Request for Proposal: Actuarial Services · Request for Proposal Actuarial Services June 3, ... Provide actuarial consulting services under a basic retainer for ... various data fields

Los Angeles County Employees Retirement Association

Request for Proposal Actuarial Services

June 3, 2005

Actuarial Services RFP LACERA

June 3, 2005

TABLE OF CONTENTS I. Introduction......................................................................................................1 II. Scope of Work for Actuarial Consulting Services ..........................................1 III. Scope of Work for Actuarial Audit Services...................................................1 IV. Background......................................................................................................2 V. Response Contents...........................................................................................4 VI. Conditions of Submission................................................................................6 VII. Request for Information Timeline ...................................................................7 VIII. Evaluation Process...........................................................................................7 IX. Submission.......................................................................................................8 X. Attachments .....................................................................................................8

A. Statement of Work

B. Sample Contract

C. Listing of LACERA System Tables

D. Available at www.lacera.com: Actuarial Valuation as of June 30, 2004 Actuarial Investigation as of June 30, 2004 Actuarial Audit as of June 30, 2004 Annual Financial Report as of June 30, 2004

http://www.lacera.com/


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I. Introduction

The Los Angeles County Employees Retirement Association (LACERA) is asking qualified firms to provide information covering the cost and related engagement personnel on their actuarial consulting services and actuarial audit services. Although it is LACERA’s intent to secure the services of one firm to provide actuarial consulting services and a separate firm to provide actuarial audit services, LACERA encourages qualified firms to provide the requested information on both their actuarial consulting and actuarial audit services.

II. Scope of Work for Actuarial Consulting Services

LACERA seeks one qualified firm (ACTUARY) to perform the following actuarial consulting services: 1. Annual valuations to determine funding status and recommend employer and

employee contribution rates. Such valuations shall consider the actual changes of economic and non-economic experience since the prior valuation.

2. Triennial investigations to consider economic and non-economic experience, assess

appropriateness of assumptions, and assess and recommend potential changes in experience and contribution rate tables.

3. Supplemental Targeted Adjustment for Retirees (STAR) Cost-of-Living annual

valuation that includes the expected benefit payments from an ad-hoc STAR program for a ten-year period and the funding requirement to vest the STAR program benefits.

4. Provide actuarial table updates in LACERA information system for benefit

calculations under the plans, including those federal and state governmental related tables necessary for system operation.

5. Provide actuarial consulting services under a basic retainer for administration

consultation, unusual benefit calculations, board meetings, auditor requests, and actuarial project cost estimates.

6. Provide actuarial consulting services through a time and material arrangement for

performance of special projects. III. Scope of Work for Actuarial Audit Services

LACERA seeks one qualified firm (ACTUARY) to perform actuarial audit services in accordance with LACERA’s actuarial audit policy that calls for parallel actuarial valuations (independent reproduction of the detailed valuation results) on a three-year cycle that coincides with LACERA’s three-year (triennial) actuarial Investigation of Experience schedule. The ACTUARY shall also perform an actuarial peer review audit for each Investigation of Experience which will include conducting a parallel Investigation of Experience (independent reproduction of the detailed investigation


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results) for every second experience study. Additionally, LACERA may request ACTUARY to perform an actuarial audit when there is a material change in benefits and/or other changes in actuarial assumptions.

IV. Background

Plan provisions and administration are set forth in the County Employees Retirement Law of 1937, California Government Code Sections 31450 through 31898. While LACERA is technically a multi-employer local government fund, unified valuations and investigations are performed for the primary plan sponsor, the County of Los Angeles, and the four participating agencies1. Thirty billion dollars in assets are held in trust for 140,000 members (91,000 active and deferred, 49,000 retired). Seven defined benefit plans are administered, of which six are contributory for members and one is non-contributory.

Plan Membership Type Status A General Contributory Closed B General Contributory Closed C General Contributory Closed D General Contributory Open E General Non-Contributory Open A Safety Contributory Closed B Safety Contributory Open

Pursuant to Government Code Section 31453, an actuarial valuation shall be performed not less than every three years and conducted under the supervision of an actuary. Based on the investigation, valuation, and recommendations of the actuary, the Board of Investments shall recommend to the Board of Supervisors such changes in the rates of interest, in the rates of contributions of members, and in County and District appropriations as are necessary. Actuarial valuations are performed annually to monitor LACERA’s funded status. Triennially, an investigation is made of the appropriateness of all economic and non-economic assumptions. Recommendations are presented to the Board of Investments for consideration. The last triennial investigation was performed as of June 30, 2004, which produced the assumptions recommended by the actuary and adopted by the Board of Investments. LACERA and its current actuary use the Entry Age Normal funding method to assess funding status. Member Data LACERA currently provides its consulting and audit actuaries with data files for the purpose of performing actuarial services in the form of five schedules: 1. Active Members

1 15 employees from the four participating agencies are active LACERA members.


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Members in current employment.

2. Terminated Active Members Members separated from plan membership prior to establishing eligibility to draw plan benefits at a later date.

3. Active Retired Members Members and survivors currently receiving plan benefits.

4. Terminated Retired Members Members terminated by death after having begun to draw plan benefits.

5. Terminated Vested (Deferred) Members Members separated from current employment waiting to draw plan benefits.

Information Technology LACERA maintains a custom developed member information system encompassing both active and retired member functions. While the system is multi-tiered, the data is structured and maintained as a DB2 database. There are approximately 1.5 terabytes of data, the integrity of which is sound. Transactional data (retiree payments, salary history, contributions, etc.) is sound from data system inception, circa 1990. LACERA supplies its current actuary with member records for valuation purposes. A single file is produced containing one 333 byte record for each of approximately 160,000 members. Each record is coded for inclusion in one of five schedules: active, terminated active, active retired, terminated retired and terminated vested. Record formats are identical with various data fields filled or blank, depending on the schedule on which the member is being reported. LACERA may be open to restructuring and/or reformatting this (these) files providing ACTUARY defines the desired file format, structure, contents, and data requirements. IRS Section 415 Limitations Under the IRS Section 415 grandfather election, benefits for members prior to January 1, 1990 are excluded from IRS Section 415 benefit limits. Members as of January 1, 1990 and later are subject to Section 415 corporate limits. Additionally, members joining the plan as of July 1, 1996 and subsequent are subject to statutory limits on compensation for consideration in computing benefits. Cost-of-Living Programs In addition to providing cost-of-living increases under the California Government Code based on the Consumer Price Index, the Board of Retirement exercised their authority to grant supplemental cost-of-living increases. This program, known as the Supplemental Targeted Adjustment for Retirees (STAR), uses surplus earnings to restore retirement allowances to 80% of the purchasing power held by retirees at the time of retirement. Current STAR program benefits have been vested and prefunded. Additional STAR program benefits resulting from future increases in the Consumer Price Index are subject to approval by the Board of Retirement on an annual basis contingent upon available surplus earnings. The STAR Program serves approximately 9,600 members.


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V. Response Contents

To be eligible for evaluation, a response must adhere strictly to the format set forth below. Each of the required sections identified must be addressed and must be specifically labeled. The content and sequence of the response will be as follows:

Section Title 1 Cover Letter 2 Table of Contents 3 Executive Summary 4 Engagement Staff 5 References 6 Pricing for Actuarial Consulting Services 7 Pricing for Actuarial Audit Services 8 Contract Form and Specifications 9 Insurance 10 Sample Valuation Report

Items 1 through 10 listed below contain brief descriptions of information that must be included in the response.

1. Cover Letter: ACTUARY shall identify the firm, its home office and branch office,

if any, to be providing services. Addresses shall be supplied, along with the name and telephone number of a principal contact for information regarding the response.

2. Table of Contents: Immediately following the cover letter, there must be a

comprehensive Table of Contents of the material included in the proposal. The Table of Contents will clearly identify the response section and the applicable page numbers.

3. Executive Summary: ACTUARY shall state their understanding that their response

to the request for information will be used by LACERA to evaluate whether the ACTUARY may be considered for either providing either actuarial consulting services or actuarial audit services. The ACTUARY’s shall include a statement that the response is a firm and irrevocable offer for 120 days following the date for submission of responses. ACTUARY shall disclose if any proposed services will be provided by the ACTUARY’s staff located outside of the greater Los Angeles area. ACTUARY shall disclose engagements where they are currently acting in the capacity of actuaries or consultants to LACERA’s plan sponsor or related employee groups. ACTUARY shall also provide information on the circumstances and status of any non routine investigation, examination, complaint, disciplinary action or other proceeding commenced by any current client, prior client, state or federal regulatory


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body, or professional organization over the past three years to which ACTUARY was a party, either as the principal or secondary subject.

4. Engagement Staff: For the ACTUARY’s actuarial consulting services staff and the

actuarial audit services staff, the ACTUARY shall separately identify the principal responsible for each engagement and respective support staff to be assigned, to include business addresses and telephone numbers. Staff background shall be provided in detail, to include years of experience, education, professional certification and accreditation, and special areas of expertise. Experience listed shall include entities for which services were performed, type of services and length of engagement, size and complexity of plans (to include assets, membership base, and number of employers and benefit tiers). Particular emphasis should be placed on previous experience with public sector plans, and experience in providing valuation, investigation, and consulting services. The ACTUARY is not precluded from proposing one engagement team to be considered for providing either actuarial consulting services or actuarial audit services.

5. References: For each principal responsible for engagement and for each actuary performing consequential and considerable services, provide a client list, with contact and phone number, for each client serviced during calendar years 2003, 2004 and year to date 2005. Such client list would include both government and non-government clients.

6. Pricing for Actuarial Consulting Services: ACTUARY shall provide individual

“not to exceed” prices for the annual valuation, investigation, STAR valuation, table updates, and basic retainer consulting portions of the engagement (TASKS 1 through 5 in the Statement of Work) for valuation years ending June 30, 2006 through June 30, 2010. If incidental costs are included in the “not to exceed” bid, such costs shall be clearly identified and segregated from actual engagement related costs. ACTUARY shall provide hourly rates for ACTUARY staff for the ‘time and material’ consulting portion of the engagement (TASK 6 in the Statement of Work).

7. Pricing for Actuarial Audit Services: ACTUARY shall provide individual “not to exceed” prices for the actuarial audit of the June 30, 2007 investigation and valuation (TASK 7 and 8 in the Statement of Work). Additionally, the ACTUARY is requested to provide a “not to exceed” price for providing an actuarial audit of the June 30, 2005 valuation (TASK 9 in the Statement of Work). While the audit of the June 30, 2005 valuation does not conform to LACERA’s audit schedule, LACERA may request such audit upon hiring a new consulting actuary. If incidental costs are included in the “not to exceed” bid, such costs shall be clearly identified and segregated from actual engagement related costs.

8. Contract Form and Specifications. Attachment B is the general form and content

of the contract LACERA anticipates using. In submitting a response, the ACTUARY will be deemed to have agreed to each clause in Attachment B (and to not seek inclusion of additional clauses) unless the response identifies an objection or inclusion, sets forth the basis for the objection or inclusion, and provides substitute


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language to make the clause acceptable to ACTUARY or to address an issue ACTUARY feels is not addressed by Attachment B. Specifically, ACTUARY shall address limitation of liability for services performed by the ACTUARY through affirmative response that no such limitations of liability will be imposed or by responding that limitation of liability shall apply and providing contract language. ACTUARY shall provide evidence of their legal counsel review in the response. LACERA reserves the right to add or delete language from Attachment B when preparing the final form of the contract.

9. Insurance: ACTUARY shall provide in their response the amount of insurance

coverage carried as defined in contract Section 10 ‘Indemnification and Insurance’ subsection (C) Insurance.

10. Sample Valuation Report: ACTUARY shall provide a copy of a valuation report

similar to that which LACERA would receive under the Statement of Work’s TASK 1. If ACTUARY is providing a response to the request for actuarial audit services, please provide a copy of a recent audit report similar to that which LACERA would receive under the Statement of Work’s TASK 7. It is acceptable for the ACTUARY to provide a copy of an existing client’s valuation and/or audit report.

VI. Conditions of Submission

1. LACERA requires receipt of four responses before the 5:00 P.M., Wednesday, June 29, 2005 submission deadline. All responses must be in writing. No telegraphic, fax, email, or telephone responses will be accepted. Proposals received after the submission deadline will be considered for evaluation solely at LACERA’s discretion.

2. All responses to this RFP shall become the exclusive property of LACERA and shall

be subject to public disclosure pursuant to the California Public Records Act (Cal. Govt. Code Section 6250 et. seq., 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. In addition, if LACERA staff chooses to recommend any respondent(s) to the Board of Investments for hiring, such recommendation and the relevant response(s) will appear on a publicly posted agenda for a public meeting of the Board of Investments. Should the ACTUARY wish to cancel, a written letter so stating must be received by LACERA before the June 29, 2005 submission deadline.

3. If a respondent believes that any portion of its response is exempt from public

disclosure under the Act, such portion may be marked “CONFIDENTIAL”. LACERA will deny public disclosure of any portions so designated. The submittal of a response with portions marked CONFIDENTIAL shall constitute the respondent’s agreement, in consideration for LACERA’s willingness to receive such response, to reimburse LACERA for, and to indemnify, defend, and hold harmless LACERA, its officers, fiduciaries, employees, and agents from and against: (a) any and all claims, damages, losses, liabilities, suits, judgments, fines, penalties, costs and expenses


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including, without limitation, attorneys’ fees, expenses and court costs of any nature whatsoever (collectively, “Claims”) arising from or relating to LACERA’s non-disclosure of any such designated portions of a response; and (b) any and all Claims arising from or relating to LACERA’s public disclosure of any such designated portions of a response if disclosure is deemed required by law or by court order.

4. All responses must remain valid for a period of not less than 120 days from the

closing date for submission. This includes pricing as well as nominated engagement staff.

5. There is no expressed or implied obligation for LACERA to reimburse ACTUARY

for any expenses incurred in preparing their response and such costs should not be included in the response. LACERA reserves the right to retain the ACTUARY’s response and use any information or ideas contained therein.

6. ACTUARY will direct all communications, oral and written, to Gregg Rademacher,

Assistant Executive Officer (626) 564-2494, and are specifically precluded from contacting other LACERA staff.

7. LACERA reserves the right to reject responses at its sole discretion for reasons

including, but not limited to: 1) Failure to respond in the format required, both in content and sequence, 2) Failure to submit the response by the specified deadline, 3) Any other reason which, in LACERA’s opinion, the response fails to meet the conditions and requirements of this Request for Proposal.

8. This RFP is not an offer to contract. Acceptance of a proposal neither commits

LACERA to award a contract to any vendor, even if all requirements stated in this RFP are met, nor limits our right to negotiate in our best interest. LACERA reserves the right to contract with a vendor for reasons other than lowest price. Failure to answer any question in this RFP may subject the proposal to disqualification. Failure to meet a qualification or requirement will not necessarily subject a proposal to disqualification.

VII. Request for Proposal Timeline

Actuarial Services RFP Timeline Issue RFP Week 1 Friday, June 3, 2005 Submission Deadline Week 4 Wednesday, June 29, 2005 Board Review and Possible Selection Week 6 Wednesday, July 13, 2005 Possible Interview and Selection Week 8 Wednesday, July 27, 2005

VIII. Evaluation Process

A panel of LACERA staff will evaluate all qualified responses. Staff recommendations will be presented to LACERA’s Board of Investments. Any one or more of the


ACTUARY's may be requested to make an oral presentation. Such presentation will provide the ACTUARY with an opportunity to answer any questions LACERA may have regarding the ACTUARY’s response. Evaluation criteria are as follows:

Score Weighting Factor Engagement Staff 50% Communication 30% Pricing 20%

IX. Submission

Responses must be received at LACERA offices not later than 5:00 P.M., Wednesday, June 29, 2005. All responses must be in writing. No telegraphic, fax, email, or telephone responses will be accepted. Responses not received by the appointed date and time may not be considered at LACERA’s sole discretion, regardless of delivery method, postmarks, or extenuating circumstances. Responses shall be delivered to:

LACERA ACTUARIAL SERVICES RFP 300 N. Lake Avenue, Suite 820 Pasadena, CA 91101 Attention: Gregg Rademacher

X. Attachments

A. Statement of Work B. Sample Contract C. Listing of LACERA System Tables D. Available at www.lacera.com:

Actuarial Valuation as of June 30, 2004 Actuarial Investigation Report as of June 30, 2004 Actuarial Audit as of June 30, 2004 Annual Financial Report as of June 30, 2004

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http://www.lacera.com/

Actuarial Services RFP STATEMENT OF WORK Attachment A

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TASK 1: Annual Valuation

Using such information as LACERA provides pursuant to the request of ACTUARY, ACTUARY shall compute an actuarial valuation of the assets and liabilities of the LACERA Retirement System as of June 30 each year, by plan tier and in total. The ACTUARY shall prepare a report and make recommendations to the Board of Investments regarding the actuarial status of the Retirement System as of said date as organized and existing under the County Employees Retirement Law of 1937 (Chapter 3 of Part 3 of division 4 of Title 3 of the Government Code as amended). Specific responsibilities are as follows: A. The ACTUARY shall prepare a report to the Board of Investments stating

separately:

1. Normal cost contributions and required rates for members by Plan and type of membership (General or Safety).

2. Normal cost contributions and required rates for County and Districts as

required by Section 31453 and 31453.5 by Plan and type of membership (General or Safety).

3. Cost-of-living contributions and required rates for member and of County

and Districts as required by Article 16.5 of the County Employees Retirement Law, by Plan and type of membership (General or Safety).

4. Breakdown of present value of basic benefits for retirees by Plan and type

of membership (General or Safety) as of the valuation date. 5. Breakdown of present value of cost-of-living benefits for retirees by Plan

and type of membership (General or Safety) as of the valuation date. 6. Present value of benefits for vested terminated members, by Plan and type

of membership (General or Safety) as of the valuation date. 7. Allocation of the Unfunded Actuarial Accrued Liability (UAAL) for each

Plan and type of membership (General or Safety) as of the valuation date. Within each type of membership, the allocation information and required rate of contribution shall state the basic benefit and the cost-of-living benefit separately.


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8. When employer agrees to pay a portion of employee’s contribution, provide percentage of employee contributions as a fixed percentage of total payroll required to be paid by employer, assuming no employee vesting in such amount, for each type of membership (General or Safety), and by Plan if different.

9. The number of participants included in the study by Plan and type of

membership. Charts and tables shall be included showing the distribution by age and service for active members, and by year of retirement by Pensioners.

B. If requested by the Board of Investments the ACTUARY shall estimate the

change in County and Member contribution rate that would result from any change in assumptions.

C. The ACTUARY shall submit a draft report of the valuation findings to LACERA

prior to its final report and will be open to suggested changes in the draft report as proposed by LACERA.

D. The ACTUARY shall submit a final report, along with one hundred (100) color

copies, to the LACERA Board of Investments on or before the latter of November 30 of the valuation year or eight weeks after the receipt of all data from LACERA necessary to complete this Task in the Statement of Work.

E. The Actuary shall include in the Valuation such supplemental information as

required to comply with Governmental Accounting Standards Board reporting requirements.

F. The ACTUARY shall prepare and provide all operating tables essential to the

administration of the system in accordance with the findings of the actuarial investigation, examination, and valuation. The ACTUARY shall provide two (2) paper copies of these tables and an electronic update as defined in the Statement of Work TASK 4.

TASK 2: Triennial Investigation

The ACTUARY shall conduct an investigation of the economic and non-economic assumptions being used to set County and Member contributions. Such recommendations shall include, but not be limited to, an examination of the earnings rate, inflation rate, and the compensation, mortality, withdrawal, retirement and disability experience of the members and beneficiaries, by Plan and by type of membership (General or Safety). Specific responsibilities are as follows:


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A. The ACTUARY shall compare actual investment experience of the Plans to the

actuarial assumption, provide a historical perspective of the experience and make a recommendation for adjustment.

B. The ACTUARY shall compare actual salary increases of Plan participants to the

actuarial assumption, provide a historical perspective, and make a recommendation for adjustment.

C. The ACTUARY shall study the actual experience of withdrawals, retirements,

disabilities, deaths, and life expectancy with respect to non-economic assumptions, and make recommendations for any changes. The ACTUARY shall maintain the related experience tables and adjust as required.

D. Prior to performing the respective annual valuation, the ACTUARY shall submit

an investigation report to the Board of Investments summarizing the results of the investigation and making recommendations for changes if any. The ACTUARY shall provide one hundred color copies of their investigation report. The first investigation report shall be for the fiscal year ending June 30, 2007 and continue each third year thereafter.

TASK 3: Supplemental Targeted Adjustment for Retirees (STAR) Valuation

Provide a valuation to LACERA no later than July 31, annually that shows: A. The expected benefit payments from the STAR program for the next ten years. B. The funding requirement to vest STAR program benefits. C. The number of years that the current STAR program reserves can be expected to

last subject to inflation and mortality assumptions as defined by LACERA.

TASK 4: Actuarial and Governmental Table Updates ACTUARY shall provide table updates for use in LACERA information systems. Such updates may be required from changes recommended in the triennial investigation, changes in the Social Security benefit calculation, and other such changes which impact tables resident in LACERA information systems for the purpose of calculating benefits. Such table updates shall be provided to LACERA in machine-readable format. Such tables shall be delivered to LACERA immediately upon issuance or adoption of revised tables, but no later than one month prior to the tables’ effective date. Such tables include, but are not limited to, the following:


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A. Actuarial tables necessary to make benefit calculations under the plans. See

Attachment C, Listing of LACERA System Tables. B. Federal and state government tables necessary for system operation, including federal

and state withholding, Social Security tables, estimated PIA tables.

TASK 5: Actuarial Consulting under Basic Retainer Provide “routine” consulting work on matters that regularly arise throughout the year, including, but not limited to, the following: A. Administrative consultation on actuarial issues. B. Assistance on unusual benefit calculations. C. Attendance at, up to six, Board meetings during the fiscal year. D. Response to auditor (financial, operational, and actuarial) requests during the

year, including phone calls and written correspondence. E. Provide LACERA the Actuarial Letter for inclusion in the Annual Report. F. Provide actuarial cost estimates that are approximate and do not require additional

computer calculations or data collection. G. Provide LACERA notification of federal, state or regulatory changes to laws,

mandates or other such guidance relative to actuarial services and the operation of LACERA’s plan. Such notification to include the ACTUARY’s general newsletter and special reports, if any.

TASK 6: Actuarial Consulting under a Time and Material Billing

A. Provide actuarial consulting services not covered in the above tasks. The

ACTUARY shall provide a fee estimate of the requested service that shall be approved by LACERA before work commences. Projects may include, but are not limited to:

1. Preparation of cost or impact reports regarding system funding resultant

from legislation, proposed regulation, salary negotiations, or other special circumstances requiring substantial data collections and use of computer resources.


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2. Programming, testing and installing changes or provide specifications for

modification of actuarial program routines, including those resident in LACERA’s member database. Such changes may be required as routine updates, for changes in plan provisions, or to perform requested program modifications. The ACTUARY shall be required to certify the accuracy of any and all benefit calculations added or modified.

3. Development of actuarial models for the purposes of benefit analysis,

policy analysis and education. TASK 7: Valuation Audit

ACTUARY shall conduct a valuation audit of LACERA’s actuarial valuation in accordance with LACERA’s actuarial audit policy that calls for parallel valuations (independent reproduction of the detailed valuation results) on a three year cycle that coincides with LACERA’s three-year Investigation of Experience schedule. The last valuation audit was conducted as of June 30, 2004 and the next valuation audit shall be conducted as of June 30, 2007. ACTUARY shall consult with LACERA’s consulting actuary and staff in the course of the audit. Such audit shall include but not be limited to:

A. Evaluation of the available data for the performance of such valuation, the degree to

which such data is sufficient to support the conclusions of the valuation, and the use and appropriateness of any assumptions made regarding such data.

B. Perform valuation audit using the assumptions, methodologies, and funding methods

used by LACERA’s consulting actuary in their performance of the valuation. ACTUARY shall reperform all work and not rely on the work of LACERA’s consulting actuary.

C. Evaluation of the parallel valuation results and reconciliation of any discrepancies

between the findings, assumptions, methodology, rates, and or adjustments of the ACTUARY and LACERA’s consulting actuary.

D. Audit to be performed concurrently with the consulting actuary’s performance of the

actuarial valuation. It is LACERA’s intent that parallel valuation results and the reconciliation of any discrepancies between the findings, assumptions, methodology, rates, and or adjustments be communicated to the consulting actuary prior to their completion of work so that the consulting actuary may consider such adjustments and recommendations for inclusion in their completed valuation.


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TASK 8: Investigation Audit

ACTUARY shall conduct an investigation audit of LACERA’s Investigation of Experience in accordance with LACERA’s actuarial audit policy that calls such audits on a three year cycle. The ACTUARY shall perform an actuarial peer review audit for each Investigation of Experience which will include conducting a parallel Investigation of Experience (independent reproduction of the detailed investigation results) for every second experience study. The last peer review investigation audit was conducted as of June 30, 2004 and the next investigation audit shall be conducted as of June 30, 2007 and shall include the reproduction of the investigation. ACTUARY shall consult with LACERA’s consulting actuary and staff in the course of the audit. Such audit shall include but not be limited to: A. Evaluation of the available data for the performance of such investigation, the degree

to which such data is sufficient to support the conclusions of the investigation, and the use and appropriateness of any assumptions made regarding such data.

B. Evaluation of recommended economic and non-economic assumptions as presented in LACERA’s consulting actuary’s investigation report.

C. Subject to the alternating investigation audit policy, ACTUARY shall reproduce the Investigation of Experience and not rely upon the work of LACERA’s consulting actuary.

D. Evaluation of the investigation results and reconciliation of any discrepancies between the findings, assumptions, methodology, rates, and or adjustments of the ACTUARY and LACERA’s consulting actuary.

E. Audit to be performed concurrently with the consulting actuary’s performance of the Investigation of Experience. It is LACERA’s intent that investigation audit results and the reconciliation of any discrepancies between the findings, assumptions, methodology, rates, and or adjustments be communicated to the consulting actuary prior to their completion of work so that the consulting actuary may consider such adjustments and recommendations for inclusion in their completed investigation.

TASK 9: Parallel Valuation

ACTUARY shall conduct a parallel valuation (independent reproduction of the detailed valuation results) of LACERA’s June 30, 2005 valuation. ACTUARY shall consult with LACERA’s consulting actuary and staff in the course of the engagement. Such engagement shall include but not be limited to the following:


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A. Evaluation of the available data for the performance of such valuation, the degree to

which such data is sufficient to support the conclusions of the valuation, and the use and appropriateness of any assumptions made regarding such data.

B. Perform parallel valuation as of June 30, 2005 using the assumptions, methodologies,

and funding method used by LACERA’s consulting actuary in their performance of the June 30, 2005 valuation. ACTUARY shall reproduce all work and not rely on the work of LACERA’s consulting actuary.

C. Evaluation of the parallel valuation results and reconciliation of any discrepancies

between the findings, assumptions, methodology, rates, and or adjustments of the ACTUARY and LACERA’s consulting actuary.

D. Audit to be performed concurrently with the consulting actuary’s performance of the

actuarial valuation. It is LACERA’s intent that parallel valuation results and the reconciliation of any discrepancies between the findings, assumptions, methodology, rates, and or adjustments be communicated to the consulting actuary prior to their completion of work so that the consulting actuary may consider such adjustments and recommendations for inclusion in their completed valuation.

Actuarial Services RFP SAMPLE CONTRACT Attachment B

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THIS IS A DRAFT CONTRACT. IF YOU WISH TO MODIFY, DELETE OR ADD LANGUAGE, YOU MUST DO SO AT THE TIME YOU SUBMIT YOUR PROPOSAL. PLEASE INCLUDE THE RATIONALE FOR THE REQUESTED MODIFICATION, DELETION OR ADDITION. LACERA RESERVES THE RIGHT TO MAKE MODIFICATIONS, DELETIONS OR ADDITIONS TO THE CONTRACT.

AGREEMENT

FOR

ACTUARIAL CONSULTING, INVESTIGATION,

AND VALUATION SERVICES

BETWEEN LACERA

AND

____________ __, 2005


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AGREEMENT

FOR ACTUARIAL CONSULTING, INVESTIGATION, AND VALUATION SERVICES

This Agreement for Actuarial Consulting, Investigation, and Valuation Services ("Agreement") is made and entered into as of __________ __, 2005 (“Agreement Date”), at Pasadena, California, by and between the Los Angeles County Employees Retirement Association ("LACERA"), and _______________, a _____________________ (“Actuary"), for the performance of actuarial services.

RECITALS A. LACERA is a duly established and existing public retirement system created under the County Employees Retirement Law of 1937, California Government Code Section 31450 et seq.; and B. Government Code Section 31453 requires LACERA to secure an actuarial valuation not less than every three years; and C. Pursuant to Government Code Section 31453, the valuation must be conducted under the supervision of an actuary and must cover the mortality, service, and compensation experience of the members and beneficiaries, and must evaluate the assets and liabilities of the retirement fund. D. Pursuant to Government Code Section 31453, LACERA’s Board of Investments (the “LACERA Board”), upon the basis of the investigation, valuation, and recommendation of the actuary, must at least 45 days prior to the beginning of the succeeding fiscal year, recommend to the Board of Supervisors of Los Angeles County, California (the “County Board”) such changes in the rates of interest, in the rates of contributions of members, and in county and district appropriations as are necessary. E. Pursuant to Government Code Section 31454, the County Board must, not later than 90 days after the beginning of the immediately succeeding fiscal year adjust the rates of interest, the rates of contributions of members, and county and district appropriations in accordance with the recommendations of the LACERA Board. F. Pursuant to Government Code Section 31454.1, the independent assumptions and calculations of an actuary contained in the actuarial valuation required by Section 31453 are not subject to the “meet and confer” provisions of the Meyers-Milias-Brown Act [cite code section]; however, it is recognized that such provisions require that the County Bo9ard meet and confer with representatives of recognized


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employee organizations prior to determining a course of action with respect to the recommendations contained in such actuarial valuation; and G. In order to obtain and retain the most competent actuarial services available to conduct the valuations required by the Section 31453 and to perform such other actuarial consulting, investigation, valuation services as the LACERA Board may require from time to time, the LACERA Board issued a request for proposals (“RFP”) to several actuarial firms, and determined from Actuary’s written and oral response to the RFP, that Actuary can best meet the needs of LACERA for experienced and skilled actuarial services. H. Actuary represents that it is an “enrolled actuary” under Section 1241 and 1242 of Title 29 of the United States Code and meets the standards of a qualified actuary under the Employee Retirement Income Security Act of 1974, as amended, and is specifically qualified and experienced thereunder and desires to perform the actuarial services required by Government Code Section 31453 and otherwise contemplated in this Agreement. NOW, THEREFORE, in consideration of the mutual covenants and conditions hereinafter set forth, and intending to be legally bound, the parties agree as follows:

AGREEMENT

1. Recitals Incorporated by Reference. The recitals set forth following the preamble to this Agreement are incorporated into the body of this Agreement and made a part of this Agreement, as if fully set forth herein.

2. Exhibits. All Exhibits are incorporated into and made a part of this

Agreement. All Exhibits shall be subject to the terms of this Agreement, and to the extent the terms of any Exhibit and this Agreement are in direct conflict, the terms of this Agreement shall govern unless the applicable Exhibit expressly provides otherwise by explicit reference to this Section 2.

3. Definitions. For purposes of this Agreement, capitalized terms

have the meanings set forth in this Section 3. "Agents" means any officers, directors, employees, agents, or representatives of Actuary acting in connection with this Agreement. "Agreement" means this Agreement for Actuarial Consulting, Investigation, and Valuation Services entered into by and between LACERA and Actuary. “Agreement Date” means the date shown in the preamble of this Agreement


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"Actuary" means __________, a __________________. “Actuary’s Proposal” means the proposal dated _________, 2005 submitted by Actuary in response to the RFP, and all supplements thereto. “County” means the County of Los Angeles, California. “County Board” means the Board of Supervisors of Los Angeles County, California.

“Covered Persons” means LACERA, its trustees, officers, and employees. “Effective Termination Date" means the date on which work under this Agreement will formally cease, as specified in any Notice of Termination delivered by one party to the other. "Force Majeure" means any cause, circumstance, or event beyond the control and without the fault or negligence of Actuary which causes Actuary to fail to perform its obligations hereunder. Such causes, circumstances or events may include, but are not restricted to, acts of God or of the public enemy, acts of any foreign, international, federal or state government (including all subdivisions thereof) in such government's sovereign capacity, fires, floods and earthquakes; but in every case the failure to perform must be beyond the control and without the fault or negligence of Actuary. "LACERA" means the Los Angeles County Employees Retirement Association, an independent public pension fund established under the authority of the County Employees Retirement Law of 1937 (California Government Code Sections 31450 et seq.). “LACERA Board” means the Board of Investments of LACERA. “LACERA Confidential Information” means the Member Records and all information relating to LACERA’s investments and financial accounting. “LACERA’s Project Director” means LACERA’s Chief Executive Officer or her/his designee. "Legal Requirements" means all federal, state, county and local laws, rules, regulations, ordinances, registrations, filings, approvals, authorizations, consents and examinations which may apply to Actuary in relation to its performance under this Agreement, including Government Code section 1090 et seq., and the Political Reform


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Act (Government Code section 81000 et seq., and including the regulations promulgated pursuant thereto by the Fair Political Practices Commission). "Member Records" means any records relating to LACERA's members or beneficiaries.

"Notice of Termination for Convenience" means a notice delivered by one party to the other party when the notifying party desires to terminate this Agreement for its convenience. "Notice of Termination for Default" means a notice delivered by one party to the other party when the notifying party desires to terminate this Agreement due to a default by the other party. “RFP” means the request for proposals for actuarial consulting, investigation and valuation services issued by LACERA dated __________, 2005. 4. Performance Requirements.

A. Work to be Performed. Actuary agrees to perform the actuarial services set forth in Exhibit “A” (Statement of Work), attached hereto.

B. Quality of Services. Actuary will perform all work with the standard of care, skill, prudence and diligence that applies to other experts practicing in a like enterprise, and will meet the requirements and standards set forth in this Agreement. Actuary will promptly correct any errors or omissions in the provision of such services, at no cost or expense to LACERA, within five (5) business days after request by LACERA’s Project Director. C. Actuary’s Work Schedule. For work for which there is no time schedule set forth in Exhibit A, for example, special projects, Actuary and LACERA’s Project Director will agree in writing on Actuary’s work schedule before Actuary commences the work. The writing will make reference to this Agreement and will include a good faith estimate of the cost of such work, and when signed by the parties shall be attached to and made a part of this Agreement. 5. Project Responsibility - Actuary. A. Actuary’s Project Manager. ___________, a _____________Actuary for Actuary, is Actuary’s Project Manager. Actuary’s Project Manager:


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(1) has full authority to act for Actuary on all matters relating to the daily operation of this Agreement; and (2) will be reasonably available during LACERA’s normal working hours for telephone contact and to meet with LACERA personnel designated to discuss Actuary’s performance. B. Primary Relationship Actuaries.

(1) Actuary designates _________________________ as the primary actuaries to perform the services described in the Statement of Work attached hereto. The appointment of the specific individuals identified in this Section as the primary relationship actuaries responsible for performing the actuarial services described in the Statement of Work constitutes a material inducement to LACERA to enter into this Agreement.

(2) Actuary will not remove Actuary’s Project Manager or any of

the primary relationship actuaries from the work without the prior written consent of LACERA’s Project Director, which LACERA may withhold in its discretion, but such restriction shall not apply to instances of employment termination, serious illness, death, or other cause beyond Actuary’s control. (3) Upon request by LACERA’s Project Director, Actuary will replace any of Actuary’s personnel or subcontractors assigned to perform services under this Agreement, who are in LACERA’s opinion, unable to effectively carry out the responsibilities of this Agreement. 6. Project Responsibility – LACERA.

A. LACERA’s Project Director. LACERA’s Project Director is LACERA’s Chief Executive Officer, who shall be responsible for: (a) providing overall management and coordination of this Agreement acting as liaison for LACERA; (b) ensuring that the provisions and objectives of this Agreement are met;

(c) providing direction to Actuary in all matters relating to policy information, information requirements, and procedural requirements; and (d) Authorizing Actuary from to time to time to perform special projects contemplated in the Statement of Work.


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B. Delegation of Authority by LACERA’s Project Director. LACERA’s Project Director may delegate all or some of her authority from time to time. C. Limit on Authority. LACERA’s Project Director is not authorized to make changes in the terms and conditions of this Agreement, and is not authorized to obligate LACERA in any respect whatsoever, beyond those duties and responsibilities delegated to the LACERA Project Director in this Agreement. D. List of Authorized Persons. Upon execution of this Agreement, LACERA’s Project Director shall provide Actuary with a list of authorized LACERA personnel (“Authorized Persons”) who will be permitted to contact Actuary regarding the work Actuary is to perform under this Agreement. The list of Authorized Persons and any changes to such list shall be made in writing to Actuary and signed by LACERA’s Chief Executive Officer. E. No Personal Liability. Neither LACERA’s Project Director nor any person delegated responsibility for the administration of this Agreement by LACERA’s Project Director will have any personal liability to Actuary for any action taken or not taken by such individual while acting or purporting to act as LACERA’s Project Director or delegate of such Project Director. 7. Independent Contractor Status. In performing under this Agreement, Actuary and its Agents are acting and performing as independent contractors. This Agreement is not intended, and may not be construed, to create the relationship of agent, servant, employee, partnership, joint venture, or association as between Actuary and LACERA. Nothing in this Agreement will cause LACERA to be responsible for any action, omission or inaction of Actuary. For all purposes, including but not limited to Workers' Compensation liability, Actuary understands and agrees that all persons furnishing services to LACERA pursuant to this Agreement are deemed employees solely of Actuary and not of LACERA. 8. Compensation and Payment. A. Compensation. Actuary will be paid according to the following schedule for its services: (1) Annual valuation: $__ per annual valuation.

(2) Triennial investigation: $__ per triennial investigation. (3) STAR valuation: $__ per annual valuation.


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(4) Actuarial and governmental table updates: $__ per update. (5) Basic retainer for consulting: $__ per year, prorated for partial years. (6) Special Projects: Actuary’s time will be billed at the hourly rates set forth in Exhibit “B” (Hourly Fee Schedule) attached to this Agreement and incorporated by reference herein. (7) Increases in the rates shown in the fixed fees above and the Hourly Fee Schedule are subject to the approval of LACERA’s Project Director. . B. Expenses. Actuary’s expenses are included in the compensation described in Section 5.A and therefore Actuary is not entitled to any separate reimbursement for any expenses incurred by it in discharging its duties under this Agreement, unless otherwise agreed by LACERA. C. Invoices and Payment.

(1) Actuary will submit to LACERA’s Project Director an invoice for each report identified in subparts (1) through (4), inclusive, of Section 8.A, within thirty (30) days after the later of completion of the task (including delivery of the final report to LACERA in the required quantity), and, if required, presentation of the report to the LACERA Board. (2) For the retainer for basic consulting, Actuary will submit monthly invoices, in arrears, which in the aggregate will not exceed $__________ per year, prorated for partial years. (3) For special projects, Actuary will submit monthly invoices, in arrears, identifying the individuals performing work, the number of hours worked, and their hourly rate. (4) All invoices are subject to the review of LACERA’s Project Director. Approved invoices will be paid within thirty (30) days of receipt. D. Non-Compensable Services. Actuary agrees that should work be performed outside the scope of the Statement of Work described in Exhibit “A” hereto, without the prior written consent of LACERA in accordance with Section 17.A (Changes and Amendments) to this Agreement, such work will be deemed to be a gratuitous effort on the part of Actuary, and Actuary will have no claim against LACERA for such work, and LACERA will have no obligation to pay for such work.


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9. Term and Termination. A. General Term. Subject to the termination provisions set forth in Sections 9.B through 9.E., inclusive, below, the term of this Agreement commences on the Agreement Date and continues for the valuation years ending June 30, 200_ through June 30, 200_. This Agreement automatically renews for subsequent and successive five year periods under the same terms, conditions and compensation, unless either party requests changes not less than ninety (90) days prior to June 30 of the final valuation year of the then current term. Neither party is required to renew or extend this Agreement. B. Termination by LACERA for Convenience. LACERA may terminate this Agreement or reduce the scope of work to be performed by Actuary without cause at any time by delivering to Actuary a written Notice of Termination for Convenience specifying the extent to which Actuary's services are terminated and the Effective Termination Date. The Effective Termination Date may be no earlier than ten (10) calendar days after such Notice of Termination for Convenience is delivered to Actuary. LACERA's termination of this Agreement under this Section 9.B is not a waiver of LACERA's right to make a claim against Actuary for damages resulting from any default by Actuary which occurred prior to the Effective Termination Date. C. Termination by LACERA for Default. LACERA may immediately terminate all or any part of this Agreement by delivering to Actuary a written Notice of Termination for Default which specifies the Effective Termination Date, under any one of the following circumstances: (1) Upon notice but without cure period, if Actuary fails to perform the work specified in Exhibit “A” hereto within the time specified herein or any extension thereof; (2) If Actuary fails to perform any other provision of this Agreement, or so fails to make progress as to endanger performance of this Agreement in accordance with its terms, and in either of these two circumstances fails to cure such default within ten (10) calendar days (or such longer period as LACERA may authorize in writing) after receipt of written notice from LACERA specifying such default; (3) Upon notice but without further cure period, if Actuary repeatedly fails to perform according to this Agreement following notice and failure to cure pursuant to Section 9.C.(2) hereof; (4) Without notice or cure period if Actuary materially breaches any of the warranties, representations and covenants made in Section 11 (Actuary’s Representations, Warranties and Covenants) below;


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(5) Without notice or cure period if Actuary is subject to criminal indictment or conviction, or is found civilly or criminally liable by a trial court, jury or administrative body in connection with any matter involving breach of trust, breach of fiduciary duty, fraud, or theft; or (6) Without notice or cure period if Actuary attempts or purports to assign this Agreement, or any portion hereof, or any of its rights or obligations hereunder, without obtaining LACERA's prior written consent. D. Termination by LACERA for Insolvency. LACERA may immediately terminate all or any part of this Agreement by delivering to Actuary a written Notice of Termination for Default which specifies the Effective Termination Date, under any one of the following circumstances: (1) Actuary becomes insolvent. Actuary will be deemed insolvent if it has ceased to pay its debts in the ordinary course of business or cannot pay its debts as they become due, whether it has committed an act of bankruptcy or not, and whether or not it is insolvent within the meaning of the United States Bankruptcy Code (11 U.S. Code § 101 et seq.); (2) Actuary files a voluntary petition under any bankruptcy, reorganization or insolvency law and relief from the automatic stay is obtained by LACERA; (3) Actuary applies for or consents to appointment of a trustee or receiver to take possession of all or substantially all its assets; (4) Actuary consents to, or files an answer admitting the jurisdiction of the court and the material allegations of, an involuntary petition filed under any bankruptcy, reorganization or insolvency law; or (5) An involuntary proceeding of bankruptcy, reorganization or insolvency is commenced against Actuary and not dismissed within thirty (30) days after commencement.

E. Termination by Actuary for Convenience. Actuary may terminate all or any part of this Agreement without cause at any time by delivering a written Notice of Termination to LACERA at least one hundred eighty (180) days before the desired effective date of termination.

F. Termination by Actuary for Default. If LACERA materially breaches this Agreement, Actuary may give written notice of such breach, and, if



LACERA has not cured the breach within thirty (30) days after receipt of notice, then Actuary shall have the right to terminate the Agreement immediately upon subsequent written notice. G. Force Majeure. Actuary shall not be liable, and may not be terminated for default, pursuant to Section 6.C or Section 6.D above, if Actuary's failure to perform under this Agreement arises solely from causes of Force Majeure. H. Rights, Remedies and Responsibilities upon Termination. If this Agreement is terminated, all of the terms and conditions of this Agreement shall continue to apply through the Effective Termination Date. The following provisions also apply to any termination of this Agreement. (1) Post-Termination Responsibilities. If LACERA terminates this Agreement, and unless otherwise expressly directed by LACERA, Actuary will: (i) take all necessary steps to stop providing services under this Agreement on the Effective Termination Date, or sooner, as provided in the Notice of Termination, and (ii) continue to perform those services, if any, which are not terminated. (2) Recovery of Reasonable Damages Upon Default. If LACERA terminates this Agreement in whole or in part for default pursuant to Section 6.C or Section 6.D above, LACERA is entitled to recover from Actuary all reasonable damages resulting from such default. By way of example and not limitation, LACERA may procure, upon such terms and in such manner as LACERA may deem appropriate, services similar to those terminated, and Actuary will be liable to LACERA for any excess cost of such similar services. (3) Payment when Terminated for Convenience. If LACERA terminates this Agreement for convenience pursuant to Section 6.B above, LACERA will pay Actuary for work already performed but for which Actuary has not been compensated through the Effective Termination Date. (4) Payment Withheld for Default. LACERA shall not authorize and shall withhold payment for services provided if LACERA terminates this Agreement for default pursuant to Section 6.C or Section 6.D above. In the event the damages caused by such default are less than the withheld payment for services, the amount withheld in excess of the damages shall be paid to Actuary. (5) Excusable Default. If, after LACERA issues a Notice of Termination for Default pursuant to Section 6.C or Section 6.D above, it is determined for any reason that Actuary was not in default, or that such default was excusable, then the rights and obligations of the parties will be the same as if LACERA had issued a Notice of Termination for Convenience pursuant to Section 6.B.



(6) Good Faith Transfer. Upon any termination of this Agreement by LACERA, and to the extent directed by LACERA, Actuary will cooperate with LACERA in good faith to effect a smooth and orderly transfer of such services and all applicable records to a successor designated by LACERA. Upon termination of this Agreement, Actuary will retain all LACERA Records according to the record retention provisions set forth in Section 9 below. (7) Cumulative Nature of Rights and Remedies. The rights and remedies provided by this Section 6 are not exclusive, but cumulative and in addition to any other rights and remedies provided by law, in equity or under any other provisions of this Agreement. The running of any grace period for cure of a default pursuant to Section 6.C or Section 6.D above does not limit LACERA's right to terminate this Agreement for convenience at any time, pursuant to Section 6.B above. 10. Indemnification and Insurance. A. Indemnification of LACERA. (1) Actuary agrees to indemnify, defend, save, and hold harmless the Covered Persons from and against any and all liabilities, losses, injuries, suits, costs, charges, judgments, fines, penalties, expenses (including defense costs and reasonable attorneys’ fees) and claims for damages of any nature whatsoever, including loss of funds, bodily injury, death, personal injury, or property damage [including any workers’ compensation suits, liability or expense arising from or connected with work performed by or on behalf of Actuary by any person pursuant to this Agreement, or any damage to Actuary’s property], which arise from the improper conduct of the Actuary, whether based on contract, tort, negligence, strict liability in tort, or by statute or otherwise, to the extent caused by, resulting from or arising out of: (a) any fraud, bad faith, negligence, willful misconduct, improper or unethical practice by Actuary or its Agents;

(b) any breach of any representation or warranty made by Actuary in this Agreement; (c) the breach of any covenant, agreement or obligation of Actuary contained in this Agreement or any other instrument contemplated by this Agreement, including breach of trust, breach of confidentiality, or violation of any Legal Requirement;



(d) any actual or alleged infringement of intellectual property rights, including infringement of any patent, trade secret, service mark, or copyright; and (e) any misrepresentation contained in any statement or certificate furnished by or on behalf of Actuary pursuant to this Agreement. (2) Covered Persons shall give Actuary prompt notice of any matter for which Covered Persons are entitled to indemnification pursuant to this Section 10.A, and Actuary shall control the defense or settlement thereof; provided, no such settlement or compromise shall be entered into unless, as part of such settlement or compromise, the third party executes a full and complete release of Covered Persons without recourse to Covered Persons for any amount, claim or other obligation whatsoever respecting such matter. Actuary shall have no right to settle or compromise any such matter without the consent of Covered Persons, which consent can be withheld for any reason or no reason, if such settlement or compromise involves the issuance of injunctive or other non-monetary relief binding upon Covered Persons or a plea of guilty or nolo contendere on the part of Covered Persons in any criminal or quasi-criminal proceeding, or which involves any admission of liability or culpability on the part of Covered Persons, or which has any collateral estoppel effect on Covered Persons. B. Insurance. Without limiting Actuary’s obligations under Section 10.A hereof, Actuary will provide and maintain at its own expense during the term of this Agreement and for so long thereafter as necessary to cover events occurring during such term and the consequences therefrom, the following programs of insurance covering its operations, from insurers rated at least A- X by A.M. Best & Company or otherwise approved in writing by LACERA. All policies, except for the Workers’ Compensation and Professional Liability policies, shall contain additional endorsements naming LACERA and its officers, trustees, and employees as additional named loss payees with respect to liabilities arising out of Actuary’s performance in connection with this Agreement. All policies required by this section will be primary and not contributing with any insurance or self-insurance programs carried or administered by LACERA. None of the insurance policies required by this section may be modified or terminated without at least thirty days prior written notice to LACERA (other than for termination for failure to pay the premium, in which case at least ten days prior written notice of termination is required). On or before the commencement date of this Agreement, and promptly as policies are modified, renewed or new policies are obtained, evidence of such insurance shall be provided to LACERA's Project Director in the form of a certificate of insurance. Such certificate shall describe the nature, amount and term of the insurance provided. Actuary’s failure to procure or maintain the insurance described in this Section 10.C will constitute a material breach upon which LACERA may immediately terminate this Agreement for default, pursuant to Section 9.C above.



(1) General Liability. General liability insurance written on a

commercial general liability form or a comprehensive general liability form covering the hazards of premises/operations, contractual, independent contractors, products/completed operations, broad form property damage, and personal injury with a combined single limit of not less than $2,000,000 per occurrence. If written with an annual aggregate limit, the policy limit should be three times the required occurrence limit.

(2) Auto. Auto liability insurance endorsed of all owned, non-owned and hired vehicles with a combined single limit of not less than $1,000,000 per occurrence. (3) Workers’ Compensation. Workers’ Compensation and Employer’s Liability insurance, in an amount and form to meet all applicable statutory requirements, including Employers Liability with a $1,000,000 limit, covering all persons who provide services for Actuary.

(4) Professional Liability (Errors and Omissions). Errors and omissions professional liability insurance with a limit of at least $100,000,000 per claim. Actuary warrants its professional liability insurance is applicable to Actuary’s actions, omissions, and obligations under this Agreement, and Actuary will provide LACERA with copies of its professional liability insurance policies upon request. Actuary will notify LACERA of any claim(s) that has a reasonable possibility of reducing Actuary’s errors and omissions professional liability coverage to less than $!00 Million during any current policy period. In addition, Actuary will notify LACERA in the event Actuary participates in any common risk pool or other insurance program in which the firm that LACERA has engaged as its audit Actuary participates, provided that LACERA notifies Actuary of such audit firm.

C. Effect of Policy Limits. Insurance coverages in the minimum amounts set forth herein shall not be construed to relieve Actuary for any liability, whether within, outside, or in excess of such coverage, and regardless of solvency or insolvency of the insure that issues the coverages; nor shall it preclude LACERA from taking such other actions as are available to it under any other provision of this Agreement or otherwise at law or in equity. D. Cooperation Regarding Insurance. LACERA may elect to procure insurance against loss or damage it may sustain in connection with Actuary’s performance under this Agreement. Actuary will promptly cooperate with any reasonable request for information regarding Actuary which is required to obtain such insurance.



11. Actuary's Representations, Warranties and Covenants. Actuary makes the following representations, warranties, covenants and agreements, acknowledging they constitute a material inducement to LACERA to enter into this Agreement. A. Authorization. This Agreement has been duly authorized, executed and delivered by Actuary and constitutes the legal, valid and binding agreements and obligations of Actuary, enforceable against Actuary in accordance with its terms, except insofar as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar limitations on creditors' rights generally and general principles of equity. Actuary is not subject to or obligated under any law, rule or regulation of any governmental authority, or any order, injunction or decree, or any contract or agreement, that would be breached or violated by Actuary's execution, delivery or performance of this Agreement. B. Contingent Fees. No person or selling agency has been employed or retained to solicit or secure this Agreement under any agreement or understanding for a commission, percentage, brokerage, or contingent fee, except bona fide employees of Actuary or bona fide established commercial or selling agencies maintained by Actuary for the purpose of securing business. In the event of any breach or violation of this warranty, LACERA shall have the right to immediately terminate this Agreement for default and, in LACERA's sole discretion, to deduct from Actuary's compensation under this Agreement, or otherwise recover, the full amount of such commission, percentage, brokerage or contingent fee. C. Gratuities. No gratuities in the form of gifts, entertainment or otherwise, were offered or given by Actuary to any officer, fiduciary, or employee of LACERA or the County with a view toward securing this Agreement or securing any favorable determination made concerning the award of this Agreement. Actuary covenants that no such gratuities will be offered or given to any such person with a view toward securing any favorable determination concerning the performance, continuation, and/or amendment of this Agreement. If it is found that such gratuities have been offered or given by Actuary, LACERA may terminate this Agreement upon one (1) calendar day's written notice; however, the facts upon which LACERA bases such findings will be at issue and may be reviewed in any competent court. In the event of such termination, LACERA may pursue the same remedies against Actuary as it could pursue in the event of default by Actuary. D. Conflicts of Interest With Persons Related to LACERA. No LACERA employee or fiduciary whose position with LACERA enables such person to influence the award of this Agreement or any competing agreement, and no spouse or economic dependent of such person, is or will be employed in any capacity by Actuary, or does or will have any direct or indirect financial interest in this Agreement.



E. Recruiting. During the term of this Agreement and for one (1) calendar year thereafter, Actuary will not intentionally induce or persuade any employee or independent actuary to LACERA to join Actuary. Actuary shall not be prohibited from hiring any employee of LACERA or an independent actuary to LACERA (i) who contacts Actuary on his or her own initiative without any direct or indirect solicitation on the part of Actuary, or (ii) where such hiring opportunity was publicly advertised or was part of a job fair to which the public was invited. F. Intellectual Property. No program, process, composition, writing, equipment, appliance or device, or any trademark, service mark, logo, idea, or any other work or invention of any nature or any other tangible or intangible assets whatsoever developed, provided or used by Actuary in connection with its performance under this Agreement, infringes or will infringe on any patent, copyright, or trademark of any other person or entity, or is or will be a trade secret of any other person or entity. If any claim of infringement of any intellectual property right is made against LACERA, Actuary will indemnify, defend and hold harmless all LACERA Covered Persons as provided in Section 10 above; however, Actuary will not be liable for any such claim which is based upon: (1) LACERA's use of a version of the work at issue that is not the then current release of such work, if such claim would have been avoided by using the then current release, or (2) LACERA's use of Actuary's work in combination with any program or data that is not Actuary's, if such claim would have been avoided by using Actuary's work exclusively. In addition, following notice of any such Claim, Actuary may, at its expense, either procure for LACERA the right to continue to use the allegedly infringing work, or replace or modify such work to make it non-infringing but functionally equivalent. G. Changes. Actuary will notify LACERA in writing within three (3) business days of any of the following changes: (i) Actuary becomes aware that any of its representations, warranties, covenants, or agreements set forth herein has been breached or ceases to be true at any time during the term of this Agreement; (ii) there is a change in Actuary's personnel assigned to perform services under this Agreement or (iii) there is any change in control of Actuary. H. Actuary’s Agents. The Agents of Actuary who will be responsible for performing under this Agreement are individuals experienced in the performance of the various functions contemplated by this Agreement and have not been convicted of any crime or found liable in a civil or administrative proceeding or pleaded no contest, or agreed to any consent decree with respect to any matter involving infringement of intellectual property rights, breach of fiduciary duty, or fraud. I. Employment Eligibility Verification. Actuary fully complies with all Federal statutes and regulations regarding employment of aliens and others and all



its employees performing work under this Agreement meet the citizenship or alien status requirements set forth in Federal statutes and regulations. Actuary will obtain from all employees performing work hereunder, all verification and other documentation of employment eligibility status as required by Federal statutes and regulations as they currently exist and as they may be hereafter amended. Actuary will retain all such documents for the period prescribed by law. Actuary will indemnify, defend and hold harmless all LACERA Covered Persons from and against any alleged employer sanctions and other liability which may be assessed against Actuary or LACERA in connection with any alleged violation of any Federal statutes or regulations pertaining to the eligibility for employment of any persons performing work under this Agreement. J. Investigations and Complaints. To the extent permitted by applicable law, Actuary shall promptly advise LACERA in writing of any extraordinary investigation, examination, complaint, disciplinary action or other proceeding relating to or affecting Actuary's ability to perform its duties under this Agreement, or involving any actuarial professional employed by Actuary who has performed any service with respect to LACERA’s account in the twenty-four (24) preceding months, which is commenced by any of the following: (A) the Securities and Exchange Commission of the United States, (B) any Attorney General or any regulatory agency of any state of the United States, (C) any U.S. Government department or agency, or (D) any governmental agency regulating actuaries in any country in which Actuary is doing business. Except as otherwise required by law, LACERA shall maintain the confidentiality of all such information until the investigating entity makes the information public. 12. Governmental Provisions. A. Compliance with Legal Requirements. In performing under this Agreement, Actuary agrees to comply with all Legal Requirements, and all provisions required thereby to be included in this Agreement are hereby incorporated by reference. B. Assurance of Compliance with Civil Rights Laws. Actuary hereby assures LACERA that Actuary complies with Subchapter VII of the Civil Rights Act of 1964, (42 U.S. Code Sections 2000(e) through 2000(e)(17)), to the end that no person shall, on grounds of race, creed, color, sex, or national origin, be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination under this Agreement or under any project, program, or activity undertaken pursuant to this Agreement. C. Nondiscrimination in Employment. Actuary will take all necessary action to ensure that job applicants are employed, and that its employees are treated during employment, without regard to their race, color, religion, sex, age, marital status, sexual orientation, disability, medical condition, ancestry or national origin. For purposes of this Section 12.C, the term "employment" shall include, but not be limited to



the following: employment, upgrading, promotion, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. 13. Records and Audits. A. Record Retention. Actuary will keep and maintain accurate records related to the performance of Actuary or its Agents under this Agreement, including but not limited to any pertinent activity, dates and time spent providing services hereunder, invoices billed to LACERA, proprietary data, and any other records created by Actuary or its Agents in connection with this Agreement (the "LACERA Records"). Actuary will keep and maintain such LACERA Records for no less than seven (7) years following the termination of this Agreement. B. Record Review and Audit. Actuary agrees that LACERA, or any duly authorized representative of LACERA, will have access to and the right to examine, audit, excerpt, copy or transcribe any LACERA Records at any time during the term of this Agreement, or at any time for up to seven (7) years after the termination of this Agreement. LACERA agrees that any such review and audit will be conducted in a manner to minimize interference with Actuary's normal business activities. Upon reasonable advance notice to Actuary, Actuary will make LACERA Records available for review and audit during normal business hours. Actuary will make the persons responsible for creating and maintaining LACERA Records available to LACERA during such review and audit for the purpose of responding to LACERA's reasonable inquiries. LACERA will pay all costs associated with such audit, other than any costs incurred by Actuary to make personnel available as required by the preceding sentence; however, if the audit reveals that Actuary has materially violated any of the provisions of this Agreement, Actuary will pay all costs associated with such audit. At LACERA’s request, Actuary will deliver copies of the LACERA Records to LACERA or to such third party designated by LACERA at LACERA’s cost and expense. C. Audit Settlement. If such audit finds that LACERA’s dollar liability for such work is less than payment made by LACERA, then the difference will be either repaid by Actuary to LACERA by cash payment upon demand or, at the option of LACERA, deducted from any amounts otherwise due to Actuary from LACERA. If such audit finds that LACERA’s dollar liability for such work is more than the payments made by LACERA, then the difference will be paid to Actuary by LACERA (but not more than the amounts agreed to for such work in this Agreement). D. Financial Statements. During the term of this Agreement, Actuary shall deliver to LACERA’s Project Director and Chief Counsel copies of Actuary’s most recent audited annual financial statements (or if none, financial statements certified as



true and correct by Actuary’s Chief Executive Officer) as soon as they become available to Actuary in the ordinary course. 14. Confidentiality; Proprietary Rights. A. Member Records. Actuary acknowledges that when performing under this Agreement, Actuary may be exposed to Member Records and that such Member Records are considered confidential and protected from public disclosure by law. Actuary will maintain the confidentiality of all Member Records according to all applicable federal, state, county and local laws, regulations, ordinances and directives relating to confidentiality. Actuary will inform all of its Agents of the confidentiality provisions of this Agreement. B. LACERA's Proprietary Rights. All materials, data, and other information developed by Actuary in the performance of this Agreement, when developed, become the sole property of LACERA (the “Work Product”). Actuary will deliver the Work Product to LACERA, or to such third party designated by LACERA, when requested by LACERA, or upon termination of this Agreement. The parties hereto acknowledge that Actuary retains the right to use its experience, expertise and knowledge on similar projects for other clients, so long as Actuary protects LACERA's interests in all of its confidential records and property. C. LACERA's Policies, Procedures and Strategies. Actuary will protect the security of and keep confidential all materials, data, and other information received by Actuary regarding LACERA’s assets and its policies, procedures and strategies for the evaluation, acquisition, development, management and disposition of same. D. Actuary's Proprietary Materials. Absent Actuary's written consent authorizing disclosure, LACERA will use commercially reasonable efforts to protect and maintain the confidentiality of any of Actuary's materials which Actuary considers to be proprietary, so long as: (i) Actuary clearly and prominently marks all such material with a restrictive legend; (ii) public disclosure of such material is not required by law; (iii) such material has not or does not become generally available to the public other than as a result of a disclosure by LACERA; (iv) such material was not available to the receiving party prior to its being furnished to such receiving party by LACERA; (v) such material was not developed by LACERA independently from Actuary; or (vi) Actuary has not consented to disclosure of such material by LACERA. In the event an action is commenced against LACERA under the California Public Records Act or otherwise which challenges LACERA's refusal to disclose Actuary's proprietary material, Actuary will defend LACERA in the action, and will pay any judgment for damages or attorneys’ fees that may be entered as a result of LACERA’s refusal to



disclose Actuary’s confidential material.

E. Tool Development. Actuary shall retain all rights, title and interest (including, without limitation, all copyrights, patents, service marks, trademarks, trade secret and other intellectual property rights) in and to all technical or internal designs, methods, ideas, concepts, know-how, techniques, generic documents and templates that have been previously developed by Actuary or developed during the course of the provision of the Work Product provided such generic documents or templates do not contain any LACERA Confidential Information or proprietary data. Rights and ownership by Actuary of original technical designs, methods, ideas, concepts, know-how, and techniques shall not extend to or include all or any part of the LACERA Records, LACERA’s proprietary data or LACERA’s Confidential Information. To the extent that Actuary may include in the Work Product any pre-existing Actuary proprietary information or other protected Actuary materials, Actuary agrees that LACERA shall be deemed to have a perpetual, fully paid up license to make copies of and use the Actuary owned materials for its internal business purposes and provided that such materials cannot be modified or distributed outside of LACERA without the written permission of Actuary. Actuary agrees that LACERA may deliver the Work Product to any entity engaged by LACERA as its actuary or audit actuary, so long as Actuary’s proprietary information or other protected Actuary materials are removed therefrom.

F. California Public Records Act. (i) Actuary’s work is subject to public disclosure under the California Public Records Act (California. Government Code sections 6250 et. seq., 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 Actuary believes in good faith that a portion of its work submitted to LACERA is exempt from public disclosure under the Act, such portion may be marked “TRADE SECRETS,” "CONFIDENTIAL," or “PROPRIETARY.” LACERA will deny public disclosure of any portions so designated. Documents marked “TRADE SECRET,” “CONFIDENTIAL,” OR “PROPRIETARY” in their entirely will not be honored, and LACERA will not deny public disclosure of all or any portion of documents so marked.



(ii) By submitting documents to LACERA with portions marked “TRADE SECRET,” “CONFIDENTIAL,” or “PROPRIETARY,” Actuary represents it has a good faith belief that such material is exempt from disclosure under the Act, and Actuary agrees to reimburse LACERA for, and to indemnify, defend and hold harmless LACERA, its officers, fiduciaries, employees, members, agents and employers participating in the LACERA plan, from and against: (a) any and all claims, damages, losses, liabilities, suits, judgments, fines, penalties, costs and expenses including, without limitation, attorneys' fees, expert witness’ fees, expenses, court costs, and costs of appeal of any nature whatsoever (collectively, "Claims") arising from or relating to LACERA's non-disclosure of any such designated portions of a proposal; and (b) any and all Claims arising from or relating to LACERA's public disclosure of any such designated portions of a document if disclosure is deemed required by law or by court order.

15. Conflicts and Disqualification [Depending on circumstances]

A. Definitions: For purposes of this Section 12: B. C. Regarding Other LACERA Actuarial Work. Actuary acknowledges that during the term of this Agreement and any renewals hereof, Actuary is disqualified from bidding on and performing any actuarial -audit services for or on behalf of LACERA. Actuary is permanently disqualified from bidding on requests for proposals to perform audits of the actuarial services it performs for or on behalf of LACERA.

16. Surviving Provisions. The parties agree that the provisions and obligations with respect to Section 9 (Term and Termination), Section 10 (Indemnification and Insurance), Section 11 (Actuary’s Representations, Warranties and Covenants), Section 13 (Records and Audits), Section 14 (Confidentiality; Proprietary Rights), Section 15 (Conflicts and Disqualification), , and any other provisions which expressly survive or by their nature are intended to survive expiration or termination of this Agreement, will survive any expiration or termination of this Agreement. 17. General Provisions. A. Changes and Amendments. LACERA reserves the right to change the Statement of Work under this Agreement, or to amend such other terms and conditions as reasonably necessary subject to the following conditions: (1) Any change which does not affect the scope of work, period of performance, payments, or any term or condition included under this Agreement,



requires a change notice prepared and signed by LACERA’s Project Director and Actuary’s Project Manager. (2) Any change which affects the scope of work, period of performance, payments, or any term or condition included in this Agreement, requires a negotiated written modification to the Agreement executed by authorized officials of LACERA and Actuary. B. Notices. All notices, requests, demands or other communications required or desired to be given under this Agreement or under any law now or hereafter in effect are to be in writing, addressed as provided below. Such notices, if properly addressed, will be deemed received (i) on the day delivered, if delivered to the recipient (ii) on the business day transmitted, if transmitted by facsimile to the number shown below (but on the next business day after transmittal if transmitted on a non-business day or after 5:00 p.m. recipient’s time), (ii) one business day after delivery to a reputable overnight courier, with delivery charges for next business day delivery paid by or charged to the sending party, or (iii) five calendar days after deposit in the U.S. Mail, first class registered or certified mail, postage prepaid:

To LACERA: To Actuary:

Chief Executive Officer ___________ LACERA ___________ 300 N. Lake Ave., Ste. 820 ___________ Pasadena, CA 91101-2601 ___________ Phone No. (626) 564-6000 ext. 3497 Phone No. ___________ Fax No. (626) 564-6177 Fax No. _____________ Either party may notify the other of its change in address in the manner provided above. Notwithstanding the prescribed method of delivery set forth above, actual receipt of written notice by the natural person designated above shall constitute notice given in accordance with this Agreement on the date received, unless deemed earlier given pursuant to the foregoing paragraph. C. Compliance with LACERA Communication Policy. Actuary agrees to comply with the following communication policy adopted by the Board:

All formal notices required to be given to LACERA by a service provider pursuant to the service provider’s contract with LACERA shall be addressed and delivered in accordance with the terms and conditions of the contract.



A service provider, or person or entity related to a service provider, shall provide to LACERA’s Chief Executive Officer a copy of all written communications to LACERA (other than purely personal or social correspondence, routine announcements, generally-distributed newsletters, and the like) related to LACERA’s business. If the communication relates to investment-related services provided to LACERA, a copy shall also be provided to LACERA’s Chief Investment Officer. If the communication relates to an actual or potential contract dispute, a copy shall also be provided to LACERA’s Chief Counsel. The addresses for LACERA’s Chief Executive Officer and Chief Counsel are:

Chief Executive Officer Chief Counsel LACERA LACERA 300 N. Lake Ave., Ste. 820 300 N. Lake Ave., Ste. 620 Pasadena, CA 91101 Pasadena, CA 91101 Chief Investment Officer LACERA 300 N. Lake Ave., Ste. 850 Pasadena, CA 91101 D. Attorneys' Fees, Costs, and Expenses.

(1) In any proceeding which arises out of this Agreement (whether in contract, tort or both), the prevailing party shall be awarded reasonable attorneys fees, together with any costs and expenses, including without limitation, expert witness fees and costs, copy costs, deposition costs, exhibit costs, costs on appeal, fees and costs associated with execution upon any judgment or order, special transcript costs, and the appointment of a Special Master or discovery referee, to resolve the dispute and enforce the final judgment or decision. These expenses shall be in addition to any other relief to which the prevailing party may be entitled and shall be included in and as part of the judgment or decision rendered in such proceeding. (2) The prevailing party shall be determined by the court based upon an assessment of which party’s major arguments made or positions taken in the proceedings could fairly be said to have prevailed over the other party’s major arguments or positions on major disputed issues in the court’s decision. If the party which shall have commenced or instituted the action, suit or proceeding shall dismiss or



discontinue it without the concurrence of the other party, such other party shall be deemed the prevailing party. E. Section Headings; Interpretation. Caption and paragraph headings used in this Agreement are for convenience and reference only and do not affect in any way the meaning, construction or interpretation of this Agreement. Any rule of construction to the effect that ambiguities are to be resolved against the drafting party does not apply in interpreting this Agreement. The language in all parts of this Agreement is to be construed according to its fair meaning, and not strictly for or against any party hereto. F. Entire Agreement. This Agreement, including the exhibits attached hereto and Actuary’s Proposal incorporated herein by reference, contains the entire and exclusive agreement between the parties hereto and supersedes all previous oral and written agreements or understandings, and all contemporaneous oral and written negotiations, commitments, understandings and communications between the parties, relating to the subject matter of this Agreement. G. Severability. If any provision of this Agreement is held by any court to be void, illegal, invalid, or unenforceable, in whole or in part, the remaining terms and provisions will not be affected thereby, and each of such remaining terms and provisions of this Agreement will be valid and enforceable to the fullest extent permitted by law, unless a party shows by a preponderance of the evidence that the invalidated provision was an essential economic term of the agreement or that an essential purpose of this Agreement would be defeated by the loss of the void, illegal, invalid or unenforceable provision. H. Waiver. The waiver of any breach of any provision of this Agreement by either party does not constitute a waiver of any preceding or subsequent breach of such provision or of any other provision of this Agreement. The failure or delay of either party to exercise any right given to the party under this Agreement does not constitute a waiver of such right, nor does any partial exercise of any right given hereunder preclude further exercise of such right.

I. Governing Law and Venue. This Agreement will be governed by, and construed and enforced in accordance with, the laws of the State of California without regard to principles of conflicts of laws. A party with one or more disputes or claims may commence an action in either the California State Superior Court or the United Stated District Court located in Los Angeles, County, California, which court shall have exclusive jurisdiction and venue over the parties, to which they hereby submit.

J. Assignment and Delegation. Actuary may not assign any of its rights or delegate or subcontract any of its duties hereunder without LACERA's prior



written consent, which consent may be granted or withheld in LACERA's sole discretion. Any attempted assignment or delegation in violation of this provision is void and entitles LACERA to terminate this Agreement. Despite LACERA's consent, no assignment releases Actuary of any of its obligations or alters any of its primary obligations to be performed under this Agreement. If Actuary is a partnership, this Agreement inures to the benefit of the surviving or remaining partners of such partnership. K. Execution in Counterparts; Facsimile Signature. This Agreement may be executed in two or more counterparts, each of which constitutes an original, and all of which, collectively, constitute one agreement. The signatures of all of the parties need not appear on the same counterpart, and delivery of an executed counterpart signature page by facsimile is as effective as executing and delivering this Agreement in the presence of the other parties to this Agreement. In proving this Agreement, a party must produce or account only for the executed counterpart of the party to be charged. L. Notice of Delays. Except as otherwise provided herein, when either party has knowledge that any actual or potential situation is delaying or threatens to delay the timely performance of this Agreement, that party will, within fifteen (15) days, give notice thereof, including all relevant information with respect thereto, to the other party. M. Time of the Essence. Time is of the essence in respect to all provisions of this Agreement that specify a time for performance. N. Joint and Several Liability. If Actuary consists of more than one person or entity, the liability of each such person or entity signing this Agreement as Actuary is joint and several. O. Word Usage. Unless the context clearly requires otherwise, (i) the plural and singular number each include the other; (ii) the masculine, feminine, and neuter genders each include the others; (iii) “or” is not exclusive; (iv) “includes” and “including” are not limiting; and (v) ”hereof,” “herein,” and other variants of “here” refer to this Agreement as a whole.

[Signatures follow on next page.]



IN WITNESS WHEREOF, the Los Angeles County Employees Retirement Association has caused this Agreement to be subscribed on its behalf by its duly authorized officer, and ____________ has caused this Agreement to be subscribed on their behalf by its duly authorized officer(s), as of the day, month, and year first written above. LACERA: Actuary: LOS ANGELES COUNTY EMPLOYEES __________________________ RETIREMENT ASSOCIATION a _________________________ By: ______________________ By: ____________________ Name: ______________________ Name:____________________ Title: ______________________ Title: _____________________ APPROVED AS TO FORM: By: _____________________ LACERA Legal Office Name: _____________________ Title: _____________________ By: ____________________ Earl W. Buehner Senior Staff Counsel

Actuarial Services RFP LISTING OF LACERA SYSTEM TABLES Attachment C

June 3, 2005 Page 1

Safety Member Retirements

A. Calculation of Service Retirement - Single Lives 1. Present value of $1 per month for life 2. Amount of monthly life annuity provided by $1,000 3. Amount of monthly "cash refund" annuity provided by $1,000

B. Service Retirement - Joint Lives

1. Joint life continuous annuity values for $1 per month 2. Present value of $1 per month life annuity with 60% continuance 3. Present value of $1 per month life annuity with 65% continuance 4. Option 2 factors 5. Option 3 factors 6. Present value of $1 per month life annuity with 50% continuance

C. Disability Retirement - Single Lives

1. Present value of $1 per month for life 2. Amount of monthly life annuity provided by $1,000 3. Amount of monthly "cash refund" annuity provided by $1,000

D. Disability Retirement - Joint Lives

1. Joint life continuous annuity values for $1 per month 2. Present value of $1 per month life annuity with 60% continuance 3. Present value of $1 per month life annuity with 65% continuance 4. Present value of $1 per month life annuity with 100% continuance

E. Social Security Option

1. Social Security level payment option at age 62 F. Expectation of Life

1. Service Retirement mortality 2. Disability Retirement mortality

G. Prospective primary Social Security monthly retirement benefits

1. Social Security monthly benefits for level income option

General Member Retirements

A. Calculation of Service Retirement - Single Lives 1. Present value of $1 per month for life 2. Amount of monthly life annuity provided by $1,000 3. Amount of monthly "cash refund" annuity provided by $1,000


June 3, 2005 Page 2

B. Service Retirement - Joint Lives 1. Joint life continuous annuity values for $1 per month 2. Present value of $1 per month life annuity with 60% continuance 3. Present value of $1 per month life annuity with 65% continuance 4. Option 2 factors 5. Option 3 factors 6. Present value of $1 per month life annuity with 50% continuance 7. Present value of $1 per month life annuity with 55% continuance

C. Disability Retirement - Single Lives

1. Present value of $1 per month for life 2. Amount of monthly life annuity provided by $1,000 3. Amount of monthly "cash refund" annuity provided by $1,000

D. Disability Retirement - Joint Lives

1. Joint life continuous annuity values for $1 per month 2. Present value of $1 per month life annuity with 60% continuance 3. Present value of $1 per month life annuity with 65% continuance 4. Present value of $1 per month life annuity with 100% continuance

E. Social Security Options

1. Social Security level payment option at age 62 2. Plan E early retirement reduction for ages 55 to 62

F. Expectation of Life

1. Service Retirement mortality 2. Disability Retirement mortality

G. Prospective primary Social Security monthly retirement benefits

1. Social Security monthly benefits for level income option 2. Social Security benefits for Plan E offset

Cost of Public Service

A. Projected average salary factors B. Present Value of Deferred Allowance

1. General Members, Plan A a. Present value of increasing life annuity starting at $1 per month at

assumed retirement age b. Present value of increasing life annuity with 60% continuance c. Present value of increasing life annuity with 65% continuance


June 3, 2005 Page 3

2. General Members, Plans B, C, D a. Present value of increasing life annuity starting at $1 per month at

assumed retirement age b. Present value of increasing life annuity with 60% continuance c. Present value of increasing life annuity with 65% continuance

3. Safety Members, Plan A

a. Present value of increasing life annuity starting at $1 per month at assumed retirement age

b. Present value of increasing life annuity with 60% continuance c. Present value of increasing life annuity with 65% continuance

4. Safety Members, Plan B

a. Present value of increasing life annuity starting at $1 per month at assumed retirement age

b. Present value of increasing life annuity with 60% continuance c. Present value of increasing life annuity with 65% continuance

C. Monthly Level Payment factors D. Amortization Table to convert lump Sum Payment into Monthly Payments

GR:ls Actrfp05.doc