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Home My WebLink About2009 10 27 Regular 603 Distributed For Board Of Trustees During Bolton Parners Inc.'s PresentationDate: October 27, 2009 This document was distributed to the Board of Trustees at the October 27, 2009 Regular Meeting during Regular Agenda Item 603. Bolton Partners, Inc. Presentation for City of Winter Springs Pension Plan Actuarial Services Proposal October 27, 2009 AW46 P artners m a r Independent Actuarial and Benefits Consulting Firm Founded in 1981 Offices: Baltimore, MD; Washington, Boca Raton, FL •Public Plan Specialists DC National Leader in the Actuarial Industry Bolton Partners, Inc. Society of Actuaries Pension Research Committee Former Chair of Committee Actuarial Standards Board Pension American Academy of Actuaries Committees Society of Certified Employee Benefits Specialist Florida Public Pension Trustees Association Florida GFOA Technical Research Committee Consultant to EEOC, US Treasury and the Federa Pension Benefit Guaranty Corporation Bolton Partners, Inc. Robert G. Bolton, FSA, EA Senior Consulting Actuary and Managing Director Over 30 Years Public Sector Experience Thomas B. Lowman, FSA, EA Chief Actuary and Director of Retirement Plar Practice Over 30 Years Public Sector Experience Bolton Partners, Inc. LW- W�._ j Jeffrey A. DeLisle Senior Benefit Consultant Public Plan Specialist 30 Years Experience a Director and Consult Ann Sturner, FSA, EA Senior Consulting Actuary Over 21 Years Actuarial Experience in both and Private Sectors Bolton Partners, Inc. Florida East Naples Fire Control District Fort Myers Shores Fire District Hallandale Beach Police and Fire North Fort Myers Fire Rescue N. Palm Beach County Improvement District Palm Beach Gardens City of Cocoa Town of Cutler Bay Palm Harbor Fire Rescue Florida Professional Fire Fighters Jacksonville Transportation Authority City of Pompano Beach City of West Palm Beach Maryland Anne Arundel County Baltimore City Howard County Bolton Partners, Inc. Other States Prince William County, VA Washington, DC Pittsburgh, PA Milwaukee, WI San Jose, CA National Education Assoc; Ohio Other Significant Actuarial Clients North Miami Beach Police and Fire City of Melbourne City of Fort Lauderdale Federal: Pension Benefit Guaranty Corporation (PBGC); US Treasury Society of Actuaries DROP Study 11LL J. VVVVVV.I I Q.�I Q.VI r,/ I 1 UaVU1 C5 /SOA ROPdesiQn.pdf :I11011 Wiffe 91:1d[:,olKw Our Winter Springs Pension Team includes only the highest level of actuarial achievement: All three lead actuaries are Fellows of the Society of Actuaries (FSA) and are also Enrolled Actuaries (EA) licensed by a Joint Federal Committee of the Department of Treasury and the Department of Labor. 1 Dui Our Winter Springs valuation will be produced and signed by an FSA -EA; not an associate or a newbie. Focused on solutions and results for our client: The Board of Trust Consulting Principles: Knowing our Client, Expectation Setting anc Surprises Philosophy: Always Act with Honesty, Integrity and Competence Virtually No Client or Staff Turnover Consistent Quality Reputation for the Highest Quality and Integrity of Work An affinity for public plans; we care. Bolton Partners, Inc. k A Ahl�arKOK� MWAh New Emphasis on Risk Market Losses Mark -to- Market Debate .2 Bolton Partners, Inc. 8 !I:S��1�1N�1�1�1�[• DJ= Range of Contribution Rates of Pay) 30.00 ez 25.00 O 20.00 .F+ ez �4 15.00 O 10.00 5.00 O i 1 11 Current Policy Mix A Mix P Mix C Mix D Mix E Bolton Partners, I Year 3 Year 5 Year 10 95th 75th 50th 25th 5th Current Policy Mix A Mix P Mix C Mix D Mix E Bolton Partners, I A Second View of Risk (EFI) i 4 MTA IUTATK• Fisk Metric 'Pension EverYt Horizor7' nay ■t LYWE rtrb• df. "aitirEr bwa or m a-pl— krqmwc mM.LwYLw.a NANA. Rnbh R.-rd Ah Prooad fka k Nie#rla: Prob[ °Penelon Ear &nt Horizon'l 5% BaWlne PUn: NG 12 so m -34mum UkAL% Is 241%. Terwk n E Yerrt Hor1 mn' L4A61 576% d payrdl A plan is IffaveM wtren (here are h&WWent ass.eis to mee' benefit payrnerris, ho Never munentium tad Insdtiemy is eetOlsM mwb idler. We Wffl e the Pen slap Event I-ia ftzm' as the point at YM k#i the plan W r" s nmdnnfn finable fixrtrdutlon Is InsMick2nt 1a pay narnrat cost and arnartize the tnlunded IM 14 aa+er a Mite period. We Oil a s* u me that the nuW rn u'n uvA n able pen slop florM Mon rai LL Is 36%. Ah .F 9 [ton Partners 4 k nay ■t LYWE rtrb• df. "aitirEr bwa or m a-pl— krqmwc mM.LwYLw.a NANA. Rnbh R.-rd Ah Prooad fka k Nie#rla: Prob[ °Penelon Ear &nt Horizon'l 5% BaWlne PUn: NG 12 so m -34mum UkAL% Is 241%. Terwk n E Yerrt Hor1 mn' L4A61 576% d payrdl A plan is IffaveM wtren (here are h&WWent ass.eis to mee' benefit payrnerris, ho Never munentium tad Insdtiemy is eetOlsM mwb idler. We Wffl e the Pen slap Event I-ia ftzm' as the point at YM k#i the plan W r" s nmdnnfn finable fixrtrdutlon Is InsMick2nt 1a pay narnrat cost and arnartize the tnlunded IM 14 aa+er a Mite period. We Oil a s* u me that the nuW rn u'n uvA n able pen slop florM Mon rai LL Is 36%. Ah .F 9 [ton Partners D[]p4-;tl EMPLOYER CONTRIBUTION VALVE FROM :a a 101T.TAff• INVESTMENT EARNINGS a ors 2 purvey 7.01 -7.25% 6 3.68% OT 21 ►umptions 7.51 -7.75% 18 11.04% 7.76 -8.00% 74 fc 8.01% -8.25% n 1 $10% V% Oft 22 13.50% 8.50% 5 3.07% 7.00% or less 2 1.23% 7.01 -7.25% 6 3.68% 7.26 -7.50% 21 12.88% 7.51 -7.75% 18 11.04% 7.76 -8.00% 74 45.40% 8.01% -8.25% 15 9.20% 8.26 -8.50% 22 13.50% 8.50% 5 3.07% Sample Size 163 100.00% on Partners,-TW. i SHrvev n Assumptions for Small F 10 Rate Count Percent 7.00% or less 20 23.81% 7.01 -7.25% 0 0.00% 7.26 -7.50% 29 34.52% 7.51% -7.75% 3 3.57% 7.76 -8.00% 29 34.52% 8.01 -8.25% 0 0.00% 8.26 -8.50% 3 3.57% 8.50% 0 0.00% Sample Size 84 100.00% Bolton Partners, Inc. 14 Our $16,000 base fee covers the following: Actuarial Valuation and SPD Preparation Based on $12,000 for annual actuarial valuation including one meeting with the Board and $4,000 for one SPD. Other services are estimated as follows: Benefits Administration Functions ($9,500 estimate) Based on $300 per benefit calculation (assuming 15 calculatioi backs per year) and $5,000 for annual benefit statements Ad hoc Calculations and Analysis ($4,000 estimate) The scope of services for individual projects will determine th fees based on the hourly rates shown in our proposal. Bolton Partners, Inc. Bolton Partners Otters AM :j No ependence Public Plan Specialists Industry Leadership Team Strength &Stability: Our actuaries are Fellows and are Enrolled. 1 Client Satisfaction: We clearly understand to whom we're employed; the Board of Trustees. On -time Delivery Favorable Pricing Bolton Partners certifies that we will not, at any time or for any reason, contract out any level of work to foreign entities. All work is anticipated to be completed by our Baltimore and Boca Raton offices. MI Bolton Partners, Inc. 16 We are offering the Fund an exceptional actuarial and consulting team with a broad depth of relevant experience. Our public plan experience allows us to get a quick and clear understanding of your plan. And we'll translate that to you in the clearest of terms; no "mumbo jumbo" here. Moreover, our team will provide the Winter Springs Pension Board Trustees with the advantage of our qualified perspective and a frE and independent look at your plan and its complexities. Finally, we want the Winter Springs Pension Plan as our client and pledge our dedication, integrity and efforts to meeting all fiduciar responsibilities; as well as, the plan's important mission. Your consideration and vote is appreciated. Thank you. mmmq 46 Bolton Partners, Inc.