Agenda 02-16-11
BOYNTON BEACH POLICE OFFICERS' PENSION FUND
SPECIAL BOARD MEETING
Wednesday, February 16,2011 @ 9:30 AM
Renaissance Executive Suites - Conference Room #1
1500 Gateway Blvd., Suite # 220
Boynton Beach, FL 33426
REVISED 2-16-11
AGENDA
I. CALL TO ORDER - Lt. Gary Chapman, Chairman
I. A) Congratulations to Jason L10pis for another term on the Board as a nomination
thru the election process for a four year term.
B) Congratulations to Scott Caudell & Toby Athol for their appointment to the
Board by the City Commission for a four year term.
II. AGENDA APPROVAL -
III. APPROV AL OF MINUTES-
IV. FINANCIAL REPORTS:
A) Goldstein Schechter Koch - Clement Johns, CPA, Senior Manager-
Financial Statements for PYE 9-30-2010
B) Gabriel, Roeder, Smith & Co. - Duane Howison, FSA, EA, ConsuItant-
Actuarial Valuation Report for PYE 9-30-2010
V. CORRESPONDENCE:
VI. OLD BUSINESS:
1 ) Web Site/Hosting - Server is no longer functional
2) Scan Program - Update by Gary Chapman-
VII. NEW BUSINESS:
A. Invoices for review and approval:
1. Russell Investment Gp. - Quarter End 12-31-2010 - $93,641
2. Russell Payment Services - Quarter End 12-31-2010 - $811.87
3. Perry & Jensen - Service for Dec 2010 & Jan 2011 - $3,763.26
4. Gabriel, Roeder, Smith & Co- Service December 2010 - $7,767
5. Goldstein Schechter Koch - Audit progress PYE 9-2010 - $8,000
B. Renewal of Fiduciary Liability - Renewal for Apr 201112012 - Authorization
VIII. PENSION ADMINISTRATOR'S REPORT -N/A
1
IX. COMMENTS:
X. ADJOURNMENT:
Next Regular Meeting Date - Tuesday, March 1,2011 @ 9:30 a.m.-
Renaissance Commons
If you cannot attend, please call Barbara @ 561-739-7972
NOTICE
IF A PERSON DECIDES TO APPEAL ANY DECISION MADE BY THE POLICE OFFICERS' PENSION BOARD WITH RESPECT TO ANY MATTER
CONSIDERED AT THIS MEETING, HE/SHE WILL NEED A RECORD OF THE PROCEEDINGS AND, FOR SUCH PURPOSE, HE/SHE MAY NEED TO
ENSURE THAT A VERBA TIM RECORD OF THE PROCEEDING IS MADE, WHICH RECORD INCLUDES THE TESTIMONY AND EVIDENCE UPON
WHICH THE APPEAL IS TO BE BASED. (F.S. 286.0 I 05)
THE CITY SHALL FURNISH APPROPRIATE AUXILIARY AIDS AND SERVICES WHERE NECESSARY TO AFFORD AN INDIVIDUAL WITH A
DISABILITY AN EQUAL OPPORTUNITY TO PARTICIPATE IN AND ENJOY THE BENEFITS OF A SERVICE, PROGRAM, OR ACTIVITY CONDUCTED
BY THE CITY. PLEASE CONTACT PAM WELSH, (561) 742-60] 3 A T LEAST TWENTY -FOUR HOURS PRIOR TO THE PROGRAM OR ACTIVITY
IN ORDER FOR THE CITY TO REASONABL Y ACCOMMODATE YOUR REQUEST.
S:\CC\ WPVANET\POLICE PENSION FUND.doc
2
GRS
Gabriel Roeder Smith &: Company
Consultants & Actuaries
CITY OF BOYNTON BEACH
MUNICIPAL POLICE OFFICERS' RETIREMENT FUND
NINE YEAR EXPERIENCE STUDY
COVERING THE PERIOD
OCTOBER 1, 2001 - SEPTEMBER 30, 2010
February 15,2011
Board of Trustees
City of Boynton Beach Municipal
Police Officers' Retirement Fund
Boynton Beach, Florida
Dear Board Members:
We are pleased to present herein our nine year Experience Study Report. The period covered by this study
is October 1,2001 through September 30,2010.
The study was performed on the basis of participant data and fmancial information supplied by the plan
sponsor in connection with the valuations performed during the years studied, and has been prepared in
accordance with generally accepted actuarial methods and procedures.
This actuarial valuation and/or cost determination was prepared and completed by me or under my direct
supervision, and I acknowledge responsibility for the results. To the best of my knowledge, the results are
complete and accurate. In my opinion, the techniques and assumptions used are reasonable, meet the
requirements and intent of Part VII, Chapter 112, Florida Statutes, and are based on generally accepted
actuarial principles and practices. There is no benefit or expense to be provided by the plan and/or paid
from the plan's assets for which liabilities or current costs have not been established or otherwise taken into
account in the valuation. All known events or trends which may require a material increase in plan costs or
required contribution rates have been taken into account in the valuation.
Gabriel, Roeder, Smith & Company will be pleased to answer any questions pertaining to the study and to
meet with you to review the Report.
Respectfully submitted,
GABRIEL, ROEDER, SMITH & COMPANY
ByJS-f~ f~:.~/.o>/;,U
J. Stephe Palmquist, ASA, 1\AA, FCA
Enrolled Actuary No. 08-1560
ByJ:j~ f!{J(~
Duane Howison, FSA )
Enrolled Actuary No. 08-6169
TABLE OF CONTENTS
I. Introduction............................................................................................................... 1
ll. Summary of Recommendations .............................................................................. 3
Ill. Study Categories
A. Investment Rate ofRetum .................................................................................... 5
B. Rates of Termination............................................................................................. 7
C. Rates of Retirement ..... ...... ........... ........... ...................... ............................. ..... ...... 9
D. Rates of Salary Increase .................................................................................. ...10
E. Rates of Mortality ............................................................................................ ...11
IV. Appendices
A. Asset Allocation Analysis
SECTION I
INTRODUCTION
INTRODUCTION
Backe:round
This Report presents the results of an actuarial experience study during the period of October 1,
2001 through September 30,2010. The demographic experience of the Plan, including termination rates,
retirement rates and deaths, has been studied. In addition, the economic experience, including investment
return and annual pay increases, has been analyzed.
Purpose of the Experience Study
The goal of this Report is to review the recent experience of the Plan in order to serve as a guide
in setting actuarial assumptions concerning the future.
The assumptions determined by the Board of Trustees, based on this Report and their long-term
perspectives, will be used to determine future plan liabilities and costs and to evaluate proposed changes
in benefits, eligibility conditions, and other aspects of the Plan's operation.
Methodolol!V
In this Report we compute the probability of terminations based on age or service for active
members. To this end, we proceed as follows:
· We count the number of members leaving for each cause during the term of the study.
This is the number of decrements.
· We count the number of members who could have left for each cause during the study.
This is the exposure.
· When there have been enough decrements, we divide the number of decrements by the
exposure for an age or service group to determine the probability of leaving due to the
cause in question.
2
· When there are insufficient decrements to compute reliable rates, we compare the total
number of actual decrements with the total number of decrements predicted by an
actuarial table, and adopt the table that predicts decrements, in total, reasonably close
to those observed.
· Actual salary increases for each year in the study period were obtained and compared
to our salary increase assumption.
On!anization of Report
The cost to the Plan of recommended changes is found in Section II of this Report. This
introductory section broadly describes the scope of the experience study.
Section III contains a separate sub-section for each assumption analyzed. Each such sub-section
contains data tables showing our findings, and other explanatory information, including our
recommendation based on the specific data and assumption analyzed.
SECTION n
SUMMARY OF RECOMMENDATIONS
3
CITY OF BOYNTON BEACH
MUNICIPAL POLICE OFFICERS' RETIREMENT FUND
NINE YEAR EXPERIENCE STUDY
SUMMARY OF RECOMMENDATIONS
The nine year period (October 1, 2001 through September 30,2010) covered by this experience
study provided sufficient data to form a basis for recommending changes in the economic and
demographic assumptions used in the actuarial valuation of the Retirement Plan.
The recommendations resulting from this experience study are summarized below:
· Lower the assumed rate of return net of investment related expenses from 8.0%
to either 7.75% or 7.50%.
· Adopt new rates of assumed employment termination based on age and service.
· Change retirement rate for first year of eligibility to 40% from 80%.
· Change the mortality table from the 1983 Group Annuity Mortality table to the
RP-2000 Generational Mortality table.
4
The estimated cost or savings associated with each of these recommendations is summarized
below. For comparison purposes, the required City contribution for the fiscal year ending September 30,
2012 is $3,806,751 or 30.16% of covered payroll. It should be noted that all changes do not have to be
made in one year. Such changes can be stretched over four or five years if the Board wishes.
Increase/(Decrease)
Actuarial in Contribution
Assumption Current Proposed as a Percent of Payroll *
Investment Return 8.0% net of 7.75% net of 1.71 %
investment expenses investment expenses
Investment Return 8.0% net of 7.5% net of 3.47%
investment expenses investment expenses
Retirement Rates Retirement rate for Reduce retirement rate -1.28%
1 st year is 80% for 1 st year to 40%
Termination Rates All rates based on Revised rates based on 3.48%
age age and service
Mortality 1983 Group Annuity RP-2000 Generational 2.62%
Mortality Mortality
Combined Effect Using 7.75% Return Assumption 6.71%
Combined Effect Using 7.50% Return Assumption 8.83%
For detailed discussions of each of these assumptions, see the complete analysis in the balance of this
Report.
* These calculations reflect the change in the unfunded accrued liability amortized over a 30 year period
SECTION ill
STUDY CATEGORIES
5
INVESTMENT RATE OF RETURN
The investment rate of return of the fund has been calculated on the following basis:
ACTUARIAL VALUE BASIS: Investment earnings recognized in the Actuarial Value of Assets
divided by the weighted average of the Actuarial Value of Assets during the year.
MARKET VALUE BASIS: Interest, dividends, realized gains (losses) and unrealized appreciation
(depreciation) divided by the weighted average of the market value of the fund during the year.
InvestmentRate of Return
Year Ended Basis 1 Basis 2
12/31/82 16.4 % 9.3 %
12/31/83 12.3 9.0
12/31/84 11.9 11.5
12/31/85 23.0 16.8
12/31/86 19.0 17.6
12/31/87 0.3 4.4
12/31/88 10.4 9.0
12/31/89 20.6 15.4
9/30/90 (9 mos.) (1.9) 1.7
9/30/91 14.4 11.6
9/30/92 10.0 9.7
9/30/93 12.6 11.9
9/30/94 1.1 3.5
9/30/95 19.1 12.9
9/30/96 12.8 10.8
9/30/97 20.2 13.1
9/30/98 10.1 12.9
9/30/99 10.5 13.5
9/30/00 9.8 12.1
9/30/01 (9.1) 7.5
9/30/02 (9.2) (4.7)
9/30/03 16.1 2.8
9/30/04 8.3 2.6
9/30/05 10.6 3.0
9/30/06 6.9 5.7
9/30/07 13.1 9.9
9/30/08 (15.1) 4.2
9/30/09 (0.8) 2.8
9/30/10 10.2 3.0
Average Compounded Rate of
Return for Number of Years
Shown 8.8 % 8.3 %
Average Compounded Rate of
Return for Last 5 Years 2.3 % 5.1 %
6
It must be recognized that the investment return assumption is of a long-term nature. Short-term
periods should not overly influence its level. The current assumed rate is 8.0% net of investment related
fees. The results of our asset allocation analysis are shown in Appendix A. To summarize these results,
there would be more than an 80% chance that the current net rate of 8.0% will not be realized over a 30
year period of time based on the current asset allocation. If the net investment retum assumption is
lowered to 7.0% there would be a 60% chance of failing to meet the assumed return over a 30 year period.
If investment returns fall short of the assumption for an extended number of years, losses will
tend to push up the recommended contribution. One source of loss which must be considered is the
historically low rate of return currently available on fixed income investments. Based on this, it may be
more realistic to lower the assumed rate for purposes of the actuarial valuation. A lower rate will result in
a higher probability of meeting the assumption.
RECOMMENDATION
We recommend a decrease in the annual investment return assumption from 8.00% to either
7.75% or 7.50%.
7
RATES OF TERMINATION
The actual number of members terminating employment for reasons other than retirement,
disability, or death was less than the total number expected. However, termination behavior frequently
differs depending on longevity. For instance, there was a significant drop in the actual rates of
termination for those who were close to becoming vested. This can be seen from the table on the
following page.
Termination of Employment for Reasons Other
Than Retirement, Disability or Death
for Nine Years Ending October 1,2010
Actual Expected
Age Number (A) Number (E)* AlE
15-19 0 0 0.00
20-24 2 10 0.20
25-29 21 34 0.62
30-34 21 37 0.57
35-39 12 9 1.33
40-44 5 0 0.00
45-49 2 0 0.00
63 90 0.70
* Based on present assumption.
RECOMMENDATION
Weare recommending new decrement tables for terminations from employment. The new
termination rates will be dependent on the amount of service and age of each participant. The proposed
rates of termination are shown on the next page:
8
RECOMMENDED TERMINATION RATES
These rates are based on service for the first five years of employment, thereafter based on age.
Expected Number of
Actual Rates Terminations
Years of for Last Recommended Based on
Service 9 Years Rates Recommended Rates
0-1 15.6 % 15.0 % 20
1 - 2 10.9 10.0 13
2-3 6.8 7.0 8
3-4 4.5 5.0 5
4-5 4.1 4.0 4
Ages for Those
with at Least 5
Years of Service
25 - 29 0.0 4.0 1
30 - 34 3.4 3.0 3
35 - 39 2.0 2.0 4
40 - 44 2.1 1.0 1
45 - 49 0.0 0.0 0
Expected Number of Terminations 59
Actual Number of Terminations 63
Actual/Expected 1.07
9
SERVICE RETIREMENT EXPERIENCE
For each year in our nine year study, we determined which participants were eligible to retire
based on the plan provisions, and compared that number to the number of participants who actually
retired. The Plan provisions are:
Normal Retirement (NRD):
Age 55 and completion of 10 years of service, or age 50 and completion of IS years of
service, or 20 years of service regardless of age.
Early Retirement (ERD):
Age 50 and completion of 10 years of service.
Normal Retirement
The table below shows actual experience for normal retirements as compared to the assumption,
along with proposed rates for the future.
Actual
Number of Years Present Experience Recommended
After NRD Assumption 2001 - 2010 Rates
0-1 80 % 33 % 40 %
1 - 2 10 21 10
2-3 10 25 10
3-4 10 0 10
4-5 10 0 10
5-6 10 67 10
6-7 10 0 10
7+ 100 0 100
Number of Normal
Retirements 38 expected 20 actual 20 expected
Actual/Expected 0.53 1.00 1.00
RATES OF SALARY INCREASE
10
Actual salary increases varied from those expected during the study period. The annual salary
increase has been assumed to vary based on age between 6.5% and 5.0% for all participants, regardless of
service, from all sources (inflation, merit, promotion, productivity, etc.). In fact, salary increases due to
merit, promotion, and productivity have tended to increase more rapidly as a percent of pay during the
early years of employment when the dollar levels are lower. As a result, a table of salary increases tied to
length of service would better predict future experience.
Salary Increase Experience for
Nine Years Ending October 1, 2010
Proposed Total
Years of Actual Average Real Proposed Increase Including
Service Increase CPI Increase Real Increase Expected Inflation of 3%
1 15.1 % 2.2 % 12.9 % N/A% N/A%
2 7.5 2.2 5.3 N/A N/A
3 7.8 2.2 5.6 N/A N/A
4 8.6 2.2 6.4 N/A N/A
5 9.7 2.2 7.5 N/A N/A
6 8.8 2.2 6.6 N/A N/A
7 11.8 2.2 9.6 N/A N/A
8 7.2 2.2 5.0 N/A N/A
9 5.7 2.2 3.5 N/A N/A
10 7.1 2.2 4.9 N/A N/A
IS 7.8 2.2 5.6 N/A N/A
20 + 7.1 2.2 4.9 N/A N/A
All Years 8.3 2.2 6.1 N/A N/A
On average, the experience for salary increases has been greater than assumed. However, a
memorandum of understanding ratified September 27,2010 negated pay raises for 2010. The result of the
next collective bargaining agreement would be a better basis for determining future pay increases than the
prior plan experience shown above. Therefore, we recommend waiting to revise this assumption until
after the next collective bargaining agreement.
11
RATES OF MORTALITY AMONG ACTIVE AND INACTIVE MEMBERS
The number of deaths during the study period was not large enough to be statistically significant
for purposes of establishing a mortality table. Unless there is solid evidence to the contrary, a generally
accepted mortality table should be used.
The mortality table currently being used for actuarial valuation purposes is the 1983 Group
Annuity Mortality Table. We recommend use of a more current mortality table - the RP-2000
Generational Mortality Table. This mortality table is more up to date and also projects how mortality
rates will decrease in future years. The RP-2000 generational mortality table will reflect that someone
who is age 55 in 10 years will be expected to live longer than someone who is age 55 today. The overall
trend is that people are living longer, and this will cause an increase in cost.
RECOMMENDATION
We recommend adopting the RP-2000 Generational Mortality Table, set forward five years for
disabled lives.
12
Old Mortality Table and New Mortality Table
Old Mortality Table - 1983 Group Annuity Mortality Table
Sample Life Expectancy
Ages Male Female
50 29.18 34.92
55 24.82 30.24
60 20.64 25.67
65 16.69 21.29
70 13.18 17.13
New Mortality Table - RP-2000 Generational Mortality Table
Life Ex lectancy
Sample 2010 2015 2020 2025
Ages Male Female Male Female Male Female Male Female
50 33.90 35.42 34.35 35.68 34.79 35.93 35.22 36.17
55 28.79 30.47 29.23 30.71 29.66 30.94 30.07 31.18
60 23.88 25.70 24.29 25.93 24.70 26.16 25.1 0 26.39
65 19.30 21 .22 19.68 21.44 20.05 21.66 20.42 21.88
70 16.13 17.73 15.48 17.32 15.81 17.53 16.13 17.73
SECTION IV
APPENDICES
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CITY OF BOYNTON BEACH MUNICIPAL POLICE OFFICERS' RETIREMENT FUND
ACTUARIAL VALUATION REPORT AS OF OCTOBER 1, 2010
ANNUAL EMPLOYER CONTRIBUTION IS DETERMINED BY THIS VALUATION FOR THE
PLAN YEAR ENDING SEPTEMBER 30, 2012
GRS
Gabriel Roeder Smith & Company
Consultants & Actuaries
One East Broward Blvd.
Suite 505
Ft. Lauderdale, FL 33301-1827
954.527.1616 phone
954.525.0083 fax
www.gabrielroeder.col11
February 8, 2011
Board of Trustees
City of Boynton Beach Municipal
Police Officers' Retirement Fund
Boynton Beach, Florida
Dear Board Members:
Weare pleased to present our October 1, 2010 Actuarial Valuation Report for the Plan. The purpose of the
Report is to set forth required contribution levels, to disclose plan assets and actuarial liabilities, to comment
on funding progress and to provide supporting information regarding the operation of the Plan. This Report
is also designed to comply with requirements of the State.
The valuation was performed on the basis of employee, retiree and financial information supplied by the
Plan's Administrator. Although we did not audit this information, it was reviewed for reasonableness and
comparability to prior years.
The benefits valued are outlined at the end of the Report. Actuarial assumptions and the actuarial cost
method are also described herein. Any changes in benefits, assumptions or methods are described in the
first section.
This actuarial valuation and/or cost determination was prepared and completed by me or under my direct
supervision, and I acknowledge responsibility for the results. To the best of my knowledge, the results are
complete and accurate. In my opinion, the techniques and assumptions used are reasonable, meet the
requirements and intent of Part VII, Chapter 112, Florida Statutes, and are based on generally accepted
actuarial principles and practices. There is no benefit or expense to be provided by the plan and/or paid
from the plan's assets for which liabilities or current costs have not been established or otherwise taken into
account in the valuation. All known events or trends which may require a material increase in plan costs or
required contribution rates have been taken into account in the valuation.
As indicated below, the undersigned is a Member of the American Academy of Actuaries (MAAA) and
meets the Qualification Standards of the Academy of Actuaries to render the actuarial opinion herein.
We will be pleased to answer any questions pertaining to the valuation and to meet with you to review this
Report.
Respectfully submitted,
GABRIEL, ROEDER, SMITH AND COMPANY
Steplien Palmquist, A , MAAA, FCA
moIled Actuary No. 08-1560
~.lt~ H Ct1ffi~
Duane Howison, FSA
Enrolled Actuary No. 08-6169
GRS
TABLE OF CONTENTS
Section Title Pa!!e
A Discussion of Valuation Results 1
Chapter Revenue 4
B Valuation Results
1. Participant Data 5
2. Annual Required Contribution (ARC) 6
3. Actuarial Value of Benefits & Assets 7
4. Calculation of Employer Normal Cost 8
5. Liquidation of the Unfunded Frozen
Actuarial Accrued Liability 9
6. Actuarial Gains and Losses 10
7. Actual Compared to Expected Decrements 16
8. Cost of Living Adjustment 17
9. Recent History of Valuation Results 18
10. Recent History of Required and
Actual Contributions 19
11. Actuarial Assumptions and Cost Method 20
12. Glossary of Terms 24
C Pension Fund Information
1. Summary of Assets 27
2. Summary of Fund's Income and Disbursements 28
3. Calculation of Actuarial Value of Assets 29
4. Investment Rate of Return 31
D Financial Accounting Information
1. F ASB No. 35 32
2. GASB No. 25 33
3. GASB No. 27 35
E Miscellaneous Information
1. Reconciliation of Membership Data 37
2. Age/Service/Salary Distributions 38
F Summary of Plan Provisions 40
GRS
SECTION A
DISCUSSION OF VALUATION RESULTS
GRS
DISCUSSION OF VALUATION RESULTS
Comparison of Required Emplover Contributions
The following is the required contribution developed in this year's actuarial valuation as compared to
last year.
For FYE 9/30/12 For FYE 9/30/11
Based on Based on
10/1/2010 10/1/2009 Increase
Valuation Valuation (Decrease)
Required Employer/State Contribution $ 4,271,838 $ 3,997,173 $ 274,665
As % of Covered Payroll 33.85 % 31. 78 % 2.07 %
Estimated State Contribution $ 465,087 $ 465,087 $ 0
As % of Covered Payroll 3.69 % 3.70 % (0.01) %
Required Employer Contribution $ 3,806,751 $ 3,532,086 $ 274,665
As % of Covered Payroll 30.16 % 28.08 % 2.08 %
The required employer contribution has been computed under the assumption that the amount to be
received from the State next year will be at least $465,087. The City may not take credit for State revenue in
excess of $465,087. If the next payment from the State falls below $465,087, the City must raise its
contribution by the difference.
The employer contributions listed above are for the City's fiscal years ending September 30,2012 and
September 30, 2011. They have been calculated as though payments would be made on a biweekly basis. The
actual employer contribution for the fiscal year ending September 30,2010 was $3,688,516, an amount equal to
the required contribution.
Required Contributions in Later Years
The current calculated City contribution requirement is 30.16% of payroll starting October 1, 2011.
For long-term planning purposes, the City contribution rate would be expected to remain near this level if the
current actuarial assumptions are realized after September 30,2010.
GRS
2
It is important to keep in mind that under the asset smoothing method, gains and losses are recognized
over five years. As of September 30, 2010, the actuarial value of assets exceeded the market value by
$3,766,428. Once all the losses through September 30,2010 are fully recognized in the actuarial asset values,
the contribution rate will increase by roughly 1.8% of payroll unless there are offsetting gains.
Relationshin to Market Value
If Market Value had been the basis for the valuation, the City contribution rate would have been 32.0%
for the fiscal year ending 2012 and the funded ratio would have been 54.1 %. In the absence of other gains and
losses, the City contribution rate should increase to that level over the next several years.
Revisions in Benefits
There have been no revisions in benefits since the last valuation.
Revisions in Actuarial Assumntions and Methods
There have been no revisions in actuarial assumptions or methods since the last valuation. The Board
has authorized an experience study which will indicate recommended changes in assumptions.
Actuarial Exnerience
There was a net actuarial loss of $1 ,404,570 for the year which means that actual experience was less
favorable than expected. The actuarial loss is primarily due to a lower than expected return on investments.
Salary increases that were less than expected partially offset losses due to investment returns.
The net actuarial loss for the year translates into an increase in annual employer contributions of 0.66%
of covered payroll.
Funded Ratio
The funded ratio was 58.7% this year compared to 59.1% last year. The funded ratio is equal to the
actuarial value of assets divided by the actuarial accrued liability.
GRS
3
Analvsis of Chan2e in Emplover Contribution
The components of change in the required employer contribution are as follows:
Contribution Rate Last Year
Actuarial Experience
Change in Administrative Expense
Amortization Payment on VAL
Change in State Contribution
Change in Normal Cost Rate
Change in Assumptions and Methods
Contribution Rate This Year
28.08 %
0.66
0.08
1.20
(0.01)
0.15
0.00
30.16
The remainder of this Report includes detailed actuarial valuation results, fmancial information,
miscellaneous information and statistics, and a summary of plan provisions.
GRS
4
CHAPTER REVENUE
Increments in Chapter revenue over that received in 1998 must fIrst be used to fund the cost of
compliance with minimum benefits. Once minimums are met, any subsequent additional Chapter revenue
must be used to provide extra benefits.
As of the valuation date, all minimum Chapter requirements have been met.
Actuarial Confirmation of the Use of State Chapter Money
1. Base Amount Previous Plan Year $ 465,087
2. Amount Received for Previous Plan Year 641,483
3. Benefit Improvements Made in Previous Plan Year 0
4. Excess Funds for Previous Plan Year: (2) - (I) - (3) 176,396
5. Accumulated Excess at Beginning of Previous Year 109,354
6. Prior Excess Used in Previous Plan Year 230,718
7. Accumulated Excess as of Valuation Date
(Available for Benefit Improvements) 55,032
8. Base Amount This Plan Year 465,087
GRS
SECTION B
VALUATION RESULTS
GRS
5
PARTICIPANT DATA
October 1, 2010 October 1, 2009
ACTIVE MEMBERS
Number 148 151
Covered Annual Payroll $ 12,134,525 $ 12,537,968
Average Annual Payroll $ 81,990 $ 83,033
Average Age 36.4 35.8
Average Past Service 8.1 7.6
Average Age at Hire 28.2 28.1
RETIREES & BENEFICIARIES & DROP
Number 91 88
Annual Benefits $ 3,812,891 $ 3,458,997
Average Annual Benefit $ 41,900 $ 39,307
Average Age 56.5 56.2
DISABILITY RETIREES
Number 15 15
Annual Benefits $ 311,885 $ 311,885
Average Annual Benefit $ 20,792 $ 20,792
Average Age 60.0 59.0
TERMINATED VESTED MEMBERS
Number 3 4
Annual Benefits $ 56,783 $ 87,127
Average Annual Benefit $ 18,928 $ 21,782
Average Age 42.6 43.5
GRS
6
I ANNUAL REQUIRED CONTRIBUTION (ARC) I
A. Valuation Date October 1, 2010 October I, 2009
B. ARC to Be Paid During
Fiscal Year Ending 9/30/2012 9/30/20 II
C. Assumed Date of Employer Contrib. Biweekly Biweekly
D. Annual Payment to Amortize
Unfunded Actuarial Liability $ 2,054,091 $ 1,902,222
E. Employer Normal Cost 1,895,893 1,931,395
F. ARC if Paid on the Valuation
Date: D+E 3,949,984 3,833,617
G. ARC Adjusted for Frequency of
Payments 4,107,983 3,984,010
H. ARC as % of Covered Payroll 33.85 % 31.78 %
I. Assumed Rate of Increase in Covered
Payroll to Contribution Year 4.00 % N/A%
J. Covered Payroll for Contribution Year 12,619,906 12,577,637 *
K. ARC for Contribution Year: H x J 4,271,838 3,997,173
L. Estimate of State Revenue in
Contribution Year 465,087 465,087
M. Required Employer Contribution CREe)
in Contribution Year 3,806,751 3,532,086
N. REC as % of Covered Payroll in
Contribution Year: M -;- J 30.16 % 28.08 %
*
Estimated payroll for the year ending 2011 per the City's Finance Department.
GRS
7
I ACTUARIAL VALUE OF BENEFITS AND ASSETS I
A. Valuation Date October 1, 2010 October 1, 2009
B. Actuarial Present Value of All Projected
Benefits for
1. Active Members
a. Service Retirement Benefits $ 51,530,350 $ 51,735,425
b. Vesting Benefits 2,628,219 2,518,288
c. Disability Benefits 2,823,092 2,959,327
d. Preretirement Death Benefits 934,789 958,277
e. Return of Member Contributions 98,024 142,361
f. Total 58,014,474 58,313,678
2. Inactive Members
a. Service Retirees & Beneficiaries 41,264,959 37,424,949
b. Disability Retirees 2,787,964 2,842,188
c. Terminated Vested Members 514,713 819,746
d. Total 44,567,636 41,086,883
3. Total for All Members 102,582,110 99,400,561
C. Actuarial Accrued (past Service)
Liability per GASB No. 25 81,957,204 78,055,403
D. Actuarial Value of Accumulated Plan
Benefits per F ASB No. 35 70,670,498 65,849,052
E. Plan Assets
1. Market Value 44,363,165 39,319,885
2. Actuarial Value 48,129,593 46,116,985
F. Unfunded Actuarial Accrued
Liability: C - E2 33,827,611 31,938,418
G. Actuarial Present Value of Projected
Covered Payroll 94,279,971 97,808,454
H. Actuarial Present Value of Projected
Member Contributions 6,599,598 6,846,592
GRS
8
ENTRY AGE NORMAL METHOD
CALCULATION OF EMPLOYER NORMAL COST
A. Valuation Date October 1, 2010 October 1, 2009
B. Normal Cost for
1. Service Retirement Benefits $ 1,983,777 $ 2,033,274
2. Vesting Benefits 272,081 279,629
3. Disability Benefits 237,822 244,319
4. Preretirement Death Benefits 56,636 58,564
5. Return of Member Contributions 72,571 76,508
6. Total for Future Benefits 2,622,887 2,692,294
7. Assumed Amount for Administrative
Expenses 122,423 116,759
8. Total Normal Cost 2,745,310 2,809,053
C. Expected Member Contribution 849,417 877,658
D. Employer Normal Cost: B8-C 1,895,893 1,931,395
E. Employer Normal Cost as a % of
Covered Payroll 15.62% 15.40%
GRS
9
LIQUIDATION OF THE UNFUNDED ACTUARIAL ACCRUED LIABILITY
r> VAAL Amortization Period and Payment. I
Current UAAL
Original UAAL
Amortization
Date Period Years
Established (Years) Amount Remaining Amount Payment
10/1/98 30 $ 1,331,353 18 $ 1,454,485 $ 109,260
10/1/99 30 1,656,722 19 1,807,930 130,829
10/1/00 30 185,619 20 200,518 14,015
10/1/01 30 46,601 21 50,488 3,417
10/1/04 30 1,166,935 24 1,265,798 78,691
10/1/05 30 2,985,574 25 3,220,186 195,281
10/1105 30 13,646,165 25 14,718,504 892,572
10/1/06 30 2,307,394 26 2,471,831 146,442
10/1/07 30 16,404 27 17,373 1,007
10/1108 30 3,582,504 28 3,726,689 211,563
10/1/09 30 3,419,100 29 3,489,239 194,250
10/1/1 0 30 1,404,570 30 1,404,570 76,764
$ 31,748,941 $ 33,827,611 $ 2,054,091
B. Amortization Schedule
The VAAL is being amortized as a level percent of payroll over the number of years remaining in the
amortization period. The expected amortization schedule is as follows:
Amortization Schedule
Year Expected UAAL
2010 $ 33,827,611
2011 34,315,421
2012 34,753,500
2013 35,134,339
2014 35,449,667
2015 35,690,405
2020 35,391,372
2025 31,258,161
2030 21,495,477
2035 4,935,004
2037 -
GRS
10
ACTUARIAL GAINS AND LOSSES
The assumptions used to anticipate mortality, employment turnover, investment income, expenses,
salary increases, and other factors have been based on long range trends and expectations. Actual
experience can vary from these expectations. The variance is measured by the gain and loss for the period
involved. If significant long term experience reveals consistent deviation from what has been expected and
that deviation is expected to continue, the assumptions should be modified. The net actuarial gain (loss) for
the past year is computed as follows:
I A. Derivation of the Current UAAL I
1. Last Year's UAAL $ 31,938,418
2. Last Year's Employer Normal Cost 1,931,395
3. Last Year's Contributions 4,153,603
4. Interest at the Assumed Rate on:
a. 1 and 2 for one year 2,709,585
b. 3 from dates paid 2,754
c. a-b 2,706,831
5. This Year's Expected UAAL:
1+2-3+4c 32,423,041
6. This Year's Actual UAAL (Before any
changes in benefits and assumptions) 33,827,611
7. Net Actuarial Gain (Loss): (5) - (6) (1,404,570)
8. Gain (Loss) due to investments (2,604, I 92)
9. Gain (Loss) due to other sources 1,199,622
Net actuarial gains in previous years are detailed in the table on the next page.
GRS
11
Change in Employer
Year Ended Cost Rate * Gain (Loss)
12/31182 (0.46) % $ (56,551)
12/31/83 (1.92) (265,213)
12/3 1184 0.04 6,977
12/31185 0.85 185,443
12/31186 0.59 158,678
12/31/87 (1.67) (516,444)
12/31188 (0.74) (254,892)
12/31189 0.52 206,590
9/30/90 (0.24) (94,609)
9/30/91 0.74 286,744
9/30/92 (0.35) (142,237)
9/30/93 1.34 564,365
9/30/94 (2.57) (1,370,604)
9/30/95 1.01 574,379
9/30/96 1.56 938,153
9/30/97 1.60 1,008,362
9/30/98 2.85 1,694,077
9/30/99 0.88 568,386
9/30/00 3.16 1,596,887
9/30/01 (3.92) (1,978,307)
9/30/02 (9.58) (5,069,210)
9/30/03 (3.22) (1,870,014)
9/30/04 (2.75) (1,615,637)
9/30/05 (1.85) (1,083,369)
9/30/06 (1.46) (2,307,394)
9/30/07 (0.02) (16,404)
9/30/08 (1.84) (3,582,504)
9/30/09 (1.54) (3,419,100)
9/30/10 (0.66) (1,404,570)
* Before 9/30/06, change in Employer Normal Cost.
GRS
Actuarial Gain (+) or Loss (_)
$8
$6
$4
$2
$0
($2)
a ($4)
o
:: ($6)
~ ($8)
($10)
($12)
($14)
($16)
($18)
($20)
~ ~ ~ ~ b ~ % ~ ~ , ~ ~ ~ ~ b ~ ~ ~ ~ , ~ ~ ~ ~ b ~ ~ ~ ~
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Plan Year End
12
- Gain or Loss - Cumulative
$6
$4
$2
$0
($2)
($4) ~
=
($6) is
($8) ~
($10)
($12)
($14)
($16)
($18)
($20)
GRS
Change in Employer Cost Rate
22%
20%
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
-2%
-4%
-6%
-8%
~ ~ ~ ~ b ~ % ~ ~ , ~ ~ ~ ~ b ~ ~ ~ ~ , ~ ~ ~ ~ b ~ ~ A ~
$$~~~\~~\~~~~~~~~~~~~~~~~~~~~~~
Plan Year End
- Employer Cost Rate -- Cumulative
13
22%
20%
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
-2%
-4%
-6%
-8%
The fund earnings and salary increase assumptions have considerable impact on the cost of the Plan
so it is important that they are in line with the actual experience. The following table shows the actual fund
earnings and salary increase rates compared to the assumed rates for the last few years:
GRS
14
Investment Return Salary Increases
Year Ending Actual Assumed Actual Assumed
12/31/1977 7.5 % 7.0 %
12/31/1978 7.1 7.0 18.3 % 10.3% (2 yrs)
12/31/1979 7.5 7.0
12/31/1980 8.0 7.0 21.2 10.3 (2 yrs)
12/31/1981 8.2 7.0 23.6 7.0
12/31/1982 9.3 7.0 14.6 7.0
12/31/1983 9.0 7.0 14.8 7.0
12/31/1984 11.5 10.0 6.8 10.0
12/31/1985 16.8 10.0 18.6 10.0
12/31/1986 17.6 10.0 16.3 10.0
12/31/1987 4.4 10.0 15.3 10.0
12/31/1988 9.0 10.0 6.7 10.0
12/31/1989 15.4 10.0 12.4 10.0
9/30/1990 (9 mos.) 1.7 7.5 6.1 10.0
9/30/1991 11.6 10.0 2.5 10.0
9/30/1992 9.7 10.0 5.4 10.0
9/30/1993 11.9 10.0 3.1 10.0
9/30/1994 3.5 8.0 7.0 6.3
9/30/1995 12.9 8.0 8.5 5.8
9/30/1996 10.8 8.0 4.9 6.3
9/30/1997 13.1 8.0 8.7 * 6.3
9/30/1998 12.9 8.0 4.6 6.3
9/30/1999 13.5 8.5 10.9 6.1
9/30/2000 12.1 8.5 3.4 6.3
9/30/2001 7.5 8.5 6.0 5.9
9/30/2002 (4.7) 8.5 17.2 5.9
9/30/2003 2.8 8.5 9.5 5.9
9/30/2004 2.6 8.5 11.5 6.0
9/30/2005 3.0 8.5 9.6 6.0
9/30/2006 5.7 8.0 14.4 6.0
9/30/2007 9.9 8.0 5.7 6.1
9/30/2008 4.2 8.0 13.1 6.1
9/30/2009 2.8 8.0 9.3 6.1
9/30/2010 3.0 8.0 0.2 6.1
Averages 8.2 % --- 9.6 % ---
The actual investment return rates shown above are based on the actuarial value of assets. The actual salary
increase rates shown above are the increases received by those active members who were included in the actuarial
valuations both at the beginning and the end of each year.
GRS
15
History ofInvestment Return Based on Actuarial Value of Assets
8%
]8%
18%
13%
13%
8%
3%
3%
-2%
-2%
-7%
~~~Q,~~~~b~%~~'~~~~b~~R~,~~~~b~~RQ
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
, , , , , , , , , , , " -, -, ~ ~
-7%
Plan Year End
--- Actual - Assumed
History of Salary Increases
25% 25%
5% 5%
20% 20%
15% 15%
10% 10%
0% 0%
~~~~~~~~~~~~~~~~~~~~Pi~,~~~~b~~PiQ
~~~~~~~~~~~~~~'~~~~~~~~~~~~~~~~~~
Plan YearEnd Compared to Previous Year
--- Actual - Assumed I
GRS
16
Actual (A) Compared to Expected (E) Decrements
Among Active Employees
Number
Added Service & Active
During DROP Disability Terminations Members
Year Year Retirement Retirement Death Vested Other Totals End of
Ended A E A E A E A E A A A E Year
9/30/2002 14 17 1 1 0 0 0 0 1 15 16 8 119
9/30/2003 14 9 6 4 0 0 0 0 1 2 3 9 124
9/30/2004 8 23 14 0 0 0 0 0 2 7 9 9 109
9/30/2005 21 14 1 1 0 0 0 0 3 10 13 8 116
9/30/2006 25 10 3 2 0 0 0 0 1 6 7 9 131
9/30/2007 17 4 3 3 0 0 0 0 0 1 1 11 144
9/30/2008 14 9 2 1 0 0 0 0 0 7 7 12 149
9/30/2009 8 6 3 7 0 0 0 0 0 3 3 11 151
9/30/2010 5 8 4 2 0 0 0 0 1 3 4 11 148
9/30/2011 4 0 10
9 Yr Totals * 126 100 37 21 0 0 0 0 9 54 63 88
* Totals are through current Plan Year only
GRS
17
SUPPLEMENTAL PENSION DISTRIBUTION
I Cumulative Actuarial Gains (Losses) !
. I
Balance at
Year Ending Beginning Gain (Loss) Supplemental Balance at
9/30 of Year Interest for Year Payment End of Year
2000 $ 0 $ 0 $ 1,596,887 $ 0 $ 1,596,887
2001 1,596,887 135,735 (1,978,307) 0 (245,685)
2002 (245,685) (20,883) (5,069,210) 0 (5,335,778)
2003 (5,335,778) (453,541 ) (1,870,014) 0 (7,659,333)
2004 (7,659,333) (651,043) (1,615,637) 0 (9,926,013)
2005 (9,926,013) (843,711) (1,083,369) 0 (11,853,093)
2006 (11,853,093) (948,247) (2,307,394) 0 (15,108,735)
2007 (15,108,735) (1,208,699) (16,404) 0 (16,333,838)
2008 (16,333,838) (1,306,707) (3,582,504) 0 (21,223,049)
2009 (21,223,049) (1,697,844) (3,419,100) 0 (26,339,992)
2010 (26,339,992) (2,107,199) (1,404,570) 0 (29,851,762)
Under certain conditions, participants in payment status can receive a supplemental distribution per Section
18-177 of the Plan. The cumulative actuarial gain for plan years beginning after 9/30/1999 must be a positive
amount for a supplemental payment to occur.
GRS
18
I RECENT HISTORY OF VALUATION RESULTS Employer Normal Cost I
. I I
N umber of
Active Inactive
Valuation Members Members Covered Actuarial Value %of
Date Annual Pavroll of Assets UFAAL Amount Payroll
1/1/77 67 1 $ 903,341 $ 514,988 $ 0 $ 37,806 4.19 %
1/1/79 60 1 935,532 716,227 341,936 48,362 5.17
1/1/81 67 2 1,166,537 1,022,373 679,836 80,753 6.92
1/1/82 71 4 1,542,723 1,235,501 678,314 162,821 10.55
1/1/83 75 4 1,768,419 1,606,141 195,234 11.04
1/1/84 76 6 2,000,834 1,992,244 75,269 237,577 11.87
1/1/85 78 8 2,109,424 2,506,277 69,847 255,451 12.11
1/1/86 88 8 2,700,315 3,239,052 63,709 317 ,557 11.76
1/1/87 97 10 3,306,137 4,191,766 55,706 363,436 10.99
1/1/88 101 12 3,830,624 4,791,236 47,674 478,126 12.48
1/1/89 115 14 4,394,160 5,806,225 35,670 574,167 13.07
1/1/90 121 15 5,111,017 7,334,224 26,768 672,246 13.15
10/1/90 119 15 5,214,164 8,160,443 0 696,652 13.36
10/1/91 118 16 5,288,735 9,961,491 0 650,512 12.30
10/1/92 121 19 5,627,956 11,619,301 0 676,120 12.01
10/1/93 124 25 5,493,434 13,670,651 0 670,021 12.20
10/1/94 114 29 5,430,866 14,629,045 0 817,743 15.06
10/1/95 121 30 5,957,175 16,967,617 0 841,330 14.12
10/1/96 127 34 6,298,250 19,439,074 0 820,603 13.03
10/1/97 130 47 6,329,651 22,898,830 0 811,606 12.82
10/1/98 121 48 6,225,413 25,462,061 1,331,353 715,944 11.50
10/1/99 128 49 7,121,387 28,956,651 1,358,222 762,124 10.70
10/1 /00 124 56 6,907,740 32,559,614 3,279,968 464,164 6.72
10/1/01 122 75 6,555,316 34,331,760 3,358,086 726,204 11.08
10/1/02 119 75 7,382,088 32,133,373 3,371,705 1,538,895 20.85
10/1/03 124 81 7,917,021 33,206,438 3,374,199 1,935,704 24.45
10/1/04 109 94 7,207,008 34,495,794 4,580,926 2,043,434 28.35
10/1/05 116 96 7,836,390 35,445,474 21,245,873 1,238,339 15.80
10/1/06 131 100 9,302,405 37,691,909 23,776,358 1,441,317 15.49
10/1/07 144 103 10,296,812 41,981,125 24,087,631 1,587,552 15.42
10/1/08 149 104 11,532,888 44,277,726 28,071,917 1,774,031 15.38
10/1/09 151 107 12,537,968 46,116,985 31,938,418 1,931,395 15.40
10/1/10 148 109 12,134,525 48,129,593 33,827,611 1,895,893 15.62
GRS
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20
ACTUARIAL ASSUMPTIONS AND COST METHOD
Valuation Methods
Actuarial Cost Method - Normal cost and the allocation of benefit values between service rendered
before and after the valuation date were determined using an Individual Entry-Age Actuarial Cost
Method having the following characteristics:
(i) the annual normal cost for each individual active member, payable from the date of
employment to the date of retirement, is sufficient to accumulate the value of the member's
benefit at the time of retirement;
(ii) each annual normal cost is a constant percentage of the member's year by year projected
covered pay.
Actuarial gains/(losses), as they occur, reduce (increase) the Unfunded Actuarial Accrued Liability.
Financing of Unfunded Actuarial Accrued Liabilities - Unfunded Actuarial Accrued Liabilities (full
funding credit if assets exceed liabilities) were amortized by level (principal & interest combined)
percent-of-payroll contributions over a reasonable period of future years.
Actuarial Value of Assets - The Actuarial Value of Assets phase in the difference between the expected
actuarial value and actual market value of assets at the rate of 20% per year. The Actuarial Value of
Assets will be further adjusted to the extent necessary to fall within the corridor whose lower limit is 80%
of the Market Value of plan assets and whose upper limit is 120% of the Market Value of plan assets.
During periods when investment performance exceeds the assumed rate, Actuarial Value of Assets will
tend to be less than Market Value. During periods when investment performance is less than assumed
rate, Actuarial Value of Assets will tend to be greater than Market Value.
Valuation Assumptions
The actuarial assumptions used in the valuation are shown in this Section.
Economic Assumptions
The investment return rate assumed in the valuation is 8.0% per year, compounded annually (net after
investment expenses).
The Wage Inflation Rate assumed in this valuation was 4% per year. The Wage Inflation Rate is
defined to be the portion of total pay increases for an individual that are due to macro economic forces
including productivity, price inflation, and labor market conditions. The wage inflation rate does not
include pay changes related to individual merit and seniority effects.
The assumed real rate of return over wage inflation is defmed to be the portion of total investment
return that is more than the assumed wage inflation rate. Considering other economic assumptions, the
8% investment return rate translates to an assumed real rate of return over wage inflation of 4%.
The rates of salary increase are as follows:
GRS
21
% Increase in Salary
Age Merit and Base Total
Seniority (Economic) Increase
20 2.5% 4.0% 6.5%
25 2.5% 4.0% 6.5%
30 2.5% 4.0% 6.5%
35 2.5% 4.0% 6.5%
40 1.5% 4.0% 5.5%
45 1.0% 4.0% 5.0%
50 1.0% 4.0% 5.0%
55 1.0% 4.0% 5.0%
Projected service retirement benefits are increased by 7% to allow for for the inclusion of unused sick and
vacation pay in average final earnings.
For purposes of financing the unfunded liabilities, total payroll is assumed to grow at 4% per year. The
most recent ten-year average is over 4.0%.
Demographic Assumptions
The mortality table was the 1983 Group Annuity Mortality Table for males and females.
Sample
Attained
Ages
50
55
60
65
70
75
80
Probability of
Dying Next Year
Men Women
0.39 % 0.16 %
0.61 % 0.25 %
0.92 % 0.42 %
1.56 % 0.71 %
2.75 % 1.24 %
4.46 % 2.40 %
7.41 % 4.30 %
Future Life
Expectancy (years)
Men Women
29.23 34.96
24.87 30.28
20.68 25.71
16.73 21.33
13.22 17.17
10.20 13.42
7.68 10.24
This assumption is used to measure the probabilities of each benefit payment being made after retirement.
For active members, the probabilities of dying before retirement were based upon the same mortality table
as members dying after retirement (75% of deaths are assumed to be service-connected).
For disabled retirees, the regular mortality tables are set forward 5 years in ages to reflect impaired
longevity.
The rate of retirement used to measure the probability of eligible members retiring under early retirement
is 5% per year. For normal retirement these rates are as follows:
GRS
22
Number of Years
After First Eligibility
for Normal Retirement
o
1
2
3
4
5
6
7
Probability of
Normal Retirement
80 %
10%
10%
10 %
10 %
10 %
10 %
100 %
Rates of separation from active membership were as shown below (rates do not apply to members
eligible to retire and do not include separation on account of death or disability). This assumption
measures the probabilities of members remaining in employment.
Sample
Ages
20
25
30
35
40
45
50
55
% of Active Members
Separating Within N ext Year
20.0%
17.0%
13.2%
8.0%
0.0%
0.0%
0.0%
0.0%
Rates of disability among active members (90% of disabilities are assumed to be service connected).
Sample
Ages
20
25
30
35
40
45
50
55
% Becoming Disabled
within N en Year
0.14 %
0.15 %
0.18 %
0.23 %
0.30 %
0.51 %
1.00 %
1.55 %
GRS
Administrative &
Investment Expenses
Benefit Service
Decrement Operation
Decrement Timing
Eligibility Testing
Forfeitures
Incidence of
Contributions
Liability Load
Marriage Assumption
Normal Form of Benefit
Pay Increase Timing
23
Miscellaneous and Technical Assumptions
The investment return assumption is intended to be the return net of
investment expenses. Annual administrative expenses are assumed to be
equal to the average of the prior two years' expenses. Assumed
administrative expenses are added to the Normal Cost.
Exact fractional service is used to determine the amount of benefit payable.
Disability and mortality decrements operate during retirement eligibility.
Decrements of all types are assumed to occur at the beginning of the year.
Eligibility for benefits is determined based upon the age nearest birthday and
service nearest whole year on the date the decrement is assumed to occur.
For vested separations from service, it is assumed that 0% of members
separating will withdraw their contributions and forfeit an employer
financed benefit. It was further assumed that the liability at termination is
the greater of the vested deferred benefit (if any) or the member's
accumulated contributions.
Employer contributions are assumed to be made biweekly effective October
1, 2010. Member contributions are assumed to be received continuously
throughout the year based upon the computed percent of payroll shown in
this report, and the actual payroll payable at the time contributions are made.
Projected normal and early retirement benefits are loaded by 7% to allow for
the inclusion of unused sick and vacation pay in final average earnings.
100% of males and 100% of females are assumed to be married for purposes
of death-in-service benefits. Male spouses are assumed to be three years
older than female spouses for active member valuation purposes.
A 10-year certain and life annuity is the normal form of benefit.
Middle of fiscal year. This is equivalent to assuming that reported pays
represent amounts paid to members during the year ended on the valuation
date.
GRS
Actuarial Accrued Liability
(AAL)
Actuarial Assumptions
Actuarial Cost Method
Actuarial Equivalent
Actuarial Present Value
(APV)
Actuarial Present Value of
Future Benefits (APVFB)
Actuarial Valuation
Actuarial Value of Assets
Amortization Method
24
GLOSSARY
The difference between the Actuarial Present Value of Future Benefits,
and the Actuarial Present Value of Future Normal Costs.
Assumptions about future plan experience that affect costs or liabilities,
such as: mortality, withdrawal, disablement, and retirement; future
increases in salary; future rates of investment earnings; future investment
and administrative expenses; characteristics of members not specified in
the data, such as marital status; characteristics of future members; future
elections made by members; and other items.
A procedure for allocating the Actuarial Present Value of Future Benefits
between the Actuarial Present Value of Future NonnaI Costs and the
Actuarial Accrued Liability.
Of equal Actuarial Present Value, determined as of a given date and based
on a given set of Actuarial Assumptions.
The amount of funds required to provide a payment or series of payments
in the future. It is determined by discounting the future payments with an
assumed interest rate and with the assumed probability each payment will
be made.
The Actuarial Present Value of amounts which are expected to be paid at
various future times to active members, retired members, beneficiaries
receiving benefits, and inactive, nonretired members entitled to either a
refund or a future retirement benefit. Expressed another way, it is the
value that would have to be invested on the valuation date so that the
amount invested plus investment earnings would provide sufficient assets
to pay all projected benefits and expenses when due.
The determination, as of a valuation date, of the Normal Cost, Actuarial
Accrued Liability, Actuarial Value of Assets, and related Actuarial
Present Values for a plan. An Actuarial Valuation for a governmental
retirement system typically also includes calculations of items needed for
compliance with GASB No. 25, such as the Funded Ratio and the Annual
Required Contribution (ARC).
The value of the assets as of a given date, used by the actuary for
valuation purposes. This may be the market or fair value of plan assets
or a smoothed value in order to reduce the year-to-year volatility of
calculated results, such as the funded ratio and the actuarially required
contribution (ARC).
A method for determining the Amortization Payment. The most common
methods used are level dollar and level percentage of payroll. Under the
Level Dollar method, the Amortization Payment is one of a stream of
payments, all equal, whose Actuarial Present Value is equal to the UAAL.
Under the Level Percentage of Pay method, the Amortization Payment is
GRS
Amortization Payment
Amortization Period
Annual Required
Contribution (ARC)
Closed Amortization Period
Employer Normal Cost
Equivalent Single
Amortization Period
Experience GainILoss
Funded Ratio
GASB
GASB No. 25 and
GASBNo.27
25
one of a stream of increasing payments, whose Actuarial Present Value is
equal to the UAAL. Under the Level Percentage of Pay method, the
stream of payments increases at the rate at which total covered payroll of
all active members is assumed to increase.
That portion of the plan contribution or ARC which is designed to pay
interest on and to amortize the Unfunded Actuarial Accrued Liability.
The period used in calculating the Amortization Payment.
The employer's periodic required contributions, expressed as a dollar
amount or a percentage of covered plan compensation, determined under
GASB No. 25. The ARC consists of the Employer Normal Cost and
Amortization Payment.
A specific number of years that is reduced by one each year, and declines
to zero with the passage of time. For example if the amortization period is
initially set at 30 years, it is 29 years at the end of one year, 28 years at the
end of two years, etc.
The portion of the Normal Cost to be paid by the employer. This is
equal to the Normal Cost less expected member contributions.
For plans that do not establish separate amortization bases (separate
components of the UAAL), this is the same as the Amortization Period.
For plans that do establish separate amortization bases, this is the period
over which the UAAL would be amortized if all amortization bases were
combined upon the current UAAL payment.
A measure of the difference between actual experience and that expected
based upon a set of Actuarial Assumptions, during the period between two
actuarial valuations. To the extent that actual experience differs from that
assumed, Unfunded Actuarial Accrued Liabilities emerge which may be
larger or smaller than projected. Gains are due to favorable experience,
e.g., the assets earn more than projected, salaries do not increase as fast as
assumed, members retire later than assumed, etc. Favorable experience
means actual results produce actuarial liabilities not as large as projected
by the actuarial assumptions. On the other hand, losses are the result of
unfavorable experience, i.e., actual results that produce Unfunded
Actuarial Accrued Liabilities which are larger than projected.
The ratio of the Actuarial Value of Assets to the Actuarial Accrued
Liability.
Governmental Accounting Standards Board.
These are the governmental accounting standards that set the accounting
rules for public retirement systems and the employers that sponsor or
contribute to them. Statement No. 27 sets the accounting rules for the
employers that sponsor or contribute to public retirement systems, while
Statement No. 25 sets the rules for the systems themselves.
GRS
Normal Cost
Open Amortization Period
Unfunded Actuarial Accrued
Liability
Valuation Date
26
The annual cost assigned, under the Actuarial Cost Method, to the current
plan year.
An open amortization period is one which is used to determine the
Amortization Payment but which does not change over time. In other
words, if the initial period is set as 30 years, the same 30-year period is
used in determining the Amortization Period each year. In theory, if an
Open Amortization Period is used to amortize the Unfunded Actuarial
Accrued Liability, the UAAL will never completely disappear, but will
become smaller each year, either as a dollar amount or in relation to
covered payroll.
The difference between the Actuarial Accrued Liability and Actuarial
Value of Assets.
The date as of which the Actuarial Present Value of Future Benefits are
determined. The benefits expected to be paid in the future are discounted
to this date.
GRS
SECTION C
PENSION FUND INFORMATION
GRS
27
SUMMARY OF ASSETS
September 30
Item 2010 2009
A. Cash and Cash Equivalents (Operating Cash) $ 81,380 $ 12,479
B. Receivables:
1. Member Contributions $ $
2. Employer Contributions 3,688,516 3,245,082
3. State Contributions
4. Buy-Backs 18,398 38,631
5. Receivable for Securities Sold 281,119 266,766
6. Total Receivables $ 3,988,033 $ 3,550,479
C. Investments
1. Short-Term Investments $ $
2. Domestic Equities 15,784,213 18,768,495
3. International Equities 12,008,954 6,271,872
4. Domestic Fixed Income 15,631,912 14,456,738
5. International Fixed Income
6. Alternative Investments 3,078,053 1,416,658
7. Private Equity
8. Total Investments $ 46,503,132 $ 40,913,763
D. Liabilities and Reserves
1. Benefits Payable $ $
2. Accrued Expenses and Other Payables (174,601) (74,753)
3. Total Liabilities and Reserves $ (174,601) $ (74,753)
E. Total Market Value of Assets Available for Benefits $ 50,397,944 $ 44,401,968
F. Reserves
1. State Contribution Reserve $ (55,032) $ (109,354)
2. DROP Accounts (4,603,461 ) (3,957,870)
3. Supplemental Benefit Reserve (1,376,286) (1,014,859)
$ (6,034,779) $ (5,082,083)
G. Market Value Net of Reserves $ 44,363,165 $ 39,319,885
H. Allocation of Investments
1. Short Term Investments 0.00% 0.00%
2. Domestic Equities 33.95% 45.88%
3. International Equities 25.82% 15.33%
4. Domestic Fixed Income 33.61 % 35.33%
5. International Fixed Income 0.00% 0.00%
6. Alternative Investments 6.62% 3.46%
7. Private Equity 0.00% 0.00%
8. Total Investments 100.00% 100.00%
GRS
28
PENSION FUND DISBURSEMENTS & INCOME
September 30
Item 2010 2009
A. Market Value of Assets at Beginning of Year $ 44,401,968 $ 43,611,174
B. Revenues and Expenditures
I. Contributions
a. Employee Contributions $ 1,014,693 $ 850,493
b. Employer Contributions 3,688,516 3,245,082
c. State Contributions 641,483 698,135
d. Buy Back Contributions 40,124 25,499
e. Health Subsidy Contributions 121,364 123,847
f. Increase in Value of Future Buy Backs (20,233) (6,581)
g. Total $ 5,485,947 $ 4,936,475
2. Investment Income
a. Interest, Dividends, and Other Income $ 69 $ 473
b. Net Realized and Unrealized Gains/(Losses) 4,923,271 (87,156)
c. Investment Expenses (344,259) (253,716)
d. Net Investment Income $ 4,579,081 $ (340,399)
3. Benefits and Refunds
a. Refunds $ (38,620) $ (29,890)
b. Regular Monthly Benefits (3,355,163) (3,448,170)
c. DROP Distributions (552,787) (204,858)
d. Total $ (3,946,570) $ (3,682,918)
4. Administrative and Miscellaneous Expenses $ (122,482) $ (122,364)
5. Transfers $ $
C. Market Value of Assets at End of Year $ 50,397,944 $ 44,401,968
D. Reserves
1. Supplemental Benefit Reserve $ (1,376,286) $ (1,014,859)
2. State Contribution Reserve (55,032) (109,354)
3. DROP Accounts (4,603,461 ) (3,957,870)
4. Total Reserves $ (6,034,779) $ (5,082,083)
E. Market Value Net of Reserves $ 44,363,165 $ 39,319,885
GRS
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GRS
30
RECONCILIATION OF DROP ACCOUNTS
Value at beginning of year $ 3,957,870
Payments credited to accounts + 857,913
Investment Earnings credited + 308,658
Withdrawals from accounts - 520,980
Value at end of year 4,603,461
GRS
31
INVESTMENT RATE OF RETURN
The investment rate of return has been calculated on the following bases:
Basis 1 -
Interest, dividends, realized gains (losses) and unrealized appreciation
(depreciation) divided by the weighted average of the market value of the fund
during the year. This figure is normally called the Total Rate of Return.
Basis 2 -
Investment earnings recognized in the Actuarial Value of Assets divided by the
weighted average of the Actuarial Value of Assets during the year.
Investment Rate of Return
Year Ended Basis 1 Basis 2
12/31/82 16.4 % 9.3 %
12/31/83 12.3 9.0
12/31/84 11.9 11.5
12/31/85 23.0 16.8
12/31/86 19.0 17.6
12/31/87 0.3 4.4
12/31/88 10.4 9.0
12/31/89 20.6 15.4
9/30/90 (9 mos.) (1.9) 1.7
9/30/91 14.4 11.6
9/30/92 10.0 9.7
9/30/93 12.6 11.9
9/30/94 1.1 3.5
9/30/95 19.1 12.9
9/30/96 12.8 10.8
9/30/97 20.2 13.1
9/30/98 10.1 12.9
9/30/99 10.5 13.5
9/30/00 9.8 12.1
9/30/01 (9.1) 7.5
9/30/02 (9.2) (4.7)
9/30/03 16.1 2.8
9/30/04 8.3 2.6
9/30/05 10.6 3.0
9/30/06 6.9 5.7
9/30/07 13.1 9.9
9/30108 (15.1) 4.2
9/30/09 (0.8) 2.8
9/30/10 10.2 3.0
Average Compounded Rate of
Return for Number of Years
Shown 8.8 % 8.3 %
Average Compounded Rate of
Return for Last 5 Years 2.3 % 5.1 %
GRS
GRS
SECTION D
FINANCIAL ACCOUNTING INFORMATION
GRS
32
I FASB NO. 35 INFORMATION I
A. Valuation Date October 1, 2010 October 1, 2009
B. Actuarial Present Value of Accumulated
Plan Benefits
1. Vested Benefits
a. Members Currently Receiving Payments $ 44,052,923 $ 40,267,137
b. Terminated Vested Members 514,713 819,746
c. Other Members 24,719,841 23,064,003
d. Total 69,287,477 64,150,886
2. Non-Vested Benefits 1,383,021 1,698,166
3. Total Actuarial Present Value of Accumulated
Plan Benefits: 1 d + 2 70,670,498 65,849,052
4. Accumulated Contributions of Active Members 5,299,542 4,904,175
C. Changes in the Actuarial Present Value of
Accumulated Plan Benefits
1. Total Value at Beginning of Year 65,849,052 62,538,394
2. Increase (Decrease) During the Period
Attributable to:
a. Plan Amendment 0 0
b. Change in Actuarial Assumptions 0 0
c. Latest Member Data, Benefits Accumulated
and Decrease in the Discount Period 8,768,016 6,993,576
d. Benefits Paid (3,946,570) (3,682,918)
e. Net Increase 4,821,446 3,310,658
3. Total Value at End of Period 70,670,498 65,849,052
D. Market Value of Assets 44,363,165 39,319,885
E. Actuarial Assumptions - See page entitled
Actuarial Assumptions and Methods
GRS
33
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GRS
34
Year Ended Annual Required Actual Percentage
September 30 Contribution Contribution Contributed
1990 $ 742,566 $ 759,432 102.3 %
1991 784,138 795,620 101.5
1992 732,204 732,204 100.0
1993 761,028 761,028 100.0
1994 737,276 737,276 100.0
1995 899,826 899,826 100.0
1996 925,780 956,441 103.3
1997 888,999 930,408 104.7
1998 879,252 879,252 100.0
1999 863,996 854,003 98.8
2000 920,372 920,370 100.0
2001 742,646 743,273 100.1
2002 1,053,863 1,053,863 100.0
2003 1,929,458 1,951,091 101.1
2004 2,343,601 2,343,601 100.0
2005 2,571,109 2,571,109 100.0
2006 2,808,957 2,808,957 100.0
2007 3,030,547 3,150,928 104.0
2008 3,236,241 3,236,241 100.0
2009 3,710,169 3,710,169 100.0
2010 4,153,603 4,153,603 100.0
GRS
35
ANNUAL PENSION COST AND NET PENSION OBLIGATION
(GASB STATEMENT NO. 27)
Employer FYE September 30 2011 2010 2009
Annual Required Contribution (ARC)* $ 3,997,173 $ 4,153,603 $ 3,710,169
Interest on Net Pension Obligation (NPO) (13,316) (13,991) (14,720)
Adjustment to ARC (21,423) (22,421) (23,834)
Annual Pension Cost (APC) 4,005,280 4,162,033 3,719,283
Contributions made ** 4,153,603 3,710,169
Increase (decrease) in NPO ** 8,430 9,114
NPO at beginning of year (166,453) (174,883) (183,997)
NPO at end of year ** (166,453) (174,883)
* Includes expected State contribution
** To be determined
THREE YEAR TREND INFORMATION
Fiscal Annual Pension Actual Percentage of Net Pension
Year Ending Cost (APC) Contribution APC Contributed Obligation
9/30/2008 $ 3,244,817 $ 3,236,241 99.7% $ (183,997)
9/30/2009 3,719,283 3,710,169 99.8% (174,883)
9/30/2010 4,162,033 4,153,603 99.8% (166,453)
GRS
36
REQUIRED SUPPLEMENTARY INFORMATION
GASB Statement No. 25 and No. 27
The information presented in the required supplementary schedules was determined as part of the actuarial
valuations at the dates indicated. Additional information as of the latest actuarial valuation:
Valuation Date
October 1, 2010
Contribution Rates:
Employer (and State)
Plan Members
33.85%
7.00%
Actuarial Cost Method
Entry Age Normal
Amortization Method
Level percent of
payroll, closed
Remaining Amortization Period
30 years
Asset Valuation Method
5-year smoothed market
Actuarial Assumptions:
Investment rate of return
Projected salary increases
8.0%
5.0% to 6.5% depending
on age
4.0%
NA
Includes inflation and other general increases at
Cost of Living adjustments
GRS
SECTION E
MISCELLANEOUS INFORMATION
GRS
37
I RECONCILIATION OF MEMBERSmp DATA I
From 10/1/09 From 10/1/08
To 10/1/10 To 10/1/09
A. Active Members
1. Number Included in Last Valuation 151 149
2. New Members Included in Current Valuation 5 8
3. Non-Vested Employment Terminations (3) (3)
4. Vested Employment Terminations (1) 0
5. DROP Participation (4) (3)
6. Service Retirements 0 0
7. Disability Retirements 0 0
8. Deaths 0 0
9. Number Included in This Valuation 148 151
. I
! B. Terminated Vested Members I
1. Number Included in Last Valuation 4 4
2. Additions from Active Members I 0
3. Lump Sum Payments/Refund of Contributions (1) 0
4. Payments Commenced (1) 0
5. Deaths 0 0
6. Other--Retum to Actives 0 0
7. Number Included in This Valuation 3 4
. I
!e. DROP Plan Members I
1. Number Included in Last Valuation 11 9
2. Additions from Active Members 4 3
3. Retirements (3) (1)
4. Deaths Resulting in No Further Payments 0 0
5. Other 0 0
6. Number Included in This Valuation 12 11
D. Service Retirees, Disability Retirees and Beneficiaries
1. Number Included in Last Valuation 92 91
2. Additions from Active Members 0 0
3. Additions from Terminated Vested Members 1 0
4. Additions from DROP Plan 3 1
5. Deaths Resulting in No Further Payments (2) 0
6. Deaths Resulting in New Survivor Benefits 0 0
7. End of Certain Period - No Further Payments 0 0
8. Other -- Lump Sum Distributions 0 0
9. Number Included in This Valuation 94 92
GRS
38
ACTIVE PARTICIPANT SCATTER
! Years of Service to Valuation Date I
Aile Group 0-1 1-2 2-3 3-4 4-5 5-9 10-14 15-19 20-24 25+ Totals
20-24 NO. I 0 I 0 0 0 0 0 0 0 2
ITOTPAY 53,352 0 62,462 0 0 0 0 0 0 0 ] ]5,814
AVGPAY 53,352 0 62,462 0 0 0 0 0 0 0 57,907
25-29 NO. I 4 6 4 6 6 0 0 0 0 27
TOT PAY 49,502 223,506 355,172 266,288 378,546 486,909 0 0 0 0 1,759,923
AVGPAY 49,502 55,877 59,195 66,572 63,091 81,152 0 0 0 0 65,182
30-34 NO. I 0 I 3 II ]6 2 0 0 0 34
TOT PAY 5],742 0 60,885 183,322 739,270 ] ,229,000 164,044 0 0 0 2,428,263
AVGPAY 51,742 0 60,885 61,107 67,206 76,813 82,022 0 0 0 71,420
35-39 NO. 0 0 0 2 I ]6 17 I 0 0 37
TOT PAY 0 0 0 103,070 70,060 1,286,]29 1,620,877 99,802 0 0 3,] 79,938
AVGPAY 0 0 0 51,535 70,060 80,383 95,346 99,802 0 0 85,944
40-44 NO. I 0 2 0 I 12 7 7 0 0 30
TOT PAY 42,064 0 112,014 0 65,290 97],318 670,484 756,799 0 0 2,6]7,969
AVGPAY 42,064 0 56,007 0 65,290 80,943 95,783 108,114 0 0 87,266
45-49 NO. 0 ] ] 0 0 3 2 I 3 0 II
TOT PAY 0 52,667 59,059 0 0 219,190 222,154 102,663 371,600 0 1,027,333
AVGPAY 0 52,667 59,059 0 0 73,063 111,077 102,663 123,867 0 93,394
50-54 NO. 0 0 0 I 0 0 3 I I 0 6
TOT PAY 0 0 0 64,291 0 0 239,870 93,071 128,077 0 525,309
AVGPAY 0 0 0 64,29] 0 0 79,957 93,07] 128,077 0 87,552
55-59 NO. 0 0 0 0 0 0 I 0 0 0 I
TOT PAY 0 0 0 0 0 0 140,470 0 0 0 140,470
AVGPAY 0 0 0 0 0 0 140,470 0 0 0 140,470
- - - - - - - - - - -
TOT NO. 4 5 ]1 10 19 53 32 10 4 0 148
TOT AMT 196,660 276,173 649,592 616,971 1,253,166 4,192,546 3,057,899 1,052,335 499,677 0 11,795,0]9
AVG AMT 49,165 55,235 59,054 61,697 65,956 79,105 95,559 105,234 124,919 0 79,696
GRS
39
INACTIVE PARTICIPANT SCATTER
Deceased with
Terminated Vested Disabled Retired Beneficiarv
Total Total Total Total
Age Group Number Benefits Number Benefits Number Benefits Number Benefits
Under 20 - - - - - - - -
20-24 - - - - - - - -
25-29 - - - - - - - -
30-34 - - - - - - - -
35-39 - - - - - - - -
40-44 3 56,693 - - 4 236,244 - -
45-49 - - - - 16 718,517 1 23,843
50-54 - - 4 83,217 28 1,364,047 - -
55-59 - - 3 61,035 14 552,691 - -
60-64 - - 4 10 1 ,599 12 506,659 1 9,397
65-69 - - 3 40,948 8 206,460 - -
70-74 - - 1 25,086 4 98,846 - -
75-79 - - - - 3 96,187 - -
80-84 - - - - - - - -
85-89 - - - - - - - -
90-94 - - - - - - - -
95-99 - - - - - - - -
100 & Over - - - - - - - -
Total 3 56,693 15 311,885 89 3,779,651 2 33,240
A veraee Aee 43 60 56 54
GRS
SECTION F
SUMMARY OF PLAN PROVISIONS
GRS
40
SUMMARY OF PLAN PROVISIONS
A. Ordinances
Plan established under the Code of Ordinances for the City of Boynton Beach, Florida, Chapter 18,
Article III, and was most recently amended under Ordinance No.09-021 passed and adopted on its
second reading on April 21, 2009. The Plan is also governed by certain provisions of Chapter 185,
Florida Statutes, Part VII, Chapter 112, Florida Statutes and the Internal Revenue Code.
B. Effective Date
August 15, 1981
C. Plan Year
October 1 through September 30
D. Type of Plan
Qualified, governmental defmed benefit retirement plan; for GASB purposes it is a single employer
plan.
E. Eligibility Requirements
All full-time police officers are eligible to participate on the first day of employment.
F. Credited Service
Service is measured as the aggregate numbers of years and fractional parts of years of service for
which a police officer made Member Contributions to the plan. No service is credited for any
periods of employment for which the member received a refund of their contributions.
G. Compensation
Total cash remuneration including overtime and lump sum payments for accumulated sick and
vacation leave, but exclusive of any payments for extra duty or special detail work.
H. Average Final Compensation (AFe)
The average of Compensation over the highest 5 years during the last 10 years of Credited Service.
I. Normal Retirement
Eligibility:
A member may retire on the first day of the month coincident with or next
following the earliest of:
(1) age 55 and 10 years of Credited Service, or
(2) age 50 and 15 years of Credited Service, or
(3) 20 years of Credited Service regardless of age.
GRS
Benefit:
Normal Form
of Benefit:
COLA
Supplemental
Benefit:
J. Early Retirement
Eligibility:
Benefit:
Normal Form
of Benefit:
COLA:
Supplemental
Benefit:
K. Delayed Retirement
41
3.5% of AFC multiplied by years of Credited Service. Benefit is limited to 100% of
AFC and the provisions of Internal Revenue Code Section 415.
1 0 Years Certain and Life thereafter; other options are also available.
None
All retirees in pay status are entitled to a monthly supplemental pension benefit
paid in a lump sum on October I of each year. The supplemental benefit is funded
by a 1 % of pay contribution from the members and a 1 % of pay contribution from
the Chapter 185 money. The benefit pool is divided according to the total number
of shares of all eligible retirees on a pro-rata basis. The number of shares allotted to
each eligible retiree is the sum of credited service at retirement (maximum of 20
years) and the number of years the participant has been retired (maximum of 20
years). An individual retiree's distribution is the number of shares multiplied by the
share value. The benefit ceases upon the later of the death of the retired member
or beneficiary.
A member may elect to retire earlier than the Normal Retirement Eligibility upon
attainment of age 50 and 10 years of Credited Service.
The Normal Retirement Benefit is reduced by 1.5% for each year by which the
Early Retirement date precedes the Normal Retirement date. For this pwpose, the
Normal Retirement date is the earlier of the date the member would have attained
age 55 or completed 20 years of Credited Service had the member continued
employment as a police officer.
1 0 Years Certain and Life thereafter; other options are also available.
None
All retirees in pay status are entitled to a monthly supplemental pension benefit
paid in a lump sum on October 1 of each year. The supplemental benefit is funded
by a 1 % of pay contribution from the members and a 1 % of pay contribution from
the Chapter 185 money. The benefit pool is divided according to the total number
of shares of all eligible retirees on a pro-rata basis. The number of shares allotted to
each eligible retiree is the sum of credited service at retirement (maximum of 20
years) and the number of years the participant has been retired (maximum of 20
years). An individual retiree's distribution is the number of shares multiplied by the
share value. The benefit ceases upon the later of the death of the retired member
or beneficiary
Same as Normal Retirement taking into account compensation earned and service credited until the
date of actual retirement.
GRS
42
L. Service Connected Disability
Eligibility:
Benefit:
Normal Form
of Benefit:
COLA:
Supplemental
Benefit:
Any member who becomes totally and permanently disabled and unable to render
useful and efficient service as a police officer as a result of an act occurring in the
performance of service for the City is immediately eligible for a disability benefit.
662/3% of the member's basic rate of earnings in effect on the date of disability,
reduced by amounts payable under Worker's Compensation and Social Security
PIA with a minimum benefit being the greater of the accrued Normal Retirement
benefit on the date of disability or 42% of APC.
10 Years Certain and Life thereafter; other options are also available.
None
All retirees in pay status are entitled to a monthly supplemental pension benefit
paid in a lump sum on October 1 of each year. The supplemental benefit is funded
by a 1 % of pay contribution from the members and a 1 % of pay contribution from
the Chapter 185 money. The benefit pool is divided according to the total number
of shares of all eligible retirees on a pro-rata basis. The number of shares allotted to
each eligible retiree is the sum of credited service at retirement (maximum of 20
years) and the number of years the participant has been retired (maximum of 20
years). An individual retiree's distribution is the number of shares multiplied by the
share value. The benefit ceases upon the later of the death of the retired member
or beneficiary.
M. Non-Service Connected Disability
Eligibility:
Benefit:
Normal Form
of Benefit:
COLA:
Supplemental
Benefit:
Any member with 10 years of Credited Service who becomes totally and
permanently disabled and unable to render useful and efficient service as a police
officer is eligible for a disability benefit.
The accrued Normal Retirement Benefit taking into account compensation earned
and service credited as of the date of disability with a minimum benefit equal to
25% of APC and a maximum benefit equal to 60% of APC.
10 years Certain and Life thereafter; other options are also available.
None
All retirees in pay status are entitled to a monthly supplemental pension benefit
paid in a lump sum on October 1 of each year. The supplemental benefit is funded
by a 1 % of pay contribution from the members and a 1 % of pay contribution from
the Chapter 185 money. The benefit pool is divided according to the total number
of shares of all eligible retirees on a pro-rata basis. The number of shares allotted to
each eligible retiree is the sum of credited service at retirement (maximum of 20
years) and the number of years the participant has been retired (maximum of 20
years). An individual retiree's distribution is the number of shares multiplied by the
GRS
43
share value. The benefit ceases upon the later of the death of the retired member
or beneficiary.
N. Death in the Line of Duty
Eligibility:
Benefit:
Normal Form
of Benefit:
COLA:
Supplemental
Benefit:
Any member whose death is determined to be the result of a service incurred injury
is eligible for survivor benefits regardless of Credited Service.
Spouse will receive the accrued Normal Retirement Benefit taking into account
compensation earned and service credited as of the date of death with a minimum
benefit equal to 30% of APe. If there is no spouse, benefits will be paid to the
deceased member's estate.
Paid until death of spouse.
None
All retirees and beneficiaries in pay status are entitled to a montWy supplemental
pension benefit paid in a lump sum on October 1 of each year. The supplemental
benefit is funded by a 1 % of pay contribution from the members and a 1 % of pay
contribution from the Chapter 185 money. The benefit pool is divided according to
the total number of shares of all eligible retirees on a pro-rata basis. The number of
shares allotted to each eligible retiree is the sum of credited service at retirement
(maximum of 20 years) and the number of years the participant has been retired
(maximum of 20 years). An individual retiree's distribution is the number of shares
multiplied by the share value. The benefit ceases upon the later of the death of the
retired member or beneficiary.
o. Other Pre-Retirement Death
Eligibility:
Benefit:
Normal Form
of Benefit:
COLA:
Supplemental
Benefit:
Members are eligible for survivor benefits after the completion of 10 or more years
of Credited Service.
Spouse will receive the accrued Normal Retirement Benefit taking into account
compensation earned and service credited as of the date of death. If there is no
spouse, benefits will be paid to the deceased member's estate.
Paid until death or remarriage of spouse; or 10 years to the member's estate.
None
All retirees and beneficiaries in pay status are entitled to a montWy supplemental
pension benefit paid in a lump sum on October 1 of each year. The supplemental
benefit is funded by a 1 % of pay contribution from the members and a 1 % of pay
contribution from the Chapter 185 money. The benefit pool is divided according to
the total number of shares of all eligible retirees on a pro-rata basis. The number of
shares allotted to each eligible retiree is the sum of credited service at retirement
(maximum of 20 years) and the number of years the participant has been retired
(maximum of 20 years). An individual retiree's distribution is the number of shares
multiplied by the share value. The benefit ceases upon the later of the death of the
retired member or beneficiary.
GRS
44
The beneficiary of a plan member with less than 10 years of Credited Service at the time of death
will receive a refund of the member's accumulated contributions.
P. Post Retirement Death
Benefit determined by the form of benefit elected upon retirement.
Q. Optional Forms
In lieu of electing the Normal Form of benefit, the optional forms of benefits available to all retirees
are a Single Life Annuity, the 50%,662/3%,75% and 100% Contingent Annuitant options and the
50%, 662/3%, 75% and 100% Survivor Annuity options.
R. Vested Termination
Eligibility:
A member has earned a non-forfeitable right to Plan benefits after the completion of
5 years of Credited Service if they elect to leave their accumulated contributions in
the fund.
Benefit:
The benefit is the member's accrued Normal Retirement Benefit as of the date of
termination.
For members with at least 5 years of Credited Service, the benefit begins on the date
that would have been the member's Normal Retirement date had they continued
employment until attaining age 55 with 10 years of Credited Service or upon
reaching what would have been 20 years of Credited Service. Alternatively,
members with at least 10 years of Credited Service can elect a reduced Early
Retirement benefit any time after age 50.
Normal Form
of Benefit:
1 0 Years Certain and Life thereafter; other options are also available.
COLA:
None
Supplemental
Benefit:
Once in pay status, all retirees are entitled to a monthly supplemental pension
benefit paid in a lump sum on October 1 of each year. The supplemental benefit is
funded by a 1 % of pay contribution from the members and a 1 % of pay
contribution from the Chapter 185 money. The benefit pool is divided according to
the total number of shares of all eligible retirees on a pro-rata basis. The number of
shares allotted to each eligible retiree is the sum of credited service at retirement
(maximum of 20 years) and the number of years the participant has been retired
(maximum of 20 years). An individual retiree's distribution is the number of shares
multiplied by the share value. The benefit ceases upon the later of the death of the
retired member or beneficiary.
Members terminating employment with less than 5 years of Credited Service will receive a refund of
their own accumulated contributions.
GRS
45
S. Refunds
Eligibility:
All members terminating employment with less than 5 years of Credited Service are
eligible. Optionally, vested members (those with 5 or more years of Credited
Service) may elect a refund in lieu of the vested benefits otherwise due.
Benefit:
Refund of the member's contributions.
T. Member Contributions
7% of Compensation
u. Employer Contributions
Chapter 185 Premium Tax Refunds and any additional amount determined by the actuary needed to
fund the plan properly according to State laws.
V. Changes from Previous Valuation
There have been no changes since the last valuation.
w. 13th Check
As described under the Supplemental Benefit subsections, a thirteenth check will be paid to retirees
on each October 1 of each year following December 1, 2006.
x. Deferred Retirement Option Plan
Eligibility:
Plan members who have less than 30 years of Credited Service but have met one of
the following criteria are eligible for the DROP:
(1) age 55 and 10 years of Credited Service, or
(2) age 50 and 15 years of Credited Service, or
(3) 20 years of Credited Service regardless of age.
Members who meet eligibility must submit a written election to participate in the
DROP.
Benefit:
The member's Credited SelVice and FAC are frozen upon entry into the DROP.
The monthly retirement benefit as described under Normal Retirement is calculated
based upon the frozen Credited Service and F AC.
Maximum
DROP Period: The earlier of 5 years of participation in the DROP or 30 years of employment.
Interest
Credited:
The member's DROP account is credited at an interest rate based upon the option
chosen by the member. Members must elect from 1 of the 3 following options:
1. Gain or loss at the same rate earned by the Plan, or
2. Guaranteed rate of 7%, or
3. A percentage of the DROP credited at the same rate earned by the Plan and
the remaining percentage credited with earnings at a guaranteed rate of 7%.
GRS
Normal Form
of Benefit:
COLA:
Supplemental
Benefit:
46
Options include a lump sum, equal annual payments over 5 years, or monthly
installments based upon actuarial tables until the balance is paid out.
None
DROP retirees are entitled to a monthly supplemental pension benefit paid in a
lump sum on October 1 of each year. The supplemental benefit is funded by a 1 %
of pay contribution from the members and a 1 % of pay contribution from the
Chapter 185 money. The benefit pool is divided according to the total number of
shares of all eligible retirees on a pro-rata basis. The number of shares allotted to
each eligible retiree is the sum of credited service at retirement (maximum of 20
years) and the number of years the participant has been retired (maximum of 20
years). An individual retiree's distribution is the number of shares multiplied by the
share value. The benefit ceases upon the later of the death of the retired member
or beneficiary.
Y. Other Ancillary Benefits
There are no ancillary benefits not required by statutes but which might be deemed a City of
Boynton Beach Municipal Police Officers' Retirement Fund liability if continued beyond the
availability of funding by the current funding source.
GRS
5 REGULAR MEMBERS
· Commission Appointed - Four-year Term
"Elected by Police Officers - Four-year Term
+ Board Appointed - Four-year Term
(Terms amended from two to four years per Ord. 10-05, effective 02/02/] 0)
Fund Established by Ord. 245 (1953)
2011
MUNICIPAL POLICE OFFICERS' RETIREMENT TRUST
FUND
MEMBER EXPIRES PHONE PROFESSION
*ATHOL, Del. Toby - Secretary 12/14 742-6100 Police Department
Appt'd 12//10 AtholTca>.bbfl.us
*CAUDELL, Inv. Scott 12/14 742-6100 Police Department
Appt'd 12/10 CaudellSca>.bbfl.us
+CHAPMAN, Lt. Gary - Chair 12/13 742-6100 Police Department
Appt'd 2/16/10 ChapmanGca>.bbfl. us
**LLOPIS, Del. Jason 12/14 742-6100 Police Department
Elected 12/10 L1opisJca>.bbfl. us
**RANZIE, Frank 12/11 742-6100 Police Department
Elected 12/16/09 RanzieFca>.bbfl. us
PENSION ADMINISTRATOR:
LA DUE, Barbara
S:\CC\WP\BOAROS\L1STS\2011 Board List\POLlCE PENSION BO.doc
Updated: 01/26/2011
Barbara Ladue
From:
Sent:
To:
Cc:
Subject:
Chapman, Gary [ChapmanG@bbfl.us]
Thursday, January 13, 2011 3:41 PM
Barbara Ladue
Athol, Toby; Caudell, Scott; L1opis, Jason; Ranzie, Frank
FW: [Tcktcode #:3805028] - Service Cancellation Request
Barb, item for agenda...
The pension server ceased to function. ITS looked at the computer and it is no longer
functional; therefore, I requested the cancellation of the mega path SDSL line starting from
2/1/2811.
The Board may choose to outsource the website with Drop accounting.
Lieutenant Gary A. Chapman
561-742-6135
CONFIDENTIALITY NOTICE: This communication is confidential, may be privileged and is meant
only for the intended recipient. If you are not the intended recipient, please notify the
sender ASAP and delete this message from your system.
c)l. Active criminal intelligence information and active criminal investigative information
are exempt from s. 119.87(1) and s. 24(a), Art. I of the State Constitution.
This transmission is protected by the Electronic Communications Privacy Act, 18 U.S.C.
Sections 2518-2521 and intended to be delivered only to the named addressee(s) and may
contain information that is confidential, proprietary. If this information is received by
anyone other than the named addressee(s), the recipient should immediately notify the sender
by E-MAIL and by telephone (561) 742-6135 and obtain instructions as to the disposal of the
transmitted material. In no event shall this material be read, used, copied, reproduced,
stored or retained by anyone other than the named addressee(s), except with the express
consent of the sender or the named addressee(s). Thank you.
-----Original Message-----
From: cancellations~egapath.com rmailto:cancellations~megapath.coml
Sent: Thursday, January 13, 2811 3:31 PM
To: Chapman, Gary
Subject: RE: [Tcktcode #:3885828] - Service Cancellation Request
Thank you for contacting MegaPath, Inc.
We are in receipt of your inquiry, which is now in our queue for research and response.
Please note that our standard response time is 72 hours.
We at MegaPath understand that there are many reasons to cancel your service, including
moving and location closure. If we can be of any assistance for your future needs please let
us know. We will process your request with the information that you have provided in your
Cancellation email. Please be aware that if you have cancelled your service prior to the
completion of your contract term that Early Termination Fees may apply.
Thank you for your business now and in the future.
1
MegaPath Inc.
1-877-611-MEGA (877.611.6342)
For future correspondence regarding this matter, please refer to
Tcktcode: 3885828.
Please do not attempt to remove (Tcktcode: 3885828] in the subject line when responding to
this e-mail.
2
Invoice
Invoice for:
City of Boynton Beach Police Retire Fund
Ms. Barbara S. LaDue
Pension Administrator
ladueb@bbpdpension.com
1500 Gateway Blvd #220
Boynton Beach, FL 33426
Mail to:
City of Boynton Beach Police Retire Fund
Ms. Barbara S. LaDue
Pension Administrator
ladueb@bbpdpension.com
1500 Gateway Blvd #220
Boynton Beach, FL 33426
I.." III" III 111..11 1.11..111."
Invoice Number
11258
Russell Client 10
C04616001
Billing Period Ending
12/31/2010
Invoice Date
01/25/2011
Payment Terms
Net 30 Days
Total Amount Due
$ 93,641.00
Specify Remittance Information
o Payment by check
Make check payable to: Russell Investments
Check Amount $
o Request payment by Direct Debit
Authorized Signer
See additional instructions on reverse side.
I _/ Direct Debit pe~ I
Description of Service Fee Amount Standing Instructions or Amount Due
Payments Received
Russell Investments
Investment Management Fees $ 93,641.00 $ 0.00 $ 93,641.00
Current Period Fees $ 93,641.00 $ 0.00 $ 93,641.00
Balance Forward 166,673.00 (166,673.00) 0.00
Total Amount Due $ 93,641.00
Invoice Number Invoice Date Russell Client 10 Payment Terms Billing Period Ending
11258 01/25/2011 C04616001 Net 30 Days 12/31/2010
Current Period Over 30 Days Over 60 Days Over 90 Days Total Amount Due
$ 93 641.00 $ 0.00 $ 0.00 $ 0.00 $ 93,641.00
The following is a summary of your account(s). For more information, please review the enclosed detail.
Please return upper portion with your check or direct debit request
-~--------- --- ---- - -------
Invoice for: City of Boynton Beach Police Retire Fund
Ms. Barbara S. LaDue
Pension Administrator
ladueb@bbpdpension.com
1500 Gateway Blvd #220
Boynton Beach, FL 33426 (See reverse side for additional information)
Invoice
Invoice Number:
Billing Period Ending:
11258
12/31/2010
Russell Investments - FEE DETAIL
Investment Management Fees
City of Boynton Beach Police
Retirement Fund
Boynton Beach Police Officers Retirement Trust Funds Investment Account
Account Number: QU7W
Fund Name Average Rate%
Market Value
Russell Concentrated Equity Fund 2,098,127 0.19750
Russell All International 7,809,600 0.19750
Markets Fund
Russell Equity I Fund 6,839,343 0.19750
Russell Large Cap Structured 4,179,649 0.19750
Equity Fund
Russell Multi-Manager Bond Fund 17,819,162 0.19750
Russell Real Estate Equity Fund 2,086,433 0.19750
Russell Global Real Estate Securities 1,078,947 o 19750
Fund
Russell Small Cap Fund 4,248,438 0.19750
Russell World Equity Fund 5,214,230 0.19750
Subtotal 51,373,929
Russell Real Estate Equity Fund - Internal Fee
Paid
Fee Amount
4,144.00
15,424.00
13,508.00
8,255.00
35,193.00
4,121.00
2,131.00
8,391.00
10,298.00
$ 101,465.00
Account Total
(7,824.00)
$ 93,641.00
Total Investment Management Fees
$ 93,641.00
Page 2
Instructions to request payment by direct debit
TO HAVE FEES DEDUCTED FROM THE ACCOUNT THAT GENERATED THE FEES:
1. Check the box labeled "Requested payment by Direct Debit" on the
front of this remittance stub.
2. Sign on the "Authorized Signer" line on the front of this remittance stub.
3. Return the remittance stub to Russell Investments in the
envelope provided.
TO HAVE FEES DEDUCTED FROM OTHER ACCOUNTS:
1. Check the box labeled "Request payment by Direct Debit" on the
front of this remittance stub.
2. Sign on the "Authorized Signer" line on the front of this remittance stub.
3. Complete the table (right) indicating the account numbers and
applicable deduction amounts.
4. Return the remittance stub to Russell Investments in the
envelope provided.
Instructions for payment by check
1. Make checks payable to Russel/Investments.
2. Return check and remittance stub to Russel/Investments
in the envelope provided.
Mailing instructions
When paying by check or requesting payment by direct debit,
please use the enclosed envelope and mail to:
Russell Investments
#774098
4098 Solutions Center
Chicago, IL 60677-4000
Definitions:
DIRECT DEBIT PER STANDING INSTRUCTIONS: Written instructions
are on file authorizing the deduction of fees from the funds and/or
account(s). Direct debited fees have already been subtracted from
the Total Amount Due on your invoice.
REQUEST PAYMENT BY DIRECT DEBIT: Written instructions to deduct
fees from the funds and/or account(s) must be provided by an
authorized signer. Absent standing instructions, this request must
be submitted each time you wish to use this service. Please use the
remittance stub to Request Payment by Direct Debit.
A I C 0 I I I 1 t N I I ) 1 I ] ^ I 1 1 0 L I r 1 t
For billing inquiries or wire instructions,
please call or write:
REGARDING RUSSELL INVESTMENTS SERVICES
Call: Your Account Executive at 800-455-3782
Write: Your Account Executive
909 A Street
Tacoma, WA 98402
Russell Investments is a registered Trade Name for the Frank
Russell Company. Frank Russell Company, a Washington, USA,
corporation, operates through subsidiaries worldwide and
is authorized to act as paying/receiving agent for any of its
worldwide subsidiaries.
n Russell
IJAJ Investments
Russell Investment Group
#774098
4098 Solutions Center
Chicago, IL 60677-4000
OS
MANAGER 4525 - -
INVOICE NO. 1012074706-9997
DATE 2011/01/28
PAGE 1 OF 1
TOTAL CHARGES CURRENT PERIOD
USO 811.87
Police Officer Retirement Trust
City of Boynton Beach
Boynton Police & Fire Pension Fnds, 1500
Pension Administrator
Boynton Beach, FL 33426
9BYM-Police Officer Retirement Trust
FOR 3 MONTH PERIOD 10/01/10 to 12/31/10
DB
Gateway Blvd,Suite #220Account ID: BOYNTON POLICE
Pay Type 3
ATTENTION Barbara L. Ladue
PLEASE DETACH THIS PORTION AND RE'l'tJRN WITH YOUR PAYMENT
UPS DELIVERY
UPS Charges 11/23/2010
UPS Charges 10/29/2010
9.98
9.94
CHARGES
456.25
20.00
40.00
0.50
75.00
189.80
8.32
2.08
19.92
R" R7
BENEFIT PAYMENT CHECK FEES
ACH Benefit Payments
Benefit Payments
Lump Sum Payments
365 AT 1.25
16 AT 1.25
4 AT 10.00
1 AT 0.50
3 AT 25.00
591. 75
BENEFIT PAYMENT: OTHER FEES
Pensioners Added
State Tax Filing
* * SUBTOTAL FEES * *
OOT OF POCKET CHARGES
POSTAGE
Advice of Deposit
Benefit Payment
Lump Sum
** SUBTO'l'AL OOT OF POCKET **
220.12
CURRENT CHARGES USD
INV.# 1012074706-9997 9BYM-Police Officer Retirement Trust
2011/01/28
THE LAw OFFICES OF
PERRY &JENSEN, LLC
ANN H. PERRY
aperry@perryjensenlaw.com
BONNI SPATARA JENSEN
bsjensen@perryjensenlaw.com
January 21, 2011
Via Email
Boynton Beach Police Pension Fund
Sgt Gary Chapman, Chairman
100 East Boynton Beach Boulevard
Boynton Beach, FL 33425
Re: Leqal Services Provided Invoice #70217
Dear Gary:
Enclosed please find the Firm's invoice for services rendered for the
period that ended 1/15/2011. Your current balance due is $3J763.26.
If you have any questions, please do not hesitate to contact me.
Sincerely yours,
I~' 'J"\'
I " \
~-l /' 7 /' ,~
Bonni S. Jense~
BSJ/adt
Enclosure
Copy to: Barbara LaDue Via Email Only
400 EXECUTIVE CENTER DRIVE, SUITE 207.:. WEST PALM BEACH, FLORIDA 33401-2922
PH: 561.686.6550 .:. Fx: 561.686.2802
~~
THE LAW OFFICES OF PERRY & JENSEN, LLC
400 Executive Center Drive
Suite 207
West Palm Beach, FL 33401-2922
Invoice submitted to:
Boynton Beach Police Pension
ATTN: Gary Chapman, Chairman - via email
100 E. Boynton Beach Blvd.
Boynton Beach, FL 33425
Copy to: Barbara LaDue - Via Email
January 20, 2011
In Reference To: FOR PROFESSIONAL SERVICES RENDERED AS FOLLOWS:
Client! File No.: 0188
Invoice #70217
Professional Services
Miscellaneous Matters
1/4/2011 KS Prepare and file Lobbyist Registration with Boynton Beach
1/10/2011 BSJ Draft Internal Revenue Service Mileage memorandum for 2011
1/14/2011 ADT E-Mail to Trustees Internal Revenue Service Mileage Memorandum for
2011
SUBTOTAL:
Participant - Crawford. Christopher (QDRO)
12/16/2010 ADT Review email from Barbara La Due
Draft QDRO Jetter to Christopher Crawford
Hrs/Rate
Amount
0.25 NO CHARGE
75.00/hr
0.10
200.00/hr
0.10
75.00/hr
0.45
0.50
75.00/hr
20.00
7.50
27.50]
37.50
Boynton Beach Police Pension
12/20/2010 ADT Review and revise QDRO letter to Attorney per markup
BSJ Review request from Participant
Review Pension benefit worksheet
Review and revise letter to Kim Nutter
12/21/2010 BSJ Telephone call with Kim Nutter
SUBTOTAL:
Plan Document
12/17/2010 BSJ Review and respond to email from Gary Lippman
12/28/2010 BSJ E-mail to Lynn Swanson re: amendment and statement of no impact
1/3/2011 BSJ Prepare Pension Plan Document in word format
E-mail to Lynn Swanson
1/5/2011 BSJ Review email and attachment from Barry Atwood re: agenda item
cover
117/2011 BSJ Review Emails from Barry Atwood
Telephone calls with Gary Chapman
Research Pension Plan Document and amendment
1/11/2011 BSJ Telephone call with Barry Atwood
Telephone call with Jim Cherat
Research waiver ot bargaining
Hrs/Rate
0.20
75.00/hr
1.00
200.00/hr
0.50
200.00/hr
2.20
0.25
200.00/hr
0.20
200.00/hr
0.25
200.00/hr
0.35
200.00/hr
0.50
200.00/hr
1.00
200.00/hr
Page
2
Amount
15.00
200.00
100.00
352.50]
50.00
40.00
50.00
70.00
100.00
200.00
Boynton Beach Police Pension
Hrs/Rate
Review waiver of bargaining
Telephone calf with Gary Chapman
E-mail to Barry Atwood
SUBTOTAL:
2.55
For professional services rendered
5.20
Additional Charges:
Bill File
12/13/2010 United Parcel Service Invoice No.: 000F49280510
Tracking #1 ZF4928003969854 72
to 1 from Barbara La Due - DROP & Expense Policies
United Parcel Service Invoice No.: 000F49280510
Pick Up Fees
1/14/2011 CopyCharges
SUBTOTAL:
Total additional charges
For professional services rendered
5.20
Total amount of this bill
Previous balance
Balance due
Page
3
Amount
510.00]
$890.00
5.13
3.18
0.75
9.06]
$9.06
$899.06
$899.06 V
$2,864.20 l/
$3,763.26 0 K
THE LAw OFFICES OF
PERRY &JENSEN, LLC
ANN H. PERRY
aperry@perryjensenlaw.com
BONNI SPATARA JENSEN
bsjensen@perryjensenlaw.com
December 22, 2010
Via Email
Boynton Beach Police Pension Fund
Sgt Gary Chapman, Chairman
100 East Boynton Beach Boulevard
Boynton Beach, FL 33425
Re: Leaal Services Provided Invoice #70177
Dear Gary:
Enclosed please find the Firm's invoice for services rendered for the
period that ended 12/15/2010. Thank you for your payment of $1,413.70. Your
current balance due is $2,864.20.
If you have any questions, please do not hesitate to contact me.
Sincerely yours,
~-~3~t ~
BonniS. Jensen
BSJ/adt
Enclosure
Copy to: Barbara LaDue Via Email Only
400 EXECUTIVE CENTER DRIVE, SUITE 207.:. WEST PALM BEACH, FLORIDA 33401-2922
PH: 561.686.6550 .:. Fx: 561.686.2802
<&IillIl!Pim",
fIIl~'"
THE lAW OFFICES OF PERRY & JENSEN, llC
400 Executive Center Drive
Suite 207
West Palm Beach, Fl 33401-2922
Invoice submitted to:
Boynton Beach Police Pension
ATTN: Gary Chapman, Chairman - via em ail
100 E. Boynton Beach Blvd.
Boynton Beach, Fl 33425
Copy to: Barbara LaDue - Via Email
December 21,2010
In Reference To: FOR PROFESSIONAL SERVICES RENDERED AS FOllOWS:
Client! File No.: 0188
Invoice #70177
Professional Services
Attendance at Trustee Meetinqs
12/1/2010 ADT Prepare Attorney Report, Handouts, and Folder for upcoming Meeting-
12/7/10
12/7/2010 BSJ Attend meeting
BSJ Prepare for meeting
Review agenda and backup material
12/10/2010 ADT Prepare notebook for special meeting 12/13/10
12/13/2010 BSJ Attend meeting
SUBTOTAL:
Hrs/Rate
0.30
75.00/hr
3.25
200.00/hr
0.25
200.00/hr
0.05
75.00/hr
1.00
200.00/hr
4.85
Amount
22.50
650.00
50.00
3.75
200.00
926.25]
Boynton Beach Police Pension
Buvback
11/23/2010 BSJ Reviewemail Barbara La Due re: processing of buyback
E-mail to Barbara La Due re: plan not yet amended
12/1/2010 BSJ Telephone call with Steve Palmquist
SUBTOTAL:
DROP
11/30/2010 ADT E-Mail to Trustees revised DROP policy for review and execution at
meeting
BSJ Review and revise DROP distribution policy
Review Pension Plan Document
12/9/2010 BSJ Correspondence with Barbara La Due re: original DROP Distribution and
Expense Policy
LB E-mail and mail original DROP Distribution and Expense Policy
SUBTOTAL:
Inv Mor - Frank Russell
11/16/2010 BSJ Correspondence with Glen Harris re: SEC Rule Pay to Play
SUBTOTAL:
Hrs/Rate
0.25
200.00/hr
0.10
200.00/hr
0.35
0.10
75.00/hr
0.75
200.00/hr
0.25
200.00/hr
0.20
75.00/hr
1.30
0.50
200.00/hr
0.50
Page
2
Amount
50.00
20.00
70.00J
7.50
150.00
50.00
15.00
222.50]
100.00
100.00J
Boynton Beach Police Pension
Investment Policv Guidelines
12/6/2010 BSJ Review email from Glenn Harris
Research Investment provisions of Plan and State law re: commodities
SUBTOTAL:
Minutes of Trustee MeetinQs
12/2/2010 ADT Review minutes of 10/7/10
SUBTOTAL:
Miscellaneous Matters
12/14/2010 BSJ Telephone call with Gary Chapman
SUBTOTAL:
Monitor/Consultants - General
12/1/2010 ADT Review Monitor reports for all funds for fiscal ytd 9/30/10 for total fund
returns
12/2/2010 ADT Review Monitor reports for all funds for fiscal ytd 9/30/10 for total fund
returns
SUBTOTAL:
Participant - General Correspondence
11/23/2010 BSJ Review email from Chris Yannuzzi re: rollover to 457
E-mail to Chris Yannuzzi
E-mail to Barbara La Due
Hrs/Rate
0.35
200.00/hr
0.35
0.30
75.00/hr
0.30
0.10
200.00/hr
0.10
1.00
75.00/hr
0.50
75.00/hr
1.50
0.75
200.00/hr
Page
3
Amount
70.00
70.00]
22.50
22.50]
20.00
20.00]
75.00
37.50
112.50]
150.00
Boynton Beach Police Pension
Review Policy
Review email from Gary Chapman
11/24/2010 BSJ Review em ails from Gary Chapman
Telephone call with Gary Chapman
11/30/2010 BSJ E-Mail to Chris Yannuzzi
Review em ail from from Gary Chapman
SUBTOTAL:
Plan Document
11/30/2010 ADT E-Mail to Trustees Buyback Amendment for review at meeting
BSJ Draft amendment to Plan for purchase of prior City of Boynton Police
service overtime
Review current plan provision
Telephone call with Trish Shoemaker
E-mail to Steve Palmquist
12/1/2010 BSJ Draft Union Waiver for Buyback Amendment
12/2/2010 BSJ Review and revise Buyback Amendment
E-mail to Trustees
12/10/2010 BSJ Draft Amendment to DROP withdrawal method
E-mail to Trustees
12/14/2010 BSJ E-Mail to Steve Palmquist re: Impact Statement
Hrs/Rate
0.35
200.00/hr
0.35
200.00/hr
1.45
0.10
75.00/hr
1.50
200.00/hr
0.50
200.00/hr
0.25
200.00/hr
0.75
200.00/hr
0.10
200.00/hr
Page
4
Amount
70.00
70.00
290.00]
7.50
300.00
100.00
50.00
150.00
20.00
Boynton Beach Police Pension
12/15/2010 ADT E-Mail to Gary Lippman Actuarial Impact Statement and Union Waiver
for Buyback Amendment
ADT E-Mail to Kurt Bressner Actuarial Impact Statement for Buyback
Amendment
BSJ Review and revise union waiver
E-mails to Gary Chapman and Toby Athol re: Union Waiver
Review and revise Plan Amendment re: buyback and DROP distribution
E-mail to Kurt Bressner
BSJ Telephone call with Gary Lippman
SUBTOTAL:
Policies - General
11/30/2010 ADT E-Mail to Trustees revised Trustee Expense policy for review and
execution at meeting
BSJ Review email from Gary Chapman
Review and revise Expense Policy
SUBTOTAL:
For professional services rendered
Additional Charges:
Bill File
12/15/2010 Copy Charges
SUBTOTAL:
Hrs/Rate
0.10
75.00/hr
0.10
75.00/hr
1.00
200.00/hr
0.25
200.00/hr
4.65
0.10
75.00/hr
0.50
200.00/hr
0.60
15.95
Page
5
Amount
7.50
7.50
200.00
50.00
892.50]
7.50
100.00
107.50]
$2,833.75
30.45
30.45]
Boynton Beach Police Pension
Total additional charges
For professional services rendered
15.95
Total amount of this bill
Previous balance
Accounts receivable transactions
12/13/2010 Payment - Thank You!. Check No. 053134
Total payments and adjustments
Balance due
Page
6
Amount
$30.45
Amount
$2,864.20
$2,864.20
$1.413.70
($1.413.70)
($1.413.70)
;'
../
$2,864.20 bt..
GRS
Gabriel Roeder Smith & Company
Consultants & Actuaries
One East Broward Blvd.
Suite 505
Ft. Lauderdale, Florida 33301-1872
(954) 527-1616
Invoice
Dall'
I IJ\ oin' #
1/12/2011
113906
Bill To:
BOARD OF TRUSTEES, BOYNTON BEACH
MUNICIPAL POLICE OFFICERS RETIREMENT FUND
I'ka...c Rl'llIit To:
Ms. Barbara La Due
City of Boynton Beach
Renaissance Executive Suites
1500 Gateway Blvd., Suite 220
Boynton Beach, Florida 33426
Dept. # 78009
Gabriel Roeder Smith & Company
PO Box 78000
Detroit, Michigan 48278-0009
or
ACH Payment to:
Gabriel Roeder Smith & Company
IPMorgan Chase, ABA #: 072000326
Account #: 0486723
Dc...criptioll Pmjl'l't # \ 1I1111J lit
For services rendered through 12/31/2010
1. 12/2/2010 and 12/1412010 opinion letters regarding 100550-052 $269
proposed ordinances
2. Charges since 10/31/2010 for preparation of the 10/1/2010 100550-052 $3,921
Actuarial Valuation Report; total charges to date
equal $4,782
3. Charges for preparation of the Experience Study; total 100550-052 $3,577
charges to date equal $3,577
Invoice Total $7,767
Paid to Date
Client No. 100550 Amount Due $7,767
PLEASE INDICATE THE INVOICE NUMBER ON YOUR REMITTANCE. THANK YOu.
ei
~..
Goldstein Schechter Koch
INVOICE
CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS
Boynton Beach Police Pension Fund
Renaissance Executive Suites
1500 Gateway Blvd - Suite 220
Boynton Beach, FL 33426
_ Master Card
_Visa
_ Amex
Account #
Amt. $
Exp. Date _ /_
Invoice No.
Date
Client No.
78895
01/03/2011
95040-22
Progress bill regarding audit work required for completion of an examination of financial
statements for the period ended 9/30/10;
$
Prior Balance
8,000.00
0.00
Total Amount Due
$
8000.00
0-30
8,000.00
31- 60
0.00
61 - 90
0.00
91 - 120
0.00
Over 120
0.00
Balance
8,000.00
.j
Goldstein Schechter Koch
CERTIFIED PUBliC ACC(tUNHNTS AND CONSULTANTS
4000 Hollywood Blvd. . Suite 215 South. Hollywood, FL 33021
(954) 989-7462 . (954) 962-1021
info@gskcpas.com . www.gskcpas.com
t- HCC
HCC Global
37 Radio Circle Drive, Mount Kisco, New York 10549
main 914 241 8900 facsimile 914 241 8098
January 17,2011
City of Boynton Beach
1500 Gateway Boulevard, Suite 220
Boynton Beach, FL 33426
J-D \/}-
~/.-l c. ~ ~,yv'\ \ ~/ID/
~ OJ- ,ot
f;~~r ~;IO/
Insured:
Policy No:
Policy Period:
Insurer:
Coverage:
City of Boynton Beach
U710-50407
04110/2010 - 04/10/2011
U.S. Specialty Insurance Company
Corporate Fiduciary Liability
In compliance with state insurance regulations, please be advised that the above captioned policy
may be subject to non-renewal, a change in coverage conditions, or an increase in premium at
expiration.
This notice is not intended to indicate an unfavorable renewal position by the carrier, but to
inform you that the renewal position is subject to the underwriting information we receive.
We appreciate your business. To ensure your renewal is reviewed on a timely basis, we
recommend that you contact your agent or broker to answer your questions and prepare a
renewal submission.
Sincerely,
HCC GLOBAL
CC: Benefits USA, Inc.
3810 lnverrary Blvd. Ste 303
Lauderhill, FL 33319
Attn: Carolyn Furlong
A Subsidiary of HCC Insurance Holdings, Inc
.---
PROFESSIONAL INDEMNITY AGENCY, Inc.
P.O. BOX 5000
MOUNT KlSCO, NY 10549-5000
March 8, 2010
TO: CITY OF BOYNTON BEACH POLICE OFFICERS' RETIREMENT FUND
RE: TRUSTEE FIDUCIARY LIABILITY POLICY
U.S. SPECIALTY INSURANCE CO.
POLICY #U709-50075
4/1 0/10-4/10111 LIMIT OF LIABILITY $2,000,000.00
Deductible $15,000.00
Includes Waiver of Recourse
ANNUAL PREMIUM
Florida CAT Surcharge (1 %)
TOTAL
$10,725.00
107.25
$10,832.25
PLEASE MAKE CHECK PAYABLE TO:
PROFESSIONAL INDEMNITY AGENCY, INC.
and mail to:
~ !/}OfO
q/ rd
Benefits USA, Inc.
3810 Inverrary Blvd., Suite 303
Lauderhill, FL 33319
THANK YOU.
'::'eb 2,2011 - 12:40pm
POLICE OFFICERS' PENSION FUND
AlP
C H E C K
HIS TOR Y
R E P 0 R T
Range: All Checks Written Against Cash Account 001210-612 To Vendors PROF Thru PROF 10/01/200C To 02/01/2011
Check
No
Check
Date
VendorNo Name Voucher PO-No
Invoice
No
Inv-Date
Amount
Paid
Discount
Taken
~---~-~--~----~-~----~---------------~-~-~-------------~----------~---~-~-~-~-~-----~-~-------------------------------~-~-----~-
Chec
Arnou
void Date
No
00052487 04/09/2008 PROF PROFESSIONAL INDEMNITY AGENCY, INC.
OO/GO/OOOO 00001157 20080409 04/09/2008 10,323.21 .00
Check Totals: 10,323.22- .00
00052614 03/30/2009 PROF PROFESSIONAL INDEMNITY AGENCY, INC.
00/00/0000 00001283 20090330 03/30/2009 10,323.21 .00
Check Totals: 10,323.21 .00
00053059 04/15/2010 PROF
00/00/0000
PROFESSIONAL INDEMNITY AGENCY, INC.
00001409
20100415 04/15/2010
CheCk Totals:
10,832.25
10,832.25
.00
.00
3 Computer CheCks
o Manual Checks
3 CheCks Total
Cash Account Totals:
31,478.67
.00
Page
10,323.
10,323.
10,323.:
10,323.:
10,832.:
10,832.:
31,478.(
5 REGULAR MEMBERS
· Commission Appointed - Four-year Term
..Elected by Police Officers - Four-year Term
+ Board Appointed - Four-year Term
(Terms amended from two to four years per Ord. 10-05, effective 02/02/10)
Fund Established by Ord. 245 (1953)
'J
2011
MUNICIPAL POLICE OFFICERS' RETIREMENT TRUST
FUND
MEMBER EXPIRES PHONE PROFESSION
*ATHOL, Det. Toby - Secretary 12/14 742-6100 Police Department
Appt'd 12//10 AtholT @bbfl.us
*CAUDELL, Inv. Scott 12/14 742-6100 Police
Department
Appt'd 12/10 CaudellS@bbfl.us
" +CHAPMAN, Lt. Gary - Chair 12/13 742-6100 Police Department
Appt'd 2/16/10 ChaomanG@bbfl.us
< **LLOPIS, Det. Jason 12/14 742-6100 Police Department
Elected 12/10 L1ooisJ@bbfl.us
~ / **RANZIE Frank 12/11 742-6100 Police Department
.~ ,
i Elected 12/16/09 ranzief@bbfl.us
PENSION ADMINISTRATOR:
LA DUE, Barbara
S:\CC\WP\BOARDS\L1STS\2011 Board List\POLlCE PENSION BD.doc
Updated: 02/16/2011
City of Boynton Beach Municipal Police
Officers' Retirement Fund
Financial Statements "nrn\not'/
Years Ended September 30, :W1lJ4HllJ':ZO~
ORN · n
O\SCtiSS\O
fot on\'/
\,UtpOse
City of Boynton Beach Mnnicipal Police Officers' Reti,^!AAI\\~o.l'l
Table of Contents ~,~' \<.~r\ .
9. cuss\ofI
rO~ Q\S 0'(\\'1
. . \,Ul?Ose
Independent Auditors Report ... ......................................... ......... ........... ....... ........................... 1 - 2
Management's Discussion and Analysis (Required Supplementary Information - Unaudited) 3 - 6
Financial Statements:
Statements of Plan Net Assets ............................................................................................... 7
Statements of Changes in Plan Net Assets ............................................................................. 8
Notes to Financial Statements ............................................. ................................................... 9 - 17
Required Supplementary Information - Unaudited:
Schedule 1 - Schedule of Funding Progress ..... ........... ......... ...... ................................. ........... 18
Schedule 2 - Schedule of Contributions by Employer and
Other Contributing Entity ...... ............. ............ ......... ........ .............................. ............. ........ 18
Other Supplementary Information:
Schedule 1 - Schedules of Investment Expenses_hnnn_mm_nmn_nn__mn__nmumn_hm____m____m__ 19
Schedule 2 - Schedules of Administrative Expensesm___n_____m__________hnumn_h_muhn_u__mu______ 19
Report on internal control over financial reporting and on compliance
and other matters based on an audit of financial statements
performed in accordance with Government Auditing Standards ...................................... 20 _ 21
xrn\f\01'/
\,te \ r>-r\
Independent Andito.s' Report DR SS \0\1
O\SCU~\,
Board of Trustees ~O ~ e 0 f\ )
The City of Boynton Beach Municipal Police Officers' Retirement ~und, \\*~OS
Boynton Beach, Florida ? V \ \'"'
We have audited the accompanying statements of plan net assets of The City of Boynton Beach
Municipal Police Officers' Retirement Fund (the "Fund") as of September 30, 2010 and 2009, and the
related statements of changes in plan net assets for the years then ended. These financial statements are
the responsibility of the Fund's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of
America, and the standards applicable to fmancial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the fmancial statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the plan
net assets of The City of Boynton Beach Municipal Police Officers' Retirement Fund as of September 30,
2010 and 2009 and the changes in its plan net assets for the years then ended in conformity with
accounting principles generally accepted in the United States of America.
Management's discussion and analysis and the required supplementary information as listed in the
accompanying table of contents are not a required part of the basic fmancial statements but are
supplementary information required by the Governmental Accounting Standards Board. We have applied
certain limited procedures, which consisted principally of inquiries of management regarding the methods
of measurement and presentation of the supplementary information. However, we did not audit the
information and express no opinion on it. The required supplementary information for the years ended
September 30, 2005 through 2007 was reported on by Koch Reiss & Co., P.A., whose report states that
they did not audit this information and did not express an opinion on it.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements of
the Fund. The accompanying other supplementary schedules of investment expenses and administrative
expenses (other supplementary schedules) as listed in the table of contents are presented for purposes of
additional analysis and are not a required part of the basic financial statements. The other
supplementary schedules have been subjected to auditing procedures applied in the audit of the basic
financial statements, and, in our opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
- 1 -
In accordance with Government Auditing Standards, we have also issued our report dated February xx,
2011 on our consideration of The City of Boynton Beach Municipal Police Officers' Retirement Fund
internal control over financial reporting and our tests of its compliance with certain provisions of laws,
regulations, contracts and other matters. The purpose of that report is to describe the scope of our testing
of internal control over financial reporting and compliance and the results of that testing, and not to
provide an opinion on the internal control over fmancial reporting or on compliance. That report is an
integral part of an audit performed in accordance with Government Auditing Standards and should be
read in conjunction with this report in considering the results of our audit.
Cold{]tcin
SChCCht~-\\~~ P.ll.
\"e (') ~t\ . ~
\)\' u.~~\O
Q\SC 0"\'1
,"0\ OSe
~)\j \?
Hollywood, Florida
February xx, 2011
-2-
Management's Discussion and Analysis
(Required Supplementary Information) - Unaudited
September 30,2010 and 2009
. \'(\O\~
\'te\\\<' x\
\)R~ '0\\
· SC\J.SS\
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r OSe
~U,?
Our discussion and analysis of the City of Boynton Beach Municipal Police Officers' Retirement Fund
(the Fund) financial performance provides an overview of the Fund's fmancial activities and funding
contributions for the fiscal years ended September 30,2010 and 2009. Please read it in conjunction with
the Fund's financial statements, which follow this discussion.
Financial Highlights
· Fund assets exceeded liabilities at the close of the fiscal year ended September 30,2010 and 2009
by $50,379,546 and $44,363,337, respectively, (reported as net assets held in trust for pension
benefits). Net assets are held in trust to meet future benefit payments. The increase of
$6,016,209 and $797,375, of the respective years has resulted primarily from the changes in the
fair value of the Fund's investments due to volatile fmancial markets.
· The Fund's funded ratio, a comparison of the actuarial value of assets to the actuarial accrued
pension benefit liability, changed from 63.5% as of the October 1, 2007 actuarial valuation to
61.2% as of the October 1,2008 valuation and 59.1 % as of the October 1, 2009 valuation.
· For the fiscal year ended September 30, 2010, receivables increased by $457,787 (or 13.0%).
This increase is due primarily to an increase in City contributions receivable.
For the fiscal year ended September 30, 2009, receivables decreased by $376,916 (or 12.0%).
This increase is due primarily to an increase in City contributions receivable.
· For the fiscal year ended September 30,2010, liabilities increased by $99,848 (or 133.6%). This
increase is due to an increase in accounts payable.
For the fiscal year ended September 30, 2009, liabilities decreased by $812 (or 1.1 %). This
decrease is due to a decrease in accounts payable.
· For the fiscal year ended September 30,2010, City contributions to the Fund increased $443,434
(or 13.7%). This increase is due primarily to an increase in the City's actuarially computed
minimum required contribution. Actual employer contributions were $3,688,516 and $3,245,082
for 2010 and 2009, respectively.
For the fiscal year ended September 30,2009, City contributions to the Fund increased $473,928
(or 17.1 %). This increase is due primarily to an increase in the City's actuarially computed
minimum required contribution. Actual employer contributions were $3,245,082 and $2,771,154
for 2009 and 2008, respectively.
- 3 -
Management's Discussion and Analysis
(Required Supplementary Information) -Unaudited
September 30,2010 and 2009
. f{\\.{Y....,l\ J
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· c'JSS\
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?ut?OS(~
Financial Highlights - (continued)
· For the fiscal year ended September 30, 2010, member contributions including buybacks and
DROP rollover contributions increased by $176,342 (or 17.6%). Actual member contibutions,
excluding buybacks and DROP rollover contributions were $970,914 and $907,526 or 2010 and
2009, respectively. Total buybacks and DROP rollover contributions were $205,267 anc $92,313
for 2010 and 2009, respectively. Member contributions have increased due to an increase in the
amount of buy backs and other contributions.
For the fiscal year ended September 30, 2009, member contributions including buybacks and
DROP rollover contributions decreased by $94,544 (or 8.6%). Actual member contributions,
excluding buybacks and DROP rollover contributions were $907,526 and $903,983 or 2009 and
2008, respectively. Total buybacks and DROP rollover contributions were $92,313 and $190,400
for 2009 and 2008, respectively. Member contributions have decreased due to a decrease in the
amount of buybacks.
· For the fiscal year ended September 30, 2010, net investment income was $4,579,081 compared
to a net investment loss of$340,399 in fiscal year ended September 30,2009. Actual results were
$4,923,271 and $(87,156) in net appreciation (depreciation) in fair value of investments for 2010
and 2009, respectively, and $69 and $473 in miscellaneous income for 2010 and 2009,
respectively. Investment expenses increased by $90,543 (or 35.7%).
For the fiscal year ended September 30, 2009, net investment loss was $340,399 compared to a
net investment loss of $7,670,257 in fiscal year ended September 30, 2010. Actual results were
$(87,156) and $$(7,365,595) in net depreciation in fair value of investments for 2009 and 2008,
respectively, and $473 and $67 in miscellaneous income for 2009 and 2008, respectively.
Investment expenses decreased by $51,013 (or 16.7%).
· For the fiscal year ended September 30, 2010, benefit payments and refunds of contributions
increased by $263,652 (or 7.2%).
For the fiscal year ended September 30, 2009, benefit payments and refunds of contributions
increased by $31,731 (or 0.9%).
· For the fiscal year ended September 30, 2010, administrative expenses increased by $118 from
2009 (or 0.1 %).
For the fiscal year ended September 30,2009, administrative expenses increased by $11,211 from
2008 (or 10.1 %), due primarily to the increase in professional fees.
Plan Highlights
For the fiscal year ended September 30, 2010, the relative return of the portfolio was 10.9% for the
trailing year and ranked in the top 29th percentile of the Universe of Funds, 0.7% below the benchmark
return of 11.6%. Actual net returns from investments were $4,579,081 in 2010 compared with a net loss
of$340,399 in 2009.
For the fiscal year ended September 30, 2009, the relative return of the portfolio was -0.6% for the
trailing year and ranked in the top 33rd percentile of the Universe of Funds, 1.3% below the benchmark
return of 0.7%. Actual net returns from investments were net loss of $340,399 in 2009 compared with net
loss of $7,670,257 in 2008.
-4-
\" m\f\ot'l
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C".,~_#
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The fmancial statements reflect the activities of the City of Boynton Beach Municipal Police Officers'
Retirement Fund and are reported in the Statement of Plan Net Assets and the Statement of Changes in
Plan Net Assets. These statements are presented on a full accrual basis, reflect all trust activities as
incurred and are based on a snapshot in time of account balances of investments at fiscal year end.
Management's Discussion and Analysis
(Required Supplementary Information) -Unaudited
September 30,2010 and 2009
Using the Audited Financial Statements
Statement of Plan Net Assets
The following condensed comparative Statement of Plan Net Assets demonstrates the investment position
of the Fund.
Cash and cash equivalents
Receivables
Investments
Total assets
Liabilities
Net assets held in trust for oension benefits
2010
$ 81,380 $
3,969,635
46.503.132
50,554,147
174.601
$ 50.379.546 $
2009
12,479
3,511,848
40.913.763
44,438,090
74.753
44.363.337
$
2008
1,267
3,134,932
40.505.328
43,641,527
75.565
43.565.962
$
Statement of Changes in Plan Net Assets
The Statement of Changes in Plan Net Assets, displays the effect of pension fund transactions that
occurred during the fiscal year, where Additions - Deductions = Net Increase (or decrease) in Net Assets.
The table below reflects a condensed comparative summary of the changes in net assets and reflects the
activities of the Fund.
2010 2009 2008
Additions :
Contributions
City $ 3,688,516 $ 3,245,082 $ 2,771,154
Member 1,176,181 999,893 1,094,383
State 641.483 698.135 686.975
Total 5,506,180 4,943,056 4,552,512
Net investment income (loss) 4.579.081 (340.399) ~7:670:257)
Total additions (reductions) 10.085.261 4.602.657 3 117 745)
Deductions:
Benefits paid 3,907,950 3,653,028 3,585,766
Participants' contributions refunded 38,620 29,890 65,421
Administrative expenses 122.482 122.364 111.153
Total deductions 4.069.052 3.805.282 3.762.340
Net increase (decrease) 6,016,209 797,375 (6,880,085)
Net assets held in trust for pension benefits
at beginning of year 44.363.337 43.565.962 50.446.047
Net assets held in trust for pension benefits
at end of vear $ 50.379.546 $ 44.363.337 $ 43.565.962
-5-
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Statement of Changes in Plan Net Assets - (continued) r \J,\ 'P 0 S
The Fund's investment activity, measured as of the end of any month, quarter or year, is a function of the
underlying marketplace for the period measured and the investment policy's asset allocation. Actual
returns increased from those of fiscal years ended 2009 and 2008.
Management's Discussion and Analysis
(Required Supplementary Information) -Unaudited
September 30,2010 and 2009
The benefit payments are a function of changing payments to retirees, their beneficiary (if the retiree is
deceased) and new retirements during the period.
Asset Allocation
At the end of the fiscal year ended September 30, 2010, the domestic equity portion comprised 33.8%
($15,784,213) of the total portfolio. The allocation to fixed income securities was 33.6% ($15,631,912),
while cash and cash equivalents was 0.2% ($81,380). The portion of investments allocated to
international equity was $12,008,954 or 25.8% of the total portfolio while alternative investments were
6.6% ($3,078,053).
At the end of the fiscal year ended September 30, 2009, the domestic equity portion comprised 45.9%
($18,768,495) of the total portfolio. The allocation to fixed income securities was 35.3% ($14,456,738),
while cash and cash equivalents was less than 1/10 of a percent ($12,479). The portion of investments
allocated to international equity was $6,271,872 or 15.3% of the total portfolio while alternative.
investments were 3.5% ($1,416,658).
The target and actual asset allocation (based on market values), at September 30, was as follows:
Target
2010 2009
Actual
2010 2009
Domestic equity
Fixed income
International equity
Cash
Alternative investments
35%
35%
15%
0%
15%
50%
35%
10%
0%
5%
34%
34%
25%
0%
7%
51%
34%
9%
0%
6%
Contacting the Fund's Financial Management
This fmancial report is designed to provide the Retirement Board, our membership, taxpayers, investors,
and creditors with a general overview of the Fund's finances and to demonstrate the Fund's accountability
for the money it receives. If you have any questions about this report or need additional financial
information, contact the City of Boynton Beach Municipal Police Officers' Retirement Fund, 1500
. Gateway Boulevard, Suite 220, Boynton Beach, FL 33426.
- 6-
\\rn\norY
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PUTPO~~
2010 2009
City of Boynton Beach Municipal
Police Officers' RdiremeritFund
Statements of Plan Net Assets
September 30,2010 and 2009
Assets
Cash and cash equivalents
$
81,380
Receivables:
City contributions
Receivable for securities sold
Total receivables
3,688,516
281,119
3,969,635
$
12,479
3,245,082
266,766
3,511,848
Investments, at fair value:
Domestic fIxed income funds
Domestic equity funds
International equity funds
Alternative investments
Total investments
15,631,912
15,784,213
12,008,954
3,078,053
46,503,132
14,456,738
18,768,495
6,271,872
1,416,658
40,913,763
Total assets
50,554,147
44,438,090
Liabilities
Accounts payable
174,601
74,753
Net assets held in trost for pension benefits
(a schedule of funding progress is presented on page 18)
$ 50,379,546
$ 44,363,337
The accompanying notes are an integral part of these financial statements.
-7-
. ~y 1
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City of Boynton Beach Municipal \,te \ ~r),f\
Police OfficerS" Retirement "Fund
o :,<:\0\\
Statements of Changes in Plan Net Assets . CU v'
For the years ended September 30, 2010 and 2009 rO~ O\S 0\,\\\1
eSA
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2 0 2009
Additions
Contributions:
City $ 3,688,516 $ 3,245,082
Member 1,176,181 999,839
State 641,483 698,135
Total contributions 5,506,180 4,943,056
Investment income:
Net appreciation (depreciation) in fair value of investments 4,923,271 (87,156)
Miscellaneous income 69 473
Total investment income (loss) 4,923,340 (86,683)
Less: investment expenses 344,259 253,716
Net investment income (loss) 4,579,081 (340,399)
Total additions 10,085,261 4,602,657
Deductions:
Benefits paid 3,907,950 3,653,028
Participants' contributions refunded 38,620 29,890
Administrative expenses 122,482 122,364
Total deductions 4,069,052 3,805,282
Net increase 6,016,209 797,375
Net assets held in trust for pension benefits
Beginning of year 44,363,337 43,565,962
End of year $ 50,379,546 $ 44,363,337
The accompanying notes are an integral part of these financial statements.
-8-
City of Boynton Beach Municipal Police Officers' Retirement FU.l\d~\nC\\f
Financial Statements ?~ e \ \ -r
September 30, 2010 and 2009 . 0 R~t \ .
. \X~5\O\\
Note 1 - Description ofthe Plan f ~ ~\ ~\OS~e 0 n\\'
Organization r V \ t"
The City of Boynton Beach Municipal Police Officers' Retirement Fund (the "Fund") is a single
employer defined benefit pension plan established by the City of Boynton Beach, Florida (the "City")
pursuant to the provisions and requirements of Section 18 of the City of Boynton Beach Code of
Ordinances. Since the Fund is sponsored by the City, the Fund is included as a pension trust fund in the
City's comprehensive annual financial report as part of the City's financial reporting entity.
The following brief description of the Fund is provided for general information purposes only.
Participants should refer to the plan agreement for more detailed and comprehensive information.
Participants
Each full time sworn police officer employed by the City of Boynton Beach, Florida.
Membership
Membership data at October 1 was as follows:
2009
2008
Retirees and beneficiaries currently receiving benefits and terminated
employees entitled to benefits but not yet receiving them
Active plan participants
Total oarticioants
107
151
258
104
149
253
Funding Requirements
Member Contributions:
Member contributions are equal to 7% of covered salary and each member's actual contributions are
individually accumulated. Members are also required to contribute an additional 1 % of their covered
salary to fund a monthly supplemental retirement benefit.
If a member terminates their employment before accumulating aggregate time of 5 years toward
retirement, the accumulated contributions will be returned to the member, without interest.
If a member terminates their employment and has been in the service of the City for at least 5 years and
elects to leave their accrued contribution in the Fund, the member, upon attaining, age fifty-five with ten
or more years of service (had he or she not terminated employment) or reaching what would have been
twenty years of service (had he or she not terminated his or her employment), may receive the accrued
normal retirement benefit.
- 9-
City of Boynton Beach Municipal Police Officers' Retirement FU~~,,\\CX~\~
Financial Statements e \\ \ \ · \ "'\
September 30,2010 and 2009 ~, 2. ~~ \ '. If'''
o r '0\ \
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Note 1- Description ofthe Plan - continued
Funding Requirements
City and State Contributions:
The City is to contribute such amounts as are necessary to maintain the actuarial soundness of the Fund
and to provide the Fund with assets sufficient to meet the benefits to be paid to the participants. This
amount is reduced by any allowable State contributions. In addition to the above amount, the City was
required to match the additional 1 % contribution the members make to fund the monthly supplemental
retirement benefit as more fully discussed below under the description for this benefit.
Pension Benefits
Normal Retirement:
Any member who has completed 20 years of creditable service regardless of age or has attained 55 years
of age and completed 10 years of credited service or has attained 50 years of age and completed 15 years
of credited service may retire with a normal retirement benefit.
Members will receive a monthly pension benefit equal to 3.5% of their Average Final Compensation
times the years of credited service. Average Final Compensation is the average Covered Salary of the best
five years during the final ten years of credited service.
Early retirement, disability, death and other benefits are also provided. All such benefits are subject to
Internal Revenue Code limitations.
Deferred Retirement Option Plan:
Members who continue employment with the City past normal retirement date may freeze their accrued
benefit and enter the Deferred Retirement Option Plan (DROP). Maximum participation in the DROP
shall be 5 years or 30 years of service, whichever comes first.
For members electing participation in the DROP, an individual DROP account shall be created. Payment
shall be made by the Fund into the employee's DROP account in an amount equal to the regular monthly
retirement benefit which the participant would have received had the participant separated from service
and commenced receipt of pension benefits plus interest. Interest shall be based either on the actual rate
ofretum for the Fund or a guaranteed rate of7.0%, based on what method the member selected.
Upon termination of employment, a member may receive distribution from the DROP account in the
following manner:
. Lump sum distribution
. Equal installments over a five year period or
. Monthly installments until the account balance is paid out
A DROP participant shall not be entitled to receive a disability retirement for pension purposes. DROP
participation does not affect any other death or disability benefit provided to a member under federal law,
state law, City ordinance, or any rights or benefits under any applicable collective bargaining agreement.
- 10-
City of Boynton Beach Municipal Police Officers' Retirement Fund . (\0'\\/
Financial Statements ~\ '" \ \
September 30,2010 and 2009 ?~e ~r\
\)9 - n
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Note 1- Description ofthe Plan - continued
Pension Benefits - continued
Deferred Retirement Option Plan - continued:
The value of the DROP account at September 30, 2010 and 2009 was $4,603,461 and $3,957,870
respectively.
Monthlv Supplemental Retirement Benefit:
Effective October 1, 2006, any retiree or beneficiary receiving pension benefits is entitled to a monthly
supplemental pension benefit. The benefit pool will be funded by 100% of the annual earnings and 10%
of the principal created by the contributions received.
The benefit pool shall be divided according to the total number of years of service rendered by all retirees,
with a cap of 40 years. The shares will be divided on a pro-rata basis as defined in the ordinances.
The supplemental benefit was to be funded by a 1 % contribution from the Members and a 1 %
contribution from the City. Effective with the Chapter 185 monies received for calendar year 2001, the
excess Chapter 185 dollars will be allocated to fund the City's contributions until the Chapter 185 dollars
are received for calendar year 2005 or, if earlier, until the entire 1 % of the City contributions are covered
by the increase in the Chapter 185 monies. Employees will contribute to this benefit through 20 years of
servIce.
The value of the monthly supplemental benefit reserve at September 30, 2010 and 2009 was
approximately $1,253,000 and $1,020,000, respectively.
Investments
Investments are carried at fair value using quoted market prices to value investments. The Fund provides
for investment in U.S. Government Securities, money market funds, bonds, notes and common stock.
The investment of funds shall be in a manner that is consistent with the applicable sections of the City
Code as well as State and Federal laws within the allocation percentages established in the Fund's
investment policy guidelines.
Note 2 - Summary of Significant Accounting Policies
Basis of Accounting
The Fund financial statements are prepared using the accrual basis of accounting. Member contributions
are recognized as revenues in the period in which the contributions are due. City contributions are
recognized as revenues when due pursuant to actuarial valuations. State contributions are recognized as
revenue in the period in which they are approved by the State. Benefits and refunds are recognized when
due and payable in accordance with the terms of the Fund. Interest and dividend income are recorded as
earned.
- 11 -
City of Boynton Beach Municipal Police Officers' Retirement FUnd\~({\\r\O\'t~
Financial Statements \,te \ :"\
September 30, 2010 and 2009 '\) R~t
. C~S\Of\
Note 2 - Summary ofSignifieant Accounting Policies - continued f O~ 0 \S eon \'I!
Investments ?U~?OS
Plan investments are reported at fair value. Quoted market prices, when available, have been used to
value investments. The fair value of quoted investments is based on the closing sales price or bid price
as reported by recognized security exchanges. The market values for securities that have no quoted
market price represent estimated fair value. Many factors are considered in arriving at that value.
International equities are valued based upon quoted foreign market prices and translated into U.S.
dollars at the exchange rate in effect at September 30, 2010 and 2009. In general, corporate debt
securities have been valued at quoted market prices or, if not available, values are based on yields
currently available on comparable securities of issuers with similar credit ratings. Publicly traded
alternative investments are valued based on quoted market prices. In the absence of readily
determinable public market values, alternative investments are valued using current estimates of fair
value obtained from the general partner or investment manager. Such valuations generally reflect
discounts for liquidity and consider variables such as financial performance of investments, discounted
cash flow analysis, recent sales prices of comparable investments, and other pertinent information.
Unrealized gains and losses are presented as net appreciation (depreciation) in fair value of investments
on the statement of changes in plan net assets along with gains and losses realized on sales of
investments. Dividends and interest income are recognized as earned. Purchases and sales of
investments are recorded on a trade-date basis.
Given the inherent nature of investments, it is reasonably possible that changes in the value of those
investments will occur in the near term and that such changes could materially affect the amounts
reported in the statements of plan net assets.
Use of Estimates
The preparation of fmancial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those estimates.
Cash Equivalents
The Fund considers all highly liquid investments with an original maturity of one year or less when
purchased., to be cash equivalents.
Income Tax Status
The Fund is tax exempt from Federal income taxes under the Internal Revenue Code, and therefore has
recorded no income tax liability or expense.
Reclassifications
Certain reclassifications have been made to the 2009 financial statement presentation to correspond to the
current year's format. Total net assets held in trust for pension benefits and net increase in net assets are
unchanged due to these reclassifications.
- 12-
City of Boynton Beach Municipal Police Officers' Retirement FUnd\'\rn\f\()\'\'j
Financial Statements ~{e .,.
September 30, 2010 and 2009 0 RP-r \ . n
. cCUSS\O
Note 2 - Summary of Significant Accounting Policies - continued rot D\" (;::> 0\\\'1
Risks and Uncertainties t> \.l Pt) 0 Sv
Contributions to the Fund and the actuarial information included in the required supplementary
information (RSI) are reported based on certain assumptions pertaining to the interest rates, inflation rates
and member compensation and demographics. Due to the changing nature of these assumptions, it is at
least reasonably possible that changes in these assumptions may occur in the near term and, due to the
uncertainties inherent in settling assumptions, that the effect of such changes could be material to the
financial statements.
Subsequent Events
Management has evaluated subsequent events through February xx, 2011, the date which the financial
statements were available for issue.
Note 3 - Funded Status and Funding Progress
The funded status of the Benefit Plan as of October 1, 2009, the most recent actuarial valuation date, is as
follows (dollar amounts in thousands):
Actuarial UAAL as
Actuarial Accrued %of
Valuation Value of Liability Unfunded Funded Covered Covered
Date Assets (AAL) AAL (VAAL) Ratio Payroll Payroll
10/01/09 $ 46,117 $ 78,055 $ 31,938 59.1% $ 12,538 254.7%
The schedule of funding progress, presented as required supplementary information (RSI) following the
notes to the fmancial statements, presents multiyear trend information about whether the actuarial value
of plan assets is increasing or decreasing over time relative to the AAL for benefits.
Additional information as of the latest actuarial valuation follows:
Valuation date
Contribution rates:
Employer (and State)
Plan members
Actuarial cost method
Amortization method
Remaining amortization period
Asset valuation method
Actuarial assumptions:
Investment rate ofreturn*
Projected salary increases*
Cost-of-Living adjustments
*Includes inflation at:
October 1, 2009
31.78%
7.0%
Entry Age Normal
Level percent of payroll, closed
30 years
5 year smoothed market
8.0%, net of investment expenses
5.0% to 6.5% depending on age
NA
4.0%
- 13 -
City of Boynton Beach Municipal Police Officers' Retirement FUnd\\rr\\f\O'{\f
Financial Statements . \'{ e \ '1'
September 30,2010 and 2009. DRP-.\- \ . n
· CUSS\O
Note 4- Contributions \-O~ D\S ~e on\\!
Actual Contributions ?U~?O.,;
The actual City contribution for active members and State contributions for the years ended September
30, 2010 and 2009 were $4,329,999 and $3,943,217, respectively and the actual amount of covered
payroll was approximately $12,142,000 and $12,345,000 for fiscal years ended September 30, 2010 and
2009, respectively.
City and State contributions consisted of the following:
City contribution
State contribution
Total
Amount
$ 3,688,516
641.483
$ 4.329.999
2010
Percent of Actual
Annual Covered Payroll
30.4%
5.3%
35.7%)
City contribution
State contribution
T otal
Amount
$ 3,245,082
698.135
$ 3.943.217
2009
Percent of Actual
AnnualCoveredPawoll
26.3%
5.7%
31.0%
Member contributions were $1,176,181 and $999,839 which includes buy backs of$40,124, and $26,727,
and DROP rollover of $190,138 and $65,587, for the years ended September 30, 2010 and 2009,
respectively.
Actuarially Determined Contributions
The contributions required from the City of Boynton Beach for the fiscal years ended September 30, 2010
and 2009, were actuarially determined using valuation dates of October 1, 2009 and 2008, respectively.
The actuarially computed annual covered payroll used in the October 1, 2009 and 2008 valuation was
$12,537,968 and $11,532,888, respectively. The amount covers the following:
Normal cost
Payments to amortize unfunded Iiabilitv
Total
Amount
$ 2,251,381
1.902.222
$ 4.153.603
2010
Percent of Actuarially
Computed Covered
Annual Pavroll
18.0%
15.1 %
33.1%)
Normal cost
Pavments to amortize unfunded liability
Total
Amount
$ 2,059,856
1.650.313
$ 3.710.169
- 14 -
2009
Percent of Actuarially
Computed Covered
Annual Pawoll
17.8%
1.4%
32.2%
City of Boynton Beach Municipal Police Officers' Retirement Fund\" rl1\\",\Or~J
Financial Statements O'(e\\\ \ \ "1'
September 30,2010 and 2009 r n ,t'\.f \
D\"I'"' · f\
. C,-\SS\O
Note 5 - Depositand Investment Risk Disclosures rO ~ D \5 e 0 n':-i
Investment Authorization ?U\~90S
The Fund's investment policy is determined by the Board of Trustees. The policy's objective is to obtain
a reasonable total rate of return - defmed as interest and dividend income plus realized and unrealized
capital gains and/or losses - that meets or exceeds the actuarial interest rate assumption net of fees to
ensure the Fund is actuarially sound. The investment policy of the Fund stipulates that the trustees shall,
in acquiring, investing, reinvesting, exchanging, retaining, selling and maintaining property for the benefit
of the Fund exercise the care, skill, prudence, and diligence that a prudent man acting in such matters
would use in the conduct of an enterprise of like character and with like aim. The policy also states that
investments of the Fund will be diversified so as to minimize the risk of large loss, unless under the
circumstances it is clearly prudent not to do so.
The Trustees are authorized to acquire and retain every kind of property, real, personal or mixed, and
every kind of investment specifically including, but not by way of limitation, bonds, debentures, and other
corporate obligations, and stocks, preferred or common, which persons of prudence, discretion and
intelligence acquire or retain for their own account. Investment in all equity securities shall be limited to
no more than 66% (at market) of the Fund's total asset value with no more than 5% of the Fund's total
assets, at cost, invested in the common stock of anyone company. Foreign investments shall be limited
to 20%, respectively, of the market value of the total Fund's assets.
The Fund has contracts with investment counselors who supervise and direct the investment of equity and
fixed income securities. In addition, the Fund utilizes an investment advisor who monitors the investing
activity. The investments owned are held by a custodian in the name of the Fund, however, equity
securities are held in a nominee name to facilitate trading.
Types of Investments
Florida statutes and Fund investment policy authorize the Trustees to invest funds in various investments.
The current target allocation of these investments at market is as follows:
Target %
of portfolio
Authorized investments
Domestic equities
Fixed income
International equities
Cash equivalents
Alternative investments
2010
35%
35
15
o
15
2009
50%
35
10
o
5
- 15 -
City of Boynton Beach Municipal Police Officers' Retirement Fund -rn\r\Or~
Financial Statements Ote\\\ \ \
September 30,2010 and 2009 f" RpJ(\
D S~\O\\
.\~CU '-'
fOt 0 '" eon\'-!
?U\?os
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an
investment. Duration is a measure of the price sensitivity of a fIxed income portfolio to changes in
interest rates. It is calculated as the weighted average time to receive a bond's coupon and principal
payments. The longer the duration of a portfolio, the greater its price sensitivity to changes in interest
rates.
Note 5 - Deposit and Investment Risk Disclosures - continued
Interest Rate Risk
Information about the sensitivity of the fair values of the Fund's investments to market interest rate
fluctuations is provided by the following tables that show the effective duration of fIxed income
investments at September 30:
2010
Investment tYpe
Bond funds
Total fixed income
Effective
Duration in
Years
4.2
4.2
Fair Value
$ 15.631.912
$ 15.631.912
Credit Risk
F air Value
$ 14.456.738
$ 14.456.738
2009
Effective
Duration in
Years
3.9
3.9
Credit risk is the risk that a security or a portfolio will lose some or all of its value due to a real or
perceived change in the ability of the issuer to repay its debt. This risk is generally measured by the
assignment of a rating by a nationally recognized statistical rating organization. The Fund's investment
policy utilizes portfolio diversification in order to control this risk.
The following tables disclose credit ratings by investment type, at September 30, as applicable:
U.S. government guaranteed*
Quality rating of credit
risk debt securities:
AAA
AA
A
BBB
BB
B
Other
Total credit risk debt securities
Total fixed income securities
2010
Percentage
of Portfolio
40.0%
Fair Value
$ 6,252,765
4,376,935 28.0
937,915 6.0
1,875,829 12.0
1,719,510 11.0
468,958 3.0
9,379,147
$ 15.631.912
60.0
100.0%
- 16 -
Fair Value
$ 4,192,454
3,758,752
722,837
1,734,809
2,023,943
433,702
722,837
1.445.674
10,842,554
$ 14.456.738
2009
Percentage
of Portfolio
29.0%
26.0
5.0
12.0
14.0
3.0
5.0
10.0
71.0
100.0%
Note 5 - Deposit and Investment Risk Disclosures - continued
· ,,0:\'1
City of Boynton Beach Municipal Police Officers' Retirement F~f(\\
Financial Statements ~, t\.~\
September 30, 2010 and 2009 t"'\ t{r . .",,,,,,y"\
\.'/\'" c. \ 'Li' '
\ \C..,~~
t""\\SC- ~. .\.."..~
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Credit Risk - continued
*Obligations of the U.S. government or obligations explicitly guaranteed by the U.S. government are not
considered to have credit risk and do not have purchase limitations.
Concentration of Credit Risk
The investment policy of the Fund contains limitations on the amount that can be invested in anyone
issuer as well as maximum portfolio allocation percentages. There were no individual investments that
represent 5% or more of plan net assets at September 30,2010 and 2009.
Custodial Credit Risk
Deposits are exposed to custodial risk if they are uninsured and uncollateralized. Custodial risk is the risk
that, in the event of the failure of the counterparty, the Fund will not be able to recover the value of its
investments or collateral securities that are in the possession of an outside party. Investment securities are
exposed to custodial risk if the securities are uninsured, are not registered in the name of the Fund and are
held either by the counterparty or the counterparty's trust department or agent but not in the Fund's name.
Consistent with the Fund's investment policy, substantially all the investments are held by the Fund's
custodial bank and registered in the Fund's name. All of the Fund's deposits are insured and or
collateralized by a financial institution separate from the Fund's depository financial institution.
Note 6 - Commitments
The Fund and Boynton Beach Firefighters Pension Fund are obligated under a joint rental operating
lease for office space, which expired on September 30, 2010 and was subsequently renewed until
September 30, 2011. The base rent of the lease is $925 per month plus applicable sales taxes and is
prorated 50/50 for each plan respectively. During the years ended September 30, 2010 and 2009, rent
expense for the Fund under the lease agreement amounted to $5,556 and $4,629, respectively.
The following is a schedule of the aggregate future minimum rental payments under this lease,
excluding applicable sales taxes.
For the year ending September 30.
2011
$5,556
- 17 -
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Required Supplementary Infortl>>~(io.l1' ,,10 0":-\'
,v O""v~'"
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Other Supplementary Schedule" n\sCU W h.'.
to' \...' or~\ '1
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9'{e\\~ f\ .
City of Boynton Beach Municipal Police Officers' Retirement Fund \)R~ c\ot\
Other Supplementary Schedules of Investment Expenses and Administrative Expenses . S C U '0:;; I> '\.1
For the Years Ended September 30, 2010 and 2009 ~ D\ Of\.'
t:O _.e,e
\ " '.J-
~.~.'~ ~'""i"
\,. ~
2010
Schedule "1" - Schedule of Investment Expenses
Financial management expenses
Russell Investment Group
Investment consultant fees
Burgess Chambers Associates
Investment custodial fees
Russell Trust Company
Total investment expenses
$
321,286 $
233,227
20,000
17,500
$
2,973
344,259 $
2,989
253,716
Schedule "2" - Schedule of Administrative Expenses
Professional services
Actuarial $ 17,230 $ 18,153
Administrator 20,052 20,052
Audit 14,000 14,375
Legal 11,243 23,853
Total professional services 62,525 76,433
Other
Computer expense 14,104 13,133
Insurance 10,832 10,323
Printing and office expense 3,150 747
Rent 5,556 4,629
Member education expense 3,070 3,495
Trustee expense 23,245 13,604
Total other 59,957 45,931
Total administrative expenses $ 122,482 $ 122,364
-19-
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Section II \)V....r \SS\O'0
Q\SG'V 0\\\"\1
Report on Internal Control Over Financial Rep~~~90c;,e
and on Compliance and Other Matters Based ?U.
on an Audit of Financial Statements Performed in Accordance With
Government Auditing Standards
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Report 00 Internal Control Over Finanetal Reporm.P'I;<J>.\ , \ sS ,G" .
and on Compliance and Other Matters -\\\c..G v r"" ";'^;\
Based on an Audit of Financial Statemenp 0 ~ V "'" e \,);
Performed in Accordance with \ OS
Government Auditing Standards ?u t?
Board of Trustees
City of Boynton Beach Municipal Police Officers' Retirement Fund
Boynton Beach, FL
We have audited the fInancial statements of the City of Boynton Beach Municipal Police Officers'
Retirement Fund (the "Fund") as of and for the year ended September 30, 2010, and have issued our
report thereon dated February xx, 20 11. We conducted our audit in accordance with auditing standards
generally accepted in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the Fund's internal control over fmancial reporting
as a basis for designing our auditing procedures for the purpose of expressing our opinion on the fmancial
statements, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal
control over fmancial reporting. Accordingly, we do not express an opinion on the effectiveness of the
Fund's internal control over financial reporting.
A deficiency in intemal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent or
detect misstatements on a timely basis. A material weakness is a deficiency, or a combination of
deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of
the entity's financial statements will not be prevented, or detected and corrected on a timely basis
Our consideration of internal control over financial reporting was for the limited purpose described in
the first paragraph of this section and was not designed to identify all deficiencies in internal control
that might be defIciencies, signifIcant defIciencies, or material weaknesses. We did not identify any
defIciencies in internal control over fInancial reporting that we consider to be material weaknesses, as
defined above.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Trust's financial statements are free of
material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts and noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with
those provisions was not an objective of our audit, and accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance or other maters that are required to be
reported under
- 20-
Government Auditing Standards
This report is intended for the information of the Board of Trustees, management, participants and
applicable state and city agencies and is not intended to be and should not be used by anyone other than
these specified parties. However, this report is a matter of public record and its distribution is not
limi ted.
Cold::Jtcin
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Hollywood, Florida
February xx, 2011
- 21 -
City of Boynton Beach Municipal Police Officers' Retirement Fun~ ~\\\O~"
Required Supplementary Information O~e\\\ \ · -1'
Schedule of Funding Progress and Schedule of Contributions (Unaudited) -r nO ~~ \ . <'\
September 30,2010 V" SS\O\ '
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Schedule "1" - Schedule of Fundinl! Prol!ress
(dollar amounts in thousands)
Unfunded
Actuarial Actuarial Actuarial
Actuarial Value of Accrued Accrued Annual UAAL as a
Valuation Assets Liability Liability Funded Covered % of Covered
Date (A V A) (AAL) (uAAL ) Ratio Pavroll Payroll
1 % 1/04 $ 34,496 $ 48,154 $ 13,658 71.6% $ 7,207 189.5%
10/01/05 35,445 56,691 21,246 62.5 7,836 271.1
10/01/06 37,691 61,468 23,776 61.3 9,302 255.6
10/01/07 41,981 66,069 24,088 63.5 10,297 233.9
10/01/08 44,278 72,350 28,072 61.2 11,533 243.4
10/01/09 46,117 78,055 31,938 59.1 12,538 254.7
Schedule "2" - Schedule of Contributions by
Employer and Other Contributinl! Entity
Year Ended September 30.
Annual Required Contribution
Percental!e Contributed
2005
2006
2007
2008
2009
2010
$ 2,571,109
2,808,957
3,030,547
3,236,241
3,710,169
4,153,603
100%
100
100
100
100
100
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