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Bob Rast <br />July 14, 2022 <br />Plan Administration <br />Administration of the plan will continue until all benefits are paid. Retirees shouldn't notice any difference, <br />but current active members will eventually receive a benefit from the Fund as well as TMRS. Employees <br />hired after the effective date will only receive a retirement benefit from TMRS. <br />Measurement Basis for the Plan Freeze <br />... Results based on discount rates of 6.75% and 7.25% are provided <br />... The mortality projection scale was updated from the MP -2018 to the ultimate rates from MP -2021 <br />... Active members are assumed to retire at age 55, or current age if older <br />... Except for the changes mentioned above, all other assumptions are the same as shown in the <br />12/31/2020 actuarial report. <br />... The cost method was changed from Entry Age Normal (EAN) to Unit Credit. The Unit Credit cost <br />method measures the actuarial present value of the accrued benefit rather than allocating the <br />ultimate projected cost (including expected future service) levelly over a member's career as the <br />EAN method does, so it is more appropriate for frozen plans when no additional benefits will be <br />earned. <br />... Census data was based on member data as of June 30, 2022 as provided by the Board. The new <br />data had 51 active members, 11 deferred vested, and 40 retirees/beneficiaries. <br />... The changes to the plan provisions were described above. Any plan provision not mentioned <br />herein is the same as described in the 2020 actuarial report. <br />Except for the most senior active members, the active members' accumulated contributions exceed the <br />actuarial present value of accrued benefits (PVAB). Over time, the PVAB will increase as the members <br />approach retirement (less discounting), but the accumulated contributions will not grow in value. These <br />estimates assumed the changes being made would not result in a mass exodus of the active member <br />population. Since the TMRS benefits will provide higher benefits at a lower member contribution rate, this <br />is a reasonable assumption. However, if all active members below age 50 were to immediately terminate <br />and take a refund of contributions, then the PVAB/AAL would increase by $1.2 million. Over time, the <br />PVAB based on the underlying assumptions will increase, and the $1.2 million difference will gradually <br />decrease. <br />Closing <br />The information contained in this analysis is intended to assist the Board in its discussions with the City of <br />Paris on this important topic. As noted at the beginning, this is not a comprehensive summary of <br />everything the Board will need to consider, and we recommend continuing discussions with the Fund's <br />attorney. If you have any questions about this analysis, I'm happy to meet with you at your earliest <br />convenience. <br />Best regards, <br />David A. Sawyer, FSA EA FCA MAAA <br />Senior Consulting Actuary <br />