AGENDA BOARD OF FIRE AND POLICE PENSION COMMISSIONERS. May 3, :30 a.m.

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1 AGENDA BOARD OF FIRE AND POLICE PENSION COMMISSIONERS May 3, :30 a.m. Sam Diannitto Boardroom Los Angeles Fire and Police Pensions Building 701 East 3rd Street, Suite 400 Los Angeles, CA An opportunity for the public to address the Board or Committee about any item on today s agenda for which there has been no previous opportunity for public comment will be provided before or during consideration of the item. Members of the public who wish to speak on any item on today s agenda are requested to complete a speaker card for each item they wish to address, and present the completed card(s) to the commission executive assistant. Speaker cards are available at the commission executive assistant s desk. In compliance with Government Code Section , non-exempt writings that are distributed to a majority or all of the Board or applicable Committee of the Board in advance of their meetings may be viewed at the office of the Los Angeles Fire and Police Pension System (LAFPP), located at 701 East 3 rd Street, 2 nd Floor, Los Angeles, California 90013, or by clicking on LAFPP s website at or at the scheduled meeting. Non-exempt writings that are distributed to the Board or Committee at a scheduled meeting may be viewed at that meeting. In addition, if you would like a copy of any record related to an item on the agenda, please contact the commission executive assistant, at (213) or by at rhonda.ketay@lafpp.com. Sign language interpreters, communication access real-time transcription, assistive listening devices, or other auxiliary aids and/or services may be provided upon request. To ensure availability, you are advised to make your request at least 72 hours prior to the meeting you wish to attend. Due to difficulties in securing sign language interpreters, five or more business days notice is strongly recommended. For additional information, please contact the Department of Fire and Police Pensions, (213) voice or (213) TDD. A. ITEMS FOR BOARD ACTION 1. CITY ADMINISTRATIVE OFFICER S REQUEST FOR DROP COST NEUTRALITY STUDY AND POSSIBLE BOARD ACTION 2. APPROVAL OF CHESTNUT TOWER LOAN REFINANCING AND POSSIBLE BOARD ACTION 3. REVIEW OF FRONTIER CAPITAL MANAGEMENT CO., LLC DOMESTIC SMALL CAP GROWTH EQUITY CONTRACT AND POSSIBLE BOARD ACTION 4. MAXIMUM RETIRED SWORN NON MEDICARE HEALTH SUBSIDY FOR FISCAL YEAR AND POSSIBLE BOARD ACTION

2 5. ACTUARIAL CONSULTING SERVICES INTERVIEWS AND POSSIBLE BOARD ACTION Cheiron, Inc. Gabriel, Roeder, Smith & Company Milliman, Inc. Segal Consulting B. REPORTS TO THE BOARD 1. NEW PREMIUM INFORMATION FROM RELIEF ASSOCIATIONS 2. REVIEW OF 2018 PRIVATE EQUITY AND COMMODITIES INVESTMENT ACTIVITY BY PORTFOLIO ADVISORS, LLC 3. Has any Board Member made any expenditure to influence State legislative or administrative action? 4. Miscellaneous correspondence from money managers, consultants, etc. Received and Filed. 5. General Manager s Report a. Benefits Actions approved by General Manager on April 19, 2018 b. Other business relating to Department operations C. CONSENT ITEMS 1. APPROVAL OF MINUTES a. Minutes of the Special Meeting of the Ad Hoc Committee on Retiree Health Plans on January 16, 2018 b. Corrected minutes Special Offsite Meeting on February 22, FINDING OF FACTS a. Paul Mercado Tier 5 D. CONSIDERATION OF FUTURE AGENDA ITEMS E. GENERAL PUBLIC COMMENT ON MATTERS WITHIN THE BOARD S JURISDICTION F. DISABILITY CASES Alternative 2 Police Officer II Kari L. Davis (terminated). Ms. Davis will be represented by Thomas J. Wicke, Esq. of Lewis, Marenstein, Wicke, Sherwin and Lee. May 3,

3 G. CLOSED SESSION 1. CLOSED SESSION PURSUANT TO GOVERNMENT CODE SECTION TO CONSIDER THE PURCHASE OF TWO (2) PARTICULAR, SPECIFIC INVESTMENTS AND POSSIBLE BOARD ACTION 2. CLOSED SESSION PURSUANT TO GOVERNMENT CODE SECTION TO CONSIDER THE PURCHASE OF ONE (1) PARTICULAR, SPECIFIC REAL ESTATE INVESTMENT BY TOWNSEND AND POSSIBLE BOARD ACTION 3. CLOSED SESSION PURSUANT TO GOVERNMENT CODE SECTION (A) TO CONFER WITH COUNSEL REGARDING PENDING LITIGATION IN TWO CASES AND POSSIBLE BOARD ACTION: a. IN RE: TRIBUNE COMPANY FRAUDULENT CONVEYANCE LITIGATION: DEUTSCHE BANK TRUST COMPANY AMERICAS, ET AL., PLAINTIFFS V. FIRST REPUBLIC BANK, ET AL., DEFENDANTS [UNITED STATES DISTRICT COURT, SOUTHERN DISTRICT OF NEW YORK, CONSOLIDATED MULTIDISTRICT ACTION 11 MD 2296 (WHP)] b. OFFICAL COMMITTEE OF UNSECURED CREDITORS OF TRIBUNE COMPANY, PLAINTIFF V. DENNIS FITZSIMMONS, ET AL., DEFENDANTS [UNITED STATES DISTRICT COURT, SOUTHERN DISTRICT OF NEW YORK, CIVIL ACTION NO. 12-CV (WHP)] May 3,

4 DEPARTMENT OF FIRE AND POLICE PENSIONS 701 E. 3rd Street, Suite 200 Los Angeles, CA (213) REPORT TO THE BOARD OF FIRE AND POLICE PENSION COMMISSIONERS DATE: MAY 3, 2018 ITEM: A.1 FROM: RAYMOND P. CIRANNA, GENERAL MANAGER SUBJECT: CITY ADMINISTRATIVE OFFICER S REQUEST FOR DROP COST NEUTRALITY STUDY AND POSSIBLE BOARD ACTION RECOMMENDATION That the Board: 1. Direct Segal Consulting (Segal) to conduct a cost-neutrality study of the Deferred Retirement Option Plan (DROP) program, as requested by the City Administrative Officer (CAO); and, 2. Direct staff to seek reimbursement from the City for the cost of the DROP cost-neutrality study. BACKGROUND Los Angeles City Charter Section 1218 (b)(1) states in part, With regard to plan funding, DROP shall be cost neutral to the City of Los Angeles as defined by the Plan s actuary. In addition, Los Angeles Administrative Code Section (c) requires that the City of Los Angeles conduct an actuarial study and review of the City s DROP program goals at least every five years or more often. The last DROP cost-neutrality study was completed by the Plan s actuary, Segal Consulting, in February 2014 and covered information through June 30, DISCUSSION On April 24, 2018, the CAO sent a letter to the General Manager requesting that LAFPP initiate a cost-neutrality study of DROP consistent with the assumptions and parameters identified by the Plan s actuary (Attachment). Section 7.6 of the LAFPP Board Operating Policies and Procedures allows the Board to consider written requests that may be received from time to time from the Plan Sponsor for actuarial studies to be conducted by the Plan actuary on behalf of the Plan Sponsor, provided the Plan Sponsor pays for said studies. The CAO s Office has confirmed that they will reimburse LAFPP for the cost of the study. Staff recommends that the Board approve the requested DROP study to allow the City to complete this mandated review in a timely manner. BUDGET No budget impact as recommended.

5 POLICY No policy changes as recommended. CONTRACTOR DISCLOSURE INFORMATION There is no contractor disclosure information required with this report. This report was prepared by: Greg Mack, Chief Benefits Analyst Pensions Division RPC:JS:GFM Attachment Board Report Page 2 May 3, 2018

6 ATTACHMENT CITY OF LOS ANGELES RICHARD H. LLEWELLYN, JR. CALIFORNIA ASSISTANT CITY ADMINISTRATIVE OFFICERS CITY ADMINISTRATIVE OFFICER BENCEJA YOLANDA CHAVEZ PATRICIA J. HUBER ERIC GARCETTI MAYOR Apri124, 2018 Raymond Ciranna, General Manager Department of Fire and Police Pensions 701 E. Third Street, Suite 200 Los Angeles, CA RE: DROP ACTUARIAL STUDY Dear Mr. Ciranna: In accordance with Section of the Los Angeles Administrative Code, an actuarial study of the Deferred Retirement Option Plan (DROP) shall be completed by the City of Los Angeles at least every five years or more often to determine whether DROP remains cost neutral. Los Angeles City Charter Section 1218 states that the cost neutrality shall be defined by the actuary for Los Angeles Fire and Police Pensions. It is therefore requested that the Segal Company be authorized to proceed with a cost neutrality study of DROP consistent with the assumptions and parameters that Segal identified. The Office of the City Administrative Officer should be billed for the cost of the study upon its completion. Should you have any questions regarding this matter, please contact Dana Brown at (213) or via at dana.brown@lacity.org. Sincerely, ~ ~~ ~ ~ ',. 'l.(,. Richard H. Llewellyn, Jr. City Administrative Officer RHL:MHA: AN EQUAL EMPLOYMENT OPPORTUNITY- AFFIRMATIVE ACTION EMPLOYER 1500 CITY HALL EAST, LOS ANGELES, CALIF TEL. (213) ; J (J

7 DEPARTMENT OF FIRE AND POLICE PENSIONS 701 E. 3rd Street, Suite 200 Los Angeles, CA (213) REPORT TO THE BOARD OF FIRE AND POLICE PENSION COMMISSIONERS DATE: MAY 3, 2018 ITEM: A.4 FROM: RAYMOND P. CIRANNA, GENERAL MANAGER SUBJECT: MAXIMUM RETIRED SWORN NON-MEDICARE HEALTH SUBSIDY FOR FISCAL YEAR AND POSSIBLE BOARD ACTION RECOMMENDATION That the Board adopt the attached resolution increasing the maximum retired sworn non-medicare health subsidy by 6%, to $1, per month, effective July 1, BACKGROUND The upper limit within the Board s purview to increase the maximum non-medicare health subsidy is the lesser of 7% or the Board-approved Medical Trend Rate, as provided in the Los Angeles City Administrative Code (LAAC). LAAC Section (e) states in part, The Board is authorized to make discretionary changes, on an annual basis beginning in 2006, to the maximum monthly subsidy, so long as no increase exceeds the lesser of a 7% increase or the actuarial assumed rate for medical inflation for pre-65 health benefits established by the Board for the applicable fiscal year. Any change made by the Board that exceeds this limitation must be submitted for Council review accompanied by an actuarial report. Any increase that is not acted upon by the Council within 45 days after receipt of the report to Council for consideration of the increase shall be deemed approved. Should the Council reject the subsidy set by the Board, the Council shall determine the amount, if any, by which the subsidy shall be increased and shall adopt this increase by resolution. Notwithstanding the authority given to the Board in this subsection, the Council retains the right to establish, by ordinance, the maximum monthly subsidy either if the Board fails to act timely to grant an increase or if the Council desires to approve an increase in excess of the amount authorized by the Board. The actuarial assumed rate for medical inflation for pre-65 health benefits (Medical Trend Rate) approved by the Board for FY is 7%. Therefore, the Board has the authority to raise the retiree subsidy by up to 7%, from the current maximum of $1, up to a maximum of $1,

8 DISCUSSION The proposed maximum non-medicare subsidy of $1, is based on known factors related to medical inflation and market trend, taking into account the overall impact to current and future retirees. While the upper limit of the Board s authority to increase the non-medicare subsidy is the lesser of seven percent or the Board-approved medical trend rate, an increase of six percent will subsidize health insurance premiums in a manner consistent with the Board s fiduciary duty to all participants of the Plan. A six percent increase aligns with LAFPP s mission to advance the health and retirement security of those who dedicate their careers and risk their lives to protect the people of Los Angeles, as it provides a subsidy benefit offset similar to the prior year s levels and safeguards funds for future retirees. Overall, premiums for plans offered by LAFRA and LAPRA have increased at an average rate of 5.8% over the last 10 years, and the Board has approved an average 6.9% subsidy increase each year since Medical Inflation/Trend On September 20, 2017, as part of its consideration of assumptions for the June 30, 2017 retiree health valuation, the Board adopted a medical trend rate of seven percent for the fiscal year. In developing the first-year health trend assumption of seven percent, a mix of health industry expectations and LAFPP plan specific information is taken into consideration by our actuary. The long term medical trend model is typically used to select medical trend assumptions for retiree medical valuations to present liabilities disclosed under the appropriate accounting standards, or to determine contributions under a funding policy. Beginning with the June 30, 2007 valuation, Segal Consulting, our current Plan actuary, has recommended that the health care trend assumptions used in the health valuation be reviewed annually due to the volatility and constant innovations present in the healthcare marketplace. These recommended assumptions are presented to the Board each year (usually in late September/early October) prior to the completion of the annual actuarial valuation. In developing its recommendations, each year Segal publishes a set of health care trend assumptions based on the latest research and information available. This research is then utilized by Segal s health actuaries to develop the health care related assumptions that are adopted by the Board. Market Survey The Plan is funding an average of 88% of LAFRA- and LAPRA-sponsored PPO health insurance premiums, 91% for HMO plans, and 99.9% for Kaiser plans. In comparison, the more common cost share amongst other municipalities and their participants tends to be 80% from the employer and 20% from the subscriber. Increasing the subsidy to $1, will result in an average cost share ratio increase for PPO and Kaiser plans, and a slight decrease for other HMO plans. Attachments 1 and 2 include the cost share ratio for the most popular plans offered by LAFRA and LAPRA. Attachment 3 provides a summary of cost share arrangements for other public safety retirement systems within the state of California. Changes to Board-approved Plans Los Angeles Firemen s Relief Association 1 (LAFRA) and Los Angeles Police Relief Association 2 (LAPRA) have both negotiated changes to their respective health plans in terms of both benefits and premiums. Within LAFRA-sponsored plans, Medical PPO rates for the fiscal year have decreased an average 5% and their Kaiser rates increased an 1 LAFRA covers approximately 27% of retired members receiving subsidies. 2 LAPRA covers approximately 71% of retired members receiving subsidies. Board Report Page 2 May 3, 2018

9 average 4%. LAFRA has added a wellness benefit as well as increased coverage for medical services outside of the U.S. Within LAPRA-sponsored plans, PPO rates for the fiscal year increased an average 9% and the Kaiser rates increased an average 7%. For the LAPRA PPO plan there will be an increase in the annual deductible, an increase in the annual out-of-pocket maximum for non-ppo network care, and an increase in copays for some prescription drugs. For the LAPRA Anthem HMO plan, there is an increase in office visit copays and an increase in copays for some prescription drugs. Impact to Members - The impact to retired members will be dependent upon the plans to which they have access and their years of service. With the current maximum non-medicare subsidy of $1,627.73, LAFPP is able to completely subsidize members with at least 15 years of service enrolled in a single-party plan sponsored by LAFRA or LAPRA. LAFPP is also able to fully subsidize the member portion for the majority of retirees enrolled in a multi-party plan sponsored by LAFRA and LAPRA. Increasing the subsidy to $1, allows the Board to continue to fully subsidize the cost of single-party coverage for retired members with at least 15 years of service in both categories. For members enrolled in the most populated LAFRA plans (with 25+ years of service), the proposed six percent increase either has no impact as their premiums are already fully subsidized, or there is a decrease in their out-of-pocket premium cost. For members enrolled in LAPRA-sponsored plans, premiums for members enrolled in single-party plans or a Kaiser plan will be fully subsidized. Attachments 4 and 5 show the out-of-pocket cost analysis for the most populated Board-approved plans sponsored by LAFRA and LAPRA, respectively. BUDGET The difference between the proposed maximum of $1, and the current maximum of $1, is $ Actual payment of a total $97.66 increase per member is dependent upon subsidy eligibility and the respective health plan premium. If approved, LAFPP will appropriate an additional amount of $2,700,000 towards health insurance premium subsidies for a total FY health subsidy budget amount of approximately $121,700,000. The health insurance subsidy budget for FY is $117,000,000. POLICY No policy changes as recommended. CONTRACTOR DISCLOSURE INFORMATION There is no contractor disclosure information required with this report. This report was prepared by: Eunice Zordilla, Manager Medical & Dental Benefits Section RPC:JS:GM:EZ Attachments: 1. Cost Share for LAFRA Plans 2. Cost Share for LAPRA Plans Board Report Page 3 May 3, 2018

10 3. California Survey of Cost Share Arrangements 4. Out-of-Pocket Cost Analysis for LAFRA Plans 5. Out-of-Pocket Cost Analysis for LAPRA Plans 6. Board Resolution for a 6% increase in the maximum retired non-medicare health subsidy Board Report Page 4 May 3, 2018

11 LAFRA Health Insurance Cost-Share Analysis Attachment 1 Eligible Members w/25yos Fire Medical PPO - 21 Current Rates 7/1/2018 PLAN CODES LAFPP Subsidy Member's Deduction Premium FPP % Mem % LAFPP Subsidy Member's Deduction Premium FPP % Mem % Mbr Non-Med $ $0.00 $ % 0.0% $ $0.00 $ % 0.0% 2-Pty Non-Med $1, $0.00 $1, % 0.0% $1, $0.00 $1, % 0.0% Family Non-Med $1, ($358.07) $1, % 18.0% $1, ($238.54) $1, % 12.1% Mbr ABD/Sps Non-Med $1, ($123.95) $1, % 9.7% $1, ($83.61) $1, % 6.9% 2-Pty ABD $ ($123.95) $ % 12.7% $ ($83.61) $ % 9.4% Average 92% 8% Average 94% 6% Fire Kaiser - 22 Current Rates 7/1/2018 PLAN CODES LAFPP Subsidy Member's Deduction Premium FPP % Mem % LAFPP Subsidy Member's Deduction Premium FPP % Mem % Mbr Non-Med $ $0.00 $ % 0.0% $ $0.00 $ % 0.0% 2-Pty Non-Med $1, $0.00 $1, % 0.0% $1, $0.00 $1, % 0.0% Family Non-Med $1, ($23.05) $1, % 1.4% $1, $0.00 $1, % 0.0% Mbr ABD/Sps Non-Med $ $0.00 $ % 0.0% $ $0.00 $ % 0.0% 2-Pty ABD $ $0.00 $ % 0.0% $ $0.00 $ % 0.0% Average 99.7% 0.30% Average 100% 0.00% A 6% increase over the current subsidy was used for the 2018 calculations

12 LAPRA Health Insurance Cost-Share Analysis Attachment 2 Eligible Members w/25yos Anthem Blue Cross PPO - 25 Current Rates 7/1/2018 PLAN CODES LAFPP Subsidy Member's Deduction Premium FPP % Mem % LAFPP Subsidy Member's Deduction Premium FPP % Mem % Mbr Non-Med $ $0.00 $ % 0.0% $ $0.00 $ % 0.0% 2-Pty Non-Med $1, ($374.65) $2, % 18.7% $1, ($438.82) $2, % 20.3% Family Non-Med $1, ($717.61) $2, % 30.6% $1, ($810.05) $2, % 31.9% Mbr ABD/Sps Non-Med $1, ($220.84) $1, % 13.5% $1, ($306.06) $1, % 17.1% 2-Pty ABD $1, ($34.19) $1, % 2.7% $1, ($55.24) $1, % 3.9% Average 87% 13% Average 85% 15% Anthem Blue Cross California Care HMO - 28 Current Rates 7/1/2018 LAFPP Member's LAFPP Member's PLAN CODES Subsidy Deduction Premium FPP % Mem % Subsidy Deduction Premium FPP % Mem % Mbr Non-Med $ $0.00 $ % 0.0% $ $0.00 $ % 0.0% 2-Pty Non-Med $1, ($34.50) $1, % 2.1% $1, ($119.22) $1, % 6.5% Family Non-Med $1, ($318.17) $1, % 16.4% $1, ($435.20) $2, % 20.1% Mbr ABD/Sps Non-Med $1, ($122.52) $1, % 8.5% $1, ($182.60) $1, % 11.4% 2-Pty ABD $1, ($122.52) $1, % 9.3% $1, ($170.38) $1, % 12.4% Average 93% 7% Average 90% 10% Police Kaiser - 29 Current Rates 7/1/2018 LAFPP Member's LAFPP Member's PLAN CODES Subsidy Deduction Premium FPP % Mem % Subsidy Deduction Premium FPP % Mem % Mbr Non-Med $ $0.00 $ % 0.0% $ $0.00 $ % 0.0% 2-Pty Non-Med $1, $0.00 $1, % 0.0% $1, $0.00 $1, % 0.0% Family Non-Med $1, $0.00 $1, % 0.0% $1, $0.00 $1, % 0.0% Mbr ABD $ $0.00 $ % 0.0% $ $0.00 $ % 0.0% 2-Pty ABD $ $0.00 $ % 0.0% $ $0.00 $ % 0.0% Average 100% 0.00% Average 100% 0.00% A 6% increase over the current subsidy was used for the 2018 calculations

13 Retirement System Health Insurance Cost Share Comparison Attachment 3 PPO Plans/Premiums/Cost Share Organization Tier Maximum Subsidy Single Two-Party Family Employer/Member Employer/Member Employer/Member Los Angeles County Employees Retirement Association - LA County Sheriffs & Fire Departments $1, $1, $2, % of Family Plan Premium 100% / 0% 100% / 0% 100% / 0% 2 100% of Retiree-only Premium 100% / 0% 56% / 44% 47% / 53% Alameda County Employees Retirement Association - Alameda County Sheriffs & Fire Departments Orange County Employees Retirement System - Orange County Sheriffs Dept & Fire Authority N/A N/A $3, $6, $8, $ (Max based on YOS) 17% / 83% 9% / 91% 6% / 94% $1, $3, $4, $ (Max based on YOS) 32% / 68% 17% / 83% 14% / 86% $1, $2, $3, City/County of San Francisco San Francisco Police Dept & Fire Dept 1 2 Non-Medicare Subsidized Premiums 90% / 10% 70% / 30% 52% / 48% $1, $3, $5, $100/Month 5% / 95% 3% / 97% 2% / 98% City of San Diego San Diego Police Dept & Fire Dept 2 $1,155.78/Month 64% / 36% 32% / 68% 21% / 79% 3 $1,036.46/Month 57% / 43% 28% / 72% 19% / 81% 4 $817.32/mo ($103/Month contributions required) 45% / 55% 22% / 78% 15% / 85%

14 HISTORICAL DEDUCTIONS AND IMPACT OF SUBSIDY INCREASES IN SELECTED HEALTH PLAN OPTIONS Attachment 4 Mbr Enrollment EFFECTIVE DATE 7/1/2008 7/1/2009 7/1/2010 7/1/2011 7/1/2012 7/1/2013 7/1/ /01/15 07/01/16 07/01/17 7/1/2018 Subsidy Increase 3/31/2018* MAXIMUM NON-MEDICARE SUBSIDY $ $ $1, $1, $1, $1, $1, $1, $1, $1, $1, $ % 7% 7% 7% 7% 7% 7% 7% 7% 6% 6% LAFRA Fire Medical PPO Deduction 7/1/2008 7/1/2009 7/1/2010 7/1/2011 7/1/2012 7/1/2013 7/1/ /01/15 07/01/16 07/01/17 7/1/2018 Increase 83 Single Party Non-Medicare Premium $ $ $ $ $ $1, $1, $1, $ $ $ Single Party Deduction $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Deduction as % of Premium 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 334 Two-Party Non-Medicare Premium $ $1, $1, $1, $1, $1, $1, $1, $1, $1, $1, Two-Party Deduction $96.45 $ $ $72.72 $77.81 $58.21 $62.28 $79.68 $0.00 $0.00 $0.00 $0.00 Deduction as % of Premium 9.72% 9.72% 9.72% 6.21% 6.21% 4.43% 4.43% 5.25% 0.00% 0.00% 0.00% 181 Family Non-Medicare Premium $1, $1, $1, $1, $1, $1, $1, $1, $1, $1, $1, Family Deduction $ $ $ $ $ $ $ $ $ $ $ $ Deduction as % of Premium 24.85% 24.85% 24.85% 21.93% 21.93% 20.44% 20.44% 21.12% 17.84% 18.03% 12.15% 140 Premium for Member Medicare A&B&D, Spouse Non-Medicare $ $ $ $ $ $ $ $ $1, $1, $1, Deduction $0.00 $0.00 $0.00 $0.00 $57.90 $52.49 $47.06 $90.94 $ $ $ $76.92 Deduction as % of Premium 0.00% 0.00% 0.00% 0.00% 7.18% 6.32% 5.30% 9.57% 10.37% 12.62% 6.86% 898 Premium for Member and Spouse, Both Medicare A&B&D $ $ $ $ $ $ $ $ $ $ $ Deduction $0.00 $0.00 $0.00 $0.00 $57.90 $52.49 $47.06 $90.94 $ $ $ $76.92 Deduction as % of Premium 0.00% 0.00% 0.00% 0.00% 7.64% 6.73% 5.64% 10.18% 13.80% 16.40% 9.42%

15 HISTORICAL DEDUCTIONS AND IMPACT OF SUBSIDY INCREASES IN SELECTED HEALTH PLAN OPTIONS Attachment 4 Mbr Enrollment EFFECTIVE DATE 7/1/2008 7/1/2009 7/1/2010 7/1/2011 7/1/2012 7/1/2013 7/1/ /01/15 07/01/16 07/01/17 7/1/2018 Subsidy Increase 3/31/2018* MAXIMUM NON-MEDICARE SUBSIDY $ $ $1, $1, $1, $1, $1, $1, $1, $1, $1, $97.66 LAFRA Kaiser Deduction 7/1/2008 7/1/2009 7/1/2010 7/1/2011 7/1/2012 7/1/2013 7/1/ /01/15 07/01/16 07/01/17 7/1/2018 Increase 13 Single Party Non-Medicare Premium $ $ $ $ $ $ $ $ $ $ $ Single Party Deduction $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Deduction as % of Premium 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 51 Two-Party Non-Medicare Premium $ $ $1, $1, $1, $1, $1, $1, $1, $1, $1, Two-Party Deduction $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Deduction as % of Premium 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 25 Family Non-Medicare Premium $1, $1, $1, $1, $1, $1, $1, $1, $1, $1, $1, Family Deduction $ $ $ $ $ $ $ $ $ $23.05 $0.00 -$23.05 Deduction as % of Premium 16.50% 19.08% 20.18% 16.58% 17.57% 12.28% 8.25% 11.47% 10.66% 1.40% 0.00% 21 Premium for Member Medicare A&B&D, Spouse Non-Medicare $ $ $ $ $ $ $ $1, $1, $ $ Deduction $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Deduction as % of Premium 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 121 Premium for Member and Spouse, Both Medicare A&B&D $ $ $ $ $ $ $ $ $ $ $ Deduction $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Deduction as % of Premium 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% *** Plan Population data reflects LAFPP member enrollment in the five (5) most popular plans that are affected by the non-medicare subsidy

16 HISTORICAL DEDUCTIONS AND IMPACT OF SUBSIDY INCREASES IN SELECTED HEALTH PLAN OPTIONS Attachment 5 Mbr Enrollment EFFECTIVE DATE 7/1/2008 7/1/2009 7/1/2010 7/1/2011 7/1/2012 7/1/2013 7/1/ /01/15 07/01/16 07/01/17 07/1/18 Subsidy Increase 3/31/2018* MAXIMUM NON-MEDICARE SUBSIDY $ $ $1, $1, $1, $1, $1, $1, $1, $1, $1, $ % 7% 7% 7% 7% 7% 7% 7% 7% 6% 6% LAPRA BC PPO Deduction 7/1/2008 7/1/2009 7/1/2010 7/1/2011 7/1/2012 7/1/2013 7/1/ /01/15 07/01/16 07/01/17 7/1/2018 Increase 559 Single Party Non-Medicare $ $ $ $ $ $ $ $ $ $ $ Single Party Deduction $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Deduction as % of Premium 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 282 Two-Party Non-Medicare $1, $1, $1, $1, $1, $1, $1, $1, $1, $2, $2, Two-Party Deduction $ $ $ $ $ $ $ $ $ $ $ $64.17 Deduction as % of Premium 30.54% 30.01% 29.59% 29.14% 27.67% 24.14% 16.53% 17.22% 18.53% 18.71% 20.28% 185 Family Non-Medicare $1, $1, $1, $1, $1, $1, $1, $2, $2, $2, , Family Deduction $ $ $ $ $ $ $ $ $ $ $ $92.44 Deduction as % of Premium 35.46% 34.99% 34.52% 34.21% 32.84% 29.57% 26.82% 28.45% 30.48% 30.60% 31.95% 381 Premium for Member Medicare A&B&D, Spouse Non-Medicare $ $1, $1, $1, $1, $1, $1, $1, $1, $1, $1, Deduction $ $ $ $ $ $ $ $ $ $ $ $48.64 Deduction as % of Premium 24.04% 24.04% 25.60% 26.13% 24.45% 20.55% 9.55% 12.28% 16.41% 15.76% 17.09% 1597 Premium for Member and Spouse, Both Medicare A&B&D $ $ $ $ $ $1, $ $1, $1, $1, $1, Deduction $0.00 $0.00 $63.86 $98.36 $ $92.77 $39.97 $56.36 $86.71 $70.77 $ $15.53 Deduction as % of Premium 0.00% 0.00% 7.32% 10.13% 10.43% 9.18% 4.31% 5.59% 7.73% 5.63% 3.90%

17 HISTORICAL DEDUCTIONS AND IMPACT OF SUBSIDY INCREASES IN SELECTED HEALTH PLAN OPTIONS Attachment 5 Mbr Enrollment EFFECTIVE DATE 7/1/2008 7/1/2009 7/1/2010 7/1/2011 7/1/2012 7/1/2013 7/1/ /01/15 07/01/16 07/01/17 07/1/18 Subsidy Increase 3/31/2018* MAXIMUM NON-MEDICARE SUBSIDY $ $ $1, $1, $1, $1, $1, $1, $1, $1, $1, $97.66 LAPRA CA Care HMO Deduction 7/1/2008 7/1/2009 7/1/2010 7/1/2011 7/1/2012 7/1/2013 7/1/ /01/15 07/01/16 07/01/17 7/1/2018 Increase 64 Single Party Non-Medicare $ $ $ $ $ $ $ $ $ $ $ Single Party Deduction $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Deduction as % of Premium 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 128 Two-Party Non-Medicare $ $ $ $ $1, $1, $1, $1, $1, $1, $1, Two-Party Deduction $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $18.63 $34.50 $ $84.72 Deduction as % of Premium 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 1.20% 2.08% 6.46% 81 Family Non-Medicare Premium $ $ $1, $1, $1, $1, $1, $1, $1, $1, $2, Family Deduction $0.00 $0.12 $73.65 $75.57 $61.94 $95.91 $ $ $ $ $ $ Deduction as % of Premium 0.00% 0.01% 6.70% 6.44% 5.01% 7.09% 7.00% 9.06% 15.39% 16.35% 20.14% 87 Premium for Member Medicare A&B&D, Spouse Non-Medicare $ $ $ $ $ $ $1, $1, $1, $1, $1, Deduction $0.00 $0.00 $0.00 $0.00 $0.00 $3.27 $0.00 $0.00 $ $ $ $23.50 Deduction as % of Premium 0.00% 0.00% 0.00% 0.00% 0.00% 0.33% 0.00% 0.00% 9.01% 11.10% 11.36% 182 Premium for Member and Spouse, Both Medicare A&B&D $ $ $ $ $ $ $ $ $1, $1, $1, Deduction $0.00 $0.00 $0.00 $0.00 $0.00 $3.27 $0.00 $0.00 $ $ $ $11.28 Deduction as % of Premium 0.00% 0.00% 0.00% 0.00% 0.00% 0.35% 0.00% 0.00% 9.93% 12.14% 12.43%

18 HISTORICAL DEDUCTIONS AND IMPACT OF SUBSIDY INCREASES IN SELECTED HEALTH PLAN OPTIONS Attachment 5 Mbr Enrollment EFFECTIVE DATE 7/1/2008 7/1/2009 7/1/2010 7/1/2011 7/1/2012 7/1/2013 7/1/ /01/15 07/01/16 07/01/17 07/1/18 Subsidy Increase 3/31/2018* MAXIMUM NON-MEDICARE SUBSIDY $ $ $1, $1, $1, $1, $1, $1, $1, $1, $1, $97.66 LAPRA Kaiser Deduction 7/1/2008 7/1/2009 7/1/2010 7/1/2011 7/1/2012 7/1/2013 7/1/ /01/15 07/01/16 07/01/17 7/1/2018 Increase 124 Single Party Non-Medicare Premium* $ $ $ $ $ $ $ $ $ $ $ Single Party Deduction $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Deduction as % of Premium 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 165 Two-Party Non-Medicare Premium* $ $ $ $ $1, $1, $1, $1, $1, $1, $1, Two-Party Deduction $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Deduction as % of Premium 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 119 Family Non-Medicare Premium* $ $ $1, $1, $1, $1, $1, $1, $1, $1, $1, Family Deduction $0.00 $0.00 $0.00 $0.00 $28.41 $0.00 $6.96 $0.00 $0.00 $0.00 $0.00 $0.00 Deduction as % of Premium 0.00% 0.00% 0.00% 0.00% 2.36% 0.00% 0.52% 0.00% 0.00% 0.00% 0.00% 93 Premium for Member Medicare A&B&D, Spouse Non-Medicare* $ $ $ $ $ $ $ $ $ $ $ Deduction $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Deduction as % of Premium 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 387 Premium for Member and Spouse, Both Medicare A&B&D* $ $ $ $ $ $ $ $ $ $ $ Deduction $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Deduction as % of Premium 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% *** Plan Population data reflects LAFPP member enrollment in the five (5) most popular plans that are affected by the non-medicare subsidy

19 ATTACHMENT 6 HEALTH SUBSIDIES/REIMBURSEMENTS FOR PENSIONERS RESOLUTION NO. WHEREAS, retired members of the Fire and Police Pension Plan, Tiers 1, 2, 3, 4, 5 and 6, have had paid, on their behalf, a health insurance premium subsidy, or have received a reimbursement, in accordance with the provisions of Article 10, Division 4, Chapters 11.5 and 20 of the Administrative Code; and WHEREAS, the Board of Fire and Police Pension Commissioners has been granted the authority under Section (e) of the Administrative Code to increase or decrease the maximum monthly amount of the health insurance subsidy in accordance with the authority conferred in subsections (e) of Sections 1330, 1428, 1518, 1618 and 1718 of the Charter and subsection (e) of of the Administrative Code; and WHEREAS, the pre-65 actuarial assumed medical trend rate for the fiscal year as adopted by the Board in the plan s most recent actuarial valuation is 7.00%; and WHEREAS, the pre-65 actuarial assumed medical trend rate for the fiscal year as adopted by the Board in the plan s most recent actuarial valuation is equal to 7%; RESOLVED, that the maximum monthly health insurance premium subsidy as described in Section (e) of the Administrative Code shall be $ 1,725.39, payable on behalf of the members and their eligible dependents (as such term is defined in the Board-approved health insurance plans) or received as a reimbursement; and RESOLVED, that retired members of age 60 and above with 10 or more years of service who retired with an effective date prior to July 1, 1998, and retired members of age 55 and above with 10 or more years of service who retired with an effective date of July 1, 1998 or after, who do not qualify for Part A of Medicare, shall have paid to their respective approved health insurance carriers a monthly health insurance subsidy, or paid directly to the member as a reimbursement, an amount of $ for each whole year of service; said subsidy to apply first to that portion of the premium applicable to the retired member with any remainder to be applied to the dependent(s) of said member; and RESOLVED, that retired members who do qualify for federally funded Part A of Medicare shall have paid to their respective approved health insurance carriers, on their behalf, a subsidy as provided in Section (c) and in addition shall have paid to said insurance carriers, on behalf of their eligible dependents, a subsidy equal to the amount payable on behalf of the dependents of a retired member in the same plan with the same years of service who does not qualify for Parts A or B of Medicare or qualifies for Part B but not Part A and has their Medicare Part B and D benefits included in their Board-approved health plan, whichever subsidy amount is greater, providing such subsidy, both member and dependent portions combined, does not exceed the highest subsidy for a retired member of Tiers 1, 2, 3, 4, 5 and 6 with a like number of years of service and who does not qualify for federally funded Part A of Medicare; and RESOLVED, that subsidies paid on behalf of retired members, the dependents of retired members, and qualified surviving spouses/domestic partners who are eligible to enroll in

20 ATTACHMENT 6 Health Subsidies/Reimbursements for Pensioners, continued Page 2 Medicare Parts A and B or Medicare Part B but not Part A shall be subject to the limits described in Board Operating Policy 8.2, and RESOLVED, the health insurance premium subsidy provided herein shall be applied against the June 30, 2018 and subsequent monthly health insurance premiums or at the earliest month thereafter which is administratively feasible, and shall remain in effect until modified or cancelled by subsequent action of the Board; and RESOLVED, that the General Manager of the Department of Fire and Police Pensions be authorized to cause demands to be drawn upon the funds of the Fire and Police Tiers 1, 2, 3, 4, 5 and 6 General Pension Funds to be paid to the service organizations through which health insurance is provided for subsidy payments applying the health insurance premiums to said eligible members in advance of or after the effective date of enrollment or change in coverage, or directly to the member in the case of a reimbursement; providing such subsidy payments have been verified against records kept by the Department of Fire and Police Pensions and found to be correct and proper and that individual subsidy amounts are within the limits set forth in the Los Angeles City Administrative Code. I HEREBY CERTIFY that the foregoing Resolution was adopted by the Board of Fire and Police Pension Commissioners at its regular meeting held May 3, Raymond P. Ciranna General Manager

21 DEPARTMENT OF FIRE AND POLICE PENSIONS 701 E. 3rd Street, Suite 200 Los Angeles, CA (213) REPORT TO THE BOARD OF FIRE AND POLICE PENSION COMMISSIONERS DATE: MAY 3, 2018 ITEM: A.5 FROM: RAYMOND P. CIRANNA, GENERAL MANAGER SUBJECT: ACTUARIAL CONSULTING SERVICES INTERVIEWS AND POSSIBLE BOARD ACTION RECOMMENDATION That the Board: 1. Select and approve an actuarial firm to provide actuarial consulting services for a three-year term; 2. Select and approve an actuarial firm to provide actuarial audit services for a one-year term, if necessary; 3. Authorize the General Manager to negotiate the terms and conditions of the contract(s); and 4. Authorize the President of the Board, on behalf of the Board, to execute the contract(s), subject to the approval of the City Attorney as to form. DISCUSSION Segal Consulting (Segal) has served as LAFPP s actuary continuously since July 1, 2006, with their current contract expiring June 30, On January 4, 2018, the Board approved a recommendation to issue a Request for Proposals (RFP) for actuarial consulting services, including a provision for a secondary consultant to conduct an actuarial audit, if necessary 1. Staff released the RFP on January 5, The RFP was advertised through the City of Los Angeles Business Assistance Virtual Network (LABAVN.org), posted on the Department s website, and mailed to actuarial services firms. Responses were due on February 14, A total of four actuarial services firms responded to the RFP. Each proposal was evaluated by staff based on the firm s level of expertise, relevant experience, fee schedule, thoroughness of work approach, and responsiveness to the requirements of the RFP. The four firms all met the requirements of the RFP and are listed below: Cheiron, Inc. Portland, OR Lead actuary for the contract term is Bill Hallmark with over 30 years of actuarial consulting experience Gabriel, Roeder, Smith & Company 1 The Board s Governance Policies provides that an actuarial audit or equivalent is conducted at least every 5-7 years, unless the System has recently appointed, or is about to appoint, a new actuary at or about the time an actuarial audit is scheduled to be performed.

22 Southfield, MI Lead actuary for the contract term is Brad Armstrong with over 30 years of actuarial consulting experience Milliman, Inc. Portland, OR - Lead actuary for the contract term is Matt Larrabee with over 20 years of actuarial consulting experience The Segal Company (Western States), Inc. (Segal Consulting) San Francisco, CA Lead actuary for the contract term is Paul Angelo with over 35 years of actuarial consulting experience As the final stage of the selection process, the lead actuarial consultant from each firm and their respective team will provide the Board an overall presentation of their services and relevant experience, as well as answer any questions the Board may have. Section 3.15(D) of the Board s Governance Policies provides that the Board will ensure that an actuarial audit or equivalent is conducted at least every 5-7 years, unless the System has recently appointed, or is about to appoint, a new actuary at or about the time an actuarial audit is scheduled to be performed. The last actuarial audit was conducted by Cheiron, Inc. in 2013 and was presented to the Board on December 5, Therefore, if Segal is selected to be the System s actuary for a new three-year term, one of the other firms will be contracted to perform an actuarial audit. BUDGET Fees for the actuarial consulting services vary among each firm, with the lead actuarial consultant fees ranging from $400 to $530 per hour. Funds in the amount of $500,000 are included in the proposed Fiscal Year budget for actuarial consulting services. Included in the budget is an actuarial audit, which if needed, will cost between $70,000 and $127,500. POLICY No policy changes as recommended. CONTRACTOR DISCLOSURE INFORMATION LAFPP received the required disclosure information from each of the four RFP respondents regarding gifts, campaign and charitable contributions, and contacts. IAS has reviewed the information, and there is nothing to report under LAFPP's contractor disclosure policy. This report was prepared by: Greg Mack, Chief Benefits Analyst Pensions Division RPC:JS:GM Attachment: RFP Summary Matrix Board Report Page 2 May 3, 2018

23 DEPARTMENT OF FIRE AND POLICE PENSIONS 701 E. 3rd Street, Suite 200 Los Angeles, CA (213) REPORT TO THE BOARD OF FIRE AND POLICE PENSION COMMISSIONERS DATE: MAY 3, 2018 ITEM: B.1 FROM: RAYMOND P. CIRANNA, GENERAL MANAGER SUBJECT: NEW PREMIUM INFORMATION FROM RELIEF ASSOCIATIONS THIS REPORT IS PROVIDED FOR INFORMATION PURPOSES. DISCUSSION Recently, two of LAFPP s retiree health plan sponsors, Los Angeles Firemen s Relief Association (LAFRA) and Los Angeles Police Relief Association (LAPRA), provided new health plan premium information that will be effective on July 1, Staff is conveying this information to the Board for its review and understanding. LAFRA renewal rates are provided in Attachment 1 for the various plan types and coverage levels. On average, the premiums for the LAFRA PPO Plan are decreasing by 5%. For the LAFRA Kaiser Plan, the rates are increasing an average of 4%. The below table illustrates the most popular coverage types and corresponding rates: Member Enrollment LAFRA Fire Medical PPO 7/1/2017 7/1/2018 Single Party Non-Medicare Premium $ $ Two-Party Non-Medicare Premium $1, $1, Family Non-Medicare Premium $1, $1, Premium for Member Medicare A&B&D, Spouse Non- Medicare $1, $1, Premium for Member and Spouse, Both Medicare A&B&D $ $ LAFRA Kaiser 7/1/2017 7/1/2018 Single Party Non-Medicare Premium $ $ Two-Party Non-Medicare Premium $1, $1, Family Non-Medicare Premium $1, $1, Premium for Member Medicare A&B&D, Spouse Non- Medicare $ $ Premium for Member and Spouse, Both Medicare A&B&D $ $524.92

24 Staff was also provided with LAPRA s renewal rates. These rates are provided in Attachment 2 for LAPRA s various plan types and coverage levels. LAPRA s renewal rates are increasing on average 9% for the PPO Plan, 6% for the HMO Plan and 7% for the Kaiser Plan. The below table illustrates the most popular coverage types and corresponding rates: Member Enrollment LAPRA BC PPO 7/1/2017 7/1/ Single Party Non-Medicare $ $ Two-Party Non-Medicare $2, $2, Family Non-Medicare $2, , Premium for Member Medicare A&B&D, Spouse Non- Medicare $1, $1, Premium for Member and Spouse, Both Medicare A&B&D $1, $1, LAPRA CA Care HMO 7/1/2017 7/1/ Single Party Non-Medicare $ $ Two-Party Non-Medicare $1, $1, Family Non-Medicare Premium $1, $2, Premium for Member Medicare A&B&D, Spouse Non- Medicare $1, $1, Premium for Member and Spouse, Both Medicare A&B&D $1, $1, LAPRA Kaiser 7/1/2017 7/1/ Single Party Non-Medicare Premium $ $ Two-Party Non-Medicare Premium $1, $1, Family Non-Medicare Premium* $1, $1, Premium for Member Medicare A&B&D, Spouse Non- Medicare $ $ Premium for Member and Spouse, Both Medicare A&B&D $ $ LAPRA provided a letter with their renewal rates and a summary of the Plan changes effective July 1, These Plan changes result in additional out of pocket cost to members and reflect increased costs for deductibles, copays, out-of-pocket maximums and prescription drugs. LAPRA also indicated its opposition to subsidy formula changes under consideration by the Board and requested staff to provide the Board with the rate file that illustrates the impact to members from a potential change to the subsidy formula. BUDGET The new health plan premiums for LAFRA and LAPRA will be effective on July 1, 2018, and will be included in retiree health subsidy calculations beginning with the June 30, 2018 pension roll. POLICY No policy changes as recommended. Board Report Page 2 May 3, 2018

25 CONTRACTOR DISCLOSURE INFORMATION There is no contractor disclosure information required with this report. This report was prepared by: Eunice Zordilla, Manager Medical & Dental Benefits Section RPC:JS:GM:EZ Attachments: 1. LAFRA s Health Plan Premiums July LAPRA s Health Plan Premiums July 2018 Board Report Page 3 May 3, 2018

26 M I N U T E S OF THE BOARD OF FIRE AND POLICE PENSION COMMISSIONERS SPECIAL BOARD MEETING OF JANUARY 16, 2018 The Ad Hoc Committee on Retiree Health Plans and members of the Board of Fire and Police Pension Commissioners of the City of Los Angeles met at the Sam Diannitto Board Room, located at the LAFPP Building, 701 East 3rd Street, Suite 400, Los Angeles on Tuesday, January 16, COMMITTEE MEMBERS PRESENT: OTHER BOARD MEMBERS: AD HOC COMMITTEE SUPPORT STAFF: DEPARTMENT OF FIRE AND POLICE PENSIONS: CITY ATTORNEY S OFFICE: Robert von Voigt, Chair Brian Pendleton, Vice Chair Ruben Navarro, Pedram Salimpour, MD Corinne Babcock Ken Buzzell Joseph Salazar, Assistant General Manager Raymond P. Ciranna, General Manager Joseph Salazar, Assistant General Manager Rhonda Ketay, Commission Executive Assistant Joshua Geller, Deputy City Attorney The Ad Hoc Committee will be noted as a Special Board meeting since a quorum of the Board was present. Chair von Voigt called the meeting to order at 9:01 a.m. All the above Commissioners were present at the start of the meeting with the exception of Commissioners Salimpour and Babcock who arrived at 9:15 a.m. and 9:20 a.m. respectively. 1. CONTINUED DISCUSSION OF MEDICAL SUBSIDY AND POSSIBLE COMMITTEE ACTION Taking part in the discussion were Ms. Dawna Gray, Bradawn, Inc., Messrs. Kevin McCarthy, LAPRA, Al Ruvalcaba, LARFPA, Tony Gamboa, UFLAC, Robert Steinbacher, LAFRA, Jeff Cawdrey, LAFRA, Jennifer Lincicum, Fickewirth Benefits Advisors (with UFLAC), and Ms. Diane Whisnant, LAPRA. Commissioner Salimpour joined the meeting at 9:15 a.m. Commissioner Babcock joined the meeting at 9:20 a.m.

27 Minutes of the Board of Fire and Police Pension Commissioners Special Meeting of January 16, 2018 Page 2 The focus of the discussion continued to be the Medicare Subsidy calculation. As requested by the committee, Staff is currently reviewing information provided by Ms. Dawna Gray, Bradawn, Inc., Health Plan Consultant to LAPRA and LAFRA. The committee requested that the associations come back to the next Ad Hoc committee meeting with possible Medicare Supplement information and any other cost saving options for discussion. 2. STATUS OF HEALTH AND DENTAL PLAN ADMINISTRATOR OPERATIONS AGREEMENTS AND POSSIBLE COMMITTEE ACTION General Manager Ciranna summarized the committee report and discussed the current status of the Operations Agreements with the committee. The Commissioners discussed contracts vs operations agreements with General Manager Ciranna, and Messrs Bob Steinbacher, LAFRA, and Joshua Geller, Deputy City Attorney, City Attorney s Office. Mr. David Jones provided public comment. Commissioner Salimpour stepped out of the boardroom prior to the vote. Motion Commissioner Navarro moved that the Committee recommend that the Board approve a one-year extension of the Operations Agreements with Los Angeles Firemen s Relief Association, Los Angeles Police Relief Association, Los Angeles Police Protective League, and United Firefighters of Los Angeles City, from the expiration of each agreement through June 30, 2018, and that the Committee provide direction to staff regarding drafting new contracts with current Board-approved health and dental plan administrators, which was seconded by Commissioner Pendleton and approved by the following votes: ayes, Commissioners Navarro, Pendleton, and Chair von Voigt - 3; nays none. 3. GENERAL PUBLIC COMMENT ON MATTERS WITHIN THE COMMITTEE S JURISDICTION There were no public comments. The meeting adjourned at 11:41 a.m. Chair Secretary