HomeMy WebLinkAboutAgenda Fire Pension 050317
PALM BEACH GARDENS FIREFIGHTERS’
PENSION FUND
Meeting of Wednesday May 3, 2017
Location: City Hall, Council Chambers
Palm Beach Gardens City Hall
10500 North Military Trail
Palm Beach Gardens, FL 33410
Time: 1 PM
AGENDA
1. Call Meeting to Order
2. Public Comments
3. Minutes:
• Regular Meeting Held on November 2, 2016
• Regular Meeting Held on March 6, 2017
4. 9/30/2016 Actuarial Valuation Report Presentation: Foster & Foster (Doug Lozen)
5. 9/30/2016 Audited Financial Statements Presentation: KSDT (Eric Leventhal)
6. Investment Monitor Report: AndCo Consulting (Dan Johnson)
• SMID Cap Comparison
• IPS
7. Attorney Report: Sugarman & Susskind, P.A. (Pedro Herrera)
• BanCorpSouth, Inc. Litigation Update
8. Administrative Report: Resource Centers (Audrey Ross)
• Disbursements
• Benefit Approvals
• Financial Statements
9. Old Business
10. New Business
• KTMC Brochure
11. Next Meeting Previously Scheduled Monday July 10, 2017 at 1PM
12. Adjourn
PLEASE NOTE:
Should any interested party seek to appeal any decision made by the Board with respect to any matter considered at such meeting or hearing, he will need a
record of the proceedings, and for such purpose he may need to insure 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 Resource Centers, LLC no later than four days prior to the meeting.
THE RESOURCE CENTERS , LLC
4360 Northlake Boulevard, Suite 206 Palm Beach Gardens, FL 33410
Phone (561) 624-3277 Fax (561) 624-3278 WWW .RESOURCE CENTERS .COM
CITY OF PALM BEACH GARDENS
FIREFIGHTERS’ PENSION FUND
ACTUARIAL VALUATION REPORT
AS OF OCTOBER 1, 2016
CONTRIBUTIONS APPLICABLE TO THE CITY'S
PLAN/FISCAL YEAR ENDING SEPTEMBER 30, 2018
13420 Parker Commons Blvd., Suite 104 Fort Myers, FL 33912 (239) 433-5500 Fax (239) 481-0634 www.foster-foster.com
April 21, 2017
Board of Trustees
City of Palm Beach Gardens
Firefighters’ Pension Fund
Resource Centers, LLC
4360 Northlake Blvd., Suite 206
Palm Beach Gardens, FL 33410
Re: City of Palm Beach Gardens
Firefighters’ Pension Fund
Dear Board:
We are pleased to present to the Board this report of the annual actuarial valuation of the City of Palm
Beach Gardens Firefighters’ Pension Fund. The valuation was performed to determine whether the assets
and contributions are sufficient to provide the prescribed benefits and to develop the appropriate funding
requirements for the applicable plan year. Please note that this valuation may not be applicable for any
other purposes.
The valuation has been conducted in accordance with generally accepted actuarial principles and
practices, including the applicable Actuarial Standards of Practice as issued by the Actuarial Standards
Board, and reflects laws and regulations issued to date pursuant to the provisions of Chapters 112, and
175, Florida Statutes, as well as applicable federal laws and regulations. In our opinion, the assumptions
used in this valuation, as adopted by the Board of Trustees, represent reasonable expectations of
anticipated plan experience. Future actuarial measurements may differ significantly from the current
measurements presented in this report for a variety of reasons including: changes in applicable laws,
changes in plan provisions, changes in assumptions, or plan experience differing from expectations.
In conducting the valuation, we have relied on personnel, plan design, and asset information supplied by
the City of Palm Beach Gardens, financial reports prepared by the custodian bank, and the actuarial
assumptions and methods described in the Actuarial Assumptions section of this report. While we cannot
verify the accuracy of all this information, the supplied information was reviewed for consistency and
reasonableness. As a result of this review, we have no reason to doubt the substantial accuracy of the
information and believe that it has produced appropriate results. This information, along with any
adjustments or modifications, is summarized in various sections of this report.
The undersigned is familiar with the immediate and long-term aspects of pension valuations and meets
the Qualification Standards of the American Academy of Actuaries necessary to render the actuarial
opinions contained herein. All of the sections of this report are considered an integral part of the actuarial
opinions.
To our knowledge, no associate of Foster & Foster, Inc. working on valuations of the program has any
direct financial interest or indirect material interest in the City of Palm Beach Gardens, nor does anyone at
Foster & Foster, Inc. act as a member of the Board of Trustees of the City of Palm Beach Gardens
Firefighters’ Pension Fund. Thus, there is no relationship existing that might affect our capacity to
prepare and certify this actuarial report.
If there are any questions, concerns, or comments about any of the items contained in this report, please
contact me at 239-433-5500.
Respectfully submitted,
Foster & Foster, Inc.
By: ______________________ _
Douglas H. Lozen, EA, MAAA
Enrolled Actuary #17 -7778
DHL/lke
Enclosures
TABLE OF CONTENTS
Section Title Page
I Introduction
a. Summary of Report 5
b. Contribution Impact of Annual Changes 7
c. Changes Since Prior Report 8
d. Comparative Summary of 9
Principal Valuation Results
II Valuation Information
a. Reconciliation of Unfunded
Actuarial Accrued Liabilities 14
b. Detailed Actuarial Gain/Loss Analysis 15
c. Actuarial Assumptions and Methods 16
d. Valuation Notes 19
III Trust Fund 20
IV Member Statistics
a. Statistical Data 27
b. Age and Service Distribution 28
c. Valuation Participant Reconciliation 29
V Summary of Plan Provisions 30
VII Governmental Accounting Standards Board
Disclosure Information 33
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 4
SUMMARY OF REPORT
The regular annual actuarial valuation of the City of Palm Beach Gardens Firefighters’ Pension Fund,
performed as of October 1, 2016, has been completed, and the results are presented in this Report.
The contribution amounts developed in this valuation are applicable to the plan/fiscal year ended
September 30, 2018.
The contribution requirements, compared with amounts developed in the October 1, 2015, actuarial
valuation, are as follows:
Valuation Date
Applicable Plan/Fiscal Year End
10/1/2016
9/30/2018
10/1/2015
9/30/2017
Total Required Contribution
% of Total Annual Payroll
64.68% 53.11%
Member Contributions (Est.)
% of Total Annual Payroll 6.00% 6.00%
City and State Required Contribution
% of Total Annual Payroll 58.68% 47.11%
State Contribution ¹
511,056
511,056
% of Total Annual Payroll 6.80% 6.80%
Balance from City ¹
% of Total Annual Payroll 51.88% 40.31%
¹ State Contribution shown is an amount based on 6.80% of the October 1, 2016 valuation payroll. For
budgeting purposes, the required Sponsor Contribution (City and State) is 47.11% of Pensionable
Earnings for the fiscal year ending September 30, 2017, and 58.68% for the fiscal year ending
September 30, 2018. The precise City requirement is the applicable Sponsor percentage, less State
Contributions equal to 6.80% of Pensionable Payroll realized for the applicable fiscal year. Please also
note that there is a $12 City shortfall for the fiscal year ended September 30, 2016.
Experience during the last twelve months was less favorable than expected, relative to the Plan’s actuarial
assumptions. The primary sources of unfavorable experience included average increases in Pensionable
Compensation that exceeded the assumption by more than 6%, lower than expected employee turnover,
unfavorable retirement experience, and a 7.45% investment return (Actuarial Asset Basis), falling short of
the 7.65% assumption.
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 5
In addition to the net actuarial loss realized for the year, a significant portion of the funding increase is
due to a reduction in the investment return assumption from 7.65% to 7.45% (as approved by the Board at
the November 6, 2013 Board Meeting), in addition to adoption of the state-mandated mortality
assumption under Chapter 2015-157, Laws of Florida.
The balance of this Report presents additional details of the actuarial valuation and the general operation
of the Fund. The undersigned would be pleased to meet with the Board to discuss the Report and answer
any questions concerning its contents.
Respectfully submitted,
FOSTER & FOSTER, INC.
By:____________________________
Douglas H. Lozen, EA, MAAA
By:____________________________
Drew D. Ballard, EA, MAAA
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 6
(1) Contribution Determined as of October 1, 2015 40.31%
(2)Summary of Contribution Impact by component:
Change in Available State Money 0.0%
Investment Return (Actuarial Asset Basis)0.3%
Salary Increases 3.1%
Payroll Change Effect on UAAL Amortization -1.5%
Active Decrements 1.6%
Inactive Mortality 0.2%
Assumption Changes 9.2%
Change in Normal Cost Rate -1.0%
Other -0.3%
Total Change in Contribution 11.57%
(3)Contribution Determined as of October 1, 2016 51.88%
CONTRIBUTION IMPACT OF ANNUAL CHANGES
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 7
CHANGES SINCE PRIOR VALUATION
Plan Changes
There were no changes in benefits since the prior valuation.
Actuarial Assumption/Method Changes
• As mandated by Chapter 2015-157, Laws of Florida, the assumed rates of mortality were changed
from the RP-2000 Combined Healthy Tables to the mortality tables for special risk employees
used by the Florida Retirement System actuary in the July 1, 2015 actuarial valuation.
• The investment return assumption has been decreased from 7.65% to 7.45%. One additional
reduction from 7.45% to 7.25% will take place with performance of the October 1, 2017
valuation.
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 8
COMPARATIVE SUMMARY OF PRINCIPAL VALUATION RESULTS
New Assump Old Assump
10/1/2016 10/1/2016 10/1/2015
A. Participant Data
Number Included
Actives 91 91 96
Service Retirees 18 18 14
DROP Retirees 22 22 18
Beneficiaries 0 0 1
Disability Retirees 5 5 5
Terminated Vested 4 4 3
Total 140 140 137
Total Annual Payroll $7,771,546 $7,771,546 $7,565,506
Payroll Under Assumed Ret. Age 7,515,525 7,515,525 7,108,558
Annual Rate of Payments to:
Service Retirees 1,313,380 1,313,380 1,122,296
DROP Retirees 1,679,219 1,679,219 1,370,978
Beneficiaries 0 0 0
Disability Retirees 118,217 118,217 118,217
Terminated Vested 121,080 121,080 90,766
B. Assets
Actuarial Value (AVA)¹82,077,152 82,077,152 74,423,562
Market Value (MVA)¹80,631,588 80,631,588 72,470,355
C. Liabilities
Present Value of Benefits
Actives
Retirement Benefits 49,460,447 46,509,525 46,654,096
Disability Benefits 431,355 392,777 378,523
Death Benefits 425,960 186,341 193,973
Vested Benefits 3,341,610 3,130,175 2,989,557
Refund of Contributions 32,446 32,384 22,859
Service Retirees 21,628,270 20,185,963 17,250,127
DROP Retirees¹31,246,434 29,347,648 23,323,776
Beneficiaries 0 0 0
Disability Retirees 1,277,869 1,141,776 1,156,125
Terminated Vested 1,579,856 1,471,545 940,073
Share Plan Balances 9,164,553 9,164,553 8,580,169
Total 118,588,800 111,562,687 101,489,278
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 9
New Assump Old Assump
C. Liabilities - (Continued)10/1/2016 10/1/2016 10/1/2015
Present Value of Future Salaries 49,836,277 49,818,166 46,768,515
Present Value of Future
Member Contributions 2,990,177 2,989,090 2,806,111
Normal Cost (Retirement)1,915,367 1,800,926 1,771,652
Normal Cost (Disability)25,364 23,100 22,097
Normal Cost (Death)20,321 8,843 9,704
Normal Cost (Vesting)176,492 165,263 159,306
Normal Cost (Refunds)9,039 9,022 5,802
Total Normal Cost 2,146,583 2,007,154 1,968,561
Present Value of Future
Normal Costs 15,221,704 14,220,177 13,555,347
Accrued Liability (Retirement)35,481,945 33,389,925 34,109,862
Accrued Liability (Disability)299,238 272,847 269,978
Accrued Liability (Death)305,340 133,288 140,527
Accrued Liability (Vesting)2,368,786 2,220,183 2,151,380
Accrued Liability (Refunds)14,805 14,782 11,914
Accrued Liability (Inactives) ¹55,732,429 52,146,932 42,670,101
Share Plan Balances 9,164,553 9,164,553 8,580,169
Total Actuarial Accrued Liability (AL)103,367,096 97,342,510 87,933,931
Unfunded Actuarial Accrued
Liability (UAAL)21,289,944 15,265,358 13,510,369
Funded Ratio (AVA / AL)79.4%84.3%84.6%
D. Actuarial Present Value of Accrued Benefits
Vested Accrued Benefits
Inactives ¹55,732,429 52,146,932 42,670,101
Share Plan Balances 9,164,553 9,164,553 8,580,169
Actives 19,198,587 17,581,894 19,880,550
Member Contributions 5,052,753 5,052,753 5,333,428
Total 89,148,322 83,946,132 76,464,248
Non-vested Accrued Benefits 1,781,562 1,715,573 1,415,671
Total Present Value Accrued Benefits (PVAB) 90,929,884 85,661,705 77,879,919
Funded Ratio (MVA / PVAB)88.7%94.1%93.1%
Increase (Decrease) in Present Value of
Accrued Benefits Attributable to:
Plan Amendments 0 0
Assumption Changes 5,268,179 0
New Accrued Benefits 0 3,885,508
Benefits Paid 0 (1,985,587)
Interest 0 5,881,865
Other 0 0
Total 5,268,179 7,781,786
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 10
New Assump Old Assump
Valuation Date 10/1/2016 10/1/2016 10/1/2015
Applicable to Fiscal Year Ending 9/30/2018 9/30/2018 9/30/2017
E. Pension Cost
Normal Cost (with interest) $2,226,543 $2,083,928 $2,043,858
% of Total Annual Payroll ²29.63 27.73 28.75
Administrative Expenses (with interest)94,540 94,631 88,051
% of Total Annual Payroll ²1.26 1.26 1.24
Payment Required to Amortize
Unfunded Actuarial Accrued
Liability over 20 years
(as of 10/1/2016, with interest)2,539,608 1,990,164 1,643,344
% of Total Annual Payroll ²33.79 26.48 23.12
Total Required Contribution 4,860,691 4,168,723 3,775,253
% of Total Annual Payroll ²64.68 55.47 53.11
Expected Member Contributions 450,932 450,932 426,513
% of Total Annual Payroll ²6.00 6.00 6.00
Expected City & State Contribution 4,409,759 3,717,791 3,348,740
% of Total Annual Payroll ²58.68 49.47 47.11
F. Past Contributions
Plan Years Ending:9/30/2016
City and State Requirement 3,605,305
Actual Contributions Made:
Members (excluding buyback)455,983
City 3,088,524
State 516,781
Total 4,061,288
G. Net Actuarial (Gain)/Loss 2,699,668
¹ The asset values and liabilities for DROP Members include accumulated DROP and Share
Balances as of 9/30/2016 and 9/30/2015.
² Contributions developed as of 10/1/2016 are expressed as a percentage of total
annual payroll at 10/1/2016 of $7,515,525.
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 11
H. Schedule Illustrating the Amortization of the Total Unfunded Actuarial Accrued Liability as of:
Projected Unfunded
Year Accrued Liability
2016 21,289,944
2017 20,245,234
2018 19,122,691
2023 12,123,759
2027 8,909,783
2032 3,211,525
2036 0
I. (i) 3 Year Comparison of Actual and Assumed Salary Increases
Actual Assumed
Year Ended 9/30/2016 11.82%5.15%
Year Ended 9/30/2015 0.29%5.13%
Year Ended 9/30/2014 1.61%5.00%
(ii) 3 Year Comparison of Investment Return on Actuarial Value
Actual Assumed
Year Ended 9/30/2016 7.45%7.65%
Year Ended 9/30/2015 9.80%7.85%
Year Ended 9/30/2014 10.89%8.05%
(iii) Average Annual Payroll Growth
(a) Payroll as of:10/1/2016 $7,771,546
10/1/2006 9,205,470
(b) Total Increase -15.58%
(c) Number of Years 10.00
(d) Average Annual Rate -1.68%
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 12
STATEMENT BY ENROLLED ACTUARY
This actuarial valuation was prepared and completed by me or under my direct supervision, and I
acknowledge responsibility for the results. To the best of my knowledge, the results are complete and
accurate, and in my opinion, the techniques and assumptions used are reasonable and meet the
requirements and intent of Part VII, Chapter 112, Florida Statutes. There is no benefit or expense to be
provided by the plan and/or paid from the plan's assets for which liabilities or current costs have not been
established or otherwise taken into account in the valuation. All known events or trends which may
require a material increase in plan costs or required contribution rates have been taken into account in the
valuation.
_____________________________
Douglas H. Lozen, EA, MAAA
Enrolled Actuary #17-7778
Please let us know when the report is approved by the Board and unless otherwise directed we will
provide copies of the report to the following offices to comply with Chapter 112 Florida Statutes:
Mr. Keith Brinkman
Bureau of Local
Retirement Systems
Post Office Box 9000
Tallahassee, FL 32315-9000
Ms. Sarah Carr
Municipal Police and Fire
Pension Trust Funds
Division of Retirement
Post Office Box 3010
Tallahassee, FL 32315-3010
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 13
RECONCILIATION OF UNFUNDED ACTUARIAL ACCRUED LIABILITIES
(1) Unfunded Actuarial Accrued Liability as of October 1, 2015 $13,510,369
(2) Sponsor Normal Cost developed as of October 1, 2015 1,542,048
(3) Expected administrative expenses for the year ended September 30, 2016 84,807
(4) Expected interest on (1), (2) and (3)1,154,754
(5) Sponsor contributions to the System during the year ended September 30, 2016 3,605,305
(6) Expected interest on (5)120,983
(7) Expected Unfunded Actuarial Accrued Liability as of
September 30, 2016 (1)+(2)+(3)+(4)-(5)-(6)12,565,690
(8) Change to UAAL due to Assumption Changes 6,024,586
(9) Change to UAAL due to Actuarial (Gain)/Loss 2,699,668
(10) Unfunded Accrued Liability as of October 1, 2016 21,289,944
Type of Date Years 10/1/2016 Amortization
Base Established Remaining Amount Amount
Prior Experience 10/1/1993 7 $10,006,785 $1,755,257
Benefit Change 10/1/2002 16 2,138,293 216,984
Experience Loss 10/1/2006 17 686,074 67,452
Assum/Method Chg 10/1/2006 17 (2,153,240)(211,697)
Experience Gain 10/1/2007 17 (288,932)(28,407)
Experience Loss 10/1/2008 17 1,366,951 134,393
Experience Loss 10/1/2009 17 857,586 84,314
Experience Loss 10/1/2010 17 448,683 44,113
Experience Loss 10/1/2011 17 3,863,620 379,854
Benefit Change 10/1/2011 17 (2,252,884)(221,494)
Experience Loss 10/1/2012 17 273,548 26,894
Experience Gain 10/1/2013 7 (2,689,389)(471,737)
Assumption Change 10/1/2013 17 1,548,293 152,221
Experience Gain 10/1/2014 8 (2,121,068)(336,370)
Assumption Change 10/1/2014 18 1,675,771 160,114
Experience Gain 10/1/2015 9 (2,717,391)(395,628)
Assumption Change 10/1/2015 19 1,922,990 179,042
Experience Loss 10/1/2016 10 2,699,668 365,199
Assumption Changes 10/1/2016 20 6,024,586 547,901
21,289,944 2,448,405
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 14
(1) Unfunded Actuarial Accrued Liability (UAAL) as of October 1, 2015 $13,510,369
(2) Expected UAAL as of October 1, 2016 12,565,690
(3)Summary of Actuarial (Gain)/Loss, by component:
Investment Return (Actuarial Asset Basis)153,874
Salary Increases 1,644,894
Active Decrements 871,533
Inactive Mortality 98,254
Other (68,887)
Increase in UAAL due to (Gain)/Loss 2,699,668
Assumption Changes 6,024,586
(4)Actual UAAL as of October 1, 2016 $21,289,944
DETAILED ACTUARIAL (GAIN)/LOSS ANALYSIS
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 15
ACTUARIAL ASSUMPTIONS AND METHODS
Mortality Rate Healthy Lives:
Female: RP2000 Generational, 100% Annuitant White
Collar, Scale BB.
Male: RP2000 Generational, 10% Annuitant White
Collar / 90% Annuitant Blue Collar, Scale BB.
Disabled Lives:
Female: 60% RP2000 Disabled Female set forward two
years / 40% Annuitant White Collar with no setback, no
projection scale.
Male: 60% RP2000 Disabled Male setback four years /
40% Annuitant White Collar with no setback, no
projection scale.
The assumed rates of mortality were mandated by
Chapter 2015-157, Laws of Florida. This law mandates
the use of the assumptions used in either of the two most
recent valuations of the Florida Retirement System
(FRS). The above rates are those outlined in the July 1,
2015 FRS actuarial valuation report for special risk
employees. We feel this assumption sufficiently
accommodates future mortality improvements.
Previously, the RP 2000 Combined Healthy – Sex
Distinct and the RP2000 Disabled Table for Disabled
Lives.
Retirement Rates
Age
Probability of
Retirement
50 5.00%
51 5.00
52 50.00
53 10.00
54 10.00
55 100.00
For those Members who attain 25 years of Credited
Service, regardless of Age, the probability of retirement
is 100%. These rates are reasonable given the retirement
provisions in the plan.
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 16
Termination Rates
Age
Years
of Service
% Separating from
Employment Within the
Next Year
All Ages 0 15.00%
1 10.00
2 9.00
3 8.00
4 7.00
25 5 & Over 7.00
30 5.90
35 4.40
40 3.00
45 2.10
50 1.70
55 1.00
We feel these rates are consistent with those utilized for
plans containing other Florida municipal firefighters.
Interest Rate 7.45% (previously 7.65%) per year compounded
annually, net of investment related expenses. This is
supported by the target asset class allocation of the trust
and the expected long-term return by asset class.
Salary Increases
Age Increase
20 8.20%
30 5.60
40 5.20
50 4.70
60 4.50
This is based on the results of an actuarial experience
study delivered on November 1, 2013.
Final Pay Load For Members hired prior to October 1, 2011, active
liabilities are increased by 3.00% to account for assumed
payments of unused sick and annual leave time.
Members hired on and after October 1, 2011 are valued
with no final pay load.
Cost of Living Adjustments 1.00% increase for members who are Age 53, 2.00%
increase for members who are Age 54, and 3.00%
increase for members who are Age 55 and greater. For
those members who were not eligible for Normal
Retirement as of September 12, 2012, the COLA
beginning at age 55 is based on 3.00% for service prior
to September 12, 2012, and 1.50% for service thereafter.
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 17
Payroll Growth Assumption 0.00%, in compliance with Part VII of Chapter 112,
Florida Statutes.
Administrative Expenses $91,145 annually. This assumption is equal to the amount
paid out of the trust in the prior year.
Actuarial Value of Assets The Actuarial Value of Assets is calculated by
recognizing 25% of the difference between the Market
Value of Assets and the expected Market Value of
Assets.
Funding Method Projected Unit Credit Cost Method.
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 18
VALUATION NOTES
Total Annual Payroll is the projected annual rate of pay as of the valuation date of all covered Members.
Present Value of Benefits is the single sum value on the valuation date of all future benefits to be paid to
current Members, Retirees, Beneficiaries, Disability Retirees and Vested Terminations.
Normal (Current Year's) Cost is determined for each participant as the present value of the increase in the
accrued benefit for the plan year, utilizing projected salary.
Projected Unit Credit Actuarial Cost Method (Level Percent of Compensation) is the method used to
determine required contributions under the Plan. The use of this method involves the systematic
funding of the Normal Cost (described above) and the Unfunded Accrued (Past Service) Liability.
The actuarial accrued liability is the present value of accrued benefits, utilizing projected salary for
active Plan Participants.
Unfunded Actuarial Accrued Liability (UAAL) is the difference between the actuarial accrued liability
(described above) and the actuarial value of assets. Under the Projected Unit Credit Actuarial Cost
Method, an actuarial gain or loss, based on actual versus expected UAAL, is determined in
conjunction with each valuation of the plan.
Total Required Contribution is equal to the Normal Cost plus an amount sufficient to amortize the
Unfunded Accrued Liability over no more than 30 years. The required amount is adjusted for interest
according to the timing of contributions during the year.
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 19
ASSETS COST VALUE MARKET VALUE
Cash and Cash Equivalents:
Money Market 2,364,165.43 2,364,165.43
Total Cash and Equivalents 2,364,165.43 2,364,165.43
Receivables:
Additional City Contributions 11.70 11.70
State Contributions 114,371.66 114,371.66
From Broker for Investments Sold 90,858.76 90,858.76
Investment Income 134,096.80 134,096.80
Total Receivable 339,338.92 339,338.92
Investments:
U. S. Bonds and Bills 4,781,578.21 4,842,771.15
Federal Agency Guaranteed Securities 3,806,066.11 3,848,203.64
Corporate Bonds 6,244,886.45 6,275,329.75
Stocks 23,082,935.62 26,407,768.42
Mutual Funds:
Fixed Income 4,510,088.27 3,918,292.60
Equity 19,542,510.61 24,089,260.32
Pooled/Common/Commingled Funds:
Real Estate 8,808,131.99 8,808,131.99
Total Investments 70,776,197.26 78,189,757.87
Total Assets 73,479,701.61 80,893,262.22
LIABILITIES
Payables:
Investment Expenses 82,385.23 82,385.23
Administrative Expenses 11,476.87 11,476.87
To Broker for Investments Purchased 167,812.17 167,812.17
Total Liabilities 261,674.27 261,674.27
NET POSITION RESTRICTED FOR PENSIONS 73,218,027.34 80,631,587.95
STATEMENT OF FIDUCIARY NET POSITION
SEPTEMBER 30, 2016
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 20
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FOR THE YEAR ENDED SEPTEMBER 30, 2016
Market Value Basis
ADDITIONS
Contributions:
Member 455,982.88
City 3,088,524.05
State 568,403.22
Total Contributions 4,112,910.15
Investment Income:
Net Realized Gain (Loss)1,388,358.99
Unrealized Gain (Loss)3,075,946.75
Net Increase in Fair Value of Investments 4,464,305.74
Interest & Dividends 2,054,492.04
Less Investment Expense¹(393,742.63)
Net Investment Income 6,125,055.15
Total Additions 10,237,965.30
DEDUCTIONS
Distributions to Members:
Benefit Payments 1,361,131.33
Lump Sum DROP Distributions 126,762.58
Lump Sum Share Distributions 217,871.41
Self- Directed DROP Benefits 279,822.11
Refunds of Member Contributions 0.00
Total Distributions 1,985,587.43
Administrative Expense 91,144.59
Total Deductions 2,076,732.02
Net Increase in Net Position 8,161,233.28
NET POSITION RESTRICTED FOR PENSIONS
Beginning of the Year 72,470,354.67
End of the Year 80,631,587.95
¹Investment related expenses include investment advisory, custodial and performance monitoring fees.
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 21
Plan Year
Ending Gain/(Loss)2016 2017 2018 2019
09/30/2013 2,088,861 0 0 0 0
09/30/2014 2,072,082 518,019 0 0 0
09/30/2015 (4,681,951)(2,340,975)(1,170,487)0 0
09/30/2016 503,189 377,392 251,594 125,798 0
Total (1,445,564)(918,893)125,798 0
Market Value of Assets, 09/30/2015 72,470,355
Contributions Less Benefit Payments & Admin Expenses 2,036,178
Expected Investment Earnings ¹5,621,866
Actual Net Investment Earnings 6,125,055
09/30/2016 Actuarial Investment Gain/(Loss)503,189
¹ Expected Investment Earnings = 0.0765 * (72,470,355 + 0.5 * 2,036,178)
(1) Market Value of Assets, 09/30/2016 80,631,588
(2) Gains/(Losses) Not Yet Recognized (1,445,564)
(3) Actuarial Value of Assets, 09/30/2016, (1) - (2)82,077,152
(A) 09/30/2015 Actuarial Assets:74,423,562
(I) Net Investment Income:
1. Interest and Dividends 2,054,492
2. Realized Gains (Losses) 1,388,359
3. Change in Actuarial Value 2,568,304
4. Investment Expenses (393,743)
Total 5,617,412
(B) 09/30/2016 Actuarial Assets:82,077,152
Actuarial Assets Rate of Return = 2I/(A+B-I):7.45%
Market Value of Assets Rate of Return:8.25%
Actuarial Gain/(Loss) due to Investment Return (Actuarial Asset Basis)(153,874)
10/01/2016 Limited Actuarial Assets:82,077,152
Amounts Not Yet Recognized by Valuation Year
Development of Investment Gain/(Loss)
Development of Actuarial Value of Assets
ACTUARIAL ASSET VALUATION
September 30, 2016
Actuarial Assets for funding purposes are developed by recognizing the total actuarial investment gain or loss for
each Plan Year over a four year period. In the first year, 25% of the gain or loss is recognized. In the second year
50%, in the third year 75%, and in the fourth year 100% of the gain or loss is recognized. The actuarial investment
gain or loss is defined as the actual return on investments minus the actuarial assumed investment return. Actuarial
Assets shall not be less than 80% nor greater than 120% of Market Value of Assets.
Gains/(Losses) Not Yet Recognized
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 22
SEPTEMBER 30, 2016
Actuarial Asset Basis
REVENUES
Contributions:
Member 455,982.88
City 3,088,524.05
State 568,403.22
Total Contributions 4,112,910.15
Earnings from Investments:
Interest & Dividends 2,054,492.04
Net Realized Gain (Loss)1,388,358.99
Change in Actuarial Value 2,568,303.75
Total Earnings and Investment Gains 6,011,154.78
EXPENDITURES
Distributions to Members:
Benefit Payments 1,361,131.33
Lump Sum DROP Distributions 126,762.58
Lump Sum Share Distributions 217,871.41
Self- Directed DROP Benefits 279,822.11
Refunds of Member Contributions 0.00
Total Distributions 1,985,587.43
Expenses:
Investment related¹393,742.63
Administrative 91,144.59
Total Expenses 484,887.22
Change in Net Assets for the Year 7,653,590.28
Net Assets Beginning of the Year 74,423,561.67
Net Assets End of the Year²82,077,151.95
¹Investment related expenses include investment advisory, custodial and performance monitoring fees.
²Net Assets may be limited for actuarial consideration.
CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 23
Beginning of the Year Balance 1,815,652.07
Plus Additions 1,369,071.75
Investment Return Earned 204,100.36
Less Distributions (126,762.58)
End of the Year Balance 3,262,061.60
Notes:
Additions for three members are on the Normal Form and will be adjusted, if necessary, during year ending
September 30, 2017.
Investment Return for three members has not been included and will be reported with the return for year ending
September 30, 2017.
DEFERRED RETIREMENT OPTION PLAN ACTIVITY
October 1, 2015 to September 30, 2016
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 24
9/30/2015 Balance (from October 1, 2016 valuation report)8,580,169.10
Adjustment from Prior Year Balance (133,848.78)
Plus Additions 220,949.27
Investment Return Earned 715,154.32
Less Distributions (217,871.41)
9/30/2016 Balance 9,164,552.50
¹ Information provided by Resource Centers, LLC.
October 1, 2015 to September 30, 2016
SHARE PLAN RECONCILIATION ¹
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 25
(1) Total Required Contribution Rate 53.44%
(2) Pensionable Payroll Derived from Member Contributions $7,599,714.67
(3) Total Required Contribution (1) x (2)4,061,287.52
(4) Less Actual Member Contributions (455,982.88)
(5) Less Allowable State Contribution (516,780.59)
(6) Equals Required City Contribution for Fiscal 2016 3,088,524.05
(7) Less 2015 Prepaid Contribution 0.00
(8) Less Actual City Contributions (3,088,512.35)
(9) Equals City's Shortfall/(Prepaid) Contribution as of $11.70
September 30, 2016
RECONCILIATION OF CITY'S SHORTFALL/(PREPAID) CONTRIBUTION
FOR THE FISCAL YEAR ENDED (FYE) SEPTEMBER 30, 2016
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 26
STATISTICAL DATA
10/1/2013 10/1/2014 10/1/2015 10/1/2016
Actives
Number 105 101 96 91
Average Current Age 42.6 41.9 42.1 41.4
Average Age at Employment 28.5 28.5 28.4 27.7
Average Past Service 14.1 13.4 13.7 13.7
Average Annual Salary $82,724 $80,620 $78,807 $85,402
Service Retirees
Number 9 13 14 18
Average Current Age N/A N/A 54.5 55.8
Average Annual Benefit $75,167 $78,982 $80,164 $72,966
DROP Retirees
Number 8 13 18 22
Average Current Age N/A N/A 54.2 54.8
Average Annual Benefit $73,309 $76,090 $76,165 $76,328
Beneficiaries
Number 1 1 1 0
Average Current Age N/A N/A N/A N/A
Average Annual Benefit ¹$31,584 $31,584 $31,584 N/A
Disability Retirees
Number 5 5 5 5
Average Current Age N/A N/A 52.1 53.1
Average Annual Benefit $23,643 $23,643 $23,643 $23,643
Terminated Vested
Number 3 3 3 4
Average Current Age N/A N/A 48.3 49.9
Average Annual Benefit $30,255 $30,255 $30,255 $30,270
¹ Annual benefit is based on remaining portion of 120 month guarantee.
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 27
AGE AND SERVICE DISTRIBUTION
PAST SERVICE
AGE 0 1 2 3 4 5-9 10-14 15-19 20-24 25-29 30+ Total
15 - 19 0 0 0 0 0 0 0 0 0 0 0 0
20 - 24 0 0 2 0 0 0 0 0 0 0 0 2
25 - 29 2 0 2 0 1 0 0 0 0 0 0 5
30 - 34 1 1 1 0 1 1 7 0 0 0 0 12
35 - 39 1 0 0 1 1 2 9 3 0 0 0 17
40 - 44 0 0 0 1 0 1 10 3 2 0 0 17
45 - 49 0 0 0 0 0 0 8 10 7 0 0 25
50 - 54 0 0 0 0 0 0 2 3 6 1 0 12
55 - 59 0 0 0 0 0 0 0 0 1 0 0 1
60 - 64 0 0 0 0 0 0 0 0 0 0 0 0
65+0 0 0 0 0 0 0 0 0 0 0 0
Total 4 1 5 2 3 4 36 19 16 1 0 91
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 28
VALUATION PARTICIPANT RECONCILIATION
1. Active lives
a. Number in prior valuation 10/1/2015 96
b. Terminations
i. Vested (partial or full) with deferred benefits (1)
ii. Non-vested or full lump sum distribution received 0
c. Deaths
i. Beneficiary receiving benefits 0
ii. No future benefits payable 0
d. Disabled 0
e. Retired (1)
f. DROP (7)
g. Continuing participants 87
h. New entrants 4
i. Total active life participants in valuation 91
2. Non-Active lives (including beneficiaries receiving benefits)
Service
Retirees,
Vested Receiving Receiving
Receiving DROP Death Disability Vested
Benefits Benefits Benefits Benefits Deferred Total
a. Number prior valuation 14 18 1 5 3 41
Retired 4 (3) 0 0 0 1
DROP 0 7 0 0 0 7
Vested Deferred 0 0 0 0 1 1
Death, With Survivor 0 0 0 0 0 0
Death, No Survivor 0 0 0 0 0 0
Disabled 0 0 0 0 0 0
Refund of Contributions 0 0 0 0 0 0
Rehires 0 0 0 0 0 0
Expired Annuities 0 0 (1) 0 0 (1)
Data Corrections 0 0 0 0 0 0
b. Number current valuation 18 22 0 5 4 49
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 29
SUMMARY OF PLAN PROVISIONS
(Through Ordinance 9, 2016)
Eligibility Full-time certified Firefighters.
Credited Service Total years and fractional parts of years of employment
with the City as a Firefighter while making Member
contributions.
Salary Total compensation, excluding overtime and payments
for unused accrued sick and annual leave for salary
earned after September 13, 2012.
Average Final Compensation Average Salary for the 5 best years of the 10 years
immediately preceding retirement or termination.
Member Contributions 6.00% of Salary.
City and State Contributions Remaining amount required in order to pay current costs
and amortize unfunded past service cost, if any, as
provided in Part VII, Chapter 112, F.S.
Normal Retirement
Date Earlier of:
1) Age 52 with 10 years of Credited Service, or
2) Attainment of 25 years of Credited Service, regardless
of Age.
Benefit 3.00% of Average Final Compensation times Credited
Service, not to exceed 75% of Average Final
Compensation.
Form of Benefit Ten Year Certain and Life Annuity (options available).
Early Retirement
Eligibility Age 50 with 10 years of Credited Service.
Benefit Accrued benefit, reduced 3.00% per year that the benefit
commencement date precedes age 52.
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 30
Vesting
Schedule 25% after 5 years of Credited Service, then 15% for each
additional year until 100% after 10 years of Credited
Service.
Benefit Amount Member will receive the vested portion of his (her)
accrued benefit payable at age 50 (reduced) or age 52.
Disability
Eligibility
Service Incurred Covered from Date of Employment.
Non-Service Incurred 10 years of Credited Service.
Exclusions Disability resulting from use of drugs, illegal
participation in riots, service in military, etc.
Benefit
Service Incurred 60% of Average Final Compensation, but not less than
2.00% of Average Final Compensation times Credited
Service.
Non-Service Incurred 2.50% of Average Final Compensation times Credited
Service.
Duration Payable for life (with 120 payments guaranteed) or until
recovery (as determined by the Board). Optional forms
of payment are available.
Death Benefits
10 or more years of Monthly accrued benefit payable to designated
Credited Service beneficiary for 10 years at otherwise Early (reduced) or
Normal (unreduced) Retirement Date.
Less than 10 years of Refund of Member contributions.
Credited Service
Post-Retirement Benefits payable to beneficiary in accordance with
option selected at retirement.
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 31
Cost of Living Adjustment
Eligibility Normal and Early Retirees and Beneficiaries (including
Vested Terminated Retirees). COLA is not payable to
Disability Retirees.
Amount 1.00% increase for members who are Age 53, 2.00%
increase for members who are Age 54, and 1.50%
increase for members who are Age 55 and greater.
Deferred Retirement Option Plan
Eligibility Satisfaction of Normal Retirement requirements.
Participation Maximum participation period of 60 months.
Rate of Return At the Member’s option, a fixed rate, actual rate of
investment return for the Plan, or returns generated by
self-directed accounts.
Distribution Cash lump sum (options available) at termination of
employment.
Chapter 175/185 Share Accounts
Allocation Ordinance 27, 1998 established a Share Plan for all
Active Members. Premium tax monies received in
excess of the base amounts, less the sum of the amounts
below are allocated annually to each individual Share
Account based on Credited Service, determined as of
September 30:
• 2.00% of salary.
• The lessor of 4.80% of salary or $507,634.00.
Investment Earnings Net rate of investment return realized by the Plan for the
preceding Plan Year.
Vesting Schedule Active Members who terminate employment with less
than 5 years of Credited Service forfeit their Share.
Distribution Active Members with 5 or more years of Credited
Service will be paid a lump sum upon separation from
service.
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 32
GASB 67
STATEMENT OF FIDUCIARY NET POSITION
SEPTEMBER 30, 2016
ASSETS
Cash and Cash Equivalents:
Money Market
Total Cash and Equivalents
Receivables:
Additional City Contributions
State Contributions
From Broker for Investments Sold
Investment Income
Total Receivable
Investments:
U. S. Bonds and Bills
Federal Agency Guaranteed Securities
Corporate Bonds
Stocks
Mutual Funds:
Fixed Income
Equity
Pooled/Common/Commingled Funds:
Real Estate
Total Investments
Self-Directed DROP Accounts
Total Assets
LIABILITIES
Payables:
Investment Expenses
Administrative Expenses
To Broker for Investments Purchased
Total Liabilities
NET POSITION RESTRICTED FOR PENSIONS¹
¹The Assets values and Liabilities included accumulated DROP Balances
MARKET VALUE
2,364,165
2,364,165
12
114,371
90,859
134,097
339,339
4,842,771
3,848,204
6,275,330
26,407,768
3,918,293
24,089,260
8,808,132
78,189,758
698,752
81,592,014
82,385
11,477
167,812
261,674
81,330,340
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 33
GASB 67
ADDITIONS
Contributions:
Member 455,983
City 3,088,524
State 568,403
Total Contributions 4,112,910
Investment Income:
Net Increase in Fair Value of Investments 4,492,162
Interest & Dividends 2,054,492
Less Investment Expense¹(393,743)
Net Investment Income 6,152,911
Total Additions 10,265,821
DEDUCTIONS
Distributions to Members:
Benefit Payments 1,361,131
Lump Sum DROP Distributions 126,763
Lump Sum Share Distributions 217,871
Self- Directed DROP Distributions 97,752
Refunds of Member Contributions 0
Total Distributions 1,803,517
Administrative Expense 91,145
Total Deductions 1,894,662
Net Increase in Net Position 8,371,159
NET POSITION RESTRICTED FOR PENSIONS
Beginning of the Year 72,959,181
End of the Year 81,330,340
¹Investment related expenses include investment advisory, custodial and performance monitoring fees.
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FOR THE YEAR ENDED SEPTEMBER 30, 2016
Market Value Basis
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 34
GASB 67
Plan Description
Plan Administration
Plan Membership as of October 1, 2015:
Inactive Plan Members or Beneficiaries Currently Receiving Benefits 38
Inactive Plan Members Entitled to But Not Yet Receiving Benefits 3
Active Plan Members 96
137
Benefits Provided
- 2.0% of salary
Vesting:
Benefit: Member will receive the vested portion of his (her) accrued benefit payable at age 50 (reduced) or age 52.
10 or more years of Credited Service: Monthly accrued benefit payable to designated beneficiary for 10 years at otherwise Early
(reduced) or Normal (unreduced) Retirement Date.
Benefit: Service Incurred 60% of Average Final Compensation, but not less than 2.0% of Average Final Compensation times Credited
Service.
Non-Service Incurred 2.5% of Average Final Compensation times Credited Service.
Schedule: 25% after 5 years of Credited Service, then 15% for each additional year until 100% after 10 years of Credited Service.
Disability:
Eligibility Service Incurred: Covered from Date of Employment.
Eligibility Non-Service Incurred: 10 years of Credited Service.
Death Benefits:
Less than 10 years of Credited Service: Refund of Member contributions.
Cost of Living Adjustment:
Vesting Schedule: Active Members who terminate employment with less than 5 years of Credited Service forfeit their Share.
Allocation: Ordinance 27, 1998 established a Share Plan for all Active Members. Premium tax monies received in excess of the base
amounts, less the sum of the amounts below, is allocated annually to each individual Share Account based on Credited Service,
determined as of September 30:
Eligibility: Normal and Early Retirees and Beneficiaries (including Vested Terminated Retirees). COLA is not payable to Disability
Retirees.
Amount: 1.0% increase for Members who are Age 53, 2.0% increase for Members who are Age 54, and 1.5% increase for Members
who are Age 55 and greater.
- The lesser of 4.8% of salary or $507,634.00
Investment Earnings: Net rate of investment return realized by the Plan for the preceding Plan Year.
Chapter 175/185 Share Accounts:
Early Retirement:
Eligibility: Age 50 with 10 years of Credited Service.
Benefit: Accrued benefit, reduced 3.0% per year that the benefit commencement date precedes age 52.
(For the Year Ended September 30, 2016)
NOTES TO THE FINANCIAL STATEMENTS
The Plan provides retirement, termination, disability and death benefits.
Normal Retirement:
Date: Earlier of: 1) Age 52 with 10 years of Credited Service, or 2) attainment of 25 years of Credited Service, regardless of Age.
Benefit: 3.0% of Average Final Compensation times Credited Service, not to exceed 75% of Average Final Compensation.
The City of Palm Beach Gardens Firefighters' Pension Fund is a single-employer defined benefit pension plan administered by a
Board of Trustees which acts as the administrator of the Fund. The Board consists of 5 trustees, 2 of whom are appointed by the City,
2 of whom are full-time Firefighters who are elected by a majority of the Members of the Fund and a fifth Trustee who is chosen by a
majority of the first 4 Trustees.
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 35
GASB 67
Contributions
Member Contributions; 6.0% of Salary.
Investments
Investment Policy:
The following was the Board's adopted asset allocation policy as of September 30, 2016:
Asset Class Target Allocation
Domestic Equity 50%
International Equity 10%
Domestic Fixed Income 20%
Global Fixed Income 5%
Real Estate 10%
Alternative 5%
Total 100%
Concentrations:
Rate of Return:
Deferred Retirement Option Program
The DROP balance as September 30, 2016 is $3,960,813¹.
¹ Additions for three members are on the Normal Form and will be adjusted, if necessary, during year ending September 30, 2017.
The Plan did not hold investments in any one organization that represent 5 percent or more of the Pension Plan's Fiduciary Net
Position.
For the year ended September 30, 2016, the annual money-weighted rate of return on Pension Plan investments, net of Pension Plan
investment expense, was 8.22 percent.
Rate of Return: At the Member’s option, a fixed rate, actual rate of investment return for the Plan, or returns generated by self-
directed accounts.
Investment Return for three members has not been included and will be reported with the return for year ending September 30, 2017.
Eligibility: Satisfaction of Normal Retirement requirements.
Participation: Maximum participation period of 60 months.
City and State Contributions: Remaining amount required in order to pay current costs and amortize unfunded past service
cost, if any, as provided in Chapter 112, Florida Statutes.
The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts
actually invested.
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 36
GASB 67
The components of the Net Pension Liability of the Sponsor on September 30, 2016 were as follows:
Total Pension Liability 104,309,008$
Plan Fiduciary Net Position (81,330,340)$
Sponsor's Net Pension Liability 22,978,668$
Plan Fiduciary Net Position as a percentage of Total Pension Liability 77.97%
Actuarial Assumptions:
Inflation 2.50%
Salary Increases Age based
Discount Rate 7.45%
Investment Rate of Return 7.45%
Mortality Rate Healthy Lives:
Female: RP2000 Generational, 100% Annuitant White Collar, Scale BB.
Male: RP2000 Generational, 10% Annuitant White Collar /90% Annuitant Blue Collar, Scale BB.
Mortality Rate Disabled Lives:
Female: 60% RP2000 Disabled Female set forward two years / 40% Annuitant White Collar with no setback, no projection scale.
Male: 60% RP2000 Disabled Male setback four years / 40% Annuitant White Collar with no setback, no projection scale.
The date of the most recent experience study for which significant assumptions are based upon is not available.
Asset Class
Domestic Equity 7.50%
International Equity 8.50%
Domestic Fixed Income 2.50%
Global Fixed Income 3.50%
Real Estate 4.50%
Alternative 6.00%
The Total Pension Liability was determined by an actuarial valuation as of October 1, 2015 updated to September 30, 2016 using the
following actuarial assumptions:
NET PENSION LIABILITY OF THE SPONSOR
The Long-Term Expected Rate of Return on Pension Plan investments was determined using a building-block method in which best-
estimate ranges of expected future real rates of return (expected returns, net of Pension Plan investment expenses and inflation) are
developed for each major asset class.
These ranges are combined to produce the Long-Term Expected Rate of Return by weighting the expected future real rates of return
by the target asset allocation percentage and by adding expected inflation.
Best estimates of arithmetic real rates of return for each major asset class included in the Pension Plan's target asset allocation as of
September 30, 2016 are summarized in the following table:
Long Term
Expected Real
Rate of Return
For 2016 the inflation rate assumption of the investment advisor was 2.50%.
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 37
GASB 67
Discount Rate:
The Discount Rate used to measure the Total Pension Liability was 7.45 percent.
1% Decrease
Current
Discount Rate 1% Increase
6.45%7.45%8.45%
Sponsor's Net Pension Liability 36,614,699$ 22,978,668$ 11,964,508$
The projection of cash flows used to determine the Discount Rate assumed that Plan Member contributions will be made at the
current contribution rate and that Sponsor contributions will be made at rates equal to the difference between actuarially determined
contribution rates and the Member rate. Based on those 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 was applied to all periods of projected benefit payments to determine the Total Pension Liability.
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 38
GASB 67
09/30/2016 09/30/2015 09/30/2014
Total Pension Liability
Service Cost 1,637,466 1,760,152 1,741,473
Interest 7,174,074 6,786,918 6,280,207
Share Plan Allocation 51,623 222,133 304,698
Changes of benefit terms - - -
Differences between Expected and Actual Experience (1,684,439) (1,460,746) -
Changes of assumptions 5,890,763 2,004,899 1,772,793
Benefit Payments, including Refunds of Employee Contributions (1,803,517) (1,935,428) (1,844,859)
Net Change in Total Pension Liability 11,265,970 7,377,928 8,254,312
Total Pension Liability - Beginning 93,043,038 85,665,110 77,410,798
Total Pension Liability - Ending (a)104,309,008$ 93,043,038$ 85,665,110$
Plan Fiduciary Net Position
Contributions - Employer 3,088,524 3,746,995 2,866,126
Contributions - State 568,403 726,993 843,533
Contributions - Employee 455,983 445,465 475,442
Net Investment Income 6,152,911 835,212 6,977,925
Benefit Payments, including Refunds of Employee Contributions (1,803,517) (1,935,428) (1,844,859)
Administrative Expense (91,145) (84,807) (88,142)
Net Change in Plan Fiduciary Net Position 8,371,159 3,734,430 9,230,025
Plan Fiduciary Net Position - Beginning 72,959,181 69,224,751 59,994,726
Plan Fiduciary Net Position - Ending (b) $ 81,330,340 $ 72,959,181 $ 69,224,751
Net Pension Liability - Ending (a) - (b)22,978,668$ 20,083,857$ 16,440,359$
Plan Fiduciary Net Position as a percentage of the Total Pension Liability 77.97%78.41%80.81%
Covered Employee Payroll¹7,599,715$ 9,695,082$ 7,924,041$
Net Pension Liability as a percentage of Covered Employee Payroll 302.36%207.16%207.47%
Notes to Schedule:
Changes of assumptions:
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS
assumption from 7.85% to 7.65%. Furthermore the inflation assumption has been lowered from 4.50% to 3.00%.
Last 10 Fiscal Years
by the Florida Retirement System for special risk employees.
For measurement date 09/30/2015, amounts reported as changes of assumptions resulted from lowering the investment return
For measurement date 09/30/2016, amounts reported as changes of assumptions resulted from lowering the investment return
assumption from 7.65% to 7.45%. Furthermore the inflation assumption rate was lowered from 3.00% to 2.50%,
matching the long-term inflation assumption utilized by the Plan's investment consultant.
Also, as a result of Chapter 2015-157, Laws of Florida, the assumed rates of mortality were changed to the assumptions used
¹ The Covered Employee Payroll numbers shown are in compliance with GASB 82, except for the 09/30/2015 measurement period
which includes DROP payroll.
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 39
GASB 67
09/30/2014 09/30/2013
Total Pension Liability
Service Cost 1,741,473 1,540,354
Interest 6,280,207 5,827,406
Share Plan Allocation 304,698 -
Changes of benefit terms - -
Differences between Expected and Actual Experience - -
Changes of assumptions 1,772,793 -
Benefit Payments, including Refunds of Employee Contributions (1,844,859) (1,613,497)
Net Change in Total Pension Liability 8,254,312 5,754,263 -
Total Pension Liability - Beginning 77,410,798 71,656,535
Total Pension Liability - Ending (a)85,665,110$ 77,410,798$ -$
Plan Fiduciary Net Position
Contributions - Employer 2,866,126 3,347,645
Contributions - State 843,533 750,073
Contributions - Employee 475,442 497,684
Net Investment Income 6,977,925 6,392,179
Benefit Payments, including Refunds of Employee Contributions (1,844,859) (1,613,497)
Administrative Expense (88,142) (99,667)
Net Change in Plan Fiduciary Net Position 9,230,025 9,274,417
Plan Fiduciary Net Position - Beginning 59,994,726 50,720,309
Plan Fiduciary Net Position - Ending (b) $ 69,224,751 $ 59,994,726
Net Pension Liability - Ending (a) - (b)16,440,359$ 17,416,072$
Plan Fiduciary Net Position as a percentage of the Total Pension Liability 80.81%77.50%
Covered Employee Payroll¹7,924,041$ 8,294,732$
Net Pension Liability as a percentage of Covered Employee Payroll 207.47%209.97%
Notes to Schedule:
Changes of assumptions:
with future valuations according to the following schedule:
Valuation Date Investment Return Assumption
10/1/2015 7.65%
10/1/2016 7.45%
10/1/2017 7.25%
decreased from 2.9% to 0.7% (the actual ten-year payroll growth as of 10/1/2014). This decrease was made for the
purpose of compliance with Part VII of Chapter 112, Florida Statutes.
• The investment return assumption has been decreased from 8.05% to 7.85%. Further reductions will be implemented
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS
Last 10 Fiscal Years
For measurement date 09/30/2014, amounts reported as changes of assumptions resulted from:
• The payroll growth assumption, utilized for amortization of the Unfunded Actuarial Accrued Liability (UAAL) has been
¹ The Covered Employee Payroll numbers shown are in compliance with GASB 82, except for the 09/30/2015 measurement
period which includes DROP payroll.
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 40
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09/30/2016 09/30/2015 09/30/2014 09/30/2013
Actuarially Determined Contribution 3,605,305 3,460,519 3,404,960 3,443,143
Contributions in relation to the Actuarially
Determined Contributions 3,605,305 4,251,855 3,404,960 3,911,687
Contribution Deficiency (Excess)-$ (791,336)$ -$ (468,544)$
Covered Employee Payroll¹7,599,715$ 9,695,082$ 7,924,041$ 8,294,732$
Contributions as a percentage of Covered
Employee Payroll 47.44%43.86%42.97%47.16%
Notes to Schedule
Valuation Date:10/01/2014
Methods and assumptions used to determine contribution rates:
Funding Method:Projected Unit Credit Cost Method.
Amortization Method:
Remaining Amortization Period:
Mortality Rates:
Interest Rate:
Retirement Rates:
Age
Probability of
Retirement
50 5%
51 5%
52 50%
53 10%
54 10%
55 100%
Actuarial Value of Assets:
Cost of Living Adjustments:
Salary Increases*:Age Increase
20 3.7%
30 1.1%
40 0.7%
50 0.2%
60 0.0%
*Expected increase in salary in addition to 4.5% inflation assumption.
SCHEDULE OF CONTRIBUTIONS
Last 10 Fiscal Years
Actuarially determined contribution rates are calculated as of October 1, two years prior to the end of the fiscal year in which
contributions are reported.
7.85% per year compounded annually, net of investment related expenses.
For those Members who attain 25 years of Credited Service, regardless of Age, the
probability of retirement is 100%.
The Actuarial Value of Assets is calculated by recognizing 25% of the difference
between the Market Value of Assets and the expected Market Value of Assets.
1.0% increase for Members who are Age 53, 2.0% increase for Members who are Age
54, and 3.0% increase for Members who are Age 55 and greater. For those members
who were not eligible for Normal Retirement as of September 12, 2012, the COLA
beginning at age 55 is based on 3.0% for service prior to September 12, 2012, and
1.5% for service thereafter.
Level Percentage of Pay, Closed.
RP-2000 Table, sex distinct, without projection.
20 Years (as of 10/01/2014).
¹ The Covered Employee Payroll numbers shown are in compliance with GASB 82, except for the 09/30/2015 measurement period
which includes DROP payroll.
Based on a study of over 650 public safety funds, this table reflects a 10% margin for
future mortality improvements.
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 41
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Payroll Growth Assumption:
Final Pay Load:
Termination Rates:
Age
Years of
Service
All Ages 0
1
2
3
4
25 5 & Over
30
35
40
45
50
55
Disability Rates:
Age
20
25
30
35
40
45
50
It is assumed that 75% of disablements and active Member deaths are service related.
0.7% for amortization of the Unfunded Actuarial Accrued Liability.
For Members hired prior to October 1, 2011, active liabilities are increased by 3% to
account for assumed payments of unused sick and annual leave time. Members
protected from benefit changes set forth in Ordinance 23, 2012 are valued with a 4.5%
final salary load. Members hired on and after October1, 2011 are valued with no final
pay load.
0.0545%
% Separating form Employment
Within the Next Year
7.0%
0.0580%
0.0895%
0.1210%
0.2750%
1.7%
1.0%
% Become Disabled within Next
Year
0.0545%
7.0%
5.9%
4.4%
3.0%
2.1%
0.4290%
15.0%
10.0%
9.0%
8.0%
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 42
GASB 67
09/30/2016 09/30/2015 09/30/2014 09/30/2013
Annual Money-Weighted Rate of Return
Net of Investment Expense 8.22%1.20%11.56%12.25%
SCHEDULE OF INVESTMENT RETURNS
Last 10 Fiscal Years
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 43
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General Information about the Pension Plan
Plan Description
Plan Membership as of October 1, 2015:
Inactive Plan Members or Beneficiaries Currently Receiving Benefits 38
Inactive Plan Members Entitled to But Not Yet Receiving Benefits 3
Active Plan Members 96
137
Benefits Provided
Normal Retirement:
Early Retirement:
Vesting:
Disability:
Benefit: Accrued benefit, reduced 3.0% per year that the benefit commencement date precedes age 52.
Eligibility: Age 50 with 10 years of Credited Service.
Eligibility Service Incurred: Covered from Date of Employment.
Eligibility Non-Service Incurred: 10 years of Credited Service.
Schedule: 25% after 5 years of Credited Service, then 15% for each additional year until 100% after 10 years of Credited Service.
Benefit: Member will receive the vested portion of his (her) accrued benefit payable at age 50 (reduced) or age 52.
NOTES TO THE FINANCIAL STATEMENTS
(For the Year Ended September 30, 2017)
The Plan provides retirement, termination, disability and death benefits.
Date: Earlier of: 1) Age 52 with 10 years of Credited Service, or 2) attainment of 25 years of Credited Service, regardless of Age.
Benefit: 3.0% of Average Final Compensation times Credited Service, not to exceed 75% of Average Final Compensation.
The City of Palm Beach Gardens Firefighters' Pension Fund is a single-employer defined benefit pension plan administered by a
Board of Trustees which acts as the administrator of the Fund. The Board consists of 5 trustees, 2 of whom are appointed by the City,
2 of whom are full-time Firefighters who are elected by a majority of the Members of the Fund and a fifth Trustee who is chosen by a
majority of the first 4 Trustees.
Each person employed by the City Fire Department as a full-time Firefighter becomes a Member of the Fund as a condition of his
employment. All Firefighters are therefore eligible for Fund benefits as provided for in the Fund document and by applicable law.
Benefit: Service Incurred 60% of Average Final Compensation, but not less than 2.0% of Average Final Compensation times Credited
Service.
Non-Service Incurred 2.5% of Average Final Compensation times Credited Service.
10 or more years of Credited Service: Monthly accrued benefit payable to designated beneficiary for 10 years at otherwise Early
(reduced) or Normal (unreduced) Retirement Date.
Death Benefits:
Less than 10 years of Credited Service: Refund of Member contributions.
Cost of Living Adjustment:
Eligibility: Normal and Early Retirees and Beneficiaries (including Vested Terminated Retirees). COLA is not payable to Disability
Retirees.
Amount: 1.0% increase for Members who are Age 53, 2.0% increase for Members who are Age 54, and 1.5% increase for Members
who are Age 55 and greater.
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 44
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Contributions
Member Contributions; 6.0% of Salary.
- 2.0% of salary
- The lesser of 4.8% of salary or $507,634.00
City and State Contributions: Remaining amount required in order to pay current costs and amortize unfunded past service cost, if
any, as provided in Chapter 112, Florida Statutes.
Investment Earnings: Net rate of investment return realized by the Plan for the preceding Plan Year.
Vesting Schedule: Active Members who terminate employment with less than 5 years of Credited Service forfeit their Share.
Allocation: Ordinance 27, 1998 established a Share Plan for all Active Members. Premium tax monies received in excess of the base
amounts, less the sum of the amounts below, is allocated annually to each individual Share Account based on Credited Service,
determined as of September 30:
Chapter 175/185 Share Accounts:
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 45
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Net Pension Liability
The measurement date is September 30, 2016.
The measurement period for the pension expense was October 1, 2015 to September 30, 2016.
The reporting period is October 1, 2016 through September 30, 2017.
The Sponsor's Net Pension Liability was measured as of September 30, 2016.
The Total Pension Liability used to calculate the Net Pension Liability was determined as of that date.
Actuarial Assumptions:
Inflation 2.50%
Salary Increases Age based
Discount Rate 7.45%
Investment Rate of Return 7.45%
Asset Class Target Allocation
Long Term Expected
Real Rate of Return
Domestic Equity 50%7.50%
International Equity 10%8.50%
Domestic Fixed Income 20%2.50%
Global Fixed Income 5%3.50%
Real Estate 10%4.50%
Alternative 5%6.00%
Total 100%
The date of the most recent experience study for which significant assumptions are based upon is not available.
The Long-Term Expected Rate of Return on Pension Plan investments was determined using a building-block method in which
best-estimate ranges of expected future real rates of return (expected returns, Net of Pension Plan investment expenses and
inflation) are developed for each major asset class.
These ranges are combined to produce the Long-Term Expected Rate of Return by weighting the expected future real rates of
return by the target asset allocation percentage and by adding expected inflation.
Best estimates of arithmetic real rates of return for each major asset class included in the Pension Plan's target asset allocation as
of September 30, 2016 are summarized in the following table:
Mortality Rate Healthy Lives:
The Total Pension Liability was determined by an actuarial valuation as of October 1, 2015 updated to September 30, 2016 using the
following actuarial assumptions:
For 2016 the inflation rate assumption of the investment advisor was 2.50%.
Female: RP2000 Generational, 100% Annuitant White Collar, Scale BB.
Male: RP2000 Generational, 10% Annuitant White Collar /90% Annuitant Blue Collar, Scale BB.
Mortality Rate Disabled Lives:
Female: 60% RP2000 Disabled Female set forward two years / 40% Annuitant White Collar with no setback, no projection scale.
Male: 60% RP2000 Disabled Male setback four years / 40% Annuitant White Collar with no setback, no projection scale.
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 46
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Discount Rate:
The Discount Rate used to measure the Total Pension Liability was 7.45 percent.
The projection of cash flows used to determine the Discount Rate assumed that Plan Member contributions will be made at the
current contribution rate and that Sponsor contributions will be made at rates equal to the difference between actuarially
determined contribution rates and the Member rate. Based on those 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 was applied to all periods of projected benefit payments to determine the
Total Pension Liability.
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 47
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Total Pension
Liability
Plan Fiduciary
Net Position
Net Pension
Liability
(a)(b)(a)-(b)
Reporting Period Ending September 30, 2016 $ 93,043,038 $ 72,959,181 $ 20,083,857
Changes for a Year:
Service Cost 1,637,466 - 1,637,466
Interest 7,174,074 - 7,174,074
Share Plan Allocation 51,623 - 51,623
Differences between Expected and Actual Experience (1,684,439) - (1,684,439)
Changes of assumptions 5,890,763 - 5,890,763
Changes of benefit terms - - -
Contributions - Employer - 3,088,524 (3,088,524)
Contributions - State - 568,403 (568,403)
Contributions - Employee - 455,983 (455,983)
Net Investment Income - 6,152,911 (6,152,911)
Benefit Payments, including Refunds of Employee Contributions (1,803,517) (1,803,517) -
Administrative Expense - (91,145) 91,145
Net Changes 11,265,970 8,371,159 2,894,811
Reporting Period Ending September 30, 2017 $ 104,309,008 $ 81,330,340 $ 22,978,668
Sensitivity of the Net Pension Liability to changes in the Discount Rate.
1% Decrease
Current Discount
Rate 1% Increase
6.45%7.45%8.45%
Sponsor's Net Pension Liability 36,614,699$ 22,978,668$ 11,964,508$
Pension Plan Fiduciary Net Position.
Detailed information about the pension Plan's Fiduciary Net Position is available in a separately issued Plan financial report.
Increase (Decrease)
CHANGES IN NET PENSION LIABILITY
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 48
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For the year ended September 30, 2016, the Sponsor has recognized a Pension Expense of $3,763,510.
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Differences between Expected and Actual Experience - 1,217,289
Changes of assumptions 2,832,235 -
Net difference between Projected and Actual Earnings on Pension Plan investments 2,462,213 -
Employer and State contributions subsequent to the measurement date 3,656,927 -
Total 8,951,375$ 1,217,289$
OUTFLOW
Year ended September 30:
2017 (524,196)$ 409,218$ 902,903$
2018 (524,198)$ 409,219$ 902,902$
2019 (524,198)$ 409,219$ 902,902$
2020 (524,198)$ 845,208$ 1,277,760$
2021 (524,198)$ (97,337)$ 90,692$
Thereafter 1,403,699$ 486,686$ -$
Payable to the Pension Plan
FINAL PENSION EXPENSE AND DEFERRED OUTFLOWS OF RESOURCES AND DEFERRED
INFLOWS OF RESOURCES RELATED TO PENSIONS
On September 30, 2016, the Sponsor reported Deferred Outflows of Resources and Deferred Inflows of Resources related to
pensions from the following sources:
The outcome of the Deferred Outflows of resources related to pensions resulting from Employer and State contributions subsequent
to the measurement date has been recognized as a reduction of the Net Pension Liability in the year ended September 30, 2016.
Other amounts reported as Deferred Outflows of Resources and Deferred Inflows of Resources related to pensions will be recognized
in Pension Expense as follows:
On September 30, 2016, the Sponsor reported a payable of $12 for the outstanding amount of contributions of the Pension Plan
required for the year ended September 30, 2016.
FISCAL YEAR SEPTEMBER 30, 2016
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 49
GASB 68
For the year ended September 30, 2017, the Sponsor will recognize a Pension Expense of $4,338,719.
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Differences between Expected and Actual Experience - 2,377,532
Changes of assumptions 7,101,401 -
Net difference between Projected and Actual Earnings on Pension Plan investments 1,566,309 -
Employer and State contributions subsequent to the measurement date TBD -
Total TBD 2,377,532$
OUTFLOW
Year ended September 30:
2018 (524,198)$ 409,219$ 1,506,619$
2019 (524,198)$ 409,219$ 1,506,619$
2020 (524,198)$ 845,208$ 1,881,477$
2021 (524,198)$ (97,337)$ 694,409$
2022 (280,740)$ -$ 701,054$
Thereafter -$ -$ -$
Payable to the Pension Plan
PRELIMINARY PENSION EXPENSE AND DEFERRED OUTFLOWS OF RESOURCES AND
DEFERRED INFLOWS OF RESOURCES RELATED TO PENSIONS
On September 30, 2016, the Sponsor reported a payable of $12 for the outstanding amount of contributions of the Pension Plan
required for the year ended September 30, 2016.
On September 30, 2017, the Sponsor reported Deferred Outflows of Resources and Deferred Inflows of Resources related to
pensions from the following sources:
Other amounts reported as Deferred Outflows of Resources and Deferred Inflows of Resources related to pensions will be recognized
in Pension Expense as follows:
The outcome of the Deferred Outflows of resources related to pensions resulting from Employer and State contributions subsequent
to the measurement date will be recognized as a reduction of the Net Pension Liability in the year ended September 30, 2017.
FISCAL YEAR SEPTEMBER 30, 2017
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 50
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Reporting Period Ending 09/30/2017 09/30/2016 09/30/2015
Measurement Date 09/30/2016 09/30/2015 09/30/2014
Total Pension Liability
Service Cost 1,637,466 1,760,152 1,741,473
Interest 7,174,074 6,786,918 6,280,207
Share Plan Allocation 51,623 222,133 304,698
Changes of benefit terms - - -
Differences between Expected and Actual Experience (1,684,439) (1,460,746) -
Changes of assumptions 5,890,763 2,004,899 1,772,793
Benefit Payments, including Refunds of Employee Contributions (1,803,517) (1,935,428) (1,844,859)
Net Change in Total Pension Liability 11,265,970 7,377,928 8,254,312
Total Pension Liability - Beginning 93,043,038 85,665,110 77,410,798
Total Pension Liability - Ending (a) $104,309,008 $ 93,043,038 $ 85,665,110
Plan Fiduciary Net Position
Contributions - Employer 3,088,524 3,746,995 2,866,126
Contributions - State 568,403 726,993 843,533
Contributions - Employee 455,983 445,465 475,442
Net Investment Income 6,152,911 835,212 6,977,925
Benefit Payments, including Refunds of Employee Contributions (1,803,517) (1,935,428) (1,844,859)
Administrative Expense (91,145) (84,807) (88,142)
Net Change in Plan Fiduciary Net Position 8,371,159 3,734,430 9,230,025
Plan Fiduciary Net Position - Beginning 72,959,181 69,224,751 59,994,726
Plan Fiduciary Net Position - Ending (b) $ 81,330,340 $ 72,959,181 $ 69,224,751
Net Pension Liability - Ending (a) - (b)22,978,668$ 20,083,857$ 16,440,359$
Plan Fiduciary Net Position as a percentage of the Total Pension Liability 77.97%78.41%80.81%
Covered Employee Payroll¹7,599,715$ 9,695,082$ 7,924,041$
Net Pension Liability as a percentage of Covered Employee Payroll 302.36%207.16%207.47%
Notes to Schedule:
Changes of assumptions:
For measurement date 09/30/2016, amounts reported as changes of assumptions resulted from lowering the investment return
matching the long-term inflation assumption utilized by the Plan's investment consultant.
Also, as a result of Chapter 2015-157, Laws of Florida, the assumed rates of mortality were changed to the assumptions used
assumption from 7.85% to 7.65%. Furthermore the inflation assumption has been lowered from 4.50% to 3.00%.
by the Florida Retirement System for special risk employees.
For measurement date 09/30/2015, amounts reported as changes of assumptions resulted from lowering the investment return
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS
Last 10 Fiscal Years
assumption from 7.65% to 7.45%. Furthermore the inflation assumption rate was lowered from 3.00% to 2.50%,
¹ The Covered Employee Payroll numbers shown are in compliance with GASB 82, except for the 09/30/2015 measurement
period which includes DROP payroll.
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 51
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Reporting Period Ending 09/30/2015 09/30/2014
Measurement Date 09/30/2014 09/30/2013
Total Pension Liability
Service Cost 1,741,473 1,540,354 -
Interest 6,280,207 5,827,406 -
Share Plan Allocation 304,698 - -
Changes of benefit terms - - -
Differences between Expected and Actual Experience - - -
Changes of assumptions 1,772,793 - -
Benefit Payments, including Refunds of Employee Contributions (1,844,859) (1,613,497) -
Net Change in Total Pension Liability 8,254,312 5,754,263 -
Total Pension Liability - Beginning 77,410,798 71,656,535 -
Total Pension Liability - Ending (a) $ 85,665,110 $ 77,410,798 $ -
Plan Fiduciary Net Position
Contributions - Employer 2,866,126 3,347,645 -
Contributions - State 843,533 750,073 -
Contributions - Employee 475,442 497,684 -
Net Investment Income 6,977,925 6,392,179 -
Benefit Payments, including Refunds of Employee Contributions (1,844,859) (1,613,497) -
Administrative Expense (88,142) (99,667) -
Net Change in Plan Fiduciary Net Position 9,230,025 9,274,417 -
Plan Fiduciary Net Position - Beginning 59,994,726 50,720,309 -
Plan Fiduciary Net Position - Ending (b) $ 69,224,751 $ 59,994,726 $ -
Net Pension Liability - Ending (a) - (b)16,440,359$ 17,416,072$ -$
Plan Fiduciary Net Position as a percentage of the Total Pension Liability 80.81%77.50%#DIV/0!
Covered Employee Payroll¹7,924,041$ 8,294,732$ -$
Net Pension Liability as a percentage of Covered Employee Payroll 207.47%209.97%#DIV/0!
Notes to Schedule:0
Changes of assumptions:
Valuation Date Investment Return Assumption
10/1/2015 7.65%
10/1/2016 7.45%
10/1/2017 7.25%
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS
Last 10 Fiscal Years
For measurement date 09/30/2014, amounts reported as changes of assumptions resulted from:
• The payroll growth assumption, utilized for amortization of the Unfunded Actuarial Accrued Liability (UAAL) has been
decreased from 2.9% to 0.7% (the actual ten-year payroll growth as of 10/1/2014). This decrease was made for the
purpose of compliance with Part VII of Chapter 112, Florida Statutes.
• The investment return assumption has been decreased from 8.05% to 7.85%. Further reductions will be implemented
with future valuations according to the following schedule:
¹ The Covered Employee Payroll numbers shown are in compliance with GASB 82, except for the 09/30/2015 measurement
period which includes DROP payroll.
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 52
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09/30/2016 09/30/2015 09/30/2014 09/30/2013 01/00/1900
Actuarially Determined Contribution 3,605,305 3,460,519 3,404,960 3,443,143 -
Contributions in relation to the
Actuarially Determined Contributions 3,605,305 4,251,855 3,404,960 3,911,687 -
Contribution Deficiency (Excess) $ - $ (791,336) $ - $ (468,544) $ -
Covered Employee Payroll¹7,599,715$ 9,695,082$ 7,924,041$ 8,294,732$ -$
Contributions as a percentage of
Covered Employee Payroll 47.44%43.86%42.97%47.16%#DIV/0!
Notes to Schedule
Valuation Date:10/01/2014
Methods and assumptions used to determine contribution rates:
Funding Method:
Amortization Method:
Remaining Amortization Period:
Mortality Rates:RP-2000 Table, sex distinct, without projection.
Interest Rate:7.85% per year compounded annually, net of investment related expenses.
Retirement Rates:
Age
Probability of
Retirement
50 5%
51 5%
52 50%
53 10%
54 10%
55 100%
Actuarial Value of Assets:
Cost of Living Adjustments:
Salary Increases*:Age Increase
20 3.7%
30 1.1%
40 0.7%
50 0.2%
60 0.0%
*Expected increase in salary in addition to 4.5% inflation assumption.
For those Members who attain 25 years of Credited Service, regardless of Age, the
probability of retirement is 100%.
The Actuarial Value of Assets is calculated by recognizing 25% of the difference
between the Market Value of Assets and the expected Market Value of Assets.
1.0% increase for Members who are Age 53, 2.0% increase for Members who are Age
54, and 3.0% increase for Members who are Age 55 and greater. For those members
who were not eligible for Normal Retirement as of September 12, 2012, the COLA
beginning at age 55 is based on 3.0% for service prior to September 12, 2012, and
1.5% for service thereafter.
Based on a study of over 650 public safety funds, this table reflects a 10% margin for
future mortality improvements.
20 Years (as of 10/01/2014).
SCHEDULE OF CONTRIBUTIONS
Last 10 Fiscal Years
Level Percentage of Pay, Closed.
Projected Unit Credit Cost Method.
Actuarially determined contribution rates are calculated as of October 1, two years prior to the end of the fiscal year in which
contributions are reported.
¹ The Covered Employee Payroll numbers shown are in compliance with GASB 82, except for the 09/30/2015 measurement
period which includes DROP payroll.
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 53
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Payroll Growth Assumption:0.7% for amortization of the Unfunded Actuarial Accrued Liability.
Final Pay Load:
Termination Rates:
Age
Years of
Service
All Ages 0
1
2
3
4
25 5 & Over
30
35
40
45
50
55
Disability Rates:
Age
20
25
30
35
40
45
50
It is assumed that 75% of disablements and active Member deaths are service related.
0.0895%
0.1210%
0.2750%
0.4290%
1.0%
% Become Disabled within Next
Year
0.0545%
0.0545%
0.0580%
5.9%
4.4%
3.0%
2.1%
1.7%
10.0%
9.0%
8.0%
7.0%
7.0%
For Members hired prior to October 1, 2011, active liabilities are increased by 3% to
account for assumed payments of unused sick and annual leave time. Members
protected from benefit changes set forth in Ordinance 23, 2012 are valued with a 4.5%
final salary load. Members hired on and after October1, 2011 are valued with no final
pay load.
% Separating form Employment
Within the Next Year
15.0%
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 54
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Net Pension
Liability
Deferred
Inflows
Deferred
Outflows
Pension
Expense
Beginning balance $ 16,440,359 $ 1,743,956 $ 5,941,127 $ -
Employer and State contributions made after 09/30/2015 - - 3,656,927 -
Total Pension Liability Factors:
Service Cost 1,760,152 - - 1,760,152
Interest 6,786,918 - - 6,786,918
Share Plan Allocation 222,133 - - 222,133
Changes in benefit terms - - - -
Differences between Expected and Actual Experience
with regard to economic or demographic assumptions (1,460,746) 1,460,746 - -
Current year amortization of experience difference - (243,457) - (243,457)
Change in assumptions about future economic or
demographic factors or other inputs 2,004,899 - 2,004,899 -
Current year amortization of change in assumptions - - (639,803) 639,803
Benefit Payments (1,935,428) - - (1,935,428)
Net change 7,377,928 1,217,289 5,022,023 7,230,121
Plan Fiduciary Net Position:
Contributions - Employer 3,746,995 - (3,746,995) -
Contributions - State 726,993 - (726,993) -
Contributions - Employee 445,465 - - (445,465)
Net Investment Income 5,547,937 - - (5,547,937)
Difference between projected and actual earnings on
Pension Plan investments (4,712,725) - 4,712,725 -
Current year amortization - (435,989) (942,545) 506,556
Benefit Payments (1,935,428) - - 1,935,428
Administrative Expenses (84,807) - - 84,807
Net change 3,734,430 (435,989) (703,808) (3,466,611)
Ending Balance $ 20,083,857 $ 2,525,256 $ 10,259,342 $ 3,763,510
FINAL COMPONENTS OF PENSION EXPENSE
FISCAL YEAR SEPTEMBER 30, 2016
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 55
GASB 68
Net Pension
Liability
Deferred
Inflows
Deferred
Outflows
Pension
Expense
Beginning balance $ 20,083,857 $ 2,525,256 $ 10,259,342 $ -
Employer and State contributions made after 09/30/2016 - - TBD*-
Total Pension Liability Factors:
Service Cost 1,637,466 - - 1,637,466
Interest 7,174,074 - - 7,174,074
Share Plan Allocation 51,623 - - 51,623
Changes in benefit terms - - - -
Differences between Expected and Actual Experience
with regard to economic or demographic assumptions (1,684,439) 1,684,439 - -
Current year amortization of experience difference - (524,196) - (524,196)
Change in assumptions about future economic or
demographic factors or other inputs 5,890,763 - 5,890,763 -
Current year amortization of change in assumptions - - (1,621,597) 1,621,597
Benefit Payments (1,803,517) - - (1,803,517)
Net change 11,265,970 1,160,243 4,269,166 8,157,047
Plan Fiduciary Net Position:
Contributions - Employer 3,088,524 - (3,088,524) -
Contributions - State 568,403 - (568,403) -
Contributions - Employee 455,983 - - (455,983)
Net Investment Income 5,666,225 - - (5,666,225)
Difference between projected and actual earnings on
Pension Plan investments 486,686 486,686 - -
Current year amortization - (533,327) (942,545) 409,218
Benefit Payments (1,803,517) - - 1,803,517
Administrative Expenses (91,145) - - 91,145
Net change 8,371,159 (46,641) (4,599,472) (3,818,328)
Ending Balance $ 22,978,668 $ 3,638,858 TBD $ 4,338,719
PRELIMINARY COMPONENTS OF PENSION EXPENSE
FISCAL YEAR SEPTEMBER 30, 2017
* Employer and State contributions subsequent to the measurement date made after September 30, 2016 but made on or before
September 30, 2017 need to be added.
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 56
GASB 68
Increase (Decrease) in Pension Expense Arising from the Recognition of the of Differences Between Projected and Actual Earnings on Pension Plan Investments
Plan Year
Ending
Differences
Between Projected
and Actual
Earnings
Recognition
Period (Years)2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Recognitio 1 2 3 4 5 6 7 8 9 10 11
2014 (2,179,944)$ 5 (435,988)$ (435,989)$ (435,989)$ (435,989)$ (435,989)$ -$ -$ -$ -$ -$ -$
2015 4,712,725$ 5 -$ 942,545$ 942,545$ 942,545$ 942,545$ 942,545$ -$ -$ -$ -$ -$
2016 (486,686)$ 5 -$ -$ (97,338)$ (97,337)$ (97,337)$ (97,337)$ (97,337)$ -$ -$ -$ -$
Net Increase (Decrease) in Pension Expense (435,988)$ 506,556$ 409,218$ 409,219$ 409,219$ 845,208$ (97,337)$ -$ -$ -$ -$
AMORTIZATION SCHEDULE - INVESTMENTS
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 57
GASB 68
Increase (Decrease) in Pension Expense Arising from the Recognition of the Effects of Changes of Assumptions
Plan Year
Ending
Changes of
Assumptions
Recognition
Period (Years)2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Recognitio 1 2 3 4 5 6 7 8 9 10 11
2014 1,772,793$ 5.8 305,654$ 305,654$ 305,654$ 305,654$ 305,654$ 244,523$ -$ -$ -$ -$ -$
2015 2,004,899$ 6 -$ 334,149$ 334,150$ 334,150$ 334,150$ 334,150$ 334,150$ -$ -$ -$ -$
2016 5,890,763$ 6 -$ -$ 981,793$ 981,794$ 981,794$ 981,794$ 981,794$ 981,794$ -$ -$ -$
Net Increase (Decrease) in Pension Expense 305,654$ 639,803$ 1,621,597 $ 1,621,598 $ 1,621,598 $ 1,560,467 $ 1,315,944 $ 981,794$ -$ -$ -$
AMORTIZATION SCHEDULE - ASSUMPTION CHANGES
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 58
GASB 6830
Increase (Decrease) in Pension Expense Arising from the Recognition of the Effects of Differences between Expected and Actual Experience
Plan Year
Ending
Differences
Between Expected
and Actual
Experience
Recognition
Period (Years)2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Recognitio 2 3 4 5 6 7 8 9 10 11 12
2015 (1,460,746)$ 6 (243,457)$ (243,457)$ (243,458)$ (243,458)$ (243,458)$ (243,458)$ -$ -$ -$ -$ -$
2016 (1,684,439)$ 6 -$ (280,739)$ (280,740)$ (280,740)$ (280,740)$ (280,740)$ (280,740)$ -$ -$ -$ -$
Net Increase (Decrease) in Pension Expense (243,457)$ (524,196)$ (524,198)$ (524,198)$ (524,198)$ (524,198)$ (280,740)$ -$ -$ -$ -$
AMORTIZATION SCHEDULE - EXPERIENCE
City of Palm Beach Gardens Firefighters' Pension Fund FOSTER & FOSTER | 59
CITY OF PALM BEACH GARDENS
FIREFIGHTERS’ PENSION FUND
FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2016
CITY OF PALM BEACH GARDENS
FIREFIGHTERS’ PENSION FUND
YEAR ENDED SEPTEMBER 30, 2016
TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITOR’S REPORT 1 - 3
MANAGEMENT’S DISCUSSION AND ANALYSIS 4 - 7
FINANCIAL STATEMENTS
Statement of Fiduciary Net Position 8
Statement of Changes in Fiduciary Net Position 9
Notes to Financial Statements 10-20
SUPPLEMENTARY INFORMATION
Schedule of Administrative Expenses 22
Schedules of Contributions from Employer and Other Contributors 23
Schedule of Investment Returns 24
Schedules of Changes in the Employer’s Net Pension Liability and Related Ratios 25
COMPLIANCE REPORT
Independent Auditor’s Report on Internal Control Over
Financial Reporting and on Compliance and Other Matters Based on an Audit of
Financial Statements Performed in Accordance with Government Auditing Standards 27-28
1625 N. COMMERCE PARKWAY, SUITE 315, WESTON, FL 33326
TEL (954) 485-5788· FAX (954) 485-8988 · WWW.KSDT-CPA.COM
INDEPENDENT AUDITOR’S REPORT
To the Board of Trustees of the
City of Palm Beach Gardens Firefighters’ Pension Fund
We have audited the accompanying financial statements of the City of Palm Beach Gardens Firefighters’ Pension
Fund, which comprise the statement of fiduciary net position as of September 30, 2016, and the related statement
of changes in fiduciary net position for the year then ended, and the related notes to the financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance
with accounting principles generally accepted in the United States of America; this includes the design,
implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial
statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our
audit in accordance with auditing standards generally accepted in the United States of America and the standards
applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the
risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the Plan’s preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Plan’s internal control. Accordingly, we express no
such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of significant accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the fiduciary net
position of the City of Palm Beach Gardens Firefighters’ Pension Fund as of September 30, 2016, and the changes
in its fiduciary net position for the year then ended in conformity with accounting principles generally accepted
in the United States of America.
1625 N. COMMERCE PARKWAY, SUITE 315, WESTON, FL 33326
TEL (954) 485-5788· FAX (954) 485-8988 · WWW.KSDT-CPA.COM
INDEPENDENT AUDITOR’S REPORT (Continued)
Other Matters
Prior Year Comparative Information
We have previously audited the City of Palm Beach Gardens Firefighters’ Pension Fund’s 2015 financial
statements, and our report dated February 12, 2016, expressed an unmodified opinion on those financial
statements. In our opinion, the summarized comparative information presented herein as of and for the year ended
September 30, 2015, is consistent, in all material respects, with the audited financial statements from which it has
been derived.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that management's discussion
and analysis on pages 4-7 and the schedules of contributions from employers and other contributors, schedule of
investment returns and schedules of changes in the employer’s net pension liability and related ratios on pages
23-25 be presented to supplement the basic financial statements. Such information, although not a part of the
basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be
an essential part of financial reporting for placing the basic financial statements in an appropriate operational,
economic or historical context. We have applied certain limited procedures to the required supplementary
information in accordance with auditing standards generally accepted in the United States of America, which
consisted of inquiries of management about the methods of preparing the information and comparing the
information for consistency with management's responses to our inquiries, the basic financial statements, and
other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or
provide any assurance on the information because the limited procedures do not provide us with sufficient
evidence to express an opinion or provide any assurance.
Other Supplementary Information
Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The
schedule of administrative expenses is presented for purposes of additional analysis and is not a required part of
the financial statements. Such information is the responsibility of management and was derived from and relates
directly to the underlying accounting and other records used to prepare the financial statements. The information
has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain
additional procedures, including comparing and reconciling such information directly to the underlying
accounting and other records used to prepare the basic financial statements or to the basic financial statements
themselves, and other additional procedures in accordance with audited standards generally accepted in the United
States of America. In our opinion, the information is fairly stated in all material respects in relation to the basic
financial statements as a whole.
1625 N. COMMERCE PARKWAY, SUITE 315, WESTON, FL 33326
TEL (954) 485-5788· FAX (954) 485-8988 · WWW.KSDT-CPA.COM
INDEPENDENT AUDITOR’S REPORT (Continued)
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated April 19, 2017, on our
consideration of the City of Palm Beach Gardens Firefighters’ Pension Fund’s internal control over financial
reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant
agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control
over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal
control over financial reporting or on compliance. That report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the City of Palm Beach Gardens Firefighters’
Pension Fund’s internal control over financial reporting and compliance.
Weston, Florida
April 19, 2017
CITY OF PALM BEACH GARDENS
FIREFIGHTERS’ PENSION FUND
MANAGEMENT’S DISCUSSION AND ANALYSIS
-4-
This section of the annual financial report presents the Management’s Discussion and Analysis (MD&A) of the
City of Palm Beach Gardens Firefighters’ Pension Fund (the Plan) financial performance. This analysis provides
an overview of the financial activities and funding conditions for fiscal year ended September 30, 2016. Please read
it in conjunction with the Plan financial statements, which immediately follow.
Overview of the Financial Statements
The financial section of this annual report consists of four parts: the MD&A, the basic financial statements, notes
to the financial statements and other required supplementary information.
The financial statements provide both long-term and short-term information about the Plan’s overall financial status.
The financial statements also include notes that explain some of the information in the financial statements and
provide more detailed data. The statements are followed by a section of other supplementary information that further
explains and supports the information in the financial statements.
The Plan’s financial statements are prepared in conformity with accounting principles generally accepted in the
United States of America (GAAP). Under GAAP, revenues are recognized in the period in which they are earned,
expenses are recognized in the period in which they are incurred and appreciation (depreciation) of assets is
recognized in the Statement of Changes in Fiduciary Net Position. All assets and liabilities associated with the
operation of the Plan are included in the Statement of Fiduciary Net Position.
The Statement of Fiduciary Net Position reports fiduciary net position and how it has changed. A net asset is the
difference between the asset and any related liabilities. It is one measurement of the financial health or current
position of the Plan.
Financial Highlights
The Plan’s financial statements net results from operations for fiscal year 2016 reflected the following financial
activities:
Total fiduciary net position was $81,344,787, which was 11% greater than 2015 total fiduciary net position.
Total contributions were $4,116,804, which was 16% lower than the 2015 contributions.
Total interest and dividend earnings were $2,017,005, which was 10% lower than the 2015 earnings.
Net investment income was $6,155,704, which was 694% greater than the 2015 income.
Total benefits paid were $1,542,582, which was 21% greater than the benefits paid during 2015.
Total contributions for the year were $4,116,804, which was 16% lower than the 2015 contributions. The
amount of employer contributions varies from year to year and is actuarially determined. Participant
contributions were 6% of their compensation.
CITY OF PALM BEACH GARDENS
FIREFIGHTERS’ PENSION FUND
MANAGEMENT’S DISCUSSION AND ANALYSIS
(Continued)
-5-
Statement of Fiduciary Net Position
The following condensed comparative Statement of Fiduciary Net Position is a snap shot of account balances at the
fiscal year end of the Plan. It reports the assets available for future payments to retirees and any current liabilities
that are owed as of the financial statement date. The resulting net asset value, or assets minus liabilities, represents
the value of assets held in trust for Plan benefits.
The Plan continues to be evaluated for actuarial soundness by the actuary of the Plan. It should be noted that
retirement system funding is based on a long-term perspective and that temporary fluctuations in the market are to
be expected.
Fiduciary net position at September 30, 2016 was $81,344,787, a 11% increase from fiduciary net position at
September 30, 2015.
Total investments at September 30, 2016 were $81,252,674, a 13% increase from the investments at September
30, 2015.
2016 2015 % Change
Receivables 353,787 2,194,167 (84%)
Other assets - 200 (100%)
Investments, at fair value 81,252,674 71,603,607 13%
Total assets 81,606,461 73,797,974 11%
Accounts payable 93,862 86,989 8%
Accounts payable - purchase of investments 167,812 741,251 (77%)
Total liabilities 261,674 828,240 (68%)
Net position restricted for pensions $ 81,344,787 $ 72,969,734 11%
Statement of Changes in Fiduciary Net Position
The Statement of Changes in Fiduciary net position presents the effect of Plan transactions that occurred during the
fiscal year. On the statement, additions to the Plan minus deductions from the plan equal net increase or decrease
in fiduciary net position.
The funding objective is to meet long-term obligations and fund all Plan benefits.
CITY OF PALM BEACH GARDENS
FIREFIGHTERS’ PENSION FUND
MANAGEMENT’S DISCUSSION AND ANALYSIS
(Continued)
-6-
Statement of Changes in Fiduciary Net Position (Continued)
Revenues (additions to the fiduciary net position) for the Plan were $10,275,560, which was made up of total
contributions of $4,116,804 plus net investment income of $6,155,704 and other income of $3,052.
Expenses (deductions from the fiduciary net position) decreased from $2,038,525 during 2015 to $1,900,507
during 2016.
2016 2015 % Change
Total contributions $ 4,116,804 $ 4,918,575 (16%)
Net investment income 6,155,704 775,398 694%
Other income 3,052 2,828 8%
Total additions 10,275,560 5,696,801 80%
Total deductions 1,900,507 2,038,525 (7%)
Net increase 8,375,053 3,658,276 129%
Net position restricted for pensions – beginning 72,969,734 69,311,458 5%
Net position restricted for pensions – ending $ 81,344,787 $ 72,969,734 11%
Asset Allocation
The table below indicates the Plan investment policy limitations and actual asset allocations as of September 30,
2016:
Investment policy Actual Allocation
Domestic equities 40%-60% 49%
International equities 5%-15% 13%
Fixed income 15%-35% 18%
International fixed income 0%-10% 5%
Real estate 5%-15% 11%
Cash and cash equivalents 0%-5% 4%
The investment guidelines provide for the appropriate diversification of the portfolio. Investments have been
diversified to the extent practicable to control risk of loss resulting from over-concentration of a specific maturity,
issuer, instrument, dealer or bank through which financial instruments are bought and sold.
The Board of Trustees (the Board) recognizes that some risk must be assumed to achieve the Plan’s long-term
investment objectives. In establishing the risk tolerances, the Plan’s ability to withstand short and intermediate term
variability has been considered. However, the Plan’s financial condition enables the Board to adopt a long-term
investment perspective.
CITY OF PALM BEACH GARDENS
FIREFIGHTERS’ PENSION FUND
MANAGEMENT’S DISCUSSION AND ANALYSIS
(Continued)
-7-
Investment Activities
Investment income is vital to the Plan for current and future financial stability. Therefore, the Board has a fiduciary
responsibility to act prudently when making Plan investment decisions. To assist the Board in this area, the Board
retains investment managers who supervise and direct the investment of the assets. The Board also retains an
investment monitor to evaluate and report on quarterly basis compliance by the investment managers with the
investment policy of the Board and investment performance of the Plan. The investment policy statement was last
amended in October 2015.
The Board and its investment consultant review portfolio performance in compliance with the investment policy
statement quarterly. Performance is evaluated both individually by money manager style and collectively by
investment type and for the aggregate portfolio.
Financial Analysis Summary
The investment activities, for the fiscal year ended September 30, 2016 are a function of the underlying market,
money managers’ performance and the investment policy’s asset allocation model. The Plan has consistently
implemented a high quality, conservative approach.
Contacting the Plan’s Financial Management
This financial analysis is designed to provide the Board, plan participants and the marketplace credit analysts with
an overview of the Plan’s finances and the prudent exercise of the Board’s oversight. If you have any questions
regarding this report or you need additional financial information, please contact the administrator of the Plan:
The Resource Center, LLC
c/o City of Palm Beach Gardens Firefighters’ Pension Fund
4360 Northlake Boulevard, Suite 206
Palm Beach Gardens, Florida 33410
CITY OF PALM BEACH GARDENS
FIREFIGHTERS’ PENSION FUND
STATEMENT OF FIDUCIARY NET POSITION
SEPTEMBER 30, 2016
(WITH COMPARATIVE TOTALS AS OF SEPTEMBER 30, 2015)
The accompanying notes are an integral part of these financial statements.
-8-
2016 2015
RECEIVABLES:
Accounts receivable - employer -$ 776,824$
Accounts receivable - Chapter 175 114,372 726,993
Accounts receivable - employee 14,459 10,553
Accounts receivable - sale of investments 90,859 486,310
Accrued investment income 134,097 193,487
TOTAL RECEIVABLES 353,787 2,194,167
OTHER ASSETS - 200
INVESTMENTS, AT FAIR VALUE:
Equity securities 48,469,683 43,783,124
U.S. Government obligations 4,842,771 5,859,228
Mortgage backed securities 3,471,657 3,971,395
Collateralized mortgage obligations 376,547 389,916
Corporate bonds 6,075,729 4,382,541
Foreign bonds 199,600 183,451
Fixed income balanced mutual fund 2,726,097 -
Fixed income mutual funds 3,918,293 3,397,142
Real estate funds 8,808,132 8,040,236
Money market funds 2,364,165 1,596,574
TOTAL INVESTMENTS, AT FAIR VALUE 81,252,674 71,603,607
TOTAL ASSETS 81,606,461 73,797,974
ACCOUNTS PAYABLE 93,862 86,989
ACCOUNTS PAYABLE - PURCHASE OF INVESTMENTS 167,812 741,251
TOTAL LIABILITIES 261,674 828,240
NET POSITION RESTRICTED FOR PENSIONS:
Net position restricted for defined benefits 68,223,275 62,218,936
Net position held in trust for DROP benefits 3,905,337 2,304,478
Net position restricted for share benefits 9,216,175 8,446,320
TOTAL NET POSITION RESTRICTED FOR PENSIONS 81,344,787$ 72,969,734$
LIABILITIES
NET POSITION RESTRICTED FOR PENSIONS
ASSETS
CITY OF PALM BEACH GARDENS
FIREFIGHTERS’ PENSION FUND
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
YEAR ENDED SEPTEMBER 30, 2016
(WITH COMPARATIVE TOTALS FOR YEAR ENDED SEPTEMBER 30, 2015)
The accompanying notes are an integral part of these financial statements.
-9-
2016 2015
ADDITIONS:
Contributions:
Employer 3,088,512$ 3,747,003$
Chapter 175 568,403 726,993
Employee 459,889 444,579
Total contributions 4,116,804 4,918,575
Investment income:
Net appreciation (depreciation) in fair value of investments 4,577,258 (1,065,309)
Interest and dividend income 2,017,005 2,229,437
Total investment income 6,594,263 1,164,128
Less: investment expenses 438,559 388,730
Net investment income 6,155,704 775,398
Other income 3,052 2 , 8 2 8
TOTAL ADDITIONS 10,275,560 5,696,801
DEDUCTIONS:
Benefit payments 1,542,582 1,273,518
DROP distributions 43,064 91,236
Share plan distributions 217,871 582,083
Administrative expenses 96,990 91,688
TOTAL DEDUCTIONS 1,900,507 2,038,525
NET INCREASE IN NET POSITION
RESTRICTED FOR PENSION 8,375,053 3,658,276
NET POSITION RESTRICTED FOR
PENSIONS - BEGINNING 72,969,734 69,311,458
NET POSITION RESTRICTED FOR
PENSIONS - ENDING 81,344,787$ 72,969,734$
CITY OF PALM BEACH GARDENS
FIREFIGHTERS’ PENSION FUND
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2016
-10-
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Investment Valuation and Income Recognition
Investments are reported at fair value (see Note 3). Fair value is the price that would be received to
sell an asset or paid to transfer a liability in an orderly transaction between market participants (See
Note 4 for discussion of fair value measurements).
Purchase and sales of securities are recorded on a trade-date basis. Interest income is recorded on the
accrual basis. Dividends are recorded on the ex-dividend date. Net appreciation (depreciation)
includes the Plan’s gains and losses on investments bought and sold as well as held during the year.
Basis of Accounting and Use of Estimates
The accompanying financial statements have been prepared using the accrual basis accounting. The
preparation of financial statements in accordance with accounting principles generally accepted in
the United States of America (GAAP) requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, benefit obligations and changes therein, and
disclosure of contingent assets and liabilities. Actual results could differ from those estimates.
Reclassifications
Certain amounts in the prior year comparative totals have been reclassified in order to be comparable
with the current year presentation.
NOTE 2. DESCRIPTION OF THE PLAN
The following description of the City of Palm Beach Gardens Firefighters’ Pension Fund (the Plan)
provides only general information. Participants should refer to the City’s ordinance for more complete
information.
The Plan is a single-employer combined defined benefit and money purchase plan covering all eligible
firefighters. The plan was established by the City in accordance with a City ordinance and state statutes.
General
Management of the Plan is vested in the Board. The Board consists of five trustees, two of whom are
appointed by the Council of the City of Palm Beach Gardens, Florida (the City), two of whom are
full-time firefighters who are elected by a majority of the Plan participants, and a fifth trustee who is
chosen by the other four trustee. The Plan is reported in the fiduciary funds (pension trust) in the
City’s basic financial statements.
CITY OF PALM BEACH GARDENS
FIREFIGHTERS’ PENSION FUND
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2016
(Continued)
-11-
NOTE 2. DESCRIPTION OF THE PLAN (Continued)
Plan Participation
Inactive Plan participants or beneficiaries currently receiving benefits 23
Inactive Plan participants entitled to but not yet receiving benefits 3
Active Plan participants 101
Total 127
Eligibility
All firefighters as of the effective date, and all future new firefighters, become participants of the
Plan as a condition of employment.
Benefits
The Plan provides normal retirement, early retirement, deferred retirement, disability retirement and
death benefits. The benefit provisions are established and may be amended under the authority of
City Ordinance.
Normal Benefits
A participant may retire with normal benefits after the earlier of age 52 with 10 years of credited
service, or 25 years of credited service regardless of age. Reduced early retirement benefits are
available once a participant reaches age 50 and accumulates 10 years of credited service. Normal
retirement benefits are 3.0% of the participant's average final compensation times the participant’s
credited service years up to a maximum of 99% (75% for participants retiring on or after September
13, 2012 who were not eligible for normal retirement or who did not have an accrued pension benefit
in excess of 75% of average final compensation on that date) of average final compensation. Early
retirement benefits are the same as normal retirement benefits, reduced by 3.0% for each year by
which the commencement of benefits precedes age 52. Average final compensation for purposes of
calculating benefits is one twelfth of the average annual salary for the best five years of the last ten
years of credited service. Salary means the total compensation for services rendered to the City as a
firefighter reportable on the participant's W-2 form plus all tax deferred, tax-sheltered or tax exempt
items of income derived from elective employee payroll deduction or salary reduction.
Notwithstanding the preceding sentence, effective September 13, 2012, salary shall exclude all
overtime compensation as well as payments for unused accrued sick and annual leave; provided the
salary of any participant employed on September 13, 2012 shall include payment for unused accrued
sick and annual leave up to the number of hours of unused sick and annual leave accrued on
September 13, 2012.
CITY OF PALM BEACH GARDENS
FIREFIGHTERS’ PENSION FUND
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2016
(Continued)
-12-
NOTE 2. DESCRIPTION OF THE PLAN (Continued)
Deferred Retirement Option Plan
Any participant who attains 25 years of service or age 52 with 10 years of service may elect to
participate in deferred retirement option plan (DROP) while continuing his or her active employment
as a firefighter.
Upon participation in the DROP, the participant becomes a retiree for all Plan purposes so that he or
she ceases to accrue any further benefits under the Plan. Normal retirement payments that would
have been payable to the participant as a result are accumulated and invested in the DROP plan to be
distributed to the participant upon his or her termination of employment. Participation in the DROP
plan ceases for a participant at the first to occur of (a) termination of employment or (b) 5 years of
participation.
Disability Benefits
Eligibility for disability benefits begins from the participant's date of hire, if the disability is service
connected, or after 10 years of service if non-service connected. Service-incurred disability benefits
are 60% of the participant's average final compensation, and not less than 2.0% of the participant's
average final compensation times his or her credited service years. Non-service incurred disability
benefits are 2.5% of the participant's average final compensation times his or her credited service
years up to a maximum of 50% of average final compensation.
Death Benefits
The death benefit for a participant who was partially or fully vested, but had not attained at least age
50, is a payment of the participant’s accrued pension benefit to the participant's beneficiary for 10
years, beginning on the date that the participant would have attained age 52 for a normal retirement
benefit or age 50 for an early retirement benefit, at the option of the beneficiary. The death benefit
for a participant who was not vested is a return of the participant’s contributions to the participant’s
beneficiary.
Termination Benefits
Termination benefits for unvested participants are the return of the participant's contributions. For
participants who are vested when they terminate, their vested accrued pension benefit is payable at
the early or normal retirement date. Full vesting occurs at the completion of 10 years of credited
service.
CITY OF PALM BEACH GARDENS
FIREFIGHTERS’ PENSION FUND
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2016
(Continued)
-13-
NOTE 2. DESCRIPTION OF THE PLAN (Continued)
Cost of Living Adjustments
Beginning January 1, 2004, and each January 1 thereafter, all participants receiving benefits,
excluding disability retirees, shall receive an age based cost of living adjustment. The amount will
be 1.0% for participants who are age 53, 2.0% for participants who are age 54, and 3.0% for
participants who are age 55 or greater. Effective January 1, 2013, the applicable percentage for
participants who are age 55 or greater, and who were not employed and eligible for normal retirement
on September 13, 2012, shall be 1.5%.
Funding
All participants are required to contribute 6.00% of pretax earnings.
Pursuant to Florida law, the City is ultimately responsible for the actuarially soundness of the Plan.
Therefore, each year, the City must contribute an amount determined by the Board in conjunction
with the Plan’s actuary to be sufficient, along with the employee’s contribution, to fund the defined
benefits under the Plan.
Pursuant to Chapter 175, Florida Statutes, the City imposes a 1.85% tax on fire insurance premiums
paid to insure real or personal property within its corporate limits. The proceeds of this tax are
contributed to the Plan and allocated to the individual participants’ accounts to fund the money
purchase portion of the benefits.
2.0% of each participant’s salary will be allocated from the state’s annual contribution and credited
as additional participant contributions. The remainder of the state’s annual contribution will be
allocated to individual participant share accounts based on years of credited service. Upon retirement,
disability, death, or termination, a participant is entitled to a lump sum payment of the vested balance
of his or her share account. Participant share accounts are not segregated from the other assets of the
Plan. As of September 30, 2016, the balance of participant share accounts was $9,216,175.
Rate of Return
For the year ended September 30, 2016, the annual money-weighted rate of return on Plan
investments, net of Plan investment expense, was 8.21%. The money-weighted rate of return
expresses investment performance, net of investment expense, adjusted for the changing amounts
actually invested.
CITY OF PALM BEACH GARDENS
FIREFIGHTERS’ PENSION FUND
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2016
(Continued)
-14-
NOTE 3. INVESTMENTS
The Plan’s policy in regard to the allocation of invested assets is established and may be amended by
the Board. Plan assets are managed on a total return basis with a long-term objective of achieving and
maintaining a fully funded status for the benefits provided through the Plan. The investment policy
statement was last amended in October 2015. The following was the Board’s adopted asset allocation
policy as of September 30, 2016:
Type of Investment Target Allocation
Domestic equities 40%-60%
International equities 5%-15%
Fixed Income 15%-35%
International fixed income 0%-10%
Real estate 5%-15%
Cash and cash equivalents 0%-5%
During the year ended September 30, 2016 the Plan’s investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated in value by $4,577,258
(reported as net appreciation in fair value of investments in the accompanying Statement of Changes in
Fiduciary Net Position) as follows:
U.S. government obligations 140,943$
Mortgage backed (42,830)
Collateralized mortgage obligation (7,067)
Corporate bonds 83,569
Common stocks 1,678,881
Equity mutual funds 1,792,444
International equity securities 172,164
International bonds 1,701
Balance mutual fund 32,628
International fixed income (100,949)
International equity common trust 331,666
ICMA DROP 16,637
Real estate 477,471
Total 4,577,258$
The Plan’s investment policy does not use limits on investment maturities as a means of managing its
exposure to fair value losses arising from increasing interest rates.
CITY OF PALM BEACH GARDENS
FIREFIGHTERS’ PENSION FUND
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2016
(Continued)
-15-
NOTE 3. INVESTMENTS (Continued)
The Plan’s investments in government securities, fixed income mutual funds and corporate bonds had
maturities as follows:
Investment Type Fair Value Less than 1 1 to 5 6 to 10 More than 10
U.S. agencies 3,244,120$ 731,177$ 2,512,943$ -$ -$
U.S. treasuries 1,598,651 - - 1,010,405 588,246
Mortgage backed securities 3,471,657 - - 1,142,927 2,328,730
Collateralized mortgage obligations 376,547 - - 7,491 369,056
Corporate bonds 6,075,729 144,031 2,662,373 2,378,731 890,594
Fixed income mutual funds 6,644,390 139,031 2,798,757 2,280,900 1,425,702
Foreign bonds 199,600 71,987 11,175 72,545 43,893
Totals 21,610,694$ 1,086,226$ 7,985,248$ 6,892,999$ 5,646,221$
The fixed income portfolio must be comprised of securities rated within the top four grades by Moody’s
or Standard & Poor’s ratings services. The Plan’s corporate bonds were rated by Moody’s Investors
Services as follows:
Rating Fair Value
A 1,266,640$
A1 183,912
A2 689,526
A3 2,167,067
A4 86,111
AA 506,934
AA2 418,596
AA3 115,943
AAA 2,177,703
B 736,291
BA1 67,005
BA2 30,902
BAA1 1,461,040
BAA2 664,209
BAA3 481,465
BB 1,518,405
BBB 1,640,683
Unrated 7,398,262
Total 21,610,694$
The Plan limits investment in the securities of any one issuer, other than the U.S. Government and its
agencies, to no more than 3% of net fiduciary position. The Plan had investments in Templeton Global
Fund, a mutual fund with numerous issuers, total 4.7% of Plan assets.
CITY OF PALM BEACH GARDENS
FIREFIGHTERS’ PENSION FUND
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2016
(Continued)
-16-
NOTE 3. INVESTMENTS (Continued)
“Foreign currency risk” is the risk that fluctuations in currency exchange rate may affect transactions
conducted in currencies other than US Dollars and the carrying value of foreign investments. The Plan’s
exposure to foreign currency risk derives mainly from its investments in international equity funds. The
Plan owns participation in international equity funds as well as individual securities.
The investment policy limits the foreign investments to no more than 25% of the Plan’s investment
balance. As of year-end, the foreign investments were 13% of total investments; however all are self-
directed investments.
NOTE 4. FAIR VALUE MEASUREMENTS
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants at the measurement date. The Plan categorizes its
fair value measurements within the fair value hierarchy as established by generally accepted accounting
principles. The fair value hierarchy categorizes the inputs to valuation techniques used to measure fair
value into three levels based on the extent to which inputs used in measuring fair value are observable
in the market as follows:
Level 1- Inputs to the valuation methodology are based upon quoted prices for identical assets in active
markets.
Level 2- Inputs to the valuation methodology are based upon observable inputs for the assets either
directly or indirectly, other than those considered Level 1 inputs, which may include quoted prices for
identical assets in markets that are not considered to be active, and quoted prices of similar assets in
active or inactive markets.
Level 3- Inputs to the valuation methodology are based upon unobservable inputs.
Following is a description of the valuation methodologies used for asset measured at fair value.
Common stocks: Valued at the closing price reported on a national or international exchange.
Mutual funds: Valued at the daily closing price as reported by the Plan. Mutual funds held by the Plan
are open-ended mutual funds that are registered with the Securities and Exchange Commission. These
funds are required to publish their daily net asset value (NAV) and to transact at that price. The mutual
funds held by the Plan are deemed to be actively traded.
Government securities: Valued using pricing models maximizing the use of observable inputs for similar
securities.
Corporate bonds: Valued using pricing models maximizing the use of observable inputs for similar
securities. This includes basing the value on yields currently available on comparable securities of
issuers with similar credit ratings. When quoted prices are not available for identical or similar bonds,
the bond is valued under a discounted cash flows approach that maximizes observable inputs, such as
current yield of similar instruments, but includes adjustments for certain risks that may not be
observable, such as credit and liquidity risks or a broker quote, if available.
CITY OF PALM BEACH GARDENS
FIREFIGHTERS’ PENSION FUND
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2016
(Continued)
-17-
NOTE 4. FAIR VALUE MEASUREMENTS (Continued)
Real estate: Valued at the net asset value of shares held by the Plan at year end. The Plan has investment
in a private market real estate investment for which no liquid public market exists.
The following table presents the Plan’s fair value hierarchy for investments at fair value as of September
30, 2016:
Quoted
Prices in Significant
Active Other Significant
Markets for Observable Unobservable
Identical Assets Inputs Inputs
Total (Level 1)(Level 2)(Level 3)
Investments by fair value level
Equity securities:
Common stocks 26,407,768$ 26,407,768$ -$ -$
Equity common trust fund 4,473,788 - 4,473,788 -
Equity balanced mutual funds 1,361,005 - 1,361,005 -
Mutual funds 16,227,122 16,227,122 - -
Total equity securities 48,469,683 42,634,890 5,834,793 -
Debt securities:
U.S. treasury securities 1,598,651 1,598,651 - -
U.S. agency securities 3,244,120 - 3,244,120 -
Mortgage backed 3,471,657 - 3,471,657 -
Collateralized mortgage obligations 376,547 - 376,547 -
Corporate bonds 6,075,729 - 6,075,729 -
Foreign bonds 199,600 - 199,600 -
Fixed income balanced mutual funds 2,726,097 - 2,726,097 -
Fixed income mutual funds 3,918,293 - 3,918,293 -
Total debt securities 21,610,694 1,598,651 20,012,043 -
Total investments by fair value level 70,080,377 44,233,541$ 25,846,836$ -$
Investments measured at the net asset value (NAV) (a)
Real estate funds 8,808,132
Money market funds (exempt)2,364,165
Total investments 81,252,674$
Fair Value Measurements Using
CITY OF PALM BEACH GARDENS
FIREFIGHTERS’ PENSION FUND
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2016
(Continued)
-18-
NOTE 4. FAIR VALUE MEASUREMENTS (Continued)
(a) As required by GAAP, certain investments that are measured at net asset value have not been
classified in the fair value hierarchy. The fair value amounts presented in this table are intended to
permit reconciliation of the fair value hierarchy to the total investment line item in the Statement of
Fiduciary Net Position.
The following table summarizes investments for which fair value is measured using the net asset value
per share practical expedient, including their related unfunded commitments and redemption
restrictions:
Investments Measured at the NAV Redemption
Unfunded Frequency (if Redemption
Fair Value Commitments Currently Eligible)Notice Period
Real estate fund (1)4,347,003$ -$ Quarterly 10 Days
Real estate fund (2)4,461,129 - Q u a r t e r l y 9 0 D a y s
Total investments measured at the NAV 8,808,132$ -$
(1) Real estate fund: The fund is an open-end diversified core real estate commingled fund that invests
primarily in core institutional office, retail, industrial, and multi-family properties located
throughout the United States. The investment is valued at NAV and its redemptions must be
received by the fund 10 days prior to quarter end.
(2) Real estate fund: The fund is an open-ended real estate investment fund investing primarily in core
institutional office, retail, industrial, and multi-family properties located throughout the United
States. The investment is valued at NAV and its redemptions must be received by the fund 90 days
prior to quarter end.
NOTE 5. RISKS AND UNCERTAINTIES
The Plan invests in various investment securities. Investment securities are exposed to various risks such
as interest rate, market and credit risks. Due to the level of risk associated with certain investment
securities, it is at least reasonably possible that changes in the values of investment securities will occur
in the near term and that such changes could materially affect the amounts reported in the statement of
fiduciary net position available for benefits.
Plan contributions are made and the actuarial present value of accumulated plan benefits are reported
based on certain assumptions pertaining to interest rates, inflation rates and employee demographics, all
of which are subject to change. Due to uncertainties inherent in the estimations and assumptions process,
it is at least reasonably possible that changes in these estimates and assumptions in the near term would
be material to the financial statements.
CITY OF PALM BEACH GARDENS
FIREFIGHTERS’ PENSION FUND
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2016
(Continued)
-19-
NOTE 6. NET PENSION LIABILITY OF THE PLAN
The components of the net pension liability of the Plan at September 30, 2016 were as follows:
Total pension liability 104,309,008$
Plan fiduciary net position 81,344,787
Net pension liability 22,964,221$
Plan fiduciary net position as a percentage of
the total pension liability 77.98%
The total pension liability was determined by an actuarial valuation as of September 30, 2016 using
certain actuarial assumptions, the most significant of which were 7.45% for the investment rate of return,
age based for projected salary increases and 2.5% for inflation.
Mortality rates for healthy males were based on RP-2000 Generational, 10% Annuitant White Collar,
90% Anuitant Blue Collar, Scale BB.
Mortality rates for healthy females were based on RP-2000 Generational, 100% Annuitant White Collar,
Scale BB.
The long-term expected rate of return on Plan investments was determined using a building-block
method in which best-estimate ranges of expected future real rates of return (expected returns, net of
Plan investment expense and inflation) are developed for each major asset class. These ranges are
combined to produce the long-term expected rate of return by weighting the expected future real rates
of return by the target asset allocation percentage and by adding expected inflation.
Best estimates of arithmetic real rates of return for each major asset class included in the Plan’s target
asset allocation as of September 30, 2016 (see the discussion of the Plan’s investment policy) are
summarized in the following table:
Long-term expected
Asset Class real rate of return
Domestic equity 10.00%
International equity 11.00%
Domestic bonds 5.00%
International bonds 6.00%
Real estate 7.00%
Alternative 8.00%
CITY OF PALM BEACH GARDENS
FIREFIGHTERS’ PENSION FUND
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 2016
(Continued)
-20-
NOTE 6. NET PENSION LIABILITY OF THE PLAN (Continued)
The discount rate used to measure the total pension liability was 7.45%. The projection of cash flows
used to determine the discount rate assumed that plan participant contributions will be made at the
current contribution rate and that employer contributions will be made at rates equal to the difference
between actuarially determined contribution rates and the participant rate. Based on those assumptions,
the Plan’s fiduciary net position was projected to be available to make all projected future benefit
payments of current Plan participants. Therefore, the long-term expected rate of return on Plan
investments was applied to all periods of projected benefit payments to determine the total pension
liability.
The sensitivity of the net pension liability to changes in the discount rate was measured as follows. The
net pension liability of the Plan was calculated using the discount rate of 7.45%. It was also calculated
using a discount rate that was 1-percentage-point lower (6.45%) and 1-percentage-point higher (8.45%)
and the different computations were compared.
Current
1% decrease discount rate 1% increase
(6.45%)(7.45%)(8.45%)
Net pension liability 36,614,699$ 22,978,668$ 11,964,508$
NOTE 7. INCOME TAXES
The Plan is exempt from federal income taxes under the Internal Revenue Code and, accordingly, no
provision for federal income taxes has been made.
Accounting principles generally accepted in the United States of America require Plan management to
evaluate tax positions taken by the Plan and recognize a tax liability if the Plan has taken an uncertain
position that more likely than not would not be sustained upon examination by a taxing authority. The Plan
is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods
in progress.
CITY OF PALM BEACH GARDENS
FIREFIGHTERS’ PENSION FUND
SUPPLEMENTARY INFORMATION
YEAR ENDED SEPTEMBER 30, 2016
CITY OF PALM BEACH GARDENS
FIREFIGHTERS’ PENSION FUND
SCHEDULE OF ADMINISTRATIVE EXPENSES
YEAR ENDED SEPTEMBER 30, 2016
(WITH COMPARATIVE TOTALS FOR YEAR ENDED SEPTEMBER 30, 2015)
The accompanying independent auditor’s report should be read with this supplementary schedule.
-22-
2016 2015
ADMINISTRATIVE EXPENSES:
Accounting 14,280$ 8,525$
Actuarial fees 21,688 25,514
Administrative fees 19,583 21,976
Meetings and conferences 8,012 6,250
Insurance 11,636 5,942
Legal fees 14,849 15,941
Miscellaneous 6,942 7,540
TOTAL ADMINISTRATIVE EXPENSES 96,990$ 9 1 , 6 8 8$
CITY OF PALM BEACH GARDENS
FIREFIGHTERS’ PENSION FUND
SCHEDULES OF CONTRIBUTIONS FROM EMPLOYER AND OTHER CONTRIBUTORS
(UNAUDITED)
The accompanying independent auditor’s report should be read with this supplementary schedule.
-23-
2016 2015 2014 2013
Actuarilly determined employer contribution 3,605,305$ 3,460,519$ 3,404,960$ 3,443,143$
Actual employer contribution 3,605,305 4,251,855 3,404,960 3,911,687
Annual contribution deficiency (excess)-$ (791,336)$ -$ (468,544)$
Covered-employee payroll 7,599,715$ 9,695,082$ 7,924,041$ 8,294,732$
Actual contributions as a percentage of
covered-employee payroll 47.44% 43.86% 42.97% 47.16%
Funding method Projected Unit Cost Method
Amortization method Level percentage of pay, Closed
Remaining amortization period 20 Years (As of October 1, 2014)
Actuarial value of assets The Actuarial Value of Assets is calculated by
recognizing 25% of the difference between the
Market Value of Assets and the expected
Market Value of Assets.
Inflation: 2.50%
Salary increases Age based
Interest rate
7.85% per year compounded annually, net of
investment related expenses
Mortality RP-2000 Table, sex distinct, without
projection.
This schedule is presented as required by accounting principles generally accepted in the United States of
America, however, until a full 10-year trend is compiled, information is presented for those years available.
CITY OF PALM BEACH GARDENS
FIREFIGHTERS’ PENSION FUND
SCHEDULE OF INVESTMENT RETURNS
(UNAUDITED)
The accompanying independent auditor’s report should be read with this supplementary schedule.
-24-
Annual money-
weighted rate
of return net of
Year Ended investment
September 30 expense
2016 8.21%
2015 0.92%
2014 11.65%
2013 14.29%
2012 17.64%
2011 (1.61%)
2010 7.78%
2009 1.01%
2008 (12.77%)
This schedule is presented as required by accounting principles generally accepted in the United States of
America, however, until a full 10-year trend is compiled, information is presented for those years available.
CITY OF PALM BEACH GARDENS
FIREFIGHTERS’ PENSION FUND
SCHEDULE OF CHANGES IN THE EMPOYER’S NET PENSION LIABILITY
AND RELATED RATIOS
(UNAUDITED)
The accompanying independent auditor’s report should be read with this supplementary schedule.
-25-
2016 2015 2014 2013
TOTAL PENSION LIABILITY:
Service Cost 1,637,466$ 1,760,152$ 1,741,473$ 1,540,354$
Interest 7,174,074 6,786,918 6,280,207 5,827,406
Share Plan Allocation 51,623 222,133 304,698 -
Assumption Changes (1,684,439) (1,460,746) - -
Benefit Payments (1,803,517) (1,935,428) (1,844,859) (1,613,497)
Changes of Assumptions 5,890,763 2,004,899 1 , 7 7 2 , 7 9 3 -
NET CHANGE IN TOTAL PENSION LIABILITY 11,265,970 7,377,928 8,254,312 5,754,263
TOTAL PENSION LIABILITY - BEGINNING 93,043,038 85,665,110 77,410,798 71,656,535
TOTAL PENSION LIABILITY - ENDING 104,309,008 93,043,038 85,665,110 77,410,798
PLAN FIDUCIARY NET POSITION:
Contributions - Employer and State 3,656,927 4,473,988 3,709,659 4,097,718
Contributions - Member 455,983 445,465 475,442 497,684
Net investment income 6,152,911 835,212 6,977,925 6,392,179
Benefit Payments (1,803,517) (1,935,428) (1,844,859) (1,613,497)
Administrative expenses (91,145) (84,807) ( 8 8 , 1 4 2 ) ( 9 9 , 6 6 7 )
NET CHANGE IN PLAN FIDUCIARY NET POSITION 8,371,159 3,734,430 9,230,025 9,274,417
PLAN FIDUCIARY NET POSITION - BEGINNING 72,959,181 69,224,751 59,994,726 50,720,309
PLAN FIDUCIARY NET POSITION - ENDING 81,330,340 72,959,181 69,224,751 59,994,726
NET PENSION LIABILITY - ENDING 22,978,668$ 20,083,857$ 16,440,359$ 17,416,072$
PLAN FIDUCIARY NET POSITION AS A PERCENTAGE
OF TOTAL PENSION LIABILITY 77.97% 78.41% 80.81% 77.50%
COVERED EMPLOYEE PAYROLL 7,599,715$ 9,695,082$ 7,924,041$ 8,294,732$
NET PENSION LIABILITY AS A PERCENTAGE
OF COVERED EMPLOYEE PAYROLL 302.36% 207.16% 207.47% 209.97%
This schedule is presented as required by accounting principles generally accepted in the United States of
America, however, until a full 10-year trend is compiled, information is presented for those years available.
CITY OF PALM BEACH GARDENS
FIREFIGHTERS’ PENSION FUND
COMPLIANCE REPORT
SEPTEMBER 30, 2016
1625 N. COMMERCE PARKWAY, SUITE 315, WESTON, FL 33326
TEL (954) 485-5788· FAX (954) 485-8988 · WWW.KSDT-CPA.COM
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN
AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT
AUDITING STANDARDS
To the Board of Trustees of the
City of Palm Beach Gardens Firefighters’ Pension Fund
We have audited, in accordance with the auditing standards generally accepted in the United States of America
and the standards applicable to financial audits contained in Government Auditing Standards issued by the
Comptroller General of the United States, the financial statements of the City of Palm Beach Gardens
Firefighters’ Pension Fund, as of and for the year ended September 30, 2016, and the related notes to the financial
statements, which collectively comprise the Plan’s basic financial statements, and have issued our report thereon
dated April 19, 2017.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Plan’s internal control over
financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances
for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an
opinion on the effectiveness of the Plan’s internal control. Accordingly, we do not express an opinion on the
effectiveness of the City of Palm Beach Gardens Firefighters’ Pension Fund’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions, to prevent, or detect and correct,
misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal
control, such that there is a reasonable possibility that a material misstatement of the Plan’s financial statements
will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a
combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough
to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section
and was not designed to identify all deficiencies in internal control that might be material weaknesses or,
significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal
control that we consider to be material weaknesses. However, material weaknesses may exist that have not been
identified.
1625 N. COMMERCE PARKWAY, SUITE 315, WESTON, FL 33326
TEL (954) 485-5788· FAX (954) 485-8988 · WWW.KSDT-CPA.COM
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN
AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT
AUDITING STANDARDS (Continued)
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City of Palm Beach Gardens Firefighters’ Pension
Fund’s financial statements are free from material misstatement, we performed tests of its compliance with certain
provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct
and material effect on the determination of financial statement amounts. However, providing an opinion on
compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an
opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the
results of that testing, and not to provide an opinion on the effectiveness of the City of Palm Beach Gardens
Firefighters’ Pension Fund’s internal control or on compliance. This report is an integral part of an audit performed
in accordance with Government Auditing Standards in considering the City of Palm Beach Gardens Firefighters’
Pension Fund’s internal control and compliance. Accordingly, this communication is not suitable for any other
purpose.
Weston, Florida
April 19, 2017
PALM BEACH GARDENS FIREFIGHTERS’
PENSION FUND
MEETING OF MAY 3, 2017
RATIFICATION OF BENEFIT PAYMENTS
APPLICATIONS TO ENTER THE DROP
JOHN FLINT Years of Credited Service: 20 Years
Age at Retirement: 52 Years & 2 Months
Total Monthly Benefit: $4,892.21
DROP Entry/Retirement Date: February 29, 2016
Type of Benefit : DROP
Form of Benefit : Standard (10 year certain)
Action: _________________________________
JULIE TUMAN Years of Credited Service: 22 Years & 2 Months
Age at Retirement: 52 Years
Total Monthly Benefit: $6,645.63
DROP Entry/Retirement Date: July 5, 2016
Type of Benefit : DROP
Form of Benefit : Standard (10 year certain)
Action: _________________________________
PAUL HODGES Years of Credited Service: 25 Years
Age at Retirement: 47 Years & 4 Months
Total Monthly Benefit: $5,407.65
DROP Entry/Retirement Date: December 4, 2016
Type of Benefit : DROP
Form of Benefit : Life Annuity
Action: _________________________________
APPLICATION FOR RETIREMENT
JILL WILLIS Years of Credited Service: 13 Years & 9 Months
Age at Retirement: 52 Years
Total Monthly Benefit: $2,526.18
Termination Date January 29, 2016
Retirement Date: April 1, 2017
Type of Benefit : Vested Deferred
Form of Benefit : Life Annuity
Action: _________________________________
Chairman________________________________
Secretary________________________________
Date_____5/3/2017_____________________
Fully engaged
means experience across cultures, currencies and courtrooms
Class aCtion litigation Firm oF the Year
LegaL InteLLIgencer
national law Journal
PLaIntIffs’ HotLIst
reCognized as leaders in the shareholder litigation FieldtHe LegaL 500
Fully committed
means the trust that we’ll treat your interests like they were our own
Kessler Topaz is widely recognized as a leading firm throughout the
world in protecting the public against corporate fraud and other
wrongdoing. Our lawyers regularly take on the foremost defense
attorneys—and win—in class actions, shareholder derivative suits,
antitrust litigation, direct action and other complex litigation around
the globe. We are proud to have recovered tens of billions of dollars
for our clients.
leading litigation Firm bencHmark LItIgatIon
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what we do
All of our work is driven by a common goal:
to protect investors, consumers, employees
and others from fraud, abuse, misconduct and
negligence by businesses and fiduciaries. We
represent investors and classes worldwide, and
are particularly known for our work on behalf of
institutional investors. At the end of the day, we
have succeeded if you recover assets you had lost
as a result of business misconduct.
Our lawyers can help you navigate through every stage of a
dispute—from assessing potential claims, to motion practice,
to trials and through appeals, to settlement negotiations
and claims administration. We are skilled advocates not
only in court, but also in arbitration and other alternative
dispute resolution fora. In addition to obtaining financial
compensation, we have been instrumental in achieving
significant corporate governance reforms to prevent future
violations of law.
“ Counsel actively, thoroughly and impressively
litigated a complex subject matter (both
factually and legally), all the while confronting
formidable defense counsel . . .”
Securities Fraud Litigation
Shareholder Derivative Actions
Mergers and Acquisitions Litigation
Global Securities Litigation
Direct and Opt-Out Actions
Fiduciary Litigation
Antitrust & Unfair Business
Practices
Whistleblower Representation
Arbitration
Portfolio Monitoring and Claims
Administration
Corporate Governance
– Honorable George H. Wu, United States District
Court for the Central District of California
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SeCURiTieS FRAUD LiTiGATiOn
Kessler Topaz’s renowned shareholder
litigation practice has recovered billions of
dollars for defrauded investors around the
world. We are aggressive, effective advocates
in securities fraud claims against public
companies—and their officers, directors and
advisors—that misrepresent information and
cause harm to their shareholders.
Our sophisticated client base is composed of
more than 250 institutional investors—including
100+ public pension funds—as well as Taft-Hartley
funds, mutual fund managers, asset managers,
insurance companies, sovereign wealth funds,
hedge funds and other institutional investors in
the United States and around the world.
representative successes
$3.2 billion
Tyco international, Ltd.: landmark settlement
included the largest securities class action recovery
from a single corporate defendant in history
$2.425 billion
Bank of America/Merrill: settlement resolved
allegations of fraud surrounding merger
$730 million
Citigroup, inc.: second largest recovery ever under
Section 11 of the Securities Act
$627 million
Wachovia Preferred Securities and Bond/notes:
one of the most significant cases arising out of the
financial crisis
$616 million
Lehman Brothers: shareholders recover despite
Lehman bankruptcy
$500 million
Countrywide Financial Corp.: litigation raised
several issues of first impression in the Ninth Circuit
“it is difficult to overstate the complexity of
[the litigation],” which also “put [Plaintiffs] at the
cutting edge of a rapidly changing area of law.”
– The Honorable Paul Barbadoro, United States District
Court for the District of New Hampshire
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Mergers and acquisitions can offer great
opportunities for shareholders to increase
value. But they also present temptation for
self-dealing and dishonesty by directors and
officers, often at shareholder expense. We
give shareholders the next best thing to a seat
at the negotiating table—strong, effective
representation in cases alleging unfairness in
a transaction’s price or process.
Each case is different, whether we seek additional
merger consideration or non-monetary deal terms
that increase shareholder value. Unlike many
of our competitors, Kessler Topaz has proven
experience bringing massive transactional cases
to trial—and winning, as we did in Southern Peru
Copper ($2 billion) and Dole Foods ($148 million).
In matters both large and small, our creative and
aggressive approach and trial readiness have
helped our clients recover billions of dollars of
increased merger consideration both through trial
and through pre-trial settlements.
RePReSenTATive SUCCeSSeS
$2 billion
Southern Peru Copper Corp.: both the largest
trial verdict and largest damages award in Delaware
Chancery Court history
$148 million
Dole Food Company, inc.: the second-largest post-
trial verdict in merger litigation in Delaware Chancery
Court history
$64 million
Cole Real estate investments: additional merger
consideration after shareholders challenge REIT sale
$26 million
Harleysville Mutual: expedited injunction hearing for
policyholders after mutual insurer sold to Nationwide
$24 million
GSi Commerce: case challenged insider dealings in
eBay acquisition
MeRGeR & ACqUiSiTiOn LiTiGATiOn
When corporate fiduciaries abuse their
power, shareholder derivative actions can
balance the scales. We have recovered
millions of dollars from wayward fiduciaries
in both high-profile matters and smaller
disputes.
Our success stories involve a wide array of
corporate misconduct, ranging from executive
compensation abuses, to related-party
transactions, to the “backdating” of stock options.
RePReSenTATive SUCCeSSeS
$62 million
Comverse Technology, inc.: overhauled the
Company’s corporate governance and internal controls
$6 million
Helios Closed-end Funds: recovered for mutual funds
in action authorized by board of directors
$4.9 million
Under Armour, inc.: monetary and corporate
governance relief for minority stockholders in dilutive
recapitalization
$3.25 million
China Agritech, inc.: cash recovery for stockholders
of Chinese “reverse merger” company
SHAReHOLDeR DeRivATive ACTiOnS
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.
GLOBAL SeCURiTieS LiTiGATiOn
investment strategies transcend national
borders. Unfortunately, so does fraud. Our
Global Securities Litigation group is dedicated
to helping investors prosecute corporate fraud
claims and recover assets around the world.
international Leadership
Through our border-crossing work, we have
developed a deep understanding of foreign laws
and procedures, as well as important relationships
with lawyers and experts in more than a dozen
countries. Our international experience gives
clients a unique advantage in pursuing claims on
a global basis.
Today, global shareholder litigation continues
to evolve, as new jurisdictions begin to allow
multiparty or group shareholder actions
and debate class action procedures. We are
committed to remaining at the forefront of these
developments and expanding our resources to
best serve shareholders around the world.
“We like the flexible and professional way Kessler
Topaz has been working with us in different cases
and their filing of settlement claims is invaluable.”
representative successes
€1.2 Billion
Fortis Bank: one of the largest securities
settlements outside the United States
$352 million
Royal Dutch Shell: landmark settlement opens
doors to class recovery in the Netherlands
$92 million
Olympus Corporation: one of the largest
securities-fraud recoveries ever achieved in Japan
–Richard Gröttheim, CEO
AP7 – Seventh Swedish National Pension Fund
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.
Looted pension funds, fraudulent
investments and vanishing profits are
the stuff of headlines—and nightmares.
When trusts and their beneficiaries find
themselves on the losing end of fiduciary
mismanagement, we help them recover
assets believed to be gone forever.
Our Fiduciary Litigation group has recovered
more than $1 billion for clients victimized by
fiduciary failures. We have served as lead or
co-lead ERISA counsel in some of the most
significant cases in history.
FiDUCiARy LiTiGATiOn
Class action litigation is not for every
investor in every case. if you’ve been injured
by corporate misconduct, there may be
other routes to recovery.
With experience in hundreds of shareholder
actions worldwide, Kessler Topaz has the skill
and perspective to help you analyze the options
and choose the one that’s right for you.
Know your Options
In a direct action, an investor or small group of
investors “opt-out” of a pending or potential class
action against a publicly traded company, its
officers or directors, and/or its advisors. Instead
of being part of a class, your fund pursues its own
claim in its own lawsuit.
We are litigating dozens of opt-out cases on
behalf of institutional investors throughout the
country and the world.
DiReCT AnD OPT-OUT ACTiOnS
representative successes
$280 million
Bny Mellon Bank, n.A.: BNY Mellon settled claims
alleging that it breached its fiduciary duties under
common law, and committed a breach of its contractual
obligations under the securities lending agreements.
$150 million
JPMorgan Chase Bank, n.A.: JPMorgan settled
claims for allegedly breaching its fiduciary duties under
the Employee Retirement Income Security Act (ERISA).
$79 million
Global Crossing, Ltd.: Global Crossing settled claims
that it allegedly breached its fiduciary duties. In 2004,
this represented the largest recovery received in a
company stock ERISA class action.
$75 million
AiG, inc: AIG settled claims with Transatlantic
Holdings, Inc., who allegedly breached its fiduciary
obligations as investment advisor.
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“. . . the Court finds that KTMC is one of the most
experienced eRiSA litigation firms in the country,
with particular expertise in the area of eRiSA
breach of fiduciary class actions . . .”
–Vicki Miles-LaGrange, Chief United States District
Judge, United States District Court for the Western
District of Oklahoma
AnTiTRUST & UnFAiR BUSineSS PRACTiCeS
Competitive markets are at the heart of the
U.S. economy. Kessler Topaz helps protect
competition against those who would
curtail choices, control prices or otherwise
interfere with fair markets.
Help for Homebuyers
Our RESPA (Real Estate Settlement Procedures
Act) Litigation practice is nationally known for
actions that challenge unfair lending and related
insurance practices. We have been selected as
lead or co-lead counsel in cases against lenders
and mortgage servicers that:
• Refer borrowers to private mortgage insurers
in return for kickbacks or fee-sharing
• Force-place borrowers into grossly over-
priced homeowners insurance or flood
insurance in return for kickbacks
In recent RESPA litigation against 13 major
national lenders, we recovered millions of dollars
on behalf of affected borrowers and have several
actions pending.
representative successes
$150 million
Flonase: millions recovered in pharmaceutical
monopoly case
$69 million
Bank of America/WaMu: consolidated class
recovers WaMu losses
$36 million
Remeron: consumers allege patent claims would
create unlawful monopoly
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For many of our clients, arbitration is an
integral part of the dispute resolution
process. Our lawyers are seasoned advocates
in domestic and international arbitration,
handling challenging disputes before panels
across the United States and europe.
An Approach That Works
We understand the unique rules and procedures
of arbitration and how to work within the
arbitration context in ways that are most
advantageous to our clients. Representing
institutional investors, corporate entities and
others, we have achieved significant arbitration
results, such as a $75 million award for
Transatlantic Holdings, Inc. and its subsidiaries
in a subprime mortgage dispute against AIG.
In addition, we advise on alternative dispute
resolution methods such as mediation and can
counsel you on the best options for any given
situation.
We combine our understanding of the arbitration
process with industry knowledge, geographic
reach and a commitment to the highest
standards of litigation. We communicate clearly,
respond quickly and strive to maintain your trust
throughout the arbitration process and beyond.
it takes conscience, courage and conviction
to bring wrongdoing to light. Kessler Topaz
knows how to use the whistleblower laws
to protect and reward those who uncover
wrong-doing and step forward to fight it.
Champions for Whistleblowers
Whistleblowers are the unsung heroes of the
marketplace, often risking career and reputation
harm to report illegal conduct and to do the right
thing in the face of corporate fraud. If you have
information about a fraud and are considering
becoming a whistleblower, we can help you make
a compelling case to authorities, protect yourself
from retaliation and claim a share of the money
the government recovers.
At Kessler Topaz, you’ll find lawyers who
have dedicated their careers to representing
whistleblowers. Fighting corporate fraud
is what we do—all day, every day. Our
whistleblower team includes lawyers who
have worked as federal and state prosecutors,
as SEC enforcement lawyers and as litigators
with decades of international experience in
complex health care, pharmaceutical, securities,
corporate and government contract fraud
cases. Clients also have access to our renowned
Investigative Services Division—which includes
former law enforcement agents known for their
relentless pursuit of evidence.
WHiSTLeBLOWeR RePReSenTATiOn
ARBiTRATiOn
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PORTFOLiO MOniTORinG AnD CLAiMS ADMiniSTRATiOn
For institutional fiduciaries, monitoring and
protecting investments is as important as
selecting them. But how do you keep track of
a diverse, active, global securities portfolio
without creating a more-than-full-time job?
Our proprietary Securities Tracker program is
the answer.
Securities Tracker Makes it easy
Offered at no cost to our institutional clients,
Securities Tracker finds every securities action
that impacts your fund, puts it on your radar
screen early and monitors it all the way through
resolution and disbursement of any recovery.
Simply put, Securities Tracker is a must-have
solution for fulfilling your fiduciary obligations.
The Securities Tracker program includes:
• New case summaries and analyses
• Quarterly reports
• Email alerts
• Claims administration auditing and filing
• Settlement chart
Up-to-Date information
Securities Tracker works 24/7, 365 days a year.
So even when you’re at a conference, on an
airplane or in another time zone, we stay on top
of your portfolio. Learn more and see a demo at
www.ktmc.com/securities-tracker.
CORPORATe GOveRnAnCe
Corporate governance doesn’t just
happen in boardrooms. it affects every
aspect of a business, every day. When you
want to make a tangible impact on how a
company is run, corporate governance is
the place to start.
We have helped our clients implement creative,
effective governance changes in diverse areas,
including:
• Director nominations
• Director election procedures
• Required disclosures for shareholder voting
• Executive compensation policies
• Internal and external audit functions
• Worker safety
Our lawyers will listen carefully to your
concerns, tailor a strategy to your unique
circumstances and adhere to the highest
standards of client service.
“Kessler Topaz’s claims filing service is an added
value to the strong litigation skills they are
providing to our fund. They have helped us recover
settlement dollars we would have otherwise
missed and served as lead counsel for us as well.”
–David H. Prince, Retirement Administrator
Imperial County Employees Retirement System
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KTMC.COM
COnTACT US
Darren J. Check, esquire
Please direct all inquiries regarding this
publication to Darren J. Check, esquire, at
610.822.2235 or dcheck@ktmc.com
Fully commited
means the trust that we’ll treat your interests like they were our own
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