SRP Retirement Plan Santa barbara Community College District PARS - - PowerPoint PPT Presentation

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SRP Retirement Plan Santa barbara Community College District PARS - - PowerPoint PPT Presentation

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Supplementary SRP Retirement Plan Santa barbara Community College District PARS Supplementary Retirement Plan (SRP) Board of Trustees Meeting October 1 5 , 2019 Santa Barbara community college District 1 About PARS (Public Agency

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Santa Barbara community college District ▎ 1

Santa barbara Community College District

PARS Supplementary Retirement Plan (SRP) – Board of Trustees Meeting October 15, 2019

SRP

Supplementary Retirement Plan

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Santa Barbara community college District ▎ 2

  • Established in 1984
  • 3rd Largest Multiple Employer Public Retirement System in

California

  • 1,000+ Member Agencies
  • Over 375,000 SRP Participants
  • 1,600+ Retirement Plans
  • Headquartered in Orange County
  • Assists in all phases of the program from plan design, analysis,

communication, implementation and ongoing plan administration

About PARS (Public Agency Retirement Services)

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Santa Barbara community college District ▎ 3

PARS CCD Clients

U p d a t e d : O c t o b e r 2 0 1 9

Allan Hancock CCD Alvin CCD, TX Cerritos CCD Chabot-Las Positas CCD Clarendon College, TX Coast CCD Compton CCD Contra Costa CCD Desert CCD Foothill-De Anza CCD Glendale CCD Grossmont-Cuyamaca CCD Hartnell CCD Hill Junior College, TX Imperial CCD Lassen CCD Lone Star College System, TX Long Beach CCD Los Angeles CCD Los Rios CCD Marin CCD MiraCosta CCD Mt San Antonio College Napa Valley CCD North Central Texas CCD, TX North Orange County CCD Palomar CCD Palo Verde CCD Pasadena City College Quincy College, MA Rancho Santiago CCD Rio Hondo CCD Riverside CCD San Bernardino CCD San Joaquin Delta CCD San Luis Obispo County (Cuesta) CCD Santa Clarita CCD Santa Monica CCD Solano CCD South Orange County CCD Southwestern CCD State Center CCD Victor Valley CCD Victoria College, TX West Valley-Mission CCD Yosemite CCD

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Santa Barbara community college District ▎ 4

  • Board approves a contingent plan offering to designated eligible

employees during two enrollment windows

  • Interested employees submit irrevocable letters of resignation

during the enrollment periods.

  • At the end of the enrollment periods, a fiscal analysis is

conducted to determine the savings (or cost) to District

  • Based on results, Board determines if Plan proceeds or is

cancelled

  • If Plan proceeds, employees resign
  • If Plan is canceled, the offer and resignation letters are

rescinded

SRP Process and Steps

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Santa Barbara community college District ▎ 5

Proposed Timeline

October 25, 2019

·

PARS mails individual benefit illustration packets to Window #1 eligible employees (excluding Faculty) Early November 2019

·

PARS holds orientation meetings Early December 2019

·

PARS holds one-on-one employee workshop December 4, 2019

·

Enrollment Window #1 closes December 31, 2019 · Window #1 employees resign from District employment February 1, 2020

·

PARS benefit checks commence for Window #1 retirees Mid-February 2020

·

PARS mails individual benefit illustration packets to Window #2 eligible employees (including Faculty) Mid-March 2020

·

PARS holds orientation meetings Late April 2020

·

PARS holds one-on-one employee workshop May 1, 2019

·

Enrollment Window #2 closes June 30, 2020

·

Window #2 employees resign from District employment August 1, 2020

·

PARS Benefit Checks commence for Window #2 retirees

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Santa Barbara community college District ▎ 6

Proposed Plan Design

Spend Amount 70% of Final Pay

  • Post-Employment contributions funded over a period of five (5) years

following termination of employment

  • District Contributions are used to fund the purchase of an annuity

through Pacific Life Insurance Co.

  • Distribution options receive favorable tax treatment and may be

eligible for IRA rollovers Plan offered through a tax-sheltered annuity program: Internal Revenue Code Section 403(b)

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Santa Barbara community college District ▎ 7

PARS Analysis Methodology

Total Compensation Differential between Retiring Employee and Replacement Employee Future Loss in Natural Attrition

  • Savings due to Non-Replacements

+ Net Savings (Cost) = Current Natural Attrition

  • Retirement Health Care Cost
  • Retirement Incentive Cost
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Santa Barbara community college District ▎ 8

Plan Assumptions (academic)

Full-Time Faculty Educational Administrators Eligibility Requirements Age 55, 5 Years of Service Age 50, 30 Years of Service Benefit Level 70% of Final Pay Resignation from District employment June 30, 2020 December 31, 2019 or June 30, 2020 Replacement Salaries Full-Time Faculty: $85,837 (Based on PARS 3-Year New Hire Study) 90.60% of Current Salary (Step 5) Adjunct Faculty Adjunct Hourly Rate: $95.90 (Step 5 Credit Adjunct Rate) Total Adjunct Hours: 525 Total Adjunct Faculty Salary: $50,348 Adjunct Faculty Health Care Cost: $3,607 (40% of Active Employee Cost) Health Care Costs Active: $9,018 Pre-65 Retiree: $5,256 Post-65 Retiree: $0 Health Care COLA: 0.00% Participation Educational Administrators - Assumes that 50% of eligible employees will retire in December and 50% of eligible employees will retire in June. PARS Plan Funding 5-Year Annuity purchased through Pacific Life Insurance

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Santa Barbara community college District ▎ 9

Plan Assumptions (classified)

Classified Non-Management Classified Management & Confidential Eligibility Requirements Age 50, 5 Years of Service Benefit Level 70% of Final Pay Resignation from District employment December 31, 2019 or June 30, 2020 Replacement Salaries 86.20% of Current Salary (Step 3) 90.60% of Current Salary (Step 5) Health Care Costs Active: $9,018 Pre-65 Retiree: $6,331 Post-65 Retiree: $0 Health Care COLA: 0.00% Participation Classified Non-Management - Assumes that 40% of eligible employees will retire in December and 60% of eligible employees will retire in June. Classified Management & Confidential - Assumes that 33% of eligible employees will retire in December and 67% of eligible employees will retire in June. PARS Plan Funding 5-Year Annuity purchased through Pacific Life Insurance

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Santa Barbara community college District ▎ 10

Full-time faculty

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Santa Barbara community college District ▎ 11

Fiscal Summary of Savings

FISCAL IMPACT ASSUMES 100% ADJUNCT REPLACEMENT FOR YEAR 1

Replacement Scenario # of Positions Replaced Projected Savings in Mid-Year 2019-20 Projected Savings in Year 1 2020-21 Projected Savings

  • ver 3 Years

2022-23 Projected Savings

  • ver 5 Years

2024-25 100% Replacement 0.00 $0 $1,007,683 $817,391 $497,825 90% Replacement 2.10 $0 $1,027,982 $1,101,195 $1,067,089 80% Replacement 4.20 $0 $1,048,280 $1,385,000 $1,636,352 70% Replacement 6.30 $0 $1,068,578 $1,668,804 $2,205,616 60% Replacement 8.40 $0 $1,088,877 $1,952,608 $2,774,879 50% Replacement 10.50 $0 $1,109,175 $2,236,413 $3,344,143

FULL-TIME FACULTY

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Santa Barbara community college District ▎ 12

Plan Eligibility

FULL-TIME FACULTY

6 3 6 6 7 8 6 1 9 8 6 5 5 1 1 1 5 1 1 1

1 2 3 4 5 6 7 8 9 10 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79+

# of Employees Age

87

Eligible Employees Avg Age: 63.1

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Santa Barbara community college District ▎ 13

Plan Eligibility

FULL-TIME FACULTY

5 10 15 20 25 30 35 40 45 50 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85

Years of Service Age

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Santa Barbara community college District ▎ 14

PARS Retirement Projections

# of Eligible Employees Projected Retirements in December 2019 Projected Retirements in June 2020 Total Projected Retirements with PARS SRP Percentage Retirements 87 21 21 24.14% FULL-TIME FACULTY

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Santa Barbara community college District ▎ 15

CLASSIFIED NON-MANAGEMENT

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Santa Barbara community college District ▎ 16

Fiscal Summary of Savings

Replacement Scenario # of Positions Replaced Projected Savings in Mid-Year 2019-20 Projected Savings in Year 1 2020-21 Projected Savings

  • ver 3 Years

2022-23 Projected Savings

  • ver 5 Years

2024-25 100% Replacement 0.00 ($37,355) ($92,808) ($288,006) ($531,229) 90% Replacement 1.90 ($5,265) $49,305 $94,398 $119,243 80% Replacement 3.80 $26,826 $191,418 $476,801 $769,715 70% Replacement 5.70 $58,916 $333,531 $859,205 $1,420,187 60% Replacement 7.60 $91,007 $475,644 $1,241,609 $2,070,658 50% Replacement 9.50 $123,097 $617,757 $1,624,013 $2,721,130

CLASSIFIED NON-MANAGEMENT

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Santa Barbara community college District ▎ 17

Plan Eligibility

CLASSIFIED NON-MANAGEMENT

10 4 8 7 5 7 3 9 5 5 2 6 6 11 4 2 4 2 2 3 2 3 2

2 4 6 8 10 12 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79

# of Employees Age

112

Eligible Employees Avg Age: 59.3

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Santa Barbara community college District ▎ 18

Plan Eligibility

CLASSIFIED NON-MANAGEMENT

5 10 15 20 25 30 35 40 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85

Years of Service Age

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Santa Barbara community college District ▎ 19

PARS Retirement Projections

# of Eligible Employees Projected Retirements in December 2019 Projected Retirements in June 2020 Total Projected Retirements with PARS SRP Percentage Retirements 112 8 11 19 16.96% CLASSIFIED NON-MANAGEMENT

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Santa Barbara community college District ▎ 20

EDUCATIONAL ADMINISTRATORS

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Santa Barbara community college District ▎ 21

Fiscal Summary of Savings

Replacement Scenario # of Positions Replaced Projected Savings in Mid-Year 2019-20 Projected Savings in Year 1 2020-21 Projected Savings

  • ver 3 Years

2022-23 Projected Savings

  • ver 5 Years

2024-25 100% Replacement 0.00 ($11,269) ($21,625) ($67,154) ($126,735) 50% Replacement 1.00 $23,871 $160,339 $430,848 $721,418 0% Replacement 2.00 $59,011 $342,304 $928,851 $1,569,571

EDUCATIONAL ADMINISTRATORS

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Santa Barbara community college District ▎ 22

Plan Eligibility

EDUCATIONAL ADMINISTRATORS

1 1 1 1 1 1

1 2 3 4 5 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79

# of Employees Age

6

Eligible Employees Avg Age: 61.00

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Santa Barbara community college District ▎ 23

Plan Eligibility

EDUCATIONAL ADMINISTRATORS

5 10 15 20 25 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85

Years of Service Age

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Santa Barbara community college District ▎ 24

PARS Retirement Projections

# of Eligible Employees Projected Retirements in December 2019 Projected Retirements in June 2020 Total Projected Retirements with PARS SRP Percentage Retirements 6 1 1 2 33.33% EDUCATIONAL ADMINISTRATORS

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Santa Barbara community college District ▎ 25

CLASSIFIED MANAGEMENT & cONFIDENTIAL

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Santa Barbara community college District ▎ 26

Fiscal Summary of Savings

Replacement Scenario # of Positions Replaced Projected Savings in Mid-Year 2019-20 Projected Savings in Year 1 2020-21 Projected Savings

  • ver 3 Years

2022-23 Projected Savings

  • ver 5 Years

2024-25 100% Replacement 0.00 ($9,309) ($32,311) ($99,116) ($179,412) 67% Replacement 1.00 $11,475 $76,259 $201,851 $336,382 33% Replacement 2.00 $32,258 $184,829 $502,819 $852,175 0% Replacement 3.00 $53,041 $293,399 $803,786 $1,367,968

CLASSIFIED MANAGEMENT & CONFIDENTIAL

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Santa Barbara community college District ▎ 27

Plan Eligibility

CLASSIFIED MANAGEMENT & CONFIDENTIAL

2 1 1 3 1 2 2 1 1 1

1 2 3 4 5 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79

# of Employees Age

15

Eligible Employees Avg Age: 60.13

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Santa Barbara community college District ▎ 28

Plan Eligibility

CLASSIFIED MANAGEMENT & CONFIDENTIAL

5 10 15 20 25 30 35 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85

Years of Service Age

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Santa Barbara community college District ▎ 29

PARS Retirement Projections

# of Eligible Employees Projected Retirements in December 2019 Projected Retirements in June 2020 Total Projected Retirements with PARS SRP Percentage Retirements 15 1 2 3 20.00% CLASSIFIED MANAGEMENT & CONFIDENTIAL

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Santa Barbara community college District ▎ 30

  • Customized Enrollment Packet:

— Individualized benefit illustration mailed to home at start of window.

  • Group Orientation Meeting:

— Held at District location to ensure maximium employee attendance

  • Toll-free Enrollment Line:

— Call-in center available for calls throughout the window and throughout retirement.

  • One on One Employee Workshop:

— Held at District location to help employees complete paperwork and answer last minute questions

Communication Process with Employee

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Santa Barbara community college District ▎ 31

Contacts

Maureen toal

Senior Vice President mtoal@pars.org (800) 540-6369 ext. 135