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PowerPoint CMB Retirement System and FRS Analysis March 25, 2009 presentation by GRSCopyright © 2009 GRS – All rights reserved.City of Miami Beach City Retirement Systems and FRS AnalysisMarch 25, 2009 FRS Contribution Rates¾Pensionable Compensation•Under FRS, virtually all compensation is pensionable•(base pay, incentive pay, longevity pay, overtime pay, annual sick and vacation buy-backs, lump sum payment of unused vacation pay upon termination of employment, and lump sum payment of unused sick pay (limited to 500 hours) upon termination of employment)•This broad definition of pay means that more compensation will be subject to FRS rates than is subject to the rates of theCity’s two Retirement Systems2 FRS Contribution Rates¾Current FRS Rates (7/1/08 – 6/30/09)Social FRSSecurityTotal•General Employees 9.85% 6.20% 16.05%•Police officers and firefighters 20.92 6.20 27.12•Special risk administrativesupport 12.55 6.20 18.75•Senior Management 13.12 6.20 19.32•DROP Participants 10.91 6.20 17.11¾Rates for 7/1/09 – 6/30/10 will likely change very little from figures above (to be determined during 2009 session of the Legislature)3 FRS Contribution Rates¾After 6/30/10•Probable increase of 4% to 6% of payroll starting 7/1/10•Further more moderate increases for the following four years4 Funded Ratios($ in millions)ERS P&F FRS10/1/08 10/1/077/1/08Actuarial Accrued Liability $ 526 $ 633 $ 122,532Actuarial Value (AV) of Assets 426 496 130,721 Market Value (MV) of Assets 364 571 126,918% based on AV 81.0% 78.4% 106.7% % based on MV 69.2% 90.2% 103.6% 5 City of Miami Beach Comparison of Costs MBERP PlanOctober 1, 2008 Preliminary Valuation620.00%22.25%33.47%Total0.00%0.22%11.46%Unfunded Accrued Liability Payment (3)10.00%15.83%(9.63 + 6.20)13.74%Employer Normal Cost10.00%6.20%(Social Security)8.27%Employee ContributionDEFINED CONTRI-BUTIONFRS (1) (2)CITY PLAN(1) FRS Rates only shown for "Regular" class, not including special risk administrative support, senior management, etc.(2) City fiscal year and FRS contribution year differ (3) Current City unfunded liability would continue to incur cost to the City –methodology to be determined City of Miami Beach Comparison of Costs F&P PlanOctober 1, 2008 Preliminary Valuation720.00%33.32%64.98%Total0.00%(1.19%)28.46%*Unfunded Accrued Liability Payment (3)10.00%28.31%(22.11 + 6.20)26.52%*Employer Normal Cost10.00%6.20%(Social Security)10.00%Employee ContributionDEFINED CONTRI-BUTIONFRS (1) (2)CITY PLAN* Estimated(1) FRS Rates shown for “Special Risk" class(2) City fiscal year and FRS contribution year differ (3) Current City unfunded liability would continue to incur cost to the City –methodology to be determined City of Miami Beach Historical Costs MBERP Plan833.47%29.93%32.78%Total11.46%8.76%*12.17%Unfunded Accrued Liability Payment (3)13.74%12.81%12.07%Employer Normal Cost8.27%8.36%8.54%Employee Contribution10/1/0810/1/0710/1/06* Includes impact of “fresh start” I 10/1/07 Valuation City of Miami Beach Historical Costs F&P Plan964.98%60.32%58.15%Total28.46%*23.80%21.03%Unfunded Accrued Liability Payment (3)26.52%*26.52%27.12%Employer Normal Cost 10.00%10.00%10.00%Employee Contribution10/1/0810/1/0710/1/06* Estimated