5A - Actuarial Valuation Report - General EmployeesGRS
AGENDA ITEM# 5A
MARCH 10, 2014
Gabriel Roeder Smith & Company
Consultants & Actuaries
CITY OF ATLANTIC BEACH GENERAL EMPLOYEES'
RETIREMENT SYSTEM
ACTUARIAL VALUATION REPORT
SEPTEMBER 30, 2013
ANNUAL EMPLOYER CONTRIBUTION
IS DETERMINED BY THIS VALUATION
TO BE PAID IN THE EMPLOYER FISCAL YEAR ENDING
SEPTEMBER 30, 2015
GRS
January 7, 2014
Gabriel Roeder Smith & Company
Consulrmns & Acmaries
The Board of Trustees
City of Atlantic Beach
General Employee Retirement System
Atlantic Beach, Florida
Dear Board Members:
One East Brow.ud Blvd.
Suite 505
Ft.. L1uderdalc, FL .l.H01-HI71
954.527.1616 phone
95•1.525.0083 fax
www.gllbriclmcdt-r.corn
We are pleased to submit herein our September 30, 2013 Actuarial Valuation Repmt for the City of Atlantic Beach
General Employees' Retirement System. The contribution results apply to the Plan Year ending September 30,
2014 and to the City's fiscal year ending September 30, 2015.
This repmt was prepared at the request of the Board of Trustees and is intended for use by the Pension Plan and
those designated or approved by the Board of Trustees. This report may be provided to parties other than the
Pension Plan only in its entirety and only with the permission of the Board of Trustees.
The purpose of the valuation is to measure the Plan's funding progress, to determine the employer contribution rate
for the fiscal year ending September 30, 2015 and to determine the actuarial information for Governmental
Accounting Standards Board (GASB) Statements No. 25 and No. 27.
This repmt should not be relied on for any purpose other than the purpose described above.
The developed findings included in this report consider data or other information through September 30, 2013.
Future actuarial measurements may differ significantly from the current measurements presented in this repmt due
to such factors as the following: plan experience differing from that anticipated by the economic or demographic
assumptions; changes in economic or demographic assumptions; increases or decreases expected as pmt of the
natural operation of the methodology used for these measurements (such as the end of an amortization period or
additional cost or contribution requirements based on the plan's funded status); and changes in plan provisions or
applicable law.
The calculations are based upon assumptions regarding future events, which may or may not materialize. They are
also based upon current plan provisions that are outlined in the report. If you have reason to believe that the
assumptions that were used are unreasonable, that the plan provisions are incorrectly described, or that conditions
have changed since the calculations were made, you should contact the author of this repmt prior to relying on
information in the repmt.
The valuation was based upon information furnished by the City, concerning Plan benefits, financial transactions,
plan provisions and active members, terminated members, retirees and beneficiaries. We checked for internal and
year-to-year consistency, but did not otherwise audit the data. We are not responsible for the accuracy or
completeness of the information provided by the City.
The undersigned actuaries 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 herein. The
signing actuaries are independent of the plan sponsor.
The Board of Trustees
January 7, 2014
Page 2
This report has been prepared by actuaries who have substantial experience valuing public employee retirement
systems. To the best of our knowledge the information contained in this report is accurate and fairly presents
the actuarial position of the Retirement Plan as of the valuation date. All calculations have been made in
conformity with generally accepted actuarial principles and practices, with the Actuarial Standards of Practice
issued by the Actuarial Standards Board and with applicable statutes.
Gabriel, Roeder, Smith & Company will be pleased to answer questions pertaining to the valuation and to meet
with you to review this Report.
Respectfully submitted,
GABRIEL, ROEDER, SMITH AND COMPANY
James J. Rizzo, ASA, MAAA
Senior Consultant & Actuary
Piotr Krekora, ASA, MAAA
Senior Actuarial Analyst
Gabriel, Roeder, Smith and Company
STATEMENT BY ENROLLED ACTUARY
This actuarial valuation and/or cost determination was prepared and completed by me or under my direct
supervision, and I aclmowledge responsibility for the results. To the best of my knowledge, the results are
complete and accurate. In my opinion, the techniques and assumptions used are reasonable, meet the requirements
and intent of Part VII, Chapter 112, Florida Statutes, and are based on generally accepted actuarial principles and
practices. 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 otherwise taken into account in the valuation. All known
events or trends which may require a material increase in plan costs or required contribution rates have been taken
into account in the valuation.
Signature
Janumy 7, 2014
Date
11-03355
Enrollment Number
GRS
TABLE OF CONTENTS
SECTION TITLE
A EXECUTIVE SUMMARY
B VALUATION RESULTS
1. Participant Data
2. Annual Required Contribution
3. Actuarial Value ofBenefits and Assets
4. Financial Soundness
5. Actuarial Gains and Losses
6. Recent Hist01y of Valuation Results
7. Recent History of Required and Actual Contributions
8. Actuarial Assumptions and Cost Method
C PENSION FUND INFORMATION
1. Summaty of Assets
2. Summary of Fund's Income and Disbursements
3. Reconciliation of DROP Accounts
4. Actuarial Value of Assets
5. Investment Rate ofReturn
D FINANCIAL ACCOUNTING INFORMATION
1. FASB No. 35
2. GASB No. 25
3. GASB No. 27
E MISCELLANEOUS INFORMATION
F
G
1. Reconciliation of Membership Data
2. Statistical Data
SUMMARY OF PLAN PROVISIONS
COMPARATIVE SUMMARY OF PRINCIPAL
VALUATION RESULTS
A-1
B-1
B-2
B-3
B-4
B-8
B-12
B-14
B-15
C-1
C-2
C-3
C-4
C-6
D-1
D-2
D-4
E-1
E-2
F-1
G-1
Circular 230 Notice: Pursuant to regulations issued by the IRS, to the extent this communication (or any
attachment) concerns tax matters, it is not intended or written to be used, and cannot be used, for the purpose
of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) marketing or recommending to
another party any tax-related matter addressed within. Each taxpayer should seek advice based on the
individual's circwnstances from an independent tax advisor.
GRS
SECTION A
EXECUTIVE SUMMARY
EXECUTIVE SUMMARY
Closed Plan
In reviewing this Repmi, it is important to keep in mind that the System was retroactively closed to new entrants as
of September I, 2008. One consequence of this closure is that the annual payment on the unfunded accrued
liability for the City will continue to increase as a percentage of covered payroll as such payroll decreases from
year to year. Therefore, the overall cost as a percentage of covered payroll will be increasing each year in the
absence of actuarial gains.
Required Employer Contributions
The following is a comparison of required contributions developed in this year's and the last actuarial valuations:
Gross Contribution Requirement
As % of Expected Payroll
Expected Employee Contribution
As % of Covered Payroll
Required Employer Contribution
(If Made in Equal Monthly Installments)
As % of Covered Payroll
Required Employer Contribution
(If Made in Whole at the Beginning of the Year)
As % of Covered Payroll
$ 1,027,619
37.59 %
$ 164,006
6.00 %
$ 863,613
$
31.59 %
827,745
30.28 %
$ 1,146,476 $
35.19 %
$ 195,496 $
6.00 %
$ 950,980 $
29.19 %
911,482
27.97%
(118,857)
2.40 %
(31,490)
0.00 %
(87,367)
2.41 %
(83,738)
2.31%
*Results have been updated to reflect provisions ofthe Ordinance 58-13-37 as discussed in the Actuarial Impact
Statement dated April15, 2013.
As illustrated in the preceding chati, the City contribution necessary to support the current benefits for the General
Employees is $863,613 for the fiscal year ending September 30, 2015. Please note that the Required Employer
Contribution for that fiscal year is developed assuming it would be deposited in monthly intervals throughout the
year.
Revisions in Benefits
There were no revisions in benefits for the current year.
Results for the prior year have been updated to reflect the most recent actuarial impact statement results for
Ordinance Number 58-13-37. Plan changes resulting from the ordinance included the transfer of active members
hired on or after September 1, 2008 to a defined contribution plan along with their accumulated employee
contributions plus interest and an increase in the employee contribution rate for remaining members from 5% to
6% of pay. There were no changes in benefits for retirees and vested terminated employees as ofthe effective date
of the ordinance.
GRS City of Atlantic Beach General Employees'
Retirement System
9/30/2013 Actuarial Valuation I A-I
Revisions in Actuarial Assumptions and Methods
Amottization method was changed in connection with the plan amendment to amottize future gains and losses over
a decreased period of I 0 years using a level dollar method to reflect the nature of a closed plan.
There were no revisions in actuarial assumptions or methods for the current year.
Actuarial Experience
Actuarial gains occur in a year whenever the experience of the plan is better than was assumed. For example, if
investment performance were better than the level being assumed in the actuarial valuation and costing process,
then an actuarial gain results and would have the effect of lowering the Minimum Required Contribution for the
year. Whenever more employees terminate employment than were assumed would terminate, fewer employees
are then expected to actually retire from the City, resulting in an actuarial gain for the plan.
Actuarial losses occur in a year whenever the experience of the plan is worse than was assumed. In the examples
given above, if the reverse were to occur, then actuarial losses would result. As another example, if salaries
increased in one year higher than was assumed, an actuarial loss would occur.
The actuarial valuation cost method which determines the Minimum Required Contribution is designed to produce
contribution requirements which remain level as a percent of payroll for an open plan whenever the experience of
the plan matches the actuarial assumptions used. Contribution Requirements are also level whenever actuarial
losses exactly offset actuarial gains.
Analysis of Change in Employer Contribution
The increase in the Employer Contribution as a percent of pay is primarily due to the plan closure resulting in a
decreased payroll and a change in the amortization method to level dollar (equivalent to lowering the assumed
payroll growth rate to 0%). The components of change in the actuarially required contribution are as follows:
Contribution rate last year*
Payment on UAAL
Experience gain/loss
Change in administrative expense
Change in normal cost before expenses
Revision in benefits
Revision in assumptions/methods
Contribution rate this year
29.19 %
2.72
( 1.60)
0.33
0.95
0.00
0.00
31.59 %
*Reflects the Actuarial Impact Statement for Ordinance 58-13-37.
There was a net actuarial gain this year which is due to the lower than expected salmy increases (1.3% actual vs.
5.9% assumed). The actuarial gain was offset slightly by the valuation asset return being 7.6% when compared to
the 8.0% assumption and by an increase in the administrative expenses.
The remainder of this Repott includes detailed actuarial valuation results, financial information, miscellaneous
information and statistics, and a summmy of plan provisions.
GRS City of Atlantic Beach General Employees'
Retirement System
9/30/2013 Actuarial Valuation I A-2
SECTIONB
VALUATION RESULTS
GRS
Number
Covered Annual Payroll (non-DROP)
Average Annual Pay
Average Age
Average Past Service
Average Age at Hire
Number
Annual Benefits
Average Annual Benefit
Average Age
Number
Annual Benefits
Average Annual Benefit
Average Age
Number
Annual Benefits
Average Annual Benefit
Average Age
City of Atlantic Beach General Employees'
Retirement System
$
$
$
$
$
$
$
$
56
2,733,429
48,811
52.8
13.4
39.4
52
778,025
14,962
68.1
4
56,377
14,094
61.5
II
113,275
10,298
53.0
$
$
$
$
$
$
$
$
63
3,072,111
48,764
52.1
12.9
39.2
47
629,722
13,398
68.7
4
56,377
14,094
60.5
12
121,445
10,120
52.2
9/30/2013 Actuarial Valuation I B-1
A. Valuation Date September 30, 2013 September 30, 2012*
B. ARC to Be Paid During
Fiscal Year Ending 9/30/2015 9/30/2014
c. Assumed Date(s) of Employer Contrib. Monthly Monthly
D. Annual Payment to Amotiize
Unfunded Actuarial Liability
if Paid on the Valuation Date $ 515,906 $ 570,451
E. Employer Normal Cost
(including Administrative Expenses)
if Paid on the Valuation Date 250,524 273,514
F. ARC if Paid on the Valuation
Date: D+E 766,430 843,965
G. ARC Adjusted for Frequency of
Payments and Interest to Required Time
of Contribution 863,613 950,980
H. Payroll Expected for Contribution Year 2,733,429 3,258,269
I. ARC as % of Covered Payroll in
Contribution Year: G + H 31.59 % 29.19 %
J. Required Employer Contribution (REC)
if Paid on the First Day of the Contribution Year 827,745 911,482
*Results have been updated to reflect provisions of the Ordinance 58-13-37 as discussed in the Actuarial Impact
Statement dated Apri/15, 2013.
GRS City of Atlantic Beach General Employees'
Retirement System
9/30/2013 Actuarial Valuation I B-2
A. Valuation Date September 30,2013 September 30, 2012*
B. Actuarial Present Value of All Projected
Benefits for
1. Active Members
a. Service Retirement Benefits $10,264,683 $11,516,775
b. Vesting Benefits 274,710 322,701
c. Disability Benefits 237,621 280,665
d. Preretirement Death Benefits 240,504 278,177
e. Return of Member Contributions 47,420 56,490
f. Total 11,064,938 12,454,808
2. Inactive Members
a. Service Retirees & Beneficiaries 7,578,313 5,972,648
b. Disability Retirees 502,066 513,152
c. Terminated Vested Members 790,967 785,507
d. Total 8,871,346 7,271,307
3. Total for All Members 19,936,284 19,726,115
c. Actuarial Accrued (Past Service)
Liability per GASB No. 25 17,282, I 01 16,599,282
D. Actuarial Value of Accumulated Plan
Benefits per F ASB No. 3 5 15,181,382 14,156,270
E. Plan Assets
1. Market Value 13,770,711 12,646,085
2. Actuarial Value 13,815,833 12,465,289
F. Actuarial Present Value of Projected
Covered Payroll 20,075,853 23,633,470
G. Actuarial Present Value of Projected
Member Contributions 1,204,551 1,418,008
* Results have been updated to reflect provisions of the Ordinance 58-13-37 as discussed in the Actuarial Impact
Statement dated April15, 2013. For consistency, Market Value of Assets as of 10/112012 is adjusted by (47, 742)
reflecting transfer of employee contributions to a DC Plan.
GRS City of Atlantic Beach General Employees'
Retirement System
9/30/2013 Actuarial Valuation I B-3
FINANCIAL SOUNDNESS
The purpose of this portion of the Report is to provide certain measures which indicate the financial soundness of
the program. These measures relate to short term solvency and long term solvency.
The various percentages listed in this Section as of a single valuation date are not that significant. What is
significant, however, is the trend of the rates over a period of years. It is also important to keep in mind that each
time benefits or assumptions are revised; actuarial liabilities are created or diminished. Any newly created
liabilities are financed systematically over a period of future years. All actuarially computed values in this analysis
are based on the actuarial assumptions utilized in the respective years' actuarial valuations.
Short Term Solvency
The ultimate test of financial soundness is the program's ability to pay all promised benefits when due. The
program's progress in accumulating assets to pay all promised benefits can be measured by comparing the market
value of assets with:
I. The actuarial present value of projected benefits payable to those already receiving benefits and to vested
terminations, and
2. The actuarial present value of accrued benefits payable to active participants. This amount is based on
benefits earned to date without future credited service or salary increases.
The total of the two items should generally be fully covered by assets. That portion of the total of the two items
covered by assets should increase over time. Often assets continue to grow beyond the actuarial present value of
these two items.
Increases in benefits will, of course, adversely affect the trend in the years when such increases are first reflected
in the actuarial values. Although different actuarial assumptions would be used in the event of a termination of the
program, this test shows how much of the benefits accrued to date might be covered by assets in the event of a plan
freeze using the valuation assumptions.
GRS
1. Accumulated Contributions
of Active Members
2. APV of Projected Benefits in
Pay Status and for Vested
Terminations
3. APV of Accrued Benefits for
Active Participants
(Employer Portion)
4. Total
5. Market Value of Assets
6. Assets as% of Total
$ 1,225,604
8,871,346
5,084,432
15,181,382
13,770,711
91%
$ 1,250,523
7,271,307
5,634,440
14,156,270
12,646,085
89%
$ 1,211,505
6,624,399
5,513,056
13,348,960
10,448,470
78%
*Reflects the Actuarial Impact Statement for Ordinance 58-13-37. For consistency with retroactive change in
the Actuarial Present Value of Accumulated Plan Benefits, Market Value of Assets as of I 0/1/2012 is adjusted
from $12,693,827 down to $12,646,085 to reflect transfer of employees' contributions to a DC Plan.
City of Atlantic Beach General Employees'
Retirement System
9/30/2013 Actuarial Valuation I B-4
GRS
Ratio of Market Value of Assets to
Present Value of Accrued Benefits
$16.0 200%
$14.0
$12.0
$10.0
"' = ;§ $8.0 100% ~ ~ :t.
0
$6.0
$4.0
$2.0
$0.0 0%
2009 2010 2011 2012 2013
Actuarial Valuation Date (September 30)
1111111111 Market Value of Assets ~ PV Accrued Benefits Ratio
City of Atlantic Beach General Employees'
Retirement System
9/30/2013 Actuarial Valuation I B-5
Long Term Solvency
Over the longer term, the solvency of an ongoing plan can be measured by comparing the Actuarial Value of
Assets to an amount known as the Actuarial Accrued Liability (AAL) under the Entry Age Actuarial Cost Method.
This item has often been called the "past service liability". Its derivation differs from the short term solvency value
derivation in several ways. The short term solvency liability number is based on the benefits accrued to date by the
participants while the long term solvency liability number is based on what the normal costs accrued to date by the
employer. In addition, the short term solvency asset number is the market value, while the long term asset number
is the actuarial value of assets. As in the case of the short term solvency values, the AAL is affected immediately
by any revisions in benefits or assumptions. The accumulation of assets to equal the AAL can be considered a
long range funding goal.
GRS
9/30/00
9/30/01 *
9/30/02
9/30/03 *
9/30/04
9/30/05 *
9/30/06 *
9/30/07
9/30/08 *
9/30/09
9/30/10 *
9/30/11
9/30/12 **
9/30/13
5,229
5,587
5,747
5,951
6,273
6,802
7,609
8,594
9,209
9,841
10,618
11,119
12,465
13,816
6,462
6,986
7,479
8,186
9,005
9,822
10,505
11,668
12,624
13,682
15,180
16,053
16,599
17,282
81%
80
77
73
70
69
72
74
73
72
70
69
75
80
*Reflects change in benefits, actuarial assumptions and/or asset method.
**Reflects the Actuarial Impact Statement for Ordinance 58-13-37.
City of Atlantic Beach General Employees'
Retirement System
9/30/2013 Actuarial Valuation I B-6
GRS
$18.0
$16.0
$14.0
$12.0
t $10.0
$8.0
$6.0
$4.0
$2.0
Ratio of Actmuial Value of Assets
to Acttuuial Accrued Liability " 150%
100%
50%
$0.0 0%
~~~ ~~"-.., ~~rv ~~'"" ~r::t ~~'; ~~~o ~~f\, ~~'b ~.g, ~"-..,~ ~"-..,"-.., ~v ~0
~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Actuarial Valuation Date (September 30)
-Actuarial Assets •--• Accrued Liability
City of Atlantic Beach General Employees'
Retirement System
--Ratio
9/30/2013 Actuarial Valuation I B-7
ACTUARIAL GAINS AND LOSSES
The assumptions used to anticipate mortality, employment turnover, investment income, expenses, salary
increases, and other factors have been based on long range trends and expectations. Actual experience can vary
from these expectations. The variance is measured by the gain and loss for the period involved. If significant long
term experience reveals consistent deviation from what has been expected and that deviation is expected to
continue, the assumptions should be modified. The net actuarial gain (loss) for the past year is computed as
follows:
GRS
1. Last Year's U AAL * $4,133,993
2. Last Year's Employer Normal Cost 284,455
3. Last Year's Actual City Contibution 1,044,392
4. Interest at the assumed rate on:
a. 1 for one year 330,719
b. 2 half a year 11,3 78
c. 3 from dates paid 41,776
d. a+ b-c 300,321
5. This Year's Expected UAAL
1+2-3+4d 3,674,377
6. This Year's Actual UAAL (before any
changes in benefits or assumptions) 3,466,268
7. Net Actuarial Gain (Loss): (5)-(6) 208,109
8. Gain (Loss) due to investments (21,124)
9. Gain (Loss) due to other sources 229,232
10. Amortization Payment Due to (Gain) Loss (28,717)
*Reflects the Actuarial Impact Statement for Ordinance 58-13-3 7.
City of Atlantic Beach General Employees'
Retirement System
9/30/2013 Actuarial Valuation I B-8
GRS
$3
$2
$1
($1)
($2)
Net actuarial gains in previous years have been as follows:
9/30/1994 (157,358) (157,358)
9/30/1995 447,291 289,933
9/30/1996 (162,663) 127,270
9/30/1997 252,238 379,508
9/30/1998 58,540 438,048
9/30/1999 108,195 546,243
9/30/2000 (55,470) 490,773
9/30/2001 (18,145) 472,628
9/30/2002 (280,151) 192,477
9/30/2003 (355,383) (162,906)
9/30/2004 (395,109) (558,0 15)
9/30/2005 (364,305) (922,320)
9/30/2006 131,266 (791,054)
9/30/2007 (170,383) (961,437)
9/30/2008 (178,856) (1,140,293)
9/30/2009 (482,223) (I ,622,515)
9/30/2010 (171,358) (1, 793,873)
9/30/2011 (364,563) (2,158,436)
9/30/2012 402,582 (1, 755,854)
9/30/2013 208,109 (1,547,746)
Actuarial Gain(+) or Loss ( -)
Plan YearEnd
-Gain or Loss ---+-----Cumulative
$2
$1
~ =
$0 ~
~
($1)
($2)
City of Atlantic Beach General Employees'
Retirement System
9/30/2013 Actuarial Valuation I B-9
The fund earnings and salary increase assumptions have considerable impact on the cost of the Plan so it is
important that they are in line with the actual experience. The following table shows the history of actuarial fund
earnings and salary increase rates compared to the assumed rates:
9/30/1999 11.0 % 8.0 % 5.6 % 5.7 %
9/30/2000 9.7 8.0 8.3 6.0
9/30/2001 5.1 8.0 4.0 6.2
9/30/2002 1.5 8.0 4.4 5.9
9/30/2003 1.7 8.0 4.5 5.9
9/30/2004 2.3 8.0 7.7 5.8
9/30/2005 4.9 8.0 10.8 5.8
9/30/2006 8.5 8.0 4.1 5.9
9/30/2007 10.0 8.0 9.8 5.9
9/30/2008 4.9 8.0 4.9 5.8
9/30/2009 4.2 8.0 6.1 5.7
9/30/2010 5.0 8.0 (0.4) 6.0
9/30/2011 2.1 8.0 0.5 6.0
9/30/2012 8.0 8.0 1.2 5.9
9/30/2013 8.0 8.0 1.3 5.9
Average 5.8 % 4.8 %
The actual investment return rates shown above are based on the actuarial value of assets. The actual salary
increase rates shown above are the increases received by those active members who were included in the actuarial
valuations both at the beginning and the end of each year.
GRS City of Atlantic Beach General Employees'
Retirement System
9/30/2013 Actuarial Valuation I B-10
GRS
History of Investment Return -Actuarial Value of Assets
15%
10% 10%
5% 5%
-5% ~------------------------------------------------------~ -5%
o,flo,
Plan Year End
-Actual -Asswned
History of Salary Increases
15%
10% 10%
5% 5%
0%
-5% ~--------------------------------------------------------L -5%
o,flo,
Plan Year End Compared to Previous Year
-Actual -Assumed
City of Atlantic Beach General Employees'
Retirement System
9/30/2013 Actuarial Valuation I B-11
~
?On
(]) -· =·~ ;;; 0 8 >-+, (]) >--:;! ...... Number of ~§" ~ s-.. Active Inactive ~ C)
~ tJj ::l (]) Valuation Members Members
Pl Date C)
::r"
CJ 9/30/99 70 33 $ 2,185 $ 4,650 $ 1,146 $ 199 9.10 % (])
:;!
(]) 9/30/00 71 37 2,330 5,229 1,233 213 9.14 ...,
e:..
tTJ 9/30/01 .
75 40 2,462 5,587 1,399 226 9.17 8
"a 9/30/02 83 40 2,768 5,747 1,732 267 9.66 0
'-<: 9/30/03 * 84 41 2,856 5,951 2,235 284 9.93 (])
(])
"'~ 9/30/04 86 42 3,051 6,273 2,732 300 9.82
9/30/05 82 45 3,182 6,802 3,020 235 7.37
9/30/06 81 48 3,195 7,609 2,896 233 7.28
9/30/07 82 51 3,476 8,594 3,074 252 7.26
9/30/08 83 52 3,727 9,209 3,415 269 7.22
\,0 ....... 9/30/09 87 50 4,019 9,841 3,841 314 7.82 w
0 w 9/30/10 84 51 3,838 10,618 4,562 364 9.49 0
w 9/30/11 83 58 3,738 11,119 4,934 367 9.82
>--9/30/12 •• C) 63 63 3,072 12,465 4,134 274 8.90 ...... :::
Pl 9/30/13 56 67 2,733 13,816 3,466 251 9.17 ...,
~
< *Reflects a change in assumptions or benefits. Pl
2" **Reflects the Actuarial impact Statement for Ordinance 58-13-37. Pl ...... s·
:;!
tJj
I
N
$9
~
GRS
Recent History of Number of Members
150
125
100
75
50
25
0
r:::,o,\0,0, r:::,o,\r:::,r:::, r:::,o,\r:::,'> r:::,o,\r:::,"v r:::,o,\r:::,'? r:::,o,\r:::,~ r:::,o,\r:::,""> r:::,o,\d::J r:::,o,\r:::,'\ r:::,drr:::,"o r:::,o,\r:::,O, r:::,o,\"r:::, r:::,o,\"" r:::,o,\""v r:::,o,\"'?
Actuarial Valuation Date
B Active Membets li!l!nactive Membets
Recent History of Covered Annual Payroll
$5.0
$4.0
$3.0
$2.0
$1.0
$0.0
~ SCI ~\0, ~\r;:s r:::, r;:s
Actuarial Valuation Date
City of Atlantic Beach General Employees'
Retirement System
9/30/2013 Actuarial Valuation I B-13
GRS
End of Year To Required Contributions
Which Valuation Valuation
Applies % of Expected Actual
Amount Payroll
9/30/03 9/30/05 $ 464,893 15.02
9/30/04 9/30/06 480,029 16.09
9/30/05 9/30/07 482,364 13.99
9/30/06 9/30/08 456,965 13.62
9/30/07 9/30/09 528,428 14.03
9/30/08 9/30/10 599,292 14.84
9/30/09 9/30/11 722,769 16.60
9/30/10 9/30/12 998,516 24.53
9/30/11 9/30/13 1,044,392 26.34 ..
9/30/12 9/30/14 950,980 29.19
9/30/13 9/30/15 863,613 31.59
*Reflects a change in assumptions or benefits.
**Reflects the Actuarial Impact Statement for Ordinance 58-13-3 7.
City of Atlantic Beach General Employees'
Retirement System
Contributions
% $ 464,893
480,029
482,363
457,005
528,426
599,292
722,769
998,516
1,044,392
9/3 0/20 13 Actuarial Valuation I B-14
ACTUARIAL ASSUMPTIONS AND COST METHOD
Valuation Methods
Actuarial Cost Method -The actuarial cost method is a procedure for allocating the actuarial present value of
benefits and expenses to time periods. Normal cost and the allocation of benefit values between service
rendered before and after the valuation date were determined using the Entry-Age Actuarial Cost Method.
The entry-age actuarial cost method allocates the actuarial present value of each member's projected benefits on
a level basis over the member's pensionable compensation between the entry age of the member and the
estimated active status exit ages. The portion of the actuarial present value allocated to the valuation year is
called the normal cost. The pmtion of the actuarial present value not provided for by the actuarial present value
of future normal costs is called the actuarial accrued liability. Deducting accrued assets from the actuarial
accrued liability dete1mines the unfunded actuarial accrued liability.
Financing of Unfimded Actuarial Accrued Liabilities-The unfunded actuarial accrued liability was financed
as a level dollar.
Actuarial Value of Assets -The Actuarial Value of Assets phases in the difference between the expected and
actual return on market value of assets at the rate of 25% 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 Market Value
of plan assets and whose upper limit is 120% of the Market Value of plan assets. During periods when
investment performance exceeds the assumed rate, Actuarial Value of Assets will tend to be less than Market
Value. During periods when investment performance is less than assumed rate, Actuarial Value of Assets will
tend to be greater than Market Value.
Valuation Assumptions
The actuarial assumptions used in the valuation are shown in this Section.
GRS City of Atlantic Beach General Employees'
Retirement System
9/30/2013 Actuarial Valuation I B-15
Economic Assumptions
The investment return rate assumed in the valuation is 8.0% per year, compounded annually (net of investment
expenses).
The wage inflation rate assumed in this valuation was 4% per year. The Wage Inflation Rate is defined to be
the portion of total pay increases for an individual that are due to macroeconomic forces including productivity,
price inflation, and labor market conditions. For an ongoing plan with a constant active population, a long term
payroll growth rate often converges to the assumed rate of wage inflation. The wage inflation rate does not
include pay changes related to individual merit and seniority effects. The price inflation rate assumed in this
valuation was 3.00% per year.
The plan does not provide for automatic post-retirement cost of living adjustments (COLA) of retiree benefits.
Ad-hoc COLA increases have been adopted in the past upon approval by the City. Most recently, such
increases have been granted in 1987, 1996 and 2001. No assumptions are made regarding future adjustments.
Any such increases will be recognized as they occur.
The total rate of return is defined as earnings resulting from interest, dividends, realized gains (losses) and
unrealized appreciation (depreciation) less investment-related expenses, all divided by the beginning market
value of the fund, adjusted for cash flow during the year. Total rate of return is as the assumed to be 8.0% per
year, net of investment-related expenses.
The rates ofsalmy increases used in the valuation are illustrated in the following table (rates below include 3%
price inflation).
GRS
Annual Rates for Salary Increase for Sample Ages
Age:
Expected Increase
City of Atlantic Beach General Employees'
Retirement System
20
14.0%
30 40 50 60
8.7% 6.5% 6.0% 5.5%
9/30/2013 Actuarial Valuation I B-16
Demographic Assumptions
The mortality rates used were taken from the gender specific RP-2000 Combined Healthy Pmiicipant Mmiality
Tables for males and females, with generational projections from the year 2000 Projection Scale AA. Sample
mortality rates and life expectancy factors illustrated below apply to the valuation year and are projected to
change in the future years.
Sample Probability of Future Life
Attained Dying Next Year Expectancy (years)
Ages (in 2013) Men Women Men Women
50 0.17% 0.13% 34.17 35.58
55 0.28 0.24 29.05 30.61
60 0.55 0.47 24.13 25.84
65 1.06 0.91 19.53 21.35
70 1.82 1.57 15.35 17.24
75 3.15 2.53 11.58 13.52
80 5.65 4.19 8.38 10.22
This assumption is used to measure the probabilities of each benefit payment being made after retirement. For
active members, the probabilities of dying before retirement were based upon the same mortality table as
members dying after retirement. All deaths before retirement are assumed to be non-service connected.
The rates of retirement used to measure the probability of eligible members retiring under normal and early
retirement eligibility during the next year were as follows:
GRS
Normal or Early Reitrement/DROP
Retirement Percent of Eligible
Ages Employees Retiring
55 15%
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
City of Atlantic Beach General Employees'
Retirement System
10%
10%
10%
10%
20%
15%
15%
15%
20%
30%
40%
50%
50%
50%
100%
9/30/2013 Actuarial Valuation I B-17
Rates of separation from active members/tip were as shown below (rates do not apply to members eligible to
retire and do not include separation on account of death or disability). This assumption is used to yield the
probabilities of members remaining in employment.
Rates of Separation from Active Employment
Sample Years of
Ages Service Assumptions
ALL 0 28.61%
20.78%
2 16.94%
3 11.67%
4 7.41%
25 5 & Over 3.70%
30 3.50%
35 3.20%
40 3.00%
45 2.70%
50 2.20%
55 2.00%
60 2.00%
Rates of disability among active members (0% of disabilities are assumed to be service-connected).
Sample
Ages
20
25
30
35
40
45
50
55
60
Percent Becoming Disabled
Within Next Year
Men Women
0.07% 0.07%
0.09% 0.09%
0.10% 0.10%
0.14% 0.14%
0.21% 0.21%
0.32% 0.32%
0.52% 0.52%
0.92% 0.92%
1.53% 1.53%
The mortality table was set forward ten years from the age at disability for projecting disability costs.
GRS City of Atlantic Beach General Employees'
Retirement System
9/30/2013 Actuarial Valuation I B-18
Administrative & Investment
Expenses
Benefit Service
Decrement Operation
Decrement Timing
Eligibility Testing
Forfeitures
Incidence of Contributions
Marriage Assumption
Normal Form of Benefit
Pay Increase Timing
Service Credit Accruals
Miscellaneous and Technical Assumptions
Annual administrative expenses are assumed to be equal to the actual
expenses paid during the preceding fiscal year. Investment expenses
are offset against gross investment income. Assumed administrative
expenses are added to the Normal Cost.
Exact fractional service is used to determine the amount of benefit
payable.
Disability and mortality decrements do not operate during the first 5
years of service. Disability and separation do not operate during
retirement eligibility.
Decrements of all types are assumed to occur at mid-year.
Eligibility for benefits is determined based upon the age nearest
bi1thday and service nearest whole year on the date the decrement is
assumed to occur.
Vested members who terminate with a benefit wmth less than 100%
of their own accumulated contributions were assumed to forfeit their
vested benefit.
Employer contributions are assumed to be received in 12 equal
monthly installments. Member contributions are assumed to be
received continuously throughout the year based upon the computed
percent of payroll shown in this report, and the actual payroll payable
at the time contributions are made.
80% of members are assumed to be married for purposes of death-in-
service benefits. Male spouses are assumed to be three years older
than female participants and female spouses are assumed to be three
years younger than male participants for active member valuation
purposes.
The normal form of benefit is a life annuity.
Beginning of fiscal year. This is equivalent to assuming that repmted
pays represent the actual amount paid during the previous fiscal year.
It is assumed that members accrue one year of service credit per year.
GRS City of Atlantic Beach General Employees'
Retirement System
9/30/2013 Actuarial Valuation I B-19
GLOSSARY OF TERMS
Actuarial Accrued Liability The difference between (i) the actuarial present value of future plan benefits,
and (ii) the actuarial present value of future normal cost. Sometimes referred to
as "accrued liability" or "past service liability."
Accrued Service The service credited under the plan which was rendered before the date of the
actuarial valuation.
Actuarial Assumptions Estimates of future plan experience with respect to rates of mortality, disability,
turnover, retirement, rate or rates of investment income and salary increases.
Decrement assumptions (rates of mortality, disability, turnover and retirement)
are generally based on past experience, often modified for projected changes in
conditions. Economic assumptions (salary increases and investment income)
consist of an underlying rate in an inflation-free environment plus a provision
for a long-term average rate of inflation.
Actuarial Cost Method A mathematical budgeting procedure for allocating the dollar amount of the
"actuarial present value of future plan benefits" between the actuarial present
value of future normal cost and the actuarial accrued liability. Sometimes
referred to as the "actuarial funding method."
Actuarial Equivalent
Actuarial Present Value
Amortization
Experience Gain (Loss)
Normal Cost
Reserve Account
Unfunded Actuarial
Accrued Liability
Valuation Assets
A single amount or series of amounts of equal value to another single amount
or series of amounts, computed on the basis of the rate(s) of interest and
mmiality tables used by the plan.
The amount of funds presently required to provide a payment or series of
payments in the future. It is determined by discounting the future payments at a
predetermined rate of interest, taking into account the probability of payment.
Paying off an interest-bearing liability by means of periodic payments of
interest and principal, as opposed to paying it off with a lump sum payment.
A measure of the difference between actual experience and that expected based
upon a set of actuarial assumptions during the period between two actuarial
valuation dates, in accordance with the actuarial cost method being used.
The annual cost assigned, under the actuarial funding method, to current and
subsequent plan years. Sometimes referred to as "current service cost." Any
payment toward the unfunded actuarial accrued liability is not part of the
normal cost.
An account used to indicate that funds have been set aside for a specific
purpose and is not generally available for other uses.
The difference between the actuarial accrued liability and valuation assets.
Sometimes referred to as "unfunded accrued liability."
The value of current plan assets recognized for valuation purposes. Generally
based on market value plus a portion of unrealized appreciation or depreciation.
GRS City of Atlantic Beach General Employees'
Retirement System
9/30/2013 Actuarial Valuation I B-20
SECTION C
PENSION FUND INFORMATION
GRS
Cash and Securities -Market Value
Cash and Cash Equivalents $ 51,245 $ 59,926
Short Term Investments 804,567 771,377
Treasury and Agency Bonds & Notes 790,293 2,090,713
Corporate Bonds 3,653,586 0
Common & Preferred Stocks 8,008,414 7,632,876
Pooled Equity Funds 0 0
Mutual or Pooled Bond Funds 426,035 2,131,912
Mutual Equity Funds 0 0
Other Securities -Participant Directed 89,120 129,591
Total 13,823,260 12,816,395
Receivables and Accruals
Member Contribution 0 0
Additional Employer Contribution 0 0
Interest and Dividends 37,471 7,241
Interest Deposit for Late Contribution 0 0
Total 37,471 7,241
Payables
Benefits-DROP Reserve 89,120 129,809
Lump Sum Distributions 0 0
Expenses 0 0
Other 900 0
Total 90,020 129,809
Net Assets-Market Value $ 13,770,711 $ 12,693,827
*No adjustments had been made to the Market Value of Assets as of9/30/2012 in connection with the
Actuarial Impact Statementfor Ordinance 58-13-37.
City of Atlantic Beach General Employees'
Retirement System
9/30/20 13 Actuarial Valuation I C-1
GRS
Market Value at Beginning of Period $ 12,693,827 $ 10,448,470
Income
Member Contributions 180,750 186,326
State Contributions 0 0
Employer Contribution 1,044,392 998,516
Interest and Dividends 274,716 299,511
Legal Settlement 31,619 0
Realized and Unrealized Gain (Loss) 481,465 1,520,313
Total Income 2,012,942 3,004,666
Disbursements
Monthly Benefit Payments 729,447 655,424
DROP Payments Held in Reserve 0 0
Lump Sum Distributions 0 0
Refund of Contributions 53,059 7,273
Investment Related Expenses 53,936 64,908
Other Administrative Expenses 34,549 31,704
Rollover of Employee Contributions to DC Plan 65,067 0
Total Disbursements 936,058 759,309
Net Increase During Period $ 1,076,884 $ 2,245,357
Market Value at End of Period $ 13,770,711 $ 12,693,827
*No adjustments had been made to the Market Value of Assets as of9/30/2012 in connection with the
Actuarial impact Statementfor Ordinance 58-13-37.
City of Atlantic Beach General Employees'
Retirement System
9/30/2013 Actuarial Valuation I C-2
DEFERRED RETIREMENT OPTION PLAN (DROP)
BENEFITS HELD IN RESERVE
State Statutes require that the value of assets be offset by the total accumulated balance of DROP payments
being held in reserve for those participating in the DROP plan. A reconciliation of the accumulated balance to
be recognized is provided in the table below.
GRS
Value at beginning ofyear
Payments credited to accounts
Investment Earnings credited
Withdrawals from accounts
Value at end of year
Number as of September 30,2012
Number entered DROP during the year
Number exited DROP during the year
Number as of September 30,2013
Average Monthly Benefit as of September 30, 20 13
City of Atlantic Beach General Employees'
Retirement System
$ 129,591
+ 55,903
+ 124
96,498
89,120
4
0
5
$2,691
9/30/2013 Actuarial Valuation I C-3
ACTUARIAL VALUE OF ASSETS
As of September 30, 2013
Valuation assets are calculated using a smoothed market value over a period of four ( 4) years, as prescribed
under Internal Revenue Procedure 2000-40. The asset value determined under this method will be adjusted to
be no greater than 120% and no less than 80% of the fair market value.
Under this method, the actuarial value of assets is equal to the market value of assets less a decreasing fraction
( 1/nth per year, where n equals the number of years in the smoothing period) of the gain or loss for each of the
preceding 3 years.
Under this method, a gain or loss for a year is determined by calculating the difference between the expected
market value of the assets at the valuation date and the actual market value of the assets at the valuation date.
The expected value of the assets for the year is the market value of the assets at the valuation date for the prior
year brought forward with interest at the valuation interest rate to the valuation date for the current year plus
contributions minus disbursements (i.e., benefits paid and expenses), all adjusted with interest at the valuation
rate to the valuation date for the current year. If the expected value is less than the market value, the difference
is a gain. Conversely, if the expected value is greater than the market value, the difference is a loss.
Calculation of Valuation Assets is shown on the following page.
GRS City of Atlantic Beach General Employees'
Retirement System
9/30/2013 Actuarial Valuation I C-4
DEVELOPMENT OF FUNDING VALUE OF ASSETS AS OF SEPTEMBER 30
2011
A. Preliminary actuarial value from prior year $ 10,618,038 $
B. Market value beginning of prior year 10,417,807
C. Market value end of prior year 10,448,470
D. Non-investment net cash flow
[contributions-(benefits & expenses)] 279,399
E. Investment retnm
I. Actual market value retnrn net of investment
expenses: C -B -D (248,736)
2. Expected retnm of8.00% 844,600
3. Excess/( shortfall) to be phased-in: El -E2 (1,093,336)
F. Phased-in recognition of investment retnrn
(4 Year Recognition)
I. Current year: 25% ofE3 (273,334)
2. 25% of excess/(shmtfall) from first prior year 52,867
3. 25% of excess/(shmtfall) from second prior year 43,244
4. 25% of excess/( shortfall) from third prior year (445,351)
5. Total phased-in recognition of investment retum (622,574)
G. Actnarial value end of year
I. Preliminary actuarial value end of year:
A+ D+ E2+ F5 11,119,463
2. Upper corridor limit: 120% of C 12,538,164
3. Lower corridor limit: 80% ofC 8,358,776
4. Adjustment to reflect retroactive plan closure
5. Actuarial value end of year* 11,119,463
H. Difference between market value and actnarial value (670,993)
I. Ratio of Funding Value to Market Value 106%
*Offset for DROP Reserve made prior Ia the calculation of valuation assets.
GRS
**Reflects the Actuarial Impact Statement for Ordinance 58-13-37.
City of Atlantic Beach General Employees'
Retirement System
2012** 2013 2014
II, 119,463 $ 12,465,289 $ 13,815,833
10,448,470 12,693,827 13,770,711
12,693,827 13,770,711
490,441 343,020 **
1,754,916 733,896
855,495 1,029,227
899,421 (295,331)
224,855 (73,833)
(273,334) 224,855 (73,833)
52,867 (273,334) 224,855
43,244 52,867 (273,334)
47,632 (69,445) (122,312)
12,513,031 13,815,833
15,232,592 16,524,853
10,155,062 11,016,569
(47,742)
12,465,289 13,815,833
180,796 ( 45, 122)
99% 100%
9/30/20 13 Actuarial Valuation I C-5
INVESTMENT RATE OF RETURN
The investment rate of return has been calculated on the following bases:
Basis 1 -Market Value: Interest, dividends, realized gains (losses) and unrealized appreciation (depreciation)
divided by the beginning market value of the fund, adjusted for cash flow during the year. This figure
is normally called the Total Rate of Return.
Basis 2-Actuarial Value: Investment eamings recognized in the Actuarial Value of Assets divided by the
weighted average of the Actuarial Value of Assets during the year.
GRS
9/30/99
9/30/00
9/30/01
9/30/02
9/30/03
9/30/04
9/30/05
9/30/06
9/30/07
9/30/08
9/30/09
9/30/10
9/30/11
9/30/12
9/30/13
Average Compounded
Rate of Return for
5 Years
10 Years
All Years
City of Atlantic Beach General Employees'
Retirement System
8.0 % 11.0 %
4.3 9.7
(1.9) 5.1
(6.7) 1.5
10.1 1.7
7.2 2.3
9.4 4.9
9.7 8.5
14.7 10.0
(11.9) 4.9
9.7 4.2
9.9 5.0
(2.4) 2.1
16.4 8.0
5.7 8.0
7.7% 5.4%
6.5% 5.8%
5.2% 5.7%
9/30/2013 Actuarial Valuation I C-6
SECTIOND
FINANCIAL ACCOUNTING INFORMATION
A. Valuation Date
B. Actuarial Present Value of Accumulated
Plan Benefits
1. Vested Benefits
a. Members Currently Receiving Payments
b. Terminated Vested Members
c. Other Members
d. Total
2. Non-Vested Benefits
3. Total Actuarial Present Value of Accumulated
Plan Benefits: 1d + 2
4. Accumulated Contributions of Active Members
C. Changes in the Actuarial Present Value of
Accumulated Plan Benefits
1. Total Value at Beginning of Year
2. Increase (Decrease) During the Period
Attributable to:
a. Plan Amendment
b. Change in Actuarial Assumptions
c. Latest Member Data, Benefits Accumulated
and Decrease in the Discount Period
d. Benefits Paid (Including DROP Rese1ve)
e. Net Increase
3. Total Value at End of Period
D. Market Value of Assets
E. Actuarial Assumptions -See page entitled
Actuarial Assumptions and Methods
September 30, 2013 September 30, 2012*
$ 8,080,379 $ 6,485,800
790,967 785,507
6,310,036 6,769,700
15,181,382 14,041,007
0 115,263
15,181,382 14,156,270
1,225,604 1,250,523
14,156,270 13,348,960
0 (125,681)
0 0
1,807,618 1,595,688
(782,506) (662,697)
1,025,112 807,310
15,181,382 14,156,270
13,770,711 12,646,085 **
*Results have been updated to include the Actuarial Impact Statement for Ordinance 58-I 3-3 7.
**For consistency with retroactive change in the Actuarial Present Value of Accumulated Plan Benefits, A1arket
Value of Assets as of I Oil 120/2 is adjusted fi'om $12,693,82 7 down to $/2,646,085 to reflect transfer of
employees' contributions to a DC Plan.
GRS City of Atlantic Beach General Employees'
Retirement System
9/30/13 Actuarial Valuation I D-1
9/30/2000 $
9/30/2001 *
9/30/2002
9/30/2003 *
9/30/2004
9/30/2005 *
9/30/2006 *
9/30/2007
9/30/2008 *
9/30/2009
9/30/2010
9/30/2011
9/30/2012 **
9/30/2013
u
I
N
5,229 $
5,587
5,747
5,951
6,273
6,802
7,609
8,594
9,209
9,841
10,618
11,119
12,465
13,816
SCHEDULE OF FUNDING PROGRESS
(Dollar amounts in thousands)
(GASB Statement No. 25)
6,462 $ 1,233 80.9 % $
6,986 1,399 80.0
7,479 1,732 76.8
8,186 2,235 72.7
9,005 2,732 69.7
9,822 3,020 69.3
10,505 2,896 72.4
11,668 3,074 73.7
12,624 3,415 72.9
13,682 3,841 71.9
15,180 4,562 69.9
16,053 4,934 69.3
16,599 4,134 75.1
17,282 3,466 79.9
*Reflects a change in assumptions or benefits.
**Reflects the Actuarial Impact Statement for Ordinance 58-13-37.
2,330 52.9%
2,462 56.8
2,768 62.6
2,856 78.3
3,051 89.5
3,182 94.9
3,195 90.7
3,476 88.4
3,727 91.6
4,019 95.6
3,838 118.9
3,738 132.0
3,072 134.6
2,733 126.8
GRS
9/30/2000
9/30/2001
9/30/2002
9/30/2003
9/30/2004
9/30/2005
9/30/2006
9/30/2007
9/30/2008
9/30/2009
9/30/2010
9/30/2011
9/30/2012
9/30/2013
SCHEDULE OF CONTRIBUTIONS FROM EMPLOYER
(GASB Statement No. 25)
11.58 % $ 259,414 $ 259,411
11.24 266,148 266,148
11.41 288,070 288,070
11.81 * 315,106 315,106
12.72 381,518 381,518
15.02 * 464,893 464,893
16.09 480,029 480,029
13.99 * 482,364 482,363
13.62 * 456,965 457,005
14.03 528,428 528,426
14.84 599,292 599,292
16.60 722,769 722,769
24.53 998,516 998,516
26.34 1,044,392 1,044,392
• Reflects a change in assumptions or benefits.
Note: Annual Required Contribution (if an;~, above, is payable by the City.
100 %
100
100
100
100
100
100
100
100
100
100
100
100
100
City of Atlantic Beach General Employees'
Retirement System
9/30/2013 Actuarial Valuation I D-3
A. Annual Required Contribution (ARC)
B. Interest on Net Pension Obligation (Asset)
C. Adjustment to ARC
D. Annual Pension Cost (APC): (A + B -C)
E. Contributions made
F. Increase (decrease) in Net Pension Obligation(Asset)
rounded to the nearest $100: (D-E)
G. Net Pension Obligation( Asset) at beginning of year
H. Net Pension Obligation(Asset) at end of year: (F+ G)
2013 2012 2011
$ 1,044,392 $ 998,516 $ 722,769
1,044,392 998,516 722,769
1,044,392 998,516 722,769
THREE YEAR TREND INFORMATION
GRS
9/30/2011
9/29/2012
9/30/2013
$ 722,769
998,516
1,044,392
$ 722,769
998,516
1,044,392
City of Atlantic Beach General Employees'
Retirement System
100.0%
100.0
100.0
$
9/30/2013 Actuarial Valuation I D-4
REQUIRED SUPPLEMENTARY INFORMATION
GASB Statement No. 25 and No. 27
The infommtion presented in the required supplementary schedules was determined as part of the actuarial
valuation at the dates indicated. Additional Information as of the latest actuarial valuation:
GRS
Valuation Date
Contribution Rates:
Employer
Plan Members
Actuarial Cost Method
Amotiization Method
Amortization Period
Asset Valuation Method
Actuarial Assumptions:
Investment rate of return
Projected salary increases
Includes price inflation
Cost-of-living adjustments
Payroll Growth Assumption
City of Atlantic Beach General Employees'
Retirement System
September 30, 2013
31.52%
6.00%
Entry Age
Closed, Level Dollar Method
10 Years
See Section entitled "Actuarial
Value of Assets"
8.0%
5.5%-14.0%
3.0%
None
None (Level Dollar Method)
9/30/2013 Actuarial Valuation I D-5
SECTIONE
MISCELLANEOUS INFORMATION
GRS
1. Number Included in Last Valuation
2. New Members Included in Current Valuation
3. Non-Vested Employment Terminations
4. Vested Employment Terminations
5. Service Retirements
6. Disability Retirements
7. Deaths
8. DROP Retirement
9. Transfer to the DC Plan
10. Number Included in This Valuation
2. Additions from Active Members
3. Lump Sum Payments/Withdrawals
4. Payments Commenced
5. Deaths
6. Other
7. Number Included in This Valuation
63
0
(2)
0
(1)
0
0
(4)
0
56
0
(1)
0
0
11
83
8
(2)
(2)
(2)
0
(1)
0
__Q!l
63
2
0
(1)
0
0
12
l'c::~,~ifi~~E.ftt~t:sl"UI~~J!ilfi~R~fit!~?s~'2il~iXett~i~rt~s"*~tnl{oJX?x~i~ ~}t~3~~~~;~;~~;1
1. Number Included in Last Valuation 51 47
2. Additions from Active Members
3. Additions entering the DROP
4. Additions from Terminated Vested Members
5. Deaths Resulting in No Further Payments
6. Deaths Resulting in New Survivor Benefits
7. End of Certain Period -No Further Payments
8. Other--New Survivor Payments for Death
9. Number Included in This Valuation
*Reflects the Actuarial Impact Statement for Ordinance 58-13-37.
City of Atlantic Beach General Employees'
Retirement System
1
4
1
(1)
0
0
0
56
2
0
1
0
0
0
51
9/30/2013 Actuarial Valuation I E-1
GRS
STATISTICAL DATA
Active Members as of September 30, 2013
20-24 NO. 0 0 0
25-29 NO. 0 0 0
30-34 NO. 0 0
35-39 NO. 0 2
40-44NO. 0 5 0
45-49 NO. 0 3
50-54 NO. 0 4 3
55-59 NO. 0 7 3
0-64 NO. 0 5 3
65&UPNO. 0 0 0
OTNO. 0 26 12
City of Atlantic Beach General Employees'
Retirement System
0 0 0 0 0
0 0 0 0 0
0 0 0 0
0 0 0 0 3
0 2 0 0 7
2 0 8
0 0 9
5 0 0 16
0 0 10
0 0 2
8 5 2 3 56
9/30/2013 Actuarial Valuation I E-2
NUMBER ADDED TO AND REMOVED FROM ACTIVE MEMBERSHIP
Number
Added Terminations During Year Active
Year
Ended
September 30
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013**
5-yr. Totals
2009-2013
Expected
for 2014
During
Year
A E
12 11
12 6
14 17
7 6
9 8
7 10
12 11
12 10
10 14
10 11
8 7
7 6
6 2
4 7
6 7
8 7
Q Q
24 23
A Represents actual number.
Normal
Retirement
A E
1 0.5
0 0.5
1 0.8
2 0.8
1 1.2
1 1.2
2 0.8
2 1.2
2 0.8
5 2.4
1 1.8
0 3.2
0 3.8
4 4.4
5 5.3
2 4.3
2 4.6
16 22.3
4.9
E Represents expected number.
Disability Died-in
Retirement Service
A E A E
1 0.2 0 0.2
0 0.2 0 0.2
1 0.2 0 0.2
0 0.1 0 0.1
0 0.1 1 0.1
0 0.2 0 0.1
0 0.2 0 0.1
0 0.2 0 0.1
0 0.2 0 0.2
0 0.1 0 0.2
1 0.2 0 0.2
0 0.1 0 0.2
0 0.1 0 0.2
0 0.1 0 0.2
1 0.1 0 0.3
0 0.2 1 0.2
Q 0.2 Q 0.2
1 0.8 1 1.1
0.1 0.2
*Reflects the Actuarial Impact Statement for Ordinance 58-13-37.
**No employees will be added following the closure of the plan.
GRS City of Atlantic Beach General Employees'
Retirement System
Withdrawal Members
Vested Other Total End of
A A A E Year
2 7 9 8.2 76
0 6 6 8.3 82
0 15 15 8.3 79
0 4 4 7.5 70
1 5 6 7.6 71
2 7 9 8.1 68
0 9 9 10.8 84
1 7 8 10.0 86
1 11 12 9.4 82
0 6 6 8.5 81
1 4 5 8.1 82
1 5 6 7.8 83
1 1 2 6.9 87
0 3 3 6.8 84
1 0 1 5.7 83
2 2 4 4.8 63*
Q 1 1 5.1 56
12 29.3
0.7
9/30/2013 Actuarial Valuation I E-3
Retired Members and Beneficiary Data
Historical Schedule
Added Removed Net Increase
Year Ended Annual Annual Annual
September 30 No. Pensions No. Pensions No. Pensions
1999 1 2,128 1 2,128
2000 6 78,522 3 32,513 3 46,009
2001 17,716 * I 17,716
2002 3 23,184 26,801 2 (3,617)
2003 2 32,159 5,889 26,270
2004 2 35,900 2 17,160 18,740
2005 3 47,505 5,774 2 41,730
2006 6 82,446 3 29,272 3 53,174
2007 3 51,425 3 51,425
2008 9,217 9,217
2009 2 17,424 2 5,992 11,432
2010 4 95,156 3 13,790 1 81,366
2011 9 105,409 1 14,326 8 91,083
2012 4 77,393 0 4 77,393
2013 6 160,587 1 12,284 5 148,303
Expected for
2014
* Includes a one-time 5. 0% cost-ofliving increase.
GRS City of Atlantic Beach General Employees'
Retirement System
Expected
End ofYear Removals
Annual Annual
No. Pensions No. Pensions
23 174,013 0.5 3,779
26 220,022 0.6 4,196
27 237,738 0.6 4,543
29 234,121 0.7 5,355
30 260,391 0.9 6,159
30 279,131 1.0 6,956
32 320,861 1.0 7,331
35 374,035 1.0 7,917
38 425,460 1.1 8,798
38 425,460 1.3 10,328
38 436,892 1.3 11,534
39 518,258 1.2 11,854
47 609,341 1.2 12,414
51 686,734 1.2 12,623
56 834,402 1.3 14,605
1.4 15,651
9/30/2013 Actuarial Valuation I E-4
SECTIONF
SUMMARY OF PLAN PROVISIONS
A. Ordinances:
Plan established under the Code of Ordinances for the City of Atlantic Beach, Florida, Patt II, Chapter 2,
Article VI, Division 3 and was most recently amended and restated under Ordinance No. 5 8-13-3 7 passed
and adopted on June 10, 2013. The Plan is also governed by certain provisions ofPatt VII, Chapter 112,
Florida Statutes (F.S.) and the Internal Revenue Code.
B. Effective Date
December 22, 1975
C. Plan Year
October 1 through September 30
D. Type of Plan
Qualified, governmental defined benefit retirement plan; for GASB purposes it is a sole employer plan.
E. Eligibility Requirements
The plan is currently closed to new entrants.
Prior to closure, the plan included all City employees, other than police officers or firefighters, who
normally worked more than I ,000 hours annually and who were not elected officials, temporary or
contractual employees, or executives or depatiments heads that elected not to participate. They became
members on the date of employment.
F. Credited Service
Service is measured as the total number of years and fractional pmts of years, but credited to the nearest
one-twelfth (1/12) of a year. No service will be credited for any periods of employment for which the
member received a refund of their employee contributions.
G. Compensation
Base salary or wages paid for services rendered to the City including longevity pay, ove1time pay, cost of
living payments, holidays and personal leave taken. Compensation excludes payments of unused personal
leave, uniform or equipment allowances, or any reimbursement of expenses.
H. Final Average Compensation (FAC)
Average monthly rate of Compensation during the highest 60 consecutive months of Credited Service out of
the last 120 months preceding the date of termination or retirement.
GRS City of Atlantic Beach General Employees'
Retirement System
9/30/20 13 Actuarial Valuation I F -1
I. Normal Retirement
Eligibility:
Benefit:
Normal Form
of Benefit:
A participant may retire on the first day of the month coincident with or next following age 60
with 5 or more years of Credited Service.
For employees hired before April24, 2005:
2.85% ofFAC times Credited Service. Benefit is limited to 100% ofFAC.
For employees hired on or after April 24, 2005:
2.50% ofF AC times Credited Service. Benefit is limited to 100% ofF AC.
Life Annuity; other options are also available.
J. Early Retirement
Eligibility:
Benefit:
Normal Form
of Benefit:
A member may elect to retire earlier than the Normal Retirement Eligibility upon attainment of
age 55 with 5 years of Credited Service.
The Normal Retirement Benefit is actuarially reduced for each year by which the member's
Early Retirement date precedes age 60.
Life Annuity; other options are also available.
K. Delayed Retirement
Same as Normal Retirement taking into account compensation earned and service credited until the date of
actual employment termination.
L. Service Connected Disability
Eligibility:
Benefit:
Normal Form
of Benefit:
Any member with 5 or more continuous years of Credited Service who becomes totally and
permanently disabled and unable to render useful and efficient service to the City is eligible for
a disability benefit.
The benefit is calculated as if the member was eligible for Normal Retirement and is payable
retroactively to the later of; the last day on payroll, or the date of application for disability
benefits.
Life Annuity; other options are also available.
GRS City of Atlantic Beach General Employees'
Retirement System
9/30/2013 Actuarial Valuation I F-2
M. Non-Service Connected Disability
Eligibility:
Benefit:
Normal Form
of Benefit:
Any member with 5 or more continuous years of Credited Service who becomes totally and
permanently disabled and unable to render useful and efficient service to the City is eligible for
a disability benefit.
The benefit is calculated as if the member was eligible for Normal Retirement and is payable
retroactively to the later of; the last day on payroll, or the date of application for disability
benefits.
Life Annuity; other options are also available.
N. Pre-Retirement Death
Eligibility:
Benefit:
Normal Form
of Benefit:
Any member with 5 or more years of Credited Service is eligible for a death benefit.
Upon the death of a member, the designated beneficiary shall be paid an actuarially reduced
benefit based on one hundred (100) percent survivor pension notwithstanding that the
member may not have satisfied the conditions for retirement. If there are no beneficiaries
designated by the member, then a benefit shall be paid to the surviving spouse or, if no
surviving spouse, a reduced benefit will be paid to the member's unmarried children.
If spouse is receiving benefits described above, no children's benefits are payable.
If spouse is not receiving benefits, children under age 19, or age 23 if a full time student, will
receive equal shares of 50% of the member's Normal Retirement Benefit under the Life
Annuity option based upon service and F AC as of the date of death.
Payable for the life of the member's beneficiary or spouse. Children's benefits are payable
until age 19 or age 23 if a full time student.
0. Post Retirement Death
Benefit determined by the form of benefit elected upon retirement.
P. Optional Forms
In lieu of electing the Normal Form of benefit, the optional forms of benefits available to all retirees are the
50%, 66 2/3%, 75% or 100% Joint and Survivor options. A Social Security option is also available for
members retiring prior to the time they are eligible for Social Security retirement benefits.
Q. Vested Termination
Eligibility:
Benefit:
A participant has earned a non-forfeitable right to Plan benefits after the completion of 5 or
more years of Credited Service.
The benefit is the member's vested portion of the accrued Normal Retirement Benefit as of the
date of termination. Benefit begins on the Normal or Early Retirement date.
GRS City of Atlantic Beach General Employees'
Retirement System
9/30/2013 Actuarial Valuation I F-3
Vested Termination-Continued
Normal Form
of Benefit: Life Annuity; other options are also available.
R. Refunds
Eligibility:
Benefit:
Optionally, vested participants may also withdraw their contributions in lieu of the deferred
benefits otherwise due.
The member who terminates employment receives a lump-sum payment of their employee
contributions with interest.
S. Member Contributions
6% of Compensation
T. Employer Contributions
u.
The amount determined by the actuary to pay the normal cost and an amortization of the unfunded actuarial
accrued liabilities, along with employee contributions. Following are contribution rates per recent
valuations:
Contribution
Year
Beginning City Member Total
10/1/2009 14.84% 5.000% 19.84%
10/1/2010 16.60% 5.000% 21.60%
10/1/2011 24.53% 5.000% 29.53%
10/1/2012 26.34% 5.000% 31.34%
I 0/112013 29.19% 6.000% 35.19%
I 0/1/2014 31.59% 6.000% 37.59%
Cost of Living Increases
The plan does not provide for automatic post-retirement cost of living adjustments (COLA) of retiree
benefits.
V. Changes from Previous Valuation
See the Discussion of Valuation Results Section of this report under the Revisions in Benefits heading.
W. Gain-sharing benefits
Not applicable.
GRS City of Atlantic Beach General Employees'
Retirement System
9/30/2013 Actuarial Valuation I F-4
X. Deferred Retirement Option Plan
Eligibility:
Benefit:
Maximum
Plan members are eligible for the DROP upon attainment of age 55 with 5 years of Credited
Service.
All members must make a written election to participate in the DROP.
The member's Credited Service and F AC are frozen upon entry into the DROP. The monthly
retirement benefit as described under Normal Retirement is calculated based upon the frozen
Credited Service and F AC. Benefits for members entering the DROP prior to age 60 will be
actuarially reduced for Early Retirement.
DROP Period: 60 months
Interest
Credited:
Normal Form
of Benefit:
Pmticipants' DROP account balances will be credited in accordance with the self-directed
options selected by the participant who entered the program prior to July 1, 2013. For all other
pmticipants, DROP account balances will be credited qumterly with interest based on Plan's
net investment earnings for that qumter.
Lump Sum or roll-over to a qualified retirement account.
GRS City of Atlantic Beach General Employees'
Retirement System
9/30/2013 Actuarial Valuation I F-5
SECTIONG
COMPARATIVE SUMMARY OF PRINCIPAL
VALUATION RESULTS
GRS
A. Participant Data
Number Included:
Actives
Service Retirees & Beneficiaries
Disability Retirees
Terminated Vested Members
Total Members and Beneficiaries
Total Annual Payroll (Excluding DROP Participants)
Annual Valuation Payroll
Expected Annual Payroll in Contribution Year
Total Annualized Benefits
Service Retirees & Beneficiaries
Disability Retirees
Terminated Vested Members
B. Assets (Market Value)
Cash and Short Term1nvestments
Treasury and Agency Bonds & Notes
Common and Preferred Stocks
Mutual or Pooled Bond Funds
Corporate Bonds
Other Securities
Net Receivables & Payables
Total
Funding (Actuarial) Value
Assets include:
Accumulated active member contributions
(with interest if applicable)
C. Actuarial present value of accrued benefits
(i) Vested accrued benefits
Retired members and benefitciaries (incl DROP)
Terminated members
Active members (includes non-forfeitable memebrs
contributions of 1,225,604 and 1,250,523)
Total
(ii) Non-vested accrued benefits
(iii) Total actuarial p.v. of accrued benefits
(iv) Actuarial p.v. of accrued benefits at begin. of year
(v) Changes attributable to:
Amendments*
Assumption change
Operation of decrements
Benefit payments
Other
(vi) Net change (PVAB measurement Method Change)
(vii) Actuarial p.v. of accr. benefits at end of year
56 63
52 47
4 4
ll 12
123 126
$2,733,429 $3,072,111
2,733,429 3,072,111
2,733,429 3,258,269
778,025 629,722
56,377 56,377
113,275 121,445
855,812 831,303
790,293 2,090,713
8,008,414 7,632,876
426,035 2,131,912
3,653,586 0
89,120 129,591
(52,549) (168,920)
13,770,711 12,647,475
13,815,833 12,465,289
1,225,604 1,250,523
8,080,379 6,485,800
790,967 785,507
6 700
15,181,382 14,041,007
0 115,263
15,181,382 14,156,270
14,156,270 13,348,960
none (125,681)
none none
1,807,618 1,595,688
(782,506) (662,697)
none none
1,025,112 807,310
15,181,382 14,156,270
*Results have been updated to include the Actuarial Impact Statement for Ordinance 58-13-37.
City of Atlantic Beach General Employees'
Retirement System
9/30/2013 Actuarial Valuation I G-1
GRS
C. Liabilities-Actuarial Present Value of Future Benefits
1. Active Members
Service Retirement Benefits $10,264,683 $11,516,775
Vesting Benefits 274,710 322,701
Disability Benefits 237,621 280,665
Preretirement Death Benefits 240,504 278,177
Return of Member Contributions 47,420 56,490
Total Actives 11,064,938 12,454,808
2. Inactive Members
Service Retirees & Beneficiaries 7,578,313 5,972,648
Disability Retirees 502,066 513,152
Terminated Vested Members 790,967 785,507
Total Inactive Members 8,871,346 7,271,307
3. Total Present Value for All Members 19,936,284 19,726,115
Total Present Value of:
Future Salaries 20,075,853 23,633,470
Future Employee Contributions 1,204,551 1,418,008
Future Contributions from Other Sources 4,915,900 5,842,818
a. Total UAAL for Prior Valuation Date $4,133,993 $4,933,603
b. Employer Normal Cost for this period 284,455 381,619
c. Interest acccrued on (a) and (b) 342,097 409,953
d. Contributions for this period (1,044,392) (998,516)
e. Interest accrued on (d) (41,776) (39,941)
f. Changes due to:
Plan Amendment* 0 (150,143)
Assumption Changes 0 0
Asset Method 0 0
Actuarial (Gain) Loss (208,109) (402,582)
Total Current UAAL: a+b+c-d-e+f
* Results have been updated to include the Actuarial Impact Statement for Ordinance 58-13-3 7.
Ori inal and Current Unfunded Actuarial Accrued Liabilities
Years Amortization Current
Date Item Description Remaining Payment Original Amount Unfunded
9/30/2012 Original UAAL*
9/30/2013 Experience Gain
9
10
$544,623
(28,717)
*Reflects the Actuarial impact Statement for Ordinance 58-13-3 7.
City of Atlantic Beach General Employees'
Retirement System
$4,133,993
(208,109)
$3,674,377
(208,109)
9/30/2013 Actuarial Valuation I G-2
GRS
D. Pension Cost
E.
F.
Entry Age Normal Cost for:
Service Retirement Benefits
Vesting Benefits
Disability Benefits
Preretirement Death Benefits
Return of Member Contributions
Total Actives
Administrative Expenses
Expected Member Contributions
Total Employer Normal Cost
Payment Required to Amortize Unfunded Actuarial
Accrued Liability
Total Contribution at Valuation Date
Total Contribution Adjusted for Frequency of
Payments and Interest to Next Following Fiscal Year
% of Expected Payroll
Amount Expected to be Contributed by Members Next FY
% of Expected Payroll
$320,754
14,272
14,819
7,588
26,775
384,208
33,220
166,904
250,524
515,906
766,430
863,613
31.59%
164,006
6.00%
Past Contributions-For the Fiscal Years Ended September 30 of2012 and 2013
Required Contribution Determined in the Valuation as of September 30, 20 II
by the Plan Sponsor $1,044,392
by Members $198,240
Actual Contribution for the Fiscal Year ended September 30, 20 13
by the Plan Sponsor $1,044,392
Members $1 750
Net experience (gain) loss during year: ($208,109)
G. I. Plan to Amortize Unfunded Actuarial Accrued Liability
I 0 year funding of the Original Unfunded Actuarial Accrued Liability,
I 0 year funding of any emerging Gains or Losses, or assumption changes.
$358,108
16,596
17,179
8,659
30,111
430,652
30,485
187,623
273,514
570,451
843,965
950,980
29.19%
195,496
6.00%
September 30, 20 I 0
$998,516
$203,503
September 30, 2012
998,516
186,326
2. Schedule Illustrating the Amortization of the Unfunded Actuarial Accrued Liability (VAAL)
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
3. Action taken since last actuarial valuation.
Contribution sufficient to the total
City of Atlantic Beach General Employees'
Retirement System
contribution.
3,466,268
3,186,389
2,884,121
2,557,672
2,205,108
1,824,338
1,413,107
968,977
489,316
(28,717)
0
9/30/2013 Actuarial Valuation I G-3
GRS
*Results have been updated to include the Actuarial Impact Statement for Ordinance 58-13-37.
H. 1. Three-Year Comparison of Actual and Assumed Salmy Increases (Annualized)
9/30/2013
9/30/2012
9/30/2011
1.3%
1.2%
0.5%
5.9%
5.9%
6.0%
2. Three-Year Comparison of Investment Return (Actuarial Value)
9/30/2013
9/30/2012
9/30/2011
8.0%
8.0%
2.1%
8.0%
8.0%
8.0%
3. Average Annual Growth in Payroll, Last Ten Years (if applicable)
9/30/2004 3,051,289
9/30/2005 3,182,450
9/30/2006 3,194,700
9/30/2007 3,475,757
9/30/2008 3,726,713
9/30/2009 4,018,667
9/30/2010 3,837,512
9/30/2011 3,738,277
9/30/2012 3,713,609
9/30/2013 2, 733,429
Total% Increase Last Ten Years (4.30)%
Annual% Increase (0.44)%
Thirty-year Forecast 0.00%
I. Benefits and Expenses of Plan not Explicitly or Implicitly Provided in Valuation
NONE
J. Trends not taken into Account but which are likely to Result in Future Cost Increases
NONE
City of Atlantic Beach General Employees'
Retirement System
9/30/2013 Actuarial Valuation I G-4