Item 5A
CITY OF ATLANTIC BEACH
~"" CITY COMMISSION MEETING
STAFF REPORT
ATTACHMENT 5A
OCTOBER 25, 2004
AGENDA ITEM: Pension Board Report for Police and General Employee Pension
°~ Plans
DATE: October 19, 2004
SUBMITTED BY: Nelson Van Liere
Pension Plan Administrator
BACKGROUND: Semi-Annually, the Pension Boards are to report to the City
Commission on recent activities. Attached to this report is a
Summary of the Annual Actuarial Reports from Gabriel, Roeder,
Smith & Company for both plans. Also provided is an Investment
Policy Compliance Checklist for each plan prepared by Merrill
Lynch as of September 30, 2004.
BUDGET: No Impact
RECOMMENDATION: To accept the Pension Board Reports
ATTACHMENTS: 1. City of Atlantic Beach General Employee Retirement
System Summary Annual Report
2. City of Atlantic Beach Police Employee Retirement System
Summary Annual Report
3. Merrill Lynch June 30, 2004 Investment Policy Checklist-
Police Pension
4. Memll Lynch June 30, 2004 Investment Policy Checklist-
General Pension
+~•
REVIEWED BY CITY MANAGER
~7.
ATTACHMENT 5A
OCTOBER 25, 2004
City of Atlantic Beach General Employee Retirement System
Summary Annual Report
The City of Atlantic Beach General Employee Retirement System is a defined benefit pension plan.
~. administered by a Board of Trustees. It was created by Chapter 99-1, Florida Statutes from City
Ordinance No. 58-75-4 and its amendments. It is intended to comply with Chapter 112, F.S. The plan
year ends on September 30, and records are maintained on a plan year basis.
The Board of Trustees is the Retirement System Administrator. The following individuals are
members of the Board of Trustees:
~+ Timothy Townsend Chair
J. Tom Wells Chair Pro-Tem
Tony F. Downing Secretary
Harry E. McNally Member
Anne E. Minor Member
The Board of Trustees is the agent for the service of legal process. Their address is:
Atlantic Beach City Hall
!~'" 800 Seminole
Atlantic Beach, Florida 32233
A description of the benefits of the Retirement System and. the sources of funding are attached. Claims
for benefits should be filed with the Board of Trustees at the Human Resources Department. If a claim
is denied, you will be notified and informed of the procedure to request a hearing before the Board of
Trustees. Claim denials are generally limited to failure to meet the eligibility requirements for a
benefit.
As of September 30, 2003 there were 30 retired participants receiving annual benefits of $260,391
~"" from the Retirement System. Active members totaled 84 with an annual payroll of $2,856,303. There
were also 11 vested terminated members eligible for future benefits.
City ofAtlantic Beach General Employee Retirement
System
-1-
ATTACHMENT SA
OCTOBER 25, 2004
The City contributed $315,106 during the 2002-2003 fiscal year. The taxpayer contribution rates for
the fiscal year, expressed as percents of payroll were as follows:
Contribution for
Normal Cost and Administrative Expenses
FS 112.64(5) Compliance
Unfunded Actuarial Accrued Liabilities
City Contribution r Rate
Employee Contribution Rate
Total
Percents of
Active Member Payroll
9.17%
0.10
2.54
11.81%
2.00%
13.81%
The September 30, 2003 actuarial report indicated that the actuarial accrued liability under
Governmental Accounting Standard No. 25 was 72.7% funded.
Contributions to the System during the year were equal to or greater than the actuarially determined
amount needed to comply with the provisions of Chapter 112, Florida Statutes.
The actuary concluded that the contribution requirement is sufficient to meet the system's level
percent-of-payroll funding objective, presuming continued receipt of contribution requirements when
due.
A copy of the annual audit report is available for inspection in the Finance Department.
City ofAtlantic Beach General Employee Retirement
System
-2-
ATTACHMENT SA
OCTOBER 25, 2004
Summary of Benefit Provisions
(September 30, 2003)
Normal Retirement (no reduction factor for age):
Eligibility -Age 60 with 5 or more years of service.
Annual Pension -Total eligible City service times 2.85% of final average compensation.
Total pension cannot exceed 100% of final average compensation. The normal form of pension
is payable for life. Optional forms are available on an actuarial equivalent basis.
Type of Final Average Salary -One-sixtieth (1/60) of the aggregate amount of compensation
paid a member during the period of sixty (60) consecutive months of the member's credited
service in which the aggregate amount of compensation paid is greatest. The sixty (60) months
of credited service must be contained within the member's last one hundred twenty (120)
months of credited service. If a member has less than sixty (60) months of credited service,
final average compensation means the aggregate amount of compensation paid the member
divided by the member's months of credited service.
Early Retirement:
Eligibility -Age 55 with 5 or more years of service.
~. Annual Pension -Computed as a normal retirement pension with an actuarially equivalent
reduction per year by which the member's age at retirement precedes the member's age 60.
DROP (Deferred Retirement Option Plan):
Eligibility -Age 55 with 5 or more years of service.
-Members may continue employment for a maximum of 5 years.
- Member contributions cease.
- Actuarial equivalent reduction for entering the DROP prior to age 60.
!~* -DROP accounts will be self directed for investment purposes.
-DROP members are not eligible for a Pension Plan death or disability benefits.
Deferred Retirement (vested benefit):
Eligibility - 5 or more years of service. Pension begins at normal retirement eligibility.
"" Annual Pension -Computed as a normal retirement pension but based upon service and final
average salary at time of termination of employment.
Disability Retirement:
Eligibility - 5 or more continuous years of service.
Annual Pension - Computed as a normal retirement pension.
~. Death Before Retirement:
Eligibility - 5 or more years of service.
Annual Pension -Computed as a normal retirement pension.
('ih~ nf'Atlantir Ranrh (wnornl Fmnlrnaov Ratiromont ,Cvctom -~_
!~"' Member Contributions:
2.0% of salary
ATTACHMENT SA
OCTOBER 25, 2004
!~" If you terminate employment and receive a refund of your own contributions, you forfeit any
rights to future benefits from the Retirement System. The taxable portion (money contributed
on a pre-tax basis) of any refund you receive is subject to an automatic 20% withholding for
~"" federal income tax purposes, and a possible 10% excise tax. These taxes can be avoided,
however, if you roll the taxable portion over to an Individual Retirement Account (IRA) or
another qualified employer plan. This rollover will result in no tax being due until you begin
~"'" withdrawing funds from the IRA or other qualified employer plan. The rollover of the
distribution, however, MUST be made directly by the Plan to your chosen IRA or other
qualified employer plan.
City Contributions: Actuarially determined amounts which are sufficient to cover the
requirements of the funding objective.
Overall Contributions: Following are the overall contribution rates for 2002, 2003 and 2004:
Effective C~ Emnlovee Total
10/01/2002 11.81 % 2.00% 13.81
10/01/2003 12.72% 2.00% 14.72%
10/01/2004 15.02% 2.00% 17.02%
Forfeiture of Retirement Benefits: Retirement benefits granted by the Retirement System
are subject to forfeiture if an employee is convicted of an offense specified in Section
112.3173, Florida Statutes, pursuant to the procedures set forth in the cited statute.
Claims Procedure: Claims for benefits should be filed with the Board of Trustees at the
Human Resources Department. If a claim is denied, you will be notified and informed of the
procedure to request a hearing before the Board of Trustees.
The preceding summary briefly describes the principal benefits of the Retirement System. Said
summary is not binding and should not be relied upon in any action concerning your
participation in the System or benefit thereunder. Detailed benefit conditions and limitations are
contained in the Pension Ordinance which established the System. Interpretations of the
Ordinance are made by the Board of Trustees. The Ordinance and Board interpretations govern
the operation of the System and should be consulted before you take any action concerning
your participation or benefits. Copies are available at the Human Resources Department.
('ih~ n~'Atlnn#i~ Ron~h r'orrornl Fmnlm~an Rotirvmont.C»ctom ~,_
ATTACHMENT SA
OCTOBER 25, 2004
Accounting Information Submitted for Valuation
Revenues and Expenditures
September 30, 2003 September 30, 2002
*' Revenues:
a. Member Contributions $ 59,712 $ 57,505
b. City Contribution 315,106 288,070
"~ Total Contributions 374,818 345,575
c. Investment income:
1. Interest and Dividends 5,838 15,076
2. Gain(loss) on investments 531,784 (310,243)
3. Investment expenses (42,525) (49,615)
~,,,,,, Total Investment Income 495,097 (344,782)
' d. Total revenues 869,915 793
Expenditures
a. Refunds of member contributions 7,511 14,720
b. Benefit payments 264,634 254,472
c. Administrative expenses 0 0
~. d. Total expenditures $ 272,145 $ 269,192
Net Income:
""' Total revenues minus total expenditures $ 597,770 $(268,399)
Summary of Assets (Market Value)
September 30, 2003 September 30, 2002
Cash and equivalents $ 19,519 $ 16,140
Receivables none none
Short term investment funds 26,701 2,381
U.S. Government Securities none none
Bonds government none none
corporate none none
mutual fund 2,344,866 2,210,808
Stocks common none none
preferred none none
mutual fund 3,067,773 2,627,942
Payables (12,036) (8,218)
Total assets $ 5,446,823 $ 4,849,053
("ih~ of Atln»tir Ronrh (:onornl Fmnlrn~oo Rotiromorrt .Cvctom
_S_
~, City of Atlantic Beach Police Officers' Retirement System
Summary Annual Report
ATTACHMENT SA
OCTOBER 25, 2004
The City of Atlantic Beach Police Officers' Retirement System is a defined benefit pension plan
administered by a Board of Trustees. It was created by Chapter 99-1, Florida Statutes from City
Ordinance No. 58-75-4 and its amendments. It is intended to comply with Chapters 112 and 185, F.S.
The plan year ends on September 30, and records are maintained on a plan year basis.
The Board of Trustees is the Retirement System Administrator. The following individuals are
members of the Board of Trustees:
Henry Bartle Chair
B. Dale Hatfield Chair Pro-Tem
Tony F. Downing Secretary
Harry E. McNally Member
Richard T. Downes Member
The Board of Trustees is the agent for the service of legal process. Their address is:
Atlantic Beach City Hall
800 Seminole
Atlantic Beach, Florida 32233
A description of the benefits of the Retirement System and the sources of funding are attached. Claims
for benefits should be filed with the Board of Trustees at the Human Resources Department. If a claim
is denied, you will be notified and informed of the procedure to request a hearing before the Board of
Trustees. Claim denials are generally limited to failure to meet the eligibility requirements for a
benefit.
As of September 30, 2003 there were 11 retired participants receiving annual benefits of $235,310
~"" from the Retirement System. Active members totaled 22 with an annual payroll of $1,129,034.
There were also 4 vested terminated members eligible for future benefits.
City of Atlantic Beach Police Officers' Retirement System -1-
ATTACHMENT SA
OCTOBER 25, 2004
~" The City contributed $155,752 and $88,641. was received under the provisions of Chapter 185, F.S.,
during the 2002-2003 fiscal year. The additional premium tax revenue under Chapter 99-1, Laws of
Florida, as of September 30, 2003 was $33,782. The taxpayer contribution rates for the fiscal year,
~"" expressed as percents of payroll were as follows:
Percents of
Contribution for Active Member Payroll
~' Normal Cost and Administrative Expenses 14.81
Temporary full funding credit 0.26
Unfunded Actuarial Accrued Liabilities 2.98
Total 18.05%
'~ The September 30, 2003 actuarial report indicated that the actuarial accrued liability under
Governmental Accounting Standard No. 25 was 73.1 % funded.
Contributions to the System during the year were equal to or greater than the actuarially determined
amount needed to comply with the provisions of Chapter 112, Florida Statutes.
The actuary concluded that the contribution requirement is sufficient to meet the system's level
percent-of-payroll funding objective, presuming continued receipt of contribution requirements when
due.
A copy of the annual audit report is available for inspection in the Human Resources Department.
Board of Trustees
City ofAtlantic Beach Police Officers' Retirement System _2_
ATTACHMENT SA
Summary of Benefit Provisions OCTOBER 25, 2004
(September 30, 2003)
Normal Retirement (No reduction factor for age):
Eligibility
Any age with 25 years of service or age 50 with 20 or more years of service or age 60 with
5 or more years of service.
Annual Pension
Total service times 3.00% of final average salary.
Total pension cannot exceed 100% of final average compensation. The normal form of
pension is payable for life. Optional forms are available on an actuarial equivalent basis.
gr Type of Final Average Salary
One-sixtieth (1/60) of the aggregate amount of compensation paid a member during the
period of sixty (60) months of the member's credited service in which the aggregate amount
~•. of compensation paid is greatest. The sixty (60) months of credited service must be
contained within the member's last one hundred twenty (120) months of credited service. If
a member has less than sixty (60) months of credited service, final average compensation
~* means the aggregate amount of compensation paid the member divided by the member's
months of credited service.
Early Retirement:
Eligibility -Age 50 with 5 or more years of service.
Annual Pension -Computed as a normal retirement pension with an actuarially equivalent
reduction per year by which the member's age at retirement precedes the member's normal
retirement age.
DROP (Deferred Retirement Option Plan):
Eligibility -Age 55 with 5 or more years of service.
~•
-Members may continue employment for a maximum of 5 years.
-Member contributions cease.
-Actuarial equivalent reduction for entering the DROP prior to normal retirement age.
DROP accounts will be self directed for investment purposes.
-DROP members are not eligible for death or disability benefits.
Deferred Retirement (Vested Benefit):
~ Eligibility - 5 or more years of service. Pension begins at normal retirement eligibility.
Annual Pension -Computed as a normal retirement pension but based upon service and final
average salary at time of termination of employment.
Disability Retirement:
~ Eligibility - 5 or more continuous years of service. Service requirement waived for member if
disability is incurred in the line of duty.
Annual Pension -Computed as a normal retirement pension. Minimum benefit is 42% of
~,,, final average salary for members if disability is incurred in the line of duty.
("ih~ of Atlnntir Ronrh Pnlino n~~orc' RoHromnnt .Cvctnm _Z_
Death Before Retirement:
Eligibility - 5 or more years of service.
Annual Pension -Computed as a normal retirement pension.
Member Contributions:
Police Bargaining Unit: 1.000% of salary
Police -Other: 4.815% of salary
ATTACHMENT SA
OCTOBER 25, 2004
~. If you terminate employment and receive a refund of your own contributions, you forfeit any
rights to future benefits from the Retirement System. The taxable portion (money contributed
on a pre-tax basis) of any refund you receive is subject to an automatic 20% withholding for
~,. federal income tax purposes, and a possible 10% excise tax. These taxes can be avoided,
however, if you roll the taxable portion over to an Individual Retirement Account (IRA) of
another qualified employer plan. This rollover will result in no tax being
+~. due until you begin withdrawing funds from the IRA of other qualified employer plan. The
rollover of the distribution, however, MUST be made directly by the Plan to your chosen IRA
or other qualified employer plan.
Premium Tax Monies: A distribution of casualty insurance premium tax monies collected by
the State pursuant to Chapter 185 Florida Statutes.
City Contributions: Actuarially determined amounts which together with Chapter 185
monies are sufficient to cover the requirements of the funding objective.
Overall Contributions: Following are the overall contribution rates for 2002, 2003 and 2004:
Union
Effective C~ Sec 185 Emaloyee Total
10/01/2002 12.44% 5.61% 1.00% 19.96%*
~"" 10/01/2003 13.31% 5.43% 1.00% 20.65%*
10/01/2004 17.05% 7.26% 1.00% 25.33%*
* Totals also include the non-union employee contribution rate of 4.815%.
Forfeiture of Retirement Benefits: Retirement benefits granted by the Retirement System
~"" are subject to forfeiture if an employee is convicted of an offense specified in Sections
112.3173 and 185.185, Florida Statutes, pursuant to procedures set forth in the cited statutes.
CLAIMS PROCEDURE: Claims for benefits should be filed with the Board of Trustees at the
Human Resources Department. If a claim is denied, you will be notified and informed of the
procedure to request a hearing before the Board of Trustees.
The preceding summary briefly describes the principal benefits of the Retirement System. Said
summary is not binding and should not be relied upon in any action concerning your
participation in the System of benefit thereunder. Detailed benefit conditions and limitations
are contained in the Pension Ordinance which established the System. Interpretations of the
Ordinance are made by the Board of Trustees. The Ordinance and Board interpretations
~" govern the operation of the System and should not be consulted before you take any action
concerning your participation or benefits. Copies are available at the Human Resources
Department.
~*
('ih~ of AtlnrrNn Ronnh Pnlina n{~irorc' RoNromnnt .R~ctom _d_
ATTACHMENT 5A
OCTOBER 25, 2004
Accounting Information Submitted for Valuation
~,
Revenues and Expenditures
September30, 2003 September 30, 2002
Revenues:
a. Member Contributions $ 24,283 $ 24,076
b. City Contribution 155,752 154,523
c. Premium taxes from State 88,641 85,719
'~" Total Contributions 268,676 264,318
d. Investment income
1. Interest and dividends 2,732 7,271
2. Gain (loss) on investments 377,307 (227,068)
3. Investment expenses (34,705) (39,982)
~„R Total Investment Income 345,334 (259,779)
e. Total revenues 614,010 4,539
~'"' Expenditures:
a. Refunds of member contributions 551 2,581
,,,,, b. Benefit payments 220,258 205,164
c. Administrative expenses 0 0
d. Total expenditures $ 220,809 $ 207,745
Net Income:
~„ Total revenues minus total expenditures $ 393,201 $ (203,206)
Summary of Assets (Market Value)
September 30, 2003 September 30, 2002
Cash and equivalents $ 22,389
_
$
~*
Receivables none none
Short term investment funds 100 2,557
~"" U.S. government securities none none
Bonds government none none
~ corporate none none
mutual fund 1,785,672 1,708,037
Stocks common none none
~. preferred none none
mutual fund 2,204,685 1,911,063
Payables (8,611) (10,623)
Total assets
$ 4,004,235
$ 3,611,034
('ih~ n~Atlnntin Ronnh Pnlino n~rore' Rotirnmont.Cvctnm _S_
~~
w
~e
...
^..
r
~M
~/
¢1
(D
N
N
ATTACHMEN'
OCTOBER 25,
cn ao c m m cn r m
~ ~ ~ ~ ~ ~ ~ ~
o c~
cn O
O
~ (D
a
-a c m o m o ~ N o `< can ~ o
m
- a .-. ~ ~' m
o m -^
~
~~ . ~ m .moo o n o
-~ D~ ~ ~ ~~o'oo ~ o.
O ~ O O ~ ~ fD ~ O O~ ~ N' '
~ 6 cn ° `~° m ~
~ n
A
O _
~ ~
O .
X
Q C
D n (
p 'Q'^^
0 0 = ~ o
~, ~
~ c
~ ~ o
~ ~ ~
m
n ~
a o 0
• --~, cn
~ ~ o
o ~
vi m
~ t ~ W t ~
0
n
~'
n
0
~,~ I~
m
•J
D
n
m
n
n
CD
T
Q.
~ ~ ~ ~l ~
C7t J~ ~ ~ ~ (O_n. ~ Ul .A ~
O ~ ~ ~ O
A
i N O
~ f
D ~ ~ A
i O
-,
co ~
to .-. -s
~
X
~
O
~
to
p cD --~
cD O 0
.O Q. -,. ~ '
0
~ ~ ~ W
O
o j ~ o
~ ~
W O
~
~, ~ a c~
0 \ ~
O
A
1
~ O
~ pOj ¢
j
~ 'a ~ N
~~
Q
CD
X
I
v~'i ~ ~ m Z
~ ~ s fq O
m m m x ~ m ~ p
C'1 C ~ U7 ~ 7 Ul .A n ~ `a,
(D ~ ~
"O fD
~
CD
-
Q -~ N Q. ~ ~ ~~ ~ ~ Q ~ ~
~ ~ OQ n U) N ~ N f/f -'~
N ~ ~•
'D O ~ -i ~ o
O ~ .~ O CAD O
~ ~ ~
O ~
I ~' w °-
W ~ o X
p ~ I I
Cn -p W W
K
~ ~ ~ ~
~
~ ~ ~
~ ~
(D
(D
~ Z
m o
~ ,
.p W N CAD '~ W
°~ d ~ N `~
N O ~
Q ~
CJ1 N
~ ~ ~
Z w co cn m m Z m
O a ~ ~ O !n O J
T SA
2004
~~
~~
tC
~D
~y
-~
~~
i,
_.
n
~D
'i n
~.
N
i~
L~
.~..
r
...
N
N
y j ~ V 1 1
~.
w
w .~
~
~ ~
~
in in ~
~
o
CD m ~
m
~
~
a - '~
~ o
o ~ ~ o
'
W ~ ~ o
~ (D
O ~
N ~ ~
7'
Q
CD
X
J
W ~ V,
~ ~ ~ N O
ATTACHMENT SA
OCTOBER 25, 2004
cn w c -n m cn m
~
o ~
i
o ~
~ ~
° ~
~
~
a ~ c
r,:
cn i
v 0 - .
i ~ . ~
°-N da m ~ ~~o~ vi o
~ c m ~ ~ ~ ~ ~-o ~
~~
~
~ °
~
° -
0'
0 o D
~ r. -D ~
0 0
° ~ fi ~ ~ O O' X
X
n 6 D
~ -
r.
O C .-. ~p (7
Q ~ ~ a' v~~
~
~
~ Q
~
a
a
o ~
~~ a
~ ~o
~ ~~
~ ~: o
° ~
~«
~ ~ o
o ~ ~
~ m
~ t t ~ ~
0
n:
~'
n
0
~~
n
CD
•J
~ m m mX ao m ~ p
n ~ ~ n ~ ~ ~ ~ ~ n ~ `~
~ ~ ~ a ~ m Q ~ ~ 5' ~ ~ a o
.
can v, ~ ~
Q° °
~ o ~
a ~ can v~ ~ v~ in -i
~' ~.
o ~
m . m ~,
~'
o ~
o ~
w ~
~ o
~ m
x
~ O
~ 3
-p ~
W I
W
~
cD ~ p ~ ~
p~ ~ SU ~
N ~ ~ N
(~D
fD
-~
CD
CD
t
.
~
O
~ q .~
~ W
~
y
~ ~~ ~ ~
!!i ~ cD
Q. LU
V7 N
z W ~ aD ~ N z ICD
O a ~ ~ ~ fn O J
D
sv
r-r
n
r~
n
n
m
~_
O
m
-n
m
O~
"T7
Q
'~
N
r+
~T
V
0
~.
n
'~
n
'~
N
.-r