HomeMy WebLinkAboutGASB Report for Plan Year Ended Septenber 30, 2007
CITY OF WINTER SPRINGS
DEFINED BENEFIT PENSION PLAN
GASB REPORT
for the Plan Year Ended
September 30, 2007
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December 3, 2007
Prepared By
Retirement Plan Specialists, /nc
Employee Benefits Adminisfrators, Actuaries & Consultants
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CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
TABLE OF CONTENTS
Paae
Part I GASB Summary 2
Parf II Actuarial Vplue of Assets q
Part III Balance Statement 5
Part IV Actuarial Method and Assumptions 6
Part V Summary of Plan Provisions g
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CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
PART 1
ANNUAL PENSION COST AND NET PENSION OBLIGATION
(GASB Statement No. 27)
Employer Fiscal Year End September 30: 2007 2006 2005
A. Annual Required Contribution (ARC) $1,807,722 $1,564,228 $1,424,101
B. Interest on Net Pension Obligation (NPO) 2,508 (2,063) (14,020)
C. Adjustment to ARC 0 0 0
D. Annual Pension Cost (A + B - C) $1,810,230 $1,562,165 $1,410,081
E. Actual Contributions $1,772,766 $1,505,020 $1,260,626
F. NPO at beginning of year 31,354 (25,791) ($175,246)
G. Increase (decrease) in NPO (D-E) 37,464 57,145 149,455
H. NPO at end of year (F + G) $68,818 $31,354 ($25, 791)
THREE YEAR TREND INFORMATION
Fiscal Year
Endin
Annual Pension
Cost (APC
Actual
Contribution Percentage of
APC
Contributed
Net Pension
Obli ation
9/30/05 1,410,081 1,260,626 89.4% (25,791)
9/30/06 1,562,165 1,505,020 96.3% 31,354
9/30/07 1,810,230 1,772,266 97.9% 68,818
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CITY OF WINTER SPRINGS DEFINED BENEFIT al ont
DISCLOSURE INFORMATION PER STATEMENT N0.25 OF 7HE
GOVERNMENTAL ACCOUNTING STANDARDS BOARDS
SCHEDULE OF FUNDING PROGRESS
(GASB Statement No. 25)
Actuarial UAAL as
Accrued of
A
t Actuarial Liability Unfunded Covered
c
uarial Value of
(AAL)
AAL
P
Valuation Assets
(UAAL
C
d ayroll
Date (°) -Entry Age ) Funded overe (b-a)/c
(b) (b-a) Ratio(a/b) Payroll (c)
10/1/04 $8,134,588 10,931,774 $2,797,186 74.4% $8,982,189 31.1%
10/1/05 $9,716,089 13,178,485 $3,462,396 73.7% $9,659,446 35.8%
10/1 /Ob $1 1,951,383 $16,042,749 $4,091,366 74.5% $10,489,087 39.0%
The schedule provided above has been prepared in accordance with the requirements of
Paragraph 37 of Statement No. 25 of the Governmental Accounting Standards Board
SCHEDULE OF EMPLOYER CONTRIBUTIONS
(GASB Statement No. 25)
Year Ended
September 30 Annual
Required
Contribution Actual
Contribution Percentage
Contributed
2005 $1,424,101 $1,260,627 89%
2006 $1,564,228 $1,505,020 96%
2007 $1,807, 722 $1,772,766 98~
The schedule provided above has been prepared in accordance with the requirements
of Paragraph 38 of Statement No. 25 of the Governmental Accounting Standards Board.
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CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
PART II
ACTUARIAL VALUE OF ASSETS
The Long Range Yield Method of asset valuation is described in the actuarial assum ptions and is
determined as follows:
1. Actuarial value of assets, October 1, 2005 $9,716,089
2. Contributions during year (includes buy back deposits)
1,505,020
3. Disbursements during year (256,037)
4. Interest to September 30, 2006 at 8% 827,246
5. Tentative value, as of September 30, 2006
- (1) + (2) + (3) + (4) $1 1,792,318
6. Market value of assets, September 30, 2006 $13,527,222
7. Excess of market value over tentative value as of
September 30, 2006 = (6) - (5) 1,734,904
8. Deferred investment gain (loss) not yet
recognized as of September 30, 2006
A. 2002: ($1,527,731) x .20 = ($305,546)
B. 2003: ($856,508) x .40 = ($342,603)
C. 2004: $237,999 x .60 = $142,799
D. 2005: $1,206,666.80 x .80 = $965,332
E. Total
$459,982
9. Deferred investment gain (loss) recognized
for 2006: 20% x [(7)] 346,980
10. Deferred investment gain (loss) recognized during
A. 2002: ($305,546)
B. 2003: ($171,302)
C. 2004: $47,600
D. 2005: $241,333
E. Total
($187,915)
1 1. Actuarial Value of Assets as of
September 30, 2006 = (5) + (9) + (10) $1 1,951,383
* Approximate rate of return on Actuarial Value of Assets for period ending September 30, 2006 is 9.5%.
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CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
PART III
City of Winter Springs
Pension Plan
FOR THE PERIOD ENDED SEPTEMBER 30, 2007
- , : _.. _
- - _ .. _.
September 30, 2006 September 30, 2007
ASSETS
Cash $ (304,974.04) $ _
Short Term Investments $ 339,293.72 $ 16,915,200.90
Bonds $ 2,066,269.27 $ _
Common Stocks $ 11,426,633.13 $ -
Total Assets $ 13,527,222.08 $ 16,915,200.90
_ . - ~ Q!~~iixi ~ttd~~'h~ Value ` - _ ~° $ 13,527.222.08 $ 16,915,200.90 = -
_` INCOME STATEIIiIE~V[
Beginning Balance $ 13,527,222.08
INCOME
Employer Contributions
Employee Contributions
Total Contributions
Interest & Dividends
Realized GainlLoss
Unrealized GaiNLoss
Total t,ainlLoss
TOTAL INCOME
EXPENSES
Distributions
Total Distributions
Suntrust Fees
Total Fees
TOTAL EXPENSES
$ 1,434,904.67
$ 337,861.35
$ 154,462.00
$ 4,311,510.98
$ (2,493,610.27)
$ (233,952.60
$ (123,197.31)
$ 1, 772, 766.02
$ 1,972,362.71
$ 3,745,128.73
$ (233,952.60)
$ (123,197.31)
$ (357,149.91)
PEI21.Qp I"NR PLAN, VALUE $ 16.915,200'90
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CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
PART IV.
ACTUARIAL METHOD AND ASSUMPTIONS
We have calculated the costs and liabilities for the actuarial valuation of the City of Winter Springs
Defined Benefit Plan as of October 1, 2006 using the Aggregate Entry Age Normal Frozen Initial Liability
Cost Method, and have analyzed the results. The employee data and the financial information relied on
for the report were provided by the Employer and the SunTrust Trust and Investment Services. To the best
of our knowledge, the information provided is complete and accurate. The actuarial assumptions used
are as follows:
a. Long Term Net Investment Return
b. Mortality
c. Retirement Age
d. Normal Form
8 %, compounded annually.
1983 Group Annuity male rate table, with ages
of women set back two years.
Later of age 60 with 10 years of service or age
on the valuation date.
Life Annuity with payments for the life of the
participant.
e. Benefit Level Effective October 1, 2000, 2.5% of average
earnings for years pre October 1, 2000 and 3%
of average earnings for each year of service
after October 1, 2000.
f. Salary Projections
g. Termination Forfeitures
h. Expenses
i. Ass?t Basis
Current salaries are assumed to increase 3% per
year.
Assumed to occur at rates approximating
t 1.62% at age 25 graded down to .16% at age
60 and over. (T-8 withdrawal table)
Assumed that the City will reimburse the Fund
far actual expenses paid.
Long Range Yield Method of asset valuation as
explained on the following page.
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CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
Long Range Yield Asset Valuation Method
The actuarial value of assets is determined as follows:
(A) A tentative asset value is determined. This value is equal to the actuarial value of assets on the
preceding valuation date multiplied by the valuation rate of interest plus the excess of
contributions over disbursements during the preceding Plan Year with interest at the valuation rate
from date of payment to end of year.
(B) The excess of market value over tentative value is determined.
(C) For the first actuarial valuation in which the long range yield method is applied, the actuarial
value of assets is (A) plus awrite-up equal to 20% of (B). An identical write-up is made in
determining the actuarial value of assets in each of the next four years, thus fully recognizing (B)
with five write-ups of equal amount.
(D) On the next actuarial valuation, the actuarial value of assets is (A) plus the write-up of the previous
year, plus an additional write-up equal to 20% of the excess of (B) on the valuation date over 80%
of (B) on the preceding valuation date. A write-up identical to this additional write-up is also
made in each of the next four years.
(E) Each subsequent valuation includes (A), plus applicable write ups for previous years, plus an
additional write up equal to 20% of the excess of (B) on the valuation date over the sum of
portions of (B) for the previous years not yet fully recognized by prior write-ups.
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CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
PART V
SUMMARY OF PLAN PROVISIONS
1. History
The Plan was adopted as a Money Purchase Floor Offset plan on October 1, 1997. The Plan was
amended and restated as a Defined Benefit Plan effective October t, 2000. SunTrust Trust and
Investment Services is the investment medium. Valuations are made annually, as of October 1 each
year. The latest amendment to the Plan was effective October 1, 2004.
2. Eligibility: Continuous Service and Participation Service
Each employee working more than 29 hours per week is eligible to join the Plan on the first day of the
month following completion of 6 months of service.
3. Normal Retirement
The first day of the calendar month following the 65~~~ birthday
4. Normal Form of Pension
The normal form of pension is a life annuity with monthly payments commencing on the participant's
retirement date
5. Retirement Benefit
The yearly amount of pension a participant will receive is equal to the sum of (a) and {b), but for years
not greater than (c) below:
(a) An amount equal to 2.5 % of Average Compensation multiplied by years of service
completed prior to October 1, 2000 effective October 1, 2006;
(b) For each year of service on and after October 1, 2000, 3 ~ of Average Compensation
multiplied by years of service after October 1, 2000.
(c} The maximum number of years of service for determining benefits is the first 30 years.
Average Compensation is the 3 highest consecutive compensation periods during
employment with the City.
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CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
SUMMARY OF PLAN PROVISIONS (continued)
6. Late Retirement
A Participant may elect a late retirement date any time after normal retirement date. The pension will
be the greater of the accrued benefit earned on the Late Retirement Date or the benefit earned at
the Normal Retirement Date actuarially increased to the Late Retirement Date.
7. Early Retirement
After age 55 and 10 years of service, a Participant is eligible for early retirement. The pension starting
immediately is the accrued benefit as of the early retirement date. The benefit will be paid monthly
for life.
If a participant has 25 years of service, the accrued benefit is not actuarially reduced. A participant
with 25 years of service may retire earlier than 55 with the benefit payable as the actuarial equivalent
of the benefit at age 55.
8. Death Benefit
The beneficiary is entitled to a death benefit equal to 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.
9. Disability Benefit
The plan does not provide for disability benefits. Disability benefits are provided under the City's long-
term disability program
10. Termination Benefit
A participant is 100% vested in the required participant contributions made under the plan. Required
participant contributions made after October 1, 2000 shall be included in the deferred vested benefit
payable at normal retirement date. All other non-forfeitable accrued benefits shall be determined by
the following vesting schedule upon termination.
Years of Service Percentage
Less than 3 years none
3 20%
4 40%
5 60%
6 80%
7 100%
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
SUMMARY OF PLAN PROVISIONS (continued)
11. Contributions
All participants are required to contribute 3 % of compensation
The City is contributing at the rate of 12% of compensation for the Plan Year beginning October 1,
2006.
The total City and participant contribution as a percentage of compensation is 15%.
12. Optional Forms of Payment
A participant may elect, in writing, to have the normal form of pension converted to an actuarially
equivalent optional form. These are (a) the joint and survivor annuity form in which the participant
receives a smaller amount monthly in return for the continuing payments to the named beneficiary in
the same amount, 2/3rds of the amount, or'/~ of the amount as designated as long as the beneficiary
may live after the death of the participant; (b) the life annuity form in which the participant receives
a lesser amount monthly in return for the guarantee of continuing payments for a certain year period,
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