Fort Walton Beach Council agenda — 08-22-2007 special agenda — reading text

232 150 b) Number of Inactive Members c) Annual Valuation Payroll for Contributing Members $ 7, 715, 643 d) Total Valuation Payroll 7, 715, 643 2. Actuarial Present Value (APV) of Future Benefits as of 10/ 01/ 06 a) Active Members 1) Retirement 18, 701, 963 2) Withdrawal 970, 830 3) 3,013,460 Disability 4) Death 600,607 5) Refund of Contributions 268, 096 6) Total $ 23,554, 956 b) Retirees and Beneficiaries 17, 972, 636 c) Disabled Retirees 890, 820 d) Vested Terminated and Pending Lump Sums 602,676 e) Total APV Future Benefits $ 43, 021, 088 3. APV Apportionment of line 2( e)* a) APV of Total Future Normal Costs 9, 135,735 3a)] 33,885, 353 b) Actuarial Accrued Liability [(2e)-( c) Actuarial Value of Assets 29,449, 082 d) Unfunded AAL (UAAL) [(3b)-( 3c)] $ 4,436, 271 4. Breakdown of UAAL on line 3( d) a) UAAL [3( d)] 4,436, 271 b) Change in UAAL Due to Assumption Change - c) UAAL Before Change [( 4a)-( 4b)] $ 4, 436, 271 d) Expected UAAL 3, 503, 736 e) Actuarial (Gain) Loss [( 4c)-( 4d)] $ 932, 535 Equiv. Quarterly Annual $ 10/ 1/ 2007 Amount % of Payroll 5. Contribution Requirements Due ** Starting a) Plan Normal Cost*** $ 1, 359,603 16.94% b) Amortization of UAAL 309,474 3. 86% c) Total Required Plan Contribution [(5a)+( 5b)] $ 1, 669, 077 20. 80% d) Estimated Member Contributions 401, 213 5.00% e) Estimated Ordinance Required Contributions - - f) Net Recommended City Contribution [(5c)-( 5d)-( 5e)] $ 1, 267,864 15. 80% Calculated in accordance with the Individual Entry Age Actuarial Cost Method. Assumed payable quarterly. Includes $13,355 in expenses. tyC~~~~ RtS  2- 4 Explanation of Financial Values Actuarial Present Value of Future Benefits (line 2e) first The actuarial present value ( APV) of future benefits is determined by member at measuring the benefit amount that would be available for each various future dates ( assuming future service credits earned and future salary increases awarded) under each of the events provided for by the Plan retirement, disability, death, termination of employment). Then the future value of those benefit entitlements is determined by multiplying the various benefit amounts by the then current value of the annuities associated with those amounts. Finally, the APV of those future benefit values is determined by applying discounts to recognize the time value of money and probabilities of death, disability, termination of employment, etc.. APV of Total Future Normal Costs (line 3a) The APV of future normal costs is that portion of the total APV of future benefits, assigned to future plan years by the Individual Entry as described above, that is Age Actuarial Cost Method (described in Appendix B). Actuarial Accrued Liability (line 3b) and Unfunded Actuarial Accrued Liability (line 3d) The actuarial accrued liability (AAL) and the unfunded AAL (UAAL) ( the AAL less the actuarial value of assets) are generated under the actuarial values Individual Entry Age Actuarial Cost Method, as described in Appendix B.These liability amounts are not the APV of benefits accrued to date by members but are actuarially determined amounts based on the accrual of Entry Age normal cost prior to the valuation date. A negative VAAL means the amounts due assets currently exceed the prior Entry Age accruals. This surplus is amortized as a credit on line Sb, pursuant to the method described in Appendix B. The liability for benefits accrued to date ( the APV of accumulated benefits) is provided in Section 3. Development of Plan Normal Cost (line Sa) The Plan normal cost for the 12- month period beginning on the valuation date has been determined by first calculating for each member an individual yearly normal cost ( that changes in dollar amount as pay increases, but is constant as a obtain the Plan normal percent of each individual's pay), then adding together to Conc~ 2ts  2-5 cost amount as of the beginning of the year. The base Plan normal cost is then adjusted to recognize expected administrative expenses to determine the total Plan normal cost rate as of the beginning of the plan year (before interest adjustments to recognize timing of contributions). The Plan normal cost for the 12- month period beginning one year after the valuation date, has been determined by multiplying the Plan normal cost amount as of the beginning of the year by a factor to adjust for payments expected to be paid quarterly, then multiplying by the expected growth in payroll of 4. 0% from the valuation date to the payment starting date. Total Required Plan Contribution (line 5c) and Net Recommended City Contribution (line 5f) The total required contribution is the annual amount necessary to cover the normal cost and amortize the UAAL over a period of four years from October I, 2004, for the unamortized portion of the UAAL established prior to October I, 1994, and over 15 years from date of inception for any portion of the UAAL established on or after October I, 1994. Each s UAAL portion can be either year' if The City's positive or negative, with amortization credits occurring negative. net recommended contribution is equal to the total required contribution less estimated member contributions. A._ _ _ __ - .. Conct\2ts  2-6 Derivation of Current UAAL Development of UAAL as of Valuation Date 1. Unfunded Actuarial Accrued Liability (UAAL) as of 10/ 01/ 06 $ 3, 459, 318 2. Normal Cost - Year Ended 9/ 30/ 06 1, 169, 040 3. Interest Accrued on (1) and ( 2) 370, 269 4. Contributions - Year Ended 9/ 30/ 06 1, 447,224 5. Interest Accrued on (4) 47,667 3, 503, 736 6. Expected UAAL at 10/ 01/ 06 1 )+( 2)+( 3)-( 4)-( 5)] 7. Changes Due to: a) Plan Changes 932, 535 b) Actuarial (Gain)/ Loss c) Total $ 932,535 8. VAAL at Valuation Date 4,436,271 a. .. LU~: 1.- c. 11..:= ConC-~Rts  3- 1 SECTION 3 ANALYSIS OF VALUATION RESULTS Valuation Comparison Table 10/ 1/ 06 with Member Data 10/ 01/ 05 10/ 1/ 06 Payment Delay a) Active Members 224 232 232 97 103 103 b) Retirees, Beneficiaries and Disableds 43 47 47 c) Vested Terminated and Limited Members d) Total Anticipated Payroll for Applicable Fiscal Year $ 7, 190, 199 $ 7, 715,643 $ 8, 024, 269 e)