DATE: February 4, 2020
TO: Board of Supervisors
SUBMITTED BY: Donald C. Kendig, CPA, Retirement Administrator
SUBJECT: June 30, 2019 Annual Actuarial Report and 2020-2021 Retirement Contribution Rates
RECOMMENDED ACTION(S):
TITLE
1. Receive and file the Fresno County Employees' Retirement Association Actuarial Valuation and Review report as of June 30, 2019 by The Segal Group, and;
2. Approve and adopt the Board of Retirement's recommended employer and employee contribution rates for FY 2020-21 as provided in the member contribution rates in Section 4, Exhibit III, the employer contributions rates in Section 2, Subsection F (pages 31-32), and the Administrative Expense Load Percentage of Payroll rates in Section 4, Exhibit I of the Actuarial Valuation and Review Report as of June 30, 2019, in accordance with Government Code sections 31453 and 31454.
REPORT
ALTERNATIVE ACTION(S):
Government Code Section 31454 requires your Board to adjust employer and employee contribution rates no later than 90 days following the commencement of a fiscal year. Your Board may defer implementation of the rates up to 90 days after the end of FY 2019-20; however, that would delay the timing of the assumed funding of FCERA and result in an adjustment to the subsequent Actuarial Valuation and Review Report, slightly increasing future rates on a relative basis. The Board of Supervisors also has the option of pre-funding contributions based on the new rates, which would lower future rates on a relative basis.
FISCAL IMPACT:
From a review of the actuarial valuation report:
Pg. 30 - The average member contribution rate will decrease 0.03%, from 9.21% to 9.18% of payroll, primarily attributed to demographic changes of active membership.
Pgs. 31-32 - The average employer contribution rate increased across all tiers. The overage composite employer rate will increase 5.76%, from 55.08% to 60.84% of payroll.
Pg. 32 - The increase in the employer cost in FY 2020-21 is estimat...
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