HomeMy WebLinkAboutDocumentation_Pension General_Tab 03_04/24/06OCTOBER 1, 2005
ACTUARIAL VALUATION REPORT
FOR THE
VILIrAGE OF TEQUESTA
GENERAL EMPLOYEES PENSION TRUST FUND
ANNUAL EMPLOYER CONTRIBUTION
IS DETERMINED BY THIS VALUATION
FOR THE PLAN YEAR ENDING
SEPTEMBER 30, 2006
TO BE PAID IN THE EMPLOYER FISCAL YEARS ENDING.
SEPTEMBER 30, 2006 and 2007
~~ GABRIEL, ROEDER, SMITH Z~ COMPANY
~ruary 45, 2006
Ord of Trustees
age of Tequesta General Employees
ension Trust Fund
luesta, Florida
jr Board Members:
are pleased to present our October 1, 2005 Actuarial Valuation Report for the Plan. The
pose of the Report is to set forth required contribution levels, to disclose plan assets and
aarial liabilities, to comment on funding. progress and to provide supporting infomtation
arding the operation of the Plan. This Report is also designed to comply with requirements of
State.
valuation was performed on the basis of employee, retiree and financial information supplied
the City. Although we did not audit this- information, it was reviewed for reasonableness and
~parability to prior years.
benefits valued are outlined at the end of the Report. Actuarial assumptions and the actuarial
t method are also described herein. Any changes in benefits, assumptions or methods are
cribed in the first section.
will be pleased to answer any questions pertaining to the valuation and to meet with you to
ew this Report.
;pectfully submitted,
BRIEL, ROEDER, SMITH AND COMPANY
1. Stephen Palmquist, ASA, MAAA, FCA
nrolled Actuary No. 05-1560
Statement by Enrolled Actuary
This actuarial valuation and/or cost determination 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. In my opinion, the techniques and
assumptions used are reasonable, meet the requirements and intent- of Part Vll, Chapter 112,
Florida Statutes, and are based on generally accepted actuarial principles and practices. 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 othervvise 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.
Signature
Date
05-1560
Enrollment Number
liL rARDIFI RIlFI1FD C6A.ITG1 ~ ~'.PIMDAIIIV
vwn~rarwvn w r~cyuncw ~nrNrv~c~ vvnarrvu~rww
The following is a schedule of required contributions developed in this years and the
previous actuarial valuations:
The required employer contribution was calculated under the assumption that payment
would be made in equal installments at the end of each month.
Reguin3d Contribution for Next Fiscal Year
In order to notify the Village of the amount to budget for the next fiscal year, this years
contribution rate (8.22%) has been applied to next year's expected payroll ($1,141,961)._ The
result of $93,869 is the required Village contribution for the fiscal year ending September 30,
2007.
Chans~es in Benefits
The Non-Duty Disability service requirement has been increased from no service
requirement to six years.
Change in Actuarial Assumptions and iNethods
There have been no such changes since the last valuation.
:~` rAQDrcr A/1C11FD C1IAITY A ~/111ADANIV
2
Actuarial Experience
Overall experience since the last valuation has been favorable resulting in an actuarial
gain of $106,598. The gain is due to higher investment return than expected and less than
expected salary increases. The actuarial gain has caused the required contribution to decrease
by 0.94% of covered payroll.
The remainder of this Report inGudes detai-led actuarial valuation results, information
relating to the pension fund, miscellaneous information and statistics, and a summary of plan
provisions.
liC~71 rARDICI p/1C11CD CRAITY ~ rARADA111V
r i i r zip ~ - ° d tl~`•,~ ~ "a' '4'
As of O ctober 1
2005 2003
s
~.
~
,.
~ ~ ~.
r
.
A. Number Included in the Valuation
1. Active Members 24 25
2. Inactive Members 0 0
B. Covered Annual Payroll - $ 1,098,039 $ 1,056,797
,~
. _ _ ~.
C. Actuarial Present Value of Projected Benefits 1,885,568 1,787,212
D. Actuarial Value of Assets 602,280 333,944
E. Actuarial Present Value of Future Contrib.
1. Total C - D 1,283,288 1,453,268
2. Portion Assigned to Unfunded Frozen
Actuarial Accrued Liability (UFAAL) 0 0
3. Portion Assigned to Future Normal Costs 1,283,288 1,453,268
CtIFtR~NT~At~~[[;jfl~L COST • - ~~N ~ ~ { ' ~ . ~ <, ~t;,=> ~_
F. Annual Payment Needed to Amortize UFAAL 0 0
As % of B ~_ __
G. Annual Employer Normal Cost 86,608 88,518
As % of B 7.89 % 8.38
H. Interest on F + G from Valuation Date to
Contribution Date(s) 3,620 3,700
As % of B 0.33 % 0.35
I. Required Employer Contribs: F + G + H 90,228 92,218
As °10 of B 8.22 % 8.73
J. Year to which Contributions Apply
1. Plan Year Ending 9/30/06 9/30/04
2. Employer Fiscal Year Ending 9/30/ 9/30/
3. Assumed Date(s) of Employer Contribs. Monthly Monthly
K. Required Employer Contribution for Fiscal
Year Ending 9/30/07 93,869 NA
As % of'06-'07 Payroll 8.22 % ---
li'~~7 ~+AODICI I~I1F~1FD CIIAITLI !L ~'A11ADAwIV
#'., ht 4 ~y. t i ~ A~~ 1.~ -.
~ E y T
Kt~ -L ~d _~~~ x.. ,.c.
As of Oc tober 1
2~5 2003
A. Actuarial Present Value of Projected
Benefits for
1. Active Members
a. Service Retirement Benefits $ 1,535,255 $ 1,434,003
b. Vesting Benefits 42,024 32,187
c. Disability Benefits 248,383 263,556
d. Preretirement Death Benefits 40,636 37,719
e. Retum of Member Contributions 19,270 19.,747
f. Other 0 0
g. Total 1,885,568 1,787,212
2. Inactive Members
a. Service Retirees & Benefits 0 0
b. Disability Retirees 0 0
c. Terminated Vested Members 0 0
d. Total 0 0
3. Total for All Members 1,885,568 '1,787,212
B. Actuarial Value of Assets 602,280 333,944
C. Unfunded Frozen Actuarial Accrued
Liaiblity (UFAAL) 0 0
D. Actuarial Present Value of Projected
Member Contributions 567,010 586,240
E. Actuarial Present Value of Projected
Employer Normal Costs: A3 - B - C - D 716,278 867,028
F. Actuarial Present Value of Projected
Covered Payroll 11,340,206 11,724,805
G. Employer Normal Cost Rate: 100 x E/F 6.32 % 7.39
H. Annual Payroll of Active Members 1,098,039 1,056,797
I. Assumed Amount of Administrative
Expenses 17,212 10,421
J. Employer Normal Cost: (G x H) + I 86,608 88,518
~i f_woo~e~ Dnenen C~e~TU 4 !`nuowuv
5
ACTUARIAL GAINS AND LOSSES
When the actual plan experience differs from the actuarial assumptions, an actuarial gain
or loss is the result. The net actuarial gain (loss) since the last valuation is computed as follows:
A. Normal Cost Rate
1. Last Year 7.39%
2. This Year 6.45
3. Change 0.94
B. Present Value of Projected Payroll $11,340,206
C. Actuarial'Gain (Loss) : A3 x B 106,598
The fund eamings and salary increase assumptions have considerable impact on the cost
of the Plan so it is important that they are in line with the actual experience. The following table
shows the actual fund eamings and salary increase rates compared to the assumed rates for the
last few years:
d
Y
r Investment Return Salary Increases
ing
En
ea
9/30 Actual Assumed Actual Assumed
1994 (0.1)% 8.0% NA 6.0%
1995 21.6 8.4 NA 6.0
1996 12.9 8.0 NA 6.0
1997 22.2 8.0 NA 6.0
1998 12.2 8.0 8.9 6.0
1999 ...---~.~•2-~----- -
.~-~-~ -•~~-° ~..~.6~.0...~- ~ _ _ 6,0 ,
2000 _•
18.7 .
~~ 8.0 11.1 6.0
2001 (10.7) 8.0 28.8 6.0
2002 (3.7) 8.0 12.0 6.0
2003'` 1.2 8.0 3.9 6.0
2004 2.5 8.0 5.0 6.0
2005 11.2 ~ ~,~ 8.0 4.9 6.0
Avers es 7.8 ~ ~~ --- 9.8 ---
* Start Investment Return for General Only
The actual investment return rates shown above are based on the actuarial value of
assets. The actual salary increase rates shown above are the increases received by those active
members who were included in the actuarial valuation both at the beginning and the end of each
period.
l2~oo~c- Dnrn~o C~~~ru 4. f n~~on~w
6
ACTUARIAL ASSUMPTIONS AND COST METHOD
A. Cost Method Aggregate Actuarial Cost Method
B. investment Eamings* 8% per year, compounded annually; net rate after
irnrestment related expenses.
C. Salary Increases* 6% each year up to the assumed retirement age.
D. Inflation 4°Yo per year.
E. Retirement Age Normal retirement date or, if later, one year after
valuation date. Probability of early retirement is 5%
for each year eligible.
F. Turnover Rates See Table below.
G. Mortality Rates 1983 Group Annuity Mortality Tables for males and
females.
H. Disability
1. Rates See Table below.
2. Percent Service Connected 50%.
I. Asset Value Market Value on the valuation date.
J. Administrative Expenses Actual expenses incurred in most recent year.
K. Increase in Covered Payroll NA
L. Post Retirement Benefit Increase NA
* InGuding inflation
A e Employment
Tenmir-ation Rates
Disability>Rates
20 12.4% 0.07%
25 11.7 0.09
30 10.5 0.11
35 8.3 0.14
40 5.7 0.19
45 3.5 0.30
50 1.5 0.51
55 o.s o.9s
so 0.5 1.66
lri`7 Rwon~o~ pnen~o C~a~ru 4 !`n~enw~iv
7
GLOSSARY OF TERMS
Actuarial Present Value is the value of an amount or series of amounts payable at various
times, determined as of the valuation date by the application of the set of actuarial assumptions.
Actuarial Assum tip ons are assumptions as to the occurrence of future events affecting pension
costs. The previous page outlines the Actuarial Assumptions utilized in this valuation.
Actuarial Cost Method is a procedure for determining the Actuarial Present Value of pension
plan benefits and for developing an actuarially equivalent allocation of such value to time periods,
usually in the form of a Normal Cost and Actuarial Accrued Liability.
Aaareaate Actuarial Cost Method is a method under which the excess of the Actuarial Present
Value of Projected Benefits of the group included in the valuation, over the sum of the Actuarial
Value of Assets, and the Actuarial Present Value of Future Member Contribution (if any) is
allocated as a level percentage of earnings of the group between the valuation date and the
assumed retirement age. This allocation is performed for the group as a whole, not as a sum of
individual allocations. The portion of this Actuarial Present Value allocated to a specific year, is
called the Employer Normal Cost. Under this method, actuarial gains (losses) reduce (increase)
future Normal Costs.
~,~` l2noo~ci Cncnco CLLAITU Q. rnAA~Ah~V
8
Cash and Securities -Market Value
Cash and Savings Accounts $ 11,105
-- $ ---
55,828
Money Market Funds -- 697
99
Treasury and Agency Bonds & Notes - ,
24'106
Corporate Bonds -- 257,734
Common Stocks 660
341
Pooled Equity Funds , p
Pooled Bond Funds 231,504 --
OtherSecurities
269
584
437,365
Total ,
Receivables
Accounts Receivable -- ~_
State Contribution
Employer Contribution
20,098 18,108
Employee Contribution 1,897 2,771
t Adjustment
t
I 76
men
nves 071
22 20'879
Total Receivables ,
Payables
Accounts Payable 4,060 6,425
Reserve for Excess State Funds -- _
Other Liabilities
060
4 6,425
Total Payables ,
Net Assets -Market Value r 602,280 ~ 451,819
2woo~c~ Cncncn Curru ~ r`n~~ow~w
9
Income
Member Contributions 56,505 49,605
0
State Contributions 0
335
97 92,218
Employer Contributions , 0
Other Contributions 0
828
55 9,844
Investment Earnings , 0
Other Income 5.0~
Total Income 214,711 151,667
Disbursements
.Monthly Benefit Payments 0 0
0
Lump Sum Distributions 0
038
47 13,694
Refunds of Contributions , 0
Investment Related Expense 0
212
17 20,098
Other Administrative Expense , 0
Insurance Premiums 0 0
Other Expense 0
Total Disbursements 64,250 33,792
Net increase During Period 150,461 117,875
Market Vaiue at End of Period 602,280 451,819
li:fiq Rnoo~c~ Dncnco C\AITtJ Q rnAA~AhIV
FASB N0.351NFORMATION
10/1/05 10/1/03
A. Actuarial Present Value of Accumulated Plan
Benefits
1. Vested .Benefits
Members Currently Receiving Payments $ 0 $ 0
a.
b. Terminated Vested Members 0
867
134 0
86,470
c. Other Members ,
134,7. 86,470
d. Total
2. Non-Vested Benefits 299,103 284,193
3. Total Actuarial Present Value of Accumulated 4
790 370,683
Plan Benefit 1 d+2 ,
4. Accumulated Contributions of Active Members 134,867 86,470
B. Changes in the Actuarial Present Value of
Accumulated Plan Benefits
1. Total Value at Beginning of Period 333,944 294'061
2. Increase (Decrease) During the Period
Attributed to:
\ a. Plan Amendment (14'246)
NA (NA)
~ b. Change in Actuarial Assumption
~ c. Latest Member Data, Benefits Accumulated
and Decrease in the Discount Period.
4
38 -101,392
d. Benefits Paid 7,0
)
~
~ (24,408)
76,602
e. Net Increase '
-
3. Total Value at End of Period 433,790 370,663
C. Market Value of Assets 602,280 333,944
10
f~~ ........_. ~.._..__ ~..._.. a ,._.........
N
N
.-.
~ N
az
Z
Z
LL
LL N
O
W N
~~
wv
U
w I
A
o ~-:~
~ ~ D
Q~>,
QJ` V a
Q
.0 ~,
a, t}
oa
v
0
:«~
ett
~ ~,
C
LL
Jqq
J ~
~ 1
C~~
C
J ~
•~ m ~ a
,~ ._.
t~ C~~WS
as ~ ,
:J
m
~ N
~ m
e~ a
•~
~~+
v
Q
-~+
_ ~
,`
Q
Q
0
~~no~ao
~o~mui
v
MMf~tiO
~N(OOM
M O d_I~ O
O N ~ O O
~~
~ 1~ C4 DO M
~ p ~ N ~
~N~c-~
OOpMMM
N N ~ ~ M
N O QO ~ O
N~Efi00cM
r
~~"~~
O W NCON
ch M oO aD ~t
~ 00 00 V' N
N'~ NCO
~ M N N ~
rnti~ o
~A O N ~ M
CO OD f~ N
~MOpMN
M00VC70
OCpNM(fl
r
pp i
O d 0 0 0
~ ~ ~ ~
r r r r r
O O O O O
r r r r r
T
C
O
C
N
d
m
N
C
N
'C
r~
VJ
~ C
Q. O
'~ ~ - __.
mE
w
N C
m
pL
c m
~ m
~~
T
0- O
C
~w
w~
~~
o~
m o
~a
~~
~ c
~ a
m
L
m N
'~ t0
C V
Il C
O O
O N
m y
N
~j ~ c
.o
°~
'L. j N
3~
N
Q to ~p
~' m C
~O ~
~, ~
w m 'a~
a~~
~ m o
r
3 ~ 3
~ ~ O
a ~
N N N
O ~
N Z
~ rmn 'D
m V
Z
12
SCHEDULE OF EMPLOYER CONTRIBUTIONS
(GASB Statement No. 25}
Fiscal Year Ended
Annual I~equimd Percen
Cor~rib~ ~'
Se tember 30 Cor+trfbuhorl Contributions
1997 $ 11,399 $ 11,400 100.0%
0
100
1998 13'~ 13,440
456
17 .
100.0
1999 17,456
456
17 ,
26,053 149.2
2000
2001 ,
.
12,887 36,983 287.0
2002 41,607 48,124- 115.7
0
108
2003 64,723 69,869
218
92 .
100.0
2004 92,218
949
95 ,
95,949 100.0
2005 ,
13
ANNUAL PENSION COST AND NET PENSION OBLIGATION
(GASB Statement No. 27)
Employer Fiscal Year End September 30: 2006 2005 2004
A. Annual Required Contribution (ARC) ~ 90,228 $ 95,949 $92'218
B.
Interest on Net Pension Obligation (NPO) 3,391
( ) 3,426
( ~ 3,461
( )
C. Adjustment to ARC (4,105) (3,860) (3,9~)
D. Annual Pension-Cost (A+B-C) 90,942 96,383 92,657
E. Actual Contributions 95,949, 92'218
F. NPO at beginning of year (42,392) (42,826) (43,265)
G. Increase (decrease) in NPO (D-E) * 434 439
O t d of ear (F+G) * (42,392} (42,826)
H. NP a en y
* To be determined
THREE-YEAR TREND INFORMATION
Fiscal
Year Endi~
9/30103
9/30104
9/30/05
Annual Pension Actual .Percentage of
APC Contributed Ne# Pension
Obligation
Cost (APC) Contribution
$ 65,157 $ 69,869 5 %
1 $ t ~~ 6~
92,657
96,383 92,218
95,949 99.
99.5 (42,392)
REQUIRED SUPPLEMENTARY INFORMATION
GASB Statement No. 25 and No. 27
The information presented in the required supplementary schedules was determined as
part of the actuarial valuations at the dates indicated. Additional information as of the
latest actuarial valuation:-
Valuation date October 1, 2005
Contribution Rates 8
22%
Employer (and State) .
Plan members 5%
Actuarial Cost Method Aggregate
Amortization Method NA
Remaining amortization period NA
Asset Valuation Method Market Value
Actuarial Assumptions
Investment rate of return 8.0%
Projected salary increases 6.0%
4
0%
InGudes inflation and other general increases at .
Cost of Living adjustments Not Applicable
14
00000000
OO NMt~O~OOOOON 0000000
O
p r
r
O 0 0 0 0 0 0 00
Q ~Q (yam jOOOOO~ 0000000
F-- ~ ~ N v I N
T
o a°
0. T''
w m
00 :.
((~', 'C)
~'
LL QC
~ Q]
Z ~ aN.. C
~ ~ C O 7+
Q ~ ~ N ~ ~ ~
~ ~ ~
io c ~`• m L, c
z ~~ m~ ~ o o ~ o ~a o~ o
Q °~~o ~ mL ~ ~ ~ma`~isZ~ ~
V 3 ~ Et, - ~ ~
~ m ~ ~• ~~> ~~~ is
~ ~ iaC~~ ~ j ~ > E > ~- ~ m iii 3Z ~_
i-v ~ m ~ ~ ~~ ~~ ~ ~' ~ m cZZ ~
J ~ ~ ~ ~ H „O J > C ~ C d ` •C ? E c C ~` ~
` r ~
O L. W 'C3 ~ O U v m C~ ~ ~ ~ ~ 'C O
~ ~~ ~ ~ m~ c a,- ~ y ~~ ~ ~ L N N~~~j
r ~
~ to W ~ C ~ N
O ~ ~ ~ ~ ~ ~ N ~ m ~ m O O ~ L O ~ ~
m ~gjm~~~~~ ~~ ~°°'~mmE '~ Eisa~~-a~~
E 3 c n Z N ~~ ~ m ~v ~ m m~ ~ ~-vv m m c
Q zzz>ii~ooOz F- zQ~aoOz c~i zQQOOwOz
~NM~~1jcOt~ ~NCM~~tO(~OD
Q, ~NMsrto(Of~000 ~ O.
16
Active Members
Number
tal Annual Payroll $
T
10
253,183
20
$ 866,463
25
$1,056,797
24
$1,098,039
o
Average Annual Salary
25,318
43,
42,272
43,162
Other Averages
36
6 40 9 42.8 ~•1
Current Age
Age at Employment .
34.9
39.1
41.1 40.6
6
2
Past Service
1.7
1.8
1.7
.
Service Retirees and Beneficiaries
Number 0 0 0
$ ~ 0
$ w
Total Annual Benefit $ - $
'- _
- w
Average Monthly Benefit -- '-
DisabiFity Retirees..:
Number 0 p 0
$ ~ 0
$ _-
Total Annual Benefit $ --- $
'- ___
Average Morrthly Benefit ---
Terminated Members Vlfith Vested Benefits
0 0 0 ~
Number $ $ __
Total Annual Benefit $ -- $ "' M
Average Monthly Benefit -- -' -
~~ GABRIEL, ROEDER, SMITH 8<COMPANY
11
SUMMARY OF PLAN PROVISIONS
Eligibility
All full-time general employees hired after December 31, 1995 are eligible for membership
on date of employment.
Compensation
Base-.pay excluding overtime and any lump sum payments.
Average Final Compensation (AFC)
Average of Compensation over the five best years within the last -ten years of service;
does not include lump sum payments of unused leave.
Cn:dited Service
Number of years and fractional parts of years of service.
Normal Retirement
Eligibility - The earlier of age 62, or 30 years of Credited Service, regardless of age.
Benefit - 2% of AFC multiplied by Credited Service; maximum benefit is 100% of
AFC.
Form of Benefit -Ten year certain and life annuity, with other options available.
Early Retirement
Eligibility - Age 50 with six years of Credited Service.
Benefit - Accrued pension benefit teduced by 5% for each year early.
Death Benefits Pre-retirement
Upon the death of any vested member, whether or not still in active employment, a
survivor benefit is payable to the beneficiary starting when the member would have
reached retirement age. The benefit payable is equal to the vested .pension benefit.
Service Incurred Disability
Eligibility - Continuous and permanent incapacity for rendering .useful and efficient
service.
Benefit - Greater of the accnaed pension benefit or 42% of AFC.
Y
11
Non-Service Incurred Disability
Eligibility - Continuous and permanent incapacity for rendering useful and efficient
service and 6 years of credited service.
Benefit - Greater of the accrued pension benefit or 25% of AFC.
Termination Benefits
For a member who is not vested when he terminates, a refund of his accumulated
contributions is payable. For a member who is vested when he terminates, his vested
accrued benefit. is payable at his Normal Retirement Date. The vesting schedule is as
follows:
Years of Vested
Creditefi Service -. -°lo
Under 6 0%
6 or more 100
Contributions
From Members - 5% of Compensation.
From the Employer - The remaining amount necessary to fund the Plan properly
according to the Plan's actuary.
Changes Since Last Valuation:
The Non-Duty Disability service requirement has been increased to six years of service.