treasury recommendation non-primary unit 827585 assets ......treasury recommendation wayne county...

Treasury Recommendation Wayne County Airport Authority

OPEB Corrective Action Plan (CAP) Non-Primary Unit 827585

Name of Systems

Type of System

Assets Liabilities Funded Ratio

ADC Revenues ADC / Revenue

CAP required?

WCAA ERS Pension $110,277,974 $161,200,880 68.4% $6,924,296

$458,318,405

1.5% No WCAA Health and Welfare Benefit Plan

OPEB $45,131,814 $130,697,085 34.5% $7,443,898 1.6% Yes

Total $155,409,788 $291,897,965 $14,368,194 $458,318,405 3.1% Source: Retirement Report 2017, Audited Financial Statements

Staff Recommendation: Approval of the OPEB corrective action plan submitted by Wayne County Airport Authority, which was received by the Municipal Stability Board (the Board) on January 16th, 2019. If approved by the Board, Treasury and the Board will continue to monitor them for compliance per Public Act 202 of 2017 and implementation of their corrective action plan.

Changes Made:

• Modern Plan Design: o None listed

• Plan Funding:

o None listed

• Other Considerations: o None listed

Prospective Changes:

• Modern Plan Design: o None listed

• Plan Funding:

o None listed

• Other Considerations: o The Wayne County Airport Authority will continue to make contributions to the Wayne

County Airport Authority Retirement Health Benefit System (System) which meet or exceed annual recommended contributions as reported in the System’s actuarial valuation. In addition, it is noted that the System valuation prepared as of September 30, 2017 shows that the funded ratio has improved to 46.3%.



Plan Size: 678 members

• Inactive employees or beneficiaries currently receiving benefits: 236 • Inactive employees entitled to but not yet receiving benefits: 0 • Active employees: 442

Corrective Action Plan Criteria:

The following corrective action plan approval criteria are met:

• Underfunded Status: o The corrective action plan demonstrates it will reach the PA 202 established funding

level of 40% funded as demonstrated by the actuarial valuation found in the corrective action plan.

• Reasonable Timeframe:

o The corrective action plan demonstrates the local unit reaches the PA 202 established funding level of 40% within a reasonable timeframe (2017).

• Legal and Feasible:

o In section 7 of the corrective action plan template, the local unit confirms that the plan is legal and feasible because the plan follows all applicable laws, the actions listed are feasible, and the plan is approved by the governing body.

• Affordable:

o The local unit confirms in section 5 of the corrective action plan template that the corrective actions listed will allow for the local unit to make, at a minimum, the retiree premium payment, as well as the normal cost payment for all new hires (if applicable) according to the long-term budget forecast.

Supplemental Information: Wayne County Airport Authority included a 9-year history of annual contributions, comprised of premiums for current retirees plus prefunding payments.



Wayne County Airport Authority also included a September 30, 2017 actuarial valuation report prepared by GRS, which shows a funded ratio of 46.3% as of September 30, 2017.

The Community Engagement and Finance Division (CEFD) Contact:

• None noted.

RESOLUTION No. 18-123

Wayne County Airport Authority Retirement Health Benefit System Corrective Action Plan

Control #1900012

By Board Member Nabih Ayad

WHEREAS, the Wayne County Airport Authority, pursuant to the Michigan Public Airport Authority Act, being MCL 259.108 – 259.125c, operates and manages the Detroit Metropolitan Wayne County Airport and Willow Run Airport and is vested with the powers and authority to undertake such management and operation pursuant to the Aeronautics Code of the State of Michigan; and WHEREAS, the Wayne County Airport Authority is governed by the Wayne County Airport Authority Board; and WHEREAS, the Wayne County Airport Authority Board desires to approve the Wayne County Airport Authority Retirement Health Benefit System Corrective Action Plan, in accordance with Public Act 202 of 2017. NOW THEREFORE, BE IT RESOLVED that the Wayne County Airport Authority Board hereby approves the Wayne County Airport Authority Retirement Health Benefit System Corrective Action Plan, in accordance with Public Act 202 of 2017. This Resolution was supported by Board Member Al Haidous and carried by the following vote:

AYES: Ayad, Beatty, Garavaglia, Haidous, Hall, Ivery, Ouimet NAYS: None DATE: November 28, 2018

Wayne County Airport Authority Retiree Health Care Plan Actuarial Valuation Report September 30, 2017

Wayne County Airport Authority Retiree Health Care Plan

Table of Contents Page

Cover Letter Executive Summary ........................................................................................................ 1

Section A Valuation Results

Results by Division .......................................................................................................... 1 Comments ...................................................................................................................... 2

Section B Retiree Premium Rate Development ............................................................................. 1

Section C Summary of Benefits ...................................................................................................... 1

Section D Summary of Valuation Data

Schedule of Active Members ......................................................................................... 1 Schedule of Inactive Members ....................................................................................... 2 Reported Financial Information ..................................................................................... 3

Section E Actuarial Cost Methods and Actuarial Assumptions

Actuarial Methods .......................................................................................................... 1 Actuarial Assumptions .................................................................................................... 2 Miscellaneous and Technical Assumptions .................................................................... 8

Appendix Glossary .......................................................................................................................... 1

November 16, 2018 Istakur Rahman Interim Chief Financial Officer Wayne County Airport Authority Retiree Health Care Plan 11050 Rogell Drive, Building #602 Detroit, Michigan 48242 Dear Istakur Rahman: Submitted in this report are the results of an Actuarial Valuation of the assets and liabilities associated with the employer financed retiree health benefits provided by the Wayne County Airport Authority Retiree Health Care Plan. The date of the valuation was September 30, 2017. This report was prepared at the request of the Authority and is intended for use by the Authority and those designated or approved by the Authority. This report may be provided to parties other than the Authority only in its entirety and only with the permission of the Authority. GRS is not responsible for unauthorized use of this report. The purposes of the valuation are to measure the Plan’s funding progress and to determine the Actuarially Computed Employer Contributions for the fiscal years ending September 30, 2018 and September 30, 2019. This report should not be relied on for any purpose other than the purposes described herein. Determinations of financial results, associated with the benefits described in this report, for purposes other than those identified above may be significantly different. This report does not satisfy Governmental Accounting Standards Board (GASB) Statements No. 74 or No. 75. A separate report satisifying GASB Statement No. 75 will be provided at a later date. The findings in this report are based on data and other information through September 30, 2017. 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 provisions or applicable law. The scope of an actuarial valuation does not include an analysis of the potential range of such future measurements.

Istakur Rahman November 16, 2018 Page 2 The valuation was based upon information furnished by the Wayne County Airport Authority concerning retiree health benefits, financial transactions, plan provisions and active members, terminated members, retirees and beneficiaries. We checked for internal reasonability and year-to-year consistency, but did not audit the data. We are not responsible for the accuracy or completeness of the information provided by the Wayne County Airport Authority. This report has been prepared by actuaries who have substantial experience valuing public employee retiree health plans. To the best of our knowledge, the information contained in this report is accurate and fairly presents the actuarial position of the Wayne County Airport Authority Retiree Health Care Plan as of the valuation date. All calculations have been made in conformity with generally accepted actuarial principles and practices and with the Actuarial Standards of Practice issued by the Actuarial Standards Board. Shana M. Neeson and James D. Anderson are Members of the American Academy of Actuaries (MAAA) and meet the qualification standards of the American Academy of Actuaries to render the actuarial opinions contained herein. The signing actuaries are independent of the plan sponsor. Respectfully submitted, Shana M. Neeson, ASA, FCA, MAAA James D. Anderson, FSA, EA, FCA, MAAA SMN/JDA:dj 3566

EXECUTIVE SUMMARY

Wayne County Airport Authority Retiree Health Care Plan 1

Executive Summary

Actuarially Computed Employer Contribution and OPEB Cost

Please note that beginning with the fiscal year ending September 30, 2017, GASB Statement No. 43 was replaced by GASB Statement No. 74. Also, beginning with the fiscal year ending September 30, 2018, GASB Statement No. 45 was replaced by GASB Statement No. 75. A separate GASB report will be required to comply with the actuarial requirements of GASB Statement No. 75, beginning with the fiscal year ending September 30, 2018. As such, there is not an “Annual Required Contribution” calculated in this valuation report. Therefore, we have determined the “Actuarially Computed Employer Contribution”. We have calculated the Actuarially Computed Employer Contribution for the fiscal years ending September 30, 2018 and September 30, 2019, using an interest rate assumption of 7.00%. Below is a summary of the results. Since the active and retiree premium rates provided are not blended, there is no implicit rate subsidy inherent in the rates; as a result, the Actuarially Computed Employer Contributions and estimated retiree premiums shown below do not include any adjustment for an implicit rate subsidy. For additional details please refer to Section A “Valuation Results.”

Fiscal Year Ending

Actuarially Computed Employer

ContributionEstimated Claims and

Premiums Paid for RetireesSeptember 30, 2018 $6,885,604 $4,143,362September 30, 2019 6,738,758 4,946,767

Liabilities and Assets – As of September 30, 2017

1. Present Value of Future Benefit Payments $125,908,8792. Actuarial Accrued Liability 115,729,2023. Plan Assets 53,539,5464. Unfunded Actuarial Accrued Liability (2) – (3) 62,189,6565. Funded Ratio (3)/(2) 46.3%

The Present Value of Future Benefit Payments (PVFB) is the present value of all benefits projected to be paid from the plan for past and future service to current members. The Actuarial Accrued Liability is the portion of the PVFB allocated to past service by the Plan’s funding method (see the Section titled “Actuarial Cost Method and Actuarial Assumptions”).

SECTION A VALUATION RESULTS

Wayne County Airport Authority Retiree Health Care Plan A-1

Wayne County Airport Authority – Results by Division as of September 30, 2017

AFSCME Police/Fire All Others TotalA. Present Value of Future Benefits

i) Retirees and Beneficiaries $ 18,765,780 $ 13,889,464 $ 16,532,799 $ 49,188,043ii) Vested Terminated Members 0 0 0 0iii) Active Members 33,133,187 29,012,288 14,575,361 76,720,836

Total Present Value of Future Benefits 51,898,967 42,901,752 31,108,160 125,908,879

B. Present Value of Future Normal Costs 4,030,206 4,430,247 1,719,224 10,179,677

C. Actuarial Accrued Liability (A.-B.) 47,868,761 38,471,505 29,388,936 115,729,202

D. Actuarial Value of Assets 22,145,419 17,797,988 13,596,139 53,539,546

E. Unfunded Actuarial Accrued Liability (C.-D.) 25,723,342 20,673,517 15,792,797 62,189,656

F. Funded Ratio (D./C.) 46.3% 46.3% 46.3% 46.3%

G. Fiscal Year Ending September 30, 2018i) Employer Normal Cost $ 673,919 $ 643,374 $ 327,419 $ 1,644,712

ii) Amortization of UAAL (24 years)* 2,167,776 1,742,214 1,330,902 5,240,892

Actuarially Computed Employer Contribution $ 2,841,695 $ 2,385,588 $ 1,658,321 $ 6,885,604

H. Fiscal Year Ending September 30, 2019

Actuarially Computed Employer Contribution $ 2,770,162 $ 2,347,218 $ 1,621,378 $ 6,738,758

* Unfunded Actuarial Accrued Liabilities (UAAL) were amortized as a level dollar amount over a period of 24 years

beginning with the fiscal year ending September 30, 2018 and decreasing by 1 each year thereafter. The long-term rate of investment return used in this valuation is 7.00%.


Comments COMMENT A: This is the first valuation of the Wayne Country Airport Authority Retiree Health Care Plan performed by GRS. A replication of the prior actuarial firm’s results was outside the scope of this assignment. Overall, the valuation results (actuarial accrued liabilities, computed contribution, etc.) have decreased since the prior valuation. Factors contributing to the decrease include, but are not limited to:

• Updating the health care trend cost rates; and • Changes in the methodology used to develop the projected retiree premium rates used for

valuation purposes. Partially offsetting these factors were increases due to:

• Reducing the long-term rate of investment return from 7.75% to 7.00%, which is consistent with the Authority’s investment policy/target asset allocation; and

• A reduction in the assumption regarding future and current retiree participation in the vision reimbursement program.

COMMENT B: One of the key assumptions used in any valuation of the cost of postemployment benefits is the rate of return on the assets that will be used to pay Plan benefits. Higher assumed investment returns will result in a lower Actuarially Computed Employer Contribution. Lower returns will tend to increase the Actuarially Computed Employer Contribution. We have calculated the liability and the resulting Actuarially Computed Employer Contribution using an assumed rate of investment return of 7.00%. COMMENT C: The plan sponsor is required by GASB to perform actuarial valuations at least biennially or more frequently if significant changes in the OPEB are made in the interim. COMMENT D: Amortization Method is the policy used to fund the unfunded actuarially accrued liability. The current policy computes contribution amounts using a closed 24-year period beginning with the fiscal year ending September 30, 2018. We suggest the Authority consider the use of a layered amortization approach for future valuations. In a layered amortization approach, new layers would be established as they occur in future valuations and would be amortized over separate 15-year closed periods. In combination, these layers are expected to reduce future contribution rate volatility. COMMENT E: The retiree health care plan is closed to new members; as a result, payments of the UAAL have been calculated as level dollar amounts. COMMENT F: The “Cadillac” tax is a 40% excise tax paid by the coverage provider (employer and/or insurer) on the value of health plan costs in excess of certain thresholds, effective in 2022. The initial thresholds are $10,200 for single coverage or $27,500 for family coverage. Many plans are below the thresholds today, but are likely to exceed them in the next decade. The thresholds will be indexed at CPI-U, which is lower than the medical inflation rates affecting the cost of the plans. There is considerable uncertainty about how the tax would be applied, and considerable latitude in grouping of participants for tax purposes. Combining early retiree and Medicare eligible retiree costs is allowed and can keep plans under the thresholds for a longer period of time. For this valuation, there was no load applied to the health care liabilities to approximate the cost for future excise tax, based on the current plan provisions and assumptions. We have not identified any other specific provision of health care reform that would be expected to have a significant impact on the measured obligation. As additional guidance on the legislation is issued, we will review and monitor the impact.


Comments COMMENT G: The GASB issued Statements Nos. 74 and 75 for OPEB valuations similar to the new pension standards. GASB Statement No. 74 for the plan OPEB disclosures is effective for fiscal years beginning after June 15, 2016. GASB Statement No. 75 for employer OPEB disclosures is effective for employer fiscal years beginning after June 15, 2017. The GASB implementation guides for Statement No. 74 and Statement No. 75 provide additional clarification related to the implementation of these Statements. It is our understanding that the Authority will need not need to comply with GASB Statement No. 74 but will need to comply with GASB Statement No. 75 beginning with the fiscal year ending September 30, 2018. The information necessary for GASB Statement No. 75 will need to be developed at a later date. The basis for the GASB Statement No. 75 information is expected to be this valuation (as of September 30, 2017), where roll-forward techniques will be applied. COMMENT H: Michigan Public Act 202 of 2017 created new reporting and other requirements for local units of government. As such, we can work with the Authority to develop a funding policy to document Plan procedures and facilitate compliance. COMMENT I: Unless otherwise indicated, a funded status measurement presented in this report is based upon the actuarial accrued liability and the actuarial value of assets (which is set equal to the market value for purposes of this valuation). Unless otherwise indicated, with regards to any funded status measurements presented in this report:

• The measurement is inappropriate for assessing the sufficiency of plan assets to cover the estimated cost of settling the plan’s benefit obligations, and

• The measurement is inappropriate for assessing the need for or the amount of future employer contributions.

SECTION B RETIREE PREMIUM RATE DEVELOPMENT

Wayne County Airport Authority Retiree Health Care Plan B-1

Retiree Premium Rate Development Premium rates for the Wayne County Airport Authority Retiree Health Care Plan were developed separately for the self-insured and the fully-insured portions and then combined to create one set of premium rates. The self-insured initial premium rates were developed separately for each class (pre-65 and post-65). The rates were calculated by using Blue Cross Blue Shield incurred claims experience and exposure data for the period of January 1, 2016 to December 31, 2017 adjusted for catastrophic claims, plus the load for administration, network access fee, and stop loss premiums. The self-insured medical and prescription drug data were provided by Wayne County Airport Authority. The medical data was analyzed for the pre-65 and post-65 participants separately since Medicare is available for the post-65 participants and has a significant impact on the claims experience. Furthermore, since the prescription drug claims and the medical claims exhibit different trends and claim payment patterns, we analyzed these claims separately. For the fully-insured plans initial premium rates were developed for the two classes of retirees (pre-65 and post-65). The January 1, 2019 HAP fully-insured rates provided by Wayne County Airport Authority were utilized to determine the appropriate premium rates. For both the pre-65 retirees and post-65 retirees, the medical and drug portion of the fully-insured premium rate is used as the basis of the initial per capita cost without adjustments since we assumed that the rates reflect the demographics of each retiree group. Age graded and sex distinct premiums are utilized by this valuation. The premiums developed by the preceding process are appropriate for the unique age and sex distribution currently existing. Over the future years covered by this valuation, the age and sex distribution will most likely change. Therefore, our process “distributes” the average premium over all age/sex combinations and assigns a unique premium for each combination. The age/sex specific premiums more accurately reflect the health care utilization and cost at that age. The combined monthly one-person medical and drug premiums at select ages are shown below.

Age40 $ 477.18 $ 775.3850 773.50 952.8860 1,314.60 1,294.4364 1,598.59 1,508.64

Age65 $ 433.00 $ 408.4075 506.60 494.3385 535.70 542.01

Female

For Those Not Eligible for Medicare (Pre-65)Male Female

For Those Eligible for Medicare (Post-65)Male


Retiree Premium Rate Development Postretirement Medical Benefit Provisions – Brief description

HAP Plan – 324A/B and POAM Deductible: $500 /$1,000 (member/family) Coinsurance: None Out of Pocket Maximum: $1,000/$2,000 (member/family) Preventive Services: $20 copay/visit Primary Care Physician (PCP) Services: $20 copay/visit Emergency Medical Care: $150 copay/visit Urgent Care: $20 copay/visit Prescription Drugs: Generics: $5 copay Preferred Brand: $30 copay Non-Preferred Brand: $50 copay Specialty: $50 copay HAP Plan – 741, 953, 1690, 2057, 2926, GAA, GA EXEC, EXEC SRVCS Deductible: $500 /$1,000 (member/family) Coinsurance: None Out of Pocket Maximum: $1,500/$3,000 (member/family) Preventive Services: $20 copay/visit Primary Care Physician (PCP) Services: $20 copay/visit Emergency Medical Care: $200 copay/visit Urgent Care: $20 copay/visit Prescription Drugs: Generics: $10 copay Preferred Brand: $30 copay Non-Preferred Brand: $50 copay Specialty: $50 copay BCBS Plan – 324 A/B and POAM Deductible: In-Network - $500 /$1,000 (member/family) Out-of-Network - $1,000 /$2,000 (member/family) Coinsurance: None Out of Pocket Maximum: In-Network - $1,000/$2,000 (member/family) Out-of-Network - $2,500/$5,000 (member/family) Preventive Services: No Copay Primary Care Physician (PCP) Services: $20 copay/visit Emergency Medical Care: $150 copay/visit Urgent Care: $20 copay/visit Prescription Drugs: Generics: $5 copay Preferred Brand: $30 copay Non-Preferred Brand: $50 copay Specialty: $50 copay


Retiree Premium Rate Development BCBS Plan – 741, 953, 1690, 2057, 2926, GAA, GA EXEC, EXEC SRVCS Deductible: In-Network - $500 /$1,000 (member/family) Out-of-Network - $1,000 /$2,000 (member/family) Coinsurance: None Out of Pocket Maximum: In-Network - $1,500/$3,000 (member/family) Out-of-Network - $3,000/$6,000 (member/family) Preventive Services: No Copay Primary Care Physician (PCP) Services: $20 copay/visit Emergency Medical Care: $200 copay/visit Urgent Care: $20 copay/visit

Prescription Drugs: Generics: $10 copay Preferred Brand: $30 copay Non-Preferred Brand: $50 copay Specialty: $50 copay

James E. Pranschke is a Member of the American Academy of Actuaries (MAAA) and meets the Qualification Standards of the American Academy of Actuaries to certify the per capita retiree health care rates shown above.

James E. Pranschke, FSA, MAAA

SECTION C SUMMARY OF BENEFITS

Wayne County Airport Authority Retiree Health Care Plan C-1

Wayne County Airport Authority Retiree Health Care Plan Summary of the Benefit Provisions as of September 30, 2017

AFSCME (Bargaining Units 07, 08, 47, 52) (G) (H) (I)(A) (B) (C) (D) (E) (F)

Leaving Employment as a Result of Eligibility Retiree Spouse Retiree

Normal Retirement Age 55 with 25 years of service(1),(2) Immediately Medical Medical BCBS/HAP(Unreduced pension benefits) Age 60 with 15 years of service(1) Prescription drug Prescription drug BCBS/HAP

Age 60 with 20 years of service(2) Vision - refund Vision - refund WCAA refundsAge 65 with 8 years of service(1),(2)

30 years of service(2) Life Insurance

Early Retirement N/A N/A(Reduced pension benefits)

Deferred Vested Termination 8 years of service N/A

Non-Duty Disability 10 years of service N/A

Duty Disability No age or service requirement Immediately Medical Medical BCBS/HAPPrescription drug Prescription drug BCBS/HAPVision Vision RefundLife Insurance

Non-Duty Death-in-Service 10 years of service Immediately Medical BCBS/HAP NonePrescription drug BCBS/HAP NoneVision Refund None

Duty Death-in-Service No age or service requirement Immediately Medical BCBS/HAP NonePrescription drug BCBS/HAP NoneVision Refund None

(1) Applies to members in pension plans 2 through 4.(2) Applies to members in pension plan 5. Plan 5 members must have 30 years of service to be eligible for retiree health care coverage.

Group NameRetiree Share of Cost for

When do retiree health benefits

commence?

Coverage Provided by EmployerRetiree Health Care

Provider(s)Spouse (while Retiree is alive)

Spouse (after Retiree's death)

10% up to medicare age






Under the vision reimbursement program, the Plan refunds an amount based on the collective bargaining agreement (between $75-$200 for every two years) to those retirees who submit reimbursement requests.

Spouses continue coverage if they are in receipt of a joint and survivor pension benefit. The plan is closed to those hired on or after 8/1/2009.



Police Command and Officers (Bargaining Units 06, 19) (G) (H) (I)(A) (B) (C) (D) (E) (F)


Normal Retirement Age 55 with 25 years of service(1),(2) Immediately Medical Medical BCBS/HAP(Unreduced pension benefits) Age 60 with 20 years of service(1),(2) Prescription drug Prescription drug BCBS/HAP

Age 65 with 8 years of service(1),(2) Vision - refund Vision - refund WCAA refunds30 years of service(1),(2) Life Insurance







(1) Applies to members in pension plans 2 through 4.(2) Applies to members in pension plan 5. Plan 5 members must have 30 years of coverage to be eligible for retiree health care coverage.



commence?











Spouses continue coverage upon the death of the retiree if they are in receipt of a joint and survivor pension benefit.

The plan is closed to those hired on or after 2/1/2008.



Fire (Bargaining Unit 09) (G) (H) (I)(A) (B) (C) (D) (E) (F)


Normal Retirement Age 50 with 25 years of service(1) Immediately Medical Medical BCBS/HAP(Unreduced pension benefits) Age 60 with 5 years of service(1) Prescription drug Prescription drug BCBS/HAP

Age 55 with 25 years of service(2),(3) Vision - refund Vision - refund WCAA refundsAge 60 with 20 years of service(2),(3) Life InsuranceAge 65 with 8 years of service(2),(3)

25 years of service(1)

30 years of service(3)







(1) Applies to members in pension plan 1.(2) Applies to members in pension plans 2 through 4.(3) Applies to members in pension plan 5. Plan 5 members must have 30 years of coverage to be eligible for retiree health care coverage.



commence?












The plan is closed to those hired on or after 4/3/2012.



Others (Bargaining Units 22, 23) (G) (H) (I)(A) (B) (C) (D) (E) (F)


Normal Retirement Age 55 with 25 years of service(1),(2) Immediately Medical Medical BCBS/HAP(Unreduced pension benefits) Age 60 with 20 years of service(1),(2) Prescription drug Prescription drug BCBS/HAP

Age 65 with 8 years of service(1),(2) Vision - refund Vision - refund WCAA refunds30 years of service(2) Life Insurance










commence?












The plan was closed to those hired on or after 10/1/2010.



Others (Bargaining Unit 51) (G) (H) (I)(A) (B) (C) (D) (E) (F)


Normal Retirement Age 55 with 25 years of service(1),(2) Immediately Medical Medical BCBS/HAP(Unreduced pension benefits) Age 60 with 15 years of service(1) Prescription drug Prescription drug BCBS/HAP

Age 60 with 20 years of service(2) Vision - refund Vision - refund WCAA refundsAge 65 with 8 years of service(1),(2) Life Insurance30 years of service(2)










commence?















Others (Bargaining Units 58, 76) (G) (H) (I)(A) (B) (C) (D) (E) (F)

Leaving Employment as a Result of Eligibility for Pension Benefit Retiree Spouse Retiree

Normal Retirement Age 55 with 25 years of service(2) Immediately Medical Medical BCBS/HAP(Unreduced pension benefits) Age 60 with 5 years of service(1) Prescription drug Prescription drug BCBS/HAP

Age 60 with 15 years of service(2)

Age 65 with 8 years of service(2) Vision - refund Vision - refund WCAA refunds25 years of service(1) Life Insurance







(1) Applies to members in pension plan 1.(2) Applies to members in pension plans 2 through 4.



commence?













SECTION D SUMMARY OF VALUATION DATA

Wayne County Airport Authority Retiree Health Care Plan D-1

Wayne County Airport Authority Retiree Health Care Plan Total Eligible Active Members as of September 30, 2017

by Age and Years of Service

Totals

Age 0-4 5-9 10-14 15-19 20-24 25-29 30 Plus No.

20-2425-2930-34 1 8 935-39 4 19 14 2 3940-44 19 25 9 5345-49 1 15 18 38 8 1 8150-54 2 13 18 23 31 12 9955-59 5 19 23 15 14 16 9260-64 1 17 12 7 12 8 57

65 & Over 2 2 1 2 3 2 12

Totals 16 112 111 96 68 39 442

Years of Service to Valuation Date

While not used in the financial computations, the following group averages are computed and shown because of their general interest.

CountAFSCME 224 51.0 yrs. 18.5 yrs.Police/Fire 133 48.6 21.8All Others 85 53.6 19.8Total 442 50.8 19.8

OPEB Group Age Service


Wayne County Airport Authority Retiree Health Care Plan Total Inactive Members as of September 30, 2017

Number of Retiree and Beneficiary Contracts

Opt-Out/ Ineligible

One-Person Coverage^

Two-Person Coverage* Total

Male 1 44 118 163Female 0 47 27 74Total 1 91 145 237

* Includes family coverage. ^ Includes individuals eligible for life insurance only.

Age AFSCME Police/Fire All Others Total0-44 1 1 2

45-49 1 2 350-54 6 8 3 1755-59 7 7 8 2260-64 30 12 22 6465-69 23 17 29 6970-74 22 8 10 4075-79 7 3 5 1580-84 2 285-89 090-94 1 1 295 +

Totals 97 58 81 236

Current RetireesNumber of Those Covered

There are 0 terminated vested members eligible for deferred Plan benefits.


Wayne County Airport Authority Retiree Health Care Plan Reported Financial Information

(Market Value)

September 30, 2017Additions

ContributionsEmployer 2,693,236$ Nonemployer Contributing Entities - Active Employees - Other -

Total Contributions 2,693,236$

Investment IncomeNet Appreciation in Fair Value of Investments 5,834,045$ Interest and Dividends - Less Investment Expense (119,549)

Net Investment Income 5,714,496$

Other -$ Total Additions 8,407,732$

Deductions

Benefit payments, including refunds of employee contributions -$ OPEB Plan Administrative Expense - Other -

Total Deductions -$

Net Increase in Net Position 8,407,732$

Net Position Restricted for OPEBBeginning of Year (October 1, 2016) 45,131,814$ End of Year (September 30, 2017) 53,539,546$

SECTION E ACTUARIAL COST METHODS AND ACTUARIAL ASSUMPTIONS

Wayne County Airport Authority Retiree Health Care Plan E-1

Actuarial Methods for Wayne County Airport Authority Retiree Health Care Plan

as of September 30, 2017

Actuarial Cost Method. Normal cost and the allocation of benefit values between service rendered before and after the valuation date was determined using an Individual Entry-Age Actuarial Cost Method having the following characteristics:

(i) the annual normal cost for each individual active member, payable from the date of employment to the date of retirement, is sufficient to accumulate the value of the member’s benefit at the time of retirement; and

(ii) each annual normal cost is a constant percentage of the member’s year-by-year projected covered pay.

Actuarial gains (losses), as they occur, reduce (increase) the Unfunded Actuarial Accrued Liability. Financing of Unfunded Actuarial Accrued Liabilities. Unfunded actuarial accrued liabilities (UAAL) (full funding credit if assets exceed liabilities) were amortized as a level dollar amount, because the divisions are closed to new hires, over a closed 24-year period. The UAAL was determined using the actuarial value of assets and actuarial accrued liability calculated as of the valuation date and projected to the beginning of the fiscal year at the assumed rate of investment return. Actuarial Value of Assets. The Actuarial Value of Assets is set equal to the reported market value of assets. Assets were allocated among the subgroups shown in this report in proportion to each group’s Actuarial Accrued Liability on the valuation date. Amortization Factors. The following amortization factors were used in developing the Actuarially Computed Employer Contribution for the fiscal years shown:

2018 2019Level Dollar 11.8662 11.6623

Fiscal Year Ending September 30


Actuarial Assumptions for Wayne County Airport Authority Retiree Health Care Plan

as of September 30, 2017 All assumptions are expectations of future experience, not market measures. The rationale for the rates of merit and longevity salary increase, base wage inflation, rates of mortality, retirement rates, rates of separation from active membership, and disability rates used in this valuation is included in the pension plan 5-year experience study for the period October 1, 2010 to September 30, 2015 performed by the pension actuary. The rate of investment return was 7.00% a year, compounded annually net after investment expenses. Rates of price inflation are not specifically used for this valuation. However, a rate of price inflation of 2.50% would be consistent with other assumptions in this report. The rates of salary increase (merit and longevity plus wage inflation) range from 3.00% to 13.15%. Select merit and longevity rates follow:

Age Increase Service Increase

20 4.35% 5 7.51%25 3.75% 10 1.75%30 2.40% 15 1.27%35 1.70% 20 3.75%40 1.55% 25 0.73%

45 1.20% 30 0.00%50 1.05% 35 0.00%55 0.88% 40 & Over 0.00%60 0.44%

65 & Over 0.00%

Ref: 481 Ref: 704

Merit and LongevityPay Increases

Non-Public Safety Public Safety



as of September 30, 2017 The mortality table used to measure post-retirement mortality was the RP-2014 Healthy Annuitant Mortality table for males and females, adjusted for mortality improvements back to the base year of 2006. Mortality rates for a particular calendar year are determined by applying the MP-2016 Mortality Improvement scale to the above described tables. The corresponding Disabled and Employee tables were used for disability and pre-retirement mortality, respectively. Mortality rates are used to measure probabilities of members dying before retirement and the probabilities of health benefits being paid after retirement. Sample post-retirement values are shown below:

SampleAttainedAges in

2017 Men Women

45 39.41 42.10 50 34.48 37.09 55 29.73 32.15 60 25.18 27.39

65 20.86 22.85 70 16.78 18.51 75 13.00 14.48 80 9.64 10.86 Ref: 2135 x 1.00 2136 x 1.00

Projection 929 930

0.4030% 0.2710%

Single Life Retirement ValuesPercent Dying Future Life

Next Year Expectancy (years)Men Women

0.2722% 0.2123%

0.5772% 0.3775%0.8022% 0.5607%

4.6430% 3.6558%

1.1501% 0.8398%1.7229% 1.3106%2.7549% 2.1443%

90% of pre-retirement deaths are assumed to be non-duty related and the remaining 10% are assumed to be duty related.



as of September 30, 2017 Rates of separation from active membership are used to estimate the number of employees at each age that are expected to terminate employment before qualifying for benefits. The rates of separation from active membership do not apply to members eligible to retire, and do not include separation on account of death or disability.

20 9.50% 0 - 1 19% 20 0 - 1 18%21 9.50% 1 - 2 16% 21 1 - 2 18%22 9.50% 2 - 3 12% 22 2 - 3 9%23 9.45% 3 - 4 11% 23 3 - 4 7%24 9.40% 4 - 5 10% 24 4 - 5 6%

25 9.35% 2530 6.00% 3035 6.00% 3540 6.00% 4045 3.79% 4550 3.07% 5055 2.59% 55

60 & Over 0.00% 60 & Over

Ref: 1398 759 Ref: 1230 x 92% 760

4.07%

% of Active Members Separating within the Next YearNon-Public Safety Public Safety

Age Service Age Service

4.14%4.14%4.14%4.10%

1.10%0.00%

4.03%2.96%2.24%2.15%1.95%1.56%



as of September 30, 2017 The probabilities of retirement for members satisfying the age and service conditions for retirement are as follows:

Age Non-Public Safety Public Safety Service Non-Public Safety Public Safety

55 25% 25% 30 30% 40%56 20% 25% 31 20% 30%57 20% 25% 32 15% 20%58 20% 25% 33 30% 30%59 30% 25% 34 30% 40%60 30% 25% 35 40% 50%61 40% 25% 36 30% 25%62 40% 50% 37 30% 25%63 40% 27% 38 30% 25%64 50% 27% 39 20% 25%65 30% 50% 40 100% 100%66 25% 27% Ref: 2120 266067 10% 27% anchor 30 30

68 15% 30%69 80% 30%70 100% 100%

Ref: 2661 2659anchor 55 55

Percent of Active ParticipantsRetiring within Next Year

Normal Retirement Normal Retirement(1)

(1) For pension Plan 1 members, eligiblity begins at 25 years and follow the same pattern as above and attains 100% at 35 years of service.

Probabilities of retirement were increased to 45% for non-public safety and 40% for public safety once the member accrues the maximum pension benefit of 75% of Average Final Compensation. All members who reach eligibility for normal retirement pension benefits before reaching eligibility for retiree health benefits are assumed to retire at the rate of 3% per year during the period when they are not eligible for health.



as of September 30, 2017 Rats of disability are represented by the following table:

SampleAges

20253035

4045505560

Ref 8 x 75% 8 x 100%

0.08% 0.10%

Percent Becoming Disabled within Next YearNon-Public Safety Public Safety

0.08% 0.10% 0.05% 0.07% 0.09% 0.12%

0.21% 0.28% 0.38% 0.51% 0.61% 0.81% 0.85% 1.13% 1.08% 1.44%

For members not in public safety, two-thirds of disabilities are assumed to be non-duty related and the remaining one-third are assumed to be duty related. For public safety members, 60% are assumed to be non-duty related and the remaining 40% are assumed to be duty related.



as of September 30, 2017 Health care cost trend rates are displayed in the following table:

1 8.50 %2 7.753 7.004 6.505 6.006 5.507 5.008 4.509 4.00

10 3.5011 3.5012 3.5013 3.5014 3.5015 3.5016 + 3.50

Health Care Trend Inflation RatesYear AfterValuation Medical/Drug


Miscellaneous and Technical Assumptions for Wayne County Airport Authority Retiree Health Care Plan

as of September 30, 2017 Administrative Expenses No explicit assumption has been made for administrative expenses.

Decrement Operation Disability does not operate during retirement eligibility.

Decrement Relativity Decrement rates are used directly from the experience study, without adjustment for multiple decrement table effects.

Decrement Timing Decrements of all types are assumed to occur mid-year.

Eligibility Testing Eligibility for benefits is determined based upon the age nearest birthday and service nearest whole year on the date the decrement is assumed to occur.

Incidence of Contributions Contributions are assumed to be received continuously throughout the year based upon the computed contribution in this report.

Marriage Assumption 100% of males and 100% of females are assumed to be married for purposes of death-in-service benefits. Male spouses are assumed to be three years older than female spouses for active member valuation purposes.

Medicare Coverage Assumed to be available for all covered employees on attainment of age 65. Disabled retirees were assumed to be eligible for Medicare coverage at age 65.

Vision Reimbursement Program

It was assumed that vision reimbursements average $100 per year and 30% of current and future retirees will participate in the vision reimbursement program.

Data Assumptions For current retired members reported with multiple life coverage the beneficiary was assumed to be the opposite gender of the retiree. Coverage was assumed to continue, upon the death of the retiree, to the beneficiary of all current retirees electing multiple life coverage. Current retirees were valued with life insurance benefits equal to the sum of the reported basic and incentive coverage amounts. Active members were parsed into the various Plans based on their reported date of hire.

Retiree Opt-Outs Retirees currently opting out of retiree health coverage are assumed to opt out indefinitely.


Miscellaneous and Technical Assumptions for Wayne County Airport Authority Retiree Health Care Plan

as of September 30, 2017 Health Care Coverage at Retirement

The table below shows the assumed portion of future retirees electing one-person or two-person/family coverage, or opting out of coverage entirely.

One-Person Electing Continuing Opt-Out

Male 30% 70% 100% 0%Female 30% 70% 100% 0%

Two-Person/Family

Report Coverage Beginning January 1, 2002, Wayne County Airport Authority participants were tracked separately. Pre-2002, no tracking was done so retirees prior to that date are shared by both entities. This report covers actives and post-2002 retirees for the Wayne County Airport Authority.

APPENDIX GLOSSARY

Wayne County Airport Authority Retiree Health Care Plan Appendix 1

Glossary Accrued Service. The service credited under the plan which was rendered before the date of the actuarial valuation. Actuarial Accrued Liability. The difference between (i) the actuarial present value of future plan benefits, and (ii) the actuarial present value of future normal cost. Sometimes referred to as "accrued liability" or "past service liability." Actuarial Assumptions. Estimates of future plan experience with respect to rates of mortality, disability, turnover, retirement, rate or rates of investment income and salary increases. Decrement assumptions (rates of mortality, disability, turnover and retirement) are generally based on past experience, often modified for projected changes in conditions. Economic assumptions (salary increases and investment income) consist of an underlying rate in an inflation-free environment plus a provision for a long-term average rate of inflation. Actuarial Cost Method. A mathematical budgeting procedure for allocating the dollar amount of the "actuarial present value of future plan benefits" between the actuarial present value of future normal cost and the actuarial accrued liability. Sometimes referred to as the "actuarial funding method." Actuarial Equivalent. A single amount or series of amounts of equal value to another single amount or series of amounts, computed on the basis of the rate(s) of interest and mortality tables used by the plan. Actuarial Present Value. The amount of funds presently required to provide a payment or series of payments in the future. It is determined by discounting the future payments at a predetermined rate of interest, taking into account the probability of payment. Amortization. Paying off an interest-bearing liability by means of periodic payments of interest and principal, as opposed to paying it off with a lump sum payment. Actuarially Computed Employer Contribution. The Actuarially Computed Employer Contribution is the normal cost plus the portion of the unfunded actuarial accrued liability to be amortized in the current period. The Actuarially Computed Employer Contribution is an amount that, if paid on an ongoing basis, would be expected to provide sufficient resources to fund both the normal cost for each year and the amortized unfunded actuarial accrued liability. Governmental Accounting Standards Board (GASB). GASB is the private, nonpartisan, nonprofit organization that works to create and improve the rules U.S. state and local governments follow when accounting for their finances and reporting them to the public. Implicit Rate Subsidy. It is common practice for employers to allow retirees to continue in the employer’s group health insurance plan (which also covers active employees), often charging the retiree some portion of the premium charged for active employees. Under the theory that retirees have higher utilization of services, the difference between the true cost of providing retiree coverage and what the retiree is being charged is known as the implicit rate subsidy.

Wayne County Airport Authority Retiree Health Care Plan Appendix 2

Glossary Medical Trend Rate (Health Care Inflation). The increase in the cost of providing health care benefits over time. Trend includes such elements as pure price inflation, changes in utilization, advances in medical technology, and cost shifting. Normal Cost. The annual cost assigned, under the actuarial funding method, to current and subsequent plan years. Sometimes referred to as "current service cost." Any payment toward the unfunded actuarial accrued liability is not part of the normal cost. Other Postemployment Benefits (OPEB). OPEB are postemployment benefits other than pensions. OPEB generally takes the form of health insurance, dental, vision, prescription drugs, life insurance or other health care benefits. Reserve Account. An account used to indicate that funds have been set aside for a specific purpose and are not generally available for other uses. Unfunded Actuarial Accrued Liability. The difference between the actuarial accrued liability and valuation assets. Sometimes referred to as "unfunded actuarial accrued liability.” Valuation Assets. The value of current plan assets recognized for valuation purposes.

treasury recommendation non-primary unit 827585 assets ......treasury recommendation wayne county...

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