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2015 Fire Valuation Report GR Gabriel S Roeder Smith Company Consultants & Actuaries CITY OF BOYNTON BEACH MUNICIPAL FIREFIGHTERS' PENSION TRUST FUND ACTUARIAL VALUATION REPORT AS OF OCTOBER 1, 2015 ANNUAL EMPLOYER CONTRIBUTION IS DETERMINED BY THIS VALUATION FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2017 GRS GRS Gabriel Roeder it & Company One East Broward Blvd. 954.527.1616 phone Consultants & Actuaries Suite 505 954.525.0083 fax GRS Ft. Lauderdale, FL 33301-1804 www.gabrielroeder.com March 31, 2016 Board of Trustees City of Boynton Beach Municipal Firefighters' Pension Trust Fund Boynton Beach, Florida Re: City of Boynton Beach Municipal Firefighters' Pension Trust Fund Actuarial Valuation as of October 1, 2015 and Actuarial Disclosures Dear Board Members: The results of the October 1, 2015 Annual Actuarial Valuation of the City of Boynton Beach Municipal Firefighters' Pension Trust Fund are presented in this report. The computed contribution rate shown on page I may be considered as a minimum contribution rate that complies with the Board's funding policy. Users of this report should be aware that contributions made at that rate do not guarantee benefit security. Given the importance of benefit security to any retirement system, we suggest that contributions to the System in excess of those presented in this report be considered. This report was prepared at the request of the Board and is intended for use by the Retirement System and those designated or approved by the Board. This report may be provided to parties other than the System only in its entirety and only with the permission of the Board. GRS is not responsible for unauthorized use of this report. The purposes of the valuation are to measure the System's funding progress, to determine the employer contribution rate for the fiscal year ending September 30, 2017, and to determine the actuarial information for Governmental Accounting Standards Board (GASB) Statement No. 67. This report also includes estimated GASB Statement No. 67 information for the fiscal year ending September 30, 2016. This report should not be relied on for any purpose other than the purpose described herein. Determinations of financial results associated with the benefits described in this report, for purposes other than those identified above may be significantly different. The findings in this report are based on data and other information through September 30, 2015. Future actuarial measurements may differ significantly from the current measurements presented in this report due to such factors as the following: plan experience differing from that anticipated by the economic or demographic assumptions; changes in economic or demographic assumptions; increases or decreases expected as part of the natural operation of the methodology used for these measurements (such as the end of an amortization period or additional cost or contribution requirements based on the plan's funded status); and changes in plan provisions or applicable law. The scope of an actuarial valuation does not include an analysis of the potential range of such future measurements. This valuation assumed the continuing ability of the plan sponsor to make the contributions necessary to fund this plan. A determination regarding whether or not the plan sponsor is actually able to do so is outside our scope of expertise and was not performed. Board of Trustees City of Boynton Beach Municipal Firefighters' Pension Trust Fund March 31, 2016 Page 2 The valuation was based upon information furnished by the Plan Administrator concerning Retirement System benefits, financial transactions, plan provisions and active members, terminated members, retirees and beneficiaries. We checked for internal reasonability and year -to -year consistency, but did not otherwise audit the data. We are not responsible for the accuracy or completeness of the information provided by the Plan Administrator. In addition, this report was prepared using certain assumptions prescribed by the Board as described in the section of this report entitled Actuarial Assumptions and Cost Method. This report has been prepared by actuaries who have substantial experience valuing public employee retirement systems. To the best of our knowledge the information contained in this report is accurate and fairly presents the actuarial position of the City of Boynton Beach Municipal Firefighters' Pension Trust Fund as of the valuation date. All calculations have been made in conformity with generally accepted actuarial principles and practices, with the Actuarial Standards of Practice issued by the Actuarial Standards Board and with applicable statutes. Peter N. Strong and Jeffrey Amrose actuaries are members of the American Academy of Actuaries. These actuaries meet the Academy's Qualification Standards to render the actuarial opinions contained herein. The signing actuaries are independent of the plan sponsor. 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. hi 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 review this valuation report with the Board of Trustees and to answer any questions pertaining to the valuation. Respectfully submitted, GABRIEL, ROEDER, SMITH & COMPANY Peter N. Strong, FSA, M CA J fr A Kse, MAAA, FCA Enrolled Actuary No. 14 -06 , nrol d Actuary No. 14 -06599 Gabriel Roeder Smith & Company TABLE OF CONTENTS Section Title Page A Discussion of Valuation Results 1. Comparison of Required Employer Contributions 1 2. Chapter Revenue 6 B Valuation Results 1. Participant Data 7 2. Actuarially Determined Employer Contribution (ADEC) 8 3. Actuarial Value of Benefits and Assets 9 4. Calculation of Employer Normal Cost 10 5. Liquidation of the Unfunded Actuarial Accrued Liability 11 6. Actuarial Gains and Losses 15 7. Actual Compared to Expected Decrements 20 8. Cumulative Actuarial Gains (Losses) 21 9. Recent History of Valuation Results 22 10. Recent History of Required and Actual Contributions 23 11. Actuarial Assumptions and Cost Method 24 12. Glossary of Terms 28 C Pension Fund Information 1. Summary of Assets 31 2. Pension Fund Income and Disbursements 32 3. Actuarial Value of Assets 33 4. Reconciliation of DROP Accounts 34 5. Investment Rate of Return 35 D Financial Accounting Information 1. FASB No. 35 36 2. GASB No. 67 37 E Miscellaneous Information 1. Reconciliation of Membership Data 43 2. Age /Service /Salary Distributions 44 F Summary of Plan Provisions 46 GRS SECTION A DISCUSSION OF VALUATION RESULTS GRS 1 DISCUSSION OF VALUATION RESULTS Comparison of Required Employer Contributions A comparison of the required employer contribution developed in this and the last actuarial valuation is shown below. The required contribution dollar amounts shown below are estimates only. The contribution policy of the City is to contribute the dollar amount determined by multiplying the required percentage of payroll determined as of the valuation date by the projected pensionable payroll for the year. For FYE 9/30/17 For FYE 9/30/16 Based on Based on 10/1/2015 10/1/2014 Increase Valuation Valuation (Decrease) if contributed on if contributed on 10/1/2016 10/1/2015 Required Employer /State Contribution $ 5,075,517 $ 4,856,683 $ 218,834 As % of Covered Payroll 49.10 % 49.44 % (0.34) % Estimated State Contribution $ 781,954 $ 781,954 $ 0 As % of Covered Payroll 7.56 % 7.96 % (0.40) % Required Employer Contribution $ 4,293,563 $ 4,074,729 $ 218,834 As % of Covered Payroll 41.54 % 41.48 % 0.06 % The required employer contribution has been computed under the assumption that the amount to be received from the State this year will be at least $781,954. If the State revenue is less than this amount, the City will have to make up the difference. The required employer contribution for the fiscal year ending September 30, 2016 calculated based on the October 1, 2014 valuation was revised to reflect this estimated State contribution. The employer contribution listed above is for the City's fiscal year ending September 30, 2017 and has been calculated as though payment is made in a single lump sum on October 1, 2016. The actual employer contribution for the fiscal year ending September 30, 2015 was $3,930,996. The minimum required employer contribution was $3,930,996. GRS 2 Ordinance 06 -692 (adopted in 2006), which added the 2% deferred COLA and increased member contributions by 5.0% of covered payroll, was intended to be cost neutral. Under the terms of this Ordinance, the actuarial cost of the COLA must be reevaluated every three years to ensure it remains cost neutral. The last reevaluation was completed as of October 1, 2012 (applicable to State money received during the fiscal year ending September 30, 2013), so a new reevaluation has recently been completed as of October 1, 2015 (applicable to State money received during the fiscal year ending September 30, 2016). This latest reevaluation has shown that the annual actuarial cost of the COLA is $77,632 higher than it was as of October 1, 2012. Therefore, the base amount of regular Chapter 175 State contributions increased by this amount, from $704,322 to $781,954, beginning in the fiscal year ending September 30, 2016. Revisions in Benefits There have been no changes in benefits since the prior valuation. Revisions in Actuarial Assumptions or Methods There have been no changes in actuarial assumptions or methods since the prior valuation. The Actuarial Standard of Practice (ASOP) with regard to the mortality assumption, ASOP No. 35 Section 4.1.1, states "The disclosure of the mortality assumption should contain sufficient detail to permit another qualified actuary to understand the provision made for future mortality improvement. If the actuary assumes zero mortality improvement after the measurement date, the actuary should state that no provision was made for future mortality improvement. " There is currently no margin for future mortality improvement in the current mortality assumption. We recommend an update to the mortality assumption to reflect increased longevity and to reflect future mortality improvements. A change in the mortality assumption to use the same mortality rates used in the actuarial valuation of the Florida Retirement System (FRS) will be required in next year's actuarial valuation report. This change is expected to cause an increase in the annual required employer contribution of approximately $350,000 to $375,000 and a reduction in the funded ratio of about 3 %. Actuarial Experience There was a net actuarial experience gain of $209,489 for the year, which means that overall actual experience was slightly more favorable than expected. The actuarial gain is primarily due to average salary increases that were less than expected (4.9% actual versus 6.2% expected). The gain was offset somewhat by GRS 3 lower than expected return on the actuarial value of assets. The net investment return on the actuarial value of assets was 7.31% versus an assumed return of 7.50 %. The net investment return on the market value of assets was 0.36 %. The net actuarial gain for the year has caused a decrease in the annual required employer contribution of 0.11 % of covered payroll. Additional Payments Toward Unfunded Actuarial Liability The City of Boynton Beach and the Firefighters' Union have mutually consented to use $1,000,000 of the Accumulated Excess State Contribution reserve to reduce the Plan's Unfunded Actuarial Liability (UAL). This is being done in three annual increments with the first increment ($333,333) occurring as of October 1, 2015. The second and third increments ($333,333 and $333,334) will be applied as of October 1, 2016 and October 1, 2017, respectively. The use of $333,333 as of October 1, 2015 was used to reduce the UAL amortization bases created on October 1, 1992. The net effect was a decrease in the annual required employer contribution of 0.51 % of covered payroll. Funded Ratio The funded ratio was 59.8% this year compared to 57.7% last year. The funded ratio was 59.5% this year before recognizing the additional payments toward the UAL from the Excess State Reserve. The funded ratio is equal to the actuarial value of assets divided by the actuarial accrued liability. Analysis of Change in Employer Contribution The components of change in the required employer contribution are as follows: Contribution rate last year 41.48 % Revision in Benefits 0.00 Experience (Gains) or Losses (0.11) Additional UAAL Payment from State Reserve (0.51) Amortization Payment on UAAL 0.18 Normal Cost Rate (0.03) Administrative Expense 0.13 State Contribution 0.40 Contribution rate this year 41.54 % According to Florida Administrative Code (Statute 112), the payroll growth assumption may not exceed the average payroll growth during the last ten years. The ten year average rate this year was equal to GRS 4 4.22% compared to the assumed rate of 4.0 %. Required Contributions in Later Years The current calculated City contribution requirement is 41.54% of payroll starting October 1, 2016. Under the asset smoothing method, market value gains and losses are recognized over five years. As of October 1, 2015, the actuarial value of assets exceeded the market value by $807,433. Once all the gains and losses through September 30, 2015 have been fully recognized in the actuarial value of assets, the employer contribution rate will increase by roughly 0.41% of payroll unless there are offsetting gains. Another important factor to consider looking down the road is the annual payment on the unfunded actuarial liability (UAL). This payment is computed as a level percentage of covered payroll under the assumption that covered payroll will rise by 4.0% per year. According to Florida Administrative Code (Statute 112), this payroll growth assumption may not exceed the average payroll growth during the last ten years, which is currently 4.22 %. Once the average payroll growth rate over the trailing ten years falls below 4.0 %, which is expected to take place next year (as of October 1, 2016), the actual ten -year average payroll growth rate will need to be used instead of 4.0 %. This will cause an increase in the employer contribution rate. If the current rate this year had been 2.0% instead of 4.0 %, for instance, the employer contribution rate would have increased by approximately 5.1% of covered pay (or nearly $530,000). The average rate of payroll growth during the past six years has been less than 0 %. If this trend continues through 2019, then the UAL will have to be amortized as a level dollar amount. If the UAL were amortized as a level dollar amount this year, the employer contribution would have increased by approximately 10.8% of covered pay (or more than $1.1 million.) Relationship to Market Value If Market Value had been the basis for the valuation, the City contribution rate would have been 41.95% and the funded ratio would have been 59.1 %. 13` Check Provision The Plan provides for a 13` check if there is a net actuarial gain for the previous year. Though the Plan experienced a gain during the prior plan year, the cumulative balance of actuarial gains and losses is negative (a net loss), so no funds are available to provide 13` checks in 2015. GRS 5 Conclusion It is important to note that if the FRS mortality assumption had been in place this year, the Trust Fund's market value of assets would not be sufficient to cover the liabilities for current retirees. As of October 1, 2015, this shortfall would be approximately $2.0 million. The funded ratio would be about 57.0% this year if the FRS mortality assumption was used, whereas it was over 100% in the year 2000. Steps have been taken in recent years to address this issue, such as strengthening the actuarial assumptions, including lowering the investment return assumption from 8.5% to 7.5% over time, and applying an additional $1,000,000 towards the unfunded liability. However, we recommend further steps be considered, such as reducing the amortization period and /or reducing the payroll growth assumption used in the amortization of the unfunded liability. The remainder of this Report includes detailed actuarial valuation results, financial information, miscellaneous information and statistics, and a summary of plan provisions. GRS 6 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. Fire Regular $ 704,322 Fire Supplemental 0 Total Base Amount Previous Plan Year 704,322 2. Fire Regular 963,573 Fire Supplemental 0 Total Amount Received for Previous Plan Year 963,573 3. Adjustment to Base Amount Due to Reevaluation of COLA cost 0 4. Excess Funds for Previous Plan Year 259,251 5. Accumulated Excess at Beginning of Previous Year 2,723,916 6. Prior Excess Used in Previous Plan Year 158,984 7. Accumulated Excess as of September 30, 2015 (Available for Benefit Improvements) 2,824,183 8. Excess Used as of October 1, 2015 to Reduce the Plan's Unfunded Actuarial Liability 333,333 9. Accumulated Excess as of Valuation Date 2,490,850 Note: The above exhibit confirms the use of State Chapter 175 Money for the fiscal year ending September 30, 2015. In the fiscal year ending September 30, 2016, the Base Amount for Fire Regular State Chapter 175 Money will increase to $781,954 due to the reevaluation of the actuarial cost of the COLA. GRS SECTION B VALUATION RESULTS GRS 7 PARTICIPANT DATA October 1, 2015 October 1, 2014 ACTIVE MEMBERS Number 118 119 Covered Annual Payroll $ 10,221,317 $ 9,823,480 Average Annual Payroll $ 86,621 $ 82,550 Average Age 38.9 37.9 Average Past Service 10.9 10.1 Average Age at Hire 28.0 27.8 RETIREES & BENEFICIARIES & DROP Number 98 97 Annual Benefits $ 5,389,431 $ 5,315,085 Average Annual Benefit $ 54,994 $ 54,795 Average Age 61.1 60.2 DISABILITY RETIREES Number 1 1 Annual Benefits $ 41,782 $ 40,963 Average Annual Benefit $ 41,782 $ 40,963 Average Age 50.3 49.3 TERMINATED VESTED MEMBERS Number 2 1 Annual Benefits $ 58,665 $ 35,771 Average Annual Benefit $ 29,333 $ 35,771 Average Age 41.8 46.1 GRS 8 ACTUARIALLY DETERMINED EMPLOYER CONTRIBUTION (ADEC) A. Valuation Date October 1, 2015 October 1, 2015 October 1, 2014 After Additional Before Additional UAALPayment UAALPayment B. ADEC to Be Paid During Fiscal Year Ending 9/30/2017 9/30/2017 9/30/2016 C. Assumed Date of Employer Contrib. 10/1/2016 10/1/2016 10/1/2015 D. Annual Payment to Amortize Unfunded Actuarial Liability $ 2,912,970 $ 2,965,445 $ 2,842,385 E. Employer Normal Cost 2,105,539 2,105,539 2,014,298 F. ADEC if Paid on the Valuation Date: D +E 5,018,509 5,070,984 4,856,683 G. ADEC Adjusted for Frequency of Payments 5,018,509 5,070,984 4,856,683 H. ADEC as % of Covered Payroll 49.10 % 49.61 % 49.44 % L Assumed Rate of Increase in Covered Payroll to Contribution Year N/A % N/A % N/A % J. Covered Payroll for Contribution Year 10,337,101 * 10,337,101 * 9,469,072 K. Covered Payroll per Valuation 10,221,317 10,221,317 9,823,480 L. ADEC for Contribution Year: H x J, but 5,075,517 5,128,236 4,856,683 not less than G M. Estimate of State Revenue in Contribution Year 781,954 781,954 781,954 N. Actuarially Determined Employer Contribution (ADEC) in Contribution Year 4,293,563 4,346,282 4,074,729 O. ADEC as % of Covered Payroll in Contribution Year: N - (Max of J and K) 41.54 % 42.05 % 41.48 % *Estimated payroll from Finance Department. Actual contributions should be no less than the listed percentage of payroll multiplied by actual covered payroll. GRS 9 ACTUARIAL VALUE OF BENEFITS AND ASSETS A. Valuation Date October 1, 2015 October 1, 2015 October 1, 2014 After Additional Before Additional UAAL Payment UAAL Payment B. Actuarial Present Value of All Projected Benefits for 1. Active Members a. Service Retirement Benefits $ 64,535,711 $ 64,535,711 $ 60,332,290 b. Vesting Benefits 3,931,931 3,931,931 4,061,247 c. Disability Benefits 1,799,269 1,799,269 1,795,467 d. Preretirement Death Benefits 829,790 829,790 820,258 e. Return of Member Contributions 120,989 120,989 136,592 f. Total 71,217,690 71,217,690 67,145,854 2. Inactive Members a. Service Retirees & Beneficiaries 63,338,026 63,338,026 63,037,423 b. Disability Retirees 695,583 695,583 686,532 c. Terminated Vested Members 587,340 587,340 371,166 d. Total 64,620,949 64,620,949 64,095,121 3. Total for All Members 135,838,639 135,838,639 131,240,975 C. Actuarial Accrued (Past Service) Liability per GASB No. 25 110,826,525 110,826,525 105,309,014 D. Actuarial Value of Accumulated Plan Benefits per FASB No. 35 98,889,292 98,889,292 93,844,530 E. Plan Assets 1. Market Value 65,450,324 65,116,991 65,148,932 2. Actuarial Value 66,257,757 65,924,424 60,766,720 F. Unfunded Actuarial Accrued Liability: C -E2 44,568,768 44,902,101 44,542,294 G. Actuarial Present Value of Projected Covered Payroll 80,605,730 80,605,730 83,474,543 H. Actuarial Present Value of Projected Member Contributions 9,672,688 9,672,688 10,016,945 L Accumulated Value of Member Contributions 9,728,194 9,728,194 8,732,736 J. Funded Ratio: E2 /C 59.8% 59.5% 57.7% GRS 10 ENTRY AGE NORMAL METHOD CALCULATION OF EMPLOYER NORMAL COST A. Valuation Date October 1, 2015 October 1, 2014 B. Normal Cost for 1. Service Retirement Benefits $ 2,721,874 $ 2,618,928 2. Vesting Benefits 243,175 234,861 3. Disability Benefits 155,009 146,701 4. Preretirement Death Benefits 44,362 43,429 5. Return of Member Contributions 40,262 38,711 6. Total for Future Benefits 3,204,682 3,082,630 7. Assumed Amount for Administrative Expenses 127,415 110,486 8. Total Normal Cost 3,332,097 3,193,116 C. Expected Member Contribution 1,226,558 1,178,818 D. Employer Normal Cost: B8 -C 2,105,539 2,014,298 E. Employer Normal Cost as a % of Covered Payroll 20.60% 20.50% GRS 11 LIQUIDATION OF THE UNFUNDED ACTUARIAL ACCRUED LIABILITY BEFORE ADDITIONAL UAAL PAYMENT A. UAAL Amortization Period and Payments Original UAAL Current UAAL Amortization Date Period Years Established (Years) Amount Remaining Amount Payment 10/1/1992 30 $ 415,550 7 $ 267,174 $ 42,060 10/1/1992 30 795,483 7 510,960 80,438 10/1/1996 26 807,234 7 592,261 93,237 10/1/1997 30 1,201,102 12 1,204,075 119,593 10/1/1999 30 613,865 14 683,516 60,007 10/1/2000 30 (1,240,378) 15 (1,372,209) (114,162) 10/1/2001 30 857,564 16 976,242 77,305 10/1/2003 30 4,337,161 18 5,159,505 374,231 10/1/2004 30 4,373,725 19 5,231,343 364,856 10/1/2005 30 (1,004,416) 20 (1,205,623) (81,071) 10/1/2005 30 3,040,117 20 3,649,123 245,381 10/1/2006 30 2,426,747 21 2,899,772 188,455 10/1/2006 30 1,889,229 21 2,257,481 146,713 10/1/2007 30 (12,675) 22 (14,957) (942) 10/1/2007 30 (1,424,046) 22 (1,683,177) (105,953) 10/1/2008 30 4,046,900 23 4,726,010 288,719 10/1/2009 30 3,681,910 24 4,240,268 251,858 10/1/2010 30 1,249,043 25 1,417,174 81,975 10/1/2010 30 2,256,012 25 2,559,692 148,063 10/1/2010 30 (43,572) 25 (49,437) (2,860) 10/1/2011 30 1,378,822 26 1,528,506 86,235 10/1/2011 30 3,739,943 26 4,145,952 233,905 10/1/2012 30 1,446,560 27 1,541,925 84,965 10/1/2012 30 (161,237) 27 (171,866) (9,470) 10/1/2013 30 199,486 28 209,445 11,287 10/1/2013 30 818,309 28 859,158 46,298 10/1/2013 30 3,401,164 28 3,570,947 192,431 10/1/2014 30 (408,227) 29 (418,258) (22,068) 10/1/2014 30 1,753,497 29 1,796,588 94,793 10/1/2015 30 (209,489) 30 (209,489) (10,834) $40,225,383 $44,902,101 $ 2,965,445 GRS 12 B. Amortization Schedule The UAAL 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 Ye ar Expected UAAL 2015 $ 44,902,101 2016 45,081,920 2017 45,147,695 2018 45,085,792 2019 44,881,326 2020 44,518,086 2025 40,669,645 2030 31,813,610 2035 16,445,529 2040 3,787,641 GRS 13 LIQUIDATION OF THE UNFUNDED ACTUARIAL ACCRUED LIABILITY AFTER ADDITIONAL UAAL PAYMENT A. UAAL Amortization Period and Payments Original UAAL Current UAAL Amortization Date Period Years Established (Ye ars) Amount Remaining Amount Payment 10/1/1992 30 $ 415,550 7 - 10/1/1992 30 795,483 7 444,801 70,023 10/1/1996 26 807,234 7 592,261 93,237 10/1/1997 30 1,201,102 12 1,204,075 119,593 10/1/1999 30 613,865 14 683,516 60,007 10/1/2000 30 (1,240,378) 15 (1,372,209) (114,162) 10/1/2001 30 857,564 16 976,242 77,305 10/1/2003 30 4,337,161 18 5,159,505 374,231 10/1/2004 30 4,373,725 19 5,231,343 364,856 10/1/2005 30 (1,004,416) 20 (1,205,623) (81,071) 10/1/2005 30 3,040,117 20 3,649,123 245,381 10/1/2006 30 2,426,747 21 2,899,772 188,455 10/1/2006 30 1,889,229 21 2,257,481 146,713 10/1/2007 30 (12,675) 22 (14,957) (942) 10/1/2007 30 (1,424,046) 22 (1,683,177) (105,953) 10/1/2008 30 4,046,900 23 4,726,010 288,719 10/1/2009 30 3,681,910 24 4,240,268 251,858 10/1/2010 30 1,249,043 25 1,417,174 81,975 10/1/2010 30 2,256,012 25 2,559,692 148,063 10/1/2010 30 (43,572) 25 (49,437) (2,860) 10/1/2011 30 1,378,822 26 1,528,506 86,235 10/1/2011 30 3,739,943 26 4,145,952 233,905 10/1/2012 30 1,446,560 27 1,541,925 84,965 10/1/2012 30 (161,237) 27 (171,866) (9,470) 10/1/2013 30 199,486 28 209,445 11,287 10/1/2013 30 818,309 28 859,158 46,298 10/1/2013 30 3,401,164 28 3,570,947 192,431 10/1/2014 30 (408,227) 29 (418,258) (22,068) 10/1/2014 30 1,753,497 29 1,796,588 94,793 10/1/2015 30 (209,489) 30 (209,489) (10,834) $40,225,383 $44,568,768 $ 2,912,970 GRS 14 B. Amortization Schedule The UAAL 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 Ye ar Expected UAAL 2015 $ 44,568,768 2016 44,779,999 2017 44,881,797 2018 44,860,966 2019 44,703,092 2020 44,392,477 2025 40,669,645 2030 31,813,610 2035 16,445,529 2040 3,787,641 GRS 15 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: A. Derivation of the Current UAAL 1. Last Year's UAAL $ 44,542,294 2. Last Year's Employer Normal Cost 2,014,298 3. Last Year's Contributions 4,635,318 4. Interest at the Assumed Rate on: a. 1 and 2 for one year 3,491,744 b. 3 from dates paid 301,428 c. a - b 3,190,316 5. This Year's Expected UAAL: 1+2-3+4c 45,111,590 6. This Year's Actual UAAL (Before any changes in benefits and/or assumptions) 44,902,101 7. Net Actuarial Gain (Loss): (5) - (6) 209,489 8. Gain (Loss) due to investments (138,946) 9. Gain (Loss) due to other sources 348,435 GRS 16 Net actuarial gains in previous years have been as follows: Change in Employer Year Ended Cost Rate Gain (Loss) 12/31/83 0.77 % $ (111,129) 12/31/84 0.13 (20,619) 12/31/85 1.27 (227,011) 12/31/86 0.50 (99,006) 12/31/87 (1.18) 279,837 12/31/88 0.52 (128,401) 12/31/89 0.41 (106,588) 9/30/90 (1.42) 371,790 9/30/91 2.09 (638,650) 9/30/92 1.61 (476,505) 9/30/93 (1.07) 483,965 9/30/94 1.76 (800,443) 9/30/95 0.56 (270,698) 9/30/96 (1.95) 895,789 9/30/97 (3.08) 1,049,747 9/30/98 (2.78) 1,020,121 9/30/99 (1.89) 722,161 9/30/00 (2.21) 891,463 9/30/01 4.44 (1,682,484) 9/30/02 9.11 (3,495,525) 9/30/03 11.31 (5,238,993) 9/30/04 4.88 (4,373,725) 9/30/05 3.04 (3,040,117) 9/30/06 1.44 (1,889,229) 9/30/07 (0.01) 12,675 9/30/08 2.33 (4,056,993) 9/30/09 2.16 (3,681,910) 9/30/10 1.25 (2,256,012) 9/30/11 2.12 (3,739,943) 9/30/12 (0.09) 161,237 9/30/13 0.12 (199,486) 9/30/14 (0.22) 408,227 9/30/15 (0.11) 209,489 GRS 17 Actuarial Gain ( +) or Loss ( -) $7 $7 $5 $5 $3 $3 $1 $1 -$1 -$1 -$3 -$3 -$5 -$5 -$7 -$7 -$9 -$9 q -$11 -$11 q -$13 -$13 .° -$15 -$15 -$17 -$17 -$19 -$19 -$21 -$21 -$23 -$23 -$25 -$25 -$27 -$27 -$29 -$29 -$31 -$31 -$33 -$33 -$35 -$35 c �� C�� Plan Year End Gain or Loss Cumulative Change in Employer Cost Rate 40% 40% 35% 35% 30% 30% 25% 25% 20% 20% 15% 15% 10% 10% 5% 5% 0% 0% -5% -5% -10% -10% -15% -15% -20% -20% -25% -25% -30% -30% -35% -35% -40% -40% Plan Year End Change in Employer Cost Rate 0 Cumulative Change GRS 18 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: Investment Return Salary Increases Year Fnding Actual Assumed Actual Assumed 12/31/1977 7.6 % 7.0 % 10.3 % 12/31/1978 7.0 7.0 21.3 % (2 years) 12/31/1979 7.5 7.0 10.3 12/31/1980 7.9 7.0 19.0 (2 years) 12/31/1981 9.0 7.0 30.5 7.0 12/31/1982 11.9 7.0 11.0 7.0 12/31/1983 13.9 7.0 6.4 7.0 12/31/1984 11.1 10.0 8.8 10.0 12/31/1985 18.7 10.0 14.5 10.0 12/31/1986 13.4 10.0 11.4 10.0 12/31/1987 10.3 10.0 19.7 10.0 12/31/1988 9.8 10.0 6.1 10.0 12/31/1989 14.8 10.0 12.8 10.0 9/30/1990 (9 mos.) 1.4 7.5 6.7 7.5 9/30/1991 13.1 10.0 8.0 10.0 9/30/1992 11.2 10.0 4.9 10.0 9/30/1993 9.7 8.0 4.0 6.5 9/30/1994 3.1 8.0 2.0 6.5 9/30/1995 9.3 8.0 10.3 6.5 9/30/1996 9.8 8.0 (0.2) 6.5 9/30/1997 12.6 8.0 5.9 6.5 9/30/1998 12.4 8.0 6.1 6.5 9/30/1999 14.1 8.0 13.3 6.5 9/30/2000 13.3 8.5 10.3 6.5 9/30/2001 8.0 8.5 4.8 6.5 9/30/2002 2.3 8.5 12.1 6.5 9/30/2003 3.5 8.5 10.0 6.5 9/30/2004 2.2 8.5 11.0 6.5 9/30/2005 2.5 8.5 11.7 6.5 9/30/2006 5.3 8.5 13.3 9.2 9/30/2007 9.3 8.50 9.2 8.9 9/30/2008 3.0 8.25 13.6 8.9 9/30/2009 0.9 8.25 7.6 8.9 9/30/2010 2.5 8.25 1.8 8.9 9/30/2011 0.9 8.10 3.7 8.1 9/30/2012 2.7 7.95 (2.8) 7.1 9/30/2013 8.1 7.80 1.9 8.7 9/30/2014 8.8 7.65 7.2 6.0 9/30/2015 7.3 7.50 4.9 6.2 Averages 8.2 % - -- 8.6 % - -- 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 19 History of Investment Return Based on Actuarial Value of Assets 20% 20% f'= f i f _ 15% 15% 10 _ � �I - 10% 5% 5% 0% 0% C)�� ZZ 0�� N Plan Year End ---- Actual +Assumed History of Salary Increases 35% 35% 30% 30% 25% 25% 20% 20% 15% 15% 0 10% fit, � � � � � 10% 5% 17� 1, 5% 0% 0% -5% -5% Q,z Z � , Plan Year End Compared to Previous Year — Actual 6 Assumed GRS 20 Actual (A) Compared to Expected (E) Decrements Among Active Employees Number Added Service & Active During DROP Dis ability 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 1 10 6 5 0 0 0 0 1 3 4 3 83 9/30/2003 15 1 1 5 0 0 0 0 0 0 0 3 97 9/30/2004 22 14 13 4 0 0 0 0 0 1 1 3 105 9/30/2005 1 4 2 1 0 0 0 0 0 2 2 4 102 9/30/2006 19 3 0 2 0 0 0 0 1 2 3 4 118 9/30/2007 5 4 1 3 0 0 0 0 0 3 3 4 119 9/30/2008 5 1 0 5 1 0 0 0 0 0 0 4 123 9/30/2009 1 6 5 6 0 0 0 0 0 1 1 4 118 9/30/2010 11 4 3 3 0 0 0 0 0 1 1 4 125 9/30/2011 0 11 10 8 0 0 0 0 1 0 1 4 114 9/30/2012 3 2 1 2 0 0 0 0 1 0 1 4 115 9/30/2013 10 7 6 2 0 0 0 0 0 1 1 4 118 9/30/2014 3 2 0 1 0 0 0 0 0 2 2 2 119 9/30/2015 1 2 1 1 0 0 0 0 1 0 1 2 118 9/30/2016 1 0 0 2 14 Yr Totals * 97 71 49 48 1 0 0 0 5 16 21 49 GRS 21 Cumulative Actuarial Gains (Losses) The Plan provides for a 13` check if there is a net actuarial gain for the previous year. There was an actuarial gain during the prior plan year. However, there is a limitation on 13` checks tied to actuarial gains provided in Chapter 112.61, Florida Statutes. The cumulative amount used to pay for 13` checks may not exceed the cumulative amount of actuarial gains. Since the cumulative amount of gains is negative (a net loss), no 13` check is payable. Cumulative Actuarial Gains (Losses) Balance at Year Ending B e ginning Gain (Loss) Balance at 9/30 of Year Interest for Year 13th Check End of Year 2001 0 0 (1,682,484) 0 (1,682,484) 2002 (1,682,484) (143,011) (3,495,525) 0 (5,321,020) 2003 (5,321,020) (452,287) (5,238,993) 0 (11,012,300) 2004 (11,012,300) (936,045) (4,373,725) 0 (16,322,070) 2005 (16,322,070) (1,387,376) (3,040,117) 0 (20,749,563) 2006 (20,749,563) (1,763,713) (1,889,229) 0 (24,402,505) 2007 (24,402,505) (2,074,213) 12,675 0 (26,464,043) 2008 (26,464,043) (2,183,284) (4,056,993) 0 (32,704,320) 2009 (32,704,320) (2,698,106) (3,681,910) 0 (39,084,336) 2010 (39,084,336) (3,224,458) (2,256,012) 0 (44,564,806) 2011 (44,564,806) (3,609,749) (3,739,943) 0 (51,914,498) 2012 (51,914,498) (4,127,203) 161,237 0 (55,880,464) 2013 (55,880,464) (4,358,676) (199,486) 0 (60,438,626) 2014 (60,438,626) (4,623,555) 408,227 0 (64,653,954) 2015 (64,653,954) (4,849,047) 209,489 0 (69,293,512) GRS 22 0 o NOa1NN -- �00 -� a1 DD \O`Ol v'� `O `O `O l 00 a1 a1 O O 0 O z 00 - 00 �--� l M 01 N 01 AO l V� M 00 l N V� AO 01 V� AO AO O �--� �--� M l� N V� V �--i V') l� 00 cn 01 �--� N M 01 00 l� 00 l l l E!) O c l N 01 AO M O AO AO 01 DD M M M M M N N N VO l� DD 00 N --� --� M M o0 O l� V� V� r 4 �--i VO �--� r-- 4 N o0 r-- "o r-- 01 01 00 01 01 01 01 01 01 O O 01 00 00 l l \O l \O \O \O V V V cn cn 0 01 � D 00 N VO 00 �--� cl 00 00 01 AO � al O � � \O � M M " rli� l 00 cn l — M N --� --� N -4 -4 �--� 01 N 00 cn M N M O 1 1C N " l� N "!I- 11C 01 O M M M V l l 00 l V N 00 V') 01 z O N vO O O vO O l M O l a l N 00 00 C1 O C1 V 00 01 01 r `O M \O N V') 00 01 M o0 l 00 00 r-� M N --- ' DD M N l 01 l 00 N M Vc N VO N 0 0 V � -- 11O Q O M al AO d� VO al O AO 00 O N O o0 O - M M N Vc v'� 00 N O O N 0 00 —� "C r MN� OI��NVO cn N O M O M o0 00 00 01 a o y AO AO --i l 00 00 M 00 00 N l 00 l V l V 01 O O l 00 �--� V') 00 N l � N M — VO AO 00 N cn lc to M Oo o cy, Oo 0 0, cy, Oc 0 0 Oc M ry, lc r-� 17 "Tt� "Tt� 01 O 00 O 01 l l � 00 Ac m M O 00 —i O 00 VO l �O 00 `ONl 01N 01l 01 oc `OO M N l `O cn z a o0 0o cy cy C� cy "o m oo cn v r-- cy f "� v'�l X0000 00OMN o0 `O V M00 cn 00 N l N 00 N l v'� 00 l `O O v'� a1 --� -� O 00 cn O l N O 00 -� �OAO V'� MaIAOOO al�OOOM 1�— O O l; 00 M cn M N VO O O AO �--� 00 Q o VO N 00 00 O O l M VO V') O M V') O 00 l N N N 00 'C N V') O M N �--� O �--� l --- o0 r M �--i o0 N ��v'i v'i v'� AOAOAO 00000 O O 01 01 01 01 O O u � NalaIO AO M O O M V'- V'- AO l N 00 M C C1 O -I- -I- V') \O \O r-- r-- r-- r-- r-- 00 00 01 01 ,� 01 --i z > V N 00 01 M 00 V V 00 01 DD l v'� alalal ODDONO NMl OO N — N — — — DD DD DD DD o0 01 00 01 01 01 01 00 01 — — — — — — — — — — — — 00 01 N M � V O O O O O O O O O O O O O O O O O O O O O O O O O �� 23 1p 1p 1p l� 00 l� l� 1p � M 00 � l O M 1p 00 M l 1p l M N 1p O � 1p 00 M 00 V'� M V'i V'i M 01 01 01 01 01 01 01 M M M � � � U V) --� --� --� N N M M m M M M M z 0 z � ,--i ,--i N N N C-i N C-i C-i M M 7 7 Q 00 �p 00 V'i 00 V'� 01 V'i M 01 01 01 01 01 01 01 M M G�i •.y _°j � --� --� --� --� N N M M M M M � � V'� V'� V'� V'� V'� V'� AO AO l� l� l� l� l� O ^ NN B C' W QQ T y ` ' x H �• C � M VO � V'� 00 � 1p � 00 �p M 01 00 --� l� � 1p 00 00 O "CJ N N N M M M M V W O O OA OA OA OA OA B O 0 0 0 0 0 0 M M M M M M M M M M M M M M M M M M M M M M M M M M N M t n O O O O O O O O O O O O O O O O O O O O O O O O O O 24 ACTUARIAL ASSUMPTIONS AND COST METHOD 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 ofAssets - The Actuarial Value of Assets phases in the difference between the actual and expected investment earnings over a period of 5 years. 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 7.50% per year, compounded annually (net after investment expenses). The Wage Inflation Rate assumed in this valuation was 3.5% per year. The Wage Inflation Rate is defined to be the portion of total pay increases for an individual that are due to macroeconomic forces including productivity, price inflation, and labor market conditions. The wage inflation rate does not include pay changes related to individual merit and seniority effects. The assumed real rate of return over wage inflation is defined to be the portion of total investment return that is more than the assumed wage inflation rate. Considering other economic assumptions, the 7.50% investment return rate translates to an assumed real rate of return over wage inflation of 3.5 %. The active member population is assumed to remain constant. For purposes of financing the unfunded liabilities, total payroll is assumed to grow at 4.00% per year. The average increase over the most recent ten years is 4.22 %. Florida administrative code requires using the lesser of the two rates for purposes of amortizing unfunded liabilities as a level percent of pay, but not less than zero. Pay increase assumptions for individual active members are shown below. Part of the assumption for each age is for merit and /or seniority increase, and the other 3.5% recognizes wage inflation, including price inflation, productivity increases, and other macroeconomic forces. GRS 25 The rates of salary increase used for individual members are in accordance with the following table. This assumption is used to project a member's current salary to the salaries upon which benefits will be based. % Incre as a in Salary Years of Merit and Base Total Service Seniority (Economic) Increase 1 11.0% 3.5% 14.5% 2 8.5% 3.5% 12.0% 3 8.5% 3.5% 12.0% 4 6.0% 3.5% 9.5% 5 1.5% 3.5% 5.0% 6 4.0% 3.5% 7.5% 7 1.5% 3.5% 5.0% 8 1.5% 3.5% 5.0% 9 4.0% 3.5% 7.5% 10 -15 0.5% 3.5% 4.0% 16 -19 5.0% 3.5% 8.5% 20 & Over 0.0% 3.5% 3.5% Demographic Assumptions The mortality table was the 1983 Group Annuity Mortality. Sample Probability of Future Life Attained Dying Next Year Expectancy (years) Ages Men Women Men Women 50 0.39% 0.16% 29.23 34.96 55 0.61 0.25 24.87 30.28 60 0.92 0.42 20.68 25.71 65 1.56 0.71 16.73 21.33 70 2.75 1.24 13.22 17.17 75 4.46 2.40 10.20 13.42 80 7.41 4.30 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. This table does not include any margin for future mortality improvements. For disabled retirees, the regular mortality tables are set forward 5 years in ages to reflect impaired longevity. GRS 26 The rates of retirement used to measure the probability of eligible members retiring during the next year were as follows: Re tire me nt Rate s S Age e <50 50-54 55 56-59 60+ r 10-19 N/A 10.0% 40.0% 40.0% 100.0% v 20 40.0% 80.0% 80.0% 100.0% 100.0% i 21-24 40.0% 80.0% 100.0% 100.0% 100.0% c 25+ 50.0% 80.0% 100.0% 100.0% 100.0% e The rate of retirement is 10% for each year of eligibility for early retirement. 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 % of Active Members Ages Separating Within Next Year 20 1.5 % 25 1.5 30 1.5 35 1.5 40 2.5 45 1.5 50 1.0 55 0.0 Rates of disability among active members (75% of disabilities are assumed to be service- connected). Sample % Becoming Disabled Ages within Next Year 20 0.09% 25 0.10 30 0.12 35 0.15 40 0.20 45 0.34 50 0.67 55 1.03 GRS 27 Miscellaneous and Technical Assumptions Administrative & Investment The investment return assumption is intended to be the return net of Expenses 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. Benefit Service Exact fractional service is used to determine the amount of benefit payable. Cost of Living Increases Benefits are increased by 2% per year beginning five years after benefit commencement. Decrement Operation Disability and mortality decrements operate during retirement eligibility. Decrement Timing Decrements of all types are assumed to occur at the beginning of the year. Eligibility Testing Eligibility for benefits is determined based upon the age nearest birthday and service nearest whole year on the date the decrement is assumed to occur. Forfeitures For vested separations from service, it is assumed that 0% of members separating will withdraw their contributions and forfeit an employer financed benefit. It was further assumed that the liability at termination is the greater of the vested deferred benefit (if any) or the member's accumulated contributions. Incidence of Contributions The employer contribution is assumed to be made in one full payment on October ls` of each year (at the beginning of the fiscal year). Member contributions are assumed to be received continuously throughout the year based upon the computed percent of payroll shown in this report, and the actual payroll payable at the time contributions are made. Liability Load Projected retirement benefits are loaded by a unique amount for each member to allow for the inclusion of unused sick and vacation pay in final average earnings. These individual loads are based on the number of hours of unused sick and vacation reported for each member as of September 27, 2013. Marriage Assumption 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. Normal Form of Benefit A ten year certain and life thereafter annuity is the Normal Form of Benefit. Pay Increase Timing Beginning of fiscal year. This is equivalent to assuming that reported pays represent amounts paid to members during the year ended on the valuation date. Service Credit Accruals It is assumed that members accrue one year of service credit per year. GRS 28 GLOSSARY Actuarial Accrued Liability The difference between the Actuarial Present Value of Future Benefits, (AAL) and the Actuarial Present Value of Future Normal Costs. Actuarial Assumptions Assumptions about future plan experience that affect costs or liabilities, such as: mortality, withdrawal, disablement, and retirement; future increases in salary; future rates of investment earnings; future investment and administrative expenses; characteristics of members not specified in the data, such as marital status; characteristics of future members; future elections made by members; and other items. Actuarial Cost Method A procedure for allocating the Actuarial Present Value of Future Benefits between the Actuarial Present Value of Future Normal Costs and the Actuarial Accrued Liability. Actuarial Equivalent Of equal Actuarial Present Value, determined as of a given date and based on a given set of Actuarial Assumptions. Actuarial Present Value The amount of funds required to provide a payment or series of payments (APV) in the future. It is determined by discounting the future payments with an assumed interest rate and with the assumed probability each payment will be made. Actuarial Present Value of The Actuarial Present Value of amounts which are expected to be paid at Future Benefits (APVFB) various future times to active members, retired members, beneficiaries receiving benefits, and inactive, nonretired members entitled to either a refund or a future retirement benefit. Expressed another way, it is the value that would have to be invested on the valuation date so that the amount invested plus investment earnings would provide sufficient assets to pay all projected benefits and expenses when due. Actuarial Valuation The determination, as of a valuation date, of the Normal Cost, Actuarial Accrued Liability, Actuarial Value of Assets, and related Actuarial Present Values for a plan. An Actuarial Valuation for a governmental retirement system typically also includes calculations of items needed for compliance with GASB. Actuarial Value ofAssets 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 determined employer contribution (ADEC). GRS 29 Amortization Method A method for determining the Amortization Payment. The most common methods used are level dollar and level percentage of payroll. Under the Level Dollar method, the Amortization Payment is one of a stream of payments, all equal, whose Actuarial Present Value is equal to the UAAL. Under the Level Percentage of Pay method, the Amortization Payment is one of a stream of increasing payments, whose Actuarial Present Value is equal to the UAAL. Under the Level Percentage of Pay method, the stream of payments increases at the rate at which total covered payroll of all active members is assumed to increase. Amortization Payment That portion of the plan contribution or ADEC which is designed to pay interest on and to amortize the Unfunded Actuarial Accrued Liability. Amortization Period The period used in calculating the Amortization Payment. Actuarially Determined The employer's periodic required contributions, expressed as a dollar Employer Contribution amount or a percentage of covered plan compensation, determined under (ADEC) GASB. The ADEC consists of the Employer Normal Cost and Amortization Payment. Closed Amortization Period A specific number of years that is reduced by one each year, and declines to zero with the passage of time. For example if the amortization period is initially set at 30 years, it is 29 years at the end of one year, 28 years at the end of two years, etc. Employer Normal Cost The portion of the Normal Cost to be paid by the employer. This is equal to the Normal Cost less expected member contributions. Equivalent Single For plans that do not establish separate amortization bases (separate Amortization Period components of the UAAL), this is the same as the Amortization Period. For plans that do establish separate amortization bases, this is the period over which the UAAL would be amortized if all amortization bases were combined upon the current UAAL payment. Experience Gain/Loss A measure of the difference between actual experience and that expected based upon a set of Actuarial Assumptions, during the period between two actuarial valuations. To the extent that actual experience differs from that assumed, Unfunded Actuarial Accrued Liabilities emerge which may be larger or smaller than projected. Gains are due to favorable experience, e.g., the assets earn more than projected, salaries do not increase as fast as assumed, members retire later than assumed, etc. Favorable experience means actual results produce actuarial liabilities not as large as projected by the actuarial assumptions. On the other hand, losses are the result of unfavorable experience, i.e., actual results that produce Unfunded Actuarial Accrued Liabilities which are larger than projected. GRS 30 Funded Ratio The ratio of the Actuarial Value of Assets to the Actuarial Accrued Liability. GASB Governmental Accounting Standards Board. GASB No. 68 and These are the governmental accounting standards that set the accounting GASB No. 67 rules for public retirement systems and the employers that sponsor or contribute to them. Statement No. 68 sets the accounting rules for the employers that sponsor or contribute to public retirement systems, while Statement No. 67 sets the rules for the systems themselves. Normal Cost The annual cost assigned, under the Actuarial Cost Method, to the current plan year. Open Amortization Period An open amortization period is one which is used to determine the Amortization Payment but which does not change over time. In other words, if the initial period is set as 30 years, the same 30 -year period is used in determining the Amortization Period each year. In theory, if an Open Amortization Period is used to amortize the Unfunded Actuarial Accrued Liability, the UAAL will never completely disappear, but will become smaller each year, either as a dollar amount or in relation to covered payroll. Unfunded Actuarial Accrued The difference between the Actuarial Accrued Liability and Actuarial Liability Value of Assets. Valuation Date The date as of which the Actuarial Present Value of Future Benefits are determined. The benefits expected to be paid in the future are discounted to this date. GRS SECTION C PENSION FUND INFORMATION GRS 31 SUMMARY OF ASSETS September 30 Item 2015 2014 A. Cash and Cash Equivalents (Operating Cash) S 48,503 S 37,728 B. Receivables: 1. Member Contributions S - S - 2. Employer Contributions 29,486 29,486 3. State Contributions - - 4. Investment Income and Other Receivables 303,787 426,840 5. Prepaid Expenses 4,834 4,891 6. Total Receivables S 338,107 S 461,217 C. Investments 1. Short Term investments S 1,513,346 S 1,117,490 2. Domestic Equities 40 ,497,654 40,676,697 3. International Equities 10,489,329 10,796,441 4. Domestic Fixed Income 16,443,965 14,633,139 5. International Fixed Income 3,525,422 3,814,078 6. Real Estate 7,881,031 6,992,603 7. Private Equity - - 8. Total investments S 80,350,747 S 78,030,448 D. Liabilities 1. Benefits Payable S - S - 2. Accrued Expenses and Other Payables (330,664) (250,302) 3. Total Liabilities S (330,664) S (250,302) E. Total Market Value of Assets Available for Benefits S 80,406,693 S 78,279,091 F. Reserves 1. State Contribution Reserve S (2,490,850) S (2,723,916) 2. DROP Accounts (12,465,519) (10,406,243) 3. Total Reserves S (14,956,369) S (13,130,159) G. Market Value Net of Reserves S 65,450,324 S 65,148,932 F. Allocation of Investments 1. Short Term Investments 1.88% 1.43% 2. Domestic Equities 50.40% 52.13% 3. International Equities 13.05% 13.84% 4. Domestic Fixed Income 20.47% 18.75% 5. International Fixed Income 4.39% 4.89% 6. Real Estate 9.81% 8.96% 7. Private Equity 0.00 0.00% 8. Total investments 100.00 100.00% GRS 32 PENSION FUND INCOME & DISBURSEMENTS September 30 Item 2015 2014 A. Market Value of Assets at Beginning of Year $ 78,279,091 $ 69,382,320 B. Revenues and Expenditures 1. Contributions a. Employee Contributions $ 1,195,448 $ 1,191,111 b. Employer Contributions 3,930,996 3,522,147 C. State Contributions 963,573 1,016,561 d. Service Purchase 56,082 100,662 e. Rollover to DROP 139,860 343,843 f. Total $ 6,285,959 $ 6,174,324 2. Investment Income a. Interest, Dividends, and Other Income $ 2,807,568 $ 2,043,910 b. Net Realized Grains /(Losses) 2,323,121 1,768,311 C. Net Unrealized Grains /(Losses) (4,559,343) 3,650,979 d. Investment Expenses (288,493) (275,620) e. Net Investment Income $ 282,853 $ 7,187,580 3. Benefits and Refunds a. Refunds $ (4,622) $ (50,673) b. Regular Monthly Benefits (3,990,792) (3,961,419) C. DROP Distributions (154,373) (224,700) d. Ad Hoc Payments from State Reserve (158,984) (105,951) e. Total $ (4,308,771) $ (4,342,743) 4. Administrative and Miscellaneous Expenses $ (132,439) $ (122,390) 5. Transfers $ - $ - C. Market Value of Assets at End of Year $ 80,406,693 $ 78,279,091 D. Reserves 1. State Contribution Reserve $ (2,490,850) $ (2,723,916) 2. DROP Accounts $ (12,465,519) $ (10,406,243) 3. Total Reserves $ (14,956,369) $ (13,130,159) E. Market Value Net of Reserves $ 65,450,324 $ 65,148,932 GRS 32 o 0 0 O o 0 N 59 59 00 CO 00 N 59 59 O N � 59 59 i i i i i c i i i 00 O O i i i i i i i i i o 0 0 1 O O O CO W N � C/1 59 59 �T l� of of � V) ° � 0 00 O (n � In V) N O O� V) O p '7T Ol CO (n Ol Vl � N M Vl � Vl �--i Vl N M 00 �O O l CO Vl � Vl r Oi 1 N �_ 00 V) O_ - N 00 � 00 V) I O V) l — O t l� O ,. of O l� 'I 00 N O O M 00 N 0, � (n � O p N 00 00 N lo 7-- N � M N � � N 17t, O O o N CO �O Ol N of 00 V) 00 of 00 V) of V) M M O M �--i V1 - llO 00 � M M � �--i 2 O0 O� N 00 N l 1:1� N O N I- Ny N 0 N 0, l� � M M O N V1 �O M "o M "O "o 00 N 00 O T 00 M V) O O N O Ol M N Cl N O 'o � 00 p, 111 00 O p 0 � I'O 0 l� l �--i M E� cs sus U d 4r y bq W y cC a ° Z Q o CZ cz — Ct ° ct i aq ° p y Y Y o u s� ct 3" '� I—I I—I f� Y U y Q CC cz o o x a i a a U cn c 's cz cz > ¢z�wwwwwwwwwwdc7c Qdr W 34 RECONCILIATION OF DROP ACCOUNTS Valuc at beginning of year $ 10,406,243 Payments credited to accounts + 1,280,351 Rollovcrs into DROP + 139,860 Investment Earnings credited + 793,438 Withdrawals from accounts - 154,373 Valuc at end of year 12,465,519 GRS 35 INVESTMENT RATE OF RETURN Investment Rate of Return Year Ended Market Value Actuarial Value 12/31/1982 NA % 11.9 % 12/31/1983 15.2 13.9 12/31/1984 11.7 11.1 12/31/1985 23.1 18.7 12/31/1986 11.8 13.4 12/31/1987 5.3 10.3 12/31/1988 10.9 9.8 12/31/1989 15.9 14.8 9/30/1990 (9 mos.) (1.6) 1.4 9/30/1991 19.6 13.1 9/30/1992 12.7 11.2 9/30/1993 13.1 9.7 9/30/1994 0.2 3.1 9/30/1995 18.8 9.3 9/30/1996 13.1 9.8 9/30/1997 24.5 12.6 9/30/1998 11.4 12.4 9/30/1999 11.8 14.1 9/30/2000 9.4 13.3 9/30/2001 (7.7) 8.0 9/30/2002 (5.6) 2.3 9/30/2003 15.3 3.5 9/30/2004 6.4 2.2 9/30/2005 7.9 2.5 9/30/2006 5.2 5.3 9/30/2007 12.3 9.3 9/30/2008 (17.1) 3.0 9/30/2009 (0.2) 0.9 9/30/2010 8.5 2.5 9/30/2011 (0.9) 0.9 9/30/2012 17.1 2.7 9/30/2013 13.6 8.1 9/30/2014 10.2 8.8 9/30/2015 0.4 7.3 Average Returns: Last Five Years 7.8 % 5.5 % Last Ten Years 4.5 % 4.8 % All Years 8.5 % 8.2 % GRS SECTION D FINANCIAL ACCOUNTING INFORMATION GRS 36 FASB NO. 35 INFORMATION A. Valuation Date October 1, 2015 October 1, 2014 B. Actuarial Present Value of Accumulated Plan Benefits 1. Vested Benefits a. Members Currently Receiving Payments $ 64,033,609 $ 63,723,955 b. Terminated Vested Members 587,340 371,166 c. Other Members 31,951,585 27,809,934 d. Total 96,572,534 91,905,055 2. Non - Vested Benefits 2,316,758 1,939,475 3. Total Actuarial Present Value of Accumulated Plan Benefits: Id + 2 98,889,292 93,844,530 4. Accumulated Contributions of Active Members 9,728,194 8,732,736 C. Changes in the Actuarial Present Value of Accumulated Plan Benefits 1. Total Value at Beginning of Year 93,844,530 88,311,151 2. Increase (Decrease) During the Period Attributable to: a. Plan Amendment 0 0 b. Change in Actuarial Assumptions 0 1,590,880 c. Latest Member Data, Benefits Accumulated and Decrease in the Discount Period 10,320,527 10,006,831 d. Benefits Paid net of DROP activity (5,275,765) (6,064,332) e. Net Increase 5,044,762 5,533,379 3. Total Value at End of Period 98,889,292 93,844,530 D. Market Value of Assets 65,450,324 65,148,932 E. Actuarial Assumptions - See page entitled Actuarial Assumptions and Methods GRS 37 SCHEDULE OF CHANGES IN THE EMPLOYER'S NET PENSION LIABILITY AND RELATED RATIOS GASB Statement No. 67 Fiscal year ending September 30, 2016* 2015 2014 Total pension liability Service Cost S 3,204,682 S 2,988,536 S 2,772,724 Interest 9,525,162 8,955,215 8,188,369 Benefit Changes - - - Difference between actual & expected experience (856,530) 708,071 (28,363) Assumption Changes - 1,809,581 Benefit Payments (5,530,288) (4,304,149) (4,292,070) Refunds (34,099) (4,622) (50,673) Other (Increase in Excess State Reserve) 181,619 259,251 312,239 Other (Rollovers into DROP) - 139,860 343,843 Net Change in Total Pension Liability 6,490,546 10,551,743 7,246,069 Total Pension Liability - Beginning 126,579,666 116,027,923 108,781,854 Total Pension Liability - Ending (a) S 133,070,212 S 126,579,666 S 116,027,923 Plan Fiduciary Net Position Contributions - Employer (from City) S 4,152,361 S 3,930,996 S 3,522,147 Contributions -Employer (from State) 963,573 963,573 1,016,561 Contributions - Non - Employer Contributing Emity - - - Contributions - Members 1,226,558 1,251,530 1,291,773 Net Investment Income 6,183,516 282,853 7,187,580 Benefit Payments (5,530,288) (4,304,149) (4,292,070) Refunds (34,099) (4,622) (50,673) Administrative Expense (127,415) (132,439) (122,390) Other (Rollovers into DROP) - 139,860 343,843 Net Change in Plan Fiduciary Net Position 6,834,206 2,127,602 8,896,771 Plan Fiduciary Net Position - Beginning 80,406,693 78,279,091 69,382,320 Plan Fiduciary Net Position - Ending (b) S 87,240,899 S 80,406,693 S 78,279,091 Net Pension Liability - Ending (a) - (b) 45,829,313 46,172,973 37,748,832 Plan Fiduciary Net Position as a Percentage of Total Pension Liability 65.56% 63.52% 67.47% Covered Employee Payroll S 12,000,000 S 11,784,702 S 11,307,953 Net Pension Liability as a Percentage of Covered Employee Payroll 381.91 % 391.80% 333.83 % * These figures are estimates only. Actual figures will be provided after the end of the fiscal year. GRS 38 SCHEDULE OF THE EMPLOYER'S NET PENSION LIABILITY GASB Statement No. 67 Total Plan Net Position Covered Net Pension Liability FYEnding Pension Plan Net Net Pension as a % of Total Employee as a % of Covered September 30, Liability Position Liability Pension Liability Payroll Employee Payroll 2014 S 116,027,923 S 78,279,091 S 37,748,832 67.47% S 11,307,953 333.83% 2015 126,579,666 80,406,693 46,172,973 63.52% 11,784,702 391.80% 2016* 133,07012 87,240,899 45,829,313 65.56% 12,000,000 381.91% * These figures are estimates only. Actual figures will be provided after the end of the fiscal year. GRS 39 NOTES TO NET PENSION LIABILITY GASB Statement No. 67 Valuation Date: October 1, 2015 Measurement Date: September 30, 2016 Methods and Assumptions Used to Determine Net Pension Liability: Actuarial Cost Method Entry Age Normal Inflation 3.5% Salary Increases Varies by years of service from 3.5% to 14.5% (see Table in Actuarial Assumptions Section) Investment Rate of Return 7.50% Retirement Age Rates vary by age and years of service (see Table in Actuarial Assumptions Section) Mortality 1983 Group Annuity Mortality Table for males and females Other Information: Notes See Discussion of Valuation Results on Page 1 GRS 40 SCHEDULE OF CONTRIBUTIONS GASB Statement No. 67 Actuarially Contribution Covered Actual Contribution FYEnding Determined Actual Deficiency Employee as a % of Covered September 30, Contribution Contribution (Excess) Payroll Employee Payroll 2014 S 4,226,469 S 4,226,469 S - S 11,307,953 37.38% 2015 4,635,318 4,635,318 - 11,784,702 39.33% 2016* 4,856,683 4,934,315 (77,632) 12,000,000 41.12% * These figures are estimates only. Actual figures will be provided after the end of the fiscal year. GRS 41 NOTES TO SCHEDULE OF CONTRIBUTIONS GASB Statement No. 67 Valuation Date: October 1, 2014 Notes Actuarially determined contribution rates are calculated as of October 1, which is two year(s) prior to the end of the fiscal year in which contributions are reported. Methods and Assumptions Used to Determine Contribution Rates: Actuarial Cost Method Entry Age Normal Amortization Method Level Percentage of Payroll, Closed Remaining Amortization Period 22 years (Single equivalent amortization period) Asset Valuation Method 5 -year smoothed market Inflation 3.5% Salary Increases Varies by years of service from 3.5% to 14.5% (see Table in Actuarial Assumptions Section) Investment Rate of Return 7.50% Retirement Age Rates vary by age and years of service (see Table in Actuarial Assumptions Section) Mortality 1983 Group Annuity Mortality Table for males and females Other Information: Notes See Discussion of Valuation Results on Page 1 of the October 1, 2014 Actuarial Valuation Report GRS 42 SINGLE DISCOUNT RATE GASB Statement No. 67 A single discount rate of 7.50% was used to measure the total pension liability. This single discount rate was based on the expected rate of return on pension plan investments of 7.50 %. The projection of cash flows used to determine this single discount rate assumed that plan member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the difference between the total actuarially determined contribution rates and the member rate. Based on these assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long -term expected rate of return on pension plan investments (7.50 %) was applied to all periods of projected benefit payments to determine the total pension liability. Regarding the sensitivity of the net pension liability to changes in the single discount rate, the following presents the plan's net pension liability, calculated using a single discount rate of 7.50 %, as well as what the plan's net pension liability would be if it were calculated using a single discount rate that is 1- percentage -point lower or 1- percentage -point higher: Sensitivity of the Net Pension Liability to the Single Discount Rate Assumption Current Single Discount 1% Decrease Rate Assumption 1% Increase 6.50% 7.50% 8.50% $ 59,832,474 $ 45,829,313 $ 34,171,335 * These figures are estimates only. Actual figures will be provided after the end of the fiscal year. GRS SECTION E MISCELLANEOUS INFORMATION GRS 43 RECONCILIATION OF MEMBERSHIP DATA From 10/1/14 From 1011113 To 1011115 To 10/1/14 A. Active Members I. Number Included in Last Valuation 119 118 2. New Members Included in Current Valuation 0 3 3. Non - Vested Employment Terminations 0 (2) 4. Vested Employment Terminations (1) 0 5. DROP Participation (1) 0 6. Service Retirements 0 0 7. Disability Retirements 0 0 8. Deaths 0 0 9. Transfer from General Employees 1 0 10. Number Included in This Valuation 118 119 B. Te rminate d Ve s to d M e mbe rs 1. Number Included in Last Valuation 1 1 2. Additions from Active Members 1 0 3. Lump Sum Payments /Refund of Contributions 0 0 4. Payments Commenced 0 0 5. Deaths 0 0 6. Other 0 0 7. Number Included in This Valuation 2 1 C. DROP Plan Members 1. Number Included in Last Valuation 14 15 2. Additions from Active Members 1 0 3. Retirements (2) 0 4. Deaths Resulting in No Further Payments 0 0 5. Other (Death Resulting in Survivor Benefits) 0 (1) 6. Number Included in This Valuation 13 14 D. Service Retirees, Disability Retirees and Beneficiaries 1. Number Included in Last Valuation 84 84 2. Additions from Active Members 0 0 3. Additions from Terminated Vested Members 0 0 4. Additions from DROP Plan 2 1 5. Deaths Resulting in No Further Payments 0 (1) 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 86 84 GRS 44 ACTIVE PARTICIPANT DISTRIBUTION Years of Service to Valuation Date Age Group 0 -1 1 -2 2 -3 3 -4 4 -5 5 -9 10 -14 15 -19 20 -24 25+ Totals 15 -19 NO. 0 0 0 0 0 0 0 0 0 0 0 TOT PAY 0 0 0 0 0 0 0 0 0 0 0 AVG PAY 0 0 0 0 0 0 0 0 0 0 0 20 -24 NO. 0 0 1 0 0 0 0 0 0 0 1 TOT PAY 0 0 59,383 0 0 0 0 0 0 0 59,383 AVG PAY 0 0 59,383 0 0 0 0 0 0 0 59,383 25 -29 NO. 0 0 3 2 0 2 0 0 0 0 7 TOT PAY 0 0 175,733 123,605 0 148,540 0 0 0 0 447,878 AVG PAY 0 0 58,578 61,803 0 74,270 0 0 0 0 63,983 30 -34 NO. 0 1 4 1 0 14 4 0 0 0 24 TOT PAY 0 45,496 223,599 62,056 0 1,022,060 343,710 0 0 0 1,696,921 AVG PAY 0 45,496 55,900 62,056 0 73,004 85,928 0 0 0 70,705 35 -39 NO. 0 2 1 0 0 15 12 0 0 0 30 TOT PAY 0 97,612 58,137 0 0 1,080,473 1,075,063 0 0 0 2,311,285 AVG PAY 0 48,806 58,137 0 0 72,032 89,589 0 0 0 77,043 40 -44 NO. 0 0 0 0 0 2 16 12 0 0 30 TOT PAY 0 0 0 0 0 143,671 1,453,272 1,220,721 0 0 2,817,664 AVG PAY 0 0 0 0 0 71,836 90,830 101,727 0 0 93,922 45 -49 NO. 0 0 0 0 0 2 7 8 1 0 18 TOT PAY 0 0 0 0 0 140,326 641,879 818,425 114,804 0 1,715,434 AVG PAY 0 0 0 0 0 70,163 91,697 102,303 114,804 0 95,302 50 -54 NO. 0 0 1 0 0 0 1 5 0 0 7 TOT PAY 0 0 113,071 0 0 0 100,243 529,615 0 0 742,929 AVG PAY 0 0 113,071 0 0 0 100,243 105,923 0 0 106,133 55 -59 NO. 0 0 0 0 0 0 0 0 0 0 0 TOT PAY 0 0 0 0 0 0 0 0 0 0 0 AVG PAY 0 0 0 0 0 0 0 0 0 0 0 60 -64 NO. 0 0 0 0 0 0 0 0 0 0 0 TOT PAY 0 0 0 0 0 0 0 0 0 0 0 AVG PAY 0 0 0 0 0 0 0 0 0 0 0 65 -99 NO. 0 0 0 0 0 0 1 0 0 0 1 TOT PAY 0 0 0 0 0 0 135,193 0 0 0 135,193 AVG PAY 0 0 0 0 0 0 135,193 0 0 0 135,193 TOT NO. 0 3 10 3 0 35 41 25 1 0 118 TOT AMT 0 143,108 629,923 185,661 0 2,535,070 3,749,360 2,568,761 114,804 0 9,926,687 AVG AMT 0 47,703 62,992 61,887 0 72,431 91,448 102,750 114,804 LL 84,124 GRS 45 INACTIVE PARTICIPANT DISTRIBUTION Deceasedwith Terminated Vested Disabled Retired Beneficiary Total Total Total Total Age Number Benefits Number Benefits Number Benefits Number Benefits Under 20 - - - - - - - - 20 -24 - - - - - - - - 25 -29 - - - - - - - - 30 -34 - - - - - - - - 35 -39 1 22,894 - - - - - - 40 -44 - - - - 1 90,426 - - 45 -49 1 35,771 - - 7 588,472 - - 50 -54 - - 1 41,782 17 1,238,336 1 29,935 55 -59 - - - - 21 1,035,393 1 57,724 60 -64 - - - - 23 1,187,145 - - 65 -69 - - - - 11 630,294 1 39,510 70 -74 - - - - 6 278,429 3 67,809 75 -79 - - - - 2 44,018 1 14,517 80 -84 - - - - - - - - 85 -89 - - - - 2 71,281 1 16,142 90 -94 - - - - - - - - 95 -99 - - - - - - - - 100 & Over - - - - - - - - Total 2 58,665 1 41,782 90 5,163,794 8 225,637 Average Age 42 50 60 70 Liability 587,340 695,583 61,117,035 2,220,991 GRS SECTION F SUMMARY OF PLAN PROVISIONS GRS 46 SUMMARY OF PLAN PROVISIONS A. Ordinances Plan established under the Code of Ordinances for the City of Boynton Beach, Florida, Chapter 18, Article IV, and was most recently amended under Ordinance No. 14 -019 passed and adopted on its second reading on September 3, 2014. The Plan is also governed by certain provisions of Chapter 175, Florida Statutes Part VII, Chapter 112, Florida Statutes and the Internal Revenue Code. B. Effective Date Date was not provided. C. Plan Year October 1 through September 30 D. Type of Plan Qualified, governmental defined benefit retirement plan; for GASB purposes it is a single employer plan. E. Eligibility Requirements All full-time firefighters are eligible to participate. F. Credited Service Service is measured as the total length of employment for which the firefighter received Compensation from the City and 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 Cash compensation exclusive of bonuses and incentive pay, but including overtime earnings not to exceed 300 hours and lump sum payment of accumulated unused sick and vacation hours, but not to exceed the number of accumulated sick and vacation hours as of September 27, 2013. H. Final Average Compensation (FAC) The average of Compensation over the highest 3 years during the last 10 years of Credited Service. L Normal Retirement Eligibility: A member may retire on the first day of the month coincident with or next following the earlier of: (1) age 55 and 10 years of Credited Service, or (2) 20 years of Credited Service regardless of age. Benefit: 3.00% of FAC multiplied by years of Credited Service. GRS 47 Normal Form of Benefit: 10 Years Certain and Life thereafter; other options are also available. COLA: Each retiree, beneficiary and disability retiree who retires or enters the DROP on or after December 1, 2006 will receive a 2.0% increase in benefits on October ls` of each year beginning 5 years after retirement. I Early Retirement Eligibility: A member may elect to retire earlier than the Normal Retirement Eligibility upon attainment of age 50 and 10 years of Credited Service. Benefit: The Normal Retirement Benefit is reduced by 3.0% for each year by which the Early Retirement date precedes the Normal Retirement date. Normal Form of Benefit: 10 Years Certain and Life thereafter; other options are also available. COLA: Each retiree, beneficiary and disability retiree who retires or enters the DROP on or after December 1, 2006 will receive a 2.0% increase in benefits on October ls` of each year beginning 5 years after retirement. K. Delayed Retirement Same as Normal Retirement taking into account compensation earned and service credited until the date of actual retirement. L. Service Connected Disability Eligibility: Any member who becomes totally and permanently disabled as a result of an act occurring in the performance of service for the City is immediately eligible for a disability benefit. Benefit: 66 2/3% of Compensation in effect on the date of disability, reduced by amounts payable under Social Security PIA with a minimum benefit equal to 42% of FAC. Normal Form of Benefit: Payable until death or recovery from disability; other options are also available. COLA: Each disability retiree who retires on or after December 1, 2006 will receive a 2.0% increase in benefits on October ls` of each year beginning 5 years after retirement. M. Non - Service Connected Disability Eligibility: Any member with 10 years of Credited Service who becomes totally and permanently disabled is immediately eligible for a disability benefit. Benefit: 2.5% of FAC multiplied by years of Credited Service with a minimum benefit equal to 25% of FAC. GRS 48 Normal Form of Benefit: Payable until death or recovery from disability; other options are also available. COLA: Each disability retiree who retires on or after December 1, 2006 will receive a 2.0% increase in benefits on October ls` of each year beginning 5 years after retirement. N. Death in the Line of Duty Eligibility: Members are eligible for survivor benefits after the completion of 10 or more years of Credited Service. Benefit: Spouse will receive 2.5% of the member's FAC multiplied by years of Credited Service. Normal Form of Benefit: Paid until death or remarriage of spouse. COLA: Each surviving spouse whose benefits began on or after December 1, 2006 will receive a 2.0% increase in benefits on October ls` of each year beginning 5 years after benefits began. 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. O. Other Pre - Retirement Death Eligibility: Members are eligible for survivor benefits after the completion of 10 or more years of Credited Service. Benefit: Spouse will receive 2.5% of the member's FAC multiplied by years of Credited Service. Normal Form of Benefit: Paid until death or remarriage of spouse. COLA: Each surviving spouse whose benefits began on or after December 1, 2006 will receive a 2.0% increase in benefits on October ls` of each year beginning 5 years after benefits began. 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 or the 50 %, 66 2/3 %, 75% and 100% Joint and Survivor options. A Social Security option is also available for members retiring prior to the time they are eligible for Social Security retirement benefits. GRS 49 R. Vested Termination Eligibility: A member has earned a non - forfeitable right to Plan benefits after the completion of 10 years of Credited Service. Benefit: The benefit is the member's accrued Normal Retirement Benefit as of the date of termination. Benefit begins on the date that would have been the member's Normal Retirement date had they continued employment. Alternatively, members can elect a reduced Early Retirement benefit any time after age 50. Normal Form of Benefit: 10 Years Certain and Life thereafter; other options are also available. COLA: Each member who retires on or after December 1, 2006 will receive a 2.0% increase in benefits on October I' of each year beginning 5 years after retirement. Members terminating employment with less than 10 years of Credited Service will receive a refund of their own accumulated contributions. S. Refunds Eligibility: All members terminating employment with less than 10 years of Credited Service are eligible. Optionally, vested members (those with 10 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 12% of compensation U. Employer Contributions Chapter 175 Premium Tax Refunds and any additional amount determined by the actuary needed to fund the plan properly according to State laws. V. Cost of Living Increases Each retiree, beneficiary and disability retiree who retires or enters the DROP on or after December 1, 2006 will receive a 2.0% increase in benefits on October I' of each year beginning 5 years after retirement. W. Changes from Previous Valuation There have been no changes since the prior valuation. X. 13` Check In years in which a cumulative net actuarial gain has been determined, there shall be payable an ad- hoc thirteenth check paid in December. GRS 50 Y. 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 with 10 years of Credited Service, or (2) 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 Service 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 FAC. 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. The rate earned by a self - directed account utilizing mutual funds selected by the Board. Normal Form of Benefit: Options include a lump sum or equal periodic payments. COLA: Each member who enters the DROP on or after December 1, 2006 will receive a 2.0% increase in benefits on October ls` of each year beginning 5 years after retirement. Z. Other Ancillary Benefits There are no ancillary retirement type benefits not required by statutes but which might be deemed a City of Boynton Beach Municipal Firefighters' Pension Trust Fund liability if continued beyond the availability of funding by the current funding source. GRS Gabriel Roeder Snlitb & Company One EastBmwamd Blvd 954 phone Consultants & Actuaries Suite 505 954.525.0083 fax GRw~� Ft. Lauderdale, FL3330l'l004 www.gabrietroeder.com March 3|,20l6 Ms. Barbara LuDue Pension Administrator Renaissance Executive Suites l500 Gateway Blvd. Suite 22O Boynton Beach, Florida 33420 Re: City of Boynton Beach Municipal Firefighters' Pension Trust Fund Dear Barbara: Enn|Vmod is a Supplemental Actuarial Valuation Report illustrating the impact ofureevaluation o/ the cost of the 296 COLA, which was first implemented 6v Ordinance U6-UO2. The results are based on census and asset data anofOctober |,20(5. This report was prepared in compliance with Ordinance Od'O92, which requires uoactuarial reevaluation of the cost ofthe COLA every three years. The last time this reevaluation was completed was aao[ October l, 2012. A copy of this report should be provided to the City. This report may he provided to parties other than the City only in its ood,cty and only with the Bmond`u permission. GRS is not responsible for unauthorized use of this report. The purpose ofthis report isto describe the financial effect of the changes summarized above. This report should not be n:|icd on for any purpose other than the purpose described above. Determinations of financial results u0000iutcd with the benefits described in this report, for purposes other than those identified above may hc significantly different. The calculations are huumd upon assumptions regarding future events, which may o, may not materialize. Future actuarial measurements may differ significantly from the current measurements presented in this report due to such factors as the following: plan experience differing from that anticipated by the economic or demographic assumptions, changes in rcon000ioo,demographic assumptions; increases or docccuoco expected as part of the natural operation of the methodology used for these measurements (such as the additional cost orcontribution requirements huoad on the p|un`a funded status); and changes in plan provisions or applicable law. If you have reason to believe that the assumptions that were used are unreasonable, that the plan provisions are incorrectly described, or that conditions have changed since the calculations were made, you should contact the author ofthe report prior to relying on information in the report. The ou\cu|o1ionm in this report are based upon information furnished by the Plan Administrator for the October l, 2015 Actuarial Valuation concerning Plan benefits, financial transactions, plan provisions and active ,oemohecn" terminated mncmnhero retirees and hcucficiurioa. We reviewed this information for iutemmu| reasonability and year-to-year consistency, but did not otherwise audit the data. We are not responsible for the accuracy or completeness of the information provided by the Plan Administrator. This report has been prepared hy actuaries who have substantial experience valuing public employee retirement systems. To the best of our knowledge the information contained in this report is accurate and fairly presents the actuarial position of the City of Boynton I3euob Municipal Firefighters' Pension Trust Ms. Barbara La Due March 31, 2016 Page 2 Fund as of the valuation date. All calculations have been made in conformity with generally accepted actuarial principles and practices, and with the Actuarial Standards of Practice issued by the Actuarial Standards Board and with applicable statutes. Peter N. Strong and Jeffrey Amrose are members of the American Academy of Actuaries. These actuaries meet the Academy's Qualification Standards to render the actuarial opinions contained herein. The undersigned actuaries are independent of the plan sponsor. We welcome your questions and comments. Sincerely yours, geterN. Str ng, FSA, A /effr Amro se, MAAA Senior Consultant & Ac uary r Consultant & Actuary PNS /jc Enclosures Gabriel Roeder Smith . Company SUPPLEMENTAL ACTUARIAL VALUATION REPORT Plan City of Boynton Beach Municipal Firefighters' Pension Trust Fund Valuation Date October 1, 2015 Date of Report March 31, 2016 Report Requested by Automatic actuarial reevaluation of the cost of the COLA under Ordinance 06 -092, which must be completed every three years Prepared by Peter N. Strong Group Valued All active and inactive Firefighters Plan Assumptions and Methods Being Considered for Change None Plan Provisions Being Considered: ➢ Reevaluation of the actuarial cost of the 2% annual COLA deferred 5 years for members who retire or enter the DROP after October 1, 2006 ➢ Reevaluation of the increase in member contributions from 7% to 12% Participants Affected All active participants as well as inactive participants who are currently receiving the COLA Actuarial Assumptions and Methods Same as October 1, 2015 Actuarial Valuation Report. Some of the key assumptions /methods are: Investment Return — 7.50% Salary Increase — 3.5% to 14.5% per year depending on service Cost Method — Entry Age Normal Amortization Period for Any Change in Actuarial Accrued Liability 30 years Summary of Data Used in Report See attached page Actuarial Impact of Proposal(s) See attached page(s) Other Cost Considerations None PARTICIPANT DATA October 1, 2015 October 1, 2015 Valuation Reevaluation of Cost of COLA (If No COLA) ACTIVE MEMBERS Number 118 118 Covered Annual Payroll $ 10,221,317 $ 10,221,317 Average Annual Payroll $ 86,621 $ 86,621 Average Age 38.9 38.9 Average Past Service 10.9 10.9 Average Age at Hire 28.0 28.0 RETIREES, BENEFICIARIES & DROP Number 98 98 Annual Benefits $ 5,389,431 $ 5,361,339 Average Annual Benefit $ 54,994 $ 54,708 Average Age 61.1 61.1 DISABILITY RETIREES Number 1 1 Annual Benefits $ 41,782 $ 39,373 Average Annual Benefit $ 41,782 $ 39,373 Average Age 50.3 50.3 TERMINATED VESTED MEMBERS Number 2 2 Annual Benefits $ 58,665 $ 58,665 Average Annual Benefit $ 29,333 $ 29,333 Average Age 41.8 41.8 ACTUARIALLY DETERMINED EMPLOYER CONTRIBUTION (ADEC) - CURRENT ASSUMPTIONS A. Valuation Date October 1, 2015 October 1, 2015 October 1, 2015 Valuation Valuation Valuation 12.0 % Member Without COLA Increase in Amount Contributions and 7.0 %Member of State Chapter with COLA Contributions 175 Funds Used B. ADEC to Be Paid During Fiscal Year Ending 9/30/2017 9/30/2017 9/30/2017 C. Assumed Date of Employer Contrib. 10/1/2015 10/1/2015 10/1/2015 D. Annual Payment to Amortize Unfunded Actuarial Liability $ 2,912,970 $ 2,627,459 $ 2,912,970 E. Employer Normal Cost 2,105,539 2,188,868 2,105,539 F. ADEC if Paid on the Valuation Date: D +E 5,018,509 4,816,327 5,018,509 G. ADEC Adjusted for Frequency of Payments 5,018,509 4,816,327 5,018,509 H. ADEC as % of Covered Payroll 49.10 % 47.12 % 49.10 % I. Estimate of Regular Base Chapter 175 Contributions in Contribution Year 704,322 579,772 781,954 J. Required Employer Contribution 4,314,187 4,236,555 4,236,555 in Contribution Year K. Increase in Use of Chapter 175 Funds N/A N/A $ 77,632 ACTUARIAL VALUE OF BENEFITS AND ASSETS - CURRENT ASSUMPTIONS A. Valuation Date October 1, 2015 October 1, 2015 October 1, 2015 Valuation Valuation Valuation 12.0 % Member Without COLA Increase in Amount Contributions and 7.0%Member of State Chapter with COLA Contributions 175 Funds Used B. Actuarial Present Value of All Projected Benefits for 1. Active Members a. Service Retirement Benefits $ 64,535,711 $ 56,189,256 $ 64,535,711 b. Vesting Benefits 3,931,931 3,399,558 3,931,931 c. Disability Benefits 1,799,269 1,578,555 1,799,269 d. Preretirement Death Benefits 829,790 701,405 829,790 e. Return of Member Contributions 120,989 100,777 120,989 f. Total 71,217,690 61,969,551 71,217,690 2. Inactive Members a. Service Retirees & Beneficiaries 63,338,026 57,701,778 63,338,026 b. Disability Retirees 695,583 514,575 695,583 c. Terminated Vested Members 587,340 501,934 587,340 d. Total 64,620,949 58,718,287 64,620,949 3. Total for All Members 135,838,639 120,687,838 135,838,639 C. Actuarial Accrued (Past Service) Liability per GASB No. 25 110,826,525 99,045,926 110,826,525 D. Actuarial Value of Accumulated Plan Benefits per FASB No. 35 N/A N/A N/A E. Plan Assets 1. Market Value 65,450,324 59,190,286 65,450,324 2. Actuarial Value 66,257,757 59,997,719 66,257,757 F. Unfunded Actuarial Accrued Liability: 44,568,768 39,048,207 44,568,768 G. Actuarial Present Value of Projected Covered Payroll 80,605,730 80,605,730 80,605,730 H. Actuarial Present Value of Projected Member Contributions 9,672,688 5,642,401 9,672,688 L Funded Ratio: E2 /C 59.8 % 60.6 % 59.8 % CALCULATION OF EMPLOYER NORMAL COST - CURRENT ASSUMPTIONS A. Valuation Date October 1, 2015 October 1, 2015 October 1, 2015 Valuation Valuation Valuation 12.0 %Member Without COLA Increase in Amount Contributions and 7.0 %Member of State Chapter with COLA Contributions 175 Funds Used B. Normal Cost for 1. Service Retirement Benefits $ 2,721,874 $ 2,371,195 $ 2,721,874 2. Vesting Benefits 243,175 210,309 243,175 3. Disability Benefits 155,009 134,549 155,009 4. Preretirement Death Benefits 44,362 37,412 44,362 5. Return of Member Contributions 40,262 23,480 40,262 6. Total for Future Benefits 3,204,682 2,776,945 3,204,682 7. Assumed Amount for Administrative Expenses 127,415 127,415 127,415 8. Total Normal Cost 3,332,097 2,904,360 3,332,097 As % of Covered Payroll 32.60 % 28.41 % 32.60 % C. Expected Member Contribution 1,226,558 715,492 1,226,558 As % of Covered Payroll 12.00 % 7.00 % 12.00 % D. Net Employer Normal Cost: B8 -C 2,105,539 2,188,868 2,105,539 As % of Covered Payroll 20.60 % 21.41 % 20.60 %