HomeMy WebLinkAboutDocumentation_Pension General_Tab 07_08/04/2008R Gabriel Roeder Smith & Company One East Broward Blvd. 954..527.1616 phone
Consultants & Actuaries Suite 505 954.525.0083 fax
Ft. Lauderdale, FL 33301-1872 www.gabrieh-oeder.com
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RECEIVED ~~
June 5, 2008
JUN 1 9 2~~3 sue: ; ~ .,,^ ~ ~~`.t,,,
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Michael Cuozzo VILLAQE CLERKS OFFIC f~~~~~°~ ~ ~ ~
Village Manager
Village of Tequesta d~
345 Tequesta Drive
Tequesta, Florida 33469-0273
Re: Supplemental Actuarial Valuation Report for the General Employees Pension Plan
Dear Mike:
As requested, we have prepared an Actuarial Study to determine the effect of the following
possible changes to the Plan:
- 3% COLA starting 5 years after retirement
- 2% COLA starting 5 years after retirement
• 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 should 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 combined effect of all of the changes. The total can be
considerably greater than the sum of the parts due to the interaction of various plan provisions
with each other, and with the assumptions that must be used.
As indicated below, the undersigned is a Member of the American Academy of Actuaries (MAAA)
. and meets the Qualifications Standards of the Academy of Actuaries to render the actuarial
opinion herein.
Michael Cuozzo
Page 2
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We welcome your questions and comments.
Sincerely yours,
,~ ~°
J. Stephen Palmquist, ASA
Senior Consultant and Actuary
Enclosures
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Gabriel Roeder Smith & Company
SUPPLEMENTAL ACTUARIAL VALUATION REPORT
Plan
Village of Tequesta General Employees Pension Trust Fund
Valuation Date
October 1, 2007
Date of Report
June 5, 2008
Report Requested by
Village Manager
Prepared by
J. Stephen Palmquist
Group Valued
Active General Employees
Plan Provisions Being Considered for Change
Present Provision Before Change
- There is no COLA
Proposed Changes
- 3% COLA starting 5 years after retirement
- 2% COLA starting 5 years after retirement
Participants Affected
Active General Employees
Actuarial Assumptions and Methods
Same as October 1, 2007 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
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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
.Ste en Palmquist, A, MAAA, FCA
Enrolled Actuary 08-1560
~~~ ~ .
Duane Howison, FSA
Enrolled Actuary 08-6169
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ANNUAL REQUIRED CONTRIBUTION (ARC)
A. Valuation Date October 1, 2007 October 1, 2007 October 1, 2007
Valuation 3.00% COLA 2.00% COLA
5 years delayed 5 years delayed
B. ARC to Be Paid During
Fiscal Year Ending 9/30/2008 9/30/2008 9/30/2008
C. Assumed Date of Employer Contrib. Monthly Monthly Monthly
D. Annual Payment to Amortize
Unfunded Actuarial Liability $ - $ - $ -
E. Employer Normal Cost 85,228 130,384 113,432
F. ARC if Paid on the Valuation Date
D+E 85,228 130,384 113,432
G. ARC Adjusted for Frequency of
Payments 88,790 135,833 118,173
H. ARC as % of Covered Payroll 5.92 % 9.05 % 7.88
I. Covered Payroll for Contribution Year 1,500,201 1,500,201 1,500,201
J. ARC for Contribution Year: H x I 88,790 135,833 118,173
K. ARC as % of Covered Payroll in
Contribution Year: J = I 5.92 % 9.05 % 7.88
L. Increase in ARC - 47,043 29,383
M. Increase in ARC as % of Covered Payroll - 3.13 % 1.96
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ACTUARIAL VALUE OF BENEFITS AND ASSETS
A. Valuation Date October 1, 2007 October 1, 2007 October 1, 2007
Valuation 3.00% COLA 2.00% COLA
5 years delayed 5 years delayed
B. Actuarial Present Value of All Projected
Benefits for
1. Active Members
a. Service Retirement Benefits $ 1,828,135 $ 2,145,504 $ 2,025,970
b. Vesting Benefits 67,383 77,955 73,752
c. Disability Benefits 258,060 303,189 286,134
d. Preretirement Death Benefits 42,497 50,062 47,206
e. Return of Member Contributions 19,854 19,854 19,854
f. Total 2,215,929 2,596,564 2,452,916
2. Inactive Members
a. Service Retirees & Beneficiaries - - -
b. Disability Retirees - - -
c. Terminated Vested Members 17,904 17,904 17,904
d. Total ~ 17,904 17,904 17,904
3. Total for All Members 2,233,833 2,614,468 2,470,820
C. Actuarial Accrued (Past Service)
Liability per GASB No. 25 764,571 890,493 843,152
D. Plan Assets
1. Market Value 1,026,897 1,026,897 1,026,897
2. Actuarial Value 1,026,897 1,026,897 1,026,897
E. Actuarial Present Value of Projected
Covered Payroll 12,626,924 12,626,924 12,626,924
F. Actuarial Present Value of Projected
Member Contributions 631,346 631,346 631,346
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CALCULATION OF EMPLOYER NORMAL COST
A. Valuation Date October 1, 2007 October 1, 2007 October 1, 2007
Valuation 3.00% COLA 2.00% COLA
5 years delayed 5 years delayed
B. Actuarial Present Value of Projected
Benefits $ 2,233,833 $ 2,614,468 $ 2,470,820
C. Actuarial Value of Assets 1,026,897 1,026,897 1,026,897
D. Unfunded Actuarial Accrued Liability - - -
E. Actuarial Present Value of Projected
Member Contributions 631,346 631,346 631,346
F. Actuarial Present Value of Projected
Employer Normal Costs: B-C-D-E 575,590 956,225 812,577
G. Actuarial Present Value of Projected
Covered Payroll 12,626,924 12,626,924 12,626,924
H. Employer Normal Cost Rate: F/G 4.56 % 7.57 % 6.44
I. Covered Annual Payroll 1,500,201 1,500,201 1,500,201
Employer Normal Cost: H x I 68,409 113,565 96,613
K. Assumed Amount of Administrative
Expenses 16,819 16,819 16,819
L. Total Employer Normal Cost: J+K 85,228 130,384 113,432
M. Employer Normal Cost as % of
Covered Payroll 5.68 % 8.69 % 7.56
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