ESBD_468598_1764973989421_3-2025 Brazos River Authority Actuarial Valuation Report.pdf

Retirement Plan for Employees of Brazos River Authority

March 1, 2025

Actuarial Valuation Report

Retirement Plan for Employees of Brazos River Authority Actuarial Valuation as of March 1, 2025

Page 2 – Brazos River Authority

Table of Contents

Actuarial Certification 3

Executive Summary 5

Summary Results 6

Changes Since Prior Valuation and Key Notes 7

Five Year Valuation Summary 8

Identification of Risks 9

Plan Maturity Measures 10

Assets and Liabilities 11

Present Value of Future Benefits 12

Actuarial Accrued Liability 13

Asset Information 14

Reconciliation of Unfunded Actuarial Accrued Liability (UAAL) 16

Funding Results 17

Development of Actuarially Determined Contribution 18

Data, Assumptions, and Plan Provisions 19

Demographic Information 20

Participant Reconciliation 22

Active Participant Schedule 23

Plan Provisions 24

Actuarial Assumptions 30

Other Measurements 33

Net Asset Information: Statement of Plan Net Assets 34

Net Asset Information: Statement of Changes in Plan Net Assets 35

Low-Default-Risk Obligation Measure (LDROM) 36

Page 3 – Brazos River Authority

Actuarial Certification

At the request of the plan sponsor, this report summarizes the actuarial results of the Retirement Plan for the Employees of Brazos River Authority as of

March 1, 2025. The purpose of this report is to communicate the following results of the valuation:

• Funded Status;

• and Recommended Contribution;

This report has been prepared in accordance with the applicable Federal and State laws. Consequently, it may not be appropriate for other purposes.

Please contact Nyhart prior to disclosing this report to any other party or relying on its content for any purpose other than that explained above. Failure to do so may result in misrepresentation or misinterpretation of this report.

The results in this report were prepared using information provided to us by other parties. The census and asset information has been provided to us by the employer. We have reviewed the provided data for reasonableness when compared to prior information provided, but have not audited the data.

Where relevant data may be missing, we have made assumptions we believe to be reasonable. We are not aware of any significant issues with and have relied on the data provided. Any errors in the data provided may result in a different result than those provided in this report. A summary of the data used in the valuation is included in this report.

The actuarial assumptions and methods were chosen by the employer. In our opinion, all actuarial assumptions and methods are individually reasonable and in combination represent our best estimate of anticipated experience of the plan. Future actuarial measurements may differ significantly from the current measurements presented in this report due to such factors as the following:

• plan experience differing from that anticipated by the economic or demographic assumptions;

• changes in economic or demographic assumptions;

• increases or decreases expected as part of the natural operation of the methodology used for these measurements (such as the end of an amortization period); and

• changes in plan provisions or applicable law.

We did not perform an analysis of the potential range of future measurements due to the limited scope of our engagement. This report has been prepared in accordance with generally accepted actuarial principles and practice.

In preparing these results, Nyhart used ProVal valuation software developed by Winklevoss Technologies, LLC. This software is widely used for the purpose of performing pension valuations. We coded the plan provisions, assumptions, methods, and participant data summarized in this report, and reviewed the liability and cost outputs for reasonableness. We are not aware of any weaknesses or limitations in the software, and have determined it is appropriate for performing this valuation.

Page 4 – Brazos River Authority

Actuarial Certification

Neither Nyhart nor any of its employees have any relationship with the plan or its sponsor which could impair or appear to impair the objectivity of this report. To the extent that this report or any attachment concerns tax matters, it is not intended to be used and cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed by law.

The undersigned are compliant with the continuing education requirements of the Qualification Standards for Actuaries Issuing Statements of Actuarial

Opinion in the United States and are available for any questions.

Nyhart

Jennifer Turk, FSA, EA, MAAA Joe Moore, ASA, EA, MAAA, FCA

Enrollment Number: 23-07346 Enrollment Number: 23-08610

June 16, 2025

Date

Page 5 – Brazos River Authority

Executive Summary

The actuarial report provides the plan sponsor with several ways to measure the funded status of the pension plan. The following detail is included in the report:

• Recommended Contribution

• Asset Performance

• Plan Demographics

This report is filled with actuarial terminology. However, the ultimate objective of the valuation is to provide a rational method of funding the plan. It is necessary to fund the benefit promised by the employer in a manner that is logical and employer friendly, yet safeguards the participants’ interest. The actuarially derived contribution, however, is not the true cost of the pension plan. The true cost is illustrated by the following formula:

Ultimate Pension Cost = Benefits Paid - Investment Income + Plan Expenses

While the plan's liability and normal cost determine the current contribution recommendations, the true cost is controlled only by the “defined” benefit and investment income generated by the underlying assets. The actuarial process only controls the timing of costs.

We suggest that a plan sponsor treat the actuarial report as you would treat a scorecard. It is simply a measure of progress toward the ultimate goal of paying all pension benefits when participants retire.

Page 6 – Brazos River Authority

63.5% 66.4% 72.3% 73.5%

76.8% 80.1%

0%

20%

40%

60%

80%

100%

History of Funded Ratio

.3

.3

.1

.2

.1

.0

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

$1.60

M ill io n s

History of Recommended Contribution

Executive Summary

Summary Results

The actuarial valuation’s primary purpose is to produce a scorecard measure displaying the funding progress of the plan toward the ultimate goal of paying benefits at retirement. The accrued liability is based on the Unit Credit cost method.

March 1, 2024 March 1, 2025

Funded Status Measures

Accrued Liability $30,449,563 $30,212,886

Actuarial Value of Assets 23,384,129 24,213,476

Unfunded Actuarial Accrued Liability (UAAL) $7,065,434 $5,999,410

Funded Percentage (AVA) 76.8% 80.1%

Funded Percentage (MVA) 78.1% 82.9%

Discount Rate 6.50% 6.50%

Cost Measures

Actuarially Determined Contribution $1,124,997 $1,060,499

Determined Contribution (as a percentage of payroll) N/A N/A

Asset Performance

Market Value of Assets (MVA) $23,772,998 $25,055,362

Actuarial Value of Assets (AVA) $23,384,129 $24,213,476

Actuarial Value/Market Value 98.4% 96.6%

Market Value Rate of Return 15.2% 11.1%

Actuarial Value Rate of Return 8.1% 9.3%

Participant Information

Active Participants 46 43

Terminated Vested Participants 98 100

Retirees, Beneficiaries and Disabled Members 170 170

Total 314 313

Expected Payroll N/A N/A

Page 7 – Brazos River Authority

Executive Summary

Changes since Prior Valuation and Key Notes

There have been no changes to the assumptions and methods used since the last valuation.

There have been no changes to the plan provisions since the last valuation.

Page 8 – Brazos River Authority

Executive Summary

Five Year Valuation Summary

03/01/2021* 03/01/2022* 03/01/2023* 03/01/2024 03/01/2025 Funding

Accrued Liability $32,459,039 $31,178,500 $30,985,667 $30,449,563 $30,212,886

Actuarial Value of Assets 21,536,819 22,539,914 22,767,471 23,384,129 24,213,476

Unfunded Actuarial Accrued Liability $10,922,220 $8,638,586 $8,218,196 $7,065,434 $5,999,410

Funded Percentage 66.4% 72.3% 73.5% 76.8% 80.1%

Normal Cost (NC) $0 $0 $0 $0 $0

NC as a Percent of Covered Payroll N/A N/A N/A N/A N/A

Market Value of Assets $23,571,124 $24,414,644 $21,750,139 $23,772,998 $25,055,362

Actual Contribution $1,379,022 $1,164,997 $1,197,007 $1,124,997 TBD

Recommended Contribution $1,379,022 $1,164,997 $1,197,007 $1,124,997 $1,060,499

Recommended Contribution (% of Pay) N/A N/A N/A N/A N/A

Interest Rate 6.50% 6.50% 6.50% 6.50% 6.50%

Expense Load Assumption N/A N/A N/A NA NA

Rate of Return

Actuarial Value of Assets N/A N/A N/A 8.1% 9.3%

Market Value of Assets 20.3% 8.1% -5.9% 15.2% 11.1%

Demographic Information

Active Participants 64 56 53 46 43

Terminated Vested Participants 104 100 99 98 100

Retired Participants 126 127 132 135 134

Beneficiaries 36 41 36 35 36

Disabled Participants 0 0 0 0 0

Total Participants 330 324 320 314 313

Covered Payroll N/A N/A N/A N/A N/A

Average Covered Pay N/A N/A N/A N/A N/A

*Results are from the Actuarial Valuation Reports prepared by Gallagher

Page 9 – Brazos River Authority

Executive Summary

Identification of Risks

The results presented in this report are shown as single point values. However, these values are derived using assumptions about future markets and demographic behavior. If actual experience deviates from our assumptions, the actual results for the plan will consequently deviate from those presented in this report. Therefore, it is critical to understand the risks facing this pension plan. The following table shows the risks we believe are most relevant to the

Retirement Plan for Employees of Brazos River Authority. The risks are generally ordered with those we believe to have the most significance at the top. Also shown are possible methods by which a more detailed assessment of the risk can be performed.

Type of Risk Additional Information Investment Return Portfolio risk and substantial equity position leave the plan open to adverse market results, which could increase costs in the future.

Participant Longevity The plan has adopted the SOA’s most recent mortality tables for valuation purposes. These tables, compared to previous SOA tables, project longer participant longevity overall. There is no guarantee that anticipated mortality experience will mirror your plan’s future experience. Deviation from expected mortality rates could impact long-term liabilities and plan cost.

Retirement The plan has a relatively generous provisions regarding retirement eligibility; if more employees than expected retire or avail themselves of early retirement options, then this could impact estimated plan liabilities.

Type of Risk Method to Assess Risk Investment Return Scenario testing; asset/liability study

Participant Longevity Benefit projections and contribution strategy

Retirement Scenario testing; review population and retirement rates

Page 10 – Brazos River Authority

Executive Summary

Plan Maturity Measures - March 1, 2025

Each pension plan has a distinct life-cycle. New plans promise future benefits to active employees and then accumulate assets to pre-fund those benefits. As the plan matures, benefits are paid and the pre-funded assets begin to decumulate until ultimately, the plan pays out all benefits. A plan’s maturity has a dramatic influence on how risks should be viewed. The following maturity measures illustrate where the Retirement Plan for Employees of Brazos River

Authority falls in its life-cycle.

Duration of Liabilities: 8.6 Duration is the most common measure of plan maturity. It is defined as the sensitivity of the liabilities to a change in the interest rate assumption. The metric also approximates the weighted average length of time, in years, until benefits are expected to be paid. A plan with high duration is, by definition, more sensitive to changes in interest rates. A plan with low duration is more susceptible to risk if asset performance deviates from expectations as there would be less time to make up for market losses in adverse market environments while more favorable environments could result in trapped surplus from gains.

Conversely, high duration plans can often take on more risk when investing, and low duration plans are less sensitive to interest rate fluctuations.

Demographic Distribution - Ratio of Actively Accruing Participants to All Participants: 0.0%

Asset Leverage - Ratio of Payroll for Plan Participants to Market Value of Assets: N/A

Benefit Payment Percentage - Ratio of Annual Benefit Payments to Market Value of Assets: 9.3% As a plan enters its decumulation phase, a larger percentage of the pre-funded assets are paid out each year to retirees. A high percentage is not cause for alarm as long as the plan is nearly fully funded. However, such a plan is more sensitive to negative asset performance, especially if cash contributions are not an option to make up for losses.

Sensitivity to 100 Point Basis Point Change in the Interest Rate The following presents the net pension liability, calculated using the interest rate of 6.50%, as well as what the net pension liability would be if it were calculated using a interest rate that is 1-percentage-point lower (5.50%) or 1-percentage-point higher (7.50%) than the current rate:

Low (5.50%) Baseline (6.50%) High (7.50%)

Net Pension liability $8,808,000 $5,999,000 $3,590,000

Funded Percentage 73.3% 80.1% 87.1%

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Assets and Liabilities

The basic building blocks of the actuarial report are contained in this section. These include:

• Present Value of Future Benefits

• Actuarial Accrued Liabilities

• Asset Information

• Reconciliation of Unfunded Actuarial Liability

Page 12 – Brazos River Authority

Assets and Liabilities

Present Value of Future Benefits

The Present Value of Future Benefits represents the discounted value of all future benefits expected to be payable to current members, considering future service and compensation not yet earned.

Present Value of Future Benefits

Active Participants

Retirement $3,081,936

Disability 183,619

Death 38,881

Termination 26,042

Total active $3,330,478

Inactive Participants

Retired Participants $19,068,904

Beneficiaries 3,881,734

Disabled Participants 0

Terminated Vested Participants 3,913,770

Total Inactive $26,882,408

Total $30,212,886

Interest Rate 6.50%

Present Value of Future Payrolls N/A

Present Value of Future Employee Contributions N/A

Present Value of Future Service 6.9

89%

11%

Inactive Liability Active Liability Normal Cost

Breakdown of Present Value of Future Benefits

Page 13 – Brazos River Authority

Assets and Liabilities

Actuarial Accrued Liability

The Accrued Liability measures the present value of benefits earned as of the valuation date, using a specified set of actuarial assumptions. The accrued liability is based on unit credit methodology.

Active Participants

Retirement $3,081,936

Disability 183,619

Death 38,881

Termination 26,042

Total Active $3,330,478

Inactive Participants

Retired Participants $19,068,904

Beneficiaries 3,881,734

Disabled Participants 0

Terminated Vested Participants 3,913,770

Total Inactive $26,882,408

Total Actuarial Accrued Liability $30,212,886

Normal Cost $0

Interest Rate 6.50%

.3

.6

.3

.3

.0

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

History of the Percentage of Inactive Liability

.0

.4

.1

.9

.4

.2

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

M ill io n s

History of Liabilities

Page 14 – Brazos River Authority

Assets and Liabilities

Asset Information

The amount of assets backing the pension promise is typically the most significant driver of volatility and future costs within a pension plan. The investment performance of the assets directly offsets the ultimate cost.

March 1, 2024 March 1, 2025

Market Value Reconciliation

Market value of assets, beginning of prior year $21,750,139 $23,772,998

Contributions 1,197,007 1,124,997

Investment income, net expenses 3,209,083 2,567,148

Benefit payments and refunds (2,299,856) (2,318,762)

Administrative expenses (83,375) (91,019)

Other expenses 0 0

Market value of assets, beginning of current year $23,772,998 $25,055,362

Return on Market Value 15.2% 11.1%

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

M ill io n s

History of Assets

Market Assets Actuarial Assets

Page 15 – Brazos River Authority

Assets and Liabilities

Asset Information (continued)

Plan Assets are used to develop funded percentages and contribution requirements.

1. Expected market value of assets

(a) Market value of assets, beginning of prior year

(b) Contributions

(c) Benefit payments

(d) Expenses

(e) Expected return

(f) Expected market value of assets, beginning of current year

$23,772,998

1,124,997

(2,318,762)

(91,019)

1,503,489

$23,991,703

2. Market value of assets, beginning of current year $25,055,362

3. Amount subject to phase in [2-1(f)] $1,063,659

4. Phase in of asset gain/(loss) % Phased Base Amount

(a) Current year 80% $1,063,659 $850,927

(b) 2023-2024 gain/(loss) 60% $1,833,876 1,100,326

(c) 2022-2023 gain/(loss) 40% ($2,953,518) (1,181,407)

(d) 2021-2022 gain/(loss) 20% $360,200 72,040

(e) 2020-2021 gain/(loss) 0% $2,748,994 0

(f) Total phase-in $841,886

5. Preliminary actuarial value of assets, beginning of current year [2-4(f)] $24,213,476

6. 80% market value of assets $20,044,290

7. 120% market value of assets $30,066,434

8. Final actuarial value of assets $24,213,476

9. Actuarial Value of Assets / Market Value of Assets 96.6%

10. Return on actuarial value of assets 9.3%

Page 16 – Brazos River Authority

Assets and Liabilities

Reconciliation of Unfunded Actuarial Accrued Liability

Actuarial Liability

(AL)

Actuarial Value of Assets

(AVA)

Unfunded Actuarial

Liability

(AL – AVA)

1. Beginning of Prior Year $30,449,563 $23,384,129 $7,065,434

2. Total Normal Cost 0 0 0

3. Interest/Expected Investment Return 1,903,862 1,478,212 425,650

4. Benefit Payments (2,318,762) (2,318,762) 0

5. Administrative Expenses 0 (91,019) 91,019

6. Total Contributions 0 1,124,997 (1,124,997)

7. Expected Beginning of Current Year $30,034,663 $23,577,557 $6,457,106

8. Changes due to:

(a) Plan Changes 0 0 $0

(b) Assumptions 0 0 0

(c) Asset (Gain)/Loss 0 635,919 (635,919)

(d) Asset Valuation Method 0 0 0

(e) Change in Actuary 0 0 0

(f) Actuarial Experience (Gain)/Loss 178,223 0 178,223

(g) Total $178,223 $635,919 ($457,696)

9. Actual Beginning of Current Year $30,212,886 $24,213,476 $5,999,410

Page 17 – Brazos River Authority

Funding Results

The key results of the valuation are contained in this section, including:

• Actuarially Determined Contribution

Page 18 – Brazos River Authority

Funding Results

Development of Actuarially Determined Contribution

The recommended contribution is the annual amount necessary to fund the plan according to funding policies and/or applicable laws.

Funded Position

1. Actuarial accrued liability $30,212,886

2. Actuarial value of assets 24,213,476

3. Unfunded accrued liability, (1)-(2) $5,999,410

Employer Contributions

1. Normal Cost $0

2. Administrative expenses 0

3. Amortization of UAAL 1,027,118

4. Applicable interest to middle of the year 33,381

5. Total recommended contribution $1,060,499

As a percentage of current payroll N/A

Per ASOP No. 4, we reviewed the plan’s funding method, contribution policy, and the computation of the recommended contribution. We believe all to be reasonable as plan costs are expected to be fully funded over a reasonable timeframe.

.3

.1

.2

.1

.0

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

$1.60

M ill io n s

History of Recommended Contribution

Page 19 – Brazos River Authority

Data, Assumptions, and Plan Provisions

• Demographic Information

• Plan Provisions

• Assumptions and Methods

Page 20 – Brazos River Authority

Data, Assumptions, and Plan Provisions

Demographic Information

The foundation of a reliable actuarial report is the participant information provided by the plan sponsor. Monitoring trends in demographic information is crucial for long-term pension planning.

Participant Counts

Active Participants 46 43

Retired Participants 135 134

Beneficiaries 35 36

Disabled Participants 0 0

Terminated Vested Participants 98 100

Total Participants 314 313

Active Participant Demographics

Average Age 55.8 56.2

Average Service 24.3 25.5

Average Compensation N/A N/A

Total Covered Payroll N/A N/A

55.4 55.8 55.8 56.2

2022 2023 2024 2025

History of Average Active Participant Age

17.3% 16.6% 14.6% 13.7%

0%

5%

10%

15%

20%

2022 2023 2024 2025

History of Active Participant Ratio

Page 21 – Brazos River Authority

Demographic Information (continued)

Retiree Statistics

Average Age 72.8 73.6

Average Monthly Benefit $1,164 $1,150

Beneficiary Statistics

Average Age 70.5 71.7

Average Monthly Benefit $992 $1,052

Disabled Participant Statistics

Average Age N/A N/A

Average Monthly Benefit N/A N/A

Terminated Vested Participant Statistics

Average Age 58.6 59.7

Average Monthly Benefit $353 $325

Monitoring the average age of the population is important due to the relationship of actuarial cost to age. Generally speaking, an older population generates a higher actuarial cost.

Changes in the ratio of active to retired participants can be a significant driver of costs in a volatile asset market.

Page 22 – Brazos River Authority

Participant Reconciliation

Active

Terminated Vested

Disabled

Retired

Beneficiaries

Totals

Prior Year 46 98 0 135 35 314

Active

0 To Death

To Terminated Vested (3) 3

0 0 0 0

To Retired 0 0 0 0 0 0

To Terminated Non-Vested 0 0 0 0 0 0

Terminated Vested To Active 0 0 0 0 0 0

To Non-Participating 0 0 0 0 0 0

To Disabled 0 0 0 0 0 0

To Retired 0 (1) 0 1 0 0

To Survivor 0 0 0 0 0 0

To Lump Sum Cash-Out 0 0 0 0 0 0

To Death 0 0 0 0 0 0

Disabled To Death 0 0 0 0 0 0

Retired To Death 0 0 0 (2) 0 (2)

Survivor To Retired 0 0 0 0 0 0 To Death 0 0 0 0 (1) (1)

Additions 0 0 0 0 2 2

Departures 0 0 0 0 0 0

Current Year 43 100 0 134 36 313

Page 23 – Brazos River Authority

Active Participant Schedule

Active participant information grouped based on age and service.

Age Group

Years of Service

Under 1 1 to 4 5 to 9 10 to 14 15 to 19 20 to 24 25 to 29 30 to 34 35 to 39 40 & Up Total

Under 25

25 to 29

30 to 34

35 to 39 1 1

40 to 44 2 2

45 to 49 3 1 4

50 to 54 2 4 4 2 12

55 to 59 4 2 2 8

60 to 64 2 6 1 2 1 12

65 to 69 2 2 4

70 & up

Total 0 0 0 0 10 15 5 8 5 0 43

Page 24 – Brazos River Authority

Data, Assumptions, and Plan Provisions

Plan Provisions

Plan Effective Date

The plan was originally effective June 1, 1959 last restated effective October 25, 2010 and amended effective November 14, 2022.

Plan Year

12 consecutive month period beginning each March 1

Plan Status

Effective August 31, 1997 participants were given a onetime option to accrue benefits under the Defined Benefit Plan or the Defined Contribution Plan. The

Plan is closed to new entrants and credited service is frozen effective September 30, 2007. Compensation on or after January 1, 2008 will not be considered in determining a participants accrued benefit.

Eligibility for Participation

Any common law employee of Brazos River Authority, excluding any individual whose customary employment is less than 20 hours per week or 5 months per year, or is designated as a temporary or part-time employee. Employees will enter the plan on the first of the month following completion of 1 year of

Eligibility Service. No employee hire or rehired after September 30, 2007 will be eligible to participate in the Plan.

Accrual of Benefits

A participant shall accumulate a benefit payable at Normal Retirement Date based on Compensation as of the date of determination of the accrued benefit and benefit service earned as of the date of determination.

Benefits

Normal Retirement

Eligibility First of the month coincident or following age 65

Benefit For participants electing to retain their benefit on August 31, 1997.

The greater of (A) or (B)

(A) The sum of

(i) 1.75% of average monthly compensation time years of credited service, plus

(ii) 0.52% of the average monthly compensation in excess of the monthly covered compensation, multiplied by credited service up to 35 years.

Page 25 – Brazos River Authority

Plan Provisions (continued)

(B) The sum of

(i) 2.70% of average monthly compensation times years for credited service up to 22 years, plus

(ii) 0.52% of average monthly compensation multiplied by credited service in excess of 22 years (up to a maximum of 6 years), plus

(iii) 0.52% of average monthly compensation in excess of monthly covered compensation, multiplied by service up to 28 years.

For all others:

1.00% of average monthly compensation times years of credited service plus, for participants as of August 31, 1997 who do not elect to retain their benefit, the transition benefit amount.

Transition Benefit Amount: Determined as of November 30, 2010, the effective date of the termination of the

Defined Contribution Plan for Employees of Brazos River Authority. The amount is the excess of (a) over (b):

(a) Vested accrued benefit under the August 31, 1997, plan provisions using benefit service, average monthly compensation and covered compensation as of September 30, 2007

(b) The sum of

(i) Participants actual vested accrued benefit under the 1% formula above.

(ii) A monthly amount payable at Normal Retirement Age that is actuarially equivalent to the vested account balance under the Defined Contribution Plan for Employees of Brazos River

Authority

Early Retirement

Eligibility Age 55 and 15 years of vesting service, or age 62 and 10 years of vesting service. A terminated participant may grow into Early Retirement eligibility via age.

Benefit The Normal Retirement Benefit specified above, where components A(i), B(i) and B(ii) are adjusted by Schedule A and components A(ii) and B(iii) are adjusted by Schedule B.

Page 26 – Brazos River Authority

Years from Benefit Commencement to

Normal Retirement Date

Schedule A Schedule B

0 1.000 1.000

1 1.000 0.920

2 1.000 0.840

3 1.000 0.760

4 0.940 0.720

5 0.880 0.680

6 0.820 0.640

7 0.760 0.600

8 0.700 0.560

9 0.640 0.520

10 0.580 0.480

Late Retirement

Eligibility A participant continues in service beyond Normal Retirement Age.

Benefit The greater of A) the plan accrued benefit determined under the benefit formula, or B) the actuarial equivalent of the Normal Retirement Benefit as of Normal Retirement Age.

Disability

Eligibility Employment is terminated due to disability. A disabled participant is one who is in receipt of disability payments by the employer or its insurer because of sickness or injury under any long-term disability program maintained by the employer. Disability excludes sickness or injury arising from use of drugs, intoxicants, or narcotics; participation in fights, riots, civil insurrections or felony; service in the armed forces; any cause subsequent to termination of employment; any cause sustained due to employment for anyone other than Brazos River Authority; an act of war.

Benefit The benefit that would have been payable to the Participant had their employment continued through their Normal

Retirement Date at their currently monthly rate of compensation and under the plan provisions applicable on termination.

Page 27 – Brazos River Authority

Death before Retirement

Eligibility Death prior to commencement of any payment from the Plan.

Benefit For an active participant: the greater of

(i) The actuarial equivalent of the accrued benefit

(ii) 12 times current average monthly compensation, or if greater, compensation earned in the year preceding date of death

(iii) For any active participant who has attained age 45 and 5 years of vesting service, or age 55: 30 times current average monthly compensation, or if greater, compensation earned in the year preceding date of death

In no event will the benefit under (ii) or (iii) exceed 100 times the Participant’s expected monthly benefit at Normal

Retirement.

For an inactive Participant: the actuarial equivalent of the vested termination benefit.

For a disabled Participant: If death occurs prior to commencement of disability benefit, the death benefit payable to an active participant as if the Participant had remained active up to his date of death.

Termination Benefit

Eligibility Termination of a vested participant prior to early, normal or late retirement for a cause other than death or disability.

Benefit The vested accrued benefit payable as of the Normal Retirement Date. Alternatively, the participant may elect to receive the actuarially equivalent lump sum prior to early or normal retirement eligibility. No other optional forms are available prior to early or normal retirement eligibility.

Vesting

A Participant in the plan prior to August 31, 1997 who elected to remain under the Defined Benefit Plan will be fully vested upon 1) completion of 15 years of Vested Service, 2) attaining age 45 and the completion of 5 years of vesting service, 3) attainment of Normal Retirement Age. All other participants will be fully vested on attainment of 5 years of Vesting Service.

Page 28 – Brazos River Authority

Average Compensation

The highest average compensation determined over any 5 consecutive, complete calendar years of employment in the last 10 years divided by 60, or if fewer than 60, the actual number of months (or portions thereof) that the participant is paid Compensation.

Compensation is defined as W-2 compensation for the applicable calendar year, including any amounts that would have been included except for the effect of elections made pursuant to IRC Codes Sections 125, 132(f), 402(e)(3), 402(h), 403(b) or 457 and employee contributions treated as picked up under 414(h)(2). Compensation shall also include amounts deducted from gross wages for the value of lodging furnished by the employer.

Compensation will exclude any period of employment during which a) the employee works less than 20 hours per week, or less than 5 months per year, b) the employee is classified as temporary or part-time, c) employment for calendar years beginning on or after January 1, 2008, or d) any bonus designated as “non-retirement plan qualifying” bonus.

Compensation will be limited to the qualified plan limit under IRC §401(a)(17).

Credited Service

Vesting An aggregation of service totaling 12 months or 365 days. Fractional periods of a year are expressed in terms of days. No more than 12 continuous months of leave will be credited for vesting service. Vesting service shall include any periods of service continued for benefit accrual.

Benefit Accrual An aggregation of service totaling 12 months or 365 days. Fractional periods of a year are expressed in terms of days.

Credited service will include any leave grated for qualified military service, and exclude any complete month for which no compensation was paid to the employee. Credited service will exclude service after September 30, 2007.

Eligibility An aggregation of service totaling 12 months or 365 days. Fractional periods of a year are expressed in terms of days. Eligibility service will include any leave grated for qualified military service, and exclude any complete month for which no compensation was paid to the employee. Eligibility service will exclude service after September 30, 2007.

Employee Contributions

Employee contributions are not required or permitted.

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Covered Compensation

The monthly average of the Code Section 401(1)(5)(E) “Covered Compensation” that applies to an individual who attains their Social Security Normal

Retirement Age in the year of a participant’s termination or retirement, to Normal Retirement Age, if earlier, rounded to the nearest $50. For valuation dates after September 30, 2007, the applicable Covered Compensation amount for participants who are not past their Normal Retirement

Date is $4,300.

Payment Forms

Normal Form Single life annuity

Optional Forms Certain and life with guaranteed years a multiple of 5; 50%, 66 2/3%, 75% or 100% Joint and Survivor; 50%, 66 2/3% or 75% Contingent Annuitant; 10, 15 or 20 year certain. A lump sum of up to $20,000. Any of the Joint and Survivor or Contingent Annuity forms can also have a 10-, 15-, or 20-year certain feature added.

Actuarial Equivalence

For converting accrued benefit into optional annuity forms: 1983 Group Annuity Gender Neutral Mortality and 7.50%

For late retirement increases: No mortality and 7.50%

Plan Provisions Not Included

We are not aware of any plan provisions not included in the valuation.

Adjustments Made for Subsequent Events

We are not aware of any event following the measurement date and prior to the date of this report that would materially impact the results of this report.

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Assumptions

Except where otherwise indicated, the following assumptions were selected by the plan sponsor with the concurrence of the actuary.

Valuation Date March 1, 2025

Participant and Asset Information Collected as of March 1, 2025

Cost Method Unit Credit Method

Amortization Method Amortization period changed from a 30-year closed amortization period as of March 1, 2009 to a 20-year closed amortization period as of March 1, 2012. As of March 1, 2025 there are 7 years remaining in the amortization period.

Asset Valuation Method Effective March 1, 2009, Market Value with gains and losses smoothed over a 5-year period.

Prior to March 1, 2009, all assets were valued at Market Value.

Interest Rates (CO) 6.50%.

This rate has been set by the plan sponsor in conjunction with their asset advisor.

Expense and/or Contingency Loading (FE) None

Annual Pay Increases (FE) Not applicable

Mortality Rates (FE)

Healthy PubG-2010 Mortality Table with Scale MP-2021

Disabled PubG-2010 Disabled Mortality Table with Scale MP-2021

As the plan is not large enough to have credible experience, mortality assumptions are set to reflect general population trends.

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Assumptions (continued)

Retirement Rates (FE) Age Rates

55-60 7.0%

61-69 15.0%

70+ 100.0%

As the plan is not large enough to have credible experience, retirement rates are based on professional judgement and expectation for the general population adjusted as necessary for the specific provisions of the plan.

Disability Rates (FE) Age Male Rates Female Rates

25 .038% .047%

30 .048% .080%

35 .069% .136%

40 .117% .211%

45 .202% .323%

50 .358% .533%

55 .722% .952%

60 1.256% 1.159%

65 1.753% 1.358%

As the plan is not large enough to have credible experience, disability rates are set to reflect general population trends.

Withdrawal Rates (FE) Age Rates

25 19.5%

30 15.5%

35 12.1%

40 9.4%

45 7.3%

50 5.6%

55 4.2%

60 3.0%

65 1.9%

As the plan is not large enough to have credible experience, turnover rates are set to reflect general population trends.

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Assumptions (continued)

Payment Form (FE) Life annuity only

Marital Status and Ages (FE) 100% of Participants assumed to be married with wives assumed to be 3 years younger than husbands.

Cost of Living None assumed

Changes Since Prior Valuation None

FE indicates an assumption representing an estimate of future experience

MD indicates an assumption representing observations of estimates inherent in market data

CO indicates an assumption representing a combination of an estimate of future experience and observations of market data

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Other Measurements

• Net Asset Information: Statement of Plan Net Assets

• Net Asset Information: Statement of Changes in Plan Net Assets

• Low-Default-Risk Obligation Measure (LDROM)

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Net Asset Information: Statement of Plan Net Assets

Assets

Cash and Deposits $203,817 $210,932

Receivables

Investment Income $15,487 $17,991

Other 13,972 0

Total Receivables $29,459 $17,991

Investments

Domestic Equities $9,827,872 $10,108,465

International Equities 3,538,118 3,682,261

Fixed Income 5,075,507 6,077,781

Real Estate 1,078,957 1,002,527

Limited Partnership – Hedge Fund 2,485,981 2,629,388

Limited Partnership 1,546,396 1,333,542

Total Investments $23,552,831 $24,833,964

Total Assets $23,786,107 $25,062,887

Liabilities

Payables

Investment Management Fees $7,846 $7,525

Other 5,263 0

Total Payables $13,109 $7,525

Total Liabilities $13,109 $7,525

Market Value of Assets Available for Pension Benefits $23,772,998 $25,055,362

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Net Asset Information: Statement of Changes in Plan Net Assets

Additions

Contributions $1,197,007 $1,124,997

Net Investment income

Interest $44,013 $72,862

Dividends 477,117 559,863

Net appreciation/depreciation in fair value of investments 2,687,953 1,934,423

Net investment income $3,209,083 $2,567,148

Other $0 $0

Total additions $4,406,090 $3,692,145

Deductions

Benefit payments $2,299,856 $2,318,762

Administrative expenses 83,375 91,019

Total $2,383,231 $2,409,781

Net increase $2,022,859 $1,282,364

Net assets held in trust for benefits

Beginning of the year $21,750,139 $23,772,998

End of the year $23,772,998 $25,055,362

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Low-Default-Risk Obligation Measure (LDROM)

For reports issued after February 15, 2023 the Plan’s actuary is generally required to disclose liabilities under an alternative low-default-risk based discount rate.

This LDROM liability measure represents the estimated asset value as of the measurement date the Plan would need in order to purchase a low-default-risk fixed income securities portfolio with durations that are reasonably consistent with the timing of benefits expected to be paid from the plan.

LDROM liability ($34,018,627)

Market value of assets 25,055,362

LDROM funded status ($8,963,265)

The LDROM liability and funded status is for informational purposes only. The plan sponsor has no requirements to contribute to the Plan to meet this threshold.

The LDROM funding target could reasonably be viewed as the assets needed to immunize the Plan against investment risk. If Plan assets are not funded to this level, it does not necessarily mean the security of participant benefits is at risk. If Plan assets are invested to earn in excess of a fixed income portfolio, future investment returns could make up the underfunding. If the plan is fully-funded, or nearly fully-funded, on the LDROM measure, the plan sponsor may want to consider reducing investment risk in order to offer greater benefit security and lower contribution volatility.

The above LDROM liability measure applies a single effective discount rate of 5.18%. This is the single effective discount rate that would produce approximately the same discounted cashflows as the FTSE Pension Liability Curve as of February 28, 2025. All other data, assumptions, methods and provisions are the same as those detailed in this report.