Loading...
LTC 175-2010 Fire & Police Pension Plan Actuarialm MIAMIBEACH OFFICE OF THE CITY MANAGER NO. LTC # 175-zoio LETTER~~O,'C'O~vIMI~SI:~N Li 7 ~ v~. ~:tal J Ui (~ ll.~`l.: TO: Mayor Matti Bower and Members of the City Commission FROM: Jorge M. Gonzalez, City Manager ~~ DATE: June 8, 2010 SUBJECT: Fire and Police Pension Plan Actuari aluation Report as of October 1, 2009 The purpose of this Letter to Commission (LTC) is to transmit the Fire and Police Pension Plan Actuarial Valuation Report as of 10/1/09. As you may recall, the preliminary initial estimate for the City contribution requirement for FY 2010/11 was $41.3 million, an increase of approximately $18 million from the current fiscal year, which was subsequently revised to $36.6 million, an increase of $13.3 million. Based on the Pension Board's refinement of assumptions as well as an assumed 0% Cost of Living Adjustment (COLA) for Police and fire salaries for Fiscal Year 2009/10, the final valuation report requires a City contribution requirement of $35,243,726 million, an increase of $11.96 million the current fiscal year. In addition the report includes the following changes from the 10/1/08 Valuation report: Oct. 1, 2009 Unfunded Liability Funded Ratio $266,792,989 66.0% Oct. 1, 2008 $176,368,408 74.2% City Contribution as a % of Salaries * 81.91 % 55.32% City Contribution as a % of Total Pensionable Pays ** 65.08% 43.80% * Includes base salaries (including salary, premiums and longevity). Premiums are any salary or pay on which longevity is calculated. *" Includes salaries plus overtime, holiday pay, allowances, etc. The Fire and Police Pension Board is responsible for setting pension assumptions and managing investments with the guidance and input from its professional advisors. Please contact Celia Locke, Fire and Police Pension Fund Administrator, if you have any questions. JMG/ /pr A Xerox Company buckconsuitants City Pension Fund for Firefighters and Po~iee ffi r i t City f i i ach Actuarial Valuation Report as of October 1, 2009 TABLE OF CONTENTS Discussion ............................... Liabilities Page Number Table I Summary of Valuation Results ................................................................. 4 Table II Gain and Loss Analysis ............................................................................. 6 Table III Accounting Disclosures (GASB 25/27) .................................................... 8 Table IV Present Value of Accrued Benefits ........................................................... 10 Table V Information Req. by Florida Statute Chapter 112 ..................................... 11 Table Va Unfunded Liability Bases .................................................................... 20 Assets Table VI Assets ........................................................................................................ 21 Table VIa Asset Reconciliation ............................................................. 22 Table VII Historical Asset Information .................................................... 24 Table VIIa Revenues by Source and Expenses by Type .................................. 25 Table VIII Contributions vs. Fund Payouts ................................................................ 26 Data Table IX Summary of Member Data ........................................................................ 27 Table IXa Active Data ........................................................................................... 28 Table IXb Retiree Data ........................................................................................... 29 Table IXc Data Reconciliation .............................................................. 30 Table IXd Age-Service-Salary Table (All Active Members) ..................................... 31 Table [Xe Age-Service-Salary Table (Active Police Officers) .................................. 32 Table IXf Age-Service-Salary Table (Active Firefighters) ....................................... 33 Table IXg Inactive -Benefit-Distribution Table (Retirees) ....................................... 34 Table IXh Inactive -Benefit-Distribution Table (Disableds) ..................................... 35 Table IXi Inactive -Benefit-Distribution Table (Beneficiary) .................................. 36 Table IXj Inactive -Benefit-Distribution Table (Vested) ......................................... 37 Table X Historical Contribution Rate ..................................................................... 38 Assumations Table XI Actuarial Assumptions and Methods ........................................................ 39 Table XIa Assumption Changes ............................................................. 42 Plan Provisions Table XII Plan Provisions ........................................................................................ 44 Table XIIa Plan Amendments ................................................................ 48 City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page i t~ckconsultants May 27, 2010 Board of Trustees City Pension Fund for Firefighters and Police Officers in the City of Miami Beach 1691 Michigan Avenue, Suite 355 Miami Beach, FL 33139-2557 Dear Members of the Board: A Xerox Company This report presents the results of the October 1, 2009 actuarial valuation of the City Pension Fund for Firefighters and Police Officers in the City of Miami Beach. This valuation will be used to determine the contributions for the City's fiscal year beginning October 1, 2010. Plan Amendments and Other Changes Affecting the Financial Status of the Fund The assumptions used in the valuation are outlined in Table XI. Provisions of the plan are set forth in Table XII. The valuation assumptions were updated as of October 1, 2009 and reflect changes to the discount rate, the mortality table, the salary scale, the retirement assumptions, the withdrawal assumptions, and the loadings for overtime and other pays. The assumptions were modified based on the results of the experience study conducted for the period October 1, 2003 through October 14, 2008. Summary of Valuation Results The City contribution requirement for the fiscal year beginning October 1, 2010 is summarized below, payable at October 1, 2010. Required City contribution for plan year beginning 10/1/2010 $35,243,726 The City's contribution increased from $23,283,269 for the 2009/2010 fiscal year to $35,243,726 for the 2010/2011 fiscal year. The increase in the contribution requirement is due to several factors the most significant of which were (1) higher than expected pay increases, 7.93% compared to an expected 4.40%, (2) asset losses (Market Value Return of 1.35% and Actuarial Value Return of 4.49% vs. expected return of 8.40%) incurred over the 2008/2009 fiscal year, and (3) assumption changes resulting from the experience review over the 5 year period 10/ 1 /2003 through 10/ 1 /2008. 200 Galleria Parkway NW, Suite 1900 • Atlanta, GA 30339-5945 770.955.2488 • 770.933.8336 (fax) Page 1 Board of Trustees May 27, 2010 In addition to the City Contributions, there are expected member contributions of $4,303,006 and contributions from the Share Plans of $120,549 to fund the ten year certain and life form of benefit payment. The City contribution requirements presented above for the 2010/2011 fiscal year reflect an annual payment at the beginning of the fiscal year, which is our understanding of the City's payment schedule. Below we present a breakdown of the interest adjustment to reflect the annual payment for the period October 1, 2010 through September 30, 201 1 with the payment due on October 1, 2010. Normal Cost at October 1, 2009 $16,599,835 Payment to Amortize Unfunded Liability at October 1, 2009 $16,780,608 Total $33,380,443 Interest at 8.30% per year to October 1, 2010 $ 2,770,577 Interest adjustment for bi-weekly payment of Expected Member Contributions 166 974 Preliminary Minimum Required Contribution $36,317,994 Estimated Service Buybacks at October 1, 2010 $ 2,581,803 Estimated Administrative Expenses at October 1, 2010 $ 767,484 Total Minimum Required Contribution payable October 1, 2010 $39,667,281 Expected Member Contributions $ (4,303,006) Expected Share Plan Contributions $ (120,549 Estimated Cit Contribution a able on October 1, 2010 $35,243,726 GASB 25/27 Information Governmental Accounting Standards Board Statement Nos. 25 and 27 (GASB 25/27) require the disclosure of certain information. GASB 25 requires disclosure of funding progress and GASB 27 requires the calculation of the net pension obligation and annual pension cost. Results for the 2008/2009 and 2009/2010 fiscal years are shown in Table III. Contents of the Report A summary of the results of the valuation is presented in Table I. Information for the auditors can be found in Tables III and IV. Information required by the State of Florida to be disclosed under Chapter 112 is presented in Tables V and Va. Finally, Tables Vt through V[II provide information about the fund's assets, while Tables IX through IXf provide information about the membership data. Table X is the Historical Contribution Rates. !xlCkconSUitants Page 2 Board of Trustees May 27, 2010 Certification 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 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. In addition, we certify that we have experience in performing actuarial valuations for public sector retirement systems, that the valuation was prepared in accordance with the standards of practice prescribed by the Actuarial Standards Board, and that the actuarial calculations were performed by qualified actuaries in accordance with accepted actuarial procedures, based on the current provisions of the Pension Fund and on actuarial assumptions that are internally consistent and reasonably based on the actual experience of the Fund. The first signatory below is a member of the American Academy of Actuaries and meets the Qualification Standards of the American Academy of Actuaries to render the actuarial opinion contained herein. Very truly yours, /l i~1•tfvN~ Kerry Schmidt, FSA, MAAA Principal Enrollment No. 08-2628 P:\Retirement\Miami Beach Fire and Police\2009\Valuation\Report\2009 Val Ltr.doc l~ckconsultants .~V David P. Campbell Consultant Page 3 SUMMARY OF VALUATION RESULTS TABLE 1. Number of Members a. Active Members b. Deferred Vested Members c. Retired Members: i. Non-disabled(excluding DROP) ii. DROP iii. Disabled iv. Beneficiaries v. Sub-total d. Total Members 2. Total Annual Compensation' a. Base Pay at Valuation Date b. Projected Payroll (Base Pay) EOY c. Projected Pensionable Pay EOY' d. Projected Pensionable Pay (plus DROP) EOY z As of As of October 1, 2008 October 1, 2009 487 14 395 46 62 98 601 1,102 $40,661,885 $42,085,051 $53,153,934 $59,275,538 3. Total Retired Member Benefits 4. Annual Minimum Required Contribution a. Present Value of Future Benefits b. Present Value of Future Normal Cost City Portion Member Portion c. Actuarial Accrued Liability (AAL) d. Actuarial Value of Assets e. Unfunded AAL (UAAL) f. BOY Normal Cost at Valuation Date g. BOY Payment to Amortize Unfunded Liability h. Interest Adjustment 3 i. Expected Service Buyback j. Expected Administrative Expenses k. Total Minimum Required Contribution 1. Expected Member Contributions m. Expected Share Plans Contributions n. Estimated City Contributions o. Total Minimum Required Contribution $37,220,325 $765,475,606 $81,743,662 $44, 719, 347 $37, 024, 315 $683,73 ] ,944 ($507,363,812) $176,368,132 $11,294,379 $11,256,706 $1,894,291 $2,525,103 $641, 844 $27,612,323 $4,208,505 $120,549 $23,283,269 $27,612,323 478 12 407 66 62 99 634 1,124 $41,574,935 $43,030,058 $54,154,885 $60,922,169 $41,838,341 $932,080,072 $147,684,250 $98, 38Q 210 $49, 304, 040 $784,395,822 ($517,602,834) $266,792,988 $16,599,835 $16,780,608 $2,937,551 $2,581,803 $767,484 $39,667,281 $4,303,006 $120,549 $35,243,726 $39,667,281 ~ Description of Total Annual Compensation provided on page 5. 2 Not used to generate valuation liabilities. Shown for comparison purposes only. s As of October 1, 2009 this includes an interest adjustment for the expected member contributions being deposited on a bi-weekly basis during the course of the fiscal year. City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 4 SUMMARY OF VALUATION RESULTS TABLE I (continued) As of As of October 1, 2008 October 1, 2009 5. Annual Cost (as a % of Projected Base Pay, Projected Pensionable Pay, and Projected Pensionable Pay plus DROP) a. Total Required Contribution 65.61% b. Estimated Share Plans Contribution 0.29% c. Expected Member Contribution d. Estimated City Contribution (4n./2b.) e. Estimated City Contribution (4n./2c.) f. Estimated City Contribution (4n./2d.) ' Description of Total Annual Compensation (Item 2 of Table I) a. Base Pay at Valuation Date: 10.00% 55.32% 43.80% 39.28% 92.19% 0.28% 10.00% 81.91% 65.08% 57.85% Participant's base pay (including salary, premiums and longevity) at snapshot date of September 30th increased by assumed salary scale to reflect pay increases that are usually granted in October. Premiums are any salary or pay on which longevity is calculated. b. Projected Payroll (Base Pay) EOY: Base pay at valuation date projected to the end of year (and beginning of fiscal year for which the city contributions are determined) by assuming an aggregate increase in payroll of 3.~0%. c. Projected Pensionable Pay EOY: Pensionable pay (includes base pay, overtime, holiday pay, allowances, etc.) at snapshot date of September 30th increased by assumed salary scale to reflect pay increases that are usually granted in October. The resulting figure is then projected to the end of year assuming an aggregate increase in payroll of 3.50%. d. Projected Pensionable Pay (plus DROP) EOY: Pensionable pay for active and DROP participants at snapshot date of September 30th increased by assumed salary scale to reflect pay increases that are usually granted in October. The resulting figure is then projected to the end of year assuming an aggregate increase in payroll of 3.50%. City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 5 GAIN AND LOSS ANALYSIS TABLE II 1. Actual Unfunded Accrued Liability as of October 1, 2008 $176,368,132 2. Expected Change in Unfunded Liability During the 2008/2009 Plan Year a. Due to Employer Normal Cost for Benefits $11,201,549 b. Due to Interest on the Unfunded Liability $14,814,923 c. Expected City and State Contributions ($23,403,818) d. Total Expected Change $2,612,654 3. Expected Unfunded Accrued Liability as of October 1, 2009 $178,980,786 4. Change in Unfunded Liability During the 2008/2009 Plan Year Due to: a. Method changes $p b. Assumption changes $22,643,463 c. Plan amendments $0 d. Experience $65,168,739 e. Total change $87,812,202 5. Actual Unfunded Accrued Liability as of October 1, 2009 $266,792,988 6. Items Affecting Calculation of Accrued Liability a. Plan provisions reflected in the accrued liability (see Table XII on page 44) b. Plan amendments reflected in item 4.c. above (see on page 48) c. Actuarial assumptions and methods used to determine accrued liability (see Table XI on page 39) d. Changes in actuarial assumptions and methods reflected in items 4.a. and 4.b. above (see on page 42) City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 6 UNFUNDED ACCRUED LIABILITY CONTRIBUTION RATE CHANGE TABLE II (continued) 7. Expected Unfunded Accrued Liability Contribution Rate as of October 1, 2008 8. Net Actuarial (Gains)/Losses During the 2008/2009 Plan Year a. Due to Salary/Service/Data 4.75% b. Due to Investment Performance 3.07% c. Due to Turnover/Mortality (1.23%) d. Due to New Retirements and Retirement Benefits 3.72% e. Due to New Members 0.10% f. Total 26.75% 10.41% 9. Change in Unfunded Accrued Liability Rate During the 2008/2009 Plan Year Due to: a. Assumption changes 3.34% b. Method changes 0.00% c. System benefit changes 0.00% d. Total Change 10. Other Effects 11. Unfunded Accrued Liability Contribution Rate as of October 1, 2009 3.34% 1.73% 42.23% 12. Comments on Change in Unfunded Accrued Liability Contribution Rate: Salary/Service/Data: Salary increases and adjustments in the reported data. Actual salary increases averaged 7.93% compared to expected increase of 4.4%. Investment Performance: 4.49% actual vs. 8.4% expected return on the actuarial value of assets. Turnover/Mortality: Net effect on the valuation liabilities of actual deaths, retirements, terminations of employment and disabilities different from what was anticipated in the aggregate by the assumptions related to those events. New Retirements and Retirement Benefits: Greater than expected number of and amount of benefits for new retirements. Assumation Changes: The assumptions were reviewed in a formal experience study covering the period October 1, 2003 through September 30, 2008. The two major adustments to the assumptions resulting from the experience study were the salary assumption and the load for overtime and other pays. Other effects: This item captures all other effects that contributed to the overall experience loss that are not detailed items 8 and 9 above. Effects included in this item are "pickups" of plan participants not valued in the prior year, catch-up COLAs for participants who retired more than 1 year and less than 2 years, and data corrections/adjustments from the prior year. City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 7 ACCOUNTING DISCLOSURES (GASB 25/27) TABLE III Plan Year 2008/2009 Plan Year 2009/2010 A. Number of Plan Participants as of October 1 a. Retirees and beneficiaries receiving benefits 601 b. Terminated plan participants entitled to but not yet receiving benefits 14 c. Active plan participants 487 d. Total 1,102 B. Development of Annual Required Contribution (ARC) a. b. c Employer normal cost: i. Total normal cost ii. Expected employee contribution iii. Employer normal cost Amortization of UAAL: i. PV of future benefits t PV of future employer normal costs ~ PV of future employee contributions iv. Actuarial accrued liability (AAL) v. Actuarial value of assets vi. Unfunded AAL (UAAL) vii. Amort. of UAAL ARC (Item B.a.iii. plus item B.b.vii.) $13,708,791 ($4,006,010) $9,702,781 $712,545,018 ($44,331,719) ($35,220,712) $632,992,587 ($495,993,903) $136,998,684 $9,534,208 $19,236,989 634 12 478 1,124 $14,461,326 ($4,208,505) $10,252,821 $765,475,606 ($44,719,347) ($37,024,315) C. Annual Pension Cost and Net Pension Obligation (NPO) a. ARC b. Interest on NPO c. Adjustment to ARC d. Annual Pension Cost e. Contributions made f. Increase(decrease) in NPO g. NPO (beginning of year) h. NPO (end of year) $19,236,989 $0 $0 $19,236,989 ($20,159,995) ($923,006) $0 ($923,006) $683,731,944 ($507,363,812) $176,368,132 $12,202,269 $22,455,090 $22,455,090 ($76,609) $0 $22,378,481 City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 8 ACCOUNTING DISCLOSURES (GASB D. Three Year Trend Information Annual Net Year Ended Pension Percentage Pension September 30 Cost(APC) Contributed Obligation 2007 $15,231,417 100% 0 2008 $17,618,045 100% 0 2009 $19,236,989 100% 0 E. Schedule of Funding Progress TABLE III cont_ (1) (2) (3) (4) (5) (6) Actuarial UAAL Actuarial Actuarial Accrued Unfunded as % of Valuation Value of Liability AAL Funded Covered Covered Date Assets (AAL) (UAAL) Ratio Payroll Payroll (Z) - (I) (I) - (2) (3) - (5) 10/1/2004 $418,089,222 $512,038,433 $93,949,211 81.7% $32,725,380 287.1% l0/1/2005 $457,680,582 $551,907,648 $94,227,066 82.9% $31,259,918 301.4% 0/1 /2006 $470,603,144 $582,016,296 $111,413,152 80.9% $35,354,776 315.1 10/1/2007 $495,993,903 $632,992,587 $136,998,684 78.4% $38,705,407 354.0% 10/1/2008 $507,363,812 $683,731,944 $176,368,132 74.2% $40,661,885 433.7% 10/1/2009 $517,602,834 $784,39,822 $266,792,988 66.0% $41,574,935 641.7% F. Additional Information Valuation date Actuarial cost method Amortization method Remaining amortization period Asset valuation method Actuarial assumptions: Investment rate of return Projected salary increases Includes projected payroll Cost-of-living adjustments October 1. 2008 Entry Age Normal Level Percent Closed 23 to 30 Years Market Related Value 8.40% 4.36% - 9.67% 3.50% 2.50% October 1, 2009 Entry Age Normal Level Percent Closed 22 to 30 Years Market Related Value 8.30% 2.87% - 9.87% 3.50% 2.50% City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 9 PRESENT VALUE OF ACCRUED BENEFITS TABLE IV 1. Actuarial Present Value of Accrued Benefits a. Vested Accrued Benefits: i. Participants currently receiving benefits ii. Other participants iii. Sub-total b. Non-vested Accrued Benefits c. Total Benefits d. Market Value of Assets e. Percentage Funded As of October 1, 2008 $481,464,271 $125,659,519 $607,123,790 $33,999,361 $641,123,151 $499,788,831 78% As of October 1, 2009 $543,334,066 $144,681,390 $688,015,456 $38,840,044 $726,855,500 $494,211, 874 68% 2. Statement of Changes in Total Actuarial Present Value of All Accrued Benefits a. Actuarial Present Value as of October 1, 2008 $641,123,151 b. Increase (Decrease) During 2008/2009 Plan Year Attributable to: i. Interest $52,250,147 ii. Benefits accumulated $58,447,174 iii. Benefits paid ($38,195,186) iv. Method Change $0 v. Plan amendments $0 vi. Changes in actuarial assumptions or methods $13,230,214 vii. Net increase (decrease) $85,732,349 c. Actuarial Present Value as of October 1, 2009 $726,855,500 3. Items Affecting Calculation of Actuarial Present Value of Accrued Benefits a. Plan provisions reflected in the accrued benefits (see Table XII page 44) b. Actuarial assumptions and methods used to determine present values (see Table XI on page 39) City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 10 INFORMATION REQ. BY FLORIDA STATUTE (CHAP. 112) TABLE V 1. Participant Data a. Active members: i. Number ii. Total annual payroll iii. Projected annual payroll b. Retired members and beneficiaries: i. Number ii. Total annualized benefit c. Disabled members receiving benefits: i. Number ii. Total annualized benefit d. Terminated vested members: i. Number ii. Total annualized benefit 2. Assets a. Actuarial value of assets b. Market value of assets 3. Liabilities a. Present value of all future expected benefit payments: i. Active members: Retirement benefits Vesting benefits Disability benefits Death benefits Sub-total ii. Terminated vested members iii. Retired members and beneficiaries: Retired (other than disabled) and beneficiaries Disabled members Sub-total iv. Member contributions (annuities & refunds) v. Total present value of all future expected ben. pmts. b. Liabilities due and unpaid October 1.2009 (Post Assumption Changes) Police Firefighters Total 316 $25,952,180 $26,860,506 339 $22,642,828 51 $2,796,660 162 $15,622,755 $16,169,551 233 $15,849,290 11 $549,563 478 $41,574,935 $43,030,057 572 $38,492,118 62 $3,346,223 11 1 12 $179,971 $29,711 $209,682 n/a n/a $517,602,834 n/a n/a $494,211,874 $213,562,455 $L39,135,829 $352,698,284 $3,739,924 $2,174,551 $5,914,475 $14,710,348 $7,992,777 $22,703,125 $2,828,049 $1,604,418 $4,432,467 $234,840,776 $150,907,575 $385,748,351 $1,960,193 $388,907 $2,349,100 $294,165,125 $209,372,874 $503,537,999 $34,048,877 $5,747,190 $39,796,067 $328,214,002 $215,120,064 $543,334,066 $399,313 $249,242 $648,555 $565,414,284 $366,665,788 $932,080,072 $0 $0 $0 City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 11 INFORMATION REQ. BY FLORIDA STATUTE (CHAP. 112) TABLE V (continued) October 1, 2009 (Post Assumption Changes) Police Firefighters Total c. Actuarial accrued liability i. Active members: Retirement benefits Vesting benefits Disability benefits Death benefits Sub-total ii. Terminated vested members iii. Retired members and beneficiaries: Retired (other than disabled) and beneficiaries Disabled members Sub-total iv. Total $133,282,873 $93,440,585 $226,723,458 $901,465 $482,603 $1,384,068 $5,662,352 $3,259,562 $8,921,914 $1,052,477 $630,738 $1,683,215 $140,899,167 $97,813,488 $238,712,655 $1,960,193 $388,907 $2,349,100 $294,165,125 $209,372,874 $503,537,999 34,048,877 5,747190 39,796,067 $328,214,002 $215,120,064 $543,334,066 $471,073,362 $313,322,459 $784,395,821 d. Entry Age Norma] Unfunded actuarial accrued liability n/a n/a $266,792,987 4. Actuarial Present Value of Accrued Benefits $434,578,461 $292,277,039 $726,855,500 (please reference Table [ V for details concerning the present value of accrued benefits) 5. Pension Cost a. Normal cost (including administrative expenses): i. Retirement benefits $9,627,455 $5,659,394 $15,286,849 ii. Vesting benefits $371,170 $224,705 $595,875 iii. Disability benefits $1,111,233 $617,837 $1,729,070 iv. Death benefits $231,982 $133,845 $365,827 v. Administrative expenses $383,742 $383,742 $767,484 vi. Sub-total $11,725,582 $7,019,523 $18,745,105 vii. As a percent of payroll projected (interest adjusted) 43.65% 43.41% 43.56% b. Payment to amortize unfunded liability n/a n/a $18,173,399 as a percent of projected payroll (interest adjusted) n/a n/a 42.24% c. Service Buyback $1,611,630 $970,173 $2,581,803 as a percent of projected payroll 6.00% 6.00% 6.00% d. Amount to be contributed by members $2,686,051 $1,616,955 $4,303,006 as a percent of projected payroll 10.00% 10.00% 10.00% e. Interest Adjustment for Expected Member Contributions $104,230 $62,744 $166,974 as a percent of projected payroll 0.39% 0.39% 0.39% f Expected Share Plans Contributions $70,669 $49,880 $120,549 as a percent of projected payroll 0.26% 0.31% 0.28% g. Expected City Contribution n/a n/a $35,243,726 as a percent of projected payroll n/a n/a 81.91 City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 12 INFORMATION REQ. BY FLORIDA STATUTE (CHAP. 112) TABLE V (continued) October 1, 2009 (Post Assumption Changes) Police Firefighters Total 6. Past Contributions (For year ending September 30,2009) a. Required Employer and State contribution b. Actual contribution made by: i. Employer ii. Members iii. State (Share Plans) 7. Net actuarial (gain)/loss 8. Other disclosures a. Present value of active members': i. Future salaries: at attained age at entry age ii. Future contributions: at attained age at entry age b. Present value of future contributions from City and State c. Amount of active members' accumulated contributions n/a n/a $20,159,995 n/a n/a $20,039,446 n/a n/a $6,542,597 n/a n/a $120,549 n/a n/a $65,168,739 $229,438,076 $133,276,621 $362,714,697 n/a n/a n/a $31,489,541 $17,814,499 $49,304,040 n/a n/a n/a $62,851,381 $35,528,829 $98,380,210 $26,793,507 $14,975,154 $41,768,661 City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 13 INFORMATION REQ. BY FLORIDA STATUTE (CHAP. 112) TABLE V (continued) October 1, 2009 (Pre Assumption Changes) POI1Ce Firefighters TOtal 9. Participant Data a. Active members: i. Number ii. Total annual payroll iii. Projected annual payroll b. Retired members and beneficiaries: i. Number ii. Total annualized benefit c. Disabled members receiving benefits: i. Number ii. Total annualized benefit d. Terminated vested members: i. Number ii. Total annualized benefit 10. Assets a. Actuarial value of assets b. Market value of assets 11. Liabilities a. Present value of all future expected benefit payments: i. Active members: Retirement benefits Vesting benefits Disability benefits Death benefits Sub-total ii. Terminated vested members iii. Retired members and beneficiaries: Retired (other than disabled) and beneficiaries Disabled members Sub-total iv. Member contributions (annuities & refunds) v. Total present value of all future expected ben. pmts. b. Liabilities due and unpaid 316 $25,629,139 $26,526,159 339 $22,642,828 51 $2,796,660 162 $15,413,103 $15,952,562 233 $15,849,290 11 $549,563 478 $41,042,242 $42,478,721 572 $38,492,118 62 $3,346,223 11 1 12 $179,971 $29,711 $209,682 n/a n/a $517,602,834 n/a n/a $494,211,874 $167,730,518 $108,428,999 $276,159,517 $3,097,378 $1,692,102 $4,789,480 $12,019,682 $6,599,651 $18,619,333 $8,444,443 $4,746,848 $13,191,291 $191,292,021 $121,467,600 $312,759,621 $1,926,]87 $381,995 $2,308,182 $291,703,648 $207,456,520 $499,160,168 $36,998,893 $6,261,175 $43,260,068 $328,702,541 $213,717,695 $542,420,236 $836,957 $581,063 $1,418,020 $522,757,706 $336,148,353 $858,906,059 $0 $0 $0 City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 14 INFORMATION REQ. BY FLORIDA STATUTE (CHAP. 112) TABLE V (continued) October 1.2009 (Pre Assumption Changes) Police Firefighters Total c. Actuarial accrued liability i. Active members: Retirement benefits Vesting benefits Disability benefits Death benefits Sub-total ii. Terminated vested members iii. Retired members and beneficiaries: Retired (other than disabled) and beneficiaries Disabled members Sub-total iv. Total $118,681,366 $82,829,324 $201,510,690 $513,050 $318,874 $831,924 $5,445,438 $3,238,309 $8,683,747 $3,741,236 $2,256,343 $5,997,579 $128,381,090 $88,642,850 $217,023,940 $1,926,187 $381,995 $2,308,182 $291,703,648 $207,456,520 $499,160,168 36,998,893 6,261,175 43,260,068 $328,702,541 $213,717,695 $542,420,236 $459,009,818 $302,742,540 $761,752,358 d. Entry Age Normal Unfunded actuarial accrued liability n/a n/a $244,149,524 12. Actuarial Present Value of Accrued Benefits $428,834,270 $284,791,016 $713,625,286 (please reference Table IV for details concerning the present value of accrued benefits) 13. Pension Cost a. Normal cost (including administrative expenses): i. Retirement benefits $6,944,830 $3,928,661 $10,873,491 ii. Vesting benefits $414,109 $253,186 $667,295 iii. Disability benefits $948,536 $526,214 $1,474,750 iv. Death benefits $718,384 $411,645 $1,130,029 v. Administrative expenses $383,742 $383,742 $767,484 vi. Sub-total $9,409,601 $5,503,448 $14,913,049 vii. As a percent of payroll projected (interest adjusted) 35.47% 34.50% 35.11% b. Payment to amortize unfunded liability n/a n/a $16,711,235 as a percent of projected payroll (interest adjusted) n/a n/a 39.34% c. Service Buyback $1,591,570 $957,154 $2,548,724 as a percent of projected payroll 6.00% 6.00% 6.00% d. Amount to be contributed by members $2,652,616 $1,595,256 $4,247,872 as a percent of projected payroll 10.00% 10.00% 10.00% e. Interest Adjustment for Expected Member Contributions $102,932 $61,902 $164,834 as a percent of projected payroll 0.39% 0.39% 0.39% £ Expected Share Plans Contributions $70,669 $49,880 $120,549 as a percent of projected payroll 0.27% 0.31 % 0.28% g. Expected City Contribution n/a n/a $29,969,421 as a percent of projected payroll n/a n/a 70.55% City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 15 INFORMATION REQ. BY FLORIDA STATUTE (CHAP. 112) TABLE V (continued) October 1, 2009 (Pre Assumption Changes) Police Firefighters Total 14. Past Contributions (For year ending September 30,2009) a. Required Employer and State contribution n/a n/a $20,159,995 b. Actual contribution made by: i. Employer n/a n/a $20,039,446 ii. Members n/a n/a $6,542,597 iii. State (Share Plans) n/a n/a $120,549 15. Net actuarial (gain)/loss n/a n/a $65,168,739 16. Other disclosures a. Present value of active members': i. Future salaries: at attained age at entry age ii. Future contributions: at attained age at entry age b. Present value of future contributions from City and State c. Amount of active members' accumulated contributions $194,345,316 $109,525,812 $303,871,128 n/a n/a n/a $24,894,868 $13,597,368 $38,492,236 n/a n/a n/a $38,853,020 $19,808,444 $58,661,464 $26,793,507 $14,975,154 $41,768,661 City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 16 INFORMATION REQ. BY FLORIDA STATUTE (CHAP. 112) TABLE V (continued) October 1, 2008 17. Participant Data a. Active members: i. Number ii. Total annual payroll iii. Projected annual payroll b. Retired members and beneficiaries: i. Number ii. Total annualized benefit c. Disabled members receiving benefits: i. Number ii. Total annualized benefit d. Terminated vested members: i. Number ii. Total annualized benefit 18. Assets Actuarial Value of Assets Market Value of Assets 19. Liabilities a. Present value of all future expected benefit payments: i. Active members: Retirement benefits Vesting benefits Disability benefits Death benefits Sub-total ii. Terminated vested members iii. Retired members and beneficiaries: Retired (other than disabled) and beneficiaries Disabled members Sub-total iv. Member contributions (annuities & refunds) v. Total present value of all future expected ben. pmts. b. Liabilities due and unpaid Police Firefighters Total 319 168 487 $24,955,974 $15,705,911 $40,661,885 $25,829,433 $16,255,618 $42,085,051 324 215 539 $20,634,088 $13,475,240 $34,109,328 51 11 62 $2,609,483 $501,514 $3,110,997 13 1 14 $207,020 $29,711 $236,731 n/a n/a $507,363,812 n/a n/a $499,788,831 $145,676,073 $103,102,885 $248,778,958 $2,657,994 $1,415,535 $4,073,529 $10,117,888 $5,787,023 $15,904,911 $7,167,156 $4,167,629 $11,334,785 $165,619,111 $114,473,072 $280,092,183 $2,238,218 $352,109 $2,590,327 $266,521,094 $174,408,286 $440,929,380 $34,778,999 $5,755,892 $40,534,891 $301,300,093 $180,164,178 $481,464,271 $804,735 $524,090 $1,328,825 $469,962,157 $295,513,449 $765,475,606 $0 $0 $0 City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 17 INFORMATION REQ. BY FLORIDA STATUTE (CHAP. 112) TABLE V (continued) October 1, 2008 c. Actuarial accrued liability i. Active members: Retirement benefits Vesting benefits Disability benefits Death benefits Sub-total ii. Terminated vested members iii. Retired members and beneficiaries: Retired (other than disabled) and beneficiaries Disabled members Sub-total iv. Total d. Unfunded actuarial accrued liability Police Firefighters Total $104,136,413 $81,892,546 $186,028,959 $366,846 $197,012 $563,858 $4,626,604 $3,051,679 $7,678,283 $3,254,252 $2,151,994 $5,406,246 $1 12,384,115 $87,293,231 $199,677,346 $2,238,218 $352,109 $2,590,327 $266,521,094 $174,408,286 $440,929,380 34,778,999 5,755,892 40,534,891 $301,300,093 $180,164,178 $481,464,271 $415,922,426 $267,809,518 $683,731,944 n/a n/a $176,368,132 20. Actuarial Present Value of Accrued Benefits $390,117,276 $251,005,875 $641,123,151 (please reference Table IV for details concerning the present value of accrued benefits) 21. Pension Cost (as a % of payroll) a. Normal cost (including administrative expenses): i. Retirement benefits $5,891,379 $3,511,067 $9,402,446 ii. Vesting benefits $377,850 $240,393 $618,243 iii. Disability benefits $790,316 $461,536 $1,251,852 iv. Death benefits $605,723 $364,842 $970,565 v. Administrative expenses $320,922 $320,922 $641,844 vi. Sub-total $7,986,190 $4,898,760 $12,884,950 vii. As a percent of projected payroll (interest adjusted) 30.92% 30.14% 30.62% b. Payment to amortize unfunded liability n/a n/a $12,202,269 as a percent of projected payroll (interest adjusted) n/a n/a 28.99% c. Service buyback $1,549,766 $975,337 $2,525,103 as a percent of projected payroll 6.00% 6.00% 6.00% d. Amount to be contributed by members $2,582,943 $1,625,562 $4,208,505 as a percent of projected payroll 10.00% 10.00% 10.00% e. Interest Adjustment for Expected Member Contributions $0 $0 $0 as a percent of projected payroll 0.00% 0.00% 0.00% £ Expected Share Plans Contributions $70,669 $49,880 $120,549 as a percent of projected payroll 0.27% 0.31% 0.29% g. Expected City Contribution n/a n/a $23,283,268 as a percent of projected payroll n/a n/a 55.32% City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 18 INFORMATION REQ. BY FLORIDA STATUTE (CHAP. 112) TABLE V (continued) October 1, 2008 22. Past Contributions (For year ending September 30,2008) a. Required Employer and State contribution b. Actual contribution made by: i. Employer ii. Members iii. State (Share Plans) 23. Net actuarial (gain)/loss 24. Other disclosures a. Present value of active members': i. Future salaries: at attained age at entry age ii. Future contributions: at attained age at entry age b. Present value of future contributions from City and State c. Amount of active members' accumulated contributions Police Firefighters Total n/a n/a $17,618,045 n/a n/a $17,497,496 n/a n/a $5,577,298 n/a n/a $120,549 n/a n/a $31,543,745 $188,086,766 $103,590,244 $291,677,010 n/a n/a n/a $24,168,667 $12,855,648 $37,024,315 n/a n/a n/a $29,871,064 $14,848,283 $44,719,347 $26,102,954 $16,283,765 $42,386,719 City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 19 UNFUNDED LIABILITY BASES TABLE Va 2008/2009 2009/2010 Outstanding Actual Outstanding Expected Original Balance as of Amortization Balance as of Amortization Years Description Amount October 1, 2008 Payment October 1, 2009 Payment Remaining Initial Unfunded Liability $11,301,726 $12,424,522 $929,621 $12,538,561 $953,593 22 10/01/2002 Method Change $12,519,763 $13,867,285 $1,013,430 $14,018,707 $1,039,243 23 10/01/2003 Amendment $1,078,557 $1,176,873 $84,138 $1,191,592 $86,255 24 10/01/2003 Experience Loss $32,473,033 $35,433,085 $2,533,198 $35,876,266 $2,596,938 24 10/01/2004 Experience Loss $34,892,889 $37,455,096 $2,623,323 $37,978,001 $2,688,536 25 10/01/2005 Method Change -$31,074,307 -$32,772,617 -$2,251,665 -$33,273,852 -$2,306,970 26 10/01/2005 Assumption Change $6,250,297 $6,591,895 $452,901 $6,692,713 $464,025 26 10/01/2005 Experience Loss $23,210,540 $24,479,070 $1,681,851 $24,853,461 $1,723,160 26 10/01/2006 Method Change -$4,690,352 -$4,864,966 -$328,283 -$4,945,340 -$336,251 27 10/01/2006 Experience Loss $20,303,584 $21,059,454 $1,421,071 $21,407,377 $1,455,562 27 10/01/2007 Experience Loss $23,808,174 $24,259,669 $1,609,580 $24,687,901 $1,648,189 28 10/01/2008 Assumption Change $5,715,022 $5,715,022 $373,207 $5,821,877 $382,056 29 10/01/2008 Experience Loss $31,543,745 $31,543,745 $2,059,897 $32,133,523 $2,108,736 29 10/01/2009 Assumption Change $22,643,463 $22,643,463 $1,462,164 30 10/01/2009 Experience Loss $65,168,739 $65,168,739 $4,208,163 30 Total $255,144,873 $176,368,133 $12,202,269 $266,792,989 $18,173,399 Date Projected Unfunded Liability October ], 2009 $266,792,989 October 1, 2010 $270,763,408 October 1, 2011 $274,427,303 October 1, 2039 $0 City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 20 ASSETS TABLE VI As of As of October 1, 2008 October 1, 2009 1. Market Value of Assets a. Cash and cash equivalents (0%) $14,988,368 $20,000 b. U.S. government bonds & notes (10%) $61,697,272 $48,079,615 c. Corporate bonds (33%) $140,814,206 $166,320,937 d. Equities (39%) $186,689,508 $194,076,975 e. Money Market Funds (1 %) $7,195,145 $5,046,909 f. Foreign bonds (0%) $0 $0 g. Collective Investment Funds (16%) $85,447,599 $77,854,385 h. Other assets (1 %) $5,175,487 $6,427,215 i. Accrued income receivable (1%) $3,079,178 $2,841,790 j. Contributions receivable (0%) $171,629 $180,821 k. Other receivables (0%) $141,462 $0 1. Benefits payable (-1 %) ($5,175,487) ($6,427,215) m.Other payables (0%) ($435,536) ($209 558) n. Market value of assets $499,788,831 $494,211,874 2. Actuarial Value of Assets a. Market value of assets $499,788,831 $494,211,874 b. 5-year phase-in of net investment appreciation: i. 2004/2005 ii. 2005/2006 iii. 2006/2007 iv. 2007/2008 v. 2008/2009 20% _ ($6,374,965) ~o% _ ($10,890,410) 60% _ ($34,585,586) Sn% _ $59,425,942 x 2n% _ ($5,445,205) x -~0% _ ($23,057,056) x 60% _ $44,569,457 x 80% _ $7,323,764 $23,390,960 vi. Total unrecognized losses(gains) $7,574,981 c. Actuarial Value of Assets $507,363,812 (Item a. less item b., but within an 80-120% corridor of item a.) City Pension Fund for Firefighters and Police Officers in the City of Miami Beach $517,602,834 Page 21 ASSET RECONCILIATION TABLE Vla 1. Market Value of Assets as of October 1, 2008 $499,788,831 2. Increases Due to: a. Contributions: i. City $20,039,446 ii. State (Share Plans) $120,549 iii. Member Contributions $5,039,349 iv. Buybacks $1,445,249 v. Transfers In $57,999 vi. Total $26,702,592 b. Investment income (interest and dividends) $17,943,433 c. Realized gains/(losses) ($22,442,587) c. Unrealized gains/(losses) $13,287,882 d. Total increases $35,491,320 3. Decreases Due to: a. Benefit payments ($37,986,970) b. Refund of member contributions ($208,216) c. Investment Expenses ($2,105,607) d. Administrative expenses ($767,484) e. Total decreases ($41,068,277) 4. Market Value of Assets as of October 1, 2009 $494,211,874 City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 22 ASSET RECONCILIATION TABLE Vla (continued) 1. Actuarial Value of Assets as of October 1, 2008 $507,363,812 2. Increases Due to: a. Contributions: i. City $20,039,446 ii. State (Share Plans) $120,549 iii. Member Contributions $5,039,349 iv. Buybacks $1,445 249 v. Transfers In $57,999 vi. Total $26,702,592 b. Investment income (interest and dividends) $17,943,433 c. Realized gains/(losses) ($22,442,587) c. Unrealized gains/(losses) $29,103,861 d. Total increases $51,307,299 3. Decreases Due to: a. Benefit payments ($37,986,970) b. Refund of member contributions ($208,216) c. Investment Expenses ($2,105,607) d. Administrative expenses ($767 484) e. Total decreases ($41,068,277) 4. Actuarial Value of Assets as of October 1, 2009 $517,602,834 City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 23 HISTORICAL ASSET INFORMATION TABLE VII Historical Market Value (Assets & Returns) $600 -- _.____ _____. ~ _________._ _ _-- ,. -- _. __ 40% $550 $500 30% $450 20% $400 ° - - c $350 10% $300 ~ L 0% ~ $250 sx ~ $200 -10% $150 -20% $100 $50 -30% $0 -40% p~ p~ p~ p^ p~ p~ pb p~ ~p ti~~p p D~~p ~~~p b~~p 1~~p 'l.~~p ~~~p ~~~p ~~~p 0 p p p ap ~p0 ~p0 ~p0 ~p0 ap ap ap ~p Plan Year (Assets as of October 1) ~ Assets C Return Market Actuarial City, State and Market Actuarial Plan Value as of Value as of Benefit Administrative Member Value Value Year October 1 October 1 Pavments* Expenses Contributions Return Return 2001/2002 $393,319,577 $404,340,268 $20,210,635 $498,825 $7,753,324 -1.65% 2.39% 2002/2003 $373,980,268 $400,898,095 $22,072,374 $521,173 $13,014,855 15.05% 4.82% 2003/2004 $419,972,421 $410,423,595 $24,173,338 $564,532 $14,082,481 9.72% 4.52% 2004/2005 $449,622,848 $418,089,222 $27,202,700 $581,953 $16,960,734 9.99% 12.22% 2005/2006 $483,180,441 $457,680,582 $30,109,229 $633,113 $19,517,106 8.28% 5.34% 2006/2007 $511,508,858 $470,603,144 $32,367,302 $646,588 $20,425,699 14.31% 8.18% 2007/2008 $571,193,561 $495,993,903 $35,014,659 $641,844 $23,195,343 -10.43% 4.87% 2008/2009 $499,788,831 $507,363,812 $38,195,186 $767,484 $26,702,592 1.35% 4.49% 2009/2010 $494,211,874 $517,602,834 * includes contributions refunded City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 24 REVENUES BY SOURCE AND EXPENSES BY TYPE TABLE Vlla REVENUES Fiscal City Share Plans Member Total Net Invest. Year Contrib. Contrib. Contrib. Contrib. Income Total 2000/200] $733,425 $3,577,878 $4,311,303 ($38,313,700) ($34,002,397) 2001/2002 $3,510,328 $4,242,996 $7,753,324 ($1,027,634) $6,725,690 2002/2003 $8,577,326 $4,437,529 $13,014,855 $55,570,845 $68,585,700 2003/2004 $9,387,091 $107,000 $4,588,390 $14,082,481 $40,305,816 $54,388,297 2004/2005 $11,857,606 $120,549 $4,982,579 $16,960,734 $44,381,512 $61,342,246 2005/2006 $14,481,287 $120,549 $4,915,270 $19,517,106 $39,553,653 $59,070,759 2006/2007 $15,110,868 $120,549 $5,194,282 $20,425,699 $72,272,894 $92,698,594 2007/2008 $17,497,496 $120,549 $5,577,298 $23,195,343 ($58,943,570) ($35,748,227) 2008/2009 $20,039,446 $120,549 $6,542,597 $26,702,592 $6,683,121 $33,385,713 EXPENSES Fiscal Benefits Member Administrative Year Paid Refunds Expenses Total 2000/2001 $18,999,180 $75,154 $526,157 $19,600,491 2001/2002 $20,107,750 $102,885 $498,825 $20,709,460 2002/2003 $21,919,356 $153,018 $521,173 $22,593,547 2003/2004 $24,130,299 $43,039 $564,532 $24,737,870 2004/2005 $27,168,740 $33,960 $581,953 $27,784,653 2005/2006 $30,048,732 $60,497 $633,113 $30,742,342 2006/2007 $32,241,728 $125,574 $646,588 $33,013,890 2007/2008 $34,912,004 $102,655 $641,844 $35,656,503 2008/2009 $37,986,970 $208,216 $767,484 $38,962,670 City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 25 CONTRIBUTIONS VS. FUND PAYOUTS TABLE VIII Historical Contributions Versus Benefit Payments & Expenses* 45 40 35 30 c 25 0 ~ 20 15 10 5 0 ~\~00'L ~~00~ ~\~00~ ~\~00~ ~\~OO~O ~\~00~ ^\~004~ ~\~OOq O O O O O O O O ,y0 ~O ~O ~O ,y0 ,~O ,y0 ,y0 Plan Year ~ Contributions C Benefit Payments & Expenses * Please reference Table VIIa on page 25 for the historical benefit payments, expenses, and contributions. City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 26 SUMMARY OF MEMBER DATA TABLE IX Total Number of Members as of October 1 1,200 _ __ _____ __..._ _ - _ t,too 1,000 - _ -- _ - },102 - 1.124 1,0'71 1 048 900 997 . , - 1,011 1,011 800 700 -_ ___ _ _ - j 600 500 400 - - _- - - _ - 300 200 -- - - - - _ _ _.......-------- 100 _ _ _ _ _ _ ------ _ - 0 "~ ,LCP ~. 5 b 1 04 Q .LOO ,LOS ,LOS ,LOO „O ,LOO 1. Active Members a. Police Officers b. Firefighters c. Sub-total 2. No n-active, Non-retired Members a. Fully or partially vested b. Beneficiaries c. Sub-total 3. Retired Members a. Non-disabled(excluding DROP) b. DROP c. Disabled d. Beneficiaries e. Sub-total 4. Total Members As of As of October 1, 2008 October 1, 2009 319 316 l68 162 487 l4 0 478 12 0 14 12 395 407 46 66 62 62 98 99 601 634 1,102 1,124 City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 27 ACTIVE DATA so 40 L 30 R d ~' 20 10 0 TABLE IXa 10/01/2003 10/01/2004 10/01/2005 10/01/2006 10/01/2007 10/01/2008 As of October 1 'Average Sen~ce 10/01/2009 Average Age Average Average Average Average Service Attained Service Attained Date Earned Age Date Earned Age 2002/2002 12.6 39.9 10/01/2006 11.9 40.0 I 0/01 /2003 12.9 402 10/0l /2007 12.3 40.2 10/01 /2004 12.9 40.4 10/01 /2008 11.9 39.7 10/01/2005 12.6 40.4 10/01/2009 11.4 39.3 75,000 ~, 60,000 45,000 d 30,000 d 15,000 0 Plan Year Ending 09/30/2002 09/30/2003 09/30/2004 09/30/2005 25% d 20% d u 15% d nu 10% :°. ~ a 5% a 0% 09'30'2003 U~~ ?0 200? U9 ;u 'U0~1 ov ;u 'uU; 09; ;02006 09 30 2007 02 30 2008 09 ;0.2009 ^Average Salary ^Assumed Increase Actual Increase Actual Assumed Actual Assumed Average Salary Salary Plan Year Average Salary Salary Salary Increase Increase Ending Salary Increase Increase $61,847 8.58% 4.82% 09/30/2006 $74,275 7.87% 4.80% $65,145 6.88% 4.82% 09/30/2007 $80,302 9.48% 4.90% $67,060 6.25% 4.82% 09/30/2008 $83,495 8.77% 4.90% $68,855 5.73% 4.80% 09/30/2009 $82,132 7.93% 4.40% City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 28 Historical Average Age & Service RETIREE DATA TABLE IXb Number of Retirees 0 25 50 75 100 125 150 175 200 225 250 Less than 30 30.39 40.44 45-49 50 51 52 53 w C 54 tL ~ 55 L ar 56 +.+ C6 57 6~ bD Q SS 59 60 61 62 63 64 65 Over 65 Average benefit being paid to non-disabled retirees is $6,385.17 per month. Average benefit being paid to disabled retirees is $4,497.58 per month. Average benefit being paid to beneficiaries is $],893.83 per month. City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 29 ^ Retirees ^ Beneficiaries ^ Disabled Retirees DATA RECONCILIATION TABLE IXc Active Vested Retired DROP Disabled Beneficia Total 1. Number of members as of October 1, 2008 487 14 395 46 62 98 1,102 2. Change in status during the plan year: a. Actives who terminated b. Actives who retired (38) 2 35 1 c. Inactives who became active d. Inactives who retired (1) 1 e. DROP to Retiree ] 5 (15) f. Retirees who became active g. Dormant 3. No longer members due to: a. Death (6) (1) (7) b. Permanent break-in-service c. Receipt of lump sum payment (3) (1) (4) d. Expiration of certain period (3) (3) e. Included in error last year 4. New member due to: a. Initial membership 32 32 b. Death of another member 4 4 c. Dormant d. Reinstatement 5. Number of members as of October 1, 2009 478 12 407 66 62 99 1,124 City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 30 AGE-SERVICE-SALARY TABLE TABLE IXd (All Active Members) Attained Age Completed Years of Service Under 1 1 to 4 5 to 9 10 to 14 15 to 19 20 to 24 25 to 29 30 to 34 35 to 39 40 & up Total Under 25 5 10 0 0 0 0 0 0 0 0 15 Avg.Pay 53,788 58,553 0 0 0 0 0 0 0 0 56,965 25 to 29 4 38 8 0 0 0 0 0 0 0 50 Avg.Pay 53,926 61,882 74,886 0 0 0 0 0 0 0 63,326 30 to 34 7 34 26 7 0 0 0 0 0 0 74 Avg.Pay 55,625 64,077 80,025 87,435 0 0 0 0 0 0 71,090 35 to 39 1 17 42 29 6 0 0 0 0 0 95 Avg.Pay 46,581 61,794 78,141 83,938 93,599 0 0 0 0 0 77,629 0 40 to 44 1 13 20 36 31 22 0 0 0 0 123 Avg.Pay 54,322 62,203 78,316 83,630 98,284 110,977 0 0 0 0 88,848 45 to 49 0 1 3 21 21 45 1 0 0 0 92 Avg.Pay 0 60,004 75,944 82,473 95,512 108,134 ]29,196 0 0 0 98,052 50 to 54 0 0 5 4 3 9 0 0 0 0 21 Avg.Pay 0 0 77,022 81,166 85,034 103,260 0 0 0 0 90,201 55 to 59 0 0 1 1 2 2 1 0 0 0 7 Avg.Pay 0 0 72,848 85,478 90,744 105,162 79,859 0 0 0 90,000 60 to 64 0 0 0 0 0 1 0 0 0 0 1 Avg.Pay 0 0 0 0 0 129,607 0 0 0 0 129,607 6S & up 0 0 0 0 0 0 0 0 0 0 0 Avg.Pay 0 0 0 0 0 0 0 0 0 0 0 70&up 0 0 0 0 0 0 0 0 0 0 0 Avg.Pay 0 0 0 0 0 0 0 0 0 0 0 Total 18 113 105 98 63 79 2 0 0 0 478 Avg.Pay 54,162 62,255 78,226 83,663 96,043 108,567 104,528 0 0 0 I I 82,132 City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 31 AGE-SERVICE-SALARY TABLE TABLE IXe (Police Officers) Attained Age Completed Years of Service Under 1 1 to 4 5 to 9 10 to 14 15 to 19 20 to 24 25 to 29 30 to 34 35 to 39 40 & up Total Under 25 4 4 0 0 0 0 0 0 0 0 8 Avg.Pay 52,398 55,687 0 0 0 0 0 0 0 0 54,043 2.5 to 29 3 23 1 0 0 0 0 0 0 0 27 Avg.Pay 53,522 59,380 69,349 0 0 0 0 0 0 0 59,098 30 to 34 5 22 14 4 0 0 0 0 0 0 45 Avg.Pay 54,978 63,535 74,582 74,764 0 0 0 0 0 0 67,019 35 to 39 1 14 32 25 5 0 0 0 0 0 77 Avg.Pay 46,581 62,477 76,118 82,128 92,467 0 0 0 0 0 76,267 40 to 44 1 ] 0 14 30 19 11 0 0 0 0 85 Avg.Pay 54,322 62,239 73,191 81,358 90,342 109,542 0 0 0 0 83,101 45 to 49 0 1 2 16 10 26 0 0 0 0 55 Avg.Pay 0 60,004 72,009 78,200 91,023 101,091 0 0 0 0 90,797 50 to 54 0 0 5 3 3 4 0 0 0 0 15 Avg.Pay 0 0 77,022 79,091 85,034 87,446 0 0 0 0 81,818 55 to 59 0 0 1 0 1 1 1 0 0 0 4 Avg.Pay 0 0 72,848 0 82,227 97,393 79,859 0 0 0 83,082 60 to 64 0 0 0 0 0 0 0 0 0 0 0 Avg.Pay 0 0 0 0 0 0 0 0 0 0 0 65 to 69 0 0 0 0 0 0 0 0 0 0 0 Avg.Pay 0 0 0 0 0 0 0 0 0 0 0 70&up 0 0 0 0 0 0 0 0 0 0 0 Avg.Pay 0 0 0 0 0 0 0 0 0 0 0 Total 14 74 69 78 38 42 1 0 0 0 316 Avg.Pay 53,282 61,396 75,013 80,532 90,168 101,917 79,859 0 0 0 77,637 City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 32 AGE-SERVICE-SALARY TABLE TABLE IXf (Firefighters) Attained Age Completed Years of Service Uuder 1 1 to 4 5 to 9 10 to 14 15 to 19 20 to 24 25 to 29 30 to 34 35 to 39 40 & up Total Under 25 1 6 0 0 0 0 0 0 0 0 7 Avg.Pay 59,346 60,464 0 0 0 0 0 0 0 0 60,304 25 to 29 1 15 7 0 0 0 0 0 0 0 23 Avg.Pay 55,137 65,718 75,677 0 0 0 0 0 0 0 68,289 30 to 34 2 12 12 3 0 0 0 0 0 0 29 Avg.Pay 57,241 65,071 86,375 104,330 0 0 0 0 0 0 77,408 35 to 39 0 3 10 4 1 0 0 0 0 0 18 Avg.Pay 0 58,609 84,615 95,251 99,260 0 0 0 0 0 83,458 40 to 44 0 3 6 6 12 11 0 0 0 0 38 Avg.Pay 0 62,082 90,273 94,987 110,858 112,411 0 0 0 0 101,701 45 to 49 0 0 1 5 11 19 1 0 0 0 37 Avg.Pay 0 0 83,814 96,145 99,592 117,771 129,196 0 0 0 108,835 50 to 54 0 0 0 1 0 5 0 0 0 0 6 Avg.Pay 0 0 0 87,390 0 115,912 0 0 0 0 111.158 55 to 59 0 0 0 1 1 1 0 0 0 0 3 Avg.Pay 0 0 0 85,478 99,260 112,930 0 0 0 0 99,223 60 to 64 0 0 0 0 0 1 0 0 0 0 1 Avg.Pay 0 0 0 0 0 129,607 0 0 0 0 129.607 65&up 0 0 0 0 0 0 0 0 0 0 0 Avg.Pay 0 0 0 0 0 0 0 0 0 0 0 70&up 0 0 0 0 0 0 0 0 0 0 0 Avg.Pay 0 0 0 0 0 0 0 0 0 0 0 Total 4 39 36 20 25 37 1 0 0 0 162 Avg.Pay 57,241 63,884 84,384 95,875 104,973 116,115 129,196 0 0 0 90,899 City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 33 INACTIVES BENEFIT DISTRIBUTION TABLE TABLE IXg (Retired Participants) Attained Age Years Retired Under 1 1 2 to 4 5 to 9 10 to 14 15 to 19 20 to 24 25 to 30 30 & up Total Under 25 0 0 0 0 0 0 0 0 0 0 Avg Ann Ben 0 0 0 0 0 0 0 0 0 0 25 to 34 0 0 0 0 0 0 0 0 0 0 Avg Ann Ben 0 0 0 0 0 0 0 0 0 0 35 to 44 0 0 0 0 0 0 0 0 0 0 Avg Ann Ben 0 0 0 0 0 0 0 0 0 0 45 to 49 26 ] 0 19 0 0 0 0 0 0 55 Avg Ann Ben 104,233 97,625 100,605 0 0 0 0 0 0 101,778 0 50 to 54 8 12 38 40 0 0 0 0 0 98 Avg Ann Ben 86,786 89,652 87,648 89,811 0 0 0 0 0 88,706 55 to 60 3 5 14 46 26 0 0 0 0 94 Avg Ann Ben 90,610 78,135 87,787 74,751 78,748 0 0 0 0 78,484 60 to 64 1 1 4 ]0 41 12 0 0 0 69 Avg Ann Ben 63,673 70,508 54,242 76,536 76,553 74,630 0 0 0 74,648 65 to 69 0 0 0 1 2 34 0 0 0 37 Avg Ann Ben 0 0 0 66,691 77,320 81,160 0 0 0 80,561 70 to 74 0 0 0 0 1 15 26 0 0 42 Avg Ann Ben 0 0 0 0 52,649 82,300 59,557 0 0 67,515 75 to 79 0 0 0 0 1 4 13 23 0 41 Avg Ann Ben 0 0 0 0 83,666 90,557 69,355 39,776 0 55,179 80 to 84 0 0 0 0 0 2 5 6 18 31 Avg Ann Ben 0 0 0 0 0 60,788 60,538 44,076 29,843 39,545 Over 85 0 0 0 0 0 0 0 0 6 6 Avg Ann Ben 0 0 0 0 0 0 0 0 19,724 19,724 Total 38 28 75 97 71 67 44 29 24 473 Avg.Pay 98,417 89,759 89,175 81,062 77,142 80,199 62,563 40,666 27,313 76,622 City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 34 INACTIVES BENEFIT DISTRIBUTION TABLE TABLE IXh Disabled Participants Attained Age Years Retired Under 1 1 2 to 4 5 to 9 10 to 14 15 to l9 20 to 24 25 to 30 30 & up Total Under 25 0 0 0 0 0 0 0 0 0 0 Avg Ann Ben 0 0 0 0 0 0 0 0 0 0 25 to 34 0 0 0 0 0 0 0 0 0 0 Avg Ann Ben 0 0 0 0 0 0 0 0 0 0 35 to 44 0 0 1 0 0 0 0 0 0 1 Avg Ann Ben 0 0 66,272 0 0 0 0 0 0 66,272 45 to 49 0 0 0 1 3 2 2 0 0 8 Avg Ann Ben 0 0 0 60,826 59,666 48,807 43,107 0 0 52,957 0 50 to 54 1 1 2 5 1 0 0 0 0 10 Avg Ann Ben 85,927 54,319 93,563 56,782 59,580 0 0 0 0 67,086 55 to 60 0 0 1 1 5 2 0 0 0 9 Avg Ann Ben 0 0 75,114 74,952 64,215 58,394 0 0 0 65,325 60 to 64 0 0 0 2 0 6 2 0 1 11 Avg Ann Ben 0 0 0 64,584 0 65,749 48,645 0 24,437 58,672 65 to 69 0 0 0 0 0 3 1 0 0 4 Avg Ann Ben 0 0 0 0 0 68,925 64,643 0 0 67,855 70 to 74 0 0 0 0 0 1 2 2 0 5 Avg Ann Ben 0 0 0 0 0 92,818 84,730 33,860 0 66,000 75 to 79 0 0 0 0 0 0 2 0 8 10 Avg Ann Ben 0 0 0 0 0 0 56,827 0 21,469 28,541 80 to 84 0 0 0 0 0 0 0 0 4 4 Avg Ann Ben 0 0 0 0 0 0 0 0 16,325 16,325 Over 85 0 0 0 0 0 0 0 0 0 0 Avg Ann Ben 0 0 0 0 0 0 0 0 0 0 Total 1 1 4 9 9 14 9 2 13 62 Avg.Pay 85,927 54,319 82,128 60,984 62,184 64,892 59,029 33,860 20,115 53,972 City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 35 INACTIVES BENEFIT DISTRIBUTION TABLE TABLE IXi Beneficiaries Attained Age Years Retired Under 1 1 2 to 4 5 to 9 10 to 14 15 to 19 20 to 24 25 to 30 30 & up Total Under 25 0 0 0 0 0 0 0 0 0 0 Avg Ann Ben 0 0 0 0 0 0 0 0 0 0 25 to 34 0 0 0 0 0 0 0 0 0 0 Avg Ann Ben 0 0 0 0 0 0 0 0 0 0 35 to 44 0 0 0 0 1 0 0 0 0 1 Avg Ann Ben 0 0 0 0 18,666 0 0 0 0 18,666 45 to 49 0 0 0 1 0 0 1 0 2 Avg Ann Ben 0 0 0 51,357 0 0 51,032 0 51,195 0 50 to 54 0 0 0 0 0 0 1 0 0 1 Avg Ann Ben 0 0 0 0 0 0 22,495 0 0 22,495 55 to 60 0 0 0 1 3 1 2 1 0 8 Avg Ann Ben 0 0 0 69,720 48,998 41,888 16,298 15,379 0 38,322 60 to 64 0 0 0 0 2 2 1 2 0 7 Avg Ann Ben 0 0 0 0 66,573 56,814 21,012 13,847 0 42,211 65 to 69 0 0 0 1 0 3 2 6 1 13 Avg Ann Ben 0 0 0 121,798 0 44,770 29,346 13,994 1 1.227 31,538 70 to 74 0 0 0 0 0 3 1 2 4 10 Avg Ann Ben 0 0 0 0 0 41,474 2,758 17,310 13,767 21,687 75 to 79 0 0 0 0 0 2 1 3 12 18 Avg Ann Ben 0 0 0 0 0 52,533 36,921 14,149 14,266 19,757 80 to 84 0 0 0 0 0 0 0 2 14 16 Avg Ann Ben 0 0 0 0 0 0 0 23,130 13,273 14,505 0 Over 85 0 0 0 0 0 0 0 0 23 23 Avg Ann Ben 0 0 0 0 0 0 0 0 12,594 12,594 Total 0 0 0 3 6 11 9 16 54 99 Avg.Pay 0 0 0 80,958 49.801 47.210 25.056 15.648 13.203 22.726 City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 36 INACTIVES BENEFIT DISTRIBUTION TABLE TABLE IXj (Non-Active, Non-Retired) Attained Age Count Total Annual Benefits Accumulated Contributions with Interest Under 25 25 to 34 35 to 44 6 96,587 63,661 45 to 49 6 113,095 21,259 50 to 54 55 to 60 Over 60 Total 12 209,682 84,920 City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 37 HISTORICAL CONTRIBUTION RATE TABLE X 100.0% 90.0% 80.0% c 70.0% L a 60.0% W O ~ 50.0°/O CC y ~ 40.0% u L a 30.0% 20.0% 10.0% 0.0% ~~~00'L 'y~00"' ^>~~00~ tk~~00~ =~~~OOb b~~00^ 1~~OOcb g~~0001 '1.00 '1.00 ''LOO X00 ''LOO LOO 'LOO 'LOO 00~\~0~0 O~O\~0~` ti ti ^ Member Contribution Rate ^ City Contribution Rate Member Expected City Member Expected City Fiscal Contribution Contribution Fiscal Contribution Contribution Year Percentage Percentage Year Percentage Percentage 2001 /2002 10.00% 21.88% 2006/2007 10.00% 46.7 I 2002/2003 10.00% 26.29% 2007/2008 10.00% 47.82% 2003/2004 10.00% 27.27% 2008/2009 10.00% 50.02% 2004/2005 10.00% 36.03% 2009/2010 10.00% 55.32% 2005/2006 10.00% 42.75% 2010/2011 10.00% 81.91 City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 38 ACTUARIAL ASSUMPTIONS TABLE XI 1. Actuarial Cost Method • Entry Age Normal Cost Method 2. Decrements • Pre-Retirement Mortality RP-2000 Combined Mortality Table with a blue collar adjustment. • Post-Retirement Healthy Mortality RP-2000 Combined Mortality Table with a blue collar adjustment. • Post-Retirement Disabled Mortality RP-2000 Disabled Mortality Table • Disability Representative values of the assumed annual rates of disability among members in active service are as follows: A e Ordinary Disability Rate Accidental Disability Rate A e Ordinary Disability Rate Accidental Disability Rate 20 .0004 .0003 45 .0032 .0026 25 .0006 .0005 50 .0055 .0044 30 .0009 .0007 55 .0079 .006 35 .0012 .0010 60 .0110 .0090 40 .0018 .0014 64 .0143 .0126 • Permanent Withdrawal from Active Status Representative values of the assumed annual rates of withdrawal among members in active service are as follows: Age Rate Age Rate Age Rate Age Rate 20 0.50% 30 1.25% 40 0.75% 45 0.25% 25 1.00% 35 1.50% City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 39 ACTUARIAL ASSUMPTIONS TABLE XI • Retirement All members are assumed to retire at age 50 with 26.25 years of service, but not later than age 65. Members under age 50 meeting the Rule of 70 are assumed to retire at the rate of 40% per year. Otherwise, retirement is assumed to occur in accordance with the following rates: Service Meeting Rule of 70 Not Meeting Rule of 70 Less than 20 20% 2% 20 30% 5% 21 50% 10% 22 30% 10% 23 30% 20% 24 45% 60% 25 65% 60% 26 100% 100% More than 26 100% 100% 3. Interest Rates • Used for Calculating All Liabilities (including GASB 25/27 liabilities) 8.30% per annum. This interest rate is assumed to be net of investment expenses and commissions 4. Salary Increases Representative values of the assumed annual rates of future salary increase are as follows: Plan Year 2009 A e Rate A e Rate A e Rate A e Rate 20 3.70% 35 3.70% 50 2.70% 60 1.70% 25 7.70% 40 2.70% 55 2.70% 65 0.70% 30 6.70% 45 2.70% All subsequent Plan Years A e Rate A e Rate A e Rate A e Rate 20 5.87% 35 5.87% 50 4.87% 60 3.87% 25 9.87% 40 4.87% 55 4.87% 65 2.87% 30 8.87% 45 4.87% Average assumed salary increase rate is 3.83% for the 2009 plan year and 6.00% thereafter. City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 40 ACTUARIAL ASSUMPTIONS TABLE XI 5. Loadings for Contingencies • Compensation Salary rates have been increased by 16.00% to load for overtime and other pays. • Pre-Employment Service A City contribution of 6.00% of loaded compensation is assumed sufficient to provide for the purchase (or "buyback") of pre-employment service by the membership. 6. Marriage Assumptions • Percent Married 77% of members are assumed married or entitled to benefits for dependents, including registered domestic partners. • Age Difference Between Spouses Male spouses are assumed to be three years older than female spouses. 7. Expenses Anticipated administrative expenses, exclusive of investment expenses and commissions, are assumed to be funded through future City normal contributions. In addition, the interest rate set forth in item 3 above is assumed to be net of investment expenses and commissions. 8. Assets Actuarial value of assets is equal to the market value of assets adjusted to reflect afive-year phase-in of the net investment gain or loss. At October 1, 2005, the "fresh start method" using the current market value of assets and starting a new five year phase-in of realized and unrealized gains and losses was implemented, recognizing one year of asset performance in the actuarial value of assets. 9. Aggregate Compensation The aggregate compensation used to compute the accrued liability contribution rate was assumed to increase at a rate of 3.50% per year. City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 41 ASSUMPTION CHANGES TABLE XIa The following assumptions have been changed during the past few years: 1. Effective October 1, 2002: The actuarial cost method was changed from frozen initial liability to entry age. 2. Effective October 1, 2002: The amortization of the unfunded accrued liability was changed from level dollar to level percentage of pay, with aggregate payroll assumed to increase at 3.50% per year 3. Effective October 1, 2005: The ``fresh start" method was applied to the actuarial value of assets to begin a new five-year phase-in of realized and unrealized gains and losses. The retirement rates were increased to reflect retirement experience for participants meeting the age 50 and "Rule of 70" eligibility criteria. The loadings for contingencies and pre-employment service were increased from 5.00% to 7.00% and from 4.50% to 5.50% respectively. 4. Effective October ] , 2006: The actuarial valuation system used by Buck Consultants was upgraded effective October 1, 2006. The gain resulting from this upgrade was amortized over 30 years. 5. Effective October 1, 2008: The interest rate used to calculate all liabilities was reduced to 8.40% from 8.50%. The salary scale used to project future pay increases was reduced by 50 basis points at each age to reflect the current and projected economic climate. The loadings for contingencies were increased by 100 basis points (50 basis points for salary rates and 50 basis points for buybacks). The retirement assumption was updated to reflect an increase in the level of retirements starting at age 45. City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 42 ASSUMPTION CHANGES TABLE Xla 6. Effective October 1, 2009: The interest rate used to calculate all liabilities was reduced from 8.40% to 8.30%. The mortality rates were changed from the 1983 Group Annuity Mortality Table to the RP-2000 Combined Mortality Table with a blue collar adjustment for healthy lives and the RP2000 Disabled Mortality Table for disabled participants. An experience study was performed on the plan over the 5 year period October 1, 2003 through October 1, 2008 and the following assumptions were changed to more accurately reflect the plans experience: • Retirement Rates: The retirement assumption was changed to reflect the results of the experience study. • Withdrawal Rates: The withdrawal assumption was changed to reflect the results of the experience study. • Salary Increase Rates: The salary increase assumption was changed to an average increase 3.83% for plan year 2009 to reflect the freeze on COLA for the plan year and to an average increase on 6.00% for all subsequent plan years. • Load for Overtime and Other Pays: The load for overtime and other pays was changed from 7.50% to 16.00% to reflect the results of the experience study. City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 43 PLAN PROVISIONS TABLE XII 1. Monthly Accrued Benefit 3% of average monthly salary multiplied by service up to 15 years, plus 4% of average monthly salary multiplied by service in excess of 15 years, to a maximum monthly benefit of 90% of average monthly salary. If the member was employed prior to July 1, 1976, the benefit can be no less than that provided by the prior Base Plan assuming its provisions continue after its merger with the prior Supplemental Plan (`grandfathered Base Plan benefit"). Average monthly salary is based upon the highest two years of compensation. A limited portion of overtime pay is included in the average monthly salary except when calculating the grandfathered Base Plan benefit referred to above. 2. Service Retirement Age and Benefit Age Age 50 or, if earlier, the date when age plus service equals 70 (Rule of 70); Retiring members may also be eligible to enter the DROP (Deferred Retirement Option Plan). • Amount Monthly Accrued Benefit • Form of Payment For members except those retiring prior to November 5, 2003, the normal form of payment is a 75% joint and survivor annuity with a designated beneficiary as provided under the plan, which includes 120 guaranteed monthly payments. The members may also 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 - 66 2/3% joint and contingent annuity with a designated beneficiary - 50% joint and contingent annuity with a designated beneficiary - 25% joint and contingent annuity with a designated beneficiary - 10 year certain and life annuity with a designated beneficiary Members who retired prior to November 5, 2003 were subject to different normal and optional forms of payment. City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 44 PLAN PROVISIONS TABLE XII 3 4. Disability Retirement Age and Benefit • Condition For a service connected disability benefit, the member must become totally and permanently disabled in the line of duty; For anon-service connected disability benefit, the member must otherwise become totally and permanently disabled and have at least five years of service. • Amount For a service connected disability benefit: Monthly Accrued Benefit, with a minimum benefit of 85% of compensation. For anon-service connected disability benefit: Monthly Accrued Benefit. Withdrawal Retirement Age and Benefit Age Any age prior to 50 with at least 10 years of service; • Amount Monthly Accrued Benefit (payable if participant survives to Service Retirement Age); • Form of Payment For members except those retiring prior to November 5, 2003, the normal form of payment is a 75% joint and survivor annuity with a designated beneficiary as provided under the plan, which includes 120 guaranteed monthly payments. The members may also 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 - 66 2/3% joint and contingent annuity with a designated beneficiary - 50% joint and contingent annuity with a designated beneficiary - 25% joint and contingent annuity with a designated beneficiary - 10 year certain and life annuity with a designated beneficiary Members who retired prior to November 5, 2003 were subject to different normal and optional forms of payment. City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 45 PL~~N PROVISIONS TABLE XII 5. Death Benefits • Service connected death benefit Greater of Monthly Accrued Benefit and 85% of compensation payable as a monthly benefit to the widow until death, to unmarried children in equal shares until age 18 (until age 22 if a full-time student or until recovery from disability if disabled), or to dependent parents in equal shares. Non-service connected death benefit For members with at least five years of service, Monthly Accrued Benefit is payable for the first 12 months after death and 75% of the Monthly Accrued Benefit is payable thereafter (with a minimum benefit of 25% of average monthly salary); benefits are payable to the widow until death or remarriage, to unmarried children in equal shares until age 18 (until age 22 if a full-time student or until recovery from disability or until marriage if disabled), or to dependent parents in equal shares. However, if the member has been married for less than ten years, benefits are payable to the spouse only for the life expectancy of the deceased member at time of death. 6. Employee Contributions 10% of salary per year (on a pre-tax basis); If contributions are refunded to the member or to his beneficiaries, then interest is credited at the rate of 3% per annum. 7. Pre-Employment Service Members with at least 20 years of service may purchase up to four total years of additional service credit at the 3% accrual rate for time spent on active military duty or other full-time public safety service for which no other benefit is payable. Also, such member may purchase an increase in benefit of 3% or 6% without purchasing service. Members purchasing other than military service must also be eligible to retire. The total of any combination of pre-employment benefit purchased is 12% increase in accrual. 8. Cost-of-Living Adjustment Benefits are increased by 2.5% per year, compounded annually, each October 1 after retirement, adjusted for partial years; 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 in the City of Miami Beach Page 46 PLAN PROVISIONS TABLE XII 9. Deferred Retirement Option Program (DROP) Police Officers and Firefighters are eligible to participate in a Deferred Retirement Option Program (DROP) upon meeting any one of the following criteria: • the attainment of age 50 or • the sum of the member's age and creditable service equal to at least 70 Operation of the DROP • 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. • The member's monthly pension will be deposited into the selected investment vehicles. • The member will cease to accrue additional pension benefits (with the exception of the COLA under the pension plan). • The member will no longer be eligible for Disability or Service Connected Death benefits from the Pension Plan. • Member contributions to the Pension Plan will cease upon entering the DROP. • Upon entering the DROP, the member will select the length of the DROP period. The maximum period of participation in the DROP is 36 months. Notwithstanding, participation 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 if they were a member prior to July 1, 1976). • The member will not have access or be able to borrow against any of the funds accumulated in their DROP account. • The member may sever his/her employment with the City at any time during the DROP period. Such separation will terminate their participation in the DROP. • No payment will be made from the DROP account until the member severs their employment with the City • Following severance of employment, the funds in the DROP will be paid under the options the member selected. The member will also start receiving their monthly pension which was previously being deposited in the DROP. City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 47 PLAN AMENDMENTS TABLE XIIa The following amendments have been made: 1. Effective September 30, 2000, members of the post-May 18, 1993 plan were merged into the pre-May 19, 1993 benefit schedule. 2. Effective November 6, 2001, domestic partners of members registered with the City of Miami Beach are entitled to survivor benefits under the Fund. 3. Effective November 6, 2001, members with at least 20 years of service and eligible to retire may purchase certain prior public safety service or purchase an increased benefit. Total accrual from purchase of service, including military time, cannot exceed 12%. 4. Effective November 5, 2003, the normal form will include 120 guaranteed monthly payments. City Pension Fund for Firefighters and Police Officers in the City of Miami Beach Page 48