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Attachment 3
Town of Los Gatos CalPERS Safety Pension PlansCalPERS Safety Pension Plans June 30, 2016 Consolidated GASB 68 Reporting Information CalPERS Risk Pools Mar Beth ReddingMary Beth Redding Bartel Associates, LLC 411 Borel Avenue, Suite 101 S M CA 94402San Mateo, CA 94402 mbredding@bartel-associates.com January 30, 2017 © Copyright 2016 Topic Page Net Pension Liability Note Disclosures Required Supplementary Information Supporting Calculations CalPERS Cost Sharing Guide Calculations * Summary of Balances 5 11 15 25 1 Contents * This section follows the calculations and journal entries found in CalPERS' GASB 68 Guide for Public Agency Cost-Sharing Multiple-Employer Defined Benefit Pension Plan. https://www.calpers.ca.gov/docs/gasb- 68-cost-sharing-guide.pdf 37 ATTACHMENT 3 ATTACHMENT 3 ■ Measurement date ■ Measurement period ■ Actuarial valuation date June 30, 2015 July 1, 2014 to June 30, 2015 June 30, 2014 Fiscal Year 2015/16 Employer Applicable Dates and Periods Net Pension Liability Page 1 January 30, 2017 Town of Los Gatos Additional information to be presented in each agency’s Notes and RSI can be found on CalPERS website in the CalPERS Risk Pool reports as of the June 30, 2015 Measurement Date: https://www.calpers.ca.gov/docs/forms-publications/gasb-68-accounting-valuation- miscellaneous-risk-pool-2015.pdf https://www.calpers.ca.gov/docs/forms-publications/gasb-68-accounting-valuation-safety- risk-pool-2015.pdf Basis of Report Net Pension Liability This report presents employer-specific amounts for reporting in accordance with Governmental Accounting Standards Board Statement No. 68 (GASB 68) for CalPERS public agency cost-sharing plans. Our calculations are based on information provided in actuarial valuation reports prepared by CalPERS and on the "Schedules of Employer Allocations by Rate Plan and Collective Pension Amounts for the Miscellaneous and Safety Risk Pools", prepared by CalPERS and audited by MGO. It was not part of the scope of this project, nor was information available, to review the census data, actuarial calculations or the actuarial assumptions used to prepare those reports. CalPERS reports used for our calculations are available at: https://www.calpers.ca.gov/page/employers/actuarial-services/gasb Page 2 January 30, 2017 Town of Los Gatos Risk Pool ■ Safety Classic Safety ■ Safety PEPRA Safety The Following Town Rate Plans are Included in this Consolidated Report: Rate Plan # Consolidated Rate Plans Net Pension Liability 947 25874 Page 3 January 30, 2017 Town of Los Gatos ■ Total See page 16 for supporting detail. 10,199,905$ 17,788,690$ June 30, 2015June 30, 2016 Proportionate Share of Net Pension Liability/(Asset) Fiscal Year Ending Net Pension Liability Page 4 January 30, 2017 Town of Los Gatos ■ Measurement Date See page 16 for supporting detail. 0.148602% 0.285879% -0.137277% ■ Percentage of Plan (PERF C) NPL Percentage Share of Risk Pool Change: Increase/ (Decrease)6/30/2016 6/30/2015 0.474242%0.247544% -0.226698% 6/30/2015 6/30/2014 ■ Percentage of Risk Pool NPL (not reported) Note Disclosures Proportionate Share of Net Pension Liability/(Asset) Page 5 January 30, 2017 Town of Los Gatos ■ Net Pension Liability See page 17 for supporting detail. 20,278,621 10,199,905 1,935,542 6/30/2015 6/30/2016 ■ Measurement Date ■ Fiscal Year End Discount Rate 6.65% (1% Decrease ) 7.65% (Current Rate) 8.65% (1% Increase ) Sensitivity of Proportionate Share of Net Pension Liability (Asset) to Changes in the Discount Rate Note Disclosures Page 6 January 30, 2017 Town of Los Gatos ■ Total pension expense (income) for fiscal year See page 22 for supporting detail. 199,428$ Pension Expense (Income) for Fiscal Year 2015/16 Note Disclosures Page 7 January 30, 2017 Town of Los Gatos ■ Safety Classic $ $ $ ■ Safety PEPRA ■ Safety Classic UAAL Payment ■ Total 1,405,568 1,586,129$ 5,953,162$ 1,999,757$ 2015/16 43,556 - 2014/15 1,542,573 1,999,757 Employer Contributions during Year Note Disclosures Fiscal Year Paid: 2013/14 - - 13,056 4,534,538 Page 8 January 30, 2017 Town of Los Gatos $$ ■ Total * Supporting detail on page 18 ** Supporting detail on page 21 *** Supporting detail on page 20 4,385,613 8,482,787 ■ Differences between expected and actual experience * ■ Changes of assumptions * ■ Net differences between projected and actual earnings on plan investments * ■ Differences between the employer's contributions and the employer's proportionate share of contributions*** - 845,098 - 428,301 2,799,484 - ■ Change in employer's proportion **- 7,025,646 - Deferred Outflows of Resources Deferred Inflows of Resources ■ Pension contributions subsequent to measurement date 1,586,129 - 183,742 Deferred Outflows/Inflows Balances at June 30, 2016 Note Disclosures Page 9 January 30, 2017 Town of Los Gatos ■ Fiscal Year Ending June 30: Amounts above are totaled from supporting detail pages 19, 20, and 21. in Future Pension Expense (2,199,680)$ (2,196,951) 525,767 ● 2019 Deferred Outflows/(Inflows) of Resources (1,812,438) - ● Thereafter ● 2020 ● 2018 ● 2017 ● 2021 - Recognition of Deferred Outflows and Inflows of Resources Note Disclosures Page 10 January 30, 2017 Town of Los Gatos Fiscal Year End ■ ■ ■ $$ ■ ■ ■ * For the year ending on the measurement date Town's proportion of the net pension liability Town's proportionate share of the net pension liability Town's covered-employee payroll * 0.148602% 0.285879% 4,281,968 10,199,905 17,788,690 Town's proportionate share of the net pension liablity as a percentage of covered-employee payroll Plan's fiduciary net position as a percentage of the plan's total pension liability 4,343,205 409.58% 79.82%78.40% 238.21% 6/30/15 6/30/14 6/30/16 6/30/15Measurement Date of the Plan's (PERF C) Net Pension Liability Schedule of Town's Proportionate Share Required Supplementary Information Page 11 January 30, 2017 Town of Los Gatos ■ ■ ■ ■ ■ * For the fiscal year ending on the date shown Contributions as a percentage of covered-employee payroll 35.65% 139.03% Contribution deficiency (Excess)- (4,534,538) Town's covered-employee payroll *4,449,403 4,281,968 5,953,161 6/30/16 6/30/15Contributions for the fiscal year ending: Actuarially determined contribution 1,586,129$ 1,418,623$ Contributions in relation to the actuarially determined contribution 1,586,129 Schedule of the Town's Contributions Required Supplementary Information Page 12 January 30, 2017 Town of Los Gatos Required Supplementary Information This page intentionally blank Page 13 January 30, 2017 Town of Los Gatos Required Supplementary Information This page intentionally blank Page 14 January 30, 2017 Town of Los Gatos Fiscal Year Ending 6/30/2016 Measurement Date 6/30/2015 Proportionate Share of Total Pension Liability Proportionate Share of Fiduciary Net Position Proportionate Share of Pension Expense and Deferred Outflows and Inflows ("Other") ■ Plan/Tier Safety Classic Safety PEPRA ■ Total Safety 0.351420% 0.000000% 0.451838% 0.000000% 0.405412% 0.000000% 0.451838% 0.351420%0.405412% Summary of Proportionate Shares Supporting Calculations Page 15 January 30, 2017 Town of Los Gatos Fiscal Year Ending 6/30/2016 Measurement Date 6/30/2015 Total Pension Liability Fiduciary Net Position Net Pension Liability Propor- tionate Share Amount Propor- tionate Share Amount Amount % of Risk Pool % of PERF-C ■ Plan/Tier Safety Classic 0.405412% Safety PEPRA 0.000000% ■ Total 0.405412% Total Pension Liability Fiduciary Net Position 100%100% ■ PERF C 100% 100% ■ Safety Risk Pool Proportionate Share of Net Pension (Liability)/Asset Supporting Calculations Net Pension Liability 0.00000% $ 63,308,241 0 0.14860%(10,199,905) 0 0.148602% $ (73,508,146) 0 (73,508,146) 63,308,241 (10,199,905) 0.24754% 0.00000% 0.24754% (18,131,714,318) (31,771,217,402) 14,011,269,803 24,907,305,871 (4,120,444,515) (6,863,911,531) 0.451838% 0.000000% 0.451838% Page 16 January 30, 2017 Town of Los Gatos ■ Net Pension Liability 6/30/2015 6/30/2016 16,093,204,683$ Supporting Calculations 6.65% (1% Decrease ) 7.65% (Current Rate) 8.65% (1% Increase ) Discount Rate Sensitivity of Proportionate Share of Net Pension Liability (Asset) to Changes in the Discount Rate ■ Risk Pool Total Pension Liability ■ Measurement Date ■ Employer's AAL Proportion ■ Proportionate share of TPL ■ Proportionate share of FNP ■ Fiscal Year End 20,617,757,339$ 18,131,714,318$ 0.405412%0.405412% 83,586,862$ 63,308,241 20,278,621 0.405412% 1,935,542 63,308,241 65,243,783$ 73,508,146$ 63,308,241 10,199,905 Page 17 January 30, 2017 Town of Los Gatos At June 30, 2016 Fiscal Year End ● Applicable proportion ● Town's proportionate share 0.351420% (845,098)$ (183,742)$ (428,301)$ ■ Net Amount at FYE ● Town's proportionate share (845,098) (183,742) (428,301) ● Total Risk Pool ● Applicable proportion 0.351420%0.351420%0.351420% (240,480,839) (52,285,670)$ (121,877,190)$ - - - ■ Deferred inflows of resources -$ 0.351420%0.351420% -$ ■ Deferred outflows of resources -$ Measurement Date 6/30/2015 Net Difference between Projected and Actual Return on Investments Changes of Assumptions Differences between Actual and Expected Experience ● Total Risk Pool Proportionate Share of Risk Pool Deferred Outflows/Inflows Supporting Calculations Page 18 January 30, 2017 Town of Los Gatos 0.351420% 0.351420% (195,055,883) - (685,465) - (685,465) (174,143,990) 0.351420% (611,977) ■ 2019 ■ 2020 ■ 2021 ■ Thereafter ■ 2017 ■ 2018 ■ 2019 Measurement Period Ending June 30: Fiscal Year Ending June 30: ■ 2016 149,612,057 0.351420% 525,767 - 0.351420% - ■ 2020 (195,055,883) 0.351420% ■ Thereafter ■ 2017 ■ 2018 Recognition in Future Pension Expense (June 30, 2016 Notes) Risk Pool Amount Applicable Percentage Town's Proportionate Share Supporting Calculations Proportionate Share of Risk Pool Deferred Outflows/Inflows Page 19 January 30, 2017 Town of Los Gatos N/A See page 27 for calculation of initial FY 15/16 amount. - 999,816 999,816 999,816 799,852 3,799,300 2,799,484 - 999,816 799,852 3,799,300 2,799,484 - 999,816 999,816 ■ Initial recognition period 3.8 years - - ■ Amount recognized in FY pension expense ● 2014/15 (Prior year) ● 2015/16 (Current year) ● 2016/17 ● 2018/19 ● Total ■ Deferred Outflows at FYE 6/30/2016 ■ Deferred Inflows at FYE 6/30/2016 - - - - ● 2017/18 - - Supporting Calculations ■ Initial amount -$ 3,799,300$ ■ Measurement Period 2013/14 2014/15 2014/15 2015/16 3.8 years Recognition Schedule for Deferred Outflows/Inflows at June 30, 2016 Difference Between Actual & Proportionate Share of Employer Contributions Initial Recognition Period FY: Employer-Specific Deferral: Total Page 20 January 30, 2017 Town of Los Gatos See page 26 for calculation of initial FY 15/16 amount. ■ Deferred Outflows at FYE 6/30/2016 - - - ■ Deferred Inflows at FYE 6/30/2016 (7,001,099) (7,025,646) (24,547) ● 2018/19 - (2,000,313) (2,000,313) ● Total (51,823) (9,501,492) (9,553,315) ● 2016/17 (13,638) (2,500,393) (2,514,031) ● 2017/18 (10,909) (2,500,393) (2,511,302) ● 2014/15 (Prior year)(13,638) N/A (13,638) ● 2015/16 (Current year)(13,638) (2,500,393) (2,514,031) ■ Initial recognition period 3.8 years 3.8 years ■ Measurement Period 2013/14 2014/15 ■ Amount recognized in FY pension expense ■ Initial amount (51,823)$ (9,501,492)$ Recognition Schedule for Deferred Outflows/Inflows at June 30, 2016 Initial Recognition Period Supporting Calculations Employer-Specific Deferral: Change in Proportions Total2014/15 2015/16 Page 21 January 30, 2017 Town of Los Gatos ■ Allocated portion of collective pension expense ● Collective pension expense $ ● Proportion applicable to pension expense ● Employer's allocated share of pension expense ■ Recognition of employer-specific amounts ● Change in proportion * ● Difference in proportions *** ● Total employer-specific recognition ■ Total pension expense/(income) * See page 21 for supporting detail. ** See page 20 for supporting detail. ***From CalPERS Public Agency Cost-Sharing Allocation Methodology Report – Measurement Period June 30, 2014: "This item captures the changes in proportions that result from CalPERS’ allocation methodology. Rather than a single proportionate share applied to all components of pension expense, the CalPERS’ method applies different employer proportions to various pension-related items such as FNP and TPL. This adjustment reconciles the differences in proportions for these various items with the rate plan’s change in NPL during the Measurement Period." This is a balancing item; see pages 23 and 33. 199,428 Fiscal Year 2015/16 0.351420% ● Difference between actual contributions and proportionate share of total contributions ** 300,366,268 Supporting Calculations Components of GASB 68 Pension Expense/(Income) 999,816 (856,119) 1,055,547 (2,514,031) 658,096 Page 22 January 30, 2017 Town of Los Gatos ■ Measurement date ■ Total pension liability ■ Fiduciary net position ■ Net pension liability (asset) ■ Deferred inflows of resources ■ Deferred outflows of resources ■ Contributions in the Measurement Period ■ Net balance sheet impact ■ Pension Expense (Income) ■ Difference *Deferral for contributions after the measurement date is excluded 21,636,941 6/30/2014 73,508,146 63,308,241 10,199,905 8,482,787 (2,799,484) 5,953,161 21,836,369 55,292,763 6/30/2015 GASB 68 Balance Equation Supporting Calculations 6/30/2015* Fiscal year ending Change6/30/2016 199,428 199,428 (0) 4,634,536 (2,799,484) 426,693 8,015,478 (7,588,785) 5,953,161 17,788,690 3,848,251 - - 73,081,453 Page 23 January 30, 2017 Town of Los Gatos Supporting Calculations This page intentionally blank Page 24 January 30, 2017 Town of Los Gatos Unamortized Unamortized Unamortized Unamortized Unamortized Changes in Assumptions Differences between Expected and Actual Experience Difference in 2014 actual contribution and proportionate share of contributions Change in Proportion Net Difference Between Projected and Actual Earnings on Investments Total Deferrals FY Ended 6/30/2015 - - - (38,185) (3,810,066) 2,104,910 2.8 2.8 4 Remaining amortization FY 2016 - (13,638) (952,517) 2017 - (13,638) (952,517) 2018 - (10,909) (952,517) 2019 - - (952,515) 2020 - - - Thereafter Total Pension Liability Fiduciary Net Position Net Pension Liability Net Position Impact FY Ended 6/30/2015 (73,081,453) 55,292,763 (17,788,690) (15,683,780) Remaining amortization years Page 4 - Assumed Reported Balances in Employer's 2015 Financial Statements (Liability)/Asset CalPERS Cost Sharing Guide Calculations 5,953,161 Deferred 2015 Contribution Page 25 January 30, 2017 Town of Los Gatos Unamortized Unamortized Unamortized Unamortized Changes in Assumptions Differences between Expected and Actual Experience Net Difference Between Projected and Actual Earnings on Investments Total Deferred Total Pension Liability Fiduciary Net Position Net Position Impact Total Safety Risk Pool (2014 GASB 68 Report) Deferred Outflows 0 0 0 0 Deferred Inflows 0 0 (960,433,882) (960,433,882) Net Amount 0 0 (960,433,882) (960,433,882) (17,719,018,179) 13,968,041,341 (4,711,410,720) Proportion:0.351420% 0.405412% 0.451838% (3,375,157) (3,375,157) (71,835,026) 63,112,919 (12,097,264) (3,810,066) (3,810,066) (73,081,453) 55,292,763 (21,598,756) Difference (434,909) (434,909) (1,246,427) (7,820,156) (9,501,492) Change in proportion as of beginning of FY 2016 (9,501,492) Page 5 - Change in Proportion Calculation 2015 Measurement Date Basis (proportion) multiplied by 2014 Measurement Date Balances 2014 Measurement Date reported balances CalPERS Cost Sharing Guide Calculations (9,066,583) Net Pension Liability (3,750,976,838) (8,722,107) (17,788,690) Page 26 January 30, 2017 Town of Los Gatos Proportionate share of aggregate Employer contribution 2,153,861 Actuarially Determined Contribution (Actual for FY 2015*) 5,953,161 Difference 3,799,300 * Calculation Aggregate employer contributions for FY 2015 FNP Proportion Proportionate Share of Aggregate Contributions Safety 476,688,774 0.451838% 2,153,861 ** Changed per CalPERS guidance Page 6 - Difference in Actual Contribution and Proportionate Share of Contribution Calculation CalPERS Cost Sharing Guide Calculations Page 27 January 30, 2017 Town of Los Gatos Unamortized Unamortized Unamortized Unamortized Unamortized Changes in Assumptions Differences between Expected and Actual Experience Difference in 2014 actual contribution and proportionate share of contributions * Change in Proportion ** Net Difference Between Projected and Actual Earnings on Investments Total Deferrals At 6/30/16 (845,098) (183,742) 2,799,484 (7,025,646) (428,301) (4,097,174) Total Pension Liability Fiduciary Net Position Net Pension Liability Net Position Impact Pension Expense (before adjustment) At 6/30/16 (73,508,146) 63,308,241 (10,199,905) (14,297,079) 1,055,547 * See page 29. ** See page 30. 1,586,129 CalPERS Cost Sharing Guide Calculations Page 7 - Allocated F/S Balance for the 2015 Measurement Period Deferred 2016 Contribution Page 28 January 30, 2017 Town of Los Gatos Calculation at June 30, 2016 financial statement date 2014 Measurement Date 2015 Measurement Date Total Balance reported at June 30, 2015 - 3,799,300 Current Year Amortization - 2.8 years (999,816) 3.8 years (999,816) Balance reported at June 30, 2016 - 2,799,484 2,799,484 CalPERS Cost Sharing Guide Calculations Page 8 - Difference in Actual Contributions and Proportionate Share of Contributions Page 29 January 30, 2017 Town of Los Gatos Calculation at June 30, 2016 financial statement date Total Balance reported at June 30, 2015 (Guide page 5) Current Year Amortization 2.8 years 3.8 years Balance reported at June 30, 2016 Page 9 - Change in Proportion CalPERS Cost Sharing Guide Calculations 2014 Measurement Date (38,185) 13,638 (24,547) 2,514,031 (7,025,646) 2015 Measurement Date (9,501,492) 2,500,393 (7,001,099) Page 30 January 30, 2017 Town of Los Gatos Following summarizes the beginning balances from the 2014 measurement date * Debit Credit Net Position 15,683,780 - Deferred - contributions 5,953,161 - Deferred - Differnce in actual vs proportionate share of contributions - - Deferred - change in proportion - 38,185 Deferred - Difference in projected and actual investment earnings - 3,810,066 Net pension liability - 17,788,690 Check 21,636,941 21,636,941 *Recorded at 6/30/15 fiscal year end. Page 10a - Journal Entries - Beginning Balances CalPERS Cost Sharing Guide Calculations Page 31 January 30, 2017 Town of Los Gatos Following records the impact of employer contributions Debit Credit Net pension liability 5,953,161 Prior Year deferred amount Deferred - contributions 5,953,161 Deferred - contributions 1,586,129 FY 2015 Actuarially Determined Contribution Contribution/Expenses 1,586,129 Check 7,539,290 7,539,290 Page 10b - Journal Entries - Employer Contributions CalPERS Cost Sharing Guide Calculations Page 32 January 30, 2017 Town of Los Gatos Following records the impact of current year (CY) pension expense, including adjustment for difference in proportions, except for difference between actual and proportionate share of contributions. Debit Credit Pension Expense/Credit - 800,388 * See below Deferred - changes in assumptions - 845,098 Deferred - difference between actual and expected experience - 183,742 Deferred - difference between actual and expected investment earnings 3,381,765 - Deferred - change in proportion - 6,987,461 Net pension liability 5,434,924 - ** See below Check 8,816,689 8,816,689 * Includes amount for difference in proportions (AAL, FNP, and Other) which is fully recognized in current year: Pension expense entry above (800,388) 999,816 199,428 Less: Proportionate share of pension expense (1,055,547) Less: Recognition of change in proportion 2,514,031 Less: Recog. of diff. betw. actual & prop. share of contrib. (999,816) Adjustment for difference in proportions 658,096 *** ** 17,788,690 (page 31)+ -10,199,905 (page 28) + -5,953,161 (page 31) + 3,799,300 (page 34) *** Balancing item. See footnote on page 22. Difference between PY and CY Page 11a - Journal Entries - CY Pension Expense CalPERS Cost Sharing Guide Calculations Recognition of difference between actual and proportionate share of contribution (Guide, page 8) Total pension expense (income) Page 33 January 30, 2017 Town of Los Gatos Following records the impact of the difference in actual vs proportionate share of contributions Debit Credit Pension Expense/Credit* 999,816 - Amortization from Guide page 8 2,799,484 - Difference between PY and CY Net pension liability - 3,799,300 Recalculated Check 3,799,300 3,799,300 * Note: Changed from CalPERS Guide following CCMA Guidance. CalPERS Cost Sharing Guide Calculations Page 11b - Journal Entries - Actual vs Proportionate Share of Contributions Deferred - difference between actual and proportionate share of contributions Page 34 January 30, 2017 Town of Los Gatos Following records the impact of current year pension expense This page totals the entries from pages 33 and 34. It does not include the entries from page 32 Debit Credit Pension Expense/Credit 199,428 - Deferred - changes in assumptions - 845,098 Deferred - difference between actual and expected experience - 183,742 Deferred - difference between actual and expected investment earnings 3,381,765 - Deferred - change in proportion - 6,987,461 Deferred - difference between actual & proportionate share of contrib. 2,799,484 - Net pension liability 1,635,624 - Check 8,016,301 8,016,301 CalPERS Cost Sharing Guide Calculations Summary Journal Entries - CY Pension Expense Guide Page 11a + Guide Page 11b Page 35 January 30, 2017 Town of Los Gatos Summary of Reported Balances at June 30, 2016 Net Pension Liability (NPL) (10,199,905) Deferred - Changes in Assumptions (845,098) Deferred - Differences between expected and actual experience (183,742) Deferred - Differences between expected and actual contributions 2,799,484 Deferred - Change in proportion (7,025,646) Deferred - Differences between projected and actual investment earnings (428,301) Deferred - contributions after the measurement date 1,586,129 Net position (14,297,079) Check: Net position from Guide page 7 (14,297,079) Total pension expense/(income) for FYE 2016 199,428 CalPERS Cost Sharing Guide Calculations Page 11c - Pension Amounts Summary as of June 30, 2016 Page 36 January 30, 2017 Town of Los Gatos ■ Measurement date ■ Total pension liability ■ Fiduciary net position ■ Net pension liability (asset) ■ Deferred inflows of resources ■ Deferred outflows of resources ■ Net balance sheet impact Summary of Balances Summary of Balances Fiscal year ending 6/30/2015 6/30/2016 6/30/2014 6/30/2015 17,788,690 10,199,905 3,848,251 8,482,787 73,081,453 73,508,146 55,292,763 63,308,241 (5,953,161) (4,385,613) 15,683,780 14,297,079 Page 37 January 30, 2017 Town of Los Gatos