PFPB Actuarial Report 10-01-2006
VILLAGE OF NORTH PALM BEACH
FIRE AND POLICE RETIREMENT FUND
REVISED ACTUARIAL VALUATION REPORT AS OF OCTOBER 1, 2006
ANNUAL EMPLOYER CONTRIBUTION DETERMINED FOR PLAN YEAR ENDING
SEPTEMBER 30, 2008
CONTRIBUTIONS PAID IN FISCAL YEAR ENDING SEPTEMBER 30, 2008
Gabriel Roeder Smith & Company
~ GABRIEL, ROEDER, SMITH & COMPANY
R Gabriel Roeder Smith & Company 301 East Las Olas Blvd. 954.527.1616 phone
Consultants & Actuaries Suite 200 954.525.0083 fax
Ft. Lauderdale, FL 33301-2254 www.gabrielroeder.com
May 17, 2007
Board of Trustees of the
I have a Village of North Palm Beach
Fire and Police Retirement Fund
North Palm Beach, Florida
Board Members:
We are pleased to present our revised October 1, 2006 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.
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
J.~tephen Palmquist, ASA{MAAA, FCA
Enrolled Actuary No. 05-1560
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:
Signature
-~ -r-o
Date
05-1560
Enrollment Number
~ GABRIEL, ROEDER, SMITH & COMPANY
TABLE OF CONTENTS
Section Title Page
A Discussion of Valuation Results
1. Discussion of Valuation Results 1
2. Chapter Revenue 3
B Valuation Results
1. Participant Data 4
2. Annual Required Contribution 5
3. Actuarial Value of Benefits and Assets 6
4. Calculation of Employer Normal Cost 7
5. Actuarial Gains and Losses 8
6. Recent History of Valuation Results 13
7. Recent History of Contributions 16
8. Actuarial Assumptions and Cost Method 18
9. Glossary of Terms 20
C .Pension Fund Information
1. Summary of Assets 21
2. Pension Fund Income and Disbursements 22
3. Actuarial Value of Assets 23
4. Investment Rate of Return 24
D Financial Accounting Information
1. FASB No. 35 25
2. GASB No. 25 26
3. GASB No. 27 28
E Miscellaneous Information
1. Reconciliation of Membership Data 30
2. Active Participant Distribution 31
3. Inactive Participant Distribution 32
F Summary of Plan Provisions 33
~ GABRIEL, ROEDER, SMITH & COMPANY
SECTION A
DISCUSSION OF VALUATION RESULTS
GABRIEL, ROEDER, SMITH & COMPANY
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 9/30/08 For FYE 9/30/07
Based on Based on
10/1 /2006 10/1 /2005 Increase
Valuation Valuation (Decrease)
Required Employer/State Contribution $ 715,784 $ 539,651 $ 176,133
As % of Covered Payroll 24.59 % 21.57 % 3.02
Estimated State Contribution $ 138,200 $ 138,200 $ 0
As % of Covered Payroll 4.75 % 5.52 % (0.77)
Required Employer Contribution $ 577,584 $ 401,451 $ 176,133
As % of Covered Payroll 19.84 % 16.05 % 3.79
The employer contribution has been adjusted for interest. on the basis that employer
contributions are made in equal payments at the end of each quarter.
The required employer contribution has been computed under the assumption that the
amount to be received from the State on behalf of members this year will be equal to the last
payment. If this year's payment from the State falls below the estimated amount, then the
employer must raise its contribution by the difference.
The actual employer and State contributions during the year ending September 30, 2006
were $551,986 and $233,641, respectively. Only $138,200 of the State revenue in 2006 may be
used as a credit against the City contribution.
Revisions in Benefits
There have been no revisions 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 & COMPANY
2
Actuarial Experience
There was a net actuarial loss of $734,276 for the year which means that actual
experience was less favorable than expected. The loss is due to actual salary increases being
11.2% for continuing active members which is above the assumed rate of 6.0%, and the
investment rate of return being 5.0% versus the assumed rate of 8.0%.
The net actuarial gain for the year translates into an increase in annual employer
contributions of 3.28% of covered payroll.
Analysis of Change in Employer Contributions
The. components of change in required contribution are as follows:
Contribution rate last year 16.05
Experience gain/loss 3.28
Change in administrative expense (0.26)
Change. in State revenue 0.77
Contribution rate this year 19.84
The remainder of this Report includes detailed actuarial valuation results, pension fund
information, miscellaneous information and statistics, and a summary of plan provisions.
~ GABRIEL, ROEDER, SMITH & COMPANY
3 .
CHAPTER REVENUE
Increments in Chapter revenue over that received in 1998 must first be used to fund the
cost of compliance with minimum benefits. Once minimums are met, any subsequent additional
Chapter revenue must be used to provide extra benefits.
As of the valuation date, a Normal Retirement Date of age 52 with 25 years of service
should. be added to meet the minimum required benefits. Also the eligibility requirement should
be changed to date of hire rather than one year after date of hire.
Actuarial Confirmation of the Use of State Chapter Money
1. Base Amount Previous Plan Year $ 138,200
2. Amount Received for Previous Plan Year 233,641
3. Benefit Improvements Made in Previous Plan Year 0
4. Excess Funds for Previous Plan Year: (2) - (1) - (3) 95,441
5. Accumulated Excess at Beginning of Previous Year 161,780
6. Prior Excess Used in Previous Plan Year 0
7. Accumulated Excess as of Valuation Date
(Available for Benefit Improvements): (4) + (5) - (6) 257,221
8. Base Amount This Plan Year: (1) + (3) 138,200
The Accumulated Excess shown in line 7 is being held in reserve to pay for additional
benefits. The reserve is subtracted from Plan assets (see Section C of this Report). The Base
Amount in line 8 is the amount the employer may take as a credit against its required contribution.
~ GABRIEL, ROEDER, SMITH & COMPANY
SECTION B
VALUATION RESULTS
! GABRIEL, ROEDER, SMITH & COMPANY
4
PARTICIPANT DATA
October 1, 2006 October 1, 2005
ACTIVE MEMBERS
Number 44 40
Covered Annual Payroll $ 2,798,919 $ 2,405,634
Average Annual Payroll $ 63,612 $ 60,141
Average Age 40.7 41.5
Average Past Service 9.4 10.6
Average Age at Hire 31.4 30.9
RETIREES & BENEFICIARIES & DROP
Number 5 3
Annual Benefits $ 99,632 $ 18,163
Average Annual Benefit $ 19,926 $ 6,054
Average Age 63.8 70.9
DISABfLITY RETIREES
Number 0 0
Annual Benefits $ 0 $ 0
Average Annual Benefit $ 0 $ 0
Average Age 0.0 0.0
TERMINATED VESTED MEMBERS
Number 12 13
Annual Benefits $ 211,364 $ 236,555
Average Annual Benefit $ 17,614 $ 18,197
Average Age 49.8 48.9
GABRIEL, ROEDER, SMITH & COMPANY
5
ANNUAL REQUIRED CONTRIBUTION (ARC)
A. Valuation Date October 1, 2006 October 1, 2005
B. ARC to Be Paid During
Fiscal Year Ending ~ 9/30/2008 9/30/2007
C. Assumed Date of Employer Contrib. Quarterly Quarterly
D. Annual Payment to Amortize
Unfunded Actuarial Liability $ 0 $ 0
E. Employer Normal Cost 656,324 494,929
F. ARC if Paid on the Valuation
Date: D+E 656,324 494,929
G. ARC Adjusted for Frequency of
Payments ~ 688,182 518,953
H. ARC as % of Covered Payroll 24.59 % 21.57
I. Assumed Rate of Increase in Covered
Payroll to Contribution Year 4.00 % 4.00
J, Covered Payroll for Contribution Year 2,910,876 2,501,859
K. ARC for Contribution Year: H x J 715,784 539,651
L. Estimate of State Revenue in
Contribution Year 138,200 138,200
M. Required Employer Contribution (REC)
in Contribution Year 577,584 401,451
N. REC as % of Covered Payroll in
Contribution Year: M _ J 19.84 % 16.05
~ GABRIEL, ROEDER, SMITH & COMPANY
6
ACTUARIAL VALUE OF BENEFITS AND ASSETS
A. Valuation Date October 1, 2006 October 1, 2005
B. Actuarial Present Value of All Projected
Benefits for
1. Active Members
a. Service Retirement Benefits $ 8,937,830 $ 8,266,271
b. Vesting Benefits 468,075 398,684
c. Disability Benefits 902,265 814,981
d. Preretirement Death Benefits 171,316 160,396
e. Return of Member Contributions 23,531 18,860
f. Total 10,503,017 9,659,192
2. Inactive Members
a. Service Retirees & Beneficiaries 1,687,549 192,344
b. Disability Retirees - -
c. Terminated Vested Members 1,757,015 1,875,945
d. Total 3,444,564 2,068,289
3. Total for All Members 13,947,581 11,727,481
C. Actuarial Accrued (Past Service)
Liability per GASB No. 25 10,294,848 8,692,747
D. Actuarial Value of Accumulated Plan
Benefits per FASB No. 35 8,665,687 7,295,994
E. Plan Assets
1. Market Value 9,193,248 8,323,682
2. Actuarial Value 8,312,363 7,600,134
F. Actuarial Present Value of Projected
Covered Payroll 23,459,286 19,753,794
G. Actuarial Present Value of Projected
Member Contributions 469,186 395,076
~ GABRIEL, ROEDER, SMITH & COMPANY
7
CALCULATION OF EMPLOYER NORMAL COST
A. Valuation Date October 1, 2006 October 1, 2005
B. Actuarial Present Value of Projected
Benefits $ 13,947,581 $ 11,727,481
C. Actuarial Value of Assets 8,312,363 7,600,134
D. Unfunded Actuarial Accrued Liability 0 0
E. Actuarial Present Value of Projected
Member Contributions 469,186 395,076
F. Actuarial Present Value of Projected
Employer Normal Costs: B-C-D-E 5,166,032 3,732,271
G. Actuarial Present Value of Projected
Covered Payroll 23,459,286 19,753,794
H. Employer Normal Cost Rate: F/G 22.02 % 18.89
I. Covered Annual Payroll 2,798,919 2,405,634
J. Employer Normal Cost: H x I ~ 616,322 454,424
K. Assumed Amount of Administrative
Expenses 40,002 40,505
L. Total Employer Normal Cost: J+K 656,324 494,929
M. Employer Normal Cost as % of
Covered Payroll 23.45 % 20.57
~ GABRIEL, ROEDER, SMITH & COMPANY
8
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 18.89
2. Current Valuation 22.02
3. Difference: 1 - 2 (3.13)
g. Actuarial Present Value of
Projected Covered Payroll $ 23,459,286
C. Net Actuarial Gain (Loss): A3 x B (734,276)
D. Gain (Loss) Due to Investments (241,271)
E. Gain (Loss) from Other Sources (493,004)
Net actuarial gains in previous years have been as follows:
Change in Employer
Year Ended Normal Cost Rate Gain (Loss)
9/30/89 1.53 % $ 220,709
9/30/90 (0.27) (40,469)
9/30/91 0.96 156,905
9/30/92 (0.48) (91,506)
9/30/93 1.88 297,196
.9/30/94 2.28 357, 766
9/30/95 1.11 179,910
9/30/96 (1.79) (236,969)
9/30/97 3.27 440,982
9/30/98 (2.87) (417,330)
9/30/99 4.60 584, 057
9/30/00 1.09 155,044
9/30/01 (2.57) (338,945)
9/30!02 (7.70) (1,284,021)
9/30/03 (1.51) (297,859)
9130/04 (3.70) (785,221)
9/30/05 3.56 703,235
9/30/06 3.13 734,276
~ GABRIEL, ROEDER, SMITH & COMPANY
9
Actuarial Gain or Loss (-)
$2 $2
$1 $1
V1 N
C C
~ $0 $0 ~
~ ~
($1) ($1)
($2) ($2)
9/89 9/90 9191 9/92 9/93 9/94 9/95 9/96 9/97 9/98 9/99 9/00 9/01 9/02 9/03 9104 9/05 9/06
Plan Year End
Gain or Loss ~ Cumulative
Change in Employer Normal Cost Rate
12% 12%
8% 8%
4% 4%
0% 0%
-4% -4%
-8% -8%
-12% -12%
9/89 9/90 9/91 9/92 9/93 9/94 9/95 9/96 9/97 9/98 9/99 9/00 9/01 9/02 9/03 9/04 9/05 9/06
Plan Year End
Normal Cost Rate ~-Cumulative
~ GABRIEL, ROEDER, SMITH & COMPANY
10
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 following table
shows the actual fund earnings and salary increase rates compared to the assumed rates for the
last few years:
Investment Return Salary Increases
Year Ending Actual Assumed Actual Assumed
9/30/1985 17.8 % 7.0 % 1.4 % 6.0
9/30/1986 24.9 7.0 13.9 6.0
9/30/1987 13.3 7.0 10.9 6.0
9/30/1988 2.3 7.0 4.3 6.0
9/30/1989 20.1 7.0 8.7 6.0
9/30/1990 (0.5) 7.0 5.3 6.0
9/30/1991 23.6 7.0 8.9 6.0
9/30/1992 12.2 7.0 9.0 6.0
9/30/1993 9.4 7.0 0.7 6.0
9/30/1994 7.2 7.0 1.2 6.0
9/30/1995 10.6 7.0 6.4 6.0
9/30/1996 8.3 . 8.0 10.2 6.0
9/30/1997 16.1 8.0 (5.4) 6.0
9/30/1998 10.7 8.0 18.6 6.0
9/30/1999 12.6 8.0 (5.5) 6.0
9/30/2000 11.6 8.0 9.2 6.0
9/30/2001 7.4 8.0 8.7 6.0
9/30/2002 1:8 8.0 15.5 6.0
9/30/2003 3.9 8.0 7.1 6.0
9/30/2004 2.8 8.0 14.0 6.0
9/30/2005 3.3 8.0 (7.1) 6.0
9/30/2006 5.0 8.0 11.2 6.0
Averages 10.0 % --- 6.5 % ---
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 & COMPANY
11
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%
\4'~0 \~1 \~~b \°j~ \°'~y \°'n' \°'D~ \°'h \°~o \°''1 \°'4' \°'o' ADO \~D~ \~h \~0
Plan Year End
Actual ~-Assumed
History of Salary Increases
20°i° 20°io
18% 18%
16% 16%
14% 14%
12% 12%
10% 10%
8% 8%
6% 6%
4% 4%
2% 2%
0% 0%
-2% -2%
-4% -4%
-6% -6%
-8% -8%
\~h ~~0 ~~1 \~0 ~`b~ ~~O ~~3 ~~h ~°'ro ~p~~b ~~O ~~b ~~h X00
~ ~ ~ 0 0 ~ ~ ~ ~ 0 0 0 ~ ~ 0 0 ~ ~ 0 0 ~ 0
Plan Year End Compared to Previous Year
Actual ~--Assumed
~ GABRIEL, ROEDER, SMITH & COMPANY
12
Actual (A) Compared to Expected (E) Decrements
Among Active Employees
Number
Added Service 8~ 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
9/30/2002 6 2 0 1 0 0 0 0 1 1 2 1 31
9/30/2003 8 2 0 1 0 0 0 0 1 1 2 1 37
9/30/2004 4 3 0 1 0 0 0 0 0 3 3 1 38
9/30/2005 8 6 0 3 0 0 0 0 1 5 6 1 40
9/30/2006 9 5 2 3 0 0 0 0 0 3 3 1 44
9/30/2007 3 0 0 2
5 Yr Totals * 35 18 2 9 0 0 0 0 3 13 16 5
* Totals are through current Plan Year only.
~ GABRIEL, ROEDER, SMITH & COMPANY
.e
y RECENT HISTORY OF VALUATION RESULTS
W
Number of Emplo er Normal Cost
~ Active Inactive
m Valuation Members Members Covered Annual Actuarial Value of
°rn~ Date Pa roll Assets UFAAL Amount % of Payroll
~ 10/1/88 31 6 $ 906,217 $ 1,094,961 $ 0 $ 112,306 12.4
.i 10/1 /89 31 6 969,198 1,413,195 0 105,967 10.9
~ 10/1 /90 31 9 1,005,750 1,503,065 0 112,554 11.2
n 10/1/91 31 9 1,074,925 1,818,821 0 114,587 10.7
~ 10/1/92 35 9 1,272,588 1,932,821 0 134,305 10.6
z 10/1/93 34 8 1,244,783 2,250,243 0 125,213 10.1
-< 10/1 /94 29 8 1,122, 868 2, 532, 566 0 121, 796 10.9
10/1/95 28 8 1,180,433 2,932,454 0 125,518 10.6
10/1/96 31 9 ~ 1.,417,072 3,316,017 0 159,996 11.3
10/1/97 33 9 1,385,328 4,039,956 0 113,150 8.2
10/1/98 31 10 1,552,984 4,650,015 0 173,847 11.2
10/1 /99 29 11 1, 355, 684 4, 839, 840 0 92, 638 6.8
10/1/00 30 13 1,493,357 5,285,938 0 81,891 5.5
10/1/01 27 16 1,517,524 5,718,291 0 124,273 8.2
10/1/02 31 17 1,921,532 6,047,007 0 352,003 18.3
10/1/03 37 18 2,312,228 6,635,342 0 467,436 20.2
10/1/04 38 15 2,627,239 6,771,959 0 632,978 24.1
10/1/05 40 16 2,405,634 7,600,134 0 494,929 20.6
10/1/06 44 17 2,798,919 8,312.,363 0 656,324 23.5
• This number includes cost-of-living benefits being paid by the pension fund for retirees whose annuities
were purchased during the 1970's.
w
14
Recent History of Number of Members
50
40
l4
30 -
20
10
0
~O~hO ^O~hh ^O~~h ^o~hti ^o~h"~ ^O~hD~ ^o~~h ^0~~6 ^o~h1 ^o~p~h ^O\~h ^o\DO ^o~Oti ^O~h'y ^O~OD~ ^o~Oh X0\06
Actuarial Valuation Date
Active Members Inactive Members
Recent History of Covered Annual Payroll
$3.0 _......._._....,.m. _
$2.5
,'`i
$2.0 3
~ x
~ f
$1.5
f
~ $1.0
-
~ F
;1
$0.5 , ~ E
$0.0 ~ '
^064 ^066 ^0\00 ~0\0~ ^o\hrL ~0~0^~ ~.o~pb ^0~9h ^0\06 ~.o~p~1 ^0\p'6 ^006 X0\00 ^0\0~ ^O\hry ^O\0"~ ^o~oR ^o~oh ^0\06
Actuarial Valuation Date
~ GABRIEL, ROEDER, SMITH $c COMPANY
15
Recent History of Employer Normal Cost
$700 28%
26%
$600 24%
22%
$500 20%
=.r 18% o
N
c $400 16% j,
14% nom.
L $300 12% o
~ 10% o .
$200 8%
6%
$100 4%
2%
$0 0%
^0~~9 ^o\~~ ^O`9ti ^O\93 ^o~9b ^0~9~ ^096 ^091 ^o~~~ ^099 ^0~~~ ~0`~ti ^O~~k ~0~00
Actuarial Valuation Date
Employer NC Amount ~ NC as % of Payroll
e GABRIEL, ROEDER, SMITH & COMPANY
e
~ RECENT HISTORY OF REQUIRED AND ACTUAL CONTRIBUTIONS
D 4
W
m
~ End of Required Contributions
p Year To
o Valuation Which Employer & State Estimated State Net Employer Actual Contributions
'r" Valuation
~ Applies % of % of % of
Amount. Pa roll Amount Payroll Amount Pa roll Emplo er State Total
0 10/1/88 9/30/89 $ 117,090 12.92 $ 44,728 4.94 % $ 72,362 7.99 % $ 64,223 $ 52,866 $ 117,089
~ 10/1/89 9/30/90 110,481 11.40 52,866 5.45 57,615 5.94 62,349 49,647 111,996
n 10/1/90 9/30/91 117,352 11.67 49,647 4.94 67,705 6.73 68,000 54,960 122,960
~ 10/1/91 9/30/92 119,472 11.11 54,960 5.11 64,512 6.00 70,000 51,832 121,832
10/1 /92 9/30/93 140,031 11.00 51,832 4.07 88,199 6.93 91,109 49,897 141,006
10/1/93 9/30/94 130,551 10.49 49,897 4.01 80,654 6..48 77,009 54,214 131,214
10/1/94 9/30/95 126,988 11.31 54,214 4.83 72,774 6.48 73,000 58,926 131,925
10/1/95 9/30/96 131,611 11.15 58,926 4.99 72,685 6.16 78,000 55,501 133,501
10/1/96 9%30/97 167,763 11.84 55,501 3.92 112,262 7.92 93,000 76,514 169,514
10/1/97 9/30/98 118,643 8.56 74,935 5.40 43,708 3.16 56,672 92,463 149,135
10/1/98 9/30/99 182,286 11..74 84,883 5.47 97,403 6.27 110,966 79,215 190,181
10/1/99 9/30/00 97,135 7.16 73,907 5.45 23,22.8 1.71 53,067 73,123 126,190
10/1/00 9/30/01 85,866 5.75 78,246 5.24 7,620 0.51 2.5,607 77,227 102,834
10/1/01 9/30/02 130,305 8.59 77,227 5.09 53,078 3.50 57,825 88,452 146,277
10/1/02 9/30/03 369,089 19.21 134,189 6.98 234,900 12.23 2.35,339 134,303 369,642
10/1/02 9/30/04 383,891 19.21 134,189 6.71 249,702 12.50 2.50,000 138,200 388,200
10/1/03 9/30/05 509,800 21.20 134,303 5.58 375,497 15.62 471,864 138,200 610,064
10/1/04 9/30/06 690,186 25.26 138,200 5.06 551,986 20.20 551,986 138,200 690,186
10/1/05 9/30/07 539,651 21.57 138,200 5.52 401,451 16.05 --- --- ---
10/1/06 9/30/08 715,784 24.59 138,200 4.75 577,584 19.84 --- --- ---
rn
Recent History of Required and Actual Contributions
$soo
$700
$600
~ $500
c
~ $400
O ~ ~
~ $300
$200 r
t a s
~a
$100
$0 -
Fiscal Year End
D Required Contribution Actual Contribution
GABRIEL, ROEDER, SMITH & COMPANY
18
ACTUARIAL ASSUMPTIONS AND COST METHOD
A. Cost Method
1. Funding Aggregate Actuarial Cost Method.
2. Accumulated Benefit Obligation Accrued Benefit Method
B. Investment Earnings 8% per year, compounded annually; net rate
(Including inflation) after investment related expenses.
C. Salary Increases 6% per year up to the assumed retirement age.
(Including inflation)
D. Inflation 4% per year.
E. Retirement Age See Table below for retirement rates.
F. Turnover Rates See Table below.
G. Mortality Rates 1983 Group Annuity Mortality Table for males and females.
H. Disability
1. Rates See Table below.
2. Percent Service Connected NA
I. Asset Value Market Value less unrecognized capital appreciation, where
capital appreciation is recognized at the rate of 20% per
year.
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 NA
L. Post Retirement Benefit Increase 3% per year.
M. Changes Since Last Valuation None.
~ GABRIEL, ROEDER, SMITH & COMPANY
19
Annual Rate of
Age Turnover Disability
25 8.6% 0.15%
30 7.5 0.18
35 5.7 0.23
40 3.9 0.30
45 2.4 -0.51
50 1.2 1.00
55 --- ---
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 100
~ GABRIEL, ROEDER, SMITH & COMPANY
20
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.
Aggreqate 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 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.
~ GABRIEL, ROEDER, SMITH & COMPANY
SECTION C
PENSION FUND INFORMATION
~ GABRIEL, ROEDER, SMITH & COMPANY
21
SUMMARY OF ASSETS
9/30/2006 9/30/2005
Cash and Securities -Market Value
State Board of Admins $ - $ 261,928
Cash 19,741 159,067
Money Market Funds 607,540 1,944,243
Treasury and Agency Bonds & Notes 2,371,798 1,060,477
Corporate Bonds 822,377 541,180
Common Stocks 5,546,799 4,451,272
Pooled Equity Funds - -
Pooled Bond Funds - -
Other Securities - -
Total 9,368,255 8,418,167
Receivables and Accruals
State Contribution 233,641 49,262
Member Contribution - -
Employer Contribution 56,390 -
Interestand Dividends 46,426 18,033
Other - -
Total 336,457 67,295
Payables
Reserve for Excess State Funds 257,221 161,780
Monthly Supplemental Benefit Reserve - -
Benefits (Prepaid) (1,071) -
Refunds - -
Expenses 12,072. -
Other -Pending Trades 243,242 -
Total 511,464 161,780
Net Assets -Market Value 9,193,248 8,323,682
~ GABRIEL, ROEDER, SMITH & COMPANY
22
PENSION FUND INCOME AND DISBURSEMENTS
Year Ending Year Ending
9/30/2006 9/30/2005
Market Value at Beginning of Period $ 8,485,462 $ 7,269;076
Income
Member Contributions 50,857 45,729
State Contributions 233,641 209,222
Employer Contributions 551,986 471,864
Other Contributions 31,589 3,286
Interest and Dividends 175,840 210,243
Realized and Unrealized Gains (Losses) 435,882 398,908
Total Investment Income 611,722 609,151
Total l ncome 1,479, 795 1, 339,252
Disbursements
Monthly Benefit Payments 18,163 18,163
Lump Sum Distributions 393,092 - 0
Refund of Contributions 4,634 13,564
Investment Related Expenses 58,242 51,793
Other Administrative Expenses 40,657 36,541
Insurance Premiums 0 2,805
Other Expenses 0 0
Total Disbursements 514,788 122,866
Net Increase During Period 965,007 1,216,386
Market Value at End of Period 9,450,469 8,485,462 ,
Less: State Contribution Reserve 257,221 161,780
Final Market Value 9,193,248 8,323,682
~ GABRIEL, ROEDER, SMITH & COMPANY
23
ACTUARIAL VALUE OF ASSETS
The Actuarial Value of Assets is equal to the market value less capital appreciation which
has not yet been recognized. Capital appreciation, the total of realized and unrealized gains, is
being recognized at the rate of 20% per year. Recognized and unrecognized capital
appreciation for this year's valuation is developed as follows:
(1) Amount of (1) Amount of (1) Amount of (1)
Year Capital Recognized Recognized by Unrecognized by
Ending Appreciation Each Year Valuation Date Valuation Date
9/30/2002 $ (519,755) $ (103,951) $ (519,755) $ 0
9/30/2003 691,198 138,240 552,960 138,238
9/30/2004 386,491 77,298 231,894 154,597
9/30/2005 398,908 79,782 159,564 239,344
9/30/2006 435,882. 87,176 87,176 348,706
1,392,724 278,545 511,839 880,885
Actuarial Value of Assets = (Market Value) - (Unrecognized Capital Appreciation)
_ $ 9,450,469 - $ 880,885
_ $ 8,569,584
Range from 80% to 120% of Market Value = $ 7,560,375 to $ 11,340,563
Preliminary Actuarial Value of Assets = $ 8,569,584
Reserve for Excess State Funds = $ 257,221
Final Actuarial Value of Assets = $ 8,312,363
Investment earnings recognized in the Actuarial Value of Assets are computed as follows:
$ 8,569,584 Actuarial Value this year"`
- 7,761,914 Actuarial Value last year'"
- 868,073 Contributions during year
+ 514,788 Expenses during year
454,385 Gross Earnings recognized
- 58,242 Investment related expenses
396,143 Net Earnings recognized
* Before reduction for State Contribution Reserve
~ GABRIEL, ROEDER, SMITH & COMPANY
24
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 17.8 % 17.8
9/30/86 24.9 24.9
9/30/87 13.3 13.3
9/30/88 2.3 2.3
9/30/89 20.1 20.1
9/30/90 (0.5) (0.5)
9/30/91 23.6 23.6
9/30/92 12.2 12.2
9/30/93 9.7 9.4
9/30/94 2.1 7.2
9/30/95 17.9 10.6
9/30196 8.6 8.3
9/30/97 26.4 16.1
9/30/98 6.0 10.7
9/30/99 12.1 12.6
9/30/00 8.7 11.6
9/30/01 (5.6) 7.4
9/30/02 (5.7) 1.8
9130/03 16.1 3.9
9/30/04 8.4 2.8
9/30/05 8.0 3.3
9/30/06 6.4 5.0
Average Compounded
Rate of Return for
Number of Years Shown 10.2 % 10.0
Average Compounded
Rate of Return for Last 5
.Years 6.4 % 3.4
Note: Figures prior to 1988 were taken from the previous
actuary's report for 1987.
*Net rate after 9/30/05
GABRIEL, ROEDER, SMITH & COMPANY
SECTION D
FINANCIAL ACCOUNTING INFORMATION
GABRIEL, ROEDER, SMITH & COMPANY
25
FASB NO. 35 INFORMATION
A. Valuation Date October 1, 2006 October 1, 2005
B. Actuarial Present Value of Accumulated
Plan Benefits
1. Vested Benefits
a. Members Currently Receiving Payments $ 1,687,549 $ 192,344
b. Terminated Vested Members 1,757,015 1,875,945
c. Other Members 4,524,546 4,685,637
d. Total 7,969,110 6,753,926.
2. Non-Vested Benefits 696,577 542,068
3. Total Actuarial Present Value of Accumulated
Plan Benefits: 1 d + 2 8,665,687 7,295,994
4. Accumulated Contributions of Active Members .274,832 266,048
C. Changes in the Actuarial Present Value of
Accumulated Plan Benefits
1. Total Value at Beginning of Year 7,295,994 6,572,410
2. Increase (Decrease) During the Period
Attributable to:
a. Plan Amendment 0 0
b. Change in Actuarial Assumptions 0 0
c. Latest Member .Data, Benefits Accumulated
and Decrease in the Discount Period 1,785,582 755,311
d. Benefits Paid (415,889) (31,727)
e. Net Increase 1,369,693 723,584
3. Total Value at End of Period 8,665,687 7,295,994
. D. Market Value of Assets 9,193,248 8,323,682
E. Actuarial Assumptions -See page entitled
Actuarial Assumptions and Methods
GABRIEL, ROEDER, SMITH & COMPANY
SCHEDULE OF FUNDING PROGRESS
e (GASB Statement No. 25)
a
Actuarial Actuarial Accrued UAAL As % of
Valuation
~ Actuarial Value of Liability (AAL) -Entry Unfunded AAL Covered
iO Date Assets Age (UAAL) Funded Ratio Covered Payroll Payroll
°rn (a) (b) (b) - (a) (a) / (b) (c) (b - a) / c
10/1/1991 $ 1,818,821 $ 1,510,461 ~ (308,360) 120.4 % $ 1,074,925 (28.7)
~ 10/1/1992 1,932,821 1,816,156 (116,665) 106.4 1,272,588 (9.2)
C7 1.0/1/1993 2,250,243 2,015,285 (234,958) 111.7 1,244,783 (18.9)
~ 10/1/1994 2,532,566 2,313,914 (218,652) 109.4 1,122,866 (19.5)
v 10/1/1995 2,932,454 2,974,020 41;566 98.6 1,180,433 3.5
z
10/1/1996 3,316,017 3,408,675 92,658 97.3 1,417,072 6.5
.10/1/1997 4,039,956 3,646,297 (393,659) 110.8 1,385,328 (28.4)
10/1/1998 4,650,015 4,640,502 (9,513) 100.2 1,552,984 (0.6)
10/1/1999 4,839,840 4,249,937 (589,903) 113.9 1,355,684 (43.5)
10/1/2000 5,285,938 4,496,853 (789,085) 117.5 1,493,357 (52.8)
10/1/2001 5,718,2.91 5,304,774 (413,517) 107.8 1,517,524 (27.2)
10/1/2002 5,963,256 6,565,654 602,398 90.8 1,921,532 31.3
10/1/2003 6,635,342 7,616,168 980,826 87.1 2,312,228 42.4
10/1/2004 6,771,959 8,546,754 1,774,795 79.2 2,627,239 67.6
10/1/2005 7,600,134 8,692,747 1,092,613 87.4 2,405,634 45.4
10/1/2006 8,312,363 10,294,848 1,982,485 80.7 2,798,919 70.8
Note: Because this Plan uses the Aggregate Actuarial Cost Method for funding, the Schedule of Funding Progress is not
required per GASB No. 25. The Schedule above is included in this Report in case the Plan and/or Employer N
believe the information would be useful to users of their financial statements. ~
27
SCHEDULE OF CONTRIBUTIONS FROM EMPLOYER
AND THE STATE OF FLORIDA
(GASB Statement No. 25)
Year Ended Annual Required Actual Percentage
September 30 Contribution Contribution Contributed
1991 117, 352 122, 960 104.8
1992 119,472 121,832 102.0
1993 140,031 141, 006 100.7
1994 130,551 131,214 100.5
1995 126,988 131,926 103.9
1996 131,611 133,501 101.4
1997 167,763 169,.514 101.0
1998 118,643 149,135 125.7
1999 182,286 190;181 104.3
2000 97,135 126,190 129.9
2001 85,866 102,834 119.8
2002 130,305 146,277 112.3
2003 369,089 369,642 100.1 .
2004 383,891 388,200 101.1
2005 509, 800 610, 064 119.7
2006 690,186 690,186 100.0
~ GABRIEL, ROEDER, SMITH & COMPANY
28
ANNUAL PENSION COST AND NET PENSION OBLIGATION
(GASB STATEMENT N0.27)
Employer FYE September 30 2007 2006 2005
Annual Required Contribution (ARC)* $ 539,651 $ 690,186 $ 509,800
Interest on Net Pension Obligation (NPO) (15,567) (16,279) (8,578)
Adjustment to ARC (23,220) (25,185) (12,570)
Annual Pension Cost (APC) 547,304 699,092 513,792
Contributions made 690,186 610,064
Increase (decrease) in NPO 8,906 (96,272)
NPO at beginning of year (194,587) (203,493) (107,221)
NPO at end of year (194,587) (203,493)
Includes expected State contribution
To be determined
THREE YEAR TREND INFORMATION
Fiscal Annual Pension Actual Percentage of Net Pension
Year Endin Cost APC Contribution APC Contributed Obli ation
. 9/30/2004 $ 387,647 $ 388,200 100.1 % $ (107,221)
9/30/2005 513,792 610,064 118.7 (203,493)
9/30/2006 699,092 690,186 98.7 194,587
GABRIEL, ROEDER, SMITH & COMPANY
29
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, 2006
Contribution Rates:
Employer 24.59%
Plan Members 2.00%
Actuarial Cost Method Aggregate
Amortization Method NA
Remaining amortization period NA
Asset valuation method 5-year smoothed market
Actuarial assumptions:
Investment rate of return 8.0%
Projected salary increases 6.0%
Includes inflation and other general increases at 4.0%
Cost of Living adjustments 3.0% per year
~ GABRIEL, ROEDER, SMITH & COMPANY
SECTION E
MISCELLANEOUS INFORMATION
~ GABRIEL, ROEDER, SMITH & COMPANY
30
RECONCILIATION OF MEMBERSHIP DATA
From 10/1/05 From 10/1!04
To 10/1/06 To 10/1/05
A. Active Members
1. Number Included in Last Valuation 40 38
2. New Members Included in Current Valuation 9 8
3. Non-Vested Employment Terminations (3) (5)
4. Vested Employment Terminations 0 (1)
5. Service Retirements (2) 0
6. Disability Retirements 0 0
7. Deaths 0 0
8. Transfer from General Employees 0 0
9. Number Included in This Valuation 44 40
B. Terminated Vested Members
1. Number Included in Last Valuation 13 12
2. Additions from Active Members 0 1
3. Lump Sum Payments/Refund of Contributions 0 0
4. Payments Commenced 0 0
5. Deaths 0 0
6. Other--Lump Sum Distribution (1) 0
7. Number Included in This Valuation 12 13
C. Service Retirees, Disability Retirees and Beneficiaries
1. Number Included in Last Valuation* 3 3
2. Additions from Active Members 2 0
3. Additions from Terminated Vested Members 0 0
4. Deaths Resulting in No Further Payments ~ 0 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 0
8. Number Included in This Valuation 5 3
This number includes cost-of-living benefits being paid by the pension fund
for retirees whose annuities were purchased during the 1970's.
~ GABRIEL, ROEDER, SMITH & COMPANY
31
ACTIVE PARTICIPANT DISTRIBUTION
Age Years of Service
Group 0-4 5-9 10-14 15-19 20-24 25-29 30 & Up Totals
20-24 2 2
Total Pay 95,051 95,051
Avg Pay 47,526 47,526
25-29 2 2 4
Total Pay 89,614 108,666 198,280
Avg Pay 44,807 54,333 49,570
30-34 6 2 2 10
Total Pay 314,825 115,430 142,160 572,415
Avg Pay 52,471 57,715 71,080 57,242
35-39 2 3 5
Total Pay 105,555 185,868 291,423
Avg Pay 52,778 61,956 58,285
40-44 1 2 1 2 6
Total Pay 7,445 117,148 81,589 143,628 349,810
Avg Pay 7,445 58,574 81,589 71,814 58,302
45-49 2 2 1 1 1 7
Total Pay 100,492 116,634 71,572 79,878 96,500 465,076
Avg Pay 50,246 58,317 71,572 79,878 96,500 66,439
50-54 1 1 1 1 4
Total Pay 63,620 60,422 73,713 83,263 281,018
Avg Pay 63,620 60,422 73,713 83,263 70,255
55-59 1 1 1 2 5
Total Pay 54,001 55,021 81,888 204,156 395,066
Avg Pay 54,001 55,021 81,888 102,078 79,013
60-64 1 1
Total Pay 69,258 69,258
Avg Pay 69,258 69,258
65-99
Total Pay
Avg Pay
Total No. 17 12 6 3 3 3 44
Total Pay 830,603 698,767 425,001 235,479 240,128 287,419 2,717,397
Avg Pay 48,859 58,231 70,834 78,493 80,043 95,806 61,759
~ GABRIEL, ROEDER, SMITH & COMPANY
32
INACTIVE PARTICIPANT DISTRIBUTION
Terminated Vested Disabled Retirees and Beneficiaries
Annual Annual Annual
Age No. Benefits No. Benefits No. Benefits
Under 45 2 $22,391 0 $0 0 $0
45-49 4 90,385 0 0 1 38,632
50-54 4 81,879 0 0 1 42,445
55-59 2 16,709 0 0 0 0
60-64 0 0 0 0 0 0
65-69 0 0 0 0 2 13,512
70-74 0 0 0 0 0 0
75-79 0 0 0 0 1 5,043
80-84 0 0 0 0 0 0
85-89 0 0 0 0 0 0
90&Up 0 0 0 0 0 0
Total 12 $211.,364 0 $0 5 $99,632
~ GABRIEL, ROEDER, SMITH & COMPANY
SECTION F
SUMMARY OF PLAN PROVISIONS
GABRIEL, ROEDER, SMITH & COMPANY
33
SUMMARY OF PLAN PROVISIONS
Effective Date
March 1, 1967
Eligibility
Full-time fire and police 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 Age 55.
Benefit 2.50% of AME multiplied by Credited Service, with a maximum benefit of
60% of AME.
Form of Benefit 10 years certain and life thereafter with other options available.
Early Retirement
Eligibility Age 50.
Benefit Calculated in same manner as Normal Retirement Benefit and payable at
Normal Retirement Date; or payable immediately after reduction by 3%
for each year by which the benefit commencement date precedes the
Normal Retirement Date.
~ GABRIEL, ROEDER, SMITH & COMPANY
34
Delayed Retirement
Eligibility Any time after the Normal Retirement Date.
Benefit Calculated in the same manner as the Normal Retirement Benefit using
the AME and Credited Service as of the Normal Retirement Date and
increased actuarially to 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 had chosen the 50% Joint and Survivor Annuity Option. Upon the death of a
member with ten years of service, a death benefit is payable for ten years in an amount
equal to the vested accrued benefit.
Disability Retirement
Eligibility For non-service connected disability, ten years of Credited Service and a
total and permanent disability. For service connected disability, a total
and permanent disability with no service requirement.
Benefit A ten year certain and life annuity that can be provided by the single-sum
value of the member's accrued pension benefit, but is at least 42% of
AME for service connected disability and at least 25% of AME for non-
service connected. disability.
Termination Benefits
For a member with less than ten years of Credited Service when he terminates, no
benefit is payable. For a member with ten or more years of Credited Service when he
terminates, his accrued benefit is payable at his Normal Retirement Date, or at any time
after age 50 is attained, with the benefit being subject to the same reduction as for Early
Retirement Benefits.
Contributions
From Members 2% of earnings.
From the City The amount necessary to fund the Plan properly according to the Plan's
actuary.
Cost of Living Increases
Up to 3% change effective each October 1st in accordance with the Consumer Price
Index.
Changes Since Last Valuation .
None.
~ GABRIEL, ROEDER, SMITH & COMPANY