2023-24 Public Agency 1959 Survivor Monthly Premiums

June 9, 2023
Circular Letter: 200-031-23
Topic: Actuarial

To: All Public Agency Employers

Purpose

The purpose of this Circular Letter is to inform you of required premiums to be collected for fiscal year (FY) 2023-24. The California Public Employees’ Retirement System (CalPERS) Board of Administration approved normal costs and required premiums for the 1959 Survivor Benefit Program on April 18, 2023. The 1959 Survivor Benefit Program is an employer contract provision that provides monthly benefits for eligible survivors of participating members who die, while actively employed. This Circular Letter pertains only to those public agencies that contract for the 1959 Survivor Benefit Program.

Billing for Employer Premiums

Employer invoices for FY 2023-24 will be posted to myCalPERS in June 2024 and will be based on the actual number of active member months.

Public agencies that contract for the 4th or Indexed Level are required to pay the employer normal cost for the first five years in the pool. Agencies that have remained at that level for more than five years are required to pay the employer premium. The difference between the employer normal cost and the employer premium is that the employer premium includes an amortization of the pool’s unfunded liability/surplus.

Payroll Reporting for Employee Premiums

Beginning with the payroll period that includes July 1, 2023, the required employee premium for the Indexed Level of benefits is $2.75 per member, per month (or $1.27 per bi-weekly pay period). The required employee premium for all other benefit levels continues to be $2 per member, per month (or $0.93 per bi-weekly pay period). Share this information with those responsible for payroll reporting.

The required employee and employer costs for FY 2023-24 are detailed in the chart below, by the various benefit levels. The invoices for the annual employer cost for FY 2023-24 will be posted to myCalPERS in June 2024.

Table Showing Required Employee and Employer Costs for FY 2023-24
Level/Pool	Employee Premiums	Employer Cost Per Member Per Month
Level/Pool	Employee Premiums	Employer Premium (If contracted on or before 7/1/18)	Employer Normal Cost (If contracted after 7/1/18)
1st	$2.00	None	N/A
2nd	$2.00	None	N/A
3rd	$2.00	None	N/A
4th	$2.00	$5.20	$5.50
Indexed	$2.75	$2.75	$6.75

The required employee and employer costs for FY 2022-23 are detailed in the chart below, by the various benefit levels. The invoices for the annual employer cost for FY 2022-23 will be posted to myCalPERS in June 2023.

Table Showing Required Employee and Employer Costs for FY 2022-23
Level/Pool	Employee Premiums	Employer Cost Per Member Per Month
Level/Pool	Employee Premiums	Employer Premium (If contracted on or before 7/1/17)	Employer Normal Cost (If contracted after 7/1/17)
1st	$2.00	None	N/A
2nd	$2.00	None	N/A
3rd	$2.00	None	N/A
4th	$2.00	$2.40	$5.10
Indexed	$2.00	$0.50	$7.20

Funded Status

Required premiums vary annually due to investment returns and mortality gains and losses experienced by the pools. A good indicator of the potential for changes in the required premiums is the funding status of the pools. Currently all pools are funded at more than 100%. As the funded ratio declines it is more likely that the pool will require employer premiums.

The funded ratio of the pools based on market value of assets as of the valuation date are detailed below:

Table Showing the Funded Ratio of the Pools Based on Market Value of Assets as of the Valuation Date
Level/Pool	2022	2021	2020
1st	2,392.4%	2,492.7%	1,965.1%
2nd	673.5%	725.4%	556.6%
3rd	461.5%	504.2%	414.3%
4th	105.7%	121.9%	107.0%
Indexed	140.8%	160.5%	138.4%

Payable Monthly Benefit

The monthly benefit payable to survivors in the Indexed Level increases by 2% each calendar year. Shown below are the benefits payable for 2023 and 2024:

Table Showing the Benefits Payable for 2023 and 2024
Indexed Level	1 Survivor	2 Survivors	3 or More Survivors
Monthly Benefit Payable 2023	$789	$1,577	$2,365
Monthly Benefit Payable 2024	$804	$1,608	$2,413

For information about other benefit levels, view the 1959 Survivor Benefit Program on the CalPERS website.

Valuation Report

Access the 1959 Survivor Benefit Program 2022 Actuarial Valuation (PDF) on the CalPERS website.

Questions

If you have questions, call the CalPERS Customer Contact Center at 888 CalPERS (or 888-225-7377888-225-7377).

Scott Terando, Chief Actuary
Actuarial Office