FROM: Amy McInerny, Chief Financial Officer
SUBJECT: SBCERA Actuary and Audit Policy No. 003 (Actuarial Funding Policy)
RECOMMENDATION:
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Approve SBCERA Actuary and Audit Policy No. 003 (Actuarial Funding Policy).
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BACKGROUND:
On March 14, 2024, the San Bernardino County Transit Authority (SBCTA) paid off its Unfunded Actuarial Accrued Liability (UAAL) in full, by wiring the entire amount to SBCERA. This action taken by SBCTA will reduce its required employer contribution rate effective July 1, 2024.
SBCTA makes up over 10% of the active members in the Other General cost group and may be large enough to absorb the actuarial experience for SBCTA individually. In addition, there is considerable complexity associated with calculating and tracking this, made even more complex by the fact that we already calculate three separate UAAL contribution rates for the Other General cost group. Therefore, as SBCTA’s funded status after reflecting the additional contributions will be significantly different than that of the other employers in the Other General cost group, Segal believes it reasonable and prudent for the Board to consider isolating the UAAL contribution rates for SBCTA so as to specifically reflect their current funded status and their future actuarial experience.
To achieve this cost group move, a very minor change to the Actuarial Funding Policy is required, as set forth in the redlined proposed changes to the SBCERA Actuary and Audit Policy No. 003 (Actuarial Funding Policy). This change simply inserts SBCTA among the entities listed in a separate cost group.
BUDGET IMPACT:
None.
STRATEGIC PLANNING GOAL/OBJECTIVE:
Prudent Fiscal Management
STAFF CONTACT:
Amy McInerny
ATTACHMENTS:
Exhibit A: SBCERA Actuary and Audit Policy No. 003 (Actuarial Funding Policy) - Redline Version