HomeMy WebLinkAbout2009 01 27 Corresponds with Regular 600 GASB Report for the Plan Year Ended 093008~r/
~,~ Retirement Plan Specialists, Inc.
~~ Employee Benefits Administrators, Actuaries & Consultants
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Oviedo, Florida 32765-8602 407-366-5154 (fax)
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December 4, 2008
Eldon McDirmit
McDirmit Davis & Company, LLC
P.O. Box 1185
Orlando, FL 32802-1185
Re: City of Winter Springs -Defined Benefit Plan
Dear Mr. McDirmit:
Per the request of Ronald W. McLemore, City Manager of the City of Winter Springs,
we are providing you with the October 1, 2007 through September 30, 2008 Actuarial Valuation and
Annual Report containing the GASB Statements Number 27.
If you need assistance or have any questions, please call.
Sincerely,
~~~~
y,
Sandra R. Turner, CPC, QPA
enclosures
ec: Ronald W. McLemore
IRS Circular 230 Notice:
To ensure compliance with requirements imposed by the IRS, we inform you that any US pension tax advice contained in this communication
(including any attachments) is not intended to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue
Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.
CITY OF WINTER SPRINGS
DEFINED BENEFIT PENSION PLAN
GASB REPORT
for the Plan Year Ended
September 30, 2008
December 4, 2008
Prepared By
Retirement Plan Specialists, Inc.
Employee Benefits Administrators, Actuaries & Consultants
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
TABLE OF CONTENTS
Paae
Part I GASB Summary
Part II Actuarial Value of Assets
Part III Balance Statement
Part IV Actuarial Method and Assumptions
Part V Summary of Plan Provisions 8
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
PART I
ANNUAL PENSION COST AND NET PENSION OBLIGATION
(GASB Statement No. 27)
Employer Fiscal Year End September 30:
A. Annual Required Contribution (ARC)
B. Interest on Net Pension Obligation (NPO)
C. Adjustment to ARC
D. Annual Pension Cost (A + B - C)
E. Actual Contributions
F. NPO at beginning of year
G. Increase (decrease) in NPO (D-E)
H. NPO at end of year (F + G)
2006 2007 2008
$1,564,228 $1,807,722 $2,005,100
(2,063) 2,508 5,505
0 0 0
$1,562,165 $1,810,230 $2,010,605
$1,505,020 $1,772,766 $1,922,570
(25,791) 31,354 68,818
57,145 37,464 88,035
$31,354 $68,818 $156,853
THREE YEAR TREND INFORMATION
Fiscal Year
Endin
Annual Pension
Cost APC
Actual
Contribution Percentage of
APC
Contributed
Net Pension
Obli ation
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
9/30/08 2,010,605 1,922,570 95.6% 156,853
2
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
DISCLOSURE INFORMATION PER STATEMENT NO. 25 OF THE
GOVERNMENTAL ACCOUNTING STANDARDS BOARDS
SCHEDULE OF FUNDING PROGRESS
(GASB Statement No. 25)
Actuarial UAAL as %
Accrued of
Actuarial Liability Unfunded Covered
Actuarial Value of (AAL) AAL Payroll
V
l
ti
a
ua
on Assets -Entry Age (UAAL) Funded Covered (b-a)/c
Date (a) (b) (b-a) Ratio(a/b) Payroll (c)
10/1 /05 $9,716,089 $13,178,485 $3,462,396 73.7% $9,659,446 35.8%
10/1 /06 $1 1,951,383 $16,042,749 $4,091,366 74.5% $10,489,087 39.0%
10/1 /07 $15,526,572 $20,114,326 $4,587,354 77.2% $1 1,190,013 41.0%
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
2006 $1,564,228 $1,505,020 96%
2007 $1,807,722 $1,772,766 98%
2008 $2,010,605 $1,922,570 96%
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.
3
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
PART II
ACTUARIAL VALUE OP ASSETS
The Long Range Yield Method of asset valuation is described in the actuarial assumptions and is
determined as follows:
1. Actuarial value of assets, October 1, 2006
2. Contributions during year (includes buy back deposits)
3. Disbursements during year
4. Interest to September 30, 2007 at 8%
5. Tentative value, as of September 30, 2007
_ (1) + (2) + (3) + (4)
6. Market value of assets, September 30, 2007
7. Excess of market value over tentative value as of
September 30, 2007 = (6) - (5)
8. Deferred investment gain (loss) not yet
recognized as of September 30, 2007
A. 2003: ($856,508) x .20 = $171,301)
B. 2004: $237,999 x .40 = $ 95,200
C. 2005: $1,206,666 x .60 = $724,000
D. 2006: $1,734,904 x .80 = $1,387,923
E. Total
9. Deferred investment gain (loss) recognized
for 2007: 20% x [(7)]
10. Deferred investment gain (loss) recognized during
A. 2003: ($171,301)
B. 2004: $47,600
C. 2005: $241,333
D. 2006: $346,980
E. Total
$1 1,951,383
1,843,147
(233,952)
1,020,477
$14,581,055
$16,985,582
2,404,527
$2,035,822
$480,905
$464,612
1 1. Actuarial Value of Assets as of
September 30, 2007 = (5) + (9) + (10) $15,526,572
* Approximate rate of return on Actuarial Value of Assets for period ending September 30, 2007 is
15.4%.
4
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
PART III
City of Winter Springs
Pension Plan
FOR THE PERIOD ENDED SEPTEMBER 30, 2008
BALANCE STA'TEMEN'T
September 30, 2007 September 30, 2008
ASSETS
Suntrust
Cash
Short Term Investments
Bonds
Common Stocks
Fifth Third Bank
Money Market
Cash
Bonds
Equity
Other
Total Assets
$ -
$ 16,915,200.90
$ -
$ -
$ 70,381.00
$ 0.59
$ -
$ -
$ -
$ 16,985,582.49
$ -
$ -
$ -
$ 702,752.00
$ (27,528.11)
$ 978,244.10
$ 7,955,189.95
$ 5,932,089.19
$ 15,540,747.13
Period End Plan Value $ 16,985,582.49 $ 15,540,747.13
Beginning Balance
INCOME
Employer Contributions $ 1,643,796.75
Employee Contributions $ 365,288.24
Total Contributions
Interest & Dividends $ 227,950.36
Realized Gain/Loss $ (561,035.08)
Unrealized Gain/Loss $ (2,666,904.20)
Total Gain/Loss
TOTAL INCOME
EXPENSES
Distributions $ (384,481.47)
Total Distributions
Bank Fees $ (69,449.96)
Total Fees
TOTAL EXPENSES
$ 16,985,582.49
$ 2,009,084.99
$ (2,999,988.92)
$ (990,903.93)
$ (384,481.47)
$ (69,449.96)
$ (453,931.43)
PERIOD END PLAN VALUE $ 15,540,747.13
5
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, 2007 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 was 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. Assumed Retirement Age
d. Normal Form
e. Benefit Level
f. Salary Projections
g. Termination Forfeitures
h. Expenses
i. Asset Basis
8 %, compounded annually.
1983 Group Annuity male rate table, with ages
of women set back two years.
Later of age 60 or 10 years of service on the
valuation date. A 1.5% expense load is added
to make allowance for 30 year unreduced
benefit provision with LTD disability program.
Life Annuity with payments for the life of the
participant.
Effective October 1, 2000, 2.75% of average
earnings for year's pre October 1, 2000 and 3%
of average earnings for each year of service
after October 1, 2000.
Current salaries are assumed to increase 3% per
year.
Assumed to occur at rates approximating
1 1.62% at age 25 graded down to .l 6% at age
60 and over. (T-8 withdrawal table)
Assumed that the City will reimburse the Fund
for actual expenses paid.
Long Range Yield Method of asset valuation as
explained on the following page.
6
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.
7
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
PART V
SUMMARY OF PLAN PROVISIONS
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 1, 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 65T" birthday
Alternative Normal Retirement: If a participant has 30 years of service and is determined to be
disabled under the City's long term disability insurance policy, the accrued benefit is payable without
actuarial reduction regardless of age.
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 2.75 % of Average Compensation multiplied by years of service
completed prior to October 1, 2000 effective October 1, 2007;
(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.
8
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%
S 60%
6 80%
7 100%
9
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 13% of compensation for the Plan Year beginning October 1,
2007.
The total City and participant contribution as a percentage of compensation is 16%.
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/s rds of the amount, or'/2 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.
10