Actuarial Valuation Report as of January 1, 2013 for the Plan Year Ending December 31, 2013
April 2013
Prepared by:
PensionBenefits, Inc.
700 E. Park Blvd.
Suite 108
Plano, TX 75074
972.424.2230
Total HR & Benefits Solutions
April 17, 2013
Ms. Susan Vinson
Finance Director
Regional Transportation Authority
5658 Bear Lane
Corpus Christi, TX 78405
Re:
Actuarial Valuation of the RTA Employees’ Defined Benefit Plan & Trust as of January 1, 2013
Dear Susan:
We are pleased to present our Report of the actuarial valuation of the RTA Employees’
Defined Benefit Plan & Trust as of January 1, 2013.
In additional to the actuarial valuation results, various accounting and employee listings are also included which should help you compare this plan year with prior years.
Based upon the actuarial valuation as of January 1, 2013, it is our opinion that the RTA
Employees’ Defined Benefits Plan & Trust is actuarially sound and that these results reasonably reflect the funding status and requirements of the plan.
We would like to thank you for your assistance in providing all necessary data to complete this valuation. Please do not hesitate to let us know if you have any questions or need additional information.
Sincerely,
L
Kien Liew, ,
,
EA FCA MAAA
Consulting Actuary
Mark A. Cavazos, ASA
Manager, Pension Services
RTA Employees’ Defined Benefit Plan & Trust
EXECUTIVE HIGHLIGHTS
1.
The target long-term sustainability goal is 9.4% of compensation as discussed in
Section 2.2 of the 2011 Report on Retirement Benefits.
2.
2013 Normal Cost remains stable at 9.2% of payroll (v. 9.2% for 2012). Normal cost represents the annual cost of providing an additional year of pension benefits (2% of average compensation) for the active participants. This is the only cost each year if the plan does not have any unfunded liability.
3.
An early retirement window program is recognized in the 2013 contribution. The effect of the program raised the 2013 annual contribution by 1.3% of payroll and lowered the funded ratio, i.e., assets as a percent of accrued liability, 2.7%.
4.
The 2013 annual contribution decreased to 13.2% of payroll (v. 15.5% for 2012).
The annual contribution is the sum of the Normal Cost plus the Amortization
Payment of the unfunded liability. The decrease in the amortization payment is mainly due to the investment and liability gains during 2012.
5.
The key to reduce contribution volatility is to identify the volatility risks and proactively manage these risks. These were discussed in the 2011 Report on
Retirement Benefits. Long term sustainability of the pension plan relies on how the risks are managed.
i
RTA Employees’ Defined Benefit Plan & Trust
CONTENTS
Section
Page
Transmittal Letter
Executive Highlights
i
Table of Contents
1.
Executive Summary
1
2.
Introduction
2
3.
Effect of Plan Amendment
3
4.
Annual Contribution Amount
4
5.
Plan Assets
6
6.
Actuarial Gains and Losses
9
7.
GASB No. 25 Disclosure
13
8.
Summary and Closing Comments
17
9.
Plan Specifications
18
10.
Demographic Data
21
11.
Schedule of Benefits
79
RTA Employees’ Defined Benefit Plan & Trust
Section 1.
1
EXECUTIVE SUMMARY
The key results from the actuarial valuation of the RTA Employees’ Defined Benefit Plan as of January 1, 2013, may be summarized as follows:
2013
1. Participants
a.Actives
b.Deferred Vested
c.Retirees & Beneficiaries
d.Total
2012
205
156
90
451
$7,474,445
2. Covered Payroll
3. Normal Cost (NC)
Percent of covered payroll
