Cavanaugh Macdonald. The experience and dedication you deserve

Cavanaugh Macdonald C O N S U L T I N G, L L C The experience and dedication you deserve June 5, 2018 Ms. Koren L. Holden, FCA, EA, MAAA Senior Project Manager Public Employees Retirement Association of Colorado 1301 Pennsylvania Street Denver, CO 80203-2386 Dear Koren: Per your request, we have attached the Fiduciary Net Position (FNP) projections used to determine the discount rate in accordance with Governmental Accounting Standards Board (GASB) Statement No. 74 and Statement No. 75 for the Health Care Trust Fund (Plan) as of December 31, 2017 (the Measurement Date). Please refer to our report, GASB Statements No. 74 & 75 - Report for the Public Employees Retirement Association of Colorado Health Care Trust Fund Prepared as of December 31, 2017 for context and all underlying methods and assumptions. As stated in the above-mentioned report, the FNP projections are based upon the Health Care Trust Fund s financial status on the Prior Measurement Date, the indicated set of methods and assumptions, and the requirements of GASB 74 and GASB 75. As such, the FNP projections are not reflective of the cash flows and asset accumulations that would occur on an ongoing Plan basis, reflecting the impact of future members. Therefore, the results of this test do not necessarily indicate whether or not the fund will actually run out of money, the financial condition of the Health Care Trust Fund, or the Health Care Trust Fund s ability to make benefit payments in future years. Cavanaugh Macdonald Consulting, LLC. (CMC) is supplying the FNP projections to the Public Employees Retirement Association of Colorado (PERA) for the express purpose of providing the information to the auditors of PERA participating employers in their review of the applicable accounting disclosures. No third party recipient of this information should rely upon CMC s work product for any other purpose than its intended use. If we can provide any further details regarding these calculations, please do not hesitate to contact us. The undersigned are members of the American Academy of Actuaries and meet the Qualification Standards of the American Academy of Actuaries to render the actuarial opinion contained herein. Sincerely yours, Edward A. Macdonald, ASA, FCA, MAAA President Edward J. Koebel, EA, FCA, MAAA Principal and Consulting Actuary Jeffrey Gann, FSA, EA, MAAA Senior Actuary 3550 Busbee Pkwy, Suite 250, Kennesaw, GA 30144 Phone (678) 388-1700 Fax (678) 388-1730 www.cavmacconsulting.com Offices in Kennesaw, Off GA Bellevue, NE

Colorado PERA - HCTF Contribution Projection Payroll for Payroll for Total Purchase Employer Employer Contributions Related Year Current Future Employee Service Contribution Contributions for to Payroll of Total Beginning Employees Employees Payroll Transfers Rate Current Employees Future Employees Contributions Jan 1 (a) (b) (c) = (a)+(b) (d) (e) (f) = (a)*(e) (g) (h) = (d)+(f)+(g) 2017 8,079,523,094 319,928,277 8,399,451,371 6,240,187 1.02% 82,411,136 2,431,455 91,082,778 2018 7,410,475,804 1,282,956,365 8,693,432,169 5,803,374 1.02% 75,586,853 9,750,468 91,140,695 2019 6,966,440,401 2,031,261,894 8,997,702,295 5,397,138 1.02% 71,057,692 15,437,590 91,892,420 2020 6,596,429,669 2,716,192,206 9,312,621,875 5,019,338 1.02% 67,283,583 20,914,680 93,217,601 2021 6,266,489,690 3,372,073,951 9,638,563,641 4,667,985 1.02% 63,918,195 25,964,969 94,551,149 2022 5,956,295,577 4,019,617,791 9,975,913,368 4,341,226 1.02% 60,754,215 31,353,019 96,448,460 2023 5,660,287,193 4,664,783,143 10,325,070,336 4,037,340 1.02% 57,734,929 36,385,309 98,157,578 2024 5,367,212,605 5,319,235,193 10,686,447,798 3,754,726 1.02% 54,745,569 42,021,958 100,522,253 2025 5,079,170,332 5,981,303,139 11,060,473,471 3,632,309 1.02% 51,807,537 47,252,295 102,692,141 2026 4,795,129,726 6,652,460,316 11,447,590,042 3,739,285 1.02% 48,910,323 53,219,683 105,869,291 2027 4,516,487,565 7,331,768,128 11,848,255,693 4,486,253 1.02% 46,068,173 58,654,145 109,208,571 2028 4,244,838,025 8,018,106,617 12,262,944,642 5,329,622 1.02% 43,297,348 64,946,664 113,573,634 2029 3,979,983,051 8,712,164,653 12,692,147,704 4,936,178 1.02% 40,595,827 70,568,534 116,100,539 2030 3,721,442,114 9,414,930,760 13,136,372,874 4,617,063 1.02% 37,958,710 77,202,432 119,778,205 2031 3,467,935,261 10,128,210,664 13,596,145,925 5,283,947 1.02% 35,372,940 83,051,327 123,708,214 2032 3,217,886,618 10,854,124,414 14,072,011,032 5,426,878 1.02% 32,822,444 90,089,233 128,338,555 2033 2,973,238,945 11,591,292,473 14,564,531,418 5,198,275 1.02% 30,327,037 96,207,728 131,733,040 2034 2,736,495,893 12,337,794,125 15,074,290,018 4,579,582 1.02% 27,912,258 103,637,471 136,129,311 2035 2,509,536,689 13,092,353,480 15,601,890,169 5,504,834 1.02% 25,597,274 109,975,769 141,077,877 2036 2,289,086,957 13,858,869,368 16,147,956,325 5,075,289 1.02% 23,348,687 117,800,390 146,224,366 2037 2,076,379,286 14,636,755,510 16,713,134,796 4,466,305 1.02% 21,179,069 124,412,422 150,057,796 2038 1,872,624,179 15,425,470,335 17,298,094,514 4,203,591 1.02% 19,100,767 132,659,045 155,963,403 2039 1,681,509,332 16,222,018,490 17,903,527,822 4,376,842 1.02% 17,151,395 139,509,359 161,037,596 2040 1,499,336,678 17,030,814,618 18,530,151,296 4,915,736 1.02% 15,293,234 148,168,087 168,377,057 2041 1,327,218,466 17,851,488,125 19,178,706,591 4,614,871 1.02% 13,537,628 155,307,947 173,460,446 2042 1,163,186,531 18,686,774,791 19,849,961,322 4,645,666 1.02% 11,864,503 164,443,618 180,953,787 2043 1,008,788,433 19,535,921,535 20,544,709,968 4,709,100 1.02% 10,289,642 171,916,110 186,914,852 2044 867,886,407 20,395,888,410 21,263,774,817 4,731,426 1.02% 8,852,441 179,483,818 193,067,685 2045 740,778,383 21,267,228,553 22,008,006,936 5,197,626 1.02% 7,555,940 189,278,334 202,031,900 2046 625,350,286 22,152,936,893 22,778,287,179 5,228,569 1.02% 6,378,573 197,161,138 208,768,280 2047 523,630,499 23,051,896,731 23,575,527,230 5,452,663 1.02% 5,341,031 207,467,071 218,260,765 2048 434,795,171 23,965,875,512 24,400,670,683 5,464,941 1.02% 4,434,911 215,692,880 225,592,732 2049 356,658,247 24,898,035,910 25,254,694,157 5,866,437 1.02% 3,637,914 224,082,323 233,586,674 2050 288,372,285 25,850,236,167 26,138,608,452 6,044,850 1.02% 2,941,397 235,237,149 244,223,396 2051 229,701,121 26,823,758,627 27,053,459,748 6,185,386 1.02% 2,342,951 244,096,204 252,624,541 2052 179,865,586 27,820,465,253 28,000,330,839 6,429,778 1.02% 1,834,629 253,166,234 261,430,641 2053 138,870,742 28,841,471,676 28,980,342,418 6,626,094 1.02% 1,416,482 265,341,539 273,384,115 2054 106,688,988 29,887,965,415 29,994,654,403 6,841,955 1.02% 1,088,228 274,969,282 282,899,465 2055 81,471,556 30,962,995,751 31,044,467,307 7,065,722 1.02% 831,010 284,859,561 292,756,293 2056 61,865,605 32,069,158,058 32,131,023,663 7,313,119 1.02% 631,029 295,036,254 302,980,402 2057 46,627,280 33,208,982,211 33,255,609,491 7,568,978 1.02% 475,598 308,843,535 316,888,111 2058 34,817,009 34,384,738,814 34,419,555,823 7,833,892 1.02% 355,133 319,778,071 327,967,096 2059 25,762,419 35,598,477,858 35,624,240,277 8,108,078 1.02% 262,777 331,065,844 339,436,699 2060 18,834,799 36,852,253,888 36,871,088,687 8,391,972 1.02% 192,115 342,725,961 351,310,048 2061 13,621,053 38,147,955,738 38,161,576,791 8,685,576 1.02% 138,935 358,590,784 367,415,295 2062 9,670,614 39,487,561,365 39,497,231,979 8,989,571 1.02% 98,640 371,183,077 380,271,288 Page 1 of 9

Colorado PERA - HCTF Contribution Projection Payroll for Payroll for Total Purchase Employer Employer Contributions Related Year Current Future Employee Service Contribution Contributions for to Payroll of Total Beginning Employees Employees Payroll Transfers Rate Current Employees Future Employees Contributions Jan 1 (a) (b) (c) = (a)+(b) (d) (e) (f) = (a)*(e) (g) (h) = (d)+(f)+(g) 2063 6,691,284 40,872,943,814 40,879,635,098 9,304,206 1.02% 68,251 384,205,672 393,578,129 2064 4,467,486 42,305,954,840 42,310,422,326 9,629,981 1.02% 45,568 397,675,975 407,351,524 2065 2,809,539 43,788,477,568 43,791,287,107 9,966,898 1.02% 28,657 415,990,537 425,986,092 2066 1,631,565 45,322,350,591 45,323,982,156 10,315,740 1.02% 16,642 430,562,331 440,894,713 2067 852,834 46,909,468,697 46,910,321,531 10,676,791 1.02% 8,699 445,639,953 456,325,443 2068 387,625 48,551,795,160 48,552,182,785 11,050,624 1.02% 3,954 461,242,054 472,296,632 2069 159,764 50,251,349,418 50,251,509,182 11,437,245 1.02% 1,630 477,387,819 488,826,694 2070 68,549 52,010,243,454 52,010,312,003 11,837,549 1.02% 699 499,298,337 511,136,585 2071 27,477 53,830,645,446 53,830,672,923 12,251,863 1.02% 280 516,774,196 529,026,339 2072 9,368 55,714,737,107 55,714,746,475 12,680,845 1.02% 96 534,861,476 547,542,417 2073 2,818 57,664,759,784 57,664,762,602 13,124,502 1.02% 29 553,581,694 566,706,225 2074 785 59,683,028,508 59,683,029,293 13,583,859 1.02% 8 572,957,074 586,540,941 2075 99 61,771,935,219 61,771,935,318 14,059,294 1.02% 1 593,010,578 607,069,873 2076 3 63,933,953,051 63,933,953,054 14,551,562 1.02% 0 620,159,345 634,710,907 2077 0 66,171,641,411 66,171,641,411 15,060,668 1.02% 0 641,864,922 656,925,590 2078 0 68,487,648,860 68,487,648,860 15,587,791 1.02% 0 664,330,194 679,917,985 2079 0 70,884,716,570 70,884,716,570 16,133,364 1.02% 0 687,581,751 703,715,115 2080 0 73,365,681,650 73,365,681,650 16,698,252 1.02% 0 711,647,112 728,345,364 2081 0 75,933,480,508 75,933,480,508 17,282,463 1.02% 0 736,554,761 753,837,224 2082 0 78,591,152,326 78,591,152,326 17,887,349 1.02% 0 762,334,178 780,221,527 2083 0 81,341,842,657 81,341,842,657 18,513,406 1.02% 0 797,150,058 815,663,464 2084 0 84,188,807,150 84,188,807,150 19,161,628 1.02% 0 825,050,310 844,211,938 2085 0 87,135,415,400 87,135,415,400 19,832,023 1.02% 0 853,927,071 873,759,094 2086 0 90,185,154,939 90,185,154,939 20,526,144 1.02% 0 883,814,518 904,340,662 2087 0 93,341,635,362 93,341,635,362 21,244,559 1.02% 0 914,748,027 935,992,586 2088 0 96,608,592,600 96,608,592,600 21,988,409 1.02% 0 946,764,207 968,752,616 2089 0 99,989,893,341 99,989,893,341 22,757,703 1.02% 0 979,900,955 1,002,658,658 2090 0 103,489,539,608 103,489,539,608 23,554,222 1.02% 0 1,014,197,488 1,037,751,710 2091 0 107,111,673,494 107,111,673,494 24,378,620 1.02% 0 1,060,405,568 1,084,784,188 2092 0 110,860,582,066 110,860,582,066 25,232,205 1.02% 0 1,097,519,762 1,122,751,967 2093 0 114,740,702,438 114,740,702,438 26,114,987 1.02% 0 1,135,932,954 1,162,047,941 2094 0 118,756,627,023 118,756,627,023 27,029,012 1.02% 0 1,175,690,608 1,202,719,620 2095 0 122,913,108,969 122,913,108,969 27,975,027 1.02% 0 1,216,839,779 1,244,814,806 2096 0 127,215,067,783 127,215,067,783 28,954,536 1.02% 0 1,259,429,171 1,288,383,707 2097 0 131,667,595,155 131,667,595,155 29,967,549 1.02% 0 1,303,509,192 1,333,476,741 2098 0 136,275,960,985 136,275,960,985 31,016,413 1.02% 0 1,349,132,014 1,380,148,427 2099 0 141,045,619,619 141,045,619,619 32,101,987 1.02% 0 1,396,351,634 1,428,453,621 2100 0 145,982,216,306 145,982,216,306 33,225,557 1.02% 0 1,445,223,941 1,478,449,498 2101 0 151,091,593,877 151,091,593,877 34,388,452 1.02% 0 1,495,806,779 1,530,195,231 2102 0 156,379,799,663 156,379,799,663 35,592,047 1.02% 0 1,548,160,017 1,583,752,064 2103 0 161,853,092,651 161,853,092,651 36,837,769 1.02% 0 1,618,530,927 1,655,368,696 2104 0 167,517,950,894 167,517,950,894 38,127,594 1.02% 0 1,675,179,509 1,713,307,103 2105 0 173,381,079,175 173,381,079,175 39,461,539 1.02% 0 1,733,810,792 1,773,272,331 2106 0 179,449,416,946 179,449,416,946 40,842,693 1.02% 0 1,794,494,169 1,835,336,862 2107 0 185,730,146,539 185,730,146,539 42,272,187 1.02% 0 1,857,301,465 1,899,573,652 2108 0 192,230,701,668 192,230,701,668 43,752,291 1.02% 0 1,922,307,017 1,966,059,308 Page 2 of 9

Colorado PERA - HCTF Projection of Fiduciary Net Position Year Beginning Jan 1 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 2051 2052 2053 2054 2055 2056 2057 2058 2059 2060 2061 2062 Projected Beginning Projected Projected Projected Projected Projected Ending Fiduciary Net Total Benefit Administrative Investment Fiduciary Net Position Contributions Payments Expense Earnings Position (a) (b) (c) (d) (e) (f) = (a)+(b)-(c)-(d)+(e) 260,228,470 91,082,778 109,700,857 0 18,259,616 259,870,007 259,870,007 91,140,695 112,703,101 0 18,137,642 256,445,244 256,445,244 91,892,420 116,015,452 0 17,805,871 250,128,083 250,128,083 93,217,601 119,444,265 0 17,279,298 241,180,717 241,180,717 94,551,149 122,645,478 0 16,569,729 229,656,117 229,656,117 96,448,460 125,784,808 0 15,693,705 216,013,474 216,013,474 98,157,578 128,916,045 0 14,658,253 199,913,260 199,913,260 100,522,253 131,839,165 0 13,472,782 182,069,130 182,069,130 102,692,141 134,586,984 0 12,160,242 162,334,529 162,334,529 105,869,291 137,067,013 0 10,752,209 141,889,016 141,889,016 109,208,571 139,108,595 0 9,312,215 121,301,206 121,301,206 113,573,634 140,816,338 0 7,906,227 101,964,729 101,964,729 116,100,539 142,289,454 0 6,538,686 82,314,501 82,314,501 119,778,205 142,913,069 0 5,213,606 64,393,243 64,393,243 123,708,214 143,337,280 0 4,028,604 48,792,781 48,792,781 128,338,555 143,343,585 0 3,048,314 36,836,065 36,836,065 131,733,040 142,904,154 0 2,306,437 27,971,388 27,971,388 136,129,311 141,871,178 0 1,840,741 24,070,262 24,070,262 141,077,877 140,394,467 0 1,767,373 26,521,045 26,521,045 146,224,366 138,169,634 0 2,185,360 36,761,137 36,761,137 150,057,796 135,874,440 0 3,127,559 54,072,053 54,072,053 155,963,403 133,322,781 0 4,658,307 81,370,982 81,370,982 161,037,596 130,442,593 0 6,896,792 118,862,777 118,862,777 168,377,057 127,090,921 0 9,963,477 170,112,391 170,112,391 173,460,446 123,593,793 0 13,958,798 233,937,841 233,937,841 180,953,787 119,578,112 0 18,961,337 314,274,853 314,274,853 186,914,852 115,465,289 0 25,114,178 410,838,594 410,838,594 193,067,685 110,924,941 0 32,463,647 525,444,984 525,444,984 202,031,900 106,196,472 0 41,218,991 662,499,403 662,499,403 208,768,280 101,185,013 0 51,538,415 821,621,086 821,621,086 218,260,765 96,226,354 0 63,545,843 1,007,201,340 1,007,201,340 225,592,732 91,059,199 0 77,407,882 1,219,142,755 1,219,142,755 233,586,674 86,046,891 0 93,197,638 1,459,880,176 1,459,880,176 244,223,396 80,931,976 0 111,164,604 1,734,336,199 1,734,336,199 252,624,541 76,029,724 0 131,496,355 2,042,427,371 2,042,427,371 261,430,641 71,147,648 0 154,279,199 2,386,989,563 2,386,989,563 273,384,115 66,442,028 0 179,803,043 2,773,734,693 2,773,734,693 282,899,465 61,829,666 0 208,302,628 3,203,107,120 3,203,107,120 292,756,293 57,389,403 0 239,898,213 3,678,372,223 3,678,372,223 302,980,402 53,141,057 0 274,826,734 4,203,038,302 4,203,038,302 316,888,111 49,176,164 0 313,447,671 4,784,197,919 4,784,197,919 327,967,096 45,483,458 0 356,063,299 5,422,744,856 5,422,744,856 339,436,699 42,072,657 0 402,843,053 6,122,951,952 6,122,951,952 351,310,048 38,898,714 0 454,098,608 6,889,461,893 6,889,461,893 367,415,295 35,911,126 0 510,293,004 7,731,259,066 7,731,259,066 380,271,288 33,107,207 0 571,833,811 8,650,256,959 Page 4 of 9

Colorado PERA - HCTF Projection of Fiduciary Net Position Year Beginning Jan 1 2063 2064 2065 2066 2067 2068 2069 2070 2071 2072 2073 2074 2075 2076 2077 2078 2079 2080 2081 2082 2083 2084 2085 2086 2087 2088 2089 2090 2091 2092 2093 2094 2095 2096 2097 2098 2099 2100 2101 2102 2103 2104 2105 2106 2107 2108 Projected Beginning Projected Projected Projected Projected Projected Ending Fiduciary Net Total Benefit Administrative Investment Fiduciary Net Position Contributions Payments Expense Earnings Position (a) (b) (c) (d) (e) (f) = (a)+(b)-(c)-(d)+(e) 8,650,256,959 393,578,129 30,476,911 0 638,980,708 9,652,338,885 9,652,338,885 407,351,524 28,002,148 0 712,161,337 10,743,849,597 10,743,849,597 425,986,092 25,680,594 0 791,979,032 11,936,134,128 11,936,134,128 440,894,713 23,500,675 0 878,976,746 13,232,504,912 13,232,504,912 456,325,443 21,451,563 0 973,533,469 14,640,912,260 14,640,912,260 472,296,632 19,524,091 0 1,076,226,497 16,169,911,298 16,169,911,298 488,826,694 17,710,238 0 1,187,676,938 17,828,704,692 17,828,704,692 511,136,585 16,011,485 0 1,308,722,140 19,632,551,932 19,632,551,932 529,026,339 14,419,631 0 1,440,136,164 21,587,294,804 21,587,294,804 547,542,417 12,931,543 0 1,582,507,157 23,704,412,835 23,704,412,835 566,706,225 11,547,352 0 1,736,668,077 25,996,239,785 25,996,239,785 586,540,941 10,260,538 0 1,903,514,092 28,476,034,281 28,476,034,281 607,069,873 9,070,839 0 2,084,007,219 31,158,040,534 31,158,040,534 634,710,907 7,974,708 0 2,279,389,502 34,064,166,235 34,064,166,235 656,925,590 6,968,832 0 2,490,840,604 37,204,963,596 37,204,963,596 679,917,985 6,050,839 0 2,719,327,890 40,598,158,632 40,598,158,632 703,715,115 5,217,657 0 2,966,137,477 44,262,793,567 44,262,793,567 728,345,364 4,465,927 0 3,232,650,961 48,219,323,965 48,219,323,965 753,837,224 3,792,472 0 3,520,352,403 52,489,721,119 52,489,721,119 780,221,527 3,193,399 0 3,830,835,853 57,097,585,100 57,097,585,100 815,663,464 2,664,826 0 4,166,078,628 62,076,662,366 62,076,662,366 844,211,938 2,202,506 0 4,528,007,480 67,446,679,278 67,446,679,278 873,759,094 1,801,937 0 4,918,310,000 73,236,946,436 73,236,946,436 904,340,662 1,458,395 0 5,339,112,526 79,478,941,229 79,478,941,229 935,992,586 1,166,965 0 5,792,698,500 86,206,465,350 86,206,465,350 968,752,616 922,624 0 6,281,519,939 93,455,815,281 93,455,815,281 1,002,658,658 720,322 0 6,808,209,739 101,265,963,356 101,265,963,356 1,037,751,710 555,063 0 7,375,594,894 109,678,754,897 109,678,754,897 1,084,784,188 421,963 0 7,987,059,875 118,750,176,997 118,750,176,997 1,122,751,967 316,352 0 8,645,979,168 128,518,591,780 128,518,591,780 1,162,047,941 233,840 0 9,355,472,976 139,035,878,858 139,035,878,858 1,202,719,620 170,385 0 10,119,304,252 150,357,732,345 150,357,732,345 1,244,814,806 122,364 0 10,941,512,496 162,543,937,283 162,543,937,283 1,288,383,707 86,606 0 11,826,433,864 175,658,668,248 175,658,668,248 1,333,476,741 60,413 0 12,778,722,743 189,770,807,319 189,770,807,319 1,380,148,427 41,539 0 13,803,374,935 204,954,289,142 204,954,289,142 1,428,453,621 28,161 0 14,905,752,550 221,288,467,152 221,288,467,152 1,478,449,498 18,830 0 16,091,610,622 238,858,508,442 238,858,508,442 1,530,195,231 12,424 0 17,367,125,732 257,755,816,981 257,755,816,981 1,583,752,064 8,094 0 18,738,926,692 278,078,487,643 278,078,487,643 1,655,368,696 5,209 0 20,214,655,107 299,948,506,237 299,948,506,237 1,713,307,103 3,314 0 21,802,120,306 323,463,930,332 323,463,930,332 1,773,272,331 2,086 0 23,508,943,456 348,746,144,033 348,746,144,033 1,835,336,862 1,300 0 25,343,927,275 375,925,406,870 375,925,406,870 1,899,573,652 802 0 27,316,517,962 405,141,497,682 405,141,497,682 1,966,059,308 491 0 29,436,851,985 436,544,408,484 Page 5 of 9

Colorado PERA - HCTF Projection of Fiduciary Net Position Year Beginning Jan 1 2109 2110 2111 2112 2113 2114 2115 2116 2117 2118 2119 Projected Beginning Projected Projected Projected Projected Projected Ending Fiduciary Net Total Benefit Administrative Investment Fiduciary Net Position Contributions Payments Expense Earnings Position (a) (b) (c) (d) (e) (f) = (a)+(b)-(c)-(d)+(e) 436,544,408,484 2,034,870,786 297 0 31,715,806,275 470,295,085,248 470,295,085,248 2,106,091,264 178 0 34,165,052,127 506,566,228,461 506,566,228,461 2,179,804,458 106 0 36,797,113,058 545,543,145,871 545,543,145,871 2,256,098,276 62 0 39,625,426,746 587,424,670,831 587,424,670,831 2,335,061,030 36 0 42,664,411,488 632,424,143,313 632,424,143,313 2,416,788,166 20 0 45,929,537,543 680,770,469,003 680,770,469,003 2,501,375,752 11 0 49,437,403,706 732,709,248,450 732,709,248,450 2,588,924,663 6 0 53,205,819,306 788,503,992,413 788,503,992,413 2,679,536,240 3 0 57,253,892,175 848,437,420,825 848,437,420,825 2,773,320,008 2 0 61,602,123,081 912,812,863,912 912,812,863,912 2,870,386,209 1 0 66,272,507,057 981,955,757,177 Total Page 6 of 9

Colorado PERA - HCTF Actuarial Present Value of Projected Benefit Payments Year Beginning Jan 1 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 2051 2052 2053 2054 2055 2056 2057 2058 2059 2060 2061 2062 Projected Benefit Payments Actuarial Present Values of Projected Benefit Payments Projected Beginning Projected "Funded" "Unfunded" Present Value of Present Value of Present Value of Benefit Fiduciary Net Benefit Portion of Portion of "Funded" "Unfunded" Payments using the Year Position Payments Benefit Payments Benefit Payments Benefit Payments Benefit Payments Single Discount Rate (a) (b) (c) (d) (e) (f) = (d)/(1.0725)^[(a)-1/2] (g) = (e)/(1.0343)^[(a)-1/2] (h) = (c)/(1.0725)^[(a)-1/2] 1 260,228,470 109,700,857 109,700,857 0 105,619,672 0 105,619,672 2 259,870,007 112,703,101 112,703,101 0 101,175,034 0 101,175,034 3 256,445,244 116,015,452 116,015,452 0 97,108,228 0 97,108,228 4 250,128,083 119,444,265 119,444,265 0 93,219,806 0 93,219,806 5 241,180,717 122,645,478 122,645,478 0 89,247,720 0 89,247,720 6 229,656,117 125,784,808 125,784,808 0 85,344,685 0 85,344,685 7 216,013,474 128,916,045 128,916,045 0 81,556,384 0 81,556,384 8 199,913,260 131,839,165 131,839,165 0 77,767,499 0 77,767,499 9 182,069,130 134,586,984 134,586,984 0 74,021,767 0 74,021,767 10 162,334,529 137,067,013 137,067,013 0 70,289,756 0 70,289,756 11 141,889,016 139,108,595 139,108,595 0 66,514,411 0 66,514,411 12 121,301,206 140,816,338 140,816,338 0 62,779,454 0 62,779,454 13 101,964,729 142,289,454 142,289,454 0 59,147,977 0 59,147,977 14 82,314,501 142,913,069 142,913,069 0 55,391,335 0 55,391,335 15 64,393,243 143,337,280 143,337,280 0 51,800,236 0 51,800,236 16 48,792,781 143,343,585 143,343,585 0 48,300,713 0 48,300,713 17 36,836,065 142,904,154 142,904,154 0 44,897,570 0 44,897,570 18 27,971,388 141,871,178 141,871,178 0 41,559,935 0 41,559,935 19 24,070,262 140,394,467 140,394,467 0 38,347,175 0 38,347,175 20 26,521,045 138,169,634 138,169,634 0 35,188,332 0 35,188,332 21 36,761,137 135,874,440 135,874,440 0 32,264,619 0 32,264,619 22 54,072,053 133,322,781 133,322,781 0 29,518,606 0 29,518,606 23 81,370,982 130,442,593 130,442,593 0 26,928,589 0 26,928,589 24 118,862,777 127,090,921 127,090,921 0 24,463,095 0 24,463,095 25 170,112,391 123,593,793 123,593,793 0 22,181,772 0 22,181,772 26 233,937,841 119,578,112 119,578,112 0 20,010,317 0 20,010,317 27 314,274,853 115,465,289 115,465,289 0 18,015,919 0 18,015,919 28 410,838,594 110,924,941 110,924,941 0 16,137,523 0 16,137,523 29 525,444,984 106,196,472 106,196,472 0 14,405,239 0 14,405,239 30 662,499,403 101,185,013 101,185,013 0 12,797,622 0 12,797,622 31 821,621,086 96,226,354 96,226,354 0 11,347,751 0 11,347,751 32 1,007,201,340 91,059,199 91,059,199 0 10,012,495 0 10,012,495 33 1,219,142,755 86,046,891 86,046,891 0 8,821,783 0 8,821,783 34 1,459,880,176 80,931,976 80,931,976 0 7,736,491 0 7,736,491 35 1,734,336,199 76,029,724 76,029,724 0 6,776,571 0 6,776,571 36 2,042,427,371 71,147,648 71,147,648 0 5,912,754 0 5,912,754 37 2,386,989,563 66,442,028 66,442,028 0 5,148,430 0 5,148,430 38 2,773,734,693 61,829,666 61,829,666 0 4,467,161 0 4,467,161 39 3,203,107,120 57,389,403 57,389,403 0 3,866,064 0 3,866,064 40 3,678,372,223 53,141,057 53,141,057 0 3,337,876 0 3,337,876 41 4,203,038,302 49,176,164 49,176,164 0 2,880,033 0 2,880,033 42 4,784,197,919 45,483,458 45,483,458 0 2,483,699 0 2,483,699 43 5,422,744,856 42,072,657 42,072,657 0 2,142,141 0 2,142,141 44 6,122,951,952 38,898,714 38,898,714 0 1,846,656 0 1,846,656 45 6,889,461,893 35,911,126 35,911,126 0 1,589,581 0 1,589,581 46 7,731,259,066 33,107,207 33,107,207 0 1,366,403 0 1,366,403 Page 7 of 9

Colorado PERA - HCTF Actuarial Present Value of Projected Benefit Payments Year Beginning Jan 1 2063 2064 2065 2066 2067 2068 2069 2070 2071 2072 2073 2074 2075 2076 2077 2078 2079 2080 2081 2082 2083 2084 2085 2086 2087 2088 2089 2090 2091 2092 2093 2094 2095 2096 2097 2098 2099 2100 2101 2102 2103 2104 2105 2106 2107 2108 Projected Benefit Payments Actuarial Present Values of Projected Benefit Payments Projected Beginning Projected "Funded" "Unfunded" Present Value of Present Value of Present Value of Benefit Fiduciary Net Benefit Portion of Portion of "Funded" "Unfunded" Payments using the Year Position Payments Benefit Payments Benefit Payments Benefit Payments Benefit Payments Single Discount Rate (a) (b) (c) (d) (e) (f) = (d)/(1.0725)^[(a)-1/2] (g) = (e)/(1.0343)^[(a)-1/2] (h) = (c)/(1.0725)^[(a)-1/2] 47 8,650,256,959 30,476,911 30,476,911 0 1,172,816 0 1,172,816 48 9,652,338,885 28,002,148 28,002,148 0 1,004,738 0 1,004,738 49 10,743,849,597 25,680,594 25,680,594 0 859,151 0 859,151 50 11,936,134,128 23,500,675 23,500,675 0 733,073 0 733,073 51 13,232,504,912 21,451,563 21,451,563 0 623,920 0 623,920 52 14,640,912,260 19,524,091 19,524,091 0 529,472 0 529,472 53 16,169,911,298 17,710,238 17,710,238 0 447,816 0 447,816 54 17,828,704,692 16,011,485 16,011,485 0 377,493 0 377,493 55 19,632,551,932 14,419,631 14,419,631 0 316,982 0 316,982 56 21,587,294,804 12,931,543 12,931,543 0 265,054 0 265,054 57 23,704,412,835 11,547,352 11,547,352 0 220,683 0 220,683 58 25,996,239,785 10,260,538 10,260,538 0 182,835 0 182,835 59 28,476,034,281 9,070,839 9,070,839 0 150,709 0 150,709 60 31,158,040,534 7,974,708 7,974,708 0 123,540 0 123,540 61 34,064,166,235 6,968,832 6,968,832 0 100,660 0 100,660 62 37,204,963,596 6,050,839 6,050,839 0 81,492 0 81,492 63 40,598,158,632 5,217,657 5,217,657 0 65,521 0 65,521 64 44,262,793,567 4,465,927 4,465,927 0 52,290 0 52,290 65 48,219,323,965 3,792,472 3,792,472 0 41,403 0 41,403 66 52,489,721,119 3,193,399 3,193,399 0 32,506 0 32,506 67 57,097,585,100 2,664,826 2,664,826 0 25,292 0 25,292 68 62,076,662,366 2,202,506 2,202,506 0 19,491 0 19,491 69 67,446,679,278 1,801,937 1,801,937 0 14,868 0 14,868 70 73,236,946,436 1,458,395 1,458,395 0 11,220 0 11,220 71 79,478,941,229 1,166,965 1,166,965 0 8,371 0 8,371 72 86,206,465,350 922,624 922,624 0 6,171 0 6,171 73 93,455,815,281 720,322 720,322 0 4,492 0 4,492 74 101,265,963,356 555,063 555,063 0 3,228 0 3,228 75 109,678,754,897 421,963 421,963 0 2,288 0 2,288 76 118,750,176,997 316,352 316,352 0 1,599 0 1,599 77 128,518,591,780 233,840 233,840 0 1,102 0 1,102 78 139,035,878,858 170,385 170,385 0 749 0 749 79 150,357,732,345 122,364 122,364 0 501 0 501 80 162,543,937,283 86,606 86,606 0 331 0 331 81 175,658,668,248 60,413 60,413 0 215 0 215 82 189,770,807,319 41,539 41,539 0 138 0 138 83 204,954,289,142 28,161 28,161 0 87 0 87 84 221,288,467,152 18,830 18,830 0 54 0 54 85 238,858,508,442 12,424 12,424 0 33 0 33 86 257,755,816,981 8,094 8,094 0 20 0 20 87 278,078,487,643 5,209 5,209 0 12 0 12 88 299,948,506,237 3,314 3,314 0 7 0 7 89 323,463,930,332 2,086 2,086 0 4 0 4 90 348,746,144,033 1,300 1,300 0 2 0 2 91 375,925,406,870 802 802 0 1 0 1 92 405,141,497,682 491 491 0 1 0 1 Page 8 of 9

Colorado PERA - HCTF Actuarial Present Value of Projected Benefit Payments Year Beginning Jan 1 Total 2109 2110 2111 2112 2113 2114 2115 2116 2117 2118 2119 Projected Benefit Payments Actuarial Present Values of Projected Benefit Payments Projected Beginning Projected "Funded" "Unfunded" Present Value of Present Value of Present Value of Benefit Fiduciary Net Benefit Portion of Portion of "Funded" "Unfunded" Payments using the Year Position Payments Benefit Payments Benefit Payments Benefit Payments Benefit Payments Single Discount Rate (a) (b) (c) (d) (e) (f) = (d)/(1.0725)^[(a)-1/2] (g) = (e)/(1.0343)^[(a)-1/2] (h) = (c)/(1.0725)^[(a)-1/2] 93 436,544,408,484 297 297 0 0 0 0 94 470,295,085,248 178 178 0 0 0 0 95 506,566,228,461 106 106 0 0 0 0 96 545,543,145,871 62 62 0 0 0 0 97 587,424,670,831 36 36 0 0 0 0 98 632,424,143,313 20 20 0 0 0 0 99 680,770,469,003 11 11 0 0 0 0 100 732,709,248,450 6 6 0 0 0 0 101 788,503,992,413 3 3 0 0 0 0 102 848,437,420,825 2 2 0 0 0 0 103 912,812,863,912 1 1 0 0 0 0 1,683,219,315-1,683,219,315 Page 9 of 9

GASB STATEMENTS NO. 74 & 75 REPORT FOR THE PUBLIC EMPLOYEES RETIREMENT ASSOCIATION OF COLORADO HEALTH CARE TRUST FUND PREPARED AS OF DECEMBER 31, 2017

Cavanaugh Macdonald C O N S U L T I N G, L L C The experience and dedication you deserve June 6, 2018 The Board of Trustees Public Employees Retirement Association of Colorado 1301 Pennsylvania Street Denver, CO 80203-2386 Ladies and Gentlemen: Presented in this report is information to assist the Public Employees Retirement Association of Colorado (PERA) in meeting the requirements of the Governmental Accounting Standards Board (GASB) Statement No. 74 and Statement No. 75 for the Health Care Trust Fund (HCTF). This report has been prepared by PERA s actuary, Cavanaugh Macdonald Consulting (CMC) as of December 31, 2017 (the Measurement Date). GASB Statement No. 74 (GASB 74) is the accounting standard that applies to the financial reports issued by systems that sponsor postemployment benefit plans other than pension plans, and is effective for fiscal years beginning after June 15, 2016. GASB Statement No. 75 (GASB 75) establishes accounting and financial reporting requirements for governmental employers who provide postemployment benefits other than pensions to their employees through a collective trust, and is effective for fiscal years beginning after June 15, 2017. The information contained in this report is intended to be used by PERA, PERA s auditors, and PERAaffiliated employers and their auditors for financial reporting purposes and its use for funding or other purposes may not be appropriate. Calculations for purposes other than satisfying the requirements of GASB 74 and GASB 75 may produce significantly different results. The annual actuarial valuation used as a basis for much of the information presented in this report was performed as of December 31, 2016 and reflects the 2016 experience analysis and other expert input, as adopted by the PERA Board of Trustees on November 18, 2016, to update the economic and demographic actuarial assumptions. The valuation was based upon data, furnished by the PERA staff, concerning active, inactive and retired members, plan provisions, and contribution figures, along with pertinent financial information. The supplied information was not audited by CMC, but it was reviewed for reasonableness and consistency. As a result, we have no reason to doubt the substantial accuracy or completeness of the information and believe that it is reliable for the purposes stated herein. The results and conclusions contained in this report depend on the integrity of this information, and if any of the supplied information or analyses change, our results and conclusions may be different and this report may need to be revised. Likewise, this report may need to be revised to reflect any significant event that affects the HCTF subsequent to the Measurement Date. The results contained in this report were prepared by qualified actuaries according to generally accepted actuarial principles and practices, as well as in conformity with Actuarial Standards of Practice issued by the Actuarial Standards Board. The financial accounting information provided in this report reflects our current understanding of Government Accounting Standard Statement Nos. 74 and 75 ( GASB accounting rules ), including any applicable guidance provided by PERA or its audit partners as of the date of this report. 3550 Busbee Pkwy, Suite 250, Kennesaw, GA 30144 Phone (678) 388-1700 Fax (678) 388-1730 www.cavmacconsulting.com Offices in Kennesaw, Off GA Bellevue, NE

Board of Trustees June 6, 2018 Page 2 The calculations are based on the plan provisions as detailed in Colorado Statute as of December 31, 2017, and on actuarial assumptions other than discount rates under GASB accounting rules that are internally consistent and individually reasonable based on the actual experience of the Plan. Discount rates for financial accounting purposes are determined based on the methods prescribed by GASB accounting rules. The actuarial cost and amortization methods are prescribed by PERA and/or GASB accounting rules. In addition, we believe that the calculations comply with all applicable laws governing the Plan, policies and procedures issued by PERA, and requirements described in GASB 74 and GASB 75. Future actuarial measurements may differ significantly from the current measurements presented in this report due to such factors as the following: retiree group benefits program experience differing from that anticipated by the assumptions; changes in assumptions; increases or decreases expected as part of the natural operation of the methodology used for these measurements (such as the end of an amortization period); and changes in retiree group benefits program provisions or applicable law. Retiree group benefits models necessarily rely on the use of approximations and estimates, and are sensitive to changes in these approximations and estimates. Small variations in these approximations and estimates may lead to significant changes in actuarial measurements. This report does not consider all possible scenarios. The funded status measurements included in this report are based on the assumptions and methods used to determine the Plan s obligations and asset values as of the valuation and/or measurement date under GASB accounting rules. Funded status measurements for financial accounting purposes may not appropriate for assessing the sufficiency of plan assets to cover the estimated cost of settling the plan s benefit obligations. Likewise, funded status measurements for financial accounting purposes may not be appropriate for assessing the need for or the amount of future actuarially determined contributions. CMC does not provide legal, investment, or accounting advice. Thus, the information in this report is not intended to supersede or supplant the advice and interpretations of PERA or its legal, investing, or accounting partners. The undersigned are familiar with the near-term and/or long-term aspects of other postemployment benefit plan valuations and collectively meet the Qualification Standards of the American Academy of Actuaries necessary to render the actuarial opinions contained in this report. All sections of this report, including any appendices and attachments, are considered an integral part of the actuarial opinions. Respectfully submitted, Edward A. Macdonald, ASA, FCA, MAAA President Edward J. Koebel, EA, FCA, MAAA Principal and Consulting Actuary Jeffrey Gann, FSA, EA, MAAA Senior Actuary EAM/EJK/JG S:/ 2017/Colorado PERA/ Health/ GASB/ 2017-12-31/ GASB 74 and 75 Report HCTF.docx

TABLE OF CONTENTS Section Item Page No. I Summary of Principal Results 1 II Introduction 2 III Financial Statement Notes GASB 74 5 IV Required Supplementary Information GASB 74 16 V Financial Statement Notes and Required Supplementary 27 Information GASB 75 VI OPEB Expense GASB 75 37 Schedule A Required Supplementary Information 39 B Summary of Principal Plan Provisions as of December 31, 2017 42 C Statement of Actuarial Assumptions and Methods as of December 31, 2017 51 D Actuarial Cost Method as of December 31, 2017 76 E Colorado PERA Defined Benefit OPEB Plan Funding Policy 77 F Balances of Deferred Outflows of Resources and Deferred 83 Inflows of Resources

REPORT OF THE ANNUAL GASB STATEMENTS NO. 74 & 75 REQUIRED INFORMATION FOR THE PUBLIC EMPLOYEES RETIREMENT ASSOCIATION OF COLORADO HEALTH CARE TRUST FUND PREPARED AS OF DECEMBER 31, 2017 SECTION I SUMMARY OF PRINCIPAL RESULTS ($ IN THOUSANDS) Valuation Date (VD): December 31, 2016 Prior Measurement Date: December 31, 2016 Measurement Date (MD): December 31, 2017 Membership Data as of December 31, 2016: Inactive Members or Beneficiaries Currently Receiving Benefits 55,789 Inactive Members Assumed Eligible for a Potential Benefit at Future 24,909 Retirement Dates Inactive Members Assumed Not to Receive Benefits N/A Active Members Assumed Eligible for a Potential Benefit at Future 190,741 Retirement Dates Total Membership 271,439 Single Equivalent Interest Rate (SEIR): Long-Term Expected Rate of Return 7.25% Municipal Bond Index Rate at Prior Measurement Date N/A Municipal Bond Index Rate at Measurement Date N/A Year in which Fiduciary Net Position is Projected to be Depleted Prior Measurement Date N/A Measurement Date N/A Single Equivalent Interest Rate at Prior Measurement Date 7.25% Single Equivalent Interest Rate at Measurement Date 7.25% Net OPEB Liability: Total OPEB Liability (TOL) $ 1,575,822 Fiduciary Net Position (FNP) 276,222 Net OPEB Liability (NOL = TOL FNP) $ 1,299,600 FNP as a percentage of TOL 17.53% Collective OPEB Expense: $ 101,835 Collective Deferred Outflows of Resources on the MD: $ 6,146 Collective Deferred Inflows of Resources on the MD: $ (21,742) Page 1

SECTION II INTRODUCTION This report, prepared as of December 31, 2017 (the Measurement Date or MD), presents information to assist the Public Employees Retirement Association of Colorado (PERA) Health Care Trust Fund (HCTF), in meeting the requirements of the Governmental Accounting Standards Board Statement No. 74 (GASB 74), Financial Reporting For Postemployment Benefit Plans Other Than Pension Plans, and Statement No. 75 (GASB 75), Accounting and Financial Reporting For Postemployment Benefits Other Than Pensions. Colorado HCTF (Plan) is a cost-sharing multiple employer defined benefit OPEB plan. Much of the material provided in this report is based on the data, assumptions and results of the annual actuarial valuation of the HCTF, as of December 31, 2016 (the Valuation Date or VD). The results of that valuation were detailed in a report dated June 8, 2017. GASB 74 requires disclosure and reporting elements for systems that sponsor postemployment benefit plans which may or may not be consistent with the basis used for funding the Plan. PERA has implemented GASB 74 based on the approach described in paragraph 61. As a result, the HCTF will not restate results for any period prior to December 31, 2016. GASB 74 requires the determination of the Total OPEB Liability (TOL) utilizing the Entry Age Normal (EAN) actuarial cost method. If the valuation date used to determine the TOL occurs before the Measurement Date, as is the case here, the TOL must be projected ( rolled forward ) from the valuation date to the measurement date. The Net OPEB Liability (NOL) as of the Measurement Date is equal to the rolledforward TOL minus the plan s Fiduciary Net Position (FNP) (the market value of assets as of the Measurement Date). The plan provisions reflected in the calculation of the TOL are summarized in Schedule B. The development of the rolled-forward TOL as of December 31, 2017 is shown in the table on page 15. Among the items needed for the liability calculation is the discount rate, as defined by GASB, or a Single Equivalent Interest Rate (SEIR). To determine the SEIR, the FNP must be projected into the future for as long as there are anticipated benefits payable under the Plan s provisions applicable to the actual and expected Plan members and their beneficiaries on the Measurement Date. Future contributions were projected to be made in accordance with contribution rates as defined in Colorado Statute as of December 31, 2017. If the FNP is not projected to be depleted at any point in the future, the long term expected rate of return on Plan investments expected to be used to finance the benefit payments may be used as the SEIR. If, however, at a future measurement date the FNP is projected to be depleted, the SEIR is determined as the single rate that will generate a present value of benefit payments equal to the sum of the present value determined by discounting all projected benefit payments through the date of depletion by the long-term expected rate of return, and the present value determined by discounting those benefits after the date of depletion by a 20-year tax-exempt municipal bond (rating AA/Aa or higher) rate (Municipal Bond Index Rate). The Municipal Bond Index Rate used, if necessary, for this purpose is the average of the Bond Buyer General Obligation 20-year Municipal Bond Index Rates during the month of December published at the end of each week by The Bond Buyer (www.bondbuyer.com). Our calculations indicated the FNP is not projected to be depleted, so the Municipal Bond Index Rate is not used in the determination of the SEIR. Please see Paragraphs 35(b) and 35(c) in Section III (Financial Statement Notes GASB 74) for more information concerning the development of the SEIRs. Page 2

The FNP projections are based upon the HCTF s financial status on the Prior Measurement Date, the indicated set of methods and assumptions, and the requirements of GASB 74 and 75. As such, the FNP projections are not reflective of the cash flows and asset accumulations that would occur on an ongoing plan basis, reflecting the impact of future members. Therefore, the results of this test do not necessarily indicate whether or not the fund will actually run out of money, the financial condition of the HCTF, or the HCTF s ability to make benefit payments in future years. The Funding Policy, as adopted by PERA s Board, is shown in Schedule E of this report. The Funding Policy includes the determination of an Actuarially Determined Contribution (ADC) to be used as a benchmark against which to gauge the employer contribution rates set forth in Colorado Statutes. GASB 75 requires disclosure and reporting elements for participating employers of the Plan that may or may not be consistent with the basis used for funding the Plan. In fact, GASB 75 paragraph B10 states: The Board concluded that it is not within the scope of its activities to set standards that establish a specific method of financing OPEB (that being a policy decision for government officials or other responsible authorities to make) or to regulate a government s compliance with the financing policy or method it adopts. Accordingly, the Board established standards in this Statement within the context of accounting and financial reporting, not within the context of the funding of OPEB. Based on the approach described in paragraph 244, the HCTF will not restate results for any period prior to December 31, 2016 for purposes of Section V of this report. GASB 75 requires participating employers to recognize a proportionate share, as appropriate, of the Collective NOL and the Collective OPEB Expense (OE) in financial statements prepared using the economic resources measurement and accrual basis of accounting. The OE may bear little relationship to the employer s funding requirements and actually may result in a negative expense item in some years. OE includes amounts for Service Cost (the Normal Cost under EAN for the year), interest on the TOL, active member contributions, administrative expenses, and other cash flows during the year, recognition of increases/decreases in the TOL due to changes in benefit structure, actuarial experience, actuarial assumption changes, and recognition of investment gains/losses. Changes in benefit terms, including any assumption changes that might be needed to reflect those amendments, are recognized immediately. Differences resulting from actuarial experience and changes of assumptions and other inputs are recognized over the average expected remaining service life of the plan membership at the beginning of the measurement period, and investment gains/losses are recognized over five years. The development of the OE is shown in Section VI. The unrecognized portions of each year s experience, assumption changes and investment gains/losses are used to develop the Collective Deferred Outflows of Resources and Collective Deferred Inflows of Resources, the proportionate share of which, as appropriate, also must be included on the Statement of Net Position for participating employers that are subject to the requirements of GASB 75. Page 3

The sections that follow provide the results of all the necessary calculations, presented in the order laid out in GASB 74 and GASB 75, for note disclosure and Required Supplementary Information (RSI). A separate schedule will be provided to PERA reporting agencies by PERA regarding the allocation percentages determined under GASB 75. This will allow the individual reporting agencies to calculate their proportionate share of the Collective NOL, OE and Collective Deferred Outflows of Resources and Collective Deferred Inflows of Resources, and, if necessary, to roll-up the shares or further allocate them as appropriate. Page 4

SECTION III FINANCIAL STATEMENT NOTES GASB 74 The material presented herein will follow the order presented in GASB 74. Paragraph numbers are provided for ease of reference. As stated previously, since PERA has implemented GASB 74 based on the approach described in paragraph 61, the HCTF will not restate results for any period prior to December 31, 2016. Paragraphs 34(a) (1)-(3): The information required is to be supplied by PERA. Paragraph 34(a) (4): The data required to be reported for the membership of the Public Employees Retirement Association of Colorado (PERA), Health Care Trust Fund (HCTF), were furnished by PERA. The following table summarizes the membership of the Plan as of the December 31, 2016 Valuation Date. Membership as of December 31, 2016 Inactive Members or Beneficiaries Currently Receiving Benefits Inactive Members Assumed Eligible for a Potential Benefit at Future Retirement Dates Inactive Members Assumed Not to Receive Benefits Active Members Assumed Eligible for a Potential Benefit at Future Retirement Dates Number 55,789 24,909 N/A 190,741 Total Membership 271,439 Paragraph 34(a) (5): Title 24, Article 51, Part 12 of the C.R.S. as amended, grants administrative authority to the PERA Board and sets forth the benefit provisions of the Plan. On July 1, 1985, employer contributions to the HCTF commenced. Plan coverage and premium subsidy payments began on July 1, 1986. The employer contribution rates of the State, School, Local Government, and Judicial Divisions include the contribution of 1.02% of PERA covered payroll allocated to the HCTF. The assets held in the HCTF are for the purpose of paying administrative costs incurred and premium subsidies earned on behalf of eligible PERA benefit structure benefit recipients and Denver Public Schools (DPS) benefit structure retirees who worked for an employer in the State, School, Local Government, and Judicial Divisions who enroll in PERACare. The following individuals are eligible to enroll in PERACare: Anyone receiving a monthly PERA benefit (benefit recipient). If the benefit recipient is enrolled in PERACare, the following dependents may be enrolled: spouses (including civil union partners recognized under Colorado law), domestic partners, unmarried dependent children under age 25, certain mentally or physically incapacitated adult children, and dependent parents. Guardians of children receiving PERA survivor benefits, if children are receiving health care benefits. PERA retirees temporarily not receiving PERA benefits. Surviving spouses of deceased retirees who are not receiving PERA benefits but were enrolled in PERACare at the time when death occurred. Page 5

Divorced spouses of retirees who are not receiving PERA benefits, but were receiving health care benefits when the divorce occurred. Eligible benefit recipients under the PERA benefit structure and retirees under the DPS benefit structure enrolled in PERACare receive a monthly premium subsidy. The following monthly amounts are based upon the benefit structure elected, date of retirement, Medicare eligibility, and credited service: PERA Benefit Structure Benefit Recipients: $5.75 per month per year of credited service (up to a maximum of 20 years of service) if age 65 or older or eligible for Medicare Part B. $11.50 per month per year of credited service (up to a maximum of 20 years of service) if not yet age 65 or not eligible for Medicare Part B. DPS Benefit Structure Retirees: $5.75 per month per year of credited service (up to a maximum of 20 years of service) if age 65 or older and eligible for premium-free Medicare Part A. $11.50 per month per year of credited service (up to a maximum of 20 years of service) if not yet age 65, or if age 65 or older and not eligible for premium-free Medicare Part A. This subsidy is used to determine member premiums, which are the projected full cost of coverage less the premium subsidy. The full costs for claims, administration, premiums, etc., are allocated and paid by the PERA HCTF and the DPS HCTF. For those benefit recipients under the PERA benefit structure who are age 65 or older, the full cost of coverage is considered to be based on the full cost of coverage assuming eligibility for premium-free Medicare Part A. This is independent of actual eligibility for premium-free Medicare Part A. Under the PERA benefit structure, an additional subsidy is paid for those members not eligible for premiumfree Medicare Part A benefits. This amount is the difference in premiums charged for those without Medicare Part A and for those enrolled in Medicare Part A. Under the DPS benefit structure, an additional subsidy is paid for those members not eligible for premiumfree Medicare Part A coverage. For these members, the additional subsidy is equal to a fixed-dollar amount of $5.75 per month for each year of credited service (up to a maximum of 20 years of service). This premium subsidy is only available to those enrolled in PERACare and who meet the requirements defined by the benefit structure under which they retire. No postemployment benefit changes are associated with the subsidy amounts described above, including automatic or ad hoc cost-of-living adjustments. Page 6