Fort Walton Beach Council agenda — 02-28-12 regular — reading text

City has a prepaid contribution of $ 16, 821 that may be utilized for the fiscal year ending September 30, 2011.  2 During the last 12 months, the experience has been less favorable than expected on the basis of the Plan' s actuarial assumptions. The primary component of loss included a 2. 2% investment return ( Actuarial Asset Basis) that was lower than the 8. 0% assumption. These lasses were partially offset by average increases in pensionable compensation of 0% Additionally, the funding requirements have increased as a percentage of payroll primarily due to a 14.2% decrease in Total Annual Payroll combined with a decrease in the payroll growth assumption utilized for amortizing the Unfunded Actuarial Accrued Liability ( UAAL). These decreases have the effect of increasing the cost of servicing the UAAL, when expressed as a percentage of payroll. The balance of this Report presents additional details of the actuarial valuation and the general operation of the Fund. The undersigned would be pleased to meet with the Board of Trustees in order to discuss the Report and answer any pending questions concerning its contents. Respectfully submitted, FOSTER & FOSTER, INC. By: Jason L. Franken, FSA, EA By:/ Kurt T. Baxl y  Plan Changes Since Prior Valuation There have been no changes in benefits since the prior valuation. Actuarial Assumption /Method Changes Since Prior Valuation There have been two assumption changes and one method change since the previous actuarial valuation. The two assumption changes are: The assumption for mortality has been changed from the 1983 Group Annuity Mortality Table to the RP 2000 Combined Healthy Table. Details of the impact of this change are set forth in the body of this report, beginning on page 4. The payroll growth assumption has been reduced from 3.0% to 0. 9% in order to comply with the provisions of Part VII of Chapter 112, Florida Statutes. The single method change is The Board approved increasing the amortization period of the Unfunded Actuarial Accrued Liability to 30 years from commencement date for all bases.  4 Comparative Summary of Principal Valuation Results New Method Old Method Old Method Old Method New Assump. New Assump. Old Assump. Old Assump. 10/ 112010 1011/ 2010 10/ 1/ 2010 10/ 1/ 2009 A. Participant Data - Number Included 43 43 43 47 Actives 31 31 31 27 Service Retirees 6 6 6 5 Beneficiaries 9 9 9 7 Terminated Vested 5 5 5 5 Disability Retirees 94 94 94 91 Total Total Annual Payroll 2, 195, 529 2, 195, 529 2, 195, 529 2, 557, 811 2, 195, 529 2, 195,529 2, 195, 529 2, 557, 811 Payroll Under Assumed Ret. Age Annual Rate of Payments to: 1, 090, 750 1, 090, 750 1, 090, 750 856, 835 Service Retirees 106, 362 106, 362 106, 362 92, 847 Beneficiaries 75, 200 75, 200 75, 200 93, 657 Terminated Vested 87, 623 87, 623 87, 623 87, 623 Disability Retirees B.B. AssetsAssets ActuarialActuarial ValueValue 18, 874, 149 18, 874, 149 18, 874, 149 18, 858, 173 MarketMarket ValueValue 17, 235, 920 17, 235, 920 17, 235, 920 16, 372, 390 C.C. Liabilities Liabilities Present Value of Benefits Active Retirement MembersBenefits 10, 332, 700 10, 332, 700 363, 543 10, 026, 056 356,206 12, 310, 413 342, 293 363, 543 Disability Benefits 143, 315 165, 123 Death Benefits 89, 808 89, 808 1, 591, 893 1, 591, 893 1, 556, 253 1, 603, 549 Vested Benefits 30, 862 30, 862 30, 851 33, 963 Refund of Contributions 13, 052, 943 13, 052, 943 12, 735, 446 9, 823, 592 Service Retirees 1, 129, 102 1, 129, 102 1, 160, 699 1, 065,665 Beneficiaries Terminated Vested Disability Retirees 509,824, 844746 509,824, 844746 494,820 813,436 618,834, 592 659 103,103, 064064 103,103, 064064 103,103, 064064 103,103, 064064 Excess State Monies Reserve Total 28, 028,505 28, 028, 5D5 27, 420, 146 26, 900,912  5 New Method Old Method Old Method Old Method New Assump. New Assump. Old Assump. Old Assump. 10/ 1/ 2010 10/ 112010 10/ 1/ 2010 101112009 C, Liabilities - ( Continued) Present Value of Future Salaries 17, 532, 181 17, 532, 161 17, 489, 362 18, 319, 611 864, 563 864, 583 852, 448 892, 587 Present Value of Future Member Cont. Normal Cost ( Entry Age Normal) 398, 384 Service Retirement 348, 599 348, 599 335, 664 21, 242 21, 242 20, 792 15, 373 Disability Benefits 2, 379 2, 379 3, 823 3, 103 Death Benefits Vested Benefits 35, 794 35, 794 34, 959 22, 887 Refund of Contributions 1, 397 1, 397 1, 398 1, 254 409, 411 409,411 396, 636 441, 001 Total Normal Cost 3, 325, 722 3, 220, 247 3, 162, 230 Present Value of Future Normal Costs 3, 325, 722 Actuarial Accrued Liability 7, 673, 466 7, 673, 466 7, 470, 497 9, 609, 083 Service Retirement 140, 249 140, 249 137, 997 279, 326 Disability Benefits Death Benefits 68, 375 66, 375 106, 433 136, 974 Vested Benefits 1, 188, 097 1, 188, 097 1, 162, 603 1, 303, 307 Refund of Contributions 14, 898 14, 898 14, 904 19, 710 Inactives 15, 516, 635 15, 516, 635 15, 204, 401 12, 342, 508 Excess State Reserve 103, 064 103, 064 103, 064 103, 064 24,702,