HomeMy WebLinkAboutDocumentation_Pension Public Safety_Tab 06_11/03/2008R Gabriel Roeder Smith & Company One Easr Broward Blvd. 954.527.1616 phone
Consultants & Actuaries Suite 505 954.525.0083 fax
ht. Lauderdale, FL 33301 1872 www.gabrielroeder.com
September 17, 2008
Board of Trustees
c/o Mr. Ken Nielson, Chairperson
Village of Tequesta Public Safety Officers' Pension Fund
345 Tequesta Drive
Tequesta, FL 33469-0273
Re: New GRS Tools and Services
Village of Tequesta Public Safety Officers' Pension Fund
Dear Board of Trustees:
In today's economic environment, the Board needs to be fully prepared to evaluate the sustainability of
the Pension Plan and to meet its fiduciary responsibility. We value the relationship that we have with the
Board and would like the opportunity to go beyond our regular work to present ideas to help the Board
achieve its goals for the Plan. Our new tools and services will provide the information needed to face
today's challenges and make the best decisions for the beneficiaries of the Plan.
GRS has designed resources that will project long term costs under various economic scenarios as well as
compare the adequacy of benefits provided by the Plan. We have also developed tools and services that
will help participants better understand and appreciate their pension benefits. The resources are briefly
described below.
Online Benefit Calculator
GRS has developed a tool that will help the Board educate participants about their benefits and assist in
retirement planning. Our online benefit calculator helps participants with benefit decisions by allowing
them to input what-if-scenarios into auser-friendly web-based estimator and view results instantaneously.
We can also provide similar software for use by retirement system staff that will enable them to prepare
benefit estimates for members. Please visit our website at www.grs-plan.com to view a demo of this tool.
Contribution Projection Tool
With shrinking revenue sources and pressure to lower contributions, the Board needs to consider the
future cost of the Plan to ensure a sustainable future. Our cost projections will give the Board the insight
it needs to understand potential changes in future required contribution levels and other metrics of
measuring the health of the Plan. The information will be useful when considering changes in benefit
levels, forecasting future budget requirements and developing strategies to reduce actuarial risks. As part
of this project, we will develop a report that includes easy to understand graphs and tables. Please see the
attachment to see a sample of an exhibit from the report. The GRS fee for this project is $7,000.
Board of Trustees
September 17, 2008
Page 2
Benefit Comparison Report
It is important for the Board to understand the adequacy of the Plan's benefits as compared to other plans
in order to ensure that your goals are being met. The Benefit Comparison Report will show your Plan's
benefits ranked against other public plans. From this report, you will be able to determine if the current
Plan's ranking is aligned with the Board's expectation. This report can be used as a valuable tool when
considering benefit improvements or when contract negotiations take place. Please see the attachment to
see a sample of some exhibits from the report.
One-on-One Discussions with Actuary
There are many tasks that the Board performs in order to ensure that Plan assets are sufficient to pay
benefits when members retire. The funding of these benefits is crucial to keep on track, but equally as
important is to provide members with an education and appreciation of the benefits they have earned. We
can facilitate this by conducting general sessions and one-on-one conversations with the members. These
sessions can provide members with answers to any questions they have concerning their employee benefit
statements. Additionally, we will be able to offer other information such as projected benefits with salary
increases, estimated benefits at various points in time, projected DROP balances and the effect of
purchasing service on benefits and eligibility.
Funding Policy
Plans are required to have an investment policy which provides asset managers with acceptable levels of
different asset classes contained in a pension trust. While creating a set of rules to invest Plan assets is
crucial to the success of the Plan, we believe a set of rules to properly fund the Plan is equally as
important. A formal funding policy will document the overall funding goals for the Plan, the benchmarks
that will be used to measure progress in achieving those goals, and the methods and assumptions that will
be used to develop the benchmarks. We can work with the Board to create a funding policy that will
accomplish these objectives.
Minute Master
The Board may find it useful to have all documents related to the Plan in a secure, searchable format that
is easily accessed by approved users. Minute Master is a web-based plan administration tool for public
employee retirement systems that uses imaging technology to store, categorize, and query policy and
administrative decisions contained in meeting minutes, legal opinions, bargaining agreements, GRS
valuation reports and letters as well as other supporting documents. During the life of a pension system,
Gabriel Roeder Smith & Company
Board of Trustees
September 17, 2008
Page 3
both staff and trustees will change, but meeting minutes serve as the permanent institutional memory of
the retirement system. Our product offers fast, comprehensive access to this institutional memory.
Social Security Death Check
It is important that the Board be able to determine the dates of death of retirees to ensure that benefits are
not paid out in error and that the Plan's retiree liability is not overstated. Another service GRS provides
is access to the Social Security Administration's "Social Security Death Check Master File" and the
ability to compare the Plan's database of social security numbers to that master file.
Update of Actuarial Equivalence Assumptions
The actuarial equivalence assumptions are used to convert from the normal form of payment to the
optional forms when calculating retirement benefits. These assumptions should be kept up to date to
ensure that the conversion properly represents equivalence between forms of payment. Updating to a
more current mortality table will often produce slightly larger optional form amounts. We can work with
the Board to determine an updated definition of actuarial equivalence.
We hope to have the opportunity to use our tools in helping the Board achieve its goal of a sustainable
pension plan. Please contact us after you have had time to review these options if we can provide more
information and fee estimates.
Sincerely,
i'~`
J. Stephen Palmquist, ASA, MAAA
Senior Consultant & Actuary
~.wa.~.c UIC~fice-d,,
Duane Howison, FSA
Consultant
Enclosure
cc:
Lori McWilliams
Gabriel Roeder Smith & Company
of
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Percentile Ranking of the Present Value of Employer Provided Normal Retirement Benefit
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90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Age of Sample New Hire
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Comparison of Present Value of Employer Provided Normal Retirement Benefit
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