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ATTACHMENT 4 California Public Employees' Retirement System Actuarial Office P.O. Box 942709 �j Sacramento,CA 94229-2709 TTY: (916)795-3240 Ca1PERS (888)225-7377 phone• (916)795-2744 fax www.calpers.ca.gov February 27, 2012 CALPERS ID:4137785275 Employer Name: CITY OF PLEASANTON Rate Plan: SAFETY POLICE PLAN Re: New Second Tier Plan (Section 20475: Different Level of Benefits Provided for New Employees;Section 21363.1 3.0%@55 Full Formula and Section 20037 Three-Year Final Compensation) Dear Requestor: In the tables below,we show your 2011-2012 and 2012-2013 employer contribution rates before and after opening a second tier. Of the rate components shown below,the first two are specific to the pool to which the plan belongs and others are specific to your agency. However,the Phase out of Normal Cost Difference will normally be 0%beginning with rates established for 2011-2012,so It has no impact from that time on. The Side Fund will continue to be paid off by the first tier plan since all the past service on which it is based belongs to those current members who will continue In the first tier. The scheduled dollar amounts payable will continue as before. However, because newly hired members will be covered by the second tier, the number of members and payroll in the first tier will(after several years)gradually decline. The Amortization of Side Fund rate component is the dollars needed to pay off the side fund divided by the payroll. So as long as the Side Fund remains,the first tier rate will increase as its payroll decreases. The first tler side fund is scheduled to be paid off after 0 years from June 30, 2012. Therefore,in determining the employer contributions savings,Amortization of Side Fund should be excluded. For your agency,the ultimate annual employer savings equals the difference between the Normal Cost and Surcharges rates times the second tier payroll. For 2011-2012 the Normal Cost and Surcharges percentage savings is (17.164%+1.021%)-(15.725%+0.000%)=2.460%. Based on the 2009 valuation,the ultimate employer annual dollar savings would then be 2.5%times the second tier fiscal year payroll. The Risk Pool's Payment on Amortization Bases is a temporary adjustment to the pool's contribution to"get the pool back on schedule".This temporary adjustment varies in amount and duration from pool to pool. As of June 30,2009 Existing Plan New Second Tier Plan 3.0%@50 3.0%@55 for newly hired members 2011-2012 Employer Contribution Rate: Risk Pool's Net Employer Normal Cost 17.164% 15.725% Risk Pool's Payment on Amortization Bases 5.927% 4.583% One-Year Final Compensation 1.021% 0.000% Phase out of Normal Cost Difference 0.000% 0.000% Amortization of Side Fund 0.000% 0.000% Total Employer Contribution Rate 24.112% 20.308% 2011-2012 Employee Contribution Rate 9.000% 9.000% California Public Employees'Retirement System www.calpers.ca.gov