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HomeMy WebLinkAboutDocumentation_Pension General_Tab 09_11/03/2008~(~ Gabriel Roeder Smith & Company pne Easc Broward Blvd. 9S4.S27.1616 phone ^\VT J Consultants & Actuaries Suite SOS 9S4.S2S.0083 fax Ft Lauderdale, FL 33301-1872 www.~;abrielroedeccom August 15, 2008 Michael Cuozzo Village Manager Village of Tequesta 345 Tequesta Drive Tequesta, Florida 33469-0273 Re: Supplemental Actuarial Valuation Report for the General Employees Pension Plan Dear Mike: As requested, we have prepared an Actuarial Study to determine the effect of the following possible changes to the Plan: - 3% COLA starting 3 years after retirement - 3% COLA starting 1 year after retirement This report is intended to describe the financial effect of the proposed plan changes. No statement in this report is intended to be interpreted as a recommendation in favor of the changes, or in opposition to them. The calculations are based upon assumptions regarding future events, which may or may not materialize. They are also based upon present and proposed plan provisions that are outlined in the report. If you have reason to believe that the assumptions that were used are unreasonable, that the plan provisions are incorrectly described, that important plan provisions relevant to this proposal are not described, or that conditions have changed since the calculations were made, you should contact the author of this report prior to relying on information in the report. If you have reason to believe that the information provided in this report is inaccurate, or is in any way incomplete, or if you need further information in order to make an informed decision on the subject matter of this report, please contact the author of the report prior to making such decision. In the event that more than one plan change is being considered, it is very important to remember that the results of separate actuarial valuations cannot generally be added together to produce a correct estimate of the combined effect of all of the changes. The total can be considerably greater than the sum of the parts due to the interaction of various plan provisions with each other, and with the assumptions that must be used. As indicated below, the undersigned is a Member of the American Academy of Actuaries (MAAA) and meets the Qualifications Standards of the Academy of Actuaries to render the actuarial opinion herein. No Text Michael Cuozzo Page 2 We welcome your questions and comments. Sincerely yours, ~ / - 1 J. Stephen Palmquis~ ASA Senior Consultant and Actuary Enclosures Gabriel Roeder Smith & Company No Text SUPPLEMENTAL ACTUARIAL VALUATION REPORT Plan Village of Tequesta General Employees Pension Trust Fund Valuation Date October 1, 2007 Date of Report August 15, 2008 Report Requested by Village Manager Prepared by J. Stephen Palmquist Group Valued Active General Employees Plan Provisions Being Considered for Change Present Provision Before Chance - There is no COLA Proposed Changes - 3% COLA starting 3 years after retirement - 3% COLA starting 1 year after retirement Participants Affected Active General Employees Actuarial Assumptions and Methods Same as October 1, 2007 Actuarial Valuation Report with no exceptions. Some of the key assumptions/methods are: Investment return - 8.0% per year Salary increase - 6.0% per year Cost Method - Aggregate No Text Amortization Period for Any Increase in Actuarial Accrued Liability NA Summary of Data Used in Report NA Actuarial Impact of Proposal(s) See attached page(s). Special Risks Involved With the Proposal That the Plan Has Not Been Exposed to Previously None Other Cost Considerations None Possible Conflicts With HtS Qualification Rules None J Stephen Palmquist, ASA, AAA, FCA Enrolled Actuary 08-1560 ~~~ Duane Howison, FSA Enrolled Actuary 08-6169 No Text ANNUAL REQUIItED CONTRIBUTION (ARC) A. Valuation Date October 1, 2007 October 1, 2007 October 1, 2007 Valuation 3.00% COLA 3.00% COLA 3 years delayed 1 year delayed B. ARC to Be Paid During Fiscal Year Ending 9/30/2008 9/30/2008 9/30/2008 C. Assumed Date of Employer Contrib. Monthly Monthly Monthly D. Annual Payment to Amortize Unfunded Actuarial Liability $ - $ - $ - E. Employer Normal Cost 85,228 144,336 161,588 F. ARC if Paid on the Valuation Date D+E 85,228 144,336 161,588 G. ARC Adjusted for Frequency of Payments 88,790 150,369 168,342 H. ARC as % of Covered Payroll 5.92 % 10.02 % 11.22 I. Covered Payroll for Contribution Year 1,500,201 1,500,201 1,500,201 J. ARC for Contribution Year: H x I 88,790 150,369 168,342 K. ARC as % of Covered Payroll in Contribution Year: J _ I 5.92 % 10.02 % 11.22 L. Increase in ARC - 61,579 79,552 M. Increase in ARC as % of Covered Payroll - 4.10 % 5.30 No Text ACTUARIAL VALUE OF BENEFITS AND ASSETS A. Valuation Date October 1, 2007 October 1, 2007 October 1, 2007 Valuation 3.00% COLA 3.00% COLA 3 years delayed 1 year delayed B. Actuarial Present Value of All Projected Benefits for 1. Active Members a. Service Retirement Benefits $ 1,828,135 $ 2,243,183 $ 2,364,573 b. Vesting Benefits 67,383 81,154 85,208 c. Disability Benefits 258,060 316,978 334,128 d. Preretirement Death Benefits 42,497 52,331 55,155 e. Return of Member Contributions 19,854 19,854 19,854 f. Total 2,215,929 2,713,500 2,858,918 2. Inactive Members a. Service Retirees & Beneficiaries - - - b. Disability Retirees - - - c. Terminated Vested Members 17,904 17,904 17,904 d. Total 17,904 17,904 17,904 3. Total for All Members 2,233,833 2,731,404 2,876,822 C. Actuarial Accrued (Past Service) Liability per GASB No. 25 764,571 930,106 979,638 D. Plan Assets 1. Market Value 1,026,897 1,026,897 1,026,897 2. Actuarial Value 1,026,897 1,026,897 1,026,897 E. Actuarial Present Value of Projected Covered Payroll 12,626,924 12,626,924 12,626,924 F. Actuarial Present Value of Projected Member Contributions 631,346 631,346 631,346 No Text CALCULATION OF EMPLOYER NORMAL COST A. Valuation Date October 1, 2007 October 1, 2007 October 1, 2007 Valuation 3.00% COLA 3.00% COLA 3 years delayed 1 year delayed B. Actuarial Present Value of Projected Benefits $ 2,233,833 $ 2,731,404 $ 2,876,822 C. Actuarial Value of Assets 1,026,897 1,026,897 1,026,897 D. Unfunded Actuarial Accrued Liability - - - E. Actuarial Present Value of Projected Member Contributions 631,346 631,346 631,346 F. Actuarial Present Value of Projected Employer Normal Costs: B-C-D-E 575,590 1,073,161 1,218,579 G. Actuarial Present Value of Projected Covered Payroll 12,626,924 12,626,924 12,626,924 H. Employer Normal Cost Rate: F/G 4.56 % 8.50 % 9.65 I. Covered Annual Payroll 1,500,201 1,500,201 1,500,201 J. Employer Normal Cost: H x I 68,409 127,517 144,769 K. Assumed Amount of Administrative Expenses 16,819 16,819 16,819 L. Total Employer Normal Cost: J+K 85,228 144,336 161,588 M. Employer Normal Cost as % of Covered Payroll 5.68 % 9.62 % 10.77 No Text R Gabriel Roeder Smith & Company one Easr Broward Blvd. 954.52 7. ] G 16 phone Consultants & Actuaries Suire 505 954.525.OU83 fax Ft. Lauderdale, FL 33301-7872 www.gabrielroedeccom • RECEIVEb June 5, 2008 ,~1 1 9 2v Michael Cuozzo VKLA~ CLlI~KS OFF~C Village Manager Village of Tequesta 345 Tequesta Drive Tequesta, Florida 33469-0273 /e " ~ ~ ~j~Yi -t-- ~~i t,S ~ ~/c ~~1~-~~ s Re: Supplemental Actuarial Valuation Report for the General Employees Pension Plan Dear Mike: As requested, we have prepared an Actuarial Study to determine the effect of the following possible changes to the Plan: - 3% COLA starting 5 years after retirement - 2% COLA starting 5 years after retirement This report is intended to describe the financial effect of the proposed plan changes. No statement in this report is intended to be interpreted as a recommendation in favor of the changes, or in opposition to them. The calculations are based upon assumptions regarding future events, which may or may not materialize. They are also based upon present and proposed plan provisions that are outlined in the report. If you have reason to believe that the assumptions that were used are unreasonable, that the plan provisions are incorrectly described, that important plan provisions relevant to this proposal are not described, or that conditions have changed since the calculations were made, you should contact the author of this report prior to relying on information in the report. If you have reason to believe that the information provided in this report is inaccurate, or is in any way incomplete, or if you need further information in order to make an informed decision on the subject matter of this report, please contact the author of the report prior to making such decision. In the event that more than one plan change is being considered, it is very important to remember that the results of separate actuarial valuations cannot generally be added together to produce a correct estimate of the combined effect of all of the changes. The total can be considerably greater than the sum of the parts due to the interaction of various plan provisions with each other, and with the assumptions that must be used. As indicated below, the undersigned is a Member of the American Academy of Actuaries (MAAA) and meets the Quaycations Standards of the Academy of Actuaries to render the actuarial opinion herein. No Text Michael Cuozzo Page 2 • We welcome your questions and comments. Sincerely yours, i~-(~^~' J. Stephen Palmquist, ASA Senior Consultant and Actuary Enclosures • Gabriel Roeder Smith & Company No Text SUPPLEMENTAL ACTUARIAL VALUATION REPORT Plan Village of Tequesta General Employees Pension Trust Fund Valuation Date October 1, 2007 Date of Report June 5, 2008 Report Requested by Village Manager Prepared by J. Stephen Palmquist Group Valued Active General Employees Plan Provisions Being Considered for Change Present Provision Before Change - There is no COLA Proposed Chan4es - 3% COLA starting 5 years after retirement - 2% COLA starting 5 years after retirement Participants Affected Active General Employees Actuarial Assumptions and Methods Same as October 1, 2007 Actuarial Valuation Report with no exceptions. Some of the key assumptions/methods are: Investment return - 8.0% per year Salary increase - 6.0% per year Cost Method - Aggregate No Text • Amortization Period for Any Increase in Actuarial Accrued Liability NA Summary of Data Used in Report NA Actuarial Impact of Proposal(s) See attached page(s). Special Risks Involved With the Proposal That the Plan Has Not Been Exposed to Previously None Other Cost Considerations None Possible Conflicts With IRS Qualification Rules None . Ste en Palmquist, A, MAAA, FCA Enrolled Actuary 08-1560 ~.~-a.~ Duane Howison, FSA Enrolled Actuary 08-6169 CJ No Text ANNUAL REQUIRED CONTRIBUTION (ARC) A. Valuation Date October 1, 2007 October 1, 2007 October 1, 2007 Valuation 3.00% COLA 2.00% COLA 5 years delayed 5 years delayed B. ARC to Be Paid During Fiscal Year Ending 9/30/2008 9/30/2008 9/30/2008 C. Assumed Date of Employer Contrib. Monthly Monthly Monthly D. Annual Payment to Amortize Unfunded Actuarial Liability $ - $ - $ - E. Employer Normal Cost 85,228 130,384 113,432 F. ARC if Paid on the Valuation Date D+E 85,228 130,384 113,432 G. ARC Adjusted for Frequency of Payments 88,790 135,833 118,173 H. ARC as % of Covered Payroll 5.92 % 9.05 % 7.88 I. Covered Payroll for Contribution Year 1,500,201 1,500,201 1,500,201 J. ARC for Contribution Year: H x I 88,790 135,833 118,173 K. ARC as % of Covered Payroll in Contribution Year: J + I 5.92 % 9.05 % 7.88 L. Increase in ARC - 47,043 29,383 M. Increase in ARC as % of Covered Payroll - 3.13 % 1.96 1 • No Text ACTUARIAL VALUE OF BENEFITS AND ASSETS A. Valuation Date October 1, 2007 October 1, 2007 October 1, 2007 Valuation 3.00% COLA 2.00% COLA 5 years delayed 5 years delayed B. Actuarial Present Value of All Projected Benefits for 1. Active Members a. Service Retirement Benefits $ 1,828,135 $ 2,145,504 $ 2,025,970 b. Vesting Benefits 67,383 77,955 73,752 c. Disability Benefits 258,060 303,189 286,134 d. Preretirement Death Benefits 42,497 50,062 47,206 e. Return of Member Contributions 19,854 19,854 19,854 f. Total 2,215,929 2,596,564 2,452,916 2. Inactive Members a. Service Retirees 8 Beneficiaries - - - b. Disability Retirees - - - c. Terminated Vested Members 17,904 17,904 17,904 _ d. Total 17,904 17,904 17,904 3. Total for All Members 2,233,833 2,614,468 2,470,820 C. Actuarial Accrued (Past Service) Liability per GASB No. 25 764,571 890,493 843,152 D. Plan Assets 1. Market Value 1,026,897 1,026,897 1,026,897 2. Actuarial Value 1,026,897 1,026,897 1,026,897 E. Actuarial Present Value of Projected Covered Payroll 12,626,924 12,626,924 12,626,924 F. Actuarial Present Value of Projected Member Contributions 631,346 631,346 631,346 • No Text CALCULATION OF EMPLOYER NORMAL COST A. Valuation Date October 1, 2007 October 1, 2007 October 1, 2007 Valuation 3.00 % COLA 2.00 % COLA 5 years delayed 5 years delayed B. Actuarial Present Value of Projected Benefits $ 2,233,833 $ 2,614,468 $ 2,470,820 C. Actuarial Value of Assets 1,026,897 1,026,897 1,026,897 D. Unfunded Actuarial Accrued Liability - - - E. Actuarial Present Value of Projected Member Contributions 631,346 631,346 631,346 F. Actuarial Present Value of Projected Employer Normal Costs: B-C-D-E 575,590 956,225 812,577 G. Actuarial Present Value of Projected Covered Payroll 12,626,924 12,626,924 12,626,924 H. Employer Normal Cost Rate: F/G 4.56 °l0 7.57 °l0 6.44 I. Covered Annual Payroll 1,500,201 1,500,201 1,500,201 Employer Normal Cost: H x I 68,409 113,565 96,613 K. Assumed Amount of Administrative Expenses 16,819 16,819 16,819 L. Total Employer Normal Cost: J+K 85,228 130,384 113,432 M. Employer Normal Cost as % of Covered Payroll 5.68 % 8.69 % 7.56 • No Text