HomeMy WebLinkAboutContract 21342134
I. Engagement
City of Columbia Heights agrees to hire Hanf Actuarial Inc. and Richard Johnson, FSA to
perform certain specified actuarial services for the city.
II. Services and Fees
It is agreed that Hanf Actuarial Inc. and Richard Johnson, FSA will perform the services
listed below for the City of Columbia Heights for the specified fee.
Services Fee
Actuarial calculations for its retiree medical plans for the Time and expenses
fiscal year ending 12/31 /2008,12/31 /2009,12/31 /2010 not to exceed
including: $5,000
- Conference call to discuss objectives, plan design,
and actuarial assumptions with staff or other
appropriate parties.
- Development of actuarial assumptions
Actuarial valuations and report to satisfy
GASB 45 accounting regulations.
Miscellaneous actuarial services not included above. Billed on a time
and expense basis.
Duane Hanf and
Richard Johnson
will charge
$225/Hour in 2008.
III. ~v'~'hat City of ColuinP~ia Ileights Agrees To Do
It is agreed that City of Columbia Heights will provide Hanf Actuarial Inc. and Richard
Johnson, FSA the information needed to professionally carry out the duties agreed to
earlier in this engagement agreement. The information and actions needed would include
the following:
- Conference call to discuss goals and objectives.
- Supply census information for the actuarial valuation. See attachment.
- Supply claims experience information and 'benefit payout information.
- Supply detail on the plans} of benefits provided
- Provide input on the selection of actuarial assumptions
IV. Services Not Provided
Hanf Actuarial Inc. and Richard Johnson, FSA do not provide the following services:
A. Legal or tax services or advice.
B. Investment services or advice.
C. Fiduciary services as defined by ERISA
D. Plan administrator
E. Accounting services or advice.
V. Limitations on Liability
Liability resulting from errors or omissions shall not include i) punitive damages, ii)
consequential damages, iii) contributions required to the plan, or iv) increased
contributions due to changes in the law or changes in interpretation of the law due to
recent court decisions.
VI. Resolution of Disputes
Disputes that can't be resolved shall be resolved by binding arbitration.
VII. Billing Procedures
An invoice will be sent periodically and will reflect work performed or projects
completed in conformance with agreed upon fees. For special projects for which a set fee
has not been established in advance services will be billed on a time and expense basis.
VIII. Terms of Agreement
This is a one-year agreement.
IX.
Acceptance
By Signing Below, the parties involved accept this agreement.
City of Columb' Heights ~ Hanf
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Walt Fehst, Cit ana er
Date: --~ °'
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Date: ~
Proposed Approach and Information Needed
We propose the following approach to fulfill your needs for GASB 45actuarial analysis:
Gather information
You would need to supply us with the following type of information at least 60 days before the
due date of the report:
/ Active employee census information including: birth date, spouse's birth date (if family
coverage), hire date, gender, medical plan, group code (e.g. city, police/fire), Social Security
number (or employee number).
/ Eligible current retirees and disabilities census information including: birth date, spouse's
birth date, retirement date, gender, medical plan, retiree contributions, group code, and Social
Security number.
/ Plan documents that describe the promise to active and retired employees.
/ Medical claims experience and exposure for pre 65 and post 65 retirees separately for the last
three fiscal years, if available and relevant. In addition medical plan experience far entire
group (active & retired} for last three years. Current plan rates.
/ Other experience information including turnover, retirement age, and investment return.
Data needed for turnover study: For each employee leaving during the past 5 years - SSN,
name, sex, birth date, hire date, payroll category, termination date, termination reason
(separated, died, disabled (STD or LTD), retired), retiree medical coverage (none, single,
family) elected if retired.
Set actuarial assumptions
Based upon historical experience and best estimates as to future experience, we need to set the
following actuarial assumptions:
/ Discount rate (as required by GASB 45)
/ Turnover rates
/ Retirement rates
/ Mortality rates
/ Employer provided retiree medical subsidy
/ Health care cost trend rate for employer subsidy
/ Other assumptions as needed to properly model your plan
Perform calculations and write report
Present report draft for discussion
Revise report to meet City of Columbia Hei hg is objectives