Actuarial Analysis of the Proposed Settlement Agreement

Transcription

1 February 10, 2014 Gina. M. Raimondo General Treasurer State House, Room 202 Providence, RI Richard A. Licht Director of Administration One Capitol Hill Providence, R.I Re: Actuarial Analysis of the Proposed Settlement Agreement As requested, this is our actuarial analysis of the proposed settlement agreement (SA) as a result of the Rhode Island Retirement Security Act of 2011 (Act) which makes changes to all plans administered by the Employees Retirement System of Rhode Island (ERSRI), including: ERSRI State Employees (including Correctional Officers, and Nurses) ERSRI Teachers Municipal Employees Retirement System (MERS), including General Employers and Public Safety Judicial Retirement Benefits Trust (JRBT) State Police Retirement Benefits Trust (SPRBT) This analysis provides information on all of the Plans except for the JRBT and the SPRBT. Analysis on those Plans will be provided at a later time. Summary of Actuarial Impact of the SA The following exhibits provide the actuarial impact of the SA on the unfunded actuarial accrued liability (UAAL) and the FY2016 employer contributions. The contributions for FY2016 include allocations toward defined contribution accounts where applicable. Unfunded Actuarial Accrued Liability ($ in millions) as of June 30, 2013 Group Provisions Mediation Difference ERSRI - State Employees $ 1,879 $ 1,957 $ 78 ERSRI - Teachers 2,666 2, MERS - General Employees MERS - Public Safety Total $ 4,822 $ 5,054 $ 232

2 Treasurer Gina. M. Raimondo and Director Richard A. Licht February 10, 2014 Page 2 Estimated Employer Contribution Amounts, DB and DC combined ($ in millions) Fiscal Year 2016 Group Projected Payroll Provisions Mediation Difference Pre-RIRSA ERSRI - State Employees $ $ $ 7.8 $ ERSRI - Teachers 1, MERS - General Employees MERS - Public Safety Total $ $ $ 24.2 $ Contribution estimates based on FY2013 payrolls projected to FY2016 at the 3.75% assumed payroll growth rate For comparative purposes, we have also included an estimate of what the employer contributions would have been had the RIRSA not passed. Summary of Proposed Changes in the SA The SA makes the following changes to all of the plans effective July 1, 2014, except where noted separately. A one-time 2% COLA payable immediately to all applicable retirees on the first $25,000 of pension benefit without the contingency of being 80% funded or the investment return. This does not impact the indexing of the $25,000 for future years. The COLA formula will become 50% of the COLA using the previous 5-year average of investment returns, with a maximum increase of 4%; and 50% of the previous Schedule B COLA, which is the previous year s CPI-U with a maximum increase of 3%. The COLA payment will be contingent on the individual plan being 80% funded. However, every 4 th year, if the COLA has been suspended for three consecutive years, the COLA may occur even if the plan is less than 80% funded. For State Workers, Teachers, and General MERS active members with 20 years of service as of June 30, 2012, they will receive future accruals (post July 1, 2014) at a rate of 2% per year and no longer participate in the defined contribution plan. The members will keep their DC balances as of 6/30/2014. For this accrual, these employees will pay higher member contribution rates beginning July 1, 2014, simultaneously with the increased accruals. For State workers and Teachers, the member contribution rate will be 11% of pay. For General MERS, the member contribution will be 8.25% or 9.25% depending on whether the unit has a COLA provision. For State Workers, Teachers, and General MERS active members with more than 10 years of service (but less than 20 years of service) as of June 30, 2012, there will be an additional employer contribution of 0.25% if the member has between 10 and 15 years of service and 0.50% if the member has between 15 and 20 years of service. For State Workers, Teachers, and General MERS active members who earn less than $35,000 per year, the administrative fee in the defined contribution plan will be waived.

3 Treasurer Gina. M. Raimondo and Director Richard A. Licht February 10, 2014 Page 3 State Workers, Teachers, and General MERS active members who were active on June 30, 2012 will be eligible to retire with full benefits at the earlier of their current RIRSA date or upon the attainment of age 65 with 30 years of service. For members who will be impacted by the RIRSA part-time anti-spiking rule, if the highest 5- year average calculation is less than the $35,000 cap under RIRSA, the pension will be based on the greater of the following: (1) highest 10 year average earnings, or (2) highest 5-year earnings with an indexed $35,000 cap. The Early retirement reduction for employees who choose to retire before eligible for full unreduced benefits will be based on the following schedule: 9% for year 1, 8% for year 2, 7% for each year thereafter. For Correctional officers active as of June 30, 2012 with fewer than 25 years of service as of that date, the benefit accrual will be 3% per year for years For MERS P&F active employees as of June 30, 2012, members can retire with full benefits at the earlier of their current RIRSA retirement age or at the attainment of age 50 with at least 25 years of service. members will pay an additional 2.00% member contribution rate beginning July 1, For MERS P&F active members (including future hires), members who retire after July 1, 2014 and after attaining age 57 with 30 years of service will have a benefit equal to the greater of their current benefit and one calculated based on a 2.25% multiplier for all years of service. Analysis (Defined Benefit Plan) The results of our analysis are shown on the attached Exhibits S (ERSRI State Employees), T (ERSRI Teachers), and M (MERS). The revised provisions in the SA are reflected in the UAAL, funded ratio, and contribution rates into the defined benefit plan for FY Readers should keep in mind that any savings shown for Teachers is shared between the State (40%) and the municipal employers (60%). Exhibits S2 and T2 provide 30 year projections of the State and Teacher plans. These projections assume all assumptions are exactly met from FY2014 forward. In the defined benefit exhibits, the payrolls shown for all groups reflect our estimate of future covered payrolls based on projecting the actual FY2013 payrolls. In every case, the actual dollar contributions should be based on actual payrolls and the contribution rates shown. Under Rhode Island General Laws (RIGL) (g), if the State s actuarially determined contribution rate for state employees or for teachers for a fiscal year will be less than in the preceding fiscal year, the Governor is required to include an appropriation to ERSRI in the fiscal year budget equal to 20% of the reduction.

4 Treasurer Gina. M. Raimondo and Director Richard A. Licht February 10, 2014 Page 4 Budgetary Impact for each Employer Individual employers could have employees across several benefit structures, most commonly Teachers, General MERS, and MERS Public Safety. In addition, the defined contribution component of the SA will impact the budget as an additional cost. In Exhibit B, we have provided a listing of each local employer along with the impact the SA will have on their estimated FY2016 budget. These amounts are based on the actual Fiscal Year 2013 payrolls projected forward at the 3.75% payroll growth rate. Data and Assumptions We prepared our analysis as though the bill would be effective July 1, 2014 and will impact the fiscal year 2016 contribution rates. We assume the fiscal year 2014 and 2015 employer contribution rates would remain unchanged. To prepare these analyses, we used member and financial data supplied by ERSRI as of June 30, We based the analyses on the actuarial assumptions and methods previously adopted by the Retirement Board. However, in connection with the retirement eligibility analyses, we modified the retirement rates consistent with the proposals. Anyone we would have assumed would retire under the current provisions before the earliest allowable age under the proposal was assumed to retire once eligible. In addition, we assume no members would retire within 1 year of the 57/30 provision and an additional 20% of members would retire immediately upon attaining 57/30. For future benefit adjustments, we assumed the average adjustment would be 2.1% and be provided without suspension for all MERS units because most of these plans will be 80% funded after the legislation passes. For State Employees, Teachers, State Police, and Judges based on projections and the 25-year re-amortization, we project the benefit adjustments will be suspended for approximately 15 years, except for the intermittent adjustment every fourth year. Other General Comments This letter is intended to describe the financial and actuarial effect of the proposed plan changes on ERSRI. Changes in retirement eligibility, for example, could impact the cost of post-retirement medical benefits, but we have not analyzed this effect. Our calculations are based upon assumptions regarding future events, which may or may not materialize. Please bear in mind that actual results could deviate significantly from our projections, depending on actual plan experience. We are not attorneys, and nothing in this letter should be construed as providing legal or tax advice. No statement in this letter is intended to be interpreted as a recommendation in favor of the changes or in opposition to them.

5 Treasurer Gina. M. Raimondo and Director Richard A. Licht February 10, 2014 Page 5 We certify that the undersigned are members of the American Academy of Actuaries and that we meet the Qualification Standards of the American Academy of Actuaries to render the actuarial opinion contained herein. If you have any questions, or require any additional clarifying information, please do not hesitate to contact either one of the undersigned. Respectfully submitted, Joseph P. Newton, FSA, MAAA, EA Senior Consultant Mark R. Randall, MAAA, EA Executive Vice President Enclosures cc: Mr. Frank Karpinski Mr. Mark Dingley

6 Exhibit S: State Employees Employees' Retirement System of Rhode Island - State Employees Defined Benefit Contributions Only Based on the June 30, 2013 Actuarial Valuation Provisions Mediation 1.a. Unfunded actuarial accrued liability $ 1,878.8 $ 1, b. Change a. Funded ratio 56.2% 55.2% 2.b. Change -1.0% FY2016 Contribution Information 3.a. Contribution rate for FY % 24.87% 3.b. Change 1.23% 4.a. Projected FY 2016 payroll $ $ b. Projected contribution c. Change 8.8 $ in millions

7 Exhibit T: Teachers Employees' Retirement System of Rhode Island - Teachers Defined Benefit Contributions Only Based on the June 30, 2013 Actuarial Valuation Provisions Mediation 1.a. Unfunded actuarial accrued liability $ 2,665.9 $ 2, b. Change a. Funded ratio 58.1% 57.1% 2.b. Change -1.01% FY2016 Contribution Information 3.a. Contribution rate for FY % 24.41% 3.b. Change 1.28% 4.a. Projected FY 2016 payroll $ 1,044.7 $ 1, b. Projected contribution c. Change 13.4 $ in millions

8 Exhibit S2: State Employees Projection Results Based on the June 30, 2013 Actuarial Valuation, Mediated Changes State Employees, 22 Year Amortization beginning 7/1/2013, 20 year ladders starting with 2015 valuation Investment Return: 7.50% each year Employer Contributions for Fiscal Year (in Actuarial Accrued Liability at Actuarial Value of Assets at Unfunded Actuarial Accrued Liability at (UAAL, in Employer Contribution Rate Calculated in Actuarial Market Value of Assets at (MVA, in Fiscal Year Employer Compensation for Valuation as of Ending June Market Return for Contribution Rate Fiscal Year (in Funded Ratio at June 30, 30, Fiscal Year for Fiscal Year Millions) Millions) (AAL, in Millions) (AVA, in Millions) Millions) Valuation Millions) (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) Funded Ratio Using MVA at % 23.05% $ $ $ 4,368.1 $ 2,411.1 $ 1, % 24.87% $ 2, % % 23.33% , , , % 24.84% 2, % % 24.87% , , , % 24.85% 2, % % 24.84% , , , % 24.98% 2, % % 24.85% , , , % 25.03% 2, % % 24.98% , , , % 25.09% 2, % % 25.03% , , , % 25.14% 2, % % 25.09% , , , % 25.09% 2, % % 25.14% , , , % 25.05% 2, % % 25.09% , , , % 25.00% 2, % % 25.05% , , , % 24.94% 2, % % 25.00% , , , % 24.88% 2, % % 24.94% , , , % 24.83% 3, % % 24.88% 1, , , , % 24.79% 3, % % 24.83% 1, , , , % 24.73% 3, % % 24.79% 1, , , , % 24.70% 3, % % 24.73% 1, , , , % 24.63% 3, % % 24.70% 1, , , , % 24.58% 3, % % 24.63% 1, , , % 24.51% 4, % % 24.58% 1, , , % 24.45% 4, % % 24.51% 1, , , % 3.27% 4, % % 24.45% 1, , , % 2.95% 4, % % 3.27% 1, , , % 2.70% 5, % % 2.95% 1, , , % 2.44% 5, % % 2.70% 1, , ,262.4 (3.3) 100.1% 2.42% 5, % % 2.44% 1, , ,339.3 (6.3) 100.1% 2.39% 5, % % 2.42% 1, , ,421.8 (5.7) 100.1% 2.37% 5, % % 2.39% 1, , ,514.5 (5.0) 100.1% 2.35% 5, % % 2.37% 1, , ,617.8 (4.1) 100.1% 2.34% 5, % % 2.35% 1, , ,732.3 (3.0) 100.1% 2.33% 5, % % 2.34% 1, , ,858.5 (1.7) 100.0% 2.32% 5, % % 2.33% 1, , ,997.2 (0.4) 100.0% 2.32% 5, %

9 Exhibit T2: Teachers Projection Results Based on the June 30, 2013 Actuarial Valuation Teachers, 22 Year Amortization beginning 7/1/2013, 20 year ladders starting with 2015 valuation Investment Return: 7.50% each year Employer Contributions for Fiscal Year (in Actuarial Accrued Liability at Actuarial Value of Assets at Unfunded Actuarial Accrued Liability at (UAAL, in Employer Contribution Rate Calculated in Actuarial Market Value of Assets at (MVA, in Fiscal Year Employer Compensation for Valuation as of Ending June Market Return for Contribution Rate Fiscal Year (in Funded Ratio at June 30, 30, Fiscal Year for Fiscal Year Millions) Millions) (AAL, in Millions) (AVA, in Millions) Millions) Valuation Millions) (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) Funded Ratio Using MVA at % 20.68% $ $ $ 6,476.2 $ 3,697.8 $ 2, % 24.41% $ 3, % % 22.60% 1, , , , % 24.50% 3, % % 24.41% 1, , , , % 24.55% 3, % % 24.50% 1, , , , % 24.66% 3, % % 24.55% 1, , , , % 24.66% 3, % % 24.66% 1, , , , % 24.69% 3, % % 24.66% 1, , , , % 24.71% 4, % % 24.69% 1, , , , % 24.66% 4, % % 24.71% 1, , , , % 24.61% 4, % % 24.66% 1, , , , % 24.59% 4, % % 24.61% 1, , , , % 24.49% 4, % % 24.59% 1, , , , % 24.49% 4, % % 24.49% 1, , , , % 24.49% 4, % % 24.49% 1, , , , % 24.46% 5, % % 24.49% 1, , , , % 24.48% 5, % % 24.46% 1, , , , % 24.51% 5, % % 24.48% 1, , , , % 24.52% 5, % % 24.51% 1, , , , % 24.54% 6, % % 24.52% 1, , , , % 24.59% 6, % % 24.54% 1, , , , % 24.61% 6, % % 24.59% 1, , , % 2.99% 7, % % 24.61% 1, , , % 2.65% 7, % % 2.99% 1, , , % 2.33% 8, % % 2.65% 2, , ,490.0 (9.2) 100.1% 2.03% 8, % % 2.33% 2, , ,618.4 (20.8) 100.2% 1.99% 8, % % 2.03% 2, , ,748.1 (27.4) 100.3% 1.95% 8, % % 1.99% 2, , ,877.7 (29.1) 100.3% 1.90% 8, % % 1.95% 2, , ,011.3 (30.8) 100.3% 1.87% 9, % % 1.90% 2, , ,148.6 (32.4) 100.4% 1.85% 9, % % 1.87% 2, , ,288.7 (33.5) 100.4% 1.83% 9, % % 1.85% 2, , ,432.7 (34.5) 100.4% 1.82% 9, % % 1.83% 2, , ,584.0 (35.2) 100.4% 1.80% 9, %

10 Unit Exhibit M: MERS Municipal Employees Retirement System (Defined Benefit Contributions Only) Based on the June 30, 2013 Actuarial Valuation FY2016 Contribution Rate UAAL as of June 30, 2013 Funded Ratio as of June 30, 2013 Mediation Provisions Difference Mediation Provisions Difference Mediation Provisions Difference (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) Bristol 15.96% 14.95% 1.01% 6,067,708 5,636, , % 73.4% -1.5% Burrillville 9.56% 8.52% 1.04% 1,154, , , % 97.8% -2.3% Central Falls 13.94% 13.62% 0.32% 2,221,204 2,181,562 39, % 69.0% -0.4% Charlestown 10.55% 9.86% 0.69% 987, , , % 86.5% -1.3% Cranston 11.10% 9.86% 1.24% 9,567,170 6,510,758 3,056, % 95.1% -2.2% Cumberland 14.01% 13.64% 0.37% 7,767,896 7,570, , % 73.6% -0.5% East Greenwich 6.17% 5.31% 0.87% (881,541) (1,020,549) 139, % 115.8% -2.5% East Providence 26.66% 25.19% 1.47% 43,379,129 40,988,292 2,390, % 59.1% -1.3% West Greenwich 13.28% 12.36% 0.92% 1,858,802 1,637, , % 82.9% -1.9% Foster 12.21% 11.83% 0.38% 621, ,266 23, % 83.8% -0.5% Glocester 10.54% 9.77% 0.77% 977, , , % 90.2% -1.8% Hopkinton 5.32% 4.77% 0.55% (606,503) (684,605) 78, % 117.5% -2.3% Jamestown 11.47% 10.69% 0.78% 2,106,730 1,865, , % 85.3% -1.6% Johnston 17.29% 16.09% 1.20% 11,510,568 10,502,266 1,008, % 73.6% -1.8% Lincoln 12.87% 12.70% 0.17% 632, ,059 18, % 69.8% -0.6% Middletown 11.63% 10.82% 0.81% 3,880,616 3,492, , % 81.5% -1.6% Newport 23.28% 21.86% 1.42% 26,373,725 24,742,841 1,630, % 64.0% -1.5% New Shoreham 8.61% 8.01% 0.60% 293, , , % 96.9% -1.7% North Kingstown 18.66% 17.44% 1.22% 16,603,123 15,283,876 1,319, % 73.6% -1.6% North Providence 7.16% 6.82% 0.34% (644,041) (831,309) 187, % 103.2% -0.7% North Smithfield 7.28% 6.44% 0.84% (532,606) (817,519) 284, % 106.6% -2.4% Pawtucket 18.28% 16.91% 1.37% 30,281,059 27,549,703 2,731, % 75.9% -1.8% Union Fire District 7.93% 7.74% 0.19% 29,296 28, % 94.9% -0.1% Richmond 10.26% 10.00% 0.26% 394, ,570 19, % 82.4% -0.7% Scituate 15.80% 14.71% 1.09% 3,156,068 2,888, , % 77.1% -1.6% Smithfield 9.31% 8.47% 0.84% 508, , , % 97.9% -2.1% South Kingstown 12.24% 11.25% 0.99% 7,210,699 6,072,771 1,137, % 88.5% -1.9% Tiverton 3.96% 3.19% 0.77% (1,853,185) (2,058,381) 205, % 121.0% -2.4% Warren 13.49% 12.68% 0.81% 2,037,513 1,904, , % 70.8% -1.4% Westerly 84.07% 82.86% 1.21% 797, ,885 10, % 16.5% -0.2%

11 Unit Exhibit M: MERS Municipal Employees Retirement System (Defined Benefit Contributions Only) Based on the June 30, 2013 Actuarial Valuation FY2016 Contribution Rate UAAL as of June 30, 2013 Funded Ratio as of June 30, 2013 Mediation Provisions Difference Mediation Provisions Difference Mediation Provisions Difference (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) West Greenwich 17.52% 16.50% 1.02% 1,444,601 1,343, , % 63.3% -1.7% Woonsocket 11.64% 10.27% 1.37% 5,671,423 4,055,652 1,615, % 93.6% -2.4% Chariho School District 11.55% 10.73% 0.82% 3,180,511 2,834, , % 84.3% -1.6% Foster/Glocester 12.66% 11.75% 0.91% 1,102, , , % 85.7% -2.0% Tiogue Fire & Lighting 0.00% 0.00% 0.00% (19,594) (20,541) % 184.0% -6.9% Narragansett Housing 6.09% 5.71% 0.38% (29,862) (35,849) 5, % 108.8% -1.6% Coventry Lighting District 0.00% 0.00% 0.00% (351,944) (366,951) 15, % 144.7% -2.6% Hope Valley Fire 3.11% 2.83% 0.28% (112,444) (115,327) 2, % 129.2% -0.9% East Greenwich Housing 10.76% 10.22% 0.54% 151, ,438 20, % 89.7% -1.5% Cranston Housing 8.13% 7.45% 0.68% (298,317) (359,071) 60, % 108.9% -1.6% East Providence Housing 12.52% 11.54% 0.98% 447, ,527 76, % 87.8% -2.1% Pawtucket Housing 0.00% 0.00% 0.00% (3,574,776) (3,737,896) 163, % 142.1% -2.6% Cumberland Housing 7.94% 7.36% 0.58% 72,041 45,111 26, % 96.4% -2.1% Lincoln Housing 16.79% 15.90% 0.89% 605, ,643 42, % 73.1% -1.5% Bristol Housing 0.00% 0.00% 0.00% (540,751) (551,093) 10, % 140.5% -1.1% Burrillville Housing 8.66% 7.58% 1.08% 62,486 39,895 22, % 95.7% -2.3% North Providence Housing 29.08% 27.46% 1.62% 803, ,959 39, % 50.9% -1.2% East Smithfield Water 3.56% 2.19% 1.37% (103,819) (123,391) 19, % 115.7% -2.8% Greenville Water 2.55% 1.96% 0.59% (214,669) (231,592) 16, % 127.1% -2.4% Newport Housing 19.64% 18.33% 1.31% 2,594,387 2,386, , % 72.0% -1.7% Warren Housing 6.79% 6.03% 0.76% (67,118) (89,883) 22, % 107.8% -2.1% Johnston Housing 11.73% 11.52% 0.21% 233, ,247 9, % 83.0% -0.6% Tiverton Local 2670A 9.47% 8.52% 0.95% 249, ,104 94, % 95.9% -2.4% Barrington COLA 9.32% 8.48% 0.84% 1,547, , , % 97.0% -1.9% Coventry Housing 10.92% 10.79% 0.13% 266, ,683 8, % 78.7% -0.6% South Kingstown Housing 2.85% 2.59% 0.26% (128,146) (130,584) 2, % 171.1% -2.2% N. RI Collaborative Adm. Services 9.79% 8.94% 0.85% 292, ,686 76, % 92.3% -2.4% West Warwick Housing 10.09% 9.42% 0.67% 191, ,220 26, % 90.3% -1.3% Smithfield Housing 2.68% 2.26% 0.42% (97,764) (95,497) (2,267) 134.6% 133.6% 1.0% Smithfield COLA 10.62% 9.73% 0.89% 1,604,288 1,329, , % 90.6% -1.7%

12 Unit Exhibit M: MERS Municipal Employees Retirement System (Defined Benefit Contributions Only) Based on the June 30, 2013 Actuarial Valuation FY2016 Contribution Rate UAAL as of June 30, 2013 Funded Ratio as of June 30, 2013 Mediation Provisions Difference Mediation Provisions Difference Mediation Provisions Difference (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) Central Falls Housing 11.85% 11.14% 0.71% 771, ,673 60, % 73.0% -1.6% Lime Rock Administrative Services 13.80% 13.25% 0.55% 82,907 82, % 75.1% 0.0% Central Falls Schools 8.85% 8.00% 0.85% 955, , , % 95.7% -2.4% Bristol/Warren Schools 18.60% 17.37% 1.23% 6,879,268 6,322, , % 70.5% -1.8% Town of E. Greenwich-COLA-NCE 6.17% 5.31% 0.87% (734,760) (1,113,652) 378, % 106.2% -2.2% Harrisville Fire District (ADMIN) 8.28% 7.62% 0.66% 7,190 1,054 6, % 99.8% -1.1% East Greenwich Fire (ADMIN) 9.64% 8.99% 0.65% 45,922 40,367 5, % 88.3% -1.3% Albion Fire District (ADMIN) 0.00% 0.00% 0.00% (7,255) (7,255) (0) 107.3% 107.3% 0.0% General Employee Units Average 13.77% 12.76% 1.02% 198,881, ,037,087 22,844, % 83.3% -1.8% Johnston Fire 9.24% 9.24% 0.00% 374, , , % 94.8% -3.2% Richmond Police 12.37% 12.37% 0.00% 495, ,901 79, % 74.0% -3.6% Smithfield Police 8.07% 6.93% 1.14% (8,617) (666,243) 657, % 106.4% -6.3% Valley Falls Fire 16.65% 16.65% 0.00% 1,065, , , % 76.1% -2.0% North Smithfield Voluntary Fire 17.48% 17.15% 0.33% 1,459,856 1,255, , % 82.4% -2.3% East Greenwich Fire 27.14% 26.48% 0.66% 6,742,110 6,171, , % 62.4% -2.1% East Greenwich Police 28.58% 27.93% 0.65% 5,953,312 5,410, , % 70.2% -2.1% North Kingstown Fire 30.92% 30.04% 0.88% 13,047,622 11,947,908 1,099, % 69.3% -1.9% North Kingstown Police 26.89% 25.44% 1.45% 8,443,213 7,511, , % 70.0% -2.5% North Providence Fire 23.56% 23.56% 0.00% 11,801,520 11,190, , % 71.6% -1.1% Barrington Fire (25) 9.53% 9.02% 0.51% 342, , , % 89.7% -6.3% Barrington Police 31.25% 29.80% 1.45% 5,166,107 4,709, , % 61.2% -2.2% Barrington Fire (20) 93.54% 89.59% 3.95% 2,788,714 2,606, , % 73.2% -1.3% Warren Police & Fire 28.60% 27.86% 0.74% 4,683,344 4,313, , % 66.0% -1.9% South Kingstown Police 26.22% 24.71% 1.51% 7,426,696 6,484, , % 75.9% -2.6% Scituate Police 0.00% 0.00% 0.00% (161,360) (161,797) % 838.9% -16.4% North Smithfield Police 23.81% 21.79% 2.02% 2,860,259 2,440, , % 77.1% -2.9% Tiverton Fire 15.54% 14.13% 1.41% 1,974,926 1,478, , % 85.9% -3.9% Foster Police 34.08% 32.58% 1.50% 1,415,683 1,277, , % 66.0% -2.4% Woonsocket Police 27.61% 26.08% 1.53% 15,376,744 13,632,522 1,744, % 70.0% -2.6%

13 Unit Exhibit M: MERS Municipal Employees Retirement System (Defined Benefit Contributions Only) Based on the June 30, 2013 Actuarial Valuation FY2016 Contribution Rate UAAL as of June 30, 2013 Funded Ratio as of June 30, 2013 Mediation Provisions Difference Mediation Provisions Difference Mediation Provisions Difference (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) Charlestown Police 24.27% 23.45% 0.82% 3,290,967 2,946, , % 71.4% -2.3% Hopkinton Police 31.17% 29.40% 1.77% 2,691,421 2,409, , % 67.8% -2.4% Glocester Police 18.95% 17.89% 1.06% 1,513,369 1,224, , % 80.5% -3.5% West Greenwich Police/Rescue 22.49% 22.45% 0.04% 1,489,124 1,361, , % 69.7% -1.9% Burrillville Police 26.57% 25.65% 0.92% 2,805,374 2,475, , % 77.0% -2.3% Cumberland Rescue 11.12% 11.12% 0.00% 350, , , % 96.7% -3.5% Woonsocket Fire 11.71% 11.28% 0.43% 3,371,185 1,902,954 1,468, % 95.0% -3.5% Bristol Fire 24.92% 24.92% 0.00% 79,356 75,600 3, % 76.2% -0.8% Cumberland Hill Fire 30.35% 28.57% 1.78% 2,174,386 1,935, , % 66.1% -2.7% Bristol Police 6.57% 5.84% 0.73% (450,096) (827,403) 377, % 120.7% -10.4% Coventry Fire 21.46% 21.46% 0.00% 2,031,782 1,838, , % 62.4% -2.4% South Kingstown EMT 5.64% 5.34% 0.30% (323,338) (456,398) 133, % 116.9% -5.5% North Cumberland 21.05% 21.05% 0.00% 1,246,471 1,093, , % 78.2% -2.4% Central Coventry Fire 16.52% 16.52% 0.00% 3,310,351 2,881, , % 73.9% -2.8% Hopkins Hill Fire 13.92% 13.92% 0.00% 260, ,820 59, % 89.6% -2.7% Cranston Police 10.64% 9.82% 0.82% 3,099,782 1,128,480 1,971, % 95.9% -6.3% Cranston Fire 8.15% 8.15% 0.00% (1,622,590) (2,932,690) 1,310, % 107.2% -3.4% Cumberland Fire 23.50% 23.37% 0.13% 1,412,628 1,267, , % 72.6% -2.2% Lincoln Rescue 19.40% 18.07% 1.33% 1,569,072 1,319, , % 67.3% -4.0% New Shoreham Police 23.45% 23.45% 0.00% 532, ,130 39, % 66.3% -1.8% Middletown Police & Fire 6.40% 6.40% 0.00% (627,230) (892,073) 264, % 130.6% -10.9% Harrisville Fire District 7.87% 7.87% 0.00% (73,125) (91,237) 18, % 109.9% -2.1% Albion Fire District 19.61% 17.45% 2.16% 344, ,152 78, % 68.9% -5.8% Johnston Police 8.98% 8.98% 0.00% 15,473 12,216 3, % 88.0% -2.7% Smithfield Fire 10.31% 10.31% 0.00% 39,469 32,979 6, % 94.4% -1.0% Police & Fire Units Average 17.70% 17.05% 0.65% 119,780, ,228,117 18,552, % 79.8% -2.8% All MERS Units Average 14.87% 13.96% 0.91% 318,662, ,265,205 41,396, % 82.1% -2.1%

14 Exhibit B: Combined Estimated Budgetary Impact on Local Employers $ in 000s FY2016 Projected Contributions Unit With Mediation Increase from SA Pre-RIRSA Pre-RIRSA less (1) (2) (3) (4) (5) Barrington $ 5,809,194 $ 6,106,311 $ 297,117 $ 10,185,686 $ 4,376,492 Bristol/Warren 6,609,782 6,943, ,164 11,420,231 4,810,449 Burrillville 3,445,495 3,642, ,708 6,070,817 2,625,322 Central Falls 4,009,779 4,225, ,638 7,434,267 3,424,488 Chariho (Charlestown, Richmond, Hopkinton) 5,983,406 6,298, ,785 11,480,007 5,496,601 Coventry 7,357,815 7,647, ,260 12,725,084 5,367,269 Cranston 18,506,084 19,503, ,787 34,903,001 16,396,917 Cumberland 7,169,306 7,442, ,360 11,671,666 4,502,360 East Greenwich 4,662,209 4,892, ,807 8,690,982 4,028,773 East Providence 10,101,077 10,607, ,274 16,285,701 6,184,624 Exeter/ West Greenwich 3,151,535 3,311, ,623 5,886,504 2,734,969 Foster/ Glocester 3,579,051 3,753, ,815 6,072,739 2,493,688 Jamestown 1,061,961 1,123,519 61,558 1,984, ,763 Johnston 5,698,962 5,977, ,181 9,515,863 3,816,901 Lincoln 4,943,600 5,170, ,689 8,209,213 3,265,613 Little Compton 410, ,455 19, , ,787 Middletown 4,262,266 4,458, ,651 7,550,037 3,287,771 Narragansett 2,190,204 2,288,332 98,128 3,672,579 1,482,375 New Shoreham 528, ,773 27, , ,475 Newport 6,055,567 6,382, ,450 10,045,646 3,990,079 North Kingstown 8,578,304 9,024, ,133 16,145,024 7,566,720 North Providence 5,693,219 5,909, ,616 9,661,655 3,968,436 North Smithfield 2,477,530 2,630, ,161 4,963,900 2,486,370 Northern RI Collaborative 418, ,293 24, , ,645 Pawtucket 12,136,551 12,849, ,705 22,770,758 10,634,207 Portsmouth 2,953,122 3,085, ,095 4,941,775 1,988,653 Providence 23,556,705 24,757,571 1,200,866 44,925,532 21,368,827 Scituate 2,238,089 2,349, ,481 3,732,967 1,494,878 Smithfield 4,029,214 4,267, ,551 7,560,490 3,531,276 South Kingstown 6,919,836 7,329, ,621 13,236,649 6,316,813 Tiverton 2,734,956 2,897, ,444 4,923,538 2,188,582 Warwick 12,645,715 13,290, ,649 24,116,933 11,471,218 West Bay Collaborative Teachers 122, ,142 6, , ,466 West Warwick 3,752,024 3,944, ,984 7,136,884 3,384,860 Westerly 4,543,731 4,745, ,282 7,571,977 3,028,246 Woonsocket 9,474,460 10,033, ,008 18,501,305 9,026,845 Charter School Teachers 309, ,250 15, , ,731 Paul Cuffee School 682, ,132 34,784 1,301, ,973 Kingston Hill Academy, Inc. 128, ,101 6, , ,609 International School 295, ,598 15, , ,084 The Compass School 121, ,262 6, , ,842 The Blackstone Academy 85,235 89,580 4, ,554 77,319 Beacon Charter School of Woonsocket 208, ,057 10, , ,073 * , ,723 24, , ,228 * , ,776 9, , ,021 * , ,914 7, , ,983 * , ,950 5, ,629 89,721 * , ,768 6, , ,185 Total $ 210,691,043 $ 221,473,115 $ 10,782,072 $ 382,179,571 $ 171,488,528 * Misc Teacher Agency Code