Exhibit 5: Page 1 of 14

WESTERN STATES OFFICE AND 

PROFESSIONAL EMPLOYEES PENSION FUND

SUSPENSION APPLICATION 

Exhibit 5
Redacted by the U.S. Department of the 

Treasury

The Plan is not expected to go insolvent under the assumptions shown, and in addition, the Plan's 

solvency ratio and available resources begins to improve over the last five plan years in the 40-year 

extended projection period ending December 31, 2055. 

To the best of our knowledge and belief, the information presented in this certification is complete and 

accurate, and each assumption used represents our best estimate of anticipated experience under the 

Plan. 

The actuarial assumptions used are the same as those used in the January 1, 2016 actuarial valuation, 

except as noted below and in the following table of assumptions: 

1. Updated mortality table, including mortality improvement 

2. An assumption for joint and survivor annuity election 

3. Revised assumed spousal age difference 

4. Estimated contributions and benefit payments for 2016 based on unaudited Administrator 

financial statements as of November 30, 2016 

5. Future investment experience was modified to reflect an estimated 2016 net investment return of 

6.60%, as provided by the Plan's investment consultant and adjusted for operating expenses. 

For 2017 and thereafter, varied expected index returns, based on capital market expectations, 

were used. We have added 0.35% of alpha to the expected index returns to reflect active 

investment management and then subtract assumed operating expenses (see Checklist item 7, 

Exhibit 3, page 10). 

6. Contributions for 11 employers known to have withdrawn in the 2016 Plan Year, including WPAS, 

have been removed from estimates of future accruing contributions and costs. All withdrawn 

employers are assumed to make quarterly withdrawal liability payments, except for ATPA. Due to 

its recent bankruptcy filing, no withdrawal liability payments are assumed to be made by ATPA. 

Certified by: 

Paul Graf, A.S.A., E.A., M.A.A.A. Enrolled Actuary No. 14-05627 

February 15, 2017 

Exhibit 5: Page 2of14 
Western States Office and Professional Employees Pension Fund 

Exhibit 5: Page 3 of 14

ACTUARIAL METHODS AND ASSUMPTIONS 

METHODS:

Asset Valuation: Assets are valued according to a method which recognizes 20% of each year’s 

excess (or deficiency) of actual investment return on the Market Value of Assets 

over the expected return on the Market Value of Assets in the year the excess (or 

deficiency) occurs. An additional 20% of the excess (or deficiency) is recognized 

in each of the succeeding four years until it is totally recognized. In no event will 

the Actuarial Value be less than 80% or more than 120% of the Market Value. 

Actuarial Cost Method: Unit Credit Cost Method 

Under this method, we determine the present value of all benefits earned through 

the valuation date. An individual's normal cost is the present value of the benefit

expected to be earned in the valuation year. The total accrued liability is the sum of 

the individual present values for all participants. The Unfunded Accrued Liability 

is the difference between the accrued liability and the assets of the Trust. If the 

assets exceed the accrued liability, the Plan is in a surplus position. This method 

requires that each year’s contributions be applied first to the normal cost, and the 

balance of the contributions applied to amortize the Unfunded Accrued Liability. 

The normal cost is adjusted at the close of the Plan Year to reflect the actual level of 

contributions received during that Plan Year.
Western States Office and Professional Employees Pension Fund 

Exhibit 5: Page 4 of 14

ASSUMPTIONS:

Interest Discount Rate: 7.25% for funding. 

Assumed Rate of Return on 

Investments: 

For 2016, 6.60% after adjusting for operating expenses. For 2017 thereafter, varied 

expected index returns, based on capital market expectations, were used. We have 

added 0.35% of alpha to the expected index returns to reflect active investment 

management and then subtract assumed operating expenses (see Checklist item 7, 

Exhibit 3, page 10). 

Derivation of Net Investment 

Return and Discount Rate for 

FASB ASC 960 Accounting: 

The expected return assumptions are established based on a long run outlook and 

are based on past experience, future expectations and professional judgement. We 

have modeled the assumptions based on average long-term future expected returns 

and their respective capital market assumptions as provided by several investment 

professionals. Based on the inputs of the Plan’s specific target asset allocation, we 

have established the reasonability of the Plan’s assumption. 

Selection of Demographic 

and Other Noneconomic 

Assumptions for Measuring 

Pension Obligations

The demographic and other noneconomic assumptions are established based on a 

long-term outlook and are based on past actuarial experience, future expectations 

and professional judgment. We believe the current demographic and other 

noneconomic assumptions reasonably reflect anticipated experience for the Plan.

Operating Expenses: $1,000,000 for 2016 and 2017, $700,000 for 2018 and all future years. 

Mortality: Healthy Lives: RP2000 Combined Mortality Table projected to 2020 (75% Scale 

BB) for Males and Females 

Disabled Lives: RP2000 Combined Mortality Table projected to 2020 (75% Scale 

BB) for Males and Females with ages set forward 8 years 

Mortality Improvement: The current mortality assumption has been updated to reflect anticipated mortality 

improvement for the Plan. 

Turnover: Table T-7, The Actuary's Pension Handbook. Non-Vested Participants are assumed 

to earn one year of vesting credit annually until vested. 

Retirement Rates: Active participants are assumed to retire based on the following rate table: 

Age Rate of Retirement 

 55 20% 

 56 15% 

 57-59 12% 

 60 15% 

 61 20% 

 62 40% 

 63-70 35% 

 71+ 100% 

Inactive Vested participants are assumed to retire at age 62. 

Disability Incidence: 1952 Society of Actuaries Table, Period 2, Benefit 5. 

Form of Payment: For those not yet in pay status, 55% of participants are assumed to elect a Life 

Annuity and 45% of participants are assumed to elect a 50% Joint and Survivor 

Annuity. 

Marital Status: 80% of non-retired participants are assumed to be married. Spouses are assumed to 

be one year younger than participants in the population. 

Active Employment: Worked at least 200 hours in covered employment. 

Future Employment: Each active participant is assumed to work the same amount of hours worked in the 

prior plan year. 
Western States Office and Professional Employees Pension Fund 

Exhibit 5: Page 5 of 14

ASSUMPTIONS:

Missing Data: If not specified, participants are assumed to be female and the same age as the 

average of participants with the same status code.

Withdrawal: Employers known to have withdrawn prior to and during 2016, including WPAS, 

are assumed to make quarterly withdrawal liability payments; no withdrawal 

liability payments are assumed to be made by ATPA due to its recent bankruptcy 

filing. 

New Entrant Profile:

New Entrants: New entrants are assumed to enter the Plan with an average age of 39 to replace 

participants that terminated employment during the year from actively participating 

employers. This experience includes those that are rehired from terminated nonvested and terminated vested status. All new entrants are assumed to be female. 

CHANGES SINCE PPA 

CERTIFICATION

The mortality assumption for healthy lives was changed from 1983 GAM(F)

Mortality Table to RP2000 Combined Mortality Table projected to 2020 (75% 

Scale BB) for Males and Females.

The mortality assumption for disabled lives was changed from 1983 GAM(F)

Mortality Table with ages set forward 17 years until age 62 to RP2000 Combined 

Mortality Table projected to 2020 (75% Scale BB) for Males and Females with 

ages set forward 8 years.

The form of payment assumption was changed from all participants elect a Life 

Annuity to 55% of participants elect a Life Annuity and 45% elect a 50% Joint and 

Survivor Annuity.

The spousal age difference assumption was changed from the spouse assumed to be 

the same age as the participant to the spouse assumed to be one year younger than 

the participant.

Accruing and supplemental/surcharge contributions for 11 employers known to 

have withdrawn during 2016 have been removed from future expected 

contributions and costs, and quarterly withdrawal liability payments have been 

added to future expected contributions. No withdrawal liability payments are 

expected from ATPA due to its recent bankruptcy filing.
Western States Office and Professional Employees Pension Fund 

Exhibit 5: Page 6 of 14

Projected Total Contribution Base Units and Contribution Rates 

Year Beginning

January 1

Base Accrual

Contribution

Total Contribution 

Base Units

(Hours)

Average 

Contribution Rate

(Hourly)

2016 4,477,091 1,552,415 2.88

2017 3,983,739 1,202,805 3.31

2018 3,983,739 1,202,805 3.31

2019 3,983,739 1,202,805 3.31

2020 3,983,739 1,202,805 3.31

2021 3,983,739 1,202,805 3.31

2022 3,983,739 1,202,805 3.31

2023 3,983,739 1,202,805 3.31

2024 3,983,739 1,202,805 3.31

2025 3,983,739 1,202,805 3.31

2026 3,983,739 1,202,805 3.31

2027 3,983,739 1,202,805 3.31

2028 3,983,739 1,202,805 3.31

2029 3,983,739 1,202,805 3.31

2030 3,983,739 1,202,805 3.31

2031 3,983,739 1,202,805 3.31

2032 3,983,739 1,202,805 3.31

2033 3,983,739 1,202,805 3.31

2034 3,983,739 1,202,805 3.31

2035 3,983,739 1,202,805 3.31

2036 3,983,739 1,202,805 3.31

2037 3,983,739 1,202,805 3.31

2038 3,983,739 1,202,805 3.31

2039 3,983,739 1,202,805 3.31

2040 3,983,739 1,202,805 3.31

2041 3,983,739 1,202,805 3.31

2042 3,983,739 1,202,805 3.31

2043 3,983,739 1,202,805 3.31

2044 3,983,739 1,202,805 3.31

2045 3,983,739 1,202,805 3.31

2046 3,983,739 1,202,805 3.31

2047 3,983,739 1,202,805 3.31

2048 3,983,739 1,202,805 3.31

2049 3,983,739 1,202,805 3.31

2050 3,983,739 1,202,805 3.31

2051 3,983,739 1,202,805 3.31

2052 3,983,739 1,202,805 3.31

2053 3,983,739 1,202,805 3.31

2054 3,983,739 1,202,805 3.31

2055 3,983,739 1,202,805 3.31
Plan Year Beginning 1/1/2016 1/1/2017 1/1/2018 1/1/2019 1/1/2020

Plan Year Ending 12/31/2016 12/31/2017 12/31/2018 12/31/2019 12/31/2020

A. Market Value at Beginning of Year 334,210,200 325,872,761 311,506,867 304,314,007 297,165,364

Income

B. Base Contributions 4,477,091 3,983,739 3,983,739 3,983,739 3,983,739

C. Supplemental/Surcharge Contributions 3,113,918 3,186,991 3,186,991 3,186,991 3,186,991

D. Withdrawal Liability Payments 3,143,651 3,997,686 3,994,682 3,990,018 3,986,838

E. Total Investment Income 21,054,925 16,579,649 16,812,466 17,186,801 17,525,285

Disbursements

F. Benefit Payments 39,127,024 41,113,959 34,470,738 34,796,192 35,085,545

G. Administrative expenses 1,000,000 1,000,000 700,000 700,000 700,000

H. Market Value at End of Year

(A+B+C+D+E-F-G)

 325,872,761 311,506,867 304,314,007 297,165,364 290,062,672

I. Available Resources 

(A+B+C+D+E-G)

 364,999,785 352,620,826 338,784,745 331,961,556 325,148,217

J. Solvency Ratio (I / F) 9.33 8.58 9.83 9.54 9.27

K. Accrued Liability 529,954,836 430,063,669 416,163,695 412,416,101 408,059,554

L. Funded Percentage (A / K) 63.06% 75.77% 74.85% 73.79% 72.82%

Western States Office and Professional Employees Pension Fund

Illustration of Projected Cash Flow and Solvency Ratio of the Extended Period

Projection for Plan Years beginning January 1, 2016 through December 31, 2055

Exhibit 5: Page 7 of 14
Western States Office and Professional Employees Pension Fund

Illustration of Projected Cash Flow and Solvency Ratio of the Extended Period

Projection for Plan Years beginning January 1, 2016 through December 31, 2055

Plan Year Beginning 1/1/2021 1/1/2022 1/1/2023 1/1/2024 1/1/2025

Plan Year Ending 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025

A. Market Value at Beginning of Year 290,062,672 282,994,242 276,176,619 269,666,201 263,309,264

Income

B. Base Contributions 3,983,739 3,983,739 3,983,739 3,983,739 3,983,739

C. Supplemental/Surcharge Contributions 3,186,991 3,186,991 3,186,991 3,186,991 3,186,991

D. Withdrawal Liability Payments 3,985,664 3,983,350 3,972,733 3,960,189 3,955,948

E. Total Investment Income 17,828,101 18,102,345 18,358,436 18,595,225 18,822,671

Disbursements

F. Benefit Payments 35,352,925 35,374,048 35,312,318 35,383,081 35,075,685

G. Administrative expenses 700,000 700,000 700,000 700,000 700,000

H. Market Value at End of Year

(A+B+C+D+E-F-G)

 282,994,242 276,176,620 269,666,201 263,309,264 257,482,928

I. Available Resources 

(A+B+C+D+E-G)

 318,347,167 311,550,667 304,978,518 298,692,345 292,558,613

J. Solvency Ratio (I / F) 9.00 8.81 8.64 8.44 8.34

K. Accrued Liability 403,087,316 430,063,669 416,163,695 412,416,101 408,059,554

L. Funded Percentage (A / K) 71.96% 65.80% 66.36% 65.39% 64.53%

Exhibit 5: Page 8 of 14
Western States Office and Professional Employees Pension Fund

Illustration of Projected Cash Flow and Solvency Ratio of the Extended Period

Projection for Plan Years beginning January 1, 2016 through December 31, 2055

Plan Year Beginning 1/1/2026 1/1/2027 1/1/2028 1/1/2029 1/1/2030

Plan Year Ending 12/31/2026 12/31/2027 12/31/2028 12/31/2029 12/31/2030

A. Market Value at Beginning of Year 257,482,928 251,902,149 246,627,768 241,716,523 237,181,965

Income

B. Base Contributions 3,983,739 3,983,739 3,983,739 3,983,739 3,983,739

C. Supplemental/Surcharge Contributions 3,186,991 3,186,991 3,186,991 3,186,991 3,186,991

D. Withdrawal Liability Payments 3,955,948 3,955,948 3,955,948 3,955,948 3,911,777

E. Total Investment Income 18,716,789 18,617,406 18,530,014 18,458,558 18,409,650

Disbursements

F. Benefit Payments 34,724,247 34,318,464 33,867,937 33,419,794 32,829,519

G. Administrative expenses 700,000 700,000 700,000 700,000 700,000

H. Market Value at End of Year

(A+B+C+D+E-F-G)

 251,902,149 246,627,769 241,716,524 237,181,966 233,144,603

I. Available Resources 

(A+B+C+D+E-G)

 286,626,395 280,946,233 275,584,461 270,601,760 265,974,122

J. Solvency Ratio (I / F) 8.25 8.19 8.14 8.10 8.10

K. Accrued Liability 370,940,688 363,651,727 356,254,809 348,788,473 341,245,216

L. Funded Percentage (A / K) 69.41% 69.27% 69.23% 69.30% 69.50%

Exhibit 5: Page 9 of 14
Western States Office and Professional Employees Pension Fund

Illustration of Projected Cash Flow and Solvency Ratio of the Extended Period

Projection for Plan Years beginning January 1, 2016 through December 31, 2055

Plan Year Beginning 1/1/2031 1/1/2032 1/1/2033 1/1/2034 1/1/2035

Plan Year Ending 12/31/2031 12/31/2032 12/31/2033 12/31/2034 12/31/2035

A. Market Value at Beginning of Year 233,144,604 229,757,174 226,927,730 224,221,692 221,216,669

Income

B. Base Contributions 3,983,739 3,983,739 3,983,739 3,983,739 3,983,739

C. Supplemental/Surcharge Contributions 3,186,991 3,186,991 3,186,991 3,186,991 3,186,991

D. Withdrawal Liability Payments 3,872,769 3,762,484 3,141,632 1,904,088 1,816,980

E. Total Investment Income 18,395,759 18,421,423 18,467,238 18,498,797 18,549,951

Disbursements

F. Benefit Payments 32,126,688 31,484,081 30,785,638 29,878,638 28,909,790

G. Administrative expenses 700,000 700,000 700,000 700,000 700,000

H. Market Value at End of Year

(A+B+C+D+E-F-G)

 229,757,174 226,927,730 224,221,692 221,216,669 219,144,540

I. Available Resources 

(A+B+C+D+E-G)

 261,883,861 258,411,811 255,007,330 251,095,307 248,054,330

J. Solvency Ratio (I / F) 8.15 8.21 8.28 8.40 8.58

K. Accrued Liability 333,766,745 326,474,395 319,319,250 312,369,118 305,854,981

L. Funded Percentage (A / K) 69.85% 70.38% 71.07% 71.78% 72.33%

Exhibit 5: Page 10 of 14
Western States Office and Professional Employees Pension Fund

Illustration of Projected Cash Flow and Solvency Ratio of the Extended Period

Projection for Plan Years beginning January 1, 2016 through December 31, 2055

Plan Year Beginning 1/1/2036 1/1/2037 1/1/2038 1/1/2039 1/1/2040

Plan Year Ending 12/31/2036 12/31/2037 12/31/2038 12/31/2039 12/31/2040

A. Market Value at Beginning of Year 219,144,540 215,138,897 210,275,353 206,121,784 202,644,899

Income

B. Base Contributions 3,983,739 3,983,739 3,983,739 3,983,739 3,983,739

C. Supplemental/Surcharge Contributions 3,186,991 3,186,991 3,186,991 3,186,991 3,186,991

D. Withdrawal Liability Payments 1,560,757 - - - -

E. Total Investment Income 15,872,997 15,548,306 15,218,200 14,938,857 14,698,930

Disbursements

F. Benefit Payments 27,910,127 26,882,580 25,842,499 24,886,473 24,246,581

G. Administrative expenses 700,000 700,000 700,000 700,000 700,000

H. Market Value at End of Year

(A+B+C+D+E-F-G)

 215,138,897 210,275,353 206,121,785 202,644,899 199,567,978

I. Available Resources 

(A+B+C+D+E-G)

 243,049,024 237,157,933 231,964,283 227,531,372 223,814,559

J. Solvency Ratio (I / F) 8.71 8.82 8.98 9.14 9.23

K. Accrued Liability 299,872,537 294,492,267 289,786,723 285,817,811 282,551,835

L. Funded Percentage (A / K) 73.08% 73.05% 72.56% 72.12% 71.72%

Exhibit 5: Page 11 of 14
Western States Office and Professional Employees Pension Fund

Illustration of Projected Cash Flow and Solvency Ratio of the Extended Period

Projection for Plan Years beginning January 1, 2016 through December 31, 2055

Plan Year Beginning 1/1/2041 1/1/2042 1/1/2043 1/1/2044 1/1/2045

Plan Year Ending 12/31/2041 12/31/2042 12/31/2043 12/31/2044 12/31/2045

A. Market Value at Beginning of Year 199,567,978 196,942,573 194,765,477 193,098,350 191,963,355

Income

B. Base Contributions 3,983,739 3,983,739 3,983,739 3,983,739 3,983,739

C. Supplemental/Surcharge Contributions 3,186,991 3,186,991 3,186,991 3,186,991 3,186,991

D. Withdrawal Liability Payments - - - - -

E. Total Investment Income 14,490,174 14,314,360 14,173,628 14,071,045 14,007,629

Disbursements

F. Benefit Payments 23,586,309 22,962,187 22,311,485 21,676,770 21,075,615

G. Administrative expenses 700,000 700,000 700,000 700,000 700,000

H. Market Value at End of Year

(A+B+C+D+E-F-G)

 196,942,573 194,765,477 193,098,350 191,963,355 191,366,099

I. Available Resources 

(A+B+C+D+E-G)

 220,528,882 217,727,663 215,409,835 213,640,125 212,441,714

J. Solvency Ratio (I / F) 9.35 9.48 9.65 9.86 10.08

K. Accrued Liability 279,712,164 277,350,824 275,465,033 274,116,812 273,328,569

L. Funded Percentage (A / K) 71.35% 71.01% 70.70% 70.44% 70.23%

Exhibit 5: Page 12 of 14
Western States Office and Professional Employees Pension Fund

Illustration of Projected Cash Flow and Solvency Ratio of the Extended Period

Projection for Plan Years beginning January 1, 2016 through December 31, 2055

Plan Year Beginning 1/1/2046 1/1/2047 1/1/2048 1/1/2049 1/1/2050

Plan Year Ending 12/31/2046 12/31/2047 12/31/2048 12/31/2049 12/31/2050

A. Market Value at Beginning of Year 191,366,099 191,357,789 191,958,791 193,196,235 195,083,570

Income

B. Base Contributions 3,983,739 3,983,739 3,983,739 3,983,739 3,983,739

C. Supplemental/Surcharge Contributions 3,186,991 3,186,991 3,186,991 3,186,991 3,186,991

D. Withdrawal Liability Payments - - - - -

E. Total Investment Income 13,985,460 14,007,158 14,074,461 14,188,856 14,352,010

Disbursements

F. Benefit Payments 20,464,500 19,876,886 19,307,747 18,772,251 18,253,385

G. Administrative expenses 700,000 700,000 700,000 700,000 700,000

H. Market Value at End of Year

(A+B+C+D+E-F-G)

 191,357,789 191,958,791 193,196,235 195,083,570 197,652,926

I. Available Resources 

(A+B+C+D+E-G)

 211,822,289 211,835,677 212,503,982 213,855,821 215,906,310

J. Solvency Ratio (I / F) 10.35 10.66 11.01 11.39 11.83

K. Accrued Liability 273,106,124 273,500,820 274,533,046 276,229,879 278,604,640

L. Funded Percentage (A / K) 70.07% 69.97% 69.92% 69.94% 70.02%

Exhibit 5: Page 13 of 14
Western States Office and Professional Employees Pension Fund

Illustration of Projected Cash Flow and Solvency Ratio of the Extended Period

Projection for Plan Years beginning January 1, 2016 through December 31, 2055

Plan Year Beginning 1/1/2051 1/1/2052 1/1/2053 1/1/2054 1/1/2055

Plan Year Ending 12/31/2051 12/31/2052 12/31/2053 12/31/2054 12/31/2055

A. Market Value at Beginning of Year 197,652,925 200,926,664 204,947,941 209,740,663 215,340,550

Income

B. Base Contributions 3,983,739 3,983,739 3,983,739 3,983,739 3,983,739

C. Supplemental/Surcharge Contributions 3,186,991 3,186,991 3,186,991 3,186,991 3,186,991

D. Withdrawal Liability Payments - - - - -

E. Total Investment Income 14,565,919 14,832,982 15,155,652 15,536,114 15,976,845

Disbursements

F. Benefit Payments 17,762,910 17,282,436 16,833,660 16,406,957 16,008,531

G. Administrative expenses 700,000 700,000 700,000 700,000 700,000

H. Market Value at End of Year

(A+B+C+D+E-F-G)

 200,926,664 204,947,941 209,740,663 215,340,551 221,779,594

I. Available Resources 

(A+B+C+D+E-G)

 218,689,575 222,230,376 226,574,323 231,747,507 237,788,126

J. Solvency Ratio (I / F) 12.31 12.86 13.46 14.12 14.85

K. Accrued Liability 281,689,246 285,505,741 290,096,823 295,485,804 301,707,656

L. Funded Percentage (A / K) 70.17% 70.38% 70.65% 70.98% 71.37%

Exhibit 5: Page 14 of 14