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UM Retirement Plan Annual Valuation Summary – January 31, 2013

This report provides an overview of the annual valuation for UM's two core retirement plans as of January 31, 2013. Funding for both defined benefit plans is managed within the same trust, with annual contributions predicted to be slightly lower for FY14 than initially estimated. Key features include characteristics of active and retired members, and the impact of past market downturns on contributions. The report outlines necessary contributions to meet funding obligations, including detailed actuarial assumptions and valuation methods. For the full report, visit the UM benefits website.

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UM Retirement Plan Annual Valuation Summary – January 31, 2013

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  1. UM Retirement PlanAnnual Valuation Board of Curators January 31, 2013

  2. UM’s Two Core Retirement Plans

  3. Funding Approach • Funding for both defined benefit plans (pre and post October 2012) is held in the same trust • Annual UM contributions are blended • Employees contribute the same amount to the defined benefit portion • Valuation as of October 1, 2012 • No members in new plan for this valuation • However, since the valuation predicts funding for FY14, the contribution includes a projection based on previous hires

  4. Defined Benefit Annual Valuation Results

  5. Annual Valuation Summary • Determine the annual contribution required to meet funding obligations • FY14 funding contribution is slightly less than originally predicted • Highest annual contribution in history of plan, due to extreme market downturn in 2008 and 2009 Note: Full report available on the UM benefits website a

  6. Actuarial Valuation Report Howard Rog, Actuary, Segal Consultants • Annual valuation includes: • Present provisions of the plan • Characteristics of active, inactive and retired members • Actuarial assumptions and methods • Actuarial value of the Plan’s Trust assets • Determination of annual contribution

  7. Characteristics of Active Members

  8. Characteristics of Retired Members • Monthly benefits range from less than $100 to more than $5,000 • 48 retirees are age 95 or older • 551 pensions began in 2012

  9. Actuarial Valuation Report Assumptions • Assumptions (reviewed every 5 years): • Investment Return • Actuarial Funding Method • Asset Valuation Method • Salary and Payroll Increases • Retirement Rates • Mortality Rates • Withdrawal Rates • Disability Rates • Presence and Age of Spouse

  10. Development of Actuarial Value of Assets

  11. Changes Impacting Plan Contribution Requirements

  12. Determination of FY 14 DB Annual Contribution Note: Includes DB funding for both pre and post October 2012 members

  13. UM Retirement Plans Contributions Actual Projected % of Payroll 11.52% 11.02% 10.63% 11.62% 10.02%

  14. Total Cost Projections for all Retirement Plans (Defined Benefit and Defined Contribution)

  15. FY14 Total Retirement Plan Costs *Estimated FY14 Employer Contribution = $119.2 million

  16. Projected Use of Stabilization Fund

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