HomeMy WebLinkAbout2011 04 12 Other - Binder of Document provided during the April 12, 2011 City Commission Workshop during Regular Agenda Items '600' Date: April 12, 2011
This information was provided to the Mayor and
City Commission at the Workshop of April 12,
2011 .
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R Gabriel Roeder Smith & Company One East Broward Blvd. 954.527.1616 phone
Consultants&Actuaries Suite 505 954.525.0083 fax
Ft.Lauderdale,FL 33301-1804
www.gabriclroeder.com
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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. Ms. Patricia Shoemaker
4 Bureau of Local Retirement Services Office of Municipal Police Officers'
Division of Retirement &Firefighters'Pension Fund
Building 8 Building 8
Post Office Box 9000 Post Office Box 3010
Tallahassee, Florida 32315-9000 Tallahassee, Florida 32315-3010
If you should have any questions concerning the above,please do not hesitate to contact us.
Sincerest regards,
Lawrence F. Wilson,A.S.A.
Senior Consultant and Actuary
Enclosures
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GRSGabriel Roeder Smith&Company
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1459
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
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0
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Gabriel Roeder Smith&Company
City of Winter Springs
Defined Benefit Plan
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
XII. Statistics for Participants Entitled to Deferred Benefits and Participants
Receiving Benefits 31
XIII. Reconciliation of Employee Data 32
XIV. Projected Retirement Benefits 33
XV. Recent Plan Experience 34
XVI. State Required Exhibit 36
0
Gabriel Roeder Smith& Company
GRS Gabriel Roeder Smith & Company One East Broward Blvd. 954.527.1616 phone
Consultants&Actuaries Suite 505 954.525.0083 fax
Ft.Lauderdale,Fl.33301-1804 www.gabrielroeder.com
February 28, 2011
Board of Trustees
do 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
4
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).
I 1
111.7 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 II 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 II 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.
ID
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,
gtijitsjo
Lawrence F. Wilson,A.S.A. Peter N. Strong,A.S.A.
Senior Consultant and Actuary Consultant and Actuary
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Gabriel Roeder Smith & Company
City of Winter Springs
Defined Benefit Plan
Summary of Retirement Plan Costs as of October 1,2010 Table I
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%
C
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Gabriel Roeder Smith & Company
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 (J. - D.2., not less than zero) $ 10,917,369 106.0%
L. Vested Benefit Security Ratio (D.2. _J.) 65.8% N/A
a
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Gabriel Roeder Smith & Company
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
Cost % of Cost % of
Data Compensation Data Compensation
A. Participants
1. Active Employees 221 N/A 210 N/A
2. Terminated Vested 92 N/A 98 N/A
3. Receiving Benefits 41 N/A 51 N/A
4. Total Annual Payroll of Active Employees $ 10,752,720 100.0% $ 10,304,054 100.0%
B. Total Normal Costs $ 1,356,965 12.6% $ 1,355,080 13.2%
C. Actuarial Accrued Liability $ 37,651,017 350.2% $ 40,331,447 391.4%
D. Present Value of Future Benefits $ 48,530,001 451.3% $ 50,696,997 492.0%
E. Actuarial Value of Assets $ 20,788,655 193.3% $ 23,887,446 231.8%
F. Market Value of Assets $ 17,323,879 161.1% $ 21,017,997 204.0%
G. Unfunded Actuarial Accrued Liability $ 16,862,362 156.8% $ 16,444,001 159.6%
H. County and City Minimum Funding Payment $ 2,627,659 24.4% $ 2,616,924 25.4%
I. Vested Benefit Security Ratio 61.2% N/A 65.8% N/A
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Gabriel Roeder Smith & Company
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 126
2. Active participants partially vested 60
3. Active participants non-vested 24
4. Total active participants 210
5. Annual rate of pay of active participants $ 10,304,054
B. Retired and Terminated Vested Participant Summary
1. Retired or terminated vested participants receiving
benefits (including DROPs) 42
2. Terminated vested participants entitled to
future benefits 98
3. Deceased participants whose beneficiaries are
receiving benefits 9
4. Disabled participants receiving benefits 0
C. Projected Annual Retirement Benefits
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
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Gabriel Roeder Smith & Company
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
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Gabriel Roeder Smith & Company
® Table V
City of Winter Springs
Defined Benefit Plan
Reconciliation of Plan Assets
A. Total Market Value of Assets as of October 1, 2009 $ 17,323,879
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 $ 4,759,169
C. Disbursements During Period
1. Pension payments $ 864,364
2. Contribution refunds 22,157
3. Administrative expenses 178,530
4. Total disbursements during period $ 1,065,051
D. Total Market Value of Assets as of September 30, 2010 $ 21,017,997
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Gabriel Roeder Smith &Company
Table V
(Cont'd)
City of Winter Springs
Defined Benefit Plan
Development of Actuarial Value of Assets as of September 30
2010 2011 2012 2013 2014
A. Preliminary total actuarial value from prior year $ 21,409,499
B. Market value beginning of year 17,323,879
C. Market value end of year 21,017,997
D. Non-investment net cash flow 1,530,873
E. Investment return 2,163,245
F. Phased-in recognition of investment return:
1. Current year (251,629)
2. First prior year (191,179) (251,629)
3. Second prior year (885,152) (191,179) (251,629)
4. Third prior year 480,905 (885,152) (191,179) (251,629)
5. Fourth prior year 346,984 480,907 (885,153) (191,178) (251,628)
6. Total phased-in recognition of investment return (500,071) (847,053) (1,327,961) (442,807) (251,628)
G. Total actuarial value end of year
1. Preliminary total actuarial value end of year 23,887,446
2. Upper corridor limit: 120%of C. 25,221,596
3. Lower corridor limit: 80%of C. 16,814,398
4. Total actuarial value end of year:
G.1.,not more than G.2., nor less than G.3. 23,887,446
H. Difference between total market value and total actuarial value (2,869,449)
I. Actuarial value rate of return 7.3%
J. Market value rate of return 12.0%
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Gabriel Roeder Smith & Company
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:
(I. +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
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Gabriel Roeder Smith & Company
Table VII
410
City of Winter Springs
Defined Benefit Plan
Amortization of Unfunded Actuarial Accrued Liability
A. Unfunded Actuarial Accrued Liability
Unfunded Amortization
Date Liability Payment
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*
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.
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Gabriel Roeder Smith & Company
Table VIII
City of Winter Springs
Defined Benefit Plan
Accounting Disclosure Exhibit
10/01/2009 10/01/2010
I. Number of Plan Members
a. Retirees and beneficiaries receiving benefits 41 51
b. Terminated plan members entitled to but not yet receiving benefits 92 98
c. Active plan members 221 210
d. Total 354 359
II. 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 $ 8,258,162 $ 10,499,351
b. Other participants 20,065,675 21,436,015
c. Total $ 28,323,837 $ 31,935,366
4 I 2. Actuarial present value of accumulated
non-vested plan benefits $ 489,901 $ 427,010
3. Total actuarial present value of accumulated plan benefits $ 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:
il
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.
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Gabriel Roeder Smith & Company
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0 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 24.4%
Members 2.7%
IActuarial valuation date October 1, 2010
Annual pension cost $ 2,627,713
Contributions made To be determined
IActuarial cost method Entry Age Normal
Amortization method Level percent, closed
4
Remaining amortization period 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%
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Gabriel Roeder Smith & Company
Table VIII
(Cont'd)
0 City of Winter Springs
Defined Benefit Plan
Accounting Disclosure Exhibit
IV. Historical Trend Information*
A. Schedule of Employer 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 Net Pension
Ended Cost(APC) APC Contributed Obligation/(Asset)
09/30/2005 $ 1,410,081 89% $ (25,791)
09/30/2006 $ 1,562,165 96% $ 31,354
09/30/2007 $ 1,810,230 102% $ (1,563)
09/30/2008 $ 2,004,975 100% $ (5,673)
09/30/2009 $ 1,781,197 100% $ (5,673)
09/30/2010 $ 2,311,108 100% $ (5,623)
V. Annual Pension Cost and Net Pension Asset
Projected
Fiscal Year Ended 9/30/2010 9/30/2011
i Annual Required Contribution (ARC) $ 2,311,058 * $ 2,627,659
Interest on Net Pension Asset(NPA) (454) (450)
Adjustment to ARC 504 504
APC $ 2,311,108 $ 2,627,713
City Contributions $ (2,311,058)
(Increase)Decrease in NPA $ 50
NPA(beginning of year) (5,673)
NPA(end of year) $ (5,623)
r * Percent of pay applied to covered payroll -2009-2010 fiscal year.
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Gabriel Roeder Smith & Company
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(EAN2) 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.
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Gabriel Roeder Smith&Company
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.
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Gabriel Roeder Smith& Company
Table IX
(Cont'd)
City of Winter Springs
Defined Benefit Plan
Outline of Principal Provisions of the Retirement Plan
G. Early 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. 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:
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-
4
Gabriel Roeder Smith & Company
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.
Years of Service Vested Percentage
Less Than 3 0%
3 20%
4 40%
5 60%
6 80%
7 100%
M. Normal Form of Payment of Retirement Income
4 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.
I
4
-19-
Gabriel Roeder Smith & Company
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
4
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.
I
B. Investment Return
I
8.0%, compounded annually, net of investment expenses.
I
C. Allowances for Expenses or Contingencies
Prior year's actual administrative expenses are included in Normal Cost.
I
D. Salary Increase Factors
Current salary is assumed to increase at a rate based on the table below per year until retirement.
General Firefighters and
Service Employees Police Officers
Less than 5 years 6.5% 7.5%
5 - 9 years 5.5% 5.5%
10 - 14 years 4.5% 5.5%
15+years 3.0% 3.5%
1
-20-
Gabriel Roeder Smith & Company
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:
Withdrawal Rates per 100 Employees
Service
Age 0 1 2 3 4 5 6 7 8 9 10+
20 32.8 25.4 22.7 18.4 15.8 11.7 11.1 11.1 11.0 10.0 9.8
25 27.2 18.5 17.2 14.6 12.7 9.7 8.5 8.4 7.7 6.3 6.2
30 25.8 15.4 14.0 13.2 11.8 8.8 7.8 7.1 6.4 5.5 4.7
35 25.8 14.3 12.8 12.6 10.9 8.5 7.5 6.8 6.2 5.3 4.2
40 24.4 12.6 12.0 10.7 9.0 7.4 6.7 6.2 5.8 5.3 3.0
45 24.4 12.5 11.6 10.3 8.8 6.8 6.5 6.0 5.1 5.1 2.7
50 23.4 12.2 10.7 9.4 7.9 6.0 5.5 5.3 4.6 4.6 3.0
55 27.4 12.2 10.7 9.3 7.8 6.8 5.4 5.2 4.4 4.3 4.5
60 27.4 12.2 10.7 9.3 7.8 6.8 5.4 5.1 4.3 4.2 5.3
65 27.4 12.2 10.7 9.3 7.8 6.8 5.4 5.1 4.3 4.2 3.7
2. Withdrawal rates for female General Employees were used in accordance with the following illustrative example:
Withdrawal Rates per 100 Employees
Service
Age 0 1 2 3 4 5 6 7 8 9 10+
20 30.3 25.8 22.1 17.4 15.4 13.5 11.4 11.3 10.5 10.2 11.6
25 26.6 19.8 17.1 13.0 12.9 10.7 9.7 9.2 7.8 7.1 5.3
30 25.4 16.9 14.5 11.6 11.3 9.4 8.7 8.1 7.1 6.5 5.4
35 25.4 15.9 13.5 11.2 10.9 9.0 8.0 7.8 6.8 6.2 4.6
40 24.4 14.0 12.1 10.0 9.1 7.0 6.5 6.3 6.1 5.0 3.3
45 24.4 13.9 11.9 9.8 8.8 6.7 6.5 6.1 5.8 4.7 3.0
50 23.2 13.4 11.0 8.8 8.4 6.2 5.9 5.5 5.5 4.6 3.0
55 23.2 13.4 11.0 8.7 8.3 6.1 5.8 5.4 5.4 4.5 3.0
60 23.2 13.4 11.0 8.7 8.3 6.1 5.8 5.4 5.4 4.5 3.0
65 23.2 13.4 11.0 8.7 8.3 6.1 5.8 5.4 5.4 4.5 3.0
The withdrawal assumptions are the withdrawal assumptions used in the July 1,2010 Florida Retirement System(FRS)Actuarial
Valuation.
0
_21_
Gabriel Roeder Smith &Company
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:
Withdrawal Rates per 100 Employees
Service
Age 0 1 2 3 4 5 6 7 8 9 10+
20 21.4 10.3 8.6 8.4 7.5 5.3 5.2 3.1 2.9 2.6 2.3
25 20.6 9.8 8.1 7.9 7.0 5.3 5.2 3.1 2.9 2.6 2.3
30 20.6 9.5 7.7 7.5 6.7 5.3 5.2 3.1 2.9 2.6 2.1
35 20.6 8.8 7.4 7.2 6.5 5.3 5.1 3.1 2.9 2.6 2.0
40 20.6 8.0 6.8 6.7 6.0 4.8 4.6 3.1 2.9 2.6 1.9
45 20.6 7.3 6.0 6.0 5.5 4.3 4.1 3.1 2.9 2.6 1.8
50 20.6 6.5 5.3 5.3 5.0 3.8 3.6 3.1 2.9 2.6 1.8
55 20.6 5.8 4.7 4.7 4.6 3.3 3.2 3.1 2.9 2.6 1.8
60 20.6 5.3 4.7 4.7 4.6 3.3 3.2 3.1 2.9 2.6 1.8
65 20.6 5.3 4.7 4.7 4.6 3.3 3.2 3.1 2.9 2.6 1.8
4. Withdrawal rates for female Firefighters and Police Officers were used in accordance with the following illustrative example:
Withdrawal Rates per 100 Employees
Service
Age 0 1 2 3 4 5 6 7 8 9 10+
20 21.3 15.5 12.3 10.3 9.7 6.1 5.9 5.0 4.2 4.2 1.9
25 21.3 14.2 11.6 9.8 9.2 6.1 5.9 5.0 4.2 4.2 1.9
30 21.3 13.2 10.6 9.3 8.7 6.1 5.9 5.0 4.2 4.2 1.7
35 21.3 12.2 9.6 8.8 8.4 6.1 5.9 5.0 4.2 4.1 1.5
40 21.3 11.2 8.6 8.3 7.6 6.1 5.9 5.0 4.1 4.1 2.5
45 21.3 10.2 7.6 7.6 7.0 6.1 5.9 5.0 4.1 4.1 2.5
50 21.3 9.2 6.6 6.6 6.4 6.1 5.9 5.0 4.1 4.0 1.6
55 21.3 8.4 5.8 5.6 5.4 5.3 5.1 5.0 4.1 4.0 4.0
60 21.3 8.4 5.8 5.6 5.4 5.3 5.1 5.0 4.1 4.0 4.0
65 21.3 8.4 5.8 5.6 5.4 5.3 5.1 5.0 4.1 4.0 4.0
The withdrawal assumptions are the withdrawal assumptions used in the July 1,2010 FRS Actuarial Valuation.
_22_
Gabriel Roeder Smith&Company
Table X
(Cont'd)
City of Winter Springs
Defined Benefit Plan
Actuarial Assumptions and Actuarial Cost Methods
Used in the Valuation
F. Disability Rates
1. Line-of-duty disability rates for General Employees were used in accordance with the following
illustrative example.
Age Male Female
20 0.002% 0.000%
25 0.002% 0.001%
30 0.003% 0.001%
35 0.005% 0.003%
40 0.009% 0.005%
45 0.014% 0.008%
50 0.022% 0.010%
55 0.034% 0.016%
60 0.048% 0.022%
65 0.050% 0.020%
2. Non-duty disability rates for General Employees were used in accordance with the following illustrative
example.
Age Male Female
20 0.000% 0.000%
25 0.027% 0.010%
30 0.053% 0.026%
35 0.066% 0.049%
40 0.092% 0.070%
45 0.122% 0.114%
50 0.203% 0.184%
55 0.339% 0.294%
60 0.445% 0.419%
65 0.215% 0.105%
The disability assumptions are the disability assumptions used in the July 1, 2010 FRS Actuarial Valuation.
-23-
Gabriel Roeder Smith & Company
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.
Age Male Female
20 0.012% 0.008%
25 0.012% 0.008%
30 0.017% 0.016%
35 0.029% 0.037%
40 0.051% 0.068%
45 0.087% 0.106%
50 0.138% 0.153%
55 0.215% 0.152%
60 0.301% 0.151%
65 0.231% 0.143%
4. Non-duty disability rates for Firefighters and Police Officers were used in accordance with the following
illustrative example.
Age Male Female
20 0.037% 0.036%
25 0.037% 0.036%
30 0.043% 0.046%
35 0.055% 0.075%
40 0.087% 0.118%
45 0.140% 0.209%
50 0.292% 0.254%
55 0.244% 0.328%
60 0.206% 0.328%
65 0.206% 0.328%
The disability assumptions are the disability assumptions used in the July 1, 2010 FRS Actuarial Valuation.
-24-
Gabriel Roeder Smith & Company
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:
General Firefighters and
Age Employees Police Officers
Under 65 0% 0%
65 and above 100% 100%
2. For members with ten (10)or more years, but less than twenty-five (25)years of service:
General Firefighters and
Age Employees Police Officers
55 - 64 10% 20%
65 and above 100% 100%
3. For members with twenty-five (25)or more years of service:
General Firefighters and
Age Employees Police Officers
Under 55 2% 5%
55 25% 50%
56 - 64 5% 20%
65 and above 100% 100%
-25-
Gabriel Roeder Smith & Company
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 Participant 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.
il
L. Changes Since Previous Valuation
None.
II
ii !
I -26-
Gabriel Roeder Smith & Company
Table XI
City of Winter Springs
Defined Benefit Plan
Distribution by Attained Age Groups
and Service Groups as of October 1,2010
Firefighters
Attained COMPLETED YEARS OF SERVICE
Age Group 00=4 55=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-
Gabriel Roeder Smith& Company
Table XI
(Cont'd)
City of Winter Springs
Defined Benefit Plan
Distribution by Attained Age Groups
and Service Groups as of October 1,2010
General Employees
Attained COMPLETED YEARS OF SERVICE
Age Group 0-4 5-9 10-14 15-19 20-24 25-29 30&Over Total
Under 25 4 - - - - - - 4
25-29 5 3 - - - - - 8
30-34 4 5 3 - - - - 12
35-39 6 8 2 3 - - - 19
40-44 3 2 2 - - - - 7
45-49 7 7 3 2 3 1 - 23
50-54 1 8 2 5 6 1 - 23
55-59 2 5 - - 2 3 1 13
60-64 2 3 5 1 - - - 11
65 &Over - 1 2 - 1 - - 4
TOTAL 34 42 19 11 12 5 1 124
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%
-28-
Gabriel Roeder Smith& Company
Table XI
(Confd)
City of Winter Springs
Defined Benefit Plan
Distribution by Attained Age Groups
and Service Groups as of October 1,2010
Police Officers
Attained COMPLETED YEARS OF SERVICE
Age Group 0-4 5-9 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-
Gabriel Roeder Smith& Company
Table XI
(Cont'd)
City of Winter Springs
Defined Benefit Plan
Distribution by Attained Age Groups
and Service Groups as of October 1,2010
All Members
Attained COMPLETED YEARS OF SERVICE
Age Group 0-4 5-9 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-
Gabriel Roeder Smith& Company
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 Total Average
Group Count Annual Benefit Annual Benefit
Less than 40 37 $ 217,837 $ 5,887
40-44 19 212,140 11,165
45-49 20 211,255 10,563
50-54 13 84,701 6,515
55-59 4 10,742 2,686
60-64 3 14,852 4,951
65 & Over 2 2,390 1,195
k, TOTAL 98 $ 753,917 $ 7,693
B. Receiving Benefits
Current Age Total Average
Group Count Annual Benefit Annual Benefit
Less than 50 3 $ 24,124 $ 8,041
50-54 1 69,549 69,549
55-59 7 193,651 27,664
60-64 16 397,707 24,857
65-69 12 234,563 19,547
70-74 8 66,857 8,357
75 & Over 4 18,372 4,593
TOTAL 51 $ 1,004,823 $ 19,702
il
-31-
Gabriel Roeder Smith & Company
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-
Gabriel Roeder Smith & Company
Table XIV
City of Winter Springs
Defined Benefit Plan
Projected Retirement Benefits
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-
Gabriel Roeder Smith &Company
Table XV
City of Winter Springs
Defined Benefit Plan
Summary of Transaction Information'
Year Benefits Administrative Employee City Actuarial
Ending Paid2 Expenses Contributions Contributions3 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
1 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-
Gabriel Roeder Smith & Company
Table XV
(Cont'd)
City of Winter Springs
Defined Benefit Plan
Recent Compensation,Termination and Investment Return Experience
General Police&Fire General Police&Fire
Compensation Termination Investment Return
Valuation %Increase/(Decrease) Ratio of Actual Net Market Net Actuarial Assumed Rate
Date Actual Assumed Actual Assumed to Expected Value Yield* Value Yield* of Return*
10/01/2010 0.9% 5.0% 2.8% 5.3% 1.2 1.7 12.0% 7.3% 8.0%
10/01/2009 6.4% 5.1% 11.6% 5.3% 1.1 1.1 2.1% 3.5% 8.0%
10/01/2008 3.9% 3.0% 5.6% 3.0% 1.2 3.1 (16.8%) 10.1% 8.0%
10/01/2007 N/A N/A N/A N/A N/A N/A 13.8% 15.4% 8.0%
10/01/2006 N/A N/A N/A N/A N/A N/A 8.6% 9.5% 8.0%
10/01/2005 N/A N/A N/A N/A N/A N/A 11.5% 4.2% 8.0%
10/01/2004 N/A N/A N/A N/A N/A N/A 12.6% 0.6% 8.0%
Last 3 Years 3.7% 4.4% 6.6% 4.5% 1.2 1.8 (1.6%) 6.9% 8.0%
Last 5 Years N/A N/A N/A N/A N/A N/A 3.3% 9.1% 8.0%
Last 7 Years N/A N/A N/A N/A N/A N/A 5.7% 7.1% 8.0%
* Information prior to October 1,2008 as reported by prior actuary.
-35-
Gabriel Roeder Smith & Company
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
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
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-
Gabriel Roeder Smith & Company
Table XVI
(Cont'd)
City of Winter Springs
Defined Benefit Plan
Actuarial Valuation as of October 1,2010
State Required Exhibit
10/01/2009 10/01/2010
4. Total actuarial present value of future
expected benefit payments $ 48,530,001 $ 50,696,997
5. Actuarial accrued liabilities $ 37,651,017 $ 40,331,447
6. Unfunded actuarial accrued liabilities $ 16,862,362 $ 16,444,001
D. Statement of Accumulated Plan Benefits
1. Actuarial present value of accumulated vested
benefits
a. Participants currently receiving benefits $ 8,258,162 $ 10,499,351
b. Other participants 20,065,675 21,436,015
c. Total $ 28,323,837 $ 31,935,366
2. Actuarial present value of accumulated non-
vested plan benefits 489,901 427,010
3. Total actuarial present value of accumulated
plan benefits $ 28,813,738 $ 32,362,376
E. Pension Cost
1. Total normal cost $ 1,356,965 $ 1,355,080
2. Payment required to amortize unfunded liability 1,423,345 1,405,371
3. Interest adjustment 132,201 131,334
4. Total required contribution $ 2,912,511 $ 2,891,785
5. Item 4 as a percentage of base payroll 27.1% 28.1%
6. Estimated employee contributions $ 284,852 $ 274,861
7. Item 6 as a percentage of base payroll 2.6% 2.7%
8. Net amount payable by County and City $ 2,627,659 $ 2,616,924
9. Item 8 as a percentage of base payroll 24.4% 25.4%
-37-
Gabriel Roeder Smith &Company
0 Table XVI
(Cont'd)
City of Winter Springs
Defined Benefit Plan
Actuarial Valuation as of October 1,2010
State Required Exhibit
10/01/2009 10/01/2010
F. Past Contributions (Prior Year Valuation)
1. Total contribution required $ 2,654,388 $ 2,912,511
2. Actual contributions made:
a. Members $ 284,866 N/A
b. City 2,311,058 N/A
c. Total $ 2,595,924 N/A
G. Disclosure of Following Items:
1. Actuarial present value of future salaries
- attained age $ 94,496,961 $ 90,841,906
2. Actuarial present value of future employee
L contributions - attained age $ 2,393,429 $ 2,321,534
3. Actuarial present value of future contributions
from other sources N/A N/A
4. Amount of active members' accumulated
contributions $ 2,101,077 $ 2,234,009
5. Actuarial present value of future salaries and
future benefits at entry age N/A N/A
6. Actuarial present value of future employee
contributions at entry age N/A N/A
-38-
Gabriel Roeder Smith&Company
QTable XVI
(Cont'd)
City of Winter Springs
Defined Benefit Plan
State Required Exhibit
Amortization balances are written down in proportion to amortization payments.
Current Remaining
Unfunded Amortization Funding
Unfunded Actuarial Accrued Liabilities Liabilities Payment Period
10/01/2000 Initial 2,250,045 212,196 20 years
10/01/2002 Assumption Change (28,677) (2,603) 22 years
10/01/2003 Plan Amendment 180,807 16,142 23 years
10/01/2004 Plan Amendment 273,310 24,036 24 years
10/01/2005 Plan Amendment 564,770 48,988 25 years
10/01/2006 Plan Amendment 648,009 55,505 26 years
10/01/2007 Plan Amendment 661,626 56,023 27 years
10/01/2008 Plan Amendment and Assumption Change 2,963,908 248,334 28 years
10/01/2008 Method Change 6,624,771 555,063 28 years
10/01/2009 Actuarial Loss(Gain) 2,827,164 234,598 29 years
10/01/2010 Actuarial Loss(Gain) (521,732) (42,911) 30 years
TOTAL $ 16,444,001 $ 1,405,371
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 g• .
Dated: February 28,2011 Lawrence F.Wilson,A.S.A.
i
I
-39-
Gabriel Roeder Smith &Company
PHASE I
G I _S Gabriel Roeder Smith & Company One East Broward Blvd. 954.527.1616 phone
Consultants& Actuaries Suite 505 954.525.0083 fax
Ft.Lauderdale,Fl.33301-1804 www.gabrielroeder.com
December 16, 2010
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
Dear Shawn:
As requested, we are pleased to enclose six (6) copies of Phase I of the City of Winter Springs
Defined Benefit Plan.
1
We trust the above is responsive to your request.
We look forward to your comments and suggestions with a goal of moving to the financial
4 I projections under Phase II of our Actuarial Study.
If you should have any question concerning the above or if we may be of further assistance with
this matter, please do not hesitate to contact us.
Sincerest regards,
Lawrence F. Wilson,A.S.A. Peter N. Strong,A.S.A.
Senior Consultant and Actuary Consultant and Actuary
Enclosures
0
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY - PHASE I
0
TABLE OF CONTENTS I
Page
I. Executive Summary 1
II. Benchmark Provisions for Florida General Employee Plans 2
III. Benchmark Provisions for Florida Firefighter and Police Officer Plans 7
IV. Alternate Approaches 12
V. Appendices 21
0
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Gabriel Roeder Smith&Company
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY - PHASE I
EXECUTIVE SUMMARY I
At the request of the City of Winter Springs, we have compared key provisions of the City of
Winter Springs Defined Benefit Plan (Plan) to those of General Employee plans and Firefighter
and Police Officer plans throughout the State. This information is gleaned from a database
maintained by the State.
We have also compared the Plan to the Florida Retirement System (FRS) based upon the
information included in the July 1, 2010 Actuarial Valuation Report for FRS.
Additionally, we have compared the Plan to the Chapter 185 benefits for Police Officers
participating in the State program.
The provisions compared are as follows:
> Eligibility requirements for normal retirement
> Eligibility requirements for early retirement
> Benefit accrual rate
> Final average compensation period
> Member contributions
Finally, we have prepared a discussion of alternate approaches to reducing City pension costs.
GRSGabriel Roeder Smith&Company - 1 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY - PHASE I
0
BENCHMARK PROVISIONS FOR GENERAL EMPLOYEE PLANS
I
The following Exhibits provide an overview of benefit provisions of public pension plans for
General Employees in the State of Florida. The source of this information is the website of
the Department of Management Services of the State of Florida. The Department of
Management Services has data on 147 General Employee plans which have reported
information for some or all of the categories below. We have also included the benefits
available to regular class members under the Florida Retirement System (FRS) based upon
information contained in the July 1, 2010 Actuarial Valuation Report for FRS.
A. Normal Retirement Eligibility
The Plan's normal retirement eligibility for General Employees is attainment of age 65 or
completion of 30 years of service if determined to be disabled under the City's long term
disability insurance policy. The Plan also has unreduced early retirement eligibility for
General Employees upon attainment of age 55 with 10 years of service. Some may
believe this is comparable to normal retirement.
Normal retirement eligibility for regular class members of the FRS is attainment of age
62 with 6 years of service or completion of 30 years of service.
The following is a summary of the normal retirement eligibility requirements by age and
service reported for 127 public pension plans for General Employees in the State of
Florida.
Age
50 51 52 53 55 56 57 60 62 65 70 Any
2 - - - 1 - - -
3 - - - - - - - I - - -
4 - - - - - - - 1 - 1 - -
5 1 - - - 4 - 1 9 13 15 - -
6 - - - - 4 - - I 6 2 - -
7 1 2 - - 1 1 2 - -
I> 8 - - - - I - I - - - - -
9 - - - - - - - I - - - -
cn 10 - - I - 12 - 2 7 6 10 - 1
I 15 - - 1 --
20 2 I 6 1 2 10
25 2 I 4 - - 1 - - - 15
28 - - - - - - I
30 - 1 - 1 2 1 - 1 - - - 24
35 - - - - - 2
Any - - - - 1 - - 6 12 10 1 The most common normal retirement eligibility is completion of 30 years of service
regardless of age, which is a provision of 23 of the plans for which this information is
available.
The earliest age-based normal retirement eligibility provided is age 50 with 5 years of
service.
rThe most restrictive normal retirement eligibility requirement is generally the earlier of
(1) age attainment of 65 or(2) completion of 30 years of service.
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CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY - PHASE I
B. Early Retirement Eligibility
The Plan's early retirement eligibility for General Employees is the earlier of (a)
attainment of age 55 with 10 years of service (unreduced) or (b) completion of 25 years
of service (actuarially reduced for each year prior to age 55).
Early retirement eligibility for regular class members of FRS is completion of 6 years of
service (reduced by five twelfths of a percent (5/12%) for each month early retirement
precedes the age-based normal retirement date - age 62 for regular class members).
The following is a summary of the early retirement eligibility requirements by age and
service reported for 138 public pension plans for General Employees in the State of
Florida.
Age
None 42 45 47 48 50 52 53 55 60 Any
None 15 - - - - - - - - - -
2 - - - - - - 1 - -
5 - 1 - - - 3 1 - 13 4 -
6 - - - - - 1 - - 2 - 7
7 - - - - - 2 1 - 4 - -
8 - - - - 1 - 1 - - - -
9 - - - - - - - - 1 - -
1 10 - - 1 1 1 13 4 1 30 1 3
c.
14 - - - - - - - - - - 1
15 - - - - - 5 - - 12 1 -
20 - - - - - 3 - - 2 1 10
25 - - - - - - 1 - - - 6
30 - - - - - - - - - - 2
35 - - - - - - - - - - 1
Any - - - - - - - - 4 - -
The most common early retirement eligibility is attainment of age 55 with 10 years of
service, which is a provision of 30 of the plans for which this information is available.
The earliest age-based early retirement eligibility provided is age 42 with 5 years of
service.
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CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY - PHASE I
C. Benefit Accrual Rates/Multiplier
The Plan's benefit accrual rate for General Employees is 3%.
The benefit accrual rate for regular class members of FRS ranges from 1.60% to 1.68%
depending on age and service at retirement.
The following is a summary of benefit accrual rates reported by 81 public pension plans
for General Employees in the State of Florida.
Number Percentage
Benefit Accrual Rate of Plans of Plans
Exactly 1% 1 1%
1.01%to 1.99% 7 9%
Exactly 2% 10 12%
2.01%to2.49% 8 10%
Exactly 2.5% 19 24%
2.51%to2.99% 9 I1%
Exactly 3.00% 26 32%
3.01%to3.49% 1 1%
Total Plans Reporting 81 100%
Mean: 2.51%
Median: 2.50%
Most Common: 3.00%
Benefit Accrual Rates- General Employees
3.01%to 3.49% Exactly 1%
1% 1% 1.01%to 1.99%
9%
Exactly 2%
Exactly 3.00% 12%
32%
2.01%to 2.49%
10%
2.51%to 2.99%
11%
Exactly 2.5%
24%
7
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CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY - PHASE I
D. Final Average Compensation Period
The Plan's final average compensation (FAC) for General Employees is average
compensation for the three (3)highest consecutive years of service.
FAC for regular class members of FRS is average compensation for the five (5) highest
years of service.
The following is a summary of the number of pay periods used in determining Average
Final Earnings reported by 138 public pension plans for General Employees in the State
of Florida.
Final Average Number Percentage
Compensation Period of Plans of Plans
1 Year 1 1%
2 Years 9 6%
3 Years 43 31%
5 Years 84 61%
Career Average 1 1%
Total Plans Reporting 138 100%
Mean: 4.1 years
Median: 5.0 years
Most Common: 5.0 years
FAC Period-General Employees
Career Average 1 Year 2 Years
1% 1% 6%
3 Years
31%
5 Years
61%
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CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY - PHASE I
E. Member Contributions
For General Employees in the Plan, member contributions are three percent (3%) of
compensation.
There are no member contributions for regular class members of FRS.
The following is a summary of member contributions reported by 148 public pension
plans for General Employees in the State of Florida.
Number Percentage
Employee Contribution Rate of Plans of Plans
No Employee Contributions 39 26%
0.01%-0.99% 1 1%
1.00%- 1.99% 6 4%
2.00%-2.99% 4 3%
3.00%-3.99% 6 4%
4.00%-4.99% 13 9%
5.00%-5.99% 23 16%
6.00%-6.99% 19 13%
7.00%-7.99% 12 8%
8.00%-8.99% 11 7%
9.00%-9.99% 5 3%
10.00%- 10.99% 5 3%
11.00%and above 4 3%
Total Plans Reporting 148 100%
Mean: 4.58%
Median: 5.00%-5.99%
Most Common: No Contributions
Member Contributions-General Employees
10.00%-10.99% 11.00%and above
3% 3%
9.00%-9.99%
3% No Employee
Contributions
26%
8.00%-8.99%
7%
7.00%-7.99%
8%
0.01%-0.99%
1%
1.00%-1.99%
4%
6.00%-6.99%
13% - 2.00%-2.99%
\ 3%
`3.00%-3.99%
4%
4.00%-4.99%
5.00%-5.99% 9%
16%
4 GRS Gabriel Roeder Smith&Company - 6 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY - PHASE I
BENCHMARK PROVISIONS FOR
FIREFIGHTER AND POLICE OFFICER PLANS
The following Exhibits provide an overview of benefit provisions of public pension plans for
Firefighters and Police Officers in the State of Florida. The source of this information is the
website of the Department of Management Services of the State of Florida. The Department
of Management Services has data on 320 Firefighter and Police Officer plans which have
reported information for some or all of the categories below. We have also included the
benefits available to special risk class members under the FRS based upon information
contained in the July 1, 2010 Actuarial Valuation Report for FRS along with Chapter 185
benefits for Police Officers for participating cities..
A. Normal Retirement Eligibility
The Plan's normal retirement eligibility for Firefighters and Police Officers is attainment
of age 65 or completion of 30 years of service if determined to be disabled under the
City's long term disability insurance policy. The Plan also has unreduced early
retirement eligibility for Firefighters and Police Officers upon attainment of age 55 with
10 years of service. Some may believe this is comparable to normal retirement.
Normal retirement eligibility for special risk class members of the FRS is attainment of
age 55 with 6 years of service or completion of 25 years of service. Chapter 185
minimum is age 55 with 10 years of service or age 52 with 25 years of service.
The following is a summary of the normal retirement eligibility requirements by age and
service reported by 308 public pension plans for Firefighters and Police Officers in the
State of Florida.
Age
<50 50 52 53 54 55 56 57 58 60 62 65 Any
3 - - - - - - 1 - - - - - -
5 - - 1 - - 15 - 1 - 3 1 - -
6 - 2 - - - 23 - - - - - - -
7 - 2 - - - - - - - - - - -
8 - - - - - 1 - - - 1 - - -
10 5 23 12 1 1 186 - - - 4 - - 1
0 15 3 1
G, 20 7 10 2 - - 1 - - - - - - 71
c4 22 - - - - - - - - - - - - 3
23 - - - - - - - - - - 3
25 - 5 82 1 - - - - - - - - 115
26 - - - - - - - - - - - - 1
28 - - - - - - - - - - - - 2
30 - - - - - - - - - - - - 8
Any - 7 3 - - 16 - - 1 17 3 1 -
The most common normal retirement eligibility is age 55 with 10 years of service, which
is a provision of 186 of the plans for which this information is available.
The earliest age-based normal retirement eligibility provided is age 40 with 20 years of
service.
GRSGabriel Roeder Smith&Company - 7 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY - PHASE I
(. B. Early Retirement Eligibility
The Plan's early retirement eligibility for Firefighters and Police Officers is the earlier of
(a) attainment of age 55 with 10 years of service (unreduced) or (b) completion of 25
years of service(reduced using actuarial equivalence for each year prior to age 55).
Early retirement eligibility for special risk members of FRS is completion of 6 years of
service (reduced by five twelfths of a percent (5/12%) for each month early retirement
precedes the age-based normal retirement date (age 55 for special risk members)).
Chapter 185 minimum is age 50 with 10 years of service.
The following is a summary of the early retirement eligibility requirements by age and
service reported by 316 public pension plans for Firefighters and Police Officers in the
State of Florida.
Age
None 40 44 45 47 48 50 55 Any
None 30 - - - - - - - -
5 - - - 1 - - 7 - -
6 - - - 1 - 1 13 - 9
7 - - - - - - 1 - 1
1.' 8
- -
- 2
-
10 6 30 5 183 1 9
v) 14 - - - - - - - - 1
15 - 1 - 6 - - 2 2 1
20 - - - 2 - - - - 20
25 - - 1 1 - - - - 3
Any - - - 2 1 - 3 - -
The most common early retirement eligibility is attainment of age 50 with 10 years of
11 service, which is a provision of 183 of the plans for which this information is available.
The earliest age-based early retirement eligibility provided is age 40 with 10 years of
il
service.
I
4
4
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CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY - PHASE I
40 C. Benefit Accrual Rates/Multiplier
The Plan's benefit accrual rate for Firefighters and Police Officers is 3%.
The benefit accrual rate for regular class members of FRS is 3%. Chapter 185 minimum
is 2%.
The following is a summary of benefit accrual rates reported by 234 public pension plans
for Firefighters and Police Officers in the State of Florida.
Number Percentage
Benefit Accrual Rate of Plans of Plans
1.01%to 1.99% 3 1%
Exactly 2% 12 5%
Exactly 2.5% 9 4%
2.51%to 2.99% 13 6%
Exactly 3.00% 111 47%
3.01%to 3.49% 39 17%
Exactly 3.50% 33 14%
3.51%to 3.99% 10 4%
Exactly 4.00% 4 2%
Total Plans Reporting 234 100%
Mean: 3.06%
Median: 3.00%
Most Common: 3.00%
Benefit Accrual Rates-Firefighters&Police Officers
Exactly 4.00% 1.01%to 1.99%Exactly 2%
3.51%to 3.99% 2% 1% 5% Exactly 2.5%
4% 4%
2.51%to 2.99%
Exactly 3.50% 6%
14%
•
1
3.01%to 3.49%
17%
Exactly 3.00%
47%
k
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CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY - PHASE I
D. Final Average Compensation Period
The Plan's final average compensation (FAC) for Firefighters and Police Officers is
average compensation for the highest three (3)years of service.
FAC for special risk members of FRS is average compensation for the five (5) highest
years of service. Chapter 185 minimum is 5 years.
The following is a summary of the number of pay periods used in determining Average
Final Earnings reported by 307 public pension plans for Firefighters and Police Officers
in the State of Florida.
Final Average Number Percentage
Compensation Period of Plans of Plans
1 Year 3 1%
2 Years 18 6%
3 Years 84 28%
4 Years 3 1%
5 Years 197 64%
7 Years 1 0%
Career Average 1 0%
Total Plans Reporting 307 100%
Mean: 4.2 years
Median: 5.0 years
Most Common: 5.0 years
FAC Period-Firefighters and Police Officers
Career Average 1 Year
7 Years 0% 1% 2 Years
0% 6%
3 Years
28%
5 Years
64% 4 Years
1%
j
GRSGabriel Roeder Smith&Company - 10 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY - PHASE I
E. Member Contributions
For Police Officers in the Plan, member contributions are three percent (3%) of
compensation. The remaining Firefighter members no longer contribute to the Plan.
There are no member contributions for special risk members of FRS. Chapter 185
minimum is five percent(5%).
The following is a summary of member contributions reported by 321 public pension
plans for Firefighters and Police Officers in the State of Florida.
Number Percentage
Employee Contribution Rate of Plans of Plans
No Employee Contributions 13 4%
0.01%-0.99% 10 3%
1.00%- 1.99% 26 8%
2.00%-2.99% 7 2%
3.00%-3.99% 12 4%
4.00%-4.99% 12 4%
5.00%-5.99% 74 23%
6.00%-6.99% 39 12%
7.00%-7.99% 41 13%
8.00%-8.99% 35 11%
9.00%-9.99% 20 6%
10.00%-10.99% 16 5%
11.00%- 11.99% 9 3%
12.00%and above 7 2%
Total Plans Reporting 321 100%
Mean: 6.1%
Median: 6.00%-6.99%
Most Common: 5.00%-5.99%
Member Contributions-Firefighters&Police Officers
11.00%-11.99% 12.00%and above No Employee
3% 2% Contributions 0.01%-0.99%
10.00%-10.99% 49' 3%
5% 1.00%-1.99%
8%
9.00%-9.99% 2.00%-2.99%
6% 2%
3.00%-3.99%
8.00%-8.99% 4%
11%
4.00%-4.99%
4%
4
7.00%-7.99%
13%
5.00%-5.99%
4 23%
6.00%-6.99%
4 \ 12%
GRSGabriel Roeder Smith&Company - 11 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY - PHASE I
11;)
ALTERNATE APPROACHES I
There are three distinct approaches to cost reduction:
• Approach I - changing the benefit provisions of the existing Plan. This approach can bring
an immediate and long term reduction in cost if Plan changes apply to current members as
well as new hires.
• Approach II - changing the type of plan. This approach can result in a long term reduction,
but often the short term cost is increased.
• Approach III - changing the methods and/or assumptions used to value the Plan. This
approach does not actually change the long term cost of the Plan but can change the
incidence of cost.
It may be that a combination of approaches will provide the best solution.
Approach I: Chan,Ilini the Benefit Provisions of the Existinji Plan
The preceding section compares selected existing Plan provisions to those of other public
pension plans in the State of Florida.
In addition to comparing provisions to other public pension plans, another consideration with
regard to Plan provisions for Police Officers is the minimum requirements of Chapter 185.
Appendix A compares the current Plan provisions for Police Officers with the Chapter 185
provisions for participating sponsors. For Police Officers, any of the following provisions can be
changed in order to reduce pension cost. Winter Park has chosen not to comply with Chapter
185 requirements—no State funds are received.
The City has an agreement with the County for Firefighters. We recommend you review your
contract to determine any restrictions on changing your Plan benefits.
1. The current benefit rate of 3%can be lowered.
2. The period for calculating average final compensation can be changed from 3 years to 5
years.
3. The amount of overtime pay included in pensionable earnings can be limited or
eliminated.
4. The 3%member contribution rate can be increased.
I5. Provide for sharing of costs above a certain level with members.
4 There are three (3) basic ways changes can be made to Plan provisions. One is to apply the
change(s) to new members only. That approach is discussed below under Creating a Two Tier
System. Another approach is to apply the change(s) to all members for future accruals only (A.
I k, + B.) - it may make sense to reduce future member contributions at the same time. The third
approach is to apply the changes to benefits for all service but not allow benefits to be less than
G1 W Gabriel Roeder Smith&Company - 12 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY - PHASE I
the amount accrued up to the date of change (Greater of A. or B.). This can put some members
in the position of not accruing benefits until the new formula catches up with the former accrual,
and could provide the greatest cost reduction,but also probably cause the greatest backlash.
Under current legal interpretation, the Plan may be restricted from reducing future accruals for
members who are currently eligible for normal retirement. You will want to check with the Plan
attorney on this issue.
You may also wish to consider compliance with Chapter 185 to receive State funds.
Approach II: ChanMin i the Type of Plan for New and/or All Members
Creating a Two Tier System
Under this benefit structure, the benefits for current members (Tier 1) would not change. The
benefit for new members (Tier 2) would be reduced. The reduced benefits for Tier 2 could be as
follows:
• Reduce the benefit multiplier from 3%
• Increase the period for calculating the average final compensation from 3 years to 5 years
Unlike the other options, creating a two tier system will not require a change in the funding
method or the method used to amortize the unfunded accrued liability since the Plan would still
be expected to exist in perpetuity. However, the savings generated from a Tier 2 design will be
slow to materialize since cost reductions will be recognized only as new employees are hired.
Furthermore, experience has shown that over time the Tier 2 members tend to bargain (whether
4 formally or informally) for the Tier 1 benefits. If the Tier 2 members are eventually granted the
Tier 1 benefit structure, any savings will be eliminated.
A number of cities have implemented a two tier structure for general employees — less for
firefighters and police officers.
Appendix B includes some advantages and disadvantages of a two tier system.
4
II
4
11
4
GRS Gabriel Roeder Smith&Company - 13 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY - PHASE I
Florida Retirement System
FRS is the retirement system that covers State, county and public school employees as well as
employees of many other entities including some Florida municipalities. There are
approximately 600,000 employees covered by the system and another 300,000 receiving
benefits. Assets are in the area of$110 billion.
The portability of FRS benefits and service to other FRS covered employers is generally
attractive to plan members. For example, a Winter Springs Police Officer could leave and work
for a different FRS member city with no interruption or effect on his/her retirement benefits.
Although this is a benefit to employees - it could result in higher turnover for the City.
Probably the most important consideration other than cost is a matter of philosophy. If members
join the FRS, the City will relinquish control over this valuable part of the employees' benefit
package. A decision to join FRS is irrevocable - once a city joins FRS it may never withdraw.
There would still be an ongoing cost to fund the benefits already accrued under the current Plan.
In fact the cost could increase in the near term due to the method and assumption changes that
may be necessary to properly fund a closed plan.
Upon joining FRS:
• The City would simply send money to FRS each payday.
• Pension issues would not be part of the collective bargaining process.
• All plan provision decisions and investment decisions would be handled
by FRS.
• All pension questions would be directed to FRS.
• There would be no Board of Trustees and related meetings, minutes, etc.
after the current plan goes away (which may not be possible for some
time).
On the other hand, the City would have no control over the mandates of the State and would not
be able to use the local retirement plan to accomplish management goals and objectives. A case
in point is the so-called rate stabilization reserve that FRS established a few years ago. The use
of this reserve has been very successful in keeping the FRS cost stable over the past few years
while nearly all other plans have had dramatic drops followed by cost increases. There has been
pressure at times from employee groups who feel that employers have benefited from the reserve
at the expense of employees. These groups have pushed to raise benefits. The City of Winter
Springs would have virtually no say in this battle. Since the July 1, 2008 Actuarial Valuation
Report, FRS has not reported a surplus position.
Appendix C includes a comparison between FRS benefits and the City of Winter Springs
Defined Benefit Plan benefits.
Appendix D includes some advantages and disadvantages of joining FRS.
GIBSGabriel Roeder Smith&Company - 14 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY - PHASE I
Options for Transitioning to FRS
Employees entering FRS are treated as new entrants under that system. Past service with the
City is not counted for FRS purposes unless this past service is purchased. Once members enter
FRS, the City must pay a percentage of payroll (10.77% for regular class members and 23.25%
for special risk members for the fiscal year ending June 30, 2011). These rates are less than the
actuarially determined costs. Members entering FRS must be covered by Social Security. We
understand City currently participates in Social Security.
Under one option, only new hires would enter FRS and current members would continue to
accrue benefits under the existing Plan. Under another option all current and future members
would be transferred into FRS. Accrued benefits for existing participants would be frozen and
going forward the City would pay the required FRS contribution.
4
It would take 6 years to vest in FRS. Members expecting to work fewer than 6 more years would
not do well under this scenario, so a third approach might be to allow those with service above a
certain level to remain in the Plan.
Under all of these options, the initial cost for the existing Plan—whether closed or frozen—will
likely increase as the future funding period is shortened and the investment return is lowered due
to cash flow requirements and asset allocation considerations.
If the existing Plan is closed but not frozen, the short term required contribution by the City may
be greater as the more expensive, longer service employees continue in the current Plan while the
less expensive new hires are moved into FRS.
Implementing a Defined Contribution (DC) Plan
One way to implement this plan design is for current members to continue accruing benefits
under the existing plan provisions while providing new participants with a defined contribution
plan in lieu of the existing pension plan. Under another option, accrued benefits for current
members under the existing plan would be frozen. New hires and current members would both
enter the defined contribution plan.
Although this design can provide long term cost savings to the City (depending on the design of
the DC plan), initially the required contribution by the City may increase, as described above.
A significant drawback from the employee perspective is the investment risk is transferred from
the City to the employees. If investment direction is extended to the employees , experience has
shown reduced investment return. This would not only be an issue to the employees but also to
the City as they would get lesser bang for their buck — the City would have to increase their
contribution to provide the current level of Plan benefits.
I
In addition, more of the funds would go to terminating members and less to retiring members.
Appendix E includes some advantages and disadvantages of DC plans.
GRSGabriel Roeder Smith&Company - 15 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY - PHASE I
Approach III: Chaneinji the Methods and/or Assumptions
Under this scenario, the Plan is maintained with the current provisions but the funding method or
actuarial assumptions are changed.
The current funding method, the Entry Age Normal funding method is the most stable and most
commonly used funding method for Florida plans.
We do not believe a change in methods or assumptions is necessary or appropriate at this time.
Other considerations
Income Replacement in Retirement
One factor to be aware of when considering plan changes is the adequacy of total retirement
benefits for your employees. It has generally been held that a retiree needs to replace at least
60% of preretirement income to maintain his / her standard of living. Currently, an employee
retiring at age 55 with 20 years of service would have 60% of final 3 year average earnings
(slightly less than 60%of preretirement income)replaced by the Plan.
Employees' Morale
1 It is very important to consider how the changes in the pension plan may impact the morale of
employees. For example if the plan were changed to a defined contribution plan and we
experience another market decline similar to what occurred over the past few years it could
impact morale and performance for employees who are close to retirement. Only a defined
benefit plan places the investment risk on the employer rather than the employee.
GRSGabriel Roeder Smith&Company - 16 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY - PHASE I
0
APPENDIX A—CHAPTER 185 MINIMUM POLICE OFFICER BENEFITS I
City of Winter Springs Chapter 185
Benefit Provision Defined Benefit Plan Minimum Benefits
Averaging Period for FAC 3 Years 5 Years
Compensation Wages, salaries and other Total cash remuneration
amounts received(whether or including up to 300 hours of
not paid in cash) for personal overtime paid by the primary
services actually rendered in the employer.
course of employment. Includes
commissions, overtime pay and
t bonuses.
i Normal Retirement Date Age 65 Age 55 with 10 years of service
(Unreduced Early Retirement or
available at Age 55 with 10 age 52 with 25 years of service
years of service)
Early Retirement Date Age 55 with 10 years of service Age 50 with 10 years of service
(unreduced) or (reduced by 3%per year Early
completion of 25 years of Retirement Date precedes
service (actuarially reduced) Normal Retirement Date)
Normal Retirement Benefit 3% of FAC per year of service 2%of FAC per year of service
Normal Form of Payment Life Annuity 10 Year Certain and Life
Duty Disability Benefit Provided under City's long term Greater of accrued benefit and
disability policy. Eligible for 42%of FAC
Normal Retirement Benefit after
30 years of service.
Non-Duty Disability Benefit Provided under City's long term Greater of accrued benefit and
disability policy. Eligible for 25% of FAC
Normal Retirement Benefit after
30 years of service.
Member Contributions 3%of compensation 5%of compensation
GRSGabriel Roeder Smith&Company - 17 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY - PHASE I
C
APPENDIX B—TWO TIER SYSTEM
Advantages Disadvantages
Reduced cost over time Savings may take many years to be realized
Current employees keep current benefits New employees receive lower level of benefits
May limit availability to participate in Chapter
185
City stays in the pension business
GRSGabriel Roeder Smith&Company - 18 -
I
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY - PHASE I
APPENDIX C—FRS BENEFITS I
City of Winter Springs Florida Retirement System
Benefit Provision Defined Benefit Plan Regular Class Special Risk
Averaging Period for FAC 3 Years 5 Years 5 Years
Normal Retirement Date Age 65 Age 62 with 6 years of Age 55 with 6 years of
(Unreduced Early service or service or
Retirement available at 30 years of service 25 years of service
age 55 with 10 years of
service)
Normal Retirement Benefit 3% of FAC per year of 1.60%to 1.68% of FAC 3%of FAC per year of
service per year of service service
(depending on age and
service at retirement)
Early Retirement Date Age 55 with 10 years of Completion of 6 years of Completion of 6 years of
service (unreduced) or service(benefit reduced service (benefit reduced
completion of 25 years by 5%per year Early by 5%per year Early
of service (actuarially Retirement Date precedes Retirement Date precedes
reduced) age 62) age 55)
COLA None 3%per year 3%per year
Duty Disability Benefit Provided under City's Greater of accrued benefit Greater of accrued benefit
long term disability or 42%of FAC or 65%of FAC
policy. Eligible for
Normal Retirement
Benefit after 30 years of
service.
Non-Duty Disability Provided under City's Greater of accrued benefit Greater of accrued benefit
Benefit long term disability or 25% of FAC or 25%of FAC
policy. Eligible for
Normal Retirement
Benefit after 30 years of
service.
1
Member Contributions 3%of compensation None None
GRSGabriel Roeder Smith&Company - 19 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY - PHASE I
APPENDIX D—FRS BENEFITS (CONTINUED) I
Advantages Disadvantages
Benefits are standardized May result in cost increases in the short and
possibly long term
Currently no employee contributions City still has to pay off liabilities of the current
Plan
Benefits are portable, which makes it easier for Benefits are portable, which makes it easier for
the City to attract employees from other FRS employees to leave the City for another FRS
agencies agency and take their benefits with them
City eventually exits the pension business City has no control over benefit levels and
contributions(set by State legislature)
GRSGabriel Roeder Smith&Company -20 -
„.._ ---
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY - PHASE I
APPENDIX E—DEFINED CONTRIBUTION PLANS
Advantages Disadvantages
Employer costs are predictable No protection against inflation(COLAs)
No investment risk for City Employees bear investment risk
Appeals to younger,mobile employees Income is not guaranteed for employee's
lifetime—may run out
Increased portability—account balance can be Increased portability—easier for employees to
rolled over to an IRA or other retirement plan change employer and take their DC balance
with them
Investments may be directed by members Member direction of investments has resulted
in lower investment return—less bang for your
buck
•
V
GRSGabriel Roeder Smith & Company -21 -
r
W
Q
0-
1
GRS Gabriel Roeder Smith & Company One East Broward Blvd. 954.527.1616 phone
Consultants&Actuaries Suite 505 954.525.0083 fax
Ft.Lauderdale,FL 33301-1804 www.gabrielroedeecom
February 3, 2011
Mr. Shawn Boyle
Finance and Administrative Services Director
City of Winter Springs
1126 East State Road 434
4 Winter Springs, Florida 32708
# Re: City of Winter Springs Defined Benefit Plan
Actuarial Study as of October 1,2009—Phase II
Dear Shawn:
As requested, we are pleased to enclose six (6) copies of Phase II of our Actuarial Study
including ten (10) year projections for the City of Winter Springs Defined Benefit Plan.
If you should have any question concerning the above or if we may be of further assistance with
this matter, please do not hesitate to contact us.
Sincerest regards,
,..y,„„siy
Lawrence F. Wilson,A.S.A. Peter N. Strong,A.S.A.
Senior Consultant and Actuary Consultant and Actuary
Enclosures
I
4 4
GRSGabriel Roeder Smith&Company
Consultants&Actuaries
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY — PHASE II
February 3,2011
Q
0
k
Gabriel Roeder Smith&Company
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
TABLE OF CONTENTS I
Page
I. Executive Summary 1
II. Projection Results 7
III. Outline of Principal Provisions of the Retirement Plan 28
IV. Actuarial Assumptions and Cost Methods 31
Gabriel Roeder Smith &Company
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
110
EXECUTIVE SUMMARY I
At the request of the City of Winter Springs, we have completed ten (10) year projections
illustrating the financial impact of several proposed plan provisions of the City of Winter Springs
Defined Benefit Plan (Plan).
Background—The benefit accrual rate is currently three percent(3.0%) for each year of credited
service - maximum thirty(30) years.
Final average salary (FAS) used to calculate retirement benefits is currently the average of the
highest three (3) consecutive years of total compensation during employment with the City/
County. Total compensation includes but is not limited to commissions, overtime pay and
bonuses.
Vesting of benefits is currently phased in from three (3) to seven (7) years at twenty percent
(20%) per year of service — twenty percent (20%) vesting after three (3) years of service, forty
percent (40%) vesting after four (4) years - grading to one hundred percent (100%) vesting upon
completion of seven (7) years of service.
Employees are currently eligible for early retirement benefits upon the earlier of(a) attainment of
age fifty-five (55) with completion of ten (10) years of service or (b) completion of twenty-five
(25) years of service. Benefits are unreduced if early retirement occurs after attainment of age
fifty-five (55). Early retirement benefits are actuarially reduced for benefit commencement prior
to age fifty-five (55).
Proposed Changes — We understand the City wishes to determine the effect on current and
future City and County's Plan contributions of the following proposed changes.
➢ Scenario 1 —Reduce the benefit accrual rate to two and a half percent (2.5%) per year of
credited service after September 30, 2009 -maximum thirty(30) years of total service.
➢ Scenario 2 — Change the final average salary (FAS) used to calculate retirement benefits
to the average of the highest five (5) consecutive years of basic compensation out of the
last ten (10) years - not less than the average of the highest three (3) consecutive years of
total compensation as of October 1, 2009. Basic compensation excludes commissions,
overtime pay and bonuses.
➢ Scenario 3 — Change the vesting schedule for future benefit accruals to a seven (7) year
cliff vesting schedule. Under this schedule, members are zero percent (0%) vested until
completion of seven (7) years of service. Upon completion of seven (7) years of service
members are one hundred percent(100%)vested.
Accrued benefits as of October 1, 2009 remain subject to the current graded vesting
schedule of twenty percent (20%) upon completion of three (3) years of service
increasing 20%per year until 100%vested upon completion of seven(7)years of service.
GRSGabriel Roeder Smith&Company - 1 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
0
> Scenario 4—Change the unreduced early retirement eligibility for future benefit accruals
to:
• For General Employees — eligible upon attainment of age fifty-five (55) with
completion of fifteen (15) years of service.
• For Police Officers and Firefighters — eligible upon completion of thirty (30)
years of service.
Accrued benefits as of October 1, 2009 remain payable unreduced upon attainment of age
fifty-five(55)with completion of ten(10)years of service.
Accrued benefits as of October 1, 2009 remain payable after completion of twenty-five
(25) years of service prior to attainment of age fifty-five (55) with an actuarial reduction
for each year early retirement benefit commencement precedes age fifty-five (55).
Benefits accrued after October 1, 2009 are payable under the above proposed unreduced
early retirement eligibility dates. For purposes of this Study, we have assumed members
will be able to commence receipt of the portion of their benefit accrued after October 1,
2009 at the current early retirement eligibility date—attainment of age fifty-five (55) with
completion of ten (10) years of service or upon completion of twenty-five (25) years of
service — subject to reduction in the amount of one fifteenth (1/15th) per year for the first
five (5) years and one thirtieth (1/30th) per year for years in excess of five (5) years for
early retirement benefit commencement.
➢ Scenario 5—All above changes above combined.
To illustrate sensitivity of the net City / County contribution to investment return, we
have projected Scenario 5 assuming investment return of eight percent (8%) per annum
(current Valuation assumption), seven percent(7%)per annum and nine percent(9%)per
annum, respectively, during the projection period.
I
GRSGabriel Roeder Smith&Company -2 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ti. ACTUARIAL STUDY AS OF OCTOBER 1, 2009
Results — The following table shows the current net City and County contribution (cost) and the
sum of the projected net City and County contributions (costs) over the next ten (10) years for
the baseline (current Plan) forecast and for each Scenario described above separately and
combined as a dollar amount ($thousands) and as a percentage of projected covered payroll,
respectively.
Net City/County Cost-Accumulated Net City/County Cost
($thousands)
Next 1 Year Next 10 Years
Amount (Decrease) Amount (Decrease)
Baseline(Current Plan)
- Net City and County Cost $ 2,746 N/A $ 31,806 N/A
- Covered Payroll $ 11,083 $ 125,652
- %of Covered Payroll 24.8% N/A 25.3% N/A
Scenario 1: 2.5%Benefit Accrual
4 Rate for Future Service
- Net City and County Cost $ 2,510 ($236) $ 28,882 ($2,924)
I - Covered Payroll $ 11,083 $ 125,652
- %of Covered Payroll 22.6% (2.2%) 23.0% (2.3%)
Scenario 2: FAS Based on
Average of Highest 5 Years of
Base Pay
4 I - Net City and County Cost $ 2,381 ($365) $ 27,982 ($3,824)
- Covered Payroll $ 10,175 $ 116,508
- %of Covered Payroll 23.4% (3.6%) 24.0% (3.3%)
Scenario 3: 7-Year Cliff Vesting
for Future Service
- Net City and County Cost $ 2,744 ($2) $ 31,773 ($33)
- Covered Payroll $ 11,083 $ 125,652
- %of Covered Payroll 24.8% (0.0%) 25.3% (0.0%)
Scenario 4: Revised Early Ret
Eligibility for Future Service
- Net City and County Cost $ 2,588 ($ 158) $ 29,938 ($ 1,868)
- Covered Payroll $ 11,096 $ 126,416
- %of Covered Payroll 23.3% (1.4%) 23.7% (1.5%)
Scenario 5: Scenarios 1 -4
Combined
- Net City and County Cost $ 2,052 ($694) $ 23,985 ($7,821)
- Covered Payroll $ 10,186 $ 117,141
- %of Covered Payroll 20.1% (6.8%) 20.5% (6.7%)
i i
GRSGabriel Roeder Smith&Company - 3 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
(
Sensitivity Analysis
Net City/County Cost-Accumulated Net City/County Cost
($thousands)
Next 1 Year Next 10 Years
Amount (Decrease) Amount (Decrease)
Baseline(Current Plan—8%)
- Net City and County Cost $ 2,746 N/A $ 31,806 N/A
- Covered Payroll $ 11,083 $ 125,652
- %of Covered Payroll 24.8% N/A 25.3% N/A
Scenario 5: Scenarios 1 -4
Combined(8%)
- Net City and County Cost $ 2,052 ($694) $ 23,985 ($7,821)
- Covered Payroll $ 10,186 $ 117,141
- %of Covered Payroll 20.1% (6.8%) 20.5% (6.7%)
Baseline(Current Plan—7%)
- Net City and County Cost $ 2,749 N/A $ 32,768 N/A
- Covered Payroll $ 11,083 $ 125,652
- %of Covered Payroll 24.8% N/A 26.1% N/A
Scenario 5: Scenarios 1 -4
Combined (7%)
- Net City and County Cost $ 2,055 ($694) $ 24,869 ($ 7,899)
- Covered Payroll $ 10,186 $ 117,141
- %of Covered Payroll 20.2% (6.8%) 21.2% (6.7%)
Baseline(Current Plan—9%)
- Net City and County Cost $ 2,743 N/A $ 30,799 N/A
- Covered Payroll $ 11,083 $ 125,652
- %of Covered Payroll 24.7% N/A 24.5% N/A
Scenario 5: Scenarios 1 -4
Combined (9%)
- Net City and County Cost $ 2,049 ($694) $ 23,059 ($7,740)
- Covered Payroll $ 10,186 $ 117,141
- %of Covered Payroll 20.1% (6.8%) 19.7% (6.6%)
Actuarial Assumptions and Methods, System Provisions, Financial Data, Member Census
Data — The actuarial assumptions and methods, system provisions, financial data and member
census data employed for purposes of our Actuarial Study are the same actuarial assumptions
and methods, system provisions, financial data and member census data utilized for the October
1, 2009 Actuarial Valuation with the following modifications.
• For Scenarios 4 and 5, assumed retirement rates are based upon rates from the Tables
below.
1 i
GRS Gabriel Roeder Smith & Company -4 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
For General Employees (percent retiring based on age and years of service):
Years of Service
Age 0 - 10 10-15 15-25 25-30 30 or more
Under 55 0% 0% 0% 2% 2%
55 0% 5% 10% 20% 25%
55 —64 0% 5% 10% 4% 5%
65 100% 100% 100% 100% 100%
For Firefighters and Police Officers (percent retiring based on age and years of service):
Years of Service
Age 0 - 10 10-15 15-25 25-30 30 or more
Under 55 0% 0% 0% 4% 5%
55 0% 10% 15% 40% 50%
55 —64 0% 10% 15% 15% 20%
65 100% 100% 100% 100% 100%
k
Throughout the forecast period, new Police Officer and General Employee members are assumed
to be hired each year at a rate sufficient to maintain a constant active Police Officer and General
Employee headcount—stationary population. Active Firefighters are assumed to not be replaced
by new active Firefighters. New employees are assumed to have the same average demographic
characteristics (age, gender, salary — adjusted each year for inflation) as those members hired
over the past five (5) years.
Projections are deterministic - throughout the projection period Plan experience is expected to
match the assumptions — including a market value 8% annual investment return — we have
included a sensitivity analysis for Scenario 5 (all changes combined) where 7% and 9% annual
returns are also modeled.
This Projection Study is intended to describe the estimated future financial effects of the
proposed benefit changes on the Plan and is not intended as a recommendation in favor of the
change nor in opposition to the change.
These calculations are based upon assumptions regarding future events. However, the Plan's
long term costs will be determined by actual future events, which may differ materially from the
assumptions made.
If you have reason to believe the assumptions used are unreasonable, the Plan provisions are
incorrectly described or referenced, important Plan provisions relevant to this Actuarial Study
are not described or that conditions have changed since the calculations were made, you should
contact the undersigned prior to relying on information in this Projection Study. If you have
GRSGabriel Roeder Smith&Company - 5 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
reason to believe that the information provided in this Actuarial Study is inaccurate, or is in any
way incomplete, or if you need further information in order to make an informed decision on the
subject matter of this report,please contact the undersigned prior to making such decision.
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 opinion
contained herein.
If you should have any question concerning the above or if we may be of further assistance with
this matter, please do not hesitate to contact us.
Sincerest regards,
Lawrence F. Wilson,A.S.A. Peter N. Strong,A.S.A.
Senior Consultant and Actuary Consultant and Actuary
Enclosures
GRSGabriel Roeder Smith&Company - 6 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
PROJECTION RESULTS I
Scenario 1—Reduce the benefit accrual rate to two and a half percent(2.5%)per year of credited
service after September 30, 2009 - maximum thirty (30) years total service.
The following Table shows the projected payroll and a comparison of the projected City and
County costs under the baseline forecast versus Scenario 1.
Projected Projected Cumulative
Fiscal City and City and Reduction in Reduction in
Year Covered County Cost County Cost City and City and
End Payroll Current Plan Scenario 1 County Cost County Cost
2012 11,083,213 2,746,240 2,509,847 236,393 236,393
2013 11,467,759 2,913,424 2,663,670 249,754 486,147
2014 11,842,171 3,101,952 2,840,083 261,869 748,016
2015 12,177,484 3,158,995 2,886,878 272,117 1,020,133
2016 12,369,938 3,210,571 2,924,891 285,680 1,305,813
4 2017 12,708,207 3,254,552 2,956,023 298,529 1,604,342
2018 13,039,669 3,294,074 2,983,504 310,570 1,914,912
2019 13,336,686 3,329,127 3,006,090 323,037 2,237,949
2020 13,693,343 3,373,902 3,037,577 336,325 2,574,274
2021 13,933,458 3,422,843 3,073,256 349,587 2,923,861
5 Year
Totals 58,940,565 15,131,182 13,825,369 1,305,813
10 Year
Totals 125,651,928 31,805,680 28,881,819 2,923,861
GRSGabriel Roeder Smith& Company - 7 -
5
j Projected Net City and County Cost
Scenario 1-2.5%Accrual Rate for Future Service
P4,000,000
PC C7
o. 3,500,000 —
c
co
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Ix 3,000,000
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2
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•
Projected Net City and County Cost as a Percentage of Pay
Scenario 1-2.5%Accrual Rate for Future Service
cr
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25.0% nQ
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a
oo 20.0% Z
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M Current Plan Scenario 1
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
Scenario 2 — Change the final average salary (FAS) used to calculate retirement benefits to the
average of the highest five (5) consecutive years of basic compensation out of the last ten (10)
years - not less than the average of the highest three (3) consecutive years of total compensation
as of October 1, 2009.
The following Table shows the projected payroll and a comparison of the projected City and
County costs under the baseline forecast versus Scenario 2.
Projected Projected Cumulative
Fiscal City and City and Reduction in Reduction in
Year Covered County Cost County Cost City and City and
End Payroll Current Plan Scenario 2 County Cost County Cost
2012 10,175,174 2,746,240 2,381,457 364,783 364,783
2013 10,541,214 2,913,424 2,542,722 370,702 735,485
2014 10,897,174 3,101,952 2,725,767 376,185 1,111,670
2015 11,230,744 3,158,995 2,781,141 377,854 1,489,524
2016 11,444,263 3,210,571 2,827,992 382,579 1,872,103
2017 11,784,431 3,254,552 2,868,229 386,323 2,258,426
2018 12,117,217 3,294,074 2,905,405 388,669 2,647,095
2019 12,438,434 3,329,127 2,939,459 389,668 3,036,763
2020 12,798,163 3,373,902 2,980,923 392,979 3,429,742
2021 13,081,179 3,422,843 3,028,813 394,030 3,823,772
5 Year
Totals 54,288,569 15,131,182 13,259,079 1,872,103
10 Year
Totals 116,507,993 31,805,680 27,981,908 3,823,772
GRSGabriel Roeder Smith&Company - 10 -
PZi
r----- _
Projected Net City and County Cost
Scenario 2-Change FAS to Final 5-Year Average of Base Pay
P 4,000,000 —
n
z
3,500,000 l'
cl. C'
a
F. n o
-ice
3,000,000
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i2,500,000 r
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1,500,000
1,000,000 1 1 1 1 1 n
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'1O,C1 ,tie ,L6,, L.6. L6,, L6,, 16,,,b. 1,6, , L61, L01' C�'l
Y
z
•Current Plan hi Scenario 2
■
Projected Net City and County Cost as a Percentage of Pay
Scenario 2-Change FAS to Final 5-Year Average of Base Pay
30.0% _ _ —
n
o 1 ]
et
eD
a nc
25.0%
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• Current Plan • Scenario 2
N
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
Scenario 3 — Change the vesting schedule for future benefit accruals to a seven (7) year cliff
vesting schedule. Members are zero percent (0%) vested until completion of seven (7) years of
service. Members are one hundred percent(100%) vested upon completion of seven (7) years of
service.
The following Table shows the projected payroll and a comparison of the projected City and
County costs under the baseline forecast versus Scenario 3.
Projected Projected Cumulative
Fiscal City and City and Reduction in Reduction in
Year Covered County Cost County Cost City and City and
End Payroll Current Plan Scenario 3 County Cost County Cost
2012 11,083,213 2,746,240 2,743,913 2,327 2,327
2013 11,467,759 2,913,424 2,910,818 2,606 4,933
2014 11,842,171 3,101,952 3,099,104 2,848 7,781
2015 12,177,484 3,158,995 3,156,099 2,896 10,677
2016 12,369,938 3,210,571 3,207,502 3,069 13,746
2017 12,708,207 3,254,552 3,251,201 3,351 17,097
2018 13,039,669 3,294,074 3,290,533 3,541 20,638
2019 13,336,686 3,329,127 3,325,293 3,834 24,472
2020 13,693,343 3,373,902 3,369,744 4,158 28,630
2021 13,933,458 3,422,843 3,418,418 4,425 33,055
5 Year
Totals 58,940,565 15,131,182 15,117,436 13,746
10 Year
Totals 125,651,928 31,805,680 31,772,625 33,055
GRSGabriel Roeder Smith&Company - 13 -
■
Projected Net City and County Cost
Scenario 3-Change Vesting Schedule to 7-Year Cliff Vesting for Future Service
P 4,000,000 -
P n
iU y
0- 3,500,000
n O
x 3,000,000
n -
O y
i2,500,000
o
y �
b
2,000,000 d
oz
1,500,000 0 I 1=
111
0 0-4 1,000,000 H
o
az to
ril
500,000 Z
)-■ M
N ►-1
0 i I I I I I I I I = H
• Current Plan • Scenario 3
k
•
Projected Net City and County Cost as a Percentage of Pay
Scenario 3-Change Vesting Schedule to 7-Year Cliff Vesting for Future Service
P 30.0%
n
4 0
25.0% n
F.
oil
I I II 111 y
B200 z
115•000
. d
,.cz
cA c4
O tv
10.0%
�
yril
5.0% td
til M
7z
0-■ t'll
N .*
0.0% , , I I o y
ti°. <' N N N N 1, l,o o o o oL ti 1 oti' o L oti o1, '1, '1, 1, 1,
1, y
• Current Plan a Scenario 3
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
Scenario 4 — Change the unreduced early retirement eligibility for future benefit accruals to
attainment of age fifty-five (55) with completion of fifteen (15) years of service (General
Employees) - completion of thirty(30) years of service (Police Officers and Firefighters).
The following Table shows the projected payroll and a comparison of the projected City and
County costs under the baseline forecast versus Scenario 4.
Projected Projected Cumulative
Fiscal City and City and Reduction in Reduction in
Year Covered County Cost County Cost City and City and
End Payroll Current Plan Scenario 4 County Cost County Cost
2012 11,096,209 2,746,240 2,587,940 158,300 158,300
2013 11,494,237 2,913,424 2,749,947 163,477 321,777
2014 11,881,758 3,101,952 2,932,381 169,571 491,348
2015 12,244,679 3,158,995 2,981,437 177,558 668,906
2016 12,432,212 3,210,571 3,022,435 188,136 857,042
2017 12,787,628 3,254,552 3,062,706 191,846 1,048,888
2018 13,144,264 3,294,074 3,100,342 193,732 1,242,620
2019 13,458,324 3,329,127 3,126,915 202,212 1,444,832
2020 13,819,434 3,373,902 3,164,837 209,065 1,653,897
2021 14,057,546 3,422,843 3,208,569 214,274 1,868,171
5 Year
Totals 59,149,095 15,131,182 14,274,140 857,042
10 Year
Totals 126,416,291 31,805,680 29,937,509 1,868,171
GRSGabriel Roeder Smith&Company - 16 -
CI)
Projected Net City and County Cost
Scenario 4-Change Unreduced Early Retirement Eligibility to 55&15(General)and 30 Years(Police/Fire)
P 4,000,000 —
PD.
o $4'
c, 3,500,000 $'
F. n
y
3,000,000
0
-
7
2,500,000 t—' ,
y -
o
2,000,000 z
1,500,000
1,000,000 H
500,000 Z
0 b
0, ti ti t ti 0 N.
o,yL o y3 O'' o o ti o 1 o ti
,y 1 d A, d y 1, d A, y C"
• Current Plan Scenario 4
•
■
Projected Net City and County Cost as a Percentage of Pay
Scenario 4-Change Unreduced Early Retirement Eligibility to 55&15(General)and 30 Years(Police/Fire)
c 30.0% ---
n
o
e
a. l
`" 25.0% n o F. y
o20.0% i -]
a Ila
15.0% d C15 °1 r5•
0cz
10.0% •• tml
0 -
n
• tml
o d
to
5.0% __. to
- M
N y0.0% I I , I f I I I t , O
'LO�� tiOy1 tiON tiON� tiON� tiON ON ON 01' 01'
ti ti ti ti
• Current Plan • Scenario 4
Q-70
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
Scenario 5—All changes (Scenarios 1 through 4)combined.
The following Table shows the projected payroll and a comparison of the projected City and
County costs under the baseline forecast versus Scenario 5 (all changes combined), assuming
investment returns of 8% per annum throughout the projection period(baseline—current
valuation assumption).
Projected Projected Cumulative
Fiscal City and City and Reduction in Reduction in
Year Covered County Cost County Cost City and City and
End Payroll Current Plan Scenario 5 County Cost County Cost
2012 10,186,427 2,746,240 2,051,881 694,359 694,359
2013 10,563,771 2,913,424 2,198,204 715,220 1,409,579
2014 10,930,660 3,101,952 2,366,627 735,325 2,144,904
2015 11,286,887 3,158,995 2,407,495 751,500 2,896,404
2016 11,495,620 3,210,571 2,434,262 776,309 3,672,713
2017 11,850,982 3,254,552 2,460,175 794,377 4,467,090
2018 12,203,840 3,294,074 2,485,117 808,957 5,276,047
2019 12,539,780 3,329,127 2,500,925 828,202 6,104,249
2020 12,901,662 3,373,902 2,524,603 849,299 6,953,548
2021 13,181,367 3,422,843 2,556,197 866,646 7,820,194
5 Year
Totals 54,463,365 15,131,182 11,458,469 3,672,713
10 Year
Totals 117,140,996 31,805,680 23,985,486 7,820,194
GRSGabriel Roeder Smith&Company 19 -
■
Projected Net City and County Cost
Scenario 5-All Proposed Changes Combined
c 4,000,000
�' n
pz
0
y
p 3,500,000 i --
CD
n o
y
-' 3,000,000
o E y
2,500,000 4
a LA
• b
2,000,000 d E
o' z
CA Z
1,500,000 I I III I II I II I II
0
y tt
r-1
• �
1,000,000 �
CO td
500,000 tt 2
N
o T i I I f I I i I c)
y
(0' 0c. <-) ' O 1 r
O O, & c* ON' O' OH O�
ti ti ti ti ti ti ti
ti ti
z
• Current Plan(8%) •Scenario 5(8%)
N
O
t
Projected Net City and County Cost as a Percentage of Pay
Scenario 5-All Proposed Changes Combined
30.0%
cr
n
o
n.
`" 25.0% n o
B y 'I7
7
0 20.0% • y
0 r
15. 0% C7
'C z
10.0% H
5.0%
zz
N i--1
0.0% ___ , _ 'd
� ,
o e 6,, .6. 6N, o .6 6N, 61, 61,
ti ti ti ti 1,
Z
• Current Plan(8%) • Scenario 5(8%)
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
Scenario 5—All changes (Scenarios 1 through 4) combined.
The following Table shows the projected payroll and a comparison of the projected City and
County costs under the baseline forecast versus Scenario 5 (all changes combined), assuming
investment returns of 7% per annum throughout the projection period(sensitivity— 1%).
Projected Projected Cumulative
Fiscal City and City and Reduction in Reduction in
Year Covered County Cost County Cost City and City and
End Payroll Current Plan Scenario 5 County Cost County Cost
2012 10,186,427 2,749,323 2,054,919 694,404 694,404
2013 10,563,771 2,924,178 2,208,695 715,483 1,409,887
2014 10,930,660 3,125,439 2,389,294 736,145 2,146,032
2015 11,286,887 3,200,758 2,447,382 753,376 2,899,408
2016 11,495,620 3,276,623 2,496,730 779,893 3,679,301
2017 11,850,982 3,348,268 2,547,833 800,435 4,479,736
2018 12,203,840 3,418,963 2,600,672 818,291 5,298,027
2019 12,539,780 3,488,805 2,647,161 841,644 6,139,671
2020 12,901,662 3,572,043 2,704,344 867,699 7,007,370
2021 13,181,367 3,663,171 2,772,277 890,894 7,898,264
5 Year
Totals 54,463,365 15,276,321 11,597,020 3,679,301
10 Year
Totals 117,140,996 32,767,571 24,869,307 7,898,264
GRSGabriel Roeder Smith&Company -22 -
y J
.e,..d
cf)
Projected Net City and County Cost
Scenario 5-All Proposed Changes Combined
S 4,000,000
c
P? n
CD 3,500,000 "
F.
.+ 3,000,000 11111 �c v
, , 4
4 b
= . 111 ill 2,000,000 C7 E,
cA
1,500,000
H
L0000
0
500,000 I I I I II II I Z
M
0 p Fd
O,� O,� O� ONE ON ON ON ON 0"V 01'1
ti ti ti ti 1, 1, ti ti ti ti Z
• Current Plan(7%) Scenario 5(7%)
N
w
■
Projected Net City and County Cost as a Percentage of Pay
Scenario 5-All Proposed Changes Combined
P 35.0%
^
n
o 30.0% y ro ,
M
F. '-7 O
R° 25.0% ' '
o �]
b
r r.
m H15.0%
H
H
5.0% MCm1
M
N
0.0% r-.._ o
h � � � 1
ON' O,' QN QN O, Q.N. QN O, 0' 01'
ti ti ti ti ti ti ti ti
• Current Plan(7%) Scenario 5(7%)
N
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
Scenario 5—All changes (Scenarios 1 through 4) combined.
The following Table shows the projected payroll and a comparison of the projected City and
County costs under the baseline forecast versus Scenario 5 (all changes combined), assuming
investment returns of 9% per annum throughout the projection period(sensitivity+ 1%).
Projected Projected Cumulative
Fiscal City and City and Reduction in Reduction in
Year Covered County Cost County Cost City and City and
End Payroll Current Plan Scenario 5 County Cost County Cost
2012 10,186,427 2,743,158 2,048,842 694,316 694,316
2013 10,563,771 2,902,610 2,187,654 714,956 1,409,272
2014 10,930,660 3,078,191 2,343,691 734,500 2,143,772
2015 11,286,887 3,116,482 2,366,875 749,607 2,893,379
2016 11,495,620 3,142,899 2,370,229 772,670 3,666,049
2017 11,850,982 3,157,825 2,369,632 788,193 4,454,242
2018 12,203,840 3,164,175 2,364,803 799,372 5,253,614
2019 12,539,780 3,161,753 2,347,436 814,317 6,067,931
2020 12,901,662 3,164,594 2,334,429 830,165 6,898,096
2021 13,181,367 3,167,022 2,325,753 841,269 7,739,365
5 Year
Totals 54,463,365 14,983,340 11,317,291 3,666,049
10 Year
Totals 117,140,996 30,798,709 23,059,344 7,739,365
GRSGabriel Roeder Smith &Company - 25 -
iir
I
Projected Net City and County Cost
Scenario 5-All Proposed Changes Combined
3,500,000
n
o �]
CD
CD
3,000,000
5 y O
5.
R' 2,500,000
C") Pt
b r
• 2,000,000 y b
d E
�Cz
1,500,000
o d
1,000,000
y tml
o
to to
500,000 tiJ M
zz
,—, rii
N y
0 r °
°` 4' � A 4' y
0%1' oti� o% 0% 0% 0% 0% 0% 01' oti
ti ti ti ti ti ti ti ti ti
Z
• Current Plan(9%) •Scenario 5(9%)
N
o,
M'�
Projected Net City and County Cost as a Percentage of Pay
Scenario 5-All Proposed Changes Combined
30.0%
cr
Pz ._ ._.
0
r
co
25.0%
CD
CI.
y
2o.o � z
�o :�
�
rtl
15.0% F
o !I
10.0/ tml
a
0% � �
zM
o �
o.o% ° b
r Current Plan(9%) Scenario 5(9%)
N
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
OUTLINE OF PRINCIPAL PROVISIONS OF THE RETIREMENT PLAN I
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 Year 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.
GRSGabriel Roeder Smith&Company -28 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
G. Early 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
4 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. 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
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.
GRSGabriel Roeder Smith&Company -29 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
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.
Years of Service Vested Percentage
Less than 3 0%
3 20%
4 40%
5 60%
6 80%
7 100%
M. Normal Form 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.
GRSGabriel Roeder Smith&Company - 30 -
A. Mortality CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
0
ACTUARIAL ASSUMPTIONS AND METHODS I
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
k
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.
General Firefighters and
Service Employees Police Officers
Less than 5 years 6.5% 7.5%
5 -9years 5.5% 5.5%
10— 14 years 4.5% 5.5%
15+years 3.0% 3.5%
I
4
GRSGabriel Roeder Smith&Company - 31 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
E. Employee Withdrawal Rates
1. Withdrawal rates for male General Employees were used in accordance with the
following illustrative example:
Withdrawal Rates per 100 Employees
Service
Age 0 1 2 3 4 5 6 7 8 9 10+
20 32.8 25.4 22.7 18.4 15.8 11.7 11.1 11.1 11.0 10.0 9.8
25 27.2 18.5 17.2 14.6 12.7 9.7 8.5 8.4 7.7 6.3 6.2
30 25.8 15.4 14.0 13.2 11.8 8.8 7.8 7.1 6.4 5.5 4.7
35 25.8 14.3 12.8 12.6 10.9 8.5 7.5 6.8 6.2 5.3 4.2
40 24.4 12.6 12.0 10.7 9.0 7.4 6.7 6.2 5.8 5.3 3.0
45 24.4 12.5 11.6 10.3 8.8 6.8 6.5 6.0 5.1 5.1 2.7
50 23.4 12.2 10.7 9.4 7.9 6.0 5.5 5.3 4.6 4.6 3.0
55 27.4 12.2 10.7 9.3 7.8 6.8 5.4 5.2 4.4 4.3 4.5
60 27.4 12.2 10.7 9.3 7.8 6.8 5.4 5.1 4.3 4.2 5.3
65 27.4 12.2 10.7 9.3 7.8 6.8 5.4 5.1 4.3 4.2 3.7
2. Withdrawal rates for female General Employees were used in accordance with the
following illustrative example:
Withdrawal Rates per 100 Employees
Service
Age 0 1 2 3 4 5 6 7 8 9 10+
20 30.3 25.8 22.1 17.4 15.4 13.5 11.4 11.3 10.5 10.2 11.6
25 26.6 19.8 17.1 13.0 12.9 10.7 9.7 9.2 7.8 7.1 5.3
30 25.4 16.9 14.5 11.6 11.3 9.4 8.7 8.1 7.1 6.5 5.4
35 25.4 15.9 13.5 11.2 10.9 9.0 8.0 7.8 6.8 6.2 4.6
40 24.4 14.0 12.1 10.0 9.1 7.0 6.5 6.3 6.1 5.0 3.3
45 24.4 13.9 11.9 9.8 8.8 6.7 6.5 6.1 5.8 4.7 3.0
50 23.2 13.4 11.0 8.8 8.4 6.2 5.9 5.5 5.5 4.6 3.0
55 23.2 13.4 11.0 8.7 8.3 6.1 5.8 5.4 5.4 4.5 3.0
60 23.2 13.4 11.0 8.7 8.3 6.1 5.8 5.4 5.4 4.5 3.0
65 23.2 13.4 11.0 8.7 8.3 6.1 5.8 5.4 5.4 4.5 3.0
The withdrawal assumptions are the withdrawal assumptions used in the July 1, 2009 Florida
Retirement System (FRS)Actuarial Valuation.
4
GRSGabriel Roeder Smith &Company - 32 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
3. Withdrawal rates for male Firefighters and Police Officers were used in accordance with
the following illustrative example:
Withdrawal Rates per 100 Employees
Service
Age 0 1 2 3 4 5 6 7 8 9 10+
20 21.4 10.3 8.6 8.4 7.5 5.3 5.2 3.1 2.9 2.6 2.3
25 20.6 9.8 8.1 7.9 7.0 5.3 5.2 3.1 2.9 2.6 2.3
30 20.6 9.5 7.7 7.5 6.7 5.3 5.2 3.1 2.9 2.6 2.1
35 20.6 8.8 7.4 7.2 6.5 5.3 5.1 3.1 2.9 2.6 2.0
40 20.6 8.0 6.8 6.7 6.0 4.8 4.6 3.1 2.9 2.6 1.9
45 20.6 7.3 6.0 6.0 5.5 4.3 4.1 3.1 2.9 2.6 1.8
50 20.6 6.5 5.3 5.3 5.0 3.8 3.6 3.1 2.9 2.6 1.8
55 20.6 5.8 4.7 4.7 4.6 3.3 3.2 3.1 2.9 2.6 1.8
60 20.6 5.3 4.7 4.7 4.6 3.3 3.2 3.1 2.9 2.6 1.8
65 20.6 5.3 4.7 4.7 4.6 3.3 3.2 3.1 2.9 2.6 1.8
4. Withdrawal rates for female Firefighters and Police Officers were used in accordance
with the following illustrative example:
Withdrawal Rates per 100 Employees
Service
Age 0 1 2 3 4 5 6 7 8 9 10+
20 21.3 15.5 12.3 10.3 9.7 6.1 5.9 5.0 4.2 4.2 1.9
25 21.3 14.2 11.6 9.8 9.2 6.1 5.9 5.0 4.2 4.2 1.9
30 21.3 13.2 10.6 9.3 8.7 6.1 5.9 5.0 4.2 4.2 1.7
35 21.3 12.2 9.6 8.8 8.4 6.1 5.9 5.0 4.2 4.1 1.5
40 21.3 11.2 8.6 8.3 7.6 6.1 5.9 5.0 4.1 4.1 2.5
45 21.3 10.2 7.6 7.6 7.0 6.1 5.9 5.0 4.1 4.1 2.5
50 21.3 9.2 6.6 6.6 6.4 6.1 5.9 5.0 4.1 4.0 1.6
55 21.3 8.4 5.8 5.6 5.4 5.3 5.1 5.0 4.1 4.0 4.0
60 21.3 8.4 5.8 5.6 5.4 5.3 5.1 5.0 4.1 4.0 4.0
65 21.3 8.4 5.8 5.6 5.4 5.3 5.1 5.0 4.1 4.0 4.0
The withdrawal assumptions are the withdrawal assumptions used in the July 1, 2009 FRS
Actuarial Valuation.
GRSGabriel Roeder Smith&Company - 33 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
F. Disability Rates
1. Line-of-duty disability rates for General Employees were used in accordance with the
following illustrative example.
Age Male Female
20 0.002% 0.000%
25 0.002% 0.001%
30 0.003% 0.001%
35 0.005% 0.003%
40 0.009% 0.005%
45 0.014% 0.008%
50 0.022% 0.010%
55 0.034% 0.016%
60 0.048% 0.022%
65 0.050% 0.020%
2. Non-duty disability rates for General Employees were used in accordance with the
following illustrative example.
Age Male Female
20 0.000% 0.000%
25 0.027% 0.010%
30 0.053% 0.026%
35 0.066% 0.049%
40 0.092% 0.070%
45 0.122% 0.114%
50 0.203% 0.184%
55 0.339% 0.294%
60 0.445% 0.419%
65 0.215% 0.105%
The withdrawal assumptions are the withdrawal assumptions used in the July 1, 2009 FRS
Actuarial Valuation.
GRSGabriel Roeder Smith&Company - 34 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
3. Line-of-duty disability rates for Firefighters and Police Officers were used in
accordance with the following illustrative example.
Age Male Female
20 0.012% 0.008%
25 0.012% 0.008%
30 0.017% 0.016%
35 0.029% 0.037%
40 0.051% 0.068%
45 0.087% 0.106%
50 0.138% 0.153%
55 0.215% 0.152%
60 0.301% 0.151%
65 0.231% 0.143%
4. Non-duty disability rates for Firefighters and Police Officers were used in accordance
with the following illustrative example.
Age Male Female
20 0.037% 0.036%
25 0.037% 0.036%
30 0.043% 0.046%
35 0.055% 0.075%
40 0.087% 0.118%
45 0.140% 0.209%
50 0.292% 0.254%
55 0.244% 0.328%
60 0.206% 0.328%
65 0.206% 0.328%
The withdrawal assumptions are the withdrawal assumptions used in the July 1, 2009 FRS
Actuarial Valuation.
GRSGabriel Roeder Smith&Company - 35 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
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:
General Firefighters and
Age Employees Police Officers
Under 65 0% 0%
65 and above 100% 100%
2. For members with ten (10) or more years, but less than twenty-five (25)years of service:
General Firefighters and
Age Employees Police Officers
55 —64 10% 20%
65 and above 100% 100%
3. For members with twenty-five (25)or more years of service:
General Firefighters and
Age Employees Police Officers
Under 55 2% 5%
55 25% 50%
56—64 5% 20%
65 and above 100% 100%
GRSGabriel Roeder Smith&Company - 36-
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
Note: For Scenarios 4 and 5, retirement rates were used in accordance with the following
tables.
1. For General Employees:
Years of Service
Age 0 - 10 10-15 15-25 25-30 30 or more
Under 55 0% 0% 0% 2% 2%
55 0% 5% 10% 20% 25%
55—64 0% 5% 10% 4% 5%
65 100% 100% 100% 100% 100%
2. For Firefighters and Police Officers:
Years of Service
Age 0 - 10 10-15 15-25 25-30 30 or more
Under 55 0% 0% 0% 4% 5%
55 0% 10% 15% 40% 50%
• 55 —64 0% 10% 15% 15% 20%
65 100% 100% 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 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
Iwhose 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.
GRSGabriel Roeder Smith&Company - 37 -
I
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
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
4 employee who is eligible to receive benefits under the Plan is the excess of the actuarial
present value of future benefits over the actuarial present value of current and future normal
'l costs. The unfunded actuarial accrued liability as of any valuation date is the excess of the
actuarial accrued liability over Plan assets.
0
GRSGabriel Roeder Smith&Company - 38 -
w
C,,
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o_
G 1 _S Gabriel Roeder Smith & Company One East Broward Blvd. 954.527.1616 phone
Consultants&Actuaries Suite 505 954.525.0083 fax
Ft.Lauderdale,F[.33301-1804 www.gabrielroeder.com
April 4, 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 Study as of October 1,2009—Phase III
Dear Shawn:
As requested, we are pleased to enclose six(6) copies of Phase III of our Actuarial Study
including ten (10)year projections for the City of Winter Springs Defined Benefit Plan.
If you should have any question concerning the above or if we may be of further assistance with
this matter, please do not hesitate to contact us.
Sincerest regards,
Lawrence F. Wilson,A.S.A. Peter N. Strong,A.S.A.
Senior Consultant and Actuary Consultant and Actuary
Enclosures
0
G IR.SGabriel Roeder Smith& Company
Consultants&Actuaries
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY — PHASE III
April 4,2011
Gabriel Roeder Smith&Company
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
0
TABLE OF CONTENTS
Pane
I. Executive Summary 1
II. Projection Results 6
III. Outline of Principal Provisions of the Retirement Plan 30
IV. Actuarial Assumptions and Cost Methods 33
41)
0
Gabriel Roeder Smith&Company
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
EXECUTIVE SUMMARY
At the request of the City of Winter Springs, we have completed ten (10) year projections
illustrating the financial impact of several proposed plan provisions of the City of Winter Springs
Defined Benefit Plan (Plan).
Background—The benefit accrual rate is currently three percent(3.0%) for each year of credited
service - maximum thirty (30)years.
Final average salary (FAS) used to calculate retirement benefits is currently the average of the
highest three (3) consecutive years of total compensation during employment with the City/
County. Total compensation includes but is not limited to commissions, overtime pay and
bonuses.
Vesting of benefits is currently phased in from three (3) to seven (7) years at twenty percent
(20%) per year of service — twenty percent (20%) vesting after three (3) years of service, forty
percent (40%) vesting after four (4) years - grading to one hundred percent(100%) vesting upon
completion of seven(7)years of service.
Employees are currently eligible for early retirement benefits upon the earlier of(a) attainment of
age fifty-five (55) with completion of ten (10) years of service or (b) completion of twenty-five
(25) years of service. Benefits are unreduced if early retirement occurs after attainment of age
fifty-five (55). Early retirement benefits are actuarially reduced for benefit commencement prior
to age fifty-five (55).
Proposed Changes — We understand the City wishes to determine the effect on current and
future City and County's Plan contributions of the following proposed changes.
➢ Scenario 1 — Change the final average salary (FAS) used to calculate retirement benefits
to the average of the highest five (5) consecutive years of basic compensation out of the
last ten (10) years - not less than the average of the highest three (3) consecutive years of
total compensation as of September 30, 2009. Basic compensation excludes
commissions, overtime pay and bonuses.
➢ Scenario 2 — Change the vesting schedule for future benefit accruals to a seven (7) year
cliff vesting schedule. Under this schedule, members are zero percent (0%) vested until
completion of seven (7) years of service. Upon completion of seven (7) years of service
members are one hundred percent(100%)vested.
Accrued benefits as of September 30, 2009 remain subject to the current graded vesting
schedule of twenty percent (20%) upon completion of three (3) years of service
increasing 20%per year until 100%vested upon completion of seven (7)years of service.
C
I
GRS Gabriel Roeder Smith & Company - 1 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
41)
> Scenario 3 — Reduce the benefit accrual rate for General Employees to two and a half
percent (2.5%) per year of credited service after September 30, 2009 - maximum thirty
(30)years of total service.
➢ Scenario 4 — Change the unreduced early retirement eligibility for newly hired Police
Officers to attainment of age sixty-two (62) with completion of fifteen (15) years of
service.
> Scenario 5 — Create a Defined Contribution (DC) Plan for all newly hired employees.
The City will provide matching contributions of up to 5%of basic compensation.
> Scenario 6 — Create a Defined Contribution (DC) Plan for newly hired General
Employees. The City will provide matching contributions of up to 5% of basic
compensation.
In addition to projections of the above described individual Scenarios, we understand the City
wishes to determine the effect on current and future City and County's Plan contributions of the
following combined Proposals.
➢ Proposal 1 —Combination of Scenarios 1 and 2 for all current employees and Scenario 5
for all newly hired employees.
> Proposal 2 — Combination of Scenarios 1 and 2 for all current employees and newly
hired Police Officers, Scenario 3 for current General Employees, Scenario 4 for future
Police Officers and Scenario 6 for newly hired General Employees.
Results — The table on the following page shows the current net City and County contribution
(cost) and the sum of the projected net City and County contributions (costs) over the next ten
(10) years for the baseline (current Plan) forecast and for each Scenario described above
separately and combined as a dollar amount ($thousands) and as a percentage of projected
covered payroll, respectively.
GRSGabriel Roeder Smith& Company -2 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
Net City/County Cost-Accumulated Net City/County Cost
($thousands)
Next 1 Year Next 10 Years
Amount (Decrease) Amount (Decrease)
Baseline(Current Plan)
- Net City and County Cost $ 2,746 N/A $ 31,806 N/A
- Covered Payroll $ 11,083 $ 125,652
- %of Covered Payroll 24.8% N/A 25.3% N/A
Scenario 1: FAS Based on Average
of Highest 5 Years of Base Pay
- Net City and County Cost $ 2,381 ($365) $ 27,982 ($3,824)
- Covered Payroll $ 10,175 $ 116,508
- %of Covered Payroll 23.4% (3.6%) 24.0% (3.3%)
Scenario 2: 7-Year Cliff Vesting
for Future Service
- Net City and County Cost $ 2,744 ($2) $ 31,773 ($33)
- Covered Payroll $ 11,083 $ 125,652
- %of Covered Payroll 24.8% (0.0%) 25.3% (0.0%)
Scenario 3: 2.5%Benefit Accrual
Rate for Future Service for General
Employees
- Net City and County Cost $ 2,622 ($ 124) $ 30,212 ($ 1,594)
- Covered Payroll $ 11,083 $ 125,652
- %of Covered Payroll 23.7% (1.1%) 24.0% (1.3%)
Scenario 4: Revised Early
Retirement Eligibility for Newly
Hired Police Officers(62&15)
- Net City and County Cost $ 2,738 ($8) $ 31,354 ($452)
- Covered Payroll $ 11,083 $ 125,652
- %of Covered Payroll 24.7% (0.1%) 25.0% (0.4%)
Scenario 5: DC Plan for All Newly
Hired Employees
- Net City and County Cost $ 2,704 ($42) $ 29,783 ($2,023)
- Covered Payroll $ 11,053 $ 124,161
- %of Covered Payroll 24.5% (0.4%) 24.0% (1.6%)
Scenario 6: DC Plan for Newly
Hired General Employees
- Net City and County Cost $ 2,711 ($35) $ 30,221 ($ 1,585)
- Covered Payroll $ 11,068 $ 125,004
- %of Covered Payroll 24.5% (0.3%) 24.2% (1.3%)
Proposal 1: Scenarios 1,2 and 5
Combined.
- Net City and County Cost $ 2,341 ($405) $ 26,103 ($5,703)
- Covered Payroll $ 10,175 $ 116,508
- %of Covered Payroll 23.0% (4.0%) 22.4% (4.9%)
Proposal 2: Scenarios 1,2,3,4 and
6 Combined.
- Net City and County Cost $ 2,238 ($508) $ 25,213 ($6,593)
- Covered Payroll $ 10,175 $ 116,508
- %of Covered Payroll 22.0% (5.0%) 21.6% (5.7%)
GRSGabriel Roeder Smith & Company - 3 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
Actuarial Assumptions and Methods, System Provisions, Financial Data and Member Census
Data — The actuarial assumptions and methods, system provisions, financial data and member
census data employed for purposes of our Actuarial Study are the same actuarial assumptions
and methods, system provisions, financial data and member census data utilized for the October
1, 2009 Actuarial Valuation with the following modifications.
• For Scenario 4 and Proposal 2, assumed retirement rates for newly hired Police Officers
are based upon rates from the Tables below.
Years of Service
A
Ae 0-14 15 16-24 25-30 30 or more
Under 55 0% 0% 0% 4% 50%
55 —61 0% 0% 0% 10% 50%
62 0% 40% 40% 40% 50%
62—64 0% 40% 20% 20% 50%
65 100% 100% 100% 100% 100%
• For Proposals 1 and 2 we have assumed newly hired employees will fully participate in
the proposed defined contribution at a level to fully earn the proposed 5%match.
Throughout the forecast period new Police Officer and General Employee members are assumed
to be hired each year at a rate sufficient to maintain a constant active Police Officer and General
Employee headcount—stationary population. Active Firefighters are assumed not to be replaced
by new active Firefighters. New employees are assumed to have the same average demographic
characteristics (age, gender, salary — adjusted each year for inflation) as those members hired
over the past five (5)years.
Projections are deterministic - throughout the projection period Plan experience is expected to
match the assumptions — including a market value 8% annual investment return. In Phase II we
modeled the current Plan under an 8%+/- 1%to assess sensitivity to investment return.
This Projection Study is intended to describe the estimated future financial effects of the
proposed benefit changes on the Plan and is not intended as a recommendation in favor of the
change nor in opposition to the change.
These calculations are based upon assumptions regarding future events. However, the Plan's
long term costs will be determined by actual future events, which may differ materially from the
assumptions made.
If you have reason to believe the assumptions used are unreasonable, the Plan provisions are
incorrectly described or referenced, important Plan provisions relevant to this Actuarial Study
are not described or that conditions have changed since the calculations were made, you should
contact the undersigned prior to relying on information in this Projection Study. If you have
reason to believe that the information provided in this Actuarial Study is inaccurate, or is in any
way incomplete, or if you need further information in order to make an informed decision on the
subject matter of this report, please contact the undersigned prior to making such decision.
GRSGabriel Roeder Smith & Company -4 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
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 opinion
contained herein.
If you should have any question concerning the above or if we may be of further assistance with
this matter,please do not hesitate to contact us.
Sincerest regards,
Lawrence F. Wilson,A.S.A. Peter N. Strong, A.S.A.
Senior Consultant and Actuary Consultant and Actuary
Enclosures
C
GRSGabriel Roeder Smith&Company - 5 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
PROJECTION RESULTS
Scenario 1 — Change the final average salary (FAS) used to calculate retirement benefits to the
average of the highest five (5) consecutive years of basic compensation out of the last ten (10)
years - not less than the average of the highest three (3) consecutive years of total compensation
as of October 1, 2009.
The following Table shows the projected payroll and a comparison of the projected City and
County costs under the baseline forecast versus Scenario 1.
Projected Projected Cumulative
Fiscal City and City and Reduction in Reduction in
Year Covered County Cost County Cost City and City and
End Payroll Current Plan Scenario 1 County Cost County Cost
2012 10,175,174 2,746,240 2,381,457 364,783 364,783
2013 10,541,214 2,913,424 2,542,722 370,702 735,485
2014 10,897,174 3,101,952 2,725,767 376,185 1,111,670
2015 11,230,744 3,158,995 2,781,141 377,854 1,489,524
2016 11,444,263 3,210,571 2,827,992 382,579 1,872,103
2017 11,784,431 3,254,552 2,868,229 386,323 2,258,426
2018 12,117,217 3,294,074 2,905,405 388,669 2,647,095
2019 12,438,434 3,329,127 2,939,459 389,668 3,036,763
2020 12,798,163 3,373,902 2,980,923 392,979 3,429,742
2021 13,081,179 3,422,843 3,028,813 394,030 3,823,772
5 Year
Totals 54,288,569 15,131,182 13,259,079 1,872,103
10 Year
Totals 116,507,993 31,805,680 27,981,908 3,823,772
C
GRSGabriel Roeder Smith& Company - 6 -
' p n
IP
Projected Net City and County Cost
Scenario 1-Change FAS to Final 5-Year Average of Base Pay
3,500,000
cr
R.
en
X/ -
o y
0 3,000,000
F. y 0
2,500,000
n Z
v ,L11
2,000,000 y
•d
•cz
1,500,000 n
d CA CA
°11 tll
1,000,000 I I I I I I I II 1 0 hh
c
500,000 m to
zz
N
0 , 1 I 1 , , I I I , O ~7
•Current Plan •Scenario 1
v
PZI
Projected Net City and County Cost as a Percentage of Pay
Scenario 1-Change FAS to Final 5-Year Average of Base Pay
P 30.0%
cr
n
o �]
a
:; 25.0%
n
3 IQ 0 O
g
:::: �]r'' V1 ld. u,__ v__ d
. z
d
10.0% ..
O1-i
od
5.0% b: VI
zz
N y0.0% 1 m a a I B a 1 1 C
VD r ti � �� tip p � � � �ti ~ y � may
ti° ° ° ° °°ti ti° ti° ti ti ti ti ti
z
•Current Plan •Scenario 1
oc
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
Scenario 2 — Change the vesting schedule for future benefit accruals to a seven (7) year cliff
vesting schedule. Members are zero percent (0%) vested until completion of seven (7) years of
service. Members are one hundred percent(100%) vested upon completion of seven (7) years of
service.
The following Table shows the projected payroll and a comparison of the projected City and
County costs under the baseline forecast versus Scenario 2.
Projected Projected Cumulative
Fiscal City and City and Reduction in Reduction in
Year Covered County Cost County Cost City and City and
End Payroll Current Plan Scenario 2 County Cost County Cost
2012 11,083,213 2,746,240 2,743,913 2,327 2,327
2013 11,467,759 2,913,424 2,910,818 2,606 4,933
2014 11,842,171 3,101,952 3,099,104 2,848 7,781
2015 12,177,484 3,158,995 3,156,099 2,896 10,677
2016 12,369,938 3,210,571 3,207,502 3,069 13,746
2017 12,708,207 3,254,552 3,251,201 3,351 17,097
2018 13,039,669 3,294,074 3,290,533 3,541 20,638
2019 13,336,686 3,329,127 3,325,293 3,834 24,472
2020 13,693,343 3,373,902 3,369,744 4,158 28,630
2021 13,933,458 3,422,843 3,418,418 4,425 33,055
5 Year
Totals 58,940,565 15,131,182 15,117,436 13,746
10 Year
Totals 125,651,928 31,805,680 31,772,625 33,055
GRSGabriel Roeder Smith & Company - 9 -
0
IN
Projected Net City and County Cost
Scenario 2-Change Vesting Schedule to 7-Year Cliff Vesting for Future Service
c3,500,000 - �
Po' n
c 3,000,000 "C
eo
I
" n O
1-3 Prl
0 2,500,000
.a " M"
2,000,000 y b
�cz
1,500,000
H
1,000,000
nm
Od
to to
500,000 Z I I
0 = b
A,ti >i It b 1 O O y r"
0 a r0 oy 0 0• 0• 0 `0�O 'L K L L � � � L
•Current Plan •Scenario 2
0
It
Projected Net City and County Cost as a Percentage of Pay
Scenario 2-Change Vesting Schedule to 7-Year Cliff Vesting for Future Service
AC cr
30.0% __
2.
n
c
ro
M 25.0% -
n
5
Oil
o 20.0%
-e y b
15.0% ,..,... d E
10.0% ..._ m
O -1
nz
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5.0% U
0.0% b
a `' ti� t ti ti %, 0 ti titi
P ° °ti
`1° ti '10 ti 1°ti `° 19' 'V L y
y
Current Plan Scenario 2
I
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
L
Scenario 3 — Reduce the benefit accrual rate for General Employees to two and a half percent
(2.5%) per year of credited service after September 30, 2009 - maximum thirty (30) years total
service.
The following Table shows the projected payroll and a comparison of the projected City and
County costs under the baseline forecast versus Scenario 3.
Projected Projected Cumulative
Fiscal City and City and Reduction in Reduction in
Year Covered County Cost County Cost City and City and
End Payroll Current Plan Scenario 3 County Cost County Cost
2012 11,083,213 2,746,240 2,622,458 123,782 123,782
2013 11,467,759 2,913,424 2,780,548 132,876 256,658
2014 11,842,171 3,101,952 2,961,577 140,375 397,033
2015 12,177,484 3,158,995 3,012,905 146,090 543,123
2016 12,369,938 3,210,571 3,055,243 155,328 698,451
2017 12,708,207 3,254,552 3,091,579 162,973 861,424
2018 13,039,669 3,294,074 3,123,515 170,559 1,031,983
2019 13,336,686 3,329,127 3,150,068 179,059 1,211,042
2020 13,693,343 3,373,902 3,186,833 187,069 1,398,111
2021 13,933,458 3,422,843 3,226,920 195,923 1,594,034
5 Year
Totals 58,940,565 15,131,182 14,432,731 698,451
10 Year
Totals 125,651,928 31,805,680 30,211,646 1,594,034
GRSGabriel Roeder Smith& Company - 12 -
■
Projected Net City and County Cost
Scenario 3-2S%Accrual Rate for Newly Hired General Employees
C"") 3,500,000
n
o r-]
3,000,000 K'
y0
a
cn 7.1
2,500,000 • z
a C/1
2,000,000 C4
d ∎
1,500,000 LA• CA
d
CA
1,000,000 O Z
o d
500,000 I I I I I I I I m !
zz
0-, m
N i--i
ti'' ti°` ti`'
N. ti� ti� ti°' 1, tiN
15°' 1§ 16 .10 1, (yo ,yo ,10 do 1, y
■ Current Plan •Scenario 3
w
Projected Net City and County Cost as a Percentage of Pay
Scenario 3-2.5%Accrual Rate for Newly Hired General Employees
w 30.0%
c
n
o H
r.
co
25.0%
n0
3 II
c 20.0% Z
o.
b V1
15.0% d
�C z
10.0% 111 H
H
5.0% td CO
til t'll
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zz
N 1■1
0.0% . , . f , , , . 1 i C y
titi ti'' ti°` ti`' CO ti tit % tic) ti� titi r
r1, 10 ,1, X10 ,10 X1, ,1, `1' �, '1,
• Current Plan • Scenario 3
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
Scenario 4—Change the unreduced early retirement eligibility for newly hired Police Officers to
attainment of age sixty-two (62)with completion of fifteen(15)years of service.
The following Table shows the projected payroll and a comparison of the projected City and
County costs under the baseline forecast versus Scenario 4.
Projected Projected Cumulative
Fiscal City and City and Reduction in Reduction in
Year Covered County Cost County Cost City and City and
End Payroll Current Plan Scenario 4 County Cost County Cost
2012 11,083,213 2,746,240 2,738,410 7,830 7,830
2013 11,467,759 2,913,424 2,898,178 15,246 23,076
2014 11,842,171 3,101,952 3,078,604 23,348 46,424
2015 12,177,484 3,158,995 3,127,692 31,303 77,727
2016 12,369,938 3,210,571 3,171,993 38,578 116,305
2017 12,708,207 3,254,552 3,206,052 48,500 164,805
2018 13,039,669 3,294,074 3,236,905 57,169 221,974
2019 13,336,686 3,329,127 3,262,693 66,434 288,408
2020 13,693,343 3,373,902 3,297,231 76,671 365,079
2021 13,933,458 3,422,843 3,336,243 86,600 451,679
5 Year
Totals 58,940,565 15,131,182 15,014,877 116,305
10 Year
Totals 125,651,928 31,805,680 31,354,001 451,679
GRSGabriel Roeder Smith & Company - 15 -
or
Projected Net City and County Cost
Scenario 4-Change Unreduced Early Retirement Eligibility to 62&15 for Newly Hi red Police Officers
n
3,500,000 I
Po'
o '_'
eco
a. 3,000,000 y 1.
o
y
lY
2,500,000
�-3
�
2,000,000 H
1500000
▪ d
1,000,000 ,*11.,
• M
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500,000
)--+ M
0 o y
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titi 1,� '\,b' 4,� �� N, tib e)� do titi
• Current Plan • Scenario4
o,
2
,Ad
c.")
Projected Net City and County Cost as a Percentage of Pay
Scenario 4-Change Unreduced Early Retirement Eligibility to 62&15 for Newly Hired Police Officers
0 30.0%
2.
rb n
0
:I 25.0% n o
▪ oil
xz
20.0% CrJ
;)=' i
15.0% II
I I
od
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° ° ° ° ° °1, "19 1, ti ti ti ti ti ti r"
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Current Plan Scenario 4
J
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
Scenario 5—Create a Defined Contribution (DC) Plan for all newly hired Employees. The City
will provide a matching contribution of up to 5%of basic compensation.
The following Table shows the projected payroll and a comparison of the projected City and
County costs under the baseline forecast versus Scenario 5.
Projected Projected Cumulative
Fiscal City and City and Reduction in Reduction in
Year Covered County Cost County Cost City and City and
End Payroll Current Plan Scenario 5 County Cost County Cost
2012 11,053,406 2,746,240 2,704,000 42,240 42,240
2013 11,411,461 2,913,424 2,837,054 76,370 118,610
2014 11,760,574 3,101,952 2,997,661 104,291 222,901
2015 12,071,166 3,158,995 3,022,528 136,467 359,368
2016 12,237,861 3,210,571 3,034,037 176,534 535,902
2017 12,547,341 3,254,552 3,038,474 216,078 751,980
2018 12,852,208 3,294,074 3,039,258 254,816 1,006,796
2019 13,120,940 3,329,127 3,033,056 296,071 1,302,867
2020 13,447,994 3,373,902 3,036,018 337,884 1,640,751
2021 13,658,230 3,422,843 3,041,132 381,711 2,022,462
5 Year
Totals 58,534,468 15,131,182 14,595,280 535,902
10 Year
Totals 124,161,181 31,805,680 29,783,218 2,022,462
GRSGabriel Roeder Smith & Company - 18 -
a
.ev
cf)
Projected Net City and County Cost
Scenario 5-Create DC Plan for All New Entrants with 5%of Base Pay Matching Employer Contribution
3,500,000
0
�]
a 3,000,000
.1
F.
n O
R' 2,500,000
en
z
CA
2,000,000 y ro
d
1,500,000
C.
d
M
1,000,000 �
1-i til
0
to to
500,000 M M
zz
N
C I.
1' ti1>' <'ti 4 A ti tib e'ti �ti titi
o o o o o oc.'0"ti ti oti oti 1 o ti ti ti 'V ti
1, Z
• Current Plan • Scenario 5
/C1
V)
■
Projected Net City and County Cost as a Percentage of Pay
Scenario 5-Create DC Plan for All New Entrants with 5%of Base Pay Matching Employer Contribution
n
c 30.0%
ro
-+ 25.0% n O
20.0% ,y t.,
ill
2 i
15.0% d
�cz
CAW)
10.00 O
p ,h
Otml
Od
5.0% to to
7o
0.0% . 6 . t . 1 ! 1 7 1 O
ti r titi � N `, � 0 4b k, ti. ti
°ti ti ION' ti°> '15' ti° "1-&ti
ti° ti° ti y
•Current Plan •Scenario 5
N
O
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
Scenario 6—Create a Defined Contribution (DC) Plan for newly hired General Employees. The
City will provide a matching contribution of up to 5%of basic compensation.
The following Table shows the projected payroll and a comparison of the projected City and
County costs under the baseline forecast versus Scenario 6.
Projected Projected Cumulative
Fiscal City and City and Reduction in Reduction in
Year Covered County Cost County Cost City and City and
End Payroll Current Plan Scenario 6 County Cost County Cost
2012 11,068,183 2,746,240 2,710,949 35,291 35,291
2013 11,440,161 2,913,424 2,847,954 65,470 100,761
2014 11,804,446 3,101,952 3,011,637 90,315 191,076
2015 12,129,882 3,158,995 3,044,194 114,801 305,877
2016 12,310,085 3,210,571 3,065,526 145,045 450,922
2017 12,638,008 3,254,552 3,083,426 171,126 622,048
2018 12,958,884 3,294,074 3,096,097 197,977 820,025
2019 13,244,694 3,329,127 3,102,678 226,449 1,046,474
(6, 2020 13,590,572 3,373,902 3,119,804 254,098 1,300,572
2021 13,818,971 3,422,843 3,138,758 284,085 1,584,657
5 Year
Totals 58,752,757 15,131,182 14,680,260 450,922
10 Year
Totals 125,003,886 31,805,680 30,221,023 1,584,657
GRSGabriel Roeder Smith& Company -21 -
■
Projected Net City and County Cost
Scenario 6-Create DC Plan for Newly Hired General Employees
with 5%of Base Pay Matching Employer Contribution
o-
2. 3,500,000
n
o y
l
a
'' 3,000,000 n c
g
R'' 2
o ,500,000 r
2,000,000
iz
1,500,000 H 1000000
i d
to to
500,000 .> _ _ M
N 1
0 . 1 . , i 1 1 I I 1 C
b
titi ti'' ti° N N CO 1 N. N, ti) ti0 titi
'L° `L° �° 1° 1, 1, 'L° ti° le ti°
• Current Plan • Scenario 6
N
N
•
Projected Net City and County Cost as a Percentage of Covered Pay
Scenario 6-Create DC Plan for Newly Hired General Employees
P with 5%of Base Pay Matching Employer Contribution
cr
2. 30.0% -
o
n o
r 25.0% y ii
� L-4,
o � A
9 20.0% tll
r 1
la 700 b
15.0i
H. %
C) z
n �
o d
td td
zz
1-, M
0.0% ' 1 1 i 1 e i coi
■C> b
1) IN 4' � � lt o oti
N, ti ti ti ti ti ti
o a o a aotiti
ti ti oti ti ti ti ti ti
ti ti Z
•Current Plan •Scenario 6
N
w
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
Proposal 1 —Scenarios 1, 2 and 5 combined.
The following Table shows the projected payroll and a comparison of the projected City and
County costs under the baseline forecast versus Proposal 1.
Projected Projected Cumulative
Fiscal City and City and Reduction in Reduction in
Year Covered County Cost County Cost City and City and
End Payroll Current Plan Proposal 1 County Cost County Cost
2012 10,175,174 2,746,240 2,340,886 405,354 405,354
2013 10,541,214 2,913,424 2,468,048 445,376 850,730
2014 10,897,174 3,101,952 2,620,849 481,103 1,331,833
2015 11,230,744 3,158,995 2,646,513 512,482 1,844,315
2016 11,444,263 3,210,571 2,659,230 551,341 2,395,656
2017 11,784,431 3,254,552 2,666,011 588,541 2,984,197
2018 12,117,217 3,294,074 2,670,374 623,700 3,607,897
2019 12,438,434 3,329,127 2,669,430 659,697 4,267,594
2020 12,798,163 3,373,902 2,675,515 698,387 4,965,981
2021 13,081,179 3,422,843 2,686,294 736,549 5,702,530
5 Year
Totals 54,288,569 15,131,182 12,735,526 2,395,656
10 Year
Totals 116,507,993 31,805,680 26,103,150 5,702,530
GRSGabriel Roeder Smith&Company - 24 -
Projected Net City and County Cost
Proposal 1(Scenarios 1,2 and 5 Combined)
12 3,500,000
n
r-�
0
y
t 3,000,000 ''c
n 0
I -i 021
2,500,000 B
0 '""'
B 1 1•e 2,000,000 y b
• E
.cz
1,500,000 ,a n
cA
021• tml
1,000,000 0 Z
-
O d
to to
500,000
N 1-1
0 . I I C
oti� �'ti ti� 4'ti tiO 1 ti tib c'ti 1. 1>0 o o o o o o o Z ti ti ti ti ti ti ti ti ti i
•Current Plan • Proposal 1
Qr
Projected Net City and County Cost as a Percentage of Covered Pay
Proposal 1(Scenarios 1,2 and 5 Combined)
P
c 30.0%
2.
n
ro
a
M 25.0%
y
9
0 20.0% a
o
15.0%
CA CA
10.0%
nz
od
5.0% to to
zz
N .
0.0% . , , , e , , , o . C
titi ti'' N. ti`' ti`0 0 ti4 N. '& N. r
1, ti �° ti° ti° ti° ti° ti° ti° ti°
• Current Plan • Proposal 1
N
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
Proposal 2— Scenarios 1, 2, 3, 4 and 6 combined.
The following Table shows the projected payroll and a comparison of the projected City and
County costs under the baseline forecast versus Proposal 2.
Projected Projected Cumulative
Fiscal City and City and Reduction in Reduction in
Year Covered County Cost County Cost City and City and
End Payroll Current Plan Proposal 2 County Cost County Cost
2012 10,175,174 2,746,240 2,238,329 507,911 507,911
2013 10,541,214 2,913,424 2,368,084 545,340 1,053,251
2014 10,897,174 3,101,952 2,523,329 578,623 1,631,874
2015 11,230,744 3,158,995 2,552,948 606,047 2,237,921
2016 11,444,263 3,210,571 2,568,297 642,274 2,880,195
2017 11,784,431 3,254,552 2,578,214 676,338 3,556,533
2018 12,117,217 3,294,074 2,585,861 708,213 4,264,746
2019 12,438,434 3,329,127 2,588,147 740,980 5,005,726
2020 12,798,163 3,373,902 2,597,740 776,162 5,781,888
2021 13,081,179 3,422,843 2,612,068 810,775 6,592,663
5 Year
Totals 54,288,569 15,131,182 12,250,987 2,880,195
10 Year
Totals 116,507,993 31,805,680 25,213,017 6,592,663
GRSGabriel Roeder Smith&Company -27 -
/"
Projected Net City and County Cost
Proposal 2(Scenarios 1,2,3,4 and 6 Combined)
c 3,500,000 �._
n
pz
A 3,000,000 y
K
F. - 0
R° 2,500,000 u
n
o
B
w ji olr.'94
-4 2,000,000
d
�cz
1,500,000
H 1C7
til
o
to 500,000 M
zz
N
0 I I I 1 1 I I I I I Q
IV
• Current Plan Proposal 2
N
oc
P:mi
Projected Net City and County Cost as a Percentage of Covered Pay
C7 Proposal 2(Scenarios 1,2,3,4 and 6 Combined)
P 30.0%
4
0
ro
a.
ro
25.0%
n
3 y
E.
3 20.0%
a
�
;771 tml
b 15.0% z
o d
10.0%
1 1 C
5.0% ed CO
xJ z
M
N i--1
0.0% C y
ed
o o o o o o o o y y d 1, , d d y d '1. y
Current Plan ■ Proposal 2
N
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
•
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 Year 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.
GRSGabriel Roeder Smith&Company - 30-
I
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
G. Early 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. 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
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.
GRSGabriel Roeder Smith & Company - 31 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
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.
Years of Service Vested Percentage
Less than 3 0%
3 20%
4 40%
5 60%
6 80%
7 100%
M. Normal Form 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.
GRSGabriel Roeder Smith& Company - 32 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
ACTUARIAL ASSUMPTIONS AND METHODS
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.
General Firefighters and
Service Employees Police Officers
Less than 5 years 6.5% 7.5%
5 -9years 5.5% 5.5%
10— 14 years 4.5% 5.5%
15+years 3.0% 3.5%
GRSGabriel Roeder Smith & Company - 33 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
E. Employee Withdrawal Rates
1. Withdrawal rates for male General Employees were used in accordance with the
following illustrative example:
Withdrawal Rates per 100 Employees
Service
Age 0 1 2 3 4 5 6 7 8 9 10+
20 32.8 25.4 22.7 18.4 15.8 11.7 11.1 11.1 11.0 10.0 9.8
25 27.2 18.5 17.2 14.6 12.7 9.7 8.5 8.4 7.7 6.3 6.2
30 25.8 15.4 14.0 13.2 11.8 8.8 7.8 7.1 6.4 5.5 4.7
35 25.8 14.3 12.8 12.6 10.9 8.5 7.5 6.8 6.2 5.3 4.2
40 24.4 12.6 12.0 10.7 9.0 7.4 6.7 6.2 5.8 5.3 3.0
45 24.4 12.5 11.6 10.3 8.8 6.8 6.5 6.0 5.1 5.1 2.7
50 23.4 12.2 10.7 9.4 7.9 6.0 5.5 5.3 4.6 4.6 3.0
55 27.4 12.2 10.7 9.3 7.8 6.8 5.4 5.2 4.4 4.3 4.5
60 27.4 12.2 10.7 9.3 7.8 6.8 5.4 5.1 4.3 4.2 5.3
65 27.4 12.2 10.7 9.3 7.8 6.8 5.4 5.1 4.3 4.2 3.7
2. Withdrawal rates for female General Employees were used in accordance with the
following illustrative example:
Withdrawal Rates per 100 Employees
Service
Age 0 1 2 3 4 5 6 7 8 9 10+
20 30.3 25.8 22.1 17.4 15.4 13.5 11.4 11.3 10.5 10.2 11.6
25 26.6 19.8 17.1 13.0 12.9 10.7 9.7 9.2 7.8 7.1 5.3
30 25.4 16.9 14.5 11.6 11.3 9.4 8.7 8.1 7.1 6.5 5.4
35 25.4 15.9 13.5 11.2 10.9 9.0 8.0 7.8 6.8 6.2 4.6
40 24.4 14.0 12.1 10.0 9.1 7.0 6.5 6.3 6.1 5.0 3.3
45 24.4 13.9 11.9 9.8 8.8 6.7 6.5 6.1 5.8 4.7 3.0
50 23.2 13.4 11.0 8.8 8.4 6.2 5.9 5.5 5.5 4.6 3.0
55 23.2 13.4 11.0 8.7 8.3 6.1 5.8 5.4 5.4 4.5 3.0
60 23.2 13.4 11.0 8.7 8.3 6.1 5.8 5.4 5.4 4.5 3.0
65 23.2 13.4 11.0 8.7 8.3 6.1 5.8 5.4 5.4 4.5 3.0
The withdrawal assumptions are the withdrawal assumptions used in the July 1, 2009 Florida
Retirement System(FRS)Actuarial Valuation.
GIRSGabriel Roeder Smith & Company - 34 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
3. Withdrawal rates for male Firefighters and Police Officers were used in accordance with
the following illustrative example:
Withdrawal Rates per 100 Employees
Service
Age 0 1 2 3 4 5 6 7 8 9 10+
20 21.4 10.3 8.6 8.4 7.5 5.3 5.2 3.1 2.9 2.6 2.3
25 20.6 9.8 8.1 7.9 7.0 5.3 5.2 3.1 2.9 2.6 2.3
30 20.6 9.5 7.7 7.5 6.7 5.3 5.2 3.1 2.9 2.6 2.1
35 20.6 8.8 7.4 7.2 6.5 5.3 5.1 3.1 2.9 2.6 2.0
40 20.6 8.0 6.8 6.7 6.0 4.8 4.6 3.1 2.9 2.6 1.9
45 20.6 7.3 6.0 6.0 5.5 4.3 4.1 3.1 2.9 2.6 1.8
50 20.6 6.5 5.3 5.3 5.0 3.8 3.6 3.1 2.9 2.6 1.8
55 20.6 5.8 4.7 4.7 4.6 3.3 3.2 3.1 2.9 2.6 1.8
60 20.6 5.3 4.7 4.7 4.6 3.3 3.2 3.1 2.9 2.6 1.8
65 20.6 5.3 4.7 4.7 4.6 3.3 3.2 3.1 2.9 2.6 1.8
4. Withdrawal rates for female Firefighters and Police Officers were used in accordance
with the following illustrative example:
Withdrawal Rates per 100 Employees
Service
Age 0 1 2 3 4 5 6 7 8 9 10+
20 21.3 15.5 12.3 10.3 9.7 6.1 5.9 5.0 4.2 4.2 1.9
25 21.3 14.2 11.6 9.8 9.2 6.1 5.9 5.0 4.2 4.2 1.9
30 21.3 13.2 10.6 9.3 8.7 6.1 5.9 5.0 4.2 4.2 1.7
35 21.3 12.2 9.6 8.8 8.4 6.1 5.9 5.0 4.2 4.1 1.5
40 21.3 11.2 8.6 8.3 7.6 6.1 5.9 5.0 4.1 4.1 2.5
45 21.3 10.2 7.6 7.6 7.0 6.1 5.9 5.0 4.1 4.1 2.5
50 21.3 9.2 6.6 6.6 6.4 6.1 5.9 5.0 4.1 4.0 1.6
55 21.3 8.4 5.8 5.6 5.4 5.3 5.1 5.0 4.1 4.0 4.0
60 21.3 8.4 5.8 5.6 5.4 5.3 5.1 5.0 4.1 4.0 4.0
65 21.3 8.4 5.8 5.6 5.4 5.3 5.1 5.0 4.1 4.0 4.0
The withdrawal assumptions are the withdrawal assumptions used in the July 1, 2009 FRS
Actuarial Valuation.
GRSGabriel Roeder Smith&Company - 35 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
F. Disability Rates
1. Line-of-duty disability rates for General Employees were used in accordance with the
following illustrative example.
Age Male Female
20 0.002% 0.000%
25 0.002% 0.001%
30 0.003% 0.001%
35 0.005% 0.003%
40 0.009% 0.005%
45 0.014% 0.008%
50 0.022% 0.010%
55 0.034% 0.016%
60 0.048% 0.022%
65 0.050% 0.020%
2. Non-duty disability rates for General Employees were used in accordance with the
following illustrative example.
Age Male Female
20 0.000% 0.000%
25 0.027% 0.010%
30 0.053% 0.026%
35 0.066% 0.049%
40 0.092% 0.070%
45 0.122% 0.114%
50 0.203% 0.184%
55 0.339% 0.294%
60 0.445% 0.419%
65 0.215% 0.105%
The withdrawal assumptions are the withdrawal assumptions used in the July 1, 2009 FRS
Actuarial Valuation.
GRSGabriel Roeder Smith& Company - 36 -
.
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
3. Line-of-duty disability rates for Firefighters and Police Officers were used in
accordance with the following illustrative example.
Age Male Female
20 0.012% 0.008%
25 0.012% 0.008%
30 0.017% 0.016%
35 0.029% 0.037%
40 0.051% 0.068%
45 0.087% 0.106%
50 0.138% 0.153%
55 0.215% 0.152%
60 0.301% 0.151%
65 0.231% 0.143%
4. Non-duty disability rates for Firefighters and Police Officers were used in accordance
with the following illustrative example.
Age Male Female
20 0.037% 0.036%
25 0.037% 0.036%
30 0.043% 0.046%
35 0.055% 0.075%
40 0.087% 0.118%
45 0.140% 0.209%
50 0.292% 0.254%
55 0.244% 0.328%
60 0.206% 0.328%
65 0.206% 0.328%
The withdrawal assumptions are the withdrawal assumptions used in the July 1, 2009 FRS
Actuarial Valuation.
GRSGabriel Roeder Smith& Company - 37 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
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:
General Firefighters and
Age Employees Police Officers
Under 65 0% 0%
65 and above 100% 100%
2. For members with ten(10) or more years, but less than twenty-five (25)years of service:
General Firefighters and
Age Employees Police Officers
55 —64 10% 20%
65 and above 100% 100%
3. For members with twenty-five (25)or more years of service:
General Firefighters and
Age Employees Police Officers
Under 55 2% 5%
55 25% 50%
56-64 5% 20%
65 and above 100% 100%
GRSGabriel Roeder Smith& Company - 38 -
CITY OF WINTER SPRINGS DEFINED BENEFIT PLAN
ACTUARIAL STUDY AS OF OCTOBER 1, 2009
Note: For Scenario 4 and Proposal 2, retirement rates for newly hired Police Officers were
used in accordance with the following table.
Years of Service
Age 0-14 15 16-24 25-30 30 or more
Under 55 0% 0% 0% 4% 50%
55 —61 0% 0% 0% 10% 50%
62 0% 40% 40% 40% 50%
62—64 0% 40% 20% 20% 50%
65 100% 100% 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 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.
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 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 Plan assets.
GRSGabriel Roeder Smith&Company - 39 -