HomeMy WebLinkAbout2021 09 27 Consent 300 - City of Winter Springs Defined Benefit Plan October 1, 2020 Actuarial Valuation Report • CONSENT AGENDA ITEM 300
,n m=ared CITY COMMISSION AGENDA I SEPTEMBER 27, 2021 REGULAR MEETING
1959
TITLE
City of Winter Springs Defined Benefit Plan October 1, 2020 Actuarial
Valuation Report
SUMMARY
On August 23, 2021 the Board of Trustees for the City's Defined Benefit Plan
met in a regular meeting held in the City's chambers. Gabriel, Roeder, Smith
& Company (GRS) the City's outside actuarial firm, is a nationally recognized
leader in the actuarial and benefits consulting industry. GRS prepared and
presented the attached Annual Actuarial Valuation Report dated October 1,
2020. The Board of Trustees unanimously accepted and approved the
valuation report as presented.
RECOMMENDATION
Staff recommends the City Commission accept the Actuarial Valuation Report
for the Defined Benefit Plan dated October 1, 2020 as put forth by the Board
of Trustees.
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May 24, 2021
Ms. Casey Howard
HR and Benefits Manager
City of Winter Springs
1126 East State Road 434
Winter Springs, Florida 32708
Re: City of Winter Springs Defined Benefit Plan
October 1, 2020 Actuarial Valuation
Dear Casey:
As requested, we are pleased to enclose eleven (11) copies of the October 1, 2020 Actuarial
Valuation Report for the City of Winter Springs Defined Benefit Plan.
We appreciate the opportunity to partner with you on this important project.
Upon Board approval of the Actuarial Valuation Report, we will upload an electronic copy of
the Actuarial Valuation Report along with the required disclosure information to the State
portal as required by the State.
If you should have any questions concerning the above, please do not hesitate to contact us.
Sincerest regards,
A'CiL& jv-A�
Shelly L.Jones, A.S.A
Consultant and Actuary
Enclosures
Lauderdale,One East Broward Boulevard Suite 505 Ft. Florida 33301-18048
City Of Winter Springs
Defined Benefit Plan
ACTUARIAL VALUATION AS OF OCTOBER 1, 2020
This Valuation Determines the Annual Contribution for the Plan Year October 1, 2021 through
September 30, 2022 to be Paid in Plan Year October 1, 2021 to September 30, 2022
May 24, 2021
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City of Winter Springs
Defined Benefit Plan
TABLE OF CONTENTS
Page
Commentary 1
I. Summary of Retirement Plan Costs...........................................................................9
II. Comparison of Cost Data of Current and Prior Valuations ..................................... 11
III. Characteristics of Participants in Actuarial Valuation ............................................. 12
IV. Statement of Assets................................................................................................. 13
V. Reconciliation of Plan Assets................................................................................... 14
VI. Actuarial Gain/(Loss).............................................................................................. 16
VII. Amortization of Unfunded Actuarial Accrued Liability............................................ 17
VIII. Accounting Disclosure Exhibit ................................................................................. 18
IX. Outline of Principal Provisions of the Retirement Plan...........................................27
X. Actuarial Assumptions and Actuarial Cost Methods Used......................................30
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
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4 S P:954.527.1616 F: 954,525,0083 www_grsconsultsng,com
May 24, 2021
City Council
City of Winter Springs Defined Benefit Plan
c/o Ms. Casey Howard
HR and Benefits Manager
1126 East State Road 434
Winter Springs, Florida 32708
Dear Council Members:
October 1, 2020 Actuarial Valuation
We are pleased to present our October 1, 2020 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 October 1,
2021—September 30, 2022 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$1,266,869 (29.9%). The figure in parentheses is the Plan cost expressed as a
percentage of projected covered annual payroll for fiscal year October 1, 2021—September 30, 2022
($4,236,443).
This total cost is to be met by member, County and City contributions. We anticipate member
contributions will be $211,822 (5.0% of projected covered payroll for fiscal year ending September 30,
2021). The resulting minimum required County and City contribution is $1,055,047 (24.9%).
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.
One East Broward Boulevard I Suite 50512
Council Members
May 24, 2021
Page Two
Changes in Actuarial Assumptions, Methods and Plan Provisions
The Plan provisions remain unchanged from our October 1, 2019 Actuarial Valuation. The Plan
provisions are outlined on Table IX.
The investment return assumption and mortality assumption for disabled participants have been
updated. The mortality assumptions have been updated to use the mortality assumptions used by the
Florida Retirement System (FRS) as required under F.S., Chapter 2015-157 based upon the July 1, 2020
FRS Actuarial Valuation. The remaining actuarial assumptions and methods remain unchanged from
our October 1, 2019 Actuarial Valuation. The actuarial assumptions and methods are outlined on
Table X.
Comparison of October 1, 2019 and October 1, 2020 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, 2019. The center columns indicate the costs as
calculated for October 1, 2020 prior to the update in actuarial assumptions. The right columns
indicate the costs as calculated for October 1, 2020 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 increased by approximately 1% while covered payroll decreased by
approximately 2%. Total Plan membership increased by approximately 2%. Total normal cost, the
unfunded actuarial accrued liability and the net County and City minimum funding requirement all
decreased both as a dollar amount and 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, the unfunded actuarial accrued liability and the net County and City
minimum funding requirement all 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 91.9% (92.8% prior to assumptions update) which is an increase from 90.3% as of the
October 1, 2019 Actuarial Valuation. The VBSR is measured on a market value of assets basis.
Plan Experience
The Plan experienced an actuarial loss in the amount of$125,424 this year. This indicates actual
overall Plan experience was less favorable than expected.
Table XV (salary, turnover and investment yield) provides figures on recent Plan experience. Salary
experience indicates actual salary increases averaged approximately 7.8% for General and Forensic
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May 24, 2021
Page Three
Employees and 4.1%for Firefighters and Police Officers for Plan Year ended September 30, 2020 when
compared to the assumed salary increase of 3.1%and 3.4%, respectively. Salary increases were
generally a source of actuarial loss. The three, five and ten-year average annual salary increases are
7.0%, 5.4% and 3.6%for General and Forensic Employees, respectively—4.8%, 4.8% and 2.7%for
Firefighters and Police Officers, respectively.
Employee turnover this year was 260%of the assumed turnover for General and Forensic Employees
and 120% of the assumed turnover for Firefighters and Police Officers. Employee turnover was an
offsetting source of actuarial gain. The three, five and ten-year average annual turnover is 300%,
240% and 200%, respectively for General and Forensic Employees- 130%, 240% and 230%,
respectively for Firefighters and Police Officers.
The smoothed value investment return of 8.42% was greater than the investment return assumption
of 7.50% (prior assumption). Smoothed value investment return was an additional offsetting source
of actuarial gain during the year. The three, five and ten-year average annual smoothed value
investment returns are 8.60%, 9.2% and 7.8%, respectively. The one, three, five and ten-year average
annual market value returns are 7.81%, 7.08%, 9.2% and 9.1%, respectively.
Member Census and Financial Data
The City submitted the Member census data used for this Actuarial Valuation to us as of October 1,
2020. This information contains name, Social Security number, date of birth, date of hire, October 1,
2020 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, 2020. 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.
Risks Associated with Measuring the Accrued Liability and Actuarially Determined Contribution
The determination of the accrued liability and the actuarially determined contribution requires the
use of assumptions regarding future economic and demographic experience. Risk measures, as
illustrated in this report, are intended to aid in the understanding of the effects of future experience
differing from the assumptions used in the course of the actuarial valuation. Risk measures may also
help with illustrating the potential volatility in the accrued liability and the actuarially determined
contribution that result from the differences between actual experience and the actuarial
assumptions.
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Council Members
May 24, 2021
Page Four
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 due to
changing conditions; increases or decreases expected as part of the natural operation of the
methodology used for these measurements (such as the end of an amortization period, or additional
cost or contribution requirements based on the Plan's funded status); and changes in Plan provisions
or applicable law. The scope of an actuarial valuation does not include an analysis of the potential
range of such future measurements.
Examples of risk that may reasonably be anticipated to significantly affect the Plan's future financial
condition include:
1. Investment risk—actual investment returns may differ from expected returns;
2. Asset/ Liability mismatch—changes in asset values may not match changes in liabilities,
thereby altering the gap between the accrued liability and assets and consequently altering
the funded status and the actuarially determined contribution requirements;
3. Contribution risk—actual contributions may differ from expected future contributions. For
example, actual contributions may not be made in accordance with the Plan's funding policy
or material changes may occur in the anticipated number of covered employees, covered
payroll or other relevant contribution base;
4. Salary and Payroll risk—actual salaries and total payroll may differ from expected, resulting in
actual future accrued liability and the actuarially determined contributions differing from
expected;
5. Longevity risk— members may live longer or shorter than expected and receive pensions for a
period of time other than assumed;
6. Other demographic risks— members may terminate, retire or become disabled at times or
with benefits other than assumed resulting in actual future accrued liability and the actuarially
determined contributions differing from expected.
The effects of certain trends in experience can generally be anticipated. For example if the
investment return since the most recent actuarial valuation is less (or more) than the assumed rate,
the actuarially determined contribution can be expected to increase (or decrease). Likewise if
longevity is improving (or worsening), increases (or decreases) in the actuarially determined
contribution can be anticipated.
The actuarially determined contribution rate shown on page one of the report may be considered as a
minimum contribution rate that complies with the Plan's funding policy. The timely receipt of the
actuarially determined contributions is critical to support the financial health of the Plan. Users of this
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Council Members
May 24, 2021
Page Five
report should be aware that contributions made at the actuarially determined rate do not necessarily
guarantee benefit security.
Plan Maturity Measures
Risks facing a pension plan evolve over time. A young plan with virtually no investments and paying
few benefits may experience little investment risk. An older plan with a large number of members in
pay status and a significant trust fund may be much more exposed to investment risk. Generally
accepted plan maturity measures include the following:
2019 2020
Ratio of market value of assets to payroll 12.65 13.82
Ratio of actuarial accrued liability to payroll 14.95 15.89
Ratio of actives to retirees and beneficiaries 0.58 0.56
Ratio of net cash flow to market value of assets -0.3% -0.8%
Duration of the actuarial accrued liability 11.57 11.42
Ratio of Market Value of Assets to Payroll
The relationship between assets and payroll is a useful indicator of the potential volatility of the
actuarially determined contribution. For example, if the market value of assets is 2.0 times the
payroll, a return on assets 5% different than assumed would equal 10% of payroll. A higher (lower) or
increasing (decreasing) level of this maturity measure generally indicates higher (lower) or increasing
(decreasing) volatility in the actuarially determined contribution as a percentage of payroll.
Ratio of Actuarial Accrued Liability to Payroll
The relationship between actuarial accrued liability and payroll is a useful indicator of the potential
volatility of the actuarially determined contributions for a fully funded plan. A funding policy targeting
a funded ratio of 100% is expected to result in the ratio of assets to payroll and the ratio of liability to
payroll converging over time.
The ratio of actuarial accrued liability to payroll may also be used as a measure of sensitivity of the
liability itself. For example, if the actuarial accrued liability is 2.5 times payroll, a change in actuarial
accrued liability 2% other than assumed would equal 5% of payroll. A higher (lower) or increasing
(decreasing) level of this maturity measure generally indicates a higher (lower) or increasing
(decreasing) volatility in actuarial accrued liability (and also the actuarially determined contribution)
as a percentage of payroll.
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May 24, 2021
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Ratio of Actives to Retirees and Beneficiaries
A young plan with many active members and few retirees will have a high ratio of active to retirees. A
mature open plan may have close to the same number of actives to retirees resulting in a ratio near
1.0. A super-mature or closed plan may have significantly more retirees than actives resulting in a
ratio below 1.0.
Ratio of Net Cash Flow to Market Value of Assets
A positive net cash flow means contributions exceed benefits and expenses. A negative cash flow
means existing funds are being used to make payments. A certain amount of negative net cash flow is
generally expected to occur when benefits are prefunded through a qualified trust. Large negative
net cash flows as a percent of assets may indicate a super-mature plan or a need for additional
contributions.
Duration of Actuarial Accrued Liability
The duration of the actuarial accrued liability may be used to approximate the sensitivity to a 1%
change in the assumed rate of return. For example, a duration of 10 indicates the actuarial accrued
liability would increase approximately 10% if the assumed rate of return were lowered 1%.
Additional Risk Assessment
Additional risk assessment is outside the scope of the annual actuarial valuation. Additional
assessment may include scenario tests, sensitivity tests, stochastic modeling, stress tests and a
comparison of the present value of accrued benefits at low-risk discount rates with the actuarial
accrued liability.
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 Plan. The economic
and demographic actuarial assumptions are based upon the results of an 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.
If all actuarial assumptions are met and if all future minimum required contributions are paid,
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Council Members
May 24, 2021
Page Seven
Plan assets will be sufficient to pay all Plan benefits, future contributions are expected to remain
relatively stable or decrease 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 smoothed value of assets.
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.
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 was prepared using ProVal's valuation model, a software product of Winklevoss
Technologies. We are relying on the ProVal model. We performed tests of the ProVal model with this
assignment and made a reasonable attempt to understand the developer's intended purpose of,
general operation of, major sensitivities and dependencies within, and key strengths and limitations of
the ProVal model. In our professional judgment, the ProVal valuation model has the capability to
provide results that are consistent with the purposes of the valuation and has no material limitations
or known weaknesses.
This report has been prepared by actuaries who have substantial experience valuing public employee
retirement plans. To the best of our knowledge the information contained in this report is accurate
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.
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Council Members
May 24, 2021
Page Eight
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,
h,
Shelly L. Jones, A.S.A., E.A. Jennifer M. Borregard, E.A.
Consultant and Actuary Consultant and Actuary
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99 19
Table I
Summary of Retirement Plan Costs as of October 1, 2020
Prior Assumptions Current Assumptions
Cost %of Cost %of
Data Payroll Data Payroll
A. Participant Data Summary(Table III)
1. Active Employees 74 N/A 74 N/A
2. Terminated Vested 167 N/A 167 N/A
3. Receiving Benefits 131 N/A 131 N/A
4. Total Annual Payroll of Active Employees $ 4,236,443 100.0% $ 4,236,443 100.0%
B. Total Normal Costs
1. Age Retirement Benefits $ 243,520 5.7% $ 250,211 5.9%
2. Termination Benefits 127,029 3.0% 129,933 3.1%
3. Death Benefits 6,692 0.2% 6,846 0.2%
4. Disability Benefits 3,516 0.1% 3,417 0.1%
5. Estimated Expenses 32,984 0.8% 32,984 0.8%
6. Total Annual Normal Costs $ 413,741 9.8% $ 423,391 10.0%
C. Total Actuarial Accrued Liability
1. Age Retirement and Termination Benefits Active Employees $ 12,734,683 300.6% $ 12,915,989 304.9%
2. Death Benefits Active Employees 214,155 5.1% 217,137 5.1%
3. Disability Benefits Active Employees 108,101 2.6% 104,665 2.5%
4. Retired or Terminated Vested Participants
Receiving Benefits 41,696,930 984.2% 42,049,921 992.6%
5. Terminated Vested Participants Entitled to
Future Benefits 9,998,885 236.0% 10,143,331 239.4%
6. Deceased Participants Whose Beneficiaries
are Receiving Benefits(includes DROs) 1,765,246 41.7% 1,778,248 42.0%
7. Disabled Participants Receiving Benefits 0 0.0% 0 0.0%
8. Miscellaneous Liability(Refunds in Process) 118,808 2.8% 118,808 2.8%
9. Total Actuarial Accrued Liability $ 66,636,808 1572.9% $ 67,328,099 1589.3%
D. Assets(Table V)
1. Smoothed Value of Assets $ 58,929,456 1391.0% $ 58,929,456 1391.0%
2. Market Value of Assets $ 58,544,989 1381.9% $ 58,544,989 1381.9%
E. Unfunded Actuarial Accrued Liability
(C.9.-D.1.) $ 7,707,352 181.9% $ 8,398,643 198.2%
City of Winter Springs Defined Benefit Plan 20
Table I
(Cont'd)
Summary of Retirement Plan Costs as of October 1, 2020
Prior Assumptions Current Assumptions
Cost %of Cost %of
Data Payroll Data Payroll
F. Minimum Required Contribution
1. Total Normal Cost(including expenses) $ 413,741 9.8% $ 423,391 10.0%
2. Amortization of Unfunded Liability 741,387 17.5% 790,747 18.7%
3. Interest Adjustment 50,735 1.2% 52,731 1.2%
4. Total Payment $ 1,205,863 28.5% $ 1,266,869 29.9%
G. Expected payroll of active employees for FYE 2022
(1.000 x$4,236,443) $ 4,236,443 100.0% $ 4,236,443 100.0%
H. Contribution Sources(percent of expected 2022 payroll)
1. County and City $ 994,041 23.5% $ 1,055,047 24.9%
2. Member 211,822 5.0% 211,822 5.0%
3. Total required contribution $ 1,205,863 28.5% $ 1,266,869 29.9%
I. Actuarial Gain/(Loss) $ (125,424) (3.0%) $ (125,424) (3.0%)
J. Actuarial Present Value of Vested Accrued Benefits
1. Retired,Terminated Vested, Beneficiaries
and Disabled Receiving Benefits $ 43,462,176 1025.9% $ 43,828,169 1034.6%
2. Terminated Vested Participants Entitled to
Future Benefits and Miscellaneous 10,117,693 238.8% 10,262,139 242.2%
3. Active Participants Entitled to Future Benefits 9,478,069 223.7% 9,610,004 226.8%
4. Total Actuarial Present Value of Vested
Accrued Benefits $ 63,057,938 1488.5% $ 63,700,312 1503.6%
K. Unfunded Actuarial Present Value of Vested
Accrued Benefits(J.4.- D.2., not less than zero) $ 4,512,949 106.5% $ 5,155,323 121.7%
L. Vested Benefit Security Ratio(D.2.=J.4.) 92.8% N/A 91.9% N/A
kvCity of Winter Springs Defined Benefit Plan 21
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Table III
Characteristics of Participants in
Actuarial Valuation as of October 1, 2020
A. Active Plan Participants Summary
1. Active participants fully vested 50
2. Active participants partially vested 0
3. Active participants non-vested 24
4. Total active participants 74
5. Annual rate of pay of active participants $ 4,236,443
B. Retired and Terminated Vested Participant Summary
1. Retired or terminated vested participants receiving
benefits 117
2. Terminated vested participants entitled to
future benefits 167
3. Deceased participants whose beneficiaries are
receiving benefits (includes DROs) 14
4. Disabled participants receiving benefits 0
C. Projected Annual Retirement Benefits
1. Retired or terminated vested receiving benefits $ 3,876,731
2. Terminated vested entitled to future benefits $ 1,632,301
3. Beneficiaries of deceased participants (includes DROs) $ 192,979
4. Disabled participants $ 0
{QRS
City of Winter Springs Defined Benefit Plan 23
Table IV
Statement of Assets as of October 1, 2020
Assets Market Value
A. Cash and Cash Equivalents $ 515,192
B. General Investments
1. Common Stock $ 38,703,802
2. Bonds 10,198,150
3. Real Estate 5,574,338
4. Other 2,917,815
C. Receivables
1. Accrued Interest $ 0
2. Employee Contribution Receivable 24,638
3. City and County Contributions Receivable 611,054
4. Accounts Receivable 0
D. Payables
1. Accounts Payable $ 0
2. Due to Broker 0
E. Plan Assets
(A+ B +C- D) $ 58,544,989
QRS
City of Winter Springs Defined Benefit Plan 24
Table V
Reconciliation of Plan Assets
A. Market Value of Assets as of October 1, 2019 $ 54,713,697
B. Receipts During Period
1. Contributions
a. Member $ 217,975
b. City and County 3,213,927
c. Total $ 3,431,902
2. Investment Income
a. Interest and dividends $ 793,550
b. Realized/ unrealized gains (losses) 3,741,524
c. Investment expenses (281,074)
d. Net investment income $ 4,254,000
3. Total receipts during period $ 7,685,902
C. Disbursements During Period
1. Pension payments and contribution refunds $ 3,821,626
2. Administrative expenses 32,984
3. Total disbursements during period $ 3,854,610
D. Market Value of Assets as of September 30, 2020 $ 58,544,989
QvCity of Winter Springs Defined Benefit Plan 25
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Table VI
Actuarial Gain/ (Loss) for
Plan Year Ended September 30, 2020
A. Derivation of Actuarial Gain /(Loss)
1. City and County net normal cost previous valuation $ 254,707
2. Unfunded actuarial accrued liability previous valuation 9,900,062
3. City and County contributions previous year 3,213,927
4. Interest on:
(a) City and County net normal cost $ 19,103
(b) Unfunded actuarial accrued liability 742,505
(c) City and County contributions 120,522
(d) Net total: (a) + (b) -(c) $ 641,086
5. Increase/ (decrease) in unfunded actuarial accrued liability due to
assumption changes $ 691,291
6. Expected unfunded actuarial accrued liability current year:
(1. + 2. -3. +4. + 5.) $ 8,273,219
7. Actual unfunded actuarial accrued liability current year 8,398,643
8. Actuarial gain/ (loss): (6. -7.) $ (125,424)
B. Approximate Portion of Gain /(Loss)
due to Investments
1. Smoothed value of assets previous year $ 54,759,146
2. Contributions during period 3,431,902
3. Benefits and administrative expenses during period 3,854,610
4. Expected appreciation for period 4,091,084
5. Expected smoothed value of assets current year:
(1. + 2. -3. +4.) $ 58,427,522
6. Actual smoothed value of assets current year $ 58,929,456
7. Approximate investment gain/(loss) due to investments: (6. -5.) $ 501,934
C. Approximate Portion of Gain /(Loss)
due to Liabilities: A.8. - B.7. $ (627,358)
R
City of Winter Springs Defined Benefit Plan 27
Table VII
Amortization of Unfunded Actuarial Accrued Liability
A. Unfunded Actuarial Accrued Liability
Unfunded Amortization
Date Liability Payment
October 1, 2020 $ 8,398,643 $ 790,747
October 1, 2021 $ 8,170,881 $ 790,747
October 1, 2022 $ 7,926,264 $ 790,747
October 1, 2023 $ 7,663,545 $ 790,747
October 1, 2024 $ 7,381,385 $ 790,747
October 1, 2050 $ 0 $ 0
B. Covered Payroll History
Covered Annual
Date Payroll Increase
October 1, 2020 $ 4,236,443 (2.1%)
October 1, 2019 $ 4,325,321 (14.2%)
October 1, 2018 $ 5,042,067 (8.9%)
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 N/A
Ten-Year Average Annual Increase (8.5%)
City of Winter Springs Defined Benefit Plan 28
Table VIII
Accounting Disclosure Exhibit
Prior Current
Assumptions Assumptions
10/01/2019 10/01/2020 10/01/2020
I. Number of Plan Members
a. Retirees and beneficiaries receiving benefits 125 131 131
b. Terminated plan members entitled to but not yet receiving benefits 167 167 167
c. Active plan members 73 74 74
d. Total 365 372 372
II.Financial Accounting Standards Board Allocation as of October 1,2020
A. Statement of Accumulated Plan Benefits
1. Actuarial present value of accumulated vested plan benefits
a. Participants currently receiving benefits $ 38,318,553 $ 43,462,176 $ 43,828,169
b. Other participants 22,281,079 19,595,762 19,872,143
c. Total $ 60,599,632 $ 63,057,938 $ 63,700,312
2. Actuarial present value of accumulated
non-vested plan benefits $ 274,181 $ 155,350 $ 157,702
3. Total actuarial present value of accumulated plan benefits $ 60,873,813 $ 63,213,288 $ 63,858,014
B. Statement of Change in Accumulated Plan Benefits
1. Actuarial present value of accumulated plan benefits
as of October 1,2019 $ 60,873,813
2. Increase(decrease)during year attributable to:
a. Plan amendment $ 0
b. Change in actuarial assumptions 644,726
c. Benefits paid including refunds (3,821,626)
d. Other, including benefits accumulated, increase
for interest due to decrease in the discount period 6,161,101
e. Net increase $ 2,984,201
3. Actuarial present value of accumulated plan benefits
as of October 1,2020 $ 63,858,014
C. Significant Matters Affecting Calculations
1. Assumed rate of return used in determining actuarial present values 7.40%
2. Change in Plan provisions None.
3. Change in actuarial assumptions See Table X, Item L.
City of Winter Springs Defined Benefit Plan "29
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Table VIII
(Cont'd)
Accounting Disclosure Exhibit
IV. Schedule of Employer Contributions(GASB No.67& No. 68)
Actuarially Contribution Actual Contribution
Fiscal Year Determined Actual Deficiency/ Covered as a%of
End 9/30 Contribution Contribution i (Excess) Payroll 2 Covered Payroll
2011 $ 2,616,924 $ 2,616,924 $ 0 $ 10,304,054 25.40%
2012 1,965,643 1,913,717 51,926 8,875,836 21.56%
2013 2,258,769 2,258,798 (29) 8,216,342 27.49%
2014 2,474,578 2,527,508 (52,930) 7,369,943 34.29%
2015 2,230,908 2,392,948 (162,040) 7,070,355 33.84%
2016 2,067,445 2,586,936 (519,491) 6,671,503 38.78%
2017 1,831,495 2,605,753 (774,258) 5,846,435 44.57%
2018 1,613,548 2,635,968 (1,022,420) 5,342,971 49.34%
2019 1,484,498 2,924,706 (1,440,208) 4,800,755 60.92%
2020 1,389,125 3,213,927 (1,824,802) 4,334,163 74.15%
20213 1,251,632 1,251,632 0 4,236,443 29.54%
i Per City CAM prior to September 30,2014
2 Reported payroll on which contributions to the Plan are based as provided under GASB No. 82 (projected prior to fiscal year
ended September 30,2014)
3 Projected -actual amounts will be available after fiscal year end
QvCity of Winter Springs Defined Benefit Plan 31
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 years prior the
fiscal year end in which contributions are reported.
Methods and Assumptions Used to Determine Contribution Rates for Fiscal Year Ending September 30, 2021:
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%-4.5%
Investment Rate of Return 7.50%
Retirement Age Experience-based table of rates that are specific to the type of eligibility condition
Mortality For healthy General Employee participants during employment, PUB-2010 Headcount
Weighted General Below Median Employee Mortality Table, separate rates for males and
females, set back 1 year for male, with fully generational mortality improvements
projected to each future decrement date with Scale MP-2018.
For healthy General Employee participants post employment, PUB-2010 Headcount
Weighted General Below Median Healthy Retiree Mortality Table, separate rates for males
and females, set back 1 year for male, with fully generational mortality improvements
projected to each future decrement date with Scale MP-2018.
For healthy Firefighter, Police Officer and Forensic Professional participants during
employment, PUB-2010 Headcount Weighted Safety Employee Female Mortality Table and
Safety Below Median Employee Male Mortality Table, both set forward 1 year, with fully
generational mortality improvements projected to each future decrement date with Scale
M P-2018.
For healthy Firefighter, Police Officer and Forensic Professional participants post
employment, PUB-2010 Headcount Weighted Safety Healthy Retiree Female Mortality
Table and Safety Below Median Healthy Retiree Male Mortality Table, both set forward 1
year, with fully generational mortality improvements projected to each future decrement
date with Scale MP-2018.
For disabled General Employee participants, PUB-2010 Headcount Weighted General
Disabled Retiree Mortality Table, separate rates for males and females, both set forward 3
years, with fully generational mortality improvements projected to each future decrement
date with Scale MP-2018.
For disabled Firefighter, Police Officer and Forensic Professional participants, 80% PUB-
2010 Headcount Weighted General Disabled Retiree Mortality Table / 20% PUB-2010
Headcount Weighted Safety Disabled Retiree Mortality Table, separate rates for males and
females, with fully generational mortality improvements projected to each future
decrement date with Scale MP-2018.
City of Winter Springs Defined Benefit Plan 32
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.
Assumption Changes
2019: Investment return, mortality rates and disability rates updated. 2017: Investment return, salary increase,
withdrawal and retirement rates updated. 2016: Mortality rates updated. 2014: Disability rates updated.
VI. Discount Rate (GASB No. 67 & No. 68)
Discount rates of 7.50% and 7.40%were used to measure the September 30, 2020 and September 30, 2021 TPL,
respectively. These discount rates were based on the expected rate of return on Plan investments of 7.50% and
7.40%. The projection of cash flows used to determine these discount rates assumed member contributions will
be made at the current member contribution rate and City and County contributions will be made at rates equal
to the difference between actuarially determined contribution rates and the member contribution rate. Based
upon these assumptions, the 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, 2020
Current
1% Decrease Discount Rate 1% Increase
Discount Rate 6.50% 7.50% 8.50%
NPL $ 14,896,257 $ 7,430,819 $ 1,152,490
Measurement date: September 30, 2021
Current
1% Decrease Discount Rate 1% Increase
Discount Rate 6.40% 7.40% 8.40%
NPL $ 16,018,034 $ 8,368,960 $ 1,940,936
* Projected -actual amounts will be available after fiscal year end
�G R
City of Winter Springs Defined Benefit Plan 33
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, 2021 $ 1,821,152
Summary of Outstanding Deferred Inflows and Outflows of Resources as of September 30, 2021
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between actual and expected experience on
liabilities $ 234,346 $ 0
Changes of assumptions or other inputs 197,310 0
Net difference between projected and actual earnings on
pension Plan investments 384,467 0
Total $ 816,123 $ 0
Projected Deferred Outflows for County and City Contributions to Be Recognized
after the Measurement Date $ 1,251,632
Summary of Deferred Outflows and Inflows of Resources that to Be Recognized in Pension Expense in
Future Years.
Year Ending
30-Sep Amount
2022 $ 139,304
2023 203,806
2024 506,277
2025 (33,264)
2026 0
Thereafter 0
F�
City of Winter Springs Defined Benefit Plan 34
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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
Remaining
Initial Recognition Recognition
Recognition Period as of Amount for Balance as of
Established Initial Balance Period 9/30/2020 2019/2020 9/30/2020
2016/2017 $ 0 3.2 0.0 $ 0 $ 0
2017/2018 $ 124,345 2.2 0.0 $ 11,305 $ 0
2018/2019 $ 1,281,355 1.9 0.0 $ 606,958 $ 0
2019/2020 $ 569,125 1.7 0.7 $ 334,779 $ 234,346
TOTAL $ 953,042 $ 234,346
Recognition of Deferred (Inflows) due to Differences Between Actual and Expected Experience on Liabilities
Remaining
Initial Recognition Recognition
Recognition Period as of Amount for Balance as of
Established Initial Balance Period 9/30/2020 2019/2020 9/30/2020
2016/2017 $ (592,087) 3.2 0.0 $ (37,006) $ 0
2017/2018 $ 0 2.2 0.0 $ 0 $ 0
2018/2019 $ 0 1.9 0.0 $ 0 $ 0
2019/2020 $ 0 1.7 0.7 $ 0 $ 0
TOTAL $ (37,006) $ 0
Recognition of Deferred Outflows due to Changes of Assumptions or Other Inputs
Remaining
Initial Recognition Recognition
Recognition Period as of Amount for Balance as of
Established Initial Balance Period 9/30/2020 2019/2020 9/30/2020
2016/2017 $ 526,115 3.2 0.0 $ 32,882 $ 0
2017/2018 $ 2,531,601 2.2 0.0 $ 230,145 $ 0
2018/2019 $ 0 1.9 0.0 $ 0 $ 0
2019/2020 $ 479,182 1.7 0.7 $ 281,872 $ 197,310
TOTAL $ 544,899 $ 197,310
QvCity of Winter Springs Defined Benefit Plan 36
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
Remaining
Initial Recognition Recognition
Recognition Period as of Amount for Balance as of
Established Initial Balance Period 9/30/2020 2019/2020 9/30/2020
2016/2017 $ 0 3.2 0.0 $ 0 $ 0
2017/2018 $ 0 2.2 0.0 $ 0 $ 0
2018/2019 $ 0 1.9 0.0 $ 0 $ 0
2019/2020 $ 0 1.7 0.7 $ 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
Remaining
Initial Recognition Recognition
Recognition Period as of Amount for Balance as of
Established Initial Balance Period 9/30/2020 2019/2020 9/30/2020
2015/2016 $ (1,064,950) 5 0 $ (212,990) $ 0
2016/2017 $ (2,480,800) 5 1 $ (496,160) $ (496,160)
2017/2018 $ (1,512,347) 5 2 $ (302,469) $ (604,940)
2018/2019 $ 2,697,710 5 3 $ 539,542 $ 1,618,626
2019/2020 $ (166,324) 5 4 $ (33,265) $ (133,059)
TOTAL $ (505,342) $ 384,467
Qv
City of Winter Springs Defined Benefit Plan 37
Table IX
Outline of Principal Provisions of the Retirement Plan
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 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 Plan Years out of the last ten (10) Plan 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.
F�
City of Winter Springs Defined Benefit Plan 38
Table IX
(Cont'd)
Outline of Principal Provisions of the Retirement Plan
2. Benefit:
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. 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. 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.
City of Winter Springs Defined Benefit Plan 39
Table IX
(Cont'd)
Outline of Principal Provisions of the Retirement Plan
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 under the form of benefit option elected.
K. Participant Contributions
Five percent (5%) of compensation.
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 upon 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.
City of Winter Springs Defined Benefit Plan 40
Table X
Actuarial Assumptions and Actuarial Cost Methods
Used in the Valuation
A. Mortality
Firefighter, Police Officer and Forensic Professional participants:
For healthy participants during employment, PUB-2010 Headcount Weighted Safety Employee Female
Mortality Table and Safety Below Median Employee Male Mortality Table, both set forward 1 year, with
fully generational mortality improvements projected to each future decrement date with Scale MP-2018.
For healthy participants post employment, PUB-2010 Headcount Weighted Safety Healthy Retiree Female
Mortality Table and Safety Below Median Healthy Retiree Male Mortality Table, both set forward 1 year,
with fully generational mortality improvements projected to each future decrement date with Scale MP-
2018.
For disabled participants, 80% PUB-2010 Headcount Weighted General Disabled Retiree Mortality Table/
20% PUB-2010 Headcount Weighted Safety Disabled Retiree Mortality Table, separate rates for males
and females, without projected mortality improvements.
Pre-retirement Post-retirement
Sample Future Life Future Life
Ages Expectancy(Years) Expectancy(Years)
(2020) Men Women Men Women
55 30.45 34.32 27.59 31.17
60 25.51 29.26 23.01 26.39
62 23.58 27.25 21.28 24.55
Pre-retirement Post-retirement
Sample Future Life Future Life
Ages Expectancy(Years) Expectancy(Years)
(2040) Men Women Men Women
55 32.09 35.81 29.48 33.00
60 27.08 30.70 24.79 28.13
62 25.11 28.67 23.00 26.25
General Employee participants:
For healthy participants during employment, PUB-2010 Headcount Weighted General Below Median
Employee Mortality Table, separate rates for males and females, set back 1 year for male, with fully
generational mortality improvements projected to each future decrement date with Scale MP-2018.
For healthy participants post employment, PUB-2010 Headcount Weighted General Below Median
Healthy Retiree Mortality Table, separate rates for males and females, set back 1 year for male, with fully
generational mortality improvements projected to each future decrement date with Scale MP-2018.
F�
City of Winter Springs Defined Benefit Plan 41
Table X
(Cont'd)
Actuarial Assumptions and Actuarial Cost Methods
Used in the Valuation
A. Mortality(cont'd)
For disabled participants, PUB-2010 Headcount Weighted General Disabled Retiree Mortality Table, separate
rates for males and females, both set forward 3 years, without projected mortality improvements.
Pre-retirement Post-retirement
Sample Future Life Future Life
Ages Expectancy(Years) Expectancy(Years)
(2020) Male Female Male Female
55 32.58 35.02 28.63 32.38
60 27.74 30.00 24.55 27.84
62 25.85 28.02 22.93 26.02
Pre-retirement Post-retirement
Sample Future Life Future Life
Ages Expectancy(Years) Expectancy(Years)
(2040) Male Female Male Female
55 34.22 36.50 30.64 34.15
60 29.30 31.44 26.40 29.51
62 27.37 29.43 24.72 27.63
B. Investment Return
7.40%, 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%.
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
City of Winter Springs Defined Benefit Plan 42
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.
General Forensic Professionals,
Employees 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, Forensic Professionals, Firefighters and Police
Officers were used in accordance with the following illustrative example.
General All Other
Age Employees Employees
<40 0.001% 0.005
45 0.001% 0.050
50 0.002% 0.050
55 0.005% 0.090
60 0.006% 0.090
65 0.001% 0.090
2. Non-duty disability rates for General Employees, Forensic Professionals, Firefighters and Police Officers
were used in accordance with the following illustrative example.
General All Other
Age Employees Employees
20 0.00% 0.02%
25 0.01% 0.02%
30 0.01% 0.04%
35 0.01% 0.04%
40 0.02% 0.04%
45 0.04% 0.04%
50 0.08% 0.07%
55 0.16% 0.07%
60 0.21% 0.07%
65 0.04% 0.07%
The disability assumptions are the disability assumptions used in the July 1, 2020 FRS Actuarial Valuation.
G R
City of Winter Springs Defined Benefit Plan 43
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.
1. For Forensic Professionals, Police Officers and Firefighters:
Years of Service
Age 0-9 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:
Years of Service
Awe
0-14 15-24 25 or more
Under 55 0% 0% 0%
55 -64 4% 18% 12%
65 and above 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.
J. Asset Valuation Method
The method used for determining the smoothed value of assets phases in the deviation between the expected
and actual return on assets at the rate of 20% per year. The smoothed 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.
QvCity of Winter Springs Defined Benefit Plan 44
Table X
(Cont'd)
Actuarial Assumptions and Actuarial Cost Methods
Used in the Valuation
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.
Vested Normal Retirement, Termination, Disability. and Death Benefits: Unit Credit Cost Method
Under this method, the actuarial present value of vested accrued benefits is an amount calculated to be the
sum of the present values of each individual's vested accrued or earned benefit under the Plan as of the
valuation date. Each individual's calculation is based on pay and service as of the valuation date.
L. Changes Since Previous Valuation
1. Mortality for Disabled participants were:
Firefighter, Police Officer and Forensic Professional participants:
80% PUB-2010 Headcount Weighted General Disabled Retiree Mortality Table / 20% PUB-2010
Headcount Weighted Safety Disabled Retiree Mortality Table, separate rates for males and females, with
fully generational mortality improvements projected to each future decrement date with Scale MP-2018.
General Employee participants:
PUB-2010 Headcount Weighted General Disabled Retiree Mortality Table, separate rates for males and
females, both set forward 3 years, with fully generational mortality improvements projected to each
future decrement date with Scale MP-2018.
2. Investment Return was:
7.50%, compounded annually, net of investment expenses- includes assumed inflation of 2.75%.
F�
City of Winter Springs Defined Benefit Plan 45
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Table XII
Statistics for Participants Entitled to Deferred Benefits
and Participants Receiving Benefits
A. Entitled to Deferred Benefits
Current Age Total Average
Group Count Annual Benefit Annual Benefit
Less than 40 23 $ 135,963 $ 5,911
40-44 27 286,656 10,617
45 -49 42 514,324 12,246
50-54 31 455,904 14,707
55 -59 21 124,432 5,925
60-64 15 91,013 6,068
65 -69 3 12,969 4,323
70-74 3 8,651 2,884
75 &Over 2 2,389 1,195
TOTAL 167 $ 1,632,301 $ 9,774
B. Receiving Benefits
Current Age Total Average
Group Count Annual Benefit Annual Benefit
Less than 50 2 $ 18,664 $ 9,332
50-54 3 128,166 42,722
55 -59 27 1,042,357 38,606
60-64 33 1,438,816 43,600
65 -69 24 619,470 25,811
70-74 24 493,818 20,576
75 -79 12 244,854 20,405
80-84 4 71,653 17,913
85 &Over 2 11,912 5,956
TOTAL 131 $ 4,069,710 $ 31,066
R
City of Winter Springs Defined Benefit Plan 51
Table XIII
Reconciliation of Employee Data
A. Active Participants
1. Active participants previous year 73
2. Retired during year (6)
3. Died during year 0
4. Disabled during year 0
5. Terminated non-vested during year (3)
6. Terminated vested during year (4)
7. New active participants 14
8. Out on military leave 0
9. Rehired during year 0
10. Transferred to DC Plan 0
11. Active participants current year 74
B. Participants Receiving Benefits
1. Participants receiving benefits previous year 125
2. New retired participants 6
3. New DRO recipient 0
4. New terminated vested receiving benefits 4
5. New beneficiaries receiving benefits 0
6. Died or ceased payment during year (4)
7. Retired or terminated vested receiving benefits current year 131
C. Terminated Vested Participants Entitled to Future Benefits
1. Terminated vested entitled previous year 167
2. Died during year 0
3. Commenced receiving benefits during year (4)
4. New terminated vested 4
5. Terminated vested refunded employee contributions 0
6. Rehired 0
7. Terminated vested entitled current year 167
F�
City of Winter Springs Defined Benefit Plan 52
Table XIV
Projected Retirement Benefits
Projected Total
Fiscal Year Ending Annual Payout
2021 $ 4,255,076
2022 $ 4,489,777
2023 $ 4,716,130
2024 $ 4,836,142
2025 $ 4,947,919
2026 $ 5,155,982
2027 $ 5,391,902
2028 $ 5,519,056
2029 $ 5,671,020
2030 $ 5,659,974
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.
F�
City of Winter Springs Defined Benefit Plan 53
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Table XVI
Actuarial Valuation as of October 1, 2020
State Required Exhibit
Prior Current
Assumptions Assumptions
10/01/2019 10/01/2020 10/01/2020
A. Participant Data
1. Active participants 73 74 74
2. Retired participants and beneficiaries
receiving benefits 125 131 131
3. Disabled participants receiving benefits 0 0 0
4. Terminated vested participants 167 167 167
5. Annual payroll of active participants $ 4,325,321 $ 4,236,443 $ 4,236,443
6. Annual benefits payable to those currently
receiving benefits $ 3,580,657 $ 4,069,710 $ 4,069,710
B. Value of Assets
1. Smoothed Value $ 54,759,146 $ 58,929,456 $ 58,929,456
2. Market Value $ 54,713,697 $ 58,544,989 $ 58,544,989
C. Liabilities
1. Actuarial present value of future expected
benefit payments for active members
a. Retirement benefits $ 15,880,274 $ 13,888,062 $ 14,120,281
b. Vesting benefits 1,491,393 1,409,700 1,440,316
c. Death benefits 318,959 258,264 262,530
d. Disability benefits 149,343 133,225 129,076
e. Total $ 17,839,969 $ 15,689,251 $ 15,952,203
2. Actuarial present value of future expected benefit
payments for terminated vested members $ 10,987,664 $ 9,998,885 $ 10,143,331
3. Actuarial present value of future expected benefit
payments for members currently receiving benefits
a. Service retired $ 36,340,974 $ 41,696,930 $ 42,049,921
b. Disability retired 0 0 0
c. Beneficiaries 1,977,579 1,765,246 1,778,248
d. Miscellaneous (Refunds in Process) 104,893 118,808 118,808
e. Total $ 38,423,446 $ 43,580,984 $ 43,946,977
City of Winter Springs Defined Benefit Plan 56
Table XVI
(Cont'd)
Actuarial Valuation as of October 1, 2020
State Required Exhibit
Prior Current
Assumptions Assumptions
10/01/2019 10/01/2020 10/01/2020
4. Total actuarial present value of future
expected benefit payments $ 67,251,079 $ 69,269,120 $ 70,042,511
5. Actuarial accrued liabilities $ 64,659,208 $ 66,636,808 $ 67,328,099
6. Unfunded actuarial accrued liabilities $ 9,900,062 $ 7,707,352 $ 8,398,643
D. Statement of Accumulated Plan Benefits
1. Actuarial present value of accumulated vested
benefits
a. Participants currently receiving benefits $ 38,318,553 $ 43,462,176 $ 43,828,169
b. Other participants 22,281,079 19,595,762 19,872,143
c. Total $ 60,599,632 $ 63,057,938 $ 63,700,312
2. Actuarial present value of accumulated non-
vested plan benefits 274,181 155,350 157,702
3. Total actuarial present value of accumulated
plan benefits $ 60,873,813 $ 63,213,288 $ 63,858,014
E. Pension Cost
1. Total normal cost $ 470,973 $ 413,741 $ 423,391
2. Payment required to amortize unfunded liability 934,804 741,387 790,747
3. Interest adjustment 62,121 50,735 52,731
4. Total required contribution $ 1,467,898 $ 1,205,863 $ 1,266,869
5. Item 4 as a percentage of base payroll 33.9% 28.5% 29.9%
6. Estimated employee contributions $ 216,266 $ 211,822 $ 211,822
7. Item 6 as a percentage of base payroll 5.0% 5.0% 5.0%
8. Net amount payable by County and City $ 1,251,632 $ 994,041 $ 1,055,047
9. Item 8 as a percentage of base payroll 28.9% 23.5% 24.9%
Q; City of Winter Springs Defined Benefit Plan 57
Table XVI
(Cont'd)
Actuarial Valuation as of October 1, 2020
State Required Exhibit
Prior Current
Assumptions Assumptions
10/01/2019 10/01/2020 10/01/2020
F. Past Contributions
1. Total contribution required (previous valuation) $ 1,607,100 $ 1,467,898 $ 1,467,898
2. Actual contributions made:
a. Members $ 217,975 N/A N/A
b. City and County 3,213,927 N/A N/A
c. Total $ 3,431,902 N/A N/A
G. Disclosure of Following Items:
1. Actuarial present value of future salaries
-attained age $ 29,745,186 $ 30,453,560 $ 30,622,636
2. Actuarial present value of future employee
contributions-attained age $ 1,487,259 $ 1,522,677 $ 1,531,132
3. Actuarial present value of future contributions
from other sources N/A N/A N/A
4. Amount of active members'accumulated
contributions $ 2,168,580 $ 1,959,373 $ 1,959,373
5. Actuarial present value of future salaries and
future benefits at entry age N/A N/A N/A
6. Actuarial present value of future employee
contributions at entry age N/A N/A N/A
City of Winter Springs Defined Benefit Plan 58
Table XVI
(Cont'd)
State Required Exhibit
Amortization balances are written down in proportion to amortization payments.
Prior Current
Current Assumptions Assumptions Remaining
Unfunded Amortization Amortization Funding
Unfunded Actuarial Accrued Liabilities Liabilities Payment Payment Period
10/01/2000 Initial $ 568,228 $ 77,007 $ 76,727 10 years
10/01/2002 Assumption Change (8,682) (1,044) (1,040) 12 years
10/01/2003 Plan Amendment 58,744 6,725 6,694 13 years
10/01/2004 Plan Amendment 94,333 10,337 10,286 14 years
10/01/2005 Plan Amendment 205,407 21,647 21,532 15 years
10/01/2006 Plan Amendment 246,700 25,104 24,964 16 years
10/01/2007 Plan Amendment 262,200 25,854 25,703 17 years
10/01/2008 Plan Amendment and Assumption Change 1,216,961 116,635 115,918 18 years
10/01/2008 Method Change 2,720,093 260,696 259,095 18 years
10/01/2009 Actuarial Loss/(Gain) 1,197,911 111,891 111,174 19 years
10/01/2010 Actuarial Loss/(Gain) (227,351) (20,745) (20,607) 20 years
10/01/2010 Plan Amendment (1,318,120) (120,277) (119,474) 20 years
10/01/2011 Actuarial Loss/(Gain) 1,475,894 131,841 130,929 21 years
10/01/2012 Actuarial Loss/(Gain) 508,890 44,587 44,267 22 years
10/01/2013 Actuarial Loss/(Gain) (404,143) (34,788) (34,531) 23 years
10/01/2014 Actuarial Loss/(Gain) (437,809) (37,081) (36,799) 24 years
10/01/2014 Assumption Change 4,113 348 346 24 years
10/01/2015 Actuarial Loss/(Gain) (178,546) (14,900) (14,783) 25 years
10/01/2016 Actuarial Loss/(Gain) (868,542) (71,503) (70,928) 26 years
10/01/2016 Assumption Change 301,051 24,784 24,585 26 years
10/01/2017 Actuarial Loss/(Gain) (442,020) (35,938) (35,642) 27 years
10/01/2017 Assumption Change 1,601,663 130,222 129,149 27 years
10/01/2018 Actuarial Loss/(Gain) 212,370 17,070 16,926 28 years
10/01/2019 Actuarial Loss/(Gain) 401,033 31,895 31,621 29 years
10/01/2019 Assumption Change 391,550 31,141 30,873 29 years
10/01/2020 Actuarial Loss/(Gain) 125,424 9,879 9,792 30 years
10/01/2020 Assumption Change 691,291 N/A 53,970 30 years
TOTAL $ 8,398,643 $ 741,387 $ 790,747
This Actuarial Valuation and/or cost determination was prepared and completed by us or under our direct supervision, and we acknowledge
responsibility for the results. To the best of our knowledge, the results are complete and accurate, and in our 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.
V pQ
Shelly L.Jones,A.S.A., E.A. Jennifer M. Borregard, E.A.
Enrollment Number: 20-08646 Enrollment Number: 20-07624
Dated: May 24,2021
City of Winter Springs Defined Benefit Plan '59
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. 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.
Qv
City of Winter Springs Defined Benefit Plan 60
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 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.
GASB. Governmental Accounting Standards Board.
kCGf S
City of Winter Springs Defined Benefit Plan 61
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.
Vested Benefit Security Ratio. The ratio of the Market Value of Assets to the Actuarial Present Value
of Vested Accrued Benefits.
%�G_R
�IrKCity of Winter Springs Defined Benefit Plan 62