10-01-2011 Actuarial Valuation Report General Employees Retirement Fund GRSGabriel Roeder Smith &Company
J Consultants&Actuaries
VILLAGE OF NORTH PALM BEACH GENERAL RETIREMENT FUND
ACTUARIAL VALUATION REPORT AS OF OCTOBER 1,2011
ANNUAL EMPLOYER CONTRIBUTION DETERMINED FOR PLAN YEAR ENDING SEPTEMBER 30,2013
May 8,2012
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, 2011 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, 2013, 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, 2011. 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.
of
of
of
Board of Trustees
Village of North Palm Beach General Retirement Fund
Page 2
of
of 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
9■
required contribution rates have been taken into account in the valuation.
Respectfully submitted,
GABRIEL, ROEDER, SMITH AND COMPANY
By �, a !4 By ilt;[z '4( CY-t-L1,i
J Stephen Palmquist,ASA, PAAA, FCA Melissa R. Algayer, MAAA, CA
• Enrolled Actuary No. 11-1560 Enrolled Actuary No. 11-6467
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TABLE OF CONTENTS
Section Title Page
A Discussion of Valuation Results 1
B Valuation Results
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
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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:
For FYE 9/30/2013 For FYE 9/30/2012
Based on Based on
10/1/2011 10/1/2010 Increase
Valuation Valuation (Decrease)
Required Employer Contribution $ 671,534 $ 696,946 $ (25,412)
As % of Covered Payroll 19.86 % 19.57 % 0.29 %
The required contribution dollar amounts shown above are estimates only. The actual contribution
should be no less than the listed percentage of payroll multiplied by the actual covered payroll for the year.
The contribution has been adjusted for interest on the basis that employer contributions are made in equal
payments on a bi-weekly basis. The actual employer contribution during the year ending September 30,
2011 was $646,537 compared to the minimum required contribution of$499,954.
Actuarial Experience
There was an actuarial gain of$73,902 for the year which means that actual experience was more
favorable than expected. There was a loss due to the recognized asset return of 2.3%versus the expected
7.5%. The return on market value was (1.6)%. Offsetting the loss was a gain due to salary increases of
(1.9)% as compared to the assumed rate of 5.5%. The net gain for the year translates into a decrease in
annual employer contributions of 0.28%of covered 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.
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2
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
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. Detail on
this assumption can be found in the Actuarial Assumptions and Actuarial Cost Method section.
Analysis of Change in Employer Contributions
The components of change in the required contribution are as follows:
Contribution rate from Actuarial Impact Statement 19.57 %
Change in Actuarial Assumptions 0.00
Payment on unfunded liability 0.52
Experience gain/loss (0.28)
Change in administrative expense 0.05
Contribution rate this year 19.86
Funded Ratio
The funded ratio this year is 70.0%compared to 65.3%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
The Actuarial Cost Method used to determine the required contribution is intended to produce
contribution rates which are generally level as a percent of payroll. Even so, when experience differs
from the assumptions, as it often does,the employer's contribution rate can vary significantly from year-
to-year.
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3
Over time, if the year-to-year gains and losses offset each other, the contribution rate would be
expected to return to the current level,but this does not always happen.
The Actuarial Value of Assets exceeds the Market Value of Assets by $879,662 as of the
valuation date (see Section Q. This difference will be gradually recognized over the next five years in
the absence of offsetting gains. In turn, the computed employer contribution rate will increase by
approximately 3.3%of covered payroll over the same period.
Relationship to Market Value
If Market Value had been the basis for the valuation, the City contribution rate would have been
23.21%. In the absence of other gains and losses, the City contribution rate should increase to that level
over the next several years.
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
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4
PARTICIPANT DATA
October 1,2011 October 1,2010
ACTIVE MEMBERS
Number 62 64
Covered Annual Payroll $ 3,251,285 $ 3,424,324
Average Annual P ayroll $ 52,440 $ 53,505
Average Age 48.8 47.7
Average Past Service 13.5 12.1
Average Age at Hire 35.3 35.6
RETIREES & BENEFICIARIES & DROP
Number 8 7
Annual Benefits $ 53,477 $ 29,649
Average Annual Benefit $ 6,685 $ 4,236
Average Age 71.1 74.0
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 48
Annual Benefits $ 207,531 $ 269,561
Average Annual Benefit $ 4,826 $ 5,616
Average Age 54.1 53.0
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5
ANNUAL REQUIRED CONTRIBUTION (ARC)
A. Valuation Date October 1,2011 October 1,2010
B. ARC to Be Paid During
Fiscal Year Ending 9/30/2013 9/30/2012
C. Assumed Date of Employer Contrib. Biweekly Biweekly
D. Annual Payment to Amortize
Unfunded Actuarial Liability $ 144,689 $ 135,128
E. Employer Normal Cost 477,749 510,653
F. ARC if Paid on the Valuation
Date: D+E 622,438 645,781
G. ARC Adjusted for Frequency of
P ayments 645,834 670,055
H. ARC as % of Covered Payroll 19.86 % 19.57 %
L Assumed Rate of Increase in Covered
Payroll to Contribution Year 4.00 % 4.00 %
J. Covered Payroll for Contribution Year 3,381,337 3,561,297
K. REC for Contribution Year:H x J 671,534 696,946
L. REC as % of Covered Payroll in
Contribution Year: M-J 19.86 % 19.57
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6
ACTUARIAL VALUE OF BENEFITS AND ASSETS
A. Valuation Date October 1,2011 October 1,2010
B. Actuarial Present Value of All Projected
Benefits for
1. Active Members
a. Service Retirement Benefits $ 12,087,764 $ 11,938,469
b. Vesting Benefits 625,662 667,231
c. Disability Benefits - -
d. Preretirement Death Benefits 189,481 192,000
e. Return of Member Contributions 5,297 8,019
f Total 12,908,204 12,805,719
2. Inactive Members
a. Service Retirees & Beneficiaries 375,259 103,428
b. Disability Retirees - -
c. Terminated Vested Members 1,335,391 1,609,368
d. Total 1,710,650 1,712,796
3. Total for All Members 14,618,854 14,518,515
C. Actuarial Accrued(Past Service)
Liability per GASB No. 25 11,103,522 10,516,549
D. Actuarial Value of Accumulated Plan
Benefits per FASB No. 35
1. Based on Plan's Interest Rate 8,560,764 7,678,015
2. Based on FRS Interest Rate 8,258,610 N/A
E. Plan Assets
1. Market Value 6,891,782 6,256,127
2. Actuarial Value 7,771,444 6,863,057
F. Actuarial Present Value of Projected
Covered Payroll 27,371,103 30,364,901
G. Actuarial Present Value of Projected
Member Contributions 1,408,262 1,572,253
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7
CALCULATION OF EMPLOYER NORMAL COST
A. Valuation Date October 1,2011 October 1,2010
B. Actuarial Present Value of Projected
Benefits $ 14,618,854 $ 14,518,515
C. Actuarial Value of Assets 7,771,444 6,863,057
D. Unfunded Actuarial Accrued Liability 1,556,580 1,696,464
E. Actuarial Present Value of Projected
Member Contributions 1,408,262 1,572,253
F. Actuarial Present Value of Projected
Employer Normal Costs: B-C-D-E 3,882,568 4,386,741
G. Actuarial Present Value of Projected
Covered Payroll 27,371,103 30,364,901
H. Employer Normal Cost Rate: F/G 14.18 % 14.45 %
L Covered Annual Payroll 3,251,285 3,424,324
J. Employer Normal Cost:H x I 461,032 494,815
K. Assumed Amount of Administrative
Expenses 16,717 15,838
L. Total Employer Normal Cost: J+K 477,749 510,653
M. Employer Normal Cost as % of
Covered Payroll 14.69 % 14.91 %
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8
LIQUIDATION OF THE UNFUNDED FROZEN ACTUARIAL ACCRUED LIABILITY
A. Derivation of the Current UAAL
1. Last Year's UAAL $ 1,696,464
2. Last Year's Employer Normal Cost 375,751
3. Last Year's Contributions 646,537
4. Interest at the Assumed Rate on:
a. 1 and 2 for one year 155,416
b. 3 from dates paid 24,514
c. a- b 130,902
5. This Year's UAAL Prior to Revision:
1 +2- 3 +4c 1,556,580
6. Change in UAAL Due to Plan Amendments
and/or Changes in Actuarial Assumptions 0
7. This Year's Revised UAAL: 5 +6 1,556,580
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 18 $ 346,593 $ 32,368
10/1/00 30 1,426,008 19 1,093,567 99,419
10/1/03 30 700,742 22 558,613 47,484
10/1/03 30 (77,576) 22 (61,841) (5,257)
1011105 30 313,729 24 247,155 20,270
10/1/09 30 (2,127,680) 28 (1,687,783) (130,897)
10/1/10 30 1,116,376 29 1,060,276 81,302
Totals 1,556,580 144,689
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9
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
2011 $ 1,556,580
2012 1,517,768
2013 1,475,454
2014 1,429,356
2015 1,379,190
2016 1,324,648
2021 973,816
2026 451,915
2031 (123,269)
2036 (80,403)
2040 -
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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 14.45 %
2. Current Valuation 14.18
3. Difference: 1 -2 0.27
B. Actuarial Present Value of $ 27,371,103
Projected Covered Payroll
C. Net Actuarial Gain(Loss): A3 x B 73,902
D. Gain(Loss)Due to Investments (375,092)
E. Gain(Loss)from Other Sources 448,994
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11
Net actuarial gains in previous years have been as follows:
Change in Employer
Year Ended 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) 220,810
9/30/94 0.25 (72,092)
9/30/95 (0.75) 218,857
9/30/96 (0.62) 119,415
9/30/97 (1.09) 238,623
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
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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 Investment Return Salary Increases
Ending Actual Assumed Actual Assumed
9/30/1985 13.8 % 7.0 % 5.3 % 6.0 %
9/30/1986 27.2 7.0 12.8 6.0
9/30/1987 16.4 7.0 8.6 6.0
9/30/1988 (6.3) 7.0 6.8 6.0
9/30/1989 19.4 7.0 5.2 6.0
9/30/1990 (0.6) 7.0 10.4 6.0
9/30/1991 19.7 7.0 5.0 6.0
9/30/1992 11.8 7.0 7.7 6.0
9/30/1993 9.7 7.0 0.8 6.0
9/30/1994 6.0 7.0 5.9 6.0
9/30/1995 8.7 7.0 4.6 6.0
9/30/1996 9.3 8.0 4.4 6.0
9/30/1997 11.5 8.0 4.3 6.0
9/30/1998 10.9 8.0 4.3 6.0
9/30/1999 13.2 8.0 2.8 6.0
9/30/2000 12.7 8.5 10.3 5.5
9/30/2001 7.9 8.5 3.4 5.5
9/30/2002 2.5 8.5 6.8 5.5
9/30/2003 1.6 8.5 7.2 5.5
9/30/2004 8.6 8.5 23.9 5.5
9/30/2005 8.7 8.5 (2.9) 5.5
9/30/2006 8.1 8.0 8.5 5.5
9/30/2007 9.0 8.0 8.0 5.5
9/30/2008 4.9 8.0 4.0 5.5
9/30/2009 3.8 8.0 3.4 5.5
9/30/2010 4.0 8.0 10.3 5.5
9/30/2011 2.3 7.5 (1.9) 5.5
Averages 8.9 % --- 6.2 % ---
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.
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13
History of Investment Return Based on Actuarial Value of Assets
30% 30%
25% 25%
20% 20%
15% 15%
10% 10%
5% 5%
0% 0%
-5% -5%
-10% -10%
Plan Year End
--*--Actual —#.--Assumed
History of Salary Increases
24% 24%
20% 20%
16% 16%
12% 12%
8% 8%
4% 4%
0% 0%
-4% -4%
Plan Year End Compared to Previous Year
(Actual tAssumed
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14
Actual (A) Compared to Expected (E) Decrements
Among Active Employees
Number
Added Service& Active
During DROP Disability Terminations Members
Year Year Retirement Retirement Death Vested Other Totals End of
Ended A E A E A E A E A A A E 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 3 0 0 2
9 Yr Totals * 62 88 26 38 0 0 1 0 34 27 61 23
* Totals are through current Plan Year only
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15
RECENT HISTORY OF VALUATION RESULTS
Number of Covered Actuarial Employer Normal Cost
Valuation Members Annual Value % of
Date Active Inactive Payroll of Assets UFAAL Amount Payroll
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
10/1/05 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
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16
RECENT HISTORY OF REQUIRED AND ACTUAL CONTRIBUTIONS
End of Year To Required Contribution
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
10/1/05 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 na
10/1/11 9/30/13 671,534 19.86 na
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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
0.39%.
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.
% Increase in Salary
Merit and Base Total
Age Seniority (Economic) 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.
Attained Probability of Future Life
Ages on Dying Next Year Expectancy (years)
10/1/2011 Men Women 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
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.
GRS
19
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 Probability of
for Normal Retirement 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.
Changes since the prior valuation—None.
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.
Pay 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.
GRS
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 airy)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.
GRS
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
September 30
Item 2011 2010
A. Cash and Cash Equivalents (Operating Cash) $ - $ -
B. Receivables:
1. Member Contributions $ 6,443 $ 6,553
2. Employer Contributions $ 17,496 $ 28,988
3. Investment Income and Other Receivables 2 22
4. Total Receivables $ 23,941 $ 35,563
C. Investments
1. Short-Term Investments $ 233,423 $ 220,943
2. Domestic and International Equities 4,056,958 3,719,423
3. Domestic and International Fixed Income 2,589,419 2,290,877
4. Real Estate - -
5. Private Equity - -
6. Total Investments $ 6,879,800 $ 6,231,243
D. Liabilities
1. Benefits/Refunds Payable $ - $ -
2. Lump Sums Distributions Payable - -
3. Accrued Expenses and Other Payables (11,959) (10,679)
4. Other - -
5. Total Liabilities $ (11,959) $ (10,679)
E. Total Market Value of Assets Available for Benefits $ 6,891,782 $ 6,256,127
F. Allocation of Investments
1. Short-Term Investments 3.39% 3.55%
2. Domestic and International Equities 58.97% 59.69%
3. Domestic and International Fixed Income 37.64% 36.76%
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
September 30
Item 2011 2010
A. Market Value of Assets at Beginning of Year $ 6,256,127 $ 5,208,323
B. Revenues and Expenditures
1. Contributions
a. Employee Contributions $ 174,570 $ 163,213
b. City Contributions 646,537 759,529
c. Purchased Service Credit - -
d. Total $ 821,107 $ 922,742
2. Investment Income
a. Interest,Dividends, and Other Income $ 34,409 $ 12,159
b. Realized Gains/(Losses) 1,194,993 (72,611)
c. Unrealized Gains/(Losses) (1,271,937) 587,492
d. Investment Expenses (62,774) (42,037)
e. Net Investment Income $ (105,309) $ 485,003
3. Benefits and Refunds
a. Refunds $ (32,479) $ -
b. Regular Monthly Benefits (29,679) (29,509)
c. Lump Sum Distributions - (314,984)
d. Total $ (62,158) $ (344,493)
4. Administrative and Miscellaneous Expenses $ (17,985) $ (15,448)
C. Market Value of Assets at End of Year $ 6,891,782 $ 6,256,127
GRS
26
ACTUARIAL VALUE OF ASSETS
Valuation Date—September 30 2010 2011 2012 2013 2014
A. Actuarial Value of Assets Beginning of Year $ 6,048,808 $ 6,863,057 B. Market Value End of Year $ 6,256,127 $ 6,891,782 - -C. Market Value Beginning of Year 5,208,323 6,256,127 - -D. Non-Investment/Administrative Net Cash Flow 562,801 740,964
E. Investment Income
El. Actual Market Total: B-C-D 485,003 (105,309) - - -
E2. Assumed Rate of Return 8.00% 7.50% 7.50% 7.50% 7.50%
E3. Assumed Amount of Return 506,417 542,515 - - -
E4. Amount Subject to Phase-In:El—E3 (21,414) (647,824) - -F. Phase-In Recognition of Investment Income
F1. Current Year: 0.20xE4 (4,283) (129,565) - - -
F2. First Prior Year (55,320) (4,283) (129,565) - -
F3. Second Prior Year (237,915) (55,320) (4,283) (129,565) -
F4. Third Prior Year 51,991 (237,915) (55,320) (4,283) (129,565)
F5. Fourth Prior Year (9,442) 51,991 (237,915) (55,320) (4,283)
F6. Total Phase-Ins (254,969) (375,092) (427,083) (189,168) (133,848)
G. Actuarial Value of Assets (AVA)Fnd of Year
GI. Preliminary AVA End of Year: A+D+E3+F6 $ 6,863,057 $ 7,771,444 -
G2. Upper Corridor Limit: 120%*B 7,507,352 8,270,138 - - -
G3. Lower Corridor Limit:80%*13 5,004,902 5,513,426 - - -
G4. Funding Value End of Year 6,863,057 7,771,444 - - -
G5. Less:DROP Balance - - - - -
G6. Final Funding Value End of Year 6,863,057 7,771,444 - -H. Difference between Market&AVA (606,930) (879,662) -
L Actuarial Rate of Return 3.97% 2.31% 0.00% 0.00% 0.00%
J. Market Value Rate of Return 8.83% -1.59% 0.00% 0.00% 0.00%
K Ratio of AVA to Market Value 109.70% 112.76% 0.00% 0.00% 0.00%
GRS
27
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
Average Compounded Rate of Return for
Number of Years Shown 8.2 % 8.9 %
Average Compounded Rate of Return for
Last 5 Years 2.1 % 4.8 %
*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 1,2011 October 1,2010
B. Actuarial Present Value of Accumulated
Plan Benefits
1. Vested Benefits
a. Members Currently Receiving Payments $ 375,259 $ 103,428
b. Terminated Vested Members 1,335,391 1,609,368
c. Other Members 6,481,817 5,541,529
d. Total 8,192,467 7,254,325
2. Non-Vested Benefits 368,297 423,690
3. Total Actuarial Present Value of Accumulated
Plan Benefits: Id+2 8,560,764 7,678,015
4. Accumulated Contributions of Active Members 1,087,437 924,200
C. Changes in the Actuarial Present Value of
Accumulated Plan Benefits
1. Total Value at Beginning of Year 7,678,015 6,222,685
2. Increase (Decrease) During the Period
Attributable to:
a. Plan Amendment 0 0
b. Change in Actuarial Assumptions 0 806,591
c. Latest Member Data,Benefits Accumulated
and Decrease in the Discount Period 944,907 993,232
d. Benefits Paid (62,158) (344,493)
e. Net Increase 882,749 1,455,330
3. Total Value at End of Period 8,560,764 7,678,015
4. Total Value at End of Period at FRS interest Rate
a. Vested 7,911,248 N/A
b. Non-Vested 347,362 N/A
c. Total 8,258,610 N/A
D. Market Value of Assets 6,891,782 6,256,127
E. Funded Ratio Using FRS Interest Rate 83.4% N/A
GRS
29
SCHEDULE OF FUNDING PROGRESS
(GASB Statement No.25)
Actuarial UAAL As
Actuarial Actuarial Accrued %of
Valuation Value of Liability(AAL) Unfunded Funded Covered Covered
Date Assets Entry Age AAL(UAAL) Ratio Payroll Payroll
(a) (b) (b)-(a) (a)/(b) (c) (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
GRS
30
SCHEDULE OF EMPLOYER CONTRIBUTIONS
(GASB Statement No.25)
Year Annual
Ended Required Actual Percentage
9/30 Contribution Contribution 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
GRS
31
ANNUAL PENSION COST AND NET PENSION OBLIGATION
(GASB STATEMENT NO. 27)
Employer FYE September 30 2012 2011 2010
Annual Required Contribution(ARC) $ 696,946 i $ 499,954 $ 734,636
Interest on Net Pension Obligation(NPO) (24,410) (13,900) (13,240)
Adjustment to ARC (37,626) (20,344) (18,308)
Annual Pension Cost(APC) 710,162 506,398 739,704
Contributions made ** 646,537 759,529
Increase (decrease) in NPO ** (140,139) (19,825)
NPO at beginning of year (325,469) (185,330) (165,505)
NPO at end of year ** (325,469) (185,330)
'This amount is an estimate. The final required contribution can be no less than 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(APC) Contribution APC Contributed Obligation
9/30/2009 $ 767,429 $ 765,381 99.7 % $ (165,505)
9/30/2010 739,704 759,529 102.7 (185,330)
9/30/2011 506,398 646,537 127.7 (325,469)
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 1,2011
Contribution Rates:
Employer 19.86%
Plan Members 6.00%*
Actuarial Cost Method Frozen Entry Age
Amortization Method Level percent, closed
Remaining amortization period 29
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 10/1/10 From 10/1/09
to 10/1/11 to 10/1/10
A. Active Members
1. Number Included in Last Valuation 64 63
2. New Members Included in Current Valuation 0 4
3. Non-Vested Employment Terminations (2) (2)
4. Vested Employment Terminations 0 0
5. Service Retirements 0 (1)
6. Disability Retirements 0 0
7. Deaths 0 0
8. Other 0 0
9. Number Included in This Valuation 62 64
B. Te rminate d Ve s to d Me mbe is
1. Number Included in Last Valuation 48 50
2. Additions from Active Members 0 0
3. Lump Sum Payments/Refund of Contributions (3) (2)
4. Payments Commenced (2) 0
5. Deaths 0 0
6. Other--Return to Actives 0 0
7. Number Included in This Valuation 43 48
C. Service Retirees, Disability Retirees and Beneficiaries
1. Number Included in Last Valuation 7 7
2. Additions from Active Members 0 1
3. Additions from Terminated Vested Members 2 0
4. Additions from DROP Plan 0 0
4. Deaths Resulting in No Further Payments (1) 0
5. Deaths Resulting in New Survivor Benefits 0 0
6. End of Certain Period-No Further Payments 0 0
7. Other-- Lump Sum Distributions 0 (1)
8. Number Included in This Valuation 8 7
GRS
34
NORTH PALM BEACH GENERAL EMPLOYEES -ACTIVE MEMBERS ON OCTOBER 1,2011
Age Years of Service
Group 0-4 5-9 10-14 15-19 20-24 25-29 30&Up Totals
20-24 No. 2 2
Total Pay 41,216 41,216
Avg Pay 20,608 20,608
25-29 No. 1 1 2
Total Pay 42,534 43,324 85,858
Avg Pay 42,534 43,324 42,929
30-34 No. 2 2
Total Pay 66,584 66,584
Avg Pay 33,292 33,292
35-39 No. 3 1 4
Total Pay 181,008 65,293 246,301
Avg Pay 60,336 65,293 61,575
40-44 No. 2 3 2 1 8
Total Pay 130,621 134,773 108,998 59,534 433,926
Avg Pay 65,311 44,924 54,499 59,534 54,241
45-49 No. 2 2 1 2 5 12
Total Pay 90,664 105,491 78,870 87,296 256,576 618,897
Avg Pay 45,332 52,746 78,870 43,648 51,315 51,575
50-54 No. 3 2 1 4 2 1 13
Total Pay 110,599 96,843 48,420 223,247 119,370 67,025 665,504
Avg Pay 36,866 48,422 48,420 55,812 59,685 67,025 51,193
55-59 No. 1 2 3 1 2 1 1 11
Total Pay 78,183 116,096 128,389 41,768 88,962 52,599 107,015 613,012
Avg Pay 78,183 58,048 42,796 41,768 44,481 52,599 107,015 55,728
60-64 No. 1 2 2 5
Total Pay 50,185 78,955 137,466 266,606
Avg Pay 50,185 39,478 68,733 53,321
65-99 No. 2 1 3
Total Pay 84,037 42,327 126,364
Avg Pay 42,019 42,327 42,121
Total No. 11 18 11 4 11 5 2 62
Total Pay 493,817 878,341 551,252 188,598 568,785 309,435 174,040 3,164,268
Avg Pay 44,892 48,797 50,114 47,150 51,708 61,887 87,020 51,037
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35
NORTH PALM BEACH GENERAL INACTIVE PARTICIPANTS RECEIVING THE COLA
AS OF OCTOBER 1,2011
Retirees and
Terminated Vested Disabled Beneficiaries
Annual Annual Annual
Age No. Benefits No. Benefits No. Benefits
Under 45 0 $0 0 $0 0 $0
45-49 4 20,589 0 0 0 0
50-54 2 16,342 0 0 0 0
55-59 1 1,741 0 0 1 11,071
60-64 4 16,225 0 0 0 0
65-69 1 640 0 0 2 3,150
70-74 1 442 0 0 1 6,724
75-79 0 0 0 0 0 0
80-84 0 0 0 0 0 0
85-89 0 0 0 0 1 1,079
90& Up 0 0 0 0 0 0
Total 13 $55,979 0 $0 5 $22,024
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NORTH PALM BEACH GENERAL INACTIVE PARTICIPANTS NOT RECEIVING THE COLA
AS OF OCTOBER 1,2011
Retirees and
Terminated Vested Disabled Beneficiaries
Annual Annual Annual
Age No. Benefits No. Benefits No. Benefits
Under 45 2 $6,900 0 $0 0 $0
45-49 9 34,304 0 0 0 0
50-54 8 49,895 0 0 0 0
55-59 7 51,982 0 0 1 23,094
60-64 3 5,898 0 0 0 0
65-69 1 21573 0 0 0 0
70-74 0 0 0 0 0 0
75-79 0 0 0 0 1 5,119
80-84 0 0 0 0 1 3,240
85-89 0 0 0 0 0 0
90& Up 0 0 0 0 0 0
Total 30 $151,552 0 $0 3 $31,453
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SECTION F
SUMMARY OF PLAN PROVISIONS
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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
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I. 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%.
J. 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%.
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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.
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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.
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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. 13th 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