Interpreting Actuarial Information. Fritzie Archuleta, ASA MAAA Senior Pension Actuary, CalPERS February 21, 2013. Overview. The big picture: understanding pension terminology Setting the employer contribution rate What do you mean I ’ m pooled? You assumed what? New report features
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Fritzie Archuleta, ASA MAAA
Senior Pension Actuary, CalPERS
February 21, 2013
Understanding Pension Terminology
“Total dollars needed today to fully fund the pension plan for current members in the plan”
The amortization bases payment gets your plan back to 100 percent funded
How do we come up with the amortization bases payment?
Imagine a homeowners journey through life…
The bottom line: annual payment by employer is the sum of the normal cost plus or minus the amount needed to bring the assets back in line with the accrued liability
CalPERS Employer Contribution Rate
Normal Cost Dollars needed
Amortization Bases Payment on Unfunded Liability
Expected Payroll of Active Employees
Interpreting Actuarial Information
Side fund Volatility - Example
* Note side fund payment increases by exactly 3.00 percent each year
** SF rate = SF Pmt divided by payroll
“Predictions developed by actuaries on what will happen to your plan in the future
Assumptions DO determine the expected costs of a plan
Assumptions DO NOT determine the actual cost of a plan
Where do discrepancies come from?