HomeMy WebLinkAboutAgenda Police Pension 061914 (Special Meeting) Agenda
City of Palm Beach Gardens Police Officers’
Pension Fund
SPECIAL MEETING OF JUNE 19, 2014
LOCATION: City Council Chambers’
10500 North Military Trail
Palm Beach Gardens, FL 33410
TIME: 9 AM
1. Call Meeting To Order
2. Roll Call:
• Jay Spencer, Chairman
• David Pierson, Secretary
• Brad Seidensticker, Trustee
• Marc Glass, Trustee
3. Presentation of the 9/30/2013 Actuarial Valuation Report – Pete Strong
(GRS)
4. Other Business
• Update on Ordinance 9, 2014 & Impact Statement
5. Public Comments
6. Adjourn
Next Meeting Date:
To be determined
PLEASE NOTE:
Should any interested party seek to appeal any decision of this Board with respect to any matter considered at such meeting or hearing, s/he
will need a record of the proceedings and for such purpose may need to ensure that a verbatim record of the proceedings is made, which
record includes the testimony and evidence upon which the appeal is to be based.
In accordance with the Americans With Disabilities Act of 1990, persons needing a special accommodation to participate in this meeting
should contact the The Pension Resource Center, LLC no later than four days prior to the meeting.
1 ORDINANCE 9, 2014
2 ,
3
4 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM
5 BEACH GARDENS, FLORIDA AMENDING CHAPTER 50. POLICE.
6 OF THE CODE OF ORDINANCES OF THE CITY OF PALM BEACH
7 GARDENS, FLORIDA AT ARTICLE III. POLICE OFFICERS'
8 RETIREMENT TRUST FUND. BY REPEALING SUBSECTION 50-
9 62(c) AND READOPTING SAME, AS REVISED; BY REPEALING
10 SECTION 50 -116. NORMAL RETIREMENT. AND READOPTING
11 SAME, AS REVISED; AND BY REPEALING SECTION 50 -151.
12 ELIGIBILITY TO PARTICIPATE. AND READOPTING SAME, AS
13 REVISED IN ORDER TO IMPLEMENT THE TERMS OF THE
14 COLLECTIVE BARGAINING AGREEMENT BETWEEN THE CITY
15 OF PALM BEACH GARDENS AND THE PALM BEACH COUNTY
16 POLICE BENEVOLENT ASSOCIATION; PROVIDING THAT EACH
17 AND EVERY OTHER SECTION AND SUB - SECTION OF CHAPTER
18 50. POLICE. SHALL REMAIN IN FULL FORCE AND EFFECT AS
19 PREVIOUSLY ADOPTED; PROVIDING A CONFLICTS CLAUSE, A
20 SEVERABILITY CLAUSE, AND AUTHORITY TO CODIFY;
21 PROVIDING AN EFFECTIVE DATE; AND FOR OTHER PURPOSES.
22
23
24 WHEREAS, the City of Palm Beach Gardens and the Palm Beach County Police
25 Benevolent Association recently entered into a collective bargaining agreement; and
26
27 WHEREAS, the collective bargaining agreement contains certain changes to the
28 Police Officers' Retirement Trust Fund; and
29
30 WHEREAS, to implement the collective bargaining agreement it is necessary to
31 amend the Police Officers' Retirement Trust Fund Ordinance; and
32
33 WHEREAS, the City Council deems approval of this Ordinance to be in the best
34 interests of the health, safety, and welfare of the residents and citizens of the City of
35 Palm Beach Gardens and the public at large.
36
37
38 NOW, THEREFORE, BE IT ORDAINED BY THE CITY OF COUNCIL OF THE
39 CITY OF PALM BEACH GARDENS that:
40
41 SECTION 1. The foregoing recitals are hereby affirmed and ratified.
42
43 SECTION 2. Chapter 50. Police. of the Code of Ordinances of the City of Palm
44 Beach Gardens, Florida is hereby amended at Article 111. Police Officers' Retirement
45 Trust Fund. by repealing subsection 50 -62(c) and readopting same, as revised;
46 providing that Section 50 -62. shall hereafter read as follows:
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Ordinance 9, 2014
Sec. 50 -62. Establishment and maintenance of retirement system.
(a) — (b) (These subsections shall remain in full force and effect as previously
adopted.)
(c) The fund shall be maintained in the following manner:
(1) By payment to the fund of the new proceeds of the 0.85 percent excise tax
which may be imposed by the city upon certain casualty insurance
companies on their gross receipts of premiums from holders of policies,
which policies cover property within the corporate limits of the city as
authorized in Chapter 185, Florida Statutes, as amended.
(2) By payment to the fund of eight and sixty one hundredths percent (8.60 %)
of the salary of each full-time police officer duly appointed and enrolled as a
member of the city police department; which eight and sixty one hundredths
percent (8.60 %) shall be deducted by the city from the compensation due to
the police officer and paid over to the board of trustees of the pension fund
immediately. Notwithstanding the preceding sentence, effective June 5,
2014, the police officer contribution shall be increased by eleven percent
(11 %) of salary (equal to a total increase of $538,552 for all contributing
police officers). Also effective on June 5, 2014, and immediately following
the increase in the police officer contribution provided in the preceding
sentence, the police officer contribution shall be reduced back to eight and
sixty one hundredths percent (8.60 %) of salary, using $538,552 from the
Accumulated Excess Chapter 185 Premium Tax Reserve to fund the
reduction in police officer contributions. In implementing the foregoing, no
police officer shall be required to contribute more than eight and sixty one
hundredths percent (8.60 %) of salary to the Plan, and the City's annual
pension contribution requirement for the 2013 -14 plan year shall be reduced
by an amount equal to $538,552.
(3) By all fines and forfeitures imposed and collected from any police officer
because of the violation of any rule and regulation promulgated by the board
of trustees.
(4) By mandatory payment annually by the city and other sources of a sum
equal to the normal costs and amount required to fund over a 30 -year basis
any actuarial deficiency shown by a triennial actuarial valuation. The first
such actuarial valuation shall be conducted for the year ending September
30, 1986.
(5) By all gifts, bequests, and devises when donated to the fund.
Page 2 of 6
Ordinance 9, 2014
1. (6) By all accretions to the fund by way of interest or dividends on bank
2 deposits, or otherwise.
3
4 (7) By all other sources or income now or hereafter authorized by law for the
5 augmentation of the pension fund.
6
7 (d) (This subsection shall remain in full force and effect as previously adopted.)
8
9 SECTION 3. Chapter 50. Police. of the Code of Ordinances of the City of Palm
10 Beach Gardens, Florida is hereby amended at Article III. Police Officers' Retirement
11 Trust Fund by repealing Section 50 -116. Normal Retirement. and readopting same, as
12 revised; providing that Section 50 -116. shall hereafter read as follows:
13
14 Sec. 50 -116. Normal retirement.
15
16 (a) Date. A member's normal retirement date shall be upon the attainment of age fifty -
17 two (52), provided the officer has at least ten (10) years of service, or upon completion
18 of twenty (20) years of service, regardless of age. Notwithstanding the preceding
19 sentence, for police officers with less than ten (10) years of creditable service on
20 September 13, 2012, and police officers hired on or after that date, the normal
21 retirement date shall be upon the attainment of age fifty -nine (59) and at least ten (10)
22 years of creditable service, and effective July 1, 2016, the normal retirement date for
23 police officers with less than ten (10) years of creditable service on September 13,
24 2012 and police officers hired on or after that date, shall be age fifty -five (55) with at
25 least ten (10) years of creditable service, or twenty- five'(25) years of creditable service
26 regardless of age.
27
28 (b) Benefit. The monthly amount of normal retirement benefit payable to a police
29 officer who retires on the normal retirement date shall be an amount equal to 3.5
30 percent multiplied by the number of years of credited service, up to a maximum of one
31 hundred (100) percent, multiplied by average monthly earnings. Notwithstanding the
32 preceding sentence, for police officers who are employed and have not attained the
33 normal retirement date prior to September 13, 2012, the monthly amount of normal
34 retirement benefit payable to a police officer who retires on or after the normal
35 retirement date shall be an amount equal to 3.5 percent multiplied by the number of
36 years of credited service prior to September 13, 2012 the — effeetive date of this
37 erd+eaRGe, plus 2.75 percent multiplied by the number of years of credited service on
38 and after September 13, 2012 the e#e^tiye Elmo of this GFdinan%, up to a maximum of
39 seventy -five (75) percent, multiplied by the police officer's average monthly earnings;
40 and for police officers hired on or after September 13, 2012 the- e#estive date --o of
41 efd+nanGe, the monthly amount of normal retirement benefit payable to a police officer
42 who retires on or after the normal retirement date shall be an amount equal to 2.75
43 percent multiplied by the number of years of credited service on and after September
44 13, 2012 the - effective date of this eFdin,nno, up to a maximum of seventy -five (75)
45 percent, multiplied by the police officer's average monthly earnings. In no event will the
46 benefit paid be less than two (2) percent per year of service.
Page 3 of 6
Ordinance 9, 2014
1 (c) Payment. A retired police officer's retirement benefit normally shall be payable in
2 the form of a monthly life annuity with one hundred twenty (120) monthly payments
3 guaranteed. This form of annuity provides for a retirement benefit payable monthly to
4 the retired employee during their lifetimes with a guarantee that not less than one
5 hundred twenty (120) monthly retirement benefits shall be paid, even if the retired
6 employee dies prior to the receipt of one hundred twenty (120) payments.
7
8 SECTION 4. Chapter 50. Police. of the Code of Ordinances of the City of Palm
9 Beach Gardens, Florida is hereby amended at Article III. Police Officers' Retirement
10 Trust Fund by repealing Section 50 -151. Eligibility to Participate. and readopting same,
11 as revised; providing that Section 50 -151. shall hereafter read as follows:
12
13 Sec. 50 -151. Eligibility to participate.
14
15 (a) Any member who is eligible to receive a normal retirement pension may enter into
16 the (DROP) for no more than five (5) years. Members shall elect to participate by
17 applying to the board of trustees on a form provided for that purpose.
18
19 (b) Election to participate shall be forfeited if not exercised within the first twenty -five
20 (25) years of credited service. Notwithstanding the preceding sentence, effective July 1,
21 2016, a member who becomes eligible to participate in the DROP may delay the
22 election to participate in the DROP until such time as the member has accrued the
23 maximum benefit percentage of seventy -five (75) percent. For members who delay the.
24 election to participate in the DROP in accordance with the preceding sentence, the
25 election to participate in the DROP shall be forfeited if not exercised within thirty (30)
26 days following the date on which the member has accrued the maximum benefit
27 percentage of seventy -five (75) percent.
28
29 (c) A member shall not participate in the DROP beyond the time of attaining thirty (30)
30 years of service. Notwithstanding the preceding sentence, effective July 1, 2016, a
31 member who delays the election to participate in the DROP until such time as the
32 member has accrued the maximum benefit percentage of seventy -five (75) percent may
33 participate in the DROP for a maximum of five (5) years from the date of entry into the
34 DROP.
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(d) Upon a member's election to participate in the DROP, he shall cease to be a
member, and is precluded from accruing any additional benefit under the pension fund.
For all fund purposes, the member becomes a retirant. The amount of credited service
and final average monthly earnings freeze as of the date of entry into the DROP.
SECTIONS. All ordinances or parts of ordinances in conflict be and the same
are hereby repealed.
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Ordinance 9, 2014
1 SECTION 6. Should any section or provision of this Ordinance or any portion
2 thereof, any paragraph, sentence, or word be declared by a Court of competent
3 jurisdiction to be invalid, such decision shall not affect the validity of the remainder of
4 this Ordinance.
5
6 SECTION 7. Specific authority is hereby given to codify this Ordinance.
7
8 SECTION 8. This Ordinance shall become effective immediately upon adoption.
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Ordinance 9, 2014
1 PASSED this day of , 2014, upon first reading.
2
3 PASSED AND ADOPTED this day of 2014, upon
4 second and final reading.
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7 CITY OF PALM BEACH GARDENS FOR
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10 BY:
11 Robert G. Premuroso, Mayor
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14 Eric Jablin Vice Mayor,
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17 Joseph R. Russo, Councilmember
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20 Marcie Tinsley, Councilmember
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23 David Levy, Councilmember
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26 ATTEST:
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29 BY:
30 Patricia Snider, CMC, City Clerk
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33 APPROVED AS TO FORM AND
34 LEGAL SUFFICIENCY
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37 BY:
38 R. Max Lohman, City Attorney
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47 G:lattorney_ share \OR DINANCES120141Ordinance 9 2014 - PBG Police Pension.docx
Page 6 of 6
AGAINST ABSENT
CITY OF PALM BEACH GARDENS POLICE OFFICERS’ PENSION FUND
ACTUARIAL VALUATION REPORT AS OF OCTOBER 1, 2013
ANNUAL EMPLOYER CONTRIBUTION FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2015
TABLE OF CONTENTS
Section Title Page
A Discussion of Valuation Results
1. Discussion of Valuation Results 1
2. Chapter Revenue 4
B Valuation Results
1. Participant Data 5
2. Annual Required Contribution 6
3. Actuarial Value of Benefits and Assets 7
4. Calculation of Employer Normal Cost 8
5. Liquidation of Unfunded Actuarial Accrued
Liability 9
6. Actuarial Gains and Losses 11
7. Recent History of Required and Actual
Contributions 15
8. Actuarial Assumptions and Cost Method 16
9. Glossary of Terms 20
C Pension Fund Information
1. Statement of Plan Assets at Market Value 23
2. Reconciliation of Plan Assets 24
3. Reconciliation of DROP Accounts 25
4. Calculation of Actuarial Value of Assets 26
5. Investment Rate of Return 27
D Financial Accounting Information
1. FASB No. 35 28
2. GASB No. 25 29
3. GASB No. 27 31
4. GASB No. 67 33
E Miscellaneous Information
1. Reconciliation of Membership Data 44
2. Active Participant Distribution 45
3. Inactive Participant Distribution 46
F Summary of Plan Provisions 47
SECTION A
DISCUSSION OF VALUATION RESULTS
1
DISCUSSION OF VALUATION RESULTS
Comparison of Required Employer Contributions
A comparison of the required employer contribution developed in this year's actuarial valuation and
the previous valuation is as follows.
Required Employer/State Contribution $3,194,990 $3,125,279 $69,711
As % of Covered Payroll 62.10 %60.62 %1.48 %
Allowable Credit for State Contribution $412,644 *$412,644 *$0
As % of Covered Payroll 8.02 %8.00 %0.02 %
Required Employer Contribution $2,782,346 $2,712,635 $69,711
As % of Covered Payroll 54.08 %52.62 %1.46 %
For FYE 9/30/2015 For FYE 9/30/2014
Based on
10/1/2012
Based on
10/1/2013
Valuation Valuation (Decrease)
Increase
The required employer contribution has been adjusted for interest on the basis that contributions are
made in equal payments at the end of each quarter.
The contribution has also been computed under the assumption that the amount to be received from
the State on behalf of police officers and credited towards the required contribution in 2014 and 2015 will be
the same as the prior base amount of $412,644. If the actual amount differs from this amount, then the net
City contribution should be adjusted by the difference.
Actual employer and allowable State contributions during the year ending September 30, 2013 were
$2,700,762 and $412,644, respectively, for a total of $3,113,406. The annual required contribution was
$3,113,406.
2
Revisions in Benefits
There have been no changes in benefits since the prior valuation.
Revisions in Actuarial Assumptions or Methods
The investment return assumption was lowered from 7.3% to 7.2%. This rate will continue to be
lowered by 0.1% each year until 6.5% is reached. This change has increased the required employer
contribution by 2.06% of covered payroll. There have been no other changes in assumptions or methods
since the prior valuation.
Actuarial Experience
There was a net actuarial gain of $151,072 for the year, which means that actual experience was
more favorable than expected. The gain is due to lower than expected salary increases (actual average
salary increases were 4.8% versus assumed salary increases of 7.5%) and gains due to recognized
investment return above the assumed rate of 7.3%. The gain was partially offset by more retirements
(DROP entries) than expected. The investment return was 14.2% based on market value of assets and
8.4% based on actuarial value of assets. The net actuarial gain has decreased the required employer
contribution by 0.34% of covered payroll.
Funded Ratio
This year’s funded ratio is 69.9% compared to 69.1% last year. The funded ratio was 70.7% before
the change in the investment return assumption. The ratio is equal to the actuarial value of assets divided by
the actuarial accrued (past service) liability.
Analysis of Change in Employer Contribution
The components of change in the employer contribution rate are as follows:
Contribution rate last year 52.62 %
Change in assumptions 2.06
Payment on unfunded liability 0.71
Experience (gain)/loss (0.34)
Change in Normal Cost Rate (0.78)
Change in administrative expense (0.17)
Change in State revenue (0.02)
Contribution rate this year 54.08
3
Variability of Future Contribution Rates
The Actuarial Cost Method used to determine the contribution rate is intended to produce
contribution rates which are generally level as a percent of payroll. Even so, when experience differs
from the assumptions, as it often does, the employer’s contribution rate can vary significantly from year-
to-year.
Over time, if the year-to-year gains and losses offset each other, the contribution rate would be
expected to return to the current level, but this does not always happen.
The Market Value of Assets exceeds the Actuarial Value of Assets by $2,459,102 as of the
valuation date (see Section C). This difference will be gradually recognized in the absence of offsetting
losses. In turn, the computed employer contribution rate will decrease by approximately 5.4% of covered
payroll.
Another area of variability has to do with the annual payment on the unfunded accrued liability
(UAL). This payment is computed as a level percent of covered payroll under the assumption that
covered payroll will rise by 5% per year. According to Chapter 112, Florida Statutes, this payroll growth
assumption may not exceed the average growth over the last ten years, which was (1.99%) during the ten-
year period ending September 30, 2013 and (1.26%) during the ten-year period ending September 30,
2012. Therefore, the UAL is again being amortized as a level dollar amount this year.
Relationship to Market Value
If Market Value had been the basis for the valuation, the required net City contribution rate would
have been 48.64% and the funded ratio would have been 73.15%. The market value-based funded ratio
was 68.1% last year. In the absence of other gains and losses, and before recognition of the additional
phase-in of the change in the investment return assumption, the City contribution rate should decrease to
that level over the next few years.
Conclusion
The remainder of this Report includes detailed actuarial valuation results, financial information,
miscellaneous information and statistics, and a summary of plan provisions.
4
CHAPTER REVENUE
Additional premium tax revenue over that received in 1998 may be used toward the required
contribution if it is less than the cost to fund Chapter minimum benefits. Once minimums are met and
additional premium tax revenue exceeds the cost to fund Chapter minimum benefits, any subsequent
additional Chapter revenue must be used to provide extra benefits.
As of the valuation date, the only minimum benefit requirement not currently being met is the
Normal Retirement eligibility for members with less than 10 years of services as of September 13,
2012.
1.Base Amount Previous Plan Year $412,644
2.Amount Received for Previous Plan Year 475,215
3.Benefit Improvements Made in Previous Plan Year 0
4.Excess Funds for Previous Plan Year: (2) - (1) - (3)62,571
5.Accumulated Excess at Beginning of Previous Year 538,552
6.Prior Excess Used in Previous Plan Year 0
7.Accumulated Excess as of Valuation Date
(Available for Benefit Improvements): (4) + (5) - (6)601,123
8.Base Amount This Plan Year: (1) + (3)412,644
Actuarial Confirmation of the Use of State Chapter Money
The Accumulated Excess shown in line 7 is being held in reserve to pay for additional benefits.
The reserve is subtracted from Plan assets (see Section C of this Report). The Base Amount in line 8 is the
former maximum amount the employer has historically taken as a credit against its required contribution; in
no event may the employer take credit for more than the actual amount of Chapter revenue received.
SECTION B
VALUATION RESULTS
5
ACTIVE MEMBERS
Number 75 74
Covered Annual Payroll $4,899,915 $4,910,023
Average Annual Payroll $65,332 $66,352
Average Age 39.1 40.2
Average Past Service 10.3 10.7
Average Age at Hire 28.8 29.5
RETIREES, BENEFICIARIES & DROP*
Number 57 54
Annual Benefits $4,179,994 $3,934,797
Average Annual Benefit $73,333 $72,867
Average Age 55.2 54.8
DISABILITY RETIREES
Number 10 10
Annual Benefits $272,822 $272,822
Average Annual Benefit $27,282 $27,282
Average Age 57.2 56.2
TERMINATED VESTED MEMBERS
Number 2 1
Annual Benefits $124,164 $49,452
Average Annual Benefit $62,082 $49,452
Average Age 42.7 41.0
* Does not include deferred supplemental benefits for DROP members
PARTICIPANT DATA
October 1, 2013 October 1, 2012
6
A.Valuation Date October 1, 2013 October 1, 2013
B.ARC to Be Paid During
Fiscal Year Ending 9/30/2015 9/30/2015 9/30/2014
C.Assumed Dates of Employer
Contributions Quarterly Quarterly Quarterly
D.Annual Payment to Amortize
Unfunded Actuarial Liability $1,991,364 $1,918,464 $1,905,316
E.Employer Normal Cost 923,576 898,365 944,743
F.ARC if Paid on the Valuation
Date: D+E 2,914,940 2,816,829 2,850,059
G.ARC Adjusted for Frequency of
Payments 3,042,673 2,941,924 2,976,630
H.ARC as % of Covered Payroll 62.10 %60.04 %60.62 %
I.Assumed Rate of Increase in Covered
Payroll to Contribution Year 5.00 %5.00 %5.00 %
J.Covered Payroll for Contribution Year 5,144,911 5,144,911 5,155,524
K.ARC for Contribution Year: H x J 3,194,990 3,089,005 3,125,279
L.Allowable Credit for State Revenue in
Contribution Year 412,644 *412,644 *412,644 *
M.Required Employer Contribution (REC)
in Contribution Year 2,782,346 2,676,361 2,712,635
N.REC as % of Covered Payroll in
Contribution Year: M ÷ J 54.08 %52.02 %52.62 %
ANNUAL REQUIRED CONTRIBUTION (ARC)
After Change Before Change
October 1, 2012
7
A.Valuation Date October 1, 2013 October 1, 2013 October 1, 2012
B.Actuarial Present Value of All Projected
Benefits for
1.Active Members
a. Service Retirement Benefits $ 26,465,192 $ 25,943,789 $ 26,846,938
b. Vesting Benefits 1,194,728 1,167,208 1,217,271
c. Disability Benefits 4,314,995 4,234,288 4,133,242
d. Preretirement Death Benefits 436,427 427,981 457,605
e. Return of Member Contributions 22,950 22,906 14,349
f. Total 32,434,292 31,796,172 32,669,405
2.Inactive Members
a. Service Retirees & Beneficiaries 52,641,668 52,123,919 48,572,874
b. Disability Retirees 2,894,330 2,871,233 2,920,636
c. Terminated Vested Members 820,252 805,368 279,574
d. Total 56,356,250 55,800,520 51,773,084
3. Total for All Members 88,790,542 87,596,692 84,442,489
C.Actuarial Accrued (Past Service)
Liability per GASB No. 25 76,093,054 75,256,736 72,156,731
D.Actuarial Value of Accumulated Plan
Benefits per FASB No. 35 73,313,409 72,493,271 70,152,684
E.Plan Assets
1.Market Value 55,660,784 55,660,784 49,144,436
2. Actuarial Value 53,201,682 53,201,682 49,859,298
F.Unfunded Actuarial Accrued Liability: C - E2 22,891,372 22,055,054 22,297,433
G.Actuarial Present Value of Projected
Covered Payroll 54,983,080 54,565,653 52,548,809
H.Actuarial Present Value of Projected
Member Contributions 4,728,545 4,692,646 4,519,197
I.Accumulated Value of Contributions
for Active Members 4,089,690 4,089,690 4,190,494
J.Funded Ratio: E2 ÷ C 69.9%70.7%69.1%
ACTUARIAL VALUE OF BENEFITS AND ASSETS
Before ChangeAfter Change
8
CALCULATION OF EMPLOYER NORMAL COST
A.Valuation Date October 1, 2013
After Change Before Change
B.Normal Cost for
1.Service Retirement Benefits $868,732 $849,088 $887,980
2.Vesting Benefits 88,474 86,690 89,091
3.Disability Benefits 239,706 236,191 230,964
4.Preretirement Death Benefits 22,828 22,489 25,544
5.Return of Member Contributions 9,941 10,012 9,859
6.Total for Future Benefits 1,229,681 1,204,470 1,243,438
7.Assumed Amount for Administrative
Expenses 115,288 115,288 123,567
8.Total Normal Cost 1,344,969 1,319,758 1,367,005
9.Total as a % of Covered Payroll 27.45%26.93%27.84%
C.Expected Member Contribution 421,393 421,393 422,262
D.Employer Normal Cost: B8-C 923,576 898,365 944,743
E.Employer Normal Cost as a % of
Covered Payroll 18.85%18.33%19.24%
October 1, 2012October 1, 2013
9
LIQUIDATION OF THE UNFUNDED ACTUARIAL ACCRUED LIABILITY
A. UAAL Amoritzation Period and Payments
Amortization
Period Years
Years (Years)Amount Remaining Amount After Change Before Change
7/1/1986 30 4,147$ 3 921$ 329$ 329$
10/1/1991 30 (1,504)8 (770)(121)(122)
10/1/1991 30 286,223 8 145,922 22,973 23,040
10/1/1992 30 122,611 9 68,372 9,873 9,905
10/1/1993 30 (194,444)10 (117,958)(15,812)(15,870)
10/1/1995 30 796,975 12 667,019 79,176 79,522
10/1/1996 30 (189,977)13 (174,106)(19,654)(19,746)
10/1/2000 30 3,639,273 17 4,080,756 395,317 397,668
10/1/2005 30 975,210 22 1,090,986 93,538 94,220
10/1/2005 30 5,273,728 22 5,899,817 505,834 509,521
10/1/2006 30 12,571,515 23 13,718,676 1,154,755 1,163,450
10/1/2007 15 (251,668)9 (198,606)(28,678)(28,773)
10/1/2008 15 3,319,494 10 2,763,667 370,457 371,816
10/1/2009 15 (137,951)11 (118,074)(14,835)(14,895)
10/1/2010 15 348,981 12 308,936 36,671 36,831
10/1/2011 15 (718,288)13 (651,846)(73,582)(73,929)
10/1/2011 15 847,054 13 768,701 86,773 87,182
10/1/2011 15 (6,706,717)13 (6,086,344)(687,046)(690,278)
10/1/2012 15 (751,599)14 (735,758)(79,424)(79,823)
10/1/2012 15 792,519 14 775,815 83,748 84,169
10/1/2013 15 (151,072)15 (151,072)(15,669)(15,753)
10/1/2013 15 836,318 15 836,318 86,741 N/A
20,710,828$ 22,891,372$ 1,991,364$ 1,918,464$
Original UAAL Current UAAL
Payment
10
B. Amortization Schedule
The UAAL is being amortized as a level percent of payroll, but is currently being amortized as a level
dollar amount due to 10-year historical average payroll growth rate. The expected amortization schedule is
as follows:
2013 $22,891,372
2014 22,404,809
2015 21,883,213
2016 21,324,062
2017 20,725,005
2018 20,082,815
2023 16,138,622
2028 11,537,735
2033 4,395,287
2036 0
Year Expected UAAL
Amortization Schedule
11
ACTUARIAL GAINS AND LOSSES
The assumptions used to anticipate mortality, employment turnover, investment income, expenses,
salary increases, and other factors have been based on long range trends and expectations. Actual
experience can vary from these expectations. The variance is measured by the gain and loss for the period
involved. If significant long term experience reveals consistent deviation from what has been expected and
that deviation is expected to continue, the assumptions should be modified. The net actuarial gain (loss) for
the past year is computed as follows:
1.Last Year's UAAL $22,297,433
2.Last Year's Employer Normal Cost 1,367,005
3.Last Year's Contributions 3,113,406
4. Interest at the Assumed Rate on:
a.1 and 2 for one year 1,727,504
b.3 from dates paid 72,410
c. a - b 1,655,094
5.This Year's Expected UAAL Prior to Revision:
1 + 2 - 3 + 4c 22,206,126
6.Change in UAAL Due to Plan Amendments
and/or Changes in Actuarial Assumptions 836,318
7.This Year's Expected UAAL: 5 + 6 23,042,444
8.This Year's Actual UAAL 22,891,372
9.Net Actuarial Gain (Loss): 7 - 8 151,072
10.Gain (Loss) Due to Investments 614,775
11.Gain (Loss) from Other Sources (463,703)
12
Experience gains/losses for the past few years are as follows:
Year Ending
September 30 Gain (Loss)
1996 $(284,232)
1997 (994,552)
1998 (674,477)
1999 (424,754)
2000 68,592
2001 (435,534)
2002 (2,162,823)
2003 (949,324)
2004 (246,347)
2005 (1,006,694)
2006 (1,517,294)
2007 251,668
2008 (3,319,494)
2009 137,951
2010 (348,981)
2011 718,288
2012 751,599
2013 151,072
13
The fund earnings and salary increase assumptions have considerable impact on the cost of the Plan
so it is important that they are in line with the actual experience. The following table shows the actual fund
earnings and salary increase rates compared to the assumed rates for the last few years:
Year Ending
9/30/1990 9.1 %8.0 %9.1 %6.5 %
9/30/1991 8.6 8.0 9.5 6.5
9/30/1992 8.2 8.0 10.9 6.5
9/30/1993 8.8 8.0 14.1 6.5
9/30/1994 2.4 8.0 0.6 6.5
9/30/1995 18.2 8.0 12.8 6.5
9/30/1996 5.2 8.0 3.6 6.5
9/30/1997 10.3 8.0 11.5 *6.5
9/30/1998 9.2 8.0 10.0 6.5
9/30/1999 9.6 8.0 8.4 6.5
9/30/2000 9.0 8.0 5.9 6.5
9/30/2001 6.3 8.5 1.1 6.0
9/30/2002 (1.6)8.5 11.8 6.0
9/30/2003 3.7 8.5 7.4 6.0
9/30/2004 3.9 8.5 16.4 6.0
9/30/2005 4.8 8.5 3.6 6.0
9/30/2006 6.5 8.5 9.7 6.0
9/30/2007 8.1 7.5 8.8 7.5
9/30/2008 3.6 7.5 13.8 7.5
9/30/2009 4.4 7.5 1.0 7.5
9/30/2010 5.6 7.5 7.7 7.5
9/30/2011 4.6 7.5 (1.9)7.5
9/30/2012 7.0 7.4 0.4 7.5
9/30/2013 8.4 7.3 4.8 7.5
Average for
Years Shown 6.8 N/A 7.4 N/A
Salary IncreasesInvestment Return
Actual Assumed Actual Assumed
* Actual raises during the year were less than 10.0%. However, there was a problem of underreporting of
compensation in the previous year that resulted in the 11.5% average increase.
The actual investment return rates shown above are based on the actuarial value of assets. The actual
salary increase rates shown above are the increases received by those active members who were included in
the actuarial valuations both at the beginning and the end of each year.
14
Active
Members
Year Vested Other End of
Ended A E A E A E A E A A A E Year
9/30/2002 10 5 2 4 0 0 0 0 1 2 3 2 90
9/30/2003 14 9 3 5 1 0 0 0 1 4 5 3 95
9/30/2004 10 7 2 6 1 0 0 0 1 3 4 3 98
9/30/2005 11 4 2 8 0 0 0 0 0 2 2 3 105
9/30/2006 7 5 1 9 0 1 0 0 0 4 4 3 107
9/30/2007 5 5 3 6 0 1 0 0 1 1 2 3 107
9/30/2008 2 3 3 5 0 1 0 0 0 0 0 3 106
9/30/2009 5 7 6 8 0 1 0 0 1 0 1 3 104
9/30/2010 3 14 11 5 0 1 0 0 1 2 3 3 93
9/30/2011 4 13 11 2 0 1 0 0 0 2 2 2 84
9/30/2012 2 12 8 1 0 0 1 0 0 3 3 2 74
9/30/2013 7 6 4 0 0 0 0 0 1 1 2 2 75
9/30/2014 1 0 0 2
12 Yr Totals *80 90 56 59 2 6 1 0 7 24 31 32
* Totals are through current Plan Year only.
Totals
During DROP
Year Retirement Retirement Death
Service &
Disability
Actual (A) Compared to Expected (E) Decrements
Among Active Employees
Number
Added
Terminations
Amount Amount Amount Employer State Total
10/1/1993 9/30/1994 $242,083
8.36 %$135,153 4.67 %$106,930
3.69 %$117,381 $151,324 $268,705
10/1/1994 9/30/1995 244,317 7.76 148,072 4.70 96,245 3.06 96,245 162,247 258,492
10/1/1995 9/30/1996 404,856 12.02 162,247 4.82 242,609 7.20 242,609 195,597 438,206
10/1/1996 9/30/1997 438,074 12.24 195,597 5.47 242,477 6.78 242,477 227,106 469,583
10/1/1997 9/30/1998 592,522 15.30 227,106 5.86 365,416 9.44 365,416 235,819 601,235
10/1/1998 9/30/1999 760,142 16.98 235,819 5.27 524,323 11.71 524,323 236,636 760,959
10/1/1999 9/30/2000 853,790 18.09 235,819 5.00 617,971 13.09 638,017 215,773 853,790
10/1/2000 9/30/2001 935,273 18.14 215,773 4.18 719,500 13.95 719,500 225,892 945,392
10/1/2001 9/30/2002 1,005,662 20.49 225,892 4.60 779,770 15.89 779,770 235,818 1,015,588
10/1/2002 9/30/2003 1,425,328 25.58 235,818 4.23 1,189,510 21.35 1,189,510 235,818 1,425,328
10/1/2002 9/30/2004 1,475,340 25.58 235,818 4.09 1,239,522 21.49 1,239,522 235,818 1,475,340
10/1/2003 9/30/2005 1,704,041 27.49 235,818 3.80 1,468,223 23.69 1,468,223 235,818 1,704,041
10/1/2004 9/30/2006 1,931,054 27.62 235,818 3.37 1,695,236 24.25 1,695,236 412,644 2,107,880
10/1/2005 9/30/2007 3,176,791 41.86 412,644 5.44 2,764,147 36.42 2,764,147 412,644 3,176,791
10/1/2006 9/30/2008 3,556,548 40.70 412,644 4.72 3,143,904 35.98 3,143,904 412,644 3,556,548
10/1/2007 9/30/2009 3,762,323 40.19 412,644 4.41 3,349,679 35.78 3,349,679 412,644 3,762,323
10/1/2008 9/30/2010 4,368,612 42.27 412,644 3.99 3,955,968 38.28 3,955,968 412,644 4,368,612
10/1/2009 9/30/2011 4,298,216 44.06 412,644 4.23 3,885,572 39.83 3,885,572 412,644 4,298,216
10/1/2010 9/30/2012 4,198,183 47.04 412,644 4.62 3,785,539 42.42 3,785,539 412,644 4,198,183
10/1/2011 9/30/2013 3,113,406 51.80 412,644 6.87 2,700,762 44.93 2,700,762 412,644 3,113,406
10/1/2012 9/30/2014 3,125,279 60.62 412,644 8.00 2,712,635 52.62 ---------
10/1/2013 9/30/2015 3,194,990 62.10 412,644 8.02 2,782,346 54.08 ---------
Required Contributions
RECENT HISTORY OF REQUIRED AND ACTUAL CONTRIBUTIONS
End of
Year To
Which
Valuation
Applies
Actual Contributions
Valuation
Date
% of
Payroll
Net Employer
% of
Payroll
Estimated State
% of
Payroll
Employer & State
15
16
ACTUARIAL ASSUMPTIONS AND COST METHOD
Valuation Methods
Actuarial Cost Method - Normal cost and the allocation of benefit values between service rendered
before and after the valuation date were determined using an Individual Entry-Age Actuarial Cost
Method having the following characteristics:
(i) the annual normal cost for each individual active member, payable from the date of
employment to the date of retirement, is sufficient to accumulate the value of the member’s
benefit at the time of retirement;
(ii) each annual normal cost is a constant percentage of the member’s year by year projected
covered pay.
Actuarial gains/(losses), as they occur, reduce (increase) the Unfunded Actuarial Accrued Liability.
Financing of Unfunded Actuarial Accrued Liabilities - Unfunded Actuarial Accrued Liabilities (full
funding credit if assets exceed liabilities) were amortized by level (principal & interest combined)
percent-of-payroll contributions over a reasonable period of future years.
Actuarial Value of Assets - The Actuarial Value of Assets phase in the difference between the expected
actuarial value and actual market value of assets at the rate of 20% per year. The Actuarial Value of
Assets will be further adjusted to the extent necessary to fall within the corridor whose lower limit is 80%
of the Market Value of plan assets and whose upper limit is 120% of the Market Value of plan assets.
During periods when investment performance exceeds the assumed rate, Actuarial Value of Assets will
tend to be less than Market Value. During periods when investment performance is less than assumed
rate, Actuarial Value of Assets will tend to be greater than Market Value.
Valuation Assumptions
The actuarial assumptions used in the valuation are shown in this Section.
Economic Assumptions
The investment return rate assumed in the valuation is 7.2% per year, compounded annually (net after
investment expenses). This assumption is being lowered by 0.1% each year until 6.5% is reached.
The Wage Inflation Rate assumed in this valuation was 3% per year. The Wage Inflation Rate is
defined to be the portion of total pay increases for an individual that are due to macro-economic forces
including productivity, price inflation, and labor market conditions. The wage inflation rate does not
include pay changes related to individual merit and seniority effects.
The assumed real rate of return over wage inflation is defined to be the portion of total investment
return that is more than the assumed wage inflation rate. Considering other economic assumptions, the
7.2% investment return rate translates to an assumed real rate of return over wage inflation of 4.2%.
17
The rate of salary increase used for individual members is 7.5% per year. Part of the assumption is for
merit and/or seniority increase, and 3% recognizes wage inflation, including price inflation, productivity
increases, and other macroeconomic forces. This assumption is used to project a member’s current salary
to the salaries upon which benefits will be based.
For purposes of financing the unfunded liabilities, total payroll is assumed to grow at 5% per year.
According to Chapter 112, Florida Statutes, this payroll growth assumption may not exceed the average
growth over the last ten years which was (1.99%). Therefore, unfunded liabilities are being amortized
this year as a level dollar amount, with no assumed payroll growth.
Demographic Assumptions
The mortality table was the RP-2000 Combined Healthy Participant Mortality Tables for males and
females. Mortality improvement is being projected to all future years from the year 2000 using Scale AA,
making it a fully generational mortality table.
Sample
Attained
Ages (in 2013)Men Women Men Women
50 0.17 %0.13 %34.17 35.58
55 0.28 0.24 29.05 30.61
60 0.55 0.47 24.13 25.84
65 1.06 0.91 19.53 21.35
70 1.82 1.57 15.35 17.24
75 3.15 2.53 11.58 13.52
80 5.65 4.19 8.38 10.22
Probability of Future Life
Dying Next Year Expectancy (years)
This assumption is used to measure the probabilities of each benefit payment being made after retirement.
For active members, the probabilities of dying before retirement were based upon the same mortality table
as members dying after retirement (75% of deaths are assumed to be service-connected).
For disabled retirees, the regular mortality tables are set forward 5 years in ages to reflect impaired
longevity.
18
The rates of retirement used to measure the probability of eligible members who were not affected by the
change in normal retirement eligibility (who had at least 10 years of service as of September 13, 2012)
retiring during the next year are as follows:
Age
42 - 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60
10 0.0%0.0%0.0%0.0%0.0%2.5%2.5%20.0%20.0%20.0%55.0%65.0%65.0%65.0%65.0%100.0%
11 0.0%0.0%0.0%0.0%0.0%2.5%2.5%10.0%10.0%10.0%47.5%57.5%60.0%60.0%60.0%100.0%
12 0.0%0.0%0.0%0.0%0.0%2.5%2.5%10.0%10.0%10.0%47.5%57.5%60.0%60.0%60.0%100.0%
13 0.0%0.0%0.0%0.0%0.0%2.5%2.5%10.0%10.0%10.0%47.5%57.5%60.0%60.0%60.0%100.0%
14 0.0%0.0%0.0%0.0%0.0%2.5%2.5%10.0%10.0%10.0%47.5%57.5%60.0%60.0%60.0%100.0%
15 0.0%0.0%0.0%0.0%0.0%2.5%2.5%10.0%10.0%10.0%47.5%57.5%60.0%60.0%60.0%100.0%
16 0.0%0.0%0.0%0.0%0.0%2.5%2.5%10.0%10.0%10.0%47.5%57.5%60.0%60.0%60.0%100.0%
17 0.0%0.0%0.0%0.0%0.0%2.5%2.5%10.0%10.0%10.0%47.5%57.5%60.0%60.0%60.0%100.0%
18 0.0%0.0%0.0%0.0%0.0%2.5%2.5%10.0%10.0%10.0%47.5%57.5%60.0%60.0%60.0%100.0%
19 0.0%0.0%0.0%0.0%0.0%2.5%2.5%10.0%10.0%10.0%47.5%57.5%60.0%60.0%60.0%100.0%
20 20.0%22.5%22.5%22.5%22.5%25.0%27.5%30.0%40.0%45.0%70.0%80.0%80.0%80.0%80.0%100.0%
21 5.0%5.0%5.0%10.0%10.0%12.5%12.5%12.5%15.0%15.0%47.5%65.0%65.0%65.0%65.0%100.0%
22 5.0%5.0%5.0%10.0%10.0%12.5%12.5%12.5%15.0%15.0%47.5%65.0%65.0%65.0%65.0%100.0%
23 5.0%5.0%5.0%10.0%10.0%15.0%15.0%15.0%15.0%15.0%47.5%65.0%65.0%65.0%65.0%100.0%
24 5.0%5.0%5.0%10.0%10.0%15.0%15.0%15.0%15.0%15.0%47.5%65.0%65.0%65.0%65.0%100.0%
25 100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%
S
e
r
v
i
c
e
The probability of normal retirement for members affected by the change in normal retirement eligibility (to
age 59 with 10 years of service) is 100% when first eligible. The probability of early retirement for these
members is 2.5% for each year eligible.
Rates of separation from active membership were as shown below (rates do not apply to members
eligible to retire and do not include separation on account of death or disability). This assumption
measures the probabilities of members remaining in employment.
Sample
Ages
20 6.0 %
25 5.7
30 5.0
35 3.8
40 2.6
45 1.6
50 0.8
55 0.3
% of Active Members
Separating Within Next Year
Rates of disability among active members (75% of disabilities are assumed to be service-connected).
Sample
Ages
20 0.21 %
25 0.23
30 0.27
35 0.35
40 0.45
45 0.77
50 1.50
55 2.32
% Becoming Disabled
within Next Year
19
Miscellaneous and Technical Assumptions
Administrative & Investment
Expenses
The investment return assumption is intended to be the return net of
investment expenses. Annual administrative expenses are assumed to
be equal to the average of the prior two years’ expenses. Assumed
administrative expenses are added to the Normal Cost.
Benefit Service Exact fractional service is used to determine the amount of benefit
payable.
Decrement Operation Disability and mortality decrements operate during retirement
eligibility.
Decrement Timing Decrements of all types are assumed to occur at the beginning of the
year.
Eligibility Testing Eligibility for benefits is determined based upon the age nearest
birthday and service nearest whole year on the date the decrement is
assumed to occur.
Forfeitures For vested separations from service, it is assumed that 0% of members
separating will withdraw their contributions and forfeit an employer
financed benefit. It was further assumed that the liability at
termination is the greater of the vested deferred benefit (if any) or the
member’s accumulated contributions.
Incidence of Contributions Employer contributions are assumed to be made in equal installments
at the end of each quarter. Member contributions are assumed to be
received continuously throughout the year based upon the computed
percent of payroll shown in this report, and the actual payroll payable
at the time contributions are made.
Liability Load Projected normal and early retirement benefits are loaded based on the
dollar amount of each active member’s frozen accrued leave as of
September 13, 2012 to allow for the inclusion of unused sick and
vacation pay (frozen as of September 13, 2012) in final average
earnings.
Marriage Assumption 100% of males and 100% of females are assumed to be married for
purposes of death-in-service benefits. Male spouses are assumed to be
three years older than female spouses for active member valuation
purposes.
Normal Form of Benefit A 10-year certain and life annuity is the normal form of benefit.
Pay Increase Timing Middle of fiscal year. This is equivalent to assuming that reported pays
represent amounts paid to members during the year ended on the
valuation date.
Service Credit Accruals It is assumed that members accrue one year of service credit per year.
20
GLOSSARY
Actuarial Accrued Liability
(AAL)
The difference between the Actuarial Present Value of Future Benefits,
and the Actuarial Present Value of Future Normal Costs.
Actuarial Assumptions Assumptions about future plan experience that affect costs or liabilities,
such as: mortality, withdrawal, disablement, and retirement; future
increases in salary; future rates of investment earnings; future investment
and administrative expenses; characteristics of members not specified in
the data, such as marital status; characteristics of future members; future
elections made by members; and other items.
Actuarial Cost Method A procedure for allocating the Actuarial Present Value of Future Benefits
between the Actuarial Present Value of Future Normal Costs and the
Actuarial Accrued Liability.
Actuarial Equivalent Of equal Actuarial Present Value, determined as of a given date and based
on a given set of Actuarial Assumptions.
Actuarial Present Value
(APV)
The amount of funds required to provide a payment or series of payments
in the future. It is determined by discounting the future payments with an
assumed interest rate and with the assumed probability each payment will
be made.
Actuarial Present Value of
Future Benefits (APVFB)
The Actuarial Present Value of amounts which are expected to be paid at
various future times to active members, retired members, beneficiaries
receiving benefits, and inactive, nonretired members entitled to either a
refund or a future retirement benefit. Expressed another way, it is the
value that would have to be invested on the valuation date so that the
amount invested plus investment earnings would provide sufficient assets
to pay all projected benefits and expenses when due.
Actuarial Valuation The determination, as of a valuation date, of the Normal Cost, Actuarial
Accrued Liability, Actuarial Value of Assets, and related Actuarial
Present Values for a plan. An Actuarial Valuation for a governmental
retirement system typically also includes calculations of items needed for
compliance with GASB No. 25, such as the Funded Ratio and the Annual
Required Contribution (ARC).
Actuarial Value of Assets The value of the assets as of a given date, used by the actuary for
valuation purposes. This may be the market or fair value of plan assets
or a smoothed value in order to reduce the year-to-year volatility of
calculated results, such as the funded ratio and the actuarially required
contribution (ARC).
21
Amortization Method A method for determining the Amortization Payment. The most common
methods used are level dollar and level percentage of payroll. Under the
Level Dollar method, the Amortization Payment is one of a stream of
payments, all equal, whose Actuarial Present Value is equal to the UAAL.
Under the Level Percentage of Pay method, the Amortization Payment is
one of a stream of increasing payments, whose Actuarial Present Value is
equal to the UAAL. Under the Level Percentage of Pay method, the
stream of payments increases at the rate at which total covered payroll of
all active members is assumed to increase.
Amortization Payment That portion of the plan contribution or ARC which is designed to pay
interest on and to amortize the Unfunded Actuarial Accrued Liability.
Amortization Period The period used in calculating the Amortization Payment.
Annual Required
Contribution (ARC)
The employer’s periodic required contributions, expressed as a dollar
amount or a percentage of covered plan compensation, determined under
GASB No. 25. The ARC consists of the Employer Normal Cost and
Amortization Payment.
Closed Amortization Period A specific number of years that is reduced by one each year, and declines
to zero with the passage of time. For example if the amortization period is
initially set at 30 years, it is 29 years at the end of one year, 28 years at the
end of two years, etc.
Employer Normal Cost The portion of the Normal Cost to be paid by the employer. This is
equal to the Normal Cost less expected member contributions.
Equivalent Single
Amortization Period
For plans that do not establish separate amortization bases (separate
components of the UAAL), this is the same as the Amortization Period.
For plans that do establish separate amortization bases, this is the period
over which the UAAL would be amortized if all amortization bases were
combined upon the current UAAL payment.
Experience Gain/Loss A measure of the difference between actual experience and that expected
based upon a set of Actuarial Assumptions, during the period between two
actuarial valuations. To the extent that actual experience differs from that
assumed, Unfunded Actuarial Accrued Liabilities emerge which may be
larger or smaller than projected. Gains are due to favorable experience,
e.g., the assets earn more than projected, salaries do not increase as fast as
assumed, members retire later than assumed, etc. Favorable experience
means actual results produce actuarial liabilities not as large as projected
by the actuarial assumptions. On the other hand, losses are the result of
unfavorable experience, i.e., actual results that produce Unfunded
Actuarial Accrued Liabilities which are larger than projected.
22
Funded Ratio The ratio of the Actuarial Value of Assets to the Actuarial Accrued
Liability.
GASB Governmental Accounting Standards Board.
GASB No. 25 and
GASB No. 27
These are the governmental accounting standards that set the accounting
rules for public retirement systems and the employers that sponsor or
contribute to them. Statement No. 27 sets the accounting rules for the
employers that sponsor or contribute to public retirement systems, while
Statement No. 25 sets the rules for the systems themselves.
Normal Cost The annual cost assigned, under the Actuarial Cost Method, to the current
plan year.
Open Amortization Period An open amortization period is one which is used to determine the
Amortization Payment but which does not change over time. In other
words, if the initial period is set as 30 years, the same 30-year period is
used in determining the Amortization Period each year. In theory, if an
Open Amortization Period is used to amortize the Unfunded Actuarial
Accrued Liability, the UAAL will never completely disappear, but will
become smaller each year, either as a dollar amount or in relation to
covered payroll.
Unfunded Actuarial Accrued
Liability
The difference between the Actuarial Accrued Liability and Actuarial
Value of Assets.
Valuation Date The date as of which the Actuarial Present Value of Future Benefits are
determined. The benefits expected to be paid in the future are discounted
to this date.
SECTION C
PENSION FUND INFORMATION
23
Statement of Plan Assets at Market Value
Item 2013 2012
A.Cash and Cash Equivalents (Operating Cash)849,326$ 1,285,425$
B.Receivables:
1.Member Contributions 30,655$ 34,753$
2.Employer Contributions - -
3.State Contributions - -
4.Investment Income and Other Receivables 261,309 240,411
5.Total Receivables 291,964$ 275,164$
C.Investments
1.Short Term Investments 1,896,360$ 3,499,191$
2.Domestic Equities 37,998,999 30,327,759
3.International Equities 5,016,371 3,680,875
4.Domestic Fixed Income 15,373,981 14,463,030
5.International Fixed Income 1,502,285 1,545,948
6.Real Estate 1,696,507 557,928
7.Private Equity - -
8.Total Investments 63,484,503$ 54,074,731$
D.Liabilities
1.Benefits Payable -$ -$
2.Accrued Expenses and Other Payables (50,340) (374,168)
3.Total Liabilities (50,340)$ (374,168)$
E.Total Market Value of Assets Available for Benefits 64,575,453$ 55,261,152$
F.Reserves
1.State Contribution Reserve (601,123)$ (538,552)$
2.DROP Accounts (8,313,546) (5,578,164)
3.Total Reserves (8,914,669)$ (6,116,716)$
G.Market Value Net of Reserves 55,660,784$ 49,144,436$
H.Allocation of Investments
1.Short Term Investments 3.0%6.5%
2.Domestic Equities 59.8%56.1%
3.International Equities 7.9%6.8%
4.Domestic Fixed Income 24.2%26.7%
5.International Fixed Income 2.4%2.9%
6.Real Estate 2.7%1.0%
7.Private Equity 0.0%0.0%
8.Total Investments 100.0%100.0%
September 30
24
Reconciliation of Plan Assets
Item 2013 2012
A.Market Value of Assets at Beginning of Year 55,261,152$ 44,279,384$
B.Revenues and Expenditures
1.Contributions
a.Member Contributions 432,301$ 559,305$
b.Employer Contributions 2,700,762 3,785,539
c.State Contributions 475,215 445,534
d.Total 3,608,278$ 4,790,378$
2.Investment Income
a.Interest, Dividends, and Other Income 752,092$ 773,887$
b.Net Realized/Unrealized Gains/(Losses)*7,347,888 7,589,148
c.Investment Expenses (174,307) (152,703)
d.Net Investment Income 7,925,673$ 8,210,332$
3.Benefits and Refunds
a.Regular Monthly Benefits (1,974,719)$ (1,679,226)$
b.Refunds (32,872) -
c.Lump Sum Benefits - -
d.DROP Distributions (93,400) (227,800)
e.Total (2,100,991)$ (1,907,026)$
4.Administrative and Miscellaneous Expenses (118,659)$ (111,916)$
5.Transfers -$ -$
C.Market Value of Assets at End of Year 64,575,453$ 55,261,152$
D.Reserves
1.State Contribution Reserve (601,123)$ (538,552)$
2.DROP Accounts (8,313,546) (5,578,164)
3.Total Reserves (8,914,669)$ (6,116,716)$
E.Market Value Net of Reserves 55,660,784$ 49,144,436$
September 30
* Breakdown between realized and unrealized gains/(losses) was not provided.
25
Year
Ended
9/30
Balance at
Beginning
of Year Credits Interest Distributions Adjustments
Balance at
End of
Year
2002 -$ 25,536$ 559$ -$ -$ 26,095$
2003 26,095 35,048 962 (33,734) - 28,371
2004 28,371 67,278 4,210 - - 99,859
2005 99,859 107,716 9,307 (54,224) - 162,658
2006 162,658 88,332 13,653 - - 264,643
2007 264,643 164,844 22,183 - - 451,670
2008 451,670 188,434 24,255 (215,043) 2,665 451,981
2009 451,981 557,339 46,178 - - 1,055,498
2010 1,055,498 993,753 96,296 (91,000) - 2,054,547
2011 2,054,547 1,426,393 167,922 (254,626) - 3,394,236
2012 3,394,236 2,128,627 283,101 (227,800) - 5,578,164
2013 5,578,164 2,387,180 441,602 (93,400) - 8,313,546
Reconciliation of DROP Accounts
26
Calculation of Actuarial Value of Assets
Item
A. Beginning of Year Assets*
1. Market Value $55,261,152 *$44,279,384 *
2. Actuarial Value 55,976,014 49,609,638
B. End of Year Market Value
of Assets*64,575,453 55,261,152
C. Net of Contributions
Less Disbursements 1,388,628 *2,771,436 *
D. Actual Net Investment
Earnings 7,925,673 8,210,332
E. Expected Investment
Earnings 4,136,934 3,773,656
F. End of Year Expected
Actuarial Value 61,501,576 56,154,730
G. End of Year Market Value Less
Expected Actuarial Value: B - F 3,073,877 (893,578)
H. 20% of Difference 614,775 (178,716)
I. End of Year Assets
1. Actuarial Value:
F + H 62,116,351 55,976,014
2. Final Actuarial Value
Within 80% to 120%
of Market Value 62,116,351 55,976,014
J. State Contribution Reserve 601,123 538,552
K. DROP Accounts 8,313,546 5,578,164
L. Final Actuarial Value of Assets:
I2 - J - K 53,201,682 49,859,298
M. Recognized Investment Earnings 4,751,709 3,594,940
N. Recognized Rate of Return 8.4%7.0%
2013 2012
Year Ending September 30
* Before offset of DROP Account Balances and State Contribution Reserve.
27
1990 9.1 % 9.1 %
1991 8.6 8.6
1992 8.2 8.2
1993 8.8 8.8
1994 2.4 2.4
1995 18.2 18.2
1996 5.2 5.2
1997 24.2 10.3
1998 5.3 9.2
1999 11.6 9.6
2000 6.7 9.0
2001 (7.8) 6.3
2002 (6.5) (1.6)
2003 12.7 3.7
2004 8.6 3.9
2005 9.6 4.8
2006 6.4 6.5
2007 11.5 8.1
2008 (13.9) 3.6
2009 6.7 4.4
2010 9.8 5.6
2011 (0.4) 4.6
2012 18.0 7.0
2013 14.2 8.4
Average Returns:
Last 5 Years 9.5 % 6.0 %
Last 10 Years 6.7 % 5.7 %
All Years 7.1 % 6.8 %
Investment Rate of Return
Actuarial ValueMarket Value *
Year Ending
September 30
The above rates are based on the retirement system’s financial information reported to the actuary. They
may differ from figures that the investment consultant reports, in part because of differences in the
handling of administrative and investment expenses, and in part because of differences in the handling of
cash flows.
SECTION D
FINANCIAL ACCOUNTING INFORMATION
28
A.Valuation Date
B.Actuarial Present Value of Accumulated
Plan Benefits
1.Vested Benefits
a.Members Currently Receiving Payments $55,535,998 $51,493,510
b.Terminated Vested Members 820,252 279,574
c.Other Members 15,964,054 17,138,300
d.Total 72,320,304 68,911,384
2.Non-Vested Benefits 993,105 1,241,300
3.Total Actuarial Present Value of Accumulated
Plan Benefits: 1d + 2 73,313,409 70,152,684
4.Accumulated Contributions of Active Members 4,089,690 4,190,494
C.Changes in the Actuarial Present Value of
Accumulated Plan Benefits
1.Total Value at Beginning of Year 70,152,684 66,770,064
2.Increase (Decrease) During the Period
Attributable to:
a.Plan Amendment and Change in
Actuarial Assumptions 820,138 684,655
c.Latest Member Data, Benefits Accumulated
and Decrease in the Discount Period 6,735,358 6,505,818
d.Benefits Paid (net basis)(4,394,771)(3,807,853)
e.Net Increase 3,160,725 3,382,620
3.Total Value at End of Period 73,313,409 70,152,684
D.Market Value of Assets 55,660,784 49,144,436
E.Actuarial Assumptions - See page entitled
Actuarial Assumptions and Methods
October 1, 2013 October 1, 2012
FASB NO. 35 INFORMATION
SCHEDULE OF FUNDING PROGRESS
(GASB Statement No. 25)
10/1/1993 $2,424,981 $2,479,049 $54,068 97.8 %$2,896,359 1.9 %
10/1/1994 2,714,651 2,552,412 (162,239)106.4 3,148,412 (5.2)
10/1/1995 3,517,565 3,807,393 289,828 92.4 3,367,324 8.6
10/1/1996 4,443,592 4,855,280 411,688 91.5 3,578,473 11.5
10/1/1997 5,511,310 6,954,077 1,442,767 79.3 3,872,799 37.3
10/1/1998 6,700,726 8,988,231 2,287,505 74.5 4,476,807 51.1
10/1/1999 8,162,736 11,019,072 2,856,336 74.1 4,720,813 60.5
10/1/2000 9,795,534 14,097,068 4,301,534 69.5 5,156,136 83.4
10/1/2001 11,417,844 16,106,731 4,688,887 70.9 4,908,315 95.5
10/1/2002 12,303,486 19,140,962 6,837,476 64.3 5,572,514 122.7
10/1/2003 14,231,515 22,196,413 7,964,898 64.1 5,989,146 133.0
10/1/2004 16,405,794 24,962,551 8,556,757 65.7 6,755,078 126.7
10/1/2005 18,950,104 35,004,203 16,054,099 54.1 7,332,448 218.9
10/1/2006 22,740,838 46,503,218 23,762,380 48.9 8,322,332 285.5
10/1/2007 27,799,386 52,230,511 24,431,125 53.2 8,915,563 274.0
10/1/2008 32,261,274 60,450,441 28,189,167 53.4 9,842,874 286.4
10/1/2009 36,834,622 65,550,027 28,715,405 56.2 9,290,829 309.1
10/1/2010 41,948,009 71,341,740 29,393,731 58.8 8,499,722 345.8
10/1/2011 45,709,740 68,822,738 23,112,998 66.4 5,724,225 403.8
10/1/2012 49,859,298 72,156,731 22,297,433 69.1 4,910,023 454.1
10/1/2013 (b)53,201,682 75,256,736 22,055,054 70.7 4,899,915 450.1
10/1/2013 (a)53,201,682 76,093,054 22,891,372 69.9 4,899,915 467.2
Actuarial
Valuation Date
UAAL As % of
Covered Payroll
(b - a) / c
Covered Payroll
(c)
Funded Ratio
(a) / (b)
Actuarial Value of
Assets
(a)
Unfunded AAL (UAAL)
(b) - (a)
Actuarial Accrued
Liability (AAL) - Entry
Age
(b)
(a) = After changes
(b) = Before changes
29
30
SCHEDULE OF CONTRIBUTIONS FROM THE EMPLOYER
AND THE STATE OF FLORIDA
(GASB Statement No. 25)
Year Ending
September 30
1994 $242,083 $268,705 111.0 %
1995 244,317 258,492 105.8
1996 404,856 438,206 108.2
1997 438,074 469,583 107.2
1998 592,522 601,235 101.5
1999 760,142 760,959 100.1
2000 853,790 853,790 100.0
2001 935,273 945,392 101.1
2002 1,005,662 1,015,588 101.0
2003 1,425,328 1,425,328 100.0
2004 1,475,340 1,475,340 100.0
2005 1,704,041 1,704,041 100.0
2006 1,931,054 2,107,880 109.2
2007 3,176,791 3,176,791 100.0
2008 3,556,548 3,556,548 100.0
2009 3,762,323 3,762,323 100.0
2010 4,368,612 4,368,612 100.0
2011 4,298,216 4,298,216 100.0
2012 4,198,183 4,198,183 100.0
2013 3,113,406 3,113,406 100.0
Contribution
Percentage
Contributed
Annual Required
Contribution
Actual
31
Employer FYE September 30 2014 2013 2012
Annual Required Contribution (ARC)*3,125,279$ 1 3,113,406$ 4,198,183$
Interest on Net Pension Obligation (NPO)(13,513) (14,017) (14,872)
Adjustment to ARC (17,537) (18,347) (23,829)
Annual Pension Cost (APC)3,129,303 3,117,736 4,207,140
Contributions made **3,113,406 4,198,183
Increase (decrease) in NPO **4,330 8,957
NPO at beginning of year (187,686) (192,016) (200,973)
NPO at end of year **(187,686) (192,016)
* Includes expected State contribution.
** To be determined.
ANNUAL PENSION COST AND NET PENSION OBLIGATION
(GASB STATEMENT NO. 27)
1 This amount is an estimate. The final required contribution should be no less than the percent of payroll
requirement multiplied by the actual covered payroll for the fiscal year.
Fiscal Annual Pension Actual
Year Ending Cost (APC)Contribution
9/30/2011 4,308,678$ 4,298,216$ 99.8 %(200,973)$
9/30/2012 4,207,140 4,198,183 99.8 (192,016)
9/30/2013 3,117,736 3,113,406 99.9 (187,686)
APC Contributed Obligation
THREE YEAR TREND INFORMATION
Percentage of Net Pension
32
REQUIRED SUPPLEMENTARY INFORMATION
GASB Statement No. 25 and No. 27
The information presented in the required supplementary schedules was determined as part of the
actuarial valuations at the dates indicated. Additional information as of the latest actuarial valuation:
Valuation Date October 1, 2013
Contribution Rates
Employer (and State) 62.10%
Plan Members 8.60%
Actuarial Cost Method Entry Age Normal
Amortization Method Level percent, closed
Remaining Amortization Period 23 years
Asset Valuation Method Recognizes 20% of difference
between market value of assets
and expected actuarial asset
value
Actuarial Assumptions
Investment rate of return 7.2%
Projected salary increases 7.5%
Includes inflation and other general increases at 3.0%
Cost-of-living adjustments Not Applicable
33
SCHEDULE OF CHANGES IN THE EMPLOYER’S
NET PENSION LIABILITY AND RELATED RATIOS
GASB Statement No. 67
Fiscal year ending September 30,2014*
Total pension liability
Service Cost 1,229,681$
Interest 6,045,113
Benefit Changes -
Difference between actual & expected experience -
Assumption Changes
Benefit Payments (4,550,123)
Refunds (4,866)
Net Change in Total Pension Liability 2,719,805
Total Pension Liability - Beginning 85,007,723
Total Pension Liability - Ending (a)87,727,528$
Plan Fiduciary Net Position
Contributions - Employer and State 2,712,635$
Contributions - Member 421,393
Net Investment Income 4,593,981
Benefit Payments (4,550,123)
Refunds (4,866)
Administrative Expense (119,366)
Other -
Net Change in Plan Fiduciary Net Position 3,053,654
Plan Fiduciary Net Position - Beginning 64,575,453
Plan Fiduciary Net Position - Ending (b)67,629,107$
Net Pension Liability - Ending (a) - (b)20,098,421
Plan Fiduciary Net Position as a Percentage
of Total Pension Liability 77.09 %
Covered Employee Payroll 4,899,915$
Net Pension Liability as a Percentage
of Covered Employee Payroll 410.18 %
* These figures are estimates only. Actual figures will be provided
after the end of the fiscal year.
34
SCHEDULE OF THE EMPLOYER’S NET PENSION LIABILITY
GASB Statement No. 67
Total Plan Net Position Net Pension Liability
FY Ending Pension Plan Net Net Pension as a % of Total Covered as a % of
September 30,Liability Position Liability Pension Liability Payroll Covered Payroll
2014*87,727,528$ 67,629,107$ 20,098,421$ 77.09%4,899,915$ 410.18%
* These figures are estimates only. Actual figures will be provided after the end of the fiscal
year.
35
SCHEDULE OF CONTRIBUTIONS
GASB Statement No. 67
Actuarially Contribution Actual Contribution
FY Ending Determined Actual Deficiency Covered as a % of
September 30,Contribution Contribution (Excess)Payroll Covered Payroll
2014*3,125,279$ 3,125,279$ -$ 4,899,915$ 63.78%
* These figures are estimates only. Actual figures will be provided after the end of the fiscal
year.
36
NOTES TO SCHEDULE OF CONTRIBUTIONS
GASB Statement No. 67
Valuation Date:October 1, 2013
Notes Actuarially determined contribution rates are calculated as of October 1,
which is two year(s)prior to the end of the fiscal year in which
contributions are reported.
Methods and Assumptions Used to Determine Contribution Rates:
Actuarial Cost Method Entry Age Normal
Amortization Method Level Percent, Closed
Remaining Amortization Period 22 years
Asset Valuation Method Recognizes 20% of difference between market value of assets
and expected actuarial asset value
Inflation 3.0%
Salary Increases 7.50%
Investment Rate of Return 7.20%
Retirement Age Experience-based table of rates that are specific to the type of eligibility
condition
Mortality RP-2000 Combined Healthy Participant Mortality Table for males and
females with mortality improvement projected to all future years after
2000 using Scale AA
Other Information:
Notes See Discussion of Valuation Results on Page 1
37
SINGLE DISCOUNT RATE
GASB Statement No. 67
A single discount rate of 7.20% was used to measure the total pension liability. This single discount
rate was based on the expected rate of return on pension plan investments of 7.20%. The projection
of cash flows used to determine this single discount rate assumed that plan member contributions will
be made at the current contribution rate and that employer contributions will be made at rates equal
to the difference between the total actuarially determined contribution rates and the member rate.
Based on these assumptions, the pension plan’s fiduciary net position was projected to be available to
make all projected future benefit payments of current plan members. Therefore, the long-term
expected rate of return on pension plan investments (7.20%) was applied to all periods of projected
benefit payments to determine the total pension liability.
Regarding the sensitivity of the net pension liability to changes in the single discount rate, the
following presents the plan’s net pension liability, calculated using a single discount rate of 7.20%,
as well as what the plan’s net pension liability would be if it were calculated using a single discount
rate that is 1-percentage-point lower or 1-percentage-point higher:
Sensitivity of the Net Pension Liability to the Single Discount Rate Assumption*
Current Single Discount
1% Decrease Rate Assumption 1% Increase
6.20%7.20%8.20%
29,418,983$ 20,098,421$ 12,338,638$
* These figures are estimates only. Actual figures will be provided after the end of the fiscal
year.
38
GASB 67 – Projection of Contributions
Single Discount Rate Determination: 50-Year
Year
Payroll for
Current Employees
Contributions from
Current Employees
Service Cost and
Expense
Contributions
UAL
Contributions
Total
Contributions
(a)(b)(c)(d)(e)=(b)+(c)+(d)
0 4,722,810$
1 4,899,915 421,393$ 971,067$ 1,847,494$ 3,239,954$
2 5,009,734 430,837 988,924 1,847,493 3,267,254
3 5,107,763 439,268 1,004,172 1,847,493 3,290,932
4 4,999,544 429,961 964,295 1,847,152 3,241,408
5 5,052,905 434,550 965,980 1,847,152 3,247,682
6 5,060,003 435,160 957,037 1,847,152 3,239,350
7 4,918,254 422,970 914,761 1,847,152 3,184,883
8 4,850,635 417,155 893,162 1,847,152 3,157,468
9 4,213,788 362,386 735,458 1,823,492 2,921,336
10 4,194,699 360,744 724,165 1,842,962 2,927,871
11 4,061,271 349,269 690,387 1,475,772 2,515,428
12 3,855,271 331,553 636,660 1,491,131 2,459,345
13 3,800,881 326,876 618,165 1,371,186 2,316,227
14 3,662,265 314,955 586,682 2,089,228 2,990,864
15 3,542,636 304,667 560,492 2,084,751 2,949,910
16 3,500,120 301,010 544,626 2,011,165 2,856,801
17 3,418,853 294,021 525,594 2,011,165 2,830,780
18 3,434,403 295,359 522,888 1,601,864 2,420,110
19 3,343,101 287,507 499,280 1,601,864 2,388,650
20 3,225,765 277,416 474,850 1,601,864 2,354,129
21 3,065,160 263,604 446,918 1,601,864 2,312,385
22 2,907,184 250,018 416,310 1,601,864 2,268,192
23 2,482,862 213,526 343,648 981,289 1,538,464
24 2,424,345 208,494 333,424 - 541,918
25 2,352,387 202,305 323,956 - 526,261
26 2,186,876 188,071 291,230 - 479,301
27 2,117,219 182,081 281,529 - 463,610
28 1,781,311 153,193 218,965 - 372,158
29 1,824,350 156,894 224,211 - 381,106
30 1,600,031 137,603 193,207 - 330,810
31 1,225,875 105,425 147,523 - 252,948
32 1,109,685 95,433 136,292 - 231,725
33 860,212 73,978 109,076 - 183,055
34 880,457 75,719 111,515 - 187,235
35 899,344 77,344 113,782 - 191,126
36 782,358 67,283 97,944 - 165,227
37 389,109 33,463 43,975 - 77,439
38 260,190 22,376 26,547 - 48,924
39 129,341 11,123 11,652 - 22,775
40 132,424 11,388 11,929 - 23,318
41 135,297 11,636 12,192 - 23,828
42 137,910 11,860 12,422 - 24,282
43 140,246 12,061 12,638 - 24,699
44 142,258 12,234 12,818 - 25,052
45 - - - - -
46 - - - - -
47 - - - - -
48 - - - - -
49 - - - - -
50 - - - - -
39
GASB 67 Single Discount Rate Determination: 100-Year Projection of Cash Flows
Year
Projected Beginning
Plan Net Position
Projected Total
Contributions
Projected Benefit
Payments
Projected
Administrative
Expenses
Projected
Investment
Earnings at 7.20%
Projected Ending Plan
Net Position
(a)(b)(c)(d)(e)(f)=(a)+(b)-(c)-(d)+(e)
1 55,660,784$ 3,239,954$ 4,554,989$ 119,366$ 3,956,836$ 58,183,219$
2 58,183,219 3,267,254 4,640,822 122,041 4,136,286 60,823,895
3 60,823,895 3,290,932 4,863,195 124,429 4,319,301 63,446,504
4 63,446,504 3,241,408 5,008,170 121,793 4,501,342 66,059,291
5 66,059,291 3,247,682 5,168,282 123,093 4,683,975 68,699,573
6 68,699,573 3,239,350 5,404,443 123,265 4,865,420 71,276,634
7 71,276,634 3,184,883 5,579,701 119,812 5,042,964 73,804,967
8 73,804,967 3,157,468 6,018,483 118,165 5,208,571 76,034,359
9 76,034,359 2,921,336 6,174,507 102,651 5,355,764 78,034,300
10 78,034,300 2,927,871 6,415,550 102,186 5,491,481 79,935,915
11 79,935,915 2,515,428 6,676,818 98,936 5,604,680 81,280,269
12 81,280,269 2,459,345 6,804,546 93,918 5,695,149 82,536,299
13 82,536,299 2,316,227 6,983,657 92,592 5,774,231 83,550,508
14 83,550,508 2,990,864 7,151,227 89,216 5,865,311 85,166,240
15 85,166,240 2,949,910 7,256,990 86,302 5,976,556 86,749,415
16 86,749,415 2,856,801 7,367,769 85,265 6,083,369 88,236,551
17 88,236,551 2,830,780 7,418,102 83,286 6,187,812 89,753,755
18 89,753,755 2,420,110 7,524,157 83,664 6,278,759 90,844,803
19 90,844,803 2,388,650 7,650,376 81,440 6,351,815 91,853,452
20 91,853,452 2,354,129 7,804,545 78,582 6,417,864 92,742,318
21 92,742,318 2,312,385 7,926,731 74,670 6,476,202 93,529,504
22 93,529,504 2,268,192 8,213,544 70,822 6,521,306 94,034,637
23 94,034,637 1,538,464 8,242,105 60,484 6,531,217 93,801,729
24 93,801,729 541,918 8,272,299 59,059 6,478,178 92,490,467
25 92,490,467 526,261 8,337,385 57,306 6,380,973 91,003,010
26 91,003,010 479,301 8,336,382 53,274 6,272,393 89,365,047
27 89,365,047 463,610 8,487,658 51,577 6,148,614 87,438,036
28 87,438,036 372,158 8,371,432 43,395 6,011,035 85,406,402
29 85,406,402 381,106 8,424,662 44,442 5,863,153 83,181,557
30 83,181,557 330,810 8,558,472 38,978 5,696,645 80,611,562
31 80,611,562 252,948 8,488,398 29,863 5,511,653 77,857,901
32 77,857,901 231,725 8,483,309 27,033 5,312,918 74,892,203
33 74,892,203 183,055 8,273,805 20,955 5,105,292 71,885,790
34 71,885,790 187,235 8,049,969 21,449 4,896,879 68,898,486
35 68,898,486 191,126 7,904,100 21,909 4,687,075 65,850,678
36 65,850,678 165,227 7,930,812 19,059 4,465,872 62,531,906
37 62,531,906 77,439 7,734,001 9,479 4,231,116 59,096,982
38 59,096,982 48,924 7,539,041 6,339 3,989,801 55,590,326
39 55,590,326 22,775 7,216,663 3,151 3,747,913 52,141,200
40 52,141,200 23,318 6,877,277 3,226 3,511,598 48,795,613
41 48,795,613 23,828 6,540,826 3,296 3,282,633 45,557,953
42 45,557,953 24,282 6,195,089 3,360 3,061,766 42,445,552
43 42,445,552 24,699 5,860,092 3,417 2,849,536 39,456,278
44 39,456,278 25,052 5,642,035 3,465 2,642,032 36,477,861
45 36,477,861 - 5,304,229 - 2,438,772 33,612,404
46 33,612,404 - 4,963,305 - 2,244,520 30,893,619
47 30,893,619 - 4,638,746 - 2,060,248 28,315,121
48 28,315,121 - 4,322,265 - 1,885,791 25,878,647
49 25,878,647 - 4,020,570 - 1,721,038 23,579,114
50 23,579,114 - 3,729,267 - 1,565,776 21,415,623
40
GASB 67 Single Discount Rate Determination: 100-Year Projection of Cash Flows (cont'd)
51 21,415,623 - 3,449,296 - 1,419,908 19,386,236
52 19,386,236 - 3,181,507 - 1,283,265 17,487,994
53 17,487,994 - 2,926,364 - 1,155,617 15,717,247
54 15,717,247 - 2,678,985 - 1,036,874 14,075,137
55 14,075,137 - 2,449,231 - 926,770 12,552,676
56 12,552,676 - 2,231,329 - 824,861 11,146,209
57 11,146,209 - 2,026,271 - 730,849 9,850,786
58 9,850,786 - 1,833,160 - 644,410 8,662,036
59 8,662,036 - 1,650,965 - 565,265 7,576,336
60 7,576,336 - 1,480,226 - 493,134 6,589,244
61 6,589,244 - 1,320,291 - 427,721 5,696,674
62 5,696,674 - 1,171,995 - 368,702 4,893,381
63 4,893,381 - 1,034,994 - 315,711 4,174,097
64 4,174,097 - 908,032 - 268,414 3,534,480
65 3,534,480 - 791,353 - 226,489 2,969,615
66 2,969,615 - 684,609 - 189,595 2,474,601
67 2,474,601 - 587,300 - 157,396 2,044,697
68 2,044,697 - 499,395 - 129,552 1,674,855
69 1,674,855 - 420,609 - 105,711 1,359,956
70 1,359,956 - 351,034 - 85,499 1,094,422
71 1,094,422 - 290,877 - 68,509 872,054
72 872,054 - 238,636 - 54,346 687,764
73 687,764 - 193,655 - 42,669 536,778
74 536,778 - 155,709 - 33,140 414,209
75 414,209 - 123,755 - 25,445 315,899
76 315,899 - 97,196 - 19,307 238,010
77 238,010 - 75,524 - 14,465 176,951
78 176,951 - 57,769 - 10,697 129,879
79 129,879 - 43,745 - 7,804 93,937
80 93,937 - 32,669 - 5,608 66,876
81 66,876 - 23,934 - 3,968 46,910
82 46,910 - 17,384 - 2,763 32,288
83 32,288 - 12,404 - 1,886 21,770
84 21,770 - 8,616 - 1,263 14,416
85 14,416 - 5,912 - 829 9,333
86 9,333 - 3,952 - 532 5,913
87 5,913 - 2,540 - 336 3,709
88 3,709 - 1,611 - 210 2,308
89 2,308 - 1,011 - 130 1,428
90 1,428 - 627 - 81 881
91 881 - 387 - 50 545
92 545 - 239 - 31 336
93 336 - 148 - 19 207
94 207 - 92 - 12 126
95 126 - 57 - 7 76
96 76 - 35 - 4 46
97 46 - 21 - 3 27
98 27 - 13 - 2 16
99 16 - 8 - 1 9
100 9 - 10 - 0 -
41
GASB 67 Single Discount Rate Determination:
100-Year Projection to Determine Cross-over Date
Year
Projected
Beginning Plan
Net Position
Projected Benefit
Payments
Funded Portion of
Benefit Payments
Unfunded Portion
of Benefit
Payments
Present Value of
Funded Benefit
Payments using
Expected Return
Rate (v)
Present Value of
Unfunded Benefit
Payments using
Municipal Bond
Rate (vf)
Present Value of
Benefit
Payments using
Single Discount
Rate (sdr)
(a)(b)(c)(d)(e)(f)=(d)*v^((a)-.5)(g)=(e)*vf ^((a)-.5)(h)=((c)/(1+sdr)^(a-.5)
1 55,660,784$ 4,554,989$ 4,554,989$ -$ 4,399,364$ -$ 4,399,364$
2 58,183,219 4,640,822 4,640,822 - 4,181,218 - 4,181,218
3 60,823,895 4,863,195 4,863,195 - 4,087,283 - 4,087,283
4 63,446,504 5,008,170 5,008,170 - 3,926,425 - 3,926,425
5 66,059,291 5,168,282 5,168,282 - 3,779,808 - 3,779,808
6 68,699,573 5,404,443 5,404,443 - 3,687,055 - 3,687,055
7 71,276,634 5,579,701 5,579,701 - 3,550,952 - 3,550,952
8 73,804,967 6,018,483 6,018,483 - 3,572,943 - 3,572,943
9 76,034,359 6,174,507 6,174,507 - 3,419,374 - 3,419,374
10 78,034,300 6,415,550 6,415,550 - 3,314,236 - 3,314,236
11 79,935,915 6,676,818 6,676,818 - 3,217,542 - 3,217,542
12 81,280,269 6,804,546 6,804,546 - 3,058,857 - 3,058,857
13 82,536,299 6,983,657 6,983,657 - 2,928,519 - 2,928,519
14 83,550,508 7,151,227 7,151,227 - 2,797,377 - 2,797,377
15 85,166,240 7,256,990 7,256,990 - 2,648,086 - 2,648,086
16 86,749,415 7,367,769 7,367,769 - 2,507,938 - 2,507,938
17 88,236,551 7,418,102 7,418,102 - 2,355,477 - 2,355,477
18 89,753,755 7,524,157 7,524,157 - 2,228,687 - 2,228,687
19 90,844,803 7,650,376 7,650,376 - 2,113,875 - 2,113,875
20 91,853,452 7,804,545 7,804,545 - 2,011,635 - 2,011,635
21 92,742,318 7,926,731 7,926,731 - 1,905,904 - 1,905,904
22 93,529,504 8,213,544 8,213,544 - 1,842,225 - 1,842,225
23 94,034,637 8,242,105 8,242,105 - 1,724,469 - 1,724,469
24 93,801,729 8,272,299 8,272,299 - 1,614,540 - 1,614,540
25 92,490,467 8,337,385 8,337,385 - 1,517,951 - 1,517,951
26 91,003,010 8,336,382 8,336,382 - 1,415,828 - 1,415,828
27 89,365,047 8,487,658 8,487,658 - 1,344,702 - 1,344,702
28 87,438,036 8,371,432 8,371,432 - 1,237,209 - 1,237,209
29 85,406,402 8,424,662 8,424,662 - 1,161,452 - 1,161,452
30 83,181,557 8,558,472 8,558,472 - 1,100,652 - 1,100,652
31 80,611,562 8,488,398 8,488,398 - 1,018,321 - 1,018,321
32 77,857,901 8,483,309 8,483,309 - 949,357 - 949,357
33 74,892,203 8,273,805 8,273,805 - 863,724 - 863,724
34 71,885,790 8,049,969 8,049,969 - 783,915 - 783,915
35 68,898,486 7,904,100 7,904,100 - 718,013 - 718,013
36 65,850,678 7,930,812 7,930,812 - 672,052 - 672,052
37 62,531,906 7,734,001 7,734,001 - 611,356 - 611,356
38 59,096,982 7,539,041 7,539,041 - 555,919 - 555,919
39 55,590,326 7,216,663 7,216,663 - 496,406 - 496,406
40 52,141,200 6,877,277 6,877,277 - 441,288 - 441,288
41 48,795,613 6,540,826 6,540,826 - 391,511 - 391,511
42 45,557,953 6,195,089 6,195,089 - 345,911 - 345,911
43 42,445,552 5,860,092 5,860,092 - 305,229 - 305,229
44 39,456,278 5,642,035 5,642,035 - 274,134 - 274,134
45 36,477,861 5,304,229 5,304,229 - 240,411 - 240,411
46 33,612,404 4,963,305 4,963,305 - 209,850 - 209,850
47 30,893,619 4,638,746 4,638,746 - 182,955 - 182,955
48 28,315,121 4,322,265 4,322,265 - 159,023 - 159,023
49 25,878,647 4,020,570 4,020,570 - 137,988 - 137,988
50 23,579,114 3,729,267 3,729,267 - 119,394 - 119,394
42
GASB 67 Single Discount Rate Determination:
100-Year Projection to Determine Cross-over Date (cont'd)
Year
Projected
Beginning Plan
Net Position
Projected Benefit
Payments
Funded Portion of
Benefit Payments
Unfunded Portion
of Benefit
Payments
Present Value of
Funded Benefit
Payments using
Expected Return
Rate (v)
Present Value of
Unfunded Benefit
Payments using
Municipal Bond
Rate (vf)
Present Value of
Benefit
Payments using
Single Discount
Rate (sdr)
(a)(b)(c)(d)(e)(f)=(d)*v^((a)-.5)(g)=(e)*vf ^((a)-.5)(h)=((c)/(1+sdr)^(a-.5)
51 21,415,623$ 3,449,296$ 3,449,296$ -$ 103,013$ -$ 103,013$
52 19,386,236 3,181,507 3,181,507 - 88,634 - 88,634
53 17,487,994 2,926,364 2,926,364 - 76,051 - 76,051
54 15,717,247 2,678,985 2,678,985 - 64,946 - 64,946
55 14,075,137 2,449,231 2,449,231 - 55,388 - 55,388
56 12,552,676 2,231,329 2,231,329 - 47,071 - 47,071
57 11,146,209 2,026,271 2,026,271 - 39,874 - 39,874
58 9,850,786 1,833,160 1,833,160 - 33,651 - 33,651
59 8,662,036 1,650,965 1,650,965 - 28,271 - 28,271
60 7,576,336 1,480,226 1,480,226 - 23,645 - 23,645
61 6,589,244 1,320,291 1,320,291 - 19,674 - 19,674
62 5,696,674 1,171,995 1,171,995 - 16,291 - 16,291
63 4,893,381 1,034,994 1,034,994 - 13,420 - 13,420
64 4,174,097 908,032 908,032 - 10,983 - 10,983
65 3,534,480 791,353 791,353 - 8,929 - 8,929
66 2,969,615 684,609 684,609 - 7,206 - 7,206
67 2,474,601 587,300 587,300 - 5,766 - 5,766
68 2,044,697 499,395 499,395 - 4,574 - 4,574
69 1,674,855 420,609 420,609 - 3,594 - 3,594
70 1,359,956 351,034 351,034 - 2,798 - 2,798
71 1,094,422 290,877 290,877 - 2,163 - 2,163
72 872,054 238,636 238,636 - 1,655 - 1,655
73 687,764 193,655 193,655 - 1,253 - 1,253
74 536,778 155,709 155,709 - 940 - 940
75 414,209 123,755 123,755 - 697 - 697
76 315,899 97,196 97,196 - 510 - 510
77 238,010 75,524 75,524 - 370 - 370
78 176,951 57,769 57,769 - 264 - 264
79 129,879 43,745 43,745 - 186 - 186
80 93,937 32,669 32,669 - 130 - 130
81 66,876 23,934 23,934 - 89 - 89
82 46,910 17,384 17,384 - 60 - 60
83 32,288 12,404 12,404 - 40 - 40
84 21,770 8,616 8,616 - 26 - 26
85 14,416 5,912 5,912 - 17 - 17
86 9,333 3,952 3,952 - 10 - 10
87 5,913 2,540 2,540 - 6 - 6
88 3,709 1,611 1,611 - 4 - 4
89 2,308 1,011 1,011 - 2 - 2
90 1,428 627 627 - 1 - 1
91 881 387 387 - 1 - 1
92 545 239 239 - 0 - 0
93 336 148 148 - 0 - 0
94 207 92 92 - 0 - 0
95 126 57 57 - 0 - 0
96 76 35 35 - 0 - 0
97 46 21 21 - 0 - 0
98 27 13 13 - 0 - 0
99 16 8 8 - 0 - 0
100 9 10 9 0 0 0 0
Totals 88,790,544$ -$ 88,790,544$
43
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73 76 79 82 85 88 91 94 97
10
0
$ [thousands]
Year
Projection of Plan Net Position and Benefit Payments
Projected Plan Net Position Projected Benefit Payments for Current Members
SECTION E
MISCELLANEOUS INFORMATION
44
A.
1.Number Included in Last Valuation 74 84
2.New Members 7 2
3.Non-Vested Employment Terminations (1)(3)
4.Vested Employment Terminations (1)0
5.Service Retirements 0 0
6.DROP Retirement (4)(8)
7.Disability Retirements 0 0
8.Deaths 0 (1)
9.Other -- Data Corrections 0 0
10.Number Included in This Valuation 75 74
B.
1.Number Included in Last Valuation 1 1
2.Additions from Active Members 1 0
3.Lump Sum Payments/Refund of Contributions 0 0
4.Payments Commenced 0 0
5.Deaths 0 0
6.Other 0 0
7.Number Included in This Valuation 2 1
1.Number Included in Last Valuation 28 24
2.Additions from Active Members 4 8
3.Retirements (1)(4)
4.Deaths Resulting in No Further Payments 0 0
5.Other 0 0
6.Number Included in This Valuation 31 28
D.
1.Number Included in Last Valuation 36 32
2.Additions from Active Members 0 0
3.Additions from Terminated Vested Members 0 0
4.Additions from DROP 1 4
5.Deaths Resulting in No Further Payments (1)0
6.Deaths Resulting in New Survivor Benefits 0 0
7.End of Certain Period - No Further Payments 0 0
8.Other 0 0
9.Number Included in This Valuation 36 36
RECONCILIATION OF MEMBERSHIP DATA
Active Members
Service Retirees, Disability Retirees and Beneficiaries
Terminated Vested Members
From 10/1/11From 10/1/12
To 10/1/12To 10/1/13
C. DROP Plan Members
45
ACTIVE PARTICIPANT DISTRIBUTION
d
Age Group 0-1 1-2 2-3 3-4 4-5 5-9 10-14 15-19 20-24 25 & Up Totals
15-24 NO.4 1 1 0 0 0 0 0 0 0 6
TOT PAY 185,519 45,748 45,748 0 0 0 0 0 0 0 277,015
AVG PAY 46,380 45,748 45,748 0 0 0 0 0 0 0 46,169
25-29 NO.0 1 0 0 0 3 0 0 0 0 4
TOT PAY 0 45,748 0 0 0 150,643 0 0 0 0 196,391
AVG PAY 0 45,748 0 0 0 50,214 0 0 0 0 49,098
30-34 NO.2 0 0 0 1 6 1 0 0 0 10
TOT PAY 93,221 0 0 0 48,526 312,543 68,185 0 0 0 522,475
AVG PAY 46,610 0 0 0 48,526 52,090 68,185 0 0 0 52,248
35-39 NO.1 0 0 0 0 7 5 2 0 0 15
TOT PAY 46,149 0 0 0 0 393,635 287,784 138,696 0 0 866,264
AVG PAY 46,149 0 0 0 0 56,234 57,557 69,348 0 0 57,751
40-44 NO.0 0 0 0 0 6 9 8 0 0 23
TOT PAY 0 0 0 0 0 329,029 545,527 678,700 0 0 1,553,256
AVG PAY 0 0 0 0 0 54,838 60,614 84,838 0 0 67,533
45-49 NO.0 0 0 0 0 3 2 4 0 0 9
TOT PAY 0 0 0 0 0 176,577 130,179 302,589 0 0 609,345
AVG PAY 0 0 0 0 0 58,859 65,090 75,647 0 0 67,705
50-54 NO.0 0 0 1 0 0 1 5 0 0 7
TOT PAY 0 0 0 121,385 0 0 59,980 457,091 0 0 638,456
AVG PAY 0 0 0 121,385 0 0 59,980 91,418 0 0 91,208
55-59 NO.0 0 0 0 0 0 1 0 0 0 1
TOT PAY 0 0 0 0 0 0 59,608 0 0 0 59,608
AVG PAY 0 0 0 0 0 0 59,608 0 0 0 59,608
60-64 NO.0 0 0 0 0 0 0 0 0 0 0
TOT PAY 0 0 0 0 0 0 0 0 0 0 0
AVG PAY 0 0 0 0 0 0 0 0 0 0 0
65-69 NO.0 0 0 0 0 0 0 0 0 0 0
TOT PAY 0 0 0 0 0 0 0 0 0 0 0
AVG PAY 0 0 0 0 0 0 0 0 0 0 0
TOT NO.7 2 1 1 1 25 19 19 0 0 75
TOT AMT 324,889 91,496 45,748 121,385 48,526 1,362,427 1,151,263 1,577,076 0 0 4,722,810
AVG AMT 46,413 45,748 45,748 121,385 48,526 54,497 60,593 83,004 0 0 62,971
Years of Service to Valuation Date
46
INACTIVE PARTICIPANT DISTRIBUTION
Disabled Retired*
Total Total Total Total
Age Group Number Benefits Number Benefits Number Benefits Number Benefits
Under 20 - - - - - - - -
20-24 - - - - - - - -
25-29 - - - - - - - -
30-34 - - - - - - - -
35-39 - - - - - - - -
40-44 2 124,164 - - 2 122,783 - -
45-49 - - 1 23,392 17 1,394,613 - -
50-54 - - 3 87,331 15 1,328,640 - -
55-59 - - 4 108,311 9 670,067 - -
60-64 - - 1 35,937 5 285,848 2 65,847
65-69 - - 1 17,851 3 144,237 - -
70-74 - - - - 4 167,959 - -
75-79 - - - - - - - -
-
80-84 - - - - - - - -
85-89 - - - - - - - -
90-94 - - - - - - - -
95-99 - - - - - - - -
100 & Over - - - - - - - -
Total 2 124,164 10 272,822 55 4,114,147 2 65,847
Average Age 43 57 55 63
Terminated Vested
Deceased with
Beneficiary
* Does not include deferred supplemental benefits for DROP members
SECTION F
SUMMARY OF PLAN PROVISIONS
47
SUMMARY OF PLAN PROVISIONS
A. Ordinances
The Plan was established under the Code of Ordinances for the City of Palm Beach Gardens,
Florida, Chapter 50, Article III, and was most recently amended under Ordinance No. 24, 2012
passed and adopted on September 13, 2012. The Plan is also governed by certain provisions of
Chapter 185, Florida Statutes, Part VII, Chapter 112, Florida Statutes and the Internal Revenue
Code.
B. Effective Date
July 1, 1972
C. Plan Year
October 1 through September 30
D. Type of Plan
Qualified, governmental defined benefit retirement plan; for GASB purposes it is a single employer
plan.
E. Eligibility Requirements
All full-time police officers are eligible for membership on the first day of the month coincident
with or next following date of employment.
F. Credited Service
Service is measured as the total number of full years (and fraction thereof) of continuous service
from the date of employment to the date of termination. No service is credited for any periods of
employment for which the member received a refund of employee contributions.
G. Compensation
Base pay, but not less than the amount of total W-2 Compensation prior to September 13, 2012.
H. Average Monthly Earnings (AME)
The average of Compensation over the last 5 years of Credited Service; includes a lump sum
payment of unused leave pay (no more than the dollar amount of unused leave accrued as of
September 13, 2012).
48
I. Normal Retirement
Eligibility: A member with at least ten years of service on September 13, 2012 may retire on
the first day of the month coincident with or next following the earlier of:
(1) age 52 and 10 years of Credited Service, or
(2) 20 years of Credited Service regardless of age.
A member with less than ten years of service on September 13, 2012 may retire on
the first day of the month coincident with or next following:
age 59 and 10 years of Credited Service.
Benefit: For service accrued before September 13, 2012, 3.5% of AME multiplied by years
of Credited Service. For service accrued after September 13, 2012, 2.75% of AME
multiplied by years of Credited Service. The maximum benefit is equal to 75% of
AME, or the percentage earned as of September 13, 2012, if greater.
Normal Form
of Benefit: 10 Years Certain and Life thereafter; other options are also available.
Supplemental
Benefit: A monthly supplemental benefit of $12.50 per year of Credited Service is payable
to all retirees and their beneficiaries in pay status.
COLA: None
J. Early Retirement
Eligibility: A member may elect to retire earlier than the Normal Retirement Eligibility upon
attainment of age 50 and 10 years of Credited Service.
Benefit: The Normal Retirement Benefit is reduced by 3.0% for each year by which the
Early Retirement date precedes the Normal Retirement date.
Normal Form
of Benefit: 10 Years Certain and Life thereafter; other options are also available.
Supplemental
Benefit: A monthly supplemental benefit of $12.50 per year of Credited Service is payable
to all retirees and their beneficiaries in pay status.
COLA: None
K. Delayed Retirement
Same as Normal Retirement taking into account compensation earned and service credited until the
date of actual retirement.
49
L. Service Connected Disability
Eligibility: Any member who becomes totally and permanently disabled and unable to render
useful and efficient service as a police officer for a period of at least 6 months
resulting from an act occurring in the performance of service for the City is eligible
for a disability benefit.
Benefit: 60% of the current rate of pay, but no less than the accrued Normal Retirement
Benefit taking into account compensation earned and service credited until the date
of disability. Disability benefits, when combined with Social Security, Worker’s
Compensation or any other local, state or federal government benefits, cannot
exceed and will be limited to the AME on the date of disability.
Normal Form
of Benefit: 10 Years Certain and Life thereafter; other options are also available.
Supplemental
Benefit: A monthly supplemental benefit of $12.50 per year of Credited Service is payable
to all retirees and their beneficiaries in pay status.
COLA: None
M. Non-Service Connected Disability
Eligibility: Any member with 10 years of Credited Service who becomes totally and
permanently disabled and unable to render useful and efficient service as a police
officer for a period of at least 6 months is eligible for a disability benefit.
Benefit: 2.5% of AME multiplied by Credited Service, but not less than 25% of salary or the
accrued Normal Retirement Benefit taking into account compensation earned and
service credited until the date of disability. Disability benefits, when combined
with Social Security, Worker’s Compensation or any other local, state or federal
government benefits, cannot exceed and will be limited to the AME on the date of
disability.
Normal Form
of Benefit: 10 Years Certain and Life thereafter; other options are also available.
Supplemental
Benefit: A monthly supplemental benefit of $12.50 per year of Credited Service is payable
to all retirees and their beneficiaries in pay status.
COLA: None
50
N. Death in the Line of Duty
Eligibility: Members who die as a result of personal injury or disease arising out of the
member’s actual performance of duties are eligible for survivor benefits regardless
of Credited Service.
Benefit: The surviving spouse will receive the greater of:
(1) 50% of the member’s AME, or
(2) the member’s accrued Normal Retirement Benefit as of the date of death with no
actuarial reduction for Early Retirement.
If there is no spouse, or if the surviving spouse dies, the spouse’s benefit determined
above shall be distributed equally among any eligible children. If there is no spouse
or eligible children, the benefit will be paid to the deceased member’s estate.
Normal Form
of Benefit: Spouse’s benefits are payable until death; children’s benefits are payable until age
18 (24 if a full-time student), marriage, death, or adoption. Benefits paid to a
member’s estate may be paid as a lump sum at the discretion of the Board of
Trustees.
Supplemental
Benefit: A monthly supplemental benefit of $12.50 per year of Credited Service is payable
to all retirees and their beneficiaries in pay status.
COLA: None
O. Other Pre-Retirement Death
Eligibility: Members are eligible for survivor benefits after the completion of 5 or more years
of Credited Service.
Benefit: The survivor benefit payable to the designated beneficiary is the member’s accrued
Normal Retirement Benefit. Benefit is payable at the member’s Early or Normal
retirement date and will be actuarially reduced for Early Retirement when
applicable.
Normal Form
of Benefit: For member’s eligible for Normal or Delayed Retirement on the date of death, the
designated beneficiary’s benefit will be paid for life. For members not yet
eligible, benefits will be paid for 10 years.
Supplemental
Benefit: A monthly supplemental benefit of $12.50 per year of Credited Service is payable
to all retirees and their beneficiaries in pay status.
COLA: None
The beneficiary of a plan member with less than 5 years of Credited Service at the time of death
will receive a refund of the member’s accumulated contributions without interest.
51
P. Post Retirement Death
Benefit determined by the form of benefit elected upon retirement.
Q. Optional Forms
In lieu of electing the Normal Form of benefit, the optional forms of benefits available to all retirees
are a Single Life Annuity or the 50%, 66 2/3%, 75% and 100% Joint and Survivor options.
R. Vested Termination
Eligibility: A member has earned a non-forfeitable right to Plan benefits after the completion of
5 years of Credited Service (see vesting table below).
Years of
Credited Service
Vested
%
Under 5
5
6
7
8
9
10 or more
0%
25
40
55
70
85
100
Benefit: The benefit is the member’s vested accrued Normal Retirement Benefit as of the
date of termination. Benefit begins at the member’s Normal Retirement date.
Alternatively, members with at least 10 years of Credited Service may elect to
receive an actuarially reduced Early Retirement Benefit any time after age 50.
Normal Form
of Benefit: 10 Years Certain and Life thereafter; other options are also available.
Supplemental
Benefit: A monthly supplemental benefit of $12.50 per year of Credited Service is payable
to all retirees and their beneficiaries once in pay status.
COLA: None
Members terminating employment with less than 5 years of Credited Service will receive a refund of
their own accumulated contributions without interest.
S. Refunds
Eligibility: All members terminating employment with less than 5 years of Credited Service are
eligible. Optionally, vested members (those with 5 or more years of Credited
Service) may elect a refund in lieu of the vested benefits otherwise due.
Benefit: Refund of the member’s contributions without interest.
52
T. Member Contributions
8.6% of Compensation
U. State Contributions
Chapter 185 Premium Tax Refunds
V. Employer Contributions
Any additional amount needed to fund the plan properly according to State laws.
W. Cost of Living Increases
None.
X. 13th Check
Not Applicable
Y. Deferred Retirement Option Plan
Eligibility: A member who had at least ten years of Credited Service as of September 13, 2012
may enter the DROP on the first day of the month coincident with or next following
the earlier of:
(1) age 52 and 10 years of Credited Service, or
(2) 20 years of Credited Service regardless of age.
Members with less than ten years of Credited Service on September 13, 2012 may
enter the DROP on the first day of the month coincident with or next following:
age 59 and 10 years of Credited Service.
Members who meet eligibility must submit a written election to participate in the
DROP. The election to participate must be made within the first 28.5 years of
Credited Service and members can no longer participate after attaining 33.5 years of
employment service.
Benefit: The member’s Credited Service and AME are frozen upon entry into the DROP.
The monthly retirement benefit as described under Normal Retirement is calculated
based upon the frozen Credited Service and AME.
Maximum
DROP Period: 60 months
Interest
Credited: The member's DROP account is credited quarterly at an interest rate based upon
the option chosen by the member. Members must elect from 1 of the 2 following
options:
1. Gain or loss at the same rate earned by the Plan, or
2. Guaranteed rate of 6.5% per annum.
53
Normal Form
of Benefit: Lump Sum; member may also elect that the DROP distribution be paid in 3 equal
payments over 3 years or used to purchase an annuity to be paid in monthly
installments.
COLA: None
Z. Other Ancillary Benefits
There are no ancillary retirement type benefits not required by statutes but which might be deemed
a City of Palm Beach Gardens Police Officers’ Pension Fund liability if continued beyond the
availability of funding by the current funding source.
AA. Changes from Previous Valuation
There have been no changes in benefits since the previous valuation.
CITY OF PALM BEACH GARDENS POLICE OFFICERS’ PENSION FUND
Actuarial Impact Statement – June 10, 2014
Description of Amendments
Proposed Ordinance 9, 2014 would implement the following changes in Plan provisions:
Effective July 1, 2016, for members who had less than ten years of service as of September 13, 2012,
eligibility for normal retirement would change from attainment of age 59 with 10 years of service to the
earlier of attainment of age 55 with 10 years of service or completion of 25 years of service regardless
of age.
Effective July 1, 2016, the eligibility conditions for entry into the DROP would change such that a
participant may delay entry into the DROP until he or she has accrued the maximum benefit of 75% of
his or her Average Monthly Earnings.
Effective June 5, 2014, the member contribution rate shall be increased by 11% of pensionable salary
(from 8.60% to 19.60%). Also effective June 5, 2014, immediately following this increase, the
member contribution rate shall be reduced back to 8.60% of pensionable salary, using $538,552 from
the Accumulated Excess Chapter 185 Premium Tax Reserve to fund the reduction in member
contributions.
Funding Implications of Amendment
An actuarial cost estimate is attached.
Certification of Administrator
I believe the amendment to be in compliance with Part VII, Chapter 112, Florida Statutes and
Section 14, Article X of the Constitution of the State of Florida.
For the Board of Trustees
as Plan Administrator
SUPPLEMENTAL ACTUARIAL VALUATION REPORT
Plan
City of Palm Beach Gardens Police Officers’ Pension Fund
Valuation Date
October 1, 2013
Date of Report
June 10, 2014
Report Requested by
Board of Trustees
Prepared by
Peter N. Strong, FSA
Group Valued
All active and inactive members of the Plan.
Plan Changes Being Considered for Change
Effective July 1, 2016, for members who had less than ten years of service as of September 13, 2012,
eligibility for normal retirement would change from attainment of age 59 with 10 years of service to the
earlier of attainment of age 55 with 10 years of service or completion of 25 years of service regardless
of age.
Effective July 1, 2016, the eligibility conditions for entry into the DROP would change such that a
participant may delay entry into the DROP until he or she has accrued the maximum benefit of 75% of
his or her Average Monthly Earnings.
Effective June 5, 2014, the member contribution rate shall be increased by 11% of pensionable salary
(from 8.60% to 19.60%). Also effective June 5, 2014, immediately following this increase, the
member contribution rate shall be reduced back to 8.60% of pensionable salary, using $538,552 from
the Accumulated Excess Chapter 185 Premium Tax Reserve to fund the reduction in member
contributions.
Participants Affected
Members who had less than ten years of service on September 13, 2012 and whose Normal Retirement
Date is subsequent to July 1, 2016 would be affected by the proposed changes.
Actuarial Assumptions and Methods
Same as October 1, 2013 Actuarial Valuation Report with the following exception: Currently,
members who had less than ten years of service as of September 13, 2012 were assumed to retire
with 100% probability upon reaching Normal Retirement eligibility. Effective July 1, 2016,
members who had less than ten years of service as of September 13, 2012 are assumed to retire
according to the retirement rates shown on the top of the next page.
Age
42 - 49 50 - 54 55 56 57 58 59 60
10 0.0%2.5%20.0%20.0%20.0%55.0%65.0%100.0%
11 - 19 0.0%2.5%10.0%10.0%10.0%47.5%57.5%100.0%
20 0.0%2.5%30.0%40.0%45.0%70.0%80.0%100.0%
21 - 22 0.0%2.5%12.5%15.0%15.0%47.5%65.0%100.0%
23 - 24 0.0%2.5%15.0%15.0%15.0%47.5%65.0%100.0%
25 - 26 15.0%15.0%15.0%15.0%15.0%47.5%65.0%100.0%
27 100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%
Revised Retirement Rates
S
e
r
v
i
c
e
Also, if at any point a member reaches the maximum benefit of 75% of his or her Average Monthly
Earnings, his or her probability of retirement is assumed to be 100%.
Some of the key assumptions/methods are:
Investment Return 7.2%
Salary increase 7.5% per year
Cost Method Entry Age Normal
Amortization Period for Any Change in Actuarial Accrued Liability
15 years
Summary of Data Used in Report
See attached page. Same as data used in the October 1, 2013 Actuarial Valuation Report.
Actuarial Impact of Proposal(s)
See attached page(s).
Special Risks Involved with the Proposal That the Plan Has Not Been Exposed to Previously
None
Other Cost Considerations
As of October 1, 2013 the Market Value of Assets exceeds the Actuarial Value of Assets by
$2,459,102. This difference will be gradually recognized over the next several years. In turn, the
computed employer contribution rate will decrease by approximately 5.4% of covered payroll in the
absence of offsetting losses.
A.Valuation Date
B.ARC to Be Paid During
Fiscal Year Ending 9/30/2015 9/30/2015
C.Assumed Dates of Employer Contrib.Quarterly Quarterly
D.Annual Payment to Amortize
Unfunded Actuarial Liability $1,991,364 $2,069,763 $78,399
E.Employer Normal Cost 923,576 993,497 69,921
F.ARC as of the Valuation Date: D+E 2,914,940 3,063,260 148,320
G.ARC Adjusted for Frequency of
Payments 3,042,673 3,197,492 154,819
H.ARC as % of Covered Payroll 62.10 %65.26 %3.16 %
I.Assumed Rate of Increase in Covered
Payroll to Contribution Year 5.00 %5.00 %- %
J.Covered Payroll for Contribution Year 5,144,911 5,144,911 0
K.ARC for Contribution Year: HxJ 3,194,990 3,357,569 162,579
L.Estimate of State Revenue in
Contribution Year 412,644 951,196 538,552
M.Required Employer Contribution (REC)
in Contribution Year: K - L 2,782,346 2,406,373 (375,973)
N.REC as % of Covered Payroll in
Contribution Year: M ÷ J 54.08 %46.77 %(7.31) %
Increase /
(Decrease)
ANNUAL REQUIRED CONTRIBUTION (ARC)
Change
Valuation
October 1, 2013
Actuarial Impact
Statement
October 1, 2013
A.Valuation Date
B.Actuarial Present Value of All Projected
Benefits for
1.Active Members
a. Service Retirement Benefits $26,465,192 $27,864,639 $1,399,447
b. Vesting Benefits 1,194,728 1,369,186 174,458
c. Disability Benefits 4,314,995 3,452,621 (862,374)
d. Preretirement Death Benefits 436,427 369,554 (66,873)
e. Return of Member Contributions 22,950 22,950 0
f. Total 32,434,292 33,078,950 644,658
2.Inactive Members
a. Service Retirees & Beneficiaries 52,641,668 52,641,668 0
b. Disability Retirees 2,894,330 2,894,330 0
c. Terminated Vested Members 820,252 820,252 0
d. Total 56,356,250 56,356,250 0
3. Total for All Members 88,790,542 89,435,200 644,658
C.Actuarial Accrued (Past Service)
Liability per GASB No. 25 76,093,054 76,848,944 755,890
D.Plan Assets
1.Market Value 55,660,784 55,660,784 0
2. Actuarial Value 53,201,682 53,201,682 0
E.Unfunded Actuarial Accured Liability 22,891,372 23,647,262 755,890
F.Actuarial Present Value of Projected
Covered Payroll 54,983,080 49,399,426 (5,583,654)
G.Actuarial Present Value of Projected
Member Contributions 4,728,545 4,248,351 (480,194)
H.Accumulated Value of Contributions
for Active Members 4,089,690 4,089,690 0
H.Funded Ratio: D2 ÷ C 69.9 %69.2 %(0.7)%
October 1, 2013
Valuation
October 1, 2013
Actuarial Impact
Statement
Change
Increase /
(Decrease)
ACTUARIAL VALUE OF BENEFITS AND ASSETS
A.Valuation Date
B.Normal Cost for
1.Service Retirement Benefits $868,732 $952,373 $83,641
2.Vesting Benefits 88,474 99,129 10,655
3.Disability Benefits 239,706 216,197 (23,509)
4.Preretirement Death Benefits 22,828 21,450 (1,378)
5.Return of Member Contributions 9,941 10,453 512
6.Total for Future Benefits 1,229,681 1,299,602 69,921
7.Assumed Amount for Administrative
Expenses 115,288 115,288 0
8.Total Normal Cost 1,344,969 1,414,890 69,921
9.Total as a % of Covered Payroll 27.45 %28.88 %1.43 %
C.Expected Member Contribution 421,393 421,393 0
D.Employer Normal Cost: B8-C 923,576 993,497 69,921
E.Employer Normal Cost as a % of
Covered Payroll 18.85 %20.28 %1.43 %
CALCULATION OF EMPLOYER NORMAL COST
Change
Increase /
(Decrease)
October 1, 2013
Valuation
October 1, 2013
Actuarial Impact
Statement
ACTIVE MEMBERS
Number 75 75 0
Covered Annual Payroll $4,899,915 $4,899,915 $0
Average Annual Payroll $65,332 $65,332 $0
Average Age 39.1 39.1 0
Average Past Service 10.3 10.3 0
Average Age at Hire 28.8 28.8 0.0
RETIREES & BENEFICIARIES
Number 57 57 0
Annual Benefits $4,179,994 $4,179,994 $0
Average Annual Benefit $73,333 $73,333 $0
Average Age 55.2 55.2 0.0
DISABILITY RETIREES
Number 10 10 0
Annual Benefits $272,822 $272,822 $0
Average Annual Benefit $27,282 $27,282 $0
Average Age 57.2 57.2 0.0
TERMINATED VESTED MEMBERS
Number 2 2 0
Annual Benefits $124,164 $124,164 $0
Average Annual Benefit $62,082 $62,082 $0
Average Age 42.7 42.7 0.0
Change
Increase /
(Decrease)
PARTICIPANT DATA
October 1, 2013
Valuation
October 1, 2013
Actuarial Impact
Statement