CAL PERS ANNUAL VALUATION REPORT

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MISCELLANEOUS PLAN OF THE CONEJO RECREATION AND PARK DISTRICT (CalPERS ID: 2176990821) Annual Valuation Report as of June 30, 2016 Page 2 Changes since the Prior Year's Valuation On December 21, 2016, the CalPERS Board of Administration lowered the aiscount rate from 7.50 percent to 7.00 percent using a three year phase-in beginning with the .lune 30, 2016 actuarial valuations. The minimum employer contributions for Fiscal Year 2018-19 determined in this valuatlon were calculated using a discount rate of 7.375 percent. The projected employer contributions on Page 5 are calculated assuming that the discount rate will be lowered to 7.25 percent next year and to 7.00 percent the following year as adopted by the Board. Beginning with Fiscal Year 2017-18 CalPERS began collecting employer contributions toward the plan's unfunded liability as dollar amounts instead of the prior method of a contribution rate. This change addresses potential funding issues that could arise from a declining payroll or reduction in the number of active members in the plan. Funding the unfunded liability as a percentage of payroll could lead to the underfunding of the plans. Due to stakeholder feedback regarding internal needs for total contributions expressed as a percentage of payroll, the reports have been modified to include such results in the contribution projection on page 5. These results are provided for information purposes only. Contributions toward the unfunded liability will continue to be collected as dollar amounts. The CalPERS Board of Administration adopted a Risk Mitigation Policy which is designed to reduce funding risk over time. This Policy has been temporarily suspended during the period over which the discount rate is being lowered. More details on the Risk Mitigation Policy can be found on our website. Besides the above noted changes, there may also be changes specific to the plan such as contract amendments and funding changes. Further descriptions of general changes are included in the "Highlights and Executive Summary" section and in Appendix A, "Actuarial Methods and Assumptions." The effects of the changes on the required contributions are included in the "Reconciliation of Required Employer Contributions" section. We understand that you might have a number of questions about these results. While we are very interested in discussing these results with your agency, in the interest of allowing us to give every public agency their results, we ask that you wait until after August 31 to contact us with actuarial questions. If you have other questions, you may tall the Customer Contact Center at (888)-CalPERS or (888-225-7377). Sincerely, SCOTT TERANDO Chief Actuary