SISC GASB 45 Trust

Simple, cost effective with a prudent investor standard

Actuarial Valuation

Timing of the valuation

GASB 45 requires actuarial valuations once every two years, with an exception for plans with fewer than 200 members (active employees and retirees). Plans meeting the exception need to have valuations once every three years. The valuation is done at the beginning of the fiscal year and is used for the two upcoming fiscal year-ends (or three if the exception is met.)

However, GASB 57 has clarified that if an employer joins a pooled trust such as the SISC GASB 45 Trust, the combined membership of all the employers in the pool must be considered in meeting the 200 member threshold, and all employers in that trust should have a common actuarial valuation date.

To avoid forcing a district to have an extra valuation as a result of joining the SISC GASB 45 Trust, SISC has established two separate trusts. One has its valuation date on July 1 of even-numbered years (July 1, 2012, 2014, etc.) and the other on July 1 of odd-numbered years (July 1, 2013, 2015, etc.). In order to determine which SISC Trust you should join, and what your next actuarial valuation date should be, please send a copy of your most recent valuation to Megan Hanson at SISC.

Over the last few years, we have found that many districts have waited until the last minute to request an actuarial valuation. One popular strategy is to wait until the auditors are on-site and notify the district that a new valuation is required. This increases the stress level for all parties involved, and increases the chances that your district will be found out of compliance. We continue to recommend that you start the valuation process well before the fiscal year-end for which the auditors will require the new report.

Choice of Actuarial Firm

The SISC GASB 45 Trust is committed to flexibility in choice of actuarial assumptions and methods, as well as in your choice of an actuarial service provider. For those districts who have not yet selected an actuarial firm, or for whatever reason are considering changing firms, SISC recommends Demsey, Filliger & Associates (DF&A). DF&A has provided thousands of GASB 45 actuarial valuations to California school districts and other public agencies. DF&A has user-friendly actuarial reports and very competitive fees. They also offer complimentary assistance in preparation of the GASB 45 disclosures for your audited financial statements, interfacing directly with your auditors to make your life easier.

What to expect during the valuation process

Once you’ve made the decision to do a GASB 45 valuation and selected the actuarial firm to perform the valuation, the next steps are as follows:

Establishing a timeline: Standard turnaround time will vary from one actuarial firm to the next, but it will generally range from one to two months from the time the actuary receives all necessary data until receipt of the valuation. Faster turnaround may be available upon request. As a minimum, you should allow 3 weeks from the time the data is provided to the delivery of the draft actuarial report.

Data request: This is often the most time-consuming part of the valuation process. Providing the actuarial firm with complete and accurate data will improve the quality of the numbers in the final report.

Follow-up questions on the data: In most cases (no matter how complete your data package is) the actuary will most likely need to contact the employer with at least a few questions. You’ll need to have a responsible, reliable contact person available for a couple of weeks to answer the actuary’s questions about the data. Most questions can be answered at a level below that of Assistant Superintendent; however, certain questions regarding district policy and interpretations of collective bargaining language may require brief involvement of a senior district official.

Draft actuarial report: This is a first report for your review. At this point you want to make sure there are no obvious errors in the data, plan provisions, or actuarial assumptions that appear at odds with your agency’s situation. You should be comfortable with your actuary and expect him or her to be receptive and willing to answer questions or concerns and address any inaccuracies during this review process.

Final report & Board presentation: You may feel confident enough to present the report to the Board yourself. Or in complex or unusual situations you may want to introduce the actuary to the Board and have the actuary make the presentation. Either way, the job isn’t finished until everyone is comfortable with the valuation report.

Our Philosophy – “Schools Helping Schools”

Our Goal is to provide the best coverage and service to our members while keeping costs affordable and stable.

SISC is a Joint Powers Authority administered by the Kern County Superintendent of Schools Office Mary C. Barlow, Superintendent

SISC

2000 K Street Bakersfield, CA 93301

661.636.4710

661.636.4156