to read entire RFP

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to read entire RFP

THE CITY OF PONTIAC
GENERAL EMPLOYEES' RETIREMENT SYSTEM
REQUEST FOR PROPOSAL
for
ACTUARIAL SERVICES
Issued: July 28, 2016
Deadline for Submissions:
5:00pm on Friday, September 23, 2016
All RFP response packages must be submitted to:
The City of Pontiac General Employees' Retirement System
Attention: Deborah Munson, Interim Executive Director
2201 Auburn Road, Suite B
Auburn Hills, Ml 48326
and electronically to
[email protected]
City of Pontiac, Ml- GERS
Actuarial SeNices RFP
Issued July 28, 2016
Table of Contents
SECTION 1: INTRODUCTION ..........................................................................................3
SECTION 2: BACKGROUND .......................................................................................................3
SECTION 3: GENERAL INFORMATION .....................................................................................4
SECTION 4: Ml N I MUM REQUIREMENTS ................................................................................4
SECT ION 5: SCHEDULE OF EVENTS ..........................................................................................5
SECTION 6: SCOPE OF SERVICES ..............................................................................................5
SECTION 7: GERS' POl NT OF CONTACT; ..................................................................................8
SECTION 8: VENDOR QUESTIONS REGARDING RFP .............................................................. 8
SECTION 9: GENERAL PROPOSAL SUBMISSION REQUIREMENTS ........................................ 9
SECT ION 10: DETAIL PROPOSAL REQUIREMENTS .................................................................9
SECTION 11: Rl GHT TO REJECT PROPOSAL ...........................................................................13
SECTION 12: INCOMPLETE RESPONSES ................................................................................14
SECTION 13: ADDENDA ..........................................................................................................14
SECTION 14: NOTICE REGARDING MICHIGAN FREEDOM OF INFORMATION ACT.. ........ 14
APPENDIX A: GERS 2015 GASB 67 Actuarial Valuation ...... 16
APPENDIX B: GERS ORGANIZATION CHART..................................................................... 17
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City of Pontiac, MJ ~ GERS
Actuoriol Services RFP
SECTION 1: INTRODUCTION
The City of Pontiac General Employees Retirement System (GERS) is issuing this Request for Proposals to
solicit proposals from qualified actuarial firms to provide a range of actuarial services and actuarial
advice to the GERS Board of Trustees and GERS staff (refer to Section 5 of this document for a
description of the Scope of Work). This search seeks to identify a potential full-service actuarial
consultant. It is anticipated that GERS will retain a full-service actuarial consultant beginning in
December 2016.
SECTION 2: BACKGROUND
GERS is a public retirement system established in 1946 that provides service retirement, disability, death
and survivor benefits to its members, administered in accordance with the City of Pontiac Ordinances
and the State of Michigan Public Act 314 of 1965. At December 31, 2015 there were 30 Active members,
1,106 Retired members and 213 Vested Inactive members served by GERS. Net assets as of December
31, 2015 were $459 million. GERS, like most public sector plans, offers a defined benefit retirement plan,
which provides its members with a guaranteed lifetime income benefit as well as certain benefits for
designated beneficiaries upon the member's death.
GERS also provides a disability retirement benefit for members who become permanently incapacitated
while performing their usual and customary duties (whether the disability was caused or related to
providing service or not), subject to certain eligibility requirements, as well as death benefits.
GERS funding was provided by three sources: employer contributions, member contributions by certain
active employees, and investment earnings. The active members no longer make contributions and
employer contributions have not been required since 2003. The plan is over funded as of December 31,
2015.
GERS is governed by the Board ofTrustees which consists of eleven members. The members are as
follows: (1) a member of the City Council selected by the City Council; (2) the Mayor of the City of
Pontiac; (3) the Finance Director of the City; (4) three citizens who are appointed by City Council and
who are electors and freeholders of the City and not eligible to receive benefits under this retirement
system (Citizen Trustees); (5) three members of the retirement system, one of whom shall be an active
member to be nominated and elected by the active members of the retirement system and two of
whom shall be either active, deferred vested, or retired members, nominated and elected by the active,
deferred vested and retired members (Member Trustees); (6) one retirant of the retirement system to
be elected by the retirants of the retirement system; (7) one deferred vested or retired member of the
retirement system who was formerly employed by Pontiac General Hospital (PGH Trustee).
The Board of Trustees is responsible for establishing policies, regulations and guidelines for the
investment of the assets of the pension fund.
GERS is a defined benefit pension plan consisting of the following employee groups:
• General employees of The City of Pontiac, Michigan (Pontiac uniformed police and fire do not
participate in GERS)
• Employees of the former Pontiac General Hospital
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Actuarial Services RFP
SECTION 3: GENERAl INFORMATION
All terms, conditions, requirements and procedures included in the RFP must be met for a response to
be qualified as responsive. A submission that fails to meet any material term, condition, requirement or
procedure of this RFP may be disqualified.
GERS reserves the right to waive or permit cure of non-material errors or omissions. GERS reserves the
right to modify, amend, or cancel the terms of the RFP at any time.
All responses must be submitted in accordance with the specific terms of this RFP. The submission
requirements for this RFP are set forth below. In the event that none of the proposals are satisfactory to
GERS, no selection will be made.
There is no express or implied obligation forGERS to reimburse Respondents for any expenses incurred
in preparing proposals in response to this RFP. A proposal shall constitute an irrevocable offer for 180
business days following the deadline for submission. Reference to a certain number of days in this RFP
shall mean business days unless otherwise specified.
SECTION 4: MINIMUM REQUIREMENTS AND EVALUATION CRITERIA
To be considered for the actuarial services described in the RFP, the firm must meet the following
minimum requirements:
1. The firm must be a professional actuarial services firm whose line of business includes providing
actuarial valuation, experience investigations and analysis, actuarial audits, and consulting services to
public pension plans or similar entities of substantial size;
2. The Primary Actuary performing the work must be a Fellow or Associate of the Society of Actuaries
and an Enrolled Actuary. Any Supporting Actuary must be either a Fellow of the Society of Actuaries, an
Enrolled Actuary or have five years of actuarial consulting experience;
3. The Primary Actuary performing the services under the Contract must have a minimum of ten years of
experience as an actuary providing pension consulting services experience analysis, valuation
assignments and actuarial audit assignments for Michigan Public Act pension retirement systems.
4. The firm must have all necessary permits and licenses. Liability as well as errors and omissions
insurance must be in full force at the time the proposal is submitted and must be maintained
throughout the term of the contract (the firm will be asked to provide a copy of the insurance coverage
certificate);
5. The firm must provide its own work facilities, equipment, supplies and support staff to perform the
required services;
6. All actuaries performing the work must meet the professional qualification standards of the American
Academy of Actuaries.
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Only Proposals that meet the Minimum Qualifications will be evaluated. The evaluation will take place
in two phases. Phase One will involve an evaluation of the written proposals. Phase Two will involve
interviews with the GERS Board of Trustees who will make the final selection.
SECTION 5: SCHEDULE OF EVENTS
Deliverable/Event
Release RFP
Deadline to submit questions
Response to submitted questions posted to
GERS website
Intent to Respond Due
Proposals Due
Proposal Evaluation
Selection of finalists to be interviewed by
Board
Finalist Presentations and
Board Selection
Estimated Contract Start Date
Date
July 28, 2016
August 19, 2016
August 26, 2016
August 31, 2016
September 23, 2016
September 26- October 26, 2016
October 26, 2016
November 30, 2016
TBD
GERS reserves the right to modify this schedule at any time.
SECTION 6: SCOPE OF SERVICES
GERS seeks one qualified actuarial firm to perform the following actuarial services:
6.1 Consulting and Advisory Services
6.1.1 Consult and advise the Board ofTrustees on actuarial matters or questions, which arise out of or
from the operations of the System. Services may be required in person, by telephone or by written
correspondence (hard copy and/or electronic).
6.1.2 Provide in-person presentations of, and public testimony on, all actuarial reports/issues to the
GERS Board of Trustees or other public bodies on any actuarial or actuarially-related issue arising during
the course of operations of the System. GERS ~xpects the consulting actuary to attend a minimum of
three GERS Board of Trustees meetings per calendar year to give presentations and/or answer
questions, including two meetings to review the annual actuarial valuation (Please refer to Section
6.2.1.2)
6.1.3 Conduct educational discussions with the GERS Board of Trustees, GERS staff and/or GERS
stakeholders. The presenting actuary must have the ability to discuss actuarial theory and other
actuarial or pension subjects in layperson's terms.
6.1.4 Make recommendations of possible improvements in regards to GERS actuarial funding policy and
the benefit structure of GERS.
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City of Pontiac, Ml ~ GERS
Actuorio/Services RFP
6.1.5 Keep GERS informed of any significant regulatory, legal or legislative changes and trends with
respect to the public pension industry or actuarial issues and the potential impact on the System's
funding and benefit structure. This may require providing estimates of the cost of potential changes in
benefit provisions.
6.1.6 Provide administrative consultation, i.e. auditor requests (including an annual actuarial
certification letter for inclusion in GERS annual financial report), fiscal impact calculations and actuarial
project costs estimates.
6.1. 7 Review, reconcile and evaluate data files- GERS will provide the actuary with all data and
statistical information deemed necessary to perform specified contract services, provided the data is
available in the records and files of the System. The actuary shall load all the data in their own
actuarial/statistical software and reconcile it back to the GERS database. The Actuary shall analyze the
data and inquire with GERS regarding any data anomalies that are discovered. The Actuary shall
determine if the content of the information is complete and adequate to provide the specified services
below and will make suggestions for modifications to ensure that the full range of data needed for
costing proposed benefits or funding methods, performing actuarial valuations and reviewing
experience studies is maintained. The Actuary will notify GERS Staff and Board of any and all anomalies
it finds from one year's data to the next.
6.2 Studies and Valuations
6.2.1 Annual Actuarial Valuation Report for Funding Purposes
6.2.1.1 Annual actuarial valuations for funding purposes are to be performed as of each December 31,
beginning with the December 31, 2016 valuation. Valuations shall be prepared in accordance with
Actuarial Standards of Practice and will determine funding status, funding requirements and
recommend employer and employee contribution rates. Such valuations shall consider the actual
changes of economic and non-economic experience since the prior valuation. A copy of GERS most
recent Actuarial Valuation Report (dated May 2016) that provides the respondent with the minimum
amount of information needed is available on GERS website at http://pontiacgers.org/reports/2015
GERS Actuarial Valuation.
6.2.1.2 The Board ofTrustees requires a two month process of presenting and approving the annual
actuarial valuation for funding. The valuation data is provided to the actuary by February 1S'h and the
first presentation that the actuary gives includes key valuation results such as contribution rates
(employer and employee), changes in UAAL and funding progress. The first presentation of this
information occurs no later than the Board of Trustees' regularly scheduled meeting in April and allows
for the Board members and other stakeholders to ask questions and time to review the information and
provide feedback prior to approval. The second and final presentation of the annual valuation shall
occur no later than at the Board of Trustees' regularly scheduled meeting in May.
6.2.1.3 While maintaining the integrity of its work product, the actuary will work with staff and the
Board of Trustees during the development process to provide a clear explanation and understanding of
cost impacts of the assumptions used, actuarial gains and losses and the reasoning underlying the
actuary's recommendations regarding contribution rates.
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6.2.1.4 Actuarially required contributions shall be calculated and the detailed components of each
contribution rate shall be provided including normal cost, COLA and UAAL.
6.2.1.5 Include an actuarial gains and loss analysis and prepare concise schedules and descriptions of
why actuarial liabilities changed from the previous year as a result of economic and non-economic risk
areas. These risks would include assumptions regarding salary/pay increases, investment return, service
and disability retirements, mortality and terminations.
6.2.1.6 Perform the calculation of the unfunded actuarial accrued liability (UAAL) by employee group as
of the valuation date. Provide a breakdown of the UAAL amortization tables for each employee group.
6.2.1. 7 Include schedules of participant counts included in the study by employee group (active, retired
and deferred). Charts and tables shall be included showing the distribution by age and service for active
members, by age for deferred and retirees.
6.2.1.8 The Valuation report shall include the basic disclosure elements for actuarial valuation reports on
public retirement system in Michigan as required under the Michigan Public Act.
6.2.2 Annual Actuarial Valuation for Reporting Purposes
6.2.2.1 The Annual Actuarial Valuation for Reporting Purposes shall provide the necessary Total Pension
Liability, Fiduciary Net Position, Net Pension Liability and Pension expense and other related disclosure
information in compliance with Government Accounting Standards Board Statement Number 67
Financial Reporting for Pension Plans (GASB 67). GERS measurement date for GASB 67 is December 31
and in the first year of implementation the existing actuary used the roll-forward approach by taking the
2013 Valuation and rolling forward the liabilities to December 31, 2014.
6.2.2.2 The actuary shall also prepare the calculations of proportionate share, net pension liability by
employer, pension expense and deferred inflows and outflow by employer along with related
disclosures in compliance with Government Accounting Standards Board Statement Number 68
Accounting and Financial Reporting for Pensions (GASB 68).
6.2.2.3 A copy of GERS most recent GASB 67 Actuarial Valuation which contains the minimum amount of
information required is attached to this RFP as Appendix A.
6.2.2.4 In coordination with GERS, prepare responses to questions and data request from GERS
independent auditors, Plan Sponsor and Plan Sponsor's auditors regarding GASB valuation reports and
the assumptions, methods and data used.
6.2.3 Experience Study
6.2.3.1 Perform an actuarial experience study for the period from January 1, 2012 through December
31, 2016 and prepare an actuarial investigation to consider economic and non-economic experience,
assess appropriateness of assumptions and assess and recommend potential changes in experience and
contribution rates. Such recommendations shall include, but are not limited to, the earnings rate,
inflation rate, compensation, mortality, retirement, withdrawal, and disability experience of members
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and beneficiaries. Prepare an in-depth analysis of and provide a comprehensive model and methodology
for developing an assumed rate of return to be used prospectively. Future experience studies will be
performed every five years.
6.2.3.2 Provide sufficiently detailed cost impact analysis for the results of the experience study and for
any recommendations for changing assumptions.
6.2.3.3 Compare actual experience to the actuarial assumptions, provide a historical perspective of the
experience and make any recommendations for adjustment to assumptions.
6.2.4 Actuarial Audit
6.2.4.1 Audit and comment on the reasonableness and appropriateness of the valuation methods,
assumptions certifications and conclusions of the most recent consulting actuaries.
6.2.4.2 Determine whether the actuarial methods, considerations and analyses used by the prior
actuaries in preparing the most recent valuations are technically sound and conform to the appropriate
Standards of Practice as promulgated by the Actuarial Standards Board. The determination should
include:
A. An in depth review and analysis of the valuations results, including an evaluation of the data
used for reasonableness and consistency as well as a review of the mathematical calculations for
completeness and accuracy.
B. Verification that all appropriate benefits have been valued and valued accurately. Verify
that the data provided by the System is consistent with the data used by the prior actuaries.
C. Evaluation of the actuarial cost method and actuarial asset valuation method in use and
whether other methods would be more appropriate forGERS
D. Verification of the reasonableness of the calculation of the unfunded accrued actuarial
liability and the amortization period.
E. A full replication of the two most recent valuations for the GERS.
6.2.4.3 Provide an opinion as to whether to prior actuary's reports conform to the appropriate
Standards of Practice as promulgated by the Actuarial Standards Board and are comprehensive. Any
recommendations for improvement in the reports and/or presentations should be included.
6.3 Other Actuarial Services
6.3.1.1 Review the annual Cost of Living Adjustment (COLA) calculation for retirement benefits in
accordance with collective bargaining agreement contracts. Present findings to the Board in October of
each year.
6.3.1.2 The GERS currently leases member data software that will no longer be available after 2016.
This software houses all demographic, wage, beneficiary, benefit data, etc ... in three separate modules
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City of Pontiac, MJ- GERS
for active, deferred and retired members. The software also contains a benefit calculation module for
calculating the members' optional forms of payments and generating the retirement application
package. Please describe any proprietary member software that you could offer the System to replace
the existing software or your recommendations for alternatives.
6.3.1.4 Other actuarial related services as requested.
SECTION 7: GERS' POINT OF CONTACT
From the date of issuance of this RFP until the selection of a vendor is completed and announced,
vendors are not permitted to communicate, for any reason, with any GERS staff member or Board
Member regarding this procurement, except through the Point of Contact named herein. For
violation of this provision, GERS shall reserve the right to disqualify the offending vendor from
further participation in this procurement.
The Point of Contact for questions and all matters relating to this RFP is:
Name:
Title:
Address:
Telephone:
Email:
Deborah Munson
Interim Executive Director
Auburn Hill, Ml 48326
(248) 456-0523
[email protected]
SECTION 8: VENDOR QUESTIONS REGARDING RFP
Vendors may submit questions regarding this RFP in writing to the Point of Contact named in Section
through 5:00PM Eastern Time on Friday, August 19, 2016. E-mail is the only acceptable method of
communication for questions and the only questions that will receive a reply. A compilation of all
questions and answers, along with any RFP addenda, will be posted on the GERS website,
www.pontiacgers.org no later than 5:00 PM Eastern Time on Friday, August 26, 2016.
SECTION 9: GENERAL PROPOSAL SUBMISSION REQUIREMENTS
Respondents to this RFP should make a single submission of their proposal in the following manner:
1. An original proposal and twelve hard copies on standard 8.5 x 11 inch paper. All pages should be
numbered and identified sequentially by section. Proposals must be bound, tabbed and indexed in
accordance with the information requested in Section 10 Detail Proposal Requirements.
Receipt of the hard copy original submission will be considered the official submission and used for
purposes of determining a timely submission.
2. An electronic version containing all required elements of the proposal as specified in Section 10 of this
RFP, files should be either Microsoft Word or Adobe Acrobat PDF format. The electronic submission
must be sent to [email protected].
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City of Pontiac, Mf-
GERS
3. Responses must be received on or prior to the deadline listed in Section 5. Note that vendor
responses will be subject to disclosure to the public upon written request under the Michigan Freedom
of Information Act. See Section 14: Notice Regarding the Michigan Freedom of Information Act below
for additional information.
A standard format for proposal submission is provided herein. Adherence to this format will help ensure
a fair and objective analysis of submitted proposals. The requested information is organized into
individual sections, which should correspond to individual sections in the submitted proposals.
Proposals must respond to each topic in the order presented, and responses should be numbered as
stated in Section 10 of this RFP. GERS reserves the right to declare as nonresponsive and reject any
proposals in which information is requested and is not furnished or when a direct or complete answer is
not provided.
SECTION 10: DETAIL PROPOSAL REQUIREMENTS
10.1. Cover letter
The cover letter must include the following:
a) Legal business name, address, telephone number and business status (individual, limited liability
partnership, corporation, etc.) of the Proposer.
b) The person(s) authorized to represent the Proposer in negotiations with GERS with respect to the RFP
and the subsequently awarded contract. Provide the representatives' name, title, address, telephone
number, e-mail address and any limitation of authority for the person named.
c) Acknowledgment that the Proposal will be valid for at least one hundred eighty (180) days from the
RFP's submission deadline. Proposals that are not valid for at least 180 days will be considered nonresponsive and subject to rejection.
d) A statement acknowledging that GERS assumes no responsibility for any understanding of the
Proposer or representation made by any of its Board Members, executives, employees or agents during
or prior to the execution of any Contract resulting from this RFP unless:
i. Such understanding or representations are expressly stated in the Contract and;
ii. The Contract expressly provides that GERS assumes the responsibility.
e) Any exceptions to or deviations from the minimum proposal requirements, and any exceptions to the
terms and conditions of this RFP. Such exceptions or deviations will be considered in evaluating the
proposals. Proposers are cautioned that exceptions taken to this RFP may cause their proposal to be
rejected.
f) Signature of a person(s) authorized to bind the Proposer to all provisions of this RFP, to any
subsequent changes and to the contract if an award is made.
10.2. Table of Contents
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City of Pontiac, M/- GERS
Table of Contents should list the sections included in the Proposal.
10.3. Questionnaire
Provide responses to the following questions and requests for information:
a)
Provide a description of your firm including:
i. Year firm was formed and began providing actuarial consulting services to institutional clients and
brief history of the firm's involvement in the actuarial consulting business.
ii. Ownership structure and affiliations, if any ownership changes are planned or anticipated within
the coming 36 months, please include pertinent information on such changes. Also include any
succession planning for the retirement of key executives.
iii. List the locations of the firm's offices from which actuarial consulting services are provided. For
each office, provide the function(s) performed and the number of professionals in that office.
Indicate which office will be primarily responsible for servicing the GERS account.
iv. Description of the scope of services the firm provides. What are the firms consulting specialties,
strengths and limitations? What distinguishes your firm from your competitors?
v. Annual revenues of the firm, percentage of firm's revenue from actuary consulting services.
vi. Organization Charts
• One that diagrams the ownership of your firm and any interrelationships between the parentsubsidiary, affiliate and joint venture entities.
• One that depicts the structure of the actuarial consulting group and identifies the key
personnel and other people that will be involved in providing services to GERS. Indicate the total
number of actuaries employed by the firm.
vii. Provide biography/profile/resume for each key manager/officer/principal of the firm.
viii. Describe the turnover in key professional personnel in each of the last five years. Indicate the
number of people lost and/or hired in the following areas: (1) actuaries (2) key technical personnel.
ix. Please provide demographic analysis of your firm's employees as of December 31 for the past
three years (i.e., 2015, 2014, and 2013):
•
•
•
Total Employees
Number of men I number of women
Number of employees that identify as non-Caucasian
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City of Pontiac, Mf ~ GERS
x. Has any officer or principal of your organization been involved in litigation or legal proceedings
related to any actuarial or other consulting activities? If so, provide a brief explanation and indicate
the current status of proceedings.
xi. Has your firm, within the last ten years been censured or fined by any regulatory body? If so,
please indicate the dates and describe the situation.
xii. Briefly summarize your philosophy relating to the consultant's relationship with Boards and
individual Board Members, staff, legal counsel etc.
xiii. List and describe any professional relationship your firm or any of your actuarial consulting
group staff have with any member of the GERS Board of Trustees, GERS staff or legal counsel, or the
City of Pontiac.
xiv. Please indicate your experience with major disruption(s) of your business and how they
impacted your clients. Please provide a copy of your Business Continuity Plan (BCP) as an appendix
to your response. If you do not have a formal BCP, indicate what contingencies your firm has made
to address potential disruptions to client services in the event of a natural or man-made disaster, or
pandemic.
xv. Why should GERS hire your firm? What is the firm's competitive advantage? Why your firm is the
most qualified to perform the services being requested by GERS?
b) Actuarial Services Staffing Proposal
i. List the name, title and office location of the primary individual(s) who would be responsible
for the GERS account.
ii. Provide biography/profile/resume for each person identified above.
iii. For the each individual assigned to GERS, provide a description of his/her responsibilities
within the firm, years of relevant experience for this engagement, years with the firm, degrees
and professional designations (and the name of the awarding institution) and any publications
authored.
iv. Describe what role each key person will play in providing the required GERS services.
v. For the primary Actuary and all secondary Actuaries list their actuarial valuation assignments
for the past five years. Include for each assignment the date of final report, whether the Actuary
served as the primary or secondary Actuary, and the client's name and size (number of pension
plan members and annuitants).
vi. For the Primary Actuary and all Secondary Actuaries, state the length of time these
individuals have all worked together as a team. Also indicate the number of client relationships
each is currently involved managing.
c)
Qualifications
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Actuorio!Services RFP
i. Provide evidence that your firm meets the minimum required qualifications (See Section 4).
d) Methodology
i. Describe your understanding of the scope and level of services required by this RFP (See
Section 6) and provide a description of the specific methodology to be used for providing the
scope of services.
ii. Provide a time line for completion of the work identified in Section 6 of this RFP. Include
proposed dates for each key stage or event of the project, indicate dates by which your firm
must have specific input data from GERS and indicate points in the project when your firm
would plan to meet with GERS staff. Include a summary of the information which will be needed
to complete the experience study (sec 6.2.3), actuarial audit (sec. 6.2.4), and annual valuations.
Specify the format and medium of transmission of data.
iii. Describe the firm's theory and methodology used in recommending an appropriate actuarial
cost method for a public pension fund.
iv. Describe the firm's theory and methodology for development of actuarial assumptions
(except for the interest rate assumption, which should be addressed separately).
v. Describe the methodology you use to formulate a recommendation for a pension fund's
actuarial interest rate assumption. How may this methodology vary from client to client?
vi. Describe your firm's approach to recommendations regarding the amortization of unfunded
liabilities.
vii. Describe you firm's approach to measuring funded status and funding progress in order to
facilitate the assessment of trends over several valuations of a client.
viii. Describe the capabilities of your valuation system(s) and your computer system support.
ix. Describe the firm's quality control processes for actuarial valuation reports and
recommendations. How are these services monitored and reviewed?
x. Provide as an appendix to your proposal a sample of your firm's actuarial valuation report for
funding purposes.
xi. Provide as an appendix·to your proposal a sample of your firm's actuarial valuation report for
reporting purposes (both GASB 67 & GASB 68).
e) Actuarial Audit
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City of Pontiac, Mf- GERS
i. Please provide information on your firm's methodology by describing your approach to the
work outlined in section 6.2.4 if this approach differs from your approach to providing actuarial
services.
ii. Provide references of three public retirement systems for which you have performed actuarial
audit services in the past five years. (Michigan public retirement systems are preferred). Please
include the name of the system, telephone number and contact name.
iii. Please provide a sample or template of a recent audit performed for an actuarial valuation.
f) Other Services: Member Data Software
i. Do you have member data software? If so, please describe in detail your software including
the software's platform, amount and type of data stored, types of calculations performed, the
capability of your software to accommodate generational mortality tables, reporting, etc ...
ii. Is your software run locally or from your network? If your network, please describe how our
member data will be protected from unauthorized access and your firm's disaster recovery plan
as it relates to the equipment and software that would be used to store our member data.
Please also describe what technical support services are available.
iii. Please provide reference names and telephone numbers for any municipal retirement system
client who is familiar with your software and would be able to provide insight on how it works
from an administrative perspective.
iv. Describe the transition process of transferring the data from the prior software.
v. If you do not offer member data software, what suggestions would you offer for replacing the
current member data software?
g. Relevant Experience
i. Complete the table below, reporting only those client relationships with "full service" actuarial
consulting similar to this mandate:
Total Number as of December 31
2011
2012
2013
2014
2015
Total actuarial consulting clients
Pension plan actuarial consulting
clients
Public pension plan actuarial
consulting clients
ii. For all current public pension plan clients, state the client's name, the first year of your initial
contract with the plan, and their asset and membership size as of their most recent valuation
date.
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iii. List of full service actuarial consulting clients that terminated their contract or
significantly/materially reduced their business relationship with your firm in the last five years.
Include the client's name, size (number of pension plan members and annuitants), date of
contract termination, and reason(s) for contract termination or reduced scope.
iv. Within the last five years, has your firm been notified by any actuarial consulting services
client that your firm is in default of its contracts, or that conditions exist endangering
continuation of that contract? If so, state the client's name, year the notice was received,
reason(s) for the notice, and resolution or current status of the relationship.
v. Has your firm's actuarial consulting services products been audited by another actuarial firm
within the last five years? If so, state the number of such audits, name of auditing firm and
whether any resulted in revisions to your clients' annual valuation results, actuarial
assumptions, or actuarial cost methods.
10.4. Compensation/Fee Proposal
Provide your firms fee proposal in the following format (note: failure to use the proposed format could
result in disqualification of the Proposal)
Fee Proposed Service Provided
Consulting and Advisory Services
(as stated in Section 6.1)
Annual Actuarial Valuation for
Funding
Annual Actuarial Valuation for
Reporting (GASB 67 & 68)
Actuarial Audit
Member Software
Experience Study
TOTAL FIXED FEE PROPOSAL
Year 1
Year 2
Year3
Year4
Year 1
Year 2
Year 3
Year4
Ad-hoc Needed for Other
Actuarial Services
Loaded Fully Burdened Hourly
Rate
SECTION 11: RIGHT TO REJECT PROPOSAL
By submitting a proposal, vendors acknowledge that they have read this RFP, understand it, and agree
to be bound by its requirements unless clearly and specifically noted in the response submitted. GERS
reserltes the right without prejudice to reject any and all responses. GERS reserves the right to modify
the terms and requirements of this RFP. Any such changes or corrections will be posted on the GERS
website www.pontiacgers.org.
15
I Page
SECTION 12: INCOMPLETE RESPONSES
If the information in the firm's response is deemed to be insufficient for evaluation, GERS reserves the
right to request additional information or to reject the submittal outright. False, incomplete or
unresponsive statements in connection with a submittal may be sufficient for its rejection. The selection
of the fulfillment of the requirements will be determined by GERS and such judgment shall be final.
SECTION 13: ADDENDA
GERS may modify the RFP prior to the date fixed for submission by posting, mailing, emailing or faxing
an addendum to the bidders known to be interested in submitting a proposal. If any bidder determines
that an addendum unnecessarily restricts its ability to bid, it must notify GERS in writing no later than
three (3) days before the deadline for submitting proposals. Failure of a bidder to receive or
acknowledge receipt of any addendum shall not relieve the bidder of the responsibility for complying
with the terms thereof.
SECTION 14: NOTICE REGARDING THE MICHIGAN FREEDOM OF INFORMATION
ACT
The proposal your firm submits in response to this RFP will become the exclusive property of GERS. It
will not be returned to you, and it will be subject to public disclosure pursuant to the Michigan Freedom
of Information Act (Michigan Public Act 442 of 1976, the "Act"). The Act provides generally that all
records relating to a public agency's business are open to public inspection and copying, unless
specifically exempted under one of several exemptions set forth in the Act.
If you believe that any portion of your proposal is exempt from public disclosure under the Act, such
portion must be marked "TRADE SECRET," "CONFIDENTIAL," or "PROPRIETARY." GERS will deny public
disclosure of any portions so designated, provided that such designation is, in GERS' reasonable
discretion, in accordance with applicable law. Proposals marked "TRADE SECRET," "CONFIDENTIAL," or
"PROPRIETARY" in their entirely will not be honored, and GERS will not deny public disclosure of all or
any portion of proposals so marked. By submitting a proposal with specifically selected portions marked
"TRADE SECRET," "CONFIDENTIAL," or "PROPRIETARY" you represent you have a good faith belief that
such material is exempt from disclosure under the Act, and you agree to reimburse GERS for, and to
indemnify, defend and hold harmless GERS, its officers, fiduciaries, employees and agents from and
against: (a) any and all claims, damages, losses, liabilities, suits, judgments, fines, penalties, costs and
expenses including, without limitation, attorneys' fees, expenses and court costs of any nature
whatsoever (collectively, "Claims") arising from or relating to GERS' non-disclosure of any such
designated portions of your proposal; and (b) any and all Claims arising from or relating to GERS' public
disclosure of any such designated portions of your proposal if GERS reasonably determines disclosure is
deemed required by law, or if disclosure is ordered by a court of competent jurisdiction.
In addition to the foregoing, GERS Board and committee meetings are subject to Michigan openmeeting requirements set forth in the Michigan Public Act 267 of 1976. Your proposal and/or contract
(if your firm is selected as a finalist) may be presented or discussed at a public meeting of the GERS
Retirement Board of Trustees (or at a Board committee meeting). Among other things, that means that,
16
I Page
City of Pontiac, Mf- GERS
regardless of whether you mark portions of your proposal as "TRADE SECRET," "CONFIDENTIAL," or
"PROPRIETARY," that information may be discussed or presented at a meeting that is open to the public
under the Michigan Open Meetings Act.
17
I P age
City of Pontiac, M!- GERS
SECTION 15: SUBMISSION DEADLINE
GERS appreciates your time and looks forward to receiving your proposal.
All RFP packages must be submitted to:
The City of Pontiac General Employees' Retirement System
Attention: Deborah Munson
Auburn Hills, Ml 48326
by 5:00pm on Friday, September 23, 2016
and electronically to:
[email protected]
Receipt at the GERS office of the original hard copy will be used as the official response in determining a
timely submission.
18
I Page
APPENDIX A: GERS 2015 GASB 67 Actuarial Valuation
19
I Page
City of Pontiac General Employees'
Retirement System
December 31, 2015
GASB Nos. 67 & 68 Report
City of Pontiac General Employees' Retirement System
GASB Nos. 67 & 68 Report as of Fiscal Year Ending December 31, 2015
Table of Contents
Actuarial Certification
3
Summary
5
Statement of Fiduciary Net Position
6
Statement of Changes in Fiduciary Net Position
7
Schedule of Changes in Net Pension Liability and Related Ratios
8
Pension Expense
9
Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions
10
Rate of Return
12
Discount Rate and Net Pension Liability Sensitivity
13
Schedule of Contributions
14
Actuarial Assumptions for Total Pension Liability
15
Actuarial Assumptions for Actuarially Determined Contributions
16
Pian Provisions
15
Projection of the Pension Plan's Fiduciary Net Position
20
Actuarial Present Value of Projected Benefit Payments
23
21
n~hart
City of Pontiac Genera! Employees' Retirement System
This report is prepared in accordance with our understanding of GASB Nos. 67 & 68 for the purpose of disclosing pension plans in financial statements. Determinations
for purposes other than meeting these requirements may be significantly different from the results contained in this report.
The information presented in this report is based on:
the actuarial assumptions included in this report;
the plan pro\isions;
participant information furnished to us by the Plan Administrator,
asset information furnished to us by the Plan Trustee.
We have re\iewed the prolided data for reasonableness when compared to prior information pro\ided, but have not audited the data. Where relevant data may be
missing, we may have made assumptions we believe are reasonable for the purpose of the measurement. We are not aware of any significant issues with and have
relied on the data prolided. Any errors in the data pro\ided may result in a different result than those prolided in this report.
The interest rate, other economic assumptions, and demographic assumptions have been selected by the plan sponsor with our recommendations. The assumptions
used, in our opinion, are reasonable and represent a reasonable expectation of future experience under the plan. All calculations have been made in accordance with
generally accepted actuarial principles and practice.
A summary of any assumptions not included in this report, the plan prolisions and the participant information is included in the Actuarial Valuation Report for funding
purposes.
Future actuarial measurements may differ significantly from the current measurements presented in this report due to such factors as the following
plan experience differing from that anticipated by the economic or demographic assumptions;
changes in economic or demographic assumptions;
increases or decreases expected as part of the natural operation of the methodology used for these measurements (such as the end of an amortization period
or additional cost or contribution requirements based on the plan's funded status); and
changes in plan prolisions or applicable law.
We did not perform an analysis of the potential range of future measurements due to the limited scope of our engagement.
31
n~hart
The undersigned are compliant with the continuing education requirements of the Qualification Standards for Actuaries Issuing Statements of Actuarial
Opinion in the United States.
To our knowledge there ha~.e been no significant
materially affect the results contained herein.
e~.ents
prior to the current
yea~s
measurement date or as of the date of this report which could
Neither Nyhart nor any of its employees have any relationships with the plan or plan sponsor wlhich could impair or appear to impair the objectility of this
report.
Nyhart
~~w~
Danielle Winegardner, ASA, EA, MAAA
41
1/uA wf1~
05/1212016
Heath W. Merlak, FSA, EA, MAAA
nljhart
Summary
Net Pension Liability
The components of the net pension liability at December 31
Total pension liability
12/31/2015
$
$
Plan fiduciary net position as a percent of the total pension liability
Pension Expense for the Fiscal Year Ended December 31
$
(459,392,841)
Plan fiduciary net position
Net pension liability
252,615,769
12/31/2014
(206, 777,072)
181.85%
$
270,151,934
(491, 726, 795)
$
(221,574,861)
182.02%
(16,614,491)
Actuarial Assumptions
The total pension liability was determined using the following actuarial
assumptions
2.75%
4.50%
4.5-9.4%
4.5%-9.4%
7.50%
7.50%
Plan Membership
The total pension liability was determined based on the plan membership as
of December 31
2015
2014
lnacti;e plan members and beneficiaries currently receilhng benefits
1,106
1,122
213
230
30
31
1,349
1,383
Inflation
Salary increases, including inflation
ln>estment rate of return, including inflation, and net of in~.estment expense
lnacti~.e
plan members entitled to but not yet recei\hng benefits
Acti>e plan members
Total members
51
nljhart
Statement of Fiduciary Net Position
12/31/2015
Assets
Cash and deposits
$
14,765,308
$
25,237,882
$
0
14,765,308
$
0
25,237,882
$
0
$
0
Securities lending cash collateral
Total cash
Receivables:
Contributions
Due from broker for inl.<lstments sold
lnl.<lstment income
Other
Total receivables
12/31/2014
0
0
0
3,775
0
2,154,155
$
3,775
$
2,154,155
$
263,328,858
$
287,549,076
lnl.<lstments:
Domestic Equities
International Equities
70,933,213
76,812,970
Fixed Income
97,263,381
86,688,091
Altematil.<ls
13,812,728
14,203,331
Total inl.<lstments
Total assets
$
445,338,180
$
465,253,468
$
460,107,263
$
492,645,505
$
0
$
0
Liabilities
Payables:
lnl.<lstment management fees
Due to broker for inl.<lstments purchased
0
0
Collateral payable for securities lending
0
0
714,422
918,710
Other
Total liabilities
Net position restricted for pensions
61'
$
714,422
$
918,710
$
459,392,841
$
491 '726, 795
n~hart
Statement of Changes in Fiduciary Net Position
. 12131/2014
12/31/2015
Additions
Contributions:
Employer
Member
Nonemployer contributing entity
Total contributions
Investment income:
Net increase in fair value of investments
Interest and di\oidends
Less investment expense, other than from securities lending
Net income other than from securities lending
Securities lending income
Less securities lending expense
Net inco.me from securities lending
Net investment income
Other
Total additions
Deductions
Benefit payments, including refunds of member contributions
$
0
0
$
0
0
$
0
$
0
$
(10,209,561)
9,429,857
(2, 725,956)
$
22,469,444
9,915,647
(2,869,403)
$
(3,505,660)
0
0
$
29,515,688
0
$
$
0
(3,505,660)
37,358
(3,468,302)
$
28,052,593
$
0
$
29,515,688
17,453
$
29,533,141
$
27,494,450
813,059
Administrative expense
Other
784,783
0
Total deductions
$
28,865,652
$
0
28,279,233
Net increase in net position
$
(32,333,954)
$
1,253,908
Net position restricted for pensions
Beginning of year
End of year
71
i'
490,472,887
491 '726, 795
$
459,392,841
$
491,726,795
n~hart
Schedule of Changes in Net Pension liability and Related Ratios
12/31/2015
Total pension liability
se,..,;ce cost
Interest
Changes of benefit terms
Differences between expected and actual experience
Changes of assumptions
Net change in total pension liability
Total pension liability - beginning
Total pension liability- ending {a)
Plan fiduciary net position
Contributions - employer
Contributions -member
Contributions - nonemployer contributing member
Net in~.<estment income
Administrati~.<e expenses
Other
Net change in plan fiduciary net position
Plan fiduciary net position - beginning
Plan fiduciary net position -ending {b)
Net pension liability- ending (a)- (b)
$
payroll
Net pension liability as percentage of co~.<eredemployee payroll
81
$
$
$
$
$
$
252,615,769
0
0
0
(3,505,660)
(28,052,593)
(813,059)
37,358
(32,333,954)
$
270,151,934
0
0
0
29,515,688
(27,494,450)
(784,783)
17,453
$
1,253,908
490.472, 887
491,726,795
459,392,841
$
491 '726, 795
{206, 777,072)
$
(221,574,861)
181.85%
$
279,188
19,973,828
0
(2,538,358)
0
(27,494,450)
{9, 779, 792)
279,931,726
(17,536,165)
270,151,934
Plan fiduciary net position as a percentage of the total
pension liability
Co~.<ered-employee
301,489
19,232,034
5,407,365
(23,548,600)
9, 124,140
(28,052,593)
12/31/2014
1,528,731
-13,526.06%
182.02%
1,478,241
-14,989.09%
n~hart
Pension Expense
12/31/2015
Fiscal year ending
Se!\ice cost
$
Interest on total pension liability
301,489
19,232,034
Projected earnings on pension plan investments
(35, 797,048)
Changes of benefit tenms
5,407,365
Employee contributions
0
Pension plan administrative expense
813,059
Other changes
0
Current period recognition of deferred outflows/(inflows) of resources
Differences between Expected & Actual Experience
in measurement of the Total Pension Liability
(23,548,600)
Changes of assumptions
9, 124,140
Differences between Projected & Actual Earnings on
Pension Plan Investments
7,853,070
Total
91
$
$
(16,614,491)
n":jhart
Differences between expected and actuarial experience in
measurement of the total pension liability for fiscal year ending:
December 31, 2015
$
Initial
Balance
Initial
Amortization Period
(23,548,600)
1
Initial
Balance
Changes in assumptions for fiscal year ending:
December31, 2015
9, 124,140
$
$
Initial
Amortization Period
December31, 2015
10
I
Initial
Balance
$
39,265,350
(23,548,600)
$
$
Initial
Amortization Period
9, 124,140
7,853,070
7,853,070
0
0
$
0
12/31/2015
Balance
Annual
Recognition
$
$
0
12131/2015
Balance
9, 124,140
1
5
(23,548,600)
Annual
Recognition
$
Differences between projected and actual earnings on pension
plan in~.estments for fiscal year ending:
12131/2015
Balance
Annual
Recognition
$
$
31,412,280
31,412,280
n~hart
Deferred Outflows
of Resources
Differences between expected and actual experience
Changes of Assumptions
Net difference between projected and actual earnings on pension plan investments
Deferred Inflows
of Resources
$
0
$
0
$
$
0
31,412,280
$
$
0
0
$
31,412,280
$
0
-
The balances as of December 31, 2015 of the deferred outflows/(inflows) of resources will be recognized in pension expense for the fiscal year ending
December 31.
11
I
C:
2016
$7,853,070
2017
$7,853,070
2018
$7,853,070
2019
$ 7,853,070
2020
$0
Thereafter
$0
nljhart
Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return
(expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These expected future real rates of return are
combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding
expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation as of December 31,
2015 are summarized in the following table:
Asset class
Target allocation
Long-term expected real rate of return
Domestic Equities
55.0%
5.30%
International Equities
15.0%
5.80%
Fixed Income
25.0%
1.80"/o
5.0%
7.60%
Cash
0.0%
---
0.00"/o
Total
100.0%
Alternatives
Long-term expected rate of return is 7.50%.
12 I
n~hart
Discount Rate and Net Pension liability Sensitivity
Discount rate
The discount rate used to measure the total pension liability was 7.50%. The projection of cash flows used to determine the discount rate assumed that plan member
contributions will be made at the current contribution rate and that contributions will be made at rates equal to the difference between actuarially determined contribution
rates and the member rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benent
payments of current plan members. Therefore, the long-term expected rate of return on pension plan in>estments was applied to all periods of projected benefit
payments to determine the total pension liability.
Sensitivity of the net pension liability to changes in the discount rate
The following presents the net pension liability, calculated using the discount rate of 7.50%, as well as what the net pension liability would be if it were calculated using
a discount rate that is 1-percentage-point lower (6.50%) or 1-percentage-point higher (8.50%) than the current rate:
1% Decrease
(6.50%)
Net pension liability
13
I
$
(182,824,385)
Current Discount
Rate (7.50%)
$
(206,777,072)
1% Increase
(8.50%)
$
(228,655,295)
n':jhart
City of Pontiac Generai Employees' Retirement System
Schedule of Contributions
2015
Actuarially determined contribution
$
Contributions in relation to the actuarially determined contribution
0
2014
$
0
0
2012
2013
$
0
0
$
0
2011
$
0
0
0
0
Contribution deficiency (excess)
$
0
$
0
$
0
$
0
$
0
Covered-employee payroll
$
1,528,731
$
1,478,241
$
1,574,964
$
2,742,912
$
3,968,743
Contributions as a percentage of covered-employee payroll
Actuarially determined contribution
$
Contributions in relation to the actuarially determined contribution
0.00%
0.00%
0.00%
0.00%
0.00%
2010
2009
2008
2007
2006
0
$
0
0
$
0
0
$
0
$
0
0
0
0
Contribution deficiency (excess)
$
0
$
0
$
0
$
0
$
0
Covered-employee payroll
$
9,493,229
$
12,553,146
$
14,414,481
$
13,559,473
$
14,996,753
Contributions as a percentage of covered-employee payroll
141
0.00%
0.00%
0.00%
0.00%
0.00%
n~hart
Actuarial Assumptions for Total Pension Liability
Actua ria I Cost Method
Entry Age NormaL This method produces a normal cost as a le~.el percent of pay over the seruce life of each
participant and the amortization of the Unfunded Actuarial Accrued liability (UAAL). Gains and losses are reflected in
the UAAL and are included in the amortization.
Asset Valuation Method
Market Value of Assets
Interest Rate
7.50% per year net of in>estment expenses
Inflation
2. 75% per year
Measurement Date
December 31, 2015
Cost of Living Increases
Rates and durations vary depending upon initial termination.
The most recent adjustments are the following
Hospital
No cost of liling adjustment
MAPE
2.50% of original retirement income for 14 years, maximum of 35%
PMEA
All Others
Mortality Rates
RP-2014 Blue Collar Mortality Table with Social Security generational impro>ements from 2006 based on the 2015
Social Security Administration Trustees Report
All other assumptions
As described in the assumptions section of the actuarially determined contribution
15
I
nljhart
Actuarial Cost Method
Entry Age Normal. This method produces a normal cost as a level percent of pay over the serlice life of each
participant and the amortization of the Unfunded Actuarial Accrued Liability (UAAL). Gains and losses are reflected in
the UAAL and are included in the amortization.
Asset Valuation Method
20% Phase-In Method. Actuarial value of assets, adjusted by 20% of the investment return of actual market value
Interest Rate
7.50% per year net of investment expenses
Measurement Date
December 31, 2015
Cost of living Increases
Rates and durations vary depending upon initial termination.
The most recent adjustments are the following
Hospital
No cost of living adjustment
MAPE
PMEA
All Others
Mortality Rates
RP-2014 Blue Collar Mortality Table with Social Security generational improvements from 2006 based on the 2015
Social Security Administration Trustees Report
Final Average Compensation Loading
For Non-Union employees, pay load of 8.25% to FAC for unused sick time.
For all other employees, pay load to 7.00% to for unused sick time.
Optional Benefit Forms Cost Loading
7.00% load on active liabilities and normal cost
Benefit Assumption
Death and disability benefits assumed to be non-duty related
16
I ··
n':Jhart
Retirement Rates
Age
Rate
50
51
52-56
57-59
60
61
62
63
65
66+
35%
30%
25%
50%
20%
25%
30%
30%
25%
50%
100%
Age
Rate
25
30
35
40
45
50
55
60
0.42%
0.45%
0.51%
0.67%
0.92%
1.36%
2.20%
4.32%
64
Disability Rates
Withdrawal Rates
Select and ultimate table
Rates during select period
Service
Rate
<1
1
2
3
4
17
1
20.0%
18.0%
15.0%
12.0%
10.0%
n~hart
Withdrawal Rates (continued)
Sample of ultimate rates
Age
Rate
20
7.0%
25
7.0%
30
6.0%
35
4.8%
40
3.5%
45
2.4%
1.5%
50
1.0%
55
1.0%
60
Marital Status and Ages
100% of Participants assumed to be married with wives assumed to be 3 years younger than husbands.
Annual Pay Increases
4.50% inflation plus additional age-related merit increase
Age
20
25
30
35
40
45
50
55
60
18
I
Rate
4.90%
3.70%
2.90%
2.10%
1.60%
1.40%
1.30%
1.10%
1.10%
n~hart
Pian Provisions
The plan provisions for measuring liabilities in this report match those shown in the December 31, 2015 funding valuation report.
19
I
n~hart
GASB Nos. 67 and 68 as of Fiscal Year Ending December 31, 2015
Projected Beginning
Fiduciary Net Position
Year
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
20 I
(a)
459,392,841
467,931,976
479,610,538
492,181,695
505,750,982
520,329,393
536,009,476
552,935,286
571 ,244,432
591 '143,454
612,743,691
636,283,370
661 ,921,204
689,861,226
720,234,108
753,249,491
789,138,554
828,247,408
870,821,692
917,127,866
967,549,418
1 ,022,409,844
1 ,082,032,130
1,146,815,303
1,217,207,235
1,293,632,803
1,376,530,703
1,466,440,198
1,563,887,930
1,669,435,541
1,783,677,531
1,907,254,446
2,040,844,524
2, 185,172,585
2,341,013,997
2,509,198,601
2,690,615,866
2,886,218,117
Projected Total
Contributions
(b)
Projected Benefit
Payments
(c)
24,133,941
21,806,728
21,791,171
21,739,681
21,747,663
21,739,941
21,675,014
21,568,943
21,367,148
21,172,711
20,875,243
20,565,433
20,212,158
19,897,989
19,558,512
19,188,312
18,696,502
18,200,823
17,699,043
17,100,787
16,488,707
15,885,876
15,244,037
14,545,571
13,843,175
13,153,656
12,413,999
11,673,623
10,936,716
10,211,910
9,497,840
8,804,149
8,134,826
7,493,423
6,883,367
6,307,088
5,768,176
5,266,364
Projected Administrative
Projected Investment
Expense 1
Eamings2
(d)
844,688
763,235
762,691
760,889
761,168
760,898
758,625
754,913
747,850
741,045
730,634
719,790
707,426
696,430
684,548
671,591
654,378
637,029
619,466
598,528
577,105
556,006
533,541
509,095
484,511
460,378
434,490
408,577
382,785
357,417
332,424
308,145
284,719
262,270
240,918
220,748
201,886
184,323
(e)
33,517,764
34,248,525
35,125,020
36,069,856
37,087,242
38,180,923
39,359,449
40,633,002
42,014,020
43,513,993
45,145,556
46,923,057
48,859,606
50,967,301
53,258,443
55,748,965
58,459,734
61,412,136
64,624,683
68,120,866
71,926,238
76,064,168
80,560,751
85,446,598
90,753,254
96,511,934
102,757,984
109,529,932
116,867,113
124,811,316
133,407' 180
142,702,372
152,747,606
163,597' 105
175,308,889
187,945,101
201,572,313
216,261,958
Projected Ending
(f)=(a)+(b )-( cHd)+( e)
467,931,976
479,610,538
492,181,695
505,750,982
520,329,393
536,009,476
552,935,286
571,244,432
591,143,454
612,743,691
636,283,370
661,921,204
689,861 ,226
720,234,108
753,249,491
789,138,554
828,247,408
870,621,692
917,127,866
967,549,418
1,022.409,844
1 ,082,032,130
1,146,815,303
1,217,207,235
1 ,293,632,803
1,376,530,703
1,466,440,198
1,563,887,930
1,669,435,541
1,783,677,531
1,907,254,446
2,040,844,524
2,185,172,585
2.34~.013,997
2,509,198,601
2,690,615,866
2.886,218,117
3,097,029,387
n~hart
Clty of Pontiac General Employees' Retirement System
Projected Beginning
Year
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
21
I
(a)
Projected Total
Contributions
(b)
Projected Benefit
Payments
(c)
Expense 1
Earnings2
(d)
3,097,029,387
4,801,284
3,324,150,912
3,568,766,624
3,832,151,167
4,115,677,881
4,420,824,837
4,372,837
3,979,237
3,617,600
3,286,314
2,983,773
4,749,182,687
2,707,354
94,757
5,102,464,198
5,482,513,425
2,454,421
2,223,385
2.012,213
1,819,056
85,905
77,818
5,891,314,433
6,331,002,276
6,803.874,123
7,312,401,158
7,859,241,403
249,141,598
267,503,053
(0=(a)+(b)-(cHd)+(e)
3,324,150,912
3,568,766,624
3,832,151,167
126,616
287,270,929
4,115,677,881
115,021
104,432
308,548,291
331,446,055
356,083,622
382,589,553
4,420,824,837
411,102,212
4,749,182,687
5,102,464,198
5,482,513,425
5,891,314,433
70,427
441,770,483
6,331,002,276
63,667
474,754,569
6,803,874,123
7,312,401,158
7,859,241,403
1,642,301
57,481
510,226,817
51,820
46,642
41,909
37,590
33,652
30,067
26,808
23,853
21,181
548,372,623
589,391,383
633,497,540
680,921,696
731,911,821
786,734,548
845,676.568
909,046,130
12,120,967,759
13,029,308,512
977,174,650
14,005,856,811
18,772
1,050,418,444
15,055,720,137
16,609
14,673
12,948
1,129,160.592
16,184,389,586
1,213,812,947
17,397,768,628
1,197,410
9,079,511,745
9,759,321,855
10,490,238,531
11,276,083,953
12,120,967,759
13,029,308,512
1,073,996
961,492
859,059
765,953
681,524
605,170
536,346
474,535
419,231
369,938
326,164
287,448
253,342
15,055,720,137
16,184,389,586
17,397,768,628
18,702,204,031
20,104,519,094
21,612,049,361
23,232,681,021
24,974,892,193
26,847,797,321
28,861,194,868
31,025,618,592
33,352,392,686
35,853,691,041
38,542,600,963
41,433,191,653
44,540,587,809
(e)
232,090,854
1,480,559
1,332,620
8,447,253,524
14,005,856,811
168,045
153,049
139,273
Projected Ending
11,416
10,061
8,867
1,304,818,289
1,402.652,643
1,507,827,775
1,620,893,869
8,447,253,524
9,079,511,745
9,759,321,855
10,490,238,531
11,276,083,953
18,702.204,031
20,104,519,094
21,612,049,361
23,232,681,021
223,414
7,819
1 '742,442,405
24,974,892,193
197,228
174,381
154,488
137,175
122,084
108,871
97,207
86,811
77,458
6,903
6,103
5,407
4,801
4,273
1,873,109,260
2,013,578,031
2,164,583,619
2,326.916,070
26,847,797,321
28,861,194,868
31,025,618,592
33,352,392,686
3,810
3,402
3,038
2,711
2,501,424,713
35,853,691,041
2,689,022,603
2,890,691,299
3,107,486,005
3,340,541,079
38,542,600,963
41,433,191,653
44,540,587,809
47,881,048,719
n'=Jhart
Projected Beginning
Year
(a)
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
Projected Total
Contributions
(b)
Projected Benefit
Payments
(c)
Expense
1
Earnings 2
(d)
(e)
Projected Ending
Fiduciary Net ?osition
iD=(a)+(b )-( c)-(d)+( e)
47,881,048,719
68,986
2,414
3,591,075,976
51,472,053,294
61,275
2,145
3,860,401,619
55,332,391,494
55,332,391,494
59,482,262,626
63,943,381,024
68,739,089,655
73,894,482,263
79,436,534,653
85,394,245,819
91,798,789,705
98,683,678,309
106,084,937,037
54,227
47,773
1,898
1,672
1,465
1,275
4,149,927,257
59,482,262,626
4,461,167,843
63,943,381,024
1 '101
114,041,293,219
10,670
122.594,378,753
131,788,947,957
8,570
6,800
41,856
36,427
31,459
26,943
22,863
19,206
15,966
13,127
141,673,111,752
5,324
152,298,589,416
4,117
163,720,979,201
3,141
176,000,049,268
189,200,050,422
203,390,052,312
218,644,304,843
235,042,626,691
2,366
1,761
1,297
946
683
943
800
672
559
459
373
300
238
186
144
110
83
62
45
33
24
51,472,053,294
4,795,751,952
68,739,089,655
5,155,430,310
73,894,482,263
5,542,084,949
5,957,739,053
6,404,567,549
6,884,908,482
79,436,534,653
85,394,245,819
7,401,275,253
106,084,937,037
7,956,369,768
8,553,096,577
114,041,293,219
91,798,789,705
98,683,678,309
122,594,378,753
9,194,578,074
131,788,947,957
9,884,170,833
141,673,111,752
10,625,483,175
152,298,589,416
11,422,394,046
163,720,979,201
12,279,073,318
176,000,049,268
13,200.003,603
189,200,050,422
14,190,003,713
203,390,052,312
15,254,253,873
218,644,304,843
16,398,322,827
235,042,626,691
17,628,196,975
252,670,822,960
1
Administrative expense was assumed to be 3.50% of the Projected Benefit Payments.
2
Assumed rate of investment return was 7.50%, net of investment expenses
221
nyhart
GASB Nos. 67 and 68 as of Ftsca! Year Ending December 31, 2015
"Funded" Portion of
Benefit Payments
Present Value of "Funded" Benefit
Payments
Year
(g)
1
2
3
4
5
24,133,941
21,806,728
21,791,171
21,739,681
21,747,663
22,450,178
18,870,073
17,541,034
16,278,685
15,148,522
6
7
21,739,941
21,675,014
14,086,645
13,064,721
8
9
10
11
12
13
21,568,943
21,367,148
21,172,711
12,093,755
11,144,751
10,272,871
9,421,899
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
231
MUnfunde.d" Portion of
Benefit Payments
20,875,243
20,565,433
20,212,158
19,897,989
19,558,512
19,188,312
18,696,502
18,200,823
17,699,043
17,100,787
16,488,707
15,885,876
15,244,037
14,545,571
13,843,175
13,153,656
12,413,999
11,673,623
10,936,716
10,211,910
9,497,840
8,804,149
8,134,826
7,493,423
6,883,367
6,307,088
5,768,176
5,266,364
(h)
(i)=(g) I (1+7.50%)'(years)
8,634,482
7,894,101
7,229,208
6,610,112
6,032,556
5,467,848
4,951,521
4,479,081
4,025,750
3,610,845
3,236,123
2,888,719
2,564,057
2,269,991
2,006,441
1,761,502
1,540,879
1,342,893
1,166,415
1,009,166
870,195
747,944
640,903
547,652
466,793
397,123
337,279
Present Value of "Unfunded"
Benefit Payments
O)=(h) I (1+3.57%)~(years)
Present Value of Benefit
Payments Using the Single
Discount Rate
(k):::(c) I (1+7.50%)"'(years)
22,450,178
18,870,073
17,541,034
16,278,685
15,148,522
14,086,645
13,064,721
12,093,755
11,144,751
10,272,871
9,421,899
8,634,482
7,894,101
7,229,208
6,610,112
6,032,556
5,467,848
4,951,521
4,479,081
4,025,750
3,610,845
3,236,123
2,888,719
2,564,057
2.269,991
2,006,441
1,761,502
1,540,879
1,342,893
1,166,415
1,009,166
870,195
747,944
640,903
547,652
466,793
397,123
337,279
n'::Jhart
"Funded" Portion of
Benefit Payments
Year
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
241
(g)
4,801,284
MUnfundedM Portion of
Benefit Payments
(h)
Present Value of "Funded" Benefit
Payments
(i)=(g) I (1+7.50%)"(years)
Present Value of "Unfunded"
Benefit Payments
O)=(h) I (1+3.57%)A(years)
Discount Rate
(k)=(c) I (1 +7.50%)"(years)
286,040
286,040
4,372,837
242,340
3,979,237
3,617,600
3,286,314
2,983,773
205,141
242,340
205,141
173,486
173,486
146,604
123,821
146,604
2,707,354
104,512
123,821
104.512
2,454,421
88,137
88,137
2,223,385
2,012,213
1,819,056
1,642,301
1,480,559
74,271
74,271
62,527
52,581
44,160
37,033
31,007
25,918
21,624
18,009
62.527
1,332,620
1,197,410
1,073,996
961,492
859,059
765,953
681,524
605,170
536,346
14,967
12,414
10,275
52,581
44,160
37,033
31.007
25,918
21,624
18,009
14,967
12,414
10,275
8,487
8,487
6,997
5,759
197,228
6,997
5,759
4,733
3.885
3,186
2,612
2,142
1,757
1,443
174,381
1,187
1,187
154,488
978
808
669
555
461
383
318
978
808
669
555
461
383
318
474,535
419,231
369,938
326,164
287,448
253,342
223,414
137,175
122,084
108,871
97,207
86,811
77,458
4,733
3,885
3,186
2,612
2,142
1,757
1,443
n'::Jhart
GASB Nos. 67 and 68 as of Fisca[ Year Ending December 31, 2015
~Funded"
Portion of
Benefit Payments
Year
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
25["'c
(g)
68,986
61,275
54,227
47,n3
41,856
36,427
31,459
26,943
22,863
19,206
15,966
13,127
10,670
8,570
6,800
5,324
4,117
3,141
2,366
1,761
1.297
946
683
"Unfunded" Portion of
Benefit Payments
(h)
Present Value of "Funded~ Benefit
Payments
m=(g) I (1 + 7.5 0% )"'(years)
263
217
179
147
120
97
78
62
49
38
30
23
17
13
9
7
5
Present Value of ~unfunded"
Benefit Payments
O)=(h)/ (1+3.57%)"(years)
Discount Rate
(k)=(c) I (1+7.50%)"'(years)
263
217
179
147
120
97
78
62
49
38
30
23
17
13
9
7
5
4
4
2
2
2
2
nljhart
City of Pontiac, M/- GERS
APPENDIX B: GERS ORGANIZATION CHART
The City of Pontiac, Michigan
City Council
11 Members
BOARD OF TRUSTEES
1 Active Trustee Elected, 1 Retiree Trustee Elected,
2 Member Trustees Elected, 1 Hospital Trustee
Elected, 3 Citizen Trustees Appointed, City Council
Member Ex-officio, Mayor Ex-officio, Director of
Finance Ex-officio
City Director of Finance
(by Ordinance)
Executive Director
(appointed by Board of Trustees)
2 FTE Staff
Finance & Administrative
20
I Page

to read entire RFP

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