Fort Walton Beach Council agenda — 04-26-11 regular — reading text

representative of the current participating group. While the asset and member information was reviewed for overall reasonableness, Actuarial Concepts has relied on the Trustees and the City for this information and does not assume responsibility for either its accuracy or completeness.  2 -2 Member Reconciliation Members at 10/ 01/ 09 196 113 6 10 46 F Increase ( Decrease) Due to: 0 a d Retirements 19) 19 - c Vested Terminations 2) 2 0 o Nonvested Terminations 19) 19 0 Rehires 0 New Entrants 6 w Deaths 3) - a 0 Part -Time Status 0 N Benefits Expired 0 a DC Plan 8) 1 7 C Contrib. Refunded 1) 36) a dv Members at 10/ 01/ 10 154 129 6 12 36 a ti M Including Limited Members. N r rr NO MO a+ R O O r N Ri d C m LL r-+ C d E t V r Q Cow  2 -3 Valuation Financial Values a) Number of Active Members 154 b) Number of Inactive Members 183 c) Annual Valuation Payroll for 2010 -11 5, 323,504 d) Annual Valuation Payroll for 2011 -12 5, 483,209 a) Active Members 1) Retirement 13, 271, 554 2) Withdrawal 713, 167 3) 2, 054,240 Disability 4) Death 421, 006 5) Refund of Contributions 160, 537 6) Total 16, 620, 504 b) Retirees and Beneficiaries 26, 873, 508 c) Disabled Retirees 583, 153 1. 509, 538 d) Vested Terminated and Pending Lump Sums e) Total APV Future Benefits a) APV of Total Future Normal Costs 5, 157,997 40,428, 706 b) Actuarial Accrued Liability [(2e) -(3a)] c) Actuarial Value of Assets 34, 351, 948 d) Unfunded AAL (UAAL) [(3b) -(3c)] 6, 076, 758 a) UAAL [3( d)] 6, 076, 758 b) Change in UAAL Due to Assumption Change 82, 285) c) UAAL Before Change [( 4a) -(4b)] 6, 159, 043 d) Expected UAAL 5, 036,986 e) Actuarial (Gain) Loss [( 4c) -(4d)] 1, 122, 057 a) Plan Normal Cost * ** 919,280 16. 77% b) Amortization of UAAL 755, 775 13. 78% c) Total Required Plan Contribution [(5a) +( 5b)] 1, 675, 055 30.55% d) Estimated Member Contributions 274, 160 5. 00% e) Estimated Ordinance Required Contributions f) Net Recommended City Contribution [(5c)- (5d) -(5e 1, 400, 895 25.55% Calculated in accordance with the Individual Entry Age Actuarial Cost Method. Assumed payable quarterly. Note: dollar amounts are for illustrative purposes only; actual payments based on actual FYE 2011 and 2012. Includes $55, 167 in expenses. Conk  2 -4 Explanation of Financial Values Actuarial Present Value of Future Benefits ( line 2e) The actuarial present value ( APV) of future benefits is determined by first measuring the benefit amount that would be available for each member at 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, as described above, that is assigned to future plan years by the Individual Entry 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 actuarial values generated under the 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 amounts due prior to the valuation date. A negative UAAL means the assets currently exceed the prior Entry Age accruals. This surplus is amortized as a credit on line 5b, 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 5a) 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 percent of each individual' s pay), then adding together to obtain the Plan normal Caw*  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 50 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 1, 2004, for the unamortized portion of the UAAL established prior to October 1, 1994, and over 15 years from date of inception for any portion of the UAAL established on or after October 1, 1994. Each year' s UAAL portion can be either positive or negative, with amortization credits occurring if negative. The City's net recommended contribution is equal to the total required contribution less estimated member contributions.  2 -6 Derivation of Current UAAL 1. Unfunded Actuarial Accrued Liability (UAAL) as of 10/ 01/ 09 $ 5, 076, 500 F O Q as 2.