2016-4035 Ordinance MIAMI BEACH
PENSION FUND FOR FIREFIGHTERS AND POLICE OFFICERS
ORDINANCE IMPLEMENTING
2015-2018 IAFF COLLECTIVE BARGAINING AGREEMENT AND
2015-2018 FOP COLLECTIVE BARGAINING AGREEMNT
ORDINANCE NO. 2016-4035
AN ORDINANCE OF THE MAYOR AND CITY COMMISSION OF
THE CITY OF MIAMI BEACH, FLORIDA, AMENDING PART I,
SUBPART B, ARTICLE IX, RELATED SPECIAL ACTS, OF THE
MIAMI BEACH CITY CODE ENTITLED "PENSION SYSTEM
FOR DISABILITY AND RETIREMENT OF MEMBERS OF
POLICE AND FIRE DEPARTMENTS"; AMENDING THE
PENSION SYSTEM TO IMPLEMENT THE COLLECTIVE
BARGAINING AGREEMENT WITH THE FIRE FIGHTERS OF
MIAMI BEACH, IAFF LOCAL 1510, FOR THE PERIOD
OCTOBER 1, 2015 THROUGH SEPTEMBER 30, 2018, AND THE
COLLECTIVE BARGAINING AGREEMENT WITH THE POLICE
OFFICERS OF MIAMI BEACH, FOP WILLIAM NICHOLS
LODGE NUMBER 8, FOR THE PERIOD OCTOBER 1, 2015
THROUGH SEPTEMBER 30, 2018; AMENDING SECTION 62,
ENTITLED "DEFINITIONS"; AMENDING SECTION 65,
ENTITLED "COMPUTATION OF CREDITABLE SERVICE;
SERVICE RECORD";AMENDING SECTION 66, ENTITLED
SERVICE AND DISABILITY BENEFITS GENERALLY;
AMENDING SECTION 79, ENTITLED "DEFERRED
RETIREMENT OPTION PLAN"; AMENDING SECTION 82,
ENTITLED "MILITARY SERVICE"; AMENDING SECTION 87,
ENTITLED "BENEFITS FOR MEMBERS HIRED ON OR AFTER
JULY 14, 2010"; AMENDING SECTION 88, ENTITLED BENEFITS
FOR MEMBERS HIRED ON OR AFTER SEPTEMBER 30, 2013;
CREATING A NEW SECTION 89, ENTITLED "BENEFITS FOR
MEMBERS HIRED ON OR AFTER [DATE OF RATIFICATION
OF COLLECTIVE BARGAINING AGREEMENT]"; PROVIDING
FOR SEVERABILITY; REPEALING ALL ORDINANCES IN
CONFLICT THEREWITH; AND PROVIDING AN EFFECTIVE
DATE.
BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF MIAMI
BEACH, FLORIDA:
Section 1. Section 62 of Part 1, Subpart B, Article IX, Related Special Acts of the Miami
Beach City Code, is amended to read:
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Sec. 62. - Definitions.
The following words, terms and phrases, when used in this article, shall have the meanings
ascribed to them in this section, except where the context clearly indicates a different
meaning:
Actuarial Assumptions (for the calculation of optional forms of benefits) means the
following interest rates compounded annually:
(a) 8.5% for plan years prior to October 1, 2009; 8.4% effective for the plan year
beginning October 1, 2009; 8.3% effective for the plan year beginning October 1,
2010; 8.2% effective for the plan year beginning October 1, 2011; 8.1% effective for
the plan year beginning October 1, 2012; and 8.0% effective for the plan years
beginning October 1, 2013 and October 1, 2014;
(b) 7.75%7.95% effective for the plan years beginning on and after October 1, 2015;
to - . .. ! ! ' o - -
plan year beginning October 1, 2017; 7.80% effective for the plan year beginning
October 1, 2018; and 7.75% effective for the plan year beginning October 1, 2019.
Actuarial Assumptions (for the calculation of optional forms of benefits) also means the
following mortality tables:
(a) for plan years beginning prior to October 1, 2010, the 1983 Group Annuity Mortality
Table; for plan years beginning on October 1, 2010 and October 1, 2011: for Pre-
Retirement Mortality the RP-2000 Combined Mortality Table with a blue collar
adjustment, for Post-Retirement Healthy Mortality the RP-2000 Combined Mortality
Table with a blue collar adjustment, and for Post-Retirement Disabled Mortality the
RP-2000 Combined Mortality Table;
(b) for plan years beginning on and after October 1, 2012: for Pre-Retirement Mortality the
RP-2000 Combined Mortality Table with a blue-collar adjustment projected 15 years
from valuation date, for Post-Retirement Healthy Mortality the RP-2000 Combined
Mortality Table with a blue-collar adjustment projected 7 years from valuation date,
and for Post-Retirement Disabled Mortality the RP-2000 Combined Mortality Table.
For purposes of determining the period that benefits are paid to a widow or widower
who was married to a deceased member for less than ten years, the 1994 Life
Expectancy Table shall be used.
(c) for plan years beginning on and after October 1, 2015: for Pre-Retirement and Post-
Retirement Mortality, the RP-2000 Combined Healthy Participant Mortality Tables
with a fixed blend of 90% male mortality rates — 10% female mortality rates, with full
generational mortality improvements projected to the year of commencement with
Scale BB for healthy participants; and for disabled participants, the RP-2000 Disabled
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Mortality Table with a fixed blend of 90% male mortality rates — 10% female
mortality rates, with no projection for disabled participants . For purposes of
determining the period that benefits are paid to a widow or widower who was married
to a deceased member for less than ten years, the following mortality tables shall be
used: RP-2000 Combined Healthy Participant Mortality Tables with a fixed blend of
90% male mortality rates— 10% female mortality rates, with full generational mortality
improvements projected to the year of commencement with Scale BB for healthy
participants; and RP-2000 Disabled Mortality Tables with a fixed blend of 90% male
mortality rates — 10% female mortality rates, with no projection for disabled
participants.
* * *
Section 2. Section 65 of Part 1, Subpart B, Article IX, Related Special Acts of the Miami
Beach City Code, is amended to read:
Sec. 65. - Computation of creditable service; service record.(a) A member's
Creditable Service shall include all periods of employment as an Employee for which
contributions have been made to this System in accordance with subsection (b) below
and section 63(b), together with all service in the uniformed services of the United States
required to be included under section 82; provided, however, that only periods of service
in the uniformed services of the United States for which the member makes the member
contributions as provided for in section 82 shall be Creditable Service for purposes of
computing the amount of the member's benefit from the System. Notwithstanding any
provision to the contrary, in no event shall the same period of service be counted more
than once as Creditable Service under this System, and in no event shall a member
receive Creditable Service under this System for any period of service for which credit
has been received under any other defined benefit retirement plan established by the
City.
(b) Employees who become members of this System in order to receive credit for
service rendered prior to their becoming a member shall make contributions to the Fund
in the amount such member would have contributed had he been a member during the
period of service for which credit is being purchased. In order to receive such credit,
employees shall make payment within six months after becoming a member or within
such other period as may be provided in a bargaining agreement covering the member.
Notwithstanding the foregoing, any employee who transfers to this System whereby the
accumulated total credit in any other pension system of the City is transferred to this
System, then and in that event, all of the creditable service time in such other system
shall be considered Creditable Service time under this System, and such employee need
make no additional contribution for time credited. No Creditable Service shall be
provided under this System for periods of service in another City retirement plan, nor
allowed,
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(c) The Board shall establish the service record of all employees who may be entitled
to participate in the benefits of this System, and shall keep a record thereof
Section 3. Section 66 of Part 1, Subpart B, Article IX, Related Special Acts of the Miami
Beach City Code, is amended to read:
Sec. 66. - Service and disability benefits generally.
(d) For purposes of determining a member's benefit, the average monthly Salary of
members who attains eligibility for retirement under subsection (a) above on or before
September 30, 2015, shall be based on the average of the two highest-paid years of the
member prior to the date of retirement or termination, or the average of the last two
paid years of the member prior to the date of retirement or termination, whichever
produces the greater benefit for members employed by the City before May 19, 1993,
and shall be based on the average of the three highest paid years of the member prior
to the date of retirement or termination for May 1993 Members. Effective September
30, 2015, the average monthly salary for members hired before July 14, 2010, who do
not attain eligibility for retirement under subsection (a) above on or before September
30, 2015, shall be based on the average of the three highest paid, years or the average
of the last three (3) years of the member prior to the date of retirement or termination,
whichever produces the greater benefit. The average monthly salary for Members
hired on or after July 14, 2010, but prior to September 30, 2013, shall be based on the
average of the three highest paid years or the average of the last three (3) years of the
member prior to the date of retirement or termination, whichever produces the greater
benefit. The average monthly salary for Members hired on or after September 30,
2013, shall be based on the average of the five (5) highest paid years or the average of
the last five (5) years of the member prior to the date of retirement or termination,
whichever produces the greater benefit. For purposes of such calculation, Salary shall
be the Salary upon which the member's contribution to the System was computed, as
provided in paragraphs (1) and (2) below:
* * *
(1) With respect to a firefighter member employed before May 19, 1993, and retiring
on or after October 1, 1994, the inclusion of overtime in the member's Salary for
the applicable average monthly salary periodtwo highest paid years or last two
years, as the case may be, shall be limited in each year to an amount which, when
combined with compensation for off-duty services and the value of any accrued
sick and/or vacation leave that is included in a member's Salary for pension
contribution and benefit purposes, is equal to 11% of the highest annualized pay
rate for the same salary rank that the member is in at time of retirement. Effective
July 14, 2010, all compensation received by a firefighter member who is eligible
for overtime pay and who receives pay for off-duty services performed after that
date for which compensation is received through the City shall be included in
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such member's Salary for pension contribution and benefit purposes; provided, in
no event shall such compensation for off-duty services, in combination with any
overtime pay and the value of any accrued sick and/or vacation leave included in
a member's Salary for pension contribution and benefit purposes, exceed 11% of
the highest annualized pay rate for the same salary rank that the member is in at
time of retirement. For firefighter members who are eligible for overtime pay and
who retire on or after September 30, 2010, upon reaching eligibility for
retirement, a member may elect to apply unused sick and/or vacation leave for
inclusion in the member's Salary for pension contribution and benefit purposes, at
a cost of 10% of the value of the unused sick and/or vacation leave (at the
member's current hourly rate). Provided, in no event shall the value of such
unused sick and/or vacation time, when combined with any overtime pay and
compensation for off-duty services included in a member's Salary for pension
contribution and benefit purposes, exceed 11% of the highest annualized pay rate
for the same salary rank that the member is in at time of retirement.
Notwithstanding the foregoing, effective September 30, 2013, overtime pay in
excess of 300 hours per calendar year, payments for unused sick and vacation
leave, hazardous duty pay (when paid), and payments relating to the domestic
partner tax credit reimbursement, shall be excluded from a firefighter member's
Salary for pension contribution and benefit purposes.
(2) With respect to a police officer member employed before May 19, 1993, and
retiring on or after October 1, 1994, the inclusion of overtime in the member's
Salary for the applicable average monthly salary periodtwo highest paid
• , • • : , shall be limited in each year to an amount
which, when combined with compensation for off-duty services and the value of
any accrued sick and/or vacation leave that is included in a member's Salary for
pension contribution and benefit purposes, is equal to 70% of the difference
between the member's annualized pay rate at retirement and the highest
annualized pay rate for the next higher salary rank; but in no event shall such
member's accrued benefit on his date of retirement be less than the benefit he had
accrued as of September 30, 1994, determined under the terms of the System in
effect on that date. Effective July 14, 2010, all compensation received by a police
officer member who is eligible for overtime pay and who receives pay for off-
duty services performed after that date for which compensation is received
through the City, shall be included in such member's Salary for pension
contribution and benefit purposes; provided, in no event shall such compensation
for off-duty services, in combination with any overtime pay and the value of any
accrued sick and/or vacation leave included in a member's Salary for pension
contribution and benefit purposes, exceed 70% of the difference between the
member's annualized pay rate at retirement and the highest annualized pay rate
for the next higher salary rank; but in no event shall such member's accrued
benefit on his date of retirement be less than the benefit he had accrued as of
September 30, 1994, determined under the terms of the System in effect on that
date. For police officer members who are eligible for overtime pay and who retire
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on or after September 30, 2010 and before September 30, 2013, upon reaching
eligibility for retirement, a member may elect to apply unused sick and/or
vacation leave for inclusion in the member's Salary for pension contribution
purposes, at a cost of 10% of the value of the unused sick and/or vacation leave
(at the member's current hourly rate). Provided, in no event shall the value of
such unused sick and/or vacation time, when combined with any overtime pay
and compensation for off-duty services included in a member's Salary for pension
contribution and benefit purposes, exceed 70% of the difference between the
member's annualized pay rate at retirement and the highest annualized pay rate
for the next higher salary rank; but in no event shall such member's accrued
benefit on his date of retirement be less than the benefit he had accrued as of
September 30, 1994, determined under the terms of the System in effect on that
date. Notwithstanding the foregoing, effective September 30, 2013, overtime pay
in excess of 300 hours per calendar year, payments for unused sick and vacation
leave, hazardous duty pay (when paid), payments relating to the domestic partner
tax credit reimbursement, and payments for voluntarily participating in a physical
fitness assessment program offered by the City shall be excluded from a police
officer member's Salary for pension contribution and benefit purposes; and in no
event shall compensation for off-duty services, in combination with overtime pay
not exceeding 300 hours per calendar year, exceed 11% of the highest annualized
pay rate for the same salary rank that the member is in at time of retirement.
Provided, the 11% limitation in the preceding sentence shall not apply to any
member who holds the rank of sergeant or lieutenant on September 30, 2013, or
any police officer who is promoted into the position of police sergeant prior to the
date the 2013 Certified Police Sergeant Promotional Register expires in 2015.
Notwithstanding any other provision of this paragraph (2), effective [date of
ratification of collective bargaining agreement], with respect to any member
excluded from the eleven percent (11%) limitation by operation of the preceding
sentence, if such member self-demotes the amount of compensation for off-duty
services, in combination with overtime pay not exceeding 300 hours per calendar
year, included in such member's Salary the member's benefit shall not exceed
11% of the highest annualized pay rate for the same salary rank that the member
is in at time of retirement; and overtime, off-duty or any other compensation shall
not be applied to produce a benefit that exceeds the eleven percent (11%)
limitation.
Section 4. Section 79 of Part 1, Subpart B, Article IX, Related Special Acts of the Miami
Beach City Code, is amended to read:
Sec. 79. - Deferred Retirement Option Plan (DROP).
* * *
(b) Conditions of eligibility. Upon becoming eligible to participate in the DROP, a
member who enters the DROP before September 1, 2012, may elect to enter that
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program for a period not to exceed 36 months. Notwithstanding, DROP participation
for members who enter the DROP before September 1, 2012, may not continue
beyond the date when the member's combined years of creditable service and time in
the DROP equals 352 months (387 months for members who were members prior to
July 1, 1976). Members who enter the DROP on or after September 1, 2012, shall be
eligible to participate for a period not to exceed sixty (60) months. Notwithstanding,
for those members who enter the DROP on or after September 1, 2012, participation
may not continue beyond the date when the member's combined years of creditable
service and time in the DROP equals 456 448 months_; Provided, members who enter
the DROP on or before September 30, 2015 may extend their DROP participation
period by 12 months, for a total maximum DROP participation period not to exceed
seventy-two (72) months; provided further, members who enter the DROP on or after
October 1, 2015 but prior to [date of ratification of collective bargaining agreement],
may extend their DROP participation period by up to 36 months, for a total maximum
DROP participation period not to exceed ninety-six (96) months; and provided
further, members who enter the DROP on or after [date of ratification of collective
bargaining agreement] may participate in the DROP for a period not to exceed ninety-
six (96) months. Provided also that participation in DROP shall require the member to
complete and submit the following prior to start of DROP payments:
1. Such forms as may be required by the Board or Plan Administrator. Election of the
DROP is irrevocable once DROP payments begin. Members who are participating
in the DROP on [date of ratification of collective bargaining agreement] and elect
to extend their DROP participation period must complete such forms as are
required by the Board no later than December 1, 2016.
2. A waiver and an irrevocable resignation from employment with the actual date of
termination being the date designated by the member as the end of his/her DROP
participation. The administration and timing of execution and delivery of the
waiver and resignation forms shall meet the requirements of the Age
Discrimination in Employment Act and the Older Worker's Benefits Protection
Act, as same may be amended from time to time.
(e) Payments to DROP account. A DROP account shall be created for each member who
elects to participate in the DROP. A DROP account shall consist of amounts
transferred to the DROP from the Plan, which include the monthly retirement benefits,
including any future cost of living increases, that would have been payable had the
member elected to cease employment and receive a normal retirement benefit upon
commencing participation in the DROP, and earnings on those amounts. Provided,
members who enter the DROP on or after September 1, 2012, and before September
30, 2013, shall receive a zero percent (0%) cost of living adjustment for the third (3rd)
and fourth (4th) annual adjustment dates, regardless of whether the member remains in
the DROP for the maximum DROP participation five—year period. Provided further,
and notwithstanding any other provision of the System, any sue# member who enters
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the DROP on or before September 30, 2015 and elects to extend their DROP
participation period by up to 12 months shall receive a zero percent (0%) cost of living
adjustment for the sixth (6th) annual adjustment date; and if such member thereafter
separates from city employment at any time duringbefore the end of the sixth year of
DROP participation, he/she shall not receive a cost of living adjustment on the sixth
annual adjustment date, but shall receive a cost of living adjustment on the seventh
annual adjustment date and each annual adjustment date thereafter. Provided further,
and notwithstanding any other provision of the System, a member who enters the
DROP on or after October 1, 2015 but prior to [date of ratification of collective
bargaining agreement], and elects to extend their DROP participation period by up to
36 months, shall receive a zero percent (0%) cost of living adjustment for the sixth
(6th), seventh (7th) and eighth (8th) annual adjustment dates; and if such member
separates from city employment at any time within the sixth, seventh or eighth year of
DROP participation, he/she shall not receive a cost of living adjustment on the annual
adjustment date next following separation of employment, but shall receive a cost of
living adjustment on each annual adjustment date thereafter. Provided further, and
notwithstanding any other provision of the System, a member hired before [date of
ratification of collective bargaining agreement] who enters the DROP on or after [date
of ratification of collective bargaining agreement] shall receive a zero percent (0%)
cost of living adjustment for the sixth (6th), seventh (7th) and eighth (8th) annual
adjustment dates; and if such member separates from city employment at any time
within the sixth (6th), seventh (7th) or eighth (8th) year of DROP participation, he/she
shall not receive a cost of living adjustment on the annual adjustment date next
following separation of employment, but shall receive a cost of living adjustment on
each annual adjustment date thereafter. Provided further, and notwithstanding any
other provision of the System, members hired on or after [date of ratification of
collective bargaining agreement] who enter the DROP shall receive a zero percent
(0%) cost of living adjustment for the first (1st), second (2"d), third (3`d) and fourth
(4th) annual adjustment dates; and if such a member separates from city employment at
any time within the first (1st), second (2"d), third (3` ) or fourth (4th) year of DROP
participation, he/she shall not receive a cost of living adjustment on the annual
adjustment date next following separation of employment, but shall receive a cost of
living adjustment on each annual adjustment date thereafter. cxits the DROP within six
(g) Payment of DROP account funds. Upon termination of a member's employment (for
any reason, whether by retirement, resignation, discharge, disability, or death), the
retirement benefits payable to the member or to the member's beneficiary shall be paid
to the member or beneficiary and shall no longer be paid to the member's DROP
account. No payments will be made from the DROP account until the member
terminates employment. In the event of the member's death, payment shall be made
directly to the member's beneficiary.
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(k) [Retaining of earned balance of accrued leave.] A member who enters the DROP on
or after September 30, 2013, shall retain the earned balance of accrued sick and
vacation leave as of date of entry into the DROP, and shall continue to earn sick and
vacation leave during the DROP period, in accordance with the collective bargaining
agreement between the City and IAFF, and between the City and FOP, as applicable.
While in the DROP, the member shall have the one-time option of receiving payment
for accrued sick and/or vacation leave, up to the maximum payout upon separation of
employment allowed by the applicable collective bargaining agreement; provided,
the member shall retain at least one hundred twenty (120) hours of accrued sick leave
after such payment. The one-time election to receive payment of leave balances shall
be made in any one year of the DROP, by notifying the City no later thanAugust 31
30 of that year (unless an alternate date as determined by the City and the
president of the respective bargaining unit). Employees may request such payment
prior to entry into the DROP, but must be in the DROP at the time of payout.
Payment will be made after the firston the second pay period ending of iffier
February of the same following year. Upon final separation from employment with
the City, a member who has participated in the DROP shall be eligible to receive
payment for the balance of all accrued sick and vacation leave as of the date of final
separation, up to the maximum provided in the collective bargaining agreement, as
reduced by the prior payout, if any. In no event shall payments for accrued sick or
vacation leave be included in such member's Salary for the purposes of contributions
and benefits under the System.
Section 5. Section 82 of Part 1, Subpart B, Article IX, Related Special Acts of the Miami
Beach City Code, is amended to read:
Sec. 82. - Military service.
* * *
(b) Effective September 30, 2013, members, who have at least 5 years but not more than
10 years of Creditable Service under the System on tha -- . .. • . . - • . - date, may
contribute an additional amount to the System in order to receive service credit for years of
active military service in the U.S. Army, Navy, Air Force, Marines or Coast Guard
occurring prior to their date of employment with the City. A member may purchase up to
two years of such service. The price for each such year shall be 10% (10.5% for members
hired on or after September 30, 2013) of the aggregate of the member's Salary during the
12 calendar months immediately preceding the date of such purchase; and such price shall
be prorated accordingly if a member's election includes a fractional year of service. Any
additional benefits attributable to service purchased under this subsection (b) shall be at the
benefit multiplier rate of 3% per year of Creditable Service, with a total maximum
additional benefit of 6% based on two years of Creditable Service purchased. The purchase
of Creditable Service under this subsection (b) for police officer members with 5 or more
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years of credited service on September 30, 2013 must be completed within 36 months
following September 30, 2013. The purchase of Creditable Service under this subsection
(b) for police officer members with less than 5 years of credited service on September 30,
2013 must be completed within 36 months following the date the member completes 5
years of Creditable Service, - -- .. - . -• - - . . - - .. . . - .
whichever .later. The purchase of Creditable Service under this subsection (b) for
firefighter members with 5 or more years of credited service on September 30, 2013 must
be completed within 24 months following September 30, 2013. The purchase of Creditable
Service under this subsection (b) for firefighter members with less than 5 years of credited
service on September 30, 2013 must be completed within 24 months following the date the
member completes 5 years of Creditable Service. A member who does not complete and
fully pay for the purchase of Creditable Service under this subsection (b) within the
applicable time period specified herein 36 months following September 30, 2013, oF-he
• ' - •• -• - • - - • -, • . - , shall not receive
Creditable Service for more than the amount for which payment has been made, and shall
not be eligible to purchase Creditable Service for prior military service in the future.
Section 6. Section 87 of Part 1, Subpart B, Article IX, Related Special Acts of the Miami
Beach City Code, is amended to read:
Sec. 87. - Benefits for employees hired on or after July 14, 2010 and prior to September
30, 2013.
The pension benefits for employees hired on or after July 14, 2010 and prior to September
30, 2013, shall be as provided in the sections 61 through 86, except as follows:
(a) The benefit multiplier shall be three percent (3%) for each year of creditable service for
the first 20 years of service, and four percent (4%) for each year of creditable service after
20 years of creditable service.
(b) The normal retirement date shall be as provided in sec. 66, except that a member must
complete at least five years of creditable service, and must attain age 48 to be eligible for
"Rule of 70" retirement.
(c) Final average monthly salary shall be based on the three (3) highest paid years or last
three (3) years as the case may be, prior to retirement or separation from employment.
(d) The cost of living adjustment shall be one and one-half percent (1.5%) annually.
(e) A member shall be vested upon completion of five years of creditable service.
(f) The maximum pension benefit shall be as provided in section 11-66(e).
who exits the DROP within six (6) months following the date of DROP entry, shall be
10
Section 7. Section 88 of Part 1, Subpart B, Article IX, Related Special Acts of the Miami
Beach City Code, is amended to read:
Sec. 88. - Benefits for members hired on or after September 30, 2013 and prior to [date of
ratification of collective bargaining agreement'.
Notwithstanding any other provision of the System, the pension benefits for members
hired on or after September 30, 2013 2013 and prior to [date of ratification of collective
bargaining agreement] shall be as provided in the sections 61 through 86, except as
follows:
(a) The benefit multiplier shall be three percent (3%) for each year of creditable
service for the first 20 years of service, and four percent (4%) for each year of
creditable service after 20 years of creditable service.
(b) The normal retirement date shall be as provided in sec. 66, except that a member
must complete at least five years of creditable service, and must attain age 48 to be
eligible for "Rule of 70" retirement.
(c) Final average monthly salary shall be based on the five (5) highest paid years or
last five (5) years as the case may be, prior to retirement or separation from
employment.
(d) The cost of living adjustment shall be one and one-half percent (1.5%) annually.
(e) A member shall be vested upon completion of five years of creditable service.
(f) The maximum pension benefit shall be as provided in section 11-66(e).
Section 8. A new Section 89 of Part 1, Subpart B, Article IX, Related Special Acts of the
Miami Beach City Code, is created to read:
Sec. 89. - Benefits for members hired on or after [date of ratification of collective
bargaining agreement].
Notwithstanding any other provision of the System, the pension benefits for
members hired on or after [date of ratification of collective bargaining agreement] shall be
as provided in sections 61 through 86, except as follows:
(a) The benefit multiplier shall be three percent (3%) for each year of creditable
service for the first 20 years of service, and four percent (4%) for each year of
creditable service after 20 years of creditable service.
(b) The normal retirement date shall be upon attainment of age 52 with five or more
years of creditable service, or when the sum of a member's age plus years of
creditable service equal 70 or more,provided the member has attained age 48.
(c) Final average monthly salary shall be based on the five (5) highest paid years prior
to retirement or separation from employment.
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(d) The cost of living adjustment shall be one and one-half percent (1.5%) annually.
(e) The maximum pension benefit shall be as provided in section 11-66(e) 85% of the
(f) A member shall be vested upon completion of five years of creditable service.
(g) The member contribution shall be ten and one-half percent (10.5%) of Salary.
Section 9. Conflicts and Severability.
(a) All Ordinances, and parts of ordinances, in conflict herewith shall be and
the same, are hereby repealed.
(b) In the event any article, section, paragraph, sentence, clause, or phrase of
this Ordinance shall be adjudicated invalid or unconstitutional, such adjudication shall in
no manner affect the other articles, sections, paragraphs, sentences, clauses or phrases of
this Ordinance, which shall be and remain in full force and effect as fully as if the item so
adjudged invalid or unconstitutional was not originally a part hereof.
Section 10. Codification. This Ordinance shall be codified in the Code of Ordinances of
the City of Miami Beach.
Section 11. Effective date. This Ordinance shall take effect ten days following adoption,
except as otherwise specified herein.
PASSED and ADOPTED by the City Commission of the City of Miami Beach this
027 day of Sep l€m be r , 2016.
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PHILIP : V,0F.,G`
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ATTES :
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RAFAEL E. GRAN• DO •�'v 1 84E 1'l4 FORM & LANGUAGE
CITY CLERK ?NQ'.••'' .. ....- &FOR EXECUTION
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Ordinances - R5 C
MAMI BEACH
COMMISSION MEMORANDUM
TO: Honorable Mayor and Members of the City Commission
FROM: Jimmy L. Morales, City Manager
DATE: September 27, 2016
5:04 p.m. Second Reading Public Hearing
SUBJECT: PENSION FUND FOR FIREFIGHTERS AND POLICE OFFICERS:
AN ORDINANCE OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, AMENDING PART I, SUBPART B, ARTICLE IX,
RELATED SPECIAL ACTS, OF THE MIAMI BEACH CITY CODE ENTITLED
"PENSION SYSTEM FOR DISABILITY AND RETIREMENT OF MEMBERS OF
POLICE AND FIRE DEPARTMENTS"; AMENDING THE PENSION SYSTEM TO
IMPLEMENT THE COLLECTIVE BARGAINING AGREEMENT WITH THE FIRE
FIGHTERS OF MIAMI BEACH, IAFF LOCAL 1510, FOR THE PERIOD OCTOBER
1, 2015 THROUGH SEPTEMBER 30, 2018, AND THE COLLECTIVE
BARGAINING AGREEMENT WITH THE POLICE OFFICERS OF MIAMI BEACH,
FOP WILLIAM NICHOLS LODGE NUMBER 8, FOR THE PERIOD OCTOBER 1,
2015 THROUGH SEPTEMBER 30, 2018; AMENDING SECTION 62, ENTITLED
"DEFINITIONS"; AMENDING SECTION 65, ENTITLED "COMPUTATION OF
CREDITABLE SERVICE; SERVICE RECORD"; AMENDING SECTION 66,
ENTITLED SERVICE AND DISABILITY BENEFITS GENERALLY; AMENDING
SECTION 79, ENTITLED "DEFERRED RETIREMENT OPTION PLAN";
AMENDING SECTION 82, ENTITLED "MILITARY SERVICE"; AMENDING
SECTION 87, ENTITLED "BENEFITS FOR MEMBERS HIRED ON OR AFTER
JULY 14, 2010"; AMENDING SECTION 88, ENTITLED BENEFITS FOR
MEMBERS HIRED ON OR AFTER SEPTEMBER 30, 2013; CREATING A NEW
SECTION 89, ENTITLED "BENEFITS FOR MEMBERS HIRED ON OR AFTER
[DATE OF RATIFICATION OF COLLECTIVE BARGAINING AGREEMENT]";
PROVIDING FOR SEVERABILITY; REPEALING ALL ORDINANCES IN
CONFLICT THEREWITH;AND PROVIDING AN EFFECTIVE DATE.
RECOMMENDATION
Adopt the Ordinance.
ANALYSIS
The City's workforce is divided into seven salary groups: (1) those covered by the American
Federation of State, County and Municipal Employees, Local 1554 (AFSCME) bargaining unit;
(2) those covered by the Communications Workers of America, Local 3178 (CWA) bargaining
unit; (3) those covered by the Government Supervisors Association of Florida/OPEIU, Local
100 (GSAF) bargaining unit; (4)those covered by the Fraternal Order of Police, William Nichols
Page 78 of 692
Lodge No. 8 (FOP) bargaining unit; (5) those covered by the International Association of Fire
Fighters, Local 1510 (IAFF) bargaining unit; (6) those employees who are at-will and are known
as unclassified; and (7) "Others" (classified service employees not represented by a bargaining
unit).
During the October 1, 2012 - September 30, 2015 contract period, the fire and police unions
agreed to significant pension reform, which yielded a reduction of$145 million to the City's ARC
over a 30-year period (2013 net present value). The savings attributed to the 2013 pension
reform have aided in the short and long-term sustainability of the plan.
On September 30, 2015, the three-year collective bargaining agreement between the City of
Miami Beach and the IAFF (covering the period of October 1, 2012 through September 30,
2015) expired. The City and IAFF began meeting in August 27, 2015 to negotiate a successor
agreement. After seven formal negotiation sessions, on March 4, 2016, the City and IAFF
reached a tentative three-year agreement covering the period of October 1, 2015 through
September 30, 2018. Subsequently, on May 4, 2016, the IAFF confirmed the passage of the
contract by the majority(97.4%) of their voting membership.
On June 8, 2016, the City Commission adopted Resolution No. 2016-29442, accepting the
proposed 2015-2018 labor agreement between the City and IAFF.
On September 30, 2015, the 2012-2015 collective bargaining agreement between the City and
the FOP expired. The parties began negotiating a successor agreement on July 7, 2015. After
twelve (12) formal negotiation sessions, on July 12, 2016, the City and the FOP leadership
reached a tentative three-year agreement for October 1, 2015, through September 30, 2018.
The FOP bargaining unit held a ratification vote from July 15, 2016 through July 18, 2016,
whereby the proposed agreement was approved by 235 of 285 of the bargaining unit members
who voted.
On July 20, 2016, the City Commission adopted Resolution No. 2016-29518, accepting the
proposed 2015-2018 labor agreement between the City and FOP.
After numerous negotiations, the City reached agreements with both the IAFF and the FOP
which include significant pension changes for both current and future employees who participate
in the Fire and Police Pension Plan. These changes include the follow:
Pension Adjustments/Changes
• Overtime. Off-duty. Accrued Leave and Other Pays -Currently, employees are not able to
apply overtime, off-duty or any other compensation for the purposes of calculating a member's
retirement benefit that yields a benefit in excess of eleven percent (11%) of the highest
annualized pay rate for the same salary rank that the member is in at time of retirement. This
provision does not apply to members who hold the rank of sergeant or lieutenant on September
30, 2013, or any Police Officer promoted to the rank of sergeant prior to the date the 2013
Certified Police Sergeant Promotional Register expired in 2015. As per the 2012-2015
Agreement between the City and FOP, for these members, the inclusion of overtime and/or off-
duty in the member's salary shall be limited to an amount which is equal to 70% of the
difference between member's annualized pay rate at retirement and thee highest annualized pay
rate for the next higher salary rank.
Page 79 of 692
As agreed to in the 2015-2018 Agreement, if any of the FOP members that were included in the
carve-out of the prior agreement self-demote, their benefit will not exceed eleven percent (11%)
of the highest annualized pay rate for the same salary rank the member is in at the time of
retirement; and overtime, off-duty or any other compensation will not be applied to produce a
benefit that exceeds the eleven percent (11%) limitation.
• Deferred Retirement Option Plan (DROP)and Retiree COLA—
Currently, the maximum DROP participation is five (5) years. Employees in the DROP are
eligible to receive a retiree COLA each year that they participate in the DROP. The rate at which
the member earns his/her annual retiree COLA shall be based on hire date (2.5 percent for all
pre-2010 members and 1.5 percent for all post-2010 members).
Employees who entered the DROP on or before September 30, 2015, who choose to extend
their DROP participation period from five (5)to six (6) years shall receive no retiree COLA(soft
zeros)while in DROP year six(6)effective upon ratification.
Employees who entered the DROP on or after October 1, 2015, but prior to the date of
ratification of the Agreements, who choose to extend their DROP participation period from five
(5) to eight (8) years shall receive no retiree COLA (soft zeros) while in DROP years six (6),
seven (7) and eight(8), effective upon ratification.
Each negotiated Agreement had specified a deadline of September 1, 2016 for the final DROP
extension election date, but as all parties concur that an extension to this deadline be granted
until December 1, 2016, due to administrative needs to complete election forms, the City of
Miami Beach and the Fire & Police unions will enter into an MOU to align the date of this Pension
Ordinance and extend the date specified in the negotiated agreements.
Employees entering the eight (8) year DROP on or after the date of ratification of this
Agreement shall receive no retiree COLA (soft zeros) while in DROP years six (6), seven (7)
and eight (8), effective upon ratification.
Changes for New Employees Hired After Ratification
• Increase the normal retirement age from 50 to 52
• No retiree COLA(soft zeros)during the first four(4)years in DROP
CONCLUSION
The terms and conditions of the proposed three-year labor agreement between the City and
IAFF assumes an estimated impact of $976,783 for FY 2015/16; $1,336,228 for FY 2016/17;
$2,748,696 for FY 2017/18. The total estimated three-year impact is $5,061,707.
The terms and conditions of the proposed three-year labor agreement between the City and
FOP assumes an estimated impact of $321,410 for FY 2015/16; $417,384 for FY 2016/17;
$2,068,198 for FY 2017/18. The total estimated three-year impact is $2,806,991.
The pension reform attained will yield present and future savings to the Fire and Police Pension
Page 80 of 692
Plan, thereby contributing to its short and long-term sustainability. The estimated pension
savings built into the figures above are based on projections provided by the plan's actuary
(Attachment 1). The impact statement provided by the actuary is attached here to (Attachment
2). The administration recommends adopting the ordinance in order to effectuate the pension
changes that were agreed upon with both the IAFF and FOP.
Legislative Tracking
Human Resources
Sponsor
Commissioner Joy Malakoff
ATTACHMENTS:
Description
❑ Fire & Police Pension Ordinance
❑ Attachment# 1
❑ Attachment#2
Page 81 of 692
GRS Gahriel Roeder Smith &Company One East liroword Blvd. 954.527,161E phone
Consultants S Actuaries Suite 505 954.525.0033 fax
Fr.Lauderdale,FL'33301.1804 www.gabriclrocdcr.com
December 14, 2015
Mr.Jose del Risco
Assistant Director
Department of Human Services
City of Miami Beach
1700 Convention Center Drive
Miami Beach, Florida 33139
Re: Actuarial Study— Extend Maximum DROP Participation
Dear Jose:
As requested, we are pleased to enclose six copies of our Actuarial Study as of October 1,2014
illustrating the financial impact of potential future changes in the maximum allowable years to
participate in the DROP under the City Pension Fund for Firefighters and Police Officers in the
City of Miami Beach.
Purpose—We understand the City is interested in the financial impact of increasing the
maximum DROP period from five(5)years to eight(8)years (six (6) years if DROP end date is
prior to October 1, 2018). Any participant remaining in the DROP for more than five(5)years
will not receive an annual Cost of Living Adjustment(COLA) for the additional DROP
participation year(s)-annual COLA will be paid following exit of the DROP program.
Back~;round—Current maximum allowable years of DROP participation is five(5)years.
Modeled Cleanses—Extension of maximum allowable DROP participation.
Baseline—Current Fund
• Maximum DROP participation is five(5)years
• Retiree receives an.annual COLA for all years while in DROP
Proposed—Extension of maximum DROP participation
• Extension of maximum DROP participation to eight(8)years for members whose
DROP end date is on or after October 1,2018
• Extension of maximum DROP participation to six(6)years for members whose
DROP end date is on or before September 30,2018
• Retiree will not receive annual COLA during years six(6), seven(7), and eight(8)
while in DROP
ATTACHMENT # 1
Page 94 of 692
Mr. Jose del Rico
December 14, 2015
Page Two
Results—The attached Exhibit sets out key financial results of our Actuarial Study. The
following sets out the decrease in minimum annual required first year City contribution. The
figures in parentheses is the decrease in minimum annual required first year City contribution
expressed as a percentage of projected covered annual pensionable payroll without and with
DROP payroll, respectively($50,491,405/$60,464,591).
:,'D a Requited Fiest Ye rCitV':
Cpnt�.ibitton
Extend maximum allowable DROP participation- $1,013,909
no COLA while in DROP for years beyond five (2.0%/ 1.7%)
Actuarial Assumptions and Methods, Fund Provisions, Financial Data and Member Census
Data
The actuarial assumptions and methods,member census and financial data and Fund provisions,
unless specified otherwise, for purposes of our Study are the same actuarial assumptions and
methods, member census and financial data and Fund provisions outlined in the October 1,2014
Actuarial Valuation Report.
80%of future retirees are assumed to participate in the DROP. DROP members are assumed to
exit the DROP as shown in the following table:
DROP end date is on or DROP end date is on or
after October 1,2018 before September 30,2018
Leave DROP prior to 5 years 0% 0%
Leave DROP after 5 years 5% 5%
Leave DROP after 6 years 5% 100%
Leave DROP after years 10% N/A
Leave DROP after 8 years 100% N/A
This Actuarial Study applies the same retirement rate assumption as the October 1,2014
Actuarial Valuation Report. However the extension of the DROP may alter the retirement
experience of the plan causing a change in the retirement rates assumption in the future.
DROP assumptions will need to be monitored in light of future DROP experience.
This Actuarial Study describes the financial effect of the proposed changes on the Fund, from a
neutral perspective. It is not intended as a recommendation in favor of nor in opposition to the
change.
Gabriel Roeder Smith&Company
Page 95 of 692
Mr. Jose del Rico
December 14, 2015
Page Three
This Actuarial Study only provides the first year financial effect of the proposed changes to the
Fund. In order to have a more complete understanding of the potential cost or savings of these
changes, we recommend a projection study over a longer period(ex. thirty years) be performed.
Consideration may also be given to performing the Study under alternate future DROP
participation assumptions in order to understand the implications of experience differing from
•
the assumption.
The Unfunded Actuarial Accrued Liability shown may not be appropriate for assessing the
sufficiency of Fund assets to meet the estimated cost of settling benefit obligations but may be
appropriate for assessing the need for or the amount of future contributions.
These calculations are based upon assumptions regarding future events. However,the Fund's
long term costs will be determined by actual future events,which may differ materially from the
assumptions made. These calculations are also based upon present and proposed Fund
provisions that are outlined or referenced in this Actuarial Study. If you have reason to believe
the assumptions used are unreasonable, the Fund provisions are incorrectly described or
referenced, important Fund provisions relevant to this proposed Actuarial Study are.not
described or that conditions have changed since the calculations were made, you should contact
the undersigned prior to relying on information in this Actuarial Study.
If you have reason to believe that the information provided in this Actuarial Study is inaccurate,
or is in any way incomplete,or if you need further information in order to make an informed
decision on the subject matter of this report,please contact the undersigned prior to making such
decision.
Future actuarial measurements may differ significantly from the current measurements presented
in this Actuarial Projection Study due to such factors as the following: Fund's experience
differing from that anticipated by the economic or demographic assumptions; changes in
economic or demographic assumptions; increases or decreases expected as part of the natural
operation of the methodology used for these measurements and changes in.Fund provisions or
applicable law. Due to the limited scope of the actuary's assignment,the actuary did not perform
an analysis of the potential range of such future measurements.
This Actuarial Study should not be relied on for any purpose other than the purpose described in
the primary communication. Determinations of the financial results associated with the benefits
described in this Projection Study in a manner other than the intended purpose may produce
significantly different results.
This report may be provided to parties other than the City only in its entirety and only with the
permission of an approved representative of the City.
Gabriel Roeder Smith'&Company
Page 96 of 692
•
Mr. Jose del Rico
December 14, 2015
Page Four
The signing actuaries are independent of the Fund Sponsor and are Members of the American
Academy of Actuaries and meet the Qualification Standards of the American Academy of
Actuaries to render the actuarial opinion contained herein.
If you should have any question concerning the above or if we may be of further assistance with
this matter,please do not hesitate to contact us.
Sincerest regards,
Lawrence F. Wilson,A.S.A. Kelly L.Adams, A.S.A.
Senior Consultant and Actuary Consultant and Actuary
Enclosure
•
cc: Ms. Donna Brito
•
•
•
• Gabriel Roeder Smith &Company
Page 97 of 692
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Consultants Actuaries Suite 505 954.525,0083 fax
Ft.Lauderdale,FL 31301.1604 twvw.gabriclrocdcr com
January 7, 2016
Mr.Jose del Risco
Assistant.Director
Department of Human Services gg
City of Miami Beach
1 700 Convention Center Drive
Miami Beach, Florida 33139
•
Re: Actuarial Study — Proposed COLA Component of Salary Increase
Dear Jose:
As requested,we are pleased to enclose six (6)copies of our Actuarial Study as of October 1,
2014 illustrating the financial impact of potential future changes in the Cost of Living
Adjustment(COLA) component of assumed salary increases under the City Pension Fund for
Firefighters and Police Officers in the City of Miami Beach.
Purpose-1 We understand the City is interested in the financial impact of proposed future COLA
adjustments to salary.
Background—Current COLA component assumed adjustments to future salary are 3%effective
October 1,2015 and 2.18%effective each October 1 thereafter.
Assumption Chances—COLA component adjustments to future salary:
Baseline—Current assumptions
• 3%effective October 1, 2015
• 2.18%effective each October 1 thereafter
Proposed—assumptions
• 2%effective April 1,2016
• 3%effective October 1, 2016
• 3%effective October 1, 2017
a 2.18%effective each October 1 thereafter
Results—The attached Exhibit sets out key financial results of our Actuarial Study. The
following sets out the increase in minimum annual required first year City contribution. The
figures in parentheses is the increase in minimum annual required first year City contribution
•
Page 99 of 692
Mr. Jose del Rico
January 7,2016 •
Page Two
expressed as a percentage of projected covered annual pensionable payroll without and with
DROP payroll, respectively($50,491,405/$60,464,591).
t Inct easelui'kequu ed Fn st'Yenr Cite
;" 'Contribution
Proposed COLA component of future salary $74,655
increases (0.1%/0.I%)
Actuarial Assumptions and Methods, Fund Provisions, Financial Data and Member Census
Data
The actuarial assumptions and methods, member census and financial data and Fund provisions,
unless specified otherwise, for purposes of our Study are the same actuarial assumptions and
methods, member census and financial data and Fund provisions outlined in the October 1,2014
Actuarial Valuation Report as modified above.
This Actuarial Study describes the financial effect of the proposed changes on the Fund, from a
neutral perspective. It is not intended as a recommendation in favor of nor in opposition to the
change.
This Actuarial Stud y p rovides the first year financial effect of the proposed changes to the Fund.
A more complete understanding of the potential cost of these changes may be determined under
a projection actuarial study over a longer period (ex. thirty years).
The Unfunded Actuarial Accrued Liability shown may not be appropriate for assessing the
sufficiency of Fund assets to meet the estimated cost of settling benefit obligations but may be
appropriate for assessing the need for or the amount of future contributions.
These calculations are based upon assumptions regarding future events. However,the Fund's
long term costs will be determined by actual future events,which may differ materially from the
assumptions made. These calculations are also based upon present and proposed Fund
provisions that are outlined or referenced in this Actuarial Study. If you have reason to believe
the assumptions used are unreasonable, the Fund provisions are incorrectly described or
referenced, important Fund provisions relevant to this proposed Actuarial Study are not
described or that conditions have changed since the calculations were made, you should contact
the undersigned prior to relying on information in this Actuarial Study.
If you have reason to believe that the information provided in this Actuarial Study is inaccurate,
or is in any way incomplete,or if you need further information in order to make an informed
decision on the subject matter of this report,please contact the undersigned prior to making such
decision.
Gabriel Roeder Smith&Company
Page 100 of 692
Mr. Jose del Rico
January 7, 2016
Page Three
Future actuarial measurements may differ significantly from the current measurements presented
in this Actuarial Projection Study due to such factors as the following: Fund's experience
differing from that anticipated by the economic or demographic assumptions; changes in
economic or demographic assumptions; increases or decreases expected as part of the natural
operation of the methodology used for these measurements and changes in Fund provisions or
applicable law. Due to the limited scope of the actuary's assignment, the actuary did not perform
an analysis of the potential range of such future measurements.
This Actuarial Study should not be relied on for any purpose other than the purpose described in
the primary communication. Determinations of the financial results associated with,the benefits
described in this Projection Study in a manner other than the intended purpose may produce
significantly different results.
This report may be provided to parties other than the City only in its entirety and only with the
permission of an approved representative of the City.
The signing actuaries are independent of the Fund Sponsor and are Members of the American
Academy of Actuaries and meet the Qualification Standards of the American Academy of
Actuaries to render the actuarial opinion contained herein.
If you should have any question concerning the above or if we may be of further assistance with
this matter, please do not hesitate to contact us.
Sincerest regards,
Lawrence F. Wilson,A.S.A. Kelly L. Adams,A.S.A.
•
Senior Consultant and Actuary Consultant and Actuary
Enclosure
cc: Ms. Donna Brito
•
Gabriel Roeder Smith& Company
Page 101 of 692
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G s Gabriel Roeder Smith 8; Company One East Broward Blvd. 954.527.1616 phone
954.52
Consultants&Actuaries Suite 505
954.525.0083 fax
Pt.Lauderdale,FL 333 7 804 www.gabrielroeder,cont
June 7, 2016
Mr. Jose del Risco
Assistant Director
Department of Human Services
City of Miami Beach
1700 Convention Center Drive
Miami Beach,Florida 33139
Re: City Pension Fund for Firefighters and Police Officers in the City of Miami Beach
Proposed Collective Bargaining Agreements
Dear Jose:
As requested, we are pleased to enclose three(3)copies of an Actuarial Impact Statement as of
October 1, 2015 for filing proposed changes due to the proposed collective bargaining
agreements under the City Pension Fund for Firefighters and Police Officers in the City of
Miami Beach(Fund) with the State of Florida.
Proposed Changes—We understand the proposed collective bargaining agreements will provide:
D Salary cost of living adjustments (COLA) will be 1% effective April 1, 2016, 3%
effective July 1,2017 and 3% effective July 1, 2018.
D Effective October 1, 201.6 for Firefighter members with ranks of Firefighter,Lieutenant
or Captain a five percent (5%)of base pay differential will be provided for Marine duties.
However the Marine pay differential cannot be combined with Special Operations pay
differential.
D Effective October 1, 2016 for Firefighter members with ranks of Firefighter,Lieutenant
or Captain a five percent(5%)of base pay differential will be provided for Special
Operations duties. However the Special Operations pay differential cannot be combined
with Marine pay differential.
D Effective October 1, 2016 for Firefighter members with ranks of Firefighter, Lieutenant
or Captain, rescue out of class pay will increase from$2 to$3 per hour.
D Effective June 1, 201.6 FLSA minimum overtime provisions for sick leave usage only.
All sick leave hours used must be made up with straight time instead.of time and one
half.
D Effective October 1.,2015 for Firefighter members with ranks of Firefighter,.Lieutenant
or Captain, six(6)additional hours of holiday pay are provided for each holiday.
•
ATTACHMENT # 2
Page 103 of 692
Mr. Jose del Risco
June 7, 2016
Page 2
D Effective June 1, 2016 for Police Officer members with ranks of Police Officer,
Lieutenant or Sergeant,FTO pay is increased to five percent(5%) of base pay. This
cannot be combined with training unit pay.
➢ Effective June 1, 2016 for Police Officer members with ranks of Police Officer,
Lieutenant or Sergeant, a five percent(5%) of base pay differential will be provided for
training unit assignment. This cannot be combined with FTO pay.
D Effective October 1, 2015 for Firefighter members with ranks of Firefighter, Lieutenant
or Captain, $500 paramedic bonus is changed from being paid biennially to annually.
➢ Effective October 1, 2015 for Firefighter members with ranks of Firefighter, Lieutenant
or Captain, clothing allowance if increased from $50 to $85 monthly.
D Effective October 1, 2016 a five percent(5%) of base pay differential will be provided
for Drug Recognition Experts and Arson Investigators and a 2.5% of base pay differential
will be provided for Arson Investigator Trainees.
Results—Based upon the results of our Actuarial Impact Statement, the proposed Collective
Bargaining Agreements along with the Proposed Ordinance (see Actuarial Impact Statement
dated June 7, 2016)decreases the first year annual City contribution by$1,117,986 (1.8%/
1.6%). The figures in parentheses are the Fund cost expressed as a percentage of projected
covered annual payroll including DROP payroll ($60,477,959) and projected covered annual
payroll excluding DROP payroll ($69,222;673), respectively as of October 1, 2015.
Filin 'Requirements—We have prepared the Actuarial Impact Statement for filing with the
State of Florida. Please note that this Statement must be signed and dated on behalf of the Board
of Trustees. Copies of the Ordinance upon passage at first reading along with the signed and
dated Actuarial Impact Statement are generally required to be filed with the State at the
following addresses:
Mr. Douglas E.Beckendorf, A.S.A. Ms. Sarah Carr
Bureau of Local Retirement Services Office of Municipal Police Officers'
Division of Retirement &Firefighters'Pension Fund
Building 8 Building 8
Post Office Box 9000 Post Office Box 3010
Tallahassee, Florida 32315-9000 Tallahassee,Florida 32315-3010
We understand the State requires funding no later than the fiscal year next following the
effective date of the increases in costs resulting from the Ordinance.
Actuarial Assumptions and Methods, Fund Provisions,Financial Data,Member Census Data
The financial data utilized in the preparation of this Actuarial Impact Statement is the same
financial data utilized for the October 1, 2015 Actuarial Valuation.
The Fund provisions employed for purposes of our Actuarial Impact Statement are the same
Fund provisions utilized for the Actuarial Impact Statement dated June 7, 2016 for the Proposed
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Mr. Jose del Risco
June 7, 2016.
Page 3
Ordinance changes. (See attached Outline of Principal Provisions of the Pension Fund section of
this Actuarial Impact Statement for details.)
The actuarial assumptions and methods and member census data utilized in the preparation of
this Actuarial Impact Statement are the same actuarial assumptions and methods and member
census data utilized for the Actuarial Impact Statement dated June 7,2016 for Proposed
Ordinance changes modified as follows:
➢ Salary changes based on the proposed collective bargaining agreements were provided by
the City including estimated impact on pensionable pay. Adjustments were made to the
census data to reflect these changes.
➢ The COLA portion of the salary increases were adjusted based on the proposed collective
bargaining agreements. (See attached actuarial assumptions and methods section of this
Actuarial Impact Statement for details.)
•
This Actuarial Impact Statement is intended to describe the estimated future financial effects of
the proposed benefit changes on the Fund, and is not intended as a recommendation in favor of
the benefit changes or in opposition of the benefit changes.
If all actuarial assumptions are met and if all future minimum required contributions are paid,
Fund assets will be sufficient to pay all Fund benefits. Fund minimum required contributions are
determined in compliance with the requirements of the Florida Protection of Public Employee
Retirement Benefits Act, Firefighters Retirement Chapter 175 and Police Officers Retirement
Chapter 185with normal cost determined as a level percent of covered payroll and a level percent
amortization payment using an initial closed amortization period of 30 years.
The Unfunded Actuarial Accrued Liability(UAAL)may not be appropriate for assessing the
sufficiency of Fund assets to meet the estimated cost of settling benefit obligations but may be
appropriate for assessing the need for or the amount of future contributions. The UAAL Ratio
would be different if they reflected the market value of assets rather than the smoothed actuarial
value of assets.
These calculations are based upon assumptions regarding future events. However, the Fund's
long term costs will be determined by actual future events,which may differ materially from the
assumptions made. These calculations are also based upon present and proposed Fund
provisions that are outlined or referenced in this Actuarial Impact Statement.
If you have reason to believe the assumptions used are unreasonable, the Fund provisions are
incorrectly described or referenced, important Fund provisions relevant to this Actuarial Impact
Statement are not described or that conditions have changed since the calculations were made,
you should contact the undersigned prior to relying on information in this Actuarial Impact
Statement.
If you have reason to believe that the information provided in this Actuarial Impact Statement is
inaccurate, or is in any way incomplete, or if you need further information in order to make an
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Mr. Jose del.Risco
June 7, 2016
Page 4
informed decision on the subject matter of this report,please contact the undersigned prior to
making such decision.
Future actuarial measurements may differ significantly from the current measurements presented
in this report due to such factors as the following: Fund experience differing from that
anticipated by the economic or demographic assumptions; changes in economic or demographic
assumptions; increases or decreases expected as part of the natural operation of the methodology
used for these measurements(such as the end of an amortization period); and changes in Fund
provisions or applicable law. Due to the limited scope of the actuary's assignment, the actuary
did not perform an analysis of the potential range of such future measurements.
This Actuarial impact Statement should not be relied on for any purpose other than the purpose
described in the primary communication. Determinations of the financial results associated with
the benefits described in this report in a manner other than the intended purpose may produce
significantly different results.
This Actuarial Impact Statement has been prepared by actuaries who have substantial experience
valuing public employee retirement systems. To the best of our knowledge the information
contained in this report is accurate and fairly presents the actuarial position of the Fund as of the
Actuarial Impact Statement date. All calculations have been made in conformity with generally
accepted actuarial principles and practices,with the Actuarial Standards of Practice issued by the
Actuarial Standards Board and with applicable statutes.
This Actuarial Impact Statement may be provided to parties other than the City or Board only in
its entirety and only with the permission of an approved representative of the City or Board.
• The signing actuaries are independent of the Fund sponsor.
The undersigned are Members of the American Academy of Actuaries and meet the
Qualification Standards of the American Academy of Actuaries to render the actuarial opinion
contained herein.
If you should have any question concerning the above or if we may be of further assistance with
this matter,please do not hesitate to contact us.
Sincerest regards,
9404?, .
Lawrence F. Wilson, A.S.A. Kelly L.Adams,A.S.A.
Senior Consultant and Actuary Consultant and Actuary
Enclosures
cc: Ms. Donna Brito
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City Pension Fund for Firefighters and Police Officers
in the City of Miami Beach
•
Actuarial Impact Statement as of October 1, 2015
A. Description of Proposed Changes Duc to Collective Bargaining Agreements
Salary cost of living adjustments (COLA) will be 1% on April 1, 2016, 3% on July 1, 2017 and 3% on
July 1, 2018.
Effective October 1, 2016 for Firefighter members with ranks of Firefighter, Lieutenant or Captain a five
percent (5%) of base pay differential will be provided for Marine duties. However the Marine pay
differential cannot be combined with Special Operations pay differential.
Effective October 1, 2016 for Firefighter members with ranks of Firefighter, Lieutenant or Captain a five
percent (5%) of base pay differential will be provided for Special Operations duties. However the
Special Operations pay differential cannot be combined with Marine pay differential. .
Effective October 1, 2016. for Firefighter members with ranks of Firefighter, Lieutenant or Captain,
rescue out of class pay will increase from$2 to $3 per hour.
Effective June 1, 2016 FLSA minimum overtime provisions for sick leave usage only. All sick leave
hours used must be made up with straight time instead of time and one half.
Effective October 1, 2015. for Firefighter members with ranks of Firefighter, Lieutenant or Captain, six
(6) additional hours of holiday pay are provided for each holiday.
Effective June 1, 2016 for Police Officer members with ranks of Police Officer, Lieutenant or Sergeant,
FTO pay is increased to five percent(5%)of base pay. This cannot be combined with training unit pay.
Effective June 1, 2016 for Police Officer members with ranks of Police Officer, Lieutenant or Sergeant, a
five percent (5%) of base pay differential will be provided for training unit assignment. This cannot be
combined with FTO pay.
Effective October 1,2015 for Firefighter members with ranks of Firefighter,Lieutenant or Captain, $500
paramedic bonus is changed from being paid biennially to annually.
Effective October 1, 2015. for Firefighter members with ranks of Firefighter, Lieutenant or Captain,
clothing allowance if increased from$50 to $85 monthly.
Effective October 1, 2016 a five percent (5%) of base pay differential will be provided for Drug
Recognition Experts and Arson Investigators and a 2.5% of base pay differential will be provided for
Arson Investigator Trainees.
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•
City Pension Fund for Firefighters and Police Officers
in the City of Miami Beach
Actuarial Impact Statement as of October 1, 2015
B. An estimate of the cost of implementing these proposed changes due to collective bargaining.
C. In my opinion, the proposed changes are in compliance with Part VU, Chapter 112, Florida Statutes and
Section 14, Article X of the State Constitution.
Chairman, Retirement_Committee
Date
•
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City Pension Fund for Firefighters and Police Officers
in the City of Miami Beach
Actuarial Impact Statement as of October I,2015
All Members
Actuarial Proposed Bargaining
A. Participant Data Valuation Ordinance Agreement
1. Active participants 508 508 508
2. Retired participants and beneficiaries
receiving benefits(including DROPs) 668 668 668
3. Disabled participants receiving benefits 56 56 56
4. Terminated vested participants 20 20 20
5. Annual Pensionable Payroll $ 59,124,134 $ 59,124,134 $ 58,545,943
6. Projected Annual Pensionable Payroll $ 61,075,230 $ 61,075,230 $ 60,477,959
7. Annual benefits payable to those currently
receiving benefits(including DROPs) $ 60,900,968 $ 60,900,968 $ 60,900,968
B. Assets
1. Smoothed actuarial value $ 759,327,614 $ 759,327,614 $ 759,327,614
2. Market value $ 750,617,498 $ 750,617,498 $ 750,617,498
C. Liabilities
1. Actuarial present value of future expected benefit payments
for active members
a. Retirement benefits
•
$ 359,044,505 $ 348,160,408 $ 347,402,867
b. Vesting benefits 13,336,011 13,336,011 13,378,921
c. Death benefits 5,631,619 5,631,618 5,632,243
d. Disability benefits 29,599,417 29,599,417 29,570,850
e. Total $ 407,611,552 $ 396,727,454 $ 395,984,881
2. Actuarial present value of future expected benefit payments
for terminated vested members $ 4,183,372 $ 4,183,372 $ 4,183,372
3. Actuarial present value of future expected benefit payments
for those currently receiving benefits
a. Service retired(includes DROPs) $ 740,928,052 $ 739,196,095 $ 739,196,095
b. Beneficiaries 38,521,088 38,521,088 38,521,088
c. Disability retired 42,956,281 42,956,281 42,956,281
d. Total $ 822,405,421 $ 820,673,464 $ 820,673,464
4. Total actuarial present value of future expected
benefit payments $ 1,234,200,345 $ 1,221,584,290 $ 1,220,841,717
5. Actuarial accrued liabilities(EAN) $1,058,484,242 $1,049,789,147 $ 1,050,154,648
6. Unfunded actuarial accrued liability(LAN) $ 299,156,628 $ 290,461,533 $ 290,827,034
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City Pension Fund for Firefighters and Police Officers
in the City of Miami Beach
Actuarial Impact Statement as of October 1,2015
All Members
Actuarial Proposed Bargaining
Valuation Ordinance Agreement
D. Statement of Accumulated Plan Benefits
1. Actuarial present value of accumulated vested benefits
a. Participants currently receiving benefits $ 822,405,421 $ 820,673,464 $ 820,673,464 •
(including DROPs)
b. Other participants 171,086,910 170,106,822 170,106,822
c. Total $ 993,492,331 $ 990,780,286 $ 990,780,286
2. Actuarial present value of accumulated non-vested
plan benefits 9,431,784 5,657,726 5,657,726
3. Total actuarial present value of accumulated plan benefits $1,002,924,115 $ 996,438,012 $ 996,438,012
E. Pension Cost
1. Total normal cost .$ 18,581,095 $ 18,163,913 $ 17,931,596
2. Payment required to amortize unfunded liability 21,205,832 20,697,603 20,718,967
3. Interest 224,475 224,475 222,287
4. Expected service buyback 162,591 162,591 161,001
5. Total required contributions $ 40,173,993 $ 39,248,582 $ 39,033,851
6. Item 5 as a percentage of projected pensionable payroll 65.8% 64.3% 64.5%
7. Estimated employee contributions $ 6,131,868 • $ 6,131,868 $ 6,072,088
8. Item 7 as a percentage of projected pensionable payroll 10.0% 10.0% 10.0%
9. Estimated State contributions $ 120,549 $ 120,549 $ 120,549
10. Item 9 as a percentage of projected pensionable payroll 0.2% 0.2% 0.2%
11. Net amount payable by City $ 35,247,317 $ 34,291,368 $ 34,129,331
12. Item 11 as a percentage of projected pensionable payroll 57.7% 56.1% 56.4%
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City Pension Fund for Firefighters and Police Officers
in the City of Miami Beach
Actuarial Impact Statement as of October 1, 2015
All Members
Actuarial Proposed Bargaining
Valuation Ordinance Agreement
F. Disclosure of Following Items;
1. Actuarial present value of future salaries excluding
DROP payroll- attained age $ 590,869,479 S 590,869,479 $ 588,001,202
2. Actuarial present value of future employee
contributions-attained age $ 59,437,078 $ 59,437,078 $ 59,151,994
3. Actuarial present value of future contributions
from other sources N/A N/A N/A
4. Amount of active members' accumulated
contributions $ 52,418,404 $ 52,418,404 $ 52,418,404
5. Actuarial present value of future salaries and
future benefits at entry age N/A N/A N/A
6. Actuarial present value of future employee
contributions at entry age • N/A N/A N/A
•
•
•
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•
City Pension Fund for Firefighters and Police Officers
. in the City of Miami Beach
Actuarial Impact Statement as of October 1,2015
G. Amortization of Unfunded Actuarial Accrued Liability Remaining
Unfunded Amortization Funding
Unfunded Actuarial Accrued Liabilities Liability Payment Period
10/01/2001 Initial Unfunded Liability $ 11,891,501 S 1,009,954 16 years
10/01/2002 Method Change 13,521,452 1,101,783 17 years
10/01/2003 Fund Amendment 1,166,830 91,522 18 years
10/01/2003 Actuarial(Gain)/Loss 35,130,772 2,755,541 18 years
10/01/2004 Actuarial(Gain)/Loss 37,698,503 2,854,733 19 years
10/01/2005 Method Change (33,438,069) (2,450,998) 20 years
10/01/2005 Assumption Change 6,725,744 492,995 20 years
10/01/2005 Actuarial(Gain)/Loss 24,976,118 1,830,740 20 years
10/01/2006 Method Change (5,025,599) (357,414) 21 years
10/01/2006 Actuarial(Gain)/Loss 21,754,805 1,547,171 21 years
10/01/2007 Actuarial(Gain)/Loss 25,345,330 1,752,599 22 years •
10/01/2008 Assumption Change 6,032,797 406,385' 23 years
10/01/2008 Actuarial(Gain)/Loss 33,297,680 2,243,017 23 years
10/01/2009 Assumption Change 23,664,844 1,555,652 24 years
10/01/2009 Actuarial(Gain)/Loss 68,108,317 4,477,226 24 years
10/01/2010 Assumption Change 4,576,885 294,075 25 years
10/01/2010 Actuarial(Gain)/Loss 17,295,879 1,111,300 25 years
10/01/2011 Fund Amendment (3,101,976) (195,091) 26 years
10/01/2011 Assumption Change 17,130,724 1,077,395 26 years
10/01/2011 Actuarial(Gain)/Loss 30,472,366 1,916,485 26 years
10/01/2012 Assumption Change 7,806,919 481,247 27 years
10/01/2012 Actuarial(Gain)/Loss 26,284,914 1,620,298 27 years
10/01/2012 Plan Amendment (20,089,474) (1,238,388) 27 years
10/01/2013 Actuarial(Gain)/Loss 1,555,268 94,084 28 years
10/01/2013 Method Change (64,520,385) (3,903,068) 28 years
10/01/2014 Actuarial(Gain)/Loss. _ (5,946,443) (353,409) 29 years
10/01/2014 Assumption Change 5,748,022 341,617 29 years
10/01/2015 Actuarial(Gain)/Loss 8,645,019 505,302 30 years
10/01/2015 Assumption Change 2,447,885 143,079 30 years
10/01/2016 Proposed Ordinance (8,695,095) (508,229) 30 years
10/01/2015 Bargaining Agreements 365,501 21,364 30 years
TOTAL $ 290,827,034 $ 20,718,967
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,and in my 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 for 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.
• Enrollment Number: 14-02802 —`---'
Dated: _June 7,2016 Lawrence F.Wilson,A.S,A.
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City Pension Fund for Firefighters and Police Officers
in the City of Miami Beach
Outline of Principal Provisions of the Pension Fund
A. Relevant Provisions:
The Fund was created under Chapter 23414, Laws of Florida, Special Act of 1945, as amended by
Ordinance No. 2015-3970 adopted October 14, 2015.
B. Eligibility Requirements:
Any full-time employee of the City who is certified as a Firefighter or Police Officer as a
condition of employment.
C. Membership Tiers:
Tier 1 - Members hired prior to July 14, 2010
Tier 2 - Members hired on or after July 14,2010 but prior to September 30, 2013
Tier 3 -Members hired on or after September 30, 2013 but prior to the date of ratification of
current collective bargaining agreement
Tier 4 - Members hired on or after the date of ratification of current collective bargaining
agreement
D. Credited Service:
All periods of employment as an Employee for which contributions have been made to the Fund
together with all service in the uniformed services of the United States required to be included.
•
E. Pre-Employment Service:
Effective September 30, 2013 members with at least 5 years of service may contribute an
additional amount of 10.0% for those hired prior to September 30, 2013 and 10.5% for those
hired on or after September 30, 2013 to receive credit for pre-employment military service. A
member may purchase up to 2 total years of additional service credit at the 3% accrual rate for
time spent on active military duty. The total of all combinations of pre-employment benefit
purchased cannot exceed a 12%increase in accrual.
Pre-employment benefit service must be purchased within 36 months following September 30,
2013, or upon completion of 5 years of creditable pension service under the pension fund,
whichever occurs later.
Effective September 30, 2013, members will no longer be able to purchase an increase in benefit
multiplier or pre-employee public safety service credit as a Police Officer or Firefighter.
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City Pension Fund for Firefighters and Police Officers
in the City of Miami Beach
Outline of Principal Provisions of the Pension Fund
F. Pensionable Pay:
Salary is defined as base pay, longevity pay, overtime, shift differential and extra compensation
allowance such as uniform allowance and any pays which are negotiated as pensionable. Effective
July 14, 2010, off-duty pay is pensionable for any member who is eligible for overtime and receives
off-duty compensation through the City. Effective September 30, 2013, overtime is limited to 300
hours a year.
1. Overtime and Off-Duty pay included in pension computation for Police Officers:
• Off-Duty and overtime pay not exceeding 300 hours per calendar year is limited in each year
to an amount that is equal to 11%of highest annualized pay rate for the same salary rank that
the member is in at time of retirement.
• The 11% limitation shall not apply to any member who holds the rank of sergeant or
lieutenant on September 30, 2013, or any Police Officer promoted to the rank of sergeant
prior to the date the 2013 Certified Police Sergeant Promotional Register expired in 2015. For
these members, the inclusion of overtime and / or off duty in the member's salary shall be
limited in each year to an amount which is equal to 70% of the difference between the
member's annualized pay rate at retirement and the highest annualized pay rate for the next
higher salary rank. For any of these members who self-demote their benefit will not exceed
eleven percent (11%) of the highest annualized pay rate for the same salary rank the member
is in at the time of retirement; and overtime, off-duty or any other compensation will not be
applied to produce a benefit that exceeds the eleven percent(11%) limitation.
2. Overtime and Off-Duty pay included in pension computation for Firefighters:
• Off-Duty and overtime pay not exceeding 300 hours per calendar year is limited in each year
to an amount that is equal to 11% of highest annualized pay rate for the same salary rank that
the member is in at time of retirement.
G. Final Average Monthly Earnings (FAME):
Tier 1 and eligible to retire prior to September 30, 2015 - the greater of the average of the 2 highest
paid years prior to date of retirement or the 2 last paid years after taking into consideration the
overtime limit.
Tier 1 and eligible to retire on or after September 30, 2015 - the greater of the average of the 3
highest paid years prior to date of retirement or the 3 last paid years after taking into consideration
the overtime limit.
Tier 2 - the greater of the average of the 3 highest paid years prior to date of retirement or the 3 last
paid years after taking into consideration the overtime limit.
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City Pension Fund for Firefighters and Police Officers
in the City of Miami Beach
Outline of Principal Provisions of the Pension Fund
Tier 3 - the greater of the average of the 5 highest paid years prior to date of retirement or the 5 last paid
years after taking into consideration the overtime limit.
Tier 4 - the average of the 5 highest paid years prior to date of retirement taking into consideration the
overtime limit.
H. Normal Retirement:
1. Eligibility:
Tier 1 and eligible to retire prior to September 30, 2013 the earlier of attainment of age 50 or Rule
of 70
Tier 1 and eligible to retire on or after September 30, 2013 - the earlier of attainment of age 50 or
Rule of 70 (must attain age 47)
Tier 2 and Tier 3 -the earlier of attainment of age 50 or Rule of 70 (must attain age 48)
Tier 4 - the earlier of attainment of age 52 or Rule of 70(must attain age 48)
2. Benefit:
Tier 1 and eligible to retire prior to September 30,2013:
3%x FAME x Credited Service up to 15 years plus 4%x Credited Service after 15 years
Benefit shall not exceed 90% of FAME.
Tier 1 and eligible to retire on or after September 30, 2013 but prior to September 30, 2015:
3%x FAME x Credited Service up to 20 years plus 4%x Credited Service after 20 years
Benefit shall not exceed 85%of FAME (exception if exceeded 85% as of September 30, 2013).
Tier 1 and eligible to retire on or after September 30, 2015, Tier 2, Tier 3 and Tier 4:
3%x FAME x Credited Service up to 20 years plus 4%x Credited Service after 20 years
Benefit shall not exceed 85%of FAME. For Tier 4 benefit shall not exceed 85% of
pensionable Salary.
A member's benefit multiplier for credited•service earned before October 1, 2013 shall not be
reduced.
I. Deferred Retirement:
1. Eligibility:
Any first day of the month past Normal Retirement Date.
2. Benefit:
Benefit calculated as for Normal Retirement based upon service and pay to Deferred Retirement Date.
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Outline of Principal Provisions of the Pension Fund
J. Disability Retirement:
1. Eligibility:
Totally and permanently disabled meaning incapacity to perform regular duty as Firefighter or
Police Officer (and completion of at least 5 years of Credited Service for non-service incurred
2. Benefit:
Accrued benefit (minimum of 85% of current salary at time of disability for service incurred
disability),
K. Death Benefit:
1. Service Incurred:
Greater of accrued benefit or 85% of compensation payable as a monthly benefit to the widow
until death or remarriage, to 'a Domestic Partner until death, marriage or entry into another
Domestic Partnership, to unmarried children in equal shares until age 18 (until age 22 if a full-
time student or until recovery from handicap if handicapped), or to dependent parents in equal
shares.
2. Non-Service Incurred:
For members with at least 5 years of service, accrued benefit is payable for the first 12 months
after death and 75% of the accrued benefit is payable thereafter(with a minimum benefit of 25%
of average monthly salary); Benefits are a payable to the widow until death or remarriage, to a
Y g ,
Domestic Partner until death, marriage or entry into another Domestic Partnership, to unmarried
children in equal shares until age 18 (until age 22 if a full-time student or until recovery from
handicap or until marriage if handicapped),or to dependent parents in equal shares. However,if
the member has been married for less than 10 years, benefits are payable to the spouse only for
the life expectancy of the deceased member at time of death.
L. Withdrawal Benefit:
1. Eligibility:
Any age prior to 50 with at least 5 years of service for members who terminate employment on
or after September 30, 2013.
2. Benefit:
Return of employee contributions or accrued benefit upon attainment of age 50. If a member
withdrawals with less than 10 years of service and passes away prior to the normal retirement
date the return of employee contributions is the.only benefit.
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City Pension Fund for Firefighters and Police Officers
in the City of Miami Beach
Outline of Principal Provisions of the Retirement Plan
M. Employee Contributions:
l0.0% of salary per year (on a pre-tax basis) for members hired prior to September 30, 2013 and 10.5%
of salary per year (on a pre-tax basis) for members hired on or after September 30, 2013; If
contributions are refunded to the member or to his beneficiaries,then interest is credited at the rate of 3%
per annum.
N. Normal Form of Payment of Retirement Income:
For members except those retiring prior to November 5, 2003, the normal form of payment is a 75%joint
and survivor annuity with a specified beneficiary as provided under the plan. The specified beneficiary •
will receive a survivor annuity equal to 100% of the total benefit for one year following the death of the
member and thereafter the greater of 75% of the total benefit or 25% of the average monthly salary for
the two highest paid years. However, upon death, if the member has been married for less than 10 years,
the survivor annuity is payable only for the life expectancy of the deceased member at time of death.
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 with a designated beneficiary
• 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.
0. Deferred Retirement Option Program(DROP):
Police Officers and Firefighters are eligible to participate in a Deferred Retirement Option Program
(DROP)upon meeting eligibility for a normal service retirement.
Operations of the DROP:
• 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.
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Gabriel Ri30 qz tly6ompany
City Pension Fund for Firefighters and Police Officers
in the City of Miami Beach
Outline of Principal Provisions of the Pension Fund
• 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 for members who enter the DROP prior to
September 1, 2012 and 60 months for members who.enter the DROP on or after September 1, 2012.
Notwithstanding the above, participation may not continue beyond the date when the member's
combined years of creditable service and time in the DROP equals 352 months for members who
• enter the DROP prior to September 1, 2012 and 456 months for members who enter the DROP on or
after September 1, 2012.
Members who enter the DROP on or before September 30, 2015 may extend their DROP
participation period by 12 months for a total maximum DROP participation period not to exceed
seventy-two (72)months.
Members who enter the DROP on or after October 1, 2015 but prior to ratification of the current
collective bargaining agreements may extend their DROP participation period by up to 36 months for a
total maximum DROP participation period not to exceed ninety-six (96)months.
Members who enter the DROP on or after ratification of the current collective bargaining agreements
may participate in DROP for a period not to exceed ninety-six(96)months.
• Members who are participating in the DROP on the date of ratification of the current collective
bargaining agreements and elect to extend their DROP participation period must complete such forms
as are required by the Board not later than September 1,2016.
• 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 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 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.
• A 2.5% COLA (1.5%per year for participants hired on or after July 14, 2010)is paid annually on the
anniversary date of the member's retirement. For members who enter the DROP after September 1,
2012 and before September 30, 2013 - no cost of living adjustment for the third and fourth annual
anniversary date, if the member participates in the DROP for six months or longer. Any member who
exits the DROP within 6 months following the date of DROP entry, shall be eligible for the 2.5%
COLA annually on the anniversary date of the member's retirement.
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City Pension Fund for Firefighters and Police Officers
in the City of Miami Beach
Outline of Principal Provisions of the Pension Fund
Members hired before the date of ratification of the collective bargaining agreements who elect to
extend or enter the DROP and participate for more than 5 years will have no COLA adjustment
applied for years six (6), seven (7), and eight(8) while participating in the DROP. Members hired on
or after the date of ratification of the current collective bargaining agreements will receive a zero
percent (0%) COLA for the first (1st), second (2nd), third (3rd) and fourth (4th) annual adjustment
dates while participating in the DROP.
P. Cost-of-Living Adjustment:
Effective October 1, 2010, benefits are increased by 2.5% per year (1.5% per year for participants hired
on or after July 14, 2010), compounded annually, on the anniversary date of each member's retirement.
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.
For members retired prior to October 1, 2010,benefit increases occur on the first of October each year.
Q. Changes Since Previous Actuarial Valuation
Membership Tiers were:
Tier 1 -Members hired prior to July 14, 2010
Tier 2-Members hired on or after July 14,2010 but prior to September 30, 2013
Tier 3 -Members hired on or after September 30, 20l
Pensionable Pay was:
Salary is defined as base pay, longevity pay, overtime, shift differential and extra compensation
allowance such as uniform allowance and any pays which are negotiated as pensionable. Effective July
14, 2010, off-duty pay is pensionable for any member who is eligible for overtime and receives off-duty
compensation through the City. Effective September 30,2013, overtime is limited to 300 hours a year.
1. Overtime and Off-Duty pay included in pension computation for Police Officers:
• Off-Duty and overtime pay not exceeding 300 hours per calendar year is limited in each year to an
amount that is equal to 11% of highest annualized pay rate for the same salary rank that the
member is in at time of retirement.
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City Pension Fund for Firefighters and Police Officers
in the City of Miami Beach
Outline of Principal Provisions of the Pension Fund
Q. Changes Since Previous Actuarial Valuation(continued)
• The 11% limitation shall not apply to any member who holds the rank of sergeant or lieutenant on
September 30, 2013, or any Police Officer promoted to the rank of sergeant prior to the date the
• 2013 Certified Police Sergeant Promotional Register expired in 2015. For these members, the
inclusion of overtime and / or off duty in the member's salary shall be limited in each year to an
amount which is equal to 70% of the difference between the member's annualized pay rate at
retirement and the highest annualized pay rate for the next higher salary rank.
•
2. Overtime and Off-Duty pay included in pension computation for Firefighters:
• Off-Duty and overtime pay not exceeding 300 hours per calendar year is limited in each year to an
amount that is equal to 11% of highest annualized pay rate for the same salary rank that the
member is in at time of retirement.
Final Average Monthly Earnings (FAME)were:
Tier 1 and eligible to retire prior to September 30, 2015 - the greater of the average of the 2 highest paid
years prior to date of retirement or the 2 last paid years after taking into consideration the overtime limit.
Tier 1 and eligible to retire on or after September 30, 2015 - the greater of the average of the 3 highest
paid years prior to date ofretirement.or the 3 last paid years after taking into consideration the overtime
limit.
Tier 2 - the greater of the average of the 3 highest paid years prior to date of retirement or the 3 last paid
years after taking into consideration the overtime limit.
Tier 3 - the greater of the average of the 5 highest paid years prior to date of retirement or the 5 last paid
years after taking into consideration the overtime limit.
Normal.Retirement was:
1. Eligibility:
Tier 1 and eligible to retire;prior to September 30, 2013 - the earlier of attainment of age 50 or Rule
of 70
Tier 1 and eligible to•retire on or after:September 30, 2013 - the earlier of attainment of age.50 or
Rule of 70'(must attain age 47)
Tier 2.and Tier.3 -the earlier of attainment of'age 50 or Rule of 70 (must attain.age 48)
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City Pension Fund for Firefighters and Police Officers
in the City of Miami Beach
Outline of Principal Provisions of the Pension Fund
Q. Changes Since Previous Actuarial Valuation(continued)
2. Benefit:
Tier 1 and eligible to retire prior to September 30, 2013:
3%x FAME x Credited Service up to 15 years plus 4% x Credited Service after 15 years
Benefit shall not exceed 90%of FAME.
Tier 1 and eligible to retire on or after September 30, 2013 but prior to September 30, 2015:
3%x FAME x Credited Service up to 20 years plus 4%x Credited Service after 20 years
Benefit shall not exceed 85%of FAME(exception if exceeded 85%as of September 30, 2013).
Tier l and eligible to retire on or after September 30, 2015,Tier 2 and Tier 3:
3%x FAME x Credited Service up to 20 years plus 4%x Credited Service after 20 years
Benefit shall not exceed 85%of FAME.
A member's benefit multiplier for credited service earned before October 1, 2013 shall not be
reduced.
Deferred Retirement Option Program(DROP) was:
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 (minimum age may apply)
Operations of the DROP were:
• 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.
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City Pension Fund for Firefighters and Police Officers
in the City of Miami Beach
Outline of Principal Provisions of the Pension Fund
Q. Changes Since Previous Actuarial Valuation(continued)
• 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 for members who enter the DROP prior to
September 1, 2012 and 60 months for members who enter the DROP on or after September 1, 2012.
Notwithstanding the above, participation may not continue beyond the date when the member's
• combined years of creditable service and time in the DROP equals 352 months for members who
enter the DROP prior to September 1, 2012 and 408 months for members who enter the DROP on or
after September 1, 2012.
•
• 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 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 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.
• A 2.5%COLA (1.5% per year for participants hired on or after July 14, 2010)is paid annually on the
anniversary date of the member's retirement. For members who enter the DROP after September 1,
2012 and before September 30, 2013 - no cost of living adjustment for the third and fourth annual
anniversary date,if the member participates in the DROP for six months or longer. Any member who
exits the DROP within 6 months following the date of DROP entry, shall be eligible for the 2.5%
COLA annually on the anniversary date of the member's retirement.
•
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Gabriel Roeder Smith&Company
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City Pension Fund for Firefighters and Police Officers
in the City of Miami Beach
Actuarial Assumptions and Actuarial Cost Methods
Used in the Valuation
A. Mortality
For healthy participants, RP-2000 Combined Healthy Participant Mortality Tables, separate rates
for males and females with Blue Collar Adjustment and projected 15 years from valuation date for
pre-retirement mortality and 7 years from valuation date for post-retirement mortality with
projection Scale AA.
For disabled participants, RP-2000 Disabled Mortality Tables, separate rates for males and females,
without projection for future mortality improvement.
B. Investment Return
7.90%,compounded annually,net of investment expenses.
C. Expenses
Prior year's actual administrative expenses.
D. Employee Withdrawal Rates
Representative values of the assumed annual rates of withdrawal among members in active service
are as follows:
i t4 er,�n„, Vj,,r7. 5 7,,--; 1Fr Mir `'''''IVY, '�? n�R�. atir7=�''-
I:: ' tr i 4{ ,r". ,
F , 11
.'' t V,, / ', d4J s. 5 �,s {1§I g 4 l . ' s } 7
i�o 97 � 4 1i r�11 ,t Si �7 ? 'Y .,,:e, ,,lG r %sG '�` c { , ,ru"�' , ': ,,,,1)L',tJ-li rs iLa
E. Disability Rates
Representative values of the assumed annual rates of disability among members in active service
are as follows:
,, > ? tn frr r• i {I,� er i- 4r. -,W2' ll'i 1 . !'e fiF �.' , ,.:
'elf \.o 1 ;' t1111,F ° P ' t a✓ :•�a try��1. �1- .�• (p ,r
' M r
1 ryw rn.''•
n A
■,t ary R A � , h" �� f ,� 1
tt $ p �
35% of disabilities are assumed to be non-service incurred-65% service incurred.
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Gabriel R13aee TZ3tolA �ompany
City Pension Fund for Firefighters and Police Officers
in the City of Miami Beach
Actuarial Assumptions and Actuarial Cost Methods
Used in the Valuation
F. Salary Increase Factors
Representative values of the assumed annual rates of future salary increase are as follows:
mss)i 2 # t� K'' 01:-Ns...'1 'k` '1,,,V' 3 r rf„ ,` k x1 et.*4'
tp r`im... A` ,' v t5!' ;5 it0 � ' `x _Z4 a t°$ile• i rz 4-01 -4 ° S K .
t 2 9�y{ k fit .3.:i6'2 q �
! e{ r E�yt 4�i's{r;��lyae�,�2Y,�3 s� #� v:€ psi 4; N o t ' ;":24
+{ � Ng
.440 �1 r a .� 4 # ',-,4%
a , o h 3 Lt ✓ # ?iFl•r r ,'7 #r ; w' 5 � x A i 3 St w� e ? 44
4 • ��. °, , ,M
In addition to the average assumed salary increase rates shown above the expected cost of living
increases are as follows:
5 °' : s - .
%ill't' 'At°' � .It c r'°_ a'' #
4t =sc� �pJ �� � a� dl,.� pltY _t Y rr
F V��C1 c . V f Y rr
a
or - :n'-ar Iii t{ s hr "4, :
1:4';',A041,64;6=''''' ':3" '. L t;,i.,,,4; „"
v , w
Liii 4�
i / �"t� .:.,,, ai
The cost of living increases shown above are based on a 1%increase as of April 1, 2016, 3%increase
as of July 1,2017 and 3%increase as of July 1,2018 contained in the collective bargaining agreements
and long term expected increases of 2.18%annually each July:
G. Payroll Growth Assumption
The aggregate compensation used to compute the accrued liability contribution rate is assumed to
increase at a rate of 3.5%per year-not greater than historical 10-year average(3.3% as of October 1,
2015).
H. Loadings for Contingencies
Pre-Employment Service: A City contribution of 0.275% of annual pensionable payroll is assumed
sufficient to provide for the purchase (or buyback) of pre-employment military service by the
L Marital Assumptions
1. 77% of members are assumed married or entitled to benefits for dependents, including registered
domestic partners. -16—
Gabriel Roeder Smith&Company
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City Pension Fund for Firefighters and Police Officers
in the City of Miami Beach
Actuarial Assumptions and Actuarial Cost Methods
Used in the Valuation
2. Male spouses are assumed to be three years older than female spouses.
J. Retirement
All members are assumed to retire at age 50 with 26.25 years of service, but not later than age 65.
Retirement is assumed to occur in accordance with the following rates:
F. I ,/yep x
[:'� ',*" „ {r a ,, l t1 ';i°.KrR11,1t.s lit, ;i',7iI i + 4'i
'---, ,...,,,w- j F',.;.4''' a7' Fl.' - 'xt f , �,a is
3r.:11= deg h9t` A �j h [7 o.',:4, ;' Ra i0),
5Y 1 Kf { f 4 Y
,''II ° a
sP it .. A ':)" t� ,1p.,.i J „
, , 1i x.14:', °k 2, Et -I ,,
i ,, l 7t h Fi;' S', 7 i �E/ i I 0 i'.
't n1✓ <v 14,)f lice(. tern .at 3-,.
i.? ' ,•Rye ' Jo���8 .'4'r. II t ',,,I,'3,9„, '. °•
IFS` 7. 1/s {d o 84f,: opf,1,et, ��^
K. DROP Assumption
80%of all active participants will participate in the DROP.
t'')F1l ' ik i 1!10 A ;1111 ,, i{) '161 �110'1°'470■1
p, '7,.,"01'0. �`i ) , aka 1 iF_laaa i ) i, ;' hF6.) 1.0 111,0) 1,° jr s
I
t i iY%e 1 r �' . 1
„, h9�r,4' ( r .a 0bt{ a�
y� Vie)00 ke
i ti
i'' v{ ,1.1„ it,,,,',- „1.t itt`,1i' a 'j�'n,SCI r �y�i',i b 15 4' 'drp'! F'1
t ''=,,s,-, /. -- r .' [.t.-,X' � '- �l '4.,%,"7 ?., '" 'C `.
-R3r i1u 5 ' €�#' . � 'M Y Rr , } " s�rjoixi+ ° w
f f Y to }. „.1 �F35'1' r Y,it'W
This Actuarial Study applies the same retirement rate assumption as the October 1, 2014 Actuarial
Valuation Report. However the extension of the DROP may alter the retirement experience of the plan
causing a change in the retirement rates assumption in the future.
DROP assumptions will need to be monitored in light of future DROP experience.
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Gabriel Roeder Smith &Company
Page 125 of 692
City Pension Fund for Firefighters and Police Officers
in the City of Miami Beach
Actuarial Assumptions and Actuarial Cost Methods
Used in the Valuation
L. Smoothed Asset Valuation Method
The method used for determining the smoothed actuarial value of assets phases in the deviation between
the expected and actual return on assets at the rate of 20% per year, The smoothed actuarial value of
assets will be further adjusted to the extent necessary to fall within the corridor whose lower limit is 80%
of the fair market value of fund assets and whose upper limit is 120% of the fair market value of fund
assets.
M. Actuarial Cost Method
Normal Retirement,Termination,Disability, and Death Benefits:Entry-Age-Actuarial Cost Method.
Under this method the normal cost for each active employee is the amount which is calculated to be a
level percentage of pay that would be required annually from his age at hire to his assumed retirement age
to fund his estimated benefits, assuming the Fund had always been in effect. The normal cost for the
Fund is the sum of such amounts for all employees. The actuarial accrued liability as of any valuation
date for each active employee or inactive employee who is eligible to receive benefits under the Fund is
the excess of the actuarial present value of estimated future benefits over the actuarial present value of
current and future normal costs. The unfunded actuarial accrued liability as of any valuation date is the
excess of the actuarial accrued liability over the smoothed actuarial value of assets of the Fund.
N. Changes Since Previous Actuarial Valuation
Salary Increase Factors were:
Representative values of the assumed annual rates of future salary increase were as follows:
fit;,lt,A.,-, -,,7 .,;",4, .4,, :,10Pa- ' ',,,,ivikmmi
4k s r a fi a p @
x l�U , ?`P, e:,,,,,,,:,N ,-+; l',)-),�) - f $���,d' � �eXAm✓'t�"
�Jl >F,40 '.-1/) 1q�A c.' 1 ,1 tl ,,, A7 to�P
Al rt�t -S':. r tlC,rR .z,,,,,'-,3 l 81 d'r i s 1:{' P Ay,4
t �r? r „�A? t Wi yp S t ? }/ U
Li n. ,Ate-F.:3 'off r1�.Q1 "���u ! ." s�,i?t�cJ4''v�Rl�oi iD) s
r . : t S, f S 1 ,n `r� . P.r � �*-- a 1.o
The average assumed salary increase rates shown above were reduced by the expected cost of living
increase of 2.18% for FYE 2015 and then increased by a 3.00% cost of living increase in FYE 2016 and
as shown above thereafter.
DROP Assumption was:
80%of all active participants will participate in the DROP.
-1s-
Gabriel RBaft Mfg WZoinpany