HomeMy WebLinkAboutDocumentation_Regular_Tab 07_03/14/2019 �� DAVISsz
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' ASHTON, PA.
Keith W. Davis, Esq.
Floriiin Bnr Bonrd Certified Attorney
City,County nnd Lacnl Gavernment Law
F.maiL keithl�davisashtonlaw.com
January 25, 2019
MEMORANDUM
To: Mayor Brennan; Vice Mayor Paterno; Council Members Arena, Brandon and
Johnson
Cc: Acting Manager Weinand, Clerk McWilliams; Building Official Rodriguez
Fr: Attorney Davis
Re: Defined Benefit Plan Opt Out Option for Police Officers.
The following describes in detail the above referenced agenda item:
The proposed ordinance provides for a one-time, non-reversible opt out of the defined
benefit plan being adopted pursuant to union negotiations.
701 Northpoint Parkway, Suite 205, West Palm Beach, FL 33407 � p 561-586-7116 � f 561-586-9611
wuno.davisashtonlaw.com
♦LEADING EXPERTS IN LOCAL GOVERNMENT LAW AND ETHICS♦
ORDINANCE NO. 3-19
AN ORDINANCE OF THE VILLAGE COUNCIL OF THE VILLAGE OF
TEQUESTA, FLORIDA, ADOPTING A ONE TIME OPPORTUNITY FOR
POLICE OFFICERS HIRED AFTER FEBRUARY 1, 2013 TO OPT OUT
OF PARTICIPATION IN THE DEFINED BENEFIT PENSION PLAN AND
REMAIN A PARTICIPANT IN THE DEFINED CONTRIBUTION
PROGRAM; PROVIDING A CONFLICTS CLAUSE, A SEVERABILITY
CLAUSE, AN EFFECTIVE DATE; AND FOR OTHER PURPOSES.
WHEREAS, the state of Florida Municipal Police Officers and Firefighters
Retirement Trust Funds Office has approved the Public Safety Officers Pension Trust
Fund to again receive "Chapter 185" money in conjunction with participation in a defined
benefits plan with the restoration of all benefits for police officers who are in the Village's
current defined contribution plan and who were hired after February 1, 2013; and
WHEREAS, the state of Florida Municipal Police Officers and Firefighters
Retirement Trust Funds Office has also approved a one-time opt out from participation
in the defined benefits plan for any police officers who choose to remain in the defined
contribution plan; and
WHEREAS, as a result of negotiations between the Village and the police union,
the Village Council of the Village of Tequesta desires to amend the Public Safety
Officers' Pension Trust Fund by incorporating provisions of the recently negotiated and
approved police officers collective bargaining agreement, including participation in the
defined benefit plan, and including the one-time opt out opportunity; and
WHEREAS, the Village Council of the Village of Tequesta desires to permit any
Police Officers hired after February 1, 2013 to exercise a one-time only opt out of
1
participation in the Public Safety Officers' Pension Trust Fund (defined benefit plan);
and
WHEREAS, the Village Council has determined that providing the one time
opportunity to opt out of the defined benefit plan as described herein is in the best
interest of the police officer employees and the citizens of the Village.
NOW, THEREFORE, BE IT ORDAINED BY THE VILLAGE COUNCIL OF THE
VILLAGE OF TEQUESTA, PALM BEACH COUNTY, FLORIDA, AS FOLLOWS:
Section 1: During the period from the effective date of this Ordinance up to and
including March 1, 2019, Police Officers hired after February 1, 2013 may affirmatively
opt not to participate in the defined benefit Public Safety Officers' Pension Trust Fund
and continue to participate in the Village's defined contribution plan. This is a one-time
opportunity. All Police Officers who do not affirmatively and voluntarily opt out of
participation will be moved in the Public Safety Officers Pension Trust Fund as provided
for in Ordinance 2-19, adopted simultaneously with this Ordinance.
Section 2: All Ordinances or parts of Ordinances in conflict herewith be and the
same are hereby repealed.
Section 3: Should any Section or provision of this Ordinance or any portion
thereof, any paragraph, sentence, or word be declared by a court of competent
jurisdiction to be invalid, such decision shall not affect the validity of the remainder of
this Ordinance.
Section 4: This Ordinance shall take effect June 1, 2018.
2
G R S Retirement P 954.527.1616 F:954.525.0083 www.brsconsulting.com
Consulting
February 22, 2019
Mr. Scott Baur
The Resource Centers, LLC
4360 Northlake Blvd., Suite 206
Palm Beach Gardens, FL 33410
Re: Village of Tequesta Public Safety Officers Pension Trust Fund
Actuarial Impad Statement
Dear Scott:
As requested,we have prepared the enclosed Actuarial Impact Statement to illustrate the first year impact of
the proposed ordinances which would amend the Village of Tequesta Public Safety Officers Pension Trust
Fund as follows:
■ The Pension Plan would be re-opened for police officers. Police officers who participate in the 401(a)
Plan would enter the Pension Plan if elected and receive credit for both future service and service
earned prior to entering the Pension Plan. The benefit multiplier would be equal to 2.75%for each
year of service,and the member contribution rate for these members would be 6%of pensionable
earnings. The remaining benefits for these police officers are the same as the current Pension Plan
provisions for police officers.
■ The 401(a)Plan balances for these 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 members
plus the contributions these members would have paid to the Pension Plan, including interest. We
have estimated the transfer amount to be approximately$269,284.
■ The State Contribution Reserve for police officers of$333,315 would be divided equally to a Share
Plan for police officers and to the Village to offset future required contributions.
■ The benefit multiplier for firefighters who are hired on or after August 14, 2015 is increased to
2.75%for each year of service.
■ It is our understanding that the Ordinance language was approved by the Division of Retirement as
compliant with the provisions of Chapter 185, allowing the Village to once again participate in the
premium tax distributions going forward. The full amount of annual Chapter 185 revenue($88,336
was altocated for FYE 2018)would be used as an offset to the Village required contribution.
■ 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,and this
amount would be increased by the Chapter 185 revenue allocated for FYE 2018 and 2019. The full
r
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�
Mr. Scott Baur
February 22, 2019
Page 2
amount of previously unreceived Chapter 185 revenue would be used as an offset to the Village
required contributions. We have assumed that the previously unreceived Chapter 185 revenue would
be applied as an offset each year starting in FYE 2020 to reduce the required Village contribution to
$0 until the balance is fully used.
The Statement must be filed with the Division of Retirement before the final public hearing on the ordinance.
Please have a member of the Board of Trustees sign the Statement. Then send the Statement along with a
copy of the proposed ordinance to Tallahassee.
Additional Disclosures
Please refer to the last two pages of this report for a discussion of risks associated with measuring the
accrued liability and actuarially determined contribution.
This report was prepared at the request of the Board and is intended for use by the Plan and those
designated or approved by the Board. This report may be provided to parties other than the Board only in
its entirety and only with the permission of the Board. GRS is not responsible for unauthorized use of this
report.
The purpose of this report is 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 potential effects on other benefit plans were not considered in this study. This report should
not be relied on for any purpose other than the purpose described above.
The calculations in this report are based upon information furnished by the Village and the Plan
Administrator for the October 1, 2018 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 resp�nsible
for the accuracy or completeness of the information provided by the Village and 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.
G RS
Mr. Scott Baur
February 22, 2019
Page 3
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 actuaries are 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.
We welcome your questions and comments.
Respectfully submitted,
� ��G�
1 ffr mrose, MAAA Trisha Amrose, MAAA
nr d Actuary No. 17-6599 Enrolled Actuary No. 17-8010
Enclosures
cc: Ms. Kerry Dutton
Ms. Bonni Jensen
G RS
VIUAGE OF TEQUESTA PUBLIC SAFETY OFFICERS PENSION TRUST FUND
Impact Statement—February 22,2019
Description of Amendments
The proposed ordinances would amend the Plan as follows:
■ The Pension Plan would be re-opened for police officers. Police officers who participate in the 401(a)
Plan would enter the Pension Plan if elected and receive credit for both future service and service
earned prior to entering the Pension Plan. The benefit multiplier would be equal to 2.75%for each
year of service,and the member contribution rate for these members would be 69�of pensionable
earnings. The remaining benefits for these police officers are the same as the current Pension Plan
provisions for police officers.
■ The 401(a)Plan balances for these 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 members
plus the contributions these members would have paid to the Pension Plan, including interest. We
have estimated the transfer amount to be approximately$269,284.
■ The State Contribution Reserve for police officers of$333,315 would be divided equally to a Share
Plan for police o�cers and to the Village to offset future required contributions.
■ The benefit multiplier for firefighters who are hired on or after August 14,2015 is increased to
2.75%for each year of service.
• It is our understanding that the Ordinance language was approved by the Division of Retirement as
compliant with the provisions of Chapter 185, allowing the Village to once again participate in the
premium tax distributions going forward. The full amount of annual Chapter 185 revenue($88,336
was allocated for FYE 2018}would be used as an ofFset to the Village required contribution.
■ 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,and this
amount would be increased by the Chapter 185 revenue allocated for FYE 2018 and 2019. The full
amount of previously unreceived Chapter 185 revenue would be used as an offset to the Village
required contributions. We have assumed that the previously unreceived Chapter 185 revenue would
be applied as an offset each year starting in FYE 2020 to reduce the required Village contribution to
$0 until the balance is fully used.
Funding Implications of Amendment
An actuarial cost estimate is attached.
Certification of Administrator
I believe the amendment to be in compliance with Part VII, Chapter 112, Florida Statutes and Section 14,
Article X of the Constitution of the State of Florida.
For the Board of Trustees
as Plan Administrator
4
SUPPLEMENTAL ACTUARIAL VALUATION REPORT
Plan
Village of Tequesta Public Safety Officers Pension Trust Fund
Valuation Date
October 1,2018
Date of Report
February 22,2019
Report Requested by
Board of Trustees
Prepared by
Jeffrey Amrose
Group Valued
All active and inactive members.
Benefits Being Considered for Change
The proposed ordinances would amend the Plan as follows:
■ The Pension Plan would be re-opened for police officers.Police officers who participate in the 401(a)
Plan would enter the Pension Plan if elected and receive credit for both future service and service
earned prior to entering the Pension Plan. The benefit multiplier would be equal to 2.75%for each
year of service,and the member contribution rate for these members would be 6%of pensionable
earnings. The remaining benefits for these police o�cers are the same as the current Pension Plan
provisions for police officers.
■ The 401(a)Plan balances for these 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 members
plus the contributions these members would have paid to the Pension Plan, including interest. We
have estimated the transfer amount to be approximately$269,284.
■ The State Contribution Reserve for police officers of$333,315 would be divided equally to a Share
Plan for police officers and to the Village to offset future required contributions.
■ The benefit multiplier for firefighters who are hired on or after August 14, 2015 is increased to
2.75%for each year of service.
■ It is our understanding that the Ordinance language was approved by the Division of Retirement as
compliant with the provisions of Chapter 185, allowing the Village to once again participate in the
premium tax distributions going forward. The full amount of annual Chapter 185 revenue($88,336
was allocated for FYE 2018)would be used as an offset to the Village required contribution.
5
■ 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,and this
amount would be increased by the Chapter 185 revenue allocated for FYE 2018 and 2019. The full
amount of previously unreceived Chapter 185 revenue would be used as an offset to the Village
required contributions. We have assumed that the previously unreceived Chapter 185 revenue would
be applied as an offset each year starting in FYE 2020 to reduce the required Village contribution to
$0 until the balance is fully used.
Participants Affeded
Police Officers hired after February 1,2013 and Firefighters hired on or aRer August 14, 2015
would be affected. However, only participants as of October 1,2018 were considered for
this study.
Actuarial Assumptions and Methods
Same Actuarial Assumptions and Methods used in the October 1,2018 Actuarial Valuation.
Some of the key assumptions/methods are:
Investment Return: 7.25%
Salary Increases: 6.00%per year
Cost Method: Entry Age Normal
Amortization Period for Any Change in Actuarial Accrued Liability
20 years
Summary of Data Used in Report
Same as the participant data used for the October 1, 2018 Actuarial Valuation, including the
11 police officers who would join the Plan as a result of the ordinances.
Actuarial Impad of Proposal(s)
See attached page(s)
Special Risks Involved with the Proposal That the Plan Has Not Been Exposed to Previously
Please refer to the last two pages of this report for a discussion of risks associated with measuring
the accrued liability and actuarially determined contribution.
Other Cost Considerations
This impact statement shows the first year impact of the proposed ordinances.This impact
statement does not reflect the Village's savings in the 401�a) Plan for police officers who would join
the Pension Plan. We have assumed that the Plan will receive the Chapter 185 revenue and 401(a)
Plan transfer amounts as detailed above.
6
SUMMARY OF VALUATION RESULTS
As of October 1
2018 2018
After Before
COVERED GROUP
Amendmeni Amendment Difference
A. Number Included in the Valuation
1. Active Members 32 21 11
2. Inactive Members 11 11 0
6. Covered Annual Payroll(Reported Payroll with Salary Scale) $ 2,427,663 $ 1,763,351 $ 664,312
LONG RANGE COST
C. Actuarial Present Value of Projected Benefits 20,489,125 17,944,686 2,544,439
D. Actuarial Present Value of Projected Normal Costs 5,570,651 3,654,011 1,916,640
E. Actuarial Accrued Liability(AAL): C-D 14,918,474 14,290,675 627,799
F. Actuarial Value of Assets 14,650,892 14,381,608 269,284
G. Unfunded Actuarial Accrued Liability(UAAL): E-F 267,582 (90,933) 358,515
CURRENT ANNUAL COST
H. Annual Payment Needed to Amortize UAAL 143,785 142,445 1,340
As%of B 5.92 % 8.08 % (2.16)
I. Annual Employer Normal Cost 515,402 396,043 119,359
As%of B 21.23 % 22.46 % (1.23)
J. Adjustment for Frequency of Payment 25,056 20,467 4,589
As%of B 1.03 % 1.16 % (0.13) %
K. Required Employer Contrib: H+I+1 684,243 558,955 125,288
As%of B 28.19 % 31.70 % (3.51)
L. Expected Covered Payroll for Contribution Year 2,524,770 1,818,656 706,114
M.Required Employer Contrib for Contribution Year 711,582 576,612 134,970
As 96 of L 28.18 % 31.71 % (3.52) %
N. Estimated State Premium Tax Refund 244,854 156,518 88,336
As%of L 9.70 % 8.61 % 1.09
O.Use of Chapter 185 Reserve(Police Only)* 157,081 0 157,081
As%of L 6.22 % 0.00 % 6.22 %
P. Balance Required from Employer: M-N-0 309,647 420,094 (110,447)
As%of L 12.26 % 23.10 % (10.84) %
Q. Year to which Contributions Apply
1. Plan Year Ending 9/30/2020 9/30/2020
2. Employer Fiscal Year Ending 9/30/2020 9/30/2020
3. Assumed Date(s)of Employer Contribs. Monthly Monthly
'Curcent�Ilage estimate of use of Chapter 185 Reserve.
7
POLICE OFFlCERS
SUMMARY OF VALUATION RESULTS
As of October 1
2o]B 2mB
After Before
COVERED GROUP Amendment Amendment Difference
A. Number Included in the Valuation
1. Active Members 16 5 11
2. Inactive Members 4 4 0
B. Covered Mnual Payroll(Reported Payroll with Salary Scale) $ 1,045,075 $ 380,764 $ 664,311
LONG RANGE COST
C. Actuarial Present Value of Projected Benefits 5,672,675 3,225,063 2,447,612
D. Actuarial Present Value of Projected Normal Costs 2,583,446 748,694 1,834,752
E. Actuarial Accrued Liability(AAL): C-D 3,089,229 2,476,369 612,860
F. Actuarial Value of Assets 4,073,489 3,804,205 269,284
6. Unfunded Actuarial Accrued Liability(UAAL): E-F (984,260) (1,327,836) 343,576
CURRENT ANNUAL COST
H. Mnual Payment Needed to Amortize UAAL 0 0 0
As%of B 0.00 % 0.00 % 0.00 %
I. Annual Employer Normal Cost 227,303 113,745 113,558
As%of B 21.75 % 29.87 % (8.12) %
J. Adjustment for Frequency of Payment 8,640 4,323 4,317
As%of B 0.83 % 1.14 % (0.31) %
K. Required Employer Contrib: H+I+1 235,943 118,068 117,875
As%of B 22.58 % 31.01 % (8.43) %
L. Expected Covered Payroll for Contribution Year 1,086,878 380,764 706,114
M.Required Employer Contrib for Contribution
Year: %from K x l 245,417 118,068 127,349
As%of l 22.58 % 31.01 % (8.43) 96
N. Estimated State Premium Tax Refund 88,336 0 88,336
As%ofL 8.13 % 0.00 % 8.13 `f'o
O. Use of Chapter 185 Reserve* 157,081 N/A N/A
As%of L 14.45 % N/A N/A
O. Balance Required from Employer: M-N 0 118,068 (118,068)
As%of L 0.00 % 31.01 % (31.01) 96
P. Year to which Contributions Apply
1. Plan Year Ending 9/30/2020 9/30/2020
2. Employer Fiscal Year Ending 9/30/2020 9/30/2020
3. Assumed Date(s)of Employer Contribs. Monthly Monthly
*Current�Ilage estimate of use of Chapter 185 Reserve.
8
FIREFIGHTERS
SUMMARY OF VALUATION RESULTS
As of October 1
2018 2018
After 8efore Difference
COVERED GROUP Amendment Amendment
A. Number Included in the Valuation
1. Active Members 16 16 0
2. Inactive Members 7 7 0
B. Covered Annual Payroll(Reported Payroll with Salary Scale) $ 1,382,588 $ 1,382,588 $ 0
LONG RANGE COST
C. Actuarial Present Value of Projected 8enefits 14,816,450 14,719,623 %,827
D. Actuarial Present Value of Projected Normal Costs 2,987,205 2,905,317 81,888
E. Aduarial Accrued Liability(AAL): C-D 11,829,245 11,814,306 14,939
f. Actuarial Value of Assets 10,577,403 10,577,403 0
G. Unfunded Actuarial Accrued Liability(UAAL): E-F 1,251,842 1,236,903 14,939
CURRENT ANNUAL COST
H. Annual Payment Needed to Amortize UAAL 143,785 142,445 1,340
As 9'0 of B 10.40 % 10.30 % 0.10 %
I. Annual Employer Normal Cost 288,099 282,298 5,801
As%of B 20.84 % 20.42 % 0.42 %
1. Adjustment for Frequency of Payment 16,416 16,144 272
P�%ofB 1.19 % 1.17 % 0.02 %
K. Required Employer Contrib: H+I+1 448,300 440,887 7,413
As%of B 32.42 % 31.89 % 0.53 %
L. Expected Covered Payroll for Contribution Year 1,437,892 1,437,892 0
M. Required Employer Contrib for Contribution
Year: 9'o from K x L 466,165 458,544 7,621
As%of L 32.42 % 31.89 % 0.53 %
N. Allowable Credit for State Revenue in Contribution Year 156,518 156,518 0
As%of L 10.89 % 10.89 % 0.00 %
O.Use of Chapter 175 Reserve 0 0 0
As%of L 0.00 % 0.00 % 0.00 %
P. Balance Required from Employer: M-N-O 309,647 302,026 7,621
As%of L 21.53 % 21.00 % 0.53 %
Q. Yearto which Contributions Apply
1. Plan Year Ending 9/30/2020 9/30/2020
2. Employer Fiscal Year Ending 9/30/2020 9/30/2020
3. Assumed Date(s)of Employer Contribs. Monthly Monthly
9
ACTUARIAL VALUE OF BENEFITS AND ASSEiS
POLICE AND FlRE COMBINED
A. Valuation Date October 1,2018 October 1,2018
AfterAmendment BeforeAmendment Difference
B. Actuarial Present Value of Al)Projected
Benefits for
1. Active Members
a.Service Retirement Benefits $ 12,778,488 5 10,687,876 $ 2,090,612
b.Vesting Benefits 798,135 600,231 197,904
c. Disability Benefits 779,466 579,602 199,864
d.Preretirement Death Benefits 185,829 133,477 52,352
e. Return of Member Contributions 12,899 9,192 3,707
f.Total 14,554,817 12,010,378 2,544,439
2. Inactive Members
a.Service Retirees&Beneficiaries 5,209,544 5,209,544 -
b.Disability Retirees - - -
c.Terminated Vested Members 724,764 724,764 -
d.Tota I 5,934,308 5,934,308 -
3. Total for All Members 20,489,125 17,944,686 2,544,439
C. Actuarial Accrued(Past Service)
Liability under Entry Age Normal 14,918,474 14,290,675 627,799
D. Actuarial Value of Accumulated Plan
Benefits per FASB No.35 12,233,630 11,840,822 392,808
E. Plan Assets
1. Market Value 15,014,272 14,744,988 269,284
2. Actuarial Value 14,650,892 14,381,608 269,284
F. Unfunded Actuarial Accrued Liability:C-E2 267,582 (90,933) 358,515
G. Actuarial Present Value of Projected
Covered Payroll 23,914,798 15,696,376 8,218,422
H. Actuarial Present Value of Projected
Member Contributions 1,403,526 910,420 443,106
10
ACTUARIAL VALUE OF BENEFITS AND ASSETS
POLICE
A. Valuation Date October 1,2018 October 1,2018
AfterAmendment BeforeAmendment Difference
B. Actuarial Present Value of All Projected
Benefits for
1. Active Members
a.Service Retirement Benefits $ 4,041,926 $ 2,036,475 $ 2,005,451
b.Vesting Benefits 331,872 139,493 192,379
c.Disability Benefits 310,027 115,531 194,496
d.Preretirement Death Benefits 80,147 28,568 51,579
e.Retum of Member Contributions 3,707 - 3,707
f.Total 4,767,679 2,320,067 2,447,612
2. Inactive Members
a.Service Retirees&Beneficiaries 361,354 361,354 -
b.Disability Retirees - - -
c.Terminated Vested Members 543,642 543,642 -
d.Total 904,996 904,996 -
3. Total forAll Members 5,672,675 3,225,063 2,447,612
C. Actuarial Accrued(Past Service)
Liability under Entry Age Normal 3,089,229 2,476,369 612,860
D. Actuarial Value of Accumulated Plan
Benefits per FASB No.35 2,443,055 2,050,259 392,796
E. Plan Assets
1. Market Value 4,182,432 3,913,148 269,284
2. Actuarial Value 4,073,489 3,804,205 269,284
F. Unfunded Actuarial Accrued Liability:C-E2 (984,260) (1,327,836) 343,576
G. Actuarial Present Value of Projected
Covered Payroll 11,354,649 3,136,227 8,218,422
H. Actuarial Present Value of Projected
Member Contributions 649,917 156,811 493,106
11
ACTUARIAL VALUE OF BENEFlTS AND ASSETS
FIRE
A. Valuation Date October 1,2018 October 1,2018
AfterAmendment BeforeAmendmeni Difference
B. Actuarial Present Value of All Projected
Benefits for
1. Active Members
a.Service Retirement Benefits $ 8,736,562 $ 8,651,401 $ 85,161
b.Vesting Benefits 466,263 460,738 5,525
c. Disability Benefits 469,439 464,071 5,368
d.Preretirement Death Benefits 105,682 104,909 773
e.Return of Member Contributions 9,192 9,192 -
f.Total 9,787,138 9,690,311 96,827
2. Inactive Members
a.Service Retirees&Beneficiaries 4,848,190 4,848,190 -
b. Disability Retirees - - -
c.Terminated Vested Members 181,122 181,122 -
d.Total 5,029,312 5,029,312 -
3. Total for All Members 14,816,450 14,719,623 96,827
C. Actuarial Accrued(Past Service)
Liability under Entry Age Normal 11,829,245 11,814,306 14,939
D. Actuarial Value of Accumulated Plan
Benefits per FASB No.35 9,790,575 9,790,563 12
E. PIan,4ssets
1. Market Value 10,831,840 30,831,840 -
2. Actuarial Value 10,577,403 30,577,403 -
F. Unfunded Actuarial Accrued Liability:C-E2 1,251,842 1,236,903 14,939
G. Actuarial Present Value of Projected
Covered Payroll 12,560,149 12,560,149 -
H. Actuarial Present Value of Projected
Member Contributions 753,609 753,609 -
12
ENTRY AGE CALCULATION OF EMPLOYER NORMAL COST TOTAL
A.Valuation Date October 1,2018 October 1,2018
After Amendment 8efore Amendment Difference
B.Normal Cost for
1. Service Retirement Benefits $ 475,841 $ 346,545 $ 129,296
2. Vesting Benefits 51,730 41,158 10,572
3. Disability Benefits 49,038 34,479 14,559
4. Preretirement Death Benefits 11,916 8,283 3,633
5. Return of Member Contributions 5,013 3,855 1,158
6. Total for Future Benefits 593,538 434,320 159,218
7. Assumed Amount for Administrative
Expenses 63,716 63,716 -
8. Total Normal Cost 657,254 498,036 159,218
C. Expected Member Contribution 141,852 101,993 39,859
D.Employer Normal Cost:88-C 515,402 396,043 119,359
E. Employer Normal Cost as�of
Covered Payroli 21.23 % 22.46 % (1.23) %
13
ENTRY AGE CALCULATION OF EMPLOYER NORMAL COST POLICE
A.Valuation Date October 1,2018 October 1,2018
AfterAmendment BeforeAmendment Difference
B. Normal Cost for
1. Service Retirement Benefits $ 206,539 $ 82,365 $ 124,174
2. Vesting Benefits 17,614 7,363 10,251
3. Disability Benefits 22,796 8,550 14,246
4. Preretirement Death Benefits 5,659 2,071 3,588
5. Return of Member Contributions 1,734 576 1,158
6. Total for Future Benefits 254,342 100,925 153,417
7. Assumed Amount for Administrative
Expenses 31,858 31,858 -
8. Total Normal Cost 286,200 132,783 153,417
C. Expeded Member Contribution 58,897 19,038 39,859
D.Employer Normal Cost:B8-C 227,303 113,745 113,558
E. Employer Normal Cost as%of
Covered Payroll 21.75 % 29.87 % (8.12) %
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ENTRY AGE CALCULATION OF EMPLOYER NORMAL COST FIRE
A.Valuation Date October 1,2018 October 1,2018
AfterAmendment BeforeAmendment Difference
B. Norma I Cost for
1. Service Retirement Benefits $ 269,302 264,180 $ 5,122
2. Vesting Benefits 34,116 33,795 321
3. Disability Benefits 26,242 25,929 313
4. Preretirement Death Benefits 6,257 6,212 45
5. Return of Member Contributions 3,279 3,279 -
6. Total for Future Benefits 339,196 333,395 5,801
7. Assumed Amount for Administrative
Expenses 31,858 31,858 -
8. Total Normal Cost 371,054 365,253 5,801
C. Expected Member Contribution 82,955 82,955 0
D.Employer Normal Cost:B8-C 288,099 282,298 5,801
E. Employer Normal Cost as%of
Covered Payroll 20.84 % 20.42 % 0.42 %
15
Risks Associated with Measuring the Accrued Liability and Actuarially Determined Contribution
The determination of the accrued liability and the actuarially determined contribution requires the use of
assumptions regarding future economic and demographic experience. Risk measures are intended to aid in
the understanding of the effects of future experience differing from the assumptions used in the course of
the actuarial valuation. Risk measures may also help with illustrating the potential volatility in the accrued
liability and the actuarially determined contribution that result from the differences between actual
experience and the actuarial assumptions.
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 due to changing
conditions; 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. The
scope of an ectuarial valuation does not include an analysis of the potential range of such future
measurements.
Examples of risk that may reasonably be anticipated to significantly affect the Plan's future financial
condition include:
1. Investment risk—actual investment returns may differ from the either assumed or forecasted
returns;
2. Contribution risk—actual contributions may differ from expected future contributions. For
example,actual contributions may not be made in accordance with the Plan's funding policy or
material changes may occur in the anticipated number of covered employees,covered payroll,or
other relevant contribution base;
3. Salary and Payroll risk—actual salaries and total payroll may differ from expected, resulting in
adual future accrued liability and contributions differing from expected;
4. Longevity risk—members may live longer or shorter than expected and receive pensions for a
period of time other than assumed;
5. Other demographic risks—members may terminate, retire or become disabled at times or with
benefits other than assumed resulting in actual future accrued liability and contributions differing
from expected.
The effects of certain trends in experience can generally be anticipated. For example if the investment
return is less(or more)than the assumed rate,the cost of the Plan can be expected to increase(or
decrease). Likewise if longevity is improving(or worsening),increases(or decreases) in cost can be
anticipated.
The computed contribution amounts may be considered as a minimum contribution that complies with the
pension Board's funding policy and the State statutes. The timely receipt of the actuarially determined
contributions is critical to support the financial health of the Plan. Users of this report should be aware that
contributions made at the actuarially determined rate do not necessarily guarantee benefit security.
16
Risk Assessment
Risk assessment was outside the scope of this report. Risk assessment may include scenario tests,
sensitivity tests,stochastic modeling,stress tests,and a comparison of the present value of accrued
benefits at low-risk discount rates with the actuarial accrued liability.We are prepared to perform such
assessment to aid the Board in the decision making process.
17