File Ref. #043
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CITY OF
MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH FLORIDA 33139
UNCLASSIFIED EMPLOYEES AND
ELECTED OFFICIALS
RETIREMENT SYSTEM
673-7437
MEMORANDUM
DATE:
March 19, 1998
TO:
Robert Parcher
City Clerk
FROM:
Margaret A. Arculeo --/);f.
Pension Administrator
RE:
Unclassified Employees & Elected Officials Retirement System
of the City of Miami Beach - Annual Report
In accordance with the Unclassified Employees and Elected Officials Retirement System Ordinance
No. 88-2603 provides for an Annual Report to be filed along with the appropriate statistical
information. The report contains the names of the Board members, how often they meet, their
mission, objectives, strategies and accomplishments as a Board during the past fiscal year. The
statistical information is reported in the Actuarial Valuation as of 10/1/97 and the Independent
Auditor's Report as of 9/30/97 attached.
If there are any questions, please do not hesitate to contact me at the Pension Office 673-7437.
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CITY OF
MIAMI BEACH
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH FLORIDA 33139
UNCLASSIFIED EMPLOYEES AND
ELECTED OFFICIALS
RETIREMENT SYSTEM
673-7437
ANNUAL STATUS REPORT
RETIREMENT SYSTEM FOR THE UNCLASSIFIED EMPLOYEES & ELECTED
OFFICIALS OF THE CITY OF MIAMI BEACH
For the Year Ended September 30, 1997
The Board of Trustees. listed below, meet on the fourth Tuesday of each month:
Ed Cox, Chairman
Ramon Duenas, Trustee
Robert Spinney, Vice Chairman
David Pearlson, Trustee
Jorge Gomez, Trustee
Linda Michols, Secretary
Kaslyn Mohamed, Trustee
Janice Pye, Trustee
Harold Rosen, Trustee
The Board of Trustees is appointed by the City Manager and consists of nine persons, including one
City Commissioner, and meets monthly. The Trustees are appointed for a two-year term with the
annual elections of a Chairman, Vice Chairman and Secretary. All were re-appointed effective April
1, 1996.
The Trustees have the responsibility for the proper operation and management of the System, and for
carrying out the wishes of the City Commission by making effective the provisions of the Pension
Plan Ordinances. They are assisted by contracted professionals in all areas concerning pension. From
the law :firm of Cypen & Cypen, Mr. Steve Cypen is legal counsel for the Board and an expert in
pension law.
The Ordinance and Investment Guidelines govern the investment strategy for the Fund's three
investment managers. Mr. Michael Haley, of Mercer Investment Consulting, Inc., is the fund
evaluator and monitors the managers' performance and compliance with the Investment Guidelines.
He reviews this infonnation and advises the Board through quarterly performance reports. The three
investment managers are Montag & Caldwell managing 40% of the assets in equities, The Northern
Trust Company managing 20% of the assets in fixed income and NWQ Investment Management
Company managing 40% of the assets in equities. The prudent investments of the managers have
caused an actual rate ofretumforthe year of35.2%. This rate ofretum caused the market value of
the Fund to increase from $58,184,407 at 9/30/96 to $77,120,728 at 9/30/97.
ANNUAL STATUS REPORT
For Plan Year Ended 9/30/97
Page 2
The Actuary for the Plan is the firm of Gabriel, Roeder, Smith & Co., formerly Kruse, O'Connor &
Ling, Inc., located in Fort Lauderdale. The Actuarial Valuation as of October 1, 1997 has been
completed and approved by the Board. A copy has been filed with the State Actuary in Tallahassee
and also forwarded to the Budget Department.
An independent audit has been conducted by the accounting firm of Spear, Safer, Harmon &
Company located in Miami. There were no control or material weaknesses reported by them, and
a copy of the completed audit has been forwarded to the Budget Department.
The mission of the Board is to implement through proper channels with the coordination and
cooperation of all of the above listed professionals, to insure that the original purpose for which the
Pension Ordinance was created, which is to provide retirement and other related benefits for eligible
employees and elected officials of the City and their beneficiaries or dependents, is accomplished as
cost effectively as possible.
The objective for meeting this mission is to secure a funding process assisted by actuarially calculated
contributions, and closely monitored investments by a fund evaluator while guided through
Investment Guidelines, to meet the operations and liabilities of the System.
The Unclassified Retirement System and the General Retirement System share an administrative staff
of three employees along with other combined administrative and office expenses. Each System is
responsible for those administrative expenses specifically directed to their System
During the Plan Year ended 9/30/97, the number of Retirees increased from 73 to 81, the Active
Membership is at 128, and the Vested Members total 35. There were no amendments to the
Ordinance this Plan Year.
For those Members who retired during the fiscal year the following provisions applied: Normal
Retirement Eligibility was age 50 with five years of creditable service; the benefit was 4% ofF AME
times the years of creditable service up to 10/18/92 with 3% of FAME thereafter, with a maximum
benefit of 80% with less than 20 years of creditable service. FAME was 1/12 of the average annual
earnings of the last year of creditable service. Retirees receiving benefits for at least 12 months are
subject to a 1 1/2 accumulated cost of living increase each year at October 1st.
Terminations with less than five years of creditable service were eligible to request a lump sum
settlement of accumulated employee contributions including interest, plus an additional 10% of
accumulated employee contributions times his/her years of service, not to exceed ten years. For a
Vested Termination with five or more years of creditable service, he/she may request the same lump
sum settlement or receive an accrued benefit beginning at age 50 (normal retirement age).
c:\v.Av.AUDcboard\annualrpt 96
CITY OF MIAMI BEACH, FLORIDA
UNCLASSIFIED EMPLOYEES AND ELECTED
OFFICIALS RETIREMENT SYSTEM
FINANCIAL STATEMENTS
FOR THE YEARS ENDED
SEPTEMBER 30, 1997 AND 1996
Cefe6rating 50 :Years Of 'Dedicated Service
1947-1997
SPEAR
SAFER' q;>.
I1ARMON
PROFESSIONAL..'" ..'
ASSOCIATION
CERTIFIED PUBLIC ACCOUNTANTS
8350 N. W. 52nd Terrace, Suite 301
Miami. Florida 33166
1.800-776-1099
Tel: (305) 591.8850
Fax: (305) 593-9883
INDEPENDENT AUDITORS' REPORT
To the Board of Trustees of City of Miami Beach,
Florida, Unclassified Employees and Elected
Officials Retirement System
Miami Beach, Florida
We have audited the accompanying statements of plan net assets of the City of Miami Beach, Florida,
Unclassified Employees and Elected Officials Retirement System (the "Plan") as of September 30, 1997
and 1996, and the related statements of changes in plan net assets for the years then ended. These
financial statements are the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards
require that we plan and perfonn the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the fmancial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a reasonable basis for our
opmJOn.
In our opinion, the financial statements referred to above present fairly, in all material respects,
infonnation regarding the Plan's net assets as of September 30, 1997 and ] 996 and changes therein for the
years then ended in confonnity with generally accepted accounting principles.
The supplementary schedules of analysis of funding progress and employer contributions are not required
parts of the basic fmancial statements, but are supplementary infonnation. We have applied certain
limited procedures, which consisted principally of inquiries of management regarding the methods of
measurement and presentation of the supplementary infonnation. However, we did not audit the
infonnation and express no opinion on it.
~,~~/~~~.
Miami, Florida
December 2, ]997
II~
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CITY OF MIAMI BEACH, FLORIDA
UNCLASSIFIED EMPLOYEES AND ELECTED OFFICIALS RETIREMENT SYSTEM
Statements of Plan Net Assets
As of September 30, 1997 and 1996
ASSETS
1997 1996
Cash $ 233.695 $ 249.772
Interest and Dividend Receivable 43.000 45.000
Investments, at fair value:
Common stocks 61,198,995 47,586,590
Commingled fixed income trust funds 13,212,187 9,584,841
Short-term investments 2,182,851 468,204
Other bonds 250.000 250.000
Total Investments 76.844.033 57.889.635
Net Assets Held in Trust for Pension
Benefits (a schedule of funding progress
is presented on Page 9)
$77.120.728
$58.184.407
See notes to financial statements.
1
CITY OF MIAMI BEACH, FLORIDA
UNCLASSIFIED EMPLOYEES AND ELECTED OFFICIALS RETIREMENT SYSTEM
Statements of Changes in Plan Net Assets
Years Ended September 30, 1997 and 1996
1997 1996
Additions:
Contributions -
Employer $ 572,832 $ 602,174
Employee 808.239 720.938
1,381,071 1,323,112
Transfers from other Systems 280.729 190.342
Total Contributions 1.661.800 1.513.454
Investment Income -
Net appreciation in fair value of investments 18,755,761 9,381,378
Interest 944,714 855,531
Dividends 566.605 639.030
20,267,080 10,875,939
Less investment management expenses (274.563) (222.076)
Net Investment Income 19.992.517 10.653.863
Total Additions 21.654.317 12.167.317
Deductions:
Benefit paid 2,443,519 2,208,226
Contributions refunded 160,719 172,673
Administrative expenses 113.758 122.898
Total Deductions 2.717.996 2.503.797
Net Increase 18,936,321 9,663,520
Net Assets Held in Trust for Pension Benefits:
Beginning of Year 58.184.407 48.520.887
End of Year $77 .120. 728 $58.1 84.407
See notes to fmancial statements.
2
CITY OF MIAMI BEACH, FLORIDA
UNCLASSIFIED EMPLOYEES AND ELECTED OFFICIALS RETIREMENT SYSTEM
Notes to Financial Statements
Years Ended September 30, 1997 and 1996
NOTE 1 - PLAN DESCRIPTION
All elected officials and full-time employees of the City of Miami Beach, Florida (the "City")
who hold unclassified positions are covered by the City of Miami Beach, Florida, Unclassified
Employees and Elected Officials Retirement System (the "Plan"). An unclassified employee is
one who has been appointed by the City Commission or the City Manager and does not have
civil service status. The Plan is the administrator of a single-employer pension plan that was
established by the City in accordance with City Ordinance 88-2603 (the "Ordinance"), as
amended through February 19, 1997. At October 1, 1996 and 1995, membership consisted of:
1996 1995
Retirees and beneficiaries currently receiving
benefits and terminated employees entitled to
benefits but not yet receiving them ---1Qf --2Q
Current Employees:
Vested 102 103
Nonvested -2l ~
Total Current Employees 134 141
Eligible employees in the predecessor plan prior to April 1, 1988 had the option to become a
participant of the Plan or remain in the General Employee Retirement Plan. Each elected
official and full-time unclassified employee of the City, subsequent to April 1, 1988, except for
the City Manager and City Attorney, must participate in the Plan starting on the first day of
employment. Subsequent to October 18, 1992, new employees have the option to join the
40 1 (a) Plan or this Plan.
The Plan provides retirement benefits as well as death and disability benefits. For all employees
in the plan prior to October 18, 1992, benefits vest after 5 years of credited service. These
employees who retire at or after age 50 with 5 years of credited service are entitled to an annual
retirement benefit, payable monthly for life, in an amount equal to 4% of their fmal average
monthly earnings (FAME), for each year of credited service until October 18, 1992, plus 3%
thereafter, not to exceed 80% of their FAME. FAME is the employee's earnings during their
last year of credited service. If an employee, however, had 20 or more years of credited service
on October 17, 1992, their maximum benefit is 90%.
3
CITY OF MIAMI BEACH, FLORIDA
UNCLASSIFIED EMPLOYEES AND ELECTED OFFICIALS RETIREMENT SYSTEM
Notes to Financial Statements (Continued)
NOTE 1 - PLAN DESCRIPTION (Continued)
Effective on October 18, 1992, the Ordinance was amended to provide a different level of
benefits for new employees. For these employees, benefits vest with 10 years of service at age
60, with their FAME calculated on their highest 3 years of credited service.
If an employee leaves covered employment or dies before 5 years of credited service, or 10
years for new members after October 17, 1992, accumulated employee contributions plus an
additional 10% of the employee's accumulated contributions multiplied by years of service, not
to exceed 10 years, is returned to the employee or designated beneficiary. For a member
terminated with 5 or more years of credited service, or 10 years for new members after
October 18, 1992, the member may either receive a return of accumulated employee
contributions plus the additional amount described above or the accrued benefit at the normal
retirement date.
A 1.5% COLA compounded annually is provided to benefit recipients.
All covered employees are required by ordinance to contribute 10% of their salary to the Plan.
Employee contributions include buybacks.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - The Plan's fmancial statements are prepared using the accrual basis of
accounting. Employee and employer contributions are recognized as revenues in the period in
which employee services are performed. Benefits and refunds are recognized when due and
payable in accordance with the terms of the Plan. Effective October 1, 1996, the Plan has
implemented Statement 25 of the Governmental Accounting Standards Board for financial
statement presentation.
Investments - Investments in common stocks, commingled fixed income trust funds, and other
bonds are recorded at fair value as determined by latest published prices. Short-term
investments are recorded at cost which approximates fair value. Dividend and interest income
are recognized when earned. Gains and losses on sales and exchanges of investments are
recognized on the trade date.
Investments may be made as deemed appropriate by the investment managers of the pension
plan.
Administrative Exoenses - Administrative expenses are paid directly by the Plan. These
expenses include, but are not limited to, all attorney fees and costs incurred by or on behalf of
the Plan. The Plan is reimbursed for 60% of the expenses paid that benefited both the Plan and
the General Employees Retirement Plan.
4
CITY OF MIAMI BEACH, FLORIDA
UNCLASSIFIED EMPLOYEES AND ELECTED OFFICIALS RETlREMENT SYSTEM
Notes to Financial Statements (Continued)
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Estimates - The preparation of fmancial statements in conformity with generally accepted
accounting principles requires the plan administrator to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results may differ from
those estimates.
Reclassification - Certain prior year financial information has been reclassified to conform with
current year presentation.
NOTE 3 - CONTRIBUTIONS
The Plan's funding policy provides for periodic employer contributions at actuarially
determined rates that, expressed as percentages of annual covered payroll, are sufficient to
accumulate sufficient assets to pay benefits when due. Level percentage of payroll employer
contribution rates are determined using the entry age actuarial cost method. There is no
unfunded actuarial accrued liability at October 1996, date of latest actuarial report.
Significant actuarial assumptions used in the latest actuarial report include (a) investment return
of 9.0%, net after administrative expenses, (b) 1983 Group Annuity Mortality Table for males
and females (effective October 1, 1996), (c) for retirement, a probability of retirement based on
age, once a member is eligible to retire, is used (effective October 1, 1996), (d) projected salary
increases of 6.0% per year compounded annually, and (e) cost of living increases of 1.5% per
year compounded.
The October 1, 1996 assumption changes resulted in a $90,684 increase in required
contributions for the Plan year September 30, 1997.
The contribution made to the Plan during the year ended September 30, 1997 was $1,381,071
and was made in accordance with actuarially determined requirements computed through an
actuarial valuation performed as of October 1, 1995. The contribution was solely attributable to
normal costs. For the year ended September 30, 1997, the City contributed $572,832 and
employees contributed $808,239 which represents 8.7% and 12.2%, respectively, of covered
payroll.
NOTE 4 - INVESTMENTS
As of September 30, 1997 and 1996, the level of credit risk of the Plan's investments is in
Category 1 as defined by the Governmental Accounting Standards Board, which includes
investments that are insured or registered or securities held by the Plan or its agent in the Plan's
name. There are no investments, loans to or leases with parties related to the pension plan.
There were no investments in anyone company which individually exceeded 5% of the net
assets available for plan benefits.
5
CITY OF MIAMI BEACH, FLORIDA
UNCLASSIFIED EMPLOYEES AND ELECTED OFFICIALS RETlREMENT SYSTEM
Notes to Financial Statements (Continued)
NOTE 4 - INVESTMENTS (Continued)
The carrying amounts for investments held at September 30, are as follows:
1997
1996
Common stocks
Commingled fixed income trust funds
Short-term investments
Other bonds
$ 33,786,218
13,098,113
2,182,852
250.000
$ 31,398,042
9,685,534
468,204
250.000
$49.317.183
$ 41.801.780
Net appreciation (depreciation) in fair value of the Plan's investments for the years ended
September 30, 1997 and 1996 (including investments bought, sold, and held during the year) is
as follows:
1997
1996
Common stocks
Commingled fixed income trust funds
$18,540,994
214.767
$18.755.761
$ 9,783,535
(402.157)
$ 9.381.378
The calculation of realized gains and losses is independent of the calculation of net appreciation
(depreciation) in fair value of Plan investments. Realized gains and losses on investments that
had been held in more than one fiscal year and sold in the current year were included as a
change in the fair value of investments in the prior years and current year.
Net realized gains on the sale of investments, using the historical cost method of accounting, for
the years ended September 30, 1997 and 1996, amounted to $7,316,766 and $4,233,020,
respectively.
NOTES - LmGATION
Certain members of the Plan filed a lawsuit against the City of Miami Beach. The effect, ifany,
upon the Plan would be to require funding by the City under State law to cover any future
benefits payable.
6
CITY OF MIAMI BEACH, FLORIDA
UNCLASSIFIED EMPLOYEES AND ELECTED OFFICIALS RETlREMENT SYSTEM
Notes to Financial Statements (Continued)
NOTE 5 - LmGATION (Continued)
On or about October 7, 1997, two individuals filed suit against the Board, its Chairman and
others in Dade County Circuit Court. Plaintiffs seek to invalidate certain City of Miami Beach
ordinances under which the Board administers the Plan. The Board and its Chairman have filed
a motion to dismiss the complaint. At present an evaluation of the likelihood of an unfavorable
outcome cannot be made.
7
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CITY OF MIAMI BEACH, FLORIDA
UNCLASSIFIED EMPLOYEES AND ELECTED OFFICIALS RETlREMENT SYSTEM
Required Supplementary Information - Schedule of Employer Contributions
Year Ended Annual Required Percentage
September 30 Contribution Contributed
1991 $ 1,871,038 105.4%
1992 2,117,615 96.8
1993 1,600,386 110.6
1994 1,509,587 100.0
1995 574,282 100.0
1996 602,174 100.0
9
CITY OF MIAMI BEACH, FLORIDA
UNCLASSIFIED EMPLOYEES AND ELECTED OFFICIALS RETIREMENT SYSTEM
Notes to Required Supplementary Information
The information in the required supplementary schedules was determined as part of the
actuarial valuations at the dates indicated. Additional information as of October 1, 1996, the
latest actuarial valuation, follows:
Actuarial Cost Method
Entry Age
Actuarial Asset Valuation Method
Market value less unrecognized capital
appreciation where capital appreciation
is recognized at the rate of 20% per year.
Actuarial Assumptions:
Investment rate of return
Projected salary increases
Inflation
Cost of living adjustment (COLA),
compounded
9%
6%
4%
1.5%
10
OCTOBER 1, 1997
ACTUARIAL VALUATION REPORT
FOR THE
CITY OF MIAMI BEAC.H
RETIREMENT SYSTEM FOR UNCLASSIFIED
EMPLOYEES AND ELECTED OFFICIALS
Gabriel, Roeder, Smith and Company
ANNUAL EMPLOYER CONTRIBUTION
IS DETERMINED BY THIS VALUATION
FOR THE PLAN YEAR ENDING
SEPTEMBER 30,1998
TO BE PAID IN THE EMPLOYER
FISCAL YEAR ENDING
SEPTEMBER 30, 1999
Gabriel, Roeder, Smith and Company
GABRIEL, ROEDER, SMITH & COMPANY
Consultants & Actuaries
301 East Las Olas Blvd. . Suite 200 . Ft. Lauderdale. FL 33301 .954-527-1616. FAX 954-525-0083
January 21, 1998
Board of Trustees
City of Miami Beach Unclassified
Retirement System
1700 Convention Center Drive
Miami Beach, Florida 33139
Dear Board Members:
We are pleased to present our October 1, 1997 Actuarial Valuation Report for the Plan. The purpose
of the Report is to set forth required contribution levels, to disclose plan assets and actuarial liabilities,
to comment on funding progress and to provide supporting information regarding the operation of the
Plan. This Report is also designed to comply with requirements of the State.
The valuation was performed on the basis of employee, retiree and financial information supplied by
the City. Although we did not audit this information, it was reviewed for reasonableness and
comparability to prior years.
The benefits valued are outlined at the end of the Report. Actuarial assumptions and the actuarial cost
method are also described herein. Any changes in benefits, assumptions or methods are described
in the first section.
We will be pleased to answer any questions pertaining to the valuation and to meet with you to review
this Report.
Respectfully submitted,
GABRIEL, ROEDER, SMITH AND COMPANY
By
Statement by Enrolled Actuary
This actuarial valuation and/or cost determination was prepared and completed by me or under
my direct supervision, and I acknowledge responsibility for the results. To the best of my knowledge,
the results are complete and accurate. In my opinion, the techniques and assumptions used are
reasonable, meet the requirements and intent of Part VII, Chapter 112, Florida Statutes, and are based
on generally accepted actuarial principles and practices. There is no benefit or expense to be provided
by the plan and/or paid from the plan's assets for which liabilities or current costs have not been
established or otherwise taken into account in the valuation. All known events or trends which may
require a material increase in plan costs or required contribution rates have been taken into account
in the valuation.
~~.
Signatu re
1- cZl-'l r
Date
96-1560
Enrollment Number
Gabriel, Roeder, Smith and Company
TABLE OF CONTENTS
Section Title Pal!e
A. Discussion of Valuation Results 1
B. Valuation Results
1. Summary of Valuation Results 3
2. Derivation of Employer Normal Cost 4
3. Actuarial Gains and Losses 5
4. Recent History of Valuation Results 9
5. Recent History of Required and
Actual Contributions 12
6. Actuarial Assumptions and Cost Method 13
7. Glossary of Terms 15
C. Pension Fund Information
1. Summary of Assets 16
2. Summary of Fund's Income and Disbursements 17
3. Actuarial Value of Assets 18
4. Investment Rate of Return 19
D. Financial Accounting Information
1. FASB No. 35 20
2. GASB No. 25 21
3. GASB No. 27 24
4. Other Disclosures 26
E. Miscellaneous Information
1. Reconciliation of Membership Data 27
2. Statistica I Data 28
3. Age/Service/Salary Distribution 30
F. Summary of Plan Provisions 35
Gabriel, Roeder, Smith and Company
SECTION A
DISCUSSION OF VALUATION RESULTS
Gabriel, Roeder, Smith and Company
1
DISCUSSION OF VALUATION OF RESULTS
Comparison of Reauired Emplover Contributions
The required employer contributions developed in this and last years actuarial valuations are
as follows:
...'...'.'.'.....'.'...'.'.'..,'........'..,.................,'.'.."..... ...-..-.-.,-...-.'.',".....,....---.,',.,.--.... ..........','.......,..-.-....,.....','.........,.,
i.<..iFort=vE...................... <............FC)r...FYE.................... ....................Inttecis.;.....<..........
i/i..9!3()/99............... '.' <<..<9/30/98..................... . ........(Oecreas$)......... '..
Required Employer Contribution
As % of Covered Payroll
$ 285,305 $ 594,655
4.39% 9.01 %
$(309,350)
(4.62)%
The contribution has been adjusted for interest on the basis that employer contributions are
made on October 1st. The actual employer contribution for the year ending September 30, 1997 was
$572,832.
Revisions in Benefits
An ordinance permitting the buyback of prior service under this System or the predecessor
System was passed. The effect of this change was shown in the April 14, 1997 Actuarial Impact
Statement.
Revisions in Actuarial Assumptions and Methods
There have been no changes in actuarial assumptions or methods since the last valuation.
Actuarial Experience
There was a net actuarial gain of $2,036,346 for the year which means that actual experience
was more favorable than assumed. The gain arose from investment earnings in excess of the assumed
rate of 9%. The rate of return was 19.1% based on the actuarial value of assets and 35.2% based
on market value. Offsetting this investment gain were salary increases in excess of the assumed rate
of 6% and the transfer of employees from the General Employees System.
The net actuarial gain for the year translates into a decrease in annual employer contributions
of 4.62% of covered payroll.
Gabriel, Roeder, Smith and Company
2
Analvsis of Chan~e in Emplover Contribution
As previously indicated, the required contribution has decreased by 4.62% of covered payroll.
The components of this change are as follows:
Contribution Rate Last Year
Actuarial Experience
9.01%
(4.62)
Contribution Rate This Year
4.39%
The remainder of this Report includes detailed actuarial valuation results, financial information,
rrliscellaneous information and stati'5tics, and a summary of plan provisions.
NOTE: Throughout this Report, "Group A" refers to those active members of the System who were
hired before October 17, 1992 and "Group B" refers to those hired thereafter.
Gabriel, Roeder, Smith and Company
SECTION B
VALUATION RESULTS
Gabriel, Roeder, Smith and Company
3
lil
I
ICO"EREDGROLJp .. ... ...../::>
A. Number Included in the Valuation
1 Active Members
2 Inactive Members
B. Covered Annual Payroll
<...(.......i.U(.U..U...................... U.....Ui.....:..........:.......:.:........:...............:.........:.......................:......:.:.:.................:............:...................................................:............:.:...:...........................:.:....... ....... .. .... .:...... .. ..... . . )...............:....::..:......:..:....::::1
. }:::<:}f}:{{::{:::}::;::::;::;:;:;:;:;:::::::::::::::::::-::'': ..
%','1WitlI1%1;;!trttr%11$!JMMAiiYipFVALUATiQN;'R~t.!l;TI!1 .. ....... ..''12::11.%%1;1 . ..... t
~< 19: of rbel::96* ' I
..q.....l
..... ....:." .... : .",-. ...:::"' :::-.::-.. "." ,
128
116
$ 6,493,032
134
102
$6,600,100
1.....1..0NG...RANGE...Cosr...........<?...........
. ... . ..
. . .
. ... , .
. .. ......... ". ...
. ...
..
d' .... .... ......
... .... ............1
............... ....
......-.-.......-_...
................ ......
........................
)..........){......
C. Actuarial Present Value of Projected Benefits
64,652,100
58,807,109
D Actuarial Value of Assets
59,035,749
50,842,182
E. Actuarial Present Value of Future Contributions
1 T ota I: C - D
2 Portion Assigned to Unfunded Frozen
Actuarial Accrued Liability (UFAAL)
3 Portion Assigned to Future Normal Costs
5,616,351
7,964,927
o
5,616,351
o
7,964,927
ICURRENT.ANNUALcosr.... .
. . I
. . ... .... ................. '.. ... .,_. -.' . --,"
... ... .......-" ....-.-.. ........ .., , .. .... ....
.. .......".....,. ......-.... , ,.... .....,.,.....
. ......... .............-.--......., ,.., .............
........ ........................_-..........-.-.. - --. ..
. ... .... .............. ......... .............:.::..........:::...:::......::..
F. Annual Payment Needed to Amortize UFAAL
As%ofB
0 0
- -
261,748 545,555
4.03% 8.27%
23,557 49,100
0.36% 0.74%
284,305 594,655
4.39% 9.01%
9/30/98 9/30/97
9/30/99 9/30/98
10/1198 10/1/97
G Annual Employer Normal Cost
As%ofB
H Interest on F and G from Valuation Date to
Contribution Date(s)
As % of B
I Required Employer Contri: F + G + H
As%ofB
J Year to Which Contributions Apply
1 Plan Year Ending
2 Employer Fiscal Year Ending
3 Assumed Date(s) of Employer Contributions
* From 4/14/97 Actuarial Impact Statement.
Gabriel, Roeder, Smith and Company
4
1~'U'Mi:"'';'M'' ",,'
.....................
.......................
...........,..........
. . . . . . . . . . . . . . . . . . . . . . .
......................
. . . . . . . . . . . . . . . . . . . . .
~e~.(IIII;lr.lltI'_IJ
.. ............................................
. . . -........... ...... -...... -....
....".......-....................
............. ................
...'...'.......-.........'.....'.....:.:-:.'..,......:-._.,.....,..-..................................,..-.-,....................
... ..........., ...,..,.......................................
. ......,.,..,.,...,...:-:-..,...,.....,..:..............;....,.......-...,....'...............
. ... ....... ....... ............
. ..... - - .. ...........".... ....
.. .. .....-~..................,.........................
. .. .. . . . . . . . . . . . . . . . . - . .. . . . . . . . .
...... ..... -.. .
A. Actuarial Present Value of Projected Benefits for
1. Active Members
a. Service Retirement Benefits $24,389,459 $24,287,137
b. Vesting Benefits 3,164,678 3,411,201
c. Disability Benefits 1,646,234 1,613,683
d. Preretirement Death Benefits 377,287 388,995
e. Return of Member Contributions 2,263 355
f. Other 0 0
g. Total 29,579,921 29,701,371
2. Inactive Members
a. Service Retirees and Beneficiaries 28,589,769 24,486,072
b. Disability Retirees 0 0
c. Terminated Vested Members 6.482.410 4.619.666
d. Total 35,072,179 29,105,738
3. Total For All Members 64,652,100 58,807,109
B. Actuarial Value of Assets 59,035,749 50,842,182
C. Unfunded Frozen Actuarial Accrued Liability
(UFAAL) 0 0
D. Actuarial Present Value of Projected Member
Contributions 4,659,832 4,852,160
E. Actuarial Present Value of Projected
Employer Normal Costs: A3 - B - C - D 956,519 3,112,767
F. Actuarial Present Value of Projected Covered
Payroll 46,598,300 48,521,600
G. Employer Normal Cost Rate: 100 x ElF 2.05% 6.42%
H. Annual Payroll of Active Members Below the
Assumed Retirement Age 6,493,032 6,600,100
I. Assumed Amount of Administrative Expenses 128,641 121,829
J. Employer Normal Cost: (G x H) + I 261,748 545,555
* From 4/14/97 Actuarial Impact Statement.
Gabriel, Roeder, Smith and Company
5
ACTUARIAL GAINS AND LOSSES
The assumptions used to anticipate mortality, employment turnover, investment income, expenses, salary
increases, and other factors have been based on long range trends and expectations. Actual experience can vary from
these expectations. The variance is measured by the gain and loss for the period involved. If significant long term
experience reveals consistent deviation from what has been expected and that deviation is expected to continue, the
assumptions should be modified. The net actuarial gain (loss) for the past year is computed as follows:
A. Employer Normal Cost as a Percentage of Covered
Payroll Below the Assumed Retirement Age
1. Last Valuation
2. Current Valuation
3. Difference: 1 - 2
6.42%
2.05
4.37
B.
Actuarial Present Value of Future Covered Payroll
$46,598,300
C.
Net Actuarial Gain (loss): A3 x B
2,036,346
Net actuarial gains in previous years have been as follows:
Year
Ending
. -.... .....'...-.... ....-. ..... .-..-......-.-,.,...'..
.... .. .. -. --- ........
iChangein ErT1ploy~r)
< >NormalCost Rate/<
9/30/94
9/30/95
9/30/96
(0.09)
5.62
1.74
$ 617,389
(2,230,401)
2,206,147
(51,357)
2,364,561
(41,669)
2,768,530
811,526
9/30/89
9/30/90
9/30/91
9/30/92
9/30/93
1.11%
(3.37)
3.51
(0.10)
5.13
Figures C2 and C3 show the figures from the previous table in graphic form.
Gabriel, Roeder, Smith and Company
$10
$8
$6
rn $4
c
0
:E $2
$0
-$2
-$4
OJ~OJ OJ~(::J ~
OJ~
Actuarial Gain (+) or Loss (-)
I
OJ~ft,
~
OJ~
OJ~~
OJ~(()
OJ~n;,
Plan Year End
IDi Gain Or Loss "* Cumulative
Figure C2
Change in Employer Normal Cost Rate
5%
0%
;XO:::.;::::::.:::::
ilii~~
~~:~~:K:K
-5%
-10%
-15%
-20%
~tb~
~~
~~~
~~
~~
~~
~~....
~~~ ~~
Plan Year End
fij Normal Cost Rate "* Cumulative
Figure C3
Gabriel, Roeder, Smith and Company
$10
$8
$6
$4 rn
c
0
$2 ~
$0
-$2
-$4
OJf:'
5%
0%
-5%
-10%
-15%
-20%
6
7
The fund earnings and salary increase assumptions have considerable impact on the cost of the
Plan so it is important that they are in line with the actual experience. The following table shows the
actual fund earnings and salary increase rates compared to the assumed rates for the last year:
. .. ,. -....,.,. , ". . ",...
.".. .-.... ......" ,..
I nvestmenfRetlll11> .... .......
..., , ,..
. ,. .... ,. ....
"."."'-'" ._,".' ',' ,.
AsSumed ...... ..
. ....Sctlary...I~~r~~:...............i>......>.................
..................... ...'.....'... ...._'.....,'..
............, ... ...............
.-..,...-..,'.........-..."..."..
r.........r....A$Sumed.......................
.. - . "'.
9/30/89 14.6% 8.0% 3.2% 6.0%
9/30/90 (2.3) 8.0 12.3 6.0
9/30/91 21.6 8.5 3.4 6.0
9/30/92 5.8 9.0 2.4 6.0
9/30/93 14.1 9.0 6.3 6.0
9/30/94 4.8 9.0 6.0 6.0
9/30/95 24.1 9.0 7.6 6.0
9/30/96 13.9 9.0 8.6 6.0
9/30/97 19.1 9.0 7.4 6.0
Average 12.6% 6.3%
The actual investment return rates shown above are based on the actuarial value of assets. The
actual salary increase rates shown above are the increases received by those active members who
were included in the actuarial valuation both at the beginning and the end of each period. Figures C4
and C5 show the figures from the previous table in graphic form.
Gabriel, Roeder, Smith and Company
History of Investment Return
Based on Actuarial Value of Assets
30%
25%
20%
15%
10%
5%
0%
-5%
~co~ ~~ ~f.J""
30%
25%
20%
15%
,- 10%
Oj~
t5%
0%
~ -5%
Oj~
Ojf.Jt},
~f.Jt>:J
OJ{/'
Ojf.J~
Plan Year End
-- Actual "* Assumed
Figure C4
History of Salary Increases
14%
12%
10%
8%
6%
4%
2%
0%
~~ ~~ ~~.....
14%
12%
10%
8%
~:
2%
0%
o,,~~
o,,~fI,
q,~
o,,-t
q,~
q,~
Plan Year End Compared to Previous Year
( - Actual .. Assumed J
Figure C5
Gabriel, Roeder, Smith and Company
8
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o
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tfl.
ae
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......,....,0)0)q-
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('I') 00 OO,....,N
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q-O) 10 0)\.0
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......-.......q--,....,,....,
9
10 q-q-,...., ('I')
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cxicxi"cxi~
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('I')q-IOIO,....,
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q-......N......,....,
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..............................
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...
Q)
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...... ...... ......
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('I') ('I') ('I') ('I') ......
q-......NNIO
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~ CTl.. \.0. \.0_ o.
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..................NN
~
OOOOO,....,N
0,....,1Oq-,....,
............ 0 N,....,
-----
""""""NNOO
,....,NN............
,....,0............10
I.!i ,....,. 00. ,...., - \.0-
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,....,10 NO)"""
,....,000)\.010
...... ...... ...... ...... ......
OOO)O......N
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-----
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..............................
Recent History of Number of Members
300
250
200
150
100
50
o
,
....~~fI, ....~~
....~'{/"
~
....~~
,
10
....~'fJ
cl-rIP
'"
cl-tCJ
'"
....~~
1'..
....~~
Actuarial Valuation Date
. Active Members Ii Inactive Members
Figure C6
Recent History of Covered Annual Payroll
$10.0
,
~
....~~
300
250
200
150
100
50
o
$10.0
$8.0 $8.0
$6.0 $6.0
CI!I U)
c: c:
~ ~
:i ~
$4.0 $4.0
$2.0
$0.0
....~? ....~~ ....~~ ....~~.... ....~~fI, ....~~ ....~'(I' ....~~ ....~~ ....~~
Actuarial Valuation Date
Figure C7
Gabriel, Roeder, Smith and Company
$2.0
$0.0
10
11
1I0JABd JO %
?fi. ?fi. ?fi. *- *-
0 10 0
C\J ,... ,... 10 0
<<%
~
Q
+-' ~
en -
0 '.( 0
L-
a >-
~ m
co ~ a..
-
E '.( 0
L.. *-
0 J> CD
z % ta CJ)
c m
I- '.(
Q) c: ()
~ ~ 0 z
0 ;: * co
<% m ()
c.. '.( ::1
E ~ - CD
c: ....
W C ::1 ::1
~ as 0 Cl
- 0':: E LL
0 '.( m <(
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0 <% <( Z
+-'
en '.( L-
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a 0
+-' ~ a.
c
Q) '.( E
0 w
Q) ~ it
a:: >;'
~ <
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0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 ~
co v C\I q CX) co v C\I
,... ,... ,... ,... ~ ~ ~ ~
~ ~ ~ ~
SPUBsnoll.l
Gabriel, Roeder, Smith and Company
12
Recommended City
For Fiscal Contribution
Valuation Year Ended Actual City
Date September 30 Amount % of Payroll Contribution
10/1/88 1990 $ 1,732,449 24.67% $ 1,732,449
10/1/89 1991 1,871,038 26.05 1,972,313
10/1/90 1992 2,117,615 26.07 2,050,406
1011191 1993 1,600,386 22.50 1,769,238
10/1/92 1994 1,509,587 23.16 1,509,587
10/1/93 1995 574,282* 9.64* 574,282
10/1/94 1996 602,174 9.64 602,174
10/1/95 1997 572,832 8.44 572,832
10/1/96 1998 594,655 9.01
10/1/97 1999 285,305 4.39
*
Figures do not match the October 1, 1993 Actuarial Report. Results were revised to reflect the
312195 receipt of the Pension Obligation Bond. The required City contribution without reflecting
the Pension Obligation Bond would have been $1,073,773, or 18.03% of covered payroll, for
the '94-'95 fiscal year.
Gabriel, Roeder, Smith and Company
13
ACTUARIAL ASSUMPTIONS AND COST METHOD
A. Cost Method
1. Funding
Frozen Entry Age Actuarial Cost Method. (Same as the
Aggregate Method when the unfunded actuarial liability
is $0).
2. Accumulated Benefit Obligation
Accrued Benefit Method
B. Investment Earnings
(including inflation)
9% per year, compounded annually; net rate after
investment related expenses.
C. Salary Increases
(including inflation)
6% per year up to the assumed retirement age.
D. Inflation
4% per year.
E. Retirement Age
See table below for retirement rates
F. Turnover Rates
See Table below.
G. Mortality Rates
1983 Group Annuity Mortality Tables for males and
females.
H. Disability
1. Rates
2. Percent Service Connected
See Table below.
25%
I. Asset Value
Market Value of assets less unrecognized capital
appreciation where capital appreciation is recognized at
the rate of 20% each year.
J. Administrative Expenses
Expenses paid out of the fund other than investment
related expenses are assumed to be equal to the
average of actual expenses over the previous two years.
K. Increase in Covered Payroll
N/A
L. Cost of Living Adjustment
1.5% per year after retirement.
M. Changes Since Last Valuation
None.
Gabriel, Roeder, Smith and Company
14
25 11.7% 0.09%
30 10.5 0.11
35 8.3 0.14
40 5.7 0.19
45 3.5 0.30
50 1.5 0.51
55 0.6 0.96
60 0.5 1.66
.-..-,.......-.. - .-.'........ .,.--.. ,',' , ".'..,....-.....,-..-.'.
..i.Al1nuaIRate.ofRetirernent for
... ... . .... /<Those Eligiblefo Retire .....
Age.
50-52
53-58
59-64
65
Rate
25%
15
40
100
60
61-64
65
60%
40
100
Gabriel, Roeder, Smith and Company
15
GLOSSARY OF TERMS
Actuarial Present Value is the value of an amount or series of amounts payable at various times,
determined as of the valuation date by the application of the set of actuarial assumptions.
Actuarial Assumptions are assumptions as to the occurrence of future events affecting pension costs.
The previous page outlines the Actuarial Assumptions utilized in this valuation.
Actuarial Cost Method is a procedure for determining the Actuarial Present Value of pension plan
benefits and for developing an actuarially c!quivalent allocation of :;uch value to time periods, usually
in the form of a Normal Cost and Actuarial Accrued liability.
Frozen Entry Ar!e Actuarial Cost Method is a method under which the excess of the Actuarial Present
Value of Projected Benefits of the group included in the valuation, over the sum of the Actuarial Value
of Assets, the Unfunded Frozen Actuarial Accrued liability and the Actuarial Present Value of Future
Member Contributions (if any) is allocated as a level percentage of earnings of the group between the
valuation date and the assumed retirement age. This allocation is performed for the group as a whole,
not as a sum of individual allocations. The portion of this Actuarial Present Value allocated to a
specific year is called the Emplover Normal Cost. Under this method, actuarial gains (losses) reduce
(increase) future Normal Costs.
Frozen Actuarial Accrued Liabilitv is the portion of the Actuarial Present Value of Projected Benefit
which is separated as of a valuation date and frozen under the Actuarial Cost Method being used. This
separated portion is the sum of an initial Unfunded Actuarial Accrued Liability and any increments or
decrements in the Actuarial Accrued liability established subsequently as a result of changes in
pension plan benefits, Actuarial Assumptions, or methods.
Unfunded Frozen Actuarial Accrued Liabilitv is the portion of the Frozen Actuarial Accrued liability
remaining after the addition of interest and the deduction of amortization payments.
Gabriel, Roeder, Smith and Company
SECTION C
PENSION FUND INFORMATION
Gabriel, Roeder, Smith and Company
Cash and Securities - Market Value
Cash and Savings Accounts
Money Market Funds
Treasury Bills
Commercial Paper
Treasury and Agency Bonds & Notes
Corporate Bonds
Common & Preferred Stocks
Pooled Equity Funds
Pooled Bond Funds
Other Securities
Total
$ 233,695
2,182,851
$ 249,772
468,204
61,198,995
13,212,187
250.000
77,077,728
47,586,590
9,584,841
250.000
58,139,407
Receivables and Accruals
Member Contribution
Employer Contribution
Interest and Dividends
Other
Total
43,000
43,000
45,000
45,000
Payables
Benefits
Refunds
Expenses
Other
Total
Net Assets - Market Value
Net Assets - Cost Value
77,120,728
49,593,878
58,184,407
42,096,552
Gabriel, Roeder, Smith and Company
16
"......-.-..,....-...........'.....................,.,.,................'....,.. ......'...........:-..:. ., .,........ -,-,."...
..;:.:iy~f:::~iji.~j::.:::::':::.:::::::.,.::.::....:::.':'.:'.'.:.'.:.':...:::.:::...::"'..::'.::..:.'.!:.::.:....:....:".!:...::.!::..::!:::..::.y::..:::....::;:::..:.ea:.:::....:.:...g::................t..'......:.'.IEri..o.... ,~.g:d. .:.6..."...'..'..:.......'.::..::...:....':..:...'.:::..:.:.:........:...:..:..:1:..:...:::...::..:.::..:..:.....:..'...............
::.':::::::,:$@()/~Z:::::"':':'.".:.:;:: ~:o;, !J..
" ...............,.......... ............"......,'
Market Value at Beginning of Period'.$58;i84~4b7.?;}$48~~2(),887<
Income
Member Contributions
Employer Contributions
Other Contrihutions
Investment Earnings
Transfer from Other Systems
Other Income
Total Income
Disbursements
Monthly Benefit Payments
Lump Sum Distributions
Refunds of Contributions
Investment Related Expenses
Other Administrative Expenses
Insurance Premiums
Other Expenses
Total Disbursements
Net Increase During Period
Market Value at End of Period
808,239
572,832
20,267,080
280,729
720,938
602,174
10,875,939
190,342
21,928,880
12,389,393
2,443,519
160,719
274,563
113,758
2,208,226
172,673
201,451
143,523
2,992,559
2,725,873
18,936,321
77,120,728
9,663,520
58,184,407
Gabriel, Roeder, Smith and Company
17
18
ACTUARIAL VALUE OF ASSETS
The Actuarial Value of Assets is equal to the market value less capital appreciation which has
not yet been recognized. Capital appreciation, the total of realized and unrealized gains, is being
recognized at the rate of 20% per year. Recognized and unrecognized capital appreciation for this
year's valuation is developed in the table below. Full implementation of the method will be completed
over four years by utilizing unrecognized capital appreciation as follows:
Valuation Date
Utilization
10/1/95
10/1/96
10/1/97
10/1/98
33 1/3%
55
75
100
I.' ".
(1) ., Amount of (l) Amount ofn) Amount of (l)
Year Capital ., Recognized Recognized by Unrecognized by
Ending Appreciation Each Year Valuation Date Valuation Date .
9/30/93 $ 3,006,904 $ 601,381 $ 3,006,904 $ 0
9/30/94 806,534 161,307 645,228 161,306
9/30/95 8,296,418 1,659,284 4,977,852 3,318,566
9/30/96 9,381,378 1,876,277 3,752,554 5,628,824
9/30/97 18.755.761 3.751.152 3.751.152 15.004.609
40,246,995 8,049,401 16,133,690 24,113,305
Actuarial Value of Assets = (Market Value) - (Unrecognized Capital Appreciation x
Utilization)
= $77,120,728 - ($24,113,305 x 75%)
= $59,035,749
Investment earnings recognized in the Actuarial Value of Assets are computed as follows:
$ 59,035,749
- 50,810,587
- 1,381,071
+ 2.992.559
9,836,650
274.563
9,562,087
Actuarial Value this year
Actuarial Value last year
Contributions during year
Expenses during year
Gross Investment Earnings
Investment related expenses
Net Earnings recognized
Gabriel, Roeder, Smith and Company
19
INVESTMENT RATE OF RETURN
The investment rate of return has been calculated on the following basis:
Basis 1 -
Interest, dividends, realized gains (losses) and unrealized appreciation (depreciation)
divided by the weighted average of the market value of the fund during the year.
This figure is normally called the Total Rate of Return.
Basis 2 -
Investment earnings recognized in the Actuarial Value of Assets divided by the
. weighted average of the Actuarial Value of Assets during the year.
... .... ...
Year Ended .. Basis!' .... Basis ...
9/30/89 14.6% 14.6%
9/30/90 (2.3) (2.3)
9/30/91 21.6 21.6
9/30/92 5.8 5.8
9/30/93 14.6 14.1
9/30/94 5.3 4.8
9/30/95 25.9 24.1
9/30/96 22.7 13.9
9/30/97 35.2 19.1
Average Compounded Rate
of Return for Number of
Years Shown 15.4% 12.6%
Average for Last 5 Years 20.3% 15.0%
Gabriel, Roeder, Smith and Company
SECTION 0
FINANCIAL ACCOUNTING INFORMATION
Gabriel, Roeder, Smith and Company
20
A. Valuation Date October 1, 1997 October 1, 1996
B. Actuarial Present Value of Accumulated
Plan Benefits
1. Vested Benefits
a. Members Currently Receiving Payments $ 28,589,769 $ 24,486,072
b. Terminated Vested Members 6,482,410 4,619,666
c. Other Members 15,439,285 14,775,130
d. Total 50,511,464 43,880,868
2. Non-Vested Benefits 244,830 343,481
3. Total Actuarial Present Value of Accumulated
Plan Benefits: 1d + 2 50,756,294 44,224,349
4. Accumulated Contributions of Active Members 4,788,274 4,654,062
C. Changes in the Actuarial Present Value of
Accumulated Plan Benefits
1. Total Value at Beginning of Year 44,224,349 38,707,895
2. Increase (Decrease) During the Period
Attributable to:
a. Plan Amendment N/A N/A
b. Change in Actuarial Assumptions N/A 1,350,402
c. Latest Member Data, Benefits Accumulated
and Decrease in the Discount Period 9,136,183 6,546,951
d. Benefits Paid (2.604.238) (2.380.899)
e. Net Increase 6,531,945 5,516,454
3. Total Value at End of Year 50,756,294 44,224,349
D. Market Value of Assets 77,120,728 58,184,407
E. Actuarial Assumptions - See page entitled
Actuarial Assumptions and Methods.
Gabriel, Roeder, Smith and Company
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Schedule of Funding of Progress
GASB Statement No. 25
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m Value of Assets . (ML) Entry Age "* Funded Ratio
Figure C10
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GASB Statement No. 25
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Figure C11
Gabriel, Roeder, Smith and Company
.
Year Ended . ....n.
...September30n
1991
1992
1993
1994
1995
1996
1997
23
SCHEDULE OF EMPLOYER CONTRIBUTIONS
(GASB Statement No. 25)
. ,'",. ..........,.',..... ....
"..':-:-::-::-><<<<:::'.'..::-..::-:':':-":-:-,.:-:-'::-:'"':-:">:-::-::.".'.".'.'.,','. ".-::.:.::-::-:.:-:.:-:-::-.-,.'"..:.::-.----,-:-::-:::., .... ................... ....... ....
> AnnuaL>. ..u~Ctual<>Percentage
. <>Required Contribution ...... . <Colltribution Contributed/
$ 1,871,038 $1,972,313 105.4%
2,117,615 2,050,406 96.8
1,600,386 1,769,238 110.6
1,509,587 1,509,587 100.0
574,282 574,282 100.0
602,174 602,174 100.0
572,832 572,832 100.0
Gabriel, Roeder, Smith and Company
24
ANNUAL PENSION COST AND NET PENSION OBLIGATION
(GASB STATEMENT NO. 27)
Employer FYE September 30
1998
Annual required contribution
Interest on net pension obligation
$594,655
o
Adjustment to annual required contribution
o
Annual pension cost
594,655
Contributions made
Increase (decrease) in net pension obligation
Net pension obligation at beginning of year
o
Net pension obligation at end of year
THREE-YEAR TREND INFORMATION
Fiscal Annual Pension Percentage of Net Pension
Year Ending Cost (APC) APC Contributed Obligation
9/30/98 $ 594,655 % $
9/30/99
9/30/00
Gabriel, Roeder, Smith and Company
Contribution Rates
Employer
Plan members
Actuarial valuation date
Actuarial cost method
Amortization method
RELATED INFORMATION
Remaining amortization period (years)
Asset valuation method
Actuarial assumptions
Investment rate of return*
Projected salary increases*
*Includes inflation at
Cost of Living adjustments
Gabriel, Roeder, Smith and Company
25
9.01%
10%
10/1/96
Aggregate
NA
NA
5-year smoothed market
9%
6%
4%
1.5%
26
OTHER DISCLOSURES
A. Required Annual Contributions for Fiscal Year Ending September 30, 1997.
Employer Normal Cost
$ 525,534
Payment Towards Unfunded
Actuarial Liability
o
Interest on These Amounts from
Actuarial Valuation Date to
Expected Payment Dates
47,298
572,832
Total Required Contribution
Effect on Contribution of
Changes in Actuarial Assumptions
or Methods
NA
Effect on Contribution of
Changes in Plan Provisions
NA
B. Description of Changes in Actuarial Assumptions or Methods - See page entitled
Actuarial Assumptions and Methods.
C. Description of Changes in Plan Provisions - See Section entitled Summary of Plan Provisions.
D. Description of Employee Groups Covered - See Section entitled Summary of Plan Provisions.
E. Description of Covered Employees Who Are Not Included in Valuation - None.
F. Number and Compensation of Participants - See Section entitled Miscellaneous Information.
G. Has Actuary Seen Notified of Any Decision by Plan Sponsor to Terminate the Plan?
Response - No.
H. Net Actuarial Gain or Loss - See page entitled Actuarial Gains and Losses. See Glossary of
Terms for methods of recognizing such gains and losses. Any unrealized appreciation
(depreciation) included in the actuarial value of assets is recognized in the same manner as
any other gains or losses.
I. All responses in this Section have been made in accordance with our understanding of FASS
No.35, GASS No. 25, GASS No. 27 and APS Opinion No.8.
Gabriel, Roeder, Smith and Company
SECTION E
MISCELLANEOUS INFORMATION
Gabriel, Roeder, Smith and Company
27
1. Number Included in Last Valuation
2. New Members Included in Current Valuation
3. Non-Vested Employment Terminations
4. Vested Employment Terminations
5. Service Retirements
6. Disability Retirements
7. Deaths
8. Other - Transfers from General
9. Other - Transfers to 401A
10. Number Included in This Valuation
134
6
(5)
(8)
(7)
o
o
8
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128
141
8
(3)
(9)
(6)
o
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134
I. .. B.Tefrni~~ted"estedM;n1~rs<< ....
I
1. Number Included in Last Valuation
2. Additions from Active Members
3. Lump Sum Payments
4. Payments Commenced
5. Deaths
6. Other
7. Number Included in This Valuation
29
8
(2)
(1)
o
---1
35
24
9
(3)
(1)
o
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29
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1. Number Included in Last Valuation 73 66
2. Additions from Active Members 7 6
3. Additions from Terminated Vested Members 1 1
4. Deaths Resulting in No Further Payments 0 0
5. Deaths Resulting in New Survivor Benefits 0 0
6. End of Certain Period - No Further Payments 0 0
7. Other -..Q -..Q
8. Number Included in This Valuation 81 73
Gabriel, Roeder, Smith and Company
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MIAMI BEACH UNCLASSIFIED
AGE
GROUP
0-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
70-74
75-79
80-84
85+
TOTAL
SERVICE
GROUP
o
1
2
3
4
0-4
5-9
10-14
15-19
20-24
25-29
30-34
35-39
40+
TOTAL
M
NUMBER
OF
PEOPLE
o
o
1
5
7
8
17
6
4
3
1
o
1
o
o
53
M
NUMBER
OF
PEOPLE
o
o
o
o
o
o
26
18
6
2
1
o
o
o
53
A L
TOTAL
ANNUAL
EARNINGS
o
o
50830
238472
427622
399126
1104974
374530
201968
111748
5980
o
9984
o
o
2925234
A L
TOTAL
ANNUAL
EARNINGS
o
o
o
o
o
o
1329172
1019928
365196
163488
47450
o
o
o
2925234
TABLE A. ANNUAL EARNINGS BY AGE GROUPS
E
AVERAGE
ANNUAL
EARNINGS
o
o
50830
47694
61089
49891
64998
62422
50492
37249
5980
o
9984
o
o
55193
F
NUMBER
OF
PEOPLE
o
o
1
1
11
8
14
9
3
1
1
o
o
o
o
49
E
M A
TOTAL
ANNUAL
EARNINGS
o
o
39520
42822
543920
424918
682734
411450
169780
88062
39520
o
o
o
o
2442726
L E
AVERAGE
ANNUAL
EARNINGS
o
o
39520
42822
49447
53115
48767
45717
56593
88062
39520
o
o
o
o
49852
NUMBER
OF
PEOPLE
o
o
2
6
18
16
31
15
7
4
2
o
1
o
o
102
TABLE B. ANNtl1I.L EARNINGS BY SERVICE GROUPS
E
AVERAGE
ANNUAL
EARNINGS
o
o
o
o
o
o
51122
56663
60866
81744
47450
o
o
o
55193
F
NUMBER
OF
PEOPLE
o
o
o
o
o
o
16
17
10
6
o
o
o
o
49
E
M A
TOTAL
ANNUAL
EARNINGS
o
o
o
o
o
o
704002
885794
530088
322842
o
o
o
o
2442726
L E
AVERAGE
ANNUAL
EARNINGS
o
o
o
o
o
o
44000
52106
53009
53807
o
o
o
o
49852
Gabriel, Roeder, Smith and Company
NUMBER
OF
PEOPLE
o
o
o
o
o
o
42
35
16
8
1
o
o
o
102
30
AS OF 10/1/97
A L
TOTAL
ANNUAL
EARNINGS
o
o
90350
281294
971542
824044
1787708
785980
371748
199810
45500
o
9984
o
o
5367960
A L
TOTAL
ANNUAL
EARNINGS
o
o
o
o
o
o
2033174
1905722
895284
486330
47450
o
o
o
5367960
L
AVERAGE
ANNUAL
EARNINGS
o
o
45175
46882
53975
51503
57668
52399
53107
49953
22750
o
9984
o
o
52627
L
AVERAGE
ANNUAL
EARNINGS
o
o
o
o
o
o
48409
54449
55955
60791
47450
o
o
o
52627
31
MIAMI BEACH UNCLASSIFIED AS OF 10/1/97
TABLE A. ANNUAL EARNINGS BY AGE GROUPS
M A L E F E M A L E A L L
NUMBER TOTAL AVERAGE NUMBER TOTAL AVERAGE NUMBER TOTAL AVERAGE
AGE OF ANNUAL ANNUAL OF ANNUAL ANNUAL OF ANNUAL ANNUAL
GROUP PEOPLE EARNINGS EARNINGS PEOPLE EARNINGS EARNINGS PEOPLE EARNINGS EARNINGS
0-19 0 0 0 0 0 0 0 0 0
20-24 0 0 0 0 0 0 0 0 0
25-29 1 33800 33800 2 61074 30537 3 94874 31625
30-34 2 97682 48841 2 78260 39130 4 175942 43986
35-39 0 0 0 4 172016 43004 4 172016 43004
40-44 2 99346 49673 2 120328 60164 4 219674 54919
45-49 5 253890 50778 1 282J.0 28210 6 282100 47017
50-54 0 0 0 2 84422 42211 2 84422 42211
55-59 1 43160 43160 1 46904 46904 2 90064 45032
60-64 0 0 0 1 5980 5980 1 5980 5980
65-69 0 0 0 0 0 0 0 0 0
70-74 0 0 0 0 0 0 0 0 0
75-79 0 0 0 0 0 0 0 0 0
80-84 0 0 0 0 0 0 0 0 0
85+ 0 0 0 0 0 0 0 0 0
TOTAL 11 527878 47989 15 597194 39813 26 1125072 43272
TABLE B, lINNUAL EARNINGS BY SERVICE GROUPS
M A L E F E M A L E A L L
NUMBER TOTAL AVERAGE NUMBER TOTAL AVERAGE NUMBER TOTAL AVERAGE
SERVICE OF ANNUAL 1INNUAL OF ANNUAL 1INNUAL OF 1INNUAL 1INNUAL
GROUP PEOPLE EARNINGS EARNINGS PEOPLE EARNINGS EARNINGS PEOPLE EARNINGS EARNINGS
0 5 243880 48776 1 30056 30056 6 273936 45656
1 2 105872 52936 4 129064 32266 6 234936 39156
2 0 0 0 2 77220 38610 2 77220 38610
3 1 42094 42094 5 181766 36353 6 223860 37310
4 3 136032 45344 3 179088 59696 6 315120 52520
0-4 11 527878 47989 15 597194 39813 26 1125072 43272
5-9 0 0 0 0 0 0 0 0 0
10-14 0 0 0 0 0 0 0 0 0
15-19 0 0 0 0 0 0 0 0 0
20-24 0 0 0 0 0 0 0 0 0
25-29 0 0 0 0 0 0 0 0 0
30-34 0 0 0 0 0 0 0 0 0
35-39 0 0 0 0 0 0 0 0 0
40+ 0 0 0 0 0 0 0 0 0
TOTAL 11 527878 47989 15 597194 39813 26 1125072 43272
Gabriel, Roeder, Smith and Company
MIAMI BEAOt UNCLASSIFIED
AGE
GROUP
0-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
70-74
75-79
80-84
85+
TOTAL
0-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
70-74
75-79
80-84
85+
TOTAL
0-4
5-9
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
T.l\BLE C, SERVICE GROUPS BY AGE GROUPS
S E R V ICE
10-14 15-19 20-24
o
o
1
5
3
3
7
3
1
1
1
o
1
o
o
26
o
o
1
o
4
1
5
2
2
o
1
o
o
o
o
16
o
o
o
o
3
3
7
1
3
1
o
o
o
o
o
18
o
o
o
o
5
7
3
2
o
o
o
o
o
o
o
17
F E
o
o
o
1
2
o
2
3
1
1
o
o
o
o
o
10
MAL E
o 0
o 0
o 0
o 0
1 0
2 0
2 1
1 1
o 0
o 0
o 0
o 0
o 0
o 0
o 0
6 2
M A
o
o
o
o
o
o
4
2
o
o
o
o
o
o
o
6
G R 0 U P
25-29 30-34
L
E
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
1
o
o
o
o
o
1
Gabriel, Roeder, Smith and Company
35-39
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
32
AS OF 10/1/97
40+
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
TOTAL
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
1
5
7
8
17
6
4
3
1
o
1
o
o
53
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
1
1
11
8
14
9
3
1
1
o
o
o
o
49
33
MIAMI BEACH UNCLASSIFIED AS OF 10/1/97
TABLE C. SERVICE GROUPS BY AGE GROUPS
AGE S E R V I C E G R 0 U P
GROUP 0-4 5-9 10-14 15-19 20-24 25-29 30-34 35-39 40+ TOTAL
M A L E
0-19 0 0 0 0 0 0 0 0 0 0
20-24 0 0 0 0 0 0 0 0 0 0
25-29 1 0 0 0 0 0 0 0 0 1
30-34 2 0 0 0 0 0 0 0 0 2
35-39 0 0 0 0 0 0 0 0 0 0
40-44 2 0 0 0 0 0 0 0 0 2
45-49 5 0 0 0 0 0 0 0 0 5
50-54 0 0 0 0 0 0 0 0 0 0
55-59 1 0 0 0 0 0 0 0 0 1
60-64 0 0 0 0 0 0 0 0 0 0
65-69 0 0 0 0 0 0 0 0 0 0
70-74 0 0 0 0 0 0 0 0 0 0
75-79 0 0 0 0 0 0 0 0 0 0
80-84 0 0 0 0 0 0 0 0 0 0
85+ 0 0 0 0 0 0 0 0 0 0
TOTAL 11 0 0 0 0 0 0 0 0 11
F E M A L E
0-19 0 0 0 0 0 0 0 0 0 0
20-24 0 0 0 0 0 0 0 0 0 0
25-29 2 0 0 0 0 0 0 0 0 2
30-34 2 0 0 0 0 0 0 0 0 2
35-39 4 0 0 0 0 0 0 0 0 4
40-44 2 0 0 0 0 0 0 0 0 2
45-49 1 0 0 0 0 0 0 0 0 1
50-54 2 0 0 0 0 0 0 0 0 2
55-59 1 0 0 0 0 0 0 0 0 1
60-64 1 0 0 0 0 0 0 0 0 1
65-69 0 0 0 0 0 0 0 0 0 0
70-74 0 0 0 0 0 0 0 0 0 0
75-79 0 0 0 0 0 0 0 0 0 0
80-84 0 0 0 0 0 0 0 0 0 0
85+ 0 0 0 0 0 0 0 0 0 0
TOTAL 15 0 0 0 0 0 0 0 0 15
Gabriel, Roeder, Smith and Company
34
MIAMI BEACH UNCLASSIFIED 10/1/97
Schedule of Non-Active Participant Data
Terminated Terminated
Vested Disabled Retired Non-Vested
Total Total Total Total
Age Number Benefit Number Benefit Number Benefit Number Benefit
Under 45 17 351205 0 0 0 0 0 0
45 to 49 17 395640 0 0 0 0 0 0
50 to 54 1 41229 0 0 18 713595 0 0
55 to 59 0 0 0 0 18 559721 0 0
60 to 64 0 0 0 0 16 589995 0 0
65 to 69 0 0 0 0 12 352685 0 0
70 to 74 0 0 0 0 10 297621 0 0
75 to 79 0 0 0 0 4 105633 0 0
80 to 84 0 0 0 0 3 67892 0 0
85 to 89 0 0 0 0 0 0 0 0
90 " up 0 0 0 0 0 0 0 0
Total 35 788074 0 0 81 2687141 0 0
Average Age -43.4 0.0 61.9 0.0
Average Benefit 22516 0 33175 0
Gabriel, Roeder, Smith and Company
SECTION F
SUMMARY OF PLAN PROVISIONS
Gabriel, Roeder, Smith and Company
35
SUMMARY OF PLAN PROVISIONS
Effective Date
April 1, 1988
Elif!ibilitv
Each unclassified employee and elected official is eligible for membership on the later of his date of
employment or April 1, 1988.
Creditable Service
Service credited under the predecessor system up to April 1, 1988 plus service after such date with
respect to which merllber contributions are made.
Earninl!S
Base pay including longevity, but excluding overtime, shift differential or extra compensation
allowances.
Final Averaf!e Monthlv Earninf!s (FAME>
One-twelfth of annual Earnings during the last year of Creditable Service; for those hired after October
17, 1992, average of Earnings during the highest three years of Creditable Service.
Payments for accumulated leave are not included in FAME.
Normal Retirement
Eligibility
Age 50 and five years of Creditable Service. For those hired after October
17, 1992, age 60 and ten years of Creditable Service.
Benefit
4.0% of FAME multiplied by Creditable Service up to October 1, 1992; 3%
of FAME multiplied by Creditable Service after September 30, 1992. If
service is at least 20 years on October 1, 1992, the maximum benefit is 90%
of FAME; if less than 20 years of service on October 1 1992, the maximum
benefit is 80% of FAME. For those hired after October 17, 1992,3.0% of
FAME multiplied by Creditable Service with a maximum benefit of 80% of
FAME.
FOim of Benefit
50% joint and survivor annuity payable only to the spouse or, if no spouse,
to the surviving children until age 21; other options are also available.
Spouse's benefits cease upon remarriage.
Delaved Retirement
Eligibility
Any time after the Normal Retirement Date.
Benefit
Calculated in the same manner as the Normal Retirement Benefit but using
the FAME and Creditable Service as of the actual retirement date.
Gabriel, Roeder, Smith and Company
36
Disability Benefits
Eligibility
A total and permanent disability which renders a member incapacitated,
mentally or physically, for the further performance of duty. Five years of
Creditable Service is also required unless the disability is service-connected.
Benefit
Accrued retirement benefit, without reduction, with a minimum of 25%, 35%
for those hired after October 17, 1992, of FAME if ordinary disability and
50%, 60% for those hired after October 17, 1992, of FAME if service-
connected. Such amounts are reduced by workers' compensation benefits
and, in certain cases, earned income will be considered in offsetting the
benefit. The period of disability shall be included in Creditable Service for
purposes of computing normal retirement benefits when a disability retiree
reaches normal retirement age.
Preretirement Death Benefits
For a member who has at least five years of Creditable Service but who dies before commencement
of retirement benefits, a monthly benefit is payable to the spouse or, if no spouse, to the children
until age 21. The benefit is equal to 50% of the accrued normal retirement benefit without reduction.
Spouse's benefits cease upon remarriage.
Termination Benefits
For a member with less than five years, ten years for those hired after October 17, 1992, of
Creditable Service when he terminates, his accumulated employee contributions, plus an additional
10% of his accumulated contributions multiplied by years of service, not to exceed ten years, is
returned to him. For a member with five or more years, ten or more for those hired after October 17,
1992, of Creditable Service when he terminates, he may either take a return of contributions plus
the additional amount described above or his accrued benefit is payable at his Normal Retirement
Date.
Post Retirement Adiustments
All benefits in pay status are subject to a 1 1/2% increase each year as of October 1st
Contributions
From Members
- 10% of Earnings.
From the City
- The amount necessary to fund the Plan properly according to the Plan's
actuary.
Chan2es Since Last Valuation
There have been no changes in benefits since the last actuarial valuation.
Gabriel, Roeder, Smith and Company