HomeMy WebLinkAboutDocumentation_Regular_Tab 01_09/08/2016 TEQUESTA PUBLIC SAFETY OFFICERS' PENSION TRUST FUND
Summary of Actions for Quarter ending 06/30/16
(presented September 8, 20'I6)
1. The regular Board meeting was held on August 1, 2016.
2. Bogdahn (by Tyler Grumbles) reviewed the 06/30/16 quarterly retums. At the end
of the quarter, the Plan's market value was $11,745,578 and the asset allocation
was Domestic Equity 50.3%, Intemational Equity 14.2%, Domestic Fixed Income
21.7%, Global Fixed Income 4.9%, Real Estate 8.5%, and Cash Equivalent 0.5%.
The returns for the quarter were:
Quarter Retums:
Total Fund (Net)1.40% versus the benchmark at 2.19%.
A. Total Equity 1.24% versus the benchmark at 1.94%,
1. Total Domestic Equity 1.69% versus the benchmark at 2.63%
2. Total Int'I Equity -0.32% versus the benchmark at -0.40%
B. Total Fixed Income was 1.97% versus the benchmark at 2.63%
1. Total Domestic Fixed Income 2.24% versus benchmark at 2.21 %
2. Total Global Fixed Income 0.52% versus benchmark at 5.21 %
Fiscal Year Retums:
Total Fund (Net) 5.00% versus the benchmark at 7.58%.
A. Total Equity 5.43% versus the benchmark at 8.37%,
1. Total Domestic Equity 6.96% versus the benchmark at 10.12%
2. Total Int'I Equity 0.26% versus the benchmark at 2.61 °!o
B. Total Fixed Income was 5.05% versus the benchmark at 5.59%
1. Total Domestic Fixed Income 5.43% versus benchmark at 4.71 %
2. Total Global Fixed Income 3.03% versus benchmark at 11.04%
The real estate portfolio began as of July 1, 2016.
3. The Board discussed active versus passive management. The Board requested
that the consuttant provide iriformation at the next meeting regarding core
index/active management as well as passive beta strategies.
4. The Board approved the October 1, 2015 Actuarial Valuation. This valuation
reduced the assumed rate of retum to 7.25% in accordance with the
recommendations of the actuary in their April 27, 2016 report (copy attached) which
was adopted by the Board at the May 31, 2016 meeti ng. The report recommended
that the Board adopt an investment retum assumption in the range of 6.50% to
7.00%.
5. The Board discussed and passed the State mandated administrative e�ense
budget per the requirements of Florida Statutes. A copy of the Budget has been
00074636.WPD;1
filed with the Village.
6. The Board discussed and approved adding Tatiana Racanati, Village Accounting
Manager as an additional signer to transfer assets befinreen the Custodian and the
Fund's local checking account.
7. The Board discussed the Custodian Fees and the invoices which have not been
paid. There were delays in the billing at Fiduciary Trust for the Tequesta Plans due
to the change in the billing to the calendar year versus the fiscal year for the other
Florida clients.
8. The next meeting is scheduled for November 7, 2016.
PLEASE ADDRESS ANYQUESTIONS IN WRITING AND THE BOARD WILL RESPOND
IN KIND.
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00074636.WPD;1
Tequesta Public Safety Officers' Pension Fund
Asset Ailocation by Asset Class
As of June 30, 2016
AAarch 31, 201G : 511,636,401 June 30, 2Ut6 : 511,7A5,578
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Allacatlon AlMcation
Maricet Value Allocation Market Value Alfocation
�i Qomas¢ic Equity 5,80A,314 49 9 ■ prymestic Equity 5.9(�2.179 50 ;f
Internatior�al Equiry 9,668,513 '4 3 ` Yntamationai Equfty 1 663.237 1A 2
�n Dumestic Fixed lncane 3.475,707 29.9 ■ Domestic Fize6 lnoome 2,5a5.36 t 21 ]
Glabai Fixed Income 573,504 4.9 Ginbal Fizetl Yncome 576.458 4.9
■ Real Estate - 0.0 ■ Rea! Estate 1.f�D.OQO 8.5
■ Casd Equivalenk 176,364 1.0 ■ Cash Eqwvalent 58,344 0.5
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Tequesta Public Safety Officers' Pension Fund
Trailing Returns
As of June 30, 2016
QTR FYTD 1 YR 3 YR 5 YR Inception �nception
Date
Total Fund (Gross) 1.42 (82) 5.15 (73) 0.42 (57) 6.59 (58) 5.96 (77) 6.17 (61) 05/01/2005
. ,� `�.�lu-.y 2.t�d ,2&i ''.:>'r; _ . � .. �. - , . - .
2i�� rilit.
i ,.... � ., i,i.f; .�,i.. ., ._, _, � .� ... ....
Total Fund (Neti 1.40 5.00 0.20 6.40 5.69 5.78 OSI01/2005
Total Equity 1.24 5.43 -2.13 5.58 7.80 6.45 04/01/2005
Domestic Equity 1.69 (43► 6.96 (45) 0.12 (30) 9.80 (40) 9.03 (60� 7.06 (40) 04/01/2005
Total Domestic Eqwty Policy �.93 , . � , �. � � .. Z . . -. � � _. , . , � L ', , . . � ?.GO .
IM U.S. All Cap Core Equity (SA+CF+MF) Median 1.�!-� ,;SO GCi. ..... ,...., ._..
Intemational Equity -0.32 (34) 0.26 (28) .9.57 (T6) 3.79 (5) 2.60 (5� 4.61 (2) 05/0112010
1"c,ial Int�rnational Equity Policy -OAO (38) 2.69 ('Ai -9-SO (29) 1.62 (30) 0.83 , , � 2.97 , . �
I I . ;.i:n � � �r�;� i,ar� ��or� Eq , h = �. ��9rc�a�. . ,.. . .._ . ; . . .- _ - ..
Total Fixed Income 1.97 5.05 5.63 3.36 2.86 4.08 04/01/2005
� �� ���
Domestic Fixed Income 2.24 (67) 5.43 (18) 7.34 (3) 3.96 (46) 3.22 (81) 4.24 (79) 04/01/2005
Total Dnmestic Fixed Income Policy _. _. �t]'� ,�1:;� 6.00 i� 3` �-11 �37) 3.48 (72j 4.4n .
IM U.S. Broad Market Fixed Income (SA+LF+N�F) Meuian ._ ., 4_62 �.P7 ;i_8i1 3.94 A.9h
Global Fixed Income 0.52 (100� 3.03 (83) -3.97 (100) N/A N/A 0.02 (89) 1 0101 /2 01 3
Global rixed In.r,ome Index 521 {�; '�. L04 (11 9.5� ,_ 4_59 (71 423 (13) 4.1 S (14��
I ! ,,.�:::8 r. � ��.�.�;��e (MF) Median ..' . . � ..� . .
ToWI Real Estate N/A N/A N!A N!A N/A N/A 07/01/2016
., . .-� . � End Diversified Core fEW? _. . . . . . ... � . . _ . �.-,.. . . . . �
�, ... ,�.,;te Real Estate (SA+CF� � ',:_.,�� �..�i . . . - .. ,. . ,. . .
ReWms for penods greater Ihan one year are ann�alized.
ReNrns are expressed as percen[ages. T fiI
Retums prior �o June 2010 do no[ indude cash.
BOGDAHN
GItOUP
Tequesta Public Safety O�cers' Pension Fund
Trailing Retums
As of June 30, 2016
QTR FYTD 1 YR 3 YR 5 YR Inception Inception
Date
Domestic Equlty Strategies
Brown Advisory (BAFGX) A.21 (66) 5.90 (36) 0.50 (31) 9.32 (85) N/A 9.52 (89) 02/0112013
R _.:,!I7Qi3nGro;n�lhlndcx G.61 (42i F.78 . , 3.02 ;9� ':f?7 ;t?� 1L'35 t121 13.58 . .�
i't _.. , .,v C , ;^�� fir in�• ',.31 . . - :.. i ,.-, i�'� ' .�c9
Gabelli/GAMCO Value 3.63 (36) 7.98 (60) -0.31 (44) 10.18 (25) N/A 11.60 (32) 02/Ot/2013
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International Equ1ty Stretegies
Europacific GrowtM (RERGX) -0.32 (34) 0.26 (28) -9.57 (26) 3.76 (5) 2.50 (5) 6.33 (4) 06/01/2010
11@SC;i AC �Norhi �.x t13h -(�.40 (3F3) 2.61 (14) -9.80 (29) 1.62 (30) 0.56 (48) 4.71 , _.
I _.. , , . _ ,�.� :;MF) Median -0.83 -0.56 -11.43 D.51 OA5 4.79
Domestic Fixed Income Strategies
Garcia Hamilton 2.24 (63) 5.43 (18) 7.34 (3) N/A N/A 2.58 (77) 02I07/2015
t� ,� A_: z.zi �sy� (s�� s.00 �sz� a.os a.�s (ss� z.s •
! . ... . .�'. . � `. '�'. .��,"�� ISA+CF) Median 2.32 4.98 6.14 4.34 4.14 2.84
Gtobal Fixed Income Strategies
Templeton Global Total Return (FTTRX) 0.52 (100) 3.03 (83) -3.97 (100) N/A N/A 0.02 (89) 10/01/2013
. I -',x�ar . , _:_R 5.21 . , ..,. . , 9.5� (3) -. , ". q.23 (13) 4.15 ;'�-d��.
, =�� ��� � -. .-•.� 2.39 S.c7 4.71 2.ic 2.04 1.87
Real Estate SVategies
ASB Real Estate N!A N/A N/A N/A N/A N/A 07/01/2016
G.,-�ES..F,� , ._. ��=ndDfversifedCore(EWl 2.?8 (73) 8.26 --0i �;.�u - � .� i,55) ,�- . ;?9) N:�
, . .... ,.. � . ,..�.�.1 ��'+.., .,..� , .. .. .. , .. . ..
Retums for penods grealer ihan one year are annuel'rzed.
Rr,tums are ezpressed as percentages. �� i ' -
Retums prior to June 2010 tlo not indude cash.
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Palro Beach Cardei�s, Florida 33��(f
Re: �'ill�tg+e �fT�questa Public Safet�y Ofticers Persi�rn Trust Fund
1)ear Kes-��:
As requesbe[f, ���e have preparec� an �naly�sis siuc�ying the investment r�eium a�sumption used ta determine the
funding requirerne���s in the Villag,e of�eq�Eesta P��t�lic 5afety� t?�cer� Pensian "C'rust Fund. �'urrentiy, the
assumptivn �s 7.5°la per year net �►t in.�estment r�#�tu� exp�nses. Ixt settin� this �ssurrtption it is im�i9ant tc�
note that the pens2on fimd is i�iti�esteti for the Iong ter�n and its investsn�rtt ii�eome auer the yeais rvi�) pa�r �
substanti�� porti�n ot'al! the �ensic�n benefit,c naid tc� �Slan metnbers. Tl�is kee{�s the em�l���er (tax�aayerj and
eenpla±��ces fro�n havin� to pay far evety� dollar c�f benefit.
T�erefore, r�e must make �.n �ssu�m�ticrn a,� to hc�t� much the pensinn func# �+iq e�m over a loi�g �a�ricx� dt 4 Fi11I� Ifi
nrder tc1 dete��miia� a reasonable levei �f cost and liability to be b�arne by the Vi11a�e (taxpa��ers}. Sh4et term
�ains a�d ic�sses are nflt nearly as relevant as the actu�l a��d exp�ted lc�ng-term �arnings a�the portfolic� �ei���
rnai7a�ed. Tliis exRectatic►n is st��angl�� inflt�enced by the i��vestrnent pc�ficy o�'t�te fu�id {t�n �aper �nd in
practirz), particuiarly the asset ailo�ation amnng the re�ec�ant asse# ciasses.
7he ic�ri�-ter�i7 r�tes of returr� for each s�ch asset class, as expected by t�e eca��rnists and invest�nent
cbnsulta��ts, can var3� civer time and 4�ary� in dif�'erent ecem�,mic c[md�tinns an� cyc}�. Sa it is hest tr� re�Visit the
investment return assumpti�n �used in ac.tuariaf valu�tionsj p�rialicaily tc� ens�re that it ret7ects the exper�s'
eurrent best estima#es.
A.s Faart �fc�iir st�d}�, we haue a mcadel fnr devein�ingthe a�prnpriate �fl�+estment returrt assumptit�n forthe �la��.
This is bmsed upc}n current cap�tal nzarket assumptivns provi�ied tsy ei�ht rn�jor investrnent �c�nsu�tai�ts and tl�e
portf�alto's eurrent tar�et �Itacatian for each asset alloeation. Thg tar�;et alloeaticsns are as fn{Inu�s:
� 50% Dnme�:tic Equity
■ ! 5°,✓0 [niernati�,nal E�t�ii��
■ 2(1°In nome:stic Core Fixed lncome
■ 5°lo Div�tsified �ixed Iticome
■ ] 0 Etea! Estate
The current lon�;-term investmeni ra6e of rettirn assurription used in the actuaria! valuati�ons has b�en 7_5°la per
year ccsinpounded aiinually net �af in�=estrnent-r�;lated fees� �1ltlyou�h actuaries h�ve �ubstantial hac�cground �n
ec��nnmics, �ae are not licensed to pro4ide in�estrnent advice or financial fot�ecasting servi�es, lnsteacl, r�re r�ely
o�i the ex�ent advice af profess�anals consulting irti this area, Fcrr ll�e pucp�ose �f rec�c�mmen�fing thc rate of return
v�°e l�ave a�iafyaed and re�viewed fnr�a�ts trc,m eight inaestinent consi��nts pro�iding aclvi�e to pensic�n p�an
spansars �nd administratc�rs. It ifi i�npc�rtant to keep in mind that all fot�casis t�f future investrner� returns are
opinic�ns. nc�t fact�.
Ms_ �Cerr�yj Dult4�n
.Aprii 27, 20t�
Page 2
As illustrated ir� Er�hibit �, tlie c�nsensus amon� €hese ad�isc�rs falls l�1uw the cur�ntly assiamed 7.5°/a artd I�arlS
us to recnmmend an assumed i�te o#'return (net of exp�enses} of 6.5% - 7.{}"/a which i& zn the ra��e betwcen the
�ec�met�i� ar�eaii of �i.3 i% and arithrnetic me�n �f 7.�?9°IQ.
�xlt�ka�t 2 shc�ws #lie imgact of lavc��ering the investrnent returrt assurrtption can t�e Acri�arially� Qetemninet�
�oi�crihutint� (AI�C�}, th� lJnfuttded A�tu�rial Accrued Li�bility (UA�1L} and the fundetl s�lic�. The exhibit
sl�ows tlge effect of low•ering the inveslmenl return assumption to G.�°/Q and 7.a%, Lawering the investme�t
return as�uiMpti�>n wc�ul� incr�ase the prvbability of ineeting the inv�stmcnt return a,ssumpti�n and, the�ref�re,
lvwe�• tl�e probab�lity� of incurring future in�estment experienc;e Iosses.
Wilh ih� excepiicm5 described herein, �II at�ier a�ssu�nptions, meth�ds, and benetit provisions are the sarn� as
ii�di�ateri in our 4ctol�er i, 2f}13 Actuarial Valuatic�n Rep�rt. Please nc�te that under Florida Statutes, effectit��
no later than tlie C}�tober l, 24� 6 Acivaria) Valuation, the Plan wiil be requir+ecf #o use the sanne mt�rt�lity
assumptic�n as is use�1 bv the Fiorida Retirecnent System �FR�). Th� impa+ct of cha��ging the mortalit�+
asswnptior� is nnt rcflocted in our �a6culatit�ns.
Summary� nf Findings
� UVe rer�mmend lawering the ior+�stmsnt return assumptit�t� ta a point in th� rar�ge of �i.�D°!o to 7.Ofl%.
■ [f the investmertt return �sumplic�n v�•as law•ered to 7.Q0°r'a, the required Vif(age c�ntributit�n �rould
i��cr�ease by' aFproxim�tel�� $123,OOU, Qr b.4b nf c�r�ered payrt�ll, in the first year. The �'lan's
t`unc�et� rt�tic� (actuaeial vatUe of asscts dicridcd by act�ae accrued ltability� vwoulr� decre�se frQrn
96.�°!� ta �0.�°10.
• lf �h� investrnent retucn assumptic�n w�s lowered to 6.SQ°!a, tl�e req�ired Village �o�tri6ution would
incr��.�e by appr�xin�ately ��55,004, ar 1339°lfl af cavered payrt�l�, in the first year. The Plan's
fuaided ratio (�ctuaria! va(ae of assets di�s�ided t�y actu�ri�i accrued liability} wnuld decrease fr��ti
9C,�°la to $4.7°lu.
■ For e��er!v' t}.2�°�o thai bhe invest�nent ��eturn is Iow�ered, the required Vi1lage cuntributi�tn wauld
inerease by' appresximatel}� �64,0{}0, arid the tunded rati� woui�i decrease by �pproxitnate�� 3.0°fo.
t�,dclitit�nal Dis�l�snr�s
Thi� re�ort u��as �reparcd at the request t�f th� Bt�ard ans� is intendec� fnr use hy the Retir�ernent P'lai� and thase
designated or apprprred by the Board, This report may be �ravid�d to �arties �ther than the Plari anly �n it�
�ntirety ai�d oialy� with the permission �ftl�e Bc,a�d.
'I'I�e purp�se o# this report is lt� descri6e the financial effect ofthe c�artges in actuarial assurnptit�ns dei�iled
abrsve. This repart should nnt bc rclied on #'�,r an�� purp�se ofi�er than the purperse described �ibc�ve.
The eatculaiinns in this report are based upon inforn�ation furnished t�y� the Flan �►dmir�istraia�r and the
Villag� ti�r tiie Qc�lc�taer l, 2015 Actuaria! Valuat�on �t�r��en�in� Flsn benefits, finautcial iransactions, plan
provisions and a�ti�.�e members, terminatec� i�►�ambers, r�tire�s and bene�ci�ries. 1Ne nevie}ued this
enfe�nnation for internal and yea�•-to-year consistencv, hui did not t�therv4��se aud�t the dai�. We are i1c�t
respon�ible for the accuracy ar �ompletenes� c�f the �nf�rmRtion provided �v the Plan A�ministrator and the
1fiIla�e.
C=abriel lt��tdc:�' �mich 5�:: Cvm��an�
Ms. Kem� f7uttc�n
Apri I �7,�2016
Pa�.c 3
The calculations in this repoirt ai�e based on data or ather Znf'ormatian through 5eptember 30, 2D l5. Future
actuarial nieasurements mx}� cliffer signi�can�ly from the current rneasurements presented in this r�pant due
to s��ch �actors 3s the lollowirtg; plan experience dit�ering fmm that anticipatEd Uy the ecanart�ic �r
demo�raphic assumptions; changes in econornic or ciemographic assump#ions; it�ereases ��' ciecreas�s
expeCted as part of the nat�►ral operatian of the methodola�y used for these measurements (such as the end of
an ait�ortization periad or additional cost �r coi�tri�utian requirements bas�d or� th� pl�n's funded status}; and
ch�nges in ulan prt���isic�ns or a�plicable law. If you ha�e reasan ta beaie��e that t4�e assucnptions that were
used are �inreasaiiable, th�t the plan pro��isians are incorrectly described that irnpnrtant �lan ��ro��isions
rel���ant tu this proposal are not cteseribed, or thAt conditions have clzanged since tF�e c�lcul�tions were made,
you shat�ld coittPCT tl�e author of the reporl prior to relyin� on informalion in the report.
J�ftre4• �lmrose and "frisha AYnrose are inernbers of the America» Academy of A.ctuaries and meet the
+(�«alificatioi� Stfrndards c�i' ihe American Academy of Actuarizs tn render the act►�ariaf opinians contained
herein. �'he ur�dcrsi�neti actuaries are independent af the pl�tn sponsc�r_
This report has been prep�rec� by actuaries wh� have suEsstantial ex�rien� r�aluin� p�iblic empinyee
relirement sy�stems. To the best nf our knoEVledgc the information containe�l in this report is accurate aitid
fairly prescrits thc actuar�al pr�sition of the Flan as oCthe valuation date. Aq calculatic�ns f�ave been rnade in
conf'�rmity w�ith ger�erally acecpted actuarial principles and prr�ctices, and v��it� the Actuarial Stand�rds c�f
Practice issueci by the Act�aria� Standards Board and with applic�tblc statutes.
V4%e welcome }�our y�ieslipns ancf cornmer�ts.
Sinccpciy yours. � �,. �.
/ � � ; ��r� / ti ` * .� . a ! = � ., tr. ���_���:,�
� ^ � �i r•.j, �,'. _ �-`
�el`fr� Arnrose, EA, MAAA Trisha Amrosc, EA, MAAA
,� Seiiior Consultant & Actuary CdnsutEant & Actuary
F.nclosur�s
TIYis corninunicstian shail i�ot be canstrued tc� prav�de tax aci►�ic:e, �eg�l acivice or investmeni �dwice.
t��l�ri�l ltc�ecfer �+n�itt� i`� f-:ursxp.tn�,
EXHIBIT 1
Im�estment F.xpected Standard
Consultant lovestment Eacpected Expected Investment Hecogni�ed Nominal Deviation
Espected Consultant Real Actuary Nominal aodActi�e Valuefor ReturnNet oSExpected
Imestment Nominal Inilation Return Inilation Return Management Active ofExpenses Return
Consultant Retur� Assum tion (2}-{3) Assum tion (4 +(5 Ex enses Nlaoa ement (6)-(7)+(8) (1-Year)
fll Rl (3) l (51 (h) (�) ( 1�1 (10)
I 6.10°, 0 2 I �% 3.98° � 2S0!%u 6.48°,�0 020`% 0.20 %0 6.4H",�u I 2.60°%
3 6.�9!ro 2.50% a.09% 2.5p% 6.59'% �20'% 0.20°.% fi.59'% 13J0%
3 6.51% 2.25°/t� 4.26°,4� 2.50'% 6.76'% 0.20% 020% fi.76'% 13.10°/a
4 h.90% 2.50°/u 4.40°/u 2.50°/u 6.90% 020% 020°io 6.90% 12.50%
5 6.90"/0 2.11% 4.79% 2.50"/i� 7.29"./u 0.20% 0?03b 7.24"/0 13.10%
6 7JS°/u 2.26"/i 4.89%� 2.50"/� 7.39% 0?0"i�� 0.20".i� 7.39"/a 12.10%
7 722':� 2.20",�� 5.02%� 2.50°/� 7.52°/n 0.20`%� Q20°i� 7.52"/"0 12.509tii
R 7.52''S� 2.20%u 53 ?.�0';f� 7.82% 0?0"4� 020° 7.82qL 13.60qi,
Averagc (.86% 2.27"/0 4.59% 2.50% 7.09% 0.2Q%, U.20% 7.09"/i, 12.83%
Distributionof20-YearAverage Probability Probability Probabilityof Probability
Investment GeometricNetNominalReturn ofexceeding ofexceeding exceeding ofexceeding
Consultant 40th SOth 60th 631% 6.50°lo Z00% 7.5U%
111 (2) (3) (4) (51 15) (?) (S)
I i.Ot'!�o �.72% 6.43°/b 41J% 39.0% .i2.4°,� 26.3°io
2 5.059/o SJ8°io 6.51�'0 42.8% 40.2°/n 33J°/ 27J%
3 5.22% SAS% 6.69'% 45.1 io 42.5% 35.9% 29.7°/a
4 5.46%� 6.IG°/a fi.86°/� 47.9°0 45.f% 38.1°/n 31.5%
5 SJS% 6.4ft'% 7?2'% 52.4!% 49.7"/u 42.9"/n 36.3%
6 6.02°�6 6.70% 73A% 55.8°/u 52.9% 45.5% 38.3%
7 6.08% 6.78°/r� 7.49°/� 56.9°/� 54.1°ii 46.9°�� 39.8%
R 6.20!% 6.95��i� 7.72°i� 5R.6% 56.0°,o A9.4°%0 42.8°,i>
Average 5.60% 6.31% 7.04% 50.1% 47.4% 40.6% 34.1%
4
EXHIBIT 2
SUPPLEMENTAL ACTUARIAL VALUATION REPORT
Plan
Village of Tequesta Public Safery Officers Pension Trust Fund
Valuation Date
October ] , 2015
Date of Report
April 27, 2416
Report Requested by
Board of Trustees
Prepared by
Jeffrey Amrose
Group Valued
All ac#ive and inactive members of the Plan.
Actuarial Assumptions and Methods
Same as October l, 2015 Actuarial Valuation Report except as described herein.
Some of the key assumptionslmethods are:
Investment Return Cunently, 7.50%; results are shown usin� 7.Q0% and 6.50°!0
Salary increase 6.00°lo per year
Cost Method Entry Age Normal
Amortization Period for Any Change in Actuariai Accrued Liability
2d years
Summary of Data Used in Report
See attached page
Actuarial lmpact of Proposal(s)
See attached page(s}
Other Cost Considerations
As of October 1, 2015 the Actuarial Value of Assets exceeds the Market Value of Assets by $360,861.
T'his difference will be recognized over the next several years. In turn, the computed overall employer
contribution rate will gradually increase by approximately 1,8% af covered payroll in the absence of
offsetting gains.
Under the Florida Statutes, effective no later than the Qctober t, 20I6 Actuarial Valuation, the Plan
will be required to use the same mortaliry assumption as is used by the Florida Retirement System
(FRS). The impact af changing the mortality assumption is not reflected in our calculations.
The funding requirements for Firefighters reflect the use of $141,OQ3 af the Chapter 175 reserve
balance to offset the Village conh-ibution. This offset will not apply after the fiscal year ending
September 30, 2018.
Special Risks involved with the Proposal That the Plan Has Not Been E�rposed to Previousiy
None
5
EXHIBIT 2
ACT[JARTAL,LY DETERMINED CONTRIBUTIUN (ADC)
POLICE OFFICERS AND FIREFIGHTERS COMBINED
A. Valuation Date October l, 2015 (}ctober 1, 2015 October 1, 201 S
Baselin� 7.0%Irtvestment 6.S%lnvestmenC
Return Assumption Return Assumption
B. ADC to Be Paid During
Fiscal Year Ending 9/30/2Q l7 9l30l20 t 7 9/30/2017
C. Assumed Date �f Employer Contributian Monthly Monthly Monthly
D. Amluai Payment to Amartize
Unfunded Actuarial Liability (UAI..) $ 48,621 $ 1 l i,473 �+ 175,866
6. Employer Normal Cost 414,723 468,316 529,193
F. ADC if Paid on the Valuation
Date: D+E 463,344 579,7$9 705,Q59
G, ADC Adjusted for Frequency of
Payments 481,534 601,090 729,165
H. ADC as % of Covered Payroll 26.05 % 32.5 l% 39,44 °10
I. Assumed Rate of Increase in Covered
Payroll to Contribution Year 0.00%/4.04% 0.40°fo/4.00°l0 0.00%/4.00°!0
J. Covered Payroll for Contribution Year 1,905,527 },905,527 1,945,527
K. ADC for Contribution Year 499,3b9 622,44I 754,477
L. Estimated Credit for State Revenue in
Contributian Year 155,040 155,040 155,040
M. Use of Chapter t 75 Reserve 141,003 141,003 141,003
N. Required Employer Contribution (REC)
in C�ntribution Year: K-L-M 203,326 326,398 458,434
O. REC as % of Covered Payrall in
Cantribution Year: M/ J 10.67 % 17,13 % 24.06 %
P. Change in REC N!A 123,072 255,10$
Q. Change in REC as °lo of Covered
Payroll inContributionYear N/A 6.46 % 1339 %
6
EXHIBIT 2
ACTUARIALLY DETERMINED CONTRIBUTIQN (ADC)
FIREFIGHTERS
A. Va}uation Date October l, 2015 October 1, 2015 October l, 2(} I S
Bcrseline 7.0%Investnrent b.S%Investment
Return Assumpiion Return Assumption
B. ADC to Be Paid Durin�
Fiscal Year Ending 9!30/2017 9/3Q/2017 9/301202?
C. Assumed Date of Employer Contributian Monthly Monthly Monthly
D. Annual Payment to Amortize
Unfunded Actuarial Liability (UA.L) $ t 29,433 $ 177,080 $ 225,8$7
E. Employer Norma] Cost 297,746 339,420 386,$07
F. ADC if Paid on the Valuation
Date: D+E 427,179 Sl6,SOQ 612,694
G. ADC Adjusted for Frequency of
Payments 443,954 535,476 633,642
N. ADC as % of Cc�vercd Payroli 31.29 °l0 37.73 % 44.65 °fo
I. Assumed Rate of Increase in Covered
Payroll to Contribution Year 4.00 % 4.00 % 4.00 %
J. Covered Payroll for Contribution Year 1,4�5,820 1,475,820 1,475,820
K. ADC for Contribution Year: H x J 461,784 556,827 658,954
[,. �stimated Credit for State Revenue in
Contribution Year 15 5,040 155,040 155,040
M. Use of Chapter 175 Reserve l41,003 141,003 141,003
N. Required Employer Contribution (REC)
in Cc�ntribution Year: K-L-M 165,741 260,784 362,911
O. REC as nf Covered Payroll in
Contribution Year: M/ J 11.23 % 17.67 % 24.59 %
P. Change in REC N/A 95,043 l9'7,170
Q. Change in REC as "lo ofCovered
Payroll in Contribution Year N!A 6.44 % 133b %
7
EXHIBIT 2
ACTUARiAL VALUE qF BEIYEFtTS A,NND ASSETS
FIREFIGHTERS
A. Valuation Date October 1, 20 I 5 Qctober 1, 2015 C?ctober l, 2015
Baseline 7.0%lnvesiment 6.5%Investment
Return Assumption Return Assumption
B. Actuarial Present Value of All Projected
Bcncfits for
1. Acti� Members
a. Service Retirement Benefits $ 8,671,103 $ 9,482,161 $ iQ,40Q,006
b. Vesting Benefits 472,295 53Q,493 597,517
c. DisahilityBenefits 50�,95$ 542,176 588,424
d. Preretirement Death Benefits 69,252 75,7U4 83,035
e. Return of Member Gontributions 2,826 2,900 2,977
f. Total 9,716,434 1U,633,434 11,671,959
2. Inactive Members
a. Service Retirees & Beneficiaries 1,849,980 1,936,983 2,03t,4b5
b. Disability Retirees 0 0 0
c. Terminated Vested Members 144,532 155,106 166,776
d. Total 1,994,5 t2 2,092,089 2,198,24I
3. Total for All Members 11,7 I d,946 I 2,725,523 13,870,200
C. Actuarial Accrued (Past Service)
Liability under Entry Age Normal 8,876,659 9,455,549 1Q,Q88,470
D. Actuarial Value of Accumulated Plan
Benefits per FASB Na. 35 NIA I*I/A NIA
E. Flan Assets
1. Market Value 7,399,710 7,349,710 7,399,710
2. Actuarial Value 7,644,539 7,644,539 7,644,539
F. UnfundedActuarialAccruedLiability 1,232,120 1,811,010 2,443,931
G. Actuarial Present Vatue of Projected
Covered Payroll 12,0�5,547 12,421,047 12,774,7Q6
H. Actuarial Present Value of Projected
Member Contributions 704,201 724,299 745,487
I. Funded Ratio: E2/C 86.1 °!0 80.8 °/a 75.8 %
8
E�ISIT z
CALCULATION OF EMPLOYER NORMAL COST
FIREFIGHTERS
A. Valuation Date October 1, 2015 Uctaber 1, 2Q t 5 October 1, 2015
Buseline 7.0%Investment 6.5%hrvestment
Return Assumption Return �ssumption
B. Normal Cost for
1. Service Retirement Benefits � 278,312 $ 312,953 $ 352,375
2. Vesting Benefits 32,033 36,246 41,063
3. DisabilityBenefits 31,388 33,924 36,741
4. Preretirement Death Benefits 4,240 4,596 S,d01
5. Return of Member Contributions 2,531 2,459 2,385
6. Total for Future Benefits 348,504 390,178 437,565
7. Assumed Amount for Administrative
Expenses 27,290 27,290 27,290
8. Total Normal Cost 375,794 417,46$ 464,855
As °lo af Covered Payroll 26.48 °fo 29.42 % 32.76 %
C. Expected Member Contribution 78,048 78,048 7�,048
As °10 of Covered Payroll 5.50 % 5.50 % 5.50 %
D. Net Employer Normal Cost: B8-C 297,746 339,424 386,807
As % of Covered Payrol I 20.98 °fo 23.92 % 27.26 %
9
EXHIBIT 2
PARTICiPANT DATA
FIREFIGHTERS
October 1, 2015 October l, 2015 October l, 2015
Buseline 7.0.%Investment 6.5%Irzvestment
Return Assum�tian Return Assurnption
ACTIVE MEMBERS
Number 1 � 17 1?
Covered Annual Payroll � 1,419,058 $ 1,419,058 $ 1,419,058
Average Annual Payrc�ll � 83,474 $ 83,474 $ &3,474
Average Age 41.2 41.2 41.2
Average Past Service 13.4 13.4 13.4
Average Age at Hire 27.8 27.8 27.8
RETIREES, BENEF[CIARIES & DROP
Number 3 3 3
Annual Benefits $ 156,287 $ 156,287 $ 156,287
Average Annual Benefit � 52,096 $ 52,496 $ 52,496
DISABIL[TY RE7TREES
Number 0 0 4
Annual Benefits $ 0 $ 0 $ 0
Average Annual Benefit $ 0 $ 0 $ 0
TERMINATED VESTED MEMBERS
Number 1 1 1
Annual Benefits $ 17,524 $ 17,524 $ i7,524
Average Annual Benefit $ 1"7,524 $ 17,524 $ 17,524
10
EXHIBIT 2
ACTUARIALLYDETERMINED CONTRIBUTIQN (ADC)
POLICE OFFICERS
A Valuation Date October 1, 20l 5 October 1, 2015 October 1, 2015
Baselrne 7.0% lnvestment 6.5% lnvestment
Return Assumption Return Assumption
B. ADC to Se Paid During
Fiscal Year Ending 9f30/2017 9/30l2017 9/30/2017
C. Assumed Date of Employer Contribution Monthly Monthly Monthly
D. Annual Payment to Amartize
Unfunded Actuarial Liability (UAL) $ {80,� l2) � (65,607) $ (50,02 t )
E. Employ�:r Normal Cost 116,977 128,896 142,386
F. ADC if Paid on the Valuation
Date: D+E 3b,165 63,289 92,365
G. ADC Adjusted far Frequency of
Payments 37,585 65,614 95,523
H. ADC as°10 af Covered Payrall 8.75 % 15.27 % 22.23 %
1. Assumed Rate of lncrease in Cavered
Payroli ta Cnntribution Year 0.00 % 0.00 % 0.00 %
J. Covered Payroll for Contriburion Year 429,707 429,707 429,�07
K. ADC for Gontribution Year: H x J 37,SE35 65,614 95,523
L. Estimated Credit for State Revenue in
Contribution Year 0 0 0
M. Required Employer Contribution (REC)
in Contribution Year: K-L 37,585 65,614 95,523
N. REC as% pf Covered Payroll in
Contribution Year: M/ J 8.75 % 15.27 % 22.23 °/a
O. Change in REC N/A 28,029 57,938
P. Change in REC as % of Covered
Pavrall in Contribution Year N/A 6.52 % 13.48 %
li
EXHIBIT 2
ACTUAR[AL VALUE OF BE�YEFITS A1�1D ASSETS
POLICE OFFICERS
A. Vaivation Date October 1, 2015 October 1, 2015 October 1, 2015
Baselir�e 7.t1%lnvestment 6.5/Investment
Ret�crn Assumption Return Assumption
B. Actuarial Present Vaiue of AIl Projected
Bcne�ts for
I. Acti� Members
a. Service Retirement Benefits $ 1,937,203 � 2,151,788 $ 2,398,046
b. Vesting Benefits 157,$53 1$0,507 207,025
c. Disability Bene�ts 15Q,292 164,299 1$0,140
d. Preretirement Death Benefits 21,492 23,709 26,243
e. Return of Member Contributions 0 0 0
f. Total 2,266,840 2,520,303 2,811,454
2. Inactive Members
a. Service Retirees & Beneficiaries 35y,163 3�0,238 443,815
b. Disability Retirees 0 0 0
c. Terminated Vested Mernbers 436,916 458,032 481,045
d. Total 796,079 838,270 884,860
3. Total for All Members 3,062,919 3,35$,573 3,696,314
C. Actuarial Accrued ( Past Service)
Liability under Entry Age Normal 2,071,498 2,215,778 2,374,962
D. Actuarial Va1ue of Accumulated Plan
Benefits per FASB No. 35 N/A N/A N/A
E. Flan Assets
l. Market Value 2,797,395 2,797,395 2,797,395
2. Actuarial Value 2,913,427 2,913,427 2,913,427
F. UnfundedActuarialAccruedLiability (841,929) (697,649) (538,465)
G. Actuariat Present Value of Projected
Covered Payroll 4,142,586 4,274,942 4,415,249
H. Actuarial Present Valuc of Prajected
Member Contributions 2d7,129 213,747 220,760
I. Funded Ratio: E2/C 14Q.6 % 13 i.5 % 122.7 %
12
EXHIBIT 2
CALCULATION OF EMPLOYER NORMAL COST
POLICE QFFICERS
A. Valuation Date October 1, 2415 October 1, 2015 October t, 2015
Bc�selirre 7.0% Investmerrt 6.5°/a Investment
Return Asst�mptlon Return Asstcmpteon
B. Normal �ost far
]. Service Retirement Benefits $ $9,69$ $ 99,666 $ 110,946
Z. Vesting Benefits 7,912 8,986 10,218
3. DisabilityBenefits 10,778 1 t,558 12,423
4. Preretirement Death Benefrts 1,492 1,607 1,738
5. Return of Member Contributions 615 597 579
6. Total for Future Benefits 1 10,495 122,414 135,904
7. Assumed Amount for Administrative
Expenses 27,967 2�,967 27,967
8. Total Norrnal Cost 138,4b2 150,381 163,871
As °lo afCovered Payroll 32.22 % 35A0 % 38.14 °lo
C. Expectcd Member Contribution 21,485 21,485 21,485
As % of Covered Payroll 5.00 % 5.00 % 5.00 %
D. Net Employer Normal Cost: B8-C 116,977 128,896 142,386
As % of Covered Payroll 27.22 °l0 30.00 % 33.14 %
13
EXHIBIT 2
PART(CIPAIVT DATA
POI.ICE OFFICERS
October 1, 20t5 October 1, 2015 October t, 2015
Baseline 7.�%Investment b.5%Investment
Return Assumption Return Assurnption
ACTIVE MEMBERS
Number 6 6 6
Covered Annual Payroll $ 429,707 $ 429,707 $ 429,707
Average Annual Payroll � 71,618 $ 71,618 $ 71,6t8
Average Age 41.4 41.4 41.4
Average Past Service 9.5 9.5 9.5
Average Age at Nire 31.9 31.9 31.9
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 RETIREFS
Number 0 0 0
Annual Benefits $ 0 $ 0 $ 0
Average Annual Benefit $ 0 $ 0 $ 0
TERMINATED VESTED MEMBERS
Numb�r 2 2 2
Annual Benefits � 37,272 $ 37,272 � 37,272
Average Annual Benefit $ 18,636 $ 18,63b $ 18,636
14