Retirement Commission (linked)

ACTUARIAL VALUATION REPORT 
TOWN OF WATERFORD OPEB PLAN 
 
 
 
ACTUARIAL VALUATION REPORT
TOWN OF WATERFORD OPEB PLAN
REPORTING AS OF JULY 1, 2024 

ACTUARIAL VALUATION REPORT 
TOWN OF WATERFORD OPEB PLAN 
 
Table of Contents 
 
Executive Summary ................................................................................................................................................. 1 
Valuation Results and Highlights ............................................................................................................................. 2 
Purpose of the Valuation ........................................................................................................................................ 2 
Information Available in the Valuation Report ...................................................................................................... 2 
Changes Reflected in the Valuation ....................................................................................................................... 2 
Cash Contribution for Fiscal Years Ending 2026 and 2027 ..................................................................................... 2 
Liability Experience During Period Under Review .................................................................................................. 2 
Asset Experience During Period Under Review ...................................................................................................... 3 
Certification ............................................................................................................................................................. 4 
Development of Unfunded Accrued Liability and Funded Ratio ............................................................................. 5 
Development of Unfunded Accrued Liability and Funded Ratio by Group ............................................................. 7 
Determination of Normal Cost and Actuarially Determined Employer Contribution ............................................. 8 
Actuarially Determined Employer Contribution per Group .................................................................................. 10 
Development of Asset Values ................................................................................................................................ 11 
Target Allocation and Expected Rate of Return .................................................................................................... 17 
Amortization of Unfunded Liability ....................................................................................................................... 18 
Member Data ........................................................................................................................................................ 19 
Expected Benefit Payments from Trust Fund ........................................................................................................ 21 
Expected Per Capita Claims (without Medicare Integration) ................................................................................ 22 
Description of Actuarial Methods ......................................................................................................................... 23 
Description of Actuarial Assumptions ................................................................................................................... 24 
Summary of Plan Provisions .................................................................................................................................. 30 
 
 
 
 
 
 
 
 
 
 
 
Report Prepared By:  
 
 
 
 
Stephen Chykirda
Jonathan Plumb
Associate Vice President & Consul?ng Actuary  
Senior Actuarial Consultant
860.856.2047
860.856.2103
stephen.chykirda@usi.com 
jon.plumb@usi.com 
 
 
 

ACTUARIAL VALUATION REPORT 
TOWN OF WATERFORD OPEB PLAN 
USICG.COM 
 
1 
 
Executive Summary 
 
Number of members
Active members
414
368
Retired members and dependents
168
179
Total
582
547
Covered employee payroll
31,264,486
        
29,029,526
        
Average plan salary
75,518
                
78,885
                
Actuarial present value of future benefits
36,779,727
        
32,284,998
        
Actuarial accrued liability
34,097,347
        
30,074,765
        
Plan assets
Market value of assets
13,311,529
8,465,847
Actuarial value of assets
13,194,398
9,206,097
Unfunded accrued liability
20,902,949
20,868,668
Funded ratio
38.7%
30.6%
Actuarially determined employer contribution (ADEC)
Fiscal year ending
2026
2024
ADEC
2,804,332 
2,505,310 
Fiscal year ending
2027
2025
ADEC
2,818,488 
2,516,833 
July 1, 2024
July 1, 2022
 
 
 

ACTUARIAL VALUATION REPORT 
TOWN OF WATERFORD OPEB PLAN 
USICG.COM 
 
2 
Ul?mate cost = Benefits Paid + Expenses Incurred – Investment Return – Employee Contribu?ons 
 
 
Valuation Results and Highlights 
 
Purpose of the Valuation 
The purpose of the valua?on is to develop the Actuarially Determined Employer Contribu?on (ADEC). 
The ul?mate cost of an OPEB plan is based primarily on the level of benefits promised by the plan.  The OPEB 
fund's investment earnings serve to reduce the cost of plan benefits and expenses.  Thus, 
 
 
 
 
 
The actuarial cost method distributes this ul?mate cost over the working life?me of current plan par?cipants.  By 
means of this budge?ng process, costs are allocated to both past and future years, and a cost is assigned to the 
current year.  The current year's allocated cost, or normal cost, is the building block upon which the actuarially 
determined employer contribu?on is developed.  The July 1, 2024 valua?on produces the contribu?ons for the 
fiscal years ending 2026 and 2027. 
 
Information Available in the Valuation Report 
The Execu?ve Summary is intended to emphasize the notable results of the valua?on from the perspec?ve of the 
Plan Sponsor.  Suppor?ng technical detail is documented in Results of the Valua?on, Suppor?ng Exhibits and 
Descrip?on of Actuarial Methods and Assump?ons.  A concise summary of the principal provisions of the Plan is 
outlined in Summary of Plan Provisions. 
 
Changes Reflected in the Valuation  
This valuation reflects changes in the medical trend rates, as well as the retirement/termination rates for the 
non-certified BOE group.  These changes in assumptions increased the liability by 6.3%.  Additionally, medical 
premiums increased more than expected resulting in a 6.2% increase in the total liability. 
 
Cash Contribution for Fiscal Years Ending 2026 and 2027 
The Town cost is:
2026 Fiscal Year
2027 Fiscal Year
Town
$621,679
$621,679
Police and Fire
698,089
698,089
BOE Certified
1,396,117
1,407,943
BOE Non-Certified
88,447
90,777
Total
$2,804,332
$2,818,488  
 
Liability Experience During Period Under Review 
The accrued liability of $34,097,347 is higher than expected primarily due to medical premiums that 
were higher than expected since the last valua?on. 
 
 

ACTUARIAL VALUATION REPORT 
TOWN OF WATERFORD OPEB PLAN 
USICG.COM 
 
3 
 
Asset Experience During Period Under Review 
The plan's assets provided the following rates of return during the past two fiscal years:
2023 Fiscal Year
2024 Fiscal Year
Market Value Basis
10.1%
10.9%
Actuarial Value Basis
5.6%
6.8%
 
The Actuarial Value of assets, rather than the Market Value, is used to determine plan contribu?ons. The 
Actuarial Value spreads the asset vola?lity over 5 years, thereby smoothing out fluctua?ons that are inherent in 
the Market Value. 
 
 

ACTUARIAL VALUATION REPORT 
TOWN OF WATERFORD OPEB PLAN 
USICG.COM 
 
4 
 
Certification 
 
This report presents the results of the July 1, 2024 Actuarial Valua?on for Town of Waterford OPEB Plan (the 
Plan) for the purpose of es?ma?ng the funded status of the Plan and determining the Actuarially Determined 
Employer Contribu?on (ADEC) for the fiscal years ending June 30, 2026 and June 30, 2027.  This report is 
intended to sa?sfy the requirements of Connec?cut General Statute 7-450a.  This report may not be appropriate 
for any other purpose. 
 
The valua?on has been performed in accordance with generally accepted actuarial principles and prac?ces. It is 
intended to comply with all applicable Actuarial Standards of Prac?ce. 
 
I cer?fy that the actuarial assump?ons and methods that were selected by me and represent my best es?mate 
of an?cipated actuarial experience under the Plan. 
 
In preparing this valua?on, I have relied on employee data provided by the Plan Sponsor, and on asset and 
contribu?on informa?on provided by the Trustee. I have audited neither the employee data nor the financial 
informa?on, although I have reviewed them for reasonableness. 
 
The results in this valua?on report are based on the Plan as summarized in the Summary of Plan Provisions 
sec?on of this report and the actuarial assump?ons and methods detailed in the Descripon of Actuarial 
Methods and Assumpons sec?on of this report. 
 
Future actuarial measurements may differ significantly from the current measurements presented in this report 
due to factors such as, but not limited to, the following: plan experience differing from that an?cipated by the 
economic or demographic assump?ons; changes in economic or demographic assump?ons; increases or 
decreases expected as part of the natural opera?on of the methodology used for these measurements (such as 
the end of an amor?za?on period or addi?onal cost or contribu?on requirements based on the Plan’s funded 
status); and changes in plan provisions or applicable law. Due to the limited scope of this report, an analysis of 
the poten?al range of such future measurements has not been performed. 
 
I have no rela?onship with the employer or the Plan that would impair, or appear to impair, my objec?vity in 
performing the work presented in this report.  I am a member of the American Academy of Actuaries and meet 
its Qualifica?on Standards to render the actuarial opinion contained herein. 
 
 
 
Stephen Chykirda, ASA, FCA, MAAA  
Enrolled Actuary 23-07517 
 
January 3, 2025 
 
 
 

ACTUARIAL VALUATION REPORT 
TOWN OF WATERFORD OPEB PLAN 
USICG.COM 
 
5 
Development of Unfunded Accrued Liability and Funded Ratio 
Actuarial accrued liability for active members
Members under age 65
$6,561,835
$5,220,130
Members over age 65
141,669
358,063
Dependents under age 65
2,471,831
1,889,341
Dependents over age 65
65,410
167,335
Total
9,240,745
7,634,869
Actuarial accrued liability for inactive members
Members under age 65
2,917,185
3,610,009
Members over age 65
13,677,377
11,169,636
Dependents under age 65
2,071,899
2,310,403
Dependents over age 65
6,190,141
5,349,848
Total
24,856,602
22,439,896
Total actuarial accrued liability
34,097,347
30,074,765
Actuarial value of assets
13,194,398
9,206,097
Unfunded accrued liability
20,902,949
20,868,668
Funded ratio
38.7%
30.6%
Actuarial accrued liability for active members
9,240,745
10,082,239
8,468,000
Actuarial accrued liability for inactive members
24,856,602
27,541,809
22,609,172
Total actuarial accrued liability
34,097,347
37,624,048
31,077,172
Actuarial accrued liability for active members
9,240,745
8,288,335
10,331,726
Actuarial accrued liability for inactive members
24,856,602
22,960,626
27,093,261
Total actuarial accrued liability
34,097,347
31,248,961
37,424,987
Healthcare Cost
Trend Rates 
(7.00% 
decreasing to 
4.40%)
1% Decrease
(6.00% 
decreasing to 
3.40%)
1% Increase
(8.00% 
decreasing to 
5.40%)
July 1, 2024
July 1, 2022
Current Discount 
Rate (6.50%)
1% Decrease
(5.50%)
1% Increase
(7.50%)
 
 
 

ACTUARIAL VALUATION REPORT 
TOWN OF WATERFORD OPEB PLAN 
USICG.COM 
 
6 
 
Actuarial Accrued Liability vs. Actuarial Value of Assets 
 
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
2018
2020
2022
2024
Actuarial Accrued Liability
Actuarial Value of Assets
 
 
 
Funded Ra9o 
 
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
2018
2020
2022
2024
Market Value
Actuarial Value
 
 
 

ACTUARIAL VALUATION REPORT 
TOWN OF WATERFORD OPEB PLAN 
USICG.COM 
 
7 
 
Development of Unfunded Accrued Liability and Funded Ratio by Group  
 
Actuarial accrued liability for active members
Members under age 65
$0
$0
$6,223,599
$338,236
$6,561,835
Members over age 65
0
0
141,669
0
141,669
Dependents under age 65
0
0
2,322,540
149,291
2,471,831
Dependents over age 65
0
0
65,410
0
65,410
Total
0
0
8,753,218
487,527
9,240,745
Actuarial accrued liability for inactive members
Members under age 65
784,678
1,413,626
718,881
0
2,917,185
Members over age 65
5,391,224
4,556,402
3,729,751
0
13,677,377
Dependents under age 65
240,818
1,031,105
799,976
0
2,071,899
Dependents over age 65
2,121,674
2,586,707
1,481,760
0
6,190,141
Total
8,538,394
9,587,840
6,730,368
0
24,856,602
Total actuarial accrued liability
8,538,394
9,587,840
15,483,586
487,527
34,097,347
Actuarial value of assets
3,304,039
3,710,136
5,991,569
188,654
13,194,398
Unfunded accrued liability
5,234,355
5,877,704
9,492,017
298,873
20,902,949
Funded ratio
38.7%
38.7%
38.7%
38.7%
38.7%
 Town 
 Police and Fire 
 BOE Certified 
 BOE Non-
Certified 
 Total 
 
 
 

ACTUARIAL VALUATION REPORT 
TOWN OF WATERFORD OPEB PLAN 
USICG.COM 
 
8 
 
Determination of Normal Cost and Actuarially Determined Employer Contribution 
 
Cost
Cost
Town's normal cost
$298,600
1.0%
$243,080
0.8%
Amortization of unfunded accrued liability
2,405,668
7.6%
2,173,878
7.5%
Contribution before adjustment as of the
valuation date
2,704,268
8.6%
2,416,958
8.3%
Estimated valuation year payroll for actives
not yet at 100% assumed retirement age
31,264,487
29,029,526
Fiscal year ending
2026
2024
Adjustment for interest and inflation
100,064
88,352
Actuarially determined employer contribution
2,804,332
2,505,310
Expected benefit payments
2,142,851
2,126,970
Fiscal year ending
2027
2025
Adjustment for interest and inflation
14,156
11,523
Actuarially determined employer contribution
2,818,488
2,516,833
Expected benefit payments
2,377,112
2,075,404
July 1, 2024
July 1, 2022
Percent of 
payroll
Percent of 
payroll
 
 
 
 
 
 

ACTUARIAL VALUATION REPORT 
TOWN OF WATERFORD OPEB PLAN 
USICG.COM 
 
9 
 
Actuarially Determined Employer Contribu9on 
 
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
2021
2022
2023
2024
2025
2026
2027
Normal Cost
Past Service Cost
 
 
 
 
 

ACTUARIAL VALUATION REPORT 
TOWN OF WATERFORD OPEB PLAN 
USICG.COM 
 
10 
 
Actuarially Determined Employer Contribution per Group  
 
Town's normal cost
$0
$0
$249,454
$49,146
$298,600
Actuarial accrued liability
8,538,394
9,587,840
15,483,586
487,527
34,097,347
Actuarial value of assets
3,304,039
3,710,136
5,991,569
188,654
13,194,398
Unfunded accrued liability
5,234,355
5,877,704
9,492,017
298,873
20,902,949
Amortization of unfunded accrued liability
602,409
676,450
1,092,412
34,397
2,405,668
Contribution before adjustment as of the
valuation date
602,409
676,450
1,341,866
83,543
2,704,268
Fiscal year ending June 30, 2026
Adjustment for interest and inflation
19,270
21,639
54,251
4,904
100,064
Actuarially determined employer contribution
621,679
698,089
1,396,117
88,447
2,804,332
Expected benefit payments
679,631
714,729
731,393
17,098
2,142,851
Fiscal year ending June 30, 2027
Adjustment for interest and inflation
0
0
11,826
2,330
14,156
Actuarially determined employer contribution
621,679
698,089
1,407,943
90,777
2,818,488
Expected benefit payments
710,002
751,805
882,927
32,378
2,377,112
 Town 
 Police and Fire 
 BOE Certified 
 Total 
 BOE Non-
Certified 
 
 
 
 
 
 

ACTUARIAL VALUATION REPORT 
TOWN OF WATERFORD OPEB PLAN 
USICG.COM 
 
11 
 
 
Development of Asset Values 
 
1.  Beginning value of assets July 1, 2023
Trust assets
$10,561,097
$10,914,288
2.  Contributions
Town contributions during year
1,458,305
1,458,305
Employee contributions during year
0
0
Total for plan year
1,458,305
1,458,305
3.  Disbursements
Benefit payments during year
0
0
Administrative expenses during year
10,564
10,564
Total for plan year
10,564
10,564
4.  Net investment return
Interest and dividends
0
N/A
Realized and unrealized gain / (loss)
1,302,691
N/A
Expected return
N/A
773,769
Recognized gain / (loss)
N/A
58,600
Required adjustment due to corridor
N/A
0
Reversal of prior year required adjustment
N/A
0
Investment-related expenses
0
N/A
Total for plan year
1,302,691
832,369
5.  Ending value of assets July 1, 2024
Trust assets: (1) + (2) - (3) + (4)
13,311,529
13,194,398
6.  Approximate rate of return
10.9%
6.8%
Summary of Fund Activity
Market Value
Actuarial Value
 
 
 
 

ACTUARIAL VALUATION REPORT 
TOWN OF WATERFORD OPEB PLAN 
USICG.COM 
 
12 
 
1. Market value 7/1/2024
$13,311,529
2. Gain / (loss) not recognized in actuarial value 7/1/2024
117,131
3. Preliminary actuarial value 7/1/2024: (1) - (2)
13,194,398
4. Preliminary actuarial value as a percentage of market value: (3) ÷ (1)
99.1%
5. Gain / (loss) recognized for corridor minimum / maximum
N/A
6. Actuarial value 7/1/2024 after corridor minimum / maximum: (3) + (5)
13,194,398
7. Actuarial value as a percentage of market value: (6) ÷ (1)
99.1%
1. Market value 7/1/2023
$10,561,097
2. Town contributions
1,458,305
3. Employee contributions
0
4. TRB reimbursements
0
4. Benefit payments
0
5. Administrative expenses
10,564
6. Expected return at 6.50%
773,769
7. Expected value 7/1/2024: (1) + (2) + (3) - (4) - (5) + (6)
12,782,607
8. Market value 7/1/2024
13,311,529
9. Market value gain / (loss) for 2023-2024 plan year: (8) - (7)
528,922
Year
(a)
Gain / (loss)
(b)
Total recognized 
as of 7/1/2023
(d)
Total recognized 
as of 7/1/2024:
(b) + (c)
2019-2020
$0
$0
$0
$0
$0
2020-2021
1,398,074
838,845
279,615
1,118,460
279,614
2021-2022
(1,973,868)
(789,548)
(394,774)
(1,184,322)
(789,546)
2022-2023
339,875
67,975
67,975
135,950
203,925
2023-2024
528,922
0
105,784
105,784
423,138
Total
58,600
117,131
Relationship of Actuarial Value to Market Value
(c)
Recognized in 
current year:
20% of (a)
(e)
Not recognized 
as of 7/1/2024:
(a) - (d)
Development of Market Value Gain / Loss for 2023-2024 Plan Year
Recognition of Gain / Loss in Actuarial Value
 
 
 

ACTUARIAL VALUATION REPORT 
TOWN OF WATERFORD OPEB PLAN 
USICG.COM 
 
13 
 
1.  Beginning value of assets July 1, 2022
Trust assets
$8,465,847
$9,206,097
2.  Contributions
Town contributions during year
1,143,311
1,143,311
Employee contributions during year
0
0
Total for plan year
1,143,311
1,143,311
3.  Disbursements
Benefit payments during year
0
0
Administrative expenses during year
8,056
8,056
Total for plan year
8,056
8,056
4.  Net investment return
Interest and dividends
0
N/A
Realized and unrealized gain / (loss)
959,995
N/A
Expected return
N/A
620,120
Recognized gain / (loss)
N/A
(47,184)
Required adjustment due to corridor
N/A
0
Reversal of prior year required adjustment
N/A
0
Investment-related expenses
0
N/A
Total for plan year
959,995
572,936
5.  Ending value of assets July 1, 2023
Trust assets: (1) + (2) - (3) + (4)
10,561,097
10,914,288
6.  Approximate rate of return
10.1%
5.6%
Summary of Fund Activity
Market Value
Actuarial Value
 
 
 

ACTUARIAL VALUATION REPORT 
TOWN OF WATERFORD OPEB PLAN 
USICG.COM 
 
14 
 
1. Market value 7/1/2023
$10,561,097
2. Gain / (loss) not recognized in actuarial value 7/1/2023
(353,191)
3. Preliminary actuarial value 7/1/2023: (1) - (2)
10,914,288
4. Preliminary actuarial value as a percentage of market value: (3) ÷ (1)
103.3%
5. Gain / (loss) recognized for corridor minimum / maximum
N/A
6. Actuarial value 7/1/2023 after corridor minimum / maximum: (3) + (5)
10,914,288
7. Actuarial value as a percentage of market value: (6) ÷ (1)
103.3%
1. Market value 7/1/2022
$8,465,847
2. Town contributions
1,143,311
3. Employee contributions
0
4. TRB reimbursements
0
4. Benefit payments
0
5. Administrative expenses
8,056
6. Expected return at 6.50%
620,120
7. Expected value 7/1/2023: (1) + (2) + (3) - (4) - (5) + (6)
10,221,222
8. Market value 7/1/2023
10,561,097
9. Market value gain / (loss) for 2022-2023 plan year: (8) - (7)
339,875
Year
(a)
Gain / (loss)
(b)
Total recognized 
as of 7/1/2022
(d)
Total recognized 
as of 7/1/2023:
(b) + (c)
2018-2019
$0
$0
$0
$0
$0
2019-2020
0
0
0
0
0
2020-2021
1,398,074
559,230
279,615
838,845
559,229
2021-2022
(1,973,868)
(394,774)
(394,774)
(789,548)
(1,184,320)
2022-2023
339,875
0
67,975
67,975
271,900
Total
(47,184)
(353,191)
Relationship of Actuarial Value to Market Value
Development of Market Value Gain / Loss for 2022-2023 Plan Year
Recognition of Gain / Loss in Actuarial Value
(c)
Recognized in 
current year:
20% of (a)
(e)
Not recognized 
as of 7/1/2023:
(a) - (d)
 
 
 

ACTUARIAL VALUATION REPORT 
TOWN OF WATERFORD OPEB PLAN 
USICG.COM 
 
15 
 
1 Year
 3 Years
 5 Years
 10 Years
2015
N/A
N/A
N/A
N/A
2016
N/A
N/A
N/A
N/A
2017
2.1%
N/A
N/A
N/A
2018
4.1%
N/A
N/A
N/A
2019
6.4%
4.2%
N/A
N/A
2020
5.4%
5.3%
N/A
N/A
2021
26.2%
12.3%
8.5%
N/A
2022
-13.7%
4.7%
4.9%
N/A
2023
10.1%
6.2%
6.1%
N/A
2024
10.9%
1.8%
7.0%
N/A
1 Year
 3 Years
 5 Years
 10 Years
2015
N/A
N/A
N/A
N/A
2016
N/A
N/A
N/A
N/A
2017
2.1%
N/A
N/A
N/A
2018
4.1%
N/A
N/A
N/A
2019
6.4%
4.2%
N/A
N/A
2020
5.4%
5.3%
N/A
N/A
2021
10.4%
7.4%
5.6%
N/A
2022
6.0%
7.2%
6.4%
N/A
2023
5.6%
7.3%
6.7%
N/A
2024
6.8%
6.1%
6.8%
N/A
Period Ending
June 30
Rate of Return on Market Value of Assets
Average Annual Effective Rate of Return
Rate of Return on Actuarial Value of Assets
Period Ending
June 30
Average Annual Effective Rate of Return
 
 
 

ACTUARIAL VALUATION REPORT 
TOWN OF WATERFORD OPEB PLAN 
USICG.COM 
 
16 
 
Actual Rate of Return on Assets 
 
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
2018
2019
2020
2021
2022
2023
2024
Market Value
Actuarial Value
 
 
 
 
 
 
 
 

ACTUARIAL VALUATION REPORT 
TOWN OF WATERFORD OPEB PLAN 
USICG.COM 
 
17 
 
Target Allocation and Expected Rate of Return 
July 1, 2024 
 
Asset Class
Target 
Allocation
Long-Term 
Expected Real 
Rate of Return*
Weighting
TIPS
1.00%
2.60%
0.03%
Core Fixed Income
24.00%
3.10%
0.74%
Dynamic Bonds
7.50%
3.90%
0.29%
High Yield Bonds
1.00%
5.10%
0.05%
Global Bonds
1.50%
3.00%
0.05%
US Large Cap
25.00%
3.90%
0.98%
US Mid Cap
7.50%
3.80%
0.29%
US Small Cap
5.00%
3.40%
0.17%
International Equity Developed
21.00%
5.60%
1.18%
Emerging Markets
2.00%
7.50%
0.15%
Broad Real Assets
4.50%
4.90%
0.22%
100.00%
4.15%
Long-Term Inflation Expectation
2.40%
Long-Term Expected Nominal Return
6.55%
*Long-Term Real Returns are provided by Fiducient Advisors. The returns are geometric means.
 
The long-term expected rate of return on OPEB plan investments was determined using a building block method 
in which best-es?mate ranges of expected future real rates of return are developed.  Best es?mates of the real 
rates of return for each major asset class are included in the OPEB plan’s target asset alloca?on. 
 
The informa?on above is based on geometric means and does not reflect addi?onal returns through investment 
selec?on, asset alloca?on and rebalancing.  An expected rate of return of 6.50% was used. 
 
 
 

ACTUARIAL VALUATION REPORT 
TOWN OF WATERFORD OPEB PLAN 
USICG.COM 
 
18 
 
Amortization of Unfunded Liability 
 
Date
established
Years 
remaining
2024 base
July 1, 2024
2,405,668
12
20,902,949
Schedule of Amortization Bases
Amortization 
installment
Present value
of remaining
installments as of
July 1, 2024
 
 
 
 
 

ACTUARIAL VALUATION REPORT 
TOWN OF WATERFORD OPEB PLAN 
USICG.COM 
 
19 
 
Member Data 
 
The data reported by the Plan Sponsor for this valua?on includes 414 ac?ve employees who met the Plan’s minimum age and service requirements  
as of July 1, 2024.   
Total members July 1, 2024
Active members
0
0
251
163
414
Retirees
47
46
20
0
113
Dependents of current retirees
20
25
10
0
55
Total
67
71
281
163
582
Average age July 1, 2024
Active members
N/A
N/A
46.9
49.5
47.9
Retirees
73.6
69.6
70.3
N/A
71.4
Dependents of current retirees
69.6
65.6
61.9
N/A
66.4
Total members July 1, 2022
Active members
0
1
241
126
368
Retirees
46
46
26
0
118
Dependents of current retirees
20
24
17
0
61
Total
66
71
284
126
547
Average age July 1, 2022
Active members
N/A
53.1
46.4
50.8
47.9
Retirees
72.5
67.6
67.7
N/A
69.5
Dependents of current retirees
70.7
63.8
63.9
N/A
66.1
 Total 
 Town 
 Police and Fire 
 BOE Certified 
 BOE Non-
Certified 
 
 

ACTUARIAL VALUATION REPORT 
TOWN OF WATERFORD OPEB PLAN 
USICG.COM 
 
20 
 
Member Counts by Status 
 
0
100
200
300
400
500
600
700
2018
2020
2022
2024
Active
Members in Pay Status
 
 
 
 
 

ACTUARIAL VALUATION REPORT 
TOWN OF WATERFORD OPEB PLAN 
USICG.COM 
 
21 
 
Expected Benefit Payments from Trust Fund  
 
An important considera?on in formula?ng short-term or intermediate-term investment policy is the need for 
liquidity to meet the payment requirements of the Plan.  The Plan's investment advisors may wish to compare 
expected benefit payments and expenses with an?cipated cash income from investments and employer 
contribu?ons.   
The table below presents projected annual benefit payments for the next twenty plan years.  The following 
assump?ons are reflected in this table: 
 
Re?rements among ac?ve par?cipants will occur consistent with the Plan's re?rement assump?on. 
 
Benefits will con?nue to accrue according to the provisions of the Plan. 
Differences between actual experience and that assumed will affect the paSern of benefit payments. 
Par?cipant categories reflect status as of July 1, 2024. 
Year
Active as of
July 1, 2024
Retired and
Terminated as
of July 1, 2024
Total
Benefit
Payments
2024
$53,647
$2,008,809
$2,062,456
2025
161,375
1,981,476
2,142,851
2026
304,342
2,072,771
2,377,113
2027
450,199
2,034,678
2,484,877
2028
625,758
1,966,133
2,591,891
2029
754,483
1,927,150
2,681,633
2030
934,931
1,928,518
2,863,449
2031
1,116,140
1,868,423
2,984,563
2032
1,176,335
1,787,331
2,963,666
2033
1,382,175
1,723,814
3,105,989
2034
1,383,746
1,717,897
3,101,643
2035
1,366,770
1,672,677
3,039,447
2036
1,312,761
1,678,750
2,991,511
2037
1,259,417
1,686,436
2,945,853
2038
1,303,916
1,632,966
2,936,882
2039
1,279,337
1,630,665
2,910,002
2040
1,228,395
1,626,153
2,854,548
2041
1,138,258
1,618,818
2,757,076
2042
1,180,190
1,608,063
2,788,253
2043
1,118,192
1,584,102
2,702,294
 
 
 

ACTUARIAL VALUATION REPORT 
TOWN OF WATERFORD OPEB PLAN 
USICG.COM 
 
22 
 
Expected Per Capita Claims (without Medicare Integration) 
 
Non-RIP Town/Police/Fire
RIP Town/Police/Fire
Sample 
Age
Expected Claim 
(Male)
Expected Claim 
(Female)
Sample 
Age
Expected Claim 
(Male)
Expected Claim 
(Female)
45
$16,208
$22,591
45
$17,456
$24,331
50
21,166
26,323
50
22,797
28,351
55
27,774
30,665
55
29,914
33,027
60
35,780
35,766
60
38,536
38,521
64
43,695
41,871
64
47,061
45,096
BOE
Sample 
Age
Expected Claim 
(Male)
Expected Claim 
(Female)
45
$14,903
$20,773
50
19,463
24,205
55
25,539
28,197
60
32,901
32,888
65
41,890
39,863
70
50,392
46,625
75
57,828
52,337
 
 
 
 
The sample per capita claim for plans not integrated with Medicare was developed as follows:  Using the total 
count of ac?ve par?cipants eligible for post-re?rement medical benefits and re?rees currently elec?ng medical 
coverage in a non-Medicare supplement plan, we calculate the total projected claims by mul?plying the total 
count by the average annual premium.  Using the cost increases derived from a study sponsored by the Society 
of Actuaries prepared by Dale H. Yamamoto from May 2013:  “Health Care Costs from Birth to Death”, we 
allocate the total projected claims by age and gender.   
 
 
 

ACTUARIAL VALUATION REPORT 
TOWN OF WATERFORD OPEB PLAN 
USICG.COM 
 
23 
 
Description of Actuarial Methods 
 
Asset Valua9on Method 
The Actuarial Value of assets used in the development of plan contribu?ons phases in the recogni?on of 
differences between the actual return on Market Value and expected return on Market Value over a 5-year 
period at 20% per year. The Actuarial Value is adjusted, if necessary, to be within the range of 80% and 120% of 
the Market Value of assets. 
 
Actuarial Cost Method 
Change in Actuarial Method: None. 
Entry Age Normal (level percentage of salary). 
Normal Cost:  Under this method, the total normal cost is the sum of amounts necessary to fund each ac?ve 
member’s normal re?rement benefit if paid annually from entry age to assumed re?rement age. Entry age is the 
age at which the employee would have been first eligible for the plan, if it had always been in effect. The normal 
cost for each par?cipant is expected to remain a level percentage of the employee’s salary. The normal cost for 
the plan is the difference between the total normal cost for the year and the an?cipated member contribu?ons 
for that year. 
Past Service Liability:  The present value of future benefits that relates to service before the valua?on date is the 
total past service liability. The unfunded past service liability is the difference between the total past service 
liability and any assets (including accumulated member contribu?ons). 
The Unfunded Accrued liability is amor?zed each year over 30 years on a closed basis, as a level dollar amount.  
The amor?za?on began July 1, 2006 and as of July 1, 2024, 12 years remain. 
 
 

ACTUARIAL VALUATION REPORT 
TOWN OF WATERFORD OPEB PLAN 
USICG.COM 
 
24 
 
Description of Actuarial Assumptions 
 
The valua?on reflects changes in the actuarial assump?ons listed below. (The assump?ons used before and aVer 
these changes are more fully described in the next sec?on.) 
 
Re?rement/Termina?on Rates 
 
Healthcare Cost Trend Rates 
 
The assump?ons indicated were changed to represent the Enrolled Actuary’s current best es?mate of 
an?cipated experience of the plan. 
 
Interest 
6.50%.   
Since the OPEB plan’s fiduciary net posi?on and future contribu?ons are projected to be sufficient to cover 
expected benefit payments for current plan members, the long-term expected rate of return on OPEB plan 
investments was used to discount liabili?es. 
 
Rate of compensa9on increase (including infla?on) 
2.40%.   
The plan does not have sta?s?cally credible data on which to form a rate of compensa?on increase assump?on.  
This assump?on is consistent with the infla?on assump?on. 
 
Infla9on  
2.40%.   
This assump?on is consistent with the Social Security Administra?on’s current best es?mate for the ul?mate long-
term (75-year horizon) annual percentage increase in the CPI, as published in the 2024 OASDI Trustee Report. 
 
Mortality  
Pub-2010 Public Re?rement Plans Mortality Tables (with separate tables for General employees, Public Safety 
employees and Teachers) and for non-annuitants and annuitants, projected to the valua?on date with Scale MP-2021. 
 
Mortality Improvement 
Projected to date of decrement using Scale MP-2021 (genera?onal). 
We have selected this mortality assump?on because it is based on the latest published public re?rement plan 
mortality study released by the Society of Actuaries.  The plan does not have sufficiently credible data on which 
to perform a mortality experience study. 
 
Re9rement 
Town:  Not applicable. 
 
Police and Fire:  Not applicable. 
 
 

ACTUARIAL VALUATION REPORT 
TOWN OF WATERFORD OPEB PLAN 
USICG.COM 
 
25 
Re9rement (cont.) 
Non-Cer?fied BOE: 
Years Of Service 
Age 
5 Years 
10 Years 
15 Years 
20 Years 
25 Years 
30 Years 
35 Years 
40 Years 
45 
 
 
 
 
18.40% 
17.60% 
19.60% 
19.60% 
50 
 
 
 
 
8.80% 
17.60% 
19.60% 
19.60% 
55 
6.30% 
6.30% 
4.40% 
9.90% 
8.80% 
12.80% 
19.60% 
19.60% 
60 
9.70% 
9.70% 
8.90% 
10.40% 
16.30% 
11.40% 
24.50% 
24.50% 
65 
17.70% 
17.70% 
19.00% 
25.60% 
30.60% 
26.10% 
24.50% 
24.50% 
70 
13.20% 
13.20% 
13.20% 
15.80% 
15.80% 
17.60% 
24.50% 
24.50% 
75 
100.00% 
100.00% 
100.00% 
100.00% 
100.00% 
100.00% 
100.00% 
100.00% 
 
Prior:   
Age 
Rate 
45 
13.00% 
50 
13.00% 
55 
7.50% 
60 
9.50% 
65 
18.00% 
70 
18.00% 
75 
100.00% 
 
The actuarial assump?on in regards to rates of re?rement shown above are based on the rates used by the state 
of Connec?cut Municipal Employee Re?rement System actuaries.   
 
Cer?fied BOE:  Per table below (from Connec?cut State TRS 2020 Pension Valua?on): 
Eligible for Normal 
(Unreduced) Re9rement 
(Age 60 and 20 Yrs. Serv. 
Or 35 Yrs. Serv.) Less 
than 35 years of Serv. 
Eligible for Normal 
(Unreduced) Re9rement 
(Age 60 and 20 Yrs. Serv. 
Or 35 Yrs. Serv.) 35 or 
more years of Serv. 
Eligible for Early 
(Reduced) Re9rement 
(Age 50 and 20 Yrs. Serv. 
Or 25 Yrs. Serv.) 
Age
Male
Female
Male
Female
Male
Female
50
35.0%
30.0%
1.50%
1.25%
51
35.0%
30.0%
1.50%
1.25%
52
35.0%
30.0%
1.50%
1.25%
53
35.0%
30.0%
1.50%
1.75%
54
35.0%
30.0%
2.00%
2.25%
55
35.0%
30.0%
3.00%
3.00%
56
35.0%
30.0%
4.00%
3.75%
57
35.0%
30.0%
5.00%
4.50%
58
35.0%
30.0%
6.50%
5.50%
59
35.0%
30.0%
8.00%
7.00%
60
20.0%
20.0%
30.0%
30.0%
61
20.0%
20.0%
30.0%
30.0%
62
22.5%
20.0%
30.0%
30.0%
63
22.5%
20.0%
30.0%
30.0%
64
25.0%
25.0%
30.0%
30.0%
65
27.5%
32.5%
35.0%
37.5%
66
27.5%
30.0%
35.0%
37.5%
67-68
27.5%
30.0%
30.0%
32.5%
69-74
27.5%
30.0%
30.0%
32.5%
75-80
100.0%
100.0%
100.0%
100.0%

ACTUARIAL VALUATION REPORT 
TOWN OF WATERFORD OPEB PLAN 
USICG.COM 
 
26 
 
Re9rement (cont.) 
The actuarial assump?on in regards to rates of re?rement shown above are based on the rates used by the 
Connec?cut State Teachers’ Re?rement System actuaries. 
 
Termina9on prior to re9rement 
Town:  Not applicable. 
Police and Fire:  Not applicable. 
Non-Cer?fied BOE: 
Male Rate
         Female Rate 
Age 
0-4 Years 
5-24 Years 
0-4 Years 
5-24 Years 
20 
14.00% 
12.00% 
30.00% 
15.00% 
25 
14.00% 
12.00% 
20.00% 
13.00% 
30 
11.00% 
8.50% 
15.00% 
10.00% 
35 
8.50% 
6.50% 
12.50% 
10.00% 
40 
7.50% 
5.00% 
10.00% 
8.00% 
45 
6.75% 
4.50% 
9.00% 
6.50% 
50 
6.75% 
4.50% 
8.50% 
5.00% 
55 
6.50% 
0.00% 
8.00% 
0.00% 
60 
7.00% 
0.00% 
9.00% 
0.00% 
65 
9.50% 
0.00% 
9.00% 
0.00% 
70 
13.00% 
0.00% 
9.00% 
0.00% 
75 
0.00% 
0.00% 
0.00% 
0.00% 
 
Prior: 
Male Rate
         Female Rate 
Age 
0-4 Years 
5-24 Years 
0-4 Years 
5-24 Years 
20 
16.00% 
12.00% 
24.00% 
18.00% 
25 
16.00% 
12.00% 
19.00% 
18.00% 
30 
12.50% 
10.00% 
16.00% 
12.00% 
35 
10.00% 
8.00% 
12.00% 
10.00% 
40 
9.50% 
5.75% 
10.00% 
8.00% 
45 
8.50% 
5.00% 
9.00% 
6.00% 
50 
8.50% 
4.50% 
9.00% 
4.50% 
55 
6.50% 
0.00% 
8.00% 
0.00% 
60 
6.50% 
0.00% 
8.00% 
0.00% 
65 
6.00% 
0.00% 
8.00% 
0.00% 
70 
6.00% 
0.00% 
8.00% 
0.00% 
 
The actuarial assump?on in regards to rates of withdrawal shown above are based on the rates used by the State 
of Connec?cut Municipal Employee Re?rement System actuaries.   
 
 

ACTUARIAL VALUATION REPORT 
TOWN OF WATERFORD OPEB PLAN 
USICG.COM 
 
27 
Termina9on prior to re9rement (cont.) 
Cer?fied BOE:  Rates based on gender and length of service for first Ten years and gender and age thereaVer 
(Connec?cut State TRS 2020 Pension Valua?on): 
Service 
Male Rate 
Female Rate 
0-1
15.00%
12.00%
1-2
11.00
11.00
2-3
8.50
9.50
3-4
7.00
8.00
4-5
5.50
7.50
5-6
4.50
7.00
6-7
4.00
6.50
7-8
3.50
6.00
8-9
3.50
5.50
9-10
3.50
5.00
10 +
use age-related rates until eligible 
to retire 
 
Sample Age-Based Withdrawal Rates (un?l eligible to re?re): 
Age 
Male Rate 
Female Rate 
25
1.80%
6.00%
30
1.80
6.00
35
1.80
4.25
40
1.80
2.50
45
1.80
2.00
50
2.25
2.40
55
4.00
3.90
59+
5.50
4.00
 
The actuarial assump?on in regards to rates of withdrawal shown above are based on the rates used by the 
Connec?cut State Teachers’ Re?rement System actuaries. 
 
U9liza9on 
Town/RIP eligible Police/RIP eligible Fire:  Percentage of ac?ves who con?nue with medical coverage:  100% if 
re?rement during RIP period.  Percentage of suspended re?rees who may elect medical coverage at a future 
date:  20%. 
Non-Cer?fied BOE and Non-RIP eligible Fire:  50% of current ac?ve members will elect medical coverage at 
re?rement.  
Cer?fied BOE:  100% of current ac?ve members will elect medical coverage at re?rement. 
 
Medicare Replacement 
30%. 
 
Medicare Eligibility 
25% of current Cer?fied BOE members hired prior to April 1, 1986 are assumed to con?nue coverage post-65, 
without Medicare coverage. 
 
 

ACTUARIAL VALUATION REPORT 
TOWN OF WATERFORD OPEB PLAN 
USICG.COM 
 
28 
 
Spousal Coverage 
50% of ac?ve members are assumed to be married and elect spousal benefits at re?rement with wives 3 years 
younger than husbands. 
 
Healthcare Cost Trend Rates  
7.00% in 2024, reducing by 0.20% each year to an ul?mate rate of 4.40% per year for 2037 and later. 
(Prior:  6.50% in 2022, reducing by 0.20% each year to an ul?mate rate of 4.40% per year for 2033 and later.) 
Dental is assumed to increase by 4.00% per year.  
The trend rates were changed to align with the infla?on assump?on change and beSer reflect actual experience.   
 
 
 

ACTUARIAL VALUATION REPORT 
TOWN OF WATERFORD OPEB PLAN 
USICG.COM 
 
29 
 
Premiums/Alloca9on rates 
Town/Non-RIP Police/Non-RIP Fire  
Employee 
Employee Plus Spouse 
$21,502.44
$45,206.40
 
Town/RIP Police/RIP Fire  
Employee 
Employee Plus Spouse 
$23,500.08
$49,406.16
 
BOE 
Employee 
Employee Plus Spouse 
$22,869.24
$49,029.12
 
Post-65 
Employee 
Employee Plus Spouse 
$6,498.12
$12,996.24
 
Premiums were used as the basis for per capita costs. 
 
Dental Premiums 
Non-RIP Town/Non-RIP Police/Non-RIP Fire  
Employee 
Employee Plus Spouse 
$440.76
$1,146.36
 
RIP Town/RIP Police/ RIP Fire  
Employee 
Employee Plus Spouse 
$493.56
$1,283.16
 
BOE 
Employee 
Employee Plus Spouse 
$431.04
$1,118.28
 
Pa9ent Protec9on and Affordable Care Act (PPACA) 
For purposes of this valua?on, extended coverage for adult children and 100% coverage of preven?ve care are 
assumed to be reflected in per capita costs. 
For purposes of this valua?on, elimina?on of life?me maximum benefits and removal of the limits on essen?al 
healthcare are assumed to have no impact on plan liabili?es. 
 
 
 

ACTUARIAL VALUATION REPORT 
TOWN OF WATERFORD OPEB PLAN 
USICG.COM 
 
30 
 
Summary of Plan Provisions 
 
This exhibit summarizes the major provisions of the Plan.  It is not intended to be, nor should it be interpreted as 
a complete statement of all plan provisions.  To the extent that this summary does not accurately reflect the plan 
provisions, then the results of this valua?on may not be accurate.   
 
 
For Town Employees 
 
Eligibility 
Town - Current re?rees with medical benefits (no future re?rees).  In addi?on, there is a group of current re?rees 
who have currently suspended benefits.  These individuals and their spouse may elect medical at a future date. 
 
Police and Fire - RIP eligible employees may qualify for subsidized benefits if they re?re within a specific date 
range.  Fire employees who are either not RIP eligible or re?re outside the eligibility period may con?nue 
medical aVer re?rement. 
 
Benefits 
Medical and dental benefits pre-65. 
Medical benefits post-65. 
 
Dependent Coverage 
Coverage available for spouses at re?rement for the spouse’s life?me. 
 
Re9ree Contribu9ons 
Pre-65:  RIP eligible employees who are eligible for subsidized benefits pay the contribu?on percentage at ?me 
of re?rement ?mes the premium rate at re?rement.  The premium rate at re?rement becomes the Town’s cap 
and the re?ree pays any premium above the Town’s cap.  All other Fire employees can con?nue coverage by 
paying 100% of the cost. 
 
Post 65:  The Town’s cap is 50% of the Medicare supplement rate at the ?me of re?rement and the re?ree pays 
any premium above the cap.  Fire employees who do not re?re under the RIP may con?nue coverage by paying 
100% of the cost. 
 
All others are not eligible for post-re?rement medical benefits. 
 
For exis?ng re?rees:  Individual caps were provided by the Town.  For pre-65 re?rees, the post-65 cost is capped 
at 50% of the pre-65 cap.  For two re?rees, the Town pays 100% of the cost. 
 
 
 

ACTUARIAL VALUATION REPORT 
TOWN OF WATERFORD OPEB PLAN 
USICG.COM 
 
31 
 
For Board of Educa9on Employees 
 
Eligibility for Medical and Dental 
Non-Cer?fied Administrators and Supervisors:  25 years of teaching/administra?ve experience (the last 10 years 
in Waterford) and be eligible to collect CT Teacher Re?rement Benefits. 
 
Teachers and Cer?fied Administrators:  Age 55 with 20 years of teaching/administra?ve  experience (the last 10 
years in Waterford) and be eligible to collect CT Teacher Re?rement Benefits. 
 
Paraprofessionals:  Age 60 with 20 years of service.   
 
Secretaries:  10 years of service. 
 
Contract Workers:  Age 55 with 5 years of service or 25 years of service. 
 
Custodians:  Age 55 with 5 years of service or 25 years of service. 
 
 
Re9ree/Spouse cost of medical coverage 
Administrators:  Administrators hired before 7/1/2004:  Re?rees and spouses pay 50% of the premium owed 
under age 65 and 100% on or aVer age 65.  Administrators hired on or aVer 7/1/2004 but before July 1, 2014:  
Re?rees and spouses pay 70% of the premium owed under age 65 and 100% on or aVer age 65.  Administrators 
hired on or aVer 7/1/2014:  Re?rees and spouses pay 100% of the premium owed under age 65 and 100% on or 
aVer age 65. 
 
Teachers:  Teachers hired before 10/1/1993:  Re?rees and spouses pay 50% of the premium owed under age 65 
and 100% on or aVer age 65. Teachers hired between October 1, 1993 and August 31, 2004:  Re?rees and 
spouses pay 60% of the premium under age 65 and 100% on or aVer age 65.  Teachers hired between September 
1, 2004 and June 30, 2012:  Re?rees and spouses pay 70% of the premium under age 65 and 100% on or aVer 
age 65.  Teachers hired aVer July 1, 2012:  Re?rees and spouses pay 100% of the premium. 
 
Non-Cer?fied BOE:  Re?rees and spouses pay 100% of the premium owed for ac?ve employees while employee 
is under age 65.  There are no benefits on or over 65.  Food Service employees are not eligible for benefits. 
 
Plan of Coverage:  Assumed the same as Ac?ve’s Plan.  Assumed that re?rees with current Medicare coverage 
are not par?cipa?ng in this plan.