e r s w i t h r e t i r e e he a l t h b e n e f i t s l i m i t e d t o a c l o s e d g r o u p , a m o r t i z a t i o n pa y m e n t s m a y b e c a l c u l a t e d a s l e v e l d o l l a r a m o u n t s . T h e Ci t y o f B a k e r s f i e l d h a s e l e c t e d t o a m o r t i z e u n f u n d e d ac t u a r i a l a c c r u e d l i a b i l i t y u s i n g t h e f o l l o w i n g r u l e s :  Cl o s e d 3 0 - y e a r p e r i o d , b e g i n n i n g J u l y 1 , 2 0 0 7  Le v e l d o l l a r a m o r t i z a t i o n CH A R T 3 Ta b l e o f A m o r t i z a t i o n B a s e s Ty p e Da t e Es t a b l i s h e d In i t i a l Ye a r In i t i a l Am o u n t An n u a l Pa y m e n t * Years Re m a i n i n g Outstanding Balance To t a l u n f u n d e d a c t u a r i a l a c c r u e d l i a b i l i t y 7 / 1 / 2 0 0 7 3 0 $ 8 3 , 6 5 3 , 2 4 1 $5 , 9 3 5 , 9 0 8 2 6 $ 8 3 , 6 5 3 , 2 4 1 *L e v e l d o l l a r . SE C T I O N 2 : V a l u a t i o n R e s u l t s f o r t h e C i t y o f B a k e r s f i e l d J u n e 3 0 , 2 0 1 1 M e a s u r e m e n t U n d e r G A S B 4 3 a n d 4 5 7 Th e A n n u a l R e q u i r e d C o n t r i b u t i o n ( A R C ) i s t h e a m o u n t ca l c u l a t e d t o d e t e r m i n e t h e a n n u a l c o s t o f t h e O P E B p l a n fo r a c c o u n t i n g p u r p o s e s as i f t h e p l a n w e r e b e i n g f u n d e d th r o u g h c o n t r i b u t i o n s t o a t r u s t f u n d . T h e G A S B s t a n d a r d s ca n n o t r e q u i r e t h e c o n t r i b u t i o n s a c t u a l l y b e m a d e t o a t r u s t fu n d . T h e A R C i s s i m p l y a d e v i c e u s e d t o m e a s u r e a n n u a l pl a n c o s t s o n a n a c c r u a l b a s i s . T h e c a l c u l a t i o n c o n s i s t s o f ad d i n g t h e N o r m a l C o s t o f t h e p l a n t o a n a m o r t i z a t i o n pa y m e n t . T h e r e s u l t i n g s u m i s t h en a d j u s t e d t o t h e s t a r t o f th e a c c o u n t i n g p e r i o d a n d a d j u s t e d a s i f t h e a n n u a l c o s t we r e t o b e c o n t r i b u t e d a t t h e e n d o f t h e f i s c a l y e a r . Th e a m o r t i z a t i o n p a y m e n t i s b a s e d o n a 2 6 - y e a r am o r t i z a t i o n o f t h e U n f u n d e d A c t u a r i a l A c c r u e d L i a b i l i t y on a l e v e l d o l l a r b a s i s f o r t h e f i s c a l y e a r e n d e d J u n e 3 0 , 20 1 2 . CH A R T 4 De t e r m i n a t i o n o f A n n u a l R e q u i r e d C o n t r i b u t i o n ( A R C ) Co s t E l e m e n t Fi s c a l Y e a r B e g i n n i n g Ju l y 1 , 2 0 1 1 a n d E n d i n g Ju n e 3 0 , 2 0 1 2 Fi s c a l Y e a r B e g i n n i n g July 1, 2009 and Ending June 30, 2010 Am o u n t A m o u n t 1. Nor m a l c o s t $ 1 , 6 3 4 , 8 2 8 $ 2 , 1 9 6 , 6 6 0 2. A m o r t i z a t i o n o f t h e u n f u n d e d a c t u a r i al a c c r u e d l i a b i l i t y 5 , 9 3 5 , 9 0 8 6 , 7 8 2 , 7 8 5 3. A d j u s t m e n t f o r t i m i n g t o e n d o f f i s c a l y e a r 4 3 5 , 3 1 7 516,318 4. T o t a l A n n u a l R e q u i r e d C o nt r i b u t i o n ( A R C ) $ 8 , 0 0 6 , 0 5 3 $9,495,763 SE C T I O N 2 : V a l u a t i o n R e s u l t s f o r t h e C i t y o f B a k e r s f i e l d J u n e 3 0 , 2 0 1 1 M e a s u r e m e n t U n d e r G A S B 4 3 a n d 4 5 8 Th e A n n u a l O P E B C o s t ( A O C ) a d j u s t s t h e A R C f o r t i m i n g di f f e r e n c e s b e t w e e n t h e A R C a n d c o n t r i b u t i o n s i n r e l a t i o n to t h e A R C . T h e A O C i s t h e c o s t o f O P E B a c t u a l l y b o o k e d as a n e x p e n s e f o r t h e F i s c a l Y e a r u n d e r G A S B 4 5 . CH A R T 4 ( c o n t i n u e d ) De t e r m i n a t i o n o f A n n u al O P E B C o s t ( A O C ) Co s t E l e m e n t Fi s c a l Y e a r B e g i n n i n g Ju l y 1 , 2 0 1 1 a n d E n d i n g Ju n e 3 0 , 2 0 1 2 Fi s c a l Y e a r B e g i n n i n g July 1, 2009 and Ending June 30, 2010 Am o u n t A m o u n t 1. A n n u a l R e q u i r e d C o n t r i b u t i o n $ 8 , 0 0 6 , 0 5 3 $ 9 , 4 9 5 , 7 6 3 2. In t e r e s t o n B e g i n n i n g o f Y e a r N e t O P E B O b l i g a t i o n (N O O ) 55 6 , 7 7 8 1 4 6 , 7 2 9 3. A R C a d j u s t m e n t - 7 7 6 , 6 0 6 -180,455 4. A n n u a l O P E B C o s t $ 7 , 8 3 6 , 2 2 5 $9,462,037 SE C T I O N 2 : V a l u a t i o n R e s u l t s f o r t h e C i t y o f B a k e r s f i e l d J u n e 3 0 , 2 0 1 1 M e a s u r e m e n t U n d e r G A S B 4 3 a n d 4 5 9 Fo r G A S B 4 3 ( p l a n r e p o r t i n g ) p u r p o s e s , t h e s c h e d u l e o f em p l o y e r c o n t r i b u t i o n s c o m p a r e s a c t u a l c o n t r i b u t i o n s t o th e A R C . F o r G A S B 4 5 ( e m p l o y e r r e p o r t i n g ) p u r p o s e s , t h e sc h e d u l e o f e m p l o y e r c o n t r i b u t i o n s c o m p a r e s a c t u a l co n t r i b u t i o n s t o t h e A O C . CH A R T 5 Re q u i r e d S u p p l e m e n t a r y I n f o r m a t i o n – Sc h e d u l e o f E m p l o y e r C o n t r i b u t i o n s GA S B 4 3 Fi s c a l Y e a r E n d e d Ju n e 3 0 An n u a l R e q u i r e d Co n t r i b u t i o n s * Ac t u a l Co n t r i b u t i o n s Percentage Contributed 20 0 8 $ 7 , 7 8 7 , 0 0 0 * * $ 7 , 9 4 9 , 2 3 5 1 0 2 . 0 8 % 20 0 9 7 , 9 9 7 , 0 0 0 * * 5 , 2 7 9 , 0 3 2 6 6 . 0 1 % 20 1 0 9 , 4 9 5 , 7 6 3 6 , 2 8 3 , 4 5 6 6 6 . 1 7 % 20 1 1 9 , 4 9 5 , 7 6 3 5 , 5 0 9 , 3 4 0 5 8 . 0 2 % 20 1 2 8 , 0 0 6 , 0 5 3 1 6 , 8 3 2 , 5 7 6 * 2 1 0 . 2 5 % * I n c l u d e s a n i n t e r e s t a d j u s t m e n t t o t h e e n d o f t h e y e a r . Re q u i r e d S u p p l e m e n t a r y I n f o r m a t i o n – Sc h e d u l e o f E m p l o y e r C o n t r i b u t i o n s GA S B 4 5 Fi s c a l Y e a r E n d e d Ju n e 3 0 An n u a l O P E B Co s t * Ac t u a l Co n t r i b u t i o n s Percentage Contributed 20 0 8 $ 7 , 7 8 7 , 0 0 0 * * $ 7 , 9 4 9 , 2 3 5 1 0 2 . 0 8 % 20 0 9 7 , 9 9 3 , 0 7 9 * * 5 , 2 7 9 , 0 3 2 6 6 . 0 5 % 20 1 0 9 , 4 6 2 , 0 3 7 6 , 2 8 3 , 4 5 6 6 6 . 4 1 % 20 1 1 9 , 4 6 2 , 0 3 7 * * 5 , 5 0 9 , 3 4 0 5 8 . 2 3 % 20 1 2 7 , 8 3 6 , 2 2 5 1 6 , 8 3 2 , 5 7 6 * 2 1 4 . 8 0 % * I n c l u d e s a n i n t e r e s t a d j u s t m e n t t o t h e e n d o f t h e y e a r . ** A s r e p o r t e d i n t h e C i t y ’ s C A F R s . SE C T I O N 2 : V a l u a t i o n R e s u l t s f o r t h e C i t y o f B a k e r s f i e l d J u n e 3 0 , 2 0 1 1 M e a s u r e m e n t U n d e r G A S B 4 3 a n d 4 5 10 Th i s s c h e d u l e o f f u n d i n g p r o g r e s s p r e s e n t s m u l t i - y e a r t r e n d in f o r m a t i o n a b o u t w h e t h e r t h e a c t u a r i a l v a l u e o f p l a n a s s e t s is i n c r e a s i n g o r d e c r e a s i n g o v e r t i m e r e l a t i v e t o t h e ac t u a r i a l a c c r u e d l i a b i l i t y f o r b e n e f i t s . CH A R T 6 Re q u i r e d S u p p l e m e n t a r y I n f o r m a t i o n – S c h e d u l e o f F u n d i n g P r o g r e s s Ac t u a r i a l V a l u a t i o n Da t e Ac t u a r i a l Va l u e of A s s e t s (a ) Ac t u a r i a l Ac c r u e d L i a b i l i t y (A A L ) (b ) Un f u n d e d AA L (U A A L ) ( b ) - ( a ) Funded Ratio (a) / (b) 7/ 1 / 2 0 0 7 $ 4 , 8 0 0 , 0 0 0 $ 1 1 3 , 3 9 5 , 00 0 $ 1 0 8 , 5 9 5 , 0 0 0 4 . 2 3 % 7/ 1 / 2 0 0 9 1 2 , 1 7 9 , 1 1 7 1 1 3 , 6 0 9 , 78 4 1 0 1 , 4 3 0 , 6 6 7 1 0 . 7 2 % 7/ 1 / 2 0 1 1 2 0 , 1 0 1 , 2 3 6 1 0 3 , 7 5 4 , 47 7 8 3 , 6 5 3 , 2 4 1 1 9 . 3 7 % SE C T I O N 2 : V a l u a t i o n R e s u l t s f o r t h e C i t y o f B a k e r s f i e l d J u n e 3 0 , 2 0 1 1 M e a s u r e m e n t U n d e r G A S B 4 3 a n d 4 5 11 Th e N e t O P E B o b l i g a t i o n m e a s u r e s t h e a c c u m u l a t e d di f f e r e n c e s b e t w e e n t h e a n n u a l O P E B c o s t a n d t h e a c t u a l co n t r i b u t i o n s i n r e l a t i o n t o t h e A R C . CH A R T 7 Re q u i r e d S u p p l e m e n t a r y I n f o r m a t i o n – N e t O P E B O b l i g a t i o n ( N O O ) Fi s c a l Ye a r En d An n u a l Re q u i r e d Co n t r i b u t i o n * (a ) In t e r e s t o n Ex i s t i n g NO O (b ) AR C Ad j u s t m e n t * (c ) An n u a l O P E B C o s t (a ) + ( b ) + ( c ) (d ) Ac t u a l Co n t r i b u t i o n Am o u n t * (e ) Ne t I n c r e a s e in NOO (d) - (e) (f) NOO as of Fiscal Year (g) 6/ 3 0 / 2 0 0 8 $ 7 , 7 8 7 , 0 0 0 * * $ 0 $ 0 $ 7 , 7 8 7 , 0 0 0 $ 7 , 9 4 9 , 2 3 5 - $ 1 6 2 , 2 3 5 - $ 1 6 2 , 2 3 5 6/ 3 0 / 2 0 0 9 7 , 9 9 7 , 0 0 0 * * - 9 , 3 2 9 * * 5 , 4 0 8 * * 7 , 99 3 , 0 7 9 5 , 2 7 9 , 0 3 2 2 , 7 1 4 , 0 4 7 2 , 5 5 1 , 8 1 2 6/ 3 0 / 2 0 1 0 9 , 4 9 5 , 7 6 3 1 4 6 , 7 2 9 - 1 8 0 , 4 5 5 9 , 46 2 , 0 3 7 6 , 2 8 3 , 4 5 6 3 , 1 7 8 , 5 8 1 5 , 7 3 0 , 3 9 3 6/ 3 0 / 2 0 1 1 9 , 4 9 5 , 7 6 3 1 4 6 , 7 2 9 * * - 1 8 0 , 4 5 5 * * 9 , 46 2 , 0 3 7 * * 5 , 5 0 9 , 3 4 0 * * 3 , 9 5 2 , 6 9 7 * * 9 , 6 8 3 , 0 9 0 * * 6/ 3 0 / 2 0 1 2 8 , 0 0 6 , 0 5 3 5 5 6 , 7 7 8 - 7 2 6 , 6 0 6 7 , 83 6 , 2 2 5 1 6 , 8 3 2 , 5 7 6 * * * - 8 , 9 9 6 , 3 5 1 6 8 6 , 7 3 9 * I n c l u d e s a n i n t e r e s t a d j u s t m e n t t o t h e e n d o f t h e y e a r . ** A s r e p o r t e d i n th e C i t y ’ s C A F R s . ** * C o n t r i b u t i o n s w i t h o u t i n te r e s t w e r e $ 1 6 , 3 5 8 , 4 9 4 . SE C T I O N 3 : S u p p l e m e n t a l V a l u a t i o n D e t a i l s f o r t h e C i t y of B a k e r s f i e l d J u n e 3 0 , 2 0 1 1 M e a s u r e m e n t U n d e r G A S B 4 3 an d 4 5 12 EX H I B I T A Su m m a r y o f P a r t i c i p a n t D a t a Ju n e 3 0 , 2 0 1 1 J u n e 3 0 , 2 0 0 9 Re t i r e e s Nu m b e r o f r e t i r e e s 42 7 4 1 1 Av e r a g e a g e o f r e t i r e e s 64 . 9 6 5 . 2 Nu m b e r o f s p o u s e s 16 8 (1 ) 170(2) Av e r a g e a g e o f s p o u s e s 62 . 2 6 3 . 5 Su r v i v i n g S p o u s e s Nu m b e r 49 4 8 Av e r a g e a g e 76 . 2 7 5 . 6 Ac t i v e P a r t i c i p a n t s Nu m b e r 89 6 (3 ) 1,428(4) Av e r a g e a g e 45 . 2 4 1 . 5 Av e r a g e y e a r s o f s e r v i c e 14 . 2 1 0 . 3 Av e r a g e e x p e c t e d r e t i re m e n t a g e 5 7 . 1 5 7 . 4 (1 ) I n c l u d e s 2 9 s p o u s e s e n r o l l e d w i t h r e t i r e e b u t n o t r e c e i v i n g C i ty p a i d s u b s i d y . (2 ) I n c l u d e s 5 0 s p o u s e s e n r o l l e d w i t h r e t i r e e b u t n o t r e c e i v i n g C i ty p a i d s u b s i d y . (3 ) E x c l u d e s S a f e t y e m p l o y e e s h i r e d a f t e r Ma y 2 0 0 6 a n d M i s c e l l a n e o u s e m p l o y e e s h i r e d a f t e r F e b r u a r y 2 0 0 6 w i t h n o l i a b i l i t y . (4 ) I n c l u d e s S a f e t y e m p l o y e e s h i r e d a f t e r M a y 2 0 0 6 a n d M i s c e l l an e o u s e m p l o y e e s h i r e d a f t e r F e b r u a r y 2 0 0 6 w i t h n o l i a b i l i t y . Th i s e x h i b i t s u m m a r i z e s th e p a r t i c i p a n t d a t a us e d f o r t h e c u r r e n t a n d pri o r v a l u a t i o n s . SE C T I O N 3 : S u p p l e m e n t a l V a l u a t i o n D e t a i l s f o r t h e C i t y of B a k e r s f i e l d J u n e 3 0 , 2 0 1 1 M e a s u r e m e n t U n d e r G A S B 4 3 an d 4 5 13 Th e A R C g e n e r a l l y e x c e e d s t h e c u r r e n t p a y - a s - y o u - g o (“ p a y g o ” ) c o s t o f a n O P E B p l a n . O v e r t i m e t h e p a y g o c o s t wi l l t e n d t o g r o w a n d m a y e v e n e v e n t u a l l y e x c e e d t h e A R C in a w e l l f u n d e d p l a n . T h e f o l l o w i n g t a b l e p r o j e c t s t h e pa y g o c o s t a s t h e p r o j e c t e d n e t f u n d p a y m e n t o v e r t h e n e x t te n y e a r s . EX H I B I T B Ca s h F l o w P r o j e c t i o n s Ye a r E n d i n g Ju n e 3 0 Pr o j e c t e d N u m b e r o f R e t i r e e s * Pr o j e c t e d B e n e f i t P a y m e n t s Cu r r e n t F u t u r e T o t a l C u r r e n t F u t u r e T o t a l 20 1 2 6 4 4 3 6 6 8 0 $ 3 , 3 0 9 , 7 5 4 $ 1 6 0 , 5 6 9 $ 3 , 4 7 0 , 3 2 3 20 1 3 6 3 3 7 1 7 0 4 3 , 0 3 3 , 5 4 4 2 9 6 , 5 2 8 3 , 3 3 0 , 0 7 2 20 1 4 6 2 0 1 0 4 7 2 4 3 , 2 0 7 , 7 9 7 4 7 4 , 2 6 4 3 , 6 8 2 , 0 6 1 20 1 5 6 0 7 1 3 7 7 4 4 3 , 3 6 7 , 1 7 5 6 7 3 , 8 4 6 4 , 0 4 1 , 0 2 1 20 1 6 5 9 1 1 7 1 7 6 2 3 , 5 1 6 , 1 8 4 8 9 8 , 4 0 9 4 , 4 1 4 , 5 9 3 20 1 7 5 8 0 2 0 3 7 8 3 3 , 6 5 2 , 7 7 7 1 , 1 4 6 , 5 0 5 4 , 7 9 9 , 2 8 2 20 1 8 5 6 5 2 3 5 8 0 0 3 , 7 6 3 , 7 2 0 1 , 4 0 2 , 5 4 2 5 , 1 6 6 , 2 6 2 20 1 9 5 5 0 2 6 6 8 1 6 3 , 8 3 4 , 0 4 1 1 , 6 6 0 , 8 5 3 5 , 4 9 4 , 8 9 4 20 2 0 5 3 5 2 9 7 8 3 2 3 , 9 1 4 , 2 1 6 1 , 9 4 1 , 8 9 5 5 , 8 5 6 , 1 1 1 20 2 1 5 2 0 3 3 0 8 5 0 3 , 9 6 9 , 9 0 3 2 , 2 1 7 , 3 4 7 6 , 1 8 7 , 2 5 0 * I n c l u d e s s p o u s e s o f r e t i r e e s . SE C T I O N 4 : S u p p o r t i n g I n f o r m a t i o n f o r t h e C i t y o f B a k e r s fi e l d J u n e 3 0 , 2 0 1 1 M e a s u r e m e n t U n d e r G A S B 4 3 a n d 4 5 14 EX H I B I T I Su m m a r y o f R e q u i r e d S u p p l e m e n t a r y I n f o r m a t i o n Va l u a t i o n d a t e Ju n e 3 0 , 2 0 1 1 Ac t u a r i a l c o s t m e t h o d Un i t C r e d i t Am o r t i z a t i o n m e t h o d 30 - y e a r s c l o s e d , l e v e l d o l l a r p a y m e n t Re m a i n i n g a m o r t i z a t i o n p e r i o d 26 y e a r s a s o f J u n e 3 0 , 2 0 1 1 As s e t v a l u a t i o n m e t h o d Ma r k e t V a l u e Ac t u a r i a l a s s u m p t i o n s : In v e s t m e n t r a t e o f r e t u r n 5 . 7 5 % In f l a t i o n r a t e N / A Pr o j e c t e d s a l a r y i n c r e a s e s N / A Me d i c a l c o s t t r e n d r a t e S e e E x h i b i t I I Pl a n m e m b e r s h i p : Ju l y 1 , 2 0 1 1 J u l y 1 , 2 0 0 9 Cu r r e n t r e t i r e e s , b e n e f i c i a r i e s , a n d d e p e n d e n t s 6 4 4 6 2 9 Cu r r e n t a c t i v e p a r t i c i p a n t s 8 9 6 * 1,428** To t a l 1 , 5 4 0 2 , 0 5 7 * E x c l u d e s S a f e t y e m p l o y e e s h i r e d af t e r M a y 2 0 0 6 a n d M i s c e l l a n e o u s e m pl o y e e s h i r e d a f t e r F e b r u a r y 2 0 0 6 . ** I n c l u d e s S a f e t y e m p l o y e e s h i r e d a f t e r M a y 2 0 0 6 a n d Mi s c e l l a n e o u s e m p l o y e e s hi r e d a f t e r F e b r u a r y 2 0 0 6 . SE C T I O N 4 : S u p p o r t i n g I n f o r m a t i o n f o r t h e C i t y o f B a k e r s fi e l d J u n e 3 0 , 2 0 1 1 M e a s u r e m e n t U n d e r G A S B 4 3 a n d 4 5 15 EX H I B I T I I Ac t u a r i a l A s s u m p t i o n s a n d Ac t u a r i a l C o s t M e t h o d Da t a : D e t a i l e d c e n s u s d a t a , p r e m iu m d a t a a n d / o r c l a i m e x p e r i e n c e , a n d s u m m a r y p l a n de s c r i p t i o n s f o r O P E B a r e p r o v i d e d b y t h e e m p l o y e r . Ac t u a r i a l C o s t M e t h o d : P r o j e c t e d U n i t C r e d i t As s e t V a l u a t i o n M e t h o d : Ma r k e t V a l u e Me a s u r e m e n t D a t e : J u n e 3 0 , 2 0 1 1 Fi s c a l Y e a r E n d : Ju n e 3 0 , 2 0 1 2 Ce n s u s D a t e : Ja n u a r y 1 , 2 0 1 2 Di s c o u n t R a t e : 5 . 7 5 % Sa l a r y I n c r e a s e s : N/ A Te r m i n a t i o n R a t e s b e f o r e a n d a f t e r R e t i r e m e n t : Tu r n o v e r f o r G e n e r a l E m p l o y e e s T u r n o v e r f o r S a f e t y E m p l o y e e s Se r v i c e Wi t h R e f u n d Wi t h V e s t e d B e n e f i t To t a l S e r v i c e Wi t h R e f u n d With Vested Benefit Total 0 0 . 1 6 0 6 0 . 0 0 0 0 0 . 1 6 0 6 0 0 . 1 0 1 3 0 . 0 0 0 0 0 . 1 0 1 3 1 0 . 1 4 0 9 0 . 0 0 0 0 0 . 1 4 0 9 1 0 . 0 6 3 6 0 . 0 0 0 0 0 . 0 6 3 6 2 0 . 1 2 1 2 0 . 0 0 0 0 0 . 1 2 1 2 2 0 . 0 2 7 1 0 . 0 0 0 0 0 . 0 2 7 1 3 0 . 1 0 1 5 0 . 0 0 0 0 0 . 1 0 1 5 3 0 . 0 2 5 8 0 . 0 0 0 0 0 . 0 2 5 8 4 0 . 0 8 1 8 0 . 0 0 0 0 0 . 0 8 1 8 4 0 . 0 2 4 5 0 . 0 0 0 0 0 . 0 2 4 5 5 0 . 0 1 7 4 0 . 0 5 3 7 0 . 0 7 1 1 5 0 . 0 0 8 6 0 . 0 1 6 3 0 . 0 2 4 9 6 0 . 0 1 5 9 0 . 0 5 1 1 0 . 0 6 7 0 6 0 . 0 0 7 9 0 . 0 1 5 7 0 . 0 2 3 6 7 0 . 0 1 4 5 0 . 0 4 8 6 0 . 0 6 3 1 7 0 . 0 0 7 2 0 . 0 1 4 9 0 . 0 2 2 1 8 0 . 0 1 3 1 0 . 0 4 6 0 0 . 0 5 9 1 8 0 . 0 0 6 6 0 . 0 1 4 2 0 . 0 2 0 8 9 0 . 0 1 1 7 0 . 0 4 3 1 0 . 0 5 4 8 9 0 . 0 0 5 9 0 . 0 1 3 4 0 . 0 1 9 3 10 0 . 0 1 0 4 0 . 0 4 0 3 0 . 0 5 0 7 1 0 0 . 0 0 5 3 0 . 0 1 2 6 0 . 0 1 7 9 15 0 . 0 0 4 2 0 . 0 3 0 5 0 . 0 3 4 7 1 5 0 . 0 0 2 7 0 . 0 0 8 2 0 . 0 1 0 9 20 0 . 0 0 2 1 0 . 0 0 0 0 0 . 0 0 2 1 2 0 0 . 0 0 1 7 0 . 0 0 6 5 0 . 0 0 8 2 25 0 . 0 0 0 5 0 . 0 0 0 0 0 . 0 0 0 5 2 5 0 . 0 0 1 2 0 . 0 0 5 8 0 . 0 0 7 0 30 0 . 0 0 0 1 0 . 0 0 0 0 0 . 0 0 0 1 3 0 0 . 0 0 0 9 0 . 0 0 5 6 0 . 0 0 6 5 35 0 . 0 0 0 1 0 . 0 0 0 0 0 . 0 0 0 1 3 5 0 . 0 0 0 9 0 . 0 0 0 0 0 . 0 0 0 9 SE C T I O N 4 : S u p p o r t i n g I n f o r m a t i o n f o r t h e C i t y o f B a k e r s fi e l d J u n e 3 0 , 2 0 1 1 M e a s u r e m e n t U n d e r G A S B 4 3 a n d 4 5 16 Di s a b i l i t y R a t e s At t a i n e d A g e Ge n e r a l Sa f e t y 20 0. 0 0 0 1 0 . 0 0 0 7 30 0. 0 0 0 2 0 . 0 0 6 4 40 0. 0 0 1 5 0 . 0 1 2 9 50 0. 0 0 3 3 0 . 0 1 9 2 60 0. 0 0 3 8 0 . 0 6 6 8 70 0. 0 0 2 8 0 . 0 6 6 8 Pr e - A n d P o s t R e t i re m e n t M o r t a l i t y Ap p l i e d t o H e a l t h y a n d D i s a b l e d L i v e s Ag e Ma l e Fe m a l e 20 0 . 0 0 0 4 0 . 0 0 0 3 25 0 . 0 0 0 6 0 . 0 0 0 3 30 0 . 0 0 0 7 0 . 0 0 0 3 35 0 . 0 0 0 8 0 . 0 0 0 4 40 0 . 0 0 0 9 0 . 0 0 0 6 45 0 . 0 0 1 3 0 . 0 0 0 9 50 0 . 0 0 2 4 0 . 0 0 1 3 55 0 . 0 0 4 7 0 . 0 0 2 4 60 0 . 0 0 7 2 0 . 0 0 4 3 65 0 . 0 1 0 7 0 . 0 0 7 8 70 0 . 0 1 6 8 0 . 0 1 2 4 75 0 . 0 3 0 8 0 . 0 2 0 7 80 0 . 0 5 2 7 0 . 0 3 7 5 85 0 . 0 9 7 8 0 . 0 7 0 1 90 0 . 1 6 7 5 0 . 1 2 4 0 95 0 . 2 5 6 6 0 . 2 1 5 6 10 0 0 . 3 4 5 5 0 . 3 1 8 8 10 5 0 . 5 8 5 3 0 . 5 6 0 9 11 0 1 . 0 0 0 0 1 . 0 0 0 0 Th e m o r t a l i t y t a b l e s w e r e d e t e r m i n e d t o c o n t a i n p r o v i s i o n a pp r o p r i a t e t o r e a s o n a b l y r e f l e c t fu t u r e m o r t a l i t y i m p r o v e m e n t , ba s e d o n t h e C a l P E R S E x p e r i e n c e S t u d y 1 9 9 7 t o 2 0 0 7 . SE C T I O N 4 : S u p p o r t i n g I n f o r m a t i o n f o r t h e C i t y o f B a k e r s fi e l d J u n e 3 0 , 2 0 1 1 M e a s u r e m e n t U n d e r G A S B 4 3 a n d 4 5 17 Ac t i v e s ’ R e t i r e m e n t R a t e s : Re t i r e m e n t R a t e s f o r G e n e r a l E m p l o y e e s ( C a l P E R S P u b l i c A g e n c y M i s c e l l a n e o u s 3 % @ 6 0 ) Y e a r s o f S e r v i c e Y e a r s o f S e r v i c e At t a i n e d Ag e 5 1 0 1 5 2 0 2 5 3 0 3 5 At t a i n e d Ag e 5 1 0 1 5 2 0 2 5 3 0 3 5 50 2 . 6 % 3 . 3 % 4 . 0 % 4 . 8 % 5 . 5 % 6 . 2 % 6 . 9 % 63 1 1 . 0 % 1 4 . 0 % 1 7 . 0 % 2 0 . 0 % 2 3 . 0 % 2 6 . 0 % 2 9 . 0 % 51 2 . 1 % 2 . 6 % 3 . 2 % 3 . 8 % 4 . 3 % 4 . 9 % 5 . 4 % 64 1 1 . 0 % 1 4 . 0 % 1 7 . 0 % 2 0 . 0 % 2 3 . 0 % 2 6 . 0 % 2 9 . 0 % 52 1 . 9 % 2 . 5 % 3 . 0 % 3 . 5 % 4 . 0 % 4 . 6 % 5 . 1 % 65 1 4 . 9 % 1 8 . 9 % 2 3 . 0 % 2 7 . 0 % 3 1 . 1 % 3 5 . 1 % 3 9 . 2 % 53 2 . 5 % 3 . 2 % 3 . 8 % 4 . 5 % 5 . 2 % 5 . 9 % 6 . 5 % 66 1 1 . 0 % 1 4 . 0 % 1 7 . 0 % 2 0 . 0 % 2 3 . 0 % 2 6 . 0 % 2 9 . 0 % 54 3 . 9 % 4 . 9 % 6 . 0 % 7 . 0 % 8 . 1 % 9 . 1 % 1 0 . 2 % 67 1 1 . 0 % 1 4 . 0 % 1 7 . 0 % 2 0 . 0 % 2 3 . 0 % 2 6 . 0 % 2 9 . 0 % 55 8 . 3 % 1 0 . 5 % 1 2 . 8 % 1 5 . 0 % 1 7 . 3 % 1 9 . 5 % 2 1 . 8 % 68 1 1 . 0 % 1 4 . 0 % 1 7 . 0 % 2 0 . 0 % 2 3 . 0 % 2 6 . 0 % 2 9 . 0 % 56 5 . 5 % 7 . 0 % 8 . 5 % 1 0 . 0 % 1 1 . 5 % 1 3 . 0 % 1 4 . 5 % 69 1 1 . 0 % 1 4 . 0 % 1 7 . 0 % 2 0 . 0 % 2 3 . 0 % 2 6 . 0 % 2 9 . 0 % 57 6 . 1 % 7 . 7 % 9 . 4 % 1 1 . 0 % 1 2 . 7 % 1 4 . 3 % 1 6 . 0 % 70 1 3 . 2 % 1 6 . 8 % 2 0 . 4 % 2 4 . 0 % 2 7 . 6 % 3 1 . 2 % 3 4 . 8 % 58 7 . 2 % 9 . 1 % 1 1 . 1 % 1 3 . 0 % 1 5 . 0 % 1 6 . 9 % 1 8 . 9 % 71 1 3 . 2 % 1 6 . 8 % 2 0 . 4 % 2 4 . 0 % 2 7 . 6 % 3 1 . 2 % 3 4 . 8 % 59 8 . 0 % 1 0 . 2 % 1 2 . 3 % 1 4 . 5 % 1 6 . 7 % 1 8 . 9 % 2 1 . 0 % 72 1 3 . 2 % 1 6 . 8 % 2 0 . 4 % 2 4 . 0 % 2 7 . 6 % 3 1 . 2 % 3 4 . 8 % 60 9 . 4 % 1 1 . 9 % 1 4 . 5 % 1 7 . 0 % 1 9 . 6 % 2 2 . 1 % 2 4 . 7 % 73 1 3 . 2 % 1 6 . 8 % 2 0 . 4 % 2 4 . 0 % 2 7 . 6 % 3 1 . 2 % 3 4 . 8 % 61 8 . 8 % 1 1 . 2 % 1 3 . 6 % 1 6 . 0 % 1 8 . 4 % 2 0 . 8 % 2 3 . 2 % 74 1 3 . 2 % 1 6 . 8 % 2 0 . 4 % 2 4 . 0 % 2 7 . 6 % 3 1 . 2 % 3 4 . 8 % 62 1 2 . 7 % 1 6 . 1 % 1 9 . 6 % 2 3 . 0 % 2 6 . 5 % 2 9 . 9 % 3 3 . 4 % 75 1 0 0 . 0 % 1 0 0 . 0 % 1 0 0 . 0 % 1 0 0 . 0 % 1 0 0 . 0 % 1 0 0 . 0 % 1 0 0 . 0 % Re t i r e m e n t R a t e s f o r S a f e t y E m p l o y e e s ( C a l P E R S P u b l i c A g e n c y P o l i c e 3 % @ 5 0 ) Y e a r s o f S e r v i c e Y e a r s o f S e r v i c e At t a i n e d Ag e 5 1 0 1 5 2 0 2 5 3 0 3 5 At t a i n e d Ag e 5 1 0 1 5 2 0 2 5 3 0 3 5 50 7 . 0 % 7 . 0 % 7 . 0 % 1 3 . 1 % 1 9 . 3 % 2 4 . 9 % 3 0 . 6 % 58 8 . 7 % 8 . 7 % 8 . 7 % 1 6 . 4 % 2 4 . 2 % 3 1 . 2 % 3 8 . 2 % 51 5 . 0 % 5 . 0 % 5 . 0 % 9 . 5 % 1 3 . 9 % 1 8 . 0 % 2 2 . 0 % 59 9 . 0 % 9 . 0 % 9 . 0 % 1 7 . 0 % 2 5 . 1 % 3 2 . 3 % 3 9 . 6 % 52 6 . 1 % 6 . 1 % 6 . 1 % 1 1 . 6 % 1 7 . 1 % 2 2 . 0 % 2 7 . 0 % 60 1 3 . 5 % 1 3 . 5 % 1 3 . 5 % 2 5 . 5 % 3 7 . 7 % 4 8 . 5 % 5 9 . 4 % 53 6 . 9 % 6 . 9 % 6 . 9 % 1 3 . 0 % 1 9 . 2 % 2 4 . 7 % 3 0 . 3 % 61 9 . 0 % 9 . 0 % 9 . 0 % 1 7 . 0 % 2 5 . 1 % 3 2 . 3 % 3 9 . 6 % 54 7 . 1 % 7 . 1 % 7 . 1 % 1 3 . 4 % 1 9 . 7 % 2 5 . 5 % 3 1 . 2 % 62 1 1 . 3 % 1 1 . 3 % 1 1 . 3 % 2 1 . 3 % 3 1 . 4 % 4 0 . 4 % 4 9 . 5 % 55 9 . 0 % 9 . 0 % 9 . 0 % 1 7 . 0 % 2 5 . 0 % 3 2 . 2 % 3 9 . 5 % 63 9 . 0 % 9 . 0 % 9 . 0 % 1 7 . 0 % 2 5 . 1 % 3 2 . 3 % 3 9 . 6 % 56 6 . 9 % 6 . 9 % 6 . 9 % 1 3 . 0 % 1 9 . 1 % 2 4 . 7 % 3 0 . 2 % 64 9 . 0 % 9 . 0 % 9 . 0 % 1 7 . 0 % 2 5 . 1 % 3 2 . 3 % 3 9 . 6 % 57 8 . 0 % 8 . 0 % 8 . 0 % 1 5 . 2 % 2 2 . 3 % 2 8 . 8 % 3 5 . 3 % 65 1 0 0 . 0 % 1 0 0 . 0 % 1 0 0 . 0 % 1 0 0 . 0 % 1 0 0 . 0 % 1 0 0 . 0 % 1 0 0 . 0 % SE C T I O N 4 : S u p p o r t i n g I n f o r m a t i o n f o r t h e C i t y o f B a k e r s fi e l d J u n e 3 0 , 2 0 1 1 M e a s u r e m e n t U n d e r G A S B 4 3 a n d 4 5 18 Mi s s i n g P a r t i c i p a n t D a t a : A m i s s i n g c e n s u s i t e m f o r a g i v e n p a r t i c i p an t a r e a s s u m e d t o e q u a l t h e a v e r a g e v a l u e of t h a t i t e m o v e r a l l o t h e r p a r t i c i p a n t s o f th e s a m e s t a t u s f o r w h o m t h e i t e m i s k n o w n . Pa r t i c i p a t i o n a n d C o v e r a g e E l e c t i o n : 9 0 % o f e m p l o y e e s e l i g i b l e t o r e t i r e a n d r e c e i v e s u b s i d i z e d p o s t r e t i r e m e n t w e l f a r e co v e r a g e a r e a s s u m e d t o e l e c t m e d i c a l c o v e r a g e . Re t i r e e s n o t y e t a g e 6 5 o r a c t i v e e m p l o y e e s a r e a s s u m e d t o e n r o l l i n p l a n s a s de s c r i b e d i n t h e b e l o w t a b l e s : Re t i r e e s u n d e r a g e 6 5 o n v a l u a t i o n d a t e a n d a c t i v e e m p l o y e e s Me d i c a l P l a n A s s u m e d E l e c t i o n P e r c e n t a t A g e 6 5 An t h e m P P O 6 0 % Ka i s e r S e n i o r A d v a n t a g e 3 0 % An t h e m S e n i o r S e c u r e 1 0 % Ac t i v e e m p l o y e e s Ac t i v e M e d i c a l P l a n As s u m e d P l a n E l e c t i o n a t Re t i r e m e n t a n d U n d e r A g e 6 5 An t h e m P P O A n t h e m P P O Ka i s e r o r C a l i f o r n i a C a r e H M O K a i s e r H M O De p e n d e n t s : F o r f u t u r e r e t i r e e s , h u s b a n d s a r e a s s u m e d t o be t h r e e y e a r s o l d e r t h a n t h e i r w i v e s . F o r fu t u r e r e t i r e e s w h o e l e c t t o c o n t i n u e t h e i r h ea l t h c o v e r a g e a t r e t i r e m e n t , 5 0 % o f m a l e s an d 2 5 % o f f e m a l e s a r e a s s u m e d t o h a v e a n e l i g i b l e s p o u s e w h o a l s o o p t s f o r h e a l t h co v e r a g e a t t h a t t i m e . Im p l i c i t S u b s i d y : Pr e m i u m s a r e u n d e r w r i t t e n f o r r e t i r e e s o n l y . T h e r e f o r e , n o i m p l i c i t s u b s i d y c o s t ex i s t s . SE C T I O N 4 : S u p p o r t i n g I n f o r m a t i o n f o r t h e C i t y o f B a k e r s fi e l d J u n e 3 0 , 2 0 1 1 M e a s u r e m e n t U n d e r G A S B 4 3 a n d 4 5 19 Pr e m i u m s : No n - M e d i c a r e : M o n t h l y S i n g l e M e d i c a l P r e m i u m s Ca l e n d a r Ye a r An t h e m Bl u e C r o s s PP O Op t u m Me n t a l He a l t h T o t a l Ka i s e r HM O Un d e r 6 5 ME S Vi s i o n T o t a l Ka i s e r H i g h De d u c t i b l e MES Vision Total 20 1 1 $ 8 6 6 . 8 2 $ 7 . 7 7 $ 8 7 4 . 5 9 $ 6 2 6 . 8 3 $ 3 . 7 5 $ 6 3 0 . 5 8 N / A N / A N / A 20 1 2 $ 7 0 1 . 1 7 $ 7 . 7 7 $ 7 0 8 . 9 4 $ 7 3 7 . 3 5 $ 3 . 7 5 $ 7 4 1 . 1 0 $ 6 0 4 . 1 2 $ 3 . 7 5 $ 6 0 7 . 8 7 Me d i c a r e : M o n t h l y S i n g l e M e d i c a l P r e m i u m s Ca l e n d a r Y e a r A n t h e m B l u e C r o s s S e n i o r S e c u r e K a i s e r S e n i o r A d v a n t a g e 20 1 1 $ 4 6 5 . 6 1 $ 1 8 3 . 2 0 20 1 2 $ 5 0 8 . 5 0 $ 1 9 9 . 8 4 SE C T I O N 4 : S u p p o r t i n g I n f o r m a t i o n f o r t h e C i t y o f B a k e r s fi e l d J u n e 3 0 , 2 0 1 1 M e a s u r e m e n t U n d e r G A S B 4 3 a n d 4 5 20 Em p l o y e r S u b s i d i e s C o s t s : Ma x i m u m M o n t h l y C o u n t y S u b s i d y Ca l e n d a r Ye a r Sp e c i a l Co n t r i b u t i o n S i n g l e Pa r t y C o v e r a g e * Sp e c i a l C o n t r i b u t i o n Tw o P a r t y C o v e r a g e * Ci t y F o r m u l a * * (3 0 y e a r s ) Medicare Part B Premium Maximum Reimbursement (Per Person)** 20 1 1 $ 3 6 7 . 3 3 $ 7 3 2 . 2 5 $ 2 8 9 . 2 0 $ 4 2 . 5 0 20 1 2 * * $ 2 9 7 . 7 5 $ 5 9 3 . 1 1 $ 2 4 0 . 6 0 $ 4 2 . 5 0 * S p e c i a l C o n t r i b u t i o n R e p r e s e n t s 4 2 % of t h e P P O r a t e ( M e d i c a l + M e n t a l He a l t h ) . N o t a p p l i c a b l e t o M i s c e l l a n e o u s e m p l o y e e s h i r e d a f t e r 4 / 1 / 9 6 , S a f e t y 4/ 1 / 9 8 . ** F o r m u l a f o r t h o s e e m p l o y e e s e l i g i b l e f o r t h e y e a r s o f s e r v i c e c o n t r i b u t i o n s : 3% o f t h e l o w e s t s i n g l e p a r t y r a t e p l u s v i s i o n r a t e t o a m a x i m u m o f 3 0 y e a r s . Th e c r e d i t p e r y e a r o f s e r v i c e w a s $ 9 . 6 4 i n 2 0 1 1 a n d i s $ 8 . 0 2 f o r 2 0 1 2 . * * * Me d i c a r e P a r t B p r e m i u m r e i m b u r s e m e n t w i l l p a y f o r e x c e s s , i f a n y , o f C i t y Fo r m u l a a m o u n t o v e r M e d i c a r e R i s k P l a n p r e m i u m . SE C T I O N 4 : S u p p o r t i n g I n f o r m a t i o n f o r t h e C i t y o f B a k e r s fi e l d J u n e 3 0 , 2 0 1 1 M e a s u r e m e n t U n d e r G A S B 4 3 a n d 4 5 21 He a l t h C a r e C o s t T r e n d R a t e s : H e a l t h c a r e t r e n d m e a s u r e s t h e a n t i c i p a t e d o v e ra l l r a t e a t w h i c h h e a l t h p l a n c o s t s a r e ex p e c t e d t o i n c r e a s e i n f u t u r e y e a r s . T h e ra t e s s h o w n b e l o w a r e “ n e t ” a n d a r e a p p l i e d to t h e n e t p e r c a p i t a c o s t s s h o w n a b o v e . T h e t r en d s h o w n f o r a p a r t i c u l a r p l a n y e a r i s th e r a t e t h a t i s a p p l i e d t o t h a t y e a r ’ s c o st t o y i e l d t h e n e x t y e a r ’ s p r o j e c t e d c o s t . An t h e m B l u e Cr o s s P P O Ka i s e r H i g h De d u c t i b l e Ka i s e r H M O Un d e r 6 5 Bl u e C r o s s Se n i o r S e c u r e Ka i s e r S e n i o r Ad v a n t a g e Special Contribution Subsidy City Formula Subsidy Tr e n d t o b e a p p l i e d t o 20 1 1 - 2 0 1 2 F i s c a l Y e a r c o s t -6 . 5 4 % 8 . 7 5 % 1 2 . 9 7 % 9 . 1 0 % 9 . 0 4 % - 6 . 4 3 % - 5 . 0 9 % Fi s c a l Y e a r T r e n d ( A p p r o x i m a t e ) 20 1 2 - 2 0 1 3 8 . 7 5 % 20 1 3 - 2 0 1 4 8 . 2 5 % 20 1 4 - 2 0 1 5 7 . 7 5 % 20 1 5 - 2 0 1 6 7 . 2 5 % 20 1 6 - 2 0 1 7 6 . 7 5 % 20 1 7 - 2 0 1 8 6 . 2 5 % 20 1 8 - 2 0 1 9 5 . 7 5 % 20 1 9 - 2 0 2 0 5 . 2 5 % 20 2 0 a n d L a t e r 5 . 0 0 % SE C T I O N 4 : S u p p o r t i n g I n f o r m a t i o n f o r t h e C i t y o f B a k e r s fi e l d J u n e 3 0 , 2 0 1 1 M e a s u r e m e n t U n d e r G A S B 4 3 a n d 4 5 22 Me d i c a r e P a r t D S u b s i d y As s u m p t i o n : GA S B g u i d e l i n e s p r o h i b i t t h e o f f s e t o f O P E B o b l i g a t i o n s b y t h e f u t u r e v a l u e o f Me d i c a r e P a r t D s u b s i d i e s . T h e r e f o r e , t h e s e c a l c u l a t i o n s d o n o t i n c l u d e a n e s t i m a t e fo r r e t i r e e p r e s c r i p t i o n d r u g p l a n f e d e r a l s u b s i d ie s t h a t t h e C i t y o f B a k e r s f i e l d m a y b e el i g i b l e t o r e c e i v e f o r p l an y e a r s b e g i n n i n g i n 2 0 0 6 . Ad m i n i s t r a t i v e E x p e n s e s : N o a d m i n i s t r a t i v e e x p e n s e l o a d a r e a d d e d i n d e v e l o p i n g t h e b e n e f i t o b l i g a t i o n s . Pl a n D e s i g n : D e v e l o p m e n t o f p l a n l i a b i l i t i e s a r e b a s e d o n t h e s u b s t a n t i v e p l a n o f b e n e f i t s i n e f f e c t as d e s c r i b e d i n E x h i b i t I I I . As s u m p t i o n C h a n g e s : Si n c e t h e p r i o r v a l u a t i o n :  Th e p e r c a p i t a p r e m i u m a n d s u b s i d y c o s t s w e r e u p d a t e d .  Th e t r e n d r a t e s w e r e u p d a t e d .  Fu t u r e p l a n e l e c t i o n a s s u m p t i o n s w e r e u p d a t e d . SE C T I O N 4 : S u p p o r t i n g I n f o r m a t i o n f o r t h e C i t y o f B a k e r s fi e l d J u n e 3 0 , 2 0 1 1 M e a s u r e m e n t U n d e r G A S B 4 3 a n d 4 5 23 EX H I B I T I I I Su m m a r y o f P l a n Th i s e x h i b i t s u m m a r i z e s t h e m a j o r b e n e f i t p r o v i s i o n s a s i n c l u d e d i n t h e v a l u a t i o n . T o t h e b e s t o f o u r k n o w l e d g e , t h e s u m m a r y re p r e s e n t s t h e s u b s t a n t i v e p l a n s a s o f t h e m e a s u r e m e n t d a t e . I t is n o t i n t e n d e d t o b e , n o r s h o u l d i t b e i n t e r p r e t e d a s , a c o m p l ete st a t e m e n t o f a l l b e n e f i t p r o v i s i o n s . El i g i b i l i t y : E m p l o y e e s w h o a r e a t l e a s t a g e 5 0 a n d r e t i r e d w i t h a m i n i m u m o f 1 5 o r 2 0 y e a r s o f se r v i c e , d e p e n d i n g o n t h e d a t e o f h i r e a s n o t ed b e l o w a r e e l i g i b l e f o r b e n e f i t s , u n l e s s re t i r e m e n t i s d u e t o d i s a b i l i t y . S a f e t y h i r e d p r i o r t o A p r i l 1 , 1 9 9 8 a n d a l l o t h e r e m p l o y e e s h i r e d p r i o r t o A p r i l 1 , 1 9 9 6 re q u i r e a m i n i m u m o f 1 5 y e a r s o f s e r v i c e . S a f e t y h i r e d b e t w e e n A p r i l 1 , 1 9 9 8 a n d Ma y 2 4 , 2 0 0 6 a n d a l l o t h e r h i r e d b e t w e e n Ap r i l 1 , 1 9 9 6 a n d F e b r u a r y 2 2 , 2 0 0 6 r e q u i r e a m i n i m u m o f 2 0 y e a r s o f s e r v i c e t o qu a l i f y f o r c o v e r a g e . Ne w h i r e s s t a r t i n g a f t e r 2 / 1 / 2 0 0 6 ( 5 / 1 / 20 0 6 f o r s a f e t y ) a r e n o t e l i g i b l e t o pa r t i c i p a t e i n r e t i r e e h e a l t h p r o g r a m . Be n e f i t T y p e s : No n - M e d i c a r e r e t i r e e s h a v e t h r e e m e d i c a l pl a n o p t i o n s t o c h o o s e f r o m – A n t h e m PP O , K a i s e r H M O a n d K a i s e r H i g h D e d u c t i b l e H e a l t h P l a n . R e t i r e e s e n r o l l e d i n An t h e m r e c e i v e m e n t a l h e a l t h b e n e f i t s th r o u g h O p t u m . R e t i r e e s e n r o l l e d i n K a i s e r re c e i v e v i s i o n b e n e f i t s t h r o u g h M e d i c a l E y e S e r v i c e s ( M E S ) . M e d i c a r e E l i g i b l e R e t i r e e s h a v e t w o M e d i ca r e A d v a n t a g e o p t i o n s – A n t h e m S e n i o r Se c u r e o r S e n i o r A d v a n t a g e t h r o u g h K a i s e r a nd a r e a l s o e l i g i b l e t o p a r t i c i p a t e i n t h e An t h e m P P O p l a n . I n a d d i t i o n , r e t i r e e s a r e e l i g i b l e f o r d e n t a l b e n e f i t s f r o m U n i t e d H e a l t h C a r e ( U H C ) a t fu l l c o s t t o t h e r e t i r e e . S i n c e t h e s e b e n e f i t s ar e f u l l y p a i d b y t h e r e t i r e e s , t h e y h a v e be e n e x c l u d e d f r o m t h i s v a l u a t i o n . Du r a t i o n o f C o v e r a g e : Li f e t i m e , s u b j e c t t o c o n t i n u i n g s u p p o r t b y t h e C i t y C o u n c i l . De p e n d e n t B e n e f i t s : Sa m e a s r e t i r e e s . SE C T I O N 4 : S u p p o r t i n g I n f o r m a t i o n f o r t h e C i t y o f B a k e r s fi e l d J u n e 3 0 , 2 0 1 1 M e a s u r e m e n t U n d e r G A S B 4 3 a n d 4 5 24 De p e n d e n t C o v e r a g e : Be n e f i t s a r e a v a i l a b l e f o r d e p e n d e n t s . H o w e ve r , t h e C i t y d o e s n o t s u b s i d i z e c o v e r a g e fo r d e p e n d e n t s u n l e s s t h e y a r e e l i g i b l e f o r t h e a d d i t i o n a l C i t y s u b s i d y f o r t h e A n t h e m PP O p l a n . Re t i r e e C o n t r i b u t i o n s : Co n t r i b u t i o n f o r m u l a s a n d c o n d i t i o n s f o r p a rt i c i p a t i o n i n t h e C i t y ’ s r e t i r e e m e d i c a l pl a n s m a y v a r y d e p e n d i n g o n t h e e m p l o y e e b a r g a i n i n g u n i t a n d t h e e m p l o y e e l a b o r ag r e e m e n t s . I n g e n e r a l , C i t y c o n t r i b u t e s a m i n i m u m o f t h e l o w e s t s i n g l e p a r t y r a t e (c u r r e n t l y K a i s e r H i g h D e d u c t i b l e ) m u l t i p l i e d b y 3 % t i m e s t h e n u m b e r o f y e a r s o f se r v i c e u p t o m a x i m u m c o n t r i b u t i o n o f 9 0 % o f t h e l o w e s t s i n g l e p a r t y r a t e o r t h e ac t u a l c o n t r a c t r a t e f o r m e d i c a l v i s i o n , a n d m e n t a l h e a l t h . I n a d d i t i o n , r e t i r e e s w h o e l e c t t h e A n t h e m P P O p l a n a r e e l i g i b l e t o r e c e i v e a n ad d i t i o n a l C i t y c o n t r i b u t i o n o f 4 2 % o f t h e PP O r a t e t i e r s e l e c t e d b y t h e r e t i r e e . T h i s ad d i t i o n a l s u b s i d y d o e s n o t a p p l y t o S a f e t y hi r e d a f t e r 4 / 1 / 1 9 9 8 a n d o t h e r s h i r e d a f t e r 4/ 1 / 1 9 9 6 . M i s c e l l a n e o u s h i r e d a f t e r 2 / 2 2 / 2 0 0 6 , F i r e Sa f e t y h i r e d a f t e r 5 / 5 / 2 0 0 6 , a n d P o l i c e Sa f e t y h i r e d a f t e r 5 / 2 4 / 2 0 0 6 a r e n o t e l i g i b l e f o r 3 % p e r y e a r o f s e r v i c e s u b s i d y . M a x i m u m M e d i c a r e r e i m b u r s e m e n t p e r e l i g i b le p e r s o n o f $ 4 2 . 5 0 i n a d d i t i o n t o t h e 3% p e r s e r v i c e y e a r s u b s i d y f o r M e d i c a r e r e t i r e e s e n r o l l e d i n t h e K a i s e r S e n i o r Ad v a n t a g e o r A n t h e m S e n i o r S e c u r e p r o g r a m . SE C T I O N 4 : S u p p o r t i n g I n f o r m a t i o n f o r t h e C i t y o f B a k e r s fi e l d J u n e 3 0 , 2 0 1 1 M e a s u r e m e n t U n d e r G A S B 4 3 a n d 4 5 25 Be n e f i t D e s c r i p t i o n s : ME D I C A L AN T H E M B L U E CR O S S PP O * KA I S E R H M O KA I S E R DE D U C T I B L E * * Li f e t i m e M a x i m u m $5 , 0 0 0 , 0 0 0 N o n e N o n e De d u c t i b l e In d i v i d u a l Tw o P a r t y Fa m i l i y $3 5 0 $7 0 0 $1 , 0 5 0 No n e No n e No n e $1 , 0 0 0 $2 , 0 0 0 $2 , 0 0 0 St o p L o s s L i m i t In - N e t w o r k S i n g l e $1 , 5 0 0 Ou t - o f - N e t w o r k $ 4 , 5 0 0 $1 , 5 0 0 c o p a y m a x si n g l e $3 , 0 0 0 c o p a y m a x si n g l e In - N e t w o r k F a m i l y $4 , 5 0 0 Ou t - o f - N e t w o r k $ 9 , 0 0 0 Al l c o p a y s a p p l y t o s t o p lo s s $3 , 0 0 0 c o p a y m a x fa m i l y $6 , 0 0 0 c o p a y m a x fa m i l y Ho s p i t a l In p a t i e n t $ 2 5 0 c o p a y p e r a d m i t pl u s In - N e t w o r k 9 0 % Ou t - o f - N e t w o r k 6 0 % $2 5 0 c o p a y pe r a d m i t 30 % a f t e r d e d u c t i b l e Ou t p a t i e n t I n - N e t w o r k 9 0 % Ou t - o f - N e t w o r k 6 0 % $2 5 c o p a y 3 0 % a f t e r d e d u c t i b l e Ph y s i c i a n C a r e Of f i c e / H o m e V i s i t s I n - N e t w o r k 9 0 % Ou t - o f - N e t w o r k 6 0 % $2 5 c o p a y $ 3 0 c o p a y ( d e d u c t i b l e do e s n o t a p p l y ) Pr e s c r i p t i o n D r u g s D r u g s ( a p p r o v e d b y t h e Fo o d a n d D r u g Ad m i n i s t r a t i o n a n d pr e s c r i b e d b y a p h y s i c i a n ) $1 0 / $ 2 0 c o p a y f o r ge n e r i c / b r a n d 30 d a y s u p p l y $1 0 / $ 2 0 c o p a y f o r ge n e r i c / b r a n d 10 0 d a y s u p p l y $1 0 / $ 3 0 c o p a y f o r ge n e r i c / b r a n d 10 0 d a y s u p p l y (g e n e r i c n o d e d u c t i b l e , br a n d $ 1 0 0 d e d u c t i b l e fo r c e r t a i n d r u g s ) * M e d i c a r e e l i g i b l e r e t i r e e s c a n a l s o p a r t i c i p a t e i n t h i s p l a n . ** A n n u a l O u t - o f - P o c k e t M a x i m u m a n d D e du c t i b l e a r e f o r c e r t a i n s e r v i c e s . SE C T I O N 4 : S u p p o r t i n g I n f o r m a t i o n f o r t h e C i t y o f B a k e r s fi e l d J u n e 3 0 , 2 0 1 1 M e a s u r e m e n t U n d e r G A S B 4 3 a n d 4 5 26 ME D I C A L ( c o n t i n u e d ) AN T H E M B L U E CR O S S PP O * KA I S E R HM O KA I S E R DE D U C T I B L E * * Ma i l O r d e r P r o g r a m $1 5 / $ 2 5 c o p a y f o r ge n e r i c / b r a n d 90 d a y s u p p l y $1 0 / $ 2 0 c o p a y f o r ge n e r i c / b r a n d 10 0 d a y s u p p l y $1 0 / $ 3 0 c o p a y f o r ge n e r i c / b r a n d 10 0 d a y s u p p l y (g e n e r i c n o d e d u c t i b l e , br a n d $ 1 0 0 d e d u c t i b l e fo r c e r t a i n d r u g s ) Me n t a l H e a l t h B e n e f i t In p a t i e n t D e d u c t i b l e N o n e N o n e In p a t i e n t $ 2 5 0 c o p a y p e r a d m i t + 80 % up t o 3 0 d a y s p e r ca l e n d a r y e a r $2 5 0 c o p a y pe r a d m i t 30 % a f t e r d e d u c t i b l e Ou t p a t i e n t M e n t a l H e a l t h 3 0 v i s i t s $1 0 c o p a y p e r v i s i t $2 5 c o p a y p e r v i s i t $ 3 0 c o p a y p e r v i s i t (d e d u c t i b l e d o e s n o t ap p l y ) Ch e m i c a l D e p e n d e n c y $0 c o p a y a n d c o v e r e d a t 10 0 % $2 5 , 0 0 0 A n n u a l Ma x i m u m $3 5 , 0 0 0 L i f e t i m e Ma x i m u m $2 5 0 c o p a y p e r a d m i t $2 5 c o p a y p e r v i s i t No A n n u a l M a x i m u m an d L i f e t i m e M a x i m u m 30 % a f t e r d e d u c t i b l e f o r in p a t i e n t d e t o x i f i c a t i o n ; $3 0 c o p a y p e r v i s i t No A n n u a l M a x i m u m an d L i f e t i m e M a x i m u m * M e d i c a r e e l i g i b l e r e t i r e e s c a n a l s o p a r t i c i p a t e i n t h i s p l a n . ** A n n u a l O u t - o f - P o c k e t M a x i m u m a n d d e d u ct i b l e a r e f o r c e r t a i n s e r v i c e s . SE C T I O N 4 : S u p p o r t i n g I n f o r m a t i o n f o r t h e C i t y o f B a k e r s fi e l d J u n e 3 0 , 2 0 1 1 M e a s u r e m e n t U n d e r G A S B 4 3 a n d 4 5 27 Be n e f i t D e s c r i p t i o n s : Me d i c a r e R e t i r e e s ME D I C A L KA I S E R SE N I O R A D V A N T A G E AN T H E M B L U E C R O S S SE N I O R S E C U R E An n u a l D e d u c t i b l e No n e N o n e Ma x i m u m O u t - o f - P o c k e t $1 , 5 0 0 s i n g l e / $ 3 , 0 0 0 f a m i l y $ 3 , 4 0 0 Ma x i m u m L i f e t i m e B e n e f i t No n e N o n e Ho s p i t a l I n p a t i e n t $2 0 0 c o p a y p e r a d m i t $ 0 c o p a y Ph y s i c i a n Of f i c e V i s i t $ 1 0 c o p a y $ 0 c o p a y Me n t a l H e a l t h / S u b s t a n c e A b u s e In p a t i e n t M e n t a l H e a l t h $ 2 0 0 c o p a y p e r a d m i t $ 0 c o p a y Ou t p a t i e n t M e n t a l H e a l t h / S u b s t a n c e A b u s e $ 1 0 c o p a y p e r v i s i t $ 0 c o p a y Ot h e r P r o v i d e r s / S e r v i c e s Ou t p a t i e n t S e r v i c e s / S u r g e r y $ 1 0 c o p a y $ 0 c o p a y Pr e s c r i p t i o n D r u g s Re t a i l $1 0 g e n e r i c / $ 2 0 b r a n d 10 0 d a y s u p p l y $5 g e n e r i c / $ 1 0 b r a n d 30 d a y s u p p l y Ma i l O r d e r $ 5 g e n e r i c / $ 1 0 b r a n d 90 d a y s u p p l y Ca t a s t r o p h i c C o v e r a g e $ 3 / $ 1 0 c o p a y f o r g e n e r i c / b r a n d (a f t e r o u t - o f - p o c k e t o f $ 4 , 7 0 0 ) Gr e a t e r o f 5 % o r $ 2 . 1 5 / $ 5 . 3 5 co p a y f o r g e n e r i c / b r a n d (a f t e r o u t - o f - p o c k e t o f $ 3 , 8 5 0 ) SE C T I O N 4 : S u p p o r t i n g I n f o r m a t i o n f o r t h e C i t y o f B a k e r s fi e l d J u n e 3 0 , 2 0 1 1 M e a s u r e m e n t U n d e r G A S B 4 3 a n d 4 5 28 Pl a n C h a n g e s s i n c e P r i o r V a l u a t i o n : An t h e m H M O P l a n w a s t e r m i n a t e d e f f e c t i v e D e c e m b e r 3 1 , 2 0 1 0 . An t h e m P P O P l a n : P r e s c r i p t i o n D r u g M a i l O r d e r B e n e f i t C h a n g e s . Ad d e d a K a i s e r H i g h D e d u c t i b l e H e a l t h P l a n . Th e S p e c i a l C o n t r i b u t i o n a n d C i t y F o r m u l a s u b s i d i e s w e r e r e d u c e d . SE C T I O N 4 : S u p p o r t i n g I n f o r m a t i o n f o r t h e C i t y o f B a k e r s fi e l d J u n e 3 0 , 2 0 1 1 M e a s u r e m e n t U n d e r G A S B 4 3 a n d 4 5 29 Th e f o l l o w i n g l i s t d e f i n e s c e r t a i n t e c h n i c a l t e r m s f o r t h e c o n v e n i e n c e o f t h e r e a d e r : As s u m p t i o n s o r A c t u a r i a l As s u m p t i o n s : T h e e s t i m a t e s o n w h i c h t h e c o s t o f t h e P l a n i s c a l c u l a t e d i n c l u d i n g : (a ) I n v e s t m e n t r e t u r n — t h e r a t e o f i n v es t m e n t y i e l d t h a t t h e P l a n w i l l e a r n o v e r th e l o n g - t e r m f u t u r e ; (b ) M o r t a l i t y r a t e s — t h e d e a t h r a t e s o f e m p l o y e e s a n d p e n s i o n e r s ; l i f e ex p e c t a n c y i s b a s e d o n t h e s e r a t e s ; (c ) R e t i r e m e n t r a t e s — t h e r a t e o r p r o b a b i l i t y o f r e t i r e m e n t a t a g i v e n a g e ; (d ) T u r n o v e r r a t e s — t h e r a t e s a t w h i c h em p l o y e e s o f v a r i o u s a g e s a r e e x p e c t e d to l e a v e e m p l o y m e n t f o r r e a s o n s o t h e r t h a n d e a t h , d i s a b i l i t y , o r r e t i r e m e n t . Ac t u a r i a l P r e s e n t V a l u e o f T o t a l Pr o j e c t e d B e n e f i t s ( A P B ) : P r e s e n t v a l u e o f a l l f u t u r e b e n e f i t p a y m e n t s f o r c u r r e n t r e t i r e e s a n d a c t i v e e m p l o y e e s ta k i n g i n t o a c c o u n t a s s u m p t i o n s a b o u t d e m o g r a p h i c s , t u r n o v e r , m o r t a l i t y , d i s a b i l i t y , re t i r e m e n t , h e a l t h c a r e t r e n d s , a n d o t h e r a c t u a r i a l a s s u m p t i o n s . No r m a l C o s t : T h e a m o u n t o f c o n t r i b u t i o n s r e q u i r e d t o f u n d t h e b e n e f i t a l l o c a t e d t o t h e c u r r e n t y e a r of s e r v i c e . Ac t u a r i a l A c c r u e d L i a b i l i t y Fo r A c t i v e s : Th e e q u i v a l e n t o f t h e a c c u m u l a t e d n o r m a l c o s t s a l l o c a t e d t o t h e y e a r s b e f o r e t h e va l u a t i o n d a t e . Ac t u a r i a l A c c r u e d L i a b i l i t y Fo r R e t i r e e s : Th e s i n g l e s u m v a l u e o f l i f e t i m e b e n e f i t s t o e x i s t i n g r e t i r e e s . T h i s s u m t a k e s a c c o u n t of l i f e e x p e c t a n c i e s a p p r o p r i a t e t o t h e a g e s o f t h e r e t i r e e s a n d o f t h e i n t e r e s t w h i c h t h e su m i s e x p e c t e d t o e a r n b e f o r e i t is e n t i r e l y p a i d o u t i n b e n e f i t s . EX H I B I T I V De f i n i t i o n s o f T e r m s SE C T I O N 4 : S u p p o r t i n g I n f o r m a t i o n f o r t h e C i t y o f B a k e r s fi e l d J u n e 3 0 , 2 0 1 1 M e a s u r e m e n t U n d e r G A S B 4 3 a n d 4 5 30 Ac t u a r i a l V a l u e o f A s s e t s ( A V A ) : T h e v a l u e o f a s s e t s u s e d b y t h e a c t u a r y i n t h e v a l u a t i o n . T h e s e m a y b e a t m a r k e t v a l u e or s o m e o t h e r m e t h o d u s e d t o s m o o t h v a r i a t i on s i n m a r k e t v a l u e f r o m o n e v a l u a t i o n t o th e n e x t . Fu n d e d R a t i o : T h e r a t i o A V A / A A L . Un f u n d e d A c t u a r i a l A c c r u e d Li a b i l i t y ( U A A L ) : T h e e x t e n t t o w h i c h t h e a c t u a r i a l a c c r u e d l i a bi l i t y o f t h e P l a n e x c e e d s t h e a s s e t s o f t h e Pl a n . T h e r e i s a w i d e r a n g e o f a p p r o a c h e s t o p a y i n g o f f t h e u n f u n d e d a c t u a r i a l a c c r u e d li a b i l i t y , f r o m m e e t i n g t h e i n t e r e s t a c c r u a l on l y t o a m o r t i z i n g i t o v e r a s p e c i f i c p e r i o d of t i m e . Am o r t i z a t i o n o f t h e U n f u n d e d Ac t u a r i a l A c c r u e d L i a b i l i t y : Pa y m e n t s m a d e o v e r a p e r i o d o f y e a r s e q u a l in v a l u e t o t h e P l a n ’ s u n f u n d e d a c t u a r i a l ac c r u e d l i a b i l i t y . In v e s t m e n t R e t u r n ( d i s c o u n t r a t e ) : Th e r a t e o f e a r n i n g s o f t h e P l a n f r o m i t s i nv e s t m e n t s , i n c l u d i n g i n t e r e s t , d i v i d e n d s a n d ca p i t a l g a i n a n d l o s s a d j u s t m e n t s , c o m p u t e d as a p e r c e n t a g e o f t h e a v e r a g e v a l u e o f th e f u n d . F o r a c t u a r i a l p u r p o s e s , t h e i n v e s t m e n t r e t u r n o f t e n r e f l e c t s a s m o o t h i n g o f th e c a p i t a l g a i n s a n d l o s s e s t o a v o i d s i g n i f i ca n t s w i n g s i n t h e v a l u e o f a s s e t s f r o m o n e ye a r t o t h e n e x t . I f t h e p l a n i s f u n d e d o n a p a y - a s - y o u - g o b a s i s , t h e d i s c o u n t r a t e i s ti e d t o t h e e x p e c t e d r a t e o f r e t u r n o n d a y - t o - d a y e m p l o y e r f u n d s . He a l t h C a r e C o s t T r e n d R a t e s : Th e a n n u a l r a t e o f i n c r e a s e i n n e t c l a i m s c o s t s p e r i n d i v i d u a l b e n e f i t i n g f r o m t h e P l a n . An n u a l R e q u i r e d Co n t r i b u t i o n ( A R C ) : Th e A R C i s e q u a l t o t h e s u m o f t h e n o r m a l c o s t a n d t h e a m o r t i z a t i o n o f t h e u n f u n d e d a c t u a r i a l a c c r u e d l i a b i l i t y . Ne t O P E B O b l i g a t i o n ( N O O ) : Th e N O O i s t h e c u m u l a t i v e d i f f e r e n c e b e t w e e n t h e A R C a n d a c t u a l c o n t r i b u t i o n s ma d e . I f t h e p l a n i s n o t p r e - f u n d e d , t h e ac t u a l c o n t r i b u t i o n w o u l d b e e q u a l t o t h e an n u a l b e n e f i t p a y m e n t s l e s s r e ti r e e c o n t r i b u t i o n s . T h e r e a r e a d d i t i o n a l a d j u s t m e n t s i n th e N O O c a l c u l a t i o n s t o a d j u s t f o r t i m i n g d i f f e r e n c e s b e t w e e n c a s h a n d a c c r u a l ac c o u n t i n g , a n d t o p r e v e n t d o u b l e c o u n t i n g o f O P E B p l a n c o s t s . SE C T I O N 4 : S u p p o r t i n g I n f o r m a t i o n f o r t h e C i t y o f B a k e r s fi e l d J u n e 3 0 , 2 0 1 1 M e a s u r e m e n t U n d e r G A S B 4 3 a n d 4 5 31 Th e G o v e r n m e n t a l A c c o u n t i n g S t a n d a r d s B o a r d ( G A S B ) is s u e d S t a t e m e n t N u m b e r 4 3 - - Fi n a n c i a l R e p o r t i n g f o r Po s t e m p l o y m e n t B e n e f i t P l a n s O t h e r T h a n P e n s i o n P l a n s , an d S t a t e m e n t N u m b e r 4 5 – A c c o u n t i n g a n d F i n a n c i a l Re p o r t i n g b y E m p l o y e r s f o r P o s t e m p l o y m e n t B e n e f i t s Ot h e r T h a n P e n s i o n s . Un d e r t h e s e s t a t e m e n t s , a l l s t a t e a n d lo c a l g o v e r n m e n t e n t i t i e s t h a t p r o v i d e o t h e r p o s t em p l o y m e n t b e n e f i t s ( O P E B ) a r e r e q u i r e d t o r e p o r t t h e co s t o f t h e s e b e n e f i t s o n t h e i r f i n a n c i a l s t a t e m e n t s . T h e ac c o u n t i n g s t a n d a r d s s u p p l e m e n t c a s h a c c o u n t i n g , u n d e r wh i c h t h e e x p e n s e f o r p o s t e m p l o ym e n t b e n e f i t s i s e q u a l t o be n e f i t a n d a d m i n i s t r a t i v e c o s t s p a i d o n b e h a l f o f r e t i r e e s an d t h e i r d e p e n d e n t s ( i. e . , a p a y - a s - y o u - g o b a s i s ) . Th e s t a t e m e n t s c o v e r p o s t e m p l o y m e n t b e n e f i t s o f h e a l t h , pr e s c r i p t i o n d r u g , d e n t a l , v i s i o n a n d l i f e i n s u r a n c e co v e r a g e f o r r e t i r e e s ; l on g - t e r m c a r e c o v e r a g e , li f e in s u r a n c e a n d d e a t h b e n e f i t s t h a t a r e no t o f f e r e d a s p a r t of a p e n s i o n p l a n ; a n d l o n g - t e r m d i s a b i l i t y in s u r a n c e f o r em p l o y e e s . T h e b e n e f i t s v a l u e d i n t h i s r e p o r t a r e l i m i t e d to t h o s e d e s c r i b e d i n E x h i b i t I I I o f S e c t i o n 4 , w h i c h a r e ba s e d o n t h o s e p r o v i d e d u n d e r t h e t e r m s o f t h e su b s t a n t i v e p l a n i n e f f e c t a t t h e t i m e o f t h e v a l u a t i o n a n d on t h e p a t t e r n o f s h a r i n g c o s t s b e t w e e n t h e e m p l o y e r a n d pl a n m e m b e r s . T h e p r o j e c t i o n o f b e n e f i t s i s n o t l i m i t e d by l e g a l o r c o n t r a c t u a l l i m i t s o n f u n d i n g t h e p l a n u n l e s s th o s e l i m i t s c l e a r l y t r a n s l a t e i n t o b e n e f i t l i m i t s o n t h e su b s t a n t i v e p l a n b e i n g v a l u e d . Th e n e w s t a n d a r d s i n t r o d u c e a n a c c r u a l - b a s i s a c c o u n t i n g re q u i r e m e n t , t h e r e b y r e c o g n i z i n g t h e e m p l o y e r c o s t o f po s t e m p l o y m e n t b e n e f i t s o v e r a n e m p l o y e e ’ s c a r e e r . T h e st a n d a r d s a l s o i n t r o d u c e a c o n s i s t e n t a c c o u n t i n g re q u i r e m e n t f o r b o t h p e n s i on a n d n o n - p e n s i o n b e n e f i t s . Th e t o t a l c o s t o f p r o v i d i n g po s t e m p l o y m e n t b e n e f i t s i s pr o j e c t e d , t a k i n g i n t o a c c o u n t a s s u m p t i o n s a b o u t de m o g r a p h i c s , t u r n o v e r , m o r t a l i t y , d i s a b i l i t y , r e t i r e m e n t , he a l t h c a r e t r e n d s , a n d o t h e r a c t u a r i a l a s s u m p t i o n s . T h e s e as s u m p t i o n s a r e s u m m a r i z e d i n E x h i b i t I I o f S e c t i o n 4 . Th i s a m o u n t i s t h e n d i s c o u n t e d t o d e t e r m i n e t h e a c t u a r i a l pr e s e n t v a l u e o f t h e t o t a l p r o j e c t e d b e n e f i t s ( A P B ) . T h e ac t u a r i a l a c c r u e d l i a b i l i t y ( A A L ) i s t h e p o r t i o n o f t h e pr e s e n t v a l u e o f t h e t o t a l p r o j e c t e d b e n e f i t s a l l o c a t e d t o ye a r s o f e m p l o y m e n t p r i o r t o t h e m e a s u r e m e n t d a t e . T h e un f u n d e d a c t u a r i a l a c c r u e d l i a b i l i t y ( U A A L ) i s t h e di f f e r e n c e b e t w e e n t h e A A L a n d a c t u a r i a l v a l u e o f a s s e t s in t h e P l a n . On c e t h e U A A L i s d e t e r m i n e d , t h e A n n u a l R e q u i r e d Co n t r i b u t i o n ( A R C ) i s d e t e r m i n e d a s t h e n o r m a l c o s t ( t h e AP B a l l o c a t e d t o t h e c u r r e n t y e a r o f s e r v i c e ) a n d t h e am o r t i z a t i o n o f t h e U A A L . T h i s A R C i s c o m p a r e d t o ac t u a l c o n t r i b u t i o n s m a d e a n d a n y d i f f e r e n c e i s r e p o r t e d a s th e N e t O P E B O b l i g a t i o n ( N O O ) . I n a d d i t i o n , R e q u i r e d Su p p l e m e n t a r y I n f o r m a t i o n ( R S I ) m u s t b e r e p o r t e d , in c l u d i n g h i s t o r i c a l i n f o r m a t i o n a b o u t t h e U A A L a n d t h e pr o g r e s s i n f u n d i n g t h e P l a n . E x h i b i t s I V a n d V I o f EX H I B I T V Ac c o u n t i n g R e q u i r e m e n t s SE C T I O N 4 : S u p p o r t i n g I n f o r m a t i o n f o r t h e C i t y o f B a k e r s fi e l d J u n e 3 0 , 2 0 1 1 M e a s u r e m e n t U n d e r G A S B 4 3 a n d 4 5 32 Se c t i o n 4 c o n t a i n a d e f i n i t i o n o f t e r m s a s w e l l a s m o r e in f o r m a t i o n a b o u t G A S B 4 3 / 4 5 c o n c e p t s . Th e c a l c u l a t i o n o f a n a c c o u n t i n g o b l i g a t i o n d o e s n o t , i n an d o f i t s e l f , i m p l y t h a t t h e r e i s a n y l e g a l l i a b i l i t y t o pr o v i d e t h e b e n e f i t s v a l u e d , n o r i s t h e r e a n y i m p l i c a t i o n th a t t h e E m p l o y e r i s r e q u i r e d t o i m p l e m e n t a f u n d i n g po l i c y t o s a t i s f y t h e p r o j e c t e d e x p e n s e . Ac t u a r i a l c a l c u l a t i o n s r e f l e c t a l o n g - t e r m p e r s p e c t i v e , a n d th e m e t h o d s a n d a s s u m p t i o n s u s e t e c h n i q u e s d e s i g n e d t o re d u c e s h o r t t e r m v o l a t i l i t y i n a c c r u e d l i a b i l i t i e s a n d t h e ac t u a r i a l v a l u e o f a s s e t s , i f a n y . Ac t u a r i a l v a l u a t i o n s i n v o l v e e s t i m a t e s o f t h e v a l u e o f re p o r t e d a m o u n t s a n d a s s u m p t i o n s a b o u t t h e p r o b a b i l i t y o f ev e n t s f a r i n t o t h e f u t u r e , a n d t h e a c t u a r i a l l y d e t e r m i n e d am o u n t s a r e s u b j e c t t o c o n t i n u a l r e v i s i o n a s a c t u a l r e s u l t s ar e c o m p a r e d t o p a s t e x p e c t a t i o n s a n d n e w e s t i m a t e s a r e ma d e a b o u t t h e f u t u r e . SE C T I O N 4 : S u p p o r t i n g I n f o r m a t i o n f o r t h e C i t y o f B a k e r s fi e l d J u n e 3 0 , 2 0 1 1 M e a s u r e m e n t U n d e r G A S B 4 3 a n d 4 5 33 Normal Cost + 30 Y e a r s A m o r t i z a t i o n of U n f u n d e d A c t u a r i a l A c c r u e d L i a b i l i t y Ann u a l R e q u i r e d C o n t r i b u t i o n ( A R C ) GA S B 4 3 / 4 5 M e a s u r e m e n t Fu t u r e Ac c o u n t i n g Pe r i o d s Pre s e n t V a l u e of F u t u r e B e n e f i t s Ne t O P E B O b l i g a t i o n = A R C 1 + A R C 2 + A R C 3 + … … - C o n t r i b u t i o n 1 - C o n t r i b u t i o n 2 - C o n t r i b u t i o n 3 - … . . . Th i s g r a p h s h o w s h o w t h e a c t u a r i a l p r e s e n t v a l u e o f t h e to t a l p r o j e c t e d b e n e f i t s (A P B ) i s b r o k e n d o w n a n d al l o c a t e d t o v a r i o u s a c c o u n t i n g p e r i o d s . T h e e x a c t br e a k d o w n d e p e n d s o n t h e a c t u a r i a l c o s t m e t h o d a n d am o r t i z a t i o n m e t h o d s s e l e c t e d b y t h e e m p l o y e r . 51 9 6 1 9 9 v 2 / 1 0 6 3 2 . 0 0 5 EX H I B I T V I GA S B 4 3 / 4 5 C o n c e p t s No r m a l C o s t ( A c t i v e s ) Fu t u r e A c c r u a l s (A c t i v e s ) Ac t u a r i a l A c c r u e d Li a b i l i t y ( A c t i v e s + Re t i r e e s ) Cu r r e n t P e r i o d Hi s t o r i c a l Ac c o u n t i n g Pe r i o d s El e m e n t s U s i n g A c t u a r i a l C o s t Me t h o d s