HomeMy WebLinkAbout2018 08 09 Regular 501 Actuarial Valuation Report and Additional Financial ReportsBOARD OF TRUSTEES
AGENDA ITEM
ITEM 501
August 9, 2018
Regular Meeting
REQUEST:
Informational
Consent
Public Hearings
Regular
I X
Mgr. /
Authorization
Dept.
The Finance And Administrative Services Department Is Requesting That The Board Of
Trustees Receive And Accept The 2017 Actuarial Valuation Report And Additional Financial
Reports From Gabriel, Roeder, Smith & Company.
ATTACHMENT(S):
A. Quarterly Investment Return Report (55 Pages)
Retirement
RGConsulting
June 15, 2018
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 1 F: 954.525.0083 I www.grsconsulting.com
Re: City of Winter Springs Defined Benefit Plan Actuarial Valuation
Dear Shawn:
As requested, we are pleased to enclose eleven (11) copies of the October 1, 2017 Actuarial
Valuation Report for the City of Winter Springs Defined Benefit Plan.
We appreciate the opportunity to partner with you on this important project and look
forward to presenting the highlights of our Report at the August 9th Meeting.
Per our letter dated April 3, 2017, the State issued a Memorandum announcing the
activation of their new online reporting portal for pension plans. Upon approval of the
Actuarial Valuation Report, we will upload the required copy of the Actuarial Valuation
Report along with the newly required disclosure information to the State portal.
If you should have any questions concerning the above, please do not hesitate to contact us.
Sincerest regards,
Lawrence F. Wilson, A.S.A.
Senior Consultant and Actuary
Enclosures
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City Of Winter Springs
Defined Benefit Plan
ACTUARIAL VALUATION AS OF OCTOBER 1, 2017
This Valuation Determines the Annual Contribution for the Plan Year October 1, 2018 through
September 30, 2019 to be Paid in Plan Year October 1, 2018 to September 30, 2019
June 15, 2018
GRS
Retirement
�] Consulting
City of Winter Springs
Defined Benefit Plan
Ret rement
Consulting
TABLE OF CONTENTS
Page
Commentary
1
I.
Summary of Retirement Plan Costs...........................................................................
6
II.
Comparison of Cost Data of Current and Prior Valuations .......................................
8
III.
Characteristics of Participants in Actuarial Valuation ...............................................
9
IV.
Statement of Assets.................................................................................................
10
V.
Reconciliation of Plan Assets...................................................................................
11
VI.
Actuarial Gain / (Loss)..............................................................................................
13
VII.
Amortization of Unfunded Actuarial Accrued Liability............................................14
VIII.
Accounting Disclosure Exhibit.................................................................................
15
IX.
Outline of Principal Provisions of the Retirement Plan ...........................................
24
X.
Actuarial Assumptions and Actuarial Cost Methods Used ......................................
27
XI.
Distribution of Plan Participants by Attained Age Groups and Service Groups......
35
XII.
Statistics for Participants Entitled to Deferred Benefits and Participants
ReceivingBenefits...................................................................................................40
XIII.
Reconciliation of Employee Data.............................................................................41
XIV.
Projected Retirement Benefits................................................................................42
XV.
Recent Plan Experience...........................................................................................43
XVI.
State Required Exhibit.............................................................................................45
XVII.
Glossary...................................................................................................................49
Ret rement
Consulting
GRSRetirement
Consult'ing
June 15, 2018
City Council
City of Winter Springs Defined Benefit Plan
c/o Mr. Shawn Boyle
Finance and Administrative Services Director
1126 East State Road 434
Winter Springs, Florida 32708
Dear Council Members:
October 1, 2017 Actuarial Valuation
P: 954.527.1616 1 F: 954.525.0083 I www.gr-sconsulting.com
We are pleased to present our October 1, 2017 Actuarial Valuation for the City of Winter Springs
Defined Benefit Plan (Plan). The purpose of this report is to indicate appropriate contribution levels,
comment on the actuarial stability of the Plan and to satisfy State requirements. The City has retained
Gabriel, Roeder, Smith and Company (GRS) to prepare an annual actuarial valuation under Section
3.02 of the Plan.
This report consists of this commentary, detailed Tables I through XV, the State Required Exhibit on
Table XVI and Glossary on Table XVII. The Tables contain basic Plan cost figures plus significant details
on the benefits, liabilities and experience of the Plan. We suggest you thoroughly review the report at
your convenience and contact us with any questions that may arise.
Retirement Plan Costs
Our Actuarial Valuation develops the required minimum Plan payment for the plan year beginning
October 1, 2018 under the Florida Protection of Public Employee Retirement Benefits Act. The
minimum payment consists of payment of annual normal costs including amortization of the
components of the unfunded actuarial accrued liability over various periods as prescribed by law. The
minimum payment is $1,761,358 (31.8%). The figure in parentheses is the Plan cost expressed as a
percentage of projected covered annual payroll for fiscal year beginning October 1, 2018
($5,537,207).
This total cost is to be met by member, County and City contributions. We anticipate member
contributions will be $276,860 (5.0% of projected covered payroll for fiscal year ending September 30,
2019). The resulting minimum required County and City contribution is $1,484,498 (26.8%).
We recommend the City continue to contribute not less than the dollar amount of minimum required
contribution due to the closing of the Plan to future general employees.
Council Members
June 15, 2018
Page Two
Changes in Actuarial Assumptions. Methods and Plan Provisions
The Plan provisions remain unchanged from our October 1, 2016 Actuarial Valuation. The Plan
provisions are outlined on Table IX.
The assumed investment return, salary increase factors, withdrawal and retirement rates are updated
based on the results of our Experience Study for the five years ended September 30, 2016. The
remaining actuarial assumptions and methods remain unchanged from our October 1, 2016 Actuarial
Valuation. The actuarial assumptions and methods are outlined on Table X.
Comaarison of October 1. 2016 and October 1. 2017 Valuation Results
Table II of our report provides information of a comparative nature. The left columns of the Table
indicate the costs as calculated for October 1, 2016. The center columns indicate the costs as
calculated for October 1, 2017, prior to the update in actuarial assumptions. The right columns
indicate the costs as calculated for October 1, 2017, after the update in actuarial assumptions
Comparing the left and center columns of Table II shows the effect of Plan experience during the year.
The number of active participants decreased by approximately 10%. Covered payroll decreased by
approximately 6%. Total Plan membership decreased by approximately 1%. Total normal
cost decreased as a dollar amount but increased as a percentage of covered payroll. The unfunded
actuarial accrued liability and the net County and City minimum funding requirement decreased both
as a dollar amount and as a percentage of covered payroll.
Comparing the center and right columns of Table II shows the effect of the update of the actuarial
assumptions. Total normal cost decreased both as a dollar amount and as a percentage of covered
payroll. The unfunded actuarial accrued liability and the net County and City minimum funding
requirement increased both as a dollar amount and as a percentage of covered payroll.
The value of vested accrued benefits exceeds Plan assets, resulting in a Vested Benefit Security Ratio
(VBSR) of 89.0% (92.9% prior to assumption changes) which is an increase from 85.2% as of the
October 1, 2016 Actuarial Valuation. The VBSR is measured on a market value of assets basis.
Plan Experience
The Plan experienced an actuarial gain in the amount of $698,660 this year. This indicates actual
overall Plan experience was more favorable than expected.
Table XV (salary, turnover and investment yield) provides figures on recent Plan experience. Salary
experience indicates actual salary increases averaged approximately 3.9% for General and Forensic
Employees and 4.0% for Firefighters and Police Officers for Plan Year ended September 30, 2017 when
D Retirement
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Council Members
June 15, 2018
Page Three
compared to the assumed salary increase of 4.0% and 4.6%, respectively (prior assumptions). Salary
increases were generally a source of actuarial gain. The three, five and ten-year average annual salary
increases are 3.2%, 2.5% and 2.6% for General and Forensic Employees, respectively -4.5%, 3.2% and
3.2% for Firefighters and Police Officers, respectively.
Employee turnover this year was 170% of the assumed turnover for General and Forensic Employees
and 660% of the assumed turnover for Firefighters and Police Officers (prior assumption). Employee
turnover was generally an additional source of actuarial gain. The three, five and ten-year average
annual turnover is 180%, 160% and 150%, respectively for General and Forensic Employees - 370%,
310% and 250%, respectively for Firefighters and Police Officers.
The smoothed value investment return of 9.9% was greater than the investment return assumption of
8.0% (prior assumption). Smoothed value investment return was an additional source of actuarial
gain during the year. The three, five and ten-year average annual smoothed value investment returns
are 9.8%, 9.7% and 7.3%, respectively. The one, three, five and ten-year average annual market value
returns are 13.9%, 8.1%, 10.4% and 6.3%, respectively.
Member Census and Financial Data
The City submitted the Member census data used for this Actuarial Valuation to us as of October 1,
2017. This information contains name, Social Security number, date of birth, date of hire, October 1,
2017 rate of pay, actual salary paid and member contributions for the previous year. Dates of
termination and retirement are provided where applicable. The City updated information on inactive
participants including retirees, beneficiaries and vested terminees.
Financial information concerning Plan assets was provided by the City as of September 30, 2017. We
do not audit the Member census data and asset information that is provided to us; however, we
perform certain reasonableness checks. The City is responsible for the accuracy of the data.
Summary
In our opinion the benefits provided for under the current Plan will be sufficiently funded through the
payment of the amount as indicated in this and future Actuarial Valuation reports. We will continue
to update you on the future payment requirements for the Plan through our actuarial reports. These
reports will also continue to monitor the future experience of the Plan.
The actuarial assumptions used in this Actuarial Valuation are as adopted by the City. The economic
and demographic actuarial assumptions were last updated based on the results of Experience Study
for the period October 1, 2011— September 30, 2016. The mortality assumptions are as prescribed by
statute. Each assumption represents an estimate of future Plan experience.
D Retirement
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Council Members
June 15, 2018
Page Four
If all actuarial assumptions are met and if all 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 percent of payroll and the funded status 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 Unfunded Actuarial Accrued Liability (UAAL) 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 UAAL would be different if it
reflected the market value of assets rather than the actuarial value of assets.
The Unfunded Actuarial Present Value of Vested Accrued Benefits and the corresponding Vested
Benefit Security Ratio may be appropriate for assessing the sufficiency of Plan assets to meet the
estimated cost of settling benefit obligations but may not be appropriate for assessing the need for or
the amount of future contributions.
The GASB Net Pension Liability and Plan Fiduciary Net Position as a Percentage of Total 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 Funded Ratio shown in Table II is for informational purposes and 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.
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 anticipated under 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) and changes in Plan provisions or
applicable law. Due to the limited scope of the actuary's assignment, the actuary did not perform an
analysis of the potential range of such future measurements.
This report should not be relied on for any purpose other than the purpose described in the primary
communication. Determinations of the financial results associated with the benefits described in this
report in a manner other than the intended purpose may produce significantly different results.
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
D Retirement
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Council Members
June 15, 2018
Page Five
and fairly presents the actuarial position of the 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.
This report may be provided to parties other than the City only in its entirety and only with the
permission of an approved representative of the City.
The signing actuaries are independent of the Plan sponsor.
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 in this
report. We are available to respond to any questions with regards to matters covered in this report.
Very truly yours,
Lawrence F. Wilson, A.S.A., E.A.
Senior Consultant and Actuary
C.sulting
Jennifer M. Borregard, E.A.
Consultant and Actuary
%RATING 8810,
38 2016 3
Table I
Summary of Retirement Plan Costs as of October 1, 2017
Prior Assumptions Current Assumptions
Cost % of Cost % of
Data Payroll Data Payroll
A. Participant Data Summary (Table III)
1. Active Employees 98 N/A 98 N/A
2. Terminated Vested 162 N/A 162 N/A
3. Receiving Benefits 103 N/A 103 N/A
4. Total Annual Payroll of Active Employees $ 5,537,207 100.0% $ 5,537,207 100.0%
B. Total Normal Costs
1. Age Retirement Benefits
2. Termination Benefits
3. Death Benefits
4. Disability Benefits
5. Estimated Expenses
6. Total Annual Normal Costs
C. Total Actuarial Accrued Liability
1. Age Retirement and Termination Benefits Active
Employees
2. Death Benefits Active Employees
3. Disability Benefits Active Employees
4. Retired or Terminated Vested Participants
Receiving Benefits
5. Terminated Vested Participants Entitled to
Future Benefits
6. Deceased Participants Whose Beneficiaries
are Receiving Benefits (includes DROs)
7. Disabled Participants Receiving Benefits
8. Miscellaneous Liability (Refunds in Process)
9. Total Actuarial Accrued Liability
D. Assets (Table V)
1. Smoothed Actuarial Value of Assets
2. Market Value of Assets
E. Unfunded Actuarial Accrued Liability
(C.9. - D.1.)
QRetirement
G R5 cor5cbr,$
$ 465,610
8.4% $
284,060
5.1%
139,598
2.5%
200,681
3.6%
21,827
0.4%
12,712
0.2%
8,716
0.2%
5,214
0.1%
55,697
1.0%
55,697
1.0%
$ 691,448
12.5% $
558,364
10.1%
$
18,123,281
327.3%
$
19,812,938
357.8%
553,010
10.0%
498,201
9.0%
204,804
3.7%
192,252
3.5%
26,781,052
483.7%
27,342,345
493.8%
8,232,027
148.7%
8,543,090
154.3%
1,897,511
34.3%
1,934,460
34.9%
0
0.0%
0
0.0%
96,624
1.7%
96,624
1.7
$
55,888,309
1009.3%
$
58,419,910
1055.0%
$
46,396,570
837.9%
$
46,396,570
837.9%
$
48,091,584
868.5%
$
48,091,584
868.5%
$
9,491,739
171.4%
$
12,023,340
217.1%
City of Winter Springs Defined Benefit Plan 6
Summary of Retirement Plan Costs as of October 1. 2017
F. Minimum Required Contribution
1. Total Normal Cost (including expenses)
2. Amortization of Unfunded Liability
3. Interest Adjustment
4. Total Payment
G. Expected payroll of active employees for FYE 2019
(1.000 x $5,537,207)
H. Contribution Sources (percent of expected 2019 payroll)
1. County and City
2. Member
3. Total required contribution
I. Actuarial Gain / (Loss)
J. Actuarial Present Value of Vested Accrued Benefits
1. Retired, Terminated Vested, Beneficiaries
and Disabled Receiving Benefits
2. Terminated Vested Participants Entitled to
Future Benefits and Miscellaneous
3. Active Participants Entitled to Future Benefits
4. Total Actuarial Present Value of Vested
Accrued Benefits
K. Unfunded Actuarial Present Value of Vested
Accrued Benefits (J.4. - D.2., not less than zero)
L. Vested Benefit Security Ratio (D.2. - J.4.)
Table I
(Cont'd)
$ 28,678,563
8,328,651
14,751,356
$ 51,758,570
$ 3,666,986
92.9%
517.9%
Prior Assumptions
29,276,805
Current Assumptions
Cost
% of
Cost
% of
$
Data
Payroll
$
Data
Payroll
$
691,448
12.5%
$
558,364
10.1%
936,565
16.9%
1,126,303
20.3%
76,342
1.4%
76,691
1.4%
$
1,704,355
30.8%
$
1,761,358
31.8%
$
5,537,207
100.0%
$
5,537,207
100.0%
$
1,427,495
25.8%
$
1,484,498
26.8%
276,860
5.0%
276,860
5.0%
$
1,704,355
30.8%
$
1,761,358
31.8%
$
698,660
12.6%
$
698,660
12.6%
$ 28,678,563
8,328,651
14,751,356
$ 51,758,570
$ 3,666,986
92.9%
517.9%
$
29,276,805
150.4%
8,639,714
266.4%
16,112,076
934.7%
$
54,028,595
66.2%
$
5,937,011
N/A
89.0%
528.7%
156.0%
291.0%
975.7%
107.2%
N/A
G RS Retirement
Conzbng City of Winter Springs Defined Benefit Plan 7
A. Participants
1. Active Employees
2. Terminated Vested
3. Receiving Benefits
4. Total Annual Payroll of Active Employees
B. Total Normal Costs
C. Actuarial Accrued Liability
D. Present Value of Future Benefits
E. Smoothed Actuarial Value of Assets
F. Market Value of Assets
G. Unfunded Actuarial Accrued Liability
(C. - E.)
H. County and City Minimum Funding Payment
I. Ratios
1. Vested Benefit Security Ratio
2. Funded Ratio (F. / C.)
qwRetirement
co".iwg
Table II
rison of Cost Data of October 1. 2016 and October 1. 2017 Valuations
City of Winter Springs Defined Benefit Plan 8
Prior Assumptions
Current Assumptions
October 1, 2016
October 1, 2017
October 1, 2017
Cost
% of
Cost
% of
Cost
% of
Data
Compensation
Data
Compensation
Data
Compensation
109
N/A
98
N/A
98
N/A
157
N/A
162
N/A
162
N/A
99
N/A
103
N/A
103
N/A
$
5,916,189
100.0%
$
5,537,207
100.0%
$
5,537,207
100.0%
$
725,667
12.3%
$
691,448
12.5%
$
558,364
10.1%
$
53,516,012
904.6%
$
55,888,309
1009.3%
$
58,419,910
1055.0%
$
58,845,973
994.7%
$
60,683,942
1095.9%
$
61,503,467
1110.7%
$
42,001,072
709.9%
$
46,396,570
837.9%
$
46,396,570
837.9%
$
42,027,234
710.4%
$
48,091,584
868.5%
$
48,091,584
868.5%
$
11,514,940
194.6%
$
9,491,739
171.4%
$
12,023,340
217.1%
$
1,613,548
27.3%
$
1,427,495
25.8%
$
1,484,498
26.8%
85.2%
N/A
92.9%
N/A
89.0%
N/A
78.5%
N/A
86.0%
N/A
82.3%
N/A
City of Winter Springs Defined Benefit Plan 8
Characteristics of Participants in
Actuarial Valuation as of October 1, 2017
A. Active Plan Participants Summa
1. Active participants fully vested
2. Active participants partially vested
3. Active participants non -vested
4. Total active participants
5. Annual rate of pay of active participants
B. Retired and Terminated Vested Participant Summary
Table III
84
0
14
98
$ 5,537,207
1. Retired or terminated vested participants receiving
benefits 88
2. Terminated vested participants entitled to
future benefits 162
3. Deceased participants whose beneficiaries are
receiving benefits (includes DROs) 15
4. Disabled participants receiving benefits 0
C. Projected Annual Retirement Benefits
1. Retired or terminated vested receiving benefits $ 2,567,311
2. Terminated vested entitled to future benefits $ 1,534,349
3. Beneficiaries of deceased participants (includes DROs) $ 195,838
4. Disabled participants $ 0
G R S Retirement
Consulting
City of Winter Springs Defined Benefit Plan 9
Table IV
Statement of Assets as of October 1, 2017
Assets Market Value
A. Cash and Cash Equivalents $ 600,121
B. General Investments
1. Common Stock $ 32,193,323
2. Bonds 8,466,738
3. Real Estate 6,399,597
C. Receivables
1. Accrued Interest $ 0
2. Employee Contribution Receivable 21,547
3. City and County Contributions Receivable 410,258
4. Accounts Receivable 0
D. Payables
1. Accounts Payable $ 0
2. Due to Broker 0
E. Plan Assets
(A + B + C - D) $ 48,091,584
G R S Retire �t
qConsulting
City of Winter Springs Defined Benefit Plan 10
Table V
Reconciliation of Plan Assets
A. Market Value of Assets as of October 1, 2016 $ 42,027,234
B. Receipts During Period
1. Contributions
a. Member $ 342,209
b. City and County 2,605,753
c. Total $ 2,947,962
2. Investment Income
a. Interest and dividends $ 820,207
b. Realized / unrealized gains (losses) 5,184,094
c. Investment expenses (152,808)
d. Net investment income $ 5,851,493
3. Total receipts during period $ 8,799,455
C. Disbursements During Period
1. Pension payments and contribution refunds
2. Administrative expenses
3. Total disbursements during period
D. Market Value of Assets as of September 30, 2017
$ 2,679,408
55,697
$ 2,735,105
$ 48,091,584
G R S Retirement
qConsulting
City of Winter Springs Defined Benefit Plan 11
Development of Smoothed Actuarial Value of Assets as of September 30
A. Preliminary total smoothed actuarial value from prior year
B. Market value beginning of year
C. Market value end of year
D. Non -investment net cash flow
E. Investment return
1. Total market value return: C. - B. - D.
2. Amount for immediate recognition (8%)
3. Amount for phased -in recognition: E.1. - E.2.
F. Phased -in recognition of investment return:
1. Current year
2. First prior year
3. Second prior year
4. Third prior year
5. Fourth prior year
6. Total phased -in recognition of investment return
G. Total smoothed actuarial value end of year
1. Preliminary total smoothed actuarial value end of year
A. + D. + E.2. + F.6.
2. Upper corridor limit: 120% of C.
3. Lower corridor limit: 80% of C.
4. Total smoothed actuarial value end of year:
G.1., not more than G.2., nor less than G.3.
H. Difference between total market value and total smoothed actuarial value
I. Smoothed actuarial value rate of return
J. Market value rate of return
CvRerreme
ir,t
C.—tmg
2016 2017 2018
$ 37,570,287 $ 42,001,072 $ 46,396,570
37,362,769 42,027,234 48,091,584
42,027,234 48,091,584
587,013 212,857
4,077,452 5,851,493
3,012,502 3,370,693
1,064,950 2,480,800
212,990
496,160
(592,399)
212,990
256,201
(592,399)
438,995
256,201
515,483
438,996
831,270
811,948
42,001,072 46,396,570
50,43 2,681 57,709,901
33,621,787 38,473,267
42,001,072
46,396,570
26,162
1,695,014
10.2%
9.9%
10.8%
13.9%
496,160
2019
212,990
496,160
(592,399)
212,990
256,202
(592,399)
372,953
116,751
2020
Table V
(Cont'd)
2021
496,160
212,990 496,160
709,150 496,160
City of Winter Springs Defined Benefit Plan 12
Table VI
Actuarial Gain / (Loss) for
Plan Year Ended September 30, 2017
A. Derivation of Actuarial Gain / (Loss)
1. City and County net normal cost previous valuation
$
429,858
2. Unfunded actuarial accrued liability previous valuation
11,514,940
3. City and County contributions previous year
2,605,753
4. Interest on:
(a) City and County net normal cost
$
34,389
(b) Unfunded actuarial accrued liability
921,195
(c) City and County contributions
104,230
(d) Net total: (a) + (b) - (c)
$
851,354
5. Increase / (decrease) in unfunded actuarial accrued liability due to
assumption changes
$
2,531,601
6. Expected unfunded actuarial accrued liability current year:
(1.+2.-3.+4.+5.)
$
12,722,000
7. Actual unfunded actuarial accrued liability current year
12,023,340
8. Actuarial gain / (loss): (6. - 7.)
$
698,660
B. Approximate Portion of Gain / (Loss)
due to Investments
1. Smoothed actuarial value of assets previous year
$
42,001,072
2. Contributions during period
2,947,962
3. Benefits and administrative expenses during period
2,735,105
4. Expected appreciation for period
3,368,600
5. Expected smoothed actuarial value of assets current year:
(1. + 2. - 3. + 4.)
$
45,582,529
6. Actual smoothed actuarial value of assets current year
$
46,396,570
7. Approximate investment gain / (loss) due to investments: (6. - 5.)
$
814,041
C. Approximate Portion of Gain / (Loss)
due to Liabilities: A.8. - B.7.
$
(115,381)
G R S Retirement
qConsulting
City of Winter Springs Defined Benefit Plan 13
Table VII
Amortization of Unfunded Actuarial Accrued Liability
A. Unfunded Actuarial Accrued Liability
B. Covered Payroll History *
Amortization
Payment
$ 1,126,303
$ 1,126,303
$ 1,126,303
$ 1,126,303
$ 1,126,303
$ 0
Unfunded
Date
Date
Liability
October 1, 2017
$
12,023,340
October 1, 2018
$
11,741,557
October 1, 2019
$
11,437,936
October 1, 2020
$
11,110,785
October 1, 2021
$
10,758,279
October 1, 2047
$
0
B. Covered Payroll History *
Amortization
Payment
$ 1,126,303
$ 1,126,303
$ 1,126,303
$ 1,126,303
$ 1,126,303
$ 0
Ten -Year Average Annual Increase (6.8%)
* Information prior to October 1, 2008 as reported by prior actuary.
G R S Retire �t
qConsulting
City of Winter Springs Defined Benefit Plan 14
Covered
Annual
Date
Payroll
Increase
October 1, 2017
$
5,537,207
(6.4%)
October 1, 2016
$
5,916,189
(13.9%)
October 1, 2015
$
6,868,214
(3.2%)
October 1, 2014
$
7,093,513
(4.5%)
October 1, 2013
$
7,431,031
(9.6%)
October 1, 2012
$
8,216,342
(7.4%)
October 1, 2011
$
8,875,836
(13.9%)
October 1, 2010
$
10,304,054
(4.2%)
October 1, 2009
$
10,752,720
(0.1%)
October 1, 2008
$
10,767,596
(3.8%)
October 1, 2007
$
11,190,013
N/A
Ten -Year Average Annual Increase (6.8%)
* Information prior to October 1, 2008 as reported by prior actuary.
G R S Retire �t
qConsulting
City of Winter Springs Defined Benefit Plan 14
Accounting Disclosure Exhibit
I. Number of Plan Members
a. Retirees and beneficiaries receiving benefits
b. Terminated plan members entitled to but not yet receiving benefits
c. Active plan members
d. Total
II. Financial Accounting Standards Board Allocation as of October 1, 2017
A. Statement of Accumulated Plan Benefits
1. Actuarial present value of accumulated vested plan benefits
a. Participants currently receiving benefits
b. Other participants
c. Total
2. Actuarial present value of accumulated
non -vested plan benefits
3. Total actuarial present value of accumulated plan benefits
B. Statement of Change in Accumulated Plan Benefits
1. Actuarial present value of accumulated plan benefits
as of October 1, 2016
2. Increase (decrease) during year attributable to:
a. Plan amendment
b. Change in actuarial assumptions
c. Benefits paid including refunds
d. Other, including benefits accumulated, increase
for interest due to decrease in the discount period
e. Net increase
3. Actuarial present value of accumulated plan benefits
as of October 1, 2017
C. Significant Matters Affecting Calculations
1. Assumed rate of return used in determining actuarial present values
2. Change in Plan provisions
3. Change in actuarial assumptions
RS:
Table VIII
Prior Current
Assumptions Assumptions
10/01/2016 10/01/2017 10/01/2017
99 103 103
157 162 162
109 98 98
365 363 363
$ 27,273,713 $ 28,678,563 $ 29,276,805
22,043,968 23,080,007 24,751,790
$ 49,317,681 $ 51,758,570 $ 54,028,595
$ 493,744 $ 428,970 $ 505,700
$ 49,811,425 $ 52,187,540 $ 54,534,295
$ 49,811,425
$ 0
2,346,755
(2,679,408)
5,055,523
$ 4,722,870
$ 54,534,295
7.75%
None.
See Table X, Item L.
City of Winter Springs Defined Benefit Plan 15
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Table VIII
(Cont'd)
Accounting Disclosure Exhibit
V. Notes to Schedule of Contributions (GASB No. 67 & No. 68)
Valuation Date: Actuarially determined contributions are calculated as of October 1st - two year(s) prior the
fiscal year end in which contributions are reported.
Methods and Assumptions Used to Determine Contribution Rates:
Actuarial Cost Method Entry Age Normal
Amortization Method Level dollar, closed
Amortization Period 30 years
Asset Valuation Method 5 -year smoothed market
Inflation 2.75%
Salary Increases 3.0%-7.5%
Investment Rate of Return 8.0%
Retirement Age Experience -based table of rates that are specific to the type of eligibility condition
Mortality For healthy male General Employee 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 General Employee 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 General Employee 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 General Employee 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 healthy Firefighter and Police Officer 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 Firefighter and Police Officer 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 General Employee participants, RP 2000 Disabled Male Mortality Table,
set back four years, without projected mortality improvements. For disabled female
General employee participants, RP 2000 Disabled Female Mortality Table, set forward two
years, without projected mortality improvements.
For disabled male Firefighter and Police Officer 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 Firefighter and Police Officer 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.
G R 5 Ret„em nt
Consulting City of Winter Springs Defined Benefit Plan 18
Table VIII
(Cont'd)
Accounting Disclosure Exhibit
V. Notes to Schedule of Contributions (GASB No. 67 & No. 68) (cont'd)
Other Information:
Benefit Changes
2011: Plan closed to future general employees; pensionable earnings to base pay, overtime - maximum 150
hours and accrued leave balance as of July 1, 2011; vesting schedule updated; unreduced early retirement
eligibility updated; final average pay updated to five year average and future service benefit accrual rate reduced
for general employees. 2008: Benefit accrual rate increased.
Assumption Changes
2016: Mortality updated. 2014: Disability rates updated. 2008: Mortality, salary increase, withdrawal, disability
and retirement rates updated; administrative expense assumption introduced and actuarial cost method
updated.
VI. Discount Rate (GASB No. 67 & No.
Discount rates of 8.00% and 7.75% were used to measure the September 30, 2017 TPL and the September 30,
2018 TPL, respectively. These discount rates were based on the expected rate of return on Plan investments of
8.00% and 7.75%, respectively. The projection of cash flows used to determine these discount rates assumed
member contributions will be made at the current member contribution rate and employer contributions will be
made at rates equal to the difference between actuarially determined contribution rates and the member
contribution rate. Based on these assumptions, the pension Plan's fiduciary net position was projected to be
available to make all projected future expected benefit payments of current Plan members. Therefore, the long-
term expected rate of return on Plan investments was applied to all periods of projected benefit payments to
determine the TPL.
VII. Sensitivity of the NPL to the Discount Rate Assumption (GASB No. 67 & No. 68)
Measurement date: September 30, 2017
Discount Rate
NPL
Discount Rate
Current
1% Decrease Discount Rate 1% Increase
7.00%
$ 14,259,497
8.00%
$ 7,672,380
Measurement date: September 30, 2018 *
Current
1% Decrease Discount Rate
6.75%
7.75%
NPL $ 16,874,961 $ 9,764,589
* Projected - actual amounts will be available after fiscal year end
9.00%
$ 2,129,852
1% Increase
8.75%
$ 3,799,916
G R S Retire �t
Consulting
City of Winter Springs Defined Benefit Plan 19
Table VIII
(Cont'd)
Accounting Disclosure Exhibit
VIII. Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to
Pensions - Reporting Date (GASB No. 68)
Pension Expense for Fiscal Year Ending September 30, 2018
$ 797,828
Summary of Outstanding Deferred Inflows and Outflows of Resources as of September 30, 2018
Differences between actual and expected experience on
liabilities
Changes of assumptions or other inputs
Net difference between projected and actual earnings on
pension Plan investments
Total
Deferred Outflows
of Resources
$ 134,458
364,156
Deferred Inflows
of Resources
$ 515,409
0
0 1,695,014
$ 498,614 $ 2,210,423
Projected Deferred Outflows for County and City Contributions to Be Recognized in
Pension Expense for Fiscal Year Ending September 30, 2019 $ 1,613,548
Summary of Deferred Outflows and Inflows of Resources that will be Recognized in Pension Expense in
Future Years.
Year Ending
30 -Sep
Amount
2019
$ (421,764)
2020
(80,611)
2021
(713,274)
2022
(496,160)
2023
0
Thereafter
0
G R S Retire �t
Consulting
City of Winter Springs Defined Benefit Plan 20
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X
Table VIII
(Cont'd)
Accounting Disclosure Exhibit
The following information is not required to be disclosed but is provided for informational purposes.
X. Recognition of Deferred Outflows and (Inflows) due to Liabilities - Measurement Date (GASB No. 68)
Recognition of Deferred Outflows due to Differences Between Actual and Expected Experience on Liabilities
$ (581,481)
4.6
0.6
Kemaining
(126,409)
$
(75,845)
2014/2015
$ (107,513)
Initial
Recognition
Recognition
(25,003)
$
(32,504)
2015/2016
Recognition
Period as of
Amount for
$
Balance as of
Established
Initial Balance
Period
9/30/2017
2016/2017
2.2
9/30/2017
2013/2014
$ 0
4.6
0.6 $
0
$
0
2014/2015
$ 0
4.3
1.3 $
0
$
0
2015/2016
$ 275,994
3.9
1.9 $
70,768
$
134,458
2016/2017
$ 0
3.2
2.2 $
0
$
0
Initial
Recognition
TOTAL $
70,768
$
134,458
Recognition of Deferred
(Inflows) due to
Differences Between Actual and Expected Experience
on Liabilities
Amount for
Balance as of
Kemaining
Initial Balance
Period
9/30/2017
2016/2017
Initial
Recognition
Recognition
Recognition
Period as of
Amount for
Balance as of
Established
Initial Balance
Period
9/30/2017
2016/2017
9/30/2017
2013/2014
$ (581,481)
4.6
0.6
$
(126,409)
$
(75,845)
2014/2015
$ (107,513)
4.3
1.3
$
(25,003)
$
(32,504)
2015/2016
$ 0
3.9
1.9
$
0
$
0
2016/2017
$ (592,087)
3.2
2.2
$
(185,027)
$
(407,060)
TOTAL
$
(336,439)
$
(515,409)
Recognition of Deferred
Outflows due to
Changes of Assumptions or Other
Inputs
Kemaining
Initial
Recognition
Recognition
Recognition
Period as of
Amount for
Balance as of
Established
Initial Balance
Period
9/30/2017
2016/2017
9/30/2017
2013/2014 $ 0 4.6 0.6
2014/2015 $ 8,107 4.3 1.3
2015/2016 $ 0 3.9 1.9
2016/2017 $ 526,115 3.2 2.2
TOTAL
G R S Retire �t
Consulting
$ 0
$
0
$ 1,885
$
2,452
$ 0
$
0
$ 164,411
$
3611704
$ 166,296 $ 364,156
City of Winter Springs Defined Benefit Plan 22
Table VIII
(Cont'd)
Accounting Disclosure Exhibit
The following information is not required to be disclosed but is provided for informational purposes.
X. Recognition of Deferred Outflows and (Inflows) due to Liabilities - Measurement Date (GASB No. 68) (cont'd
Recognition of Deferred (Inflows) due to Changes of Assumptions or Other Inputs
Kemaining
Initial Recognition Recognition
Recognition Period as of Amount for Balance as of
Established Initial Balance Period 9/30/2017 2016/2017 9/30/2017
2013/2014
$ 0 4.6
2014/2015
$ 0 4.3
2015/2016
$ 0 3.9
2016/2017
$ 0 3.2
0.6
$
0
$ 0
1.3
$
0
$ 0
1.9
$
0
$ 0
2.2
$
0
$ 0
TOTAL $ 0 $ 0
XI. Recognition of Deferred Outflows and (Inflows) due to Assets - Measurement Date (GASB No. 68)
Recognition of Deferred Outflows / (Inflows) due to Difference Between Projected and Actual Earnings on
Pension Plan Investments
Kemaining
Initial Recognition Recognition
Recognition Period as of Amount for Balance as of
Established Initial Balance Period 9/30/2017 2016/2017 9/30/2017
2013/2014
$
(1,281,006) 5 1
$
(256,201)
$
(256,202)
2014/2015
$
2,961,995 5 2
$
592,399
$
1,184,798
2015/2016
$
(1,064,950) 5 3
$
(212,990)
$
(638,970)
2016/2017
$
(2,480,800) 5 4
$
(496,160)
$
(1,984,640)
TOTAL
$
(372,952)
$
(1,695,014)
G R S Retire �t
Consulting
City of Winter Springs Defined Benefit Plan 23
Outline of Principal Provisions of the Retirement Plan
A. Effective Date
Table IX
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 2017-10
adopted November 13, 2017.
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.
Retirement
4Consulting
City of Winter Springs Defined Benefit Plan 24
Outline of Princioal Provisions of the Retirement Plan
2. Benefit:
Table IX
(Cont'd)
For Firefighters, Police Officers and Forensic Professionals, 3.00% times Final Average Compensation
multiplied by Accrual Service, up to a maximum of 30 years.
For General Employees, 3.00% times Accrual Service earned through September 30, 2011 times 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. Earlv 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. A participant as of September 30, 2011 who attains age 55 and
completes 10 or more years of service but less than 15 years of service may receive the accrued
benefit as of September 30, 2011 payable without actuarial reduction plus the accrued benefit earned
after September 30, 2011 payable with actuarial reduction from normal retirement date.
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.
Qw
Retire �t
Consulting
City of Winter Springs Defined Benefit Plan 25
Outline of Principal Provisions of the Retirement Plan
I)Path RPnPfit
Table IX
(Cont'd)
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 under the form of benefit option elected.
Participant Contributions
Five percent (5%) of compensation for all employees.
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 following table.
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.
Qw
Retire �t
Consulting
City of Winter Springs Defined Benefit Plan 26
Table X
Actuarial Assumptions and Actuarial Cost Methods
Used in the Valuation
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 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.
Pre -retirement Post-retirement
Sample Future Life Future Life
Ages Expectancy (Years) Expectancy (Years)
(2017) Men Women Men Women
55
29.73
32.50
29.21
32.30
60
24.84
27.46
24.64
27.31
62
22.97
25.50
22.85
25.39
Pre -retirement
Post-retirement
Sample
Future Life
Future Life
Ages
Expectancy (Years)
Expectancy (Years)
(2037)
Men
Women
Men
Women
55
31.96
34.44
31.46
34.27
60
27.11
29.40
26.92
29.27
62
25.23
27.41
25.12
27.33
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.
;w
S Retire �t
4Consulting
City of Winter Springs Defined Benefit Plan 27
Actuarial Assumptions and Actuarial Cost Methods
Used in the Valuation
A. Mortality (continued)
Table X
(Cont'd)
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
(2017)
55
60
62
Sample
Ages
(2037)
Pre -retirement
Future Life
Expectancy (Years)
Male Female
Post-retirement
Future Life
Expectancy (Years)
Male Female
30.42
33.47
29.99
33.25
25.49
28.45
25.32
28.35
23.58
26.49
23.48
26.43
Pre -retirement
Future Life
Expectancy (Years)
Male Female
Post-retirement
Future Life
Expectancy (Years)
Male Female
55
32.57
35.32
32.16
35.12
60
27.67
30.29
27.52
30.21
62
25.76
28.32
25.68
28.26
B. Investment Return
7.75%, compounded annually, net of investment expenses - includes assumed inflation of 2.75%.
C. Allowances for Expenses or Contingencies
Prior year's actual administrative expenses are included in normal cost.
D. Salary Increase Factors
Current salary is assumed to increase at a rate based on the table below per year until retirement - includes
assumed wage inflation of 3.0%.
G R S Retire �t
Consulting
City of Winter Springs Defined Benefit Plan 28
Forensic Professionals,
General
Firefighters and
Service
Employees
Police Officers
Less than 5 years
4.50%
4.50%
5 - 14 years
3.25%
3.25%
15 - 20 years
3.00%
3.25%
20+ years
3.00%
3.00%
G R S Retire �t
Consulting
City of Winter Springs Defined Benefit Plan 28
Table X
(Cont'd)
Actuarial Assumptions and Actuarial Cost Methods
Used in the Valuation
E. Employee Withdrawal Rates
Withdrawal rates were used in accordance with the following illustrative example.
F. Disability Rates
1. Line -of -duty disability rates for General Employees were used in accordance with the following
illustrative example.
Age
Male
General
Forensic Professionals,
0.000%
Employees
25
Firefighters and Police Officers
Service
Male
Female
Male Female
Less than 5 years
20.5%
15.5%
13.5% 4.0%
5 - 9 years
8.0%
12.0%
9.0% 4.0%
10+ years
4.5%
5.0%
4.5% 4.0%
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, 2017 FRS Actuarial Valuation.
G petire t
Consulting
City of Winter Springs Defined Benefit Plan 29
Table X
(Cont'd)
Actuarial Assumptions and Actuarial Cost Methods
Used in the Valuation
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, 2017 FRS Actuarial Valuation.
Qw�petit
Consulting
City of Winter Springs Defined Benefit Plan 30
Table X
(Cont'd)
Actuarial Assumptions and Actuarial Cost Methods
Used in the Valuation
G. Assumed Retirement Age
Retirement rates were used in accordance with the following tables.
I. For Forensic Professionals, Police Officers and Firefighters:
Age
Years of Service
00=9
10-14
15-24
25-29
30 or more
Under 55
0.0%
0.0%
0.0%
3.5%
40.0%
55
0.0%
5.0%
25.0%
70.0%
80.0%
56-64
0.0%
5.0%
7.5%
7.5%
10.0%
65 and above
100.0%
100.0%
100.0%
100.0%
100.0%
2. For General Employees:
Ae
Years of Service
0-14
15-24
25 or more
Under 55
0.0%
0.0%
0.0%
55-64
4.0%
18.0%
12.0%
65 and above
100.0%
100.0%
100.0%
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.
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.
tvReti em nt
Consulting City of Winter Springs Defined Benefit Plan 31
Table X
(Cont'd)
Actuarial Assumptions and Actuarial Cost Methods
Used in the Valuation
L. Changes Since Previous Valuation
I. Investment Return was:
8.0%, compounded annually, net of investment expenses - 2.75% inflation.
2. Salary Increase Factors were:
Current salary is assumed to increase at a rate based on the table below per year until retirement.
3. Assumed Retirement Age was:
Retirement rates were used in accordance with the following tables.
1. For Forensic Professionals, Police Officers and Firefighters:
Years of Service
Forensic
10-15
15-25
Professionals
30 or more
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%
3. Assumed Retirement Age was:
Retirement rates were used in accordance with the following tables.
1. For Forensic Professionals, Police Officers and Firefighters:
2. For General Employees:
Age
Years of Service
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:
Age
Years of Service
0-10
10-15
15-25
25-30
30 or more
Under55
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%
G R 5 koi—rt
c°" Itmg City of Winter Springs Defined Benefit Plan 32
Table X
(Cont'd)
Actuarial Assumptions and Actuarial Cost Methods
Used in the Valuation
L. Changes Since Previous Valuation (continued)
4. Employee Withdrawal Rates were:
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.
G RS Re nt1 g`
co�s� . City of Winter Springs Defined Benefit Plan 33
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.
G RS Re nt1 g`
co�s� . City of Winter Springs Defined Benefit Plan 33
Table X
(Cont'd)
Actuarial Assumptions and Actuarial Cost Methods
Used in the Valuation
L. Changes Since Previous Valuation (continued)
4. 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 RS Re nt1 g`
co�s� . City of Winter Springs Defined Benefit Plan 34
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 RS Re nt1 g`
co�s� . City of Winter Springs Defined Benefit Plan 34
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Statistics for Participants Entitled to Deferred Benefits
and Participants Receiving Benefits
A. Entitled to Deferred Benefits
Current Age
Group
Less than 40
40-44
45-49
50-54
55 -59
60-64
65-69
70-74
75 & Over
TOTAL
B. Receiving Benefits
Current Age
Group
Less than 50
50-54
55-59
60-64
65-69
70-74
75-80
80 & Over
TOTAL
Count
33
24
36
34
20
8
4
2
Count
3
0
19
26
24
18
10
3
103
Total
Annual Benefit
$ 204,882
273,333
433,840
442,829
111,180
48,248
14,861
2,942
2,234
$ 1,534,349
Total
Annual Benefit
$ 24,124
805,239
898,472
533,851
320,019
166,822
14,622
$ 2,763,149
Average
Annual Benefit
$ 6,209
11,389
12,051
13,024
5,559
6,031
3,715
1,471
2,234
$ 9,471
Average
Annual Benefit
$ 8,041
42,381
34,557
2 2, 244
17,779
16,682
4,874
$ 26,827
Table XII
G R S Retirement
qConsulting
City of Winter Springs Defined Benefit Plan 40
Reconciliation of Employee Data
A. Active Participants
Table XIII
1. Active participants previous year
109
2. Retired during year
(5)
3. Died during year
0
4. Disabled during year
0
5. Terminated non -vested during year
(7)
6. Terminated vested during year
(6)
7. New active participants
7
8. Out on military leave
0
9. Rehired during year
0
10. Transferred to DC Plan
0
11. Active participants current year
98
B. Participants Receiving Benefits
1. Participants receiving benefits previous year 99
2. New retired participants 5
3. New DRO recipient 0
4. New terminated vested receiving benefits 0
5. New beneficiaries receiving benefits 0
6. Died or ceased payment during year (1)
7. Retired or terminated vested receiving benefits current year 103
C. Terminated Vested Participants Entitled to Future Benefits
1. Terminated vested entitled previous year 157
2. Died during year 0
3. Commenced receiving benefits during year 0
4. New terminated vested 6
5. Terminated vested refunded employee contributions (1)
6. Rehired 0
7. Terminated vested entitled current year 162
G R S Retirement
Consulting
City of Winter Springs Defined Benefit Plan 41
Table XIV
Projected Retirement Benefits
The above projected payout of Plan benefits during the next ten years is based on assumptions involving all
decrements. Actual payouts may differ from the above estimates depending upon the death, salary and
retirement experience of the Plan. However, since the projected payment is recomputed each valuation date,
there is an automatic correction to the extent that actual experience varies from expected experience.
G R S Retire �t
Consulting
City of Winter Springs Defined Benefit Plan 42
Projected Total
Fiscal Year Ending
Annual Payout
2018
$
3,022,125
2019
$
3,420,834
2020
$
3,654,881
2021
$
3,843,523
2022
$
4,130,006
2023
$
4,425,753
2024
$
4,589,632
2025
$
4,800,705
2026
$
4,984,698
2027
$
5,150,479
The above projected payout of Plan benefits during the next ten years is based on assumptions involving all
decrements. Actual payouts may differ from the above estimates depending upon the death, salary and
retirement experience of the Plan. However, since the projected payment is recomputed each valuation date,
there is an automatic correction to the extent that actual experience varies from expected experience.
G R S Retire �t
Consulting
City of Winter Springs Defined Benefit Plan 42
X
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Actuarial Valuation as of October 1, 2017
State Required Exhibit
A. Participant Data
1. Active participants
2. Retired participants and beneficiaries
receiving benefits
3. Disabled participants receiving benefits
4. Terminated vested participants
5. Annual payroll of active participants
6. Annual benefits payable to those currently
receiving benefits
B. Value of Assets
1. Smoothed Actuarial Value
2. Market Value
C. Liabilities
1. Actuarial present value of future expected
benefit payments for active members
a. Retirement benefits
b. Vesting benefits
c. Death benefits
d. Disability benefits
e. Total
2. Actuarial present value of future expected benefit
payments for terminated vested members
3. Actuarial present value of future expected benefit
payments for members currently receiving benefits
a. Service retired
b. Disability retired
c. Beneficiaries
d. Miscellaneous (Refunds in Process)
e. Total
10/01/2016
109
99
0
157
$ 5,916,189
$ 2,615,710
$ 42,001,072
$ 42,027,234
Prior
Assumptions
10/01/2017
M
103
0
162
$ 5,537,207
$ 2,763,149
$ 46,396,570
$ 48,091,584
Table XVI
Current
Assumptions
10/01/2017
W.
103
0
162
$ 5,537,207
$ 2,763,149
$ 46,396,570
$ 48,091,584
$ 22,203,699
$ 21,669,835
$ 21,049,488
947,988
1,022,354
1,736,234
752,815
713,488
576,007
282,412
271,051
225,219
$ 24,186,914
$ 23,676,728
$ 23,586,948
$ 7,326,128
$ 8,232,027
$ 8,543,090
$ 25,340,367 $ 26,781,052
0 0
1,933,346 1,897,511
59,218 96,624
$ 27,332,931 $ 28,775,187
$ 27,342,345
0
1,934,460
96,624
$ 29,373,429
�C Retirement
i RJ c—s°i""$ City of Winter Springs Defined Benefit Plan 45
Actuarial Valuation as of October 1, 2017
State Required Exhibit
4. Total actuarial present value of future
expected benefit payments
5. Actuarial accrued liabilities
6. Unfunded actuarial accrued liabilities
D. Statement of Accumulated Plan Benefits
1. Actuarial present value of accumulated vested
benefits
a. Participants currently receiving benefits
b. Other participants
c. Total
2. Actuarial present value of accumulated non -
vested plan benefits
3. Total actuarial present value of accumulated
plan benefits
E. Pension Cost
1. Total normal cost
2. Payment required to amortize unfunded liability
3. Interest adjustment
4. Total required contribution
5. Item 4 as a percentage of base payroll
6. Estimated employee contributions
7. Item 6 as a percentage of base payroll
8. Net amount payable by County and City
9. Item 8 as a percentage of base payroll
G R S Retire �t
Consulting
Table XVI
(Cont'd)
Prior Current
Assumptions Assumptions
10/01/2016 10/01/2017 10/01/2017
$ 58,845,973
$
60,683,942
$
61,503,467
$ 53,516,012
$
55,888,309
$
58,419,910
$ 11,514,940
$
9,491,739
$
12,023,340
$ 27,273,713 $ 28,678,563 $ 29,276,805
22,043,968 23,080,007 24,751,790
$ 49,317,681 $ 51,758,570 $ 54,028,595
493,744 428,970 505,700
$ 49,811,425 $ 52,187,540 $ 54,534,295
$
725,667
$
691,448
$
558,364
11098,033
936,565
1,126,303
85,657
76,342
76,691
$
1,909,357
$
1,704,355
$
1,761,358
32.3%
30.8%
31.8%
$
295,809
$
276,860
$
276,860
5.0%
5.0%
5.0%
$
1,613,548
$
1,427,495
$
1,484,498
27.3%
25.8%
26.8%
City of Winter Springs Defined Benefit Plan 46
Actuarial Valuation as of October 1, 2017
State Required Exhibit
F. Past Contributions
1. Total contribution required (previous valuation)
2. Actual contributions made:
a. Members
b. City and County
c. Total
G. Disclosure of Following Items:
1. Actuarial present value of future salaries
- attained age
2. Actuarial present value of future employee
contributions - attained age
3. Actuarial present value of future contributions
from other sources
4. Amount of active members' accumulated
contributions
5. Actuarial present value of future salaries and
future benefits at entry age
6. Actuarial present value of future employee
contributions at entry age
Table XVI
(Cont'd)
$ 48,666,708
$ 2,433,336
N/A
$ 2,718,646
N/A
N/A
$ 44,084,029
$ 2,204,202
N/A
$ 2,694,676
N/A
N/A
$ 36,166,792
$ 1,808,341
N/A
$ 2,694,676
1 Retirement
R5
G cor5cbr,$ City of Winter Springs Defined Benefit Plan 47
N/A
N/A
Prior
Current
Assumptions
Assumptions
10/01/2016
10/01/2017
10/01/2017
$ 2,173,704
$ 1,909,357
$ 1,909,357
$ 342,209
N/A
N/A
2,605,753
N/A
N/A
$ 2,947,962
N/A
N/A
$ 48,666,708
$ 2,433,336
N/A
$ 2,718,646
N/A
N/A
$ 44,084,029
$ 2,204,202
N/A
$ 2,694,676
N/A
N/A
$ 36,166,792
$ 1,808,341
N/A
$ 2,694,676
1 Retirement
R5
G cor5cbr,$ City of Winter Springs Defined Benefit Plan 47
N/A
N/A
Table XVI
(Cont'd)
State Required Exhibit
Amortization balances are written down in proportion to amortization payments.
This Actuarial Valuation and/or cost determination was prepared and completed by me or under my direct supervision, and I
acknowledge responsibility for the results. To the best of my knowledge, the results are complete and accurate, and in my
opinion, the techniques and assumptions used are reasonable and meet the requirements and intent of Part VII, Chapter 112,
Florida Statutes. 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 other wise provided for in the valuation. All known events or trends which may
require material increase in Plan costs or required contribution rates have been taken into account in the valuation.
Enrollment Number: 17-02802 g • 7�",
Dated: June 15, 2018 Lawrence F. Wilson, A.S.A.
QvRetirement
c-d=mg City of Winter Springs Defined Benefit Plan 48
Prior
Current
Current
Assumptions
Assumptions
Remaining
Unfunded
Amortization
Amortization
Funding
Unfunded Actuarial Accrued Liabilities
Liabilities
Payment
Payment
Period
10/01/2000
Initial
$ 1,379,722
$ 161,634
$ 159,788
13 years
10/01/2002
Assumption Change
(18,683)
(2,021)
(1,995)
15 years
10/01/2003
Plan Amendment
120,740
12,630
12,458
16 years
10/01/2004
Plan Amendment
186,510
18,932
18,661
17 years
10/01/2005
Plan Amendment
392,858
38,814
38,232
18 years
10/01/2006
Plan Amendment
458,493
44,205
43,514
19 years
10/01/2007
Plan Amendment
475,275
44,822
44,093
20 years
10/01/2008
Plan Amendment and Assumption Change
2,158,177
199,496
196,135
21 years
10/01/2008
Method Change
4,823,844
445,903
438,391
21 years
10/01/2009
Actuarial Loss / (Gain)
2,083,814
189,149
185,854
22 years
10/01/2010
Actuarial Loss / (Gain)
(388,788)
(34,711)
(34,087)
23 years
10/01/2010
Plan Amendment
(2,254,095)
(201,245)
(197,630)
23 years
10/01/2011
Actuarial Loss / (Gain)
2,485,830
218,610
214,568
24 years
10/01/2012
Actuarial Loss / (Gain)
845,563
73,344
71,950
25 years
10/01/2013
Actuarial Loss / (Gain)
(663,397)
(56,823)
(55,716)
26 years
10/01/2014
Actuarial Loss / (Gain)
(710,839)
(60,190)
(58,989)
27 years
10/01/2014
Assumption Change
6,676
565
554
27 years
10/01/2015
Actuarial Loss / (Gain)
(287,048)
(24,051)
(23,560)
28 years
10/01/2016
Actuarial Loss / (Gain)
(1,383,956)
(114,841)
(112,450)
29 years
10/01/2016
Assumption Change
479,703
39,806
38,977
29 years
10/01/2017
Actuarial Loss / (Gain)
(698,660)
(57,463)
(56,243)
30 years
10/01/2017
Assumption Change
2,531,601
N/A
203,798
30 years
TOTAL
$ 12,023,340
$ 936,565
$ 1,126,303
This Actuarial Valuation and/or cost determination was prepared and completed by me or under my direct supervision, and I
acknowledge responsibility for the results. To the best of my knowledge, the results are complete and accurate, and in my
opinion, the techniques and assumptions used are reasonable and meet the requirements and intent of Part VII, Chapter 112,
Florida Statutes. 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 other wise provided for in the valuation. All known events or trends which may
require material increase in Plan costs or required contribution rates have been taken into account in the valuation.
Enrollment Number: 17-02802 g • 7�",
Dated: June 15, 2018 Lawrence F. Wilson, A.S.A.
QvRetirement
c-d=mg City of Winter Springs Defined Benefit Plan 48
Table XVII
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. 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 of Future Benefits. The Actuarial Present Value of amounts which are expected to
be paid at various future times to active members, retired members, beneficiaries receiving benefits and
inactive, 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.
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.
Qw
Retire �t
Consulting
City of Winter Springs Defined Benefit Plan 49
Table XVII
(Cont'd)
Glossary
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 Contribution. The employer's periodic required contributions, expressed as a dollar
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 Amortization Period. For plans that do not establish separate amortization bases
(separate components of the UAAL), this is the same as the Amortization Period. For plans that do
establish separate amortization bases, this is the period over which the UAAL would be amortized if
all amortization bases were combined upon the current UAAL pavment.
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 nroduce Unfunded Actuarial Accrued Liabilities which are Iareer than nroiected.
Funded Ratio. The ratio of the Actuarial Value of Assets to the Actuarial Accrued Liability.
GASB. Governmental Accounting Standards Board.
;w
S Retire �t
4Consulting
City of Winter Springs Defined Benefit Plan 50
Table XVII
(Cont'd)
Glossary
GASB No. 67 and GASB No. 68. These are the governmental accounting standards that set the
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 Liability. The difference between the Actuarial Accrued Liability and
Actuarial 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.
;w
S Retire �t
4Consulting
City of Winter Springs Defined Benefit Plan 51