COH Pension Systems Retirement Benefit Levels

Replacement Ratio: - Standard measure of retirement benefit level - Retirement income as % of pre-retirement income 1

2 HMEPS Civilian Employees Replacement Ratio w/o DROP Years of Service at Retirement Employees Hired Prior to 1/1/08 – Plan A Employees Hired After 1/1/08 CurrentUltimate* 2063%+SS50%+SS36%+SS 2585%+SS66%+SS45%+SS 3090%+SS83%+SS50%+SS EE Contribution % of Salary5%+6.2%0%+6.2% Eligible for Full BenefitAge+Svc=75Age 62/5 Svc OT Included in Benefit Calculation No DROP AvailableYesNo Automatic COLAYesNo * All Service After 1/1/05

3 HPOPS and HFRRF Public Safety Employees Replacement Ratio w/o DROP Years of Service at RetirementHPOPSHFRRF CurrentFuture*CurrentFuture** 2055%45%50%? 2565%55%65%? 3075%65%80%? EE Contribution % of Salary 9%10.25%9%? Eligible for Full Benefit20 Yrs SvcAge 55/10 Svc20 Yrs Svc? OT Included in Benefit Calculation No Yes? DROP AvailableYesNoYes? Automatic COLAYes ? * Applies to police officers hired after October 9, 2004 ** Work in process

4 DROP Is A Game Changer  Specific to Individual – cannot generalize  Variables Include:  Provisions of DROP  Age and service at DROP entry and exit  Basic benefit accrual rates w/o DROP  Salary changes during DROP  EE Contributions during DROP  Interest credits on DROP account

5 Sample of DROP Changing the Game At DROP Entry:  Age 45  20 years of service  Annual Salary $75,000  Eligible for lifetime annuity of $37,500 (50%) per year

6 Sample of DROP Changing the Game (cont’d) During DROP:  Active, but no further benefit accruals based on salary and service  Salary increases 3% per year  DROP account credited each year with:  Annuity amount based on salary and service at 20 yrs  EE contributions of 9% of salary  Interest at 5% per yr

Sample of Drop Changing The Game (cont’d) At Retirement:  Age 55  30 years of service  Annual salary of $100,794  Accumulated value of DROP account - $627,655  COLA adjusted 20 year service annuity - $45,000/yr 7

8 Sample of Drop Changing the Game (cont’d) with DROPw/o DROP  Pre-Retirement Salary$100,794  Annuity Value ‾ From DROP account$ 44,832$ N/A ‾ Based on salary/service 45,000 80,634 ‾ Total$ 89,832$ 80,634  Replacement Ratio89%80%