1. RTD/ATU 1001 Pension Plan February 9, 2016 Pension Fund Status
As of January 1, 2015

2. January 1, 2015 Valuation Highlights (the plan is in funding peril)
Contributions are not sufficient to fund the liabilities
The amount of insufficiency has improved
Total actuarial requirement is 25.21% (prior year was 27.14%) ; 18.0% scheduled for receipt in 2015
The contribution deficiency decreased, from 11.14% of payroll to 7.21%
Fund is projected to be fully depleted by 2040; last year was 2036 and the prior year was 2032
Assuming 6% earnings the depletion date is 2035; at 8% there is no depletion date in the 30 year projection period
Actuarial Accrued Liability increased by $1.0 million
From $426.3 million to $427.3 million
Actuarial Value of Assets returned 7.36%, exceeding the assumed 7.0%
Increased by $4.6 million, from $207.4 million to $212.0 million
Market value increased from $213.0 million to $214.5 million

3. January 1, 2015 Valuation Highlights (the plan is in funding peril)
Unfunded Actuarial Accrued Liability decreased by $3.5M
From $218.8M to $215.3 million
This decreased the actuarially determined contribution

4. January 1, 2015 Valuation Highlights
The normal cost decreased from 11.81% of pay (including admin expenses) to 10.79%
The scheduled contribution is 18% of pay
Actuarially determined contribution (ADC) decreased by 1.93% of pay
Decrease due to investment gains, salary increases less than expected and retirements fewer than expected (with that related assumption change)
ADC will keep increasing as the actuarially determined contributions are “missed”
Funded ratio increased from 48.7% funded on an actuarial basis to 49.6%
Total active participant count increased by 106
From 1,581 to 1,687
New hires will continue to “bend down” the normal cost, so more funding can go to the unfunded accrued liability

5. History of the Funded Ratio
Valuation Date- January 1,
Funded Ratio
2002
106.39%
2003
82.96
2004
91.09
2005
91.73
2006
89.06
2007
87.07
2008
86.03
2009
72.57
2010
73.08
2011
68.67
2012
52.24
2013
47.52
2014
48.66
2015
49.61

6. The scheduled contribution amount was insufficient, starting in 2003
Plan Year Ended December 31,
Percentage of ARC contributed
2002
102.2%
2003
53.7
2004
60.9
2005
75.3
2006
64.2
2007
64.6
2008
67.8
2009
44.5
2010
59.0
2011
47.3
2012
33.5
2013
46.2
2014
57.4
2015 --

7. Long-Term Funding-Reforms to improve the plan
Total ARC is 25.21% of payroll compared to the total scheduled contribution rate of 18.00% of payroll.
Amendment #22 was adopted in 2010 with the following changes in effect for participants hired on or after January 1, 2011 (Tier 2):
New benefit schedule listed in Section 6.01 of the Plan provisions
Vesting is changed from 5 years to 10 years
The benefit multiplier is changed from 2.5% to 1.0%
Unreduced retirement is changed from age 55 with 20 years of service to age 60 with 20 years of service
Early retirement reduction is changed from 5.0% from age 55 to 2.5% from age 60
The maximum service included in the benefit calculation is reduced from 30 years to 25 years
Sick and vacation payouts are no longer included in the pension benefit calculation
Interest on employee contributions is changed from 5% to 3%
Due to amendment #22, a drop in the normal cost rate is expected as new hires enter the plan.
The normal cost last year was 11.81% and this year it is 10.79%

8. Long-Term Funding-Reforms to improve the plan
On February 27, 2013, a tentative agreement was reached with the following schedule for contributions:
Agreement also included specific short-term salary increases (less than 3% per year)
Year
RTD
Members
Total
2013
12% 4%
16%
2014
2015
13% 5%
18%
2016
2017

9. Long-Term Funding Considerations
If all actuarial assumptions are met each year, including a net investment return of 7.0% per year, and annual contributions equal those stated in the tentative agreement:
Assets will be fully depleted by 2040
Members are not retiring as quickly as assumed
Based on a five year history, 745 members were expected to elect normal (non reduced) retirement and 185 were expected to elect early retirement.
194 elected normal retirement and 40 elected early retirement
The retirement probabilities have been changed to reflect this slow down in retirement

10. RTD/ATU Summary
There are positive signs that the pension reforms are working
Decrease in the normal cost rate
Decrease in the actuarially determined contribution
Improvement in the funded ratio
Gained four more years in the future depletion date (have gained 8 years in the past two years)
But the plan is “not out of the woods yet”.
Projections (based on an assumed 7% return) still show depletion in 2040
This is a highly volatile calculation; one year of poor returns could bring that number much closer to today