General Actuary Report 2010
CITY OF ATLANTIC BEACH GENERAL EMPLOYEES’ RETIREMENT SYSTEM ACTUAR IAL VALUAT ION R E POR T S E P T EMB E R 3 0 , 2 0 1 0
ANNUAL EMPLOYER CONTRIBUTION IS DETERMINED BY THIS VALUATION TO BE PAID IN THE EMPLOYER FISCAL YEAR ENDING SEPTEMBER 30, 2012
April 2, 2011 The Board of Trustees City of Atlantic Beach General Employee Retirement System Atlantic Beach, Florida Dear Board Members: We are pleased to submit herein our September
30, 2010 Actuarial Valuation Report for the City of Atlantic Beach General Employees’ Retirement System. The contribution results apply to the Plan Year ending September 30, 2011 and
to the City's fiscal year ending September 30, 2012. The valuation was performed on the basis of participant data and financial information supplied by the City whose information is
summarized in this Report. Although this information was not audited by us, we did review it for reasonableness and comparability to prior years. The benefits valued are those which
were in effect on the valuation date. There is no material benefit or expense to be provided by the Plan and/or paid from the plan's assets for which no liabilities or current costs
have been established or otherwise provided for in the valuation. We know of no event or trend not taken into into account in this valuation which may require a material increase in
plan costs or required contribution rates. Gabriel, Roeder, Smith & Company will be pleased to answer questions pertaining to the valuation and to meet with you to review this Report.
The undersigned are members of the American Academy of Actuaries and meet the Qualification Standards of the Academy of Actuaries to render the actuarial opinion herein. We hereby certify
that this actuarial valuation is complete and accurate, and in our opinion, the techniques and assumptions used are reasonable and meet the requirements and intent of Part VII, Chapter
112, Florida Statutes. Respectfully submitted, GABRIEL, ROEDER, SMITH AND COMPANY James J. Rizzo, ASA, MAAA Senior Consultant & Actuary Piotr Krekora, ASA, MAAA Senior Actuarial Analyst
STATEMENT BY ENROLLED ACTUARY 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. 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 March 1, 2011 Date 11-03355 Enrollment Number
TABLE OF CONTENTS SECTION TITLE PAGE A EXECUTIVE SUMMARY A-1 B VALUATION RESULTS 1. Participant Data B-1 2. Annual Required Contribution B-2 3. Actuarial Value of Benefits and Assets
B-3 4. Financial Soundness B-4 5. Actuarial Gains and Losses B-8 6. Recent History of Valuation Results B-12 7. Recent History of Required and Actual Contributions B-14 8. Actuarial
Assumptions and Cost Method B-15 C PENSION FUND INFORMATION 1. Summary of Assets C-1 2. Summary of Fund's Income and Disbursements C-2 3. Reconciliation of DROP Accounts C-3 4. Actuarial
Value of Assets C-4 5. Investment Rate of Return C-6 D FINANCIAL ACCOUNTING INFORMATION 1. FASB No. 35 D-1 2. GASB No. 25 D-2 3. GASB No. 27 D-4 E MISCELLANEOUS INFORMATION 1. Reconciliation
of Membership Data E-1 2. Statistical Data E-2 F SUMMARY OF PLAN PROVISIONS F-1 G COMPARATIVE SUMMARY OF PRINCIPAL VALUATION RESULTS 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 circumstances from an independent tax advisor.
SECTION A EXECUTIVE SUMMARY
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | A-1 EXECUTIVE SUMMARY Funding Objective The funding objective of the Retirement System is
to establish and receive contributions, expressed as percents of active member payroll, which will remain approximately level from year to year and will not have to be increased for
future generations of citizens in the absence of benefit improvements. This objective is stated in the Retirement System Ordinance and meets the requirements of Part VII, Chapter 112,
Florida Statutes. Comparison of Required Employer Contributions The following is a comparison of required contributions developed in this year's and the last actuarial valuations: Gross
Contribution Requirement $ 1,202,019 $ 940,505 $ 261,513 As % of Expected Payroll 29.53 % 21.60 % 7.94 % Expected Employee Contribution $ 203,503 $ 217,736 $ (14,234) As % of Covered
Payroll 5.00 % 5.00 % 0.00 % Required Employer Contribution $ 998,516 $ 722,769 $ 275,747 As % of Covered Covered Payroll 24.53 % 16.60 % 7.94 % Based on 9/30/10 Valuation Valuation
(Decrease) Based on 10/01/09 Increase For FYE 9/30/2012 For FYE 9/30/2011 Minimum Required Contribution As illustrated in the preceding chart, the City contribution necessary to support
the current benefits for the General Employees is $998,516 for the fiscal year ending September 30, 2012. 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. Revisions in Actuarial
Assumptions and Methods This valuation reflects the following revisions in actuarial assumptions and methods, as adopted by the Board: The mortality table is updated from the 1983
Group Annuity Mortality Table to the RP-2000 Generational Mortality Table. The turnover rates were updated to reflect the recent and anticipated experience. We continue using a table
with select rates based on service and ultimate rates based on age. The new rates are generally lower than used in previous valuations. The retirement rates were updated. We continue
using a table with rates based on age. The disability rates for female employees have been changed to be the same as applicable for male
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | A-2 employees. We continue using an age based table. All rates currently used are the same
as used previously for male employees. The long-term inflation assumption has been lowered to an annual rate of 3% from 5% used previously. The salary increase assumptions were updated
to reflect the recent and anticipated experience. We continue using an age based table. The new rates are generally higher than used in previous valuations. The rate of payroll increase
assumption has been lowered to an annual rate of 4% from 5.5% used previously. The Board chose to maintain the same long-term expected rate of return at 8% per year without change.
The net effect of these changes combined includes an increase in the Unfunded Actuarial Accrued Liability of $525,869. Changes to the City Contribution (for the year ending 9/30/2012)
resulting from the assumption changes include: a new amortization payment of $34,975; an increase of amounts required to amortize the existing bases of $ 24,204 and an increase in the
Normal Cost of $ 112,584. 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, or more new employees were hired than terminated, 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 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 components of change in the actuarially required contribution are as follows: Contribution rate last year 16.60 % Payment on UAAL prior to changes 2.30 Experience
gain/loss 2.49 Change in administrative expense 0.15 Change in normal cost before expenses (1.66) Revision in benefits 0.00 Revision in assumptions/methods 4.65 Contribution rate this
year 24.53 % There was a net actuarial loss this year which is due to the actuarial asset investment return being less than
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | A-3 expected (5% return on an actuarial basis vs. 8.0% assumed for the year ending September
30, 2010), partially offset by lower than expected salary increases that were well below the expected (-.4% actual vs. 6% assumed). Administrative expenses were higher than the previous
year by 0.15% of pay. The remainder of this Report includes detailed actuarial valuation results, financial information, miscellaneous information and statistics, and a summary of plan
provisions.
SECTION B VALUATION RESULTS
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | B-1 ACTIVE MEMBERS Number 84 87 Covered Annual Payroll $ 3,837,512 $ 4,018,667 Average Annual
Payroll $ 45,685 $ 46,192 Average Age 50.6 50.4 Average Past Service 9.9 9.5 Average Age at Hire 40.7 40.9 RETIREES, BENEFICIARIES, & DROP MEMBERS Number 36 35 Annual Benefits $ 473,298
$ 391,931 Average Annual Benefit $ 13,147 $ 11,198 Average Age 69.1 69.7 DISABILITY RETIREES Number 3 3 Annual Benefits $ 44,960 $ 44,960 Average Annual Benefit $ 14,987 $ 14,987 Average
Age 59.2 58.2 TERMINATED VESTED MEMBERS Number 12 12 Annual Benefits $ 127,706 $ 127,706 Average Annual Benefit $ 10,642 $ 10,642 Average Age 54.0 53.0 PARTICIPANT DATA September 30,
2010 September 30, 2009
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | B-2 A. Valuation Date September 30, 2010 B. ARC to Be Paid During Fiscal Year Ending 9/30/2012
9/30/2012 9/30/2011 C. Assumed Date(s) of Employer Contrib. Monthly Monthly Monthly D. Annual Payment to Amortize Unfunded Actuarial Liability if Paid on the Valuation Date $ 522,022
$ 469,503 $ 327,221 E. Employer Normal Cost 12.83% 11.29% 7.51% (including Administrative Expenses) if Paid on the Valuation Date 364,130 264,215 314,214 8.95% 6.35% 7.22% F. ARC if
Paid on the Valuation Date Date: D+E 886,152 733,718 641,435 G. ARC Adjusted for Frequency of Payments and Interest to Required Time of Contribution 998,516 826,753 722,769 H. Payroll
Expected for Contribution Year 4,070,050 4,158,421 4,354,725 I. ARC as % of Covered Payroll in Contribution Year: G ÷ H 24.53 % 19.88 % 16.60 % ANNUAL REQUIRED CONTRIBUTION (ARC) After
Changes Before Changes September 30, 2010 September 30, 2009
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | B-3 A. Valuation Date After Changes B. Actuarial Present Value of All Projected Benefits for
1. Active Members a. Service Retirement Benefits $12,352,447 $10,799,306 $10,991,953 b. Vesting Benefits 363,432 324,963 321,985 c. Disability Benefits 325,140 249,722 248,077 d. Preretirement
Death Benefits 309,938 449,854 467,766 e. Return of Member Contributions 99,825 132,706 142,597 f. Total 13,450,782 11,956,551 12,172,378 2. Inactive Members a. Service Retirees & Beneficiaries
4,458,095 4,372,835 3,482,976 b. Disability Retirees 429,652 421,862 429,664 c. Terminated Vested Members 868,534 814,036 749,964 d. Total 5,756,281 5,608,733 4,662,604 3. Total for
All Members 19,207,063 17,565,284 16,834,982 C. Actuarial Accrued (Past Service) Liability per GASB No. 25 15,179,961 14,654,092 13,682,154 D. Actuarial Value of Accumulated Plan Benefits
per FASB No. 35 12,227,533 11,717,109 10,574,385 E. Plan Assets 1. Market Value 10,417,807 10,417,807 9,213,319 2. Actuarial Value 10,618,038 10,618,038 9,841,314 F. Actuarial Present
Value of Projected Covered Payroll 30,692,226 27,747,062 26,316,975 G. Actuarial Present Value of Projected Member Contributions 1,534,611 1,387,353 1,315,849 ACTUARIAL VALUE OF BENEFITS
AND ASSETS September 30, 2010 September 30, 2010 September 30, 2009 Before Changes
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | B-4 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: 1. 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
freeze using the valuation assumptions. 1. Accumulated Contributions of Active Members $ 1,120,281 $ 989,457 $ 799,475 2. APV of Projected Benefits in Pay Status and for Vested Terminations
5,756,281 4,662,604 4,652,774 3. APV of Accrued Benefits for Active Participants (Employer Portion) 5,350,971 4,922,324 4,236,432 4. Total 12,227,533 10,574,385 9,688,681 5. Market Value
of Assets 10,417,807 9,213,319 8,167,648 6. Assets as % of Total 85 % 87 % 84 % General Employees 9/30/2010* 9/30/2009 9/30/2008* *Reflects change in benefits, methods or assumptions.
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | B-5 0% 100% 200% $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 2008 2009 2010 Ratio Millions
Actuarial Valuation Date (September 30) Ratio of Market Value of Assets to Present Value of Accrued Benefits Market Value of Assets PV Accrued Benefits Ratio
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | B-6 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 a long range funding goal. 9/30/00 $ 5,229 $ 6,462 81 % 9/30/01 * 5,587 6,986 80
9/30/02 5,747 7,479 77 9/30/03 * 5,951 8,186 73 9/30/04 6,273 9,005 70 9/30/05 * 6,802 9,822 69 9/30/06 * 7,609 10,505 72 9/30/07 8,594 11,668 74 9/30/08 * 9,209 12,624 73 9/30/09 9,841
13,682 72 9/30/10 * 10,618 15,180 70 Valuation Date Actuarial Value of Assets (in Thousands) Actuarial Accrued Liability (in Thousands) % of AAL Covered by Assets *Reflects change in
benefits, actuarial assumptions and/or asset method.
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | B-7 0% 50% 100% 150% $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 $16.0 2004 2005 2006 2007
2008 2009 2010 Ratio Millions Actuarial Valuation Date (September 30) Actuarial Assets Accrued Liability Ratio
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | B-8 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: 1. Last Year's UAAL $3,840,840 2. Last Year's Employer Normal
Cost 326,782 3. Last Year's Actual City Contibution 599,292 4. Interest at the assumed rate on: a. 1 for one year 307,267 b. 2 half a year 13,071 c. 3 from dates paid 23,972 d. a + b
-c 296,366 5. This Year's Expected UAAL 1 + 2 -3 + 4d 3,864,696 6. This Year's Actual UAAL (before any changes in benefits or assumptions) 4,036,054 7. Net Actuarial Gain (Loss): (5)
-(6) (171,358) 8. Gain (Loss) due to investments (295,676) 9. Gain (Loss) due to other sources 124,318 10. Amortization Payment Due to Gain (Loss) (15,857) Derivation of Experience Gain
(Loss)
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | B-9 Net actuarial gains in previous years have been as follows: Year Ended 9/30/1995 447,291
4 47,291 9/30/1996 ( 162,663) 2 84,628 9/30/1997 252,238 5 36,866 9/30/1998 58,540 5 95,406 9/30/1999 108,195 7 03,601 9/30/2000 ( 55,470) 6 48,131 9/30/2001 ( 18,145) 6 29,986 9/30/2002
( 280,151) 3 49,835 9/30/2003 ( 355,383) (5,548) 9/30/2004 ( 395,109) (400,657) 9/30/2005 ( 364,305) (764,962) 9/30/2006 131,266 (633,696) 9/30/2007 ( 170,383) (804,079) 9/30/2008 (
178,856) (982,935) 9/30/2009 ( 482,223) (1,465,157) 9/30/2010 ( 171,358) (1,636,515) Actuarial Gain (Loss) Cumulative Gain (Loss) ($2) ($1) $0 $1 $2 ($2) ($1) $0 $1 $2 Millions Millions
Plan Year End Actuarial Gain (+) or Loss ( -) Gain or Loss Cumulative
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | B-10 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: 9/30/2000 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 % Average 5.2 % ---5.8 % ---Assumed Salary Increases
Actual Investment Return Year Ending Actuarial Assumed 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.
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | B-11 -5% 0% 5% 10% 15% -5% 0% 5% 10% 15% Plan Year End History of Investment Return -Actuarial
Value of Assets Actual Assumed 0% 5% 10% 15% 0% 5% 10% 15% Plan Year End Compared to Previous Year History of Salary Increases Actual Assumed
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | B-12 Active Members Inactive Members 9/30/00 71 37 $ 2,330 $ 5,229 $ 1,233 $ 213 9.14 % 9/30/01
* 75 40 2,462 5,587 1,399 226 9.17 9/30/02 83 40 2,768 5,747 1,732 267 9.66 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 9/30/09 87 50 4,019 9,841 3,841 314
7.82 9/30/10 * 84 51 3,838 10,618 4,562 364 9.49 % of Payroll Amount (in Thousands) UAAL (in Thousands) RECENT HISTORY OF VALUATION RESULTS Number of Employer Normal Cost Valuation Date
Reported Annual Payroll (in Thousands) Actuarial Value of Assets (in Thousands) * Reflects a change in assumptions or benefits.
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | B-13 0 25 50 75 100 125 150 Actuarial Valuation Date Recent History of Number of Members Active
Members Inactive Members $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 Millions Actuarial Valuation Date Recent History of Covered Annual Payroll
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | B-14 9/30/04 9/30/06 $ 480,029 16.09 % $ 480,029 9/30/05 * 9/30/07 482,364 13.99 482,363 9/30/06
* 9/30/08 456,965 13.62 457,005 9/30/07 9/30/09 528,428 14.03 528,426 9/30/08 * 9/30/10 599,292 14.84 599,292 9/30/09 9/30/11 722,769 16.60 ---9/30/10 * 9/30/12 998,516 24.53 ---RECENT
HISTORY OF REQUIRED AND ACTUAL CONTRIBUTIONS Required Contributions Actual Contributions Valuation End of Year To Which Valuation Applies Amount % of Expected Payroll * Reflects a change
in assumptions or benefits.
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | B-15 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 portion 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 actuarial accrued liability determines the unfunded actuarial accrued liability. Financing of Unfunded
Actuarial Accrued Liabilities -The unfunded actuarial accrued liability was financed as a level percent of member payroll. Actuarial Value of Assets -The Actuarial Value of Assets phase
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.
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | B-16 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 4.0% 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. 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 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 of salary increases used in
the valuation are illustrated in the following table. Annual Rates for Salary Increase for Sample Ages Age: 20 30 40 50 60 Expected Increase (After Assumption Changes) 14.0% 8.7% 6.5%
6.0% 5.5% Expected Increase (Before Assumption Changes) 8.5% 8.1% 5.7% 5.7% 5.5%
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | B-17 Demographic Assumptions The mortality table was the RP-2000 Healthy White Collar tables
for males and females, as projected from the year 2001 using Projection Scale AA. New Assumptions Old Assumptions Ages Men Women Men Women 45 $142.32 $144.10 36.55 38.92 50 137.16 139.47
31.81 34.12 55 130.09 133.16 27.13 29.40 60 120.93 125.02 22.62 24.85 65 109.77 115.10 18.40 20.57 70 96.86 103.57 14.56 16.65 75 82.00 90.48 11.08 13.11 80 66.10 75.95 8.09 9.96 $1
Monthly for Life Expectancy (Years) RP2000 Table Projected to Valuation Year Value of Future Life Ages Men Women Men Women 45 $138.18 $143.79 33.74 39.42 50 132.10 139.24 29.18 34.68
55 124.57 133.42 24.82 30.08 60 115.04 126.21 20.64 25.68 65 103.26 117.13 16.69 21.46 70 90.18 105.77 13.18 17.45 75 76.40 92.85 10.15 13.84 80 62.65 79.21 7.64 10.72 $1 Monthly for
Life Expectancy (Years) 1983 GAM Table Value of Future Life 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: Retirement Ages
New Assumptions Old Assumptions
55 15% 15% 56 10% 10% 57 10% 10% 58 10% 10% 59 10% 10% 60 20% 20% 61 15% 10% 62 15% 15% 63 15% 10% 64 20% 15% 65 30% 50% 66 40% 50% 67 50% 50% 68 50% 50% 69 50% 50% 70 100% 100% Normal
or Early Reitrement/DROP Percent of Eligible Employees Retiring
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | B-18 Rates of separation from active membership 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 measures the probabilities of members remaining in employment. Sample Years
of New Old Ages Service Assumptions Assumptions ALL 0 28.61% 35.00% 1 20.78% 25.00% 2 16.94% 20.00% 3 11.67% 14.00% 4 7.41% 10.00% 25 5 & Over 3.70% 8.00% 30 3.50% 8.00% 35 3.20% 8.00%
40 3.00% 8.00% 45 2.70% 4.67% 50 2.20% 2.00% 55 2.00% 2.00% 60 2.00% 2.00% Rates of Separationg from Active Employment Rates of disability among active members (0% of disabilities are
assumed to be service-connected). New Assumptions Old Assumptions Sample Ages Men Women 20 0.07% 0.07% 25 0.09% 0.09% 30 0.10% 0.10% 35 0.14% 0.14% 40 0.21% 0.21% 45 0.32% 0.32% 50 0.52%
0.52% 55 0.92% 0.92% 60 1.53% 1.53% Percent Becoming Disabled Within Next Year Sample Ages Men Women 20 0.07% 0.03% 25 0.09% 0.05% 30 0.10% 0.07% 35 0.14% 0.13% 40 0.21% 0.19% 45 0.32%
0.28% 50 0.52% 0.45% 55 0.92% 0.76% 60 1.53% 1.10% Percent Becoming Disabled Within Next Year The mortality table was set forward ten years from the age at disability for projecting
disability costs.
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | B-19 Miscellaneous and Technical Assumptions Administrative & Investment Expenses 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. Benefit Service Exact fractional service is used to determine the amount of benefit payable. Decrement Operation Disability and mortality decrements
do not operate during the first 5 years of service. Disability and separation do not operate during retirement eligibility. Decrement Timing Decrements of all types are assumed to occur
at mid-year. Eligibility Testing Eligibility for benefits is determined based upon the age nearest birthday and service nearest whole year on the date the decrement is assumed to occur.
Forfeitures Vested members who terminate with a benefit worth less than 100% of their own accumulated contributions were assumed to forfeit their vested benefit. Incidence of Contributions
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. Marriage Assumption 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. Normal Form of Benefit The normal form of benefit is a life annuity. Pay Increase Timing Beginning of fiscal year. This is equivalent to assuming
that reported pays represent the actual amount paid during the previous fiscal year. Service Credit Accruals It is assumed that members accrue one year of service credit per year.
year. City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | B-20 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 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 mortality tables used by the plan. Actuarial Present Value 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. Amortization 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. Experience Gain (Loss) 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. Normal Cost 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. Reserve Account An account used to indicate that funds have been set aside for a specific purpose and is not generally available for other uses. Unfunded
Actuarial Accrued Liability The difference between the actuarial accrued liability and valuation assets. Sometimes referred to as “unfunded accrued liability.” Valuation Assets The value
of current plan assets recognized for valuation purposes. Generally based on market value plus a portion of unrealized appreciation or depreciation.
SECTION C PENSION FUND INFORMATION
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | C-1 Cash and Securities -Market Value Cash and Cash Equivalents $ 35,136 $ 8,966 Short Term
Investments 445,204 0 Treasury and Agency Bonds & Notes 2,379,976 0 Corporate Bonds 0 0 Common & Preferred Stocks 0 0 Pooled Equity Funds 0 0 Mutual or Pooled Bond Funds 1,686,331 5,832,064
Mutual Equity Funds 5,872,170 3,372,318 Other Securities -Participant Directed 151,128 96,855 Total 10,569,944 9,310,203 Receivables and Accruals Member Contribution 0 0 Additional Employer
Contribution 0 0 Interest and Dividends 0 0 Interest Deposit for Late Contribution 0 0 Total 0 0 Payables Benefits-DROP Reserve 151,128 96,855 Lump Sum Distributions 0 Expenses 0 0 Other
1,010 0 Total 152,138 96,855 Net Assets -Market Value $ 10,417,807 $ 9,213,348 SUMMARY OF ASSETS 9/30/2010 9/30/2009
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | C-2 Market Value at Beginning of Period $ 9,213,319 $ 8,167,648 Income Member Contributions
198,363 200,072 State Contributions 0 0 Employer Contribution 599,292 528,426 Interest and Dividends 42,043 257,983 Realized and Unrealized Gain (Loss) 888,316 546,911 Total Income 1,728,013
1,533,393 Disbursements Monthly Benefit Payments 462,801 435,135 DROP Payments Held in Reserve 0 0 Lump Sum Distributions 0 0 Refund of Contributions 5,606 32,032 Investment Related
Expenses 28,302 0 Other Administrative Expenses 26,815 20,554 Insurance Premiums 0 0 Total Disbursements 523,525 487,722 Net Increase During Period $ 1,204,488 $ 1,045,671 Market Value
at End of Period $ 10,417,807 $ 9,213,319 Year Ending 9/30/2009 Year Ending 9/30/2010 PENSION FUND INCOME AND DISBURSEMENTS
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | C-3 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. $96,855+61,960+181,778-189,465151,128RECONCILIATION OF DROP ACCOUNTSPayments credited to accountsInvestment Earnings creditedWithdrawals
from accountsValue at end of yearValue at beginning of year
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | C-4 ACTUARIAL VALUE OF ASSETS As of September 30, 2010 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.
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | C-5 2008 2009 2010 2011 A. Preliminary actuarial value from prior year $ 8,594,090 $ 9,208,773
$ 9,841,314 $ 10,618,038 B. Market value beginning of prior year 9,067,486 8,167,648 9,213,348 10,417,807 C. Market value end of prior year 8,167,648 9,213,319 10,417,807 D. Non-investment
net cash flow [contributions-(benefits & expenses)] 186,574 210,849 246,078 E. Investment return 1. Actual market value return net of investment expenses: C -B -D (1,086,412) 834,822
958,380 2. Expected return of 8.00% 694,990 661,846 746,911 3. Excess/(shortfall) to be phased-in: E1 -E2 (1,781,402) 172,976 211,469 F. Phased-in recognition of investment return (4
Year Recognition) 1. Current year: 25% of E3 (445,351) 43,244 52,867 2. 25% of excess/(shortfall) from first prior year 132,975 (445,351) 43,244 52,867 3. 25% of excess/(shortfall) from
second prior year 28,978 132,975 (445,351) 43,244 4. 25% of excess/(shortfall) from third prior year 16,517 28,978 132,975 (445,351) 5. Total phased-in recognition of investment return
(266,881) (240,154) (216,265) (349,240) G. Actuarial value end of year 1. Preliminary actuarial value end of year: A + D + E2 + F5 9,208,773 9,841,314 10,618,038 2. Upper corridor limit:
120% of C 9,801,178 11,055,982 12,501,368 3. Lower corridor limit: 80% of C 6,534,118 7,370,655 8,334,245 4. Actuarial value end of year * 9,208,773 9,841,314 10,618,038 H. Difference
between market value and actuarial value (1,041,125) (627,995) (200,231) I. Ratio of Funding Value to Market Value 113% 107% 102% DEVELOPMENT OF FUNDING VALUE OF ASSETS AS OF SEPTEMBER
30 * Offset for DROP Reserve made prior to the calculation of valuation assets.
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | C-6 INVESTMENT RATE OF RETURN The investment rate of return has been calculated on the following
bases: Basis 1 -Cost Value: Interest, dividends and realized gains (losses) divided by the beginning cost value of the fund, adjusted for cash flow during the year. Basis 2 -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 3 -Actuarial Value: Investment earnings recognized in the Actuarial Value of Assets divided by the weighted average of the Actuarial
Value of Assets during the year. 9/30/00 4 .3 % 9 .7 % 9/30/01 ( 1.9) 5 .1 9/30/02 ( 6.7) 1 .5 9/30/03 1 0.1 1 .7 9/30/04 7 .2 2 .3 9/30/05 9 .4 4 .9 9/30/06 9 .7 8 .5 9/30/07 1 4.7
1 0.0 9/30/08 ( 11.9) 4 .9 9/30/09 9 .7 4 .2 9/30/10 9 .9 5 .0 6.1 % 5.9 % 4.5 % 5.8 % Average Compounded Rate of Return for 5 Years 10 Years Year Ended Market Value Actuarial Value
Investment Rate of Return
SECTION D FINANCIAL ACCOUNTING INFORMATION
City of Atlantic Beach General Employees’ Retirement System 9/30/09 Actuarial Valuation | D-1 A. Valuation Date B. Actuarial Present Value of Accumulated Plan Benefits 1. Vested Benefits
a. Members Currently Receiving Payments $ 4,887,747 $ 3,912,640 b. Terminated Vested Members 868,534 749,964 c. Other Members 6,075,614 5,569,113 d. Total 11,831,895 10,231,717 2. Non-Vested
Benefits 395,638 342,668 3. Total Actuarial Present Value of Accumulated Plan Benefits: 1d + 2 12,227,533 10,574,385 4. Accumulated Contributions of Active Members 1,120,281 989,457
C. Changes in the Actuarial Present Value of Accumulated Plan Benefits 1. Total Value at Beginning of Year 10,574,385 9,688,681 2. Increase (Decrease) During the Period Attributable
to: a. Plan Amendment 0 0 b. Change in Actuarial Assumptions 510,424 0 c. Latest Member Data, Benefits Accumulated and Decrease in the Discount Period 1,611,131 1,352,871 d. Benefits
Paid (Including DROP Reserve) (468,407) (467,167) e. Net Increase 1,653,148 885,704 3. Total Value at End of Period 12,227,533 10,574,385 D. Market Value of Assets 10,417,807 9,213,319
E. Actuarial Assumptions -See page entitled Actuarial Assumptions and Methods FASB NO. 35 INFORMATION September 30, 2010 September 30, 2009
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | D-2 SCHEDULE OF FUNDING PROGRESS (GASB Statement No. 25) 9/30/2001 * $ 5 ,587 $ 6 ,986 $ 1,399
80.0 % $ 2 ,462 56.8 % 9/30/2002 5 ,747 7 ,479 1,732 76.8 2 ,768 62.6 9/30/2003 * 5 ,951 8 ,186 2,235 72.7 2 ,856 78.3 9/30/2004 6 ,273 9 ,005 2,732 69.7 3 ,051 89.5 9/30/2005 * 6 ,802
9 ,822 3,020 69.3 3 ,182 94.9 9/30/2006 * 7 ,609 1 0,505 2,896 72.4 3 ,195 90.7 9/30/2007 8 ,594 1 1,668 3,074 73.7 3 ,476 88.4 9/30/2008 * 9 ,209 1 2,624 3,415 72.9 3 ,727 91.6 9/30/2009
9 ,841 1 3,682 3,841 71.9 4 ,019 95.6 9/30/2010 10,618 1 5,180 4,562 69.9 3 ,838 118.9 Actuarial Valuation Date UAAL As % of Covered Payroll (b -a) /c Covered Payroll ( c ) Funded Ratio
(a) /(b) Actuarial Value of Assets (a) Unfunded AAL (UAAL) (b) -(a) Actuarial Accrued Liability (AAL) -Entry Age (b) * Reflects a change in assumptions or benefits.
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | D-3 SCHEDULE OF CONTRIBUTIONS FROM EMPLOYER (GASB Statement No. 25) Fiscal Year Ending 9/30/2001
11.24 % $ 266,148 $ 266,148 100 % 9/30/2002 11.41 288,070 288,070 100 9/30/2003 11.81 * 315,106 315,106 100 9/30/2004 12.72 381,518 381,518 100 9/30/2005 15.02 * 464,893 464,893 100
9/30/2006 16.09 480,029 480,029 100 9/30/2007 13.99 * 482,364 482,363 100 9/30/2008 13.62 * 456,965 457,005 100 9/30/2009 14.03 528,428 528,426 100 9/30/2010 14.84 599,292 599,292 100
Percentage Contributed Annual Required Contribution Contribution Contribution Rate Actual As a % of Payroll * Reflects a change in assumptions or benefits. Note: Annual Required Contribution
(if any), above, is payable by the City.
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | D-4 Employer FYE September 30 A. Annual Required Contribution (ARC) $ 599,292 $ 528,428 $
456,965 B. Interest on Net Pension Obligation (Asset) ---C. Adjustment to ARC ---D. Annual Pension Cost (APC): (A + B -C) 599,292 528,428 456,965 E. Contributions made 599,292 528,426
457,005 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) ---ANNUAL PENSION COST AND NET PENSION OBLIGATION (GASB STATEMENT NO. 27) 2010 2009 2008 Fiscal Annual Pension Actual Year Ending Cost (APC) Contribution 9/30/2008
$ 456,965 $ 456,965 100.0 % $ -9/30/2009 528,428 528,428 100.0 -9/30/2010 599,292 599,292 100.0 -THREE YEAR TREND INFORMATION Percentage of APC Contributed Net Pension Obligation
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | D-5 REQUIRED SUPPLEMENTARY INFORMATION GASB Statement No. 25 and No. 27 The information 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: Valuation
Date Contribution Rates: Employer Plan Members Actuarial Cost Method Amortization Method Equivalent Single Amortization Period Asset Valuation Method Actuarial Assumptions: Investment
rate of return Projected salary increases Includes price inflation Cost-of-living adjustments Payroll Growth Assumption September 30, 2010 24.53 % 5.00% Entry Age Closed, Level % of
Pay Method 5.88 Years See Section entitled “Actuarial Value of Assets” 8.0% 5.5%-14.0% 3.0% None 4.0%
SECTION E MISCELLANEOUS INFORMATION
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | E-1 A. 1. Number Included in Last Valuation 87 83 2. New Members Included in Current Valuation
4 6 3. Non-Vested Employment Terminations (3) (1) 4. Vested Employment Terminations 0 (1) 5. Service Retirements (2) 0 6. Disability Retirements 0 0 7. Deaths 0 0 8. DROP Retirement
(2) 0 9. Transfer to Another Division 0 0 10. Number Included in This Valuation 84 87 B. 1. Number Included in Last Valuation 12 14 2. Additions from Active Members 0 1 3. Lump Sum Payments/Withdrawa
ls 0 (1) 4. Payments Commenced 0 (2) 5. Deaths 0 0 6. Other 0 0 7. Number Included in This Valuation * 12 12 C. 1. Number Included in Last Valuation 38 38 2. Additions from Active Members
2 0 3. Additions entering the DROP 2 0 4. Additions from Terminated Vested Members 0 2 5. Deaths Resulting in No Further Payments (3) (2) 6. Deaths Resulting in New Survivor Benefits
0 0 7. End of Certain Period -No Further Payments 0 0 8. Other --Lump Sum Distributions 0 0 9. Number Included in This Valuation 39 38 To 9/30/10 RECONCILIATION OF MEMBERSHIP DATA Active
Members Service Retirees, Disability Retirees, Beneficiaries & DROP Terminated Vested Members From9/30/09 From9/30/08 To 9/30/09
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | E-2 STATISTICAL DATA Active Members as of September 30, 2010 Age Group 0-4 5-9 10-14 15-19
20-24 25-29 30 & Up Totals Avg. Pay 20-24 NO. 25-29 NO. 2 0 0 0 0 0 0 2 34,243 30-34 NO. 1 0 0 0 0 0 0 1 26,374 35-39 NO. 4 3 0 1 0 0 0 8 33,072 40-44 NO. 7 3 0 2 2 0 0 14 43,690 45-49
NO. 2 1 1 1 0 1 0 6 45,446 50-54 NO. 2 4 4 2 0 1 1 14 47,529 55-59 NO. 9 8 4 3 2 1 0 27 47,172 60-64 NO. 3 2 2 1 2 1 0 11 52,172 65&UP NO. 0 0 1 0 0 0 0 1 0 8 0 , 7 8 4 TOT NO. 30 21
12 10 6 4 1 84 45,685
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | E-3 Active Year Members Ended Vested Other End of September 30 A E A E A E A E A A A E Year
2000 14 13 4 1.9 0 0.2 0 0.1 2 7 9 7.1 71 2001 13 9 0 1.2 0 0.2 0 0.1 3 6 9 8.3 75 2002 20 12 0 1.7 1 0.2 0 0.1 1 10 11 9.1 83 2003 12 11 2 0.8 0 0.2 0 0.1 0 9 9 10.8 84 2004 12 10 2
1.2 0 0.2 0 0.1 1 7 8 10.0 86 2005 10 14 2 0.8 0 0.2 0 0.2 1 11 12 9.4 82 2006 10 11 5 2.4 0 0.1 0 0.2 0 6 6 8.5 81 2007 8 7 1 1.8 1 0.2 0 0.2 1 4 5 8.1 82 2008 7 6 0 3.2 0 0.1 0 0.2
1 5 6 7.8 83 2009 6 2 0 3.8 0 0.1 0 0.2 1 1 2 6.9 87 2010 4 7 4 4.4 0 0.1 0 0.2 0 3 3 6.8 84 5-yr. Totals 2006-2010 35 33 10 15.5 1 0.7 0 1.1 22 38.2 Expected for 2011 4.8 0.2 0.2 4.4
A Represents actual number. E Represents expected number. Year Retirement Retirement Service Total NUMBER ADDED TO AND REMOVED FROM ACTIVE MEMBERSHIP Number Added Terminations During
Year During Normal Disability Died-in Withdrawal
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | E-4 Year Ended September 30No.Annual PensionsNo.Annual PensionsNo.Annual PensionsNo.Annual
PensionsNo.Annual Pensions2000678,522332,513 3 46,009 26220,022 0.64,196 2001117,716*1 17,716 27237,738 0.64,543 2002323,184126,801 2 (3,617) 29234,121 0.75,355 2003232,15915,889 1 26,270
30260,391 0.96,159 2004235,900217,160 18,740 30279,131 1.06,956 2005347,50515,774 2 41,730 32320,861 1.07,331 2006682,446329,272 3 53,174 35374,035 1.07,917 2007351,4253 51,425 38425,460
1.18,798 200819,21719,217 38425,460 1.310,328 2009217,42425,992 11,432 38436,892 1.311,534 2010495,156313,790 81,366 39518,258 1.311,534 Expected for20111.010,752 *Includes a one-time
5.0% cost-of-living increase. Retired Members and Beneficiary DataHistorical ScheduleExpected AddedRemovedNet IncreaseEnd of YearRemovals
SECTION F SUMMARY OF PLAN PROVISIONS
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | F-1 A. Ordinances: Plan established under the Code of Ordinances for the City of Atlantic
Beach, Florida, Part II, Chapter 2, Article VI, Division 3 and was most recently amended and restated under Ordinance No. 58-08-34 passed and adopted on August 11, 2008. The Plan is
also governed by certain provisions of Part 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 All city employees, other
than police officers or firefighters, who normally work more than 1,000 hours annually and are not an elected officials, temporary or contractual employees, or executives or departments
heads who have elected not to participate, will become members on the date of employment. F. Credited Service Service is measured as the total number of years and fractional parts 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, overtime pay, cost of living payments, holidays and personal leave. 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.
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | F-2 I. Normal Retirement Eligibility: For Employees Hired Before September 1, 2008: 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 On or After September 1, 2008: A participant
may retire on the first day of the month coincident with or next following age 60 with 10 or more years of Credited Service. Benefit: For employees hired before April 24, 2005: 2.85%
of FAC times Credited Service. Benefit is limited to 100% of FAC. For employees hired on or after April 24, 2005: 2.50% of FAC times Credited Service. Benefit is limited to 100% of FAC.
Normal Form of Benefit: Life Annuity; other options are also available. J. Early Retirement Eligibility: For Employees Hired Before September 1, 2008: A member may elect to retire earlier
than the Normal Retirement Eligibility upon attainment of age 55 with 5 years of Credited Service. For Employees Hired On or After September 1, 2008: A member may elect to retire earlier
than the Normal Retirement Eligibility upon attainment of age 55 with 10 years of Credited Service. Benefit: The Normal Retirement Benefit is actuarially reduced for each year by which
the member’s Early Retirement date precedes age 60. Normal Form of Benefit: 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 retirement.
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | F-3 L. Service Connected Disability Eligibility: For Employees Hired Before September 1, 2008:
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. For Employees Hired On or After September 1, 2008: Any member with 10 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. 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. Normal Form of Benefit: Life Annuity; other options are also
available. M. Non-Service Connected Disability Eligibility: For Employees Hired Before September September 1, 2008: 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. For Employees Hired On or After September
1, 2008: Any member with 10 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. 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. Normal Form of Benefit: Life Annuity; other options are also available.
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | F-4 N. Pre-Retirement Death Eligibility: Any member with 5 or more years of Credited Service
is eligible for a death benefit. 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 fulltime student, will receive equal shares of 50% of the member’s Normal Retirement Benefit under
the Life Annuity option based upon service and FAC as of the date of death. Normal Form of Benefit: Payable for the life of the member’s beneficiary or spouse. Children’s benefits are
payable until age 19 or age 23 if a fulltime student. O. 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% 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: For Employees Hired Before September 1, 2008: A participant has
earned a non-forfeitable right to Plan benefits after the completion of 5 or more years of Credited Service. For Employees Hired On or After September 1, 2008: A participant has earned
a non-forfeitable right to Plan benefits after the completion of 10 or more years of Credited Service. Benefit: 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. Normal Form of Benefit: Life Annuity; other options are also available. Member’s terminating
employment with less than 5 years of Credited Service, or 10 years for those hired on or after September 1, 2008, will receive a refund of their own accumulated contributions.
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | F-5 R. Refunds Eligibility: All non-vested members are eligible. Optionally, vested participants
may also withdraw their contributions in lieu of the deferred benefits otherwise due. Benefit: The member who terminates employment receives a lump-sum payment of their employee contributions.
S. Member Contributions 5% of Compensation T. Employer Contributions 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: Effective City Member Total 10/1/2006 13.99% 5.000% 18.99% 10/1/2007 13.62% 5.000%
18.62% 10/1/2008 14.03% 5.000% 19.03% 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% U. 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.
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | F-6 X. Deferred Retirement Option Plan Eligibility: For Employees Hired Before September 1,
2008: Plan members are eligible for the DROP upon attainment of age 55 with 5 years of Credited Service. For Employees Hired On or After September 1, 2008: Plan members are eligible
for the DROP upon attainment of age 55 with 10 years of Credited Service. All members must make a written election to participate in the DROP. Benefit: The member’s Credited Service
and FAC 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 FAC. Benefits
for members entering the DROP prior to age 60 will be actuarially reduced for Early Retirement. Maximum DROP Period: 60 months Interest Credited: Earnings to the DROP account will be
accordance with the self-directed options selected by the participant. Normal Form of Benefit: Lump Sum
SECTION G COMPARATIVE SUMMARY OF PRINCIPAL VALUATION RESULTS
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | G-1 A. Participant Data Number Included: Actives 84 84 87 Service Retirees & Beneficiaries
36 36 35 Disability Retirees 3 3 3 Terminated Vested Members 12 12 12 Total Members and Beneficiaries 135 135 137 Total Annual Payroll $3,837,512 $3,837,512 $4,018,667 Annual Valuation
Payroll 3,837,512 3,837,512 3,976,434 Expected Annual Payroll in Contribution Year 4,070,050 4,158,421 4,354,725 Total Annualized Benefits Service Retirees & Beneficiaries 473,298 473,298
391,931 Disability Retirees 44,960 44,960 44,960 Terminated Vested Members 127,706 127,706 127,706 B. Assets (Market Value) Cash and Short Term Investments 480,340 480,340 8,966 Treasury
and Agency Bonds & Notes 2,379,976 2,379,976 0 Mutual or Pooled Bond Funds 1,686,331 1,686,331 5,832,064 Mutual Equity Funds 5,872,170 5,872,170 3,372,318 Other Securities 151,128 151,128
96,855 Net Receivables & Payables (152,138) (152,138) (96,855) Total 10,417,807 10,417,807 9,213,348 Actuarial Value 10,618,038 10,618,038 9,841,314 Assets include: Accumulated active
member contributions 1,120,281 1,120,281 989,457 (with interest if applicable) C. Actuarial present value of accrued benefits (i) Vested accrued benefits Retired members and benefitciaries
(incl DROP) 4,887,747 4,794,697 3,912,640 Terminated members 868,534 814,036 749,964 Active members (includes non-forfeitable memebrs contributions of 1,120,281 and 989,457) 6,075,614
5,731,856 5,569,113 Total 11,831,895 11,340,589 10,231,717 (ii) Non-vested accrued benefits 395,638 431,034 342,668 (iii) Total actuarial p.v. of accrued benefits 12,227,533 11,771,623
10,574,385 (iv) Actuarial p.v. of accrued benefits at begin. of year 10,574,385 10,574,385 11,401,895 (v) Changes attributable to: Amendments none none none Assumption change 455,910
none none Operation of decrements 1,665,645 1,665,645 1,442,101 Benefit payments (468,407) (468,407) (467,167) Other none none (1,802,444) (vi) Net change (PVAB measurement Method Change)
1,653,148 1,197,238 (827,510) (vii) Actuarial p.v. of accr. benefits at end of year 12,227,533 11,771,623 10,574,385 September 30, 2009 COMPARATIVE SUMMARY OF PRINCIPAL VALUATION RESULTS
September 30, 2010 Prior to Changes September 30, 2010 After Changes
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | G-2 C. Liabilities-Actuarial Present Value of Future Benefits 1. Active Members Service Retirement
Benefits $12,352,447 $10,799,306 $10,991,953 Vesting Benefits 363,432 324,963 321,985 Disability Benefits 325,140 249,722 248,077 Preretirement Death Benefits 309,938 449,854 467,766
Return of Member Contributions 99,825 132,706 142,597 Total Actives 13,450,782 11,956,551 12,172,378 2. Inactive Members Service Retirees & Beneficiaries 4,458,095 4,372,835 3,482,976
Disability Retirees 429,652 421,862 429,664 Terminated Vested Members 868,534 814,036 749,964 Total Inactive Members 5,756,281 5,608,733 4,662,604 3. Total Present Value for All Members
19,207,063 17,565,284 16,834,982 Total Present Value of: Future Salaries 30,692,226 27,747,062 26,316,975 Future Employee Contributions 1,534,611 1,387,353 1,315,849 Future Contributions
from Other Sources 7,054,414 5,559,893 5,677,819 Derivation of Current Employer Unfunded Actuarial Accrued Liability (UAAL) a. Total UAAL for Prior Valuation Date $3,840,840 $3,840,840
$3,415,311 b. Employer Normal Cost for this period 326,782 326,782 266,968 c. Interest acccrued on (a) and (b) 320,338 320,338 283,904 d. Contributions for this period 599,292 599,292
528,426 e. Interest accrued on (d) 23,972 23,972 21,137 f. Changes due to: Plan Amendment 0 0 0 Cost Method 525,869 0 (120,470) Asset Method 0 0 62,468 Actuarial (Gain) Loss 171,358
171,358 482,223 g. Total Current UAAL: a+b+c-d-e+f 4,561,923 4,036,054 3,840,840 September 30, 2009 COMPARATIVE SUMMARY OF PRINCIPAL VALUATION RESULTS September 30, 2010 Prior to Changes
September 30, 2010 After Changes
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | G-3 Date Years Remaining Amortization Payment Original Amount 9/30/1993 Original 3 $129,556
9/30/1995 Experience Loss --(447,291) 9/30/1996 Experience Gain 1 34,249 162,663 9/30/1997 Experience Loss 2 (45,880) (252,238) 9/30/1998 Experience Gain 3 (9,767) (58,540) 9/30/1999
Experience Gain 4 (16,861) (108,195) 9/30/2000 Experience Gain 5 8,137 55,470 9/30/2001 Experience Loss 6 2,516 18,145 9/30/2002 Experience Loss 7 36,809 280,151 9/30/2003 Experience
Loss 8 44,316 355,383 9/30/2004 Experience Loss 9 46,811 395,109 9/30/2005 Experience Loss 10 41,035 364,305 9/30/2006 Experience Loss 11 (14,065) (131,266) 9/30/2007 Experience Gain
12 17,372 170,383 9/30/2008 Experience Loss 13 17,359 178,856 9/30/2009 Experience Loss 14 43,649 482,223 9/30/2010 Experience Loss 15 15,857 171,358 9/30/1993 Benefit Changes 13 45,588
358,417 9/30/1996 Benefit Changes 16 4,558 41,503 9/30/2001 Benefit Changes 21 8,726 101,350 9/30/2003 Benefit Changes 23 2,852 36,516 9/30/2005 Benefit Changes 25 (10,578) (149,268)
9/30/1995 Assumption/Method Change 15 53,168 461,074 9/30/1997 Assumption/Method Change 17 31,863 304,637 9/30/2008 Assumption/Method Change 28 7,055 115,225 9/30/2009 Assumption/Method
Change 29 (3,342) (58,002) 9/30/2010 Assumption/Method Change 30 31,039 525,869 TOTAL $522,022 $3,373,836 Original and Current Unfunded Actuarial Accrued Liabilities Current Unfunded
$374,451 -34,249 (90,061) Item Description 171,358 477,277 55,785 128,946 44,686 363,989 348,296 (28,230) (63,788) $4,561,923 (129,020) 170,832 181,738 483,703 (174,431) (60,023) 525,869
620,534 407,389 124,270 37,782 13,764 230,739 311,819
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | G-4 D. Pension Cost Entry Age Normal Cost for: Service Retirement Benefits $453,127 $343,449
$385,020 Vesting Benefits 18,370 14,482 16,187 Disability Benefits 19,383 13,090 14,572 Preretirement Death Benefits 11,068 16,171 18,353 Return of Member Contributions 31,923 46,247
51,493 Total Actives 533,871 433,439 485,625 Administrative Expenses 25,784 25,784 19,763 Expected Member Contributions 195,525 195,008 191,175 Total Employer Normal Cost 364,130 264,215
314,214 Payment Required to Amortize Unfunded Actuarial Accrued Liability 522,022 469,503 327,221 Total Contribution at Valuation Date 886,152 733,718 641,435 Total Contribution Adjusted
for Frequency of Payments and Interest to Next Following Fiscal Year 998,516 826,753 669,230 % of Expected Payroll 24.53% 19.88% 16.83% Amount Expected to be Contributed by Members Next
FY 203,503 207,921 217,736 % of Expected Payroll 5.00% 5.00% 5.00% E. Past Contributions-For the Fiscal Years Ended September 30 of 2009 and 2010 Required Contribution Determined in
the Valuation as of September 30, 2008 September 30, 2007 by the Plan Sponsor $599,292 $528,428 by Members $201,918 $188,321 Actual Contribution for the Fiscal Year ended September 30,
2010 September 30, 2009 by the Plan Sponsor $599,292 528,426 by Members $198,363 2 00,072 F. N e t experience (gain) loss during year: $171,358 $482,223 G. 1. Plan to Amortize Unfunded
Actuarial Accrued Liability 20 year funding of the Original Unfunded Actuarial Accrued Liability, 15 year funding of any Gains or Losses and 30 year of adjustments due to benefit or
assumption changes. 2. Schedule Illustrating the Amortization of the Unfunded Actuarial Accrued Liability (UAAL) Year Projected UAAL 2010 (peak) $4,036,054 2011 3,838,018 2012 3,642,643
2013 3,357,748 2020 1,415,784 2025 147,598 2035 20,653 2037 1,427 2039 0 3. Action taken since last actuarial valuation. Contribution sufficient to satisfy the total required contribution.
September 30, 2009 COMPARATIVE SUMMARY OF PRINCIPAL VALUATION RESULTS September 30, 2010 Prior to Changes September 30, 2010 After Changes
City of Atlantic Beach General Employees’ Retirement System 9/30/2010 Actuarial Valuation | G-5 H. 1. Three-Year Comparison of Actual and Assumed Salary Increases (Annualized) Actual
Assumed -0.4% 6.0% 6.1% 5.7% 4.9% 5.8% 2. Three-Year Comparison of Investment Return (Actuarial Value) Actual Assumed 5.0% 8.0% 4.2% 8.0% 4.9% 8.0% 3. Average Annual Growth in Payroll,
Last Ten Years (if applicable) Total % Increase Last Ten Years 64.71% Annual % Increase 5.12% Thirty-year Forecast 4.00% 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 9/30/2006 9/30/2005 9/30/2001 9/30/2002 3,182,450 9/30/2008 3,194,700
3,475,757 9/30/2000 $2,329,877 2,462,229 2,767,895 2,856,303 3,726,713 4,018,667 3,837,512 9/30/2008 Year Ended 9/30/2010 9/30/2009 3,051,289 9/30/2003 9/30/2004 9/30/2010 9/30/2007
9/30/2008 9/30/2009 COMPARATIVE SUMMARY OF PRINCIPAL VALUATION RESULTS Year Ended Valuation Date Total Payroll 9/30/2010 9/30/2009