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Home My WebLink AboutPension General_Documentation_Tab 02_08/06/2007'GRS C~'_i~r'gel .~~~e~~ 5 <~~ka; t°-'_ pct==*~~FTy 307 East Las Olas Elvd. 94.527.1616 phone Consultans ~ F.cnte.ries Suite 200 954.525.0083 fax Ft. Lauderdale, FL 3 330 I -2254 www.gabrielroeder.com August 3, 2007 Ms. Betty Laur Village of Tequesta 345 Tequesta Drive Tequesta, Florida 33469 Re: Proposed changes to General Employees Pension Trust Fund Dear Betty: Enclosed is the Supplemental Actuarial Valuation Report which shows the financial effect of incrementally increasing the Benefit Multiplier by one-tenth of a percent, from 2.0% to 2.5% for Tequesta General Employees' Pension Trust Fund. This report is intended to describe the financial effect of the proposed plan changes. No statement in this report is intended to be interpreted as a recommendation in favor of the changes, or in opposition to them. The calculations are based upon assumptions regarding future events, which may or may not materialize. They are also based upon present and proposed plan provisions that are outlined in the report. If you have reason to believe that the assumptions that were used are unreasonable, that the plan provisions are incorrectly described, that important plan provisions relevant to this proposal are not described, or that conditions have changed since the calculations were made, you shoula contact the author of this report prior to relying on information in the report. If you have reason to believe that the information provided in this report is inaccurate, or is in any way incomplete, or if you need further information in order to make an informed decision on the subject matter of this report, please contact the author of the report prior to making such decision. In the event that more than one plan change is being considered, it is very important to remember that the results of separate actuarial valuations cannot generally be added together to produce a correct estimate of the combi!~ed effect of all of the changes. The total can be considerably greater than the sum of the karts due to the interaction of various plan provisions with each other, and with tt~e assumptions that must be used. Ms. Betty Laur Page 2 We welcome your questions and comments. Respectfully submitted, -'~ .. dc4- ~ .~~,__ ~- . / J. Stephen Palmquis#, ASA Senior Consultant and Actuary JSP/tb Enclosures Gabriel Roeder Smith & ~onipany SUPPLEMENTAL ACTUARIAL VALUATION REPORT Plan Village of Tequesta General Employees Pension Trust Fund Valuation Date October 1, 2005 Date of Report August 3, 2007 Report Requested by Pension Board Prepared by J. Stephen Palmquist Group Valued All active employees Plan Provisions Being Considered for Change Present Provision Before Change Normal Retirement Benefit 2% of AFC multiplied by Credited Service; maximum benefit is 100% of AFC. Proposed Changes Normal Retirement Benefit 2.1% (or 2.2%, or 2.3%, or 2.4%, or 2.5%) of AFC multiplied by Credited Service; maximum benefit is 100% of AFC. Participants Affected All active General Employees Actuarial Assumptions and Methods Same as October 1, 2005 Actuarial Valuation Report with no exceptions. Some of the key assumptions/methods are: Investment return - 8.0% per year Salary increase - 6.0% per year Cost Method -Aggregate Amortization Period for Any Increase in Actuarial Accrued Liability NA Summary of Data Used in Report NA Actuarial Impact of Proposal(s) See attached page(s). Special Risks Involved With the Proposal That the Plan Has Not Been Exposed to Previously None Other Cost Considerations None Possible Conflicts With IRS Qualification Rules None J. tephen Palmquist, ASA MAAA, FCA Enrolled Actuary 05-1560 TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND SUMMARY OF VALUATION RESULTS As of October 1 2005 2005 2005 2005 2005 2005 COVERED GROUP Valuation 2.1 % Benefit Multiplier 2.2% Benefit Multiplier 2.3% Benefit Multiplier 2.4% Benefit Multiplier 2.5% Benefit Multiplier A. Number Included in the Valuation 1. Active Members 24 24 24 24 24 24 2. Inactive Members 0 0 0 0 0 0 B. Covered Annual Payroll $ 1,098,039 $ 1,098,039 1,098,039 1,098,039 1,098,039 $ 1,098,039 LONG RANGE COST C. Actuarial Present Value of Projected Benefits 1,885,568 1,968,773 2,052,308 2,136,113 2,220,191 2,304,552 D. Actuarial Value of Assets 602,280 602,280 602,280 602,280 602,280 602,280 E. Actuarial Present Value of Future Contrib. 1. Total C - D 1,283,288 1,366,493 1,450,028 1,533,833 1,617,911 1,702,272 2. Portion Assigned to Unfunded Frozen Actuarial Accrued Liability (UFAAL) 0 0 0 0 0 0 3. Portion Assigned to Future Normal Costs 1,283,288 1,366,493 1,450,028 1,533,833 1,617,911 1,702,272 CURRENT ANNUAL COST F. Annual Payment Needed to Amortize UFAAL 0 0 0 0 0 0 As % of B ___ G. Annual Employer Normal Cost 84,961 92,977 101,102 109,228 117,353 125,479 As % of B 7.74 % 8.47 % 9.21 % 9.95 % 10.69 % 11.43 H. Interest on F + G from Valuation Date to Contribution Date(s) 3,551 3,886 4,226 4,566 4,905 5,245 As % of B 0.32 % 0.35 % 0.38 % 0.42 % 0.45 % 0.48 I. Required Employer Contribs: F + G + H 88,512 96,863 105,328 113,794 122,258 130,724 As % of B 8.06 % 8.82 % 9.59 % 10.36 % 11.13 % 11.91 J. Year to which Contributions Apply 1. Plan Year Ending 9/30/06 9/30/06 9/30106 9/30/06 9/30/06 9/30/06 2. Employer Fiscal Year Ending 9/30/06 9/30/06 9/30/06 9/30/06 9/30/06 9/30/06 3. Assumed Date(s) of Employer Contribs. Monthly Monthly Monthly Monthly Monthly Monthly K. Required Employer Contribution for Fiscal Year Ending 9/30/07 92,042 100,721 109,514 118,307 127,100 136,008 As % of '06-'07 Payroll 8.06 % 8.82 % 9.59 % 10.36 % 11.13 % 11.91 TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND DERIVATION OF EMPLOYER NORMAL COST As of October 1 2005 2005 2005 2005 2005 2005 Valuation 2.1 % Benefit Multiplier 2.2% Benefrt Multiplier 2.3% Benefit Multiplier 2.4% Benefit Multiplier 2.5% Benefit Multiplier A. Actuarial Present Value of Projected Benefits for 1. Active Members a. Service Retirement Benefits $ 1,535,255 $ 1,612,014 $ 1,688,779 $ 1,765,540 $ 1,842,302 $ 1,919,066 b. Vesting Benefits 42,024 43,635 45,287 47,010 48,760 50,581 c. Disability Benefits 248,383 251,185 254,272 257,560 261,095 264,840 d. Preretirement Death Benefits 40,636 42,669 44,700 46,733 48,764 50,795 e. Return of Member Contributions 19,270 19,270 19,270 19,270 19,270 19,270 f. Other - - _ _ _ _ g. Total 1,885,568 1,968,773 2,052,308 2,136,113 2,220,191 2,304,552 2. Inactive Members a. Service Retirees & Benefits - - - _ _ _ b. Disability Retirees - - - _ _ _ c. Terminated Vested Members - - - _ _ _ d. Total - - _ _ _ _ 3. Total for All Members 1,885,568 1,968,773 2,052,308 2,136,113 2,220,191 2,304,552 B. Actuarial Value of Assets 602,280 602,280 602,280 602,280 602,280 602,280 C. Unfunded Frozen Actuarial Accrued Liaiblity (UFAAL) - - _ _ _ _ D. Actuarial Present Value of Projected Member Contributions 567,010 567,010 567,010 567,010 567,010 567,010 E. Actuarial Present Value of Projected Employer Normal Costs: A3 - B - C - D 716,278 799,483 883,018 966,823 1,050,901 1,135,262 F. Actuarial Present Value of Projected Covered Payroll 11,340,206 11,340,206 11,340,206 11,340,206 11,340,206 11,340,206 G. Employer Normal Cost Rate: 100 x E/F 6.32 % 7.05 % 7.79 % 8.53 % 9.27 % 10.01 H. Annual Payroll of Active Members 1,098,039 1,098,039 1,098,039 1,098,039 1,098,039 1,098,039 I. Assumed Amount of Administrative Expenses 15,565 15, 565 15,565 15,565 15, 565 15, 565 J. Employer Normal Cost: (G x H) + I 84,961 92,977 101,102 109,228 117,353 125,479 VILLAGE G. , EQUESTA VILLAGE EMPLOYEES PENSION -GENERAL \~~ Expenditures 2006 2006 Expenses 10/1/06 to 2007 2007 Adopted 2008 2008 Adopted Budget Actual 3/31107 Estimate gud et Estimate gud et Dept: 000 General Acct Class: 530 Operating Expenditures/Expense 531.301 Legal Services - 3,250 1,687 4,049 4,049 4,500 4 500 (Hanson, Perry & Jensen) , 531.304 Recording Secy Service - 1,104 193 772 772 1,000 1 000 (Business Services Connection) , 531.307 Investment Services - 10,034 3,272 6,544 6,544 7,000 7 000 ((Salem, Bogdahn, Rockwood Capital) , 531.309 Actuarial Services - 4,500 1,561 ~, 2,600 4 500 4 500 (Gabriel, Roeder, Smith) , , 534.300 Other Contractual Services _ _ _ 540.300 Travel & Per Diem - ~~ - - - 1,000 1,000 545.300 Insurance - 907 839 839 839 1 000 1 000 (Acordia Liability Insurance) , , 549.300 Other Misc Chgs & Obligations - 12 25 60 60 (Fedex, etc) 60 60 ~ 554.300 Books, Publ, Subs & Membership - 225 - 200 ~, ~' 500 200 500 554.600 Seminars & Training -Pensions - - r~ Trustees School - - 5~~, 1,500 300 3,000 TOTAL - 20,032 7,577 12,464 17,864 18,560 22,560 Dept: 165 Pension Acct Class: 530 Operating Expenditures/Expense 531.300 Professional Services _ 531.307 Investment Services _ 536.300 Pension Distributions/Refunds - 8,346 25,264 _ TOTAL - 8,346 25,264 - _