Actuarial Policy
Actuarial valuations are key to maintaining and improving the retirement systems’ funded status and overall health. It is crucial that these valuations are conducted by a fully-qualified and reputable actuarial firm. The valuation is done in three stages; namely annual valuations, actuarial experience studies, and actuarial audits. The relevant County Code sections regarding funding of the systems are as follows:
Annual Valuation
Annual actuarial valuations occur every year, using employee and retiree data from the most-recent December 31st year-end and asset information from the fiscal year ended June 30th. During the summer of each year, the actuarial firm works with Retirement Systems’ staff to ensure that the data being used to produce the annual valuations are accurate and up to date.
The results of each annual actuarial valuation are presented to the Boards of Trustees in early fall, generally at their September meetings. The presentation summarizes the findings from the annual valuation, provides the current and future funded status of the plan, and recommends the employer contribution rate (percentage).
The Boards of Trustees then vote to accept the annual valuation and either approve the recommended employer contribution rate or recommend an alternative rate. Staff then forwards the valuation presentation and the Boards' recommended contribution rate to the County's Chief Financial Officer for inclusion in the next year's budget.Experience Study
Every 5 years the actuary reviews what has occurred for the prior 5 years and compares it to actuarial assumptions.Specifically, the actuary compares the following data; comparing what actually occurred vs what was assumed:- Active member salaries
- Increase or decrease in the number of active members
- Retiree cost of living adjustments (COLAs)
- Ratio of actives to retirees
- Investment returns
- Mortality