1. City of Saginaw’s Unfunded Liability Presented to City Council By Dennis Jordan SPHR, Director of Human Resources February 3, 2014

2. Fund Balance Beginning F/YBalance% of Budget 2014 - $ 268,8810.8% 2013 - $1,248,0583.9% 2012 - $3,970,352 11.6% 2011 -$3,771,779 11.0% 2010 -$1,544,461 4.9% 2009 -$1,455,258 4.4%

3. Unfunded Liability(s) % Funded OPEB -$220,255,7451.6% Police/Fire Pension- $ 69,116,72662% MERS Pension - $ 76,562,229 47% TOTAL = $365,934,700

4. Annual Required Contributions Police and Fire Pension FY Beginning 2013 -$6,046,388 2012 -$5,845,642 2011 -$5,685,858 2010 -$4,469,001 2009 -$4,453,364 Average Annual Increase = 7.1%

5. Annual Required Contribution MERS FY Beginning 2013 - $9,059,568 2012 -$7,576,236 2011 - $6,720,804 2010 -$5,856,972 2009 -$5,104,320 Average Annual Increase = 15.5%

6. 5 Year Projected Pension Contributions Police and FireMERS FY Beginning 2014$6,475,681$ 9,979,000 2015$6,935,455$11,975,000 2016$7,427,872$12,514,000 2017$7,955,251$10,631,000 2018$8,520,074$ 9,034,000

7. Possible Pension Solutions Note: Both Pension Systems Closed to New Hires in 2000 Freeze current participants benefit and change benefit to a hybrid (both DB and DC) or only a Defined Contribution Plan. Negotiate changes to current employees in the system to comply with State EVIP Compensation Plan ( Multiplier and/or Adders). Move the Police and Fire Pension System to MERS.

8. Healthcare Strategy Three Draw Downs on the Healthcare system Active Employees Future Employees/Retirees Active Retirees

9. Changes to Healthcare ACTIVE Pre 2009 No Deductibles; Co-pays; Contributions 2009 - Negotiated - –$250/$500 Deductibles –$1000/$1500 Co-Pays –$20 per pay contribution Performed audit of dependent status on active employees (estimated savings of $250,000 annually )

10. Changes to Healthcare New Hires New Hires (2009) no longer eligible for Retiree Healthcare. Healthcare Savings Plan (HSP) provided for New Hires @ $125 per month.

11. More Changes to Healthcare 2010 - Initiated annual open enrollment process for Active and Retiree Health Care Participants. 2011/2012 - Negotiated All Actives - –$500/$1000 Deductibles –$2000/$3000 Co-Pays –$20/$30/$50 per pay contribution (indexed annually) –Three Tier Drug plan (7/35/70) –Created New PT Contract with SEIU – No HealthCare

12. Retiree Health Care Contributions Annual Required Contribution 2013 - $16,188,521 2012 -$17,615,866 2011 -$17,836,256 2010 -$20,635,286 2009 -$20,070,947 Actual Contribution 2013 -$8,282,847 2012 -$9,791,130 2011 -$9,515,047 2010 -$8,945,764 2009 -$7,888,799 *726 Retirees

13. What have we done so far with the Retirees? July 1, 2013 – Efforts made to move retirees to one plan ( same as current active employees). Retirees appealed – Court ordered and injunction. Litigation in process. Retiree Association has met with the City on several occasions. Alternative plan offered by City-No agreement at this time.

18. Don’t Shoot the Messenger!