10-01-2012 Actuarial Valuation Report General Employees Retirement Fund�1 \�J C Gabriel Roeder Smith & Company
Consultants & Actuaries
VILLAGE OF NORTH PALM BEACH GENERAL RETIREMENT FUND
ACTUARIAL VALUATION REPORT AS OF OCTOBER 1, 2012
ANNUAL EMPLOYER CONTRIBUTION DETERMINED FOR PLAN YEAR ENDING SEPTEMBER 30, 2014
Gabriel Roeder Smith & Company One East Broward Blvd. 954.527.1616 phone
GRS Consultants & Actuaries Suite 505 954.525.0083 fax
Ft. Lauderdale, FL 33301 -1804 www.gabrielroeder.coln
April 11, 2013
Board of Trustees of the
Village of North Palm Beach
General Retirement Fund
North Palm Beach, Florida
Dear Board Members:
The results of the October 1, 2012 Actuarial Valuation of the Village of North Palm Beach General
Retirement Fund are presented in this report.
This report was prepared at the request of the Board and is intended for use by the Retirement Fund and
those designated or approved by the Board. This report may be provided to parties other than the Fund only
in its entirety and only with the permission of the Board.
The purpose of the valuation is to measure the Fund's funding progress, to determine the employer
contribution rate for the fiscal year ending September 30, 2014 and to determine the actuarial information
for Governmental Accounting Standards Board (GASB) Statement No. 25 and No. 27.
This report should not be relied on for any purpose other than the purpose described above.
The findings in this report are based on data or other information through September 30, 2012. Future
actuarial measurements may differ significantly from the current measurements presented in this report due
to such factors as the following: plan experience differing from that anticipated by the economic or
demographic assumptions; changes in economic or demographic assumptions; increases or decreases
expected as part of the natural operation of the methodology used for these measurements (such as the end
of an amortization period or additional cost or contribution requirements based on the plan's funded status);
and changes in plan provisions or applicable law.
The valuation was based upon information furnished by the Village concerning Retirement Plan benefits,
financial transactions, plan provisions and active members, terminated members, retirees and beneficiaries.
We checked for internal and year -to -year consistency, but did not otherwise audit the data. We are not
responsible for the accuracy or completeness of the information provided by the Village.
This report was prepared using certain assumptions prescribed by the Board as described in Section B.
The undersigned actuaries are members of the American Academy of Actuaries and meet the Qualification
Standards of the American Academy of Actuaries to render the actuarial opinions contained herein. The
signing actuaries are independent of the plan sponsor.
This report has been prepared by actuaries who have substantial experience valuing public employee
retirement Funds. To the best of our knowledge the information contained in this report is accurate and
fairly presents the actuarial position of the Retirement Plan as of the valuation date. All calculations have
been made in conformity with generally accepted actuarial principles and practices, with the Actuarial
Standards of Practice issued by the Actuarial Standards Board and with applicable statutes.
Board of Trustees
Village of North Palm Beach General Retirement Fund
Page 2
This actuarial valuation and /or cost determination was prepared and completed by me or under my direct
supervision, and I acknowledge responsibility for the results. To the best of my knowledge, the results are
complete and accurate. In my opinion, the techniques and assumptions used are reasonable, meet the
requirements and intent of Part VII, Chapter 112, Florida Statutes, and are based on generally accepted
actuarial principles and practices. 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 taken into
account in the valuation. All known events or trends which may require a material increase in plan costs or
required conty.ibution rates have been taken into account in the valuation.
Respectfully submitted,
GABRIEL, ROEDER, SMITH AND COMPANY
ByLko
d -tea_
Melissa R. Algayer, A, CA
Enrolled Actuary No. 11 -5457
By
I ni fr e mrose, MAAA
a ed Actuary No. 11 -1560
Gabriel Roeder Smith & Company
TABLE OF CONTENTS
Section Title
24
Page
A Discussion of Valuation Results
1
B Valuation Results
4. Investment Rate of Return
1.
Participant Data
4
2.
Annual Required Contribution (ARC)
5
3.
Actuarial Value of Benefits & Assets
6
4.
Calculation of Employer Normal Cost
7
5.
Liquidation of Unfunded Liability
8
6.
Actuarial Gains and Losses
10
7.
Recent History of Valuation Results
15
8.
Recent History of Required and
Actual Contributions
16
9.
Actuarial Assumptions and Cost Method
17
10.
Miscellaneous and Technical Assumptions
20
11.
Glossary of Terms
21
C Pension Fund Information
1. Statement of Assets
24
2. Income and Disbursements
25
3. Actuarial Value of Assets
26
4. Investment Rate of Return
27
D Financial Accounting Information
1. FASB No. 35
28
2. GASB No. 25
29
3. GASB No. 27
31
E Miscellaneous Information
1. Reconciliation of Membership Data
33
2. Age /Service /Salary Distributions
34
F Summary of Plan Provisions
37
GRS
SECTION A
DISCUSSION OF VALUATION RESULTS
W %I
I
DISCUSSION OF VALUATION RESULTS
Comparison of Required Employer Contributions
A comparison of the required employer contribution developed in this year's and last year's actuarial
valuations is as follows:
The contribution has been adjusted for interest on the basis that employer contributions are made in
equal payments on a bi- weekly basis. The required contribution dollar amounts shown above are estimates
only. The actual contribution should be based on the required percentage multiplied by actual payroll for
the fiscal year.
The actual employer contribution during the year ending September 30, 2012 was $625,209 or
19.57% of payroll based on a payroll amount of $3,194,732. The minimum required contribution was
19.57% of payroll.
Revisions in Benefits
There were no changes in benefit provisions since the prior valuation.
Revisions in Actuarial Assumptions or Methods
There were no changes in actuarial assumptions or methods since the prior valuation.
The Actuarial Standard of Practice (ASOP) with regard to the mortality assumption has recently
been revised. ASOP No. 35 Disclosure Section 4.1.1 now states "The disclosure of the mortality
assumption should contain sufficient detail to permit another qualified actuary to understand the provision
made for future mortality improvement. If the actuary assumes zero mortality improvement after the
GRS
For FYE 9/30/2014
For FYE 9/30/2013
Based on
Based on
10/1/2012
10/1/2011
Increase
Valuation
Valuation
(Decrease)
Required Employer Contribution
$ 693,605
$ 671,534
$ 22,071
As % of Covered Payroll
20.82 %
19.86 %
0.96 OX
The contribution has been adjusted for interest on the basis that employer contributions are made in
equal payments on a bi- weekly basis. The required contribution dollar amounts shown above are estimates
only. The actual contribution should be based on the required percentage multiplied by actual payroll for
the fiscal year.
The actual employer contribution during the year ending September 30, 2012 was $625,209 or
19.57% of payroll based on a payroll amount of $3,194,732. The minimum required contribution was
19.57% of payroll.
Revisions in Benefits
There were no changes in benefit provisions since the prior valuation.
Revisions in Actuarial Assumptions or Methods
There were no changes in actuarial assumptions or methods since the prior valuation.
The Actuarial Standard of Practice (ASOP) with regard to the mortality assumption has recently
been revised. ASOP No. 35 Disclosure Section 4.1.1 now states "The disclosure of the mortality
assumption should contain sufficient detail to permit another qualified actuary to understand the provision
made for future mortality improvement. If the actuary assumes zero mortality improvement after the
GRS
2
measurement date, the actuary should state that no provision was made for future mortality improvement."
The mortality assumption currently does not reflect future mortality improvements beyond 2010. We
recommend the mortality assumption be revised to include a provision for mortality improvements after
2010. Detail on this assumption can be found in the Actuarial Assumptions and Actuarial Cost Method
section.
Actuarial Experience
There was an actuarial loss of $159,767 for the year which means that actual experience was less
favorable than expected. The loss was primarily due to the recognized asset return of 3.8% compared to the
assumed return of 7.5 %. The return on market value was 16.9 %. Partially offsetting the loss was a gain due
to salary increases of 2.8% as compared to the assumed rate of 5.5 %. The net actuarial loss for the year
translates into an increase in annual employer contributions of 0.64% of covered payroll.
Analysis of Chance in Employer Contributions
The components of change in the required contribution are as follows:
Contribution rate from Actuarial Impact Statement 19.86 %
Change in Actuarial Assumptions 0.00
Payment on unfunded liability 0.26
Experience gain/loss 0.64
Change in administrative expense 0.06
Contribution rate this year 20.82
Funded Ratio
The funded ratio this year is 71.6% compared to 70.0% last year. The ratio is equal to the actuarial
value of assets divided by the actuarial accrued (past service) liability.
Variability of Future Contribution Rates
It is important to keep in mind that under the asset smoothing method, the difference between
actual and expected return is recognized over five years. As of September 30, 2012, the market value of
GRS
3
assets exceeds the actuarial value by $39,407. Once all the gains and losses through September 30, 2012
are fully recognized in the actuarial value of assets, the contribution rate will decrease by roughly 0.2% of
payroll unless there are further gains and losses.
If we were not using an asset smoothing method, the contribution rate would have been 20.66 %,
and the funded ratio would have been 71.9 %.
Another potential area of variability has to do with the annual payment on the unfunded accrued
liability (UAL). This payment is computed as a level percent of covered payroll under the assumption
that covered payroll will rise by 4% per year. According to the Florida Administrative Code, this payroll
growth assumption may not exceed the average growth over the last ten years which was 0.40 %. If the
ten -year average falls below this rate next year, the amortization payments will increase. For example, if
the payroll growth assumption is lowered to 0 %, the UAL payment would increase from $150,477 to
$154,344.
Conclusion
The remainder of this Report includes detailed actuarial valuation results, financial information,
miscellaneous information and statistics, and a summary of plan provisions.
GRS
SECTION B
VALUATION RESULTS
GRS
PARTICIPANT DATA
October 1, 2012
October 1, 2011
ACTIVE MEMBERS
Number
58
62
Covered Annual Payroll
$
3,203,302
$
3,251,285
Average Annual Payroll
$
55,229
$
52,440
Average Age
49.6
48.8
Average Past Service
14.0
13.5
Average Age at Hire
35.6
35.3
RETIREES & BENEFICIARIES & DROP
Number
10
8
Annual Benefits
$
92,127
$
53,477
Average Annual Benefit
$
9,213
$
6,685
Average Age
68.1
71.1
DISABILITY RETIREES
Number
0
0
Annual Benefits
$
0
$
0
Average Annual Benefit
$
0
$
0
Average Age
0.0
0.0
TERMINATED VESTED MEMBERS
Number
43
43
Annual Benefits
$
208,299
$
207,531
Average Annual Benefit
$
4,844
$
4,826
Average Age
54.7
54.1
GRS
ANNUAL REQUIRED CONTRIBUTION (ARC)
A. Valuation Date
October 1, 2012
October 1, 2011
B. ARC to Be Paid During
Fiscal Year Ending
9/30/2014
9/30/2013
C. Assumed Date of Employer Contrib.
Biweekly
Biweekly
D. Annual Payment to Amortize
Unfunded Actuarial Liability
$ 150,477
$ 144,689
E. Employer Normal Cost
492,290
477,749
F. ARC if Paid on the Valuation
Date: D +E
642,767
622,438
G. ARC Adjusted for Frequency of
Payments
666,929
645,834
H. ARC as % of Covered Payroll
20.82 %
19.86 %
L Assumed Rate of Increase in Covered
Payroll to Contribution Year
4.00 %
4.00 %
J. Covered Payroll for Contribution Year
3,331,434
3,381,337
K. REC for Contribution Year: H x J
693,605
671,534
L. REC as % of Covered Payroll in
Contribution Year: M _ J
20.82 %
19.86 %
GRS
ACTUARIAL VALUE OF BENEFITS AND ASSETS
A. Valuation Date
October 1, 2012
October 1, 2011
B. Actuarial Present Value of All Projected
Benefits for
1. Active Members
a. Service Retirement Benefits
$ 12,275,851
$ 12,087,764
b. Vesting Benefits
608,237
625,662
c. Disability Benefits
-
-
d. Preretirement Death Benefits
183,250
189,481
e. Return of Member Contributions
5,008
5,297
f Total
13,072,346
12,908,204
2. Inactive Members
a. Service Retirees & Beneficiaries
1,030,326
375,259
b. Disability Retirees
-
-
c. Terminated Vested Members
1,377,818
1,335,391
d. Total
2,408,144
1,710,650
3. Total for All Members
15,480,490
14,618,854
C. Actuarial Accrued (Past Service)
Liability per GASB No. 25
12,231,978
11,103,522
D. Actuarial Value of Accumulated Plan
Benefits per FASB No. 35
1. Based on Plan's Interest Rate
9,748,090
8,560,764
2. Based on FRS Interest Rate
9,420,167
8,258,610
E. Plan Assets
1. Market Value
8,797,605
6,891,782
2. Actuarial Value
8,758,198
7,771,444
F. Actuarial Present Value of Projected
Covered Payroll
25,768,914
27,371,103
G. Actuarial Present Value of Projected
Member Contributions
1,333,707
1,408,262
GRS
CALCULATION OF EMPLOYER NORMAL COST
A. Valuation Date
October 1, 2012
October 1, 2011
B. Actuarial Present Value of Projected
Benefits
$ 15,480,490
$ 14,618,854
C. Actuarial Value of Assets
8,758,198
7,771,444
D. Unfunded Actuarial Accrued Liability
1,573,621
1,556,580
E. Actuarial Present Value of Projected
Member Contributions
1,333,707
1,408,262
F. Actuarial Present Value of Projected
Employer Normal Costs: B -C -D -E
3,814,964
3,882,568
G. Actuarial Present Value of Projected
Covered Payroll
25,768,914
27,371,103
H. Employer Normal Cost Rate: F/G
14.80 %
14.18 %
L Covered Annual Payroll
3,203,302
3,251,285
J. Employer Normal Cost: H x I
474,089
461,032
K. Assumed Amount of Administrative
Expenses
18,201
16,717
L. Total Employer Normal Cost: J +K
492,290
477,749
M. Employer Normal Cost as % of
Covered Payroll
15.37 %
14.69 %
GRS
LIQUIDATION OF THE UNFUNDED FROZEN ACTUARIAL ACCRUED LIABILITY
A. Derivation of the Current UAAL
Original UAAL
1.
Last Year's UAAL
$ 1,556,580
2.
Last Year's Employer Normal Cost
510,653
3.
Last Year's Contributions
625,209
4.
Interest at the Assumed Rate on:
a. 1 and 2 for one year
155,042
Amount
b. 3 from dates paid
23,445
Payment
c. a - b
131,597
5.
This Year's UAAL Prior to Revision:
$ 350,283
$ 33,675
I + 2 - 3 + 4c
1,573,621
6.
Change in UAAL Due to Plan Amendments
1,107,077
103,321
and /or Changes in Actuarial Assumptions
0
7.
This Year's Revised UAAL: 5 + 6
1,573,621
B. UAAL Amortization Period and Payments
Original UAAL
Current UAAL
Amortization
Date
Period
Years
Established
(Years)
Amount
Remaining
Amount
Payment
10/1/99
30
$ 535,528
17
$ 350,283
$ 33,675
10 /1 /00
30
1,426,008
18
1,107,077
103,321
10/1/03
30
700,742
21
567,789
49,222
10/1/03
30
(77,576)
21
(62,857)
(5,449)
1011105
30
313,729
23
251,724
20,984
10/1/09
30
(2,127,680)
27
(1,724,168)
(135,251)
10 /1 /10
30
1,116,376
28
1,083,773
83,975
Totals
1,573,621
150,477
GRS
C. Amortization Schedule
The UFAAL is being amortized as a level percent of payroll over the number of years remaining in the
amortization period. The expected amortization schedule is as follows:
Amortization Schedule
Year
Expected UAAL
2012
$ 1,573,621
2013
1,529,880
2014
1,482,211
2015
1,430,318
2016
1,373,880
2017
1,312,554
2022
918,675
2027
333,742
2032
(152,108)
2037
(28,637)
2040
-
GRS
10
ACTUARIAL GAINS AND LOSSES
The assumptions used to anticipate mortality, employment turnover, investment income, expenses,
salary increases, and other factors have been based on long range trends and expectations. Actual
experience can vary from these expectations. The variance is measured by the gain and loss for the period
involved. If significant long term experience reveals consistent deviation from what has been expected and
that deviation is expected to continue, the assumptions should be modified. The net actuarial gain (loss) for
the past year has been computed as follows:
A. Employer Normal Cost as a
Percentage of Covered Payroll
1. Last Valuation 14.18 %
2. Current Valuation 14.80
3. Difference: 1 - 2 (0.62)
B. Actuarial Present Value of $ 25,768,914
Projected Covered Payroll
C. Net Actuarial Gain (Loss): A3 x B (159,767)
D. Gain (Loss) Due to Investments (304,085)
E. Gain (Loss) from Other Sources 144,318
GRS
11
Net actuarial gains in previous years have been as follows:
Year Ended
Change in Employer
Normal Cost Rate
Gain (Loss)
9/30/89
(1.27) %
$ 247,650
9/30/90
0.99
(208,184)
9/30/91
(1.89)
449,984
9/30/92
(0.46)
116,603
9/30/93
(0.85)
220,910
9/30/94
0.25
(72,092)
9/30/95
(0.75)
219,957
9/30/96
(0.62)
119,415
9/30/97
(1.09)
239,623
9/30/98
(0.63)
143,651
9/30/99
(1.14)
266,397
9/30/00
(0.42)
98,421
9/30/01
(0.99)
266,154
9/30/02
2.05
(526, 865)
9/30/03
2.01
(566,552)
9/30/04
4.74
(1,665,087)
9/30/05
(0.06)
17,103
9/30/06
(1.24)
403,362
9/30/07
(1.34)
375,088
9/30/08
(0.43)
112,703
9/30/09
0.12
(31,231)
9/30/10
1.34
(392,336)
9/30/11
(0.27)
73,902
9/30/12
0.62
(159,767)
GRS
12
The fund earnings and salary increase assumptions have considerable impact on the cost of the Plan
so it is important that they are in line with the actual experience. The table shows the actual fund earnings
and salary increase rates compared to the assumed rates for the last few years:
Year
9/30/1985
9/30/1986
9/30/1987
9/30/1988
9/30/1989
9/30/1990
9/30/1991
9/30/1992
9/30/1993
9/30/1994
9/30/1995
9/30/1996
9/30/1997
9/30/1998
9/30/1999
9/30/2000
9/30/2001
9/30/2002
9/30/2003
9/30/2004
9/30/2005
9/30/2006
9/30/2007
9/30/2008
9/30/2009
9/30/2010
9/30/2011
9/30/2012
Averages
Investment Return
Actual
Assumed
13.8 %
7.0 %
27.2
7.0
16.4
7.0
(6.3)
7.0
19.4
7.0
(0.6)
7.0
19.7
7.0
11.8
7.0
9.7
7.0
6.0
7.0
8.7
7.0
9.3
8.0
11.5
8.0
10.9
8.0
13.2
8.0
12.7
8.5
7.9
8.5
2.5
8.5
1.6
8.5
8.6
8.5
8.7
8.5
8.1
8.0
9.0
8.0
4.9
8.0
3.8
8.0
4.0
8.0
2.3
7.5
3.8
7.5
8.7 % I - --
Salary Increases
Actual
Assumed
5.3 %
6.0 %
12.8
6.0
8.6
6.0
6.8
6.0
5.2
6.0
10.4
6.0
5.0
6.0
7.7
6.0
0.8
6.0
5.9
6.0
4.6
6.0
4.4
6.0
4.3
6.0
4.3
6.0
2.8
6.0
10.3
5.5
3.4
5.5
6.8
5.5
7.2
5.5
23.9
5.5
(2.9)
5.5
8.5
5.5
8.0
5.5
4.0
5.5
3.4
5.5
10.3
5.5
(1.9)
5.5
2.8
5.5
6.1 % - --
The actual investment return rates shown above are based on the actuarial value of assets. The
actual salary increase rates shown above are the increases received by those active members who were
included in the actuarial valuations both at the beginning and the end of each year.
GRS
13
History of Investment Return Based on Actuarial Value of Assets
History of Salary Increases
30%
30%
25%
25%
20%
20%
15%
15%
10%
10%
5%
4%
5%
0%
0%
-5%
-5%
-4%
-4%
,\A � � �A � A °I�� �1�� �)�pl^� Cpl ����7 ��b�1�p1� �� �1�� X011' '\,Z� °l�� ���J �\�kl �A �� °1��1
-10%
-10%
t Actual t Assumed
Plan Year End
t Actual t Assumed
History of Salary Increases
GRS
24%
24%
20%
20%
16%
16%
12%
12%
8%
8%
4%
4%
0%
0%
-4%
-4%
,\A � � �A � A °I�� �1�� �)�pl^� Cpl ����7 ��b�1�p1� �� �1�� X011' '\,Z� °l�� ���J �\�kl �A �� °1��1
Plan Year End Compared to Previous Year
t Actual t Assumed
GRS
14
Actual (A) Compared to Expected (E) Decrements
Among Active Employees
Number
Added
Service &
Active
During
DROP
Disability
Terminations
Members
Vested Other Totals
Year
Year
Retirement
Retirement
Death
End of
A
FE
A
E
A
E
A
E
A
A
A
E
Ended
Year
9/30/2003
7
3
0
7
0
0
0
0
2
1
3
3
92
9/30/2004
10
8
5
8
0
0
0
0
1
2
3
3
94
9/30/2005
12
22
10
7
0
0
0
0
9
3
12
3
84
9/30/2006
15
9
0
2
0
0
1
0
4
4
8
2
90
9/30/2007
3
21
2
4
0
0
0
0
8
11
19
4
72
9/30/2008
6
14
6
3
0
0
0
0
7
1
8
2
64
9/30/2009
5
6
2
2
0
0
0
0
3
1
4
2
63
9/30/2010
4
3
1
2
0
0
0
0
0
2
2
2
64
9/30/2011
0
2
0
3
0
0
0
0
0
2
2
2
62
9/30/2012
2
6
2
3
0
0
1
0
1
2
3
2
58
9/30/2013
5
0
0
2
10 Yr Totals *
64
94
28
41
0
0
2
0
35
29
64
25
* Totals are through current Plan Year only
GRS
15
RECENT HISTORY OF VALUATION RESULTS
Number of
Covered
Actuarial
Employer Normal Cost
"/(o of
Valuation
Members
Annual
Value
Active Inactive
Date
Payroll
of Assets
UFAAL
Amount
Pavroll
10/1/88
71 37
$ 1,473,422
$ 1,743,234
$ 0
$ 176,109
12.0 %
10/1/89
83 37
1,715,049
2,105,292
0
184,804
10.8
10/1/90
79 37
1,848,726
2,134,052
0
232,938
12.6
10/1/91
86 34
2,022,569
2,531,076
0
219,669
10.9
10/1/92
87 35
2,153,587
2,645,252
0
216,069
10.0
10/1/93
91 35
2,241,595
3,018,716
0
205,294
9.2
10/1/94
96 35
2,471,296
3,209,342
0
258,406
10.5
10/1/95
93 35
2,451,309
3,471,658
0
245,007
10.0
10/1/96
80 39
2,251,610
3,805,073
0
229,496
10.2
10/1/97
79 40
2,380,024
4,301,968
0
214,402
9.0
10/1/98
79 42
2,435,518
4,574,342
0
204,401
8.4
10/1/99
83 46
2,532,741
5,179,781
535,528
247,653
9.8
10 /1 /00
84 45
2,761,773
5,732,329
1,891,134
285,337
10.3
10 /1 /01
93 45
3,127,313
6,312,447
1,899,439
297,452
9.5
10/1/02
88 49
3,076,493
6,193,676
1,900,967
359,426
11.7
10/1/03
92 48
3,443,843
6,759,012
2,555,216
451,615
13.1
10/1/04
94 48
4,275,981
6,578,832
2,618,609
760,337
17.8
1011105
84 55
3,220,258
3,817,605
2,956,402
596,120
18.5
10/1/06
90 56
3,680,960
5,283,023
2,970,967
628,515
17.1
10/1/07
72 59
3,238,894
6,481,382
2,944,876
505,658
15.6
10/1/08
64 60
2,977,995
5,824,447
2,951,925
454,988
15.3
10/1/09
63 55
3,046,421
6,048,808
811,721
375,751
12.3
10 /1 /10
64 55
3,424,324
6,863,057
1,696,464
510,653
14.9
10 /1 /11
62 51
3,251,285
7,771,444
1,556,580
477,749
14.7
10/1/12
58 53
3,203,302
8,758,198
1,573,621
492,290
15.4
GRS
16
RECENT HISTORY OF REQUIRED AND ACTUAL CONTRIBUTIONS
End of Year
Required Contribution
To Which
Actual
Valuation
Valuation
Contribution
Applies
% of
Amount
Payroll
10/1/88
9/30/89
$ 183,611
12.46 %
$ 184,000
10/1/89
9/30/90
192,677
11.23
195,000
10/1/90
9/30/91
242,868
13.14
245,000
10/1/91
9/30/92
229,034
11.42
230,000
10/1/92
9/30/93
225,280
10.46
226,000
10/1/93
9/30/94
214,046
9.55
223,000
10/1/94
9/30/95
269,422
10.90
270,000
10/1/95
9/30/96
259,751
10.65
260,000
10/1/96
9/30/97
240,637
10.69
245,169
10/1/97
9/30/98
224,810
9.45
250,721
10/1/98
9/30/99
214,323
8.80
227,112
10/1/99
9/30/00
292,866
11.56
372,744
10 /1 /00
9/30/01
415,152
15.03
447,128
10 /1 /01
9/30/02
430,411
13.76
467,750
10/1/02
9/30/03
502,855
16.35
503,220
10/1/02
9/30/04
523,127
16.35
524,000
10/1/03
9/30/05
662,237
18.49
662,237
10/1/04
9/30/06
1,007,695
22.66
1,007,695
1011105
9/30/07
866,069
25.86
873,854
10/1/06
9/30/08
875,126
22.86
876,712
10/1/07
9/30/09
761,943
22.62
765,381
10/1/08
9/30/10
734,636
23.72
759,529
10/1/09
9/30/11
499,954
15.78
646,537
10 /1 /10
9/30/12
696,946
19.57
625,209
10 /1 /11
9/30/13
671,534
19.86
na
10/1/12
9/30/14
693,605
20.82
na
GRS
17
ACTUARIAL ASSUMPTIONS AND COST METHOD
Valuation Methods
Actuarial Cost Method — Normal cost and the allocation of benefit values between service rendered
before and after the valuation date were determined using the Frozen Entry -Age Actuarial Cost Method.
The excess of the Actuarial Present Value of Projected Benefits of the group included in the valuation,
over the sum of the Actuarial Value of Assets, the Unfunded Frozen Actuarial Accrued Liability and the
Actuarial Present Value of Future Member Contribution (if any) is allocated as a level percentage of
earnings of the group between the valuation date and the assumed retirement age. This allocation is
performed for the group as a whole, not as a sum of individual allocations. The portion of this Actuarial
Present Value allocated to a specific year is called the Employer Normal Cost.
Under this method, actuarial gains (losses) reduce (increase) future Normal Costs.
Financing of Unfunded Actuarial Accrued Liabilities - Unfunded Actuarial Accrued Liabilities (full
funding credit if assets exceed liabilities) were amortized by level (principal & interest combined)
percent -of- payroll contributions over a reasonable period of future years.
Actuarial Value of Assets - The Actuarial Value of Assets phases in the difference between the expected
return on the actuarial value of assets and the actual return on the market of assets at the rate of 20% per
year. The Actuarial Value of Assets is further adjusted to the extent necessary to fall within the corridor
whose lower limit is 80% of the Market Value of plan assets and whose upper limit is 120% of the
Market Value of plan assets. During periods when investment performance exceeds the assumed rate,
Actuarial Value of Assets will tend to be less than Market Value. During periods when investment
performance is less than assumed rate, Actuarial Value of Assets will tend to be greater than Market
Value.
Valuation Assumptions
The actuarial assumptions used in the valuation are shown in this Section.
Economic Assumptions
The investment return rate assumed in the valuation is 7.5% per year, compounded annually (net after
investment expenses).
The Wage Inflation Rate assumed in this valuation was 4% per year. The Wage Inflation Rate is
defined to be the portion of total pay increases for an individual that are due to macro economic forces
including productivity, price inflation, and labor market conditions. The wage inflation rate does not
include pay changes related to individual merit and seniority effects.
The assumed real rate of return over wage inflation is defined to be the portion of total investment
return that is more than the assumed wage inflation rate. Considering other economic assumptions, the
7.5% investment return rate translates to an assumed real rate of return over wage inflation of 3.5 %.
The active member population is assumed to remain constant. For purposes of financing the unfunded
liabilities, total payroll is assumed to grow at 4% per year. According to the Florida Administrative Code,
this payroll growth assumption may not exceed the average growth over the last ten years, which is
0.40 %.
GRS
18
Administrative Expenses paid out of the fund are assumed to be the average of actual expenses over the
previous two years.
Pay increase assumptions for individual active members are shown below. Part of the assumption for
each age for merit and /or seniority increase, and the other 4% recognizes wage inflation, including price
inflation, productivity increases, and other macro economic forces.
The rates of salary increase used are in accordance with the following table. This assumption is used to
project a member's current salary to the salaries upon which benefits will be based.
Demographic Assumptions
The mortality table was the RP 2000 Combined Healthy Participant Mortality Tables for males and
females projected to 2010. The provision for projecting future mortality improvements through 2010 is
being made by using Scale AA. There is no allowance for mortality improvements after 2010.
This assumption is used to measure the probabilities of each benefit payment being made after retirement.
For active members, the probabilities of dying before retirement were based upon the same mortality table
as members dying after retirement. For disabled retirees, the regular mortality tables are set forward 5 years
in ages to reflect impaired longevity.
As noted in the Discussion of Valuation Results section, we recommend that the mortality assumption be
revised to reflect a provision for mortality improvements after 2010. Sample values of the current and
proposed life expectancies are shown in the tables below.
Current Mortalitv Assumption
Attained
Ages on
10/1/2012
%
Increase in Salary
50
0.18
Merit and
Base
34.12
Age
Seniority
(Economic)
Total Increase
20
1.5%
4.0%
5.5%
25
1.5%
4.0%
5.5%
30
1.5%
4.0%
5.5%
35
1.5%
4.0%
5.5%
40
1.5%
4.0%
5.5%
45
1.5%
4.0%
5.5%
50
1.5%
4.0%
5.5%
55
1.5%
4.0%
5.5%
Demographic Assumptions
The mortality table was the RP 2000 Combined Healthy Participant Mortality Tables for males and
females projected to 2010. The provision for projecting future mortality improvements through 2010 is
being made by using Scale AA. There is no allowance for mortality improvements after 2010.
This assumption is used to measure the probabilities of each benefit payment being made after retirement.
For active members, the probabilities of dying before retirement were based upon the same mortality table
as members dying after retirement. For disabled retirees, the regular mortality tables are set forward 5 years
in ages to reflect impaired longevity.
As noted in the Discussion of Valuation Results section, we recommend that the mortality assumption be
revised to reflect a provision for mortality improvements after 2010. Sample values of the current and
proposed life expectancies are shown in the tables below.
Current Mortalitv Assumption
Attained
Ages on
10/1/2012
Probability of
Dying Next Year
Men Women
Future Life
Expectancy (years)
Men Women
50
0.18
% 0.14 %
31.81
34.12
55
0.30
0.25
27.13
29.40
60
0.57
0.48
22.62
24.85
65
1.11
0.92
18.40
20.57
70
1.91
1.59
14.56
16.65
75
3.29
2.59
11.08
13.11
80
5.82
4.28
8.09
9.96
GRS
19
Proposed Mortality Assumption*
Sample
Ages
Life Expectancy
2007
2012
2017
2022
Male Female
Male Female
Male Female
Male Female
50
33.58
35.23
34.04
35.48
34.49
35.73
34.92
35.98
55
28.47
30.28
28.92
30.52
29.36
30.76
29.78
31.00
60
23.58
25.52
24.00
25.75
24.42
25.98
24.82
26.21
65
19.02
21.05
19.41
21.27
19.79
21.49
20.16
21.71
70
1 14.901
16.95
15.241
17.16
15.571
17.361
15.891
17.57
*The RP -2000 Combined Healthy Participant Mortality Tables for males and females. The provision for
future mortality improvements is being made by using Scale AA after 2000.
The rates of retirement used to measure the probability of eligible members retiring during the next year
were as follows:
Probability of
Early Retirement
5 % per year
Number of Years
After First Eligibility
for Normal Retirement
Probability of
Normal Retirement
0 -1
60%
1 -2
40
2 -3
40
3 -4
40
4 -5
40
5+
100
Rates of separation from active membership were as shown below (rates do not apply to members
eligible to retire and do not include separation on account of death or disability). This assumption
measures the probabilities of members remaining in employment.
Sample Ages
Turnover
25
18.8%
30
11.2%
35
6.3%
40
4.8%
45
3.4%
50
2.4%
55
0.5%
60
0.0%
Rates of disability among active members - It was assumed that no members would become disabled.
GRS
20
Miscellaneous and Technical Assumptions
Administrative & Investment The investment return assumption is intended to be the return net of
Expenses investment expenses. Annual administrative expenses are assumed to
be equal to the average of the prior two years' expenses. Assumed
administrative expenses are added to the Normal Cost.
Benefit Service Exact fractional service is used to determine the amount of benefit
payable.
Decrement Operation Mortality operates during retirement eligibility.
Decrement Timing Decrements of all types are assumed to occur at the beginning of the
year.
Eligibility Testing Eligibility for benefits is determined based upon the age nearest
birthday and service nearest whole year on the date the decrement is
assumed to occur.
Forfeitures For vested separations from service, it is assumed that 0% of members
separating will withdraw their contributions and forfeit an employer
financed benefit. It was further assumed that the liability at
termination is the greater of the vested deferred benefit (if any) or the
member's accumulated contributions.
Incidence of Contributions Employer contributions are assumed to be made at the end of each
biweekly pay period. Member contributions are assumed to be
received continuously throughout the year based upon the computed
percent of payroll shown in this report, and the actual payroll payable
at the time contributions are made.
Marriage Assumption 100% of males and 100% of females are assumed to be married for
purposes of death -in- service benefits. Male spouses are assumed to be
three years older than female spouses for active member valuation
purposes.
Normal Form of Benefit A life annuity is the normal form of benefit.
PUv Increase Timing Middle of fiscal year. This is equivalent to assuming that reported pays
represent amounts paid to members during the year ended on the
valuation date.
Service Credit Accruals It is assumed that members accrue one year of service credit per year.
GRS
21
GLOSSARY OF TERMS
Actuarial Accrued Liability The difference between the Actuarial Present Value of Future Benefits, and the
(AAL) Actuarial Present Value of Future Normal Costs.
Actuarial Assumptions Assumptions about future plan experience that affect costs or liabilities, such as:
mortality, withdrawal, disablement, and retirement; future increases in salary;
future rates of investment earnings; future investment and administrative
expenses; characteristics of members not specified in the data, such as marital
status; characteristics of future members; future elections made by members; and
other items.
Actuarial Cost Method A procedure for allocating the Actuarial Present Value of Future Benefits between
the Actuarial Present Value of Future Normal Costs and the Actuarial Accrued
Liability.
Actuarial Equivalent Of equal Actuarial Present Value, determined as of a given date and based on a
given set of Actuarial Assumptions.
Actuarial Present Value (APP) The amount of funds required to provide a payment or series of payments in the
future. It is determined by discounting the future payments with an assumed
interest rate and with the assumed probability each payment will be made.
Actuarial Present Value of The Actuarial Present Value of amounts which are expected to be paid at various
Future Benefits (APVFB) future times to active members, retired members, beneficiaries receiving benefits,
and inactive, nonretired members entitled to either a refund or a future retirement
benefit. Expressed another way, it is the value that would have to be invested on
the valuation date so that the amount invested plus investment earnings would
provide sufficient assets to pay all projected benefits and expenses when due.
Actuarial Valuation The determination, as of a valuation date, of the Normal Cost, Actuarial Accrued
Liability, Actuarial Value of Assets, and related Actuarial Present Values for a
plan. An Actuarial Valuation for a governmental retirement system typically also
includes calculations of items needed for compliance with GASB No. 25, such as
the Funded Ratio and the Annual Required Contribution (ARC).
Actuarial Value ofAssets The value of the assets as of a given date, used by the actuary for valuation
purposes. This may be the market or fair value of plan assets or a smoothed
value in order to reduce the year -to -year volatility of calculated results, such as
the funded ratio and the actuarially required contribution (ARC).
Amortization Method A method for determining the Amortization Payment. The most common methods
used are level dollar and level percentage of payroll. Under the Level Dollar
method, the Amortization Payment is one of a stream of payments, all equal,
whose Actuarial Present Value is equal to the UAAL. Under the Level Percentage
of Pay method, the Amortization Payment is one of a stream of increasing
payments, whose Actuarial Present Value is equal to the UAAL. Under the Level
Percentage of Pay method, the stream of payments increases at the rate at which
total covered payroll of all active members is assumed to increase.
22
Amortization Payment That portion of the plan contribution or ARC which is designed to pay interest on
and to amortize the Unfunded Actuarial Accrued Liability.
Amortization Period The period used in calculating the Amortization Payment.
Annual Required Contribution The employer's periodic required contributions, expressed as a dollar amount or
(ARC) a percentage of covered plan compensation, determined under GASB No. 25.
The ARC consists of the Employer Normal Cost and Amortization Payment.
Closed Amortization Period A specific number of years that is reduced by one each year, and declines to zero
with the passage of time. For example if the amortization period is initially set at
30 years, it is 29 years at the end of one year, 28 years at the end of two years, etc.
Employer Normal Cost The portion of the Normal Cost to be paid by the employer. This is equal to the
Normal Cost less expected member contributions.
Equivalent Single Amortization For plans that do not establish separate amortization bases (separate components
Period of the UAAL), this is the same as the Amortization Period. For plans that do
establish separate amortization bases, this is the period over which the UAAL
would be amortized if all amortization bases were combined upon the current
UAAL payment.
Experience Gain/Loss A measure of the difference between the normal cost rate from last year and the
normal cost rate from this year.
Frozen Entry Age Actuarial A method under which the excess of the Actuarial Present Value of Projected
Cost Method Benefits of the group included in the valuation, over the sum of the Actuarial
Value of Assets, the Unfunded Frozen Actuarial Accrued Liability and the
Actuarial Present Value of Future Member Contributions (if any) is allocated as a
level percentage of earnings of the group between the valuation date and the
assumed retirement age. This allocation is performed for the group as a whole,
not as a sum of individual allocations. The portion of this Actuarial Present Value
allocated to a specific year is called the Employer Normal Cost. Under this
method, actuarial gains (losses) reduce (increase) future Normal Costs.
Frozen Actuarial Accrued The portion of the Actuarial Present Value of Projected Benefits which is
Liability separated as of a valuation date and frozen under the Actuarial Cost Method being
used. This separated portion is the sum of an initial Unfunded Actuarial Accrued
Liability and any increments or decrements in the Actuarial Accrued Liability
established subsequently as a result of changes in pension plan benefits, Actuarial
Assumptions or methods.
Funded Ratio The ratio of the Actuarial Value of Assets to the Actuarial Accrued Liability.
GASB Governmental Accounting Standards Board.
GASB No. 25 and These are the governmental accounting standards that set the accounting rules for
GASB No. 27 public retirement systems and the employers that sponsor or contribute to them.
Statement No. 27 sets the accounting rules for the employers that sponsor or
contribute to public retirement systems, while Statement No. 25 sets the rules for
the systems themselves.
Owl M-
23
Normal Cost The annual cost assigned, under the Actuarial Cost Method, to the current plan
year.
Open Amortization Period An open amortization period is one which is used to determine the Amortization
Payment but which does not change over time. In other words, if the initial period
is set as 30 years, the same 30 -year period is used in determining the
Amortization Period each year. In theory, if an Open Amortization Period is used
to amortize the Unfunded Actuarial Accrued Liability, the UAAL will never
completely disappear, but will become smaller each year, either as a dollar
amount or in relation to covered payroll.
Unfunded Actuarial Accrued The difference between the Actuarial Accrued Liability and Actuarial Value of
Liability Assets.
Valuation Date The date as of which the Actuarial Present Value of Future Benefits are
determined. The benefits expected to be paid in the future are discounted to this
date.
GRS
SECTION C
PENSION FUND INFORMATION
GRS
24
STATEMENT OF ASSETS
GRS
September 30
Item
2012
2011
A.
Cash and Cash Equivalents (Operating Cash)
B.
Receivables:
1. Member Contributions
$
-
$
6,443
2. Employer Contributions
$
29,966
$
17,496
3. Investment Income and Other Receivables
82
2
4. Total Receivables
$
30,048
$
23,941
C.
Investments
1. Short-Term Investments
$
537
$
233,423
2. Domestic and International Equities
5,560,676
4,056,958
3. Domestic and International Fixed Income
3,214,473
2,589,419
4. Real Estate
-
-
5. Private Equity
-
-
6. Total Investments
$
8,775,686
$
6,879,800
D.
Liabilities
1. Benefits/Refunds Payable
-
2. Lump Sums Distributions Payable
-
-
3. Accrued Expenses and Other Payables
(8,129)
(11,959)
4. Other
-
-
5. Total Liabilities
$
(8,129)
$
(11,959)
E.
Total Market Value of Assets Available for Benefits
$
8,797,605
$
6,891,782
F.
Allocation of Investments
1. Short-Term Investments
0.01%
3.39%
2. Domestic and International Equities
63.36%
58.97%
3. Domestic and International Fixed Income
36.63%
37.64%
4. Real Estate
0.00%
0.00%
5. Private Equity
0.00%
0.00%
6. Total Investments
100.00%
100.00%
GRS
25
INCOME AND DISBURSEMENTS
Item
A. Market Value of Assets at Beginning of Year
B. Revenues and Expenditures
1. Contributions
a. Employee Contributions
b. City Contributions
c. Purchased Service Credit
d. Total
2. Investment Income
a. Interest, Dividends, and Other Income
b. Realized Gains /(Losses)
c. Unrealized Gains /(Losses)
d. Investment Expenses
e. Net Investment Income
3. Benefits and Refunds
a. Refunds
b. Regular Monthly Benefits
c. Lump Sum Distributions
d. Total
4. Administrative and Miscellaneous Expenses
C. Market Value of Assets at End of Year
GRS
September 30
2012 2011
$ 6,891,782 $ 6,256,127
$ 169,466 $ 174,570
625,209 646,537
$ 794,675 $ 821,107
$ 232,419
$ 34,409
64,163
1,194,993
953,588
(1,271,937)
(26,738)
(62,774)
$ 1,223,432
$ (105,309)
$ -
$ (32,479)
(93,868)
(29,679)
$ (93,868)
$ (18,416)
$ 8,797,605
$ (62,158)
$ (17,985)
$ 6,891,782
26
ACTUARIAL VALUE OF ASSETS
GRS
Valuation Date — September 30
2011
2012
2013 2014 2015
A
Actuarial Value of Assets Beginning of Year
$6,863,057
$ 7,771,444
$ - $ - $
B.
Market Value End of Year
$6,891,782
$ 8,797,605
- -
C.
Market Value Beginning of Year
6,256,127
6,891,782
- -
D.
Non- hive stment/Administrative Net Cash Flow
740,964
682,391
E.
Investment Income
E1. Actual Market Total: B -C -D
(105,309)
1,223,432
- - -
E2. Assumed Rate of Return
7.50%
7.50%
7.50% 7.50% 7.50%
E3. Assumed Amount of Return
542,515
608,448
- - -
E4. Amount Subject to Phase -In: EI —E3
(647,824)
614,984
- -
F.
Phase -In Recognition of Investment Income
F1. Current Year: 0.20 x E4
(129,565)
122,997
- - -
F2. First Prior Year
(4,283)
(129,565)
122,997 - -
F3. Second Prior Year
(55,320)
(4,283)
(129,565) 122,997 -
F4. Third Prior Year
(237,915)
(55,320)
(4,283) (129,565) 122,997
F5. Fourth Prior Year
51,991
(237,914)
(55,320) (4,283) (129,565)
F6. Total Phase -Ins
(375,092)
(304,085)
(66,171) (10,851) (6,568)
G.
Actuarial Value of Assets (AVA) End of Year
G1. Preliminary AVA End of Year: A +D +E3 +F6
$7,771,444
$8,758,198
$ - $ - $ -
G2. Upper Corridor Limit: 120 % *B
8,270,138
10,557,126
- - -
G3. Lower Corridor Limit: 80 % *B
5,513,426
7,038,084
- - -
G4. Funding Value End of Year
7,771,444
8,758,198
- - -
G5. Less: DROP Balance
-
-
- - -
G6. Final Funding Value End of Year
7,771,444
8,758,198
- - -
H.
Difference between Market & AVA
(879,662)
39,407
$ - $ - $ -
I.
Actuarial Rate of Return
2.31%
3.75%
0.00% 0.00% 0.00%
J.
Market Value Rate of Return
-1.59%
16.91%
0.00% 0.00% 0.00%
K
Ratio of AVA to Market Value
112.76%
99.55%
0.00% 0.00% 0.00%
GRS
27
* Figures prior to 1988 were taken from the previous actuary's report for 1987.
** Net rate after investment expenses starting in 2004.
GRS
Investment Rate of Return*
Year Ended
Market Value* *
Actuarial Value
9/30/85
13.8 %
13.8
%
9/30/86
27.2
27.2
9/30/87
16.4
16.4
9/30/88
(6.3)
(6.3)
9/30/89
19.4
19.4
9/30/90
(0.6)
(0.6)
9/30/91
19.7
19.7
9/30/92
11.8
11.8
9/30/93
10.0
9.7
9/30/94
(1.5)
6.0
9/30/95
18.6
8.7
9/30/96
12.6
9.3
9/30/97
23.1
11.5
9/30/98
5.6
10.9
9/30/99
13.9
13.2
9/30/00
13.0
12.7
9/30/01
(4.6)
7.9
9/30/02
(6.6)
2.5
9/30/03
10.9
1.6
9/30/04
9.0
8.6
9/30/05
9.0
8.7
9/30/06
6.9
8.1
9/30/07
12.6
9.0
9/30/08
(11.4)
4.9
9/30/09
3.8
3.8
9/30/10
8.8
4.0
9/30/11
(1.6)
2.3
9/30/12
16.9
3.8
Average Returns:
Last 5 Years
2.9 %
3.7
%
Last 10 Years
6.2 %
5.4
%
All Years
8.5 %
8.7
%
* Figures prior to 1988 were taken from the previous actuary's report for 1987.
** Net rate after investment expenses starting in 2004.
GRS
SECTION D
FINANCIAL ACCOUNTING INFORMATION
GRS
28
FASB NO. 35 INFORMATION
A. Valuation Date
October 1, 2012
October 1, 2011
B. Actuarial Present Value of Accumulated
Plan Benefits
1. Vested Benefits
a. Members Currently Receiving Payments
$ 1,030,326
$ 375,259
b. Terminated Vested Members
1,377,818
1,335,391
c. Other Members
7,040,334
6,481,817
d. Total
9,448,478
8,192,467
2. Non - Vested Benefits
299,612
368,297
3. Total Actuarial Present Value of Accumulated
Plan Benefits: Id + 2
9,748,090
8,560,764
4. Accumulated Contributions of Active Members
1,191,631
1,087,437
C. Changes in the Actuarial Present Value of
Accumulated Plan Benefits
1. Total Value at Beginning of Year
8,560,764
7,678,015
2. Increase (Decrease) During the Period
Attributable to:
a. Plan Amendment
0
0
b. Change in Actuarial Assumptions
0
0
c. Latest Member Data, Benefits Accumulated
and Decrease in the Discount Period
1,281,194
944,907
d. Benefits Paid
(93,868)
(62,158)
e. Net Increase
1,187,326
882,749
3. Total Value at End of Period
9,748,090
8,560,764
4. Total Value at End of Period at FRS interest Rate
a. Vested
9,135,633
7,911,248
b. Non - Vested
284,534
347,362
c. Total
9,420,167
8,258,610
D. Market Value of Assets
8,797,605
6,891,782
E. Funded Ratio Using FRS Interest Rate
93.4%
83.4%
GRS
29
SCHEDULE OF FUNDING PROGRESS
(GASB Statement No. 25)
Actuarial
Valuation
Date
Actuarial
Value of
Assets
(a)
Actuarial
Accrued
Liability (AAL)
Entry Age
(b)
Unfunded
AAL (UAAL)
(b) -(a)
Funded
Ratio
(a) /(b)
Covered
Payroll
(c)
UAAL As
% of
Covered
Payroll
(b -a) /c
10/1/91
$ 2,531,076
$ 2,716,601
$ 185,525
93.2 %
$ 2,022,569
9.2 %
10/1/92
2,645,252
3,055,166
409,914
86.6
2,153,587
19.0
10/1/93
3,018,716
3,258,012
239,296
92.7
2,241,595
10.7
10/1/94
3,209,342
3,659,663
450,321
87.7
2,471,296
18.2
10/1/95
3,471,658
4,132,092
660,434
84.0
2,451,309
26.9
10/1/96
3,805,073
4,295,018
489,945
88.6
2,251,610
21.8
10/1/97
4,301,968
4,585,587
283,619
93.8
2,380,024
11.9
10/1/98
4,574,342
4,733,864
159,522
96.6
2,435,518
6.5
10/1/99
5,179,781
5,943,849
764,068
87.1
2,543,984
30.0
10 /1 /00
5,732,329
7,508,961
1,776,632
76.3
2,761,773
64.3
10 /1 /01
6,312,447
8,150,125
1,837,678
77.5
3,127,313
58.8
10/1/02
6,193,676
8,594,442
2,400,766
72.1
3,076,493
78.0
10/1/03
6,759,012
10,404,349
3,645,337
65.0
3,443,843
105.9
10/1/04
6,578,832
12,084,785
5,505,953
54.4
4,275,981
128.8
1011105
3,817,605
9,116,599
5,298,994
41.9
3,220,258
164.6
10/1/06
5,283,023
10,490,332
5,207,309
50.4
3,680,960
141.5
10/1/07
6,481,382
10,997,783
4,516,401
58.9
3,238,894
139.4
10/1/08
5,824,447
10,138,981
4,314,534
57.4
2,977,995
144.9
10/1/09
6,048,808
8,328,331
2,279,523
72.6
3,046,421
74.8
10 /1 /10
6,863,057
10,516,549
3,653,492
65.3
3,424,324
106.7
10 /1 /11
7,771,444
11,103,522
3,332,078
70.0
3,251,285
102.5
10/1/12
8,758,198
12,231,978
3,473,780
71.6
3,203,302
108.4
GRS
30
SCHEDULE OF EMPLOYER CONTRIBUTIONS
(GASB Statement No. 25)
Year
Ended
9/30
Annual
Required
Contribution
Actual
Contribution
Percentage
Contributed
1991
$ 242,868
$ 245,000
100.9 %
1992
229,034
230,000
100.4
1993
225,280
226,000
100.3
1994
214,046
223,000
104.2
1995
269,422
270,000
100.2
1996
259,751
260,000
100.1
1997
240,637
245,169
101.9
1998
224,810
250,721
111.5
1999
214,323
227,112
106.0
2000
292,866
372,744
127.3
2001
415,152
447,128
107.7
2002
430,411
467,750
108.7
2003
502,855
503,220
100.1
2004
523,127
524,000
100.2
2005
662,237
662,237
100.0
2006
1,007,695
1,007,695
100.0
2007
866,069
873,854
100.9
2008
875,126
876,712
100.2
2009
761,943
765,381
100.5
2010
734,636
759,529
103.4
2011
499,954
646,537
129.3
2012
625,209 *
625,209
100.0
* This is the required contribution amount determined as a percentage of actual
payroll for the fiscal year.
GRS
31
ANNUAL PENSION COST AND NET PENSION OBLIGATION
(GASB STATEMENT NO. 27)
Employer FYE September 30
2013
2012
2011
Annual Required Contribution (ARC)
$ 671,534 '
$ 625,209
$ 499,954
Interest on Net Pension Obligation (NPO)
(23,341)
(24,410)
(13,900)
Adjustment to ARC
(36,968)
(38,661)
(20,344)
Annual Pension Cost (APC)
685,161
639,460
506,398
Contributions made
**
625,209
646,537
Increase (decrease) in NPO
**
14,251
(140,139)
NPO at beginning of year
(311,218)
(325,469)
(185,330)
NPO at end of year
**
(311,218)
(325,469)
'This amount is an estimate. The final required
contribution will be based on the percent of payroll
requirement multiplied by actual covered payroll for the fiscal year.
** To be determined.
THREE YEAR TREND INFORMATION
Fiscal
Annual Pension
Actual
Percentage of
Net Pension
Year Ending
Cost (APQ
Contribution
APC Contributed
Obligation
9/30/2010
$ 739,704
$ 759,529
102.7 %
$ (185,330)
9/30/2011
506,398
646,537
127.7
(325,469)
9/30/2012
639,460
625,209
97.8
(311,218)
GRS
32
REQUIRED SUPPLEMENTARY INFORMATION
GASB Statement No. 25 and No. 27
The information presented in the required supplementary schedules was determined as part of the actuarial
valuations at the dates indicated. Additional information as of the latest actuarial valuation:
Valuation date October 1, 2012
Contribution Rates:
Employer 20.82%
Plan Members 6.00 %*
Actuarial Cost Method Frozen Entry Age
Amortization Method Level percent, closed
Remaining amortization period 28
Asset valuation method Difference between
actual return and
expected return
recognized over 5 years.
Actuarial assumptions:
Investment rate of return 7.5% per annum
Projected salary increases
5.5%
Includes inflation and other general increases at
4.0%
Cost -of- living adjustments
3.0% for those retired
before 2/1/82 or who
contribute an extra
2 %.
Except for certain members who have elected not to contribute and for other members
who have elected to contribute only 2% or 4 %.
GRS
SECTION E
MISCELLANEOUS INFORMATION
GRS
33
RECONCILIATION OF MEMBERSHIP DATA
From 10 /1 /11 to
From 10 /1 /10 to
10/1/12
10 /1 /11
A. Active Members
L Number Included in Last Valuation
62
64
2_ New Members Included in Current Valuation
2
0
3_ Non - Vested Employment Terminations
(2)
(2)
4_ Vested Employment Terminations
(1)
0
5_ Service Retirements
(2)
0
6_ Disability Retirements
0
0
7_ Deaths
(1)
0
8- Other
0
0
9_ Number Included in This Valuation
58
62
B. Terminated Vested Members
L Number Included in Last Valuation
43
48
2_ Additions from Active Members
1
0
3. Lump Sum Payments /Refund of Contributions
0
(3)
4. Payments Commenced
(1)
(2)
5. Deaths
0
0
6. Other - -Return to Actives
0
0
7. Number Included in This Valuation
43
43
C. Service Retirees, Disability Retirees and Beneficiaries
1. Number Included in Last Valuation
8
7
2. Additions from Active Members
3
0
3. Additions from Terminated Vested Members
1
2
4. Additions from DROP Plan
0
0
4. Deaths Resulting in No Further Payments
0
(1)
5. Deaths Resulting in New Survivor Benefits
0
0
6. End of Certain Period - No Further Payments
(2)
0
7. Other -- Lump Sum Distributions
0
0
8_ Number Included in This Valuation
10
8
GRS
34
NORTH PALM BEACH GENERAL EMPLOYEES - ACTIVE MEMBERS ON OCTOBER 1, 2012
Age
Years of Senice
Group
04
5 -9
10 -14
15 -19
20 -24
25 -29
30 & Up
Totals
20-24 No.
2
2
TotalPay
59,746
59,746
Avg Pay
29,873
29,873
25 -29 No.
TotalPay
Avg Pay
30-34 No.
4
4
TotalPay
164,235
164,235
Avg Pay
41,059
41,059
35 -39 No.
2
1
3
TotalPay
141,644
72,622
214,266
Avg Pay
70,822
72,622
71,422
40-44 No.
2
3
1
6
TotalPay
107,093
162,844
66,846
336,783
Avg Pay
53,547
54,281
66,846
56,131
45-49 No.
1
2
2
2
2
2
11
TotalPay
80,958
116,049
134,246
91,132
82,846
109,120
614,351
Avg Pay
80,958
58,025
67,123
45,566
41,423
54,560
55,850
50-54No.
3
3
1
1
4
1
1
14
TotalPay
110,323
119,718
60,625
48,560
261,454
64,152
67,363
732,195
Avg Pay
36,774
39,906
60,625
48,560
65,364
64,152
67,363
52,300
55 -59No.
1
3
2
1
2
1
10
TotalPay
81,683
156,244
83,059
43,135
115,206
106,702
586,029
Avg Pay
81,683
52,081
41,530
43,135
57,603
106,702
58,603
60-64 No.
4
1
5
TotalPay
180,598
99,752
280,350
Avg Pay
45,150
99,752
56,070
65 -99 No.
2
1
3
TotalPay
87,287
42,327
129,614
Avg Pay
43,644
42,327
43,205
TotalNo.
6
16
14
7
7
6
2
58
TotalPay
251,027
817,709
767,179
331,924
387,435
388,230
174,065
3,117,569
Avg Pay
41,838
51,107
54,799
47,418
55,348
64,705
87,033
53,751
GRS
35
NORTH PALM BEACH GENERAL INACTIVE PARTICIPANTS RECEIVING THE COLA
AS OF OCTOBER 1, 2012
Retirees and
Terminated Vested Disabled Beneficiaries
Annual Annual Annual
Age No. Benefits No. Benefits No. Benefits
Under 45
1
$6,036
0
$0
0
$0
45 -49
3
16,749
0
0
0
0
50 -54
2
10,104
0
0
1
15,842
55 -59
2
11,819
0
0
0
0
60 -64
3
10,958
0
0
2
21,922
65 -69
0
0
0
0
1
2,008
70 -74
2
1,082
0
0
0
0
75 -79
0
0
0
0
0
0
80 -84
0
0
0
0
0
0
85 -89
0
0
0
0
0
0
90 &Up
0
0
0
0
0
0
Total
13
$56,748
0
$0
4
$39,772
GRS
36
NORTH PALM BEACH GENERAL INACTIVE PARTICIPANTS NOT RECEIVING THE COLA
AS OF OCTOBER 1, 2012
Age
Terminated Vested
Annual
No. Benefits
No.
Disabled
Annual
Benefits
Retirees and
Beneficiaries
Annual
No. Benefits
Under 45
2
$6,900
0
$0
0
$0
45 -49
6
24,496
0
0
0
0
50 -54
10
53,523
0
0
0
0
55 -59
8
58,162
0
0
2
42,614
60 -64
3
5,898
0
0
0
0
65 -69
1
2,573
0
0
0
0
70 -74
0
0
0
0
1
855
75 -79
0
0
0
0
0
0
80 -84
0
0
0
0
2
8,359
85 -89
0
0
0
0
1
527
90 &Up
0
0
0
0
0
0
Total 30 $151,552 0 $0 6 $52,355
GRS
SECTION F
SUMMARY OF PLAN PROVISIONS
GRS
37
SUMMARY OF PLAN PROVISIONS
A. Ordinances
Plan established under the Code of Ordinances for the Village of North Palm Beach, Florida, Part II,
Chapter 2, and was most recently amended under Ordinance No. 2010 -7 passed May 27, 2010 and
effective February 25, 2010. The Plan is also governed by certain provisions of Part VII, Chapter 112,
Florida Statutes (F.S.) and the Internal Revenue Code.
B. Effective Date
September 1, 1967
C. Plan Year
October 1 through September 30
D. Type of Plan
Qualified, governmental defined benefit retirement plan; for GASB purposes it is a single employer
plan.
E. Eligibility Requirements
All full -time, General Employees are eligible for membership.
F. Credited Service
Total number of years and fractional parts of years of actual service
G. Compensation
Total compensation for services rendered to the Village as a General Employee includes gross salary
including overtime but excluding bonuses or any other non regular payments such as unused sick
leave and vacation pay.
H. Final Average Compensation (FAC)
The average of Compensation during the 5 years within the last 10 years of employment which produces
the highest average
GRS
38
L Normal Retirement
Eligibility: A member may retire on the first day of the month coincident with or next following:
➢ Age 65 for employees hired prior to 1983
➢ Age 65 and 9 years of credited service or Age 60 and 9 years of credited
service, depending on employee hire date and /or employee contribution rate.
Benefit: Either 2 %, 2.25 %, or 2.50% (depending on employee contribution rate) of AME
multiplied by Credited Service up to 20 years plus 1% of AME multiplied by
Credited Service over 20 years.
Normal Form
of Benefit: Life Annuity, with other options available.
COLA: For those retired before February 1, 1982, those hired after 9/30/00, or those hired
before 10 /1 /00 who elect to contribute an extra 2 %, a Cost of Living increase is paid
annually from the Plan, up to a maximum of 3 %.
I Early Retirement
Eligibility: Age 55.
Benefit: Calculated in the same manner as Normal Retirement Benefit and payable at Normal
Retirement Date; or payable immediately after reduction by 5% for each year by which
the benefit commencement date precedes the Normal Retirement Date.
Normal Form
of Benefit: Life Annuity, with other options available.
COLA: For those retired before February 1, 1982, those hired after 9/30/00, or those hired
before 10 /1 /00 who elect to contribute an extra 2 %, a Cost of Living increase is paid
annually from the Plan, up to a maximum of 3 %.
K. Delayed Retirement
Eligibility: Any time after the Normal Retirement Date.
Benefit: Calculated in the same manner as Normal Retirement Benefit but using the AME and
Credited Service as of the actual retirement date.
Normal Form
of Benefit: Life Annuity, with other options available.
COLA: For those retired before February 1, 1982, those hired after 9/30/00, or those hired
before 10 /1 /00 who elect to contribute an extra 2 %, a Cost of Living increase is paid
annually from the Plan, up to a maximum of 3 %.
GRS
39
L. Service Connected Disability
Eligibility: The Plan does not provide for benefits in the event of disability.
Benefit: N /A.
Normal Form: N /A.
COLA: N /A.
M. Non - Service Connected Disability
Eligibility: The Plan does not provide for benefits in the event of disability.
Benefit: N /A.
Normal Form: N /A.
COLA: N /A.
N. Death while employed by the Village
Eligibility: Members are eligible for survivor benefits after the completion of 5 years of Credited
Service. The benefit will be paid to the member's beneficiary.
Benefit: The survivor benefit payable to the designated beneficiary is the member's vested
accrued Normal Retirement Benefit as of the date of death.
Normal Form
of Benefit: Ten Years Certain.
COLA: For those retired before February 1, 1982, those hired after 9/30/00, or those hired
before 10 /1 /00 who elect to contribute an extra 2 %, a Cost of Living increase is paid
annually from the Plan, up to a maximum of 3 %.
O. Other Pre - Retirement Death
Eligibility: Vested terminated members who have reached age 55 and completed 5 years of
Credited Service.
Benefit: Benefit payable as if member retired on the date of death, selected a 50% Joint &
Survivor annuity, and then passed away, with 50% of the benefit then continuing to the
survivor.
Normal Form
of Benefit: Life of the beneficiary.
GRS
40
COLA: For those retired before February 1, 1982, those hired after 9/30/00, or those hired
before 10 /1 /00 who elect to contribute an extra 2 %, a Cost of Living increase is paid
annually from the Plan, up to a maximum of 3 %.
P. Post Retirement Death
Benefit determined by the form of benefit elected upon retirement.
Q. Optional Forms
In lieu of electing the Normal Form of benefit, the optional forms of benefits available to all retirees are
the 10 Year Certain and Life option or the 50 %, 66.67 %, 75% or 100% Joint and Survivor options. A
Social Security option is also available for members retiring prior to the time they are eligible for Social
Security retirement benefits. The Pension Board also reserves the right to pay out beneficiaries with this
option when the monthly benefit amount is less than $100.00.
R. Vested Termination
Eligibility: A member has earned a non - forfeitable right to Plan benefits after the completion of 5
years of Credited Service.
Benefit: The benefit is the Accrued Benefit on the termination date multiplied by the vested
interest. The vested percentage is 50% for those terminating with credited service
between 5 and 7 years, 75% for service between 7 and 9 years and 100% for those
terminating with 9 or more years of credited service. In lieu of the deferred vested
benefit, a member may receive a refund of member contributions.
Normal Form
of Benefit: Life Annuity, with other options available.
COLA: For those retired before February 1, 1982, those hired after 9/30/00, or those hired
before 10 /1 /00 who elect to contribute an extra 2 %, a Cost of Living increase is paid
annually from the Plan, up to a maximum of 3 %.
S. Refunds
Return of Accumulated Contributions.
T. Member Contributions
6 %, 4 %, 2 %, or 0% of Earnings as elected by the employee.
U. Employer Contributions
The amount determined by the actuary needed to fund the plan properly according to State laws.
GRS
41
V. Cost of Living Increases
For those retired before February 1, 1982, those hired after 9/30/00, or those hired before 10 /1 /00 who
elect to contribute an extra 2 %, a Cost of Living increase is paid annually from the Plan, up to a
maximum of 3 %.
W. Changes from Previous Valuation
None.
X. 13`h Check
Not Applicable.
Y. Deferred Retirement Option Plan
Eligibility: The Plan does not provide for DROP benefits.
Z. Other Ancillary Benefits
There are no ancillary retirement type benefits not required by statutes but which might be deemed a
Village of North Palm Beach General Employees' liability if continued beyond the availability of
funding by the current funding source.
GRS