Actuarial - CalPERS - 2011-04-18 Actuarial Office
t fP O Box 1494
j Sacramento, CA 95812 1494
TTY for Speech and Hearing Impaired (916) 795-3240
Ca1PERS (888) CaIPERS (or 888-225-7377) FAX (916) 795-3005
April 18, 2011
Employer Number 1896
Employer Name: COSTA MESA SANITARY DISTRICT
Rate Plan: MISCELLANEOUS PLAN
Re: New Second Tier Plan (Section 20475. Different Level of Benefits Provided for New Employees)
Dear Requestor
In the tables below, we show your 2010-2011 and 2011 2012 employer contribution rates before and after opening a
second tier
Of the five rate components,the first three are specific to the pool to which the plan belongs and the last two are
specific to your agency However the Phase out of Normal Cost Difference will be 0% beginning with rates established
for 2011 2012, so it has no impact from that time on.
The Side Fund will continue to be paid off by the first tier plan since all the past service on which it is based belongs to
those current members who will continue in the first tier The scheduled dollar amounts payable will continue as
before. However because newly hired members will be covered by the second tier the number of members and
payroll in the first tier will (after several years) gradually decline. The Amortization of Side Fund rate component is the
dollars needed to pay off the side fund divided by the payroll. So as long as the Side Fund remains,the first tier rate
will increase as its payroll decreases. The first tier side fund is scheduled to be paid off after 4 years from June
30, 2011.
Therefore, in determining the employer contributions savings, Amortization of Side Fund should be excluded. For your
agency, the ultimate annual employer savings equals the difference between the Normal Cost and Surcharges rates
times the second tier payroll. For 2010-2011 the Normal Cost and Surcharges percentage savings is (7.740%+1.393%)
(6.553%+0.786%) = 1.794%. The ultimate annual dollar savings is about 1.8% times the second tier
fiscal year payroll.
The Risk Pool's Payment on Amortization Bases is a temporary adjustment to the pool's contribution to 'get the pool
back on schedule' This temporary adjustment varies in amount and duration from pool to pool.
As of June 30, 2008 Existing Plan New Second Tier.Plan
2% @ 55 '" 2.0%@ 60 for newly hired
members
2010-2011 Employer Contribution Rate:
Risk Pool's Net Employer Normal Cost 7.7400/0 6.553%
Risk Pool's Payment on Amortization Bases 0.735% 0.202%
One-Year Final Compensation 0.509% 0.000%
PRSA 50% 0.884% 0.786%
Phase out of Normal Cost Difference 1.966% 0.000%
Amortization of Side Fund 0.055% 0.000%
Total Employer Contribution Rate 11.889% 7.541%
2010-2011 Employee Contribution Rate 7.000% 7.000%
California Public Employees' Retirement System
www.calpers.ca.gov
MISCELLANEOUS PLAN OF THE COSTA MESA SANITARY DISTRICT(EMPLOYER# 1896)
April 2011
Page 2
For 2011 2012 the Normal Cost and Surcharges percentage savings is(7.684%+1.322%) (6.622%+0.705%) =
1.679%. The ultimate annual dollar savings is about 1.7% times the second tier fiscal year payroll.
As of June 30, 2009 Existing Plan New Second Tier Plan
2% @ 55 2.0% @ 60 for newly hired
members
2011 2012 Employer Contribution Rate:
Risk Pool's Net Employer Normal Cost 7.684°k 6.622%
Risk Pool's Payment on Amortization Bases 1.8550/0 1.111%
One-Year Final Compensation 0.520% 0.000%
PRSA 50% 0.802°k 0.705%
Phase out of Normal Cost Difference 0.983°k 0.000%
Amortization of Side Fund 0.056°k 0.000%
Total Employer Contribution Rate 11.900% 8.438%
2011 2012 Employee Contribution Rate 7.000% 7.000%
To initiate an amendment to the contract, please complete the attached election form and mail or FAX(916) 795-3005
the form with a letter to the Contracts Maintenance Unit, indicating your wish to contract for Section 20475 (Different
Level of Benefits) and identifying the group(s)to which the benefit reduction applies.
In sections 20463 (b) and (c), the California Public Employees' Retirement Law requires the governing body of a public
agency within five days of receipt of the contract amendment cost analysis,to provide each employee organization with
a copy of the analysis. If this cost analysis was requested by an employee organization, the employee organization is
also required within five days of receipt of the analysis,to provide a copy of the analysis to the public agency
The June 30, 2009 Section 2 Risk Pool actuarial valuation report applicable to your new second tier plan can be viewed
on the following website:
http://www.ca 1pers.ca.gov/index.jsp?bc=/employer/actuaria I-gasb/risk-pooling/valuation-reports.xml
If you have questions, please call (888)CaIPERS (225-7377).
/0/151Lc
RICHARD SANTOS, CFA, ASA, MW
Senior Pension Actuary, CaIPERS