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Agenda 03-06-18 POLICE OFFICERSÔ PENSION FUND 2100 North Florida Mango Road West Palm Beach, Florida 33409 Telephone: 954.636.7170 Toll Free Fax:866.769.0678 AGENDA CITY OF BOYNTON BEACH POLICE OFFICERS’ PENSION FUND 2100 North Florida Mango Road West Palm Beach, FL 33409 March 6, 2018 at 2:00 P. M. 1.CALL TO ORDER 2.ROLL CALL 1 3.PUBLIC DISCUSSION 4.CONSENT AGENDA a.Minutes from 02-07-17 Meeting b.Warrant Ratifications / Approvals 5.NEW / UNFINISHED BUSINESS 6.ACTUARY REPORT a.Valuation Report 7.ATTORNEY’S REPORT 8.PLAN ADMINISTRATOR’S REPORT a.Death Checks- b.New DROP Members: None c.Terminations/ Refund of Contributions: None d.Retirement: Tony Magnanti e.Buy-Back s: Michael Johnson -3 years 9.OPEN DISCUSSION 10.ADJOURNMENT 11.NEXT MEETING DATE: May 8, 2018 at 10 A.M. IN COMPLIANCE OF STATE LAW, THE BOARD OF TRUSTEES FINDS THAT A PROPER AND LEGITIMATE PURPOSE IS SERVED WHEN MEMBERS OF THE PUBLIC HAVE BEEN GIVEN A REASONABLE OPPORTUNITY TO BE HEARD ON A MATTER BEFORE THE BOARD. THEREFORE, THE BOARD OF TRUSTEES HAVE DETERMINED AND DECLARED THAT THEY WILL A LOT FIFTEEN (15) MINUTES IN TOTAL FOR THIS PURPOSE; HOWEVER EACH PERSON IS LIMITED TO NO MORE THAN THREE(3)MINUTES TO COMMENT AT EACH MEETING. City of Boynton Beach Municipal Police Officers' Retirement Fund Actuarial Valuation Report as of October 1, 2017 Annual Employer Contribution for the Fiscal Year Ending September 30, 2019 ‘iFol S f G R s 400Retirement P:954.527.1616 I F:954.525.0083 I www.grsconsulting.com Consulting March 5,2018 Board of Trustees City of Boynton Beach Municipal Police Officers' Retirement Fund Boynton Beach, Florida Dear Board Members: The results of the October 1, 2017 Annual Actuarial Valuation of the City of Boynton Beach Municipal Police Officers' Retirement Fund are presented in this report. The computed contribution rate shown on page 1 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. The contribution rate in this report is determined using the actuarial assumptions and methods disclosed in Section B of this report.This report does not include a robust assessment of the risks of future experience not meeting the actuarial assumptions, as the assessment of these risks was outside the scope of this assignment. We encourage a review and assessment of investment and other significant risks that may have a material effect on the Plan's financial condition. 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 purpose of the valuation is to measure the System's funding progress,to determine the employer contribution rate for the fiscal year ending September 30, 2019, 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 30,2018. This report should not be relied on for any purpose other than the purposes 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 or other information through September 30, 2017. 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 . 'f H444arrs5d"�X. E "' j 4—;. riii - r, One East Broward'Boulevard I Suite 505 I Ft.Lauderdale,Florida 33301-1804 t Board of Trustees City of Boynton Beach Municipal Police Officers' Retirement Fund March 5,2018 Page ii 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. The valuation was based upon information furnished by the Plan Administrator concerning Retirement Plan benefits, financial transactions, plan provisions and active members,terminated members, retirees and beneficiaries. We checked for internal and year-to-year consistency, but did not otherwise audit the data. We are not responsible for the accuracy or completeness of the information provided by the Plan Administrator. In addition,this report was prepared using assumptions approved by the Board as described in the section of this report entitled Actuarial Assumptions and Methods. In addition,this report was prepared using certain assumptions approved by the Board and prescribed by the Florida Statues as described in the section of this report entitled Actuarial Assumptions and Cost Methods.The prescribed assumptions are the assumed mortality rates detailed in the Actuarial Assumptions and Cost Methods section in accordance with Florida Statutes, Chapter 112.63. This report has been prepared by actuaries who have substantial experience valuing public employee retirement systems. To the best of our knowledge the information contained in this report is accurate and fairly presents the actuarial position of the Retirement Plan as of the valuation date. All calculations have been made in conformity with generally accepted actuarial principles and practices, with the Actuarial Standards of Practice issued by the Actuarial Standards Board,and with applicable statutes. 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 signing actuaries are independent of the plan sponsor. This actuarial valuation and/or cost determination was prepared and completed by us or under our direct supervision, and we acknowledge responsibility for the results. To the best of our knowledge,the results are complete and accurate. In our 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 eRetirement ConsuinnE Board of Trustees City of Boynton Beach Municipal Police Officers'Retirement Fund March 5,2018 Page iii 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 AND COMPANY /a ,, By IM /L f By /u�... P-ter N.Strong, FSA, FCA, M Je ref, Amrose, MAAA Enrolled Actuary No. 17-069 5 rol ed Actuary No. 17-06599 cRetirement Consulting TABLE OF CONTENTS Section Title Page A Discussion of Valuation Results 1 Chapter Revenue 4 B Valuation Results 1. Participant Data 5 2. Actuarially Determined Employer Contribution(ADEC) 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. Supplemental Pension Distribution 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 25 C Pension Fund Information 1. Summary of Assets 28 2. Summary of Fund's Disbursements and Income 29 3. Calculation of Actuarial Value of Assets 30 4. Reconciliation of DROP Accounts 31 5. Investment Rate of Return 32 D Financial Accounting Information 1. FASB No.35 33 2. GASB No.67 34 E Miscellaneous Information 1. Reconciliation of Membership Data 40 2. Age/Service/Salary Distributions 41 F Summary of Plan Provisions 43 (tiGi Retirement Cityof Boynton BeachMunicipal Police Officers'Retirement Fund 1 ,t Consulting--. 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 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 9/30/19 For FYE 9/30/18 Based on Based on 10/1/2017 10/1/2016 Increase Valuation Valuation (Decrease) Required Employer/State Contribution $ 6,274,800 $ 5,820,145 $ 454,655 As%of Covered Payroll 51.74 % 51.64 % 0.10 Estimated State Contribution $ 465,087 $ 465,087 $ 0 As%of Covered Payroll 3.83 % 4.13 % (0.30) Required Employer Contribution $ 5,809,713 $ 5,355,058 $ 454,655 As%of Covered Payroll 47.91 % 47.51 % 0.40 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 contribution listed above is for the City's fiscal year ending September 30,2019 and has been calculated assuming the employer contribution is made on October 1,2018. The actual City contribution for the fiscal year ending September 30,2017 was$4,791,528,which equals the required contribution. REVISIONS IN BENEFITS ' There have been no revisions in benefits since the last valuation. REVISIONS IN ACTUARIAL ASSUMPTIONS AND METHODS The investment return assumption has been lowered from 7.50%to 7.25%since the prior valuation. Additionally,the payroll growth assumption used in the amortization of the Unfunded Accrued Actuarial Liability(UAAL)was changed. Previously the assumption was 4.0%, but limited to the average of the 10 year actual historical payroll growth,which would have limited the payroll growth assumption to 1.4%this year. Total covered payroll is now assumed to grow at 2.50% per year using a forward looking methodology,as permitted under Florida Statues, Chapter 112.64(5)(b). The combined effect of these assumption changes 4100 GR S Retiremient= _;_ _; - _ _ < City of Boynton Beach Municipal Police Officers' Retirement Fund 1 Consultn ' • was an increase in the required employer contribution rate of 0.49%of covered payroll (or a dollar amount of $120,128). ACTUARIAL EXPERIENCE There was a net actuarial experience loss of$542,252 for the year,which means that actual experience was less favorable than expected. The actuarial loss was primarily due to higher than expected salary increases for continuing active employees. Average salary increases were 10.4%versus 5.7%expected. This experience was partially offset by a higher than expected investment return on the actuarial value of assets. The return on the actuarial value of assets was 8.26%versus 7.50%expected. The return on the market value of assets was 9.91%. Other demographic experience was also a contributing factor to this year's experience loss. There were more retirements or DROP entries than expected(7 actual versus 3 expected),fewer terminations of employment than expected(3 actual versus 5 expected),and more disabilities than expected(1 versus less than 1 expected). The net actuarial loss for the year caused a increased in the annual required employer contribution of 0.31%of covered payroll(or$37,192). FUNDED RATIO The funded ratio is 64.1%as of October 1,2017 compared to 64.4%as of October 1, 2016. Prior to recognizing the changes in assumptions described above,the funded ratio as of October 1,2017 would have been 65.9%. 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 47.51 Actuarial Experience 0.31 Change in Administrative Expense (0.03) Amortization Payment on UAL (0.29) Change in State Contribution 0.25 Change in Normal Cost Rate (0.33) Change in Assumptions and Methods 0.49 Contribution Rate This Year 47.91 REQUIRED CONTRIBUTIONS IN LATER YEARS • The current calculated City contribution requirement is 47.91%of payroll starting October 1,2017. It is important to keep in mind that under the asset smoothing method,gains and losses are recognized over five years. As of September 30,2017,the market value of assets exceeded the actuarial value of assets by $1,704,723. Once all the gains and losses through September 30,2017 are fully recognized in the actuarial asset values,the contribution rate will decrease by roughly 0.86%of payroll before any other changes are taken into account, unless there are offsetting gains. - or. nc 460Retirement. City of Boynton Beach Municipal Police Officers' Retirement Fund;:•• 2 V IRConsulting RELATIONSHIP TO MARKET VALUE If Market Value had been the basis for the valuation,the City contribution rate would have been 47.05%($5,705,416)for the fiscal year ending September 30,2019 and the funded ratio would have been 65.4%. The funded ratio on a market value basis was 64.5% last year. CONCLUSION The remainder of this Report includes detailed actuarial valuation results,financial information, miscellaneous information and statistics,and a summary of plan provisions. 460 Reti�emen; City,of Boynton Beach Municipal Police Officers' Retirement Fund' 3 . 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 781,307 3. Benefit Improvements Made in Previous Plan Year 0 4. Excess Funds for Previous Plan Year:(2) - (1) - (3) 316,220 5. Accumulated Excess at Beginning of Previous Year 158,129 6. Prior Excess Used in Previous Plan Year 276,473 7. Accumulated Excess as of Valuation Date (Available for Benefit Improvements) 197,876 8. Base Amount This Plan Year 465,087 TR S Retionsultrementing City of Boynton Beach Municipal Police Officers' Retirement Fund 4 C � - - PARTICIPANT DATA October 1,2017 October 1,2016 ACTIVE MEMBERS Number 136 133 Covered Annual Payroll $ 11,831,766 $ 11,075,682 Average Annual Payroll $ 86,998 $ 83,276 Average Age 37.7 38.1 Average Past Service 9.6 10.1 Average Age at Hire 28.1 28.0 RETIREES& BENEFICIARIES& DROP Number 119 113 Annual Benefits $ 5,944,967 $ 5,444,487 Average Annual Benefit $ 49,958 $ 48,181 • Average Age 59.3 59.4 DISABILITY RETIREES Number 15 14 Annual Benefits $ 362,066 $ 305,130 Average Annual Benefit $ 24,138 $ 21,795 Average Age 63.2 63.4 TERMINATED VESTED MEMBERS Number 20 20 Annual Benefits $ 495,428 $ 515,393 Average Annual Benefit $ 24,771 $ 25,770 Average Age 39.5 39.3 GRSRetirement City of Boynton Beach Municipal Police Officers' Retirement Fund;' 5 Consulting- ACTUARIALLY DETERMINED EMPLOYER CONTRIBUTION (ADEC) A. Valuation Date October 1, 2017 October 1, 2017 October 1, 2016 New Investment Current Investment Return Assumption Return Assumption 7.25% 7.50% B. ADEC to Be Paid During Fiscal Year Ending 9/30/2019 9/30/2019 9/30/2018 C. Assumed Date of Employer Contrib. 10/1/2018 10/1/2018 10/1/2017 D. Annual Payment to Amortize Unfunded Actuarial Liability $ 3,411,985 $ 3,532,427 $ 3,304,156 E. Employer Normal Cost 2,709,713 2,537,291 2,415,066 F. ADEC if Paid on the Valuation Date: D+E 6,121,698 6,069,718 5,719,222 G. ADEC Adjusted for Frequency of Payments 6,121,698 6,069,718 5,719,222 H. ADEC as%of Covered Payroll 51.74 % 51.30 % 51.64 I. Assumed Rate of Increase in Covered Payroll to Contribution Year 2.50 % 1.40 % 1.76 J. Covered Payroll for Contribution Year 12,127,560 11,997,411 11,270,614 K. ADEC for Contribution Year: H x J 6,274,800 6,154,672 5,820,145 L. Estimate of State Revenue in Contribution Year 465,087 465,087 465,087 M.Actuarially Determined Employer Contribution (ADEC) in Contribution Year 5,809,713 5,689,585 5,355,058 N. ADEC as%of Covered Payroll in Contribution Year: M=J 47.91 % 47.42 % 47.51 *Estimate provided by the City,but adjusted to reflect average overtime during the last three years. j R Retirement • City of Boynton Beach.Municipal Police Officers' Retirement Fund 6 6� Consulting ACTUARIAL VALUE OF BENEFITS AND ASSETS A. Valuation Date October 1, 2017 October 1, 2017 October 1, 2016 New Investment Current Investment Return Assumption Return Assumption 7.25% 7.50% B. Actuarial Present Value of All Projected Benefits for 1. Active Members a.Service Retirement Benefits $ 68,856,446 $ 65,658,863 $ 63,744,228 b.Vesting Benefits 2,518,904 2,389,208 2,238,784 c. Disability Benefits 3,803,293 3,661,633 3,446,196 d. Preretirement Death Benefits 1,036,045 991,567 945,933 e. Return of Member Contributions 74,466 74,207 50,714 f.Total 76,289,154 72,775,478 70,425,855 2. Inactive Members a.Service Retirees&Beneficiaries 70,489,330 68,829,810 62,894,950 b. Disability Retirees 3,425,706 3,359,047 2,807,155 c.Terminated Vested Members 4,139,840 3,974,955 4,082,598 d.Total 78,054,876 76,163,812 69,784,703 3. Total for All Members 154,344,030 148,939,290 140,210,558 C. Actuarial Accrued (Past Service) Liability 123,848,125 120,419,052 113,697,993 D. Actuarial Value of Accumulated Plan Benefits per FASB No.35 111,391,695 108,252,403 102,633,140 E. Plan Assets 1. Market Value 81,034,320 81,034,320 73,386,776 2. Actuarial Value 79,329,597 79,329,597 73,166,635 F. Unfunded Actuarial Accrued Liability: C- E2 44,518,528 41,089,455 40,531,358 G. Actuarial Present Value of Projected Covered Payroll 108,595,154 107,045,981 97,850,497 H. Actuarial Present Value of Projected Member Contributions 7,601,660 7,493,218 6,849,535 I. Accumulated Contributions of Active Members 6,532,640 6,532,640 6,662,803 RS Retirement City of Boynton Beach Municipal Police Officers' Retirement Fund 7 v= Cong ENTRY AGE NORMAL METHOD CALCULATION OF EMPLOYER NORMAL COST A. Valuation Date October 1, 2017 October 1, 2017 October 1, 2016 New Investment Current Investment Return Assumption Return Assumption 7.25% 7.50% B. Normal Cost for 1. Service Retirement Benefits $ 2,790,286 $ 2,639,321 $ 2,504,904 2. Vesting Benefits 217,962 207,194 197,748 3. Disability Benefits 275,776 267,261 249,830 4. Preretirement Death Benefits 63,228 60,680 55,641 5. Return of Member Contributions 24,637 25,011 23,490 6. Total for Future Benefits 3,371,889 3,199,467 3,031,613 7. Assumed Amount for Administrative Expenses 166,048 166,048 158,751 8. Total Normal Cost 3,537,937 3,365,515 3,190,364 C. Expected Member Contribution 828,224 828,224 775,298 D. Employer Normal Cost: B8-C 2,709,713 2,537,291 2,415,066 E. Employer Normal Cost as a%of Covered Payroll 22.90% 21.44% 21.81% G®S Retirementng` City of Boynton Beach Municipal Police Officers' Retirement Fund 8 !I Consulti • LIQUIDATION OF THE UNFUNDED ACTUARIAL ACCRUED LIABILITY UAAL Amortization Period and Payments Original UAAL Current UAAL Type of Amortization Date Amortization Period Years Established Base (Years) i Amount Remaining Amount Payment 10/1/98 Fresh Start 30 $ 1,331,353 11 $ 1,350,168 $ 152,376 10/1/99 Plan Amendment 30 1,656,722 12 1,728,787 182,586 10/1/00 Plan Amendment 30 185,619 13 196,752 19,579 10/1/01 Plan Amendment 30 46,601 14 50,674 4,779 10/1/04 Plan Amendment 30 1,166,935 17 1,340,690 110,567 10/1/05 Plan Amendment 30 2,985,574 18 3,460,045 274,856 10/1/05 Method/Assum Change 30 13,646,165 18 15,814,825 1,256,284 10/1/06 Experience Loss 30 2,307,394 19 2,690,654 206,480 10/1/07 Experience Loss 30 16,404 20 19,137 1,422 10/1/08 Experience Loss 30 3,582,504 21 4,149,044 299,396 10/1/09 Experience Loss 30 3,419,100 22 3,923,041 275,412 10/1/10 Experience Loss 30 1,404,570 23 1,593,494 109,043 10/1/11 Experience Loss 30 4,476,765 24 4,996,423 333,847 10/1/11 Assumption Change 30 1,634,520 24 1,824,252 121,891 10/1/12 Experience Gain 30 (2,249,576) 25 (2,448,350) (159,988) 10/1/12 Assumption Change 30 412,194 25 448,616 29,315 10/1/12 Plan Amendment 30 (426,604) 25 (464,299) (30,340) 10/1/13 Experience Gain 30 (794,394) 26 ` (853,779) (54,640) 10/1/13 Assumption Change. 30 430,545 26 462,732 29,614 10/1/14 Experience Gain 30 (2,463,259) 27 (2,602,483) (163,334) 10/1/14 Assumption Change 30 461,268 27 487,339 30,586 10/1/15 Experience Loss 30' 1,896,466 28 1,971,740 121,503 10/1/15 Assumption Change 30 (588,861) 28 (612,234) (37,727) 10/1/16 Experience Gain 30 (2,092,313) 29 (2,122,571) (128,569) 10/1/16 Assumption Change 30 3,097,709 ' 29 3,142,506 190,349 10/1/17 Experience Gain 30 542,252 30 542,252 32,319 10/1/17 Assumption Change 30 3,429,073 30 3,429,073 204,379 • $ 39,514,726 $ 44,518,528 $ 3,411,985 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 Year Expected UAAL 2017 $ 44,518,528 ' 2018 - 44,086,726 1 2019 43,532,176 2020 42,843,650 2021 42,009,091 2022 41,015,508 2027 33,133,140 2032 20,580,722 2037 6,815,629 2042 2,354,695 2047 - = ®® Retirement,:. ,.' - , City of Boynton Beach Municipal Police Officers' Retirement Fund 9 G fly►S Retic lting' 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 $ 40,531,358 2. Last Year's Employer Normal Cost 2,415,066 3. Last Year's Contributions 5,256,615 4. Interest at the Assumed Rate on: a. 1 and 2 for one year 3,220,982 b. 3 from dates paid 363,588 c. a-b 2,857,394 5. This Year's Expected UAAL: 1+2-3+4c 40,547,203 6. This Year's Actual UAAL(Before any changes in benefits and assumptions) 41,089,455 7. Net Actuarial Gain (Loss): (5)-(6) (542,252) 8. Gain (Loss) due to investments 669,930 9. Gain (Loss) due to other sources (1,212,182) Net actuarial gains in previous years are detailed in the table on the next page. Retionsureentting City of Boynton Beach Municipal Police Officers'Retirement Fund 10. - - % ml - - HISTORY OF NET ACTUARIAL GAINS AND LOSSES Change in Employer Year Ended Cost Rate* Gain (Loss) 12/31/82 0.46 % $ (56,551) 12/31/83 1.92 (265,213) 12/31/84 (0.04) 6,977 12/31/85 (0.85) 185,443 12/31/86 (0.59) 158,678 12/31/87 1.67 (516,444) 12/31/88 0.74 (254,892) 12/31/89 (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) 9/30/11 1.98 (4,476,765) 9/30/12 (1.01) 2,249,576 9/30/13 (0.38) 794,394 9/30/14 (1.18) 2,463,259 9/30/15 0.86 (1,896,466) 9/30/16 (1.28) 2,092,313 9/30/17 0.31 (542,252) * Before 9/30/06,change in Employer Normal Cost. , - _. G R Retionsult�emienngi.:_., - City of Boynton Beach Municipal Police Officers' Retirement Fund 11 ` I C ' Actuarial Gain (+)or Loss(-) $10 $10 $5 $5 $o +-4-- ,t 1 . 11 11 . 1 " . I 1 . 111 _ $o ($5) ($5) 2 0 0 ($10) ($10) ($15) ($15) ($20) ($20) ($25) ($25) ti:t1��1h��t9;19ee)\:tiO4 0.'e 0\c)Ob c5c roti\oti0:' doh\o\o\\ow�o� 90\ \titiP3\y\tihece PlanYear End Gain or Loss -+-Cumulative .'. L,'G RCetionsulti�emeng�t, City of Boynton Beach Municipal Police Officers' Retirement Fund 12 ;` Change in Employer Cost Rate 24% _ _ 24% 22% = = 22% 20% _ _ 20% 18% _ _ 18% 16% - = 16% 14% = 14% 12% - = 12% 10% - = 10% 8% - = 8% 6% = = 6% 4% _ = 4% 0% ■ ■ . ■ _ . . ■ I 111000 . 1 _ ■ _ 0% -2% - ' — -2% -4% = - -4% -6% - = -6% -8% -8% • Plan Year End Change in Employer Cost Rate — - Cumulative Change 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: "� Retirement • City of Boynton Beach Municipal Police Officers' Retirement Fund 13 Consulting HISTORY OF INVESTMENT EARNINGS AND SALARY INCREASES Investment Return Salary Increases Year Ending Actual Assumed Actual Assumed 12/31/1977 7.5 % 7.00 % 12/31/1978 7.1 7.00 18.3 % 10.3% (2 yrs) 12/31/1979 7.5 7.00 12/31/1980 8.0 7.00 21.2 10.3 (2 yrs) 12/31/1981 8.2 7.00 23.6 7.0 12/31/1982 9.3 7.00 14.6 7.0 12/31/1983 9.0 7.00 14.8 7.0 12/31/1984 11.5 10.00 6.8 10.0 12/31/1985 16.8 10.00 18.6 10.0 12/31/1986 17.6 10.00 16.3 10.0 12/31/1987 4.4 10.00 15.3 10.0 12/31/1988 9.0 10.00 6.7 10.0 12/31/1989 15.4 10.00 12.4 10.0 9/30/1990 (9 mos.) 1.7 7.50 6.1 10.0 9/30/1991 11.6 10.00 2.5 10.0 9/30/1992 9.7 10.00 5.4 10.0 9/30/1993 11.9 10.00 3.1 10.0 9/30/1994 3.5 8.00 7.0 6.3 9/30/1995 12.9 8.00 8.5 5.8 9/30/1996 10.8 8.00 4.9 6.3 9/30/1997 13.1 8.00 8.7 6.3 9/30/1998 12.9 8.00 4.6 6.3 9/30/1999 13.5 8.50 10.9 6.1 9/30/2000 12.1 8.50 3.4 6.3 9/30/2001 7.5 8.50 6.0 5.9 9/30/2002 (4.7) 8.50 17.2 5.9 9/30/2003 2.8 8.50 9.5 5.9 9/30/2004 2.6 8.50 11.5 6.0 9/30/2005 3.0 8.50 9.6 6.0 9/30/2006 5.7 8.00 14.4 6.0 9/30/2007 9.9 8.00 5.7 6.1 9/30/2008 4.2 8.00 13.1 6.1 9/30/2009 2.8 8.00 9.3 6.1 9/30/2010 3.0 8.00 0.2 6.1 9/30/2011 1.6 8.00 7.3 5.8 9/30/2012 6.9 7.75 (3.1) 5.9 9/30/2013 7.0 7.75 0.1 5.8 9/30/2014 8.9 7.75 1.0 5.8 9/30/2015 7.5 7.75 8.6 5.8 9/30/2016 9.3 7.75 1.5 5.7 9/30/2017 8.3 7.50 10.4 5.7 Averages 8.0 % --- 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. Retirement- City of Boynton Beach Municipal Police Officers' Retirement Fund 14 C[ `�1 Consultin�- History of Investment Return Based on Actuarial Value of Assets • 18% - 18% 13% Ay A, 13% 8% _ ■ *if - • •i 8% 3% 11111111 = 3% I I 1 1 1 1 1 1 1 1 1 1 11111111111 11111111 I I I I I -2% - -2% -7% -7% PlanYear End -U—Actual Assumed History of Salary Increases 25% - . 25% 20% - = 20% 15% = = 15% 10% _ isk A A AaAA 10% v V 5% = Ir. "• r v _ 5% 0% _ I I I I I I I I 1 1 1 1 1 1 1 I I I I I I I I 1111111 1,I 0% -5% -5% Plan Year End Compared to Previous Year Actual - Assumed SRetirement,;; _ City of Boynton Beach Municipal Police Officers''Retirement Funo 15` Consulting' "" 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 5 9 5 4 0 0 0 0 2 2 4 10 144 9/30/2012 9 7 3 1 0 0 0 0 2 2 4 4 146 9/30/2013 5 10 3 1 0 0 0 0 4 3 7 7 141 9/30/2014 5 7 2 1 0 0 0 0 2 3 5 6 139 9/30/2015 9 11 3 2 1 0 0 0 4 3 7 4 137 9/30/2016 17 21 7 1 0 0 0 0 11 3 14 4 133 9/30/2017 15 12 7 3 1 0 1 0 1 2 3 5 136 9/30/2018 4 1 0 i 5 16 Yr Tota Is * 191 177 67 34 2 0 1 I 0 35 72 I 107 I 128 *Totals are through current Plan Year only. it�C Retir'e'ment'_"%• .=i: -- - City of Boynton Beach Municipal Police Officers' Retirement Fund' 16 " . - t via Consulting SUPPLEMENTAL PENSION DISTRIBUTION Cumulative Actuarial Gains(Losses) Balance at Year Ending Beginning Gain(Loss) Supplemental Balance at 9/30 of Year for Year Payment End of Year 2000 $ 0 $ 1,596,887 $ 0 $ 1,596,887 2001 1,596,887 (1,978,307) 0 (381,420) 2002 (381,420) (5,069,210) 0 (5,450,630) 2003 (5,450,630) (1,870,014) 0 (7,320,644) 2004 (7,320,644) (1,615,637) 0 (8,936,281) 2005 (8,936,281) (1,083,369) 0 (10,019,650) 2006 (10,019,650) (2,307,394) 0 (12,327,044) 2007 (12,327,044) (16,404) 0 (12,343,448) 2008 (12,343,448) (3,582,504) 0 (15,925,952) 2009 (15,925,952) (3,419,100) 0 (19,345,052) '2010 (19,345,052) (1,404,570) 0 (20,749,622) 2011 (20,749,622) (4,476,765) 0 (25,226,387) 2012 (25,226,387) 2,249,576 0 (22,976,811) 2013 (22,976,811) 794,394 0 (22,182,417) 2014 (22,182,417) 2,463,259 0 (19,719,158) 2015 (19,719,158) (1,896,466) 0 (21,615,625) 2016 (21,615,625) 2,092,313 0 (19,523,311) 2017 (19,523,311) (542,252) 0 (20,065,563) 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. • y -i' i., RetoniremsuitientnE City of Boynton Beach Municipal Police Officers' Retirement Fund 17 1,SC • RECENT HISTORY OF VALUATION RESULTS Number of Employer Normal Cost Active Inactive Valuation Members Members Covered Annual Actuarial Value Actuarial Accrued Funded Date Payroll of Assets Liability UFAAL Ratio Amount %of Payroll 10/1/00 124 56 $ 6,907,740 $ 32,559,614 $ 33,726,879 $ 1,167,265 96.5 % $ 464,164 6.72 10/1/01 122 75 6,555,316 34,331,760 37,715,963 3,384,203 91.0 726,204 11.08 10/1/02 119 75 7,382,088 32,133,373 40,604,148 8,470,775 79.1 1,538,895 20.85 10/1/03 124 81 7,917,021 33,206,438 44,029,168 10,822,730 75.4 1,935,704 24.45 10/1/04 109 94 7,207,008 34,495,794 48,154,162 13,658,368 71.6 2,043,434 28.35 10/1/05 116 96 7,836,390 35,445,474 56,691,347 21,245,873 62.5 1,238,339 15.80 10/1/06 131 100 9,302,405 37,691,909 61,468,267 23,776,358 61.3 1,441,317 15.49 10/1/07 144 103 10,296,812 41,981,125 66,068,756 24,087,631 63.5 1,587,552 15.42 10/1/08 149 104 11,532,888 44,277,726 72,349,643 28,071,917 61.2 1,774,031 15.38 10/1/09 151 107 12,537,968 46,116,985 78,055,403 31,938,418 59.1 1,931,395 15.40 10/1/10 148 109 12,134,525 48,129,593 81,957,204 33,827,611 58.7 1,895,893 15.62 10/1/11 144 113 12,397,266 49,115,728 89,656,412 40,540,684 54.8 2,126,920 17.16 10/1/12 146 116 11,789,237 52,594,653 91,924,429 39,329,776 57.2 2,114,509 17.94 10/1/13 141 122 11,302,523 56,693,338 95,951,447 39,258,109 59.1 2,132,984 18.87 10/1/14 139 123 11,142,832 62,320,013 99,965,363 37,645,350 62.3 2,214,983 19.88 10/1/15 137 130 11,774,623 67,380,705 106,464,806 39,084,101 63.3 2,425,913 20.60 10/1/16 133 147 11,075,682 73,166,635 113,697,993 40,531,358 64.4 2,415,066 21.81 • 10/1/17 136 154 11,831,766 79,329,597 123,848,125 44,518,528 64.1 2,709,713 22.90 Retirement City of Boynton Beach Municipal Police Officers'Retirement Fund 18 C_____, C:onsultinP RECENT HISTORY OF REQUIRED AND ACTUAL CONTRIBUTIONS End of Required Contributions Year To Employer&State Estimated State Net Employer Actual Contributions Valuation Which Valuation %of %of %of Applies Amount Payroll Amount Payroll Amount i Payroll Employer State Total 10/1/98 9/30/99 863,996 13.88 427,874 6.87 436,122 7.01 426,129 427,874 854,003 10/1/99 9/30/00 920,372 12.92 427,874. 6.00 492,498 6.92 490,425 429,945 920,370 10/1/00 9/30/01 742,646 10.75 429,945 6.22 312,701 4:53 312,701 430,572 743,273 10/1/01 9/30/02 1,053,863 16.08 443,454 6.77 610,409 9.31 610,409 443,454 1,053,863 10/1/02 9/30/03 1,929,458 26.14 443,454 6.01 1,486,004 20.13 1,486,004. 465,087 1,951,091 10/1/03 9/30/04 2,343,601 29.60 465,087 5.87 1,878,514 23.73 1,878,514 465,087 2,343,601 10/1/04 9/30/05 2,571,109 35.67 465,087 6.45 2,106,022 29.22 2,106,022 465,087 2,571,109 10/1/05 9/30/06 2,808,957 35.85 465,087 5.93 2,343,870 29.92 2,343,870 465,087 2,808,957 10/1/06 9/30/07 3,030,547 32.58 465,087 5.00 2,565,460 27.58 2,685,841 465,087 3,150,928 10/1/07 9/30/08 3,236,241 31.43 465,087 4.52 2,771,154 26.91 2,771,154 465,087 3,236,241 10/1/08 9/30/09 3,710,169 32.17 465,087 4.03 3,245,082 28.14 3,245,082 465,087 . 3,710,169 10/1/09 9/30/10 4,153,603 33.13 465,087 3.71 3,688,516 29.42 3,688,516 465,087 4,153,603 10/1/09 9/30/11 3,997,173 31.78 465,087 3.70 3,532,086 28.08 3,552,348 465,087 4,017,435. 10/1/10 9/30/12 4,098,955 32.55 465,087 3.69 3,633,868 28.86 3,633,868 465,087 4,098,955 10/1/11 9/30/13 4,701,572 36.68 465,087 3.63 " 4,236,485 33.05 4,236,485 465,087 4,701,572 10/1/12 9/30/14 4,560,918 38.54 465,087 3.93 4,095,831 34.61 4,159,736 465,087 4,624,823 10/1/13 9/30/15 • 4,830,346 41.73 465,087 4.02 4,365,259 37.71 4,365,259 465,087 . 4,830,346 10/1/14 9/30/16 4,856,392 42.26 465,087 4.05 4,391,305 38.21 4,391,305_: 465,087 4,856,392 10/1/15 9/30/17 5,256,615 43.16 465,087 3.82 4,791,528 39.34 4,791,528 465,087 5,256,615 10/1/16 9/30/18 5,820,145 51.64 465,087 4.13 5,355,058 47.51 na na na 10/1/17 9/30/19 6,274,800 51.74 465,087 3.83 5,809,713 47.91 na na na G Retirement Consulting City of Boynton Beach Municipal Police Officers'Retirement Fund 19 Nali ¢;U;v,$ 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 7.25% per year,compounded annually(net after investment expenses).This rate was 7.50% in the previous valuation. The Wage Inflation Rate assumed in this valuation is 3% 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 Price Inflation Rate assumed in this valuation was 2.5% per year. The assumed real rate of return over price inflation is defined to be the portion of total investment return that is more than the assumed price inflation rate. Considering other economic assumptions,the 7.25% investment return rate translates to an assumed real rate of return over price inflation of 4.75%. G RS Retirement '- City of Boynton Beach Municipal Police Officers' Retirement Fund 20 Consulting The rates of salary increase are as follows: Increase in Salary Age Merit and Wage Total Seniority Inflation Increase 20 3.5% 3.0% 6.5% 25 3.5% 3.0% 6.5% 30 3.5% 3.0% 6.5% 35 3.5% 3.0% 6.5% 40 2.5% 3.0% 5.5% 45 2.0% 3.0% - 5.0% 50 2.0% 3.0% 5.0% 55 2.0% 3.0% 5.0% Projected service retirement benefits are increased to allow for the inclusion of unused sick and vacation pay in average final earnings. The increase amount is unique for each member based on the number of hours of accumulated sick and vacation time reported for each member as of June 18,2013. For purposes of financing the unfunded liabilities,total payroll is assumed to grow at the Price Inflation assumption of 2.50% per year using a forward looking methodology,as permitted under Florida Statutes,Chapter 112.64(5)(b). Previously,the assumption was 4.0% per year,not to exceed the average annual increase over the most recent ten years,which is 1.40%as of October 1, 2017. DEMOGRAPHIC ASSUMPTIONS The mortality table is the RP-2000 Combined Healthy Participant Mortality Table(for pre-retirement mortality)and the RP-2000 Mortality Table for Annuitants (for post-retirement mortality),with mortality improvements projected to all future years after 2000 using Scale BB. For males,the base mortality rates include a 90%blue collar adjustment and a 10%white collar adjustment. For females,the base mortality rates include a 100%white collar adjustment. These are the same rates currently in use for Special Risk Class members of the Florida Retirement System (FRS),as required under Florida Statutes, Chapter 112.63. FRS Healthy Post-Retirement Mortality for Special Risk Class Members Sample Probability of Future Life Attained Dying Next Year Expectancy(years) Ages(in 2017) Men Women Men Women 50 0.54 % 0.23 % 33.90 38.31 55 0.67 0.32 29.26 33.29 60 0.90 0.47 24.68 28.39 65 1.31 0.74 20.28 23.65 70 2.01 1.24 16.15 19.19 75 3.26 2.09 12.43 15.11 80 5.37 3.51 9.23 11.49 This assumption is used to measure the probabilities of each benefit payment being made after retirement. GRetirement City of Boynton Beach Municipal Police Officers' Retirement Fund 21 ojc Consulting 7 FRS Healthy Pre-Retirement Mortality for Special Risk Class Members Sample Probability of Future Life Attained Dying Next Year Expectancy(years) Ages(in 2017) Men Women Men Women 50 0.23 % 0.15 % 34.89 38.66 55 0.39 0.24 29.77 33.51 60 0.71 0.39 24.89 28.49 65 1.23 0.70 20.33 23.67 70 2.01 1.24 16.15 19.19 75 3.26 2.09 12.43 15.11 80 5.37 3.51 9.23 11.49 This assumption is used to measure the probabilities of active members dying prior to retirement. (75% of deaths are assumed to be service connected) For disabled retirees,the mortality table used was 60%of the RP-2000 for Disabled Annuitants with ages set back 4 years for males and set forward 2 years for females, and 40%of the RP2000 Annuitant Mortality Table with a White Collar adjustment with no age setback, both with no provision being made for future mortality improvements.These are the same rates currently in use for Special Risk Class members of the Florida Retirement System (FRS), as mandated by Florida House Bill 1309. FRS Disabled Mortality for Special Risk Class Members Sample Probability of Future Life Attained Dying Next Year Expectancy(years) Ages(in 2017) Men Women Men Women 50 1.67 % 0.91 % 23.74 27.06 55 2.03 1.26 20.77 23.37 60 2.47 1.67 17.91 19.90 65 3.07 2.24 15.15 16.62 70 3.90 3.18 12.52 13.58 75 5.30 4.60 10.02 10.86 80 7.59 6.66 7.80 8.48 The rates 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: Number of Years After First Eligibility Probability of for Normal Retirement Normal Retirement 0 40 % . 1 10 % 2 10 % 3 10 % 4 10 % 5 10 % 6 10 % 7 100 % • - GR Rel remeni - -- . _ : City of Boynton Beach Municipal Police Officers' Retirement Fund 22 '�7 I Gonsulxing Rates of separation from active membership are as shown below(rates do not apply to members eligible to retire and do not include separation on account of death or disability). Years Sample %of Active Members of Service Ages Separating Within Next Year 0-1 ALL 15.0% 1-2 10.0% 2-3 7.0% 3-4 5.0% 4-5 4.0% At least 5 25 4.0% 30 3.0% 35 2.0% 40 1.0% 45 0.0% Rates of disability among active members (90%of disabilities are assumed to be service connected). Sample %Becoming Disabled Ages within Next Year 20 0.14 % 25 0.15 30 0.18 35 0.23 40 0.30 45 0.51 50 1.00 55 1.55 G R(.7 Retonsultiiremenngt City of Boynton Beach Municipal Police Officers' Retirement Fund 23 C MISCELLANEOUS AND TECHNICAL ASSUMPTIONS Administrative& The investment return assumption is intended to be the return net of Investment 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. 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 Employer contributions are assumed to be made at the beginning of the Contributions year effective October 1, 2011. 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 normal and early 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 accumulated sick and vacation time reported for each member as of June 18,2013. 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 10-year certain and life annuity is the normal form of benefit. Pay Increase Timing Middle of fiscal year.This is equivalent to assuming that reported pays represent amounts paid to members during the year ended on the valuation date. G R5 CRetironsultemienngt City of Boynton Beach Municipal Police Officers' Retirement Fund 24 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 (APV) 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. 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,such as the Funded Ratio and theActuarially Determined Contribution(ADEC). Actuarial Value of Assets The value of the assets as of a given date, used by the actuary for valuation purposes. This may be the market or fair value of plan assets or a smoothed value in order to reduce the year-to-year volatility of calculated results,such as the funded ratio and the Actuarially Determined contribution (ADEC). Actuarially Determined The employer's periodic required contributions,expressed as a dollar Contribution(ADEC) amount or a percentage of covered plan compensation,determined under GASB. The ADEC consists of the Employer Normal Cost and Amortization Payment. V R SFcetonsuinirnmen�nt - City of Boynton Beach Municipal Police Officers' Retirement Fund 25 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. 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. 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 GASB No. 67 accounting rules for public retirement systems and the employers that sponsor or contribute to them.Statement No. 68 sets the accounting CRetionsreultmieng nt . City of Boynton Beach Municipal Police Officers' Retirement Fund 26 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. keinsultiirementng' City of Boynton Beach Municipal Police Officers' Retirement Fund 27 Co SUMMARY OF ASSETS September 30 Item - 2017 2016 A. Cash and Cash Equivalents(Operating Cash) $ 2,445 $ 2,494 B. Receivables: 1. Member Contributions 2. Employer Contributions - - 3. State Contributions - - 4. Buy-Back Installment Payments 84,764 102,537 5. Receivables for Securities Sold plus Prepaid Expenses 1,432,375 438,583 6. DROP Loans 335,309 298,294 7. Total Receivables $ 1,852,448 $ 839,414 C. Investments 1. Short-Term Investments $ - $ - 2. Domestic Equities(Large cap defensive) 24,492,976 22,077,962 3. Real Estate 6,279,311 6,759,760 4. Multi-Asset Core Fund (Equities) 36,605,491 33,038,093 5. Multi-Manager Bond Fund (Fixed Income) 26,219,476 23,733,809 6. Total Investments $ 93,597,254 $ 85,609,624 D. Liabilities and Reserves 1. Benefits Payable - 2. Accrued Expenses and Other Payables (157,888) (146,905) 3. Total Liabilities and Reserves $ (157,888) $ (146,905) E. Total Market Value of Assets Available for Benefits $ 95,294,259 $ 86,304,627 F. Reserves 1. State Contribution Reserve $ (197,876) $ (158,129) 2. DROP Accounts (11,516,817) (10,639,649) 3. Supplemental Benefit Reserve (2,545,246) (2,120,073) $ (14,259,939) $ (12,917,851) G. Market Value Net of Reserves $ 81,034,320 $ 73,386,776 H. Allocation of Investments 1. Short-Term Investments 0.00% 0.00% 2. Domestic Equities(Large cap defensive) 26.17% 25.79% 3. Real Estate 6.71% 7.90% 4. Multi-Asset Core Fund (Equities) 39.11% 38.59% 5. Multi-Manager Bond Fund (Fixed Income) 28.01% 27.72% 6. Total Investments 100.00% 100.00% G1� d kCetionsun,ltiree-ng: City of Boynton Beach Municipal Police Officers' Retirement Fund 28 V PENSION FUND DISBURSEMENTS& INCOME September 30 Item 2017 2016 A. Market Value of Assets at Beginning of Year $ 86,304,627 $ 78,272,684 B. Revenues and Expenditures 1. Contributions a. Employee Contributions $ 946,743 $ 902,350 b. Employer Contributions 4,791,528 4,391,305 c. State Contributions 781,307 735,945 d. Buy Back Contributions 29,945 25,803 e. Health Subsidy Contributions - - f. DROP Rollover 98,740 109,362 g. Change in Value of Remaining Buy Back Payments (17,773) 39,561 h. Total $ 6,630,490 $ 6,204,326 2. Investment Income a. Interest, Dividends,and Other Income $ 1,601 $ 8,932 b. Net Realized Gains/(Losses) 2,408,640 1,747,966 c. Net Unrealized Gain/(Losses) 7,020,964 7,074,131 d. Investment Expenses (633,478) (576,576) e: Net Investment Income $ 8,797,727 $ 8,254,453 3. Benefits and Refunds a. Refunds $ (11,413) $ (93,339) b. Regular Monthly Benefits to Retirees (5,204,486) (5,321,881) c. Supplemental Distributions and DROP Loans (186,979) (376,822) d. DROP Distributions (868,009) (470,396) e. Total $ (6,270,887) $ (6,262,438) 4. Administrative and Miscellaneous Expenses $ (167,698) $ (164,398) 5. Transfers $ - $ - C. Market Value of Assets at End of Year $ 95,294,259 $ 86,304,627 D. Reserves 1. State Contribution Reserve $ (197,876) $ (158,129) 2. DROP Accounts (11,516,817) (10,639,649) 3. Supplemental Benefit Reserve (2,545,246) (2,120,073) 4. Total Reserves $ (14,259,939) $ (12,917,851) E. Market Value Net of Reserves $ 81,034,320 $ 73,386,776 f® Retirement City of Boynton Beach Municipal Police Officers' Retirement Fund 29 RF Consukin� ACTUARIAL VALUE OF ASSETS Valuation Date—September 30 2016 2017 2018 2019 2020 2021 A.Actuarial Value of Assets Beginning of Year $78,975,201 $86,084,486 $ - $ - $ - $ - B. Market Value End of Year 86,304,627 95,294,259 - - - - C. Market Value Beginning of Year 78,272,684 86,304,627 - - - - D.Non-Investment/Administrative Net Cash Flow (222,510) 191,905 E. Investment Income El. Actual Market Total: B-C-D 8,254,453 8,797,727 - - - - E2. Assumed Rate of Return 7.75% 7.50% ' 7.25% 7.25% 7.25% 7.25% E3. Assumed Amount of Return 6,111,956 6,643,215 - - - - E4. Amount Subject to Phase-In:E1—E3 2,142,497 2,154,512 - - - - F. Phase-In Recognition of Investment Income Fl. Current Year: 0.2 x E4 428,499 430,902 - - - - F2. First Prior Year (848,929) 428,499 430,902 - - - F3. Second Prior Year 393,473 (848,929) 428,499 430,902 - - F4. Third Prior Year 265,985 393,473 (848,929) 428,499 430,902 - F5. Fourth Prior Year 980,811 265,985 393,472 (848,929) 428,501 430,904 F6. Total Phase-Ins 1,219,839 669,930 403,944 10,472 859,403 430,904 G.Actuarial Value of Assets End of Year G1. Preliminary Actuarial Value of Assets: $86,084,486 $93,589,536 $ - $ - $ - $ - G2. Upper Corridor Limit:120%*B 103,565,552 114,353,111 - - - - G3. Lower Corridor Limit:80%*B 69,043,702 76,235,407 - - - - G4. Funding Value End of Year 86,084,486 93,589,536 - - - - G5. Less:State Contribution Reserve (158,129) (197,876) - - - - G6. Less:DROP Account Balances (10,639,649) (11,516,817) - - - - G7. Less:Supplemental Benefit Reserve (2,120,073) (2,545,246) - - - - G8. Final Funding Value End of Year 73,166,635 79,329,597 - - - - H.Difference between Market&Actuarial Value $ 220,141 $ 1,704,723 $ - $ - $ - $ - I. Actuarial Rate of Return 9.30% 8.26% 0.00% 0.00% 0.00% 0.00% J. Market Value Rate of Return 10.56% 9.91% 0.00% 0.00% 0.00% 0.00% K.Ratio of Actuarial Value to Market Value 99.74% 98.21% 0.00% 0.00% 0.00% 0.00% GRSRetirement onsulting City of Boynton Beach Municipal Police Officers'Retirement Fund 30 RECONCILIATION OF DROP ACCOUNTS Value at beginning of year $ 10,639,649 Adjustment to beginning of year balances + (4,449) Payments credited to accounts + 905,920 Rollovers into DROP account + 98,740 Investment Earnings credited + 773,816 Withdrawals from accounts - 868,009 Loan Proceeds - 145,000 Loan Payments + 116,150 Value at end of year 11,516,817 Retirement Consulting City of Boynton Beach Municipal Police Officers' Retirement Fund 31 INVESTMENT RATE OF RETURN Investment Rate of Return , Year Ended Market Value Actuarial Value 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 9/30/11 (0.6) 1.6 9/30/12 18.0 6.9 9/30/13 9.8 7.0 9/30/14 10.3 8.9 9/30/15 1.9 7.5 9/30/16 10.6 9.3 9/30/17 9.9 8.3 Average Returns: Last Five Years 8.4 % 8.2 Last Ten Years 5.0 % 5.9 iAll Years 8.7 % 8.1 GR S Retirement City of Boynton Beach Municipal Police Officers' Retirement Fund 32 I� Consulting FASB NO.35 INFORMATION A. Valuation Date October 1,2017 October,1, 2016 B. Actuarial Present Value of Accumulated Plan Benefits 1. Vested Benefits a. Members Currently Receiving Payments $ 73,915,036 $ 65,702,105 b. Terminated Vested Members 4,139,840 4,082,598 c. Other Members 32,218,854 32,081,978 d. Total 110,273,730 101,866,681 2. Non-Vested Benefits 1,117,965 766,459 3. Total Actuarial Present Value of Accumulated Plan Benefits: 1d+2 111,391,695 102,633,140 4. Accumulated Contributions of Active Members 6,532,640 6,662,803 C. Changes in the Actuarial Present Value of Accumulated Plan Benefits 1. Total Value at Beginning of Year 102,633,140 94,104,420 2. Increase (Decrease) During the Period Attributable to: a. Plan Amendment 0 0 b. Change in Actuarial Assumptions 3,139,292 2,668,316 c. Latest Member Data, Benefits Accumulated and Decrease in the Discount Period 11,737,198 11,999,696 d. Benefits Paid(Net basis, including credits to DROP accounts) (6,117,935) (6,139,292) e. Net Increase 8,758,555 8,528,720 3. Total Value at End of Period 111,391,695 102,633,140 D. Market Value of Assets 81,034,320 73,386,776 E. Actuarial Assumptions-See page entitled Actuarial Assumptions and Methods !` 6 Retirement Consultinb City of Boynton Beach Municipal Police Officers' Retirement Fund 33' t V R SCHEDULE OF CHANGES IN THE EMPLOYER'S NET PENSION LIABILITY AND RELATED RATIOS GASB Statement No. 67 Fiscal year ending September 30, 2018* 2017 2016 Total pension liability Service Cost $ 3,199,467 $ 2,886,162 $ 3,047,445 Interest 9,998,796 9,654,424 9,076,479 Benefit Changes - - - Difference between actual &expected experience 1,355,270 (1,118,136) 1,820,086 Assumption Changes 3,526,158 3,177,559 (565,994) Benefit Payments (6,578,789) (6,259,474) (6,169,099) Refunds (22,140) (11,413) (93,339) Other(Adjustments to Reserves) - _ 533,304 481,282 Net Change in Total Pension Liability 11,478,762 8,862,426 7,596,860 Total Pension Liability-Beginning 133,418,274 124,555,848 116,958,988 Total Pension Liability-Ending(a) $ 144,897,036 $ 133,418,274 $ 124,555,848 Plan Fiduciary Net Position Contributions- Employer(from City) $ 5,355,058 $ 4,791,528 $ 4,391,305 Contributions- Employer(from State) 781,307 781,307 735,945 Contributions- Non-Employer Contributing Entity - - - Contributions- Member 828,224 976,688 • 928,153 Net Investment Income 7,082,731 8,797,727 8,254,453 Benefit Payments (6,578,789) (6,259,474) (6,169,099) Refunds (22,140) (11,413) (93,339) Administrative Expense (166,048) (167,698) (164,398) Other - 98,740 109,362 Net Change in Plan Fiduciary Net Position 7,280,343 9,007,405 7,992,382 Plan Fiduciary Net Position-Beginning 95,209,495 86,202,090 78,209,708 Plan Fiduciary Net Position-Ending(b) $ 102,489,838 $ 95,209,495 $ 86,202,090 Net Pension Liability-Ending(a)-(b) 42,407,198 38,208,779 38,353,758 Plan Fiduciary Net Position as a Percentage of Total Pension Liability 70.73 % 71.36 % 69.21 Covered Payroll $ 12,000,000 $ 11,834,364 11,279,375 Net Pension Liability as a Percentage of Covered Payroll 353.39 % 322.86 % 340.03 *These figures are estimates only. Actual figures will be provided after the end of the fiscal year. Note that only three years are shown here for summary purposes.The actual September 30,2018 GASB 67 disclosure report will include all years(up to 10) beginning with the first year GASB 67 was implemented(Fiscal Year 2014). GRSRetirementf4twong City of Boynton Beach Municipal Police Officers' Retirement Fund 34 Consulti ' SCHEDULE OF THE EMPLOYER'S NET PENSION LIABILITY GASB Statement No.67 Total Plan Net Position Net Pension Liability FY Ending Pension Plan Net Net Pension as a%of Total Covered as a%of September30, Liability Position Liability Pension Liability Payroll Covered Payroll 2014 $111,783,071 $76,282,065 $35,501,006 68.24% $11,070,863 320.67% 2015 116,958,988 78,209,708 38,749,280 66.87% 11,553,613 335.39% 2016 124,555,848 86,202,090 38,353,758 69.21% 11,279,375 340.03% 2017 133,418,274 95,209,495 38,208,779 71.36% 11,834,364 322.86% 2018* 144,897,036 102,489,838 42,407,198 70.73% 12,000,000 353.39% *These figures are estimates only. Actual figures will be provided after the end of the fiscal year. • CRSRetiremen City of Boynton Beach Municipal Police Officers' Retirement Fund 35 V R Consukine NOTES TO NET PENSION LIABILITY GASB Statement No.67 Valuation Date: October 1, 2017 Measurement Date: September 30, 2018 Methods and Assumptions Used to Determine Net Pension Liability: Actuarial Cost Method Entry Age Normal Inflation 2.5% Salary Increases 5.0%to 6.5%depending on age, including inflation. Investment Rate of Return 7.25% Retirement Age Experience-based table of rates that are specific to the type of eligibility condition. Mortality RP-2000 Combined Healthy Participant Mortality Table (for preretirement mortality) and the RP-2000 Mortality Table for Annuitants (for post-retirement mortality), with mortality improvements projected to all future years after 2000 using Scale BB. For males, the base mortality rates include a 90% blue collar adjustment and a 10% white collar adjustment. For females, the base mortality rates include a 100% white collar adjustment.These are the same rates currently in use for Special Risk Class members of the Florida Retirement System (FRS), as required under Florida Statutes, Chapter 112.63. Other Information: Notes See Discussion of Valuation Results. ‘: D S Retireen, City of Boynton Beach Municipal Police Officers' Retirement Fund 36 E� Consutmling SCHEDULE OF CONTRIBUTIONS GASB Statement No. 67 Actuarially Contribution Actual Contribution FY Ending Determined Actual Deficiency Covered as a%of September 30, Contribution Contribution (Excess) Payroll Covered Payroll 2014 $ 4,560,918 $ 4,624,823 $ (63,905) $11,070,863 41.77% 2015 4,830,346 4,830,346 - 11,553,613 41.81% 2016 4,856,392 4,856,392 - 11,279,375 43.06% 2017 5,256,615 5,256,615 - 11,834,364 44.42% 2018* 5,820,145 5,820,145 - 12,000,000 48.50% *These figures are estimates only. Actual figures will be provided after the end of the fiscal year. QSConsume. City of Boynton Beach Municipal Police Officers' Retirement Fund 37 Consulting NOTES TO SCHEDULE OF CONTRIBUTIONS GASB Statement No. 67 Valuation Date: October 1, 2016 Notes Actuarially determined contribution rates are calculated as of the October 1st 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 20 years(single equivalent period) Asset Valuation Method 5-year smoothed market Inflation 3.0% Salary Increases 5.0%to 6.5%depending on age, including inflation. Investment Rate of Return 7.50% Retirement Age Experience-based table of rates that are specific to the type of eligibility condition. Mortality RP-2000 Combined Healthy Participant Mortality Table (for preretirement mortality) and the RP-2000 Mortality Table for Annuitants (for post-retirement mortality), with mortality improvements projected to all future years after 2000 using Scale BB. For males, the base mortality rates include a 90% blue collar adjustment and a 10% white collar adjustment. For females, the base mortality rates include a 100% white collar adjustment.These are the same rates currently in use for Special Risk Class members of the Florida Retirement System (FRS), as required under Florida Statutes, Chapter 112.63. Other Information: Notes See Discussion of Valuation Results in the October 1, 2016 Actuarial Valuation Report. Consumen` City of Boynton Beach Municipal Police Officers' Retirement Fund 38 SINGLE DISCOUNT RATE GASB Statement No. 67 A single discount rate of 7.25%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 7.25%.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 (7.25%)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 7.25%,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 6.25% 7.25% 8.25% $ 58,314,702 $ 42,407,198 $ 29,221,764 *These figures are estimates only. Actual figures will be provided after the end of the fiscal year. GRetirement - City of Boynton Beach Municipal Police Officers' Retirement Fund 39 R Consulting RECONCILIATION OF MEMBERSHIP DATA From 10/1/16 From 10/1/15 To 10/1/17 To 10/1/16 A. Active Members 1. Number Included in Last Valuation 133 137 2. New Members Included in Current Valuation 15 17 3. Non-Vested Employment Terminations (2) (3) 4. Vested Employment Terminations (1) (11) 5. DROP Participation (5) (5) 6. Service Retirements (2) (2) 7. Disability Retirements (1) 0 8. Deaths (1) 0 9. Number Included in This Valuation 136 133 B. Terminated Vested Members 1. Number Included in Last Valuation 20 10 2. Additions from Active Members 1 11 3. Lump Sum Payments/Refund of Contributions 0 (1) 4. Payments Commenced (1) 0 5. Deaths 0 0 6. Other--Data Correction 0 0 7. Number Included in This Valuation 20 20 C. DROP Plan Members 1. Number Included in Last Valuation 11 9 2. Additions from Active Members 5 5 3. Retirements (5) (3) 4. Deaths Resulting in No Further Payments 0 0 5. Other 0 0 6. Number Included in This Valuation 11 11 D. Service Retirees, Disability Retirees and Beneficiaries 1. Number Included in Last Valuation 116 111 2. Additions from Active Members 3 2 3. Additions from Terminated Vested Members 1 0 4. Additions from DROP Plan 5 3 5. Deaths Resulting in No Further Payments (3) 0 6. Deaths Resulting in New Survivor Benefits 1 0 7. End of Certain Period- No Further Payments 0 0 8. Other-- Lump Sum Distributions 0 0 9. Number Included in This Valuation 123 116 G RS Retirement Consulting City of Boynton Beach Municipal Police Officers' Retirement Fund 40 *tip ' ACTIVE PARTICIPANT SCATTER 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 20-24 NO. 4 2 0 0 0 0 0 0 0 0 6 TOT PAY 214,731 116,717 0 0 0 0 0 0 0 0 331,448 AVG PAY 53,683 58,359 0 0 0 0 0 0 0 0 55,241 25-29 NO. 6 8 4 0 0 5 0 0 0 0 23 TOT PAY 317,335 498,103 268,781 0 0 401,221 0 0 0 0 1,485,440 AVG PAY 52,889 62,263 67,195 0 0 80,244 0 0 0 0 64,584 30-34 N0. 3 3 2 1 0 9 8 0 0 0 26 TOT PAY 158,667 185,936 130,132 68,220 0 686,964 737,907 0 0 0 1,967,826 AVG PAY 52,889 61,979 65,066 68,220 0 76,329 92,238 0 0 0 75,686 35-39 NO. 0 2 0 0 .1 4 14 1 0 0 22 TOT PAY 0 123,459 0 0 70,518 333,301 1,328,703 81,933 0 0 1,937,914 AVG PAY 0 61,730 0 0 70,518 83,325 94,907 81,933 0 0 88,087 40-44 NO. 0 0 2 1 0 1 11 10 1 0 26 TOT PAY 0 0 193,496 70,820 0 81,277 988,113 1,067,059 89,848 0 2,490,613 AVG PAY 0 0 96,748 70,820 0 81,277 89,828 106,706 89,848 0 95,793 45-49 NO. 1 0 0 0 0 0 5 18 0 0 24 TOT PAY 52,889 0 0 0 0 0 442,041 1,942,078 0 0 2,437,008 AVG PAY 52,889 0 0 0 0 0 88,408 107,893 0 0 101,542 50-54 NO. 0 0 0 1 0 2 1 3 1 0 8 TOT PAY 0 0 0 68,400 0 139,175 92,458 331,274 133,845 0 765,152 AVG PAY 0 0 0 68,400 0 69,588 92,458 110,425 133,845 0 95,644 55-59 NO. 1 0 0 0 0 0 0 0 0 0 1 TOT PAY 120,099 0 0 0 0 0 0 0 0 0 120,099 AVG PAY 120,099 0 0 0 0 0 0 0 0 0 120,099 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 TOT NO. 15 15 8 3 1 21 39 32 2 0 136 TOT AMT 863,721 924,215 592,409 207,440 70,518 1,641,938 3,589,222 3,422,344 223,693 0 11,535,500 AVG AMT 57,581 61,614 74,051 69,147 70,518 78,188 92,031 106,948 111,847 0 84,820 Retirement Consulting City of Boynton Beach Municipal Police Officers' Retirement Fund 41 ./;= INACTIVE PARTICIPANT SCATTER Terminated Deceased with Vested Disabled Retired Beneficiary Total Total Total Total Age Group Number Benefits Number Benefits Number Benefits Number Benefits Under 20 - - - - - - - - 20-24 - - - - - - - - 25-29 - - - - - - - - 30-34 5 125,160 - - - - - - 35-39 8 170,461 - - - - - - 40-44 2 41,077 - - 3 224,973 - - 45-49 4 147,810 2 98,634 9 682,589 1 53,739 50-54 1 10,920 - - 26 1,367,313 1 23,843 55-59 - - 3 60,877 30 1,710,108 - - 60-64 - - 3 61,756 21 847,531 - - 65-69 - - 3 85,776 11 488,642 1 9,397 70-74 - - 3 42,474 12 420,484 - - 75-79 - - 1 12,549 2 37,019 - - 80-84 - - - - 2 79,329 - - 85-89 - - - - - - - - 90-94 - - - - - - - - 95-99 - - - - - - - - 100&Over - - - - - - - - Total 20 495,428 15 362,066 116 5,857,988 3 86,979 Average Age 39 63 59 56 �j Retirement City of Boynton Beach Municipal Police Officers' Retirement Fund 42 1� Consulting 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.15-022 passed and adopted on its second reading on September 3, 2015. 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 defined 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 up to 300 hours of overtime and lump sum payments for the lesser of the amount of sick and vacation leave accumulated as of June 18, 2013 or the amount cashed out at retirement, but exclusive of any payments for extra duty or special detail work. H. Average Final Compensation(AFC) The average of Compensation over the highest 5 years during the last 10 years of Credited Service. GRSRetirement Consulting City of Boynton Beach Municipal Police Officers' Retirement Fund 43 /"ti 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. Benefit: 3.5% of AFC multiplied by years of Credited Service for Members hired before October 1, 2015. Benefit is limited to 100% of AFC and the provisions of Internal Revenue Code Section 415. All Members hired on or after October 1, 2015 receive 3.0% of AFC multiplied by years of Credited Service. Benefit is limited to 100%of AFC and the provisions of the Internal Revenue Code Section 415. Normal Form of Benefit: 10 Years Certain and Life thereafter;other options are also available. COLA None Supplemental Benefit: 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. J. 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 1.5%for each year by which the Early Retirement date precedes the Normal Retirement date. For this purpose, 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. Normal Form of Benefit: 10 Years Certain and Life thereafter; other options are also available. COLA: None RetiremonsSultinent G g City of Boynton Beach Municipal Police Officers' Retirement Fund 44 Supplemental Benefit: 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. 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 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. Benefit: 66 2/3% 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 AFC. Normal Form of Benefit: 10 Years Certain and Life thereafter;other options are also available. COLA: None Supplemental Benefit: 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 eligibleretirees 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: 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. kGw 6iRetireonsumltientng City of Boynton Beach Municipal Police Officers' Retirement Fund 45 I'C C 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 AFC and a maximum benefit equal to 60%of AFC. Normal Form of Benefit: 10 years Certain and Life thereafter;other options are also available. COLA: None Supplemental Benefit: 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. N. Death in the Line of Duty Eligibility: Any member whose death is determined to be the result of a service incurred injury is eligible for survivor benefits regardless of Credited Service. Benefit: 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 AFC. If there is no spouse, benefits will be paid to the deceased member's estate. Normal Form of Benefit: Paid until death of spouse. COLA: None Supplemental Benefit: All retirees and beneficiaries 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. Retiremen_4G0ng ConsultiCity of Boynton Beach Municipal Police Officers' Retirement Fund 46 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 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. Normal Form of Benefit: Paid until death or remarriage of spouse;or 10 years to the member's estate. COLA: None Supplemental Benefit: All retirees and beneficiaries 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. 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%, 66 2/3%, 75% and 100% Contingent Annuitant options and the 50%,66 2/3%,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. Se Retionsumlti reengnr City of Boynton Beach Municipal Police Officers' Retirement Fund 47 C 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: 10 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. 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. 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. vcRS Retirement Consulting City of Boynton Beach Municipal Police Officers' Retirement Fund 48 W. 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 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. 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%. Normal Form of Benefit: Options include a lump sum, equal annual payments over 5 years, or monthly installments based upon actuarial tables until the balance is paid out. COLA: None Supplemental Benefit: 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. iswqRetirement City of Boynton Beach Municipal Police Officers' Retirement Fund 49 Consulting X. 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. Y. Changes Since Previous Valuation There have been no changes since the last valuation. G R S Retiremen, Consulting City of Boynton Beach Municipal Police Officers' Retirement Fund 50 1� 1 ,