Ordinance 2024-4661 ORDINANCE NO. 2024-4661
AN ORDINANCE OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, AMENDING PART I, SUBPART B, ARTICLE
IX, RELATED SPECIAL ACTS, OF THE MIAMI BEACH CITY CODE
ENTITLED "PENSION SYSTEM FOR DISABILITY AND RETIREMENT OF
MEMBERS OF POLICE AND FIRE DEPARTMENTS"; AMENDING SECTION
66, "SERVICE AND DISABILITY BENEFITS GENERALLY", RELATED TO
SALARY AND MINIMUM LINE-OF-DUTY DISABILITY BENEFITS;
AMENDING SECTION 79, ENTITLED "DEFERRED RETIREMENT OPTION
PLAN (DROP)", RELATED TO THE MAXIMUM DROP PARTICIPATION
PERIOD; AMENDING SECTION 88, "BENEFITS FOR MEMBERS HIRED ON
OR AFTER SEPTEMBER 30, 2013 AND PRIOR TO JUNE 8, 2016 FOR
INTERNATIONAL ASSOCIATION OF FIREFIGHTERS, LOCAL 1510 (IAFF)
AND JULY 20, 2016 FOR FRATERNAL ORDER OF POLICE, WILLIAM
NICHOLS LODGE NO. 8 (FOP)", RELATED TO AVERAGE MONTHLY
SALARY;AMENDING SECTION 89, "BENEFITS FOR MEMBERS HIRED ON
OR AFTER JUNE 8, 2016 AND PRIOR TO MAY 8, 2019 FOR
INTERNATIONAL ASSOCIATION OF FIREFIGHTERS, LOCAL 1510 ( IAFF)
AND HIRED ON OR AFTER JULY 20, 2016 AND PRIOR TO JULY 31, 2019
FOR FRATERNAL ORDER OF POLICE, WILLIAM NICHOLS LODGE NO. 8
(FOP)", RELATED TO AVERAGE MONTHLY SALARY; AMENDING
SECTION 90, ENTITLED"BENEFITS FOR MEMBERS HIRED ON OR AFTER
MAY 8, 2019 FOR INTERNATIONAL ASSOCIATION OF FIREFIGHTERS,
LOCAL 1510 ( IAFF)AND ON OR AFTER JULY 31, 2019 FOR FRATERNAL
ORDER OF POLICE, WILLIAM NICHOLS LODGE NO. 8 (FOP)", RELATED
TO CREDITED SERVICE; PROVIDING FOR SEVERABILITY; REPEALING
ALL ORDINANCES IN CONFLICT HEREWITH; AND PROVIDING AN
EFFECTIVE DATE.
WHEREAS, On July 11, 2024, the Administration and the International Association of
Firefighters (IAFF) Local 1510 reached a tentative agreement on a union contract covering the
period from October 1, 2024, through September 30, 2027; and
WHEREAS, the IAFF bargaining unit employees held a ratification vote, whereby the
proposed 2024-2027 Agreement was approved by a majority (99.3%) of the bargaining unit
members who voted; and
WHEREAS, on October 30, 2024, the City Commission ratified the three-year Agreement
with the IAFF, which covered the contract period of October 1, 2024 through September 30, 2027;
and
WHEREAS, the Administration seeks to allow Fire and Police management employees to
continue to have pay for off-duty services received through the City included in their pensionable
salary, up to the applicable maximum allowed under the ordinance, as such pay was previously
included for these employees as IAFF and FOP bargaining unit members; and
WHEREAS, the ratified Agreement between the City and the IAFF lowers the minimum
benefit for line-of-duty permanent and total disability from 85% of the member's salary to 50% of
salary; and
WHEREAS, the ratified Agreement between the City and the IAFF extends the maximum
Deferred Retirement Option Program(DROP)participation period for firefighter members from 8 years
(96 months)to 10 years (120 months), and
WHEREAS, the ratified Agreement between the City and the IAFF reduces the averaging
period for calculating final average monthly salary, upon which the pension benefit is based, from
five years to three years for multiple tiers of firefighter members; and
WHEREAS, on February 1, 2023, the City passed and adopted Ordinance 2023-4533,
which incorporated the Memorandum of Understanding executed on October 20, 2022, allowing
firefighters to receive service credit under the Fire & Police Pension Plan for their prior service
under the Miami Beach Employees' Retirement Plan ("Employees' Retirement Plan"); and the
ratified agreement between the City and the International Association of Firefighters (IAFF)
formalizes these changes, and
NOW, THEREFORE, BE IT ORDAINED BY THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA:
SECTION 1.
That Article IX, Related Special Acts of the Miami Beach City Code, is amended to read:
ARTICLE IX. - PENSION SYSTEM FOR DISABILITY AND RETIREMENT
OF MEMBERS OF POLICE AND FIRE DEPARTMENTS
Sec. 66. - Service and disability benefits generally
* * *
(d) For purposes of determining a member's benefit, the average monthly Salary of
members who attains eligibility for retirement under subsection (a)above on or before
September 30, 2015, shall be based on the average of the two highest-paid years of
the member prior to the date of retirement or termination, or the average of the last
two paid years of the member prior to the date of retirement or termination,whichever
produces the greater benefit for members employed by the City before May 19, 1993,
and shall be based on the average of the three highest paid years of the member
prior to the date of retirement or termination for May 1993 Members. Effective
September 30, 2015, the average monthly salary for members hired before July 14,
2010, who do not attain eligibility for retirement under subsection (a) above on or
before September 30, 2015, shall be based on the average of the three highest paid
years or the average of the last three (3) years of the member prior to the date of
retirement or termination, whichever produces the greater benefit. The average
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monthly salary for Members hired on or after July 14, 2010, but prior to September
30, 2013, shall be based on the average of the three highest paid years or the average
of the last three (3)years of the member prior to the date of retirement or termination,
whichever produces the greater benefit. The average monthly salary for police officer
Members hired on or after September 30, 2013, shall be based on the average of the
five (5) highest paid years or the average of the last five(5)years of the member prior
to the date of retirement or termination, whichever produces the greater benefit. For
purposes of such calculation, Salary shall be the Salary upon which the member's
contribution to the System was computed, as provided in paragraphs (1) and (2)
below:
(1) With respect to a firefighter member employed before May 19, 1993, and retiring
on or after October 1, 1994, the inclusion of overtime in the member's Salary for
the applicable average monthly salary period, shall be limited in each year to an
amount which, when combined with compensation for off-duty services and the
value of any accrued sick and/or vacation leave that is included in a member's
Salary for pension contribution and benefit purposes, is equal to 11% of the
highest annualized pay rate for the same salary rank that the member is in at
time of retirement. Effective July 14, 2010, all compensation received by a
firefighter member who is eligible for overtime pay and who receives pay for off-
duty services performed after that date for which compensation is received
through the City shall be included in such member's Salary for pension
contribution and benefit purposes; provided, in no event shall such compensation
for off-duty services, in combination with any overtime pay and the value of any
accrued sick and/or vacation leave included in a member's Salary for pension
contribution and benefit purposes, exceed 11% of the highest annualized pay
rate for the same salary rank that the member is in at time of retirement. For
firefighter members who are eligible for overtime pay and who retire on or after
September 30, 2010, upon reaching eligibility for retirement, a member may elect
to apply unused sick and/or vacation leave for inclusion in the member's Salary
for pension contribution and benefit purposes, at a cost of 10% of the value of
the unused sick and/or vacation leave (at the member's current hourly rate).
Provided, in no event shall the value of such unused sick and/or vacation time,
when combined with any overtime pay and compensation for off-duty services
included in a member's Salary for pension contribution and benefit purposes,
exceed 11% of the highest annualized pay rate for the same salary rank that the
member is in at time of retirement. Notwithstanding the foregoing, effective
September 30, 2013, overtime pay in excess of 300 hours per calendar year,
payments for unused sick and vacation leave, hazardous duty pay (when paid),
and payments relating to the domestic partner tax credit reimbursement, shall be
excluded from a firefighter member's Salary for pension contribution and benefit
purposes. Effective 'Effective date of this ordinancel,for firefighter members who
are not eligible for overtime pay, pay for off-duty services performed on or after
that date for which compensation is received through the City, shall be included
in such member's Salary for pension contribution and benefit purposes;
provided, in no event shall such compensation for off-duty services, in
combination with the value of any accrued sick and/or vacation leave included in
a member's Salary for pension contribution and benefit purposes, exceed 11%
of the highest annualized pay rate for the same salary rank that the member is
in at time of retirement.
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(2) With respect to a police officer member employed before May 19, 1993, and
retiring on or after October 1, 1994, the inclusion of overtime in the member's
Salary for the applicable average monthly salary period, shall be limited in each
year to an amount which, when combined with compensation for off-duty
services and the value of any accrued sick and/or vacation leave that is included
in a member's Salary for pension contribution and benefit purposes, is equal to
70% of the difference between the member's annualized pay rate at retirement
and the highest annualized pay rate for the next higher salary rank; but in no
event shall such member's accrued benefit on his date of retirement be less than
the benefit he had accrued as of September 30, 1994, determined under the
terms of the System in effect on that date. Effective July 14, 2010, all
compensation received by a police officer member who is eligible for overtime
pay and who receives pay for off-duty services performed after that date for
which compensation is received through the City, shall be included in such
member's Salary for pension contribution and benefit purposes; provided, in no
event shall such compensation for off-duty services, in combination with any
overtime pay and the value of any accrued sick and/or vacation leave included
in a member's Salary for pension contribution and benefit purposes, exceed 70%
of the difference between the member's annualized pay rate at retirement and
the highest annualized pay rate for the next higher salary rank; but in no event
shall such member's accrued benefit on his date of retirement be less than the
benefit he had accrued as of September 30, 1994, determined under the terms
of the System in effect on that date. For police officer members who are eligible
for overtime pay and who retire on or after September 30, 2010 and before
September 30, 2013, upon reaching eligibility for retirement, a member may elect
to apply unused sick and/or vacation leave for inclusion in the member's Salary
for pension contribution purposes, at a cost of 10% of the value of the unused
sick and/or vacation leave (at the member's current hourly rate). Provided, in no
event shall the value of such unused sick and/or vacation time, when combined
with any overtime pay and compensation for off-duty services included in a
member's Salary for pension contribution and benefit purposes, exceed 70% of
the difference between the member's annualized pay rate at retirement and the
highest annualized pay rate for the next higher salary rank; but in no event shall
such member's accrued benefit on his date of retirement be less than the benefit
he had accrued as of September 30, 1994, determined under the terms of the
System in effect on that date. Notwithstanding the foregoing, effective
September 30, 2013, overtime pay in excess of 300 hours per calendar year,
payments for unused sick and vacation leave, hazardous duty pay(when paid),
payments relating to the domestic partner tax credit reimbursement, and
payments for voluntarily participating in a physical fitness assessment program
offered by the City shall be excluded from a police officer member's Salary for
pension contribution and benefit purposes; and in no event shall compensation
for off-duty services, in combination with overtime pay not exceeding 300 hours
per calendar year, exceed 11% of the highest annualized pay rate for the same
salary rank that the member is in at time of retirement. Provided, the 11%
limitation in the preceding sentence shall not apply to any member who holds the
rank of sergeant or lieutenant on September 30, 2013, or any police officer who
is promoted into the position of police sergeant prior to the date the 2013 Certified
Police Sergeant Promotional Register expires in 2015. Notwithstanding any
other provision of this paragraph (2), effective June 8, 2016 for International
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Association of Firefighters, Local 1510 (IAFF)and July 20, 2016 Fraternal Order
of Police, William Nichols Lodge No. 8 (FOP), with respect to any member
excluded from the eleven percent (11%) limitation by operation of the preceding
sentence, if such member self-demotes the amount of compensation for off-duty
services, in combination with overtime pay not exceeding 300 hours per calendar
year, included in such member's Salary shall not exceed 11% of the highest
annualized pay rate for the same salary rank that the member is in at time of
retirement; and overtime, off-duty or any other compensation shall not be applied
to produce a benefit that exceeds the eleven percent (11%) limitation. Effective
[Effective date of this ordinance', for police officer members who are not eligible
for overtime pay, pay for off-duty services performed on or after that date for
which compensation is received through the Ciy, shall be included in such
member's Salary for pension contribution and benefit purposes; provided, in no
event shall such compensation for off-duty services, in combination with the
value of any accrued sick and/or vacation leave included in a member's Salary
for pension contribution and benefit purposes, exceed 11% of the highest
annualized pay rate for the same salary rank that the member is in at time of
retirement.
(e) Notwithstanding anything in this section to the contrary, the benefits provided in this
section shall not exceed 90% of the member's average monthly Salary as defined in
subsection (d) of this section; provided, however, that the benefits for May 1993
Members shall not exceed 80% of such Salary. Notwithstanding the foregoing,
effective September 30, 2013, the benefits provided in this section shall not exceed
85% of the member's average monthly Salary as defined in subsection (d) of this
section; provided, however, that the benefits for May 1993 Members shall not exceed
80% of such Salary; and provided further, the benefit of any member who has an
accrued benefit in excess of 85% of average monthly Salary as defined in subsection
(d) of this section on September 30, 2013 shall not exceed 90% of such Salary.
(f) The minimum pension for a member retiring for permanent and total disability under
subsection (a)(2) of this section shall be 85% of the member's Salary at the time of
disability retirement; provided, however, that the minimum pension for a May 1993
Member shall be 75% of such Salary; and provided further that the minimum pension
for a firefighter member retiring for permanent and total disability under subsection
(a)(2) on or after October 1, 2024, shall be 50% of such member's Salary at the time
of disability retirement. The minimum pension for a May 1993 Member retiring for
permanent and total disability under subsection (a)(3) of this section shall be 50% of
the member's Salary at the time of the disability retirement.
(h) (1) Notwithstanding anything in this section to the contrary, the minimum monthly
pension payable for the life of any member who was employed prior to July 1, 1976
and who retires after attaining age 50 and completing at least 15 years of Creditable
Service or after meeting the requirements of subsection (a)(3)or(a)(4)of this section
66 shall be equal to:
* * *
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(4) The minimum pension for a member retiring under this subsection (h) for
permanent and total disability shall be 75% of the member's Salary at the time of his
disability retirement. Notwithstanding the preceding sentence, the minimum pension
for"a firefighter member retiring under this subsection (h) for permanent and total
disability on or after October 1, 2024, shall be 50% of the member's Salary at the time
of his disability retirement.
Sec. 79. - Deferred Retirement Option Plan (DROP)
(a) Eligibility. Any active member of the System may enter into the DROP on the first
day of any month following the date upon which the member first becomes eligible
for a normal service retirement, subject to the provisions of this section 79.
(b) Conditions of eligibility. Upon becoming eligible to participate in the DROP, a member
who enters the DROP before September 1, 2012, may elect to enter that program for
a period not to exceed 36 months. Notwithstanding, DROP participation for members
who enter the DROP before September 1, 2012, may not continue beyond the date
when the member's combined years of creditable service and time in the DROP
equals 352 months (387 months for members who were members prior to July 1,
1976). Members who enter the DROP on or after September 1, 2012, shall be eligible
to participate for a period not to exceed sixty(60) months. Notwithstanding, for those
members who enter the DROP on or after September 1, 2012, participation may not
continue beyond the date when the member's combined years of creditable service
and time in the DROP equals 456 months. Provided, members who enter the DROP
on or before September 30, 2015, may extend their DROP participation period by 12
months, for a total maximum DROP participation period not to exceed seventy-two
(72) months; provided further, members who enter the DROP on or after October 1,
2015, but prior to June 8, 2016 for International Association of Firefighters, Local 1510
(IAFF) and July 20, 2016 Fraternal Order of Police, William Nichols Lodge No. 8
(FOP), may extend their DROP participation period by up to 36 months, for a total
maximum DROP participation period not to exceed ninety-six (96) months; and
provided further, members who enter the DROP on or after June 8, 2016 for
International Association of Firefighters, Local 1510 (IAFF) and July 20, 2016
Fraternal Order of Police, William Nichols Lodge No. 8 (FOP) may participate in the
DROP for a period not to exceed ninety-six (96) months. Notwithstanding any other
provision of this subsection (b), members in the bargaining units represented by
International Association of Firefighters, Local 1510 (IAFF), who entered the DROP
on or after June 8, 2016, but prior to [Effective date of this ordinancel, may extend
their DROP participation period by up to twenty-four(24)months, for a total maximum
DROP participation period not to exceed one-hundred twenty (120) months; and
provided further, such bargaining unit members who enter the DROP on or after
[Effective date of this ordinancel may participate in the DROP for a period not to
exceed one-hundred twenty (120) months. Provided also that participation in DROP
shall require the member to complete and submit the following prior to start of DROP
payments:
1. Such forms as may be required by the Board or Plan Administrator. Election of
the DROP is irrevocable once DROP payments begin. Members in the
bargaining units represented by International Association of Firefighters, Local
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1510 (IAFF) who are participating in the DROP on [effective date of this
ordinance) - - ! : _ - - - .e•- ' - - - - - - --- -
(IAFF)and July 20, 2016 Fraternal Order of Policc, William-Nichols Lodge No. 8
(FOP) and elect to extend their DROP participation period must complete such
forms as are required by the Board no later than February 20, 2025 September
1, 2010.
2. A waiver and an irrevocable resignation from employment with the actual date of
termination being the date designated by the member as the end of his/her
DROP participation. The administration and timing of execution and delivery of
the waiver and resignation forms shall meet the requirements of the Age
Discrimination in Employment Act and the Older Worker's Benefits Protection
Act, as same may be amended from time to time.
(c) Conditions of employment for DROP participants. Members shall be subject to
termination of employment while in DROP to the same extent as they were in their
pre-DROP status.A member who has elected the DROP remains an employee during
the DROP period and receives all the benefits of being an employee during the DROP
period, except any form of pension contribution.
(d) Effect of DROP participation.
1. A member's creditable service and his/her accrued benefit under the System
shall be determined on the date of his/her election to participate in the DROP
first becomes effective.
2. The member shall not accrue any additional creditable service while he/she is a
participant in the DROP, or after termination of participation in the DROP.
3. A DROP participant is not eligible for disability benefits from the Plan.
4. A member may participate in the DROP only once.
5. Effective with the start date of a member's DROP participation, contributions to
the Pension Plan by the member and the normal cost contribution to the Pension
Plan by the City, on behalf of the member, shall cease.
(e) Payments to DROP account. A DROP account shall be created for each member who
elects to participate in the DROP. A DROP account shall consist of amounts
transferred to the DROP from the Plan,which include the monthly retirement benefits,
including any future cost of living increases, that would have been payable had the
member elected to cease employment and receive a normal retirement benefit upon
commencing participation in the DROP, and earnings on those amounts. Provided,
members who enter the DROP on or after September 1, 2012, and before September
30, 2013, shall receive a zero percent(0%)cost of living adjustment for the third (3rd)
and fourth (4th)annual adjustment dates, regardless of whether the member remains
in the DROP for the maximum DROP participation period. Provided further, and
notwithstanding any other provision of the System, any member who enters the
DROP on or before September 30, 2015, and elects to extend their DROP
participation period by up to 12 months shall receive a zero percent(0%)cost of living
adjustment for the sixth (6th) annual adjustment date; and if such member thereafter
separates from city employment at any time during the sixth year of DROP
participation, he/she shall not receive a cost of living adjustment on the sixth annual
adjustment date, but shall receive a cost of living adjustment on the seventh annual
adjustment date and each annual adjustment date thereafter. Provided further, and
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4871-3747-7361,v.2
notwithstanding any other provision of the System, a member who enters the DROP
on or after October 1, 2015, but prior to June 8, 2016 for International Association of
Firefighters, Local 1510 (IAFF) and July 20, 2016 Fraternal Order of Police, William
Nichols Lodge No. 8 (FOP), and elects to extend their DROP participation period by
up to 36 months, shall receive a zero percent (0%) cost of living adjustment for the
sixth (6th), seventh (7th) and eighth (8th) annual adjustment dates; and if such
member separates from city employment at any time within the sixth, seventh or
eighth year of DROP participation, he/she shall not receive a cost of living adjustment
on the annual adjustment date next following separation of employment, but shall
receive a cost of living adjustment on each annual adjustment date thereafter.
Provided further, and notwithstanding any other provision of the System, a member
hired before June 8, 2016 for International Association of Firefighters, Local 1510
(IAFF) and July 20, 2016 Fraternal Order of Police, William Nichols Lodge No. 8
(FOP)who enters the DROP on or after June 8, 2016 for International Association of
Firefighters, Local 1510 (IAFF) and July 20, 2016 Fraternal Order of Police, William
Nichols Lodge No. 8(FOP)shall receive a zero percent(0%)cost of living adjustment
for the sixth (6th), seventh (7th)and eighth (8th)annual adjustment dates; and if such
member separates from city employment at any time within the sixth (6th), seventh
(7th) or eighth (8th) year of DROP participation, he/she shall not receive a cost of
living adjustment on the annual adjustment date next following separation of
employment, but shall receive a cost of living adjustment on each annual adjustment
date thereafter. Provided further, and notwithstanding any other provision of the
System, members hired on or after June 8, 2016 for International Association of
Firefighters, Local 1510 (IAFF) and July 20, 2016 Fraternal Order of Police, William
Nichols Lodge No. 8 (FOP) who enter the DROP shall receive a zero percent (0%)
cost of living adjustment for the first (1st), second (2nd), third (3rd) and fourth (4th)
annual adjustment dates; and if such a member separates from city employment at
any time within the first (1st), second (2nd), third (3rd) or fourth (4th) year of DROP
participation, he/she shall not receive a cost of living adjustment on the annual
adjustment date next following separation of employment, but shall receive a cost of
living adjustment on each annual adjustment date thereafter.
(f) DROP account earnings.
1. Members may direct their DROP account balance to any of the investment
options offered and approved by the Board. Any losses incurred by the
participant shall not be made up by the City or the Pension Plan. The selection
of these programs shall be made by the participant on forms provided by the
Board. Any and all interest and/or earnings shall be credited to the participant's
DROP account.
2. A member's DROP account shall only be credited or debited with earnings while
the member is a participant in the DROP and, depending on the DROP Account
Payment Options selected, after the member dies, retires, or terminates
employment with the City of Miami Beach.
(g) Payment of DROP account funds. Upon termination of a member's employment (for
any reason, whether by retirement, resignation, discharge, disability, or death), the
retirement benefits payable to the member or to the member's beneficiary shall be
paid to the member or beneficiary and shall no longer be paid to the member's DROP
account. No payments will be made from the DROP account until the member
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4871-3747-7361,v.2
terminates employment. In the event of the member's death, payment shall be made
directly to the member's beneficiary.
(h) DROP account payment options. Following the termination of a member's
employment, the member shall select one of the following options to begin to receive
payment from his/her DROP account. Said selection shall occur no later than 30 days
prior to the end of the DROP participation period or within 30 days following the final
transfer of monthly retirement benefits to the member's DROP account following +he
-- - - 0 - 6 -
1. Lump sum: All accrued DROP benefits, plus interest, shall be paid from the
DROP in a single lump sum payment.
2. Partial lump sum: A member designated portion of accrued DROP benefits, plus
interest, shall be paid from the DROP in a partial lump sum payment with the
remainder being directly rolled over into an eligible retirement plan.
3. Direct rollover: All accrued DROP benefits, plus interest, shall be paid from the
DROP directly to the custodian of an eligible retirement.
4. Other method(s) of payment that are in compliance with the Internal Revenue
Code and adopted by the Board.
(i) Death of DROP participant. If a DROP participant dies before his/her account
balances are paid out in full, the participant member's designated beneficiary shall
have the same rights as the member to elect and receive the pay-out options set forth
in Paragraph (h), above. DROP payments to a beneficiary shall be in addition to any
other retirement benefits payable to the beneficiary.
Sec 82. - Military service
(a) Any member of the System or any probationary employee in the fire or police
department who is absent from the service of the City because of service in the
uniformed services of the United States (as defined in the Uniformed Services
Employment and Reemployment Rights Act of 1994)who returns to the service of
the City having applied to return while his reemployment rights were protected by
law, shall be entitled to all retirement rights and privileges under this system if such
member, or such probationary employee after he becomes a member, contributes
the amount such member or probationary employee would have contributed had he
been a member during the period of service in the uniformed services for which
credit is being purchased, and creditable toward service retirement as provided in
this section. The amount of any such contributions shall be determined based on
the member's Salary in effect immediately prior to such period of absence and the
terms of the System in effect at that time. The member shall make any such
payments to the System during a repayment period equal to the lesser of(i)three
times the member's period of absence for service in the uniformed services or(ii)
five years. The repayment period shall begin on the later of(i) the date the member
is reemployed by the City and (ii)the date the City notifies the member of his rights
under this section.
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(b) Effective September 30, 2013, members who have at least 5 years but not more
than 10 years of Creditable Service under the System on that date, may contribute
an additional amount to the System in order to receive service credit for years of
active military service in the U.S. Army, Navy, Air Force, Marines or Coast Guard
occurring prior to their date of employment with the City. A member may purchase
up to two years of such service. The price for each such year shall be 10% (10.5%
for members hired on or after September 30, 2013) of the aggregate of the
member's Salary during the 12 calendar months immediately preceding the date of
such purchase; and such price shall be prorated accordingly if a member's election
includes a fractional year of service. Any additional benefits attributable to service
purchased under this subsection (b) shall be at the benefit multiplier rate of 3% per
year of Creditable Service, with a total maximum additional benefit of 6% based on
two years of Creditable Service purchased. The purchase of Creditable Service
under this subsection (b)for police officer members with 5 or more years of credited
service on September 30, 2013 must be completed within 36 months September
30, 2013. The purchase of Creditable Service under this subsection (b)for police
officer members with less than 5 years of credited service on September 30, 2013
must be completed within 36 months following the date the member completes 5
years of Creditable Service. The purchase of Creditable Service under this
subsection (b)for firefighter members with 5 or more years of credited service on
September 30, 2013 must be completed within 24 months following September 30,
2013. The purchase of Creditable Service under this subsection (b)for firefighter
members with less than 5 years of credited service on September 30, 2013 must be
completed within 24 months following the date the member completes 5 years of
Creditable Service. A member who does not complete and fully pay for the
purchase of Creditable Service under this subsection (b)within the applicable time
period specified herein shall not receive Creditable Service for more than the
amount for which payment has been made, and shall not be eligible to purchase
Creditable Service for prior military service in the future.
(c) Effective{effective date of ordinance} October 14, 2020, members who have at least
five (5) years Creditable Service under the System (ten years of Creditable Service
for firefighter members hired after May 8, 2019 and police officer members hired
after July 31, 2019) may contribute an additional amount to the System in order to
receive service credit for up to two years of active military service in the U.S. Army,
Navy, Air Force, Marines or Coast Guard occurring prior to their date of employment
with the City, at the benefit multiplier rate of 3% per year of Creditable Service,
provided in no event shall the total aggregate amount of Creditable Service
purchased pursuant to this section 82 and section 65 exceed a combined total of
two (2)years or 6% additional multiplier. The price for each year of prior military
service purchased shall be 10% (10.5% for members hired on or after September
30, 2013) of the member's pensionable salary during the twelve (12) calendar
months immediately preceding the date of such purchase, and such price shall be
prorated accordingly if a member's purchase includes a fractional year of service.
For the purpose of purchases of Creditable Service under this subsection (c), a
member may use the value of accrued sick and/or annual leave valued at the
member's hourly rate at the time of purchase, with the cost prorated for fractional
10
4871-3747-7361,v.2
years of service. The purchase of Creditable Service under this subsection (c) must
be completed within twenty-four(24) months following a member's completion of
five years of Creditable Service under the System (ten years of Creditable Service
for firefighter members hired after May 8, 2019 and police officer members hired
after July 31, 2019). A member who does not complete and fully pay for the
purchase of Creditable Service under this subsection (c)within the twenty-four(24)
month period shall not receive Creditable Service for more than the amount for
which payment has been made, and shall not be eligible to purchase Creditable
Service for prior military service in the future. Service credit purchased pursuant to
this subsection (c) may be used for purposes of benefit calculation and eligibility for
normal retirement; however, in no event may such purchased service credit be used
for purposes of vesting.
(d) Notwithstanding any provision of this plan to the contrary, effective as of December
12, 1994, contributions, benefits and service credit with respect to qualified military
service will be provided in accordance with Section 414(u) of the Internal Revenue
Code of 1986, as amended, and USERRA, as applicable.
Sec. 88. - Benefits for members hired on or after September 30, 2013 and prior to June 8,
2016 for International Association of Firefighters, Local 1510 (IAFF) and July 20, 2016 for
Fraternal Order of Police, William Nichols Lodge No. 8 (FOP).
Notwithstanding any other provision of the System, the pension benefits for members
hired on or after September 30, 2013 and prior to June 8, 2016 for International
Association of Firefighters, Local 1510 (IAFF) and July 20, 2016 for Fraternal Order of
Police, William Nichols Lodge No. 8 (FOP)shall be as provided in the sections 61 through
86, except as follows:
(a) The benefit multiplier shall be three percent (3%) for each year of creditable
service for the first 20 years of service, and four percent (4%) for each year of
creditable service after 20 years of creditable service.
(b) The normal retirement date shall be as provided in sec. 66, except that a member
must compete at least five years of creditable service, and must attain age 48 to
be eligible for"Rule of 70" retirement or reach the 85% maximum pension benefit
regardless of age.
(c) Final average monthly salary shall be based on the five (5) highest paid years or
last five (5) years as the cacc may be, prior to retirement or separation from
employment, whichever is of greater benefit to the employee. Notwithstanding
the preceding sentence,final average monthly salary for firefighter members who
retire or enter the DROP on or after (Effective date of this ordinancel shall be
based on the three(3)highest paid years or last three(3)years prior to retirement
or separation from employment, whichever is of greater benefit to the employee.
(d) The cost of living adjustment shall be one and one-half percent(1.5%) annually.
(e) A member shall be vested upon completion of five years of creditable service.
(f) The maximum pension benefit shall be as provided in section 11-66(e).
11
4871-3747-7361,v.2
Sec. 89. - Benefits for members hired on or after June 8, 2016 and prior to May 8, 2019 for
International Association of Firefighters, Local 1510 (IAFF) and hired on or after July 20,
2016 and prior to July 31, 2019 for Fraternal Order of Police, William Nichols Lodge No. 8
(FOP).
Notwithstanding any other provision of the System, the pension benefits for members
hired on or after June 8, 2016 and prior to May 8, 2019 for International Association of
Firefighters, Local 1510 (IAFF) and hired on or after July 20, 2016 and prior to July 31,
2019 for Fraternal Order of Police, William Nichols Lodge No. 8(FOP)shall be as provided
in sections 61 through 86, except as follows:
(a) The benefit multiplier shall be three percent (3%) for each year of creditable
service for the first 20 years of service, and four percent (4%) for each year of
creditable service after 20 years of creditable service.
(b) The normal retirement date shall be upon attainment of age 52 with five or more
years of creditable service, or when the sum of a member's age plus years of
creditable service equal 70 or more, provided the member has attained age 48 or
reach the 85% maximum pension benefit regardless of age.
(c) Final average monthly salary shall be based on the five (5) highest paid years or
the last five (5) years prior to retirement or separation from employment
(whichever is of greater benefit to the employee). Notwithstanding the preceding
sentence, final average monthly salary for firefighter members who retire or enter
the DROP on or after[Effective date of this ordinance] shall be based on the three
(3) highest paid years or last three (3)years prior to retirement or separation from
employment, whichever is of greater benefit to the employee.
(d) The cost of living adjustment shall be one and one-half percent(1.5%) annually.
(e) The maximum pension benefit shall be as provided in section 11-66(e).
(f) A member shall be vested upon completion of five years of creditable service.
(g) The member contribution shall be ten and one-half percent (10.5%) of Salary.
Sec. 90. - Benefits for members hired on or after May 8, 2019 for International Association
of Firefighters, Local 1510 (IAFF)and on or after July 31, 2019 for Fraternal Order of Police,
William Nichols Lodge No. 8 (FOP).
Notwithstanding any other provision of the System, the pension benefits for members
hired on or after May 8, 2019 for International Association of Firefighters, Local 1510
(IAFF), and on or after July 31, 2019 for Fraternal Order of Police, William Nichols Lodge
No. 8(FOP), shall be as provided in section 89, except that such members shall be vested
upon completion of ten years of creditable service and police officer members shall not be
credited with any service under this System for service as a member of the Miami Beach
Employees' Retirement Plan. Notwithstanding any other provision of the System,
firefighter members hired on or after May 8, 2019 who participated in another city pension
system prior to becoming a member of this System shall, upon transfer of funds
attributable to up to 10 years of the member's accumulated total service credit in the other
system to this System, receive credited service under this System for the same period of
service, and such member need make no additional contribution for time credited.
12
4871-3747-7361,v.2
SECTION 2. REPEALER.
All ordinances or parts of ordinances and all section and parts of sections in conflict herewith are
hereby repealed.
SECTION 3. CODIFICATION.
It is the intention of the City Commission, and it is hereby ordained, that the provisions of this
Ordinance shall become and be made part of the Code of the City of Miami Beach, as amended;
that the sections of this Ordinance may be re-numbered or re-lettered to accomplish such
intention; and that the word "ordinance" may be changed to "section" or other appropriate word.
SECTION 4. SEVERABILITY.
If any section, subsection, clause or provision of this Ordinance is held invalid, the remainder shall
not be affected by such invalidity.
SECTION 5. EFFECTIVE DATE.
This Ordinance shall take effect ten days following adoption.
PASSED and ADOPTED this ci0 day of 41/107414/ 2024.
Steven Meiner, Mayor
ATTEST:
1 ' NOV 2 2 2024
Rafael E. Granado, City Clerk
APPROVED AS TO
Sponsored by Mayor Steven Meiner FORM AND LANGUAGE
& FOR EXECUTION
_ °t'V�. �'' )) 51202 4-
•
OCOP ORMED:40City Attorney ViV.22e
'',, '• .df� 13
4871-3747-7361,v.2
Ordinances - R5 H
MIAMI BEACH
COMMISSION MEMORANDUM
TO: Honorable Mayor and Members of the City Commission
FROM: Eric Carpenter, City Manager
DATE: November 20, 2024 9:50 a.m. Second Reading Public Hearing
TITLE: AN ORDINANCE OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, AMENDING PART I, SUBPART B, ARTICLE IX,
RELATED SPECIAL ACTS, OF THE MIAMI BEACH CITY CODE ENTITLED
"PENSION SYSTEM FOR DISABILITY AND RETIREMENT OF MEMBERS OF
POLICE AND FIRE DEPARTMENTS"; AMENDING SECTION 66, "SERVICE AND
DISABILITY BENEFITS GENERALLY", RELATED TO SALARY AND MINIMUM
LINE-OF-DUTY DISABILITY BENEFITS; AMENDING SECTION 79, ENTITLED
"DEFERRED RETIREMENT OPTION PLAN (DROP)", RELATED TO THE
MAXIMUM DROP PARTICIPATION PERIOD; AMENDING SECTION 88,
"BENEFITS FOR MEMBERS HIRED ON OR AFTER SEPTEMBER 30, 2013 AND
• PRIOR TO JUNE 8, 2016 FOR INTERNATIONAL ASSOCIATION OF
FIREFIGHTERS, LOCAL 1510 (IAFF) AND JULY 20, 2016 FOR FRATERNAL
ORDER OF POLICE, WILLIAM NICHOLS LODGE NO. 8 (FOP)", RELATED TO
AVERAGE MONTHLY SALARY; AMENDING SECTION 89, "BENEFITS FOR
MEMBERS HIRED ON OR AFTER JUNE 8, 2016 AND PRIOR TO MAY 8, 2019
FOR INTERNATIONAL ASSOCIATION OF FIREFIGHTERS, LOCAL 1510 (IAFF)
AND HIRED ON OR AFTER JULY 20, 2016 AND PRIOR TO JULY 31, 2019 FOR
FRATERNAL ORDER OF POLICE, WILLIAM NICHOLS LODGE NO. 8 (FOP)",
RELATED TO AVERAGE MONTHLY SALARY; AMENDING SECTION 90,
ENTITLED "BENEFITS FOR MEMBERS HIRED ON OR AFTER MAY 8, 2019 FOR
INTERNATIONAL ASSOCIATION OF FIREFIGHTERS, LOCAL 1510 ( IAFF) AND
ON OR AFTER JULY 31, 2019 FOR FRATERNAL ORDER OF POLICE, WILLIAM
NICHOLS LODGE NO. 8 (FOP)", RELATED TO CREDITED SERVICE; PROVIDING
FOR SEVERABILITY; REPEALING ALL ORDINANCES IN CONFLICT HEREWITH;
AND PROVIDING AN EFFECTIVE DATE.
RECOMMENDATION
Approve the proposed ordinance on first reading and set the ordinance for second reading on
November 20, 2024.
BACKGROUND/HISTORY
The City of Miami Beach has the following five(5)classified employee groups that are represented
by bargaining units:
Group I - Represented by the American Federation of State, County and Municipal Employees
(AFSCME) Local 1554;
Group II - Represented by the Fraternal Order of Police (FOP) William Nichols Lodge No. 8;
Group III - Represented by the International Association of Firefighters (IAFF) Local 1510;
• Group IV - Represented by the Communications Workers of America (CWA) Local 3178; and
• Group V- Represented by the Government Supervisors Association of Florida (GSAF), OPEIU,
Local 100
Page 711 of 1993
In addition, the City has one classified employee group, Group VI, comprising all other
classifications in the classified service not covered by a bargaining unit. This group is commonly
referred to in the City of Miami Beach as "Others". There is a seventh salary group comprised of
at-will employees commonly referred to as Unclassified.
Employees represented by the FOP and IAFF are eligible for a defined benefit pension plan
governed by Part I, Subpart B, Article IX, Related Special Acts, of The Miami Beach City Code
entitled "Pension System For Disability And Retirement Of Members Of Police And Fire
Departments."
All other full time employees are eligible for a defined benefit pension plan governed by Part I,
Subpart B, Article VI, Related Special Acts, of The Miami Beach City Code entitled "Pension and
Retirement System for Officers and Employees Generally."
On July 11, 2024, the Administration and the International Association of Firefighters (IAFF)Local
1510 reached a tentative agreement on a union contract covering the period from October 1,
2024, through September 30, 2027.
On February 1, 2023, the City passed and adopted Ordinance 2023-4533, which incorporated the
Memorandum of Understanding executed on October 20, 2022, allowing firefighters to receive
service credit under the Fire & Police Pension Plan for their prior service under the Miami Beach
Employees' Retirement Plan ("Employees'Retirement Plan"); and the ratified agreement between
the City and the International Association of Firefighters (IAFF)formalizes these changes.
ANALYSIS
The Administration reached tentative agreements on union contracts with the International
Association of Firefighters (IAFF) Local 1510 on July 11, 2024, and with the Fraternal Order of
Police (FOP) William Nichols Lodge No. 8 on September 5, 2024. This agreement necessitates
amendments to the Fire & Police Pension Plan.
On February 1, 2023,the City passed and adopted Ordinance 2023-4533, which incorporated the
Memorandum of Understanding executed on October 20, 2022, allowing firefighters to receive
service credit under the Fire & Police Pension Plan transferred from their prior service under the
Miami Beach Employees' Retirement Plan ("Employees' Retirement Plan") up to 10 years of
creditable service; and this agreement between the City and the International Association of
Firefighters (IAFF) formalizes these changes. The proposed ordinance formally adopts this
change.
The proposed ordinance amends the City's Fire & Police Pension Plan to include off-duty pay for
members of the International Association of Fire Fighters (IAFF)and the Fraternal Order of Police
(FOP) who are not eligible for overtime pay. Under this amendment, off-duty compensation
received through the City will be treated as part of the member's salary for the purpose of
calculating pension contributions and benefits, subject to the applicable maximum.
This change aligns with the City's ongoing efforts to ensure equitable treatment of all employees
concerning pension benefits. Currently, only regular earnings are considered for pension
purposes, excluding certain forms of compensation like off-duty pay for those ineligible for
overtime. By including this off-duty compensation, the ordinance ensures that IAFF and FOP
members in management who take on additional off-duty responsibilities are appropriately
credited toward their pension contributions.
Also, the proposed ordinance amends the City's Fire & Police Pension Plan to change to the
City's disability retirement benefits with a reduction in the minimum pension benefit for IAFF
members retiring after October 1, 2024. Currently, IAFF members retiring due to permanent and
Page 712 of 1993
total disability receive at least 85% of their salary. The new provision reduces this floor to 50%.
The proposed ordinance also extends the Deferred Retirement Option Program (DROP)
participation period for members of the International Association of Firefighters (IAFF), Local
1510, from 8 years (96 months) to a maximum of 10 years (120 months). This change affects
members who entered the DROP on or after June 8, 2016, as well as future participants.
Extending the DROP period allows the City to retain experienced and skilled firefighters for an
additional two years. This is particularly beneficial in maintaining institutional knowledge and
leadership within the Fire Department. The longer DROP period provides a financial incentive for
eligible firefighters to remain in service, delaying their full retirement while they accumulate
additional pension benefits in the DROP.
The proposed ordinance seeks to amend the Final Average Monthly Earnings (FAME)calculation
for members of the International Association of Firefighters (IAFF) by shortening the Final
Average Monthly Earnings (FAME) period from five years to three years.
FISCAL IMPACT STATEMENT
Please see the attached actuarial studies for detailed analysis.
The change to include off-duty pay in pensionable pay for all current and future active Police &
Fire command staff members is estimated to require an increase of $105,911 to the City's
contribution to the pension plan.
The actuarial impact of changing the DROP participation for IAFF members from a maximum of
96 months to a maximum of 120 months is cost-neutral.
The actuarial impact of changing Final Average Monthly Earnings (FAME) calculation for IAFF
members by shortening the Final Average Monthly Earnings (FAME) period from five years to
three years along with the reduction of the Disability Pension percentage from 85%to 50% results
in a cumulative savings of $798,000.to the City's contribution over the next five (5) years. The
City will not see an increase to its contribution for these changes until year 10 following these
changes and will not see an increase to the cumulative effect of these changes until year
17. These changes will result in a 0.05% increase to the City's cumulative contribution over 20
years, a $633,000 increase over 20 years. (See Scenario 3 on page 9 of the August 15, 2024
GRS Actuarial Analysis for the combined effect of both changes.)
Does this Ordinance require a Business Impact Estimate? No
(FOR ORDINANCES ONLY)
If applicable, the Business Impact Estimate (BIE)was published on: 11/5/2024.
See BIE at: https://www.miamibeachfl.qov/city-hall/city-clerk/meetinq-notices/
FINANCIAL INFORMATION
See above fiscal impact statement. Fiscal year 2024/25 pension benefits are funded in the City's
2024/25 budget.
CONCLUSION
Page 713 of 1993
The Administration recommends amending Part I, Subpart B, Article IX, Related Special Acts, of
The Miami Beach City Code entitled "Pension System For Disability And Retirement Of Members
Of Police And Fire Departments."
Based on the foregoing, the Administration recommends that the City Commission approve the
proposed ordinance on first reading and set the ordinance for second reading on November 20,
2024.
Applicable Area
Citywide
Is this a "Residents Right to Know" item, Is this item related to a G.O. Bond
pursuant to City Code Section 2-17? Project?
No No
Was this Agenda Item initially requested by a lobbyist which, as defined in Code Sec. 2-481,
includes a principal engaged in lobbying? No
If so, specify the name of lobbyist(s)and principal(s):
Department
Human Resources
Sponsor(s)
Mayor Steven Meiner
Co-sponsor(s)
Condensed Title
9:50 a.m. 2nd Rdg, Amend Pension System for Disability/Retirement of PD/FD. (Meiner) HR
Page 714 of 1993
10.17.22
MEMORANDUM OF UNDERSTANDING
This Memorandum of Understanding ("MOU") is entered into this 20 day of October,
2022. This MOU sets forth the agreement between the City of Miami Beach ("City") and the
International Association of Fire fighters, Local 1510 ("IAFF") regarding the amendment to
Sections 65 and 90 of the City Pension Fund for Firefighters and Police Officers in the City of
Miami Beach ("Fire&Police Plan").
WHEREAS the Parties wish to amend the Fire & Police Pension Plan to allow
Firefighters to receive service credit under the Fire & Police Plan for prior service under the
Miami Beach Employees' Retirement Plan ("Employees' Retirement Plan"). The amendment
would allow Firefighters, regardless of date of hire, to receive service credit under the Fire &
Police Plan for prior service under the Employees'Retirement Plan,as set forth more specifically
in attached Exhibit A, Draft Amendment to Sections 65 and 90 of the Fire& Police Pension Plan.
WHEREAS the Parties agree that this MOU shall be in effect, and upon adoption of the
pension ordinance implementing this MOU, said ordinance shall be in effect, notwithstanding
any provision in the Parties'2021-2024 Collective Bargaining Agreement.
IT IS THEREFORE AGREED AS FOLLOWS:
1. Upon adoption of the Amendments to Sections 65 and 90 of the Fire & Police Pension
Plan, Firefighters, regardless of date of hire, shall receive service credit under the Fire &
Police Pension Plan for prior service under the Employees' Retirement Plan, in
accordance with the Amendments.
IAFF LOCAL 1510 CITY OF MIAMI BEACH
By:
By: /
ADONIS GARCIA, PRESIDENT ' INA HUDAK,CITY MANAGER
01843117-2
Page 728 of 1993
Rev. 10.17.22
Exhibit A
Proposed Amendments to
The City Pension Fund for Firefighters and Police Officers in the City of Miami Beach
Sec. 65. -Computation of creditable service;service record.
(b) Employees who become members of this System in order to receive credit for service rendered prior
to their becoming a member shall make contributions to the Fund in the amount such member would
have contributed had he been a member during the period of service for which credit is being purchased.
In order to receive such credit, employees shall make payment within six months after becoming a
member or within such other period as may be provided in a bargaining agreement covering the member.
Notwithstanding the foregoing, any firefighter member Mired before M 8, 2019 and any police officer
member hired before July 31, 2019 who transfers to this System whereby the accumulated total credit in
any other pension system of the City is transferred to this System, then and in that event, all of the
creditable service time in such other system shall be considered Creditable Service time under this System,
and such employee need make no additional contribution for time credited. Firefighter ..,,o., ber- hired
e • - Police officer members hired on or after July 31, 2019 shall not be
credited with any service under this System for service as a member of the Miami Beach Employees'
Retirement Plan.
Sec. 90. - Benefits for members hired on or after May 8, 2019 for International Association of
Firefighters,Local 1510(IAFF)and on or after July 31,2019 for Fraternal Order of Police,William Nichols
Lodge No.8(FOP).
Notwithstanding any other provision of the System, the pension benefits for members hired on or after
May 8, 2019 for International Association of Firefighters, Local 1510(IAFF), and on or after July 31, 2019
for Fraternal Order of Police,William Nichols Lodge No.8(FOP), shall be as provided in section 89,except
that such members shall be vested upon completion of ten years of creditable service, and police officer
members shall not be credited with any service under this System for service as a member of the Miami
Beach Employees' Retirement Plan.
01843104-2
Page 729 of 1993
ORDINANCE NO. 2023-4533
AN ORDINANCE OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, AMENDING PART I, SUBPART B, ARTICLE
IX, RELATED SPECIAL ACTS, OF THE MIAMI BEACH CITY CODE
ENTITLED "PENSION SYSTEM FOR DISABILITY AND RETIREMENT OF
MEMBERS OF POLICE AND FIRE DEPARTMENTS"; AMENDING SECTION
62, "DEFINITIONS", RELATED TO ACTUARIAL ASSUMPTIONS;
AMENDING SECTION 65, ENTITLED "COMPUTATION OF CREDITABLE
SERVICE; 'SERVICE RECORD"; AMENDING SECTION 76, "BOARD OF
TRUSTEES", TO PROVIDE FOR STAGGERED THREE (3) YEAR TERMS;
AMENDING SECTION 90, ENTITLED "BENEFITS FOR MEMBERS HIRED
ON OR AFTER MAY 8, 2019 FOR INTERNATIONAL ASSOCIATION OF
FIREFIGHTERS, LOCAL 1510 ( IAFF) AND ON OR AFTER JULY 31, 2019
FOR FRATERNAL ORDER OF POLICE, WILLIAM NICHOLS LODGE NO. 8
(FOP)"; PROVIDING FOR SEVERABILITY; REPEALING ALL ORDINANCES
IN CONFLICT HEREWITH;AND PROVIDING AN EFFECTIVE DATE.
WHEREAS,on October 20, 2022,the City and the IAFF have entered into a Memorandum
of Understanding to allow Firefighters to receive service credit under the Fire & Police Plan for
prior service under the Miami. Beach Employees' Retirement Plan ("Employees' Retirement
Plan"), regardless of date of hire; and
WHEREAS, the Parties agree that this upon ratification, this ordinance change shall be in
effect, notwithstanding any provision in the Parties' 2021-2024 Collective Bargaining Agreement;
and
WHEREAS, On May 21, 2020, the Fire and Police Pension Board voted to change the
plan's definition of actuarial equivalence by adopting the recommended mortality tables and long-
term interest rate; and
WHEREAS, On August 18, 2022, the Fire and Police Pension Board voted to extend the
elected Trustees length of term from 2 years to 3 years, and to stagger the election for each
individual Fire and Police Trustee; and
NOW,THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COMMISSION OF
THE CITY OF MIAMI BEACH, FLORIDA,AS FOLLOWS:
SECTION 1.
That Article IX, Related Special Acts of the Miami Beach City Code, is amended to read:
ARTICLE IX. - PENSION SYSTEM FOR DISABILITY AND RETIREMENT
OF MEMBERS OF POLICE AND FIRE DEPARTMENTS
Page 730 of 1993
Sec. 62. - Definitions.
The following words,terms and phrases,when used in this article,shall have the meanings
ascribed to them in this section, except where the context clearly indicates a different meaning:
Actuarial Assumptions (for the calculation of optional forms of benefits) means the
following interest rates compounded annually:
(a) 8.5%for plan years prior to October 1,2009; 8.4%effective for the plan year beginning
October 1, 2009; 8.3.% effective for the plan year beginning October 1, 2010; 8.2.%
effective for the plan year beginning October 1, 2011; 8.1.% effective for the plan year
beginning October 1, 2012; and 8.0.% effective for the plan years beginning October
1, 2013, and October 1, 2014;
(b) 7.75% effective for plan years beginning on and after October 1, 2015;
(c) 7.50% effective for pian years beainninc on or after October 1, 2020.
Actuarial Assumptions (for the calculation of optional forms of benefits) also means the
following mortality tables:
(a) For plan years beginning prior to October 1, 2010, the 1983 Group Annuity Mortality
Table; for plan years beginning on October 1, 2010, and October 1, 2011: for Pre-
Retirement Mortality the RP-2000 Combined Mortality Table with a blue-collar
adjustment, for Post-Retirement Healthy Mortality the RP-2000 Combined Mortality
Table with a blue-collar adjustment, and for Post-Retirement Disabled Mortality the
RP-2000 Combined Mortality Table.
(b) For plan years beginning on or after October 1, 2012: for Pre-Retirement Mortality the
RP-2000 Combined Mortality Table with blue-collar adjustment projected 15 years
from valuation date, for Post-Retirement Healthy Mortality the RP-2000 Combined
Mortality Table with a blue-collar adjustment projected 7 years from valuation date,
and for Post-Retirement Disabled Mortality the RP-2000 Combined Mortality Table.
For purposes of determining the period that benefits are paid to a widow or widower
who was married to a deceased member for less than ten years, the 1994 Life
Expectancy Table shall be used.
(c) For plan years beginning on or after October 1, 2015: for Pre-Retirement and Post-
Retirement Mortality,the RP-2000 Combined Healthy Participant Mortality Tables with
a fixed blend of 90% male mortality rates — 10% female mortality rates, with full
generational mortality improvements projected to the year of commencement with
Scale BB for healthy participants; and for disabled participants, the RP-2000 Disabled
Mortality Table with a fixed blend of 90% male mortality rates— 10% female mortality
rates, with no projection for disabled participants. For purposes of determining the
period that benefits are paid to a widow or widower who was married to a deceased
member for less than ten years, the following mortality tables shall be used: RP-2000
Combined Healthy Participant Mortality Tables with a fixed blend of 90%male mortality
2
Page 731 of 1993
rates — 10% female mortality rates, with full generational mortality improvements
projected to the year of commencement with Scale BB for healthy participants; and
RP-2000 Disabled Mortality Tables with a fixed blend of 90% male mortality rates —
10%female mortality rates, with no projection for disabled participants.
(d) For plan years beginning on or after October 1, 2020, mortality based upon the PUB-
2010 Headcount Weighted Safety Mortality Tables with a fixed blend of 85% Below
Median Healthy Retiree male mortality rates- 15% Healthy Retiree female mortality
rates, both set forward one year, with generational mortality improvements projected
to the fiscal year of benefit commencement date with Scale MP-2018 for healthy
participants; Mortality based upon 80% PUB-2010 Headcount Weighted General
Disabled Retiree Mortality Table/20% PUB-2010 Headcount Weighted Safety
Disabled Retiree Mortality Table, with a fixed blend of 85% male and 15% female
mortality rates, with no projection for disabled participants. For purposes of
determining the period that benefits are paid to a widow or widower who was married
to a deceased member for less than ten years, the following life expectancy tables
shall be used: Mortality based upon the PUB-2010 Headcount Weighted Safety
Mortality Tables with a fixed blend of 85% Below Median Healthy Retiree male
mortality rates- 15% Healthy Retiree female mortality rates,both set forward one year,
with generational mortality improvements projected to the fiscal year of benefit
commencement date with Scale MP-2018 for healthy participants; Mortality based
upon 80% PUB-2010 Headcount Weighted General Disabled Retiree Mortality
Table/20% PUB-2010 Headcount Weighted Safety Disabled Retiree Mortality Table,
with a fixed blend of 85% male and 15% female mortality rates, with no projection for
disabled participants.
Sec. 65. - Computation of creditable service; service record.
(b) Employees who become members of this System in order to receive credit for service
rendered prior to their becoming a member shall make contributions to the Fund in the
amount such member would have contributed had he been a member during the period
of service for which credit is being purchased. In order to receive such credit, employees
shall make payment within six months after becoming a member or within such other
period as may be provided in a bargaining agreement covering the member.
Notwithstanding the foregoing, any firefighter member-hir-ed-befer-e-May-8T-204-9 and any
police officer member hired before July 31, 2019 who transfers to this System whereby
the accumulated total credit in any other pension system of the City is transferred to this
System, then and in that event, all of the creditable service time in such other system shall
be considered Creditable Service time under this System, and such employee need make
no additional contribution for time credited. • - • z e* = - ; - •
201-9-ami-peliGe Police officer members hired on or after July 31,2019 shall not be credited
with any service under this System for service as a member of the Miami Beach
Employees' Retirement Plan.
3
Page 732 of 1993
*
Sec. 76. - Board of trustees.
* *
(b) The election of the trustees from the Employees of the fire department and the police
department shall be held by per capita vote of all active and retired Employees of each
of the respective departments who come within the purview of this article. An election
to elect the members of the fire department and police department to serve as trustees
shall be held every two years. Notwithstanding the foregoing, effective for the first
election held after January 1, 2023, one fire department and one police department
trustee shall be elected for a period of two years, one fire department and one police
department trustee shall be elected for a period of three years,and one fire department
and one police department trustee shall be elected for a period of four years.
Commencing with the election held in 2025, there shall be an election every year for
the expiring terms of one firefighter trustee and one police officer trustee position,with
all elected firefighter and police officer trustee terms being three years.
* *
Sec. 90. - Benefits for members hired on or after May 8, 2019 for International Association
of Firefighters, Local 1510(IAFF)and on or after July 31,2019 for Fraternal Order of Police,
William Nichols Lodge No. 8(FOP).
Notwithstanding any other provision of the System, the pension benefits for members hired on or
after May 8, 2019 for International Association of Firefighters, Local 15.10 (IAFF), and on or after
July 31, 2019 for Fraternal Order of Police, William Nichols Lodge No. 8 (FOP), shall be as
provided in section 89, except that such members shall be vested upon completion of ten years
of creditable service, and police officer members shall not be credited with any service under this
System for service as a member of the Miami Beach Employees' Retirement Plan.
SECTION 2. REPEALER.
All ordinances or parts of ordinances and all section and parts of sections in conflict
herewith are hereby repealed.
SECTION 3. CODIFICATION.
It is the intention of the City Commission, and it is hereby ordained, that the provisions of
this Ordinance shall become and be made part of the Code of the City of Miami Beach, as
amended; that the sections of this Ordinance may be re-numbered or re-lettered to accomplish
such intention; and that the word "ordinance" may be changed to "section" or other appropriate
word.
4
Page 733 of 1993
SECTION 4. SEVERABILITY.
If any section, subsection, clause or provision of this Ordinance is held invalid, the
remainder shall not be affected by such invalidity.
SECTION 5. EFFECTIVE DATE.
This Ordinance shall take effect ten days following adoption.
PASSED and ADOPTED this / day of Feb/u61 , 2023.
'18. :24"--1"------- .
Dan Gelber, Mayor
ATTEST: 1-4910":
. 4.C's,
FEB....7.1d
0 8 s � rls.2923 , 11N(ORD;4,A•: 'rh
Rafael E. Granado, City Clerk ,'11' /4• '�•fi"
APPROVED AS TO
FORM AND LANGUAGE
&FOR EXECUTION
City Attorney ate
5
Page 734 of 1993
Ordinances-R5 B
MIAMI BEACH
COMMISSION MEMORANDUM
TO: Honorable Mayor and Members of the City Commission
FROM: Alina T. Hudak, City Manager
DATE: February 1,2023
9:35 a.m. Second Reading Public Hearing
SUBJECT:AN ORDINANCE OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, AMENDING PART I, SUBPART B, ARTICLE
IX, RELATED SPECIAL ACTS, OF THE MIAMI BEACH CITY CODE
ENTITLED "PENSION SYSTEM FOR DISABILITY AND RETIREMENT OF
MEMBERS OF POLICE AND FIRE DEPARTMENTS";AMENDING SECTION
62, "DEFINITIONS", RELATED TO ACTUARIAL ASSUMPTIONS;
AMENDING SECTION 65, ENTITLED "COMPUTATION OF CREDITABLE
SERVICE; SERVICE RECORD"; AMENDING SECTION 76, "BOARD OF
TRUSTEES", TO PROVIDE FOR STAGGERED THREE (3) YEAR TERMS;
AMENDING SECTION 90, ENTITLED "BENEFITS FOR MEMBERS HIRED
ON OR AFTER MAY 8, 2019 FOR INTERNATIONAL ASSOCIATION OF
FIREFIGHTERS, LOCAL 1510 (IAFF) AND ON OR AFTER'JULY 31, 2019
FOR FRATERNAL ORDER OF POLICE, WILLIAM NICHOLS LODGE NO. 8
(FOP)"; PROVIDING FOR SEVERABILITY; REPEALING ALL
ORDINANCES IN CONFLICT HEREWITH; AND PROVIDING AN
EFFECTIVE DATE.
RECOMMENDATION
Approve the proposed ordinance on first reading and set the ordinance for second reading on
February 1, 2023.
BACKGROUND/HISTORY
The City of Miami Beach has the following five (5) classified employee groups that are
represented by bargaining units:
• Group I - Represented by the American Federation of State, County and Municipal
Employees (AFSCME)Local 1554;
• Group II -Represented by the Fraternal Order of Police (FOP)William Nichols Lodge
No. 8;
• Group III - Represented by the International Association of Firefighters (IAFF) Local
1510;
• Group IV - Represented by the Communications Workers of America (CWA) Local
3178; and
Page 881 of 1420
Page 735 of 1993
• Group V - Represented by the Government Supervisors Association of Florida
(GSAF), OPEIU, Local 100
In addition, the City has one classified employee group, Group VI, comprising all other
classifications in the classified service not covered by a bargaining unit. This group is commonly
referred to in the City of Miami Beach as "Others". There is a seventh salary group comprised
of at-will employees commonly referred to as Unclassified.
Employees represented by the FOP and IAFF are eligible for a defined benefit pension plan
governed by Part I, Subpart B,Article IX, Related Special Acts, of The Miami Beach City Code
entitled "Pension System For Disability And Retirement Of Members Of Police And Fire
Departments."
All other full time employees are eligible for a defined benefit pension plan governed by Part I,
Subpart B, Article VI, Related Special Acts, of The Miami Beach City Code entitled "Pension
and Retirement System for Officers and Employees Generally."
On May 21, 2020, the Fire and Police Pension Board voted to change the plan's definition of
actuarial equivalence by adopting the recommended mortality tables and long-term interest rate.
On August 18, 2022, the Fire and Police Pension Board voted to extend the elected Trustees
length of term from 2 years to 3 years, and to stagger the election for each individual Fire and
Police Trustee.
ANALYSIS
The Administration and the International Association of Fire fighters, Local 1510(IAFF)entered
into a Memorandum of Understanding on October 20,2022 to amend the Fire& Police Pension
Plan to allow Firefighters to receive service credit under the Fire & Police Plan for prior service
under the Miami Beach Employees' Retirement Plan ("Employees' Retirement Plan").The
proposed ordinance would allow Firefighters, regardless of date of hire, to receive service
credit under the Fire& Police Plan for prior service under the Employees' Retirement Plan.
The Fire and Police Pension Board voted to update the plan's actuarial assumptions for the
calculation of benefits effective October 1,2020. The changes to the mortality tables for funding
and accounting were adopted as required by the State of Florida (F.S., Chapter 2015-157); for
the Optional Forms of Benefits, the actuary recommends a blended mortality table and life
expectancy table based on the tables which are consistent with what are used to fund the Plan;
the ordinance change brings the language of the ordinance in line with these changes.The
change to lower the assumption for the actuarial rate of return was adopted by the Board to be
more consistent with recommendations by the State of Florida. A lower, more conservative
actuarial rate of return should result in healthier plan over the long term.
The Pension Board also recommended that the terms of elected Trustees be extended from 2
years to 3 years, and to stagger the election for each individual Fire and Police Trustee. The
proposed ordinance would update the plan's definitions of actuarial assumptions to reflect the
Pension Board's action, implement the Pension Board's recommended change in the terms of
elected Board members,and provide for staggered terms of Fire and Police Trustees.
SUPPORTING SURVEY DATA
Page 882 of 1420
Page 736 of 1993
N/A
FINANCIAL INFORMATION
The Fire and Police Pension Office will provide an impact statement prepared by the Plan's
actuary once the ordinance has gone through the first reading. The actuarial assumptions for the
benefits have already been absorbed by the plan from •FYE 2020. There is no cost to the
transfer of service for IAFF members as there is already built into the Plan an assumption of
0.025%of annual pensionable payroll for transfer of service under another City pension system.
Finally,there is no cost to the staggered Board terms.
•
CONCLUSION
The Administration recommends amending Part I, Subpart B,Article IX, Related Special Acts,
of The Miami Beach City Code entitled "Pension System For Disability And Retirement Of
Members Of Police And Fire Departments."
Based on the foregoing,the Administration recommends that the City Commission approve the
proposed ordinance on first reading and set the ordinance for second reading on February 1,
2023.
Applicable Area
Citywide
Is this a"Residents Right Does this iteln utilize G.O.
to Know" item,pursuant to Bond Funds?
City Code Section 2-14?
Yes No
Strategic Connection
Organizational Innovation-Attract and retain top talent.
Legislative Tracking
Human Resources
Sponsor
Mayor Dan Gelber
ATTACHMENTS:
Description
o Ordinance
• IAFF MOU
o Aug 18 2022 approved Board motion
o May 21 2020 approved Board motion
Page 883 of 1420
Page 737 of 1993
10.17.22
MEMORANDUM OF UNDERSTANDING
This Memorandum of Understanding ("MOU") is entered into this 20 day of October,
2022. This MOU sets forth the agreement between the City of Miami Beach ("City") and the
International Association of Fire fighters, Local 1510 ("IAFF") regarding the amendment to
Sections 65 and 90 of the City Pension Fund for Firefighters and Police Officers in the City of
Miami Beach ("Fire&Police Plan").
WHEREAS the Parties wish to amend the Fire & Police Pension Plan to allow
Firefighters to receive service credit under the Fire & Police Plan for prior service under the
Miami Beach Employees' Retirement Plan ("Employees' Retirement Plan"). The amendment
would allow Firefighters, regardless of date of hire, to receive service credit under the Fire &
Police Plan for prior service under the Employees'Retirement Plan,as set forth more specifically
in attached Exhibit A,Draft Amendment to Sections 65 and 90 of the Fire&Police Pension Plan.
WHEREAS the Parties agree that this MOU shall be in effect, and upon adoption of the
pension ordinance implementing this MOU, said ordinance shall be in effect, notwithstanding
any provision in the Parties'2021-2024 Collective Bargaining Agreement.
IT 1S THEREFORE AGREED AS FOLLOWS:
1. Upon adoption of the Amendments to Sections 65 and 90 of the Fire & Police Pension
Plan, Firefighters, regardless of date of hire, shall receive service credit under the Fire&
Police Pension Plan for prior service under the Employees' Retirement Plan, in
accordance with the Amendments.
IAFF LOCAL 1510 CITY OF MIAMI BEACH
By. � an�c
�d� By: _ •�
ADONIS GARCIA, PRESIDENT = INA HUDAK, CITY MANAGER
0{843117.2
Page 889 of 1420
Page 738 of 1993
Rev.10.17.22
Exhibit A
Proposed Amendments to
The City Pension Fund for Firefighters and Police Officers in the City of Miami Beach
Sec.65.-Computation of creditable service;service record.
(b) Employees who become members of this System in order to receive credit for service rendered prior
to their becoming a member shall make contributions to the Fund In the amount such member would
have contributed had he been a member during the period of service for which credit is being purchased.
In order to receive such credit, employees shall make payment within six months after becoming a
member or within such other period as may be provided in a bargaining agreement covering the member.
Notwithstanding the foregoing, any firefighter member Wed-before-May-8,20n and any police officer
member hired before July 31,2019 who transfers to this System whereby the accumulated total credit in
any other pension system of the City is transferred to this System, then and in that event, all of the
creditable service time in such other system shall be considered Creditable Service time under this System,
and such employee need make no additional contribution for time credited. Firefighter mcmbcr hired
Police officer members hired on or after July 31, 2019 shall not be
credited with any service under this System for service as a member of the Miami Beach Employees'
Retirement Plan.
Sec. 90. - Benefits for members hired on or after May 8, 2019 for International Association of
Firefighters,Local 1510(IAFF)and on or after July 31,2019 for Fraternal Order of Police,William Nichols
Lodge No.8(FOP).
Notwithstanding any other provision of the System,the pension benefits for members hired on or after
May 8,2019 for International Association of Firefighters, Local 1510(IAFF),and on or after July 31, 2019
for Fraternal Order of Police,William Nichols Lodge No.8(FOP),shall be as provided in section 89,except
that such members shall be vested upon completion often years of creditable service,and police officer
members shall not be credited with any service under this System for service as a member of the Miami
Beach Employees'Retirement Plan.
018431044
Page 890 of 1420
Page 739 of 1993
946w MEETING OF THE BOARD OF TRUSTEES
CITY PENSION FUND FOR FIREFIGHTERS AND POLICE OFFICERS
IN THE CITY OF MiAMI BEACH
August 18, 2022
CALL TO ORDER
Meeting was called to order at 8:32 AM by Chairman Nolan.
Board members present, via a quorum physically present and videoconference, were as follows:
FIRE DEPARTMENT POLICE DEPARTMENT ADMINISTRATION
David J. Frazier. Jr. Steven L. Feldman Heman D. Cardeno
Paul D. Johnson James D. Nolan Eric T. Carpenter
Dwight M. Nicholas Tameka Otto Stewart
Absent was:
Daniel 0. Molina - Police Department
Present were:
Stuart A. Kaufman, Esq. - Attorney, Klausner, Kaufman,Jensen &Levinson (KKJL)
Donna Brito - Executive Director
Frank Estevez - Assistant Director
Myriame Jean-Baptiste - Pension Administrator
Clara La Rosa - Office Manager
Also present were:
Michael Bray - Vice President, Inverness Counsel, LLC
Adonis L. Garcia - President, Local 1510-international Association of Firefighters
Robert K. Maddock - Senior Vice President, Inverness Counsel, LLC
Greg Russell, MBA, CRC - Program Director, Nationwide
Adrian Sancho - Senior Vice President, Inverness Counsel, LLC
Erik Sherman - Registered Representative, Voya
Anthony Steel, CRC - Investment Adviser Representative, Nationwide
Brendon Vavrica, CFP - Consultant, AndCo Consulting
MINUTES
Regular Meeting of the Board of Trustees-July 21,2022
Minutes from the regular board meeting were distributed as part of the agenda packet. Secretary Frazier
made a motion to approve the minutes. The motion was seconded by Chairman Nolan and unanimously
carried.
Discussion and possible action regarding Trustee Feldman's request to stagger the election cycle
between the Fire Department and the Police Department and to increase the term of office for the
elected Trustees from 2 years too years
•
Trustee Feldman previously asked the Board to consider two requests that would require a future
ordinance change. The first request was to stagger the Pension Board of Trustees'elections between the
Fire Department and the Police Department to avoid the risk of a full Fire and Police Board turnover. The
second request was to extend the current 2-year term to a 4-year term in order to provide the Board with
more stability as the Trustees continue to gain valuable education and knowledge. •
1
Page 891 of 1420
Page 740 of 1993
•
946thMeeting of the Board of Trustees
August 18,2022
Trustee Feldman clarified that his intent was to stagger the election of each individual Trustee from the Fire
and Police Departments to serve a 4-year term.
Adonis L. Garcia, President, Local 1510—International Association of Firefighters,joined the meeting via
Zoom and agreed that staggering the elections was the prudent thing to do, but in his opinion a 4-year term
was too long. He suggested a 3-year term and to hold annual elections in order to stagger the term for
each individual Fire and Police Trustee. The first year election would be unusual in order to initiate the
staggered election cycle. Members would need to elect one Fire Trustee serving a 1-year term, one Fire
Trustee serving a 2-year term, one Fire Trustee serving a 3-year term, and the same process for Police.
The following year the 1-year Trustee would be elected fora 3-year term. Following that,the 2-year Trustee
would be elected for a 3-year term until the process works itself out and all Trustees are serving a staggered
3-year term.
After various discussions the Board agreed that this seemed to be a fair and balanced process that would
preserve the stability and knowledge base of the Board.
Attorney Kaufman advised that his only concern is whether or not the Division of Retirement would accept
less than a 2-year term. If not, the first year election may have to start the staggering process by electing
one Trustee serving a 2-year term, one Trustee serving a 3-year term, and one Trustee serving a 4-year
term.
Secretary Frazier made a motion to grant Attorney Kaufman the authority to draft the required ordinance to
extend the elected Trustees length of term from 2 years to 3 years, and to stagger the election for each
individual Fire and Police Trustee. The initial staggered election cycle will depend on the Division of
Retirement's required length of term. The motion was seconded by Trustee Nicholas and unanimously
carried.
Mr. Garcia thanked the Board for their time and consideration before leaving the meeting.
COMMENCEMENT OF PENSION
Police Officer George R. Varon was retired under the DROP program and resigned from City employment
effective July 29, 2022. He is eligible to commence his monthly pension in accordance with the Miami
Beach Code, Section 66(a) and Section 79.
Police Sergeant Jorge Alessandri was retired under the DROP program and resigned from City employment
effective July 31, 2022. He is eligible to commence his monthly pension in accordance with the Miami
Beach Code, Section 66(a) and Section 79.
Trustee Johnson made a motion to approve the commencement of pension for Officer Varon and Sergeant
Alessandri. The motion was seconded by Chairman Nolan and unanimously carried. (Attachment #1-1
Schedule A)
SERVICE RETIREMENT
Trustee Johnson made a motion to add the service retirement for Police Sergeant Jose D. Perez to the
Agenda. The motion was seconded by Trustee Carden and unanimously carried.
Police Sergeant Jose D. Perez retired effective July 22, 2022, with 7 years 10 months of service in
accordance with the Miami Beach Code, Section 66(a). Sergeant Perez met the eligibility for retirement
by Tier 3, and attainment of at least age 50.
• 2
Page 892 of 1420
Page 741 of 1993
922"d Meeting of the Board of Trustees
May 21,2020
Trustee Otto Stewart asked Ms. Jones if she had a recommendation. Ms. Jones replied that the current
7.75% investment return assumption is overly optimistic so any of the above scenarios are acceptable to
lower the assumption. The average investment return assumption among GRS'clients is approximately
7.3%. Attorney Kaufman added that the Florida Retirement System (FRS) recently lowered their
investment return assumption to 7.2%. The FRS assumption is considered to be the standard that every
plan targets so that the State cannot have an argument that a plan's assumption is not low enough.
After various discussions regarding the advantages and disadvantages of each scenario, Trustee
Carpenter made a motion to lower the investment return assumption by 10 basis points a year for the
October 1, 2019, and the October 1, 2020, actuarial valuation and 5 basis points a year for the October 1,
2021, actuarial valuation to achieve a long-term expected annual rate of return of 7.5%. The Board will
re-evaluate the assumption as needed. The motion was seconded by Trustee Nolan and unanimously
carried. (Attachment#3)
Update of the definition of actuarial equivalence (interest rate and mortality table) for the
calculation of optional forms of benefits: Discussion and possible action
Ms. Jones recommended replacing the current actuarial equivalence mortality tables for both optional
forms of payment and life expectancies with the new mortality tables that are consistent with what will be
used to fund the Plan. The recommended tables are listed below. Ms. Jones also recommended a long-
term interest rate of 7.50% for all purposes of actuarial equivalence. She further explained that keeping
the definition of actuarial equivalence up to date assures that the optional forms of payment are priced
fairly for both the members and the Plan and life expectancies are property determined. An actuarial
impact statement would be issued showing no cost od funding for these changes.
Mortality, for healthy participants, based upon the PUB-2010 Headcount Weighted Safety
Mortality Tables with fixed blend of 85%Below Median Healthy Retiree Male Mortality Table and
15%Healthy Retiree Female Mortality Table, both set forward 1 year, with fully generational
mortality improvements projected to each future decrement date with Scale MP-2018.
For Disabled Participants, mortality based upon the 80%PUB-2010 Headcount Weighted
General Disabled Retiree Mortality Table/20%PUB-2010 Headcount Weighted Safety Disabled
Retiree Mortality Table, with a fixed blend of 85%male and 15%female mortality rates, without
projected mortality improvements.
Director Brito explained that actuarial equivalence in this plan is used in two different circumstances:
1. To determine life expectancies if the surviving spouse was married to the deceased member for
less than 10 years, or the domestic partnership was registered for less than 10 years, then the
benefits are payable for a period no longer than the normal life expectancy of the deceased
member at time of death.
2. To convert one form of benefit payment to another form of benefit payment. For example, to
convert the 10 year certain and life benefit to a life of member only or joint and survivor benefit.
Trustee Spina-Taylor made a motion to change the plan's definition of actuarial equivalence by adopting
the recommended mortality tables and long-term interest rate. The change is effective immediately and
shall be applied when a beneficiary benefit is limited to a period no longer than the normal life expectancy
of a deceased member at the time of death and optional forms of benefit payments. The motion was
seconded by Trustee Nicholas and unanimously carried. (Attachment#4)
4
Page 893 of 1420
Page 742 of 1993
P:954.527.1616 F:954.525.0083 i www.grsconsulting.corn
4111:0S
August 15, 2024
Ms. Marla Alpizar
Director, SHRM-SCP
City of Miami Beach
Human Resources Department
1700 Convention Center Drive
Miami Beach, Florida 33139
Re: Actuarial Projection Study
City Pension Fund for Firefighters and Police Officers in the City of Miami Beach
Dear Marla:
As requested, we are pleased to enclose our updated Actuarial Projection Study including twenty
(20) year projections beginning October 1, 2023 for the City Pension Fund for Firefighters and Police
Officers in the City of Miami Beach (Fund)illustrating the financial impact of the current and proposed
provisions.
This update reflects proposed changes on Final Average Monthly Earnings (FAME) and the service
incurred disability benefit for Firefighters only.
Census data and financial information is reported as of October 1, 2023.
If you should have any question concerning the above or if we may be of further assistance with this
matter, please do not hesitate to contact us.
Sincerest regards,
Gabriel, Roeder, Smith &Company
Intildee itscits24,
Shelly L. Jones,A.S.A., M.A.A.A., E.A., F.C.A.
Consultant and Actuary
Enclosure
Or E,-t 9rcre3.'Boulevard Suite 505 Ft.Lauderdale,Florida 33301-1804
7
City Pension Fund for Firefighters and
Police Officers in the City of Miami Beach
Actuarial Projection Study as of October 1, 2023
Prepared: August 15, 2024
GRS
Page 745 of 1993
TABLE OF CONTENTS
Page
I. Executive Summary 1
II. Projection Results 5
III. Outline of Principal Provisions of the Retirement Plan 13
IV. Actuarial Assumptions and Cost Methods 20
V. Glossary 26
GRS
Page 746 of 1993
EXECUTIVE SUMMARY I
As requested, we have updated twenty (20) year projections illustrating the financial impact of proposed
changes to the benefit provisions of the City Pension Fund for Firefighters and Police Officers in the City of
Miami Beach (Fund).
The update reflects proposed changes for Firefighters only.
Background—Currently the Fund provides:
> Final Average Monthly Earnings(FAME)as the greater of the average of the five(5)highest paid years
or the five (5) last paid years prior to date of retirement after taking into consideration the overtime
limit for Tier 3,Tier 4 and Tier 5 active members.
> For all current and future active members,the service incurred disability benefit is the accrued benefit
with a minimum of 85% of current salary at time of disability.
Proposed Changes—We understand the City wishes to determine the effect on future City contributions of
the following proposed changes:
> Scenario 1—For Tier 3,Tier 4 and Tier 5 current and future active Firefighters,the FAME is the greater
of the average of the three (3) highest paid years or the three (3) last paid years prior to date of
retirement after taking into consideration the overtime limit.
> Scenario 2—For Tier 3,Tier 4 and Tier 5 current and future active Firefighters,the FAME is the greater
of the average of the four (4) highest paid years or the four (4) last paid years prior to date of
retirement after taking into consideration the overtime limit.
> Scenario 3—For Tier 3,Tier 4 and Tier 5 current and future active Firefighters,the FAME is the greater
of the average of the three (3) highest paid years or the three (3) last paid years prior to date of
retirement after taking into consideration the overtime limit. Additionally, for all current and future
active Firefighter members, the service incurred disability benefit is the accrued benefit with a
minimum of 50% of current salary at time of disability.
> Scenario 4—For Tier 3,Tier 4 and Tier 5 current and future active Firefighters,the FAME is the greater
of the average of the four (4) highest paid years or the four (4) last paid years prior to date of
retirement after taking into consideration the overtime limit. Additionally, for all current and future
active Firefighter members, the service incurred disability benefit is the accrued benefit with a
minimum of 50% of current salary at time of disability.
Results—The following table shows the current City cost over the next five (5),ten (10)and twenty(20)years
for the baseline (current Fund) and for the proposed benefit changes described above both as a dollar
amount and as a percentage of projected covered payroll, respectively.
4 �` R S City Pension Fund for Firefighters and Police Officers 1
��aa ,3 in the City of Miami Beach
Page 747 of 1993
.-- -n :_;::::...,7,1,-,-, ':-_ v._ aSummary,of fosts.($.1PQOOs) _ -
E. _- eui•rnt`titiC F Scenario�l t Scenario ='.F ` _ Scenario 3r3, ,r }Scenarioj4
r�'r r ,�a ;� ',��'° rs�-fs�j�rjyt'.� �.,.`r :�,�tam ,Y;
( , -i:::::„, -14 3tyet TAME u.;sif-araF 'L
3 ear FAMEuefi hter 4f ear FAME Fi�efi h'` andru dated LOD diabdi and u`datedgLOD diabil '
� � � �Y 6 Y g �; .,P ty � P �i
r On(y +t L .__ Onlyr� �benefitiFirefighter0nly benefit Flmfighter�Oniy,4
}, T fi,Prfg W:0`,-. :' increase , FIncrease+g,' .3 l=lnciease%x
r.._• _„__..,,,,,„:,,,.,.., ,,„„ ,,, :A„,,,44. :ilAmount ;`(DecAease r"Amourit (Decrease) t Amount%` " (Decrease)) `aAmount (Decrease)
5 Years
-Pensionable Payroll $465,208 $465,208 ($0) $465,208 ($0) $465,208 ($0) $465,208 (50)
-Net City Cost$ $316,326 $317,652 $1,326 $316,982 $656 $315,528 ($798) $314,842 ($1,484)
- %of Payroll 68.0% 68.3% 0.3% 68.1% 0.1% 67.8% -0.2% 67.7% -0.3%
10 Years
-Pensionable Payroll $998,469 $998,469 ($0) $998,469 ($0) $998,469 ($0) $998,469 ($0)
-Net City Cost$ $687,778 $691,136 $3,358 $689,438 $1,660 $686,778 ($1,000) $685,040 ($2,737)
-%of Payroll 68.9% 69.2% 0.3% 69.0% 0.2% 68.8% -0.1% 68.6% -0.3%
20 Years
-Pensionable Payroll $2,247,014 $2,247,014 ($0) $2,247,014 ($0) $2,247,014 ($0) $2,247,014 ($0)
-Net City Cost$ $1,285,132 $1,294,932 $9,800 $1,289,974 $4,841 $1,285,765 $633 $1,280,692 ($4,440)
- %of Payroll 57.2% 57.6% 0.4% 57.4% 0.2% 57.2% 0.0% 57.0% -0.2%
Actuarial Assumptions and Methods, Fund Provisions, Financial Data and Member Census Data - Fund
provisions, financial data and member census data employed for purposes of our Actuarial Projection Study
are the same Fund provisions, financial data and member census data utilized for the October 1, 2023
Actuarial Valuation unless otherwise specified herein.
The actuarial assumptions and methods are the same as outlined in the October 1, 2023 Actuarial Valuation
with the following projection modifications:
• Fund provisions are as described above
• For Scenarios 3 and 4, 15%of disabilities are assumed to be non-service incurred-85%service incurred.
• Future members are assumed to be hired each year at a rate sufficient to maintain a constant active
headcount - stationary population. New members are assumed to have the same average
demographic characteristics (age, gender, salary - adjusted each year for inflation) as those hired
over the past five (5)years.
• State (Share Plan) contributions are projected to remain $120,549 during the 20-year projection
period for all Scenarios.
• Investment return assumption decreases 10 basis points next year to 7.20%.
• Payroll growth is assumed to remain the same as current year(3.5%)for all projection years.
• Administrative expenses included in the normal cost are assumed to grow with projected inflation -
3% per annum.
Projections are deterministic - throughout the projection period Fund experience is expected to match the
assumptions(asset value reported as of October 1, 2023).
Other Considerations-Under Governmental Accounting Standards Board (GASB)Statement Number 68,we
understand the full cost of benefit changes must be recognized immediately in the Pension Expense (for
accounting, not funding).
Risk Assessment-Risk assessment may include scenario tests,sensitivity,or stress tests,stochastic modeling
and a comparison of the present value of benefits at low-risk discount rates. We are prepared to perform
GCity Pension Fund for Firefighters and Police Officers 2
IZ S J in the City of Miami Beach
Page 748 of 1993
such assessment to aid in the decision making process. Please refer to the October 1, 2023 Actuarial
Valuation Report dated April 11, 2024 for additional discussion regarding the risks associated with measuring
the accrued liability and the minimum funding payment.
This Actuarial Projection Study is intended to describe the estimated future financial effects of the proposed
benefit changes on the Fund and is not intended as a recommendation in favor of the change nor in
opposition to the change.
These calculations are based upon assumptions regarding future events. However, the Fund's long term
costs will be determined by actual future events, which may differ materially from the assumptions made.
These calculations are also based upon present and proposed Fund provisions that are outlined or referenced
in this Actuarial Study.
If all actuarial assumptions are met and if all future minimum required contributions are paid, Fund assets
will be sufficient to pay all Fund benefits, future contributions are expected to remain relatively stable as a
percent of payroll and the funded status is expected to improve. Fund minimum required contributions are
determined in compliance with the requirements of the Florida Protection of Public Employee Retirement
Benefits Act, Firefighters Retirement Chapter 175 and Police Officers Retirement Chapter 185 with normal
cost determined as a level percent of covered payroll and with a level percent amortization payment using a
closed amortization period of 30-years.
All actuarial assumptions used in this Actuarial Study are reasonable for the purposes of this study. The
combined effect of the assumptions is expected to have no significant bias (i.e. not significantly optimistic or
pessimistic). All actuarial assumptions and methods used in the study follow the guidance in the applicable
Actuarial Standards of Practice.
The Unfunded Actuarial Accrued Liability(UAAL) may not be appropriate for assessing the sufficiency of Fund
assets to meet the estimated cost of settling benefit obligations but may be appropriate for assessing the
need for or the amount of future contributions.The UAAL would be different if it reflected the market value
of assets rather than the smoothed actuarial value of assets.
Future actuarial measurements may differ significantly from the current measurements presented in this
report due to such factors as the following: Fund 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 Fund's funded status);
and changes in Fund provisions or applicable law. Due to the limited scope of the actuary's assignment,the
actuary did not perform an analysis of the potential range of such future measurements.
This report should not be relied on for any purpose other than the purpose described in the primary
communication. Determinations of the financial results associated with the benefits described in this report
in a manner other than the intended purpose may produce significantly different results.
If you have reason to believe the assumptions used are unreasonable, the Fund provisions are incorrectly
described or referenced, important Fund provisions relevant to this Actuarial Projection Study are not
described or that conditions have changed since the calculations were made, you should contact the
undersigned prior to relying on information in this Actuarial Projection Study. If you have reason to believe
G R S City Pension Fund for Firefighters and Police Officers 3
in the City of Miami Beach
Page 749 of 1993
that the information provided in this Actuarial Projection Study is inaccurate, or is in any way incomplete, or
if you need further information in order to make an informed decision on the subject matter of this report,
please contact the undersigned prior to making such decision.
This Actuarial Study was prepared using ProVal's valuation model, a software product of Winklevoss
Technologies. We are relying on the ProVal model. We performed tests of the ProVal model with this
assignment and made a reasonable attempt to understand the developer's intended purpose of, general
operation of, major sensitivities and dependencies within, and key strengths and limitations of the ProVal
model. In our professional judgment, the ProVal valuation model has the capability to provide results that
are consistent with the purposes of the valuation and has no material limitations or known weaknesses.
This Study has been prepared by actuaries who have substantial experience valuing public employee
retirement systems. To the best of our knowledge the information contained in this report is accurate and
fairly presents the actuarial position of the Fund 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.
This Actuarial Study was prepared at the request of the City and is intended for use by the City and those
designated or approved by the City.This Actuarial Study may be provided to parties other than the City only
in its entirety and only with the permission of the City. GRS is not responsible for unauthorized use of this
Study.
The signing actuaries are independent of the Fund sponsor.
The undersigned are Members of the American Academy of Actuaries and meet the Qualification Standards
of the American Academy of Actuaries to render the actuarial opinion contained herein.
If you should have any question concerning the above or if we may be of further assistance with this matter,
please do not hesitate to contact us.
Sincerest regards,
Gabriel, Roeder, Smith &Company
Intiiet& 1201524,
Shelly L.Jones,A.S.A., E.A., M.A.A.A, F.C.A. Jennifer M. Borregard, E.A., M.A.A.A, F.C.A.
Consultant and Actuary Consultant and Actuary
CRSCity Pension Fund for Firefighters and Police Officers 4
47 in the City of Miami Beach
Page 750 of 1993
PROJECTION RESULTS I
Scenario 1 - For Tier 3, Tier 4 and Tier 5 current and future active Firefighter members, the FAME is the
greater of the average of the three (3) highest paid years or the three (3) last paid years prior to date of
retirement after taking into consideration the overtime limit.
The following Tables show projected covered payroll, comparison of projected City and Unfunded Actuarial
Accrued Liability (UAAL) under the baseline forecast versus Scenario 1-($1,000s).
Current Plan Scenario 1-3 year FAME,Firefighter Only
Projected Projected Increase/ Cumulative Increase/
Contribution Annual Projected Annual Projected (Reduction) Inc/(Red) (Reduction)
Fiscal Pensionable Net City Cost Pensionable Net City Cost in Net in Net in
Year Payroll Amount %of Pay UAAL Payroll Amount %of Pay UAAL City Cost City Cost UAAL
2024-2025 85,775 55,019 64.1% 401,283 85,775 55,231 64.4% 402,193 212 212 911
2025-2026 89,989 59,981 66.7% 438,131 89,989 60,227 66.9% 439,296 246 458 1,165
2026-2027 93,620 63,354 67.7% 455,247 93,620 63,621 68.0% 456,457 267 724 1,210
2027-2028 96,532 67,896 70.3% 491,878 96,532 68,184 70.6% 493,117 288 1,012 1,239
2028-2029 99,293 70,075 70.6% 479,790 99,293 70,389 70.9% 481,056 314 1,326 1,265
2029-2030 101,992 71,947 70.5% 463,631 101,992 72,289 70.9% 464,927 342 1,668 1,296
2030-2031 104,292 73,374 70.4% 444,349 104,292 73,747 70.7% 445,674 373 2,041 1,325
2031-2032 106,632 75,402 70.7% 421,540 106,632 75,807 71.1% 422,895 405 2,447 1,355
2032-2033 108,847 75,449 69.3% 396,086 108,847 75,888 69.7% 397,469 439 2,885 1,383
2033-2034 111,497 75,279 67.5% 366,749 111,497 75,752 67.9% 368,158 472 3,358 1,409
2034-2035 114,277 72,173 63.2% 335,557 114,277 72,680 63.6% 336,989 506 3,864 1,431
2035-2036 . 116,642 68,115 58.4% 302,827 116,642 68,658 58.9% 304,277 543 4,407 1,450
2036-2037 118,614 69,872 58.9% 271,047 118,614 70,451 59.4% 272,513 579 4,986 1,467
2037-2038 121,274 69,379 57.2% 241,928 121,274 69,992 57.7% 243,406 613 5,599 1,478
2038-2039 123,958 67,506 54.5% 209,464 123,958 68,154 55.0% 210,946 647 6,247 1,482
2039-2040 125,469 63,067 50.3% 175,748 125,469 63,738 50.8% 177,228 671 6,918 1,480
2040-2041 127,463 51,414 40.3% 141,605 127,463 52,108 40.9% 143,065 693 7,611 1,460
2041-2042 129,864 49,271 37.9% 110,412 129,864 49,987 38.5% 111,844 716 8,326 1,431
2042-2043 133,603 43,766 32.8% 90,755 133,603 44,487 33.3% 92,152 721 9,047 1,396
2043-2044 137,380 42,790 31.1% 72,794 137,380 43,543 31.7% 74,128 752 9,800 1,334
5 Year Totals 465,208 316,326 68.0% 465,208 317,652 68.3% 1,326
10 Year Totals 998,469 687,778 68.9% 998,469 691,136 69.2% 3,358
20 Year Totals 2,247,014 1,285,132 57.2% 2,247,014 1,294,932 57.6% 9,800
4G City Pension Fund for Firefighters and Police Officers 5
1[.7 in the City of Miami Beach
Page 751 of 1993
Scenario 1-Projected City Contributions as a%of Payroll
80.0%
70.0%
•
60.0%
50.0%
40.0%
30 0 -
0/0
20.0 —
10.0%
: iiIIIIIIIIIIII1I
1frOti '2 '2 '2 'h2 '2 0 N. ti tx
l' 01 O) Ort' 0 OH0") OOOOO' 6 O612 61> OtOb
6
1'
tiOti ti ti ti ti fV 1, 1, 1, 1, ti ti ti ti ti 1, ti ti 1,
, , 0 , 00 , . • , ,
1, hOA Cb CI)
/3)01ebti I?, II? 1h0)(311 ';; I) O aypti tt
0� OoOH0� O� 01O000OOO0OOOOOO
ti ti ti ti 1, ti ti rt' ti ti ti ti ti eV
ti
N Current Plan ■ Scenario 1- 3 year FAME, Firefighter Only
G R S City Pension Fund for Firefighters and Police Officers 6
in the City of Miami Beach
Page 752 of 1993
,
Scenario 2 - For Tier 3, Tier 4 and Tier 5 current and future active Firefighter members, the FAME is the
greater of the average of the four (4) highest paid years or the four (4) last paid years prior to date of
retirement after taking into consideration the overtime limit.
The following Tables show projected covered payroll, comparison of projected City and Unfunded Actuarial
Accrued Liability (UAAL) under the baseline forecast versus Scenario 2-($1,000s).
Current Plan Scenario 2-4 year FAME,Firefighter Only
Projected Projected Increase/ Cumulative Increase/
Contribution Annual Projected Annual Projected (Reduction) Inc/(Red) (Reduction)
Fiscal Pensionable Net City Cost Pensionable Net City Cost in Net in Net in
Year Payroll Amount %of Pay UAAL Payroll Amount %of Pay UAAL City Cost City Cost UAAL
2024-2025 85,775 55,019 64.1% 401,283 85,775 55,124 64.3% 401,735 105 105 453
2025-2026 89,989 59,981 66.7% 438,131 89,989 60,103 66.8% 438,710 122 227 579
2026-2027 93,620 63,354 67.7% 455,247 93,620 63,486 67.8% 455,848 132 358 601
2027-2028 96,532 67,896 70.3% 491,878 96,532 68,038 70.5% 492,496 142 501 617
2028-2029 99,293 70,075 70.6% 479,790 99,293 70,231 70.7% 480,421 155 656 631
2029-2030 101,992 71,947 70.5% 463,631 101,992 72,116 70.7% 464,276 169 825 646
2030-2031 104,292 73,374 70.4% 444,349 104,292 73,559 70.5% 445,009 184 1,010 660
2031-2032 106,632 75,402 70.7% 421,540 106,632 75,602 70.9% 422,215 200 1,210 675
2032-2033 108,847 75,449 69.3% 396,086 108,847 75,666 69.5% 396,775 217 1,427 689
2033-2034 111,497 75,279 67.5% 366,749 111,497 75,513 67.7% 367,451 233 1,660 702
2034-2035 114,277 72,173 63.2% 335,557 114,277 72,424 63.4% 336,270 250 1,910 713
2035-2036 116,642 68,115 58.4% 302,827 116,642 68,383 58.6% 303,549 268 2,179 722
2036-2037 118,614 69,872 58.9% 271,047 118,614 70,158 59.1% 271,777 286 2,464 730
2037-2038 121,274 69,379 57.2% 241,928 121,274 69,682 57.5% 242,663 303 2,767 736
2038-2039 123,958 67,506 54.5% 209,464 123,958 67,826 54.7% 210,202 320 3,087 738
2039-2040 125,469 63,067 50.3% 175,748 125,469 63,398 50.5% 176,484 331 3,418 736
2040-2041 127,463 51,414 40.3% 141,605 127,463 51,757 40.6% 142,331 342 3,760 726
2041-2042 129,864 49,271 37.9% 110,412 129,864 49,625 38.2% 111,125 353 4,114 712
2042-2043 133,603 43,766 32.8% 90,755 133,603 44,122 33.0% 91,451 356 4,470 695
2043-2044 137,380 42,790 31.1% 72,794 137,380 43,162 31.4% 73,458 372 4,841 665
5 Year Totals 465,208 316,326 68.0% 465,208 316,982 68.1% 656
10 Year Totals 998,469 687,778 68.9% 998,469 689,438 69.0% 1,660
20 Year Totals 2,247,014 1,285,132 57.2% 2,247,014 1,289,974 57.4% 4,841
4G City Pension Fund for Firefighters and Police Officers 7
V 1�S J in the City of Miami Beach
Page 753 of 1993
Scenario 2-Projected City Contributions as a%of Payroll
80.0%
70.0 ___ :i ,i, ri I
0 1 .
1,,. 4 1 i ,,, ,,,I, , . I ',.; 5
x l
:::: i
f, 14s: s ; ' :
i ,,111
I y jf° 11 � 1l r ;'' ,
40.0% 1 ' S
30.0% ,�� 1 ,
1IILI�' liiis
1 � � .ia s rr �� �' r"�'
0 � �1
20.0% I r �� � �IIIIiIl
" � � � �r s
F w F r , ) 9 � ti f '
10.0% + , c 11� I , —
w
1 1 1 '- c 1 .
O.O% �.._ T v , '
Ooh O�� 01A 01� Ol� O'�O Off~ O�� O�� O'�� Ooh O0; Oq; O,), O'�� O4O Obi O44 o�� O.
ti ti ti , ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti
oti°` otih otic otic oti• ,' otic' opo o�ti o0ti o�; ora o?) o10 011 cY 030tP 99 , •
ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti
0 Current Plan FO Scenario 2 -4 year FAME,Firefighter Only
City Pension Fund for Firefighters and Police Officers 8
4167111•Res
in the City of Miami Beach
Page 754 of 1993
Scenario 3 - For Tier 3, Tier 4 and Tier 5 current and future active Firefighter members, the FAME is the
greater of the average of the three (3) highest paid years or the three (3) last paid years prior to date of
retirement after taking into consideration the overtime limit. Additionally, for all current and future active
Firefighter members,the service incurred disability benefit is the accrued benefit with a minimum of 50% of
current salary at time of disability.
The following Tables show projected covered payroll, comparison of projected City and Unfunded Actuarial
Accrued Liability (UAAL) under the baseline forecast versus Scenario 3-($1,000s).
Scenario 3-3 year FAME and
updated LOD diability benefit,
Current Plan Firefighter Only
Projected Projected Increase/ Cumulative Increase/
Contribution Annual Projected Annual Projected (Reduction) Inc/(Red) (Reduction)
Fiscal Pensionable Net City Cost Pensionable Net City Cost in Net in Net in
Year Payroll Amount %of Pay UAAL Payroll Amount %of Pay UAAL City Cost City Cost UAAL
2024-2025 85,775 55,019 64.1% 401,283 85,775 54,841 63.9% 401,217 (178) (178) (66)
2025-2026 89,989 59,981 66.7% 438,131 89,989 59,804 66.5% 437,886 (177) (355) (245)
2026-2027 93,620 63,354 67.7% 455,247 93,620 63,189 67.5% 455,006 (165) (520) (241)
2027-2028 96,532 67,896 70.3% 491,878 96,532 67,747 70.2% 491,654 (149) (669) (224)
2028-2029 99,293 70,075 70.6% 479,790 99,293 69,946 70.4% 479,586 (129) (798) (204)
2029-2030 101,992 71,947 70.5% 463,631 101,992 71,843 70.4% 463,451 (104) (902) (180)
2030-2031 104,292 73,374 70.4% 444,349 104,292 73,303 70.3% 444,198 (72) (974) (150)
2031-2032 106,632 75,402 70.7% 421,540 106,632 75,358 70.7% 421,428 (44) (1,018) (113)
2032-2033 108,847 75,449 69.3% 396,086 108,847 75,440 69.3% 396,006 (9) (1,026) (81)
2033-2034 111,497 75,279 67.5% 366,749 111,497 75,306 67.5% 366,708 27 (1,000) (41)
2034-2035 114,277 72,173 63.2% 335,557 114,277 72,233 63.2% 335,557 60 (940) (1)
2035-2036 116,642 68,115 58.4% 302,827 116,642 68,213 58.5% 302,863 98 (842) 36
2036-2037 118,614 69,872 58.9% 271,047 118,614 70,001 59.0% 271,125 129 (713) 78
2037-2038 121,274 69,379 57.2% 241,928 121,274 69,534 57.3% 242,041 155 (557) 113
2038-2039 123,958 67,506 54.5% 209,464 123,958 67,684 54.6% 209,606 177 (380) 142
2039-2040 125,469 63,067 50.3% 175,748 125,469 63,262 50.4% 175,914 195 (185) 166
2040-2041 127,463 51,414 40.3% 141,605 127,463 51,617 40.5% 141,790 203 18 185
2041-2042 129,864 49,271 37.9% 110,412 129,864 49,479 38.1% 110,606 208 225 194
2042-2043 133,603 43,766 32.8% 90,755 133,603 43,966 32.9% 90,955 200 425 199
2043-2044 137,380 42,790 31.1% 72,794 137,380 42,998 31.3% 72,985 208 633 192
5 Year Totals 465,208 316,326 68.0% 465,208 315,528 67.8% (798)
10 Year Totals 998,469 687,778 68.9% 998,469 686,778 68.8% (1,000)
20 Year Totals 2,247,014 1,285,132 57.2% 2,247,014 1,285,765 57.2% 633
GR S City Pension Fund for Firefighters and Police Officers 9
v in the City of Miami Beach
Page 755 of 1993
Scenario 3-Projected City Contributions as a%of Payroll
80.0% - -- --- -
70.0% --- :
60.0% i ' � —
50.0% —
I !
11---:I
40.0% i ,, y_-- —_
30.0% — —
20.0% - A'— . �i ' I
1—:1111-1 10.0% — — r-0.0�° —�1— ( r r I , 1 ~ 1I T t 1t
OSV CCV 61' OSV C9' �0 c) OQ� 'IPc) Q1 QIe)214 149 OZO Q0 QI 61)41 C5 OHO Off~ Oaf ob` O
ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti 1, ti
61' 61' , OHO Orli, (61' 461' , Q1" Opti 61) 6)) 0)) 6)) 61' Ori, 61) 092' 3) , OP0, Ory (4)' ON
ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti
® Current Plan Scenario 3 -3 year FAME and
updated LOD diability benefit,
Firefighter Only
G 117;s City Pension Fund for Firefighters and Police Officers 10
in the City of Miami Beach
Page 756 of 1993
Scenario 4 - For Tier 3, Tier 4 and Tier 5 current and future active Firefighter members, the FAME is the
greater of the average of the four (4) highest paid years or the four (4) last paid years prior to date of
retirement after taking into consideration the overtime limit. Additionally, for all current and future active
Firefighter members,the service incurred disability benefit is the accrued benefit with a minimum of 50% of
current salary at time of disability.
The following Tables show projected covered payroll, comparison of projected City and Unfunded Actuarial
Accrued Liability (UAAL) under the baseline forecast versus Scenario 4-($1,000s).
Scenario 4-4 year FAME and
updated LOD diability benefit,
Current Plan Firefighter Only
Projected Projected Increase/ Cumulative Increase/
Contribution Annual Projected Annual Projected (Reduction) Inc/(Red) (Reduction)
Fiscal Pensionable Net City Cost Pensionable Net City Cost in Net in Net in
Year Payroll Amount %of Pay UAAL Payroll Amount %of Pay UAAL City Cost City Cost UAAL
2024-2025 85,775 55,019 64.1% 401,283 85,775 54,732 63.8% 400,748 (287) (287) (535)
2025-2026 89,989 59,981 66.7% 438,131 89,989 59,677 66.3% 437,286 (305) (592) (845)
2026-2027 93,620 63,354 67.7% 455,247 93,620 63,051 67.3% 454,382 (303) (895) (865)
2027-2028 96,532 67,896 70.3% 491,878 96,532 67,599 70.0% 491,018 (298) (1,193) (861)
2028-2029 99,293 70,075 70.6% 479,790 99,293 69,784 70.3% 478,936 (292) (1,484) (854)
2029-2030 101,992 71,947 70.5% 463,631 101,992 71,666 70.3% 462,785 (281) (1,765) (846)
2030-2031 104,292 73,374 70.4% 444,349 104,292 73,110 70.1% 443,517 (265) (2,030) (831)
2031-2032 106,632 75,402 70.7% 421,540 106,632 75,149 70.5% 420,731 (254) (2,284) (809)
2032-2033 108,847 75,449 69.3% 396,086 108,847 75,213 69.1% 395,295 (236) (2,520) (791)
2033-2034 111,497 75,279 67.5% 366,749 111,497 75,061 67.3% 365,984 (218) (2,737) (765)
2034-2035 114,277 72,173 63.2% 335,557 114,277 71,971 63.0% 334,821 (202) (2,940) (736)
2035-2036 116,642 68,115 58.4% 302,827 116,642 67,932 58.2% 302,118 (183) (3,123) (709)
2036-2037 118,614 69,872 58.9% 271,047 118,614 69,701 58.8% 270,371 (170) (3,294) (676)
2037-2038 121,274 69,379 57.2% 241,928 121,274 69,216 57.1% 241,281 (163) (3,456) (647)
2038-2039 123,958 67,506 54.5% 209,464 123,958 67,348 54.3% 208,844 (158) (3,614) (621)
2039-2040 125,469 63,067 50.3% 175,748 125,469 62,914 50.1% 175,153 (152) (3,767) (595)
2040-2041 127,463 51,414 40.3% 141,605 127,463 51,258 40.2% 141,039 (156) (3,923) (566)
2041-2042 129,864 49,271 37.9% 110,412 129,864 49,108 37.8% 109,870 (163) (4,086) (542)
2042-2043 133,603 43,766 32.8% 90,755 133,603 43,593 32.6% 90,237 (173) (4,259) (518)
2043-2044 137,380 42,790 31.1% 72,794 137,380 42,609 31.0% 72,300 (181) (4,440) (494)
5 Year Totals 465,208 316,326 68.0% 465,208 314,842 67.7% (1,484)
10 Year Totals 998,469 687,778 68.9% 998,469 685,040 68.6% (2,737)
20 Year Totals 2,247,014 1,285,132 57.2% 2,247,014 1,280,692 57.0% (4,440)
GR S City Pension Fund for Firefighters and Police Officers 11
y J in the City of Miami Beach
Page 757 of 1993
Scenario 4-Projected City Contributions as a%of Payroll
80.0% -_____-________ --- -- --
70.0% --- - –. >,— _ 1-.1 ---- —
1 f ! " 1 _
60.0%
a
1.
50.0% r _ '' L to ;i ._
• i i
40.0% , { i ,
6 �9{ .1 ..1� _� 1 I � 1 t .' vl
ti 1
30.0% i 1 l i t
20.0% i i t �} �l s _
I
e
I f
10.0% _ i--- ,r— 3 �— ,I— ! i .{ ! .i
s a ,
I1
i , 1 i i
0.0% 1 1 . I .,_-,T_.._ I I I 1 1 f i "---T- 1 '.'1
,tib ti� til 'L% ti° ,,0 3? 3ti `�`� .�� �4 3° �1 3% .5C NQ dti p'y 0') DQ`
.lo ,tio .10 ,y0 ,lo ,tio ,10 .10 ,10 .10 ,10 ,lo ,10 ,LO ,10 ,10 ,10 ,LO ,10 ,lo
o�° o�� oti( 0�A otic oy� o02 o`ti o"ti ol3 01 ooh o�(o o0� o0)` o'bc o°o oati Doti oc3
ti ti ti ti ti ti ti ti ti ti '19 ti ti ti ti ti ti ti
'1, ti
® Current Plan 1= Scenario 4-4 year FAME and
updated LOD diability benefit,
Firefighter Only
---
‘1170s City Pension Fund for Firefighters and Police Officers 12
in the City of Miami Beach
Page 758 of 1993
OUTLINE OF PRINCIPAL PROVISIONS OF THE RETIREMENT FUND
PRIOR TO ANY PROPOSED CHANGES INCLUDED IN THIS STUDY
A. Relevant Provisions:
The Fund was created under Chapter 23414, Laws of Florida, Special Act of 1945, as most recently amended
by Ordinance No. 2023-4533 adopted February 1, 2023 and reflecting the most recent Collectively Bargained
Agreements executed December 2, 2022 and January 10, 2023 for Firefighters and Police Officers,
respectively.
B. Eligibility Requirements:
Any full-time employee of the City who is certified as a Firefighter or Police Officer as a condition of
employment.
C. Membership Tiers:
Tier 1- Members hired prior to July 14, 2010
Tier 2- Members hired on or after July 14, 2010 but prior to September 30, 2013
Tier 3- Members hired on or after September 30, 2013 but prior to June 8, 2016 for the Fire Department
and July 20, 2016 for the Police Department
Tier 4- Members hired on or after June 8, 2016 but prior to May 8, 2019 for the Fire Department and hired
on or afterJuly 20, 2016 but prior to July 31, 2019 for the Police Department
Tier 5- Members hired on or after May 8, 2019 for the Fire Department and July 31, 2019 for the Police
Department
D. Credited Service:
All periods of employment as an Employee for which contributions have been made to the Fund together
with all service in the uniformed services of the United States required to be included.
E. Pre-Employment Service:
Members with at least 5 years of credited service (10 years for Tier 5 members) may purchase
pre-employment military service. Pre-employment military service must be purchased within 24 months
following the date the member completes 5 years of credited service (10 years for Tier 5 members) under
the pension fund. A member may purchase up to two years of pre-employment military service at the
accrual rate of 3% per year.
The price for each year purchased shall be of 10.0% (10.5% for members hired on or after September 30,
2013) of the member's Salary during the 12 calendar months immediately preceding the date of such
purchase.
GR S City Pension Fund for Firefighters and Police Officers 13
J in the City of Miami Beach
Page 759 of 1993
F. Pensionable Pay:
Pensionable pay is defined as base pay, any premiums that longevity is calculated on, longevity pay,
pensionable overtime and any other pay negotiated as pensionable. Effective July 14, 2010, off-duty
pay is pensionable for any member who is eligible for overtime and receives off-duty compensation
through the City. Effective September 30, 2013, pensionable overtime is limited to 300 hours per
calendar year.
1. Overtime and Off-Duty pay included in pension computation for Police Officers:
• Pensionable overtime pay not exceeding 300 hours per calendar year and off duty is limited
in each year to an amount that is equal to 11% of highest annualized pay rate for the same
salary rank that the member is in at time of retirement.
• The 11% limitation shall not apply to any member who holds the rank of sergeant or
lieutenant on September 30, 2013, or any Police Officer promoted to the rank of sergeant
prior to the date the 2013 Certified Police Sergeant Promotional Register expired in 2015. For
these members, the inclusion of overtime and / or off duty in the member's salary shall be
limited in each year to an amount which is equal to 70% of the difference between the
member's annualized pay rate at retirement and the highest annualized pay rate for the next
higher salary rank.
• For any members who self-demote they will become subject to the eleven percent (11%)
limitation on overtime and off-duty compensation.
2. Overtime and Off-Duty pay included in pension computation for Firefighters:
• Pensionable overtime pay not exceeding 300 hours per calendar year and off duty is limited
in each year to an amount that is equal to 11% of highest annualized pay rate for the same
salary rank that the member is in at time of retirement.
G. Final Average Monthly Earnings(FAME):
Tier 1 and eligible to retire on or after September 30, 2015 - the greater of the average of the 3
highest paid years or the 3 last paid years prior to date of retirement after taking into consideration
the overtime limit.
Tier 2-the greater of the average of the 3 highest paid years or the 3 last paid years prior to date of
retirement after taking into consideration the overtime limit.
Tier 3,Tier 4 and Tier 5-the greater of the average of the 5 highest paid years or the 5 last paid years
prior to date of retirement after taking into consideration the overtime limit.
V�+ R S City Pension Fund for Firefighters and Police Officers 14
IS in the City of Miami Beach
Page 760 of 1993
H. Normal Retirement:
1. Eligibility:
Tier 1 and eligible to retire on or after September 30, 2013-the earlier of attainment of age 50 or Rule
of 70(must attain age 47) or reach the 85% maximum pension benefit regardless of age
Tier 2 and Tier 3- the earlier of attainment of age 50 with 5 years of creditable service or Rule of 70
(must attain age 48) or reach the 85% maximum pension benefit regardless of age
Tier 4 and Tier 5 - the earlier of attainment of age 52 with 5 years of creditable service or Rule of 70
(must attain age 48) or reach the 85% maximum pension benefit regardless of age
2. Benefit:
All Tiers and eligible to retire on or after September 30, 2015:
3%x FAME x Credited Service up to 20 years plus 4%x Credited Service after 20 years
Benefit shall not exceed 85%of FAME.
A member's benefit multiplier for credited service earned before October 1, 2013 shall not be
reduced.
I. Deferred Retirement:
1. Eligibility:
Any first day of the month past Normal Retirement Date.
2. Benefit:
Benefit calculated as for Normal Retirement based upon service and pay to Deferred Retirement Date.
J. Disability Retirement:
1. Eligibility:
Totally and permanently disabled meaning incapacity to perform regular duty as Firefighter or Police
Officer(and completion of at least 5 years of Credited Service for non-service incurred disability).
Effective July 1, 2019, a Firefighter who becomes totally and permanently unable to perform useful
and efficient service as a Firefighter due to a diagnosis of cancer or circumstances that arise out of the
treatment of such cancer will be presumed to be disabled in-line of duty subject to the limitations in
Chapter 112.1816, Florida Statutes.
2. Benefit:
Accrued benefit(minimum of 85%of current salary at time of disability for service incurred disability).
GR S City Pension Fund for Firefighters and Police Officers 15
V J in the City of Miami Beach
Page 761 of 1993
K. Pre-Retirement Death Benefit:
1. Service Incurred:
Greater of accrued benefit or 85% of members salary payable as a monthly benefit to the spouse
until death or remarriage,to a Domestic Partner until death, marriage or entry into another Domestic
Partnership, to unmarried children in equal shares until age 18 (until age 22 if a full-time student or
until recovery from handicap if handicapped), or to dependent parents in equal shares.
2. Non-Service Incurred:
For members'with at least 5 years of service, accrued benefit is payable for the first 12 months after
death and 75% of the accrued benefit is payable thereafter (with a minimum benefit of 25% of
average monthly salary); Benefits are payable to the spouse until death or remarriage,to a Domestic
Partner until death, marriage or entry into another Domestic Partnership, to unmarried children in
equal shares until age 18 (until age 22 if a full-time student or until recovery from handicap or until
marriage if handicapped), or to dependent parents in equal shares. However, if the member has
been married or in a domestic partnership for less than 10 years, benefits are payable to the spouse
or domestic partner only for the life expectancy of the deceased member at time of death.
L. Vested Benefit:
1. Eligibility:
Any age prior to 50 with at least 5 years (10 years for Tier 5 members) of service for members who
terminate employment on or after September 30, 2013.
2. Benefit:
Return of employee contributions or accrued benefit upon attainment of age 50. If a member
terminates employment with less than 10 years of service and passes away prior to the normal
retirement date,the return of employee contributions is the only benefit.
M. Employee Contributions:
10.0% of pensionable wages (on a pre-tax basis) for members hired prior to September 30, 2013 and
10.5% of pensionable wages (on a pre-tax basis) for members hired on or after September 30, 2013; If
contributions are refunded to the member or to his or her beneficiaries, then interest is credited at the
rate of 3% per annum.
‘11:10S
City Pension Fund for Firefighters and Police Officers 16
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Page 762 of 1993
N. Payment of Retirement Benefit:
Benefit is payable to the member for his or her life. Upon death of member, except those retiring prior
to November 5, 2003, the standard benefit is a 75% joint and survivor annuity with a specified
beneficiary as provided under the plan. The specified beneficiary will receive a survivor annuity equal
to 100% of the total benefit for one year following the death of the member and thereafter 75% of the
total benefit until death or remarriage. However, upon death, if the member has been married or in a
domestic partnership for less than 10 years, the survivor annuity is payable only for the life expectancy
of the deceased member at time of death.
In lieu of the standard benefit, the members may elect the actuarial equivalent of the 10 year certain
and life annuity,with a designated beneficiary, any of the following optional forms of payment:
• 75%joint and contingent survivor annuity with a designated beneficiary
• 66%%joint and contingent survivor annuity with a designated beneficiary
• 50%joint and contingent survivor annuity with a designated beneficiary
• 25%joint and contingent survivor annuity with a designated beneficiary
• 10 year certain and life annuity with a designated beneficiary
• Life of member only
Members who retired prior to November 5, 2003 were subject to different normal and optional forms of
payment.
O. Deferred Retirement Option Program (DROP):
Police Officers and Firefighters are eligible to participate in a Deferred Retirement Option Program
(DROP) upon meeting eligibility for a normal service retirement.
Operations of the DROP:
1. Member contributions to the Pension Plan will cease upon entering the DROP.
2. The member's monthly retirement benefit, based on final average earnings and service, will be
calculated as of the date prior to them entering the DROP.
3. The member will cease to accrue additional pension benefits (with the exception of the COLA under
the pension plan).
4. The member will no longer be eligible for Disability or Pre-Retirement Service Connected Death
benefits from the Pension Plan.
5. The member's monthly pension will be deposited into the selected investment vehicles.
6. Members who enter the DROP on or after June 8, 2016 for Fire Department members and July 20,
2016 for Police Department members may participate in DROP for a period not to exceed ninety-six
(96) months.
G City Pension Fund for Firefighters and Police Officers 17
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Page 763 of 1993
Notwithstanding the above, participation may not continue beyond the date when the member's
combined years of creditable service and time in the DROP equals 456 months for members who
enter the DROP on or after September 1, 2012.
Members who enter the DROP on or after October 1, 2015 but prior to June 8, 2016 for Fire
Department members and July 20, 2016 for Police Department members may extend their DROP
participation period by up to 36 months for a total maximum DROP participation period not to exceed
ninety-six (96) months.
7. The member will not have access or be able to borrow against any of the funds accumulated in their
DROP account.
8. The member may sever employment with the City at any time during the DROP period. Such
separation will terminate their participation in the DROP.
9. No payment will be made from the DROP account until the member severs employment with the
City.
10. Following severance of employment, the funds in the DROP will be paid under the DROP Account
Payment Options the member selected. The member will also start receiving their monthly pension
which was previously being deposited in the DROP.
11. A 2.5% COLA (1.5% per year for participants hired on or after July 14, 2010) is paid annually on the
anniversary date of the member's retirement.
Members hired before June 8, 2016 for Fire Department members and July 20, 2016 for Police
Department members who elect to extend or enter the DROP and participate for more than 5 years
will have no COLA adjustment applied for years six (6), seven (7), and eight (8) while participating in
the DROP. Members hired on or after June 8, 2016 for Fire Department members and July 20, 2016 for
Police Department members will receive a zero percent (0%) COLA for the first (1st), second (2nd),
third (3rd) and fourth (4th) annual adjustment dates while participating in the DROP.
P. Cost-of-Living Adjustment:
Effective October 1, 2010, after 1 year of retirement, benefits are increased by 2.5% per year (1.5% per
year for participants hired on or after July 14, 2010), compounded annually, on the anniversary date of
each member's retirement.
For members retired prior to October 1, 2010, benefit increases occur on the first of October each year.
Members whose grandfathered Base Plan benefit is greater than the benefit otherwise provided by this
plan will receive the applicable cost-of-living adjustment on that basis (2%a year beginning the October
three years after retirement) until such time as the benefit from this plan with 2.5% cost-of-living
exceeds that comparable grandfathered Base Plan benefit.
® City Pension Fund for Firefighters and Police Officers 18
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Page 764 of 1993
Q. Changes Since Previous Actuarial Valuation
None.
City Pension Fund for Firefighters and Police Officers 19
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Page 765 of 1993
ACTUARIAL ASSUMPTIONS AND METHODS
PRIOR TO ANY PROPOSED CHANGES INCLUDED IN THIS STUDY
A. Mortality
For healthy participants during employment, PUB-2010 Headcount Weighted Safety Employee Female
Mortality Table and Safety Below Median Employee Male Mortality Table, both set forward 1 year,
with fully generational mortality improvements projected to each future decrement date with Scale
M P-2018.
For healthy participants post employment, PUB-2010 Headcount Weighted Safety Healthy Retiree
Female Mortality Table and Safety Below Median Healthy Retiree Male Mortality Table, both set
forward 1 year, with fully generational mortality improvements projected to each future decrement
date with Scale MP-2018.
For disabled participants, 80% PUB-2010 Headcount Weighted General Disabled Retiree Mortality
Table/20%PUB-2010 Headcount Weighted Safety Disabled Retiree Mortality Table,separate rates for
males and females,without projected mortality improvements.
Pre-retirement Post-retirement
Sample Future Life Future Life
Ages Expectancy(Years) Expectancy(Years)
(2023) Male Female Male Female
45 40.93 44.88 37.48 41.66
50 35.78 39.69 32.65 36.48
55 30.70 34.54 27.87 31.44
60 25.74 29.47 23.27 26.64
62 23.80 27.46 21.53 24.79
Pre-retirement Post-retirement
Sample Future Life Future Life
Ages Expectancy(Years) Expectancy(Years)
(2043) Male Female Male Female
45 42.65 46.42 39.54 43.56
50 37.46 41.20 34.62 38.35
55 32.33 36.03 29.77 33.27
60 27.31 30.92 25.06 28.39
62 25.35 28.88 23.27 26.50
B. Investment Return
7.30%, compounded annually, net of investment expenses includes inflation at 3.00%. The
investment return is scheduled to be scaled down to 7.20% in the October 1,2024 Actuarial Valuation
and thereafter.
R S City Pension Fund for Firefighters and Police Officers 20
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Page 766 of 1993
C. Expenses
Prior year's actual administrative expenses.
D. Employee Withdrawal Rates
Representative values of the assumed annual rates of withdrawal among members in active service
are as follows:
Withdrawal Withdrawal
Age . Rate r - Age Rate
20 2.00% 35 1.25%
25 1.75% • 40 1.00%
30- : : 1.50% 45 0.75%
E. Disability Rates
Representative values of the assumed annual rates of disability among members in active service are
as follows:
Disability " Disability
Age. " . Rates Age - Rate
20 0.07%. • 45"" 0.58%
25 0.11% 50 0.99%
30 0.16% - 55 1.42%
35 0.22% " 60 - 2.00%
40 0.32% • 64- • - • 2.69%
For Firefighters, 30%of disabilities are assumed to be non-service incurred- 70%service incurred.
For Police Officers, 35%of disabilities are assumed to be non-service incurred-65%service incurred.
‘10:109S City Pension Fund for Firefighters and Police Officers 21
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Page 767 of 1993
F. Salary Increase Factors
Representative values of the assumed annual rates of future salary increase are as follows:
Merit Salary. Merit Salary
-Age-. - Increase'- `. A>;e Increase
•
20 _' 3.7% 45
25 7'.7%- 50 - 2.7% .:
•
30 -' 6.7% '55 - 2.7%,
35 3.7%
40 -2.7%.'; : 64, - 0:7%
In addition to the average assumed salary increase rates shown above the expected cost of living
increases are as follows:
COLA Salary, Weighted
FYE. Increase Average Increase.*
-2024'.` ;` 3.00% '6.68%
2025 and- 2.18% 5.66% •
thereafter
The cost of living increases shown above are based long term expected increases of 2.18%annually.
*The weighted average increase shown is based on aging of the current active census demographics.
G. Payroll Growth Assumption
The aggregate compensation used to compute the accrued liability contribution rate is assumed to
increase at a rate of 3.5% per year. For purposes of financing the unfunded liabilities, the payroll
growth assumption is assumed to increase at a rate of 3.5%per year- not greater than historical 10-year
average (5.1%as of October 1, 2023) and not less than 0%.
RS City Pension Fund for Firefighters and Police Officers 22
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Page 768 of 1993
H. Retirement
All members are assumed to retire at age 50 with 26.25 years of service, but not later than age 65. Retirement
is assumed to occur in accordance with the following rates:
Rate of Retirement
Service
Meeting Rule of 70 Not Meeting Rule of 70
Less than 20 30% 8%
20 45% 8%
21 45% - 8% -
22 .50% V 8%
23 50% 20%
24 -70%. 60%.
25 •70%
More than 25 , 100% - - V 100%
I. DROP Assumption
80%of all active participants will participate in the DROP.
Leave DROP V_Enterthe DROP on or after
October 1,2015
Prior to 5 years 0%,
After 5 years. 5%°,
After 6 years 5%
After 7,years 10%
After8years - 100% - -`
The recent extension of the DROP may alter the retirement experience of the Fund.
DROP assumptions will need to be monitored in light of future DROP experience.
J. Overtime and Off-Duty Pay Limitation
No members excluded from the eleven percent (11%) limitation on overtime and off-duty compensation are
assumed to self-demote.
G R S City Pension Fund for Firefighters and Police Officers 23
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Page 769 of 1993
K. Loadings for Contingencies
Pre-Employment Service: A City contribution of 0.275% of annual pensionable payroll is added to provide
for the purchase (or buyback) of pre-employment military service and any probationary service by the
membership.
Transfers into Fund from other City pension systems: A City contribution of 0.025%of annual pensionable
payroll is added to provide for the transfer of service under another City pension system. This load does
not apply to Tier 5 Police members.
L. Marital Assumptions
1. 77% of members are assumed married or entitled to benefits for dependents, including registered
domestic partners.
2. Male spouses are assumed to be three years older than female spouses.
M. Smoothed Asset Valuation Method
The method used for determining the smoothed value of assets phases in the deviation between the
expected and actual return on assets at the rate of 20% per year. The smoothed value of assets will be
further adjusted to the extent necessary to fall within the corridor whose lower limit is 80% of the fair
market value of fund assets and whose upper limit is 120%of the fair market value of fund assets.
N. Actuarial Cost Methods
Normal Retirement,Termination, Disability, and Death Benefits: Entry-Age-Actuarial Cost Method
Under this method the normal cost for each active employee is the amount which is calculated to be a level
percentage of pay that would be required annually from his age at hire to his assumed retirement age to
fund his estimated benefits, assuming the Fund had always been in effect. The normal cost for the Fund is
the sum of such amounts for all employees. The actuarial accrued liability as of any valuation date for each
active employee or inactive employee who is eligible to receive benefits under the Fund is the excess of
the actuarial present value of estimated future benefits over the actuarial present value of current and
future normal costs. The unfunded actuarial accrued liability as of any valuation date is the excess of the
actuarial accrued liability over the smoothed value of assets of the Fund.
Vested Normal Retirement,Termination, Disability, and Death Benefits: Unit Credit Cost Method
Under this method,the actuarial present value of vested accrued benefits is an amount calculated to be the
sum of the present values of each individual's vested accrued or earned benefit under the Fund as of the
valuation date. Each individual's calculation is based on pay and service as of the valuation date.
The DROP accounts balance is included in the assets and liabilities as of the valuation date.
G R S City Pension Fund for Firefighters and Police Officers 24
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0. Disclosure of Assumptions
The retirement assumption was updated based on the most recent experience study performed for the
five years ending September 30, 2019. The salary increases and withdrawal assumptions were updated
based on the experience study performed for the five years ending September 30,2014. The investment
return assumption was lowered from 7.35% to 7.30%, as adopted by the Board on March 16, 2023, based
upon an Investment Return Assumption Study completed in 2023 along with recommendations from the
Investment Consultant. The mortality rates are based upon the July 1, 2023 FRS Actuarial Valuation, as
required under F.S., Chapter 2015-157.
P. Changes Since Previous Actuarial Valuation
1. Investment Return:
The interest rate used to calculate all liabilities was reduced from 7.35%to 7.30%.
G R S City Pension Fund for Firefighters and Police Officers 25
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GLOSSARY
Actuarial Accrued Liability The difference between the Actuarial Present Value of Future Benefits,
and the 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 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
Future Benefits at various future times to active members, retired members,
beneficiaries receiving benefits and inactive, non-retired 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. 67.
Actuarial Value of Assets 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.
City Pension Fund for Firefighters and Police Officers 26
in the City of Miami Beach
Page 772 of 1993
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.
Amortization Payment That portion of the plan contribution 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 The employer's periodic required contributions, expressed as a dollar
Contribution amount or a percentage of covered plan compensation. The annual
required contribution consists of the Employer Normal Cost and
Amortization Payment plus interest adjustment.
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 For plans that do not establish separate amortization bases (separate
Amortization Period components 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 actual experience and that
expected based upon a set of Actuarial Assumptions, during the period
between two actuarial valuations. To the extent that actual experience
differs from that assumed, Unfunded Actuarial Accrued Liabilities
emerge which may be larger or smaller than projected. Gains are due
to favorable experience, e.g., the assets earn more than projected,
salaries do not increase as fast as assumed, members retire later than
assumed, etc. Favorable experience means actual results produce
actuarial liabilities not as large as projected by the actuarial
assumptions. Losses are the result of unfavorable experience,i.e.,actual
results that produce Unfunded Actuarial Accrued Liabilities which are
larger than projected.
G R S City Pension Fund for Firefighters and Police Officers 27
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Page 773 of 1993
Funded Ratio The ratio of the Actuarial Value of Assets to the Actuarial Accrued
Liability.
GASB Governmental Accounting Standards Board.
GASB No. 67 and These are the governmental accounting standards that set the
GASB No. 68 accounting rules for public retirement plans and the employers that
sponsor or contribute to them. Statement No. 67 sets the accounting
rules for the plans themselves, while Statement No. 68 sets the
accounting rules for the employers that sponsor or contribute to public
retirement plans.
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
Liability Value of 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.
G R C J City Pension Fund for Firefighters and Police Officers 28
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P:954.527.1616 F:954.525.0083 ! www.grsconsulting.com
(111160
October 15, 2024
Ms. Marla Alpizar
Director,SHRM-SCP
Miami Beach
Human Resources Department
1700 Convention Center Drive
Miami Beach, FL 33139
Re: Actuarial Study—Benefit Changes for Firefighters and Police Officers
Dear Ms.Alpizar:
As requested, we are pleased to enclose our Actuarial Study as of October 1, 2023 illustrating the
financial impact of a proposed change in pensionable payroll for actuarial valuation purposes under the
City Pension Fund for Firefighters and Police Officers in the City of Miami Beach (Fund). This study was
originally performed at the request of the Unions.
Background—Currently the Fund provides:
> Off-duty pay is not included as pensionable pay for command staff members.
Proposed Changes—We understand the Unions are interested in determining the financial impact of the
following proposed Fund change:
> For all current and future active command staff members,changing the definition of Pensionable
Pay to include off-duty pay.
Results—The following table summarizes the projected annual change in the minimum required City
contribution as a dollar amount and as percentages of projected annual pensionable payroll excluding
DROPs ($86,197,130)and projected annual pensionable payroll including DROPs($112,771,837). For
comparison purposes,the minimum required City contributions as of the October 1, 2023 Actuarial
Valuation is$55,019,105 (64.1%/49.0%) for the fiscal year ending September 30, 2025.
One East Brcwyd Boulevard Suite 505 't Ft.Lauderdale,Florida 33301-1804
Ms. Marla Alpizar
October 15, 2024
Page Two
Estimated Change in Annual
Proposed Changes City Required Contribution
include Off-duty pay in pensionable pay
for all current and future active + $lO5,911
(+0.1%/+O
l��)
conornandstaffrnern6eo ' '
As requested, we also reviewed the actuarial impact of changing the DROP participation from a
maximum of 96 months to a maximum of 120 months. We understand this change would be cost
neutral to the plan (not significantly increasing or decreasing the estimated annual City required
contribution to the Fund).
Actuarial Assumptions and Methods, Fund Provisions,Financial Data and Member Census Data—The
actuarial assumptions and methods, member census data and financial data utilized for purposes of our
Actuarial Study are the same actuarial assumptions and methods, member census data and financial
data outlined in our October 1, 2023 Actuarial Valuation with the following exceptions:
�
Thirteen (13) active command staff members were identified, members'off-duty pays were
provided by the Pension Board for fiscal year ending 2023 and used to individually adjust the
2023 pensionable pay. For the command staff who did not have off-duty pay in the fiscal year
ending 2023, an average of the group off-duty pay was used. DROP member payroll was
unchanged in this Scenario.
Fund provisions employed for purposes of our Actuarial Study are the same Fund provisions utilized for
the October 1, 2023 Actuarial Valuation with the exception of the proposed benefit changes described
above.
Other Considerations—Additionally, under Governmental Accounting Standards Board (GASB)
Statement Number 68,we understand the full cost of benefit changes must be recognized immediately
in the Pension Expense (for accounting, not funding).
Risk Assessment Risk assessment may include scenario tests,sensitivity, or stress tests,stochastic
modeling and a comparison of the present value of benefits at low-risk discount rates. We are prepared
to perform such assessment to aid in the decision making process. Please refer to the October 1,2023
Actuarial Valuation Report dated April 11, 2024 for additional discussion regarding the risks associated
with measuring the accrued liability and the minimum funding payment.
Ms. Marla Alpizar
October 15, 2024
Page Three
This Actuarial Study describes the estimated financial effect of the proposed Fund provision changes on
the Fund,from a neutral perspective and is not intended as a recommendation in favor of the benefit
changes nor in opposition to the benefit changes.
If all actuarial assumptions are met and if all current and future minimum required contributions are
paid, Fund assets will be sufficient to pay all Fund benefits,future contributions are expected to remain
relatively stable as a percent of payroll and the funded status is expected to improve. Fund minimum
required contributions are determined in compliance with the requirements of the Florida Protection of
Public Employee Retirement Benefits Act, Firefighters Retirement Chapter 175 and Police Officers
Retirement Chapter 185 of Florida statute with normal cost determined as a level percent of covered
payroll and a level percent amortization payment using an initial amortization period of 30 years.
The Unfunded Actuarial Accrued Liability(UAAL)and the Funded Ratio may not be appropriate for
assessing the sufficiency of Fund assets to meet the estimated cost of settling benefit obligations but
may be appropriate for assessing the need for or the amount of future contributions. The UAAL and
Funded Ratio would be different if they reflected the market value of assets rather than the smoothed
value of assets.
These calculations are based upon assumptions regarding future events. However, the Fund's long term
costs will be determined by actual future events,which may differ materially from the assumptions
made. These calculations are also based upon present and proposed Fund provisions that are outlined
or referenced in this Actuarial Study.
All actuarial assumptions used in this Actuarial Study are reasonable for the purposes of this study. The
combined effect of the assumptions is expected to have no significant bias (i.e. not significantly
optimistic or pessimistic). All actuarial assumptions and methods used in the study follow the guidance
in the applicable Actuarial Standards of Practice.
If you have reason to believe the assumptions used are unreasonable,the Fund provisions are
incorrectly described or referenced, important Fund provisions relevant to this proposed Actuarial Study
are not described or that conditions have changed since the calculations were made,you should contact
the undersigned prior to relying on information in this Actuarial Study.
If you have reason to believe that the information provided in this Actuarial Study is inaccurate, or is in
any way incomplete,or if you need further information in order to make an informed decision on the
subject matter of this report, please contact the undersigned prior to making such decision.
Future actuarial measurements may differ significantly from the current measurements presented in
this Actuarial Study due to such factors as the following: Fund's 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 and changes in Fund provisions or applicable law. Due to the limited scope of
QRS
Ms. Maria Alpizar
October 15, 2024
Page Four
the actuary's assignment, the actuary did not perform an analysis of the potential range of such future
measurements.
This Actuarial Study should not be relied on for any purpose other than the purpose described in the
primary communication. Determinations of the financial results associated with the benefits described
in this Study in a manner other than the intended purpose may produce significantly different results.
This Actuarial Study was prepared using ProVal's valuation model, a software product of Winklevoss
Technologies. We are relying on the ProVal model. We performed tests of the ProVal model with this
assignment and made a reasonable attempt to understand the developer's intended purpose of,general
operation of, major sensitivities and dependencies within, and key strengths and limitations of the
ProVal model. In our professional judgment, the ProVal valuation model has the capability to provide
results that are consistent with the purposes of the valuation and has no material limitations or known
weaknesses.
This Actuarial Study has been prepared by actuaries who have substantial experience valuing public
employee retirement systems. To the best of our knowledge the information contained in this report is
accurate and fairly presents the actuarial position of the 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.
This Actuarial Study was prepared at the request of the Unions and is intended for use by the Unions
and those designated or approved by the Unions. This Actuarial Study may be provided to parties other
than the Unions only in its entirety and only with the permission of the Unions. GRS is not responsible
for unauthorized use of this Actuarial Study.
The signing actuaries are independent of the Fund Sponsor and are Members of the American Academy
of Actuaries and meet the Qualification Standards of the American Academy of Actuaries to render the
actuarial opinion contained herein.
If you should have any question concerning the above or if we may be of further assistance with this
matter, please do not hesitate to contact us.
Sincerest regards,
GABRIEL, ROEDER, SMITH & COMPANY
/ gaiittLi4G
----—
Shelly L.Jones,A.S.A., E.A., M.A.A.A., F.C.A. Jennifer M. Borregard, E.A., M.A.A.A., F.C.A.
Actuarial Study as of October 1, 2023
Actuarial Valuation Proposed Change
For all current and future active command
staff members,changing the definition of
_
Current Plan Pensionable Pay to include off-duty pay.
%of Projected %of Projected
Cost Pensionable Cost Pensionable
Data Payroll Data Payroll
��
A. Participants
1. Active Employees 516 N/A 516 N/A
2. Terminated Vested(including dormants) 30 N/A 30 N/A
3. Receiving Benefits(including DROPS) 818 N/A 818 N/A
4. Projected Annual Pensionable Payroll $ 85'774'916 100.0% $ 86,197,130 100.0m
5. Projected Annual Pensionable Payroll
(indud/nXoRoPs)~ $ 112.349,623 1310% $ 112,771.837 130.8%
B. Present Value of Future Benefits $ 1'821,600'745 2123.7% $ 1'823'448'442 2115.4%
C. Total Normal Costs $ 28,420,733 33.1% $ 28,477,932 33.0%
D. Actuarial Accrued Liability $ 1'558,188'336 1816.6% $ 1,559,744,246 1809.5%
E. Fund Assets
1. Market Value of Assets $ 1,077'274'635 1255,9% $ 1'077.274*35 1249.8m
2. Smoothed Value of Assets $ 1'156'e05'670 1348.8m $ 1'156'905,670 1342.2%
F. Unfunded Actuarial Accrued Liability $ 401'282.66* 467.8m $ 402'838.576 467.3m
G. Fund Ratio
1. Market Value of Assets Basis(E.l./D.) 69.1% N/A 69.1% N/A
2. Smoothed Value ofAssets Basis(s.2./D.) 74.2% N/A 74.2% N/A
H. Member Contribution $ 8.764.291 10.2% $ 8'806,620 10.2%
I. City Minimum Funding Payment $ 55'019'105 64.1% $ 55,125'016 64.0%
(%of Projected Annual Payroll inciuding DROP) 49.0%� 48.9%
]. Increase/(Decrease)in City Minimum Funding Payment N/A N/A $ 105'911 01%
(%ofProjected Annual Payroll indudingDROP)
�
0.1%
City Pension Fund for Firefightenand Police Officers
QS
Page77B0f1993 in the City of Miami Beach -5 -
November 11, 2024
Ms. Donna Brito
Executive Director
City Pension Fund for Firefighters and Police Officers
in the City of Miami Beach
1691 Michigan Avenue,Suite 355
Miami Beach, Florida 33139
Re: City Pension Fund for Firefighters and Police Officers in the City of Miami Beach
Actuarial Impact Statement
Dear Donna:
As requested,we are pleased to enclose twenty(20) copies of our Actuarial Impact
Statement as of October 1, 2023 for filing the proposed Ordinance under the City Pension
Fund for Firefighters and Police Officers in the City of Miami Beach (Fund) with the State of
Florida (copy enclosed) prior to second reading.
Background—Currently,the Fund provides:
Off-duty pay is not included as pensionable pay for command staff members.
'r Final Average Monthly Earnings (FAME) is the greater of the average of the five (5)
highest paid years or the five (5) last paid years prior to date of retirement after
taking into consideration the overtime limit for Tier 3,Tier 4 and Tier 5 active
members.
y The service incurred disability benefit is the accrued benefit with a minimum of 85%
of current salary at time of disability for all active members.
Members who enter the DROP on or after June 8, 2016 for Fire Department
members may participate in DROP for a period not to exceed ninety-six(96) months.
r Firefighters hired on or after May 8, 2019 (Tier 5)who transfer funds attributable to
the members' accumulated total service in the other City System to this System
receive credited service under this System for the same period of service.
Proposed Ordinance—The proposed Ordinance provides:
i Include off-duty pay for active command staff members, subject to the eleven
percent(11%) limitation.
One East Broward Boulevard ` Suite 505 I Ft.Lauderdale,Florida 33301-1804
Ms. Donna Brito
November 11, 2024
Page Two
FAME is the greater of the average of the three (3) highest paid years or last three
(3)years prior to date of retirement for Tier 3,Tier 4 and Tier 5 active Firefighters.
> The service incurred disability benefit is the accrued benefit with a minimum of 50%
of current salary at time of disability for active Firefighters.
Firefighters who entered the DROP on or after June 8, 2016 may participate in DROP
for a period not exceed one-hundred twenty(120) months.
Firefighters hired on or after May 8,2019(Tier 5)who transfer funds attributable to
up to 10 years of the members' accumulated total service in the other City System
to this System will receive credited service under this System for the same period of
service.
Cost—The total impact of the proposed Ordinance results in an expected decrease in the
first year Net City Minimum Required Contribution of$(70,168) (-0.1%/-0.1%). The figures
in parentheses is the Net City Minimum Required Contribution expressed as a percentage of
projected annual pensionable payroll excluding DROP payroll ($86,197,130)and projected
annual pensionable payroll including DROP payroll ($112,771,837) respectively for fiscal
year ending September 30, 2024.
Filing Requirements—We have prepared the Actuarial Impact Statement for filing with the
State of Florida. Please note that this Statement must be signed and dated on behalf of the
Board of Trustees. Copies of the Ordinance upon passage at first reading along with the
signed and dated Actuarial Impact Statement are generally required to be filed with the
State at the following address:
Mr. Douglas E. Beckendorf,A.S.A.
Bureau of Local Retirement Services
Division of Retirement
Building 8
Post Office Box 9000
Tallahassee, Florida 32315-9000
We understand the State requires funding any increases in costs no later than the fiscal
year next following the effective date of the Ordinance.
Please forward a signed copy of the Ordinance upon passage to update our files.
Actuarial assumptions and methods,Fund provisions,financial data and member census
data—The actuarial assumptions and methods, member census data and financial data
employed for purposes of our Actuarial Impact Statement are the same actuarial
Ms. Donna Brito
November 11, 2024
Page Three
assumptions and methods, member census data and financial data utilized for the October
1, 2023 Actuarial Valuation with the following exceptions:
• Thirteen (13) active command staff members were identified, members' off-duty
pays were provided by the Pension Board for fiscal year ending 2023 and used to
individually adjust the 2023 pensionable pay. For the command staff members who
did not have off-duty pay in the fiscal year ending 2023, an average of the group off-
duty pay was used. DROP member payroll was unchanged.
• 15%of disabilities are assumed to be non-service incurred—85% service incurred for
Firefighters
The Fund provisions employed for purposes of our Actuarial Impact Statement are the same
Fund provisions utilized in the October 1, 2023 Actuarial Valuation with the exception of the
proposed changes described above.
Other Considerations—Additionally, under Governmental Accounting Standards Board
(GASB)Statement Number 68,we understand the full cost of benefit changes must be
recognized immediately in the Pension Expense (for accounting, not funding).
Risk Assessment—Risk assessment may include scenario tests, sensitivity, or stress tests,
stochastic modeling and a comparison of the present value of benefits at low-risk discount
rates. We are prepared to perform such assessment to aid in the decision-making process.
Please refer to the October 1, 2023 Actuarial Valuation Report dated April 11, 2024 for
additional discussion regarding the risks associated with measuring the accrued lability and
the minimum funding payment.
This Actuarial Impact Statement describes the estimated future financial effect of the
proposed provision benefit changes on the Fund from a neutral perspective and is not
intended as a recommendation in favor of the benefit changes nor in opposition to the
benefit changes.
If all actuarial assumptions are met and if all current and future minimum required
contributions are paid, Fund assets will be sufficient to pay all Fund benefits, future
contributions are expected to remain relatively stable as a percent of payroll and the funded
status is expected to improve. Fund minimum required contributions are determined in
compliance with the requirements of the Florida Protection of Public Employee Retirement
Benefits Act, Firefighters Retirement Chapter 175 and Police Officers Retirement Chapter
185 with normal cost determined as a level percent of covered payroll and with a level
percent amortization payment using a closed amortization period of 30-years.
G R�
age o
Ms. Donna Brito
November 11, 2024
Page Four
The Unfunded Actuarial Accrued Liability(UAAL) may not be appropriate for assessing the
sufficiency of Fund assets to meet the estimated cost of settling benefit obligations but may
be appropriate for assessing the need for or the amount of future contributions. The UAAL
would be different if it reflected the market value of assets rather than the smoothed value
of assets.
These calculations are based upon assumptions regarding future events. However,the
Fund's long term costs will be determined by actual future events,which may differ
materially from the assumptions made. These calculations are also based upon present and
proposed Fund provisions that are outlined or referenced in this Actuarial Impact
Statement.
All actuarial assumptions used in this Actuarial Impact Statement are reasonable for the
purposes of this statement. The combined effect of the assumptions is expected to have no
significant bias (i.e. not significantly optimistic or pessimistic). All actuarial assumptions and
methods used in the statement follow the guidance in the applicable Actuarial Standards of
Practice.
If you have reason to believe the assumptions used are unreasonable,the Fund provisions
are incorrectly described or referenced, important Fund provisions relevant to this Actuarial
Impact Statement are not described or that conditions have changed since the calculations
were made, you should contact the undersigned prior to relying on information in this
Actuarial Impact Statement.
If you have reason to believe that the information provided in this Actuarial Impact
Statement is inaccurate, or is in any way incomplete, or if you need further information in
order to make an informed decision on the subject matter of this report, please contact the
undersigned prior to making such decision.
Future actuarial measurements may differ significantly from the current measurements
presented in this report due to such factors as the following: Fund 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) and changes in Fund provisions or applicable law. Due to the limited scope of our
assignment,we did not perform an analysis of the potential range of such future
measurements.
This Actuarial Impact Statement should not be relied upon for any purpose other than the
purpose described in the primary communication. Determinations of the financial results
� RS
age o
Ms. Donna Brito
November 11, 2024
Page Five
associated with the benefits described in this report in a manner other than the intended
purpose may produce significantly different results.
This Report was prepared using ProVal's valuation model, a software product of Winklevoss
Technologies. We are relying on the ProVal model. We performed tests of the ProVal
model with this assignment and made a reasonable attempt to understand the developer's
intended purpose of,general operation of, major sensitivities and dependencies within, and
key strengths and limitations of the ProVal model. In our professional judgment, the ProVal
valuation model has the capability to provide results that are consistent with the purposes
of the valuation and has no material limitations or known weaknesses.
This Actuarial Impact Statement has been prepared by actuaries who have substantial
experience valuing public employee retirement systems. To the best of our knowledge the
information contained in this report is accurate and fairly presents the actuarial position of
the Fund 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.
This Actuarial Impact Statement was prepared at the request of the Board and is intended
for use by the Board and those designated or approved by the Board. This Statement may
be provided to parties other than the Board only in its entirety and only with the permission
of the Board. GRS is not responsible for unauthorized use of this Statement.
The signing actuaries are independent of the Fund sponsor.
The undersigned are Members of the American Academy of Actuaries and meet the
Qualification Standards of the American Academy of Actuaries to render the actuarial
opinion contained herein.
If you should have any question concerning the above or if we may be of further assistance
with this matter, please do not hesitate to contact us.
Sincerest regards,
Gabriel, Roeder,Smith &Company
'Mai& i-critC24- 94.frutti-u.„ leauti-druzi
Shelly 1.Jones,ASA, EA, MAAA, FCA, CFA Jennifer M. Borregard, EA, MAAA, FCA
Consultant and Actuary Consultant and Actuary
Enclosures
cc: Mr. Frank Estevez
1�7 �5
Actuarial Impact Statement as of October 1, 2023
A. Description of Proposed Amendment
Pensionable Pay
Include off-duty pay for active command staff members, subject to the eleven percent(11%)
limitation.
Disability Benefits
The service incurred disability benefit is the accrued benefit with a minimum of 50%of current
salary at time of disability for active Firefighters.
Deferred Retirement Option Program (DROP)
Firefighters who entered the DROP on or after June 8, 2016 may participate in DROP for a period
not exceed one-hundred twenty(120) months.
Final Average Monthly Earnings (FAME)
FAME is the greater of the average of the three (3)highest paid years or last three (3)years prior
to retirement for active Firefighters who were hired on or after September 30, 2013 (Tier 3,Tier 4
and Tier 5).
Credited Sevice
Firefighters hired on or after May 8, 2019(Tier 5) who transfer funds attributable to up to 10 years
of the members' accumulated total service credit in the other city system to this System will
receive credited service under this System for the same period of service.
B. An estimate of the cost implementing this amendment (see attachment)
C. In my opinion, the proposed changes are in compliance with Part VII, Chapter 112, Florida Statutes
and Section 14, Article X of the Statement Constitution.
Aida/4 Ai/
rr ►2 ,20.714
hairman, Retirement Committee to
Page 785 of 1993
Actuarial Impact Statement as of October 1, 2023
All Members
Proposed
Valuation Ordinance
10/01/2023 10/01/2023
A. Participant Data
1. Active participants 516 516
2. Retired participants and beneficiaries
receiving benefits (including DROPS) 770 770
3. Disabled participants receiving benefits 48 48
4. Terminated vested participants (including dormants) 30 30
5. Annual Pensionable Payroll 82,874,315 $ 83,282,251
6. Projected Annual Pensionable Payroll 85,774,916 $ 86'197'130
7. Annual benefits payable to those currently
receiving benefits (including DROPs) 5 05,488'022 $ 85,488,023
B. Value of Assets
1. Smoothed Value 1'156'905'670 $ 1.156'905'670
2. MarketVa/ue �
_ 1'077'374^635 $ 1,077'274'635
C. Liabilities
1. Actuarial present value of future expected
benefit payments for active members
a. Retirement benefits 530,626.749 $ 535'195,502
b. Vesting benefits 2I'036'067 22,385'335
c. Death benefits 7,151'825 7'160'1I5
d. Disability benefits 40'604,763 36.979,849
e. Total 600.419'404 $ 601,620,711
2. Actuarial present value of future expected benefit
payments for terminated,vested members
(including dormants) 7'325,680 $ 7,335'680
3. Actuarial present value of future expected benefit
payments for members currently receiving benefits
a. Service retired (includes DROPs) 1.101'598.783 $ 1'101.598'783
b. Beneficiaries 61.786.496 61.786'495
c. Disability retired 50'470,383 50,470'383
d. Total 1,213.855,861 $ 1.213'855'661
4. Total actuarial present value of future
expected benefit payments 1,821,600\745 $ 1,822,802,052
5. Actuarial accrued liabilities 1,558,188'336 $ 1,559'695,831
6. Unfunded actuarial liabilities 401,282,666 $ 402'790,161
City Pension Fund for Firefighters and Police Officers
in the City of Miami Beach -2-
Page 786 of 1993
Actuarial Impact Statement as of October 1, 2023
All Members
Proposed
Valuation Ordinance
10/01/2023 10/01/2023
D. Statement of Accumulated Fund Benefits
1. Actuarial present value of accumulated vested
benefits
a. Participants currently receiving benefits $ 1,213,855,661 $ 1,213,855,661
b. Other participants 250,235,881 248,212,612
c. Total $ 1,464,091,542 $ 1,462,068,273
2. Actuarial present value of accumulated non-
vested fund benefits $ 13,336,965 $ 13,480,154
3. Total actuarial present value of accumulated
fund benefits $ 1,477,428,507 $ 1,475,548,427
E. Pension Cost
1. Total normal cost(including admin expenses) $ 28,420,733 $ 28,310,401
2. Payment required to amortize unfunded liability 32,777,927 32,858,697
3. Interest adjustment 298,132 299,572
4. Expected service buyback 246,150 247,374
5. Total required contribution $ 61,742,942 $ 61,716,044
6. Item 5 as a percentage of projected pensionable payroll 72.0% 71.6%
7. Estimated employee contributions $ 8,764,291 $ 8,806,620
8. Item 7 as a percentage of projected pensionable payroll 10.2% 10.2%
9. Estimated State contributions $ 120,549 $ 120,549
10. Item 9 as a percentage of projected pensionable payroll 0.1% 0.1%
11. Net amount payable by City $ 55,019,105 $ 54,948,937
12. Item 11 as a percentage of projected pensionable payroll 64.1% 63.7%
F. Disclosure of Following Items:
1. Actuarial present value of future salaries excluding
DROP payroll -attained age $ 824,274,854 $ 825,958,219
2. Actuarial present value of future employee
contributions- attained age $ 84,892,459 $ 85,060,795
3. Actuarial present value of future contributions
from other sources N/A N/A
4. Amount of active members' accumulated
contributions $ 77,373,909 $ 77,373,909
5. Actuarial present value of future salaries and
future benefits at entry age N/A N/A
6. Actuarial present value of future employee
contributions at entry age N/A N/A
GRS City Pension Fund for Firefighters and Police Officers
in the City of Miami Beach -3-
Page 787 of 1993
Actuarial Impact Statement as of October 1. 2023
Amortization balances are written down in proportion to amortization payments.
Current
Current Assumptions Remaining
Valuation Date Unfunded Amortization Funding
Established Unfunded Actuarial Accrued Liabilities Liabilities Payment Period
10/01/2001 Initial Unfunded Liability $ 8,732,239 S 1,234,134 8 years
10/01/2002 Method Update 10,498,071 1,341,603 9 years
10/01/2003 Fund Amendment 949,343 111,062 10 years
10/01/2003 Actuarial(Gain)/Loss 28,582,614 3,343,817 10 years
10/01/2004 Actuarial(Gain)/Loss 31,919,560 3,452,563 11 years
10/01/2005 Method Update (29,302,271) (2,954,524) 12 years
10/01/2005 Assumption Update 5,893,869 594,274 12 years
10/01/2005 Actuarial(Gain)/Loss 21,886,940 2,206,843 12 years
10/01/2006 Method Update (4,537,758) (429,446) 13 years
10/01/2006 Actuarial(Gain)/Loss 19,643,039 1,858,987 13 years
10/01/2007 Actuarial(Gain)/Loss 23,494,004 2,099,119 14 years
10/01/2008 Assumption Update 5,723,519 485,211 15 years
10/01/2008 Actuarial(Gain)/Loss 31,590,634 2,678,093 15 years
10/01/2009 Assumption Update 22,920,436 1,851,679 16 years
10/01/2009 Actuarial(Gain)/Loss 65,965,885 5,329,201 16 years
10/01/2010 Assumption Update 4,515,656 348,974 17 years
10/01/2010 Actuarial(Gain)/Loss 17,064,502 1,318,758 17 years
10/01/2011 Fund Amendment (3,111,811) (230,820) 18 years
10/01/2011 Assumption Update 17,185,034 1,274,706 18 years
10/01/2011 Actuarial(Gain)/Loss 30,568,972 2,267,465 18 years
10/01/2012 Assumption Update 7,950,242 567,707 19 years
10/01/2012 Actuarial(Gain)/Loss 26,767,462 1,911,399 19 years
10/01/2012 Fund Amendment (20,458,284) (1,460,876) 19 years
10/01/2013 Actuarial(Gain)/Loss 1,605,555 110,666 20 years
10/01/2013 Method Update (66,606,547) (4,590,970) 20 years
10/01/2014 Actuarial(Gain)/Loss (6,215,349) (414,512) 21 years
10/01/2014 Assumption Update 6,007,958 400,681 21 years
10/01/2015 Actuarial(Gain)/Loss 9,138,938 591,007 22 years
10/01/2015 Assumption Update 2,587,739 167,347 22 years
10/01/2015 Fund Amendment (8,805,492) (569,443) 22 years
10/01/2016 Actuarial(Gain)/Loss (11,928,002) (749,448) 23 years
10/01/2016 Assumption Update 36,992,353 2,324,266 23 years
10/01/2017 Actuarial(Gain)/Loss 8,420,625 514,958 24 years
10/01/2017 Assumption Update 7,314,573 447,318 24 years
10/01/2018 Actuarial(Gain)/Loss 6,883,895 410,416 25 years
10/01/2018 Assumption Update 7,634,664 455,177 25 years
10/01/2019 Actuarial(Gain)/Loss (1,348,970) (78,525) 26 years
10/01/2019 Fund Amendment and Assumption Update (16,601,767) (966,402) 26 years
10/01/2020 Actuarial(Gain)/Loss (2,424,622) (137,993) 27 years
10/01/2020 Assumption Update 19,658,862 1,118,852 27 years
10/01/2021 Actuarial(Gain)/Loss (31,830,877) (1,773,476) 28 years
10/01/2021 Assumption Update 24,322,584 1,355,147 28 years
G RS City Pension Fund for Firefighters and Police Officers
in the City of Miami Beach -4-
Page 788 of 1993
Actuarial Impact Statement as of October 1,2023
Amortization balances are written down in proportion to amortization payments.
Current
Current Assumptions Remaining
Valuation Date Unfunded Amortization Funding
Established Unfunded Actuarial Accrued Liabilities Liabilities Payment Period
10/01/2022 Actuarial(Gain)/Loss 19,915,854 1,087,545 29 years
10/01/2022 Assumption Update 11,042,773 603,013 29 years
10/01/2023 Actuarial(Gain)/Loss 52,234,466 2,798,655 30 years
10/01/2023 Assumption Update 8,841,556 473,719 30 years
10/01/2023 Proposed Ordinance 1,507,495 80,770 30 years
TOTAL 5 402,790,161 $ 32,858,697
This actuarial valuation and/or cost determination was prepared and completed by us or under our direct supervision, and we acknowledge
responsibility for the results. To the best of our knowledge, the results are complete and accurate, and in our opinion, the techniques and
assumptions used are reasonable and meet the requirements and intent of Part VII,Chapter 112, Florida Statutes. There is no benefit or expense
to be provided by the fund and/or paid from fund assets for which liabilities or current costs have not been established or other wise provided for
in the valuation. All known events or trends which may require material increase in fund costs or required contribution rates have been taken into
account in the valuation.
Intik& iirfrica"
g,.tive..c,/r...c. ifhwuc- aAJoi.
Shelly L Jones,A.S.A.,E.A. Jennifer Borregard,E.A. (J
Enrollment Number:23-08646 Enrollment Number:23-07624
Dated: November 11,2024
CR S City Pension Fund for Firefighters and Police Officers
in the City of Miami Beach -5-
Page 789 of 1993
Outline of Principal Provisions of the Pension Fund
A. Relevant Provions:
The Fund was created under Chapter 23414, Laws of Florida, Special Act of 1945, as most recently amended by
Ordinance No. 2023-4533 adopted February 1, 2023 and reflecting the most recent Collectively Bargained
Agreements executed December 2, 2022 and January 10, 2023 for Firefighters and Police Officers, respectively.
B. Eligibility Requirements:
Any full-time employee of the City who is certified as a Firefighter or Police Officer as a condition of
employment.
C. Membership Tiers:
Tier 1 - Members hired prior to July 14, 2010
Tier 2- Members hired on or after July 14, 2010 but prior to September 30, 2013
Tier 3 - Members hired on or after September 30, 2013 but prior to June 8, 2016 for the Fire Department and
July 20, 2016 for the Police Department
Tier 4 Members hired on or after June 8, 2016 but prior to May 8, 2019 for the Fire Department and hired on
or after July 20, 2016 but prior to July 31, 2019 for the Police Department
Tier 5- Members hired on or after May 8, 2019 for the Fire Department and July 31, 2019 for the Police
Department
O. Credited Service:
All periods of employtnent as an Employee for which contributions have been made to the Fund together with
all service in the uniformed services of the United States required to be included.
E. Pre-Employment Service:
Members with at least 5 years of credited service (10 years for Tier 5 members) may purchase pre-employment
military service. Pre-employment military service must be purchased within 24 months following the date the
member completes 5 years of credited service (10 years for Tier 5 members) under the pension fund. A
member may purchase up to two years of pre-employment military service at the accrual rate of 3% per year.
The price for each year purchased shall be of 10.0% (10.596 for members hired on or after September 30, 201])
of the member's Salary during the 12 calendar months immediately preceding the date of such purchase.
City Pension Firefighters onFvn�hor
andpo|iceOf�cen
CRoeS
in the City of Miami Beach 'a'
Page 790 of 1993
Outline of Principal Provisions of the Pension Fund
F. Pensionable Pay:
Pensionable pay is defined as base pay, any premiums that longevity is calculated on, longevity pay,
pensionable overtime and any other pay negotiated as pensionable. Effective July 14, 2010, off-duty
pay is pensionable for any member who is eligible for overtime and receives off-duty compensation
through the City. Effective September 30, 2013, pensionable overtime is limited to 300 hours per
calendar year. Effective [effective date of the ordinance], off-duty pay is pensionable for any member
who is not eligible for overtime and receives off-duty compensation through the City.
1. Overtime and Off-Duty pay included in pension computation for Police Officers:
• Pensionable overtime pay not exceeding 300 hours per calendar year and off duty is limited in
each year to an amount that is equal to 11% of highest annualized pay rate for the same salary
rank that the member is in at time of retirement.
• The 11% limitation shall not apply to any member who holds the rank of sergeant or lieutenant
on September 30, 2013, or any Police Officer promoted to the rank of sergeant prior to the date
the 2013 Certified Police Sergeant Promotional Register expired in 2015. For these members,
the inclusion of overtime and/or off duty in the member's salary shall be limited in each year to
an amount which is equal to 70% of the difference between the member's annualized pay rate at
retirement and the highest annualized pay rate for the next higher salary rank.
• For any members who self-demote they will become subject to the eleven percent (11%)
limitation on overtime and off-duty compensation.
2. Overtime and Off-Duty pay included in pension computation for Firefighters:
• Pensionable overtime pay not exceeding 300 hours per calendar year and off duty is limited in
each year to an amount that is equal to 11% of highest annualized pay rate for the same salary
rank that the member is in at time of retirement.
G. Final Average Monthly Earnings(FAME):
Tier 1 and eligible to retire on or after September 30, 2015 -the greater of the average of the 3 highest
paid years or the 3 last paid years prior to date of retirement after taking into consideration the
overtime limit.
Tier 2 - the greater of the average of the 3 highest paid years or the 3 last paid years prior to date of
retirement after taking into consideration the overtime limit.
Tier 3, Tier 4 and Tier 5 - the greater of the average of the 5 highest paid years (3 highest paid years for
Firefighters) or the 5 last paid years (3 last paid years for Firefighters) prior to date of retirement after
taking into consideration the overtime limit.
GR5 City Pension Fund for Firefighters and Police Officers
in the City of Miami Beach -7-
Page 791 of 1993
Outline of Principal Provisions of the Pension Fund
H. Normal Retirement:
1. Eligibility:
Tier 1 and eligible to retire on or after September 30 2013 - the earlier of attainment of age 50 or Rule of
70(must attain age 47) or reach the 85% maximum pension benefit regardless of age
Tier 2 and Tier 3 the earlier of attainment of age 50 with 5 years of creditable service or Rule of 70 (must
attain age 48) or reach the 85% maximum pension benefit regardless of age
Tier 4 and Tier 5 -the earlier of attainment of age 52 with 5 years of creditable service or Rule of 70 (must
attain age 48)or reach the 85% maximum pension benefit regardless of age
2. Benefit:
All Tiers and eligible to retire on or alter September 30, 2015:
3%x FAME x Credited Service up to 20 years plus 4%x Credited Service after 20 years
Benefit shall not exceed 85%of FAME.
A member's benefit multiplier for credited service earned before October 1, 2013 shall not be reduced.
I. Deferred Retirement:
1. Eligibility:
Any first day of the month past Normal Retirement Date.
2. Benefit:
Benefit calculated as for Normal Retirement based upon service and pay to Deferred Retirement Date.
J. Disability Retirement:
1. Eligibility:
Totally and permanently disabled meaning incapacity to perform regular duty as Firefighter or Police
Officer(and completion of at least 5 years of Credited Service for non-service incurred disability).
Effective July 1, 3019' a Firefighter who becomes totally and permanently unable to perform useful and
efficient service as a Firefighter due to a diagnosis of cancer or circumstances that arise out of the
treatment of such cancer will be presumed to be disabled in-line of duty subject to the limitations in
Chapter 112.1816, Florida Statutes.
I. Benefit:
Accrued benefit (minimum of 85% of current salary for Police Officers and 50% of current salary for
Firefighters at time of disability hnrserv/cc incurred disability).
City Pension Fund for Firefighters and Police Officers
CopeRS
in the City of MimI Beach -8-
Outline of Principal Provisions of the Pension Fund
K. Pre-Retirement Death Benefit:
1. Service Incurred:
Greater of accrued benefit or 85% of members salary payable as a monthly benefit to the spouse until
death or remarriage, to a Domestic Partner until death, marriage or entry into another Domestic
Partnership, to unmarried children in equal shares until age 18 (until age 22 if a full-time student or until
recovery from handicap if handicapped), or to dependent parents in equal shares.
2. Non-Service Incurred:
For members with at least 5 years of service, accrued benefit is payable for the first 12 months after
death and 75% of the accrued benefit is payable thereafter (with a minimum benefit of 25% of average
monthly salary); Benefits are payable to the spouse until death or remarriage, to a Domestic Partner
until death, marriage or entry into another Domestic Partnership, to unmarried children in equal shares
until age 18 (until age 22 if a full-time student or until recovery from handicap or until marriage if
handicapped), or to dependent parents in equal shares. However, if the member has been married or in
a domestic partnership for less than 10 years, benefits are payable to the spouse or domestic partner
only for the life expectancy of the deceased member at time of death.
L. Vested Benefit:
1. Eligibility:
Any age prior to 50 with at least 5 years (10 years for Tier 5 members) of service for members who
terminate employment on or after September 30, 2013.
2. Benefit:
Return of employee contributions or accrued benefit upon attainment of age 50. If a member
terminates employment with less than 10 years of service and passes away prior to the normal
retirement date,the return of employee contributions is the only benefit.
M. Employee Contributions:
10.0% of pensionable wages (on a pre-tax basis) for members hired prior to September 30, 2013 and 10.5%
of pensionable wages (on a pre-tax basis) for members hired on or after September 30, 2013; If
contributions are refunded to the member or to his or her beneficiaries,then interest is credited at the rate
of 3% per annum.
filiG RS City Pension Fund for Firefighters and Police Officers
in the City of Miami Beach -9-
Page 793 of 1993
Outline of Principal Provisions of the Pension Fund
N. Payment of Retirement Benefit:
Benefit is payable to the member for his or her life. Upon death of member, except those retiring prior to
November 5, 2003, the standard benefit is a 75% joint and survivor annuity with a specified beneficiary as
provided under the plan.The specified beneficiary will receive a survivor annuity equal to 100% of the total benefit
for one year following the death of the member and thereafter 75% of the total benefit until death or remarriage.
However, upon death, if the member has been married or in a domestic partnership for less than 10 years, the
survivor annuity is payable only for the life expectancy of the deceased member at time of death.
in lieu of the standard benefit, the members may elect the actuarial equivalent of the 10 year certain and life
annuity,with a designated beneficiary, any of the following optional forms of payment:
• 75%joint and contingent survivor annuity with a designated beneficiary
• 66%%joint and contingent survivor annuity with a designated beneficiary
• 50%joint and contingent survivor annuity with a designated beneficiary
• 25%joint and contingent survivor annuity with a designated beneficiary
• 10 year certain and life annuity with a designated beneficiary
• Life of member only
Members who retired prior to November 5, 2003 were subject to different normal and optional forms of payment.
O. Deferred Retirement Option Program (DROP):
Police Officers and Firefighters are eligible to participate in a Deferred Retirement Option Program (DROP) upon
meeting eligibility for a normal service retirement.
Operations of the DROP:
1. Member contributions to the Pension Plan will cease upon entering the DROP.
2. The member's monthly retirement benefit, based on final average earnings and service, will be calculated as of
the date prior to them entering the DROP.
3. The member will cease to accrue additional pension benefits (with the exception of the COLA under the
pension plan).
4. The member will no longer be eligible for Disability or Pre-Retirement Service Connected Death benefits from
the Pension Plan.
5. The member's monthly pension will be deposited into the selected investment vehicles.
6. Fire Department members who enter the DROP on or after June 8, 2016 may participate in DROP for a period
not to exceed one-hundred twenty (120) months; and Police Department members who enter the DROP on or
after July 20, 2016 may participate in DROP for a period not to exceed ninety-six(96) months.
•
G R S City Pension Fund for Firefighters and Police Officers
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Page 794 of 1993
Outline of Principal Provisions of the Pension Fund
Notwithstanding the above, participation may not continue beyond the date when the member's
combined years of creditable service and time in the DROP equals 456 months for members who enter
the DROP on or after September 1, 2012.
Members who enter the DROP on or after October 1, 2015 but prior to June 8, 2016 for Fire Department
members and July 20, 2016 for Police Department members may extend their DROP participation period
by up to 36 months for a total maximum DROP participation period not to exceed ninety-six (96)
months.
Members who enter the DROP on or after June 8, 2016 but prior to [effective date of the ordinance] for
Fire Department members may extend their DROP participation period by up to 24 months for a total
maximum DROP participation period not to exceed one-hundred twenty(120) months.
7. The member will not have access or be able to borrow against any of the funds accumulated in their
DROP account.
8. The member may sever employment with the City at any time during the DROP period. Such separation
will terminate their participation in the DROP.
9. No payment will be made from the DROP account until the member severs employment with the City.
10. Following severance of employment, the funds in the DROP will be paid under the DROP Account
Payment Options the member selected. The member will also start receiving their monthly pension
which was previously being deposited in the DROP.
11. A 2.5% COLA (1.5% per year for participants hired on or after July 14, 2010) is paid annually on the
anniversary date of the member's retirement.
Members hired before June 8, 2016 for Fire Department members and July 20, 2016 for Police
Department members who elect to extend or enter the DROP and participate for more than 5 years will
have no COLA adjustment applied for years six (6), seven (7), and eight (8) while participating in the
DROP. Members hired on or after June 8, 2016 for Fire Department members and July 20, 2016 for
Police Department members will receive a zero percent (0%) COLA for the first (1st), second (2nd), third
(3rd) and fourth (4th) annual adjustment dates while participating in the DROP.
P. Cost-of-Living Adjustment:
Effective October 1, 2010, after 1 year of retirement, benefits are increased by 2.5% per year (1.5% per year
for participants hired on or after July 14, 2010), compounded annually, on the anniversary date of each
member's retirement.
For members retired prior to October 1, 2010, benefit increases occur on the first of October each year.
Members whose grandfathered Base Plan benefit is greater than the benefit otherwise provided by this plan
will receive the applicable cost-of-living adjustment on that basis (2% a year beginning the October three
years after retirement) until such time as the benefit from this plan with 2.5% cost-of-living exceeds that
comparable grandfathered Base Plan benefit.
G RS City Pension Fund for Firefighters and Police Officers
in the City of Miami Beach -11-
Page 795 of 1993
Outline of Principal Provisions of the Pension Fund
Q. Changes Since Previous Actuarial Valuation
a. Pensionable pay:
Pensionable pay is defined as base pay, any premiums that longevity is calculated on, longevity pay,
pensionable overtime and any other pay negotiated as pensionable. Effective July 14, 2010, off-duty pay is
pensionable for any member who is eligible for overtime and receives off-duty compensation through the
City. Effective September 30,2013, pensionable overtime is limited to 300 hours per calendar year.
1. Overtime and Off-Duty pay included in pension computation for Police Officers:
• Pensionable overtime pay not exceeding 300 hours per calendar year and off duty is limited in
each year to an amount that is equal to 11%of highest annualized pay rate for the same salary
rank that the member is in at time of retirement.
• The 11% limitation shall not apply to any member who holds the rank of sergeant or lieutenant on
September 30, 2013, or any Police Officer promoted to the rank of sergeant prior to the date the
2013 Certified Police Sergeant Promotional Register expired in 2015. For these members,the
inclusion of overtime and/or off duty in the member's salary shall be limited in each year to an
amount which is equal to 70% of the difference between the member's annualized pay rate at
retirement and the highest annualized pay rate for the next higher salary rank.
• For any members who self-demote they will become subject to the eleven percent (11%) limitation
on overtime and off-duty compensation.
2. Overtime and Off-Duty pay included in pension computation for Firefighters:
• Pensionable overtime pay not exceeding 300 hours per calendar year and off duty is limited in
each year to an amount that is equal to 11%of highest annualized pay rate for the same salary
rank that the member is in at time of retirement.
b. Final Average Monthly Earnings (FAME):
Tier 3, Tier 4 and Tier 5 -the greater of the average of the 5 highest paid years or the 5 last paid years prior
to date of retirement after taking into consideration the overtime limit.
c. Disability Benefit:
Accrued benefit(minimum of 85% of current salary at time of disability for service incurred disability).
46711;S City Pension Fund for Firefighters and Police Officers
in the City of Miami Beach -12-
Page 796 of 1993
Outline of Principal Provisions of the Pension Fund
d. DROP:
Members who enter the DROP on or after June 8, 2016 for Fire Department members and July 20, 2016
for Police Department members may participate in DROP for a period not to exceed ninety-six (96)
months.
Notwithstanding the above, participation may not continue beyond the date when the member's
combined years of creditable service and time in the DROP equals 456 months for members who enter the
DROP on or after September 1, 2012.
Members who enter the DROP on or after October 1, 2015 but prior to June 8, 2016 for Fire Department
members and July 20, 2016 for Police Department members may extend their DROP participation period
by up to 36 months for a total maximum DROP participation period not to exceed ninety-six (96) months.
�s RS City Pension Fund for Firefighters and Police Officers
in the City of Miami Beach - 13-
Page 797 of 1993
Actuarial Assumptions and Actuarial Cost Methods
Used in the Valuation
A. Mortality
For healthy participants during employment, PUB-2010 Headcount Weighted Safety Employee Female
Mortality Table and Safety Below Median Employee Male Mortality Table, both set forward 1. year, with
fully generational mortality improvements projected to each future decrement date with Scale MP-2018.
For healthy participants post employment, PUB-2010 Headcount Weighted Safety Healthy Retiree Female
Mortality Table and Safety Below Median Healthy Retiree Male Mortality Table, both set forward 1 year,
with fully generational mortality improvements projected to each future decrement date with Scale
MP-2018.
For disabled participants, 80% PUB-2010 Headcount Weighted General Disabled Retiree Mortality Table /
20% PUB-2010 Headcount Weighted Safety Disabled Retiree Mortality Table, separate rates for males and
females, without projected mortality improvements.
Pre-retirement Post-retirement
Sample Future Life Future Life
Ages Expectancy(Years) Expectancy (Years)
(2023) Male Female Male Female
45 40.93 44.88 37.48 41.66
50 35.78 39.69 32.65 36-48
55 30.70 34.54 27.87 31.44
60 25.74 29.47 23.27 26.64
62 23.80 27.46 21.53 24.79
Pre-retirement Post-retirement
Sample Future Life Future Life
Ages Expectancy(Years) Expectancy (Years)
(2043) Male Female Male Female
45 42.65 46.42 39.54 43.56
50 37.46 41.20 34.62 38.35
55 32.33 36.03 29.77 33.27
60 27.31 30.92 25.06 28.39
62 25.35 28.88 23.27 26.50
B. Investment Return
7.30%, compounded annually, net of investment expenses includes inflation at 3.00%. The investment
return is scheduled to be scaled down to 7.20% in the October 1, 2024 Actuarial Valuation and thereafter.
G R S City Pension Fund for Firefighters and Police Officers
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Page 798 of 1993
Actuarial Assumptions and Actuarial Cost Methods
Used in the Valuation
C. Expenses
Prior year's actual administrative expenses.
D. Employee Withdrawal Rates
Representative values of the assumed annual rates of withdrawal among members in active service are as
follows:
Withdrawal Withdrawal
Age Rate Age Rate
20 2.00% 35 1.25%
25 1.75% 40 1.00%
30 1.50% 45 0.75%
E. Disability Rates
Representative values of the assumed annual rates of disability among members in active service are as
follows:
Disability Disability
Age Rates Age Rate
20 0.07% 45 0.58%
25 0.11% 50 0.99%
30 0.16% 55 1.42%
35 0.22% 60 2.00%
40 0.32% 64 2.69%
For Firefighters, 15%of disabilities are assumed to be non-service incurred -85% service incurred.
For Police Officers, 35%of disabilities are assumed to be non-service incurred - 65% service incurred.
GR$ City Pension Fund for Firefighters and Police Officers
in the City of Miami Beach -15-
Page 799 of 1993
Actuarial Assumptions and Actuarial Cost Methods
Used in the Valuation
F. Salary Increase Factors
Representative values of the assumed annual rates of future salary increase are as follows:
Merit Salary Merit Salary
Age Increase Age Increase
20 3.7% 45 2.7%
25 7.7% 50 2.7%
30 6.7% 55 2.7%
35 3.7% 60 1.7%
40 2.7% 64 0.7%
In addition to the average assumed salary increase rates shown above the expected cost of living increases
are as follows:
COLA Salary Weighted
PIE Increase Average Increase *
2024 3.00% 6.68%
2025 and 2.18% 5.66%
thereafter
The cost of living increases shown above are based long term expected increases of 2.18% annually.
* The weighted average increase shown is based on aging of the current active census demographics.
G. Payroll Growth Assumption
The aggregate compensation used to compute the accrued liability contribution rate is assumed to increase
at a rate of 3.5% per year. For purposes of financing the unfunded liabilities, the payroll growth assumption
is assumed to increase at a rate of 3.5% per year - not greater than historical 10-year average (5.1% as of
October 1, 2023) and not less than 0%.
GRS City Pension Fund for Firefighters and Police Officers
in the City of Miami Beach - 16-
Page 800 of 1993
Actuarial Assumptions and Actuarial Cost Methods
Used in the Valuation
H. Retirement
All members are assumed to retire at age 50 with 26.25 years of service, but not later than age 65. Retirement is
assumed to occur in accordance with the following rates:
Rate of Retirement
Service
Meeting Rule of 70 Not Meeting Rule of 70
Less than 20 30% 8%
20 45% 8%
21 45% 8%
22 50% 8%
23 50% 20%
24 70% 60%
25 70% 60%
More than 25 100% 100%
I. DROP Assumption
80% of all active participants will participate in the DROP.
Leave DROP Enter the DROP on or after
October 1, 2015
Prior to 5 years 0%
After 5 years 5%
After 6 years 5%
After 7 years 10%
After 8 years 100%
The recent extension of the DROP may alter the retirement experience of the Fund.
DROP assumptions will need to be monitored in light of future DROP experience.
J. Overtime and Off-Duty Pay Limitation
No members excluded from the eleven percent (11%) limitation on overtime and off-duty compensation are
assumed to self-demote.
G R s City Pension Fund for Firefighters and Police Officers
in the City of Miami Beach -17-
Page 801 of 1993
Actuarial Assumptions and Actuarial Cost Methods
Used in the Valuation
K. Loadings for Contingencies
Pre-Employment Service: A City contribution of 0.275% of annual pensionable payroll is added to provide for
the purchase (or buyback) of pre-employment military service and any probationary service by the
membership.
Transfers into Fund from other City pension systems: A City contribution of 0.025% of annual pensionable
payroll is added to provide for the transfer of service under another City pension system. This load does not
apply to Tier 5 Police members.
L. Marital Assumptions
1. 77% of members are assumed married or entitled to benefits for dependents, including registered
domestic partners.
2. Male spouses are assumed to be three years older than female spouses.
M. Smoothed Asset Valuation Method
The method used for determining the smoothed value of assets phases in the deviation between the expected
and actual return on assets at the rate of 20% per year. The smoothed value of assets will be further adjusted
to the extent necessary to fall within the corridor whose lower limit is 80% of the fair market value of fund
assets and whose upper limit is 120% of the fair market value of fund assets.
N. Actuarial Cost Methods
Normal Retirement, Termination, Disability, and Death Benefits: Entry-Age-Actuarial Cost Method
Under this method the normal cost for each active employee is the amount which is calculated to be a level
percentage of pay that would be required annually from his age at hire to his assumed retirement age to fund
his estimated benefits, assuming the Fund had always been in effect. The normal cost for the Fund is the sum
of such amounts for all employees. The actuarial accrued liability as of any valuation date for each active
employee or inactive employee who is eligible to receive benefits under the Fund is the excess of the actuarial
present value of estimated future benefits over the actuarial present value of current and future normal costs.
The unfunded actuarial accrued liability as of any valuation date is the excess of the actuarial accrued liability
over the smoothed value of assets of the Fund.
Vested Normal Retirement, Termination, Disability, and Death Benefits: Unit Credit Cost Method
Under this method, the actuarial present value of vested accrued benefits is an amount calculated to be the
sum of the present values of each individual's vested accrued or earned benefit under the Fund as of the
valuation date. Each individual's calculation is based on pay and service as of the valuation date.
The DROP accounts balance is included in the assets and liabilities as of the valuation date.
CRS City Pension Fund for Firefighters and Police Officers
in the City of Miami Beach -18-
Page 802 of 1993
Actuarial Assumptions and Actuarial Cost Methods
Used in the Valuation
0. Disclosure of Assumptions
The retirement assumption was updated based on the most recent experience study performed for the five
years ending September 30, 2019. The salary increases and withdrawal assumptions were updated based
on the experience study performed for the five years ending September 30, 2014. The investment return
assumption was lowered from 7.35% to 7.30%, as adopted by the Board on March 16, 2023, based upon an
Investment Return Assumption Study completed in 2023 along with recommendations from the Investment
Consultant. The mortality rates are based upon the July 1, 2023 FRS Actuarial Valuation, as required under
F.S., Chapter 2015-157.
P. Changes Since Previous Actuarial Valuation
1. Disability Rates:
For Firefighters, 30%of disabilities are assumed to be non-service incurred - 70% service incurred.
G R$ City Pension Fund for Firefighters and Police Officers
in the City of Miami Beach - 19-
Page 803 of 1993