LTC 093-2013 Actuarial Valuation Reportsm MIAMI BEACH
OFFICE OF THE CITY MANAGER
NO. LTC # 093 -2013 LETTER TO COMMISSION
TO: Mayor Matti Herrera Bower and Members of the City Commission
FROM: Kathie G. Brooks, Interim City Managerc/
DATE: March 21, 2013
SUBJECT: Actuarial Valuation Reports for the City's Two Pension Plans, Miami Beach
Employees Retirement Plan and the City Pension Fund for Firefighters and
Police Officers in the City of Miami Beach
The purpose of this Letter to the Commission (LTC) is to provide the Mayor and the City
Commission with the City's Annual Required Contributions payable October 1, 2013, for
both of the City's pension plans. The actuary for the City Pension Fund for Firefighters
and Police Officers in the City of Miami Beach (Fire and Police Pension Plan), presented
a draft FY2013/2014 Actuarial Valuation Report during the last Fire and Police Pension
Board meeting. This report will be made available once approved by the Fire and Police
Pension Board. Based on the draft valuation, the preliminary estimate for the City's
Annual Required Contribution (ARC) towards the Fire and Police Pension Plan payable
October 1, 2013 is $41.51 million, an increase of approximately $2.14 million from the
current fiscal year.
The FY2013/2014 Actuarial Valuation Report for the Miami Beach Employees'
Retirement Plan was adopted during the March 12, 2013, Pension Board meeting
(Attached). Based on the results of the valuation, the City's Annual Required
Contribution (ARC) towards the Miami Beach Employees' Retirement Plan payable
October 1, 2013 is $26.2 million, an increase of $4 million.
Attached, please find a summary of valuation data for both of the City's pension plans for
the past five years. Should you require additional information, please do not hesitate to
contact Carla Gomez, Human Resources Assistant Director or myself.
Thank you.
KGB /CMG
Attachments
C'� N
O
'{ w
b
r �a
n- ry
� w
T,
iT. Z
M
rl
City of Miami Beach
Valuation Data for City's Pension Plans
*Amount was reduced by $466,878 due to City overpayment in FY10/11
** Police and Fire Estimated Projections as Valuation has not been adopted by the Board
Police & Fire
General Employees
Valuation
ARC Payable
October 1 of
Fiscal Year
Actuarial
Required City
Contribution
Projected
Pensionable
Payroll
% of
Payroll
Unfunded
Actuarial
Accrued
Liability
(UAAL)
Actuarial
Required City
Contribution
Covered
Payroll
% of
Payroll
Unfunded
Actuarial
Accrued
Liability
(UAAL)
2008
2009 -2010
$23,283,269
$ 53,153,934
43.80
$176,368,132
$17,137,394
$68,009,550
25.20
$125,016,843
2009
2010 -2011
$35,243,726
$ 54,154,885
65.08
$266,792,988
$14,474,678
$70,097,549
20.65
$148,766,860
2010
2011 -2012
$36,175,910
$49,718,966
72.76
$291,931,506
*$17,583,191
$68,844,264
25.54
$176,796,453
2011
2012 -2013
$39,370,000
$49,186,724
80.041
$339,297,4481
21,222,051
$66,346,9041
31.991
$205,827,133
2012 **
2013- 2014 **
$41,510,000
$46,313,650
89.62
$382,000,000
$26,212,015
$65,053,945
40.29
$215,987,733
*Amount was reduced by $466,878 due to City overpayment in FY10/11
** Police and Fire Estimated Projections as Valuation has not been adopted by the Board
G T)C Gabriel Roeder Smith Sc Company
J Consultants & Actuaries
CITY OF NHAMI BEACH EMPLOYEES' RETIREMENT PLAN
ACTUARIAL VALUATION REPORT AS OF OCTOBER 1, 2012
ANNUAL EMPLOYER CONTRIBUTION FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2014
RS Gabriel Roeder Smith & Company One East Broward Blvd. 954.527.1616 phone
Consultants & Actuaries Suite 505 954.525.0083 fax
Ft. Lauderdale, FL 33301 -1804 www.gabrielroeder.com
March 11, 2013
Board of Trustees
City of Miami Beach Employees'
Retirement Plan
Miami Beach, Florida
Dear Board Members:
The results of the October 1, 2012 Actuarial Valuation of the City of Miami Beach Employees' Retirement
Plan are presented in this report.
This report was prepared at the request of the Board and is intended for use by the Retirement Plan and
those designated or approved by the Board. This report may be provided to parties other than the
Retirement Plan only in its entirety and only with the permission of the Board.
The purpose of the valuation is to measure the Plan's funding progress, to determine the employer
contribution rate for the fiscal years ending September 30, 2014 and to determine the actuarial
information for Governmental Accounting Standards Board (GASB) Statement No. 25.
This report should not be relied on for any purpose other than the purpose described above.
The findings in this report are based on data or other information through September 30, 2012. Future
actuarial measurements may differ significantly from the current measurements presented in this report
due to such factors as the following: plan experience differing from that anticipated by the economic or
demographic assumptions; changes in economic or demographic assumptions; increases or decreases
expected as part of the natural operation of the methodology used for these measurements (such as the
end of an amortization period or additional cost or contribution requirements based on the plan's funded
status); and changes in plan provisions or applicable law.
The valuation was based upon information furnished by the City concerning Plan benefits, financial
transactions, plan provisions and active members, terminated members, retirees and beneficiaries. We
checked for internal and year -to -year consistency, but did not otherwise audit the data. We are not
responsible for the accuracy or completeness of the information provided by the City.
This report was prepared using certain assumptions prescribed by the Board as described in Section B.
The undersigned actuaries are members of the American Academy of Actuaries and meet the
Qualification Standards of the American Academy of Actuaries to render the actuarial opinions contained
herein. The signing actuaries are independent of the plan sponsor.
This report has been prepared by actuaries who have substantial experience valuing public employee
retirement systems. To the best of our knowledge the information contained in this report is accurate and
fairly presents the actuarial position of the Retirement Plan as of the valuation date. All calculations have
been made in conformity with generally accepted actuarial principles and practices, with the Actuarial
Standards of Practice issued by the Actuarial Standards Board and with applicable statutes.
This actuarial valuation and/or cost determination was prepared and completed by me or under my direct
supervision, and I acknowledge responsibility for the results. To the best of my knowledge, the results are
complete and accurate. In my opinion, the techniques and assumptions used are reasonable, meet the
requirements and intent of Part VII, Chapter 112, Florida Statutes, and are based on generally accepted
actuarial principles and practices. There is no benefit or expense to be provided by the plan and/or paid
from the plan's assets for which liabilities or current costs have not been established or otherwise taken into
account in the valuation. All known events or trends which may require a material increase in plan costs or
required contribution rates have been taken into account in the valuation.
Respectfully submitted,
GABRIEL, ROEDER, SMITH AND COMPANY
By 3
Melissa R. Algayer MAAh, F &A
Enrolled Actuary No. 11 -06467
t
By y
Z J fre mrose, MAAA
l nrolled Actuary No. 11 -06599
Gabriel Roeder Smith & Company
TABLE OF CONTENTS
Section
Title
Page
A
Discussion of Valuation Results
1
B
Valuation Results
1. Participant Data
7
2. Annual Required Contribution
8
3. Actuarial Value of Benefits and Assets
9
4. Calculation of Normal Cost
10
5. Liquidation of the Unfunded Accrued Liability
11
6. Actuarial Gains and Losses
14
7. History of Investment Returns and Salary Increases
15
8. Actual Compared to Expected Decrements among
Active Employees
18
9. History of Contributions
19
10. Actuarial Assumptions and Cost Method
21
11. Glossary of Terms
26
C
Pension Fund Information
1. Statement of Plan Assets at Market Value
29
2. Reconciliation of Plan Assets
30
3. Actuarial Value of Assets
32
4. Investment Rate of Return
33
D
Financial Accounting Information
1. FASB No. 35
34
2. GASB No. 25
35
E
Miscellaneous Information
1. Reconciliation of Membership Data
37
2. Age and Service Distribution
38
3. Inactive Member Distribution
39
F
Summary of Plan Provisions
40
GRS
SECTION A
DISCUSSION OF VALUATION RESULTS
GRS
DISCUSSION OF VALUATION RESULTS
Comparison of Required Employer Contributions
A comparison of the required employer contribution developed in this and the last actuarial
valuation is shown below.
Increase (Decrease) 4,989,964 8.30 7.72 (1,292,959) (1,345,012)
The contribution has been adjusted for interest on the basis that the employer contribution is made
in a single payment on the first day of the fiscal year. The actual employer contribution for the year ending
September 30, 2012 was $16,312,068 plus $1,271,123 of prepaid employer contributions for a total of
$17,583,191. The minimum required contribution was $17,583,191.
Revisions in Benefits
There have been no revisions in benefits since the last valuation.
Revisions in Actuarial Assumptions and Methods
The investment return assumption was reduced from 8.15% last year to 8.00% this year.
The Actuarial Standard of Practice (ASOP) with regard to the mortality assumption has recently
been revised. ASOP No. 35 Disclosure Section 4.1.1 now states "The disclosure of the mortality
assumption should contain sufficient detail to permit another qualified actuary to understand the provision
made for future mortality improvement. If the actuary assumes zero mortality improvement after the
measurement date, the actuary should state that no provision was made for future mortality improvement. "
The mortality table used was the RP -2000 Combined Healthy Participant Mortality Tables for males and
females projected to the year 2010 using Scale AA. There is no provision for future mortality
improvements after 2010. We recommend that the mortality assumption be revised to include a margin for
GRS
Required City Contribution
% of Non -DROP % of Total
Non -DROP
Total
Amount Payroll Payroll
Covered Payroll
Covered Payroll
For FYE 9/30/14 Based
on 10/1/12 Valuation $
26,212,015 40.29 % 37.56 %
$ 65,053,945
$ 69,782,689
For FYE 9/30/13 Based
on 10 /1 /11 Valuation
21,222,051 31.99 % 29.84 %
$ 66,346,904 $
71,127,701
Increase (Decrease) 4,989,964 8.30 7.72 (1,292,959) (1,345,012)
The contribution has been adjusted for interest on the basis that the employer contribution is made
in a single payment on the first day of the fiscal year. The actual employer contribution for the year ending
September 30, 2012 was $16,312,068 plus $1,271,123 of prepaid employer contributions for a total of
$17,583,191. The minimum required contribution was $17,583,191.
Revisions in Benefits
There have been no revisions in benefits since the last valuation.
Revisions in Actuarial Assumptions and Methods
The investment return assumption was reduced from 8.15% last year to 8.00% this year.
The Actuarial Standard of Practice (ASOP) with regard to the mortality assumption has recently
been revised. ASOP No. 35 Disclosure Section 4.1.1 now states "The disclosure of the mortality
assumption should contain sufficient detail to permit another qualified actuary to understand the provision
made for future mortality improvement. If the actuary assumes zero mortality improvement after the
measurement date, the actuary should state that no provision was made for future mortality improvement. "
The mortality table used was the RP -2000 Combined Healthy Participant Mortality Tables for males and
females projected to the year 2010 using Scale AA. There is no provision for future mortality
improvements after 2010. We recommend that the mortality assumption be revised to include a margin for
GRS
2
mortality improvements after 2010. Detail on this assumption can be found in the Actuarial Assumptions
and Cost Method section.
Actuarial Experience
There was a net actuarial loss of $23,859,099 for the year which means actual experience was less
favorable than expected. The actuarial loss was primarily due to lower than expected recognized return on
investments, and was partially offset by gains due to lower salary increases than expected. The return on the
Actuarial Value of Assets was 2.1% and the return on the Market Value of Assets was 20.5 %. The actuarial
loss translates into an increase in the employer contribution equal to 3.31% of non -DROP payroll.
Funded Ratio
The funded ratio this year is 66.1% compared to 70.7% last year. This year's ratio was 67.2%
before the assumption change described above.
The funded ratio is equal to the actuarial value of assets divided by the actuarial accrued (past
service) liability.
Analysis of Change in Employer Contribution
The components of change in the required employer contribution as a percent of non -DROP payroll
are as follows:
Contribution rate last year
31.99 %
Change in assumptions /methods
1.66
Payment on unfunded liability
3.38
Change in employer normal cost rate
(0.19)
Experience gain/loss
3.31
Adjustment due to prepaid contribution
0.12
Change in administrative expense
0.02
Contribution rate this year
40.29 %
Asset Values
It is important to keep in mind that under the asset smoothing method, the difference between
actual and expected return is recognized over five years. As of September 30, 2012 the market value of
assets exceeded the actuarial value by $2,071,601. Once all the gains and losses through September 30,
2012 are fully recognized in the actuarial asset values, the contribution rate will decrease by roughly 0.3%
of non -DROP payroll unless there are further gains or losses.
GRS �
3
If we were not using an asset smoothing method, the City contribution rate would have been
40.01% and the funded ratio would have been 66.4%.
Proiections of Required Contributions and Funded Ratio
The following three pages show the estimated City contributions and funded ratios over the next ten
years, and a projection of the unfunded accrued liability and amortization payments over the next thirty
years. The projections are based on these assumptions:
• An 8.0% return on market value of assets for 2013 and for each year after.
e Cash flow remains constant
• No future gains or losses other than the recognition of prior investment experience
0 3% payroll growth
The projections reflect the expiration of amortization bases. For example, for the 2013 valuation,
there will be an increase in the amortization payments on the unfunded accrued liability in the amount of
$1,142,872. In 2014, the amortization payments will increase by $1,194,337. In 2015, the amortization
payments will increase by $502,225. In 2016, the amortization payments will decrease by $1,323,663.
Conclusion
The remainder of this Report includes detailed actuarial valuation results, financial information,
miscellaneous information and statistics, and a summary of plan provisions.
GRS
4
10 -Year Projection of Annual Required Contribution (ARC)
Assumptions
8.0% return on Market Value of Assets
No gains or losses other than recognition
of prior investment experience
Constant cash flow
3.0% payroll growth
GRS
Total ARC
Current Assumptions
Dollar
Fiscal Year
Amount
Ending 9/30
(thousands)
% of Payroll
2014
$ 26,212
40.29
2015
28,264
42.18
2016
29,454
42.68
2017
29,947
42.13
2018
27,761
37.91
2019
27,669
36.69
2020
27,573
35.50
2021
27,484
34.35
2022
27,378
33.22
2023
27,274
32.13
2024
27,163
31.07
Assumptions
8.0% return on Market Value of Assets
No gains or losses other than recognition
of prior investment experience
Constant cash flow
3.0% payroll growth
GRS
L1 �
0
w
a
b
b
a
4
85.0 f
80.0
75.0
70.0
66,
65.0
60.0
55.0 r
50.0
45.0
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
ti
ti
ti
City of Miami Beach Employees' Retirement Plan
10 -Year Projection of Funded Ratio
� ~L7
ti
o\
O ff` �Q1b 1�
NZ,
Valuation Date
796 81.1
0 O `11 O�
1o�tiV �d1�
m
I
30- Year Projection of Unfunded Actuarial Accrued Liability (UAL) and Amortization Payments
22.0
20.0 '
18.0
16.0
C
0
:o
E 14.0
C
12.0
�a
CL
C
0
10.0
0
A 8.0
C.
4.0
2.0
220.0
200.0
180.0
160.0
140.0
0
120.0
100.0
80.0
60.0
40.0
20.0
0.0 0.0
ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti
�Amor iatim Payment — * — UAL
ski+ � � ti � gym+ - i �--
SECTION B
VALUATION RESULTS
GRS
h
PARTICIPANT DATA
October 1, 2012 1 October 1, 2011
ACTIVE MEMBERS
Number (Non -DROP)
Covered Annual Non -DROP Payroll
Average Annual Non -DROP Pay
Total Covered Annual Payroll
Average Total Annual Pay
Average Age (Non -DROP)
Average Past Service (Non -DROP)
Average Age at Hire (Non -DROP)
DROP PARTICIPANTS
Number
Annual Benefits
Average Annual Benefit
Average Age
RETIREES & BENEFICIARIES
Number
Annual Benefits
Average Annual Benefit
Average Age
DISABILITY RETIREES
Number
Annual Benefits
Average Annual Benefit
Average Age
TERMINATED VESTED MEMBERS
Number
Annual Benefits
Average Annual Benefit
Average Age
1,049
$ 65,053,945
$ 62,015
$ 69,782,689
$ 63,209
45.1
9.8
35.3
55
$ 2,994,703
$ 54,449
59.3
1,002
$ 33,085,394
$ 33,019
71.1
43
$ 1,117,160
$ 25,980
65.6
63
$ 1,343,444
$ 21,325
45.9
1,072
$ 66,346,904
$ 61,891
$ 71,127,701
$ 62,834
44.8
9.6
35.2
60
3,038,978
50,650
59.1
972
$ 30,321,221
$ 31,195
71.3
43
$ 1,038,368
$ 24,148
66.3
68
$ 1,296,576
$ 19,067
46.5
GRS
ANNUAL REQUERED CONTRIBUTION (ARC)
A. Valuation Date
October 1, 2012
October 1, 2012
October 1, 2011
AjlerAssumption
Before Assumption
Change
Change
B. ARC to Be Paid During
Fiscal Year Ending
9/30/2014
9/30/2014
9/3012013
C. Assumed Date of Employer Contrib.
10/1/2013
10/1/2013
10/1/2012
D. Annual Payment to Amortize
Unfunded Actuarial Liability
$ 17,184,796
$ 16,555,575
$ 12,706,745
E. Employer Normal Cost
7,085,589
6,682,247
6,916,048
F. ARC if Paid on the Valuation
Date: D +E
24,270,385
23,237,822
19,622,793
G. ARC Adjusted for Frequency of
Payments
26,212,015
25,131,704
21,222,051
H. ARC as % of Covered Payroll
- Non -DROP Payroll
40.29 %
38.63 %
31.99 %
- Total Payroll
37.56 %
36.01 %
29.84 %
I. Expected Covered Payroll
- Non -DROP Payroll
65,053,945
65,053,945
66,346,904
- Total Payroll
69,782,689
69,782,689
71,127,701
GRS
ACTUARIAL VALUE OF BENEFITS AND ASSETS
Faluation Date
October 1, 2012
October 1, 2012
October 1, 2011
After Assumption
Before Assumption
Change
Change
B. Actuarial Present Value of All Projected
Benefits for
1. Active Members
a. Service Retirement Benefits
$ 264,825,342
$ 257,622,998
$ 269,719,201
b. Vesting Benefits
31,967,178
30,885,431
31,827,213
c. Disability Benefits
7,271,899
7 ,097,334
6,968,416
d. Preretirement Death Benefits
3,953,764
3,855,931
3,901,096
e. Return of Member Contributions
631,843
628,393
618,849
308,650,026
300,090,087
313,034,775
f. Total
2. Inactive Members
a. Service Retirees & Beneficiaries
409,347,392
404,010,960
372,407,944
b. Disability Retirees
12,377,127
12,213,881
11,255,203
c. Terminated Vested Members
11,480,115
11,210,208
12,545,886
433,204,634
427,435,049
396,209,033
d. Total
3. Total for All Members
741,854,660
727,525,136
709,243,808
C. Actuarial Accrued (Past Service)
Liability per GASB No. 25
637,363,774
627,203,174
602,577,503
D. Actuarial Value of Accumulated Plan
Benefits per FASB No. 35
1. Based on Plan's Interest Rate
596,192,659
586,776,312
563,637,296
2. Based on FRS Interest Rate
612,487,510
612,487,510
588,546,798
E. Plan Assets
1. Market Value
423,447,642
423,447,642
362,764,920
2. Actuarial Value
421,376,041
421,376,041
425,781,050
F. Unfunded Actuarial Accrued Liability: GE2
215,987,733
205,827,133
176,796,453
G. Actuarial Present Value of Projected
Covered Payroll
543,825,043
539,308,153
548,806,758
H. Actuarial Present Value of Projected
Member Contributions
51,791,078
51,395,925
52,578,408
fGRS
In
CALCULATION OF EMPLOYER NORMAL COST
I A Valuation Date
October 1, 2012
After Assumption
Change
October 1, 2012
Before Assumption
Change
October 1, 2011
0 B. Normal Cost for
1. Service Retirement Benefits
2. Vesting Benefits
3. Disability Benefits
4. Preretirement Death Benefits
5. Return of Member Contributions
6. Total for Future Benefits
7. Assumed Amount for Administrative
Expenses
8. Total Normal Cost
% of Covered Payroll
- Non -DROP Payroll
- Total Payroll
C. Expected Member Contribution
% of Covered Payroll
- Non -DROP Payroll
- Total Payroll
D. Employer Normal Cost: B8-C
% of Covered Payroll
- Non -DROP Payroll
- Total Payroll
$ 9,825,032
2,047,065
529,872
268,222
225,573
12,895,764
694,180
13,589,944
20.89 %
19.47 %
6,504,355
10.00 %
9.32 %
7,085,589
10.89 %
10.15 %
$ 9,508,736
1,975,912
518,795
262,014
226,965
12,492,422
694,180
13,186,602
20.27 %
18.90 %
6,504,355
10.00 %
9.32 %
6,682,247
10.27 %
9.58 %
9,815,719
2,015,078
515,569
262,722
226,604
12,835,692
693,694
13,529,386
20.39 %
19.02 %
6,613,338
9.97 %
9.30 %
6,916,048
10.42 %
9.72 %
GRS
11
LIQUIDATION OF THE UNFUNDED ACTUARIAL ACCRUED LIABILITY
A. Derivation of the Current UAAL
1.
Last Year's UAAL
$ 176,796,453
2.
Employer Normal Cost for Contribution Year
7,433,480
3.
Last Year's Contributions
a. Employer Contribution Paid During FYE 9/30/2012
16,312,068
b. Prepaid Contribution Applied to FYE 9/30/2012
466,878
c. Total
16,778,946
4.
Interest at the Assumed Rate on:
a. 1 and 2 for one year
15,014,740
b. 3 from dates paid
1,367,484
c. a - b
13,647,256
5.
This Year's Expected UAAL Prior to Revision:
1 + 2 - 3 + 4c
181,098,243
6.
Change in UAAL Due to Plan Amendments
and/or Changes in Actuarial Assumptions
10,160,600
7.
This Year's Expected UAAL After Revisions: 5 + 6
191,258,843
8.
This Year's Actual UAAL After Revisions:
215,987,733
9.
Adjustment for 2012 Prepaid Contribution*
869,791
10.
This Year's Gain (Loss): 7 - 8 + 9
(23,859,099)
11.
Gain (Loss) Due to Investments
(25,503,240)
12.
Gain (Loss) Due to Other Causes
1,644,141
An excess contribution of $804,245 was made during fiscal year ending 9/30/2011 that was
used to offset the contribution requirement for the fiscal year ending 9/30/2012. Since this
amount was already reflected in assets for the 10/1/2011 Valuation, an adjustment is
required. Therefore, a charge base in the amount of $869,791 ($804,245 plus 8.15%
interest) was created as of 10/1/2012.
GRS
12
B. UAAL Amortization Period andPayments
Original UAAL
Current UAAL
Amortization
Date
Period
Years
Payment
Before Changes After Changes
Established
Source
(Years)
Amount
Remaining
Amount
10/1/98
(Gain) Loss
15
$ (9,492,383)
1
$ (1,142,872)
$ (1,142,872)
$ (1,142,872)
10/1/99
(Gain) Loss
15
(11,197,306)
2
(2,467,935)
(1,282,283)
(1,281,428)
10/1/99
Plan Chg.
15
761,013
2
167,731
87,149
87,091
10 /1 /00
(Gain) Loss
15
(1,184,364)
3
(361,679)
(130,119)
(129,948)
10 /1 /01
(Gain) Loss
15
4,182,294
4
1,563,571
437,958
437,106
10 /1 /01
Plan Chg.
15
8,482,719
4
3,171,302
888,286
886,557
10/1/02
(Gain) Loss
30
24,017,296
20
20,763,850
1,977,351
1,958,189
10/1/03
(Gain) Loss
30
16,972,622
21
16,343,016
1,526,028
1,510,704
10/1/04
(Gain) Loss
30
9,682,048
22
9,131,281
837,543
828,850
1011105
(Gain) Loss and Assum. Chg.*
30
9,377,578
23
8,608,071
776,841
768,527
10/1/06
(Gain) Loss
30
11,796,972
24
10,858,091
965,521
954,888
10/1/06
(Gain) Loss
30
34,747,408
24
31,981,987
2,843,896
2,812,578
10/1/07
(Gain) Loss
30
(14,036,710)
25
(13,079,347)
(1,147,475)
(1,134,497)
10/1/07
Assum. and Method Chg.**
30
(12,143,754)
25
(11,315,499)
(992,730)
(981,502)
10/1/08
(Gain) Loss
30
29,844,325
26
29,463,272
2,553,274
2,523,669
10/1/08
Assum. Chg
30
8,228,994
26
8,123,925
704,016
695,853
10/1/09
(Gain) Loss
30
28,291,986
27
27,828,306
2,384,639
2,356,339
10/1/09
Assum. Chg
30
8,975,372
27
8,828,274
756,505
747,527
10/1/09
Assum. Chg
30
(7,968,884)
27
(7,838,281)
(671,671)
(663,700)
10/1/09
Plan Chg.
30
(6,161,412)
27
(6,060,432)
(519,325)
(513,162)
10/1/09
* **
6
(1,126,404)
3
(1,036,146)
(372,767)
(372,277)
10 /1 /10
(Gain) Loss
30
15,123,488
28
15,306,995
1,298,259
1,282,512
10/1/10
Assum. Chg
30
8,061,915
28
8,159,739
692,066
683,672
10 /1 /11
(Gain) Loss
30
22,163,141
29
22,422,914
1,883,978
1,860,656
10 /1 /11
Assum. Chg
30
1,658,668
29
1,678,109
140,995
139,250
10/1/12
* * **
29
869,791
29
869,791
73,080
72,175
10/1/12
(Gain) Loss
30
23,859,099
30
23,859,099
1,987,432
1,962,354
10/1/12
Assum. Chg
30
10,160,600
30
10,160,600
N/A
835,685
215,987,733
16,555,575
213,946,112
17,184,796
* Loss of 7,060,041 plus assumption change of 2,317,537.
* *Assumption change of 5,311,398 plus method change of (17,455,152).
** *Credit Base established to reflect receivables from Excess Plan
* ** *Charge Base established to reflect excess contribution for fiscal year ending 9/30/11 that was included in assets. This base is
established as of 10/1/12.
GRS
191
C. Amortization Schedule
The UAAL is being liquidated as a level dollar amount over the number of years remaining in the
amortization period. The expected amortization schedule is as follows:
Amortization Schedule
Year
Expected UAAL
2012
$ 215,987,733
2013
214,707,175
2014
212,089,868
2015
207,973,292
2016
202,984,986
2017
199,027,173
2022
173,950,748
2027
137,105,252
2032
82,967,131
2037
31,880,733
2042
-
GRS
ACTUARIAL GAINS AND LOSSES
14
The assumptions used to anticipate mortality, employment turnover, investment income, expenses,
salary increases, and other factors have been based on long range trends and expectations. Actual
experience can vary from these expectations. The variance is measured by the gain and loss for the period
involved. If significant long term experience reveals consistent deviation from what has been expected and
that deviation is expected to continue, the assumptions should be modified.
Net actuarial gains in previous years are as follows:
Year Ended
Gain Loss
9/30/1990
$ (9,106,524)
9/30/1991
2,727,904
9/30/1992
4,954,823
9/30/1993
5,370,894
9/30/1994
(1,696,061)
9/30/1995
6,661,918
9/30/1996
7,568,621
9/30/1997
13,539,264
9/30/1998
6,894,790
9/30/1999
16,168,137
9/30/2000
6,540,306
9/30/2001
(6,572,791)
9/30/2002
(32,586,068)
9/30/2003
(18,414,901)
9/30/2004
(9,682,048)
9/30/2005
(7,060,041)
9/30/2006
(11,796,971)
9/30/2007
14,036,710
9/30/2008
(29,844,325)
9/30/2009
(28,291,986)
9/30/2010
(15,123,488)
9/30/2011
(22,163,141)
9/30/2012
23,859,099)
GRS
HISTORY OF INVESTMENT RETURNS AND SALARY INCREASES
15
The.fund earnings and salary increase assumptions have considerable impact on the cost of the Plan so
it is important that they are consistent with the actual experience. The following table shows the actual fund
earnings and salary increase rates compared to the assumed rates for the last several years:
* Approximate rate
** Represents salary increases and investment return for the total group
Note: Figures before 1992 were taken from Reports of Buck Consultants.
The actual investment return rates shown above are based on the actuarial value of assets. The actual
salary increase rates shown above are the increases received by those active members who were included in
the actuarial valuation both at the beginning and the end of each period. The exhibits that follow illustrate
the table above in graphic form.
GRS
General Plan
Unclassified Plan
Investment Return
Salary Increases
Investment Return
Salary Increases
Year Ending
Actual
Assumed
Actual
Assumed
Actual
Assumed
Actual
Assumed
9/30/1989
11.6 %
8.0 %
1.9 %
6.0 %
14.6 %
8.0 %
3.2 %
6.0 %
9/30/1990
7.3
8.5
7.5
6.0
(2.3)
8.0
12.3
6.0
9/30/1991
8.1
8.5
3.0
6.0
21.6
8.5
3.4
6.0
9/30/1992
13.7
8.5
2.0 *
6.0
5.8
9.0
2.4
6.0
9/30/1993
11.4
8.5
3.1
6.0
14.1
9.0
6.3
6.0
9/30/1994
6.8
8.5
3.9
6.0
4.8
9.0
6.0
6.0
9/30/1995
11.4
8.5
8.8
6.0
24.1
9.0
7.6
6.0
9/30/1996
15.3
8.5
4.2
6.0
13.9
9.0
8.6
6.0
9/30/1997
13.8
8.5
6.0
6.0
19.1
9.0
7.4
6.0
9/30/1998
12.5
8.5
5.0
6.0
4.3
9.0
4.1
6.0
9/30/1999
14.4
8.5
7.3
6.0
18.8
9.0
7.1
6.0
9/30/2000
10.7
8.5
6.7
6.0
16.5
9.0
6.7
6.0
9/30/2001
7.2
8.5
9.3
6.0
9.7
9.0
7.0
6.0
9/30/2002
0.3
8.5
8.9
6.0
1.7
9.0
9.2
6.0
9/30/2003
4.3
8.5
8.1
6.0
4.6
9.0
7.5
6.0
9/30/2004
4.1
8.5
3.1
6.0
9.7
9.0
5.7
6.0
9/30/2005
4.4
8.5
4.7
6.0
10.7
9.0
6.8
6.0
9/30/2006
7.7
8.5
11.9
6.0
10.2
8.75
7.9
6.0
9/30/2007 **
12.0
8.75
(3.6)
6.0
NA
NA
NA
NA
9/30/2008 **
5.2
8.65
11.3
6.0
NA
NA
NA
NA
9/30/2009 **
1.1
8.50
4.8
6.0
NA
NA
NA
NA
9/30/2010 * *
5.0
8.35
2.5
6.0
NA
NA
NA
NA
9/30/2011 * *
1.1
8.25
0.8
6.8
NA
NA
NA
NA
9/30/2012 * *
2.1
8.15
1.7
5.7
NA
NA
NA
NA
Averages
7.9 %
- --
5.1 %
- --
11.0 %
- --
6.6 %
--
* Approximate rate
** Represents salary increases and investment return for the total group
Note: Figures before 1992 were taken from Reports of Buck Consultants.
The actual investment return rates shown above are based on the actuarial value of assets. The actual
salary increase rates shown above are the increases received by those active members who were included in
the actuarial valuation both at the beginning and the end of each period. The exhibits that follow illustrate
the table above in graphic form.
GRS
I
16
I
History of Investment Return Based
on Actuarial Value of Assets — General Plan
and Combined Plan after 2006
History of Salary Increases — General Plan
and Combined Plan after 2006
20%
20%
20%
15%
15%
10%
10%
5%
5%
12%
8%
0%
8%
0%
-5%
-5%
-10%
-10%
9� 9� 9�
Plan Year End
0%
IN Actual --0 A..-d
History of Salary Increases — General Plan
and Combined Plan after 2006
20%
20%
16%
16%
12%
12%
8%
8%
4%
4%
0%
0%
-4%
-4%
-8%
-8%
,b
Plan Year End Compared to Previous Year
t Actual t As wned
GRS
1
17
GRS
History of Investment Return Based on
Actuarial Value of Assets - Unclassified Plan
20%
30%
16%
30%
25%
16%
25%
20%
20%
8%
15%
1 A
15%
10 %
4%
10%
5 %
5%
0%
-4%
0%
-4 %
0%
5%
5%
Plan Year End
—�— Actual t A+sun> =d
17
GRS
History of Salary Increases - Unclassified Plan
20%
20%
16%
16%
12%
12%
8%
8%
4%
4%
0%
0%
-4%
-4 %
-8%
-8%
Plan Year End Compared to Previous Year
— r Actual 0 A--d
17
GRS
18
Actual (A) Compared to Expected (E) Decrements
Among Active Employees
Number
Added
Service &
Active
During
DROP
Disability
Terminations
Members
Vested Other Totals
Year
Year
Retirement
Retirement
Death
End of
A
I E
A
E
A
E
A
E
A
A
A
E
Ended
Year
9/30/2003
109
46
20
40
0
3
2
1
15
9
24
33
714
9/30/2004
65
54
24
37
2
3
1
1
18
9
27
35
725
9/30/2005
73
62
16
43
2
3
2
1
23
19
42
37
736
9/30/2006 *
357
75
40
40
0
3
1
1
21
13
34
37
1018
9/30/2007
149
106
40
86
2
3
1
2
17
46
63
49
1061
9/30/2008
182
85
29
92
1
3
1
2
24
30
54
61
1158
9/30/2009
78
29
55
123
2
3
1
2
12
12
24
64
1154
9/30/2010
35
72
31
114
0
3
1
2
10
30
40
69
1117
9/30/2011
37
82
27
38
3
1
3
2
9
40
49
43
1072
9/30/2012
60
83
41
46
2
1
1
2
16
23
39
39
1049
9/30/2013
45
1
2
38
10 Yr Totals **
1145
694
323
659
14
26
14
16
165
231
396
467
* Includes 401a transfers
** Totals are through current Plan Year only
r.
C
C
GRS
19
RECENT HISTORY OF REQUIRED AND ACTUAL CONTRIB UTIONS
End of
Required Employer
Actual Employer
Expected Employee
Valuation
Year To
Contribution
Contribution
Contribution
Which
Date
Valuation
% of
Applies
i
Amount Payroll
Amount % of Payroll
10/1/92
9/30/94
$ 3,004,556 13.59 %
$ 3,004,556
2,210,760 10.00 %
10/1/93
9/30/95
2,809,509 13.32
2,809,509
2,109,411 10.00
10/1/94
9/30/96
4,151,807 18.92
4,151,807
2,194,453 10.00
10/1/95
9/30/97
3,982,477 16.97
3,982,477
2,346,131 10.00
10/1/96
9/30/98
3,091,359 12.29
3,091,359
2,514,836 10.00
10/1/97
9/30/99
1,293,920 4.99
1,293,920
2,593,998 10.00
10/1/98
9/30/00
666,897 2.66
666,897
2,507,033 10.00
10/1/99
9/30/01
- -
-
2,541,861 10.00
10 /1 /00
9/30/02
- -
-
2,588,940 10.00
10 /1 /01
9/30/03
- -
-
2,766,409 10.00
10/1/02
9/30/04
2,476,702 8.16
2,476,702
3,035,064 10.00
10/1/03
9/30/05
5,082,595 14.74
5,082,595
3,448,863 10.00
10/1/04
9/30/06
5,500,329 15.89
5,500,329
3,461,920 10.00
10/1/05
9/30/07
12,234,519 * 23.11
13,053,231
4,550,013 * 8.59
10/1/06
9/30/08
13,911,545 24.24
13,911,545
4,901,855 8.54
10/1/07
9/30/09
12,863,823 21.57
12,863,823
4,987,739 8.36
10/1/08
9/30/10
17,137,394 25.20
17,137,394
5,627,519 8.27
10/1/09
9/30/11
14,474,678 20.65
14,474,678
7,146,837 10.20
10 /1 /10
9/30/12
17,583,191 25.54
17,583,191 **
6,995,774 10.16
10/1/11
9/30/13
21,222,051 31.99
NA
6,613,338 9.97
10/1/12
9/30/14
26,212,015 40.29
NA
6,504,355 10.00
Average % of
Payroll
15.91 %
9.72 %
* From February 28, 2006 Actuarial Impact Statement.
** Reflects use of $1,271,123 prepaid contribution
Non -DROP Payroll
GRS
Fill
Recent History of Required and Actual Contributions
Total
$30,000
$25,000 _I
$20,000 —
'O
s~
$15,000
0
$10,000
$5,000
$0 ]moll, ..Bill oil
eee eeeeq u o", eee- 4 0 - 0 0 a0 , eq0 1, .4 0, O N;, -10' IiO
Fiscal Year End
dRequired Contribution MActual Contribution
GRS
21
ACTUARIAL ASSUMPTIONS AND COST METHOD
Valuation Methods
Actuarial Cost Method - Normal cost and the allocation of benefit values between service rendered before and
after the valuation date were determined using an Individual Entry -Age Actuarial Cost Method having the
following characteristics:
(i) the annual normal cost for each individual active member, payable from the date of employment
to the date of retirement, is sufficient to accumulate the value of the member's benefit at the time
of retirement;
(ii) each annual normal cost is a constant percentage of the member's year by year projected covered
pay.
Actuarial gains /(losses), as they occur, reduce (increase) the Unfunded Actuarial Accrued Liability.
Financing of Unfunded Actuarial Accrued Liabilities - Unfunded Actuarial Accrued Liabilities (full funding
credit if assets exceed liabilities) were amortized by level (principal & interest combined) dollar contributions
over a reasonable period of future years.
Actuarial Value of Assets - The Actuarial Value of Assets phase in the difference between the expected
actuarial value and actual market value of assets at the rate of 20% per year. The Actuarial Value of Assets
will be further adjusted to the extent necessary to fall within the corridor whose lower limit is 80% of the
Market Value of plan assets and whose upper limit is 120% of the Market Value of plan assets. During periods
when investment performance exceeds the assumed rate, Actuarial Value of Assets will tend to be less than
Market Value. During periods when investment performance is less than assumed rate, Actuarial Value of
Assets will tend to be greater than Market Value.
Valuation Assumptions
The actuarial assumptions used in the valuation are shown in this Section.
Economic Assumptions
The investment return rate assumed in the valuations is 8.00% per year, compounded annually (net after
investment expenses).
The Wage Inflation Rate assumed in this valuation was 4.00% per year. The Wage Inflation Rate is defined
to be the portion of total pay increases for an individual that are due to macroeconomic forces including
productivity, price inflation, and labor market conditions. The wage inflation rate does not include pay
changes related to individual merit and seniority effects.
The assumed real rate of return over wage inflation is defined to be the portion of total investment return that
is more than the assumed wage inflation rate. Considering other economic assumptions, the 8.00% investment
return rate translates to an assumed real rate of return over wage inflation of 4.00 %.
Rates of salary increases used are in accordance with the following table. This assumption is used to project a
member's current salary to the salaries upon which benefits will be based.
GRS
22
Demographic Assumptions
The mortality table was the RP -2000 Combined Healthy Participant Mortality Tables for males and
females projected to the year 2010 using Scale AA. There is no provision for future mortality
improvements after 2010. As noted in the Discussion of Valuation Results, we recommend that the
mortality assumption be revised to include a margin for mortality improvements after 2010. Sample
values of the current life expectancies are shown below. e
This assumption is used to measure the probabilities of each benefit being made after retirement. For
active members, the probabilities of dying before retirement were based upon the same mortality table as
members dying after retirement (25% of deaths are assumed to be service - connected).
Current Mortality Assumption
Sample
%
Increase in Salary
Future Life
Years of
Merit and
Base
Total
Service
Seniority
(Economic)
Increase
1
3.0%
4.0%
7.0%
2
2.9%
4.0%
6.9%
3
2.8%
4.0%
6.8%
4
2.7%
4.0%
6.7%
5
2.6%
4.0%
6.6%
6
2.5%
4.0%
6.5%
7
2.0%
4.0%
6.0%
8
1.9%
4.0%
5.9%
9
1.8%
4.0%
5.8%
10
1.7%
4.0%
5.7%
11
1.6%
4.0%
5.6%
12
1.5%
4.0%
5.5%
13
1.4%
4.0%
5.4%
14
1.3%
4.0%
5.3%
15
1.2%
4.0%
5.2%
16
1.1%
4.0%
5.1%
17
1.0%
4.0%
5.0%
18
0.9%
4.0%
4.9%
19
0.8%
4.0%
4.8% r
20
0.7%
4.0%
4.7%
21+
0.5%
4.0%
4.5%
Demographic Assumptions
The mortality table was the RP -2000 Combined Healthy Participant Mortality Tables for males and
females projected to the year 2010 using Scale AA. There is no provision for future mortality
improvements after 2010. As noted in the Discussion of Valuation Results, we recommend that the
mortality assumption be revised to include a margin for mortality improvements after 2010. Sample
values of the current life expectancies are shown below. e
This assumption is used to measure the probabilities of each benefit being made after retirement. For
active members, the probabilities of dying before retirement were based upon the same mortality table as
members dying after retirement (25% of deaths are assumed to be service - connected).
Current Mortality Assumption
Sample
Probability
of
Future Life
Attained
Dying Next Year
Expectancy
(years)
Ages
Men
Women
Men
Women
50
0.18 %
0.14 %
31.85
34.16
55
0.30
0.25
27.17
29.44
60
0.57
0.48
22.66
24.89
65
1.11
0.92
18.44
20.61
70
1.91
1.59
14.60
16.69
75
3.29
2.59
11.12
13.15
80
5.82
4.28
8.13
10.00
GRS
23
The rates of retirement used to measure the probability of eligible members retiring during the next year are
shown in the table below.
The rate of retirement is 5% for each year of eligibility for early retirement.
GRS
Normal Retirement Rates
Assumed Rate of
Years of Service Age
Retirement
5 -9
50 -54
5.0 %
55 -59
5.0
60 -64
10.0
65 -69
20.0
70+
100.0
10 -14
50 -54
5.0
55 -59
5.0
60 -64
10.0
65 -69
10.0
70+
100.0
15 -19
50 -54
15.0
55 -59
15.0
60 -64
20.0
65 -69
25.0
70+
100.0
20 -24
50 -54
25.0
55 -59
25.0
60 -64
35.0
65 -69
50.0
70+
100.0
25 -29
50 -54
70.0
55 -59
40.0
60 -64
50.0
65 -69
50.0
70+
100.0
30+
50 -54
100.0
55 -59
100.0
60 -64
100.0
65 -69
100.0
70+
100.0
The rate of retirement is 5% for each year of eligibility for early retirement.
GRS
24
Rates of separation from active membership were as shown below (rates do not apply to members eligible to
retire and do not include separation on account of death or disability). This assumption measures the
probabilities of members remaining in employment.
Sample
Years of
% of Active Members
Ages
Service
Separating Within Next Year
ALL
0
9.80 %
0.05
1
7.70
45
2
6.20
0.17
3
5.00
60
4
4.00
20
5 & Over
7.00
25
6.64
30
6.16
35
5.28
40
4.20
45
3.44
50
2.84
55
2.60
Rates of disability among active members are shown in the table below (50% of disabilities are assumed to be
service connected).
Sample
% Becoming Disabled
Ages
Within Next Year
25
0.03 %
30
0.03
35
0.05
40
0.07
45
0.11
50
0.17
55
0.23
60
0.37
65
0.56
GRS
Miscellaneous and Technical Assumptions
25
Administrative & Investment The investment return assumption is intended to be the return net of
Expenses investment expenses. Annual administrative expenses are assumed to
be the average of non - investment related expenses averaged over the
last two years. Assumed administrative expenses are added to the
Normal Cost.
Benefit Service Service rounded to the nearest month is used to determine the amount
of benefit payable.
Decrement Operation Disability and mortality decrements operate during retirement
eligibility.
Decrement Timing Decrements of all types are assumed to occur at the beginning of the
year.
Eligibility Testing Eligibility for benefits is determined based upon the age nearest
birthday and service nearest whole year on the date the decrement is
assumed to occur.
Forfeitures For vested separations from service, it is assumed that 0% of members
separating will withdraw their contributions and forfeit an employer
financed benefit. It was further assumed that the liability at
termination is the greater of the vested deferred benefit (if any) or the
member's accumulated contributions.
Incidence of Contributions Employer contributions are assumed to be made in full on the first day
of the fiscal year. Member contributions are assumed to be received
continuously throughout the year based upon the computed percent of
payroll shown in this report, and the actual payroll payable at the time
contributions are made.
Marriage Assumption 85% of males and 85% of females are assumed to be married for
purposes of death -in- service benefits. Male spouses are assumed to be
three years older than female spouses for active member valuation
purposes.
Normal Form of Benefit 50% joint and survivor annuity; life annuity for members hired after
September 30, 2010.
Pay Increase Timing Middle of fiscal year. This is equivalent to assuming that reported pays
represent amounts paid to members during the year ended on the
valuation date.
Cost of Living Increase 2.5% per year for Tier A and Tier B members; 1.5% per year for Tier
C members. Increases are assumed to begin 2.75 years after
retirement / DROP for Tier A and Tier B members and 4 years after
retirement / DROP for Tier C members. This assumption reflects the
COLA delay for DROP members.
Maximum Benefits Benefits calculated for valuation purposes are limited to the maximum
allowable benefits under Section 415 of the Internal Revenue Code.
GRS
26
GLOSSARY
Actuarial Accrued Liability The difference between the Actuarial Present Value of Future Benefits,
(AAL) and the Actuarial Present Value of Future Normal Costs.
Actuarial Assumptions Assumptions about future plan experience that affect costs or liabilities,
such as: mortality, withdrawal, disablement, and retirement; future
increases in salary; future rates of investment earnings; future investment
and administrative expenses; characteristics of members not specified in
the data, such as marital status; characteristics of future members; future
elections made by members; and other items.
Actuarial Cost Method A procedure for allocating the Actuarial Present Value of Future Benefits
between the Actuarial Present Value of Future Normal Costs and the
Actuarial Accrued Liability.
Actuarial Equivalent Of equal Actuarial Present Value, determined as of a given date and based
on a given set of Actuarial Assumptions.
Actuarial Present Value The amount of funds required to provide a payment or series of payments
(APV) in the future. It is determined by discounting the future payments with an
assumed interest rate and with the assumed probability each payment will
be made.
Actuarial Present Value of The Actuarial Present Value of amounts which are expected to be paid at
Future Benefits (APVFB) various future times to active members, retired members, beneficiaries
receiving benefits, and inactive, nonretired members entitled to either a
refund or a future retirement benefit. Expressed another way, it is the
value that would have to be invested on the valuation date so that the
amount invested plus investment earnings would provide sufficient assets
to pay all projected benefits and expenses when due.
Actuarial Valuation The determination, as of a valuation date, of the Normal Cost, Actuarial
Accrued Liability, Actuarial Value of Assets, and related Actuarial
Present Values for a plan. An Actuarial Valuation for a governmental
retirement system typically also includes calculations of items needed for
compliance with GASB No. 25, such as the Funded Ratio and the Annual
Required Contribution (ARC).
Actuarial Value of Assets The value of the assets as of a given date, used by the actuary for
valuation purposes. This may be the market or fair value of plan assets
or a smoothed value in order to reduce the year-to -year volatility of
calculated results, such as the funded ratio and the actuarially required
contribution (ARC).
GRS
27
Amortization Method A method for determining the Amortization Payment. The most common
methods used are level dollar and level percentage of payroll. Under the
Level Dollar method, the Amortization Payment is one of a stream of
payments, all equal, whose Actuarial Present Value is equal to the UAAL.
Under the Level Percentage of Pay method, the Amortization Payment is
one of a stream of increasing payments, whose Actuarial Present Value is
equal to the UAAL. Under the Level Percentage of Pay method, the
stream of payments increases at the rate at which total covered payroll of
all active members is assumed to increase.
Amortization Payment That portion of the plan contribution or ARC which is designed to pay
interest on and to amortize the Unfunded Actuarial Accrued Liability.
Amortization Period The period used in calculating the Amortization Payment.
Annual Required The employer's periodic required contributions, expressed as a dollar
Contribution (ARC) amount or a percentage of covered plan compensation, determined under
GASB No. 25. The ARC consists of the Employer Normal Cost and
Amortization Payment.
Closed Amortization Period A specific number of years that is reduced by one each year, and declines
to zero with the passage of time. For example if the amortization period is
initially set at 30 years, it is 29 years at the end of one year, 28 years at the
end of two years, etc.
Employer Normal Cost The portion of the Normal Cost to be paid by the employer. This is
equal to the Normal Cost less expected member contributions.
Equivalent Single For plans that do not establish separate amortization bases (separate
Amortization Period components of the UAAL), this is the same as the Amortization Period.
For plans that do establish separate amortization bases, this is the period
over which the UAAL would be amortized if all amortization bases were
combined upon the current UAAL payment.
Experience Gain /Loss A measure of the difference between actual experience and that expected
based upon a set of Actuarial Assumptions, during the period between two
actuarial valuations. To the extent that actual experience differs from that
assumed, Unfunded Actuarial Accrued Liabilities emerge which may be
larger or smaller than projected. Gains are due to favorable experience,
e.g., the assets earn more than projected, salaries do not increase as fast as
assumed, members retire later than assumed, etc. Favorable experience
means actual results produce actuarial liabilities not as large as projected
by the actuarial assumptions. On the other hand, losses are the result of
unfavorable experience, i.e., actual results that produce Unfunded
Actuarial Accrued Liabilities which are larger than projected.
GRS
28
Funded Ratio The ratio of the Actuarial Value of Assets to the Actuarial Accrued
Liability.
GASB Governmental Accounting Standards Board.
GASB No. 25 and These are the governmental accounting standards that set the accounting
GASB No. 27 rules for public retirement systems and the employers that sponsor or
contribute to them. Statement No. 27 sets the accounting rules for the
employers that sponsor or contribute to public retirement systems, while
Statement No. 25 sets the rules for the systems themselves.
Normal Cost The annual cost assigned, under the Actuarial Cost Method, to the current
plan year.
Open Amortization Period An open amortization period is one which is used to determine the
Amortization Payment but which does not change over time. In other
words, if the initial period is set as 30 years, the same 30 -year period is
used in determining the Amortization Period each year. In theory, if an
Open Amortization Period is used to amortize the Unfunded Actuarial
Accrued Liability, the UAAL will never completely disappear, but will
become smaller each year, either as a dollar amount or in relation to
covered payroll.
Unfunded Actuarial Accrued The difference between the Actuarial Accrued Liability and Actuarial
Liability Value of Assets.
Valuation Date The date as of which the Actuarial Present Value of Future Benefits are
determined. The benefits expected to be paid in the future are discounted
to this date.
C ��
SECTION C
PENSION FUND INFORMATION
GRS
29
STATEMENT OF PLAN ASSETS AT MARKET VALUE
September 30
Item 2012 2011
A. Cash and Cash Equivalents (Operating Cash) $ - $
B. Receivables
1.
Member Contributions
$
$ -
2.
Employer Contributions
-
-
3.
Investment Income and Other Receivables
677,079
6,690,355
4.
Total Receivables
$ 677,079
$ 6,690,355
C. Investments
9.
Total Investments
* Includes outstanding loan balances.
1.
Short Term Investments
$ 8,587,189
$ 11,420,963
2.
Domestic Equities
220,807,764
184,999,731
3.
International Equities
72,280,878
63,176,401
4.
Domestic Fixed Income
119,997,247
106,295,271
5.
International Fixed Income
543,630
250,000
6.
Real Estate
-
-
7.
Private Equity
-
-
8.
ICMA Account (for DROP)*
6,215,544
5,522,157
9.
Total Investments
$ 428,432,252
$ 371,664,523
D. Liabilities
1. Benefits $ -
2. Prepaid Employer Contribution
3. Expenses (166,258)
4. Other (213,117)
5. Total Liabilities $ (379,375)
E. Total Market Value of Assets Available for Benefits $ 428,729,956
F. Reserves
1. DROP Accounts*
2. Total Reserves
G. Adjustments
1. Receivables from Excess Benefit Plan
2. Prepaid Contribution
3. Total Adjustments
H. Market Value Net of Reserves and Adjustments
I. Allocation of Investments
1.
Short Term Investments
2.
Domestic Equities
3.
International Equities
4.
Domestic Fixed Income
5.
International Fixed Income
6.
Real Estate
7.
Private Equity
8.
ICMA Account (for DROP)
9.
Total Investments
* Includes outstanding loan balances.
** Overpayment
by the city for fiscal year ending 9/30/11.
$ (6,215,544)
$ (6,215,544)
$ 933,230
$ 423,447,642
2.00%
51.54%
16.87%
28.01%
0.13%
0.00%
0.00%
(144,286)
(10,700,944)
$ (10,845,230)
$ 367,509,648
$ (5,522,157)
$ (5,522,157)
$ 1,244,307
(466,878) **
$ 777,429
$ 362,764,920
3.07%
49.77%
17.00%
28.60%
0.07%
0.00%
0.00%
1.49%
100.00%
GRS
30
r
RECONCILIATION OF PLAN
ASSETS
September 30
r
Item
2012
2011 .
A. Market Value of Assets at Beginning of Year
$
367,509,648
$
381,385,702
B. Revenues and Expenditures
1. Contributions
a. Employee Contributions
$
7,425,051
$
7,278,327
b. Employer Contributions
16,312,068
14,474,678
1
C. Other
-
-
d. Total
$
23,737,119
$
21,753,005
r
2. Investment Income
a. Interest, Dividends, and Other Income
$
5,095,280
$
4,738,296
b. Net Realized and Unrealized Gains /(Losses)*
69,957,932
(7,308,679)
C. Investment Expenses
(907,577)
(913,759)
d. Net Investment Income
$
74,145,635
$
(3,484,142)
3. Benefits and Refunds
a. Refunds
$
(811,738)
$
(722,830)
b. Regular Monthly Benefits
(32,210,101)
(30,566,434)
c. DROP Disbursements
(2,934,154)
(173,747)
d. Other Payments (Transfers to Police & Fire Plan)
e. Total
$
(35,955,993)
$
(31,463,011)
,
l
4. Administrative and Miscellaneous Expenses
$
(706,453)
$
(681,906)
5. Transfers
$
-
$
-
C. Market Value of Assets at End of Year
$
428,729,956
$
367,509,648
D. Reserves
1. DROP Accounts **
$
(6,215,544)
$ (5,522,157)
2. Total Reserves
$
(6,215,544)
$
(5,522,157)
E. Adjustments
1. Receivables from Excess Benefit Plan
$
933,230
$
1,244,307
i
2. Prepaid Contribution
-
(466,878)
3. Total Adjustments
$
933,230
$
777,429
F. Market Value Net of Reserves and Adjustments
$
423,447,642
$
362,764,920
* We were not provided with the breakdown of this amount between realized
gains /(losses) and unrealized__
gains /(losses).
** Includes outstanding loan balances.
* ** Overpayment by the city for fiscal year ending 9/30/11.
GRS
31
Reconciliation of DROP Accounts
Value at Beginning of Year $ 5,522,157
Payments Credited to Accounts* 3,352,662
Investment Earnings Credited to Accounts 274,879
Withdrawals from Accounts (2,934,154)
Value at End of Year 6,215,544
*Reflects change in outstanding loan balance.
GRS
C)l
DEVELOPMENT OF ACTUARIAL VALUE OF ASSETS
Valuation Date — September 30
2011
2012
2013 2014 2015
A Actuarial Value of Assets Beginning of Year
$ 432,953,336
$ 430,525,778
$ - $ - $
B. Market Value End of Year
367,509,648
428,729,956
- -
C. Market Value Beginning of Year
381,385,702
367,509,648
- -
D. Non-Investment/Administrative Net Cash Flow
(10,391,912)
(12,925,327)
- -
E. Investment Income
- - -
El. Actual Market Total: B -C -D
(3,484,142)
74,145,635
- - -
E2. Assumed Rate of Return
8.25%
8.15%
8.00% 8.00% 8.00%
E3. Assumed Amount of Return
35,289,984
34,561,144
- - -
E4. Amount Subject to Phase -In: E1—E3
(38,774,126)
39,584,491
- - -
F. Phase -In Recognition of Investment Income
- - -
Fl. Current Year: 0.20 x E4
(7,754,825)
7,916,898
- - -
F2. First Prior Year
709,422
(7,754,825)
7,916,898 - -
F3. Second Prior Year
(7,750,361)
709,422
(7,754,825) 7,916,898 -
F4. Third Prior Year
(18,624,374)
(7,750,361)
709,422 (7,754,825) 7,916,898
F5. Fourth Prior Year
2,685,676
(18,624,374)
(7,750,361) 709,422 (7,754,825)
F6. ASOP No. 44 Compliance Adjustment*
3,408,832
-
- - -
F7. Total Phase -Ins
(27,325,630)
(25,503,240)
(6,878,866) 871,495 162,073
G. Actuarial Value of Assets End of Year
GI. Preliminary Actuarial Value of Assets:
$ 430,525,778
$ 426,658,355
$ - $ - $ -
G2. Upper Corridor Limit: 120 % *B
441,011,578
514,475,947
- - -
G3. Lower Corridor Limit: 80 % *B
294,007,718
342,983,965
- - -
G4. Funding Value End of Year
430,525,778
426,658,355
- - -
G5. Less: DROP Account Balances
5,522,157
6,215,544
- - -
G6. Plus: Adjustments
1,244,307
933,230
G7. Less: Prepaid Contribution
466,878
-
G8. Final Funding Value End of Year
425,781,050
421,376,041
- - -
H. Difference between Market & Actuarial Value $ (63,016,130) $ 2,071,601 $ - $ - $ -
I. Actuarial Rate of Return 1.06% ** 2.14% 0.00% 0.00% 0.00%
J. Market Value Rate of Return - 0.93% 20.54% 0.00% 0.00% 0.00%
K Ratio of Actuarial Value to Market Value 117.15% 99.52% 0.00% 0.00% 0.00%
* Per ASOP No. 44, a one -time adjustment of $3,408,832 is required.
** Before adjustment for ASOP No. 44
w
N
33
INVESTMENT RATE OF RETURN
* Note: Effective 10/1/06, the former General and Unclassified Plans were merged and assets were
combined. Investment returns after this date are for the total group.
** Combined Plan after 2006
GRS
General Plan **
Unclassified Plan
Actuarial
Actuarial
Market Value
Market Value
Year Ended
Value
Value
9/30/89
NA %
11.6 %
14.6 %
14.6 %
9/30/90
NA
7.3
(23)
(2.3)
9/30/91
NA
8.1
21.6
21.6
9/30/92
12.2
13.7
5.8
5.8
9/30/93
14.6
11.4
14.6
14.1
9/30/94
1.4
6.8
5.3
4.8
9/30/95
20.0
11.4
25.9
24.1
9/30/96
9.8
15.3
22.7
13.9
9/30/97
23.0
13.8
35.2
19.1
9/30/98
8.4
12.5
(03)
4.3
9/30/99
13.1
14.4
19.1
18.8
9/30/00
10.8
10.7
11.5
16.5
9/30/01
(7.4)
7.2
(8.1)
9.7
9/30/02
(5.9)
0.3
(9.8)
1.7
9/30/03
17.4
4.3
16.9
4.6
9/30/04
11.4
4.1
13.0
9.7
9/30/05
12.8
4.4
13.8
10.7
9/30/06
7.4 *
7.7
7.5 *
10.2
9/30/07
15.3
12.0
NA
NA
9/30/08
(13.6)
5.2
NA
NA
9/30/09
(0.8)
1.1
NA
NA
9/30/10
11.3
5.0
NA
NA
9/30/11
(0.9)
1.1
NA
NA
9/30/12
20.5
2.1
NA
NA
Average Returns:
Last 5 Years
2.6 %
2.9 %
NA %
NA %
Last 10 Years
7.6 %
4.7 %
NA %
NA %
All Years
8.2 %
7.9 %
10.9 %
11.0 %
* Note: Effective 10/1/06, the former General and Unclassified Plans were merged and assets were
combined. Investment returns after this date are for the total group.
** Combined Plan after 2006
GRS
SECTION D
FINANCIAL ACCOUNTING INFORMATION
GRS
34
FASB NO. 35 INFORMATION
A. Valuation Date
October 1, 2012
October 1, 2011
B. Actuarial Present Value of Accumulated
Plan Benefits
1. Vested Benefits
a. Members Currently Receiving Payments
$ 421,724,519
$ 383,663,147
b. Terminated Vested Members
11,480,115
12,545,886
c. Other Members
156,713,222
161,655,997
589,917,856
d. Total
557,865,030
2. Non - Vested Benefits
6,274,803
5,772,266
3. Total Actuarial Present Value of Accumulated
Plan Benefits: 1 d + 2
596,192,659
563,637,296
4. Accumulated Contributions of Active Members
61,073,761
60,662,311
C. Changes in the Actuarial Present Value of
Accumulated Plan Benefits
1. Total Value at Beginning of Year
563,637,296
534,033,829
2. Increase (Decrease) During the Period
Attributable to:
a. Plan Amendment
0
0
b. Change in Actuarial Assumptions
9,416,347
5,939,085
c. Latest Member Data, Benefits Accumulated
and Decrease in the Discount Period
59,513,517
55,127,393
d. Benefits Paid
(36,374,501)
(31,463,011)
32,555,363
29,603,467
e. Net Increase
3. Total Value at End of Period
596,192,659
563,637,296
D. Actuarial Present Value of Accumulated Plan Benefits Using
FRS Interest Rate
a, Vested
605,681,200
581,914,369
b. Non - Vested
6,806,310
6,632,429
612,487,510
588,546,798
c. Total
E. Market Value of Assets
423,447,642
362,764,920
F. Funded Ratio Using FRS Interest Rate
69.1 %
61.6 %
G. Actuarial Assumptions - See page entitled
Actuarial Assumptions and Methods
GRS
�n
SCHEDULE OF FUNDING PROGRESS
(GASB Statement No. 25)
Actuarial
Valuation
Date
Actuarial Value of
Assets
(a)
Actuarial Accrued
Liability (AAL) -
Entry Age
(b)
Unfunded AAL
(UAAL)
(b) - (a)
Funded Ratio
(a) / (b)
Covered Payroll
(c)
UAAL As % of
Covered
Payroll
(b - a) / c
10/1/1993
$ 185,721,855
$ 187,130,465
$ 1,408,610
99.2 %
$ 21,094,111
6.7 %
10/1/1994
188,997,087
202,078,377
13,081,290
93.5
21,944,531
59.6
10/1/1995
208,877,297
213,844,465
4,967,168
97.7
23,461,309
21.2
10/1/1996
226,633,680
222,221,064
(4,412,616)
102.0
25,148,361
(17.5)
10/1/1997
251,171,973
232,871,332
(18,300,641)
107.9
25,939,981
(70.5)
10/1/1998
266,716,007
240,760,472
(25,955,535)
110.8
25,070,334
(103.5)
10/1/1999
305,344,213
263,462,059
(41,882,154)
115.9
25,418,614
(164.8)
10/1/2000
326,816,322
277,933,325
(48,882,997)
117.6
25,889,403
(188.8)
10/1/2001
336,024,366
292,748,088
(43,276,278)
114.8
27,664,085
(156.4)
10/1/2002
322,181,146
319,831,292
(2,349,854)
100.7
30,350,644
(7.7)
10/1/2003
320,053,468
338,904,200
18,850,732
94.4
34,488,630
54.7
10/1/2004
320,735,755
352,105,058
31,369,303
91.1
34,619,199
90.6
10/1/2005
325,727,087
368,096,409
42,369,322
88.5
36,680,110
115.5
10/1/2006
358,458,949
448,933,278
90,474,329
79.8
57,390,894
157.6
10/1/2007
412,824,235
478,067,829
65,243,594
86.4
59,632,425
109.4
10/1/2008
425,714,565
526,481,586
100,767,021
80.9
68,009,550
148.2
10/1/2009
420,520,122
545,536,965
125,016,843
77.1
70,097,549
178.3
10/1/2010
431,479,305
580,246,165
148,766,860
74.4
68,844,264
216.1
10/1/2011
425,781,050
602,577,503
176,796,453
70.7
66,346,904
266.5
10/1/2012
(b) 421,376,041
627,203,174
205,827,133
67.2
65,053,945
316.4
10/1/2012
(a) 421,376,041
1 637,363,774
215,987,733
66.1
65,053,945
332.0
(a) After Changes
(b) Before Changes
w
till
SCHEDULE OF EMPLOYER CONTRIBUTIONS
(GASB Statement No. 25)
Year Ended
September 30
Annual Required
Contribution
Actual
Contribution
Percentage
Contributed
1994
$ 3,004,556
$ 3,004,556
100.0 %
1995
2,809,509
2,809,509
100.0
1996
4,151,807
4,151,807
100.0
1997
3,982,477
3,982,477
100.0
1998
3,091,359
3,091,359
100.0
1999
1,293,920
1,293,920
100.0
2000
666,897
666,897
100.0
2001
0
0
NA
2002
0
0
NA
2003
0
0
NA
2004
2,476,702
2,476,702
100.0
2005
5,082,595
5,082,595
100.0
2006
5,500,329
5,500,329
100.0
2007
12,234,519
13,053,231
106.7
2008
13,911,545
13,911,545
100.0
2009
12,863,823
12,863,823
100.0
2010
17,137,394
17,137,394
100.0
2011
14,474,678
14,474,678
100.0
2012
17,583,191
17,583,191
100.0
GRS
SECTION E
MISCELLANEOUS INFORMATION
GRS
37
RECONCILIATION OF MEMBERSHIP DATA
From 10/1/11
From 10/1/10
To 10/1/12
To 10 /1 /11
A. Active Members
1. Number Included in Last Valuation
1,072
1,117
2. New Members Included in Current Valuation
60
37
3. Employment Terminations
(35)
(49)
4. Service Retirements
(13)
(12)
5. DROP Retirements
(28)
(15)
6. Disability Retirements
(2)
(3)
7. Deaths
(1)
(3)
S. Other - Transfers Out and Data Adjustments
(4)
0
9. Number Included in This Valuation
1,049
1,072
B. Terminated Vested Members
1. Number Included in Last Valuation
68
75
2. Additions from Active Members
16
8
3. Lump Sum Payments /Refund of Contributions
(10)
(5)
4. Payments Commenced
(11)
(9)
5. Deaths
0
0
6. Other - Data Adjustments
0
(1)
7. Number Included in This Valuation
63
68
C. DROP Plan Members
1. Number Included in Last Valuation
60
49
2. Additions from Active Members
28
15
3. Retirements
(32)
(4)
4. Deaths
(1)
0
5. Other
0
0
6. Number Included in This Valuation
55
60
D. Service Retirees, Disability Retirees and Beneficiaries
1. Number Included in Last Valuation
1,015
1,021
2. Additions from Active Members
15
17
3. Additions from Terminated Vested Members
11
9
4. Additions from DROP Plan
33
4
5. Deaths Resulting in No Further Payments
(30)
(37)
6. Deaths Resulting in New Survivor Benefits
1
0
7. End of Certain Period - No Further Payments
0
0
S. Other
0
1
9. Number Included in This Valuation
1,045
1,015
GRS
38
MIAMI BEACH EMPLOYEES' RETIREMENT PLAN - ACTIVE MEMBERS ON OCTOBER 1, 2012
Age Years of Service
Group 1 04 5 -9 10 -14 15 -19 20 -24 25 -29 30 & UP Totals
20-24
8
8
Total Pay
315,444
315,444
Avg Pay
39,431
39,431
25 -29
41
31
72
Total Pay
1,731,144
1,203,502
2,934,646
Avg Pay
42,223
38,823
40,759
30-34
44
59
9
112
Total Pay
2,037,301
2,794,671
452,603
5,284,575
Avg Pay
46,302
47,367
50,289
47,184
35 -39
35
59
27
6
127
Total Pay
1,766,394
3,074,098
1,741,978
307,580
6,890,050
Avg Pay
50,468
52,103
64,518
51,263
54,252
40 -44
37
56
45
25
2
165
Total Pay
2,016,184
3,110,985
2,841,591
1,835,234
141,623
9,945,617
Avg Pay
54,491
55,553
63,146
73,409
70,812
60,276
45-49
34
48
44
41
23
7
1
198
Total Pay
2,372,127
2,889,856
3,111,759
2,910,006
1,854,330
483,786
58,986
13,680,850
Avg Pay
69,768
60,205
70,722
70,976
80,623
69,112
58,986
69,095
50 -54
20
51
40
42
10
9
4
176
Total Pay
1,218,613
2,885,974
2,785,749
2,997,090
859,051
740,235
396,840
11,883,552
Avg Pay
60,931
56,588
69,644
71,359
85,905
82,248
99,210
67,520
55 -59
18
19
27
22
5
91
Total Pay
982,329
1,009,870
1,596,067
1,453,669
384,327
5,426,262
Avg Pay
54,574
53,151
59,114
66,076
76,865
59,629
60-64
8
25
14
21
1
69
Total Pay
653,782
1,739,751
923,785
1,682,187
63,466
5,062,971
Avg Pay
81,723
69,590
65,985
80,104
63,466
73,376
65 -99
3
9
6
8
3
2
31
Total Pay
246,909
479,847
345,142
485,151
171,852
110,911
1,839,812
Avg Pay
82,303
53,316
57,524
60,644
57,284
55,456
59,349
Total No.
248
357
212
165
43
19
5
1,049
Total Pay
13,340,227
19,188,554
13,798,674
11,670,917
3,411,183
1,398,398
455,826
63,263,779
Avg Pay
53,791
53,749
65,088
70,733
79,330
73,600
91,165
60,309
GRS
39
INACTIVE MEMBERS ON OCTOBER 1, 2012
Age
Terminated Vested
Annual
No. Benefits
No.
Disabled
Annual
Benefits
Retirees, Beneficiaries &
DROP
Annual
No. Benefits
Grand Total
Annual
No. Benefits
Under 45
23
$ 489,869
1
$ 15,847
5
79,817
29
$ 585,533
45 -49
23
571,763
5
135,657
5
162,300
33
869,720
50 -54
17
281,812
7
239,288
85
4,233,473
109
4,754,573
55 -59
0
-
5
121,500
112
5,093,837
117
5,215,337
60 -64
0
-
4
96,683
182
7,937,185
186
8,033,868
65 -69
0
-
7
240,413
161
6,203,706
168
6,444,119
70 -74
0
-
1
33,079
127
3,759,671
128
3,792,750
75 -79
0
-
3
67,854
127
3,392,548
130
3,460,402
80 -84
0
-
3
45,720
113
2,631,053
116
2,676,773
85 -89
0
-
6
110,722
79
1,628,311
85
1,739,033
90 & Up
0
-
1
10,397
61
958,196
62
968,593
Total
63
$ 1
43
$1
1057
$ 36,080,097
1
$ 38,540,701
GRS
SECTION F
SUMMARY OF PLAN PROVISIONS
GRS
M
SUMMARY OF PLAN PROVISIONS
Effective Date
September 30, 2010 under Ordinance No. 2010 -3693 and Ordinance No. 2010 -3706
Eligibility
Each general employee who works more than 30 hours per week is eligible for membership
on his date of employment
Creditable Service
Service credited under the predecessor system plus service after such date with respect to
which member contributions are made.
Tiers of Employees
Tier C — All members hired on or after September 30, 2010 (October 27, 2010 for members of
CWA)
Tier B — Members of AFSCME hired on or after April 30, 1993; members classified as GSA
or "Other" hired on or after August 1, 1993; members of CWA hired on or after February 21,
1994; and Unclassified members hired on or after October 18, 1992.
Tier A — All other members
Earnings
For Tier B and C members, base pay including longevity, but excluding overtime, shift
differential or extra compensation allowances. For Tier A members, actual salary or wages
received. Earnings do not include lump sum payments of unused sick or vacation time.
Overtime pay for Classified Tier A members is limited to 10% of regular pay.
Final Average Monthly Earnings (FAME)
One - twelfth of average annual Earnings during the two highest paid years of Creditable
Service, not less than the average monthly earnings for the 12 months as of March 8, 2006 for
Unclassified Tier A members
Effective September 30, 2010 averaging period is five years except for members who are less
than five years away from normal retirement eligibility. Members who are eligible for normal
retirement within in two years or less as of September 30, 2010 will have average earnings of
two years. Members who are eligible for normal retirement in within three years as of
September 30, 2010 will have average earnings of three years. Members who are eligible for
normal retirement within four years as of September 30, 2010 will have average earnings of
four years.
Normal Retirement
Eligibility Age 50 and five years of Creditable Service for those in Tier A
Age 55 and five years of Creditable Service for those in Tier B
Age 55 with 30 years of service or age 62 with 5 years of service for
those in Tier C
GRS
41
Benefit 3% of FAME multiplied years of Creditable Service with the total not
to exceed 80% of FAME. There is a 90% cap for certain Tier A
members.
2.5% of FAME multiplied years of Creditable Service with the total not
to exceed 80% of FAME for Tier C members.
Form of Benefit 50% joint and survivor annuity payable only to the spouse or, if no
spouse, to the surviving children until age 21; other options are also
available. Spouse's benefits cease upon remarriage.
Life annuity for Tier C members
COLA 2.5% for Tier A and Tier B members; 1.5% for Tier C members
Early Retirement
Eligibility Tier B members of the General Plan whose total of age plus service is
75, not earlier than age 50
Tier C members whose total of age plus service is 75, not earlier than
age 55
Benefit Accrued pension actuarially reduced for number of years by which
Early Retirement Date precedes Normal Retirement Date.
Form of Benefit 50% joint and survivor annuity payable only to the spouse or, if no
spouse, to the surviving children until age 21; other options are also
available. Spouse's benefits cease upon remarriage.
Life annuity for Tier C members
COLA 2.5% for Tier A and Tier B members; 1.5% for Tier C members
Delayed Retirement
Eligibility Any time after the Normal Retirement Date.
Benefit Calculated in the same manner as the Normal Retirement Benefit but
using the FAME and Creditable Service as of the actual retirement date.
Form of Benefit 50% joint and survivor annuity payable only to the spouse or, if no
spouse, to the surviving children until age 21; other options are also
available. Spouse's benefits cease upon remarriage.
Life annuity for Tier C members
COLA 2.5% for Tier A and Tier B members; 1.5% for Tier C members
Disability Benefits
Eligibility A total and permanent disability which renders a member incapacitated
for the further performance of duty. Five years of Creditable Service is
also required unless the disability is service - connected.
GRS
42
Benefit Ordinary Disability: Accrued retirement benefit, without reduction,
with a minimum of 35% of FAME.
Service - Connected Disability: Accrued retirement benefit without
reduction, with a minimum of 65% of FAME; 75% of FAME minimum
for General Tier A members.
Such amounts are reduced by workers' compensation benefits and, in
certain cases, earned income will be considered in offsetting the benefit.
The period of disability shall be included in Creditable Service for
purposes of computing normal retirement benefits when a disability
retiree reaches normal retirement age.
Form of Benefit 50% joint and survivor annuity payable only to the spouse or, if no
spouse, to the surviving children until age 21; other options are also
available. Spouse's benefits cease upon remarriage.
Life annuity for Tier C members
COLA 2.5% for Tier A and Tier B members; 1.5% for Tier C members
Preretirement Death Benefits
For a member who has at least three years of Creditable Service but who dies before
commencement of retirement benefits, a monthly benefit is payable to the spouse or, if no
spouse, to the children until age 21. The benefit is equal to 50% of the accrued normal
retirement benefit without reduction with the result being a minimum of 30% of FAME and a
maximum of 40% of FAME for General members.
Termination Benefits
Any member who terminates employment and does not request a refund of his own
contributions and has completed at least five years of Creditable Service will be eligible to
receive his accrued benefit upon reaching his normal retirement age.
Contributions
Tier A Members 12% of Earnings.
Tier B and Tier C
Members 10% of Earnings.
Employees who have reached the applicable benefit accrual cap
(90% for General Tier A employees and 80% for all others) but
have not yet reached retirement age will continue to contribute to
the pension Plan, but only on the amount by which pay increases
after reaching the cap
From the City The amount necessary to fund the Plan properly according to the
Plan's actuary.
GRS
43
Deferred Retirement Option Plan (DROP)
Eligibility Members who are eligible for Normal Retirement
Benefit The member's Credited Service and AFC are frozen upon entry
into the DROP. The monthly retirement benefit as described under
Normal Retirement is calculated based upon the frozen Credited
Service and AFC.
Maximum
DROP Period
Interest
Credited
Normal Form
of Benefit
COLA
Changes Since Last Valuation
36 months for Tier A and Tier B members; 60 months for Tier C
members
The investment return is determined by the self - directed
investments.
Lump Sum
None
The have been no changes since the last valuation.
GRS