HomeMy WebLinkAboutDocumentation_Workshop_Tab 03_10/29/2018`.....71S'11' i_G RSn 0
June 8, 2018
Ms. Kerry Dutton
Resource Centers, LLC
4360 Northlake Boulevard, Suite 206
Palm Beach Gardens, Florida 33410
Re:, Village of Tequesta Public Safety Officers Pension Trust Fund
Supplemental Actuarial Valuation Report
Dear Kerry:
As requested, we have prepared the enclosed 30 -year projections showing the financial impact on the
Village of Tequesta Public Safety Officers Pension Trust Fund of the proposed Plan changes detailed
below.
Scenario 1(Updated Baseline) —These are the updated baseline results, reflecting the benefit
changes adopted in the most recent collective bargaining agreement for police officers. The Pension
Plan would be re -opened for police officers. The 12 current police officers who currently participate
in the 401(a) Plan would not receive credit for service earned prior to entering the Pension Plan. The
benefit multiplier for new members would be equal to 2% for the first three years of service, 2.35%
for the next three years of service, and 2.75% for each year of service thereafter. The member
contribution rate for these members would be 6916 of pensionable earnings.
■ Scenario 2 — Same as Scenario 1 except the benefit multiplier would be equal to 2.75% for each
year of service.
Scenario 3 — Same as Scenario 2 except the 12 police officers who currently participate in the
401(a) Plan would receive credit for both future service and service earned prior to entering the
Pension Pian. The 401(a) Plan balances for these 12 police officers would be transferred to the
Pension Plan. This transfer amount would be equal to the Village contributions to the 401(a) Plan
for these 12 members plus the contributions these members would have paid to the Pension Plan,
including interest. We have estimated the transfer amount to be $269,284. Under this scenario,
we have assumed the Plan would be eligible to receive future annual Chapter 185 revenue. We
have assumed that the full amount of annual Chapter 185 revenue ($157,450 was allocated for
FYE 2017) would be used as an offset to the Village required contribution, but this would be
subject to negotiations between the Union and the Village.
■ Scenario 4 — Same as Scenario 3 except we assume the Plan would also receive the annual Chapter
185 revenue that was allocated, but not received, for FYE 2014 — 2017. The unreceived Chapter
185 revenue for these years totaled $471,094. We have assumed that this full amount of
previously unreceived Chapter 185 revenue would be used as an offset to the Village required
contributions.
L?
Ms. Kerry Dutton
June 8, 2018
Page 2
Under ail scenarios, the remaining benefits for these police officers are assumed to be the same as the
current Pension Plan provisions for police officers.
It is important to note that potential effects on other benefit plans were not considered in this study. This
study does not reflect the Village's savings in the 401(a) Plan for police officers who would join the Pension
Plan.
Under Scenario 3, the required Village contributions would decrease as compared to the updated baseline
resufts. The decrease is based on the Plan receiving future Chapter 185 revenue. The Village required
contribution for FYE 2018 would also be reduced by the Chapter 185 revenue received in August 2018.
Under Scenario 4, the required Village contributions would decrease as compared to the updated baseline
results. The net required Village contributions are projected to be $0 for the fiscal years ending 2019
through 2022. The decrease is based on the Plan receiving future Chapter 185 revenue as well as the
previously unreceived Chapter 185 revenue for FYE 2014-2017. We have assumed that the previously
unreceived Chapter 185 revenue of $471,094 would be applied as an offset each year starting in FYE 2019
to reduce the required Village contribution to $0 until the balance is fully used. The Village required
contribution for FYE 2018 would also be reduced by the Chapter 185 revenue received in August 2018.
We have assumed that Chapter 185 revenue would remain level at $157,450 for the fiscal years ending
2017 through 2019 then increase by 2.5% each future year. Administrative expenses are also assumed
to increase by 2.5% each future year.
The projections are deterministic, meaning throughout the projection period, Plan experience is
expected to match the assumptions used during all future years beginning with the fiscal year ending
September 30, 2018, including the assumed investment return of 7.25% each year.
,,6,G R S
Ms. Kerry Dutton
June 8, 2018
Page 3
Additional Disclosures
This report was prepared at the request of the Board of Trustees and is intended for use by the Pension
Plan and those designated or approved by them. This report may be provided to parties other than the
Plan only in its entirety and only with the permission of the Board. GRS is not responsible for unauthorized
use of this report.
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. Except as otherwise noted, potential effects on other benefit plans were not considered.
The calculations in this report are based upon data provided by the Village covering the 12 police officers
currently in the 401(a) Plan as well as information furnished by the Plan Administrator for the October 1,
2017 Actuarial Valuation concerning Plan benefits, financial transactions, plan provisions and active
members, terminated members, retirees and beneficiaries. We reviewed this information for internal and
year-to-year consistency, but did not audit the data. We are not responsible for the accuracy or
completeness of the information provided by the Plan Administrator.
The calculations are based upon assumptions regarding future events, which may or may not materialize.
They are also based on the assumptions, methods, and plan provisions outlined in this report. Future
actuarial measurements may differ significantly from the current measurements presented in this report
due to such factors as the following: plan experience differing from that anticipated by the economic or
demographic assumptions; changes in economic or demographic assumptions; increases or decreases
expected as part of the natural operation of the methodology used for these measurements (such as the
end of an amortization period or additional cost or contribution requirements based on the plan's funded
status); and changes in plan provisions or applicable law. 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 the report prior to relying on
information in the report.
Jeffrey Amrose and Trisha Amrose are members of the American Academy of Actuaries and meet the
Qualification Standards of the American Academy of Actuaries to render the actuarial opinions contained
herein. The undersigned actuary is independent of the plan sponsor.
This report has been prepared by actuaries who have substantial experience valuing public employee
retirement systems. To the best of our knowledge the information contained in this report is accurate and
fairly presents the actuarial position of the Plan as of the valuation date. All calculations have been made
in conformity with generally accepted actuarial principles and practices, and with the Actuarial Standards
of Practice issued by the Actuarial Standards Board and with applicable statutes.
Ms. Kerry Dutton
June 8, 2018
Page 4
We welcome your questions and comments.
Sincerely yours,
Jex1/ ifi�tc•v--
rose, EA, MAAA
Beni Consultant & Actuary
Enclosures
dtA� dret'-�
Trisha Amrose, EA, MAAA
Consultant & Actuary
This communication shall not be construed to provide tax advice, legal advice or investment advice.
cc: Bonn! Jensen
Village of Tequesta Public Safety Officers Pension Trust Fund
30 -Year Projection of Required Village Contributions for Poke Officers
5
Scenario 1(Updated Baserme)
Some& 2
Reor ,
Contrbuhon
Furled Ratio
Re*"
Com ie'fJ°"
Funded Ratio
cost/(SWMA
Find Year
Pandonable
Tod
state
Net vow
Net vlbp
on Valuation
Total
Stabs
Nd villap
Net Vile
on Valuation
Ended
Payrotl
$ Amount
$ Amount
$ Amount
%of Payr
Date
$ Amount
$ Amount:
$ Amount
% of Payroll
Date
$ Amount
%of PayroN
2019
1,168,605
244,355
0
244,355
2031%
147%
253,470
0
253,470
2169%
147%
9,115
0.78%
2020
1,223 041
256,390
0
256,390
20.96%
139%
266,347
0
266,347
2L78%
138%
9,957
0.82%
2021
1,288,879
251,750
0
251,750
1953%
136%
263,641
0
263,641
20.46%
135%
11,891
093%
2022
1357,448
264,030
0
264,030
19.45%
135%
276,844
0
276,844
20.39%
135%
W14
094%
2023
1,428,91
276,705
0
276,705
19.3796
134%
290,477
0
290,477
20.33%
133%
13,772
096%
2024
1,501,149
289,871
0
289,871
1931%
133%
304,797
0
304,797
2030%
132%
14,926
0.99%
2025
1564,948
303,059
0
303,059
1937%
131%
319,155
0
319,155
20.39%
130%
16,096
L02%
2026
1,625,756
311,294
0
3111294
19.15%
130%
326,924
0
326,924
20.11%
129%
15,630
096%
2027
1,648,688
315,151
0
315,151
19.12%
129%
332,396
0
331,396
2016%
128%
17,245
L04%
2028
1,659,703
315,100
0
315,100
1899%
128%
334,118
0
334,218
20.14%
127%
19,118
L15%
2029
1,743,793
313,680
0
313,680
17.99%
128%
331,407
0
331,407
19.00%
127%
17,777
LON
2030
1,810,897
328,571
0
328,571
18.14%
128%
347,435
0
347,435
19.19%
127%
18,864
LOS%
2031
1,891,001
337,177
0
337,177
17.83%
128%
355,822
0
355,822
18.82%
127%
18,645
099%
2032
1,981,242
350,393
0
350,393
17.69%
127%
369,745
0
369,745
18.66%
126%
19,352
097%
2033
2,075,391
365,864
0
365,864
17.63%
127%
386,153
0
386,153
18.61%
126%
2OX
0.98%
2034
2,145,630
382,043
0
382,043
17.81%
127%
403,296
0
403,796
18.80%
126%
21252
099%
2035
2,240,103
390,706
0
390,706
17.44%
127%
413,608
0
413,608
18.46%
126%
22,902
LON
2036
2,326,239
406,639
0
406,639
17.48%
126%
430577
0
430577
1851%
125%
23,938
L03%
2037
2,413,486
420,069
0
420,069
17.41%
126%
444,766
0
444,766
16.43%
125%
24,698
LON
2038
2,424,697
434,001
0
434,001
17M%
126%
459,604
0
459,604
18.9696
125%
25,603
LON
2039
2,411,807
433,366
0
433,366
17.97%
126%
460,632
0
460,632
19.10%
125%
27,266
L13%
2040
2,385,169
427,746
0
427,746
17.93%
127%
456,945
0
456,945
19.16%
125%
29,199
L23%
2041
2,478,529
420,819
0
420,819
16.98%
127%
451,120
0
451,120
18.20%
126%
30,302
L22%
2042
2,522,183
435,575
0
435,575
17.2796
128%
466,932
0
464932
1851%
127%
31,357
L24%
2043
2,623,939
441,743
0
441,743
16.84%
129%
474,821
0
474,821
18.10%
127%
33,079
1.26%
2044
2,551,076
458,507
0
458,507
1797%
129%
492,980
0
492,980
1932%
128%
34,473
L35%
2045
2,587,923
447,393
0
447,393
171%
130%
483,799
0
483,799
18.69%
129%
36,407
140%
2046
2,681,099
454,524
0
454,524
16.95%
132%
491,855
0
491,855
1835%
130%
37,331
1.40%
2047
2,772,613
470,047
0
470,047
1635%
133%
508,691
0
508,691
1835%
131%
38,643
1.40%
2048
2,862,288
485,426
0
485,426
16.96%
134%
525,327
0
525,327
18.35%
132%
39,901
139%
Total
11,181,993
0
UA31,993
11,723,784
0
11,723,784
69LM
TOW Present
Value
4,233,917
0
4,233,977
4,471,78
0
4,471,711
237,795
5
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Fatal Year Perniorg6le
Ending Payroll
2019 1,168,605
2020 1223,041
2021 1,288,879
2022 1,357,448
2023 1,428,891
2024 1,501,149
2025 1,564,948
2026 1,625,756
2027 1,64898
2028 1,659,703
2029 1,743,793
2030 1,810,897
2031 1,891,001
2032 1,981,242
2033 2,075,391
2034 4145,630
2035 2,240,103
2036 2,326,239
2037 2,413,486
2038 2,424,87
2039 2,411,807
2040 4385,169
2041 2,478,529
2042 2,522,183
2043 2,623,939
2044 2,551,076
2045 2,587,923
2046 2,681,099
2047 2,772,613
2048 2,862,288
Map of Tapesta Public Safety Officers Pension Trust Fund
30 -Year Projection of Required Village Contribudons for Police Officers
Swanlo 1(Updated Baseline)
Scenario 4
Required Conub
don
wnaed Ratio
Taal
Sate
Net vaage
Nat vbp
on Valuation
$ Amount
$ Amount
$ Amount
% of Payroll
Date
244,355
0
244,355
2091%
147%
256,390
0
256,390
2096%
139%
251,750
0
251,750
19SA
136%
264,030
0
264,030
19.45%
135%
276,705
0
276,705
1937%
134%
289,871
0
289,871
1931%
133%
303,059
0
303,059
1937%
131%
311,294
0
311,294
19.15%
130%
315,151
0
315,151
19.12%
129%
315,100
0
315,100
18.99%
128%
313,680
0
313,680
17.99%
128%
328,571
0
328,571
18.14%
128%
337,177
0
337,177
17.83%
128%
350,393
0
350,393
17.69%
127%
365,864
0
365,864
17.63%
127%
382,043
0
382,043
17.8196
127%
390,706
0
390,706
17.44%
127%
406,639
0
406,639
17.48%
126%
420,069
0
420,069
17.41%
126%
434,001
0
434,001
1790%
126%
433,366
0
433,366
1797%
126%
427,746
0
427,746
1793%
127%
420,819
0
420,819
1698%
117%
435,575
0
435,575
1717%
128%
441,743
0
441,743
16.84%
129%
458,507
0
458,507
1797%
129%
447,393
0
447,393
1719%
130%
454,524
0
454,524
1695%
132%
470,047
0
470,047
1695%
133%
485,426
0
485,426
1696%
134%
Scenario 4
Taal 1.1,M1,993 0 11,1,993 11,533,409 7,383.575 4,149,834
ToalPresentvWN 4933,977 0 km,977 4,399,017 3,05549 1,343,788
7
cost/Isms)
$ Amount
(244,355)
(256,389)
(251,750)
(264,031)
(237,348)
(165,637)
(178,478)
(177,686)
(180,810)
(183,928)
(190580)
(194,647)
(200,177)
(205,013)
(209,729)
(214,477)
(217,183)
(224,426)
(227,478)
(232,879)
(237,483)
(241,290)
(253,672)
(258,849)
(270,331)
(282,075)
(261,289)
(266,851)
(273,485)
(279,832)
(60W)
M890M)
%ofPayroB
(2091)%
(2096)%
(1953)%
(19.45)
(16.62)%
(11.03)%
(11.41)6
(1093)%
(1097)%
(11.09)%
(1093)%
(10.74)%
(10591%
(1035)%
(10.11)%
(10.00)%
(9.69)%
(9.65)%
(9.43)%
(9.61)6
(9.85)6
(10.11)%
(1014)%
(1016)6
(1031)6
(11.05)%
(1010)96
(995)6
(9.86)6
(9.78)6
Required Conub
don
Fur" Ratio
Taal
State
Flet village
Net vie
on valuatim
$ Amount
$ Amout
$ Amount
%of Payroll
Date
250,783
250,783
0
0.00%
135%
263,756
263,755
0
0.00%
134%
261,156
261,156
0
0.00%
132%
274,293
274,293
0
0.00%
131%
288,072
248,715
39,357
2.75%
130%
302,374
178,140
124,234
8.28%
129%
307,174
182,594
124,591
796%
128%
320,766
187,159
133,608
81A
127%
326,179
191,838
134,342
815%
126%
327,806
196,633
131,172
790%
126%
324,649
201,549
123,100
7.06%
125%
340,512
206,588
133,924
7.40%
125%
348,753
211,753
137,000
714%
125%
362,426
217,047
145,380
7.34%
125%
378,607
122,473
156,135
752%
125%
395,600
228,035
167,566
7.81%
124%
407,258
233,735
173,523
7.75%
124%
421,792
239,579
182,213
7.83%
124%
438,159
245,568
192,591
798%
124%
452,830
251,707
201,122
819%
124%
453,883
258,000
mw
8.12%
124%
450,906
264,450
196,456
7.82%
124%
438,208
171,061
167,147
6.74%
125%
454,564
277,838
176,726
7.01%
126%
456,195
284,784
171,411
653%
127%
468,335
291,903
176,431
692%
128%
485,305
299,2111
186,104
7.1996
129%
494,355
306,681
187,674
7.00%
130%
510,910
314,348
196,562
7.09%
131%
527,801
322,207
205,594
718%
132%
Taal 1.1,M1,993 0 11,1,993 11,533,409 7,383.575 4,149,834
ToalPresentvWN 4933,977 0 km,977 4,399,017 3,05549 1,343,788
7
cost/Isms)
$ Amount
(244,355)
(256,389)
(251,750)
(264,031)
(237,348)
(165,637)
(178,478)
(177,686)
(180,810)
(183,928)
(190580)
(194,647)
(200,177)
(205,013)
(209,729)
(214,477)
(217,183)
(224,426)
(227,478)
(232,879)
(237,483)
(241,290)
(253,672)
(258,849)
(270,331)
(282,075)
(261,289)
(266,851)
(273,485)
(279,832)
(60W)
M890M)
%ofPayroB
(2091)%
(2096)%
(1953)%
(19.45)
(16.62)%
(11.03)%
(11.41)6
(1093)%
(1097)%
(11.09)%
(1093)%
(10.74)%
(10591%
(1035)%
(10.11)%
(10.00)%
(9.69)%
(9.65)%
(9.43)%
(9.61)6
(9.85)6
(10.11)%
(1014)%
(1016)6
(1031)6
(11.05)%
(1010)96
(995)6
(9.86)6
(9.78)6
Village of Tequesta Public Safety Officers Pension Trust Fund
30 -Year Projection of Required Village Contributions for Police Officers
6W,WO
--§-Scenario 1(Updated Baseline)
500,000
—$—Scenario 2
Scenario 3
o —0—Scenario 4
a 40Q000
L
c
0
v
m
> 3DO'000
a
m
u
m
0
CL 200,000
100,000
0
�0ti� ti0�1 �0�3 �0�h 1011 10" 10, 4
1 10, +11, ,y0 ti0a1 APO X00 10"
Fiscal Year End
8
Village of Tequesta Public Safety Officers Pension Trust Fund
30 -Year Projection of Funded Ratio for Police Officers
150%
145%
140%
0
120%
-3-Scenario 1(Updated Baseline)
u5%
—6—Scenario 2
110%
—t—Scenario 3
-—Scenario 4
105ao
100%
Valuation Date
10/1
9
ion +0 'PO
� �.
Retirement P:954•527.1616 ; F:9S4.525.0083 � www.grsconsulting.com
� R S Consulting
April 27,2018
Ms.Kerry Dutton
Resource Centers,LLC
4360 Northlake Boulevard,Suite 206
Palm Beach Gardens, Florida 33410
Re: vllage of Tequesta Public Safety Officers Pension Trust Fund
Supplemental Actua�iai Valuation Repon
�ear Kerry:
As requested,we have prepared the enclosed Supplemental Actuarial Valuation Report which shows the
first year financial impact of reopening the Village of Tequesta Public Safety Officers Pension Trust Fund to
police off'icers. Under Ordinance No.i8-12,the Plan was closed to police officers hired on or after
February 1,2013. The enclased study shows the first year financial impact of allowing 12 active police
officers who currently participate in the 401(a)Plan to join the Pension Plan under the following fou�
scenarios.
■ Scenario 1-The 12 police o�cers would not receive credit for service earned prior to entering the
Pension Plan and the benefit multiplier would be equal to 2%for the first three years of service,
2.35%for the next three years of service,and 2.75%for each year of service thereafter. The
member contribution rate for these members would be 6%of pensionable earnings.
• Scenario 2-Same as Scenario 1 except the benefit multiplier would be equal to 2.75%for each
year of service.
■ Scenario 3-The 12 police officers would receive credit for both future service and service earned
prior to entering the Pension Plan and the bene�t multiplier would be equal to 2.75%for each
year of service. The member contribution rate for these members would be 6%of pensionable
earnings. The 401(a)Plan balances for these 12 police officers would be transferred to the
Pension Plan. This transfer amount would be equal to the Village contributions to the 401{a)Plan
for these 12 members plus the contributions these members wou{d have paid to the Pensian Plan,
including interest. We have estimated the transfer amount to be$269,284. Under this scenario,
we have assumed the Plan would be eligible to receive future annual Chapter 185 revenue. We
have assumed that the full amount of annual Chapter 185 revenue($157,450 was allocated for
FYE 2017}would be used as an offset to the Village required contribution,but this would be
subject to negotiations between the Union and the Village.
■ Scenario 4-Same as Scenario 3 except we assume the Plan would also receive the annual Chapter
185 revenue that was allocated,but not received,for FYE 2014-2017. The unreceived Chapter 1 O-11- 1 Sr
185 revenue for these years totaled$471,094. We have assumed that this full amount of �la/���'
previously unreceived Chapter 185 revenue would be used as an offset to the Village required T
contributions. � 2
Ms. Kerry Dutton
April 27,2018
Page 2
Under all scenarios,the remaining benefits for these police officers are assumed to be the same as the
current Pension Plan provisions for police officers.
Under each of these scenarios,we have assumed that all 12 police officers would transfer to the Pension
Plan. If there are any police officers that do not transfer to the Pension Plan,the Division of Retirement
would need to determine if the Chapter 185 revenue would still be available to the Plan. We recommend
that this be confirmed in writing before any final decision is made.
Additionally,under all scenarios,the calculations do not include an allocation of the accumulated unused
balance of Chapter 185 money of$333,315. The use of this reserve is subject to negotiations between the
Union and the Village. The funds can be used for share accounts,to offset the Village's contribution,or
other uses defined by the parties.
It is important to note that potential effects on other benefit plans were not considered in this study. This
study does not reflect the Village's savings in the 401(a)Plan for police ofFicers who would join the Pension
Plan. Also,our study shows the first year financial impact to the Pension Plan.Please let us know if you
would like us to prepare projections which would show the financial impact over a 30-year period.
Summary of Findings
• Scenario 1—The first year required Village contribution increases by approximatefy$142,000 if the
12 new police officers join the Pension Plan. This is roughly 18.2%of their payroll and does not
reflect any savings the Village would realize from no longer contributing to the 401(a)Plan for
these members.
■ Scenario 2—The first year required Village contribution increases by approximately$151,000 if the
12 new police officers join the Pension Plan. This is roughly 19.3%of their payroll and does not
reflect any savings the Village would realize from no longer contributing to the 401(a�Plan for
these members.
■ Scenario 3—The first year required Village contribution would decrease by approximately$9,000.
The decrease is based on the Plan receiving future Chapter 185 revenue. The Village required
contribution for FYE 2018 would also be reduced by the Chapter 185 revenue received in August
2018. This does not include any savings the Village would realize from no longer contributing to
the 401(a)Plan for these members.
■ Scenario 4—The first year required Village contribution would decrease by approximately
$103,000 to$0. The decrease is based on the Plan receiving future Chapter 185 revenue as well as
the previously unreceived Chapter 185 revenue for FYE 2014-2017. Approximately,$93,000 of
the previously unreceived Chapter 185 revenue is assumed to be applied as an offset in FYE 2019,
leaving a balance of roughly$378,000 which could be used as an offset to future required Village
G R 5 ��`����
Ms. Kerry Dutton
April 27,2018
Page 3
contributions. The Village required contribution for FYE 2018 would also be reduced by the
Chapter 185 revenue received in August 2018.
■ It is important to note that under Scenarios 3 and 4,provided the Plan remains in a surplus
position,the required Village/State contribution rate would be approximately 19%of covered
payroll for new police officen. This cost would be offset by the Chapter 185 revenue used as a
credit toward the required contribution and the savings the Village would realize from no longer
contributing to the 401(a)Plan for these members.
Additional 0isclosures
This report was prepared at the request of the Board of Trustees and is intended for use by the Pension
Plan and those designated or approved by them. This report may be provided to parties other than the
Plan only in its entirety and only with the permission of the Board. GRS is not responsible for unauthorized
use of this report.
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. Except as otherwise noted,potential effects on other benefit plans were not considered.
The calculations in this report are based upon data provided by the Village covering the 12 police officers
currently in the 401(a)Plan as well as information furnished by the Plan Administrator for the October 1,
2017 Actuarial Valuation concerning Plan benefits,financial transactions,plan provisions and active
members,terminated members, retirees and beneficiaries. We reviewed this information for internal and
year-tayear consistency, but did not audit the data. We are not responsible for the accuracy or
completeness of the information provided by the Plan Administrator.
The calculations are based upon assumptions regarding future events,which may or may not materialize.
They are also based on the assumptions, methods,and plan provisions outlined in this report. Future
actuarial measurements may differ significantly from the current measurements presented in this report
due to such factors as the following: plan experience differing from that anticipated by the economic or
demographic assumptions;changes in economic or demographic assumptions;increases or decreases
expected as part of the natural operation of the methodology used for these measurements(such as the
end of an amortization period or additional cost or contribution�equirements based on the plan's funded
status);and changes in plan provisions or applicable law. If you have reason to believe that the
assumptions that were used are unreasonable,that the plan provisions are incorrectly described,that
importent plan provisions relevant to this proposal are not described,or that conditions have changed
since the calculations were made,you should contad the author of the report prior to relying on
information in the report.
G R S Conw t ng
Ms.Kerry Dutton
April 27,2018
Page 4
Jeffrey Amrose and Trisha Amrose are members of the American Academy of Actuaries and meet the
Qualification Standards of the American Academy of Actuaries to render the actuarial opinions contained
herein. The undersigned actuary is independent of the ptan sponsor.
This report has been prepared by actuaries who have substantial experience valuing public employee
retirement systems.To the best of our knowledge the information contained in this report is accurate and
fairty presents the actuarial position of the Plan as of the valuation date. A!I calculations have been made
in conformity with general{y accepted actuarial princip{es and practices,and with the Actuarial Standards
of Practice issued by the Aduarial Standards Board and with applicable statutes.
We welcome your questions and comments.
Sincerely yours,
C�►�►�-' ����.�:�,�.
1e re rose,EA,MAAA Trisha Amrose,EA,MAAA
nio onsultant&Actuary Consultant&Actuary
Enclosures
This communication shall not be construed to provide tax advice,legal advice or investment advice.
cc: Bonni lensen
G R S �onsulemegt
SUPPLEMENTAL ACTUARIAL VALUATION REPORT
Plan
Village of Tequesta Public Safery Officers Pension Trust Fund
Valuation Date
Odober 1,2017
Date of Report
April 27, 2018
Report Requested by
Board of Trustees
Prepared by
leffrey Amrose
Group Valued
All active and inactive members of the Plan as of October 1,2017.
Plan Changes Being Considered for Change
Allow 12 active police ofFicers who currently participate in the 401(a)Plan to join the Pension Plan.
The benefits for these officers would be determined using the current plan provisions with the
following exceptions:
• Scenario 1—The 12 police officers woutd not receive credit for service earned prior to entering
the Pension Plan and the benefit muftiplier would be equal to 2%for the first three years of
service,235%for the next three years of service,and 2.7596 for each year of service thereafter.
The member contribution rate for these members would be 6%of pensionable earnings.
■ Scenario 2—Same as Scenario 1 except the�nefit multiplier would be equal to 2.75%for
each year of service.
■ Scenario 3—The 12 police officers would receive credit for both future service and service
earned prior to entering the Pension Plan and the benefit multiplier would be equal to 2.75%
for each year of service. The member contribution rate for these members would be 6%of
pensionable earnings. The 401(a)Plan balances for these 12 police officers would be
transferred to the Pension Plan. This transfer amount would be equal to the Village
contributions to the 401(a)Plan for these 12 members plus the contributions these members
woutd have paid to the Pension Plan,including interest. We have estimated the transfer
amount to be$269,284. Under this scenario,we have assumed the Plan would be eligible to
receive future annual Chapter 185 revenue. We have assumed that the full amount of annual
Chapter 185 revenue($157,450 was allocated for FYE 2017)would be used as an offset to tfie
Village required contribution,but this would be subjed to negotiations between the Union
and the Village.
■ Scenario 4—Same as Scenario 3 except we assume the Plan would also receive the annual
Chapter 185 revenue that was a�located,but not received,for FYE 2014—2017. The
unreceived Chapter 185 revenue for these years totaled$471,094. We have assumed that
this full amount of previously unreceived Chapter 185 revenue would be used as an offset to
the Village required contributions.
S
Participants Affected
The 12 current active police officers who are not already members of the Pension Plan. Future
police officers would also become members of the Pension Plan.
Actuariai Assumptions and Methods
Same as Odober 1,2017 Aduarial Valuation Report with no exceptions. Some of the key
assumptions/methods are: �
Investment Return 7.25%
Salary increase 6.096 per year
Cost Method Entry Age Normal
Amortization Period for Any Change in Actua�ia)Accrued Liability
20 years
Summary of Data Used in Report
Same as data used in the October 1,2017 Aduarial Valuation Report and data provided by the
Village regarding the 12 police officers who would join the Pension Plan.
Aduarial Impad of Proposal(s)
See attached page(s)
6
,
ACTUARIALLY DETERMINED CON7RIBUTION(ADC)
POLICE OFFICERS
A. Yaluation Date October 1,2017 October 1,2017 October 1,2017 October 1,2017 October 1,2017
Baseline Scenario 1 Scenario 1 Scenario 3 Scenorio Q
B. AOC to Be Paid Duri�g
FiscalYearEnding 9/30/2019 4/30/2019 9/3Q/Z014 9/30/2019 9/30/2019
C. Assumed Date of Employer Corrtribution Monthly Monthly Monthly Monthly Monthly
D. Annual Paymerrt to Amortize
Unfunded Actuarial Liability(UAL) $ 0 $ 0 $ 0 $ 0 $ 0
E. Employer Nortnal Cost 98,770 226,352 234,760 232,352 232,352
F. ADC if Paid on the Valuatton
Date: D+E 98,770 226,352 234,760 232,352 232,352
G. AOC Adjusted for Frequency of
Payments 102,524 234,955 243,683 241,183 241,183
H. ADC as%of Covered Payroli 27.50 96 20.91 % 21.69 % 21.46 % 21.46 %
I. Assumed Rate of Increase in Covered
Payroll to Contribution Year 0.00 % 4.00 % 4.00 % 4.00 % 4.00 %
J. Covered Payroll for Contribution Year 372,781 1,168,605 1,168,605 1,168,605 1,168,605
K. ADC for Contribution Year:H x 1 102,524 �44,355 253,470 250,783 250,783
L. Estimated CredR for State Revenue in
Contribution Year 0 0 0 157,450 250,783
M. Required Employer Contribution(REC)
in Contribution Year:K-L 102,524 244,355 253,470 93,333 1 0 ''Z
N. REC as%of Covered Payroll in
Corrtribution Vear:M/J 27.50 % 20.41 % 21.69 % 7.99 S6 0.00 %
0. Change in Required Employer
Contributio�(REC) N/A 141,831 150,946 (9,191) (102,524)
P. Change in REC as%of Covered Payroll in
Contribution Year N/A % (6.59) 96 (5.81) % (19.51)% (27.50) %
'Village required corttribution for FYE 2018 would also be offset by Chapter 185 revenue received by the Plan in August 2018. The Viliage
contribution for fYE 2018 is not shown on these exhibits.
2 Chapter 185 revenue allocated to the Defined Benefit Plan on behalf of Police Officers,but not received,for FYE 2014-2017 totaled$471,094.
After using this amount to offset the required Village contribution for FYE 2019 there would still be$377,761 remaining which may be used as an
offset to future vllage required contributions.
Note: Under aN uenarios,the cakulatbns do not include an allocatlon of the$333,315 Accumulated Unused Chapter 185 Money Reserve
which Is wbject to ne�otlations between the Union and the Vibage.
7
ACTUARIAL VAW E OF BENEHTS ANO ASSETS
POLICE OFFICERS
A. Valuation Date October 1,2017 October 1,2017 October 1,2017 October 1,2017 October 1,2017
8oseline Scenario 1 Scenario 2 Scenario 3 Scenorio 4
B. ActuarialPreserrt Value of AIl Projected
Benefits for
1. Active Members
a.Service Retirement Benefits 5 1,899,651 $ 3,636,542 $ 3,713,692 5 3,958,235 $ 3,958,235
b.Vesti�g Benefits 138,237 236,493 241,217 308,744 308,744
c.Disability Benefits 111,989 325,318 327,447 328,096 328,096
d.Preretiremer�t Death Benefits 27,810 81,026 81,501 82,157 82,157
e.Retum of Member Contributions 0 14,194 14,194 5,468 5,468
f.Total 2,17'7,687 4,293,573 4,378,051 4,682,700 4,682,70p
2. Inactive Members
a.Service Retirees&Beneficiaries 362,999 362,999 362,999 362,999 362,999
b.Disabi�ity Retirees - - - - -
c.Terminated Vested Members 510,358 510,358 510,358 510,358 510,358
d.Total 873,357 873,357 873,357 873,357 873,357
3. Total for All Members 3,U51,044 5,166,930 5,251,408 5,556,057 5,556,057
C.Actuarial Accrued(Past Service)
Liability under Entry Age Normal 2,288,611 2,288,611 2,288,611 2,692,001 2,692,001
D.Actuarial Value of Accumulated Plan
Benefits per FASB No.35 N/A N/A N/A N/A N/A
E. Plan Assets
1. Market Value 3,421,640 3,421,640 3,421,640 3,690,924 3,690,924
2. Actuariat Value 3,372,321 3,372,321 3,372,321 3,641,605 3,641,605
f. Unfunded Actuarial Accrued Liabiiity (1,083,710) f 1,083,7101 (1,083,710) (949,604) (949,604)
G.Actuarial Present Value of Projected
Covered Payroll 3,181,429 12,526,224 12526,224 12,341,695 12,341,695
H.Actuarial Present Ualue of Projected
Member Contributions 159,071 719,759 719,759 708,687 708,687
1. Funded Ratio:E2/C 147.4 9b 147.4% 147.4% 135.3 % 1353 %
8
CALCULATION OF EMPLOYER NORMAL COST
POLICE OFFICERS
A. Valuation Date October 1,2017 October 1,2017 October 1,2017 October 1,2017 October 1,2017
Baseline Scenorio 1 Scenario 2 Scenario 3 Scenorlo 4
B. Normal Cost for
1. Service Retirement Benefits $ 80,530 $ 222,431 $ 230,320 $ 226,854 $ 226,854
2. Vestlng Benefiu 7,124 14,040 14,373 16,961 16,961
3. Disabflity Benefits 8,374 26,732 26,879 25,565 �5,565
4. Preretirement Death Benefits 2,033 6,425 6,464 6,114 6,114
5. Retum of Member Contributions 560 1,628 1,628 1,762 1,762
6. Tota!for Future Benefits 98,611 271,256 279,664 277,256 277,256
7. Assumed Amount for Administrative
Expenses 18,788 18,788 18,788 18,788 18,788
8. Total Nortnal Cost 117,409 290,044 298,452 296,044 296,044
As%of Covered Payroll 31.50 % 25.81 % 26.56 % 26.35 % 26.35 %
C. Expected Member Contribution 18,639 63,692 63,692 63,692 63,692
As%of Covered Payroll 5.00 % 5.67 % 5.67 % 5.67 % 5.67 9'0
D. Net Employer Normal Cost:BS-C 98,770 226,352 234,760 232,352 232,352
As%of Covered Payroll 26.50 % 20.14 % 20.89 % 20.68 % 20.68 %
9
PARTICIPANT DATA
POIICE OFFICERS
October 1,2017 October 1,2017 October 1,2017
Baseline Scenarios 1&2 Scenarios 3&4
ACTIVE MEMBERS
Number 5 17 17
Covered Annual Payroll $ 372,781 $ 1,123,658 $ 1,123,658
Average Annual Payroll $ 74,556 $ 66,098 $ 66,098
Average Age 43.2 38.0 38.0
Average Past Service 11.5 3.4 5.0
Average Age at Hire 31.7 34.6 33.0
RETIREES,BENEFICIARIES&DROP
Number 2 2 2
Annual Benefits $ 27,708 $ 27,708 $ 27,708
Average Annual Benefit $ 13,854 $ 13,854 $ 13,854
DISABILITY RETIREES
Number 0 0 0
Annual Benefits $ 0 $ 0 $ 0
Average Annual Benefit $ 0 $ 0 $ 0
TERMINATED VESTED MEMBERS
Number 2 2 2
Annual Benefits $ 37,272 $ 37,272 $ 37,272
Average Mnual Benefit $ 18,636 $ 18,636 $ 18,636
10