HomeMy WebLinkAbout2011 03 31 Regular 600 Presentation And Acceptance of the 2010 Actuarial ValuationGabriel Roeder Smith & Company One East Bruward Blvd. 954.527.1616 phone
GRS C� & Actuarics Suite 505 954.525.0083 fax
Ft. i audeukle_ FL 33301 -1804 www.ga l►+�rlrnr irr_rnm
February 28, 2011
Mr. Shawn Boyle
Finance and Administrative Services Director
City of Winter Springs
1126 East State Road 434
Winter Springs, Florida 32708
Re: City of Winter Springs Defined Benefit Plan Actuarial Valuation
Dear Shawn:
As requested, we are pleased to enclose eleven (11) copies of the October 1, 2010
Actuarial Valuation Report for the City of Winter Springs Defined Benefit Plan.
We appreciate the opportunity to work with the City on this important project.
As you are aware, a copy of the Report should be filed with the State at the following
address upon approval by the Board.
Mr. Douglas E. Beckendorf, A.S.A.
Bureau of Local Retirement Services
Division of Retirement
Building 8
Post Office Box 9000
Tallahassee, Florida 32315 -9000
Ms. Patricia Shoemaker
Office of Municipal Police Officers'
& Firefighters' Pension Fund
Building 8
Post Office Box 3010
Tallahassee, Florida 32315 -3010
If you should have any questions concerning the above, please do not hesitate to contact us.
Sincerest regards,
C�f,,�
Lawrence F. Wilson, A.S.A.
Senior Consultant and Actuary
Enclosures
GRS Gabriel Roeder Smith &- Company
Consultants & Actuaries
CITY OF WINTER SPRINGS
DEFINED BENEFIT PLAN
ACTUARIAL VALUATION AS OF OCTOBER 1, 2010
This Valuation Determines the Annual Contribution for the Plan Year October 1, 2011 through September 30, 2012 to be
Paid in Plan Year October 1, 2011 to September 30, 2012
February 28, 2011
Gabriel Roeder smith & Company
City of Winter Springs
Defined Benefit Plan
Gabriel Roeder Smith & Company
TABLE OF CONTENTS
Page
Commentary
1
I.
Summary of Retirement Plan Costs ................................................. ...............................
4
II.
Comparison of Cost Data of Current and Prior Valuations ............. ...............................
6
III.
Characteristics of Participants in Actuarial Valuation ..................... ...............................
7
IV .
Statement of Assets .......................................................................... ...............................
8
V.
Reconciliation of Plan Assets .......................................................... ...............................
9
VI.
Actuarial Gains ( Losses) ................................................................ ...............................
11
VII.
Amortization of Unfunded Actuarial Accrued Liability ................ ...............................
12
VIII.
Accounting Disclosure Exhibit ...................................................... ...............................
13
IX.
Outline of Principal Provisions of the Retirement Plan ................. ...............................
17
X.
Actuarial Assumptions and Actuarial Cost Methods Used ............ ...............................
20
XI.
Distribution of Plan Participants by Attained Age Groups and Service Groups ..........
27
XIL
Statistics for Participants Entitled to Deferred Benefits and Participants
ReceivingBenefits ........................................................................ ...............................
31
XIII.
Reconciliation of Employee Data .................................................. ...............................
32
XIV.
Projected Retirement Benefits ....................................................... ...............................
33
XV.
Recent Plan Experience ................................................................. ...............................
34
XVI
State Required Exhibit ................................................................... ...............................
36
Gabriel Roeder Smith & Company
Gabriel Roeder Smith & Company One East Bro wd Blvd. 954.527.1616 phone
GRS Cam„ lt� 8c Actuaries suite 505 954.525.0083 fax
Ft. Laudcu W FL 33301 -1804 www.ga l►+�rlrnr irr_rnm
February 28, 2011
Board of Trustees
c/o Mr. Shawn Boyle
Finance and Administrative Services Director
City of Winter Springs Defined Benefit Plan
1126 East State Road 434
Winter Springs, Florida 32708
Dear Board Members:
October 1, 2010 Actuarial Valuation
We are pleased to present our October 1, 2010 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 Board
of Trustees 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 and the State Required
Exhibit on Table XVI. The Tables contain basic Plan cost figures plus significant details on the
benefits, liabilities and experience of the Plan. We suggest you thoroughly review the report at
your convenience and contact us with any questions that may arise.
Retirement Plan Costs
Our Actuarial Valuation develops the required minimum Plan payment for the plan year beginning
October 1, 2011 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 28.1% of covered payroll ($2,891,785). The figure in parentheses is
the Plan cost expressed as a dollar amount based on projected covered annual payroll for fiscal year
beginning October 1, 2011 ($10,304,054).
This total cost is to be met by member, County and City contributions. We anticipate member
contributions will be 2.7% of covered payroll for fiscal year ending September 30, 2012
($274,861). The resulting minimum required County and City contribution is 25.4% of covered
payroll for fiscal year ending September 30, 2012 ($2,616,924).
Board of Trustees
February 28, 2011
Page 2
Changes in Actuarial Assumptions, Methods and Plan Benefits
The Plan provisions are unchanged from the previous actuarial valuation. Plan provisions are
summarized on Table IX.
The actuarial assumptions and methods are unchanged from the previous actuarial valuation. The
actuarial assumptions and methods are outlined on Table X.
Comparison of October 1, 2009 and October 1, 2010 Valuation Results
Table H of our report provides information of a comparative nature. The left columns of the Table
indicate the costs as calculated for October 1, 2009. The right columns indicate the costs as
calculated for October 1, 2010.
Comparing the left and right columns of Table H shows the effect of Plan experience during the
year. The number of active participants decreased by approximately 5% while covered payroll
decreased by approximately 4 %. Total normal cost decreased as a dollar amount but increased as a
percentage of covered payroll. The unfunded actuarial accrued liability also decreased as a dollar
amount but increased as a percentage of covered payroll. Similarly, the net County and City
minimum funding requirement decreased as a dollar amount but increased as a percentage of
covered payroll.
The value of vested accrued benefits exceeds Plan assets, resulting in a Vested Benefit Security
Ratio (VBSR) of 65.8% which is an increase from 61.2% as of the October 1, 2009 Actuarial
Valuation. The VBSR is measured on a market value basis.
Plan Experience
The Plan experienced an actuarial gain in the amount of $521,732 this year. This indicates actual
overall Plan experience was more favorable than expected.
Table XV (salary, turnover and investment yield) provides figures on recent Plan experience.
Salary experience indicates actual salary increases averaged approximately 0.9% for General
Employees and 2.8% for Firefighters and Police Officers for the Plan Year ended September 30,
2010. Salary experience was generally a source of actuarial gain.
Employee turnover this year was 120% of the assumed turnover for General Employees and 170%
of the assumed turnover for Firefighters and Police Officers. Employee turnover was generally an
additional source of actuarial gain.
Gabriel Roeder Smith & Company
Board of Trustees
February 28, 2011
Page 3
The actuarial value investment return of 7.3% was less than the investment return assumption of
8.0 %. Investment return was an offsetting source of actuarial loss during the year. The three and
five year average annual actuarial value investment returns are 6.9% and 9.1% respectively. The
one, three and five year average annual market value returns are 12.0 %, -1.6% and 3.3 %,
respectively.
Member Census and Financial Data
The City submitted the Member census data used for this actuarial valuation to us. This
information contains name, Social Security number, date of birth, date of hire, October 1, 2010 rate
of pay, actual salary paid and member contributions for the previous year. Dates of termination and
retirement are provided where applicable. The Board updated information on inactive participants
including retirees, beneficiaries and vested terminees.
We used financial information concerning Plan assets as provided by the City. We do not audit the
Member census data and asset information that is provided to us. However, we perform certain
reasonableness checks and on this basis we believe that the information that we received is reliable.
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 undersigned are Members of the American Academy of Actuaries and meet the qualification
standards of the American Academy of Actuaries to render the actuarial opinions contained in this
report. We are available to respond to any questions with regards to matters covered in this report.
Very truly yours,
Lawrence F. Wilson, A.S.A.
Senior Consultant and Actuary
(A y
Peter N. Strong, A.S.A.
Consultant and Actuary
Gabrid Roeder Smith & Compmy
Table I
City of Winter Springs
Defined Benefit Plan
Summary of Retirement Plan Costs as of October 1, 2010
Cost % of
Data Payroll
A. Participant Data Summary (Table III)
1. Active Employees 210 N/A
2. Terminated Vested 98 N/A
3. Receiving Benefits (including DROPS) 51 N/A
4. Total Annual Payroll of Active Employees $ 10,304,054 100.0%
B. Total Normal Costs
1.
Age Retirement Benefits
$ 955,879
9.3%
2.
Termination Benefits
181,751
1.8%
3.
Death Benefits
28,671
0.3%
4.
Disability Benefits
10,249
0.1%
5.
Estimated Expenses
178,530
1.7%
6.
Total Annual Normal Costs
$ 1,355,080
13.2%
C. Total Actuarial Accrued Liability
1.
Age Retirement Benefits Active Employees
$
23,977,256
232.7%
2.
Termination Benefits Active Employees
1,099,474
10.7%
3.
Death Benefits Active Employees
728,853
7.1%
4.
Disability Benefits Active Employees
1,017,614
9.9%
5.
Retired or Terminated Vested Participants
Receiving Benefits (including DROPS)
9,015,908
87.5%
6.
Terminated Vested Participants Entitled to
Future Benefits
2,994,167
29.1%
7.
Deceased Participants Whose Beneficiaries
are Receiving Benefits
1,483,443
14.4%
8.
Disabled Participants Receiving Benefits
0
0.0%
9.
Miscellaneous Liability (Refunds in Process)
14,732
0.1%
10.
Total Actuarial Accrued Liability
$
40,331,447
391.4%
D. Assets (Table V)
1.
Actuarial Value of Assets
$
23,887,446
231.8%
2.
Market Value of Assets
$
21,017,997
204.0%
E. Unfunded
Actuarial Accrued Liability
(C.
- D.1.)
$
16,444,001
159.6%
-4-
Table I
(Cont'd)
City of Winter Springs
Defined Benefit Plan
Summary of Retirement Plan Costs as of October 1, 2010
Cost % of
Data Payroll
F. Minimum Required Contribution
1. Total Normal Cost (including expenses)
$
1,355,080
13.2%
2. Amortization of Unfunded Liability
1,405,371
13.6%
3. Interest Adjustment
131,334
1.3%
4. Total Payment
$
2,891,785
28.1%
G. Expected payroll of active employees for 2011/2012 year
$
10,304,054
100.0%
H. Contribution Sources (percent of expected 2011/2012 payroll)
1. County and City
$
2,616,924
25.4%
2. Member
274,861
2.7%
3. Total required contribution
$
2,891,785
28.1%
I. Actuarial Gains (Losses)
$
521,732
5.1%
J. Actuarial Present Value of Vested Accrued Benefits
1. Retired, Terminated Vested, Beneficiaries
and Disabled Receiving Benefits (including DROPS) $ 10,499,351 101.9%
2. Terminated Vested Participants Entitled to
Future Benefits and Miscellaneous 3,008,899 29.2%
3. Active Participants Entitled to Future Benefits 18,427,116 178.8%
4. Total Actuarial Present Value of Vested
Accrued Benefits $ 31,935,366 309.9%
K. Unfunded Actuarial Present Value of Vested
Accrued Benefits Q. - D.2., not less than zero) $ 10,917,369 106.0%
L. Vested Benefit Security Ratio (D.2. - J.) 65.8% N/A
-5-
Table II
City of Winter Springs
Defined Benefit Plan
Comparison of Cost Data of October 1, 2009 and October 1, 2010 Valuations
October 1, 2009 October 1, 2010
A. Participants
1. Active Employees
2. Terminated Vested
3. Receiving Benefits
4. Total Annual Payroll of Active Employees
B. Total Normal Costs
C. Actuarial Accrued Liability
D. Present Value of Future Benefits
E. Actuarial Value of Assets
F. Market Value of Assets
G. Unfunded Actuarial Accrued Liability
H. County and City Minimum Funding Payment
I. Vested Benefit Security Ratio
-6-
Cost
% of
Cost
% of
Data
Compensation
Data
Compensation
221
N/A
210
N/A
92
N/A
98
N/A
41
N/A
51
N/A
$
10,752,720
100.0%
$
10,304,054
100.0%
$
1,356,965
12.6%
$
1,355,080
13.2%
$
37,651,017
350.2%
$
40,331,447
391.4%
$
48,530,001
451.3%
$
50,696,997
492.0%
$
20,788,655
193.3%
$
23,887,446
231.8%
$
17,323,879
161.1%
$
21,017,997
204.0%
$
16,862,362
156.8%
$
16,444,001
159.6%
$
2,627,659
24.4%
$
2,616,924
25.4%
61.2%
N/A
65.8%
N/A
-6-
Table III
City of Winter Springs
Defined Benefit Plan
Characteristics of Participants in
Actuarial Valuation as of October 1, 2010
A. Active Plan Participants Summary
1. Active participants fully vested
2. Active participants partially vested
3. Active participants non - vested
4. Total active participants
5. Annual rate of pay of active participants
B. Retired and Terminated Vested Participant Summary
1. Retired or terminated vested participants receiving
benefits (including DROPS)
2. Terminated vested participants entitled to
future benefits
3. Deceased participants whose beneficiaries are
receiving benefits
4. Disabled participants receiving benefits
C. Projected Annual Retirement Benefits
126
60
24
210
$ 10,304,054
42
.,
,1
1. Retired or terminated vested receiving benefits (including DROPS) $ 865,510
2. Terminated vested entitled to future benefits $ 753,917
3. Beneficiaries of deceased participants $ 139,313
4. Disabled participants $ 0
-7-
Table IV
City of Winter Springs
Defined Benefit Plan
Statement of Assets as of October 1, 2010
Assets Market Value
A. Cash and Cash Equivalents $ 2,617,038
B. General Investments
1. Common Stocks $ 13,363,209
2. Bonds 4,953,986
C. Receivables
1. Accrued Interest $ 0
2. Member Contributions Receivable 83,764
3. Accounts Receivable 0
D. Payables
1. Accounts Payable $ 0
2. Due to Broker 0
E. Plan Assets
(A + B + C - D) $ 21,017,997
0
Table V
City of Winter Springs
Defined Benefit Plan
Reconciliation of Plan Assets
A. Total Market Value of Assets as of October 1. 2009
B. Receipts During Period
1. Contributions
a. Member $ 284,866
b. City and County 2,311,058
c. Total $ 2,595,924
2. Investment Income
a. Interest and dividends
$ 163,009
b. Realized gains /(losses)
747,897
c. Unrealized gains /(losses)
1,252,339
d. Net investment income
$ 2,163,245
3. Total receipts during period
C. Disbursements During Period
1. Pension payments $ 864,364
2. Contribution refunds 22,157
3. Administrative expenses 178,530
4. Total disbursements during period
D. Total Market Value of Assets as of September 30, 2010
$ 17,323,879
$ 4,759,169
$ 1,065,051
$ 21,017,997
-9-
Table V
(Cont'd)
City of Winter Springs
Defined Benefit Plan
Development of Actuarial Value of Assets as of September 30
A. Preliminary total actuarial value from prior year
B. Market value beginning of year
C. Market value end of year
2010 2011 2012 2013
$ 21,409,499
17,323,879
21,017,997
1,530,873
2,163,245
2014
D. Non - investment net cash flow
E. Investment return
F. Phased -in recognition of investment return:
1. Current year
2. First prior year
3. Second prior year
4. Third prior year
5. Fourth prior year
6. Total phased -in recognition of investment return
G. Total actuarial value end of year
1. Preliminary total actuarial value end of year
2. Upper corridor limit: 120% of C.
3. Lower corridor limit: 80% of C.
4. Total actuarial value end of year:
G.1., not more than G.2., nor less than G.3.
H. Difference between total market value and total actuarial value
I. Actuarial value rate of return
J. Market value rate of return
(251, 629)
(191,179)
(251,629)
(885,152)
(191,179)
(251,629)
480,905
(885,152)
(191,179) (251,629)
346,984
480,907
(885,153) (191,178) (251,628)
(500,071)
(847,053)
(1,327,961) (442,807) (251,628)
23,887,446
25,221,596
16,814,398
23,887,446
(2,869,449)
7.3%
12.0%
-10-
Table VI
City of Winter Springs
Defined Benefit Plan
Actuarial Gains (Losses) for
Plan Year Ending September 30, 2010
A. Derivation of Actuarial Gain (Loss)
1. City and County net normal cost
$
1,072,113
2. Unfunded actuarial accrued liability
16,862,362
3. City and County contributions previous year
2,311,058
4. Interest on:
(a) City and County net normal cost
$
85,769
(b) Unfunded actuarial accrued liability
1,348,989
(c) City and County contributions
92,442
(d) Net total: (a) + (b) - (c)
$
1,342,316
5. Expected unfunded actuarial accrued liability current year:
(1. + 2. - 3. + 4.)
$
16,965,733
6. Actual unfunded actuarial accrued liability current year
16,444,001
7. Actuarial gain (loss): (5. - 6.)
$
521,732
B. Approximate Portion of Gain (Loss)
Due to Investments
1. Actuarial value of assets previous year $ 20,788,655
2. Contributions during period 2,595,924
3. Benefits and administrative expenses during period 1,065,051
4. Expected appreciation for period 1,724,327
5. Expected actuarial value of assets current year:
(1. + 2. - 3. + 4.) $ 24,043,855
6. Actual actuarial value of assets current year $ 23,887,446
7. Approximate investment gain (loss): (6. - 5.) $ (156,409)
C. Approximate Portion of Gain (Loss)
Due to Liabilities: A. - B. $ 678,141
-11-
Table VII
City of Winter Springs
Defined Benefit Plan
Amortization of Unfunded Actuarial Accrued Liability
A. Unfunded Actuarial Accrued Liabili
B. Covered Payroll History*
Covered
Unfunded
Amortization
Date
Increase
Liability
$ 10,304,054
Payment
October 1, 2009
October 1, 2010
$
16,444,001
$
1,405,371
October 1, 2011
$
16,241,720
$
1,405,371
October 1, 2012
$
16,023,257
$
1,405,371
October 1, 2013
$
15,787,317
$
1,405,371
October 1, 2014
$
15,532,502
$
1,405,371
October 1, 2040
$
0
$
0
B. Covered Payroll History*
* Information prior to October 1, 2008 as reported by prior actuary.
-12-
Covered
Annual
Date
Payroll
Increase
October 1, 2010
$ 10,304,054
(4.2 %)
October 1, 2009
$ 10,752,720
(0.1 %)
October 1, 2008
$ 10,767,596
(3.8 %)
October 1, 2007
$ 11,190,013
6.7%
October 1, 2006
$ 10,489,087
8.6%
October 1, 2005
$ 9,659,446
7.5%
October 1, 2004
$ 8,982,189
11.0%
October 1, 2003
$ 8,094,829
22.9%
October 1, 2002
$ 6,586,077
0.3%
October 1, 2001
$ 6,569,263
N/A
Nine Year Average Annual Increase
5.1%
* Information prior to October 1, 2008 as reported by prior actuary.
-12-
Table VIII
City of Winter Springs
Defined Benefit Plan
Accounting Disclosure Exhibit
I. Number of Plan Members
10/01/2009
10/01/2010
a. Retirees and beneficiaries receiving benefits
b. Terminated plan members entitled to but not yet receiving benefits
c. Active plan members
d. Total
H. Financial Accounting Standards Board Allocation as of October 1, 2010
A. Statement of Accumulated Plan Benefits
1. Actuarial present value of accumulated vested plan benefits
a. Participants currently receiving benefits
b. Other participants
c. Total
2. Actuarial present value of accumulated
non - vested plan benefits
3. Total actuarial present value of accumulated plan benefits
41
92
221
51
98
210
354
359
$ 8,258,162 $ 10,499,351
20,065,675 21,436,015
$ 28,323,837 $ 31,935,366
$ 489,901 $ 427,010
$ 28,813,738 $ 32,362,376
B. Statement of Change in Accumulated Plan Benefits
1. Actuarial present value of accumulated plan benefits
as of October 1, 2009
$ 28,813,738
2. Increase (decrease) during year attributable to:
a. Plan amendment
$ 0
b. Change in actuarial assumptions
0
c. Benefits paid including refunds
(886,521)
d. Other, including benefits accumulated, increase
for interest due to decrease in the discount period
4,435,159
e. Net increase
$ 3,548,638
3. Actuarial present value of accumulated plan benefits
as of October 1, 2010
$ 32,362,376
C. Significant Matters Affecting Calculations
1. Assumed rate of return used in determining actuarial present values 8.0%
2. Change in plan provisions None.
3. Change in actuarial assumptions None.
-13-
Table VIII
(Cont'd)
City of Winter Springs
Defined Benefit Plan
Accounting Disclosure Exhibit
III. Annual Pension Cost For the Current Year and Related Information:
Contribution rates:
City
Members
Actuarial valuation date
Annual pension cost
Contributions made
Actuarial cost method
Amortization method
Remaining amortization period
24.4%
2.7%
October 1, 2010
$ 2,627,713
To be determined
Entry Age Normal
Level percent, closed
30 years
Asset valuation method 5 year smoothed market
Actuarial assumptions:
Investment rate of return * 8.0%
Projected salary increases * 3.0%-7.5%
* Includes expected inflation at 3.0%
-14-
Table VIII
(Cont'd)
City of Winter Springs
Defined Benefit Plan
Accounting Disclosure Exhibit
IV. Historical Trend Information
A. Schedule of Emblover Costs (GASB No. 25
Fiscal Year
Annual Required
Percentage of
Ended
Contribution (ARC)
ARC Contributed
09/30/2005
$ 1,424,101
89%
09/30/2006
$ 1,564,228
96%
09/30/2007
$ 1,807,722
102%
09/30/2008
$
2,005,100
100%
09/30/2009
$
1,781,651
100%
09/30/2010
$
2,311,058
100%
B. Schedule of Employer
Costs GASB No. 27)
Fiscal Year
Annual Pension
Percentage of
Ended
Cost (APQ
APC Contributed
09/30/2005
$
1,410,081
89%
09/30/2006
$
1,562,165
96%
09/30/2007
$
1,810,230
102%
09/30/2008
$
2,004,975
100%
09/30/2009
$
1,781,197
100%
09/30/2010
$
2,311,108
100%
V. Annual Pension Cost and Net Pension Asset
Fiscal Year Ended
Annual Required Contribution (ARC)
Interest on Net Pension Asset (NPA)
Adjustment to ARC
APC
City Contributions
(Increase) Decrease in NPA
NPA (beginning of year)
NPA (end of year)
$ 2,311,058
(454)
504
$ 2,311,108
$ (2,311,058)
$ 50
(5,673)
$ (5,623)
* Percent of pay applied to covered payroll - 2009 -2010 fiscal year.
Net Pension
Obligation /(Asset
$ (25,791)
$ 31,354
$ (1,563)
$ (5,673)
$ (5,673)
$ (5,623)
Proj ected
n /�ninni 1
$ 2,627,659
(450)
504
$ 2,627,713
-15-
Table VIII
(Cont'd)
City of Winter Springs
Defined Benefit Plan
Schedule of Funding Progress
(Dollar Amounts in Thousands)
VI. Schedule of Funding Progress'
Actuarial Accrued Unfunded UAAL as a
Actuarial Liability (EAN') AAL Funded Percentage of
Actuarial Value of Assets (AAL) (UAAL) Ratio Payroll Payroll
Valuation Date (a) (b) (b - a) (a /b) (c) ((b -a) /c)
10/01/2005
$
9,716
$
13,178
$
3,462
73.7%
$
9,659
35.8%
10/01/2006
$
11,951
$
16,043
$
4,092
74.5%
$
10,489
39.0%
10/01/2007
$
15,527
$
20,114
$
4,587
77.2%
$
11,190
41.0%
10/01/2008
$
18,747
$
32,414
$
13,667
57.8%
$
10,768
126.9%
10/01/2009
$
20,789
$
37,651
$
16,862
55.2%
$
10,753
156.8%
10/01/2010
$
23,887
$
40,331
$
16,444
59.2%
$
10,304
159.6%
1 Information prior to October 1, 2008 as reported by prior actuary.
2 Frozen Initial Liability prior to change in method as of October 1, 2008.
-16-
Table IX
City of Winter Springs
Defined Benefit Plan
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 2007 -20 effective April 23, 2007.
B. Eligibility Requirements
Employees 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.
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. Total Compensation
Wages, salaries and other amounts received (whether or not paid in cash) for personal services
actually rendered in the course of employment. This includes but is not limited to commissions,
overtime pay and bonuses.
E. Final Average Compensation
Average earnings during the three (3) highest consecutive compensation periods during
employment with the City.
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.
2. Benefit:
3.00% times Final Average Compensation multiplied by Accrual Service, up to a maximum of
30 years.
-17-
Table IX
(Cont'd)
City of Winter Springs
Defined Benefit Plan
Outline of Principal Provisions of the Retirement Plan
G. Earlv Retirement
1. Eligibility:
(a) Attainment of age 55 and completion of ten (10) 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.
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. Disabilitv 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:
3.00% times Final Average Compensation multiplied by Accrual Service.
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.
-18-
Table IX
(Cont'd)
City of Winter Springs
Defined Benefit Plan
Outline of Principal Provisions of the Retirement Plan
K. Participant Contributions
Three percent (3 %) of compensation for General Employees and Police Officers.
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
on pay and service at date of termination multiplied by a percentage from the following table.
M. Normal Form of Pavment 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.
-19-
Table X
City of Winter Springs
Defined Benefit Plan
Actuarial Assumptions and Actuarial Cost Methods
Used in the Valuation
A. Mortality
For healthy General Employee participants, the RP -2000 Combined Mortality Table was used with
separate rates for males and females and fully generational mortality improvements projected to each
future decrement date.
For healthy Firefighter and Police Officer participants, the RP -2000 Combined Mortality Table with
Blue Collar Adjustment was used with separate rates for males and females and fully generational
mortality improvements projected to each future decrement date.
For disabled participants, the RP -2000 Combined Disabled Mortality Table was used with separate rates
for males and females and fully generational mortality improvements projected to each future decrement
date.
B. Investment Return
8.0 %, compounded annually, net of investment expenses.
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.
-20-
Table X
(Cont'd)
City of Winter Springs
Defined Benefit Plan
Actuarial Assumptions and Actuarial Cost Methods
Used in the Valuation
E. Employee Withdrawal Rates
1. Withdrawal rates for male General Employees were used in accordance with the following illustrative example:
2. Withdrawal rates for female General Employees were used in accordance with the following illustrative example:
The withdrawal assumptions are the withdrawal assumptions used in the July 1, 2010 Florida Retirement System (FRS) Actuarial
Valuation.
-21-
Table X
(Cont'd)
City of Winter Springs
Defined Benefit Plan
Actuarial Assumptions and Actuarial Cost Methods
Used in the Valuation
E. Employee Withdrawal Rates (continued)
3. Withdrawal rates for male Firefighters and Police Officers were used in accordance with the following illustrative example:
4. Withdrawal rates for female Firefighters and Police Officers were used in accordance with the following illustrative example:
The withdrawal assumptions are the withdrawal assumptions used in the July 1, 2010 FRS Actuarial Valuation.
-22-
Table X
(Cont'd)
City of Winter Springs
Defined Benefit Plan
F. Disability Rates
Actuarial Assumptions and Actuarial Cost Methods
Used in the Valuation
1. Line -of -duty disability rates for General Employees were used in accordance with the following
illustrative example.
2. Non -duty disability rates for General Employees were used in accordance with the following illustrative
example.
The disability assumptions are the disability assumptions used in the July 1, 2010 FRS Actuarial Valuation.
-23-
Table X
(Cont'd)
City of Winter Springs
Defined Benefit Plan
Actuarial Assumptions and Actuarial Cost Methods
Used in the Valuation
F. Disability Rates (continued)
3. Line -of -duty disability rates for Firefighters and Police Officers were used in accordance with the
following illustrative example.
4. Non -duty disability rates for Firefighters and Police Officers were used in accordance with the following
illustrative example.
The disability assumptions are the disability assumptions used in the July 1, 2010 FRS Actuarial Valuation.
-24-
Table X
(Cont'd)
City of Winter Springs
Defined Benefit Plan
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 members with less than ten (10) years of service:
2. For members with ten (10) or more years, but less than twenty -five (25) years of service:
3. For members with twenty -five (25) or more years of service:
-25-
Table X
(Cont'd)
City of Winter Springs
Defined Benefit Plan
Actuarial Assumptions and Actuarial Cost Methods
Used in the Valuation
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 Particibant Contributions
3.75 %, compounded annually.
J. Asset Valuation Method
The method used for determining the actuarial value of assets phases in the deviation between the
expected and actual return on assets at the rate of 20% per year. The actuarial value of assets will be
further adjusted to the extent necessary to fall within the corridor whose lower limit is 80% of the fair
market value of plan assets and whose upper limit is 120% of the fair market value of plan assets -
adjusted for equation of balance October 1, 2010.
K. Cost Method
Normal Retirement, Termination, Disability, and Death Benefits: Entry Age Normal Cost Method
Under this method the normal cost for each active employee is the amount which is calculated to be a
level percentage of pay that would be required annually from his entry age to his assumed retirement
age to fund his estimated benefits, assuming the Fund had always been in effect. The normal cost for
the Fund 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 Fund 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 Fund.
L. Changes Since Previous Valuation
None.
-26-
Table XI
-27-
City of Winter Springs
Defined Benefit Plan
Distribution by Attained Ate Groups
and Service Groups as of October 1, 2010
Firefighters
Attained
----------------------------------- - - - - -- COMPLETED YEARS OF SERVICE-----------------------------------------
Age Group
0 -4 5 -9
10 -14 15 -19 20 -24
25 -29 30 & Over
Total
Under 25
- -
- - -
- -
0
25 -29
- -
- - -
- -
0
30 -34
- -
1 - -
- -
1
35 -39
- -
- - -
- -
0
40 -44
- -
1 1 -
- -
2
45 -49
- -
- 1 3
2 -
6
50 -54
- -
1 1 2
- 3
7
55 -59
- -
- - -
- -
0
60 -64
- -
- - -
- -
0
65 & Over
- -
- - -
- -
0
TOTAL
0 0
3 3 5
2 3
16
10/01/2009
10/01/2010
Average Attained Age
47.04 years
47.86 years
Average Hire Age
27.39 years
26.61 years
Average Pay
$ 73,980
$ 71,376
Percent Female
0.0%
0.0%
-27-
Table XI
(Cont'd)
Total
4
8
12
19
7
23
23
13
11
4
124
28
City of Winter Springs
Defined Benefit Plan
Distribution by Attained Ate Groups
and Service Groups as of October 1, 2010
General Employees
Attained
-----------------------------------
- - - - -- COMPLETED YEARS OF SERVICE------------------ - - - - --
Age Group
00 = 4
55 = 9
10 -14 15 -19 20 -24
25 -29 30 & Over
Under 25
4
-
- - -
- -
25 -29
5
3
- - -
- -
30 -34
4
5
3 - -
- -
35 -39
6
8
2 3 -
- -
40 -44
3
2
2 - -
- -
45 -49
7
7
3 2 3
1 -
50 -54
1
8
2 5 6
1 -
55 -59
2
5
- - 2
3 1
60 -64
2
3
5 1 -
- -
65 & Over
-
1
2 - 1
- -
TOTAL
34
42
19 11 12
5 1
10/01/2009
10/01/2010
Average Attained Age
45.64 years
45.67 years
Average Hire Age
36.41 years
35.98 years
Average Pay
$ 42,934
$ 42,858
Percent Female
35.6%
36.3%
Total
4
8
12
19
7
23
23
13
11
4
124
28
Table XI
(Cont'd)
-29-
City of Winter Springs
Defined Benefit Plan
Distribution by Attained Ate Groups
and Service Groups as of October 1, 2010
Police Officers
Attained
----------------------------------- - - - - -- COMPLETED YEARS OF SERVICE-----------------------------------------
Age Group
00 = 4 55 = 9
10 -14 15 -19 20 -24
25 -29 30 & Over
Total
Under 25
5 -
- - -
- -
5
25 -29
4 5
- - -
- -
9
30 -34
3 8
2 - -
- -
13
35 -39
4 1
5 3 -
- -
13
40 -44
1 1
5 2 2
- -
11
45 -49
- 1
4 - 1
1 -
7
50 -54
1 1
- - 2
2 -
6
55 -59
- 1
1 - 2
- -
4
60 -64
- -
2 - -
- -
2
65 & Over
- -
- - -
- -
0
TOTAL
18 18
19 5 7
3 0
70
10/01/2009
10/01/2010
Average Attained Age
38.78 years
38.88 years
Average Hire Age
29.08 years
28.77 years
Average Pay
$ 53,608
$ 54,967
Percent Female
15.9%
15.7%
-29-
Table XI
(Cont'd)
-30-
City of Winter Springs
Defined Benefit Plan
Distribution by Attained Ate Groups
and Service Groups as of October 1, 2010
All Members
Attained
----------------------------------- - - - - -- COMPLETED YEARS OF SERVICE-----------------------------------------
Age Group
00 = 4 55 = 9
10 -14 15 -19 20 -24
25 -29
30 & Over
Total
Under 25
9 -
- - -
-
-
9
25 -29
9 8
- - -
-
-
17
30 -34
7 13
6 - -
-
-
26
35 -39
10 9
7 6 -
-
-
32
40 -44
4 3
8 3 2
-
-
20
45 -49
7 8
7 3 7
4
-
36
50 -54
2 9
3 6 10
3
3
36
55 -59
2 6
1 - 4
3
1
17
60 -64
2 3
7 1 -
-
-
13
65 & Over
- 1
2 - 1
-
-
4
TOTAL
52 60
41 19 24
10
4
210
10/01/2009
10/01/2010
Average Attained Age
43.61 years
43.57 years
Average Hire Age
33.43 years
32.86 years
Average Pay
$ 48,655
$ 49,067
Percent Female
26.7%
26.7%
-30-
Table XII
City of Winter Springs
Defined Benefit Plan
Statistics for Participants Entitled to Deferred Benefits
and Participants Receiving Benefits
A. Entitled to Deferred Benefits
Current Age
Group
Less than 40
40 -44
45 -49
50 -54
55 -59
60 -64
65 & Over
TOTAL
B. Receiving Benefits
Current Age
Group
Less than 50
50 -54
55 -59
60 -64
65 -69
70 -74
75 & Over
TOTAL
Count
37
19
20
13
4
3
Count
3
1
7
16
12
8
Total
Annual Benefit
$ 217,837
212,140
211,255
84,701
10,742
14,852
2,390
$ 753,917
Total
Annual Benefit
$ 24,124
69,549
193,651
397,707
234,563
66,857
18,372
$ 1,004,823
-31-
Average
Annual Benefit
$ 5,887
11,165
10,563
6,515
2,686
4,951
1,195
$ 7,693
Average
Annual Benefit
$ 8,041
69,549
27,664
24,857
19,547
8,357
4,593
$ 19,702
Table XIII
City of Winter Springs
Defined Benefit Plan
Reconciliation of Employee Data
A. Active Participants
1.
Active participants previous year
221
2.
Retired during year
(7)
3.
Died during year
(1)
4.
Disabled during year
0
5.
Terminated non - vested during year
(3)
6.
Terminated vested during year
(13)
7.
New active participants
13
8.
Out on military leave
0
9.
Rehired during year
0
10.
Active participants current year
210
B. Participants Receiving Benefits
1. Participants receiving benefits previous year 41
2. New retired participants 7
3. New terminated vested receiving benefits 2
4. New beneficiaries receiving benefits 2
5. Died or ceased payment during year (1)
6. Retired or terminated vested receiving benefits current year 51
C. Terminated Vested Participants Entitled to Future Benefits
1. Terminated vested entitled previous year 92
2. Died during year 0
3. Commenced receiving benefits during year (2)
4. New terminated vested 13
5. Terminated vested paid lump sum (5)
6. Rehired 0
7. Adjustment 0
8. Terminated vested entitled current year 98
-32-
Table XIV
City of Winter Springs
Defined Benefit Plan
Proiected Retirement Benefits
The above projected payout of Plan benefits during the next ten years is based on assumptions
involving all decrements. Actual payouts may differ from the above estimates depending upon the
death, salary and retirement experience of the Plan. However, since the projected payment is
recomputed each valuation date, there is an automatic correction to the extent that actual experience
varies from expected experience.
-33-
Projected Total
Fiscal Year
Annual Payout
2011
$ 1,116,494
2012
$ 1,367,441
2013
$ 1,559,881
2014
$ 1,809,282
2015
$ 2,067,386
2016
$ 2,325,497
2017
$ 2,628,099
2018
$ 2,925,768
2019
$ 3,360,872
2020
$ 3,624,834
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.
-33-
Table XV
City of Winter Springs
Defined Benefit Plan
' Information prior to September 30, 2008 as reported by prior actuary.
2 Includes refunds.
3 Values prior to September 30, 2008 include Employee Contributions.
-34-
Summary of Transaction Information'
Year
Benefits
Administrative
Employee
City
Actuarial
Ending
Paid'
Expenses
Contributions
Contributions
Value
09/30/2010
$ 886,521
$ 178,530
$ 284,866
$ 2,311,058
$ 23,887,446
09/30/2009
617,274
116,982
306,420
1,781,197
20,788,655
09/30/2008
384,482
70,423
365,288
1,663,951
18,746,975
09/30/2007
233,953
123,197
N/A
1,843,147
15,526,572
09/30/2006
171,697
84,340
N/A
1,505,020
11,951,383
09/30/2005
N/A
N/A
N/A
1,260,627
9,716,089
09/30/2004
140,509
62,225
N/A
1,013,379
8,134,588
09/30/2003
138,353
47,477
N/A
903,748
7,279,048
' Information prior to September 30, 2008 as reported by prior actuary.
2 Includes refunds.
3 Values prior to September 30, 2008 include Employee Contributions.
-34-
Table XV
(Cont'd)
City of Winter Springs
Defined Benefit Plan
Recent Compensation, Termination and Investment Return Experience
General Police & Fire General Police & Fire
Last 3 Years
3.7% 4.4% 6.6%
Compensation
Valuation
Last 7 Years
% Increase /
(Decrease)
Date
Actual
Assumed
Actual
10/01/2010
0.9%
5.0%
2.8%
10/01/2009
6.4%
5.1%
11.6%
10/01/2008
3.9%
3.0%
5.6%
10/01/2007
N/A
N/A
N/A
10/01/2006
N/A
N/A
N/A
10/01/2005
N/A
N/A
N/A
10/01/2004
N/A
N/A
N/A
Last 3 Years
3.7% 4.4% 6.6%
Last 5 Years
N/A N/A N/A
Last 7 Years
N/A N/A N/A
* Information
prior to October 1, 2008 as reported by prior actuary.
Investment Return
Net Market
Net Actuarial
Termination
Value Yield*
Ratio of Actual
Assumed
12.0%
to Expected
8.0%
2.1%
5.3%
1.2
1.7
5.3%
1.1
1.1
3.0%
1.2
3.1
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Investment Return
Net Market
Net Actuarial
Assumed Rate
Value Yield*
Value Yield*
of Return*
12.0%
7.3%
8.0%
2.1%
3.5%
8.0%
(16.8 %)
10.1%
8.0%
13.8%
15.4%
8.0%
8.6%
9.5%
8.0%
11.5%
4.2%
8.0%
12.6%
0.6%
8.0%
4.5%
1.2
1.8
(1.6 %)
6.9%
8.0%
N/A
N/A
N/A
3.3%
9.1%
8.0%
N/A
N/A
N/A
5.7%
7.1%
8.0%
-35-
Table XVI
City of Winter Springs
Defined Benefit Plan
Actuarial Valuation as of October 1, 2010
State Required Exhibit
10/01/2009 10/01/2010
A. Participant Data
1. Active participants
221
210
2. Retired participants and beneficiaries
benefit payments for active members
receiving benefits
41
51
3. Disabled participants receiving benefits
0
0
4. Terminated vested participants
92
98
5. Annual payroll of active participants
$ 10,752,720
$ 10,304,054
6. Annual benefits payable to those currently
2,778,467
c. Death benefits
receiving benefits
$ 770,775
$ 1,004,823
B. Value of Assets
1. Actuarial Value $ 20,788,655 $ 23,887,446
2. Market Value $ 17,323,879 $ 21,017,997
C. Liabilities
1. Actuarial present value of future expected
benefit payments for active members
a. Retirement benefits
$
32,584,598
$
32,318,747
b. Vesting benefits
2,924,854
2,778,467
c. Death benefits
998,687
972,590
d. Disability benefits
1,129,880
1,118,943
e. Total
$
37,638,019
$
37,188,747
2. Actuarial present value of future expected benefit
payments for terminated vested members
$
2,611,419
$
2,994,167
3. Actuarial present value of future expected benefit
payments for members currently receiving benefits
a. Service retired (includes DROPS)
$
6,858,478
$
9,015,908
b. Disability retired
0
0
c. Beneficiaries
1,399,684
1,483,443
d. Miscellaneous (Refunds in Process)
22,401
14,732
e. Total
$
8,280,563
$
10,514,083
-36-
Table XVI
(Cont'd)
City of Winter Springs
Defined Benefit Plan
Actuarial Valuation as of October 1, 2010
State Required Exhibit
4. Total actuarial present value of future
expected benefit payments
5. Actuarial accrued liabilities
6. Unfunded actuarial accrued liabilities
D. Statement of Accumulated Plan Benefits
1. Actuarial present value of accumulated vested
benefits
a. Participants currently receiving benefits
b. Other participants
c. Total
2. Actuarial present value of accumulated non -
vested plan benefits
3. Total actuarial present value of accumulated
plan benefits
10/01/2009
10/01/2010
$ 48,530,001
$ 50,696,997
$ 37,651,017
$ 40,331,447
$ 16,862,362
$ 16,444,001
$ 8,258,162 $ 10,499,351
20,065,675 21,436,015
$ 28,323,837 $ 31,935,366
489,901 427,010
$ 28,813,738 $ 32,362,376
E. Pension Cost
1. Total normal cost
2. Payment required to amortize unfunded liability
3. Interest adjustment
4. Total required contribution
5. Item 4 as a percentage of base payroll
6. Estimated employee contributions
7. Item 6 as a percentage of base payroll
8. Net amount payable by County and City
9. Item 8 as a percentage of base payroll
$
1,356,965
$
1,355,080
1,423,345
1,405,371
132,201
131,334
$
2,912,511
$
2,891,785
27.1%
28.1%
$
284,852
$
274,861
2.6%
2.7%
$
2,627,659
$
2,616,924
24.4%
25.4%
-37-
Table XVI
(Cont'd)
City of Winter Springs
Defined Benefit Plan
Actuarial Valuation as of October 1, 2010
State Required Exhibit
F. Past Contributions (Prior Year Valuation)
1. Total contribution required
2. Actual contributions made:
a. Members
b. City
c. Total
G. Disclosure of Following Items:
1. Actuarial present value of future salaries
- attained age
2. Actuarial present value of future employee
contributions - attained age
3. Actuarial present value of future contributions
from other sources
4. Amount of active members' accumulated
contributions
5. Actuarial present value of future salaries and
future benefits at entry age
6. Actuarial present value of future employee
contributions at entry age
10/01/2009 10/01/2010
$ 2,654,388 $ 2,912,511
$ 284,866 N/A
2,311,058 N/A
$ 2,595,924 N/A
$ 94,496,961 $
90,841,906
$ 2,393,429 $
2,321,534
N/A
N/A
$ 2,101,077 $
2,234,009
N/A
N/A
N/A
N/A
110:1
Table XVI
(Cont'd)
City of Winter Springs
Defined Benefit Plan
State Required Exhibit
Amortization balances are written down in proportion to amortization payments.
Unfunded Actuarial Accrued Liabilities
10/01/2000
10/01/2002
10/01/2003
10/01/2004
10/01/2005
10/01/2006
10/01/2007
10/01/2008
10/01/2008
10/01/2009
10/01/2010
Initial
Assumption Change
Plan Amendment
Plan Amendment
Plan Amendment
Plan Amendment
Plan Amendment
Plan Amendment and Assumption Change
Method Change
Actuarial Loss (Gain)
Actuarial Loss (Gain)
TOTAL
Current
Unfunded Amortization
Liabilities Pa ment
2,250,045
212,196
(28,677)
(2,603)
180,807
16,142
273,310
24,036
564,770
48,988
648,009
55,505
661,626
56,023
2,963,908
248,334
6,624,771
555,063
2,827,164
234,598
(521,732)
(42,911)
$ 16,444,001 $ 1,405,371
Remaining
Funding
Period
20 years
22 years
23 years
24 years
25 years
26 years
27 years
28 years
28 years
29 years
30 years
This actuarial valuation and /or cost determination was prepared and completed by me or under my direct supervision,
and I acknowledge responsibility for the results. To the best of my knowledge, the results are complete and accurate,
and in my opinion, the techniques and assumptions used are reasonable and meet the requirements and intent of Part
VII, Chapter 112, Florida Statutes. There is no benefit or expense to be provided by the plan and /or paid from the
plan's assets for which liabilities or current costs have not been established or other wise provided for in the valuation.
All known events or trends which may require material increase in plan costs or required contribution rates have been
taken into account in the valuation.
Enrollment Number: 08 -02802
Dated: February 28, 2011 Lawrence F. Wilson, A.S.A.
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