10-01-2007 Actuarial Valuation Report General Employees Retirement Fund
VILLAGE OF NORTH PALM BEACH GENERAL RETIREMENT FUND
ACTUARIAL VALUATION REPORT AS OF OCTOBER 1, 2007
ANNUAL EMPLOYER CONTRIBUTION DETERMINED FOR PLAN YEAR ENDING SEPTEMBER 30, 2009
R Gabriel Roeder Smith & Company One East Bro~~vard Blvd. 954.527.1616 phone
Consultants & Actuaries Suite 505 954.525.0083 fax
Ft. Lauderdale, FL 33 3 0 1-1 8 72 www.gabrielroeder.com
June 3, 2008
Board of Trustees of the
Village of North Palm Beach
General Retirement Fund
North Palm Beach, Florida
Dear Board Members:
We are pleased to present our October 1, 2007 Actuarial Valuation Report for the Plan. The purpose
of the Report is to set forth required contribution levels, to disclose plan assets and actuarial liabilities,
to comment on funding progress and to provide supporting information regarding the operation of the
Plan. This Report is also designed to comply with requirements of the State.
The valuation was performed on the basis of employee, retiree and financial information supplied by
the City. Although we did not audit this information, it was reviewed for reasonableness and
comparability to prior years.
The benefits valued are outlined at the end of the Report. Actuarial assumptions and the actuarial
cost method are also described herein. Any changes in benefits, assumptions or methods are
described in the first section.
As indicated below, one of the undersigned is a Member of the American Academy of Actuaries
(MAAA) and meets the Qualification Standards of the Academy of Actuaries to render the actuarial
opinion herein.
We will be pleased to answer any questions pertaining to the valuation and to meet with you to review
this Report.
Respectfully submitted,
GABRIEL, ROEDER, SMITH AND COMPANY
B ~
Y
J. S phen almquist, ASA, AAA, FCA Duane Howison, FSA
Enrolled Actuary No. 08-01560 Enrolled Actuary No. 08-06169
Gabriel, Roeder, Smith and Company
Statement by Enrolled Actuary
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 contribution rates have been taken into
account in the valuation.
Si ature
6-3-~P
Date
08-01560
Enrollment Number
TABLE OF CONTENTS
Section Title Page
A Discussion of Valuation Results 1
B Valuation Results
1. Participant Data 3
2. Annual Required Contribution (ARC) 4
3. Actuarial Value of Benefits & Assets 5
4. Calculation of Employer Normal Cost 6
5. Liquidation of Unfunded Liability 7
6. Actuarial Gains and Losses 9
7. Recent History of Valuation Results 14
8. Recent History of Required and
Actual Contributions 17
9. Actuarial Assumptions and Cost Method 19
10. Glossary of Terms 21
C Pension Fund Information
1. Summary of Assets 22
2. Summary of Fund's Income and Disbursements 23
3. Actuarial Value of Assets 24
4. Investment Rate of Return 25
D Financial Accounting Information
1. FASB No. 35 26
2. GASB No. 25 27
3. GASB No. 27 29
E Miscellaneous Information
1. Reconciliation of Membership Data 31
2. Age/Service/Salary Distributions 32
F Summary of Plan Provisions 35
Gabriel, Roeder, Smith and Company
SECTION A
DISCUSSION OF VALUATION RESULTS
1
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 9/30/09 For FYE 9/30108
Based on Based on
10/1 /2007 10/1 /2006 Increase
Valuation Valuation (Decrease)
Required Employer Contribution $ 761,943 $ 875,126 $ (113,183)
As % of Covered Payroll 22.62 % 22.86 % (0.24)
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, 2007 was
$873,854 compared to the minimum required contribution of $866,069.
Revisions in Benefits
There have been no changes in benefits since the last valuation.
Revisions in Actuarial Assumptions or Methods
There have been no changes in actuarial assumptions or methods since the last valuation.
Gabriel, Roeder, Smith and Company
2
Actuarial Experience
There was an actuarial gain of $375,088 for the year which means that actual experience
was more favorable than expected. There was a small gain due to recognized asset return of
9.0% versus the expected 8.0%. The estimated return on market value was 12.6%. There were
also experience gains resulting from fewer retirements than expected coupled with more turnover
than expected. A considerable amount of the turnover was due to one-time events. The gain for
the year translates into a decrease in annual employer contributions of 1.39% of covered payroll.
Analysis of Change in Employer Contributions
The components of change in the required contribution are as follows:
Contribution rate last year 22.86
Change in Actuarial Assumption 0.00
Payment on unfunded liability 1.28
Experience gain/loss (1.39)
Change in administrative expense 0.13
Contribution rate this year 22.62
The remainder of this Report includes detailed actuarial valuation results, financial
information, miscellaneous information and statistics, and a summary of plan provisions.
Gabriel, Roeder, Smith and Company
SECTION B
VALUATION RESULTS
Gabriel, Roeder, Smith and Company
3
PARTICIPANT DATA
October 1, 2007 October 1, 2006
ACTIVE MEMBERS
Number 72 90
Covered Annual Payroll $ 3,238,894 $ 3,680,960
Average Annual Payroll $ 44,985 $ 40,900
Average Age 47.5 46.1
Average Past Service 11.6 10.0
Average Age at Hire 35.9 36.1
RETIREES & BENEFICIARIES & DROP
Number 10 10
Annual Benefits $ 43,928 $ 43,332
Average Annual Benefit $ 4,393 $ 4,333
Average Age 74.7 73.7
DISABILITY RETIREES
Number 0 0
Annual Benefits $ 0 $ 0
Average Annual Benefit $ 0 $ 0
Average Age 0.0 0.0
TERMINATED VESTED MEMBERS
Number 49 46
Annual Benefits $ 285,492 $ 216,297
Average Annual Benefit $ 5,826 $ 4,702
Average Age 50.5 50.3
Gabriel, Roeder, Smith and Company
4
ANNUAL REQUIRED CONTRIBUTION (ARC)
A. Valuation Date October 1, 2007 October 1, 2006
B. ARC to Be Paid During
Fiscal Year Ending 9/30/2009 9/30/2008
C. Assumed Date of Employer Contrib. Bi-Weekly Bi-Weekly
D. Annual Payment to Amortize
Unfunded Actuarial Liability $ 198,890 $ 180,700
E. Employer Normal Cost 505,658 628,515
F. ARC if Paid on the Valuation
Date: D+E 704,548 809,215
G. ARC Adjusted for Frequency of
Payments 732,729 841,583
H. ARC as % of Covered Payroll 22.62 % 22.86
I. Assumed Rate of Increase in Covered
Payroll to Contribution Year 4.00 % 4.00
J. Covered Payroll for Contribution Year 3,368,450 3,828,198
K. REC for Contribution Year: H x J 761,943 875,126
L. REC as % of Covered Payroll in
Contribution Year: M _ J 22.62 % 22.86
Gabriel, Roeder, Smith and Company
5
ACTUARIAL VALUE OF BENEFITS AND ASSETS
A. Valuation Date October 1, 2007 October 1, 2006
B. Actuarial Present Value of All Projected
Benefits for
1. Active Members
a. Service Retirement Benefits $ 12,081,901 $ 12,549,044
b. Vesting Benefits 1,029,203 1,136,248
c. Disability Benefits - -
d. Preretirement Death Benefits 345,351 382,920
e. Return of Member Contributions 6,918 11,687
f. Total 13,463,373 14,079,899
2. Inactive Members
a. Service Retirees & Beneficiaries 223,024 238,898
b. Disability Retirees - -
c. Terminated Vested Members 1,388,226 930,178
d. Total 1,611,250 1,169,076
3. Total for All Members 15,074,623 15,248,975
C. Actuarial Accrued (Past Service)
Liability per GASB No. 25 10,997,783 10,490,332
D. Actuarial Value of Accumulated Plan
Benefits per FASB No. 35 7,946,254 7,334,152
E. Plan Assets
1. Market Value 6,677,782 5,273,701
2. Actuarial Value 6,481,382 5,283,023
F. Actuarial Present Value of Projected
Covered Payroll 27,991,675 32,529,167
G. Actuarial Present Value of Projected
Member Contributions 1,402,075 1,623,904
Gabriel, Roeder, Smith and Company
6
CALCULATION OF EMPLOYER NORMAL COST
A. Valuation Date October 1, 2007 October 1, 2006
B. Actuarial Present Value of Projected
Benefits $ 15,074,623 $ 15,248,975
C. Actuarial Value of Assets 6,481,382 5,283,023
D. Unfunded Actuarial Accrued Liability 2,944,876 2,970,967
E. Actuarial Present Value of Projected
Member Contributions 1,402,075 1,623,904
F. Actuarial Present Value of Projected
Employer Normal Costs: B-C-D-E 4,246,290 5,371,081
G. Actuarial Present Value of Projected
Covered Payroll 27,991,675 32,529,167
H. Employer Normal Cost Rate: F/G 15.17 % 16.51
I. Covered Annual Payroll 3,238,894 3,680,960
J. Employer Normal Cost: H x I 491,340 607,726
K. Assumed Amount of Administrative
Expenses 14,318 20,789
L. Total Employer Normal Cost: J+K 505,658 628,515
M. Employer Normal Cost as % of
Covered Payroll 15.61 % 17.07
Gabriel, Roeder, Smith and Company
7
LIQUIDATION OF THE UNFUNDED FROZEN ACTUARIAL ACCRUED LIABILITY
A. Derivation of the Current UAAL
1. Last Year's UAAL $ 2,970,967
2. Last Year's Employer Normal Cost 596,120
3. Last Year's Contributions 873,854
4. Interest at the Assumed Rate on:
a. 1 and 2 for one year 285,367
b. 3 from dates paid 33,724
c. a - b 251,643
5. This Year's UAAL Prior to Revision:
1 + 2 - 3 + 4c 2,944,876
6. Change in UAAL Due to Plan Amendments
and/or Changes in Actuarial Assumptions 0
7. This Year's Revised UAAL: 5 + 6 2,944,876
B. UAAL Amortization Period and Payments
Ori final UAAL Current UAAL
Amortization
Date Period Years
Established (Years) Amount Remaining Amount Payment
10/1/99 30 $ 535,528 22 $ 482,552 $ 34,125
10/1/00 30 1,426,008 23 1,495,456 103,114
10/1/03 30 700,742 26 731,406 47,203
10/1/03 30 (77,576) 26 (80,970) (5,226)
10/1/05 30 313,729 28 316,432 19,674
2, 944, 876 198, 890
Gabriel, Roeder, Smith and Company
8
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
2007 $ 2,944,876
2008 2,965,650
2009 2,981,377
2010 2,991,429
2011 2, 995,135
2012 2, 991, 762
2017 2,838,217
2022 2,353,089
2027 1,337,519
2032 212, 580
2035 -
Gabriel, Roeder, Smith and Company
9
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 16.51
2. Current Valuation 15.17
3. Difference: 1 - 2 1.34
B. Actuarial Present Value of $ 27,991,675
Projected Covered Payroll
C. Net Actuarial Gain (Loss): A3 x B 375,088
D. Gain (Loss) Due to Investments 54,233
E. Gain (Loss) from Other Sources 320,856
Gabriel, Roeder, Smith and Company
10
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
Gabriel, Roeder, Smith and Company
11
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
Averages 9.8 % --- 6.6 % ---
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.
Gabriel, Roeder, Smith and Company
12
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%
~~h goo X01 goo goo \oti X03 ~o~ ~~h goo ~o~ ~o~ goo goo ~o~ Doti \oo ~o~ soh goo X01
0 0 0 0 0 0 0 o a o~ o a o~ o~ o 0 0 0 o a
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%
-8% -8%
~~h ~`b'~ ~`b~b ~`b~ ~p'O ~~R ~p'h ~~ro ~p''1 ~p~~b ~p-'~ ~~O \0~ ~~3 ~~h ~~1
~ ~ 0 0 ~ ~ 0 ~ ~ ~ ~ ~ ~ ~ ~ 0 ~ ~ ~ ~ ~ ~ ~
Plan Year End Compared to Previous Year
Actual +Assumed
Gabriel, Roeder, Smith and Company
13
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 3 0 0 2
5 Yr Totals * 47 63 17 28 0 0 1 0 24 21 45 15
* Totals are through current Plan Year only
Gabriel, Roeder, Smith and Company
14
RECENT HISTORY OF VALUATION RESULTS
Number of Covered Actuarial Employer Normal Cost
Valuation Members Annual Value % of
Date Active Inactive Pa roll of Assets UFAAL Amount Pa roll
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
1011/98 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 1'1.7
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
Gabriel, Roeder, Smith and Company
15
Recent History of Number of Members
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Actuarial Valuation Date
Active Members Inactive Members
Recent History of Covered Annual Payroll
$4.5 ~m
$4.0
$3.5
$3.0
o $2.5
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$2.0
$1.5
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Actuarial Valuation Date
Gabriel, Roeder, Smith and Company
16
Recent History of Employer Normal Cost
$800 24%
$700
20%
$600
y $500 16% _
~ o
L
$400 12% a
o "-
~ o
F- $300
8%
$200
$100 4%
$0 0%
~O\~~~0~~9~0~9~ ~~~9~~~~9~~~`9~~~`9~~~~96~~~91 ~~~9~~~~~9 ~~`~0~~~~~ ~~~~~~~`~~~~~~~~~~~y^~~~6~~~~~
Actuarial Valuation Date
Employer NC Amount -~-- NC as % of Payroll
Gabriel, Roeder, Smith and Company
17
RECENT HISTORY OF REQUIRED AND ACTUAL CONTRIBUTIONS
End of
Year To Required Contribution
Valuation Which Actual Contribution
Valuation % of
Applies 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
1011/90 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 na
10/1/07 9/30/09 761,943 22.62 na
Gabriel, Roeder, Smith and Company
18
Recent History of Required and Actual Contributions
$1,200 ._..~..._.._M_._____.,~...._...,,_..,.....,~._.___m_~d___~w.._~,...~..~,..........,~.__....,..._...,.
$1,000
us $800
c 4
$600
r
~ ~
E'- $400 rx A
s t d
§ r s
$200 ~ ~
i 1, ; F t ; 5 ~ I"
f P
{ P ~ ~ ~
$0 k
~~~ry 0~~~ ~~~6 ~~~o 9~~~ ~~~6
Fiscal Year End
Required Contribution Actual Contribution
Gabriel, Roeder, Smith and Company
19
ACTUARIAL ASSUMPTIONS AND COST METHOD
A. Cost Method
1. Funding Frozen Entry Age Actuarial Cost Method.
2. Accumulated Benefit Obligation Accrued Benefit Method
B. Investment Earnings 8.0% per year, compounded annually; net rate after
(Including Inflation) investment related expenses. It is being assumed
that each retiree will elect a lump sum distribution
and the interest rate used to calculate the lump sum
will be 5.25%.
C. Salary Increases 5.5% per year up to the assumed retirement age.
(Including Inflation)
D. Inflation 4% per year.
E. Retirement Age See Table below.
F. Turnover Rates See Table below.
G. Mortality Rates 1983 Group Annuity Mortality Tables for males and
females.
H. Disability
1. Rates NA
2. Percent Service Connected NA
I. Asset Value Difference between actual and expected return
recognized over five years.
J. Administrative Expenses Expenses paid out of the fund other than investment
related expenses are assumed to be equal to the
average of actual expenses over the previous two
years.
K. Increase in Covered Payroll 4% per year, but limited to average increase over
last 10 years (4.00% this year).
L. Post Retirement Benefit Increase 3% for those who retired before 2/1/82. Employees
hired before 10/1/00 may choose to contribute an
extra 2% starting 10/1/00 in order to receive a 3%
COLA upon retirement. This clause is mandatory for
employees hired after 9/30/00.
M. Changes Since Last Valuation None.
Gabriel, Roeder, Smith and Company
20
Annual Rate of
Age Turnover Disability
25 18.8% NA
30 11.2 NA
35 6.3 NA
40 4.8 NA
45 3.4 NA
50 2.4 NA
55 0.5 NA
60 0.0 NA
Annual Rate of Retirement
For each year
eligible for early
retirement 5%
For year when
normal retirement
date is attained 60
For each of four
years after normal
retirement date 40
For fifth year after
normal retirement
date 100
Gabriel, Roeder, Smith and Company
21
GLOSSARY OF TERMS
Actuarial Present Value is the value of an amount or series of amounts payable at various
times, determined as of the valuation date by the application of the set of actuarial assumptions.
Actuarial Assumptions are assumptions as to the occurrence of future events affecting pension
costs. The previous page outlines the Actuarial Assumptions utilized in this valuation.
Actuarial Cost Method is a procedure for determining the Actuarial Present Value of pension
plan benefits and for developing an actuarially equivalent allocation of such value to time periods,
usually in the form of a Normal Cost and Actuarial Accrued Liability.
Frozen Entry Age Actuarial Cost Method is a method under which 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 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 Liability is the portion of the Actuarial Present Value of Projected
Benefits which is 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.
Unfunded Frozen Actuarial Accrued Liability is the portion of the Frozen Actuarial Accrued
Liability remaining after the addition of interest and the deduction of amortization payments.
Gabriel, Roeder, Smith and Company
SECTION C
PENSION FUND INFORMATION
Gabriel, Roeder, Smith and Company
22
SUMMARY OF ASSETS
9/30/2007 9/30/2006
Cash and Securities -Market Value
Cash and Savings Accounts $ - $ -
Money Market Funds 119,831 122,092
Treasury and Agency Bonds & Notes - -
Corporate Bonds - -
Common & Preferred Stocks - -
Pooled Equity Funds 4,302,214 3,103,712
Pooled Bond Funds 2,310,117 1,881,450
Other Securities - -
Total 6,732,162 5,107,254
Receivables and Accruals
State Contribution - -
Member Contribution - -
Employer Contribution - 113,586
Interest and Dividends 379 1,038
Other 58,522 51,823
Total 58,901 166,447
Payables
Benefits 113,281 -
Refunds - -
Expenses - -
Other - -
Total 113,281 0
Net Assets -Market Value 6 677 782 5 273 701
Gabriel, Roeder, Smith and Company
23
PENSION FUND INCOME AND DISBURSEMENTS
Year Ending Year Ending
9/30/2007 9/30/2006
Market Value at Be innin of Period $ 5,273,701 $ 3,857,737
Income
Member Contributions 171,126 185,394
State Contributions N/A N/A
Employer Contributions 873,854 1,007,695
Other Contributions 0 0
Interest and Dividends 19,584 14,406
Recognized/Unrecognized Gains (Losses) 733,250 326,856
Total Investment Earnings 752,834 341,262
Total Income 1, 797, 814 1, 534, 351
Disbursements
Monthly Benefit Payments 43,927 47,452
Lump Sum Distributions 296,446 0
Refund of Contributions 0 14,636
Investment Related Expenses 42,488 38,536
Other Administrative Expenses 10,872 17,763
Insurance Premiums 0 0
Other Expenses 0 0
Total Disbursements 393,733 118,387
Net Increase During Period 1,404,081 1,415,964
Market Value at End of Period 6,677,782 5,273,701
Gabriel, Roeder, Smith and Company
24
ACTUARIAL VALUE OF ASSETS
Year Endin Se tember 30
2005 2006 2007 2008 2009
A. Beginning of Year Assets
1. Market Value $ 6,605,254 $ 3,857,737 $ 5,273,701 $ 6,677,782 $ 0
2. Actuarial Value 6,578,832 3,817,605 5,283,023 6,481,382 0
B. Net of Contributions
Less Disbursements* (3,196,270) 1,113,238 693,735 0 0
C. Actual Net Investment
Earnings* 448,753 302,726 710,346 0 0
D. Expected Investment
Earnings* 423,359 349,938 450,391 0 0
E. Excess of Actual Over
Expected Investment
Earnings: C - D 25,394 (47,212) 259,955 0 0
F. Recognition of Excess
Earnings Over 5 Years
1. From This Year 5,079 (9,442) 51,991 0 0
2. From One Year Ago 6,605 5,079 (9,442) 51,991 0
3. From Two Years Ago 0 6,605 5,079 (9,442) 51,991
4. From Three Years Ago 0 0 6,605 5,079 (9,442)
5. From Four Years Ago 0 0 0 6,605 5,079
6. Total 11,684 2,242 54,233 54,233 47,627
G. End of Year Assets
1. Market Value 3,857,737 5,273,701 6,677,782 0 0
2. Actuarial Value:
A2 + g + D + F6 3,817,605 5,283,023 6,481,382 0 0
3. Final Actuarial Value
Within 80% to 120% 3,817,605 5,283,023 6,481,382 0 0
Of Market Value
Gabriel, Roeder, Smith and Company
25
INVESTMENT RATE OF RETURN
The investment rate of return has been calculated as follows:
Basis 1 Interest, dividends, realized gains (losses) and unrealized appreciation (depreciation)
divided by the weighted average of the market value of the fund during the year. This
figure is normally called the Total Rate of Return.
Basis 2 Investment earnings recognized in the Actuarial Value of Assets divided by the weighted
average of the Actuarial Value of Assets during the year.
Investment Rate of Return
Year Ended Basis 1 Basis 2
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
*
9130/05 9.0 8.7
9/30/06 6.9 * 8.1
9/30/07 12.6 * 9.0
Average Compounded Rate of Return
for Number of Years Shown 9.8 % 9.8
Average Compounded Rate of Return
for Last 5 Years 9.7 % 7.2
Note: Figures prior to 1988 were taken from the previous actuary's report for 1987.
* Net rate after investment expenses.
Gabriel, Roeder, Smith and Company
SECTION D
FINANCIAL ACCOUNTING INFORMATION
Gabriel, Roeder, Smith and Company
26
FASB NO. 35 INFORMATION
A. Valuation Date October 1, 2007 October 1, 2006
B. Actuarial Present Value of Accumulated
Plan Benefits
1. Vested Benefits
a. Members Currently Receiving Payments $ 223,024 $ 238,898
b. Terminated Vested Members 1,388,226 930,178
c. Other Members 5,709,634 5,409,637
d. Total 7,320,884 6,578,713
2. Non-Vested Benefits 625,370 755,439
3. Total Actuarial Present Value of Accumulated
Plan Benefits: 1d + 2 7,946,254 7,334,152
4. Accumulated Contributions of Active Members 696,763 634,923
C. Changes in the Actuarial Present Value of
Accumulated Plan Benefits
1. Total Value at Beginning of Year 7,334,152 6,062,751
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 952,475 1,333,489
d. Benefits Paid 340,373 62,088)
e. Net Increase 612,102 1,271,401
3. Total Value at End of Period 7,946,254 7,334,152
D. Market Value of Assets 6,677,782 5,273,701
E. Actuarial Assumptions -See page entitled
Actuarial Assumptions and Methods
Gabriel, Roeder, Smith and Company
27
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
10/1/05 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
Gabriel, Roeder, Smith and Company
28
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
Gabriel, Roeder, Smith and Company
29
ANNUAL PENSION COST AND NET PENSION OBLIGATION
(GASB STATEMENT N0.27)
Employer FYE September 30 2008 2007 2006
Annual Required Contribution (ARC) $875,126 $866,069 $1,007,695
Interest on Net Pension Obligation (NPO) (13,692) (13,473) (14,006)
Adjustment to ARC (18,869) (18,527) (20,673)
Annual Pension Cost (APC) 880,303 871,123 1,014,362
Contributions made 873,854 1,007,695
Increase (decrease) in NPO (2,731) 6,667
NPO at beginning of year (171,144) (168,413) (175,080)
NPO at end of year (171,144) (168,413)
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!2005 $ 669,011 $ 662,237 99.0 % $ (175,080)
9/30/2006 1,014,362 1,007,695 99.3 (168,413)
9/30/2007 871,123 873, 854 100.3 (171,144)
Gabriel, Roeder, Smith and Company
30
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, 2007
Contribution Rates:
Employer 22.13%
Plan Members 6.00%*
Actuarial Cost Method Frozen Entry Age
Amortization Method Level percent, closed
Remaining amortization period 30
Asset valuation method Difference between
actual return and
expected return
recognized over 5
years.
Actuarial assumptions:
Investment rate of return 8.0% up to
retirement, 5.25%
thereafter
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%.
Gabriel, Roeder, Smith and Company
SECTION E
MISCELLANEOUS INFORMATION
Gabriel, Roeder, Smith and Company
31
RECONCILIATION OF MEMBERSHIP DATA
From 1011/06 From 10/1/05
to 10/1 /07 to 10/1 /06
A. Active Members
1. Number Included in Last Valuation 90 84
2. New Members Included in Current Valuation 3 15
3. Non-Vested Employment Terminations (5) (4)
4. Vested Employment Terminations (8) (4)
5. Service Retirements (2) 0
6. Disability Retirements 0 0
7. Deaths 0 (1)
8. Other (6) 0
9. Number Included in This Valuation 72 90
B. Terminated Vested Members
1. Number Included in Last Valuation 46 42
2. Additions from Active Members 8 4
3. Lump Sum Payments/Refund of Contributions (5) 0
4. Payments Commenced 0 0
5. Deaths 0 0
6. Other--Return to Actives 0 0
7. Number Included in This Valuation 49 46
C. Service Retirees, Disability Retirees and Beneficiaries
1. Number Included in Last Valuation 10 13
2. Additions from Active Members 2 0
3. Additions from Terminated Vested Members 0 0
4. Deaths Resulting in No Further Payments 0 (3)
5. Deaths Resulting in New Survivor Benefits 0 0
6. End of Certain Period - No Further Payments 0 0
7. Other -- Lump Sum Distributions (2) 0
8. Number Included in This Valuation 10 10
Gabriel, Roeder, Smith and Company
32
NORTH PALM BEACH GENERAL EMPLOYEES -ACTIVE MEMBERS ON OCTOBER 1, 2007
Age Years of Service
Group 0-4 5-9 10-14 15-19 20-24 25-29 30 & Up Totals
20-24 No.
Total Pay
Avg Pay
25-29 No. 2 2
Total Pay 64,527 64,527
Avg Pay 32,264 32,264
30-34 No. 5 3 8
Total Pay 204,455 119,122 323,577
Avg Pay 40,891 39,707 40,447
35-39 No. 3 3 1 7
Total Pay 109,515 143,112 47,661 300,288
Avg Pay 36,505 47,704 47,661 42,898
40-44 No. 2 2 2 2 2 10
Total Pay 72,431 104,265 72,426 77,883 93,058 420,063
Avg Pay 36,216 52,133 36,213 38,942 46,529 42,006
45-49 No. 1 3 2 5 1 1 13
Total Pay 32,411 109,193 71,984 252,123 58,377 59,482 583,570
Avg Pay 32,411 36,398 35,992 50,425 58,377 59,482 44,890
50-54 No. 3 3 3 3 1 13
Total Pay 137,860 100,757 115,308 182,060 89,842 625,827
Avg Pay 45,953 33,586 38,436 60,687 89,842 48,141
55-59 No. 1 5 2 1 1 10
Total Pay 39,334 178,846 130,076 61,017 45,650 454,923
Avg Pay 39,334 35,769 65,038 61,017 45,650 45,492
60-64 No. 2 4 2 1 9
Total Pay 69,563 164,494 89,914 59,769 383,740
Avg Pay 34,782 41,124 44,957 59,769 42,638
65-99 No.
Total Pay
Avg Pay
Total No. 16 23 10 11 8 2 2 72
Total Pay 592,236 956,892 382,742 505,083 463,571 120,499 135,492 3,156,515
Avg Pay 37,015 41,604 38,274 45,917 57,946 60,250 67,746 43,840
Gabriel, Roeder, Smith and Company
33
NORTH PALM BEACH GENERAL INACTIVE PARTICIPANTS RECEIVING THE COLA
AS OF OCTOBER 1, 2007
Retirees and
Terminated Vested Disabled Beneficiaries
Annual Annual Annual
Age No. Benefits No. Benefits No. Benefits
Under 45 2 $9,189 0 $0 0 $0
45-49 3 14, 343 0 0 0 0
50-54 2 11, 819 0 0 1 10,191
55-59 5 65,180 0 0 0 0
60-64 1 2,812 0 0 0 0
65-69 2 1,082 0 0 2 7,240
70-74 0 0 0 0 0 0
75-79 0 0 0 0 1 2,034
80-84 0 0 0 0 1 994
85-89 0 0 0 0 0 0
90&Up 0 0 0 0 0 0
Total 15 $104,425 0 $0 5 $20,459
Gabriel, Roeder, Smith and Company
34
NORTH PALM BEACH GENERAL INACTIVE PARTICIPANTS NOT RECEIVING THE COLA
AS OF OCTOBER 1, 2007
Retirees and
Terminated Vested Disabled Beneficiaries
Annual Annual Annual
Age No. Benefits No. Benefits No. Benefits
Under 45 10 $58,908 0 $0 0 $0
45-49 11 54,159 0 0 0 0
50-54 7 47,482 0 0 0 0
55-59 3 5,898 0 0 0 0
60-64 3 14,619 0 0 0 0
65-69 0 0 0 0 0 0
70-74 0 0 0 0 1 1,274
75-79 0 0 0 0 2 8,359
80-84 0 0 0 0 0 0
85-89 0 0 0 0 2 13,836
90&Up 0 0 0 0 0 0
Total 34 $181,066 0 $0 5 $23,469
Gabriel, Roeder, Smith and Company
SECTION F
SUMMARY OF PLAN PROVISIONS
Gabriel, Roeder, Smith and Company
35
SUMMARY OF PLAN PROVISIONS
Effective Date
September 1, 1967
Eligibility
Full-time general employees are eligible for membership on the October 1st following
completion of 12 months of employment.
Earnings
Gross salary including overtime but excluding bonuses or any other nonregular payments
such as unused sick leave and vacation pay.
Average Monthly Earnings (AME)
Average of earnings during the five years within the last ten years of employment which
produces the highest average.
Credited Service
Total number of years and fractional parts of years of actual service.
Normal Retirement
Eligibility - Either age 60 with nine years Credited Service or age 65 (depending on
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.
Form of Benefit -Life annuity, with other options available.
Early Retirement
Eligibility - Age 55.
Benefit - Calculated in 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.
Gabriel, Roeder, Smith and Company
36
Delayed Retirement
Eligibility - Any time after the Normal Retirement Date.
Benefit - Calculated in the same manner as the Normal Retirement Benefit but using
the AME and Credited Service as of the actual retirement date.
Preretirement Death Benefits
For a member who is age 55 and has at least five years of service but who dies before
commencement of retirement benefits, a monthly benefit is payable to the designated
beneficiary; the benefit is calculated as though the member had retired on his date of
death and payable according to option elected by the employee.
For an active member who has at least five years of Credited Service and dies prior to
reaching Normal Retirement Date, a benefit equal to his vested accrued benefit will be
paid to his beneficiary for ten years.
Termination Benefits
For a member with less than five years of Credited Service when he terminates, no
benefit is payable. For a member with five or more years of Credited Service when he
terminates, his vested accrued benefit is payable at his Normal Retirement Date, or at any
time after age 55 is attained, with the benefit being subject to the same reduction as for
Early Retirement Benefits. The vesting schedule is as follows:
Years of Vested
Credited Service
Under 5 0%
5 or 6 50
7or8 75
9 or more 100
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 3% Cost of Living increase is paid annually
from the Plan.
Contributions
From Members - 6%, 4%, 2% or 0% of Earnings as elected by the employee.
From the City -The amount necessary to fund the Plan properly according to the Plan's
actuary.
Chances Since Last Valuation
None.
Gabriel, Roeder, Smith and Company