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