HomeMy WebLinkAbout2017 12 05 Informational 200 October 1, 2016 Chapter 112.664 Compliance ReportBOARD OF TRUSTEES
AGENDA ITEM
ITEM 200
December 11, 2017
Regular Meeting
REQUEST:
Informational
X
Consent
Public Hearings
Regular
The Finance And Administrative Services Department Is Advising The Board Of Trustees Of
The October 1, 2016 Chapter 112.664, F.S. Compliance Report From Gabriel, Roeder, Smith &
Company.
ATTACHMENT(S):
A. October 1, 2016 Chapter 112.664, F. S. Compliance Report (34 Pages)
Retirement
GRSConsulting
September 28, 2017
Mr. Shawn Boyle
Finance and Administrative Services Director
City of Winter Springs
1126 East State Road 434
Winter Springs, Florida 32708
P: 954.527.1616 ' F:954.525.0083 1 www.grsconsulting.com
Re: City of Winter Springs Defined Benefit Plan
October 1, 2016 Chapter 112.664 Compliance Report
Dear Board Members:
As requested, we are pleased to enclose eleven (11) copies of the October 1, 2016 Chapter 112.664
Compliance Report for the City of Winter Springs Defined Benefit Plan (Plan).
As required, we will timely upload the required data to the State's online portal prior to the filing deadline.
Please note we understand the following items must be posted on the Plan's website and must be posted on
any website containing budget information relating to the City or actuarial or performance information
relating to the Plan:
• this compliance report
• most recent financial statement
• most recent actuarial valuation report
• a link to the Division of Retirement Actuarial Summary Fact Sheet
http: / /www.d ms.myflorida.com/ workforce_ operations/ retirement /local_retirement_plans /local_ret
irement_section /actuarial_su m mary_fact_sheets
• for the previous five years - a side -by -side comparison of the Plan's assumed rate of return compared
to the actual rate of return as well as the percentages of cash, equity, bond and alternative
investments in the Plan portfolio
• the Plan's funded ratio as determined in the most recent actuarial valuation — 78.5% on a market
value of assets basis as of October 1, 2016
We appreciate the opportunity to work with the Board on this important assignment.
If you should have any questions concerning the above, please do not hesitate to contact us.
Sincerest regards,
C�:, . 7::s.1..,--� LL4-11�
Lawrence F. Wilson, A.S.A.
Senior Consultant and Actuary
Enclosures
City of Winter Springs
Defined Benefit Plan
CHAPTER 112.664, F.S. COMPLIANCE REPORT
In Connection with the October 1, 2016 Funding Actuarial Valuation Report
and the Plan's Financial Reporting for Fiscal Year Ended September 30, 2016
RS
G ; Retirement
J
Consulting
Retirement
4 R Consulting
September 28, 2017
Board of Trustees
c/o Mr. Shawn Boyle
Finance and Administrative Services Director
City of Winter Springs Defined Benefit Plan
1126 East State Road 434
Winter Springs, Florida 32708
P: 954.527.1616 F: 954.525.0083 I www.grsconsuit 'fng.com
Re: October 1, 2016 Chapter 112.664 Compliance Report
Dear Board Members:
Gabriel, Roeder, Smith & Company (GRS) has been engaged by the Board of Trustees (Board) of the
City of Winter Springs Defined Benefit Plan (Plan) to prepare a disclosure report to satisfy the
requirements set forth in Chapter 112.664, F.S. and as further required pursuant to Chapter 60T-
1.0035, F.A.C.
This report was prepared at the request of the Board and is intended for use by the Board and
those designated or approved by the Board. This report may be provided to parties other than the
Board only in its entirety and only with the permission of the Board.
The purpose of the report is to provide the required information specified in Chapter 112.664, F.S.
and to supplement this information with additional exhibits. This report should not be relied on for
any purpose other than the purpose described above.
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 this engagement does not include an analysis of the potential range of such
measurements.
This report is based upon information furnished by the City and the Board concerning Plan benefits,
Plan provisions and Plan members as used in the corresponding Actuarial Valuation Reports for the
Valuation Dates indicated. Financial information was provided by the City and Board as of
September 30, 2016. We reviewed the information provided for internal and year -to -year
consistency, but did not audit the data. The Plan is responsible for the accuracy of the data.
Board of Trustees
September 28, 2017
Page Two
Except where specific assumptions are required by Chapter 112.664, F.S, this report was prepared
using actuarial assumptions adopted by the Board as described in Section C. The Board's
assumptions are based on past and expected future Plan experience and represent an estimate of
future Plan experience. The mortality assumptions are prescribed by statute and were last updated
in 2016.
The investment return assumption of 2% higher than the investment return assumption utilized in
the Actuarial Valuation Report does not represent an estimate of future Plan experience nor an
observation of the estimates inherent in market data. This assumption is provided as a counterpart
to the Chapter 112.664, F.S. requirement to utilize an investment return assumption of 2% lower
than the investment return assumption utilized in the Actuarial Valuation Report. The inclusion of
the additional 2% higher assumption shows a more complete assessment of the range of potential
results as opposed to the one -sided range required by statute.
If all actuarial assumptions are met and if all current and future minimum required contributions
are paid, Plan assets will be sufficient to pay all Plan benefits, future contributions are expected to
remain relatively stable as a percentage of payroll and the funded status of the Plan is expected to
improve. Plan minimum required contributions are determined in compliance with the
requirements of the Florida Protection of Public Employee Retirement Benefits Act with normal cost
determined as a level percent of covered payroll and a level dollar amortization payment using an
initial closed amortization period of 30 years.
The Plan's funded ratio as of October 1, 2016 is 78.5% defined as the ratio of the market value of
Plan assets to the actuarial accrued liability.
The Plan's funded ratio and the GASB Net Pension Liability may not be appropriate for assessing the
sufficiency of Plan assets to meet the estimated cost of settling benefit obligations but may be
appropriate for assessing the need for or the amount of future contributions.
The undersigned are members of the American Academy of Actuaries and meet the Qualification
Standards of the American Academy of Actuaries to render the actuarial opinions contained herein.
The signing actuaries are independent of the Plan sponsor.
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 presents the actuarial position of the Plan as of the valuation date as
required by statute. 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.
`RS
Retirement
Consulting
Board of Trustees
September 28, 2017
Page Three
With respect to the reporting standards for defined benefit retirement plans or systems contained in
Section 112.664(1), F.S., the actuarial disclosures required under this section were prepared and
completed by me or under my direct supervision and I acknowledge responsibility for the results. To
the best of my knowledge, the results are complete and accurate, and in my opinion, meet the
requirements of Section 112.664(1), F.S., and Section 60T- 1.0035, F.A.C.
Respectfully submitted,
GABRIEL, ROEDER, SMITH AND COMPANY
Y By
Lawrence F. Wilson, M.A.A.A
Enrolled Actuary No. 17 -02802
Senior Consultant & Actuary
`GRS
Date: September 28, 2017
Retirement
Consulting
Jennifer M. Borregard, M.A.A.A
Enrolled Actuary No. 17 -07624
Consultant & Actuary
TABLE OF CONTENTS
Section Title Page
A Chapter 112.664, F.S. Results
Net Pension Liability
1. Using financial reporting assumptions per GASB Statement No. 67 and No. 68 1
2. Using assumptions required under Section 112.664(1)(a), F.S. 2
3. Using assumptions required under Section 112.664(1)(b), F.S. 3
4. Using assumptions required under Section 112.664(1)(a), F.S. plus 2% 4
Asset and Benefit Payments Projection
1. Using financial reporting assumptions per GASB Statement No. 67 and No. 68 and
using assumptions required under Section 112.664(1)(a), F.S. 5
2. Using assumptions required under Section 112.664(1)(b), F.S. 6
3. Using assumptions required under Section 112.664(1)(a), F.S. plus 2% 7
Actuarially Determined Contribution
N.
Unfunded Actuarial Accrued Liabilities Bases and Amortization Payments 9
B Summary of Plan Provisions
10
C Actuarial Assumptions and Cost Methods Used for Funding 13
D Glossary
Retirement
Consulting
Q.
21
SECTION A
CHAPTER 112.664, F.S. RESULTS
Net Pension Liability
Using Financial Reporting Assumptions per GASB Statements No. 67 and No. 68
Measurement Date
September 30, 2016
A. Total Pension Liability (TPL)
Service Cost
$
808,281
Interest
4,059,813
Benefit Changes
0
Difference Between Actual and Expected Experience
275,994
Assumption Changes
0
Benefit Payments
(2,450,972)
Other
0
Net Change in Total Pension Liability
$
2,693,116
Total Pension Liability (TPL) - (beginning of year)
50,888,868
Total Pension Liability (TPL) - (end of year)
$
53,581,984
B. Plan Fiduciary Net Position
Contributions - County and City
$
2,586,936
Contributions- Member
479,257
Net Investment Income
4,077,452
Benefit Payments
(2,450,972)
Administrative Expenses
(28,208)
Other
0
Net Change in Plan Fiduciary Net Position
$
4,664,465
Plan Fiduciary Net Position - (beginning of year)
37,362,769
Plan Fiduciary Net Position - (end of year)
$
42,027,234
C. Net Pension Liability (NPL) -(end of year): (A) - (B)
Valuation Date
Certain Key Assumptions
$ 11,554,750
October 1, 2015
Investment Return Assumption 8%
Mortality Table:
Healthy General Members: RP -2000 Combined Healthy Participant Mortality Tables, separate rates for
males and females, with fully generational mortality improvements projected to each future payment
date with Scale AA. Healthy Firefighter and Police Officer Members: RP -2000 Combined Healthy
Participant Mortality Tables with Blue Collar Adjustment, separate rates for males and females, with
fully generational mortality improvements projected to each future payment date with Scale AA.
Disabled Members: RP -2000 Disabled Mortality Tables, separate rates for males and females, with fully
generational mortality improvements projected to each future payment date with Scale AA.
Retirement City of Winter Springs Defined Benefit Plan 1
QS . Consulting
Net Pension Liability
Using Assumptions Required Under 112.664(1)(a), F.S.
Measurement Date
September 30, 2016
A. Total Pension Liability (TPL)
Service Cost
$
819,021
Interest
4,092,293
Benefit Changes
0
Difference Between Actual and Expected Experience
257,455
Assumption Changes
0
Benefit Payments
(2,450,972)
Other
0
Net Change in Total Pension Liability
$
2,717,797
Total Pension Liability (TPL) - (beginning of year)
51,302,677
Total Pension Liability (TPL) - (end of year)
$
54,020,474
B. Plan Fiduciary Net Position
Contributions - County and City
$
2,586,936
Contributions - Member
479,257
Net Investment Income
4,077,452
Benefit Payments
(2,450,972)
Administrative Expenses
(28,208)
Other
0
Net Change in Plan Fiduciary Net Position
$
4,664,465
Plan Fiduciary Net Position - (beginning of year)
37,362,769
Plan Fiduciary Net Position - (end of year)
$
42,027,234
C. Net Pension Liability (NPL) -(end of year): (A) - (B)
$
11,993,240
Valuation Date
October 1, 2015
Certain Key Assumptions
Investment Return Assumption 8%
Mortality Table:
RP -2000 Combined Healthy Participant Mortality Tables, separate rates for males and females, with
fully generational mortality improvements projected to each future payment date with Scale AA.
QG R S Retirement City of Winter Springs Defined Benefit Plan 2
Consulting
Net Pension Liability
Using Assumptions Required Under 112.664(1)(b), F.S.
Measurement Date
September30, 2016
A. Total Pension Liability (TPL)
Service Cost
$
1,356,387
Interest
3,917,493
Benefit Changes
0
Difference Between Actual and Expected Experience
311,486
Assumption Changes
0
Benefit Payments
(2,450,972)
Other
0
Net Change in Total Pension Liability
$
3,134,394
Total Pension Liability (TPL) - (beginning of year)
64,849,156
Total Pension Liability (TPL) - (end of year)
$
67,983,550
B. Plan Fiduciary Net Position
Contributions - County and City
$
2,586,936
Contributions - Member
479,257
Net Investment Income
4,077,452
Benefit Payments
(2,450,972)
Administrative Expenses
(28,208)
Other
0
Net Change in Plan Fiduciary Net Position
$
4,664,465
Plan Fiduciary Net Position - (beginning of year)
37,362,769
Plan Fiduciary Net Position - (end of year)
$
42,027,234
C. Net Pension Liability (NPL) -(end of year): (A) - (B)
$
25,956,316
Valuation Date
October 1, 2015
Certain Key Assumptions
Investment Return Assumption 6%
Mortality Table:
RP -2000 Combined Healthy Participant Mortality Tables, separate rates for males and females, with
fully generational mortality improvements projected to each future payment date with Scale AA.
QS Retirement City of Winter Springs Defined Benefit Plan 3
. Consulting
Net Pension Liability
Using Assumptions Required Under 112.664(1)(a), F.S. Plus 2% on Investment Return Assumption
Measurement Date
September 30, 2016
A. Total Pension Liability (TPL)
Service Cost
$
505,898
Interest
4,116,730
Benefit Changes
0
Difference Between Actual and Expected Experience
211,164
Assumption Changes
0
Benefit Payments
(2,450,972)
Other
0
Net Change in Total Pension Liability
$
2,382,820
Total Pension Liability (TPL) - (beginning of year)
41,675,725
Total Pension Liability (TPL) - (end of year)
$
44,058,545
B. Plan Fiduciary Net Position
Contributions - County and City
$
2,586,936
Contributions - Member
479,257
Net Investment Income
4,077,452
Benefit Payments
(2,450,972)
Administrative Expenses
(28,208)
Other
0
Net Change in Plan Fiduciary Net Position
$
4,664,465
Plan Fiduciary Net Position - (beginning of year)
37,362,769
Plan Fiduciary Net Position - (end of year)
$
42,027,234
C. Net Pension Liability (NPL) -(end of year): (A) - (B)
Valuation Date
Certain Key Assumptions
$ 2,031,311
October 1, 2015
Investment Return Assumption 10%
Mortality Table:
RP -2000 Combined Healthy Participant Mortality Tables, separate rates for males and females, with
fully generational mortality improvements projected to each future payment date with Scale AA.
Consu king Retirement City of Winter Springs Defined Benefit Plan 4
4��-
FYE
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
Asset and Benefit Payment Projection
Not Reflecting Any Future Contributions
Using Financial Reporting Assumptions per GASB Statements No. 67 and No. 68
and Using Assumptions Required Under 112.664(i)(a). F.S.
Market Value of
Assets (BOY)
$ 42,027,234
42,490,648
42,846,028
42, 937, 764
42,857,870
42,606,470
42,027,629
41,176,799
40,117,643
38,775,206
37,194,151
35,370,047
33, 293,162
30,973,326
28,380,358
25,545,135
22,460,664
19,121,850
15,555,614
11, 738,788
7,684,850
3,315,736
Expected Investment
Return
$
3,243,140
3,274,254
3,290,691
3,290,680
3,277,508
3,244,776
3,189,201
3,11S,374
3,022,488
2,909,705
2,778,434
2,628,117
2,458,813
2,269,631
2,060,764
1,833,025
1,585,955
1,320,480
1,036,606
734,062
410,123
81,491
Projected Benefit
Payments
$ 2,779,726
2,918,874
3,198,955
3,370,574
3,528,908
3,823,617
4,040,031
4,174,530
4,364,925
4,490,760
4,602,538
4,705,002
4,778,649
4,862,599
4,895,987
4,917,496
4,924,769
4,886,716
4,853,432
4,788,000
4,779,237
4,749,795
4,680,604
4,596,190
4,485,308
4,380,745
4,258,055
4,128,104
4,004,287
3,863,016
Market Value of
Assets(EOY)
$ 42,490,648
42,846,028
42,937,764
42,857,870
42,606,470
42,027,629
41,176, 799
40,117,643
38,775,206
37,194,151
35,370,047
33,293,162
30,973,326
28, 380, 358
25,545,135
22,460,664
19,121,850
15,555,614
11,738,788
7,684,850
3,315,736
Number of years for which current market value of assets are adequate to sustain the payment
of expected retirement benefits reflecting no contributions from the City, County or Members: 21.67
Certain Key Assumptions
Investment return assumption 8%
Mortality Table:
Firefighter and Police Officer participants: For healthy participants during employment, RP 2000 Combined Healthy Participant
Mortality Tables, separate rates for males and females, with 90% Blue Collar Adjustment/ 10% White Collar Adjustment and fully
generational mortality improvements projected to each future decrement date with Scale BB. For healthy participants post
employment, RP 2000 Annuitant Mortality Tables, separate rates for males and females, with 90% Blue Collar Adjustment / 10%
White Collar Adjustment and fully generational mortality improvements projected to each future decrement date with Scale BB.
For disabled male participants, 60% RP 2000 Disabled Male Mortality Table setback four years / 40% RP 2000 Annuitant Male
Mortality Table with White Collar Adjustment with no setback, without projected mortality improvements. For disabled female
participants, 60% RP 2000 Disabled Female Mortality Table set forward two years / 40% RP 2000 Annuitant Female Mortality
Table with White Collar Adjustment with no setback, without projected mortality improvements. General Employee participants:
For healthy male participants during employment, RP 2000 Combined Male Healthy Participant Mortality Table, with 50 %White
Collar/ 50% Blue Collar Adjustment and fully generational mortality improvements projected to each future decrement date with
Scale BB. For healthy female participants during employment, RP 2000 Combined Female Healthy Participant Mortality Table,
with White Collar Adjustmentand fully generational mortality improvements projected to each future decrementdate with Scale
BB. For healthy male participants post employment, RP 2000 Annuitant Male Mortality Table, with 50% White Collar/ 50% Blue
Collar Adjustment and fully generational mortality improvements projected to each future decrement date with Scale BB. For
healthyfernale participants postemployment, RP 2000 Annuitant Female Mortality-fable, with White Collar Adjustment and fully
generational mortality improvements projected to each future decrementdate with Scale BB. For disabled male participants, RP
2000 Disabled Male Mortality Table, set back four years, without projected mortality improvements. For disabled female
participants, RP 2000 Disabled Female Morta I i ty Ta b I e, set forwa rd two years, without projected mortality improvements.
Note: As required in Section 112.664(c) of the Florida Statutes, the projection of Plan assets does not include future contributions
from the City, County or Members. For this reason, this projection should not be viewed as representative of the amount of time
the Plan can sustain benefit payments. Under the Government Accounting Standards Board standards which include City, County
and Member contributions, the Plan is expected to be able to pay all future benefit payments.
QS Retirement City of Winter Springs Defined Benefit Plan
. Consulting
FYE
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
Asset and Benefit Payment Projection
Not Reflecting Any Future Contributions
Using Assumptions Required Under 112.664(i)(b), F.S.
Market Value of
Assets (BOY)
$ 42,027,234
41, 679, 605
41,167,488
40, 335, 542
39,276,532
37,990,547
36, 323, 201
34,332,430
32,083,381
29,502,862
26,637,623
23,485,091
20,037,643
16,307,329
12, 266, 542
7,948,944
3,349,883
Expected Investment
Return
$ 2,432,097
2,406,757
2,367,009
2,311,564
2,242,923
2,156, 271
2,049,260
1,925,481
1,784,406
1,625,521
1,450,006
1,257,554
1,048,335
821,812
578,289
318,535
59,952
Projected Benefit
Payments
$ 2,779,726
2,918,874
3,198, 955
3,370,574
3,528,908
3,823,617
4,040,031
4,174,530
4,364,925
4,490,760
4,602,538
4,705,002
4,778,649
4,862,599
4,895,987
4,917,496
4,924,769
4,886,716
4,853,432
4,788,000
4,779,237
4,749,795
4,680,604
4,596,190
4,485,308
4,380,745
4,258,055
4,128,104
4,004,287
3,863,016
Market Value of
Assets(EOY)
$ 41,679,605
41,167,488
40,335,542
39, 276, 532
37,990,547
36,323,201
34,332,430
32,083,381
29,502,862
26,637,623
23,485,091
20,037,643
16,307,329
12,266,542
7,948,844
3,349,883
Number of years for which current market value of assets are adequate to sustain the payment
of expected retirement benefits reflecting no contributions from the City, County or Members: 16.67
Certain Key Assumptions
Investment return assumption 6%
Mortality Table:
Firefighter and Police Officer participants: For healthy participants during employment, RP 2000 Combined Healthy Participant
Mortality Tables, separate rates for males and females, with 90% Blue Collar Adjustment/ 10 %White Collar Adjustment and fully
generational mortality improvements projected to each future decrement date with Scale BB. For healthy participants post
employment, RP 2000 Annuitant Mortality Tables, separate rates for males and females,with 90% Blue Collar Adjustment / 10%
White Collar Adjustment and fully generational mortality improvements projected to each future decrement date with Scale BB.
For disabled male participants, 60% RP 2000 Disabled Male Mortality Table setback four years / 40% RP 2000 Annuitant Male
Mortality Table with White Collar Adjustment with no setback, without projected mortality improvements. For disabled female
participants, 60% RP 2000 Disabled Female Mortality Table set forward two years / 40% RP 2000 Annuitant Female Mortality
Tablewith White Collar Adjustmentwith no setback, without projected mortality improvements. General Employee participants:
For healthy male participants during employment, RP 2000 Combined Male Healthy Participant Mortality Ta bl e, wi th 50 %White
Collar /50% Blue Collar Adjustment and fully generational mortality improvements projected to each future decrement datewith
Scale BB. For healthy female participants during employment, RP 2000 Combined Female Healthy Participant Mortality Table,
with White Collar Adjustment and fully generational mortality improvements projected to each future decrement date with Scale
BB. For healthy male participants post employment, RP 2000 Annuitant Male Mortality Table, with 50 %White Collar / 50% Blue
Collar Adjustment and fully generational mortality improvements projected to each future decrement date with Scale BB. For
healthy female participants post employment, RP 2000 Annuitant Female Mortality Table, with White Collar Adjustment and fully
generational mortality improvements projected to each future decrement date with Scale BB. For disabled male participants, RP
2000 Disabled Male Mortality Table, set back four years, without projected mortality improvements. For disabled female
participants, RP 2000 Disabled Female Morta I ity Ta bl e, set forwa rd two years, without projected mortality improvements.
Note: As required in Section 112.664(c) of the Florida Statutes, the projection of Plan assets does not include future contributions
from the City, County or Members. For this reason, this projection should not be viewed as representative of the amount of time
the Plan can sustain benefit payments. Under the Government Accounting Standards Board standards which Include City, County
and Member contributions, the Plan is expected to be able to pay all future benefit payments.
QG R S Retirement City of Winter Springs Defined Benefit Plan 6
Consulting
Asset and Benefit Payment Projection
Not Reflecting Any Future Contributions
Usine Assumptions Reouired Under 112.664111(a). F.S. Plus rA on Investment Return Assumption
Number of years for which current market value of assets are adequate to sustain the payment
of expected retirement benefits reflecting no contributions from the City, County or Members: 99.99
Certain Key Assumptions
Investment return assumption 109/.
Mortality Table:
Firefighter and Police Officer participants: For healthy participants during employment, RP 2000 Combined Healthy Participant
Mortality Tables, separate rates for males and females, with 90% Blue Collar Adjustment/ 10% White Collar Adjustment and fully
generational mortality improvements projected to each future decrement date with Scale BB. For healthy participants post
employment, RP 2000 Annuitant Mortality Tables, separate rates for males and females, with 90% Blue Collar Adjustment / 10%
White Collar Adjustment and fully generational mortality improvements projected to each future decrement date with Scale BB.
For disabled male participants, 60% RP 2000 Disabled Male Mortality Table setback four years / 40% RP 2000 Annuitant Male
Mortality Table with White Collar Adjustment with no setback, without projected mortality improvements. For disabled female
participants, 60% RP 2000 Disabled Female Mortality Table set forward two years / 40% RP 2000 Annuitant Female Mortality
Table with White Collar Adjustment with no setback, without projected mortality improvements. General Employee participants:
For healthy male participants during employment, RP 2000 Combined Male Healthy Participant Mortality Table, with 50% White
Collar/ 50% Blue Collar Adjustment and fully generational mortality improvements projected to each future decrement date with
Scale BB. For healthy female participants during employment, RP 2000 Combined Female Healthy Participant Mortality Table,
with White Collar Adjustment and fully generational mortality improvements projected to each future decrement date with Scale
BB. For healthy male participants post employment, RP 2000 Annuitant Male Mortality Table, with 50 %White Collar/ 50% Blue
Collar Adjustment and fully generational mortality improvements projected to each future decrement date with Scale BB. For
healthyfernale participants postemployment, RP 2000 Annuitant Female Mortality-Fable, with White Collar Adjustmentand fully
generational mortality improvements projected to each future decrementdate with Scale BB. For disabled male participants, RP
2000 Disabled Male Mortality Table, set back four years, without projected mortality improvements. For disabled female
participants, RP 2000 Disabled Female Morta I ity Ta bl e, set forwa rd two yea rs, wi thout projected mortality improvements.
Note: As required in Section 112.664(c) of the Florida Statutes, the projection of Plan assets does not include future contributions
from the City, County or Members. For this reason, this projection should not be viewed as representative of the amount of time
the Plan can sustain benefit payments. Under the Government Accounting Standards Board standards which Include City, County
and Member contributions, the Plan is expected to be able to pay all future benefit payments.
QG R S Retirement City of Winter Springs Defined Benefit Plan
Consulting
Market Value of
Expected Investment
Projected Benefit
Market Value of
FYE
Assets (BOY)
Return
Payments
Assets (EOY)
2017
$ 42, 027, 234
$ 4,054,347
$ Z779,726
$ 43, 301, 855
2018
43,301,855
4,174,382
2,918,874
44,557,363
2019
44,557,363
4,284,982
3,198,955
45,643,390
2020
45,643,390
4,384,424
3,370,574
46,657,240
2021
46,657,240
4,477,358
3,528,908
47,605,690
2022
47,605,690
4,556,472
3,823,617
48,338,545
2023
48,338,545
4,618,206
4,040,031
48,916,720
2024
48, 916, 720
4,668,844
4,174, 530
49, 411,034
2025
49, 411, 034
4,708,112
4,3K925
49, 754, 221
2026
49, 754, 221
4,735,714
4,490,760
49, 999,175
2027
49, 999,175
4,754,243
4, 602, 538
50,150, 880
2028
50,150, 880
4,763,944
4,705,002
50, 209, 822
2029
50, 209, 822
4,765,907
4,778,649
50,197,080
2030
50,197, 080
4,760,152
4,862,599
50,094,633
2031
50, 094, 633
4,748,125
4,895,987
49,946, 771
2032
49,946,771
4,732,191
4,917,496
49,761,466
2033
49,761,466
4,713,272
4,924,769
49,549,969
2034
49,549,969
4,694,154
4,886,716
49,357,407
2035
49,357,407
4,676,674
4,853,432
49,180,649
2036
49,180,649
4,662,491
4,788,000
49,055,140
2037
49,055,140
4,650,408
4,779,237
48,926,311
2038
48,926,311
4,639,096
4,749,795
48,815,612
2039
48,815,612
4,631,720
4,680,604
48,766,728
2040
48,766,728
4,631,337
4,596,190
48,801,875
2041
48,801,875
4,640,771
4,485,308
48,957,338
2042
48,957,338
4,661,898
4,380,745
49,238,491
2043
49,238,491
4,696,562
4,258,055
49,676,998
2044
49,676, 998
4,747,350
4,128,104
50, 296, 244
2045
5Q296,244
4,815,883
4,004, 287
51,107,840
2046
51,107, 840
4,904,584
3,863,016
52,149,408
Number of years for which current market value of assets are adequate to sustain the payment
of expected retirement benefits reflecting no contributions from the City, County or Members: 99.99
Certain Key Assumptions
Investment return assumption 109/.
Mortality Table:
Firefighter and Police Officer participants: For healthy participants during employment, RP 2000 Combined Healthy Participant
Mortality Tables, separate rates for males and females, with 90% Blue Collar Adjustment/ 10% White Collar Adjustment and fully
generational mortality improvements projected to each future decrement date with Scale BB. For healthy participants post
employment, RP 2000 Annuitant Mortality Tables, separate rates for males and females, with 90% Blue Collar Adjustment / 10%
White Collar Adjustment and fully generational mortality improvements projected to each future decrement date with Scale BB.
For disabled male participants, 60% RP 2000 Disabled Male Mortality Table setback four years / 40% RP 2000 Annuitant Male
Mortality Table with White Collar Adjustment with no setback, without projected mortality improvements. For disabled female
participants, 60% RP 2000 Disabled Female Mortality Table set forward two years / 40% RP 2000 Annuitant Female Mortality
Table with White Collar Adjustment with no setback, without projected mortality improvements. General Employee participants:
For healthy male participants during employment, RP 2000 Combined Male Healthy Participant Mortality Table, with 50% White
Collar/ 50% Blue Collar Adjustment and fully generational mortality improvements projected to each future decrement date with
Scale BB. For healthy female participants during employment, RP 2000 Combined Female Healthy Participant Mortality Table,
with White Collar Adjustment and fully generational mortality improvements projected to each future decrement date with Scale
BB. For healthy male participants post employment, RP 2000 Annuitant Male Mortality Table, with 50 %White Collar/ 50% Blue
Collar Adjustment and fully generational mortality improvements projected to each future decrement date with Scale BB. For
healthyfernale participants postemployment, RP 2000 Annuitant Female Mortality-Fable, with White Collar Adjustmentand fully
generational mortality improvements projected to each future decrementdate with Scale BB. For disabled male participants, RP
2000 Disabled Male Mortality Table, set back four years, without projected mortality improvements. For disabled female
participants, RP 2000 Disabled Female Morta I ity Ta bl e, set forwa rd two yea rs, wi thout projected mortality improvements.
Note: As required in Section 112.664(c) of the Florida Statutes, the projection of Plan assets does not include future contributions
from the City, County or Members. For this reason, this projection should not be viewed as representative of the amount of time
the Plan can sustain benefit payments. Under the Government Accounting Standards Board standards which Include City, County
and Member contributions, the Plan is expected to be able to pay all future benefit payments.
QG R S Retirement City of Winter Springs Defined Benefit Plan
Consulting
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0 C)
O O
SECTION 6
SUMMARY OF PLAN PROVISIONS
Outline of Principal Provisions of the Retirement Plan
(as of October 1, 2016)
A. Effective Date
Plan adopted as a Money Purchase Floor Offset plan on October 1, 1997. Plan amended and
restated as a Defined Benefit Plan effective October 1, 2000. Plan most recently amended by
Resolution 2011 -57 adopted December 12, 2011.
B. Eligibility Requirements
General Employees hired prior to October 1, 2011, Police Officers and Forensic Professionals
working 30 or more hours per week are eligible to join the Plan on the first day of the month
following completion of six (6) months of service. Electing transferring Firefighters as of October
2, 2008 under the Agreement with the County.
C. Accrual Service
Years of Accrual Service are any Plan Years during which an Employee completes at least 1,000
hours of service, including years of service completed prior to participation in the Plan.
D. Compensation
Wages, salaries and other amounts received (whether or not paid in cash) for personal services
actually rendered in the course of employment. Effective October 10, 2011 Compensation shall
exclude commissions, bonuses, overtime pay in excess of one hundred fifty (150) hours per Plan
year and payments for accrued leave in excess of the dollar amount of an Employee's accrued
leave balance on July 1, 2011.
E. Final Average Compensation
Average earnings during the best five (5) consecutive years out of the last ten (10) years preceding
termination or retirement, but not less than the three (3) highest consecutive compensation
periods during employment with the City as of September 30, 2011.
F. Normal Retirement
1. Eligibility:
(a) Attainment of age 65; or
(b) Completion of 30 years of service and determined to be disabled under the City's long term
disability insurance policy.
QG R S Retirement City of Winter Springs Defined Benefit Plan 10
Consulting
Outline of Principal Provisions of the Retirement Plan
(as of October 1, 2016)
2. Benefit:
For Firefighters, Police Officers and Forensic Professionals, 3.00% times Final Average
Compensation multiplied by Accrual Service, up to a maximum of 30years.
For General Employees, 3.00% times Accrual Service earned through September 30, 2011times
Final Average Compensation plus 2.50% times Accrual Service earned after September 30,
2011 times Final Average Compensation, up to a maximum of 30 years of Accrual Service.
G. Early Retirement
1. Eligibility:
(a) Attainment of age 55 and completion of 15 years of service; or
(b) Completion of 25 years of service.
2. Benefit:
Benefit accrued to date of early retirement, actuarially reduced for each year early retirement
benefit commencement precedes age 55.
H. Late Retirement
1. Eligibility:
Continued employment beyond Normal Retirement Date.
2. Benefit:
Greater of (a) and (b):
(a) Accrued benefit calculated as for Normal Retirement based upon service and pay at Late
Retirement Date.
(b) Actuarially increased benefit as of Late Retirement Date.
I. Disability Retirement
1. Eligibility:
Completion of 30 years of service and determined to be disabled under the City's long term
disability insurance policy.
2. Benefit:
Accrued benefit calculated as for Normal Retirement based upon service and pay at Disability
Retirement Date.
4 Retirement City of Winter Springs Defined Benefit Plan 11
G
R S Consulting
Outline of Principal Provisions of the Retirement Plan
(as of October 1, 2016)
J. Death Benefit
Beneficiary entitled to a monthly benefit supported by the present value of the non - forfeitable
accrued benefit at the time of the participant's death. If death occurs after actual retirement, the
beneficiary receives whatever is payable underthe form of benefit option elected.
K. Participant Contributions
Five percent (5 %) of compensation for all employees.
L. Vested Benefit Upon Termination
100% vested in required participant contributions. Participant contributions made after October
1, 2000 are included in the deferred vested benefit payable at normal or early retirement date.
Upon termination of service prior to normal or early retirement date a participant shall be
entitled to a benefit payable at normal or early retirement date calculated as for normal
retirement. Based on pay and service at date of termination multiplied by a percentage from the
folIowingtable.
Years of Service Vested Percentage
Less Than 7 0%
7 or More 100%
M. Normal Form of Payment of Retirement Income
Monthly benefit payable for life.
Other Options
Actuarially equivalent joint and survivor at 50 %, 75 %, 100 %; or ten (10) years certain and life.
N. Changes Since Previous Valuation
None.
G Retirement
. Consulting
City of Winter Springs Defined Benefit Plan 12
SECTION C
ACTUARIAL ASSUMPTIONS AND COST METHODS USED FOR
FUNDING
Actuarial Assumptions and Actuarial Cost Methods Used in the Valuation
(as of October 1, 2016)
A. Mortality
Firefighter and Police Officer participants:
For healthy participants during employment, RP 2000 Combined Healthy Participant Mortality
Tables, separate rates for males and females, with 90% Blue Collar Adjustment/ 10% White Collar
Adjustment and fully generational mortality improvements projected to each future decrement
date with Scale BB.
For healthy participants post employment, RP 2000 Annuitant Mortality Tables, separate rates for
males and females, with 901/o Blue Collar Adjustment / 10% White Collar Adjustment and fully
generational mortality improvements projected to each future decrement date with Scale BB.
For disabled male participants, 60% RP 2000 Disabled Male Mortality Table setback four years /
40% RP 2000 Annuitant Male Mortality Table with White Collar Adjustment with no setback,
without projected mortality improvements. For disabled female participants, 60% RP 2000
Disabled Female Mortality Table set forward two years / 40% RP 2000Annuitant Female Mortality
Table with White Collar Adjustment with no setback, without projected mortality improvements.
Sample
Ages
( 2016)
Pre - retirement
Future Life
Expectancy (Years)
Men Women
Post - retirement
Future Life
Expectancy (Years)
Men Women
55 29.61 32.40 29.10 32.20
60 24.73 27.36 24.52 27.21
62 22.86 25.40 22.74 25.29
Pre - retirement Post - retirement
Sample Future Life Future Life
Ages Expectancy (Years) Expectancy (Years)
(2036) Men Women Men Women
55 31.85 34.35 31.35 34.17
60 27.00 29.30 26.81 29.17
62 25.12 27.32 25.01 27.23
General Employee participants:
For healthy male participants during employment, RP 2000 Combined Male Healthy Participant
Mortality Table, with 50% White Collar / 50% Blue Collar Adjustment and fully generational
mortality improvements projected to each future decrement date with Scale BB. For healthy
female participants during employment, RP 2000Combined Female Healthy Participant Mortality
Table, with White Collar Adjustment and fully generational mortality improvements projected to
each future decrement date with Scale BB.
Consulting Retirement City of Winter Springs Defined BenefQS . it Plan 13
Actuarial Assumptions and Actuarial Cost Methods Used in the Valuation
(as of October 1, 2016)
A. Mortality (continued)
B
IS
NI
For healthy male participants post employment, RP 2000 Annuitant Male Mortality Table, with 50%
White Collar / 50% Blue Collar Adjustment and fully generational mortality improvements projected
to each future decrement date with Scale BB. For healthy female participants post employment, RP
2000 Annuitant Female Mortality Table, with White Collar Adjustment and fully generational
mortality improvements projected to each future decrement date with Scale BB.
For disabled male participants, RP 2000 Disabled Male Mortality Table, set back four years, without
projected mortality improvements. For disabled female participants, RP 2000 Disabled Female
Mortality Table, set forward two years, without projected mortality improvements.
Sample
Ages
( 2016)
55
60
62
Sample
Ages
(2036)
55
60
62
Investment Return
Pre - retirement
Future Life
Expectancy (Years)
Male Female
30.30 33.37
25.37 28.35
23.47 26.40
Pre - retirement
Future Life
Expectancy (Years)
Male Female
Post - retirement
Future Life
Expectancy (Years)
Male Female
29.88
33.15
25.21
28.25
23.37
26.33
Post - retirement
Future Life
Expectancy (Years)
Male Female
32.47
35.23
32.06
35.03
27.57
30.20
27.42
30.12
25.66
28.23
25.57
28.17
8.0 %, compounded annually, net of investment expenses - 2.75% inflation.
Allowances for Expenses or Contingencies
Prior year's actual administrative expenses are included in normal cost.
Salary Increase Factors
Current salary is assumed to increase at a rate based on the table below per year until retirement.
Q. Retirement
Consulting
City of Winter Springs Defined Benefit Plan
14
Forensic Professionals
General
Firefighters and
Service
Employees
Police Officers
Less than 5 years
6.5%
7.5%
5 - 9 years
5.5%
5.5%
10 -14 years
4.5%
5.5%
15+ years
3.0%
3.5%
City of Winter Springs Defined Benefit Plan
14
Actuarial Assumptions and Actuarial Cost Methods Used in the Valuation
(as of October 1, 2016)
E. Employee Withdrawal Rates
1. Withdrawal rates for male General Employees were used in accordance with the following illustrative example:
2. Withdrawal rates for female General Employees were used in accordance with the following illustrative example:
Withdrawal Rates per 100 Employees
Service
Age
0
1
2
3
4
5
6
7
8
9
10+
20
32.8
25.4
22.7
18.4
15.8
11.7
11.1
11.1
11.0
10.0
9.8
25
27.2
18.5
17.2
14.6
12.7
9.7
8.5
8.4
7.7
6.3
6.2
30
25.8
15.4
14.0
13.2
11.8
8.8
7.8
7.1
6.4
5.5
4.7
35
25.8
14.3
12.8
12.6
10.9
8.5
7.5
6.8
6.2
5.3
4.2
40
24.4
12.6
12.0
10.7
9.0
7.4
6.7
6.2
5.8
5.3
3.0
45
24.4
12.5
11.6
10.3
8.8
6.8
6.5
6.0
5.1
5.1
2.7
50
23.4
12.2
10.7
9.4
7.9
6.0
5.5
5.3
4.6
4.6
3.0
55
27.4
12.2
10.7
9.3
7.8
6.8
5.4
5.2
4.4
4.3
4.5
60
27.4
12.2
10.7
9.3
7.8
6.8
5.4
5.1
4.3
4.2
5.3
65
27.4
12.2
10.7
9.3
7.8
6.8
5.4
5.1
4.3
4.2
3.7
2. Withdrawal rates for female General Employees were used in accordance with the following illustrative example:
The withdrawal assumptions are the withdrawal assumptions used in the July 1, 2016 Florida Retirement System (FRS) Actuarial
Valuation.
Q. Retirement Consulting City of Winter Springs Defined Benefit Plan 15
Withdrawal Rates per 100 Employees
Service
Age
0
1
2
3
4
5
6
7
8
9
10+
20
30.3
25.8
22.1
17.4
15.4
13.5
11.4
11.3
10.5
10.2
11.6
25
26.6
19.8
17.1
13.0
12.9
10.7
9.7
9.2
7.8
7.1
5.3
30
25.4
16.9
14.5
11.6
11.3
9.4
8.7
8.1
7.1
6.5
5.4
35
25.4
15.9
13.5
11.2
10.9
9.0
8.0
7.8
6.8
6.2
4.6
40
24.4
14.0
12.1
10.0
9.1
7.0
6.5
6.3
6.1
5.0
3.3
45
24.4
13.9
11.9
9.8
8.8
6.7
6.5
6.1
5.8
4.7
3.0
50
23.2
13.4
11.0
8.8
8.4
6.2
5.9
5.5
5.5
4.6
3.0
55
23.2
13.4
11.0
8.7
8.3
6.1
5.8
5.4
5.4
4.5
3.0
60
23.2
13.4
11.0
8.7
8.3
6.1
5.8
5.4
5.4
4.5
3.0
65
23.2
13.4
11.0
8.7
8.3
6.1
5.8
5.4
5.4
4.5
3.0
The withdrawal assumptions are the withdrawal assumptions used in the July 1, 2016 Florida Retirement System (FRS) Actuarial
Valuation.
Q. Retirement Consulting City of Winter Springs Defined Benefit Plan 15
Actuarial Assumptions and Actuarial Cost Methods Used in the Valuation
(as of October 1. 2016)
E. Employee Withdrawal Rates (continued)
3. Withdrawal rates for male Forensic Professionals, Firefighters and Police Officers were used in accordance with the
following illustrative example:
4. Withdrawal rates for female Forensic Professionals, Firefighters and Police Officers were used in accordance with the
following illustrative example:
Withdrawal Rates per 100 Employees
Service
Age
0
1
2
3
4
5
6
7
8
9
10+
20
21.4
10.3
8.6
8.4
7.5
5.3
5.2
3.1
2.9
2.6
2.3
25
20.6
9.8
8.1
7.9
7.0
5.3
5.2
3.1
2.9
2.6
2.3
30
20.6
9.5
7.7
7.5
6.7
5.3
5.2
3.1
2.9
2.6
2.1
35
20.6
8.8
7.4
7.2
6.5
5.3
5.1
3.1
2.9
2.6
2.0
40
20.6
8.0
6.8
6.7
6.0
4.8
4.6
3.1
2.9
2.6
1.9
45
20.6
7.3
6.0
6.0
5.5
4.3
4.1
3.1
2.9
2.6
1.8
50
20.6
6.5
5.3
5.3
5.0
3.8
3.6
3.1
2.9
2.6
1.8
55
20.6
5.8
4.7
4.7
4.6
3.3
3.2
3.1
2.9
2.6
1.8
60
20.6
5.3
4.7
4.7
4.6
3.3
3.2
3.1
2.9
2.6
1.8
65
20.6
5.3
4.7
4.7
4.6
3.3
3.2
3.1
2.9
2.6
1.8
4. Withdrawal rates for female Forensic Professionals, Firefighters and Police Officers were used in accordance with the
following illustrative example:
The withdrawal assumptions are the withdrawal assumptions used in the July 1, 2016 FRS Actuarial Valuation.
G J
Consulting l t
City of Winter Springs Defined Benefit Plan 16
Withdrawal Rates per 100 Employees
Service
Age
0
1
2
3
4
5
6
7
8
9
10+
20
21.3
15.5
12.3
10.3
9.7
6.1
5.9
5.0
4.2
4.2
1.9
25
21.3
14.2
11.6
9.8
9.2
6.1
5.9
5.0
4.2
4.2
1.9
30
21.3
13.2
10.6
9.3
8.7
6.1
5.9
5.0
4.2
4.2
1.7
35
21.3
12.2
9.6
8.8
8.4
6.1
5.9
5.0
4.2
4.1
1.5
40
21.3
11.2
8.6
8.3
7.6
6.1
5.9
5.0
4.1
4.1
2.5
45
21.3
10.2
7.6
7.6
7.0
6.1
5.9
5.0
4.1
4.1
2.5
50
21.3
9.2
6.6
6.6
6.4
6.1
5.9
5.0
4.1
4.0
1.6
55
21.3
8.4
5.8
5.6
5.4
5.3
5.1
5.0
4.1
4.0
4.0
60
21.3
8.4
5.8
5.6
5.4
5.3
5.1
5.0
4.1
4.0
4.0
65
21.3
8.4
5.8
5.6
5.4
5.3
5.1
5.0
4.1
4.0
4.0
The withdrawal assumptions are the withdrawal assumptions used in the July 1, 2016 FRS Actuarial Valuation.
G J
Consulting l t
City of Winter Springs Defined Benefit Plan 16
Actuarial Assumptions and Actuarial Cost Methods Used in the Valuation
(as of October 1, 2016)
F. Disability Rates
1. Line -of -duty disability rates for General Employees were used in accordance with the following
illustrative example.
Age
Male
Female
20
0.000%
0.000%
25
0.001%
0.001%
30
0.001%
0.001%
35
0.001%
0.001%
40
0.001%
0.001%
45
0.004%
0.001%
50
0.006%
0.006%
55
0.006%
0.006%
60
0.010%
0.013%
65
0.010%
0.010%
2. Non -duty disability rates for General Employees were used in accordance with the following illustrative
example.
Age
Male
Female
20
0.000%
0.000%
25
0.010%
0.010%
30
0.010%
0.010%
35
0.020%
0.010%
40
0.020%
0.020%
45
0.080%
0.060%
50
0.160%
0.100%
55
0.250%
0.160%
60
0.300%
0.260%
65
0.100%
0.080%
The disability assumptions are the disability assumptions used in the July 1, 2016 FRS Actuarial Valuation.
Retirement City of Winter Springs Defined Benefit Plan 17
Consulting
Q.
Actuarial Assumptions and Actuarial Cost Methods Used in the Valuation
(as of October 1, 2016)
F. Disability Rates (continued)
3. Line -of -duty disability rates for Forensic Professionals, Firefighters and Police Officers were used in
accordance with the following illustrative example.
Age
Male
Female
20
0.010%
0.000%
25
0.010%
0.004%
30
0.010%
0.004%
35
0.010%
0.004%
40
0.020%
0.040%
45
0.060%
0.040%
50
0.140%
0.050%
55
0.100%
0.080%
60
0.140%
0.150%
65
0.260%
0.150%
4. Non -duty disability rates for Forensic Professionals, Firefighters and Police Officers were used in
accordance with the following illustrative example.
Age
Male
Female
20
0.020%
0.000%
25
0.020%
0.020%
30
0.030%
0.020%
35
0.030%
0.030%
40
0.030%
0.030%
45
0.030%
0.060%
50
0.080%
0.110%
55
0.050%
0.110%
60
0.050%
0.110%
65
0.050%
0.110%
The disability assumptions are the disability assumptions used in the July 1, 2016 FRS Actuarial Valuation.
Q. Retirement City of Winter Springs Defined Benefit Plan 18
Consulting
Actuarial Assumptions and Actuarial Cost Methods Used in the Valuation
(as of October 1, 2016)
G. Assumed Retirement Age
Retirement rates were used in accordance with the following tables.
1. For Forensic Professionals, Police Officers and Firefighters:
2. For General Employees:
Years of Service
Age
0 -10
10 -15
15 -25
25 -30
30 or more
Under55
0%
0%
0%
4%
5%
55
0%
10%
15%
40%
50%
56-64
0%
10%
15%
15%
20%
65 and above
100%
100%
100%
100%
100%
2. For General Employees:
H. Marital Assumptions
1. 100% of active members are assumed to be married.
2. Females are assumed to be three (3) years younger than their male spouses.
I. Interest on Future Participant Contributions
3.75 %, compounded annually.
QG R S Retirement City of Winter Springs Defined Benefit Plan 19
Consulting
Years of Service
Age
0-10
10 - 15
15-25
25-30
30 or more
Under 55
0%
0%
0°%
2°%
2°%
55
0%
5%
10%
20%
25%
56-64
0%
5%
10%
4%
5%
65 and above
100%
100%
100°%
100%
100%
H. Marital Assumptions
1. 100% of active members are assumed to be married.
2. Females are assumed to be three (3) years younger than their male spouses.
I. Interest on Future Participant Contributions
3.75 %, compounded annually.
QG R S Retirement City of Winter Springs Defined Benefit Plan 19
Consulting
Actuarial Assumptions and Actuarial Cost Methods Used in the Valuation
(as of October 1, 2016)
J. Asset Valuation Method
The method used for determining the smoothed actuarial value of assets phases in the deviation
between the expected and actual return on assets at the rate of 20% per year. The smoothed actuarial
value of assets will be further adjusted to the extent necessary to fall within the corridor whose lower
limit is 80% of the fair market value of plan assets and whose upper limit is 120% of the fair market
value of plan assets - adjusted for equation of balance October 1, 2010.
K. Cost Method
Normal Retirement, Termination, Disability, and Death Benefits: Entry Age Normal Cost Method
Under this method the normal cost for each active employee is the amount which is calculated to be a
level percentage of pay that would be required annually from his entry age to his assumed retirement
age to fund his estimated benefits, assuming the Plan had always been in effect. The normal cost for
the Plan is the sum of such amounts for all employees. The actuarial accrued liability as of any
valuation date for each active employee or inactive employee who is eligible to receive benefits
under the Plan is the excess of the actuarial present value of estimated future benefits over the
actuarial present value of current and future normal costs. The unfunded actuarial accrued liability as
of any valuation date is the excess of the actuarial accrued liability over the assets of the Plan.
L. Changes Since Previous Valuation
Mortality was:
For healthy General Employee participants, RP -2000 Combined Healthy Participant Mortality
Tables, separate rates for males and females, with fully generational mortality improvements
projected to each future payment date with Scale AA.
For healthy Firefighter and Police Officer participants, RP -2000 Combined Healthy Participant
Mortality Tables with Blue Collar Adjustment, separate rates for males and females, with fully
generational mortality improvements projected to each future payment date with Scale AA.
For disabled participants, RP -2000 Disabled Mortality Tables, separate rates for males and females,
with fully generational mortality improvements projected to each future payment date with Scale
AA.
4�wRetirement City of Winter Springs Defined Benefit Plan 20
Consulting
SECTION D
GLOSSARY
GLOSSARY
Actuarial Accrued Liability The difference between the Actuarial Present Value of Future Benefits,
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 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 various future times to active members, retired members, beneficiaries
receiving benefits and inactive, non - retired 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 No. 67.
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 required
contribution.
Q. Retirement City of Winter Springs Defined Benefit Plan 21
Consulting
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 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.
Annual Required The employer's periodic required contributions, expressed as a dollar
Contribution amount or a percentage of covered plan compensation. The annual
required contribution consists of the Employer Normal Cost and
Amortization Payment plus interest adjustment.
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. 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.
QG R S Retirement City of Winter Springs Defined Benefit Plan 22
Consulting
GASB Governmental Accounting Standards Board.
GASB No. 67 and These are the governmental accounting standards that set the
GASB No. 68 accounting rules for public retirement plans and the employers that
sponsor or contribute to them. Statement No. 67 sets the accounting
rules for the plans themselves, while Statement No. 68 sets the
accounting rules for the employers that sponsor or contribute to public
retirement plans.
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.
Q. Retirement Consulting City of Winter Springs Defined Benefit Plan 23