HomeMy WebLinkAboutDocumentation_Miscellaneous_Tab 10A_09/29/1994 d�� THE.�"'v.� .
DEPAR � - EMEIVi' �
SE �t~�ES _ ��
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LAWI'ON CHILES DIVISION OF RETIREMENI' �LL1M4 H. LINDNER
GOVERNOR SECRETARY
. Cedars Fxecutive Center � Building C� 2b39 North Monrce Street � Tallahassee, �. s2399-�2�26 Z� �829�
. �,ti � �i
August Z5, 1994 N, ��� rs9 �
o �...��� �„� .�
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Ms. Joyce J. Case, Manager �
Risk Administrative Services � ��.`'� } c�"
Fl�rida League of Cities, Inc. l��� ` �� a ��
P.C. Box 1757
Tal:'.ahassee, FL 32302-1757
RE: Village of Tequesta Municipal Firefighters' Pension Trust Fund
October 1, 1993 Actuarial Valuation Report .
Dear Joyce:
We nave completed our review of the referenced report, and we have.determined
it �`o be state accepted.
The legislative intent in s.112.61, F.S., provides, in part, that governmental
r�t�rement plans are to be funded in such a manner as to maximize the protec-
tic�n of public employee retirement benefits, that the pens�on liabilities
att�ibutable to the benefits promised public employees be fairly, orderly and
equ_itably funded by the current, as well as future, taxpayers, and prohibits
the use of any procedure, methodology, or assumptions the effect of which is to
transfer to future taxpayers any portion of the cost which may reasonably have
been expected to be paid by the current taxpayers. Consistent with this intent,
yeu•r actuary is requested to use appropriate actuarial techniques in all future
actuarial determinations to take into account in the annual funding cost a
cur.rent mortality assumption. At this time, for healthy lives, it will be
act:�ptable to use any mortality assumption with life expectancies equivalent to
or greater than such expectancies using the GAM 1983 mortality assumption.
(Alternatively, the assumption in use may be considered satisfactory by
der.�onstrating that it does not yield continuing non de minimus actuarial
losses )
Should you hav� any questions, please do not hesitate to contact us at (904)
488-2784 (SUNCOM 278-2784).
Sincerely,
� C �� r ' i ---�E••�
Charles S1'avin, Actuary
Bureau of Program Services
CS/lc/je
cc: Bill Kascavelis
Harry Boggs
Patricia Shoemaker
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` VILLAGE OF TEQUESTA MUNICIPAL FIREFIGHTERS'
PENSION TRUST FUND
� ACTUARIAL REVIEW -- OCTOBER 1, 1993
F4R USE DURING THE FISCAL YEAR BEGINNING 10/01/93
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' FLORIDA MUNICIPAL PENSiON TRUST FUND
SPONSORED AND ADMINISTRATED BY THE
� FLORIDA LEAGUE OF CITIES, INC.
201 W. PARK AVE
TALLAHASSEE, FLORIDA 32302
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REVIEf,1 OF COST
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' Su�ary of Valuation Results 10/Ol/93
Number Covered
' Active . 12
Retired
Disabled �
� (receiving Benefits from System) �
Vested Terminations �
Beneficiaries Receiving Death Benefits �
' Covered Annual Payroll
Total
Under Assumed Retirement Age 312,626
' 312,626
Present Value of Retirement Benefits
Total
Accrued to Date and Vested 831,103
, 426
Assets
' Market 1,653
Actuarial 426
Unfunded Accrued (Past Service) Liability �
' Total Normal (Current Year's) Cost
� of Payroll 67,022
� 21.47
Minimum Funding of the Unfunded
Accrued Liability �
' 7 of Payroll 0.07
Other (Previous) (Surplus)/Deficit �1�22��
' ' of Payroll 0.47
Total Required Annual Contribution 65,795
7 of Payroll 21.07
' Source of Contributions
Members 15,631
7 of Payroll 5.07
Non-Employee Contribution* 50,164
' of Payroll 16.07
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*See Page 9 for Details
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ACTUARIAL BASIS
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' What Is An Actuarial Valuation?
An Actuarial Valuation is a mathematical device for measuring the liabilities
' under a pension plan and to determine a schedule of contributions to finance the
plan. The actual cost of a pension plan cannot be dtermined until its entire
experience is complete; however, actuarial techniques determine a pattern of
' contributions which will finance the liabilities in an orderly fashion. Assumptions
are made regarding future experience in regard to the rate of investment return
on invested funds, the probability of death, disability and other terminations
from employment, the rate of future salary increases, etc. The set of actuarial
' assumptions and the valuation method selected by the actuary become the basis
for making a valuation of the pension plan. The degree of conservatism to be
reflected in the actuarial assumptions is a matter of judgement of the actuary,
' who is charged by the Employee Retirement Income Security Act with the
responsibility of selecting assumptions which, in the aggregate, offer his best
estimate of anticipated experience under the plan.
' An Actuarial Valuation does not determine ultimate pension plan costs; only
the actual experience in regard to the many variables involved will establish the
' true cost of the plan. An Actuarial Valuation, however, reveals the year to year
incidence of contributions necessary to soundly fund pension benefits. The
incidence of contributions, or "funding schedule," may be increasing, level or
decrease from year to year as a percent payroll, depending on the actuarial funding
' method utilized. Annual actuarial valuations are made to adjust contributions
gradually as actual experience emerges. Changes in the assumptions may be required
if the experience consistently departs from the valuation assumptions.
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Description of Aggregate Actuarial Cost Method
, The valuation method used in this report is the "Aggregate Actuarial Cost"
funding method. Under this method of actuarial valuation, the present value of
benefits, less all assets, are equated to the present value of future employer
, contributions, and of future employee contributions, if any. The required
contribution is then expressed as a percentage of current payroll.
, Because actuarial assumptions will not prove to be exactly correct in the
future, the actual contribution rate will vary from year to year either up or
down as actual experience departs from that assumed.
' In other words, there will be actuarial gains or losses each year arising from
mortality, turnover rates, salary increases, new entrants and investment gains or
' losses, as experience differs from the actuarial assumptions made in the valuation.
Under the aggregate actuarial cost method, the unfunded value of future benefits,
adjusted for these gains and losses is, in effect, amortized over the future
active working years of the employees. The effect of this procedure is to spread
' the gains and losses over future years, thus avoiding sharp fluctuations in the
rate of employer contributions.
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COST CERTIFICATION
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As requested, I have determined the costs arising under the Village of
, Tequesta, Florida -- Municipal FIrefighters' Pension Fund for the year
beginning October 1, 1993.
' Calculations have been based on the employee data and ottier information
furnished by the Village and the Florida League of Cities.
' This actuarial valuation is complete and accurate, and in my opinion, the
techniques and assumptions used are reasonable and meet the requirements and
intent of Part VII, Chapter 112, Florida StaCutes. There is no benefit or
, expense to be provided by the Plan and/or paid from the plan's assets for which
liabilities or current costs have not been established or otherwise provided
for 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.
' Enrollment Number 94-2423
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M RRAY E HEN DATE
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ACTUARIAL ASSDMPTIONS FOR VALIIATION OF LIABILITIES
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1. Assumptions Concerning Future Events:
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Sample Values
(Rates are per 1,000 lives)
� Age: 20 30 40 � 50 60
Mortality Rate
� Before and after retirement: The 1984 Unisex Pension Table (UP-84).
I Disability Rate:
Male: 0.30 0.40 .70 4.80 0.00
� Female: 0.30 0.40 .70 4.80 0.00
Withdrawal Rate
I Male: 80.0 64.0 20.0 00.0 0.00
Female: 80.0 64.0 20.0 00.0 0.00
� Salary Scale
6.07 Per Annum
I Rate of Death and Recover Among
Disabled Lives 1984 Unisex Pension Table (UP-84).
1 Rate of Retirement
Assume early retirement occurs according to withdrawal rate table; others at the
( later of normal retirement date or the valuation date.
Interest Rate
� 87 Per Annum
� Disability Benefit Assumptions 75� Service, 257 Non-Service.
, Death Benefit Assumptions 20� Service, 807 Non-Service.
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VILLAGE OF TEQUESTA, FLORIDA
MUNICIPAL FIREFIGHTER.S' PENSION FUND
PRESENT VALUE OF F.%PECTED BENEFITS
AS OF OCTOBER 1, 1993
Active Participants
Retirement
Vesting & Refunds
Disability
Death
Total
Retired and Separated
Longevity
Disability
Beneficiaries �
Vested Termination
Total
Present Value of F.gpected Benefits
Present Value of Future Salaries
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10/1/93
690,766
46,682
61,176
32,479
831,103
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831,103
4,056,243
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NORMAL COST DEVELOPMENT FOR PLAN YEAR
BEGINNING OCTOBER 1, 1993
(1) Present Value of Expected Benefits
(2) Actuarial Value of Assets
(3) Present Value of Future Contributions (1)-(2)
(4) Present Value of Future Employee Contributions
(5) Present Value of Future Non-Employee Contributions (3)-(4)
(6) Present Value of Future Payroll
(7) City Normal COst Rate (5)-(6)
(8) Expenses
(9) Normal Cost Payroll
(10) Non-Employee Normal Cost (7)x(9)+(8)
Beginning of Fiscal Year - 10/1/93
End of Fiscal Year - 9/30/94
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10/1/93
831,103
426
830,677
202,812
627,865
4,056,243
15.47907
3,000
312,626
51,391
55,503
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DEVELOPI�NT OF NON—II�LOYEE COSTS
FOR PLAN YEAR
BEGINNING OCTOBER 1, 1993
Normal COst (10/1/93)
Amortization of Unfunded Liability
Total Non-Employee Benefit Cost (10/1/93)
Deficit/(Surplus) as of 10/1/93*
Total Non-Employee Contribution for Plan Year**
(i) Beginning of Plan Year (10/1/93)
(ii) End of Fiscal Year (9/30/94)
Estimated State Contributions
(i) Beginning of Fiscal Year (10/1/93)
(ii) End of Fiscal Year (9/30/94)
Estimated Minimum City Contributions
(i) Beginning of Fiscal Year (10/1/93)
(ii) End of Fiscal Year (9/30/94)
Cost
51,391
0
51,391
1,227
50,164
54,177
8,148
8,800
42,016
45,377
x of Pay
16.47
0.07
16.47
0.07
16.07
17.37
2.67
2.87
13.47
14.57
*Prepaid Employer Contribution.
**This is the minimum amount which must be contributed to the trust excluding employee
contributions. It includes payments from the State.
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Comparative Summary of Principal Valuation Results
A. Participant Data
Number Included
Active
Retirees
Beneficiaries
Disabilities
Vested Terminated
Total Annual Payroll
All Actives Included
Below Retirement Age
Total Annual Payment of Benefits to Retirees
and Beneficiaries
B. Assets
Actuarial Value
Statement Value (using MV of Stocks, Market
Value of Bonds)
C. Liabilities
Present Value of Benefits Total (Future)
Accrued to Date and Vested
Unfunded Actuarial Accrued Liability
Employee Contributions
D. Pension Cost
Normal Gost (Total)
Payment Required to Amortize Unfunded Liability
Total Required Contributions
Deficit/(Surplus)
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Valuation
10/1/93
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312,626
312,626
0
426
1,653
831,103
426
0
426
67,022
21.4�
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0.0�
67,022
21.47
(1,227)
0.47
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Total Required Contributions (including normal costs,
amortization payment(s), and interest, if any.
As of � of Payroll
Estimated Member Contributions
Non-Member Contributions
Estimated Premium Tax Refund
Remaining Amount to be Contributed by City
As a� of Payroll (Beginning of Year)
E. Schedule Illustrating The Amortization of Unfunded Liabilities
Projected Unfunded
Year Accrued Liability � of Payroll
10/1/93 0 0.07
10/1/94 0 0.07
10/1J95 0 0.07
10/1/96 0 0.0�
F. Comparison of Actual and Assumed Annual Salary Increase
Year Ended Actual Assumed
N/A N/A N/A
G. Comparison of Actual and Assumed Annual Investment Return
Year Ended Actuarial Assumed
N/A N/A N/A
H. Required Contribution for Year Endin 09/30/93
N/A
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65,795
21.0'
15,631
S.OZ
50,164
16.07
8,148
2.67
42,016
13.4%
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I. Entry Age Present Values
Benefits
Salaries
Employee Contributions
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10/1/93
820,278
3,975,961
198,798
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VILLAGE OF.TEQUESTA, FLORIDA
MUNICIPAL FIREFIGHTERS' PEpSION FUND
PENSION BENEFIT OBLIGATIONS
Inactive
Retirees and beneficiaries currently receiving benefits
and terminated employees not yet receiving benefits
Current Employees
Employee Contributions
Vested Benefits - Employer Financed
Non-Vested Benefits - Employer FInanced
Total Pension Benefit Obligation
Net Assets Available for Benefits at Market
Unfunded Pension Benefit Obligation
Present Value of Vested Accrued Benefits
7 of Funded
Present Value of Accrued Benefits
7 of Funded
Change in Pension Obligations
a. Pension Benefit Obligations as of 10/1/92
b. Increase due to benefit accruals for additional
service,�time, salary increases, and cost of living
awards. This also includes deviations from expected
actuarial contingencies.
c. Benefit payments to pensioners and refunds.
d. Pension benefit obligations as of 10/1/93.
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N/A
N/A
N/A
8,236
10/1/93
C
426
0
7,810
8,236
1,653
6,583
426
388�
3,076
547
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ANALY.SIS OF LIVES
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' I. Key Statistics Relating to Estimated Active Employees
Number of Employees
, Annual Earnings
' Annual Earnings Under Retirement Age
Averages.
� Current Age
Past Service
Age at Hire
' Annual Earnings
II. Rey Statistics Relating to Retired Emploqees
' Number of Employees
� Total Annual Pensions
Average Annual Pensions
' III. Rey Statistics Relating to Terminated Employees with
Deferred Vested Pensions
� Number of Lives
Total Annual Pensions
, Average Annual Pensions
' ID. Rey Statistics Relating to Beneficiaries Receiving
Benef its
Number of Lives
' Total Annual Pensions
' Average Annual Pensions
V. Key Statistics Relating to Disabled Emploqees
' Receiving Benefits
Number of Lives
' Total Annual Pensions
Average Annual Pensions
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10/1/92
0
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N/A
N/A
N/A
N/A
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10/1/93
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312,626
312,626
31.5
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31.6
26,052
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RECONCILIATION OF PARTICIPANT DATA
VALIIATION GROIIP
Terminated
Active Retired Vested Disabled
Participant Participant Beneficiaries Participants Participants Total
1. As reported in 10/1/92 valuation. 0 0 0 p � 0
2. Terminated:
a. with vested benefits
b, without vested benefits
3. Died:
a. with eligible spouse
b. without eligible spouse
4. Lump sum distributions
S. Disabled
6. Retired & vested retired
7. Re-employed
8. New Entrants 12 12
9. Cessation of benefit payments
10. As reported in 10/1/92 valuation 12 0 0 p � 12
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ACTIVE MQ�iBERS - yEARg pg SERVICE
�e 0-1 2-4 5-9 10 14 15 19 20 24 25 � DP TOTAL
16 to 20 0 0 0 0 0 0 0 0
21 to 25 3 0 0 0 0 0 0 3
26 to 30 6 0 0 p p � O 6
31 to 35 0 0 0 p p � 0 0
36 to 40 2 0 0 0 0 0 0 2
41 to 45 1 0 0 0 0 p O 1
46 to 50 0 0 0 0 0 0 0 0 �
51 to 55 0 0 0 p � 0 0 0
56 � Over 0 0 0 0 0 0 0 0
TOTAL 12 0 0 0 0 0 0 12
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SUl4lARY OF RECEIPTS AND DISBDRSII�NTS
SEPTE[�ER 7, 1993 — SEPTII�IBER 30, 1993
Market Value of Assets as of September 7, 1993
Receipts:
Interest, Realized and Unrealized Gains
Contributions-
Employees
City
State
Other
Adjustments
Disbursements
Contribution Refunds
Benefit Payments-
Retirement
Beneficiary
Disability
Expenses
Other
Total Disbursements
Market Value of Assets as of September 30, 1993
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426
1,227
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1,653
0
1,653
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DETERMINATION OF ACTUARIAL VALUE OF ASSETS
OCTOBER 1, 1993
Market Value of Stocks and Other Securities
Market Value of Government Obligations & Corporate Bonds
and Debentures
Cash & Cash Equivalents
Other
Total Assets
Interest Receivables
Accounts Receivables
Accounts Payable
Total Assets
Prepaid Employee Contributions
Actuarial Asset Value
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882
712
59
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1,653
0
0
0
1,653
1,227
426
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PLAN OUTLINE FOR THE MUNICIPAL FIREFIGflTERS'
RETIRII�iENT PLAN AND TRUST FUND OF THE VILLAGE OF TEQIIESTA, FLORIDA
Plan: The Village of Tequesta Municipal Firefighters' Pension Trust Fund as
amended through September 30, 1992.
Eligibility: All Firefighters, as of the effective date and all future new
Firefighters when hired, shall become a participant.
Sa�: With respect to a Firefighter, compensation means, base compensation
to include regular earnings, vacation pay, sick pay, longevity and periodical
inactive pay, plus all tax deferred items; excludes lump sum payments.
Credited Service: Total number of years and fractional parts of years of
service in completed months measured from date of employment.
Final Monthly Compensation: One-Twelfth of the highest average earnings during
the five best succesive years out of the last ten years of creditable service
prior to separation as an active member.
Accrued Benefit: Means a fraction of the normal retirement benefit to which
a participant would be entitled at their Normal Retirement Date based on final
monthly compensation. The numerator of the fraction is the years of participation
at the time of serverance and the denominator is the years of participation in
the Plan that would have occrured at their Normal Retirement Date.
Normal Retirement Date: The first of the month coincident with or next following
the date of attainment of age 55 and 10 years of service or earlier attainment
of age 52 and 25 years of service.
Normal Retirement Benefit: The monthly retirement benefit shall be equal to
number of years of credited service multiplied by 3.07 and multiplied by final
monthly compensation.
Normal Form of Benefit: The normal form of benefit is a ten (10) year certain and
' life annuity.
Termination of Service Benefit: If a member terminates before completing 10 years
' of credited service all contributions are returned. After the completion of 10
years of credited service, any member who elects to leave their contributions
in the fund will receive their accrued benefit at their normal retirement date.
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Disabilitq (On-Duty): A member deemed to be totally and permanently disabled
from service connected injury or disease will receive the greater of (a) or (b):
(a) Monthly pension equal to 427 of average compensation based on final
5 years of service, or
(b) An amount equal to years of credited service multiplied by 37 of average
monthly salary based upon final 5 years of service.
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Disability (Off-Duty): A member deemed to be totally and permanently disabled
from a Non-service cause shall be entitled to the greater of (a) or (b):
(a) Monthly pension equal to 257 of average compensation based upon final
5 years of service, or
(b) An amount equal to the number of years of his credited service multiplied
by 37 of his average monthly salary based upon final S years of service.
Pre-Retirement Death Benefit: Firefighters' beneficiary shall receive:
(a) Line-of-Duty-Death: Benefit of SOZ of average compensation for life
or remarried.
(b) Non-Line-of-Duty-Death: Benefit to the spouse of a member with 10 years
of credited service is the actuarial equivalent of the accrued normal retirement
benefit.
Post-Retirement Death Benefit: Optional forms that are actuarial equivalent to
the normal form of benefit may be chosen with Board and beneficiary approval.
Employee Contributions: All participants contribute 57 of their compensation.
THIS IS INTENDED AS AN OUTLINE OF PLAN PROVISIONS AND DOES NOT ALTER THE INTENT
OR MEANING OF THE PROVISIONS CONTAINED IN THE PLAN DOCUMENTS (ORDINANCE).
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