Item 5B- Pension Actuarial Report- General EmployeesGRS
AGENDA I TEM #58
.JUNE 13, 2016
Gabriel Roeder Smith & Company
Consultants & Actuaries
CITY OF A TLAN TIC BEACH GEN E RAL E MPLOYEE S'
RETIREMENT SYSTEM
ACTUARIAL VALUATION REPORT
SEPTEMBER 3 0, 2015
ANNUAL EMPLOYER CONTRIBUTION
IS DETERMINED BY THIS VALUATION
TO BE PAID IN THE EMPLOYER FISCAL YEAR ENDING
SEPTEMBER 30, 2017
GRS
May 27,2016
Gabrie l Roeder Smith & Compn ny
l.n n ~ul t.ln Is & Actlhtrit:'
The Board ofTrustces
C ity o f Atlantic Bea ch
General Employee R etirem ent System
A tlantic Beach, Florida
D ear B oard Members:
O ne East Browar d Blvd.
Suite 505
Ft. Laud erda le, FL 3330 1-1804
95 4.527.1616 phone
95 4.S25 .008:l fax
www.ga br it:! ro cder.o.;om
W e al'e pleased to su bmit her ein our September 30, 20 15 Actuarial Valuation R eport for th e City of A tla ntic Beac h
General Employees' Retiremertl System. The contribution r es ul ts app ly to t he C ity's fisca l yea r ending Sept ember
30 ,20 17.
T h is report was prepa r ed at th e request of the Board of T r ustees and i s in tended f o r use by the Retirement Syst em
an d those d esi gnated o r app ro ved by th e Board of Trustees. T his rer ort may be provided to parties other than t he
Retirement Sys tem only in its entirety an d o nly with the perm iss i on of the Board of T ru stees. GR S i s no t
responsible for unautho ri ze d use oft his repo rt.
The purpose of th e va luati on is l o mea sure the Pl an's fund ing progress, t o det ermine the emp loyer contr i bLition rate
for the fiscal year ending Septem ber 30, 20 17 and certain stal e r eporting req uirements under P.S. C h . 11 2.63.
T his r eport sho uld not be r el ied on for any pu rp ose oth er th an t he purpose desc ribed above. Det ermina ti o ns of
fin anci al resu lts associated with the benefi ts d esc ribed in thi s repor t, fo r purposes ot her than those identified a bove
may be significa ntly d i fferent.
The co mputed co ntribution rate shown on pa ge A-1 may be consi dered as a minimum co ntribution rate thut
complies with th e B oard 's f unding p olicy and th e State statute. Users of this r eport should be aware t hat
co ntributions made at that rate do not g uamntee benefit secu rity. Given the imp011ance of benefit sec urity t o any
r eti r ement system, we sugges t t hat contributions to lhe Trust i n excess of those presented i n this r epo rt be
con sidered.
The contributio n r a te in this r eport is d etermined using th e ac tu ari al ass umpti ons and meth ods d i scl osed in Sec tio n
cc Actuarial A ssumpti ons a11d Cos t Method" of this repo rt. T his r epo 1t does not include a r ob ust ass ess ment of the
risk s of future experience not mee t ing the actuaria l ass umpti ons. Additional assess ment of ri sks wa s outside the
sco pe o f thi s ass ignment. W e encourage a review and assess ment of i nvest ment and oth er signi ficant risks that
may have a material effect on th e plan's fin anci al condi t ion.
T h e deve loped findings incloded in this r eport cons ider data o t· other infor mation through Sep te mbet· 30, 20 15.
ruture actuari al m eas urem ents may d i ffer sign ifica ntly Jl'om th e current measu rem ents pre se nted in this repo rt due
to such fa ctors as the followi ng: plan exper ience differ ing from th at an ti cipate d by th e econo mic or demograph ic
assu mptions; chan ges in economic o r demographic ass umptions; increases or dec reases expected as part of th e
natural opera ti on of the metho dol ogy used for these meas urements (such as th e end of an amort i za ti on per i od o r
additi ona l cos t or cont ri bulion requ i rem ents base d on th e plan's f und ed status); and changes in p lan provisi ons or
appli ca bl e Jaw. T he sco pe of an ac t uari al va luati on does not inc l ud e an ana lys i s of the potential ran ge of such
fu t ure meas urements.
The Board of Trustees
May 27,2016
Page2
This valuation assumed the continuing ability of the plan sponsor to make the contributions necessary to fund this
plan. A determination regarding whether or not the plan sponsor is actually able to do so is outside our scope of
expertise and was not perfonned.
In addition, this repmt was prepared using assumptions approved by the Board as described in the section of this
report entitled Actuarial Assumptions and Methods.
The valuation was based upon infmmation 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 calculations are based upon assumptions regarding future events, which may or may not materialize. They are
also based upon plan provisions that are outlined in this repmt. 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 infmmation in the
report.
James J. Rizzo and Piotr Krekora 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.
This repmt 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
confmmity 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 pe1taining 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
Consultant & Actuary
Gabriel, Roeder, Smith and Company
STATEMENT BY ENROLLED ACTUARY
This actuarial valuation and/or cost dete1mination 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
May 27,2016
Date
14-03355
Enrollment Number
GRS
TABLE OF CONTENTS
::;:r:;~IIQt:l TITLE ~
A EXECUTIVE SUMMARY A-I
B VALUATION RESULTS
1. Part icipant Data B-1
2 . Actuariall y Determined Co ntribution B-2
3. Act uari al Valu e of Benefits and Assets B-3
4. Financ ia l Soundness B-4
5. Actuaria l Ga in s and Losses B-8
6. Recent Hi story of Va lu ation Re sult s 8-1 2
7. Rece nt ll istor y of Required and Act ual Co ntributions B-14
8. Actuaria l Assumptions and Cos t Method B-15
c PENSION FUND INFORMATION
I. S umm ruy of Assets C-1
2 . Summa1y of Fu nd's In come and Dis bursements C-2
3. Recon c ili ation of DROP Accounts C-3
4. Actuaria l Value of Asse ts C-4
5. lnv cstmcnt Rate ofRetum C-6
0 MISCELLANEOUS INFORMATION
I. Re co nciliation ofMcmbcrship Data D-1
2. Statistical Data D-2
E SUMMARY OF PLAN PROVISIONS E-1
F COMPARATIVE SUMMARY OF PRINCIPAL f-1
VALUATION RE SULTS
GRS
SECTION A
EXECUTIVE SUMMARY
EXECUTIVE SUMMARY
Closed Plan
In reviewing this Repmt, it is important to keep in mind that the System is closed to new entrants. One of the
consequences 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 the number of active plan members and 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 significant actuarial gains.
Required Employer Contributions
The following is a comparison of required contributions developed in this year's and the last actuarial valuations:
For FYE 9/30/2017 For FYE 9/30/2016
Based on 9/30/15 Based on 9/30/14 Increase
Valuation Valuation (Decrease)
Gross Contribution Requirement $ 1,300,048 $ 1,256,217 $ 43,831
As% of Expected Payroll 62.66 % 52.39 % 10.27 %
Expected Employee Contribution $ 124,476 $ 143,873 $ (19,397)
As % of Covered Payroll 6.00 % 6.00 % 0.00 %
Required Employer Contribution
(If Made in Equal Monthly Installments) $ 1,175,572 $ 1,112,344 $ 63,228
As % of Covered Payroll 56.66 % 46.39 % 10.27 %
Required Employer Contribution
(IfMade in Whole at the Beginning of the Year) $ 1,132,626 1,071,708 60,918
As % of Covered Payroll 54.59 % 44.69% 9.90%
Minimum Required Contribution
As illustrated in the preceding chmt, the City contribution necessary to support the current benefits for the General
Employees is $1,175,572 for the fiscal year ending September 30,2017. Please note that the Required Employer
Contribution for that fiscal year is developed assuming it would be deposited in monthly intervals throughout the
year. For completeness, we are also presenting an amount required to be contributed if deposited in a single sum at
the beginning of the contribution year in lieu of periodic installments.
Revisions in Benefits
There were no revisions in benefits for the current year.
Revisions in Actuarial Assumptions and Methods
There were no revisions in Actuarial Assumptions and Methods for the current year.
GRS City of Atlantic Beach General Employees'
Retirement System
9/30/2015 Actuarial Valuation I A-1
Recommendations
We recommend a review of demographic assumptions including salmy scale, retirement, and termination rates.
The last such study was based on plan experience for the period ending September 30, 2010. An updated study is
warranted to ensure actuarial assumptions remain in line with emerging demographic trends and the assumed long
term rate of return reflects revisions in the Plan's investment policy.
Actuarial Experience
Actuarial gains occur in a year whenever the experience of the plan is better than was assumed. For example, a
gain would occur if investment performance were better than the rate being assumed in the actuarial valuation
and costing process and this gain would have the effect of lowering the Minimum Required Contribution for the
year. Furthermore, a gain will also occur whenever more employees terminate employment than were assumed
would terminate as fewer employees are then expected to actually retire from the City.
Actuarial losses occur in a year whenever the experience of the plan is worse than was assumed. In the exmnples
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 -covered payroll has been dropping faster than the employer contribution. The components of
change in the actuarially required contribution are as follows:
Contribution rate last year 46.39 %
Payment on UAAL 6.75
Experience gain/loss 2.70
Change in administrative expense 0.78
Change in normal cost before expenses 0.04
Revision in benefits 0.00
Revision in assumptions/methods 0.00
Contribution rate this year 56.66 %
There was a net actuarial loss this year which was partially due to a lower than expected recognized investment
return on the actuarial value of assets (5.7% recognized, compared to the 7.0% assumed) and partially due to data
adjustments and unfavorable mortality and retirement experience. These losses were partially offset by lower than
expected salary increases. A small increase in the administrative expenses is also contributing to an increase in the
City contribution and due to the decrease in payroll from the prior year it represents a larger percentage of the
projected payroll.
The remainder of this Report includes detailed actuarial valuation results, finm1cial information, miscellaneous
infmmation and statistics, and a summm-y of plan provisions.
GRS City of Atlantic Beach General Employees'
Retirement System
9/30/2015 Actuarial Valuation I A-2
SECTIONB
VALUATION RESULTS
GRS
PARTICIPANT DATA
September 30, 2015 September 30, 2014
ACTIVE MEMBERS
Number 43
Covered Annual Payroll (non-DROP) $ 2,074,607
Average Annual Pay $ 48,247
Average Age 52.6
Average Past Service 15.4
Average Age at Hire 37.2
RETIREES, BENEFICIARIES, & DROP MEMBERS
Number
Annual Benefits
Average Annual Benefit
Average Age
DISABILITY RETIREES
Number
Annual Benefits
Average Annual Benefit
Average Age
TERMINATED VESTED MEMBERS
Number
Annual Benefits
Average Aruma! Benefit
Average Age
City of Atlantic Beach General Employees'
Retirement System
61
$ 1,024,754
$ 16,799
68.3
3
$ 46,861
$ 15,620
62.7
12
$ 164,653
$ 13,721
53.8
48
$ 2,397,875
$ 49,956
52.7
14.7
38.0
55
$ 853,087
$ 15,511
67.9
4
$ 56,377
$ 14,094
62.5
12
$ 122,575
$ 10,215
53.1
9/30/2015 Actuarial Valuation I B-1
A.
B.
C.
D.
E.
F.
G.
H.
I.
J.
GRS
ACTUARIALLY DETERMINED CONTRIBUTION (ADC)
Valuation Date
ADC to Be Paid During
Fiscal Year Ending
Assumed Date(s) of Employer Contrib.
Annual Payment to Amm1ize
Unfunded Actuarial Liability
if Paid on the Valuation Date
Employer Normal Cost
(including Administrative Expenses)
if Paid on the Valuation Date
ADC ifPaid on the Valuation
Date: D+E
ADC Adjusted for Frequency of
Payments and Interest to Required Time
of Contribution
Payroll Expected for Contribution Year
ADC as % of Covered Payroll in
Contribution Year: G -T-H
Actuarially Determined Contribution
if Paid on the First Day of the Contribution Year
City of Atlantic Beach General Employees'
Retirement System
September 30, 2015 September 30, 2014
9/30/2017 9/30/2016
Monthly Monthly
$ 799,150 $ 719,527
259,379 282,070
1,058,529 1,001,597
1,175,572 1,112,344
2,074,607 2,397,875
56.66 % 46.39 %
1,132,626 1,071,708
9/30/2015 Actuarial Valuation I B-2
I ACTUARIAL VALUE OF BENEFITS AND ASSETS I
A. Valuation Date September 30,2015 September 30, 2014
B. Actuarial Present Value of All Projected
Benefits for
1. Active Members
a. Service Retirement Benefits $9,703,457 $11,057,889
b. Vesting Benefits 390,470 319,225
c. Disability Benefits 244,497 250,285
d. Preretirement Death Benefits 233,309 256,659
e. Return of Member Contributions 9,093 41,929
f. Total 10,580,826 11,925,987
2. Inactive Members
a. Service Retirees & Beneficiaries 10,738,561 9,104,369
b. Disability Retirees 467,097 525,530
c. Terminated Vested Members 1,438,314 998,673
d. Total 12,643,972 10,628,572
3. DROP Balances* 252,720 273,114
4. Total for All Members 23,477,518 22,827,673
c. Actuarial Accrued (Past Service)
Liability (Entry Age Normal)* 20,941,934 20,023,500
D. Actuarial Value of Accumulated Plan
Benefits perF ASB No. 35 18,682,676 17,642,825
E. Plan Assets
1. Market Value* 15,008,338 14,919,308
2. Actuarial Value* 15,958,619 15,167,400
F. Actuarial Present Value of Projected
Covered Payroll 16,233,175 18,159,759
G. Actuarial Present Value of Projected
Member Contributions 973,991 1,089,585
* Beginning with September 30, 2014 Valuation DROP balances are being included in Present Value of
Projected Benefits, Actuarial Accrued Liability and in Plan Assets.
GRS City of Atlantic Beach General Employees'
Retirement System
9/30/2015 Actuarial Valuation I B-3
FINANCIAL SOUNDNESS
The purpose of this pmiion of the Report is to provide certain measures which indicate the financial soundness of
the program. These measures relate to shmi term solvency and long tetm 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 pmiicipants. This amount is based on
benefits eamed to date without future credited service or salary increases.
The total of the two items should generally be fully covered by assets. That pmiion 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.
I
1.
2.
3.
4.
5.
6.
GRS
I General Employees
9/30/15 9/30/14
Accumulated Contributions
of Active Members $ 1,121,958 $ 1,204,929 $
APV of Projected Benefits in
Pay Status and for Vested
Terminations 12,896,692 1 10 901 686 1'2
' '
APV of Accrued Benefits for
Active Participants
(Employer Portion) 4,664,026 5,536,210 1.
Total 18,682,676 17,642,825
Market Value of Assets 15,008,338 I 14,919,308 I
Assets as% of Total 80% 85%
1 DROP balances are being included in Actuarial Accrued Liability and in Plan Assets.
2 Reflects changes in actuarial assumptions.
I
09/30/13
1,225,604
8,871,346
5,084,432
15,181,382
13,770,711
91%
City of Atlantic Beach General Employees'
Retirement System
9/30/2015 Actuarial Valuation I B-4
$20.0
$18.0
$16.0
$14 .0
$12 .0
U) = 0
~ $10.0
$8.0
$6.0
$4 .0
$2.0
$0.0
Ratio of Market Value of Assets to
Present Value of Accrued Benefits
20 10 20.11 2012 2013 2014 2015
Actuarinl Vn l uati on Date (SctJtc m bcr 30)
-Market Value of Asse ts c:::J PV Accrued Benefits -•-Ratio
200%
100% ~ Q'.
0
0%
Increases in be nefi ts w ill, of cou rse, adve rse ly affect the tre nd in the years when such inc reases are first refl ected
in the actuarial values . Although different ac tu ari al assu mpt ions wo uld be used in the even t of a termin ati on of the
program, this te st shows how much of th e benefits accrued to da te might be covered by asse ts in the event of a plan
fre eze usi ng th e va lu at ion assum pti ons.
GRS City of Atlantic Beac h Ge neral Employees'
Retirement Sys tem
9/30/20 15 Ac tu ari a l Valuati on 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 Actumial 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 te1m 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
Actuarial Value of Actuarial Accrued %ofAAL
Valuation Assets Liability Covered by
Date (in Thousands) (in Thousands) Assets
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
9/30/11 11,119 16,053 69
9/30/12 ** 12,465 16,599 75
9/30/13 13,816 17,282 80
9/30/14 *,*** 15,167 20,024 76
9/30/15 *** 15,959 20,942 76
*Reflects change in benefits, actuarial assumptions and/or asset method.
**Reflects the Actuarial Impact Statement for Ordinance 58-13-37.
***DROP balances are included in Actuarial Accrued Liability and in Plan Assets.
City of Atlantic Beach General Employees'
Retirement System
9/30/2015 Actuarial Valuation I B-6
GRS
$2 0 .0
$15.0
~ ~ $1 0.0
$5.0
$0.0
-
-
Ratio of Actuarial Value of Assets
to Actuarial Accrued Liability
-
f~£ L. • • e r-• -~ • • r-• • • • ·-
~~'\:::, ~r;::::,' ~r;::::,"v ~'\:::,"" ~~ ~'\:::,~ ~r;::::,Ca ~'\:::," ~r;::::,'b ~r§J ~ ...... '\:::, ~"' ~~ ~" ~~ ~ .... ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Act uar ial Va lu at ion Date (Sep tember 30)
-Ach~1rial Assets c:::::::l Acc ru ed Liability -•-Rat io
300%
25 0%
200%
1 50%~ 8·
100%
SO%
0%
C ity o f A tl antic Beac h Ge neral Employees '
Ret irement Syste m
9/30/20 IS Actua ri a l Va lu ati on I B-7
ACTUARIAL GAINS AND LOSSES
The assumptions used to anticipate mortality, employment tumover, investment income, expenses, salmy
increases, and other factors have been based on long range trends and expectations. Actual experience can vmy
from these expectations. The variance is measured by the gain and loss for the period involved. If significant long
tenn 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
Derivation of Experience Gain (Loss)
1. Last Year's UAAL
2. Last Year's Employer Normal Cost
3. Last Year's Actual City Contibution
4. Interest at the assumed rate on:
a. 1 for one year
b. 2 for one year
c. 3 from dates paid
d. a+ b-c
5. This Year's Expected UAAL
1 + 2-3 + 4d
6. This Year's Actual UAAL (before any
changes in benefits or assumptions)
7. Net Actuarial Gain (Loss): (5)-(6)
8. Gain (Loss) due to investments
9. Gain (Loss) due to other sources
10. Amortization Payment Due to (Gain) Loss
City of Atlantic Beach General Employees'
Retirement System
$4,856,100
282,070
863,613
339,927
19,745
30,226
329,446
4,604,003
4,983,315
(379,312)
(177,271)
(202,041)
50,472
9/30/2015 Actuarial Valuation I B-8
GRS
Net act uari al ga in s in previ ous years have been as follows:
C umul ative Gnin
Year Enclcrl Ac tnnrh•l Gain (Loss) (Loss)
9/30/1994 (.157,358) ( 157,358)
9/30/1995 447,29 1 289,933
9/30/!996 (162,663) 127,270
9/3 0/1997 252,2 3& 379,5 08
9/3 0/1998 58,540 438,04 1!
9/30/1999 108,195 546,243
9/3 0/2000 (55 ,470) 490,773
9/30/2001 (18,145) 1)72,628
9/30/2002 (21!0, 151) 192,477
9/30/2003 (355,3 &3) ( 162,906)
9/30/2004 (395, 109) (558,0 15)
9/30/2005 (364,305) (922,320)
9/30/2006 13 1,266 (79 1,054)
9/30/2007 ( 170,383) (96 1,437)
9/30/2008 {178,856) (1,14 0,293)
9130/2009 (482,223) (I ,622,5 15)
9/30/20 10 (17 1,358) ( 1,793,873 )
9/30/2 0 11 {364,563) {2, 158,436)
9/30/2 0 12 402,582 (I ,755,8511}
9/30/20 13 208,109 ( 1,5 47 ,746)
9/30/2014 (13, 100) (I ,560,846)
9/30/2015 (379,3 12) (I ,940,158)
Actuarial Gain(+) or Loss ( -)
$3 $3
$2 $2
$1 $1
($1)
($2) ($2)
Plan Yea r E nd
-Gni n or l.oss -c umulnl ive
City of Atlant i c B eac h Ge neral Em pl oyees'
Reti rement System
9/30/20 15 Actuarial Va l uat ion I B-9
The fund eamings and salmy 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
eamings and salary increase rates compared to the assumed rates:
Investment Return (AVA) Salary Increases
Year Ending Actual Assumed Actual Assumed
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
9/30/2014 6.3 8.0 4.8 5.9
9/30/2015 5.7 7.0 3.3 5.4
Average 5.8 % ---4.7 % ---
The actual investment retum rates shown above are based on the actuarial value of assets. The actual salmy
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
9/30/2015 Actuarial Valuation I B-10
History oflnvestment Return-Actual'i a l Value of Assets
-5~ -S~o
$#~###~###~#~#~~#
Plan Yea r End
--Actua l -+--Ass1uncd
History of Salary Increases
-5% -5%
GRS
$#~#~$~###~~~#~~#
Plan Yea r End Compa red to Previo us Yea r
-Actua l -Ass umed
City of A tl ant ic Beac h Ge neral Emp loyees'
Retirement Sys tem
9/30/20 15 Actu ar i al V aluati on I B-11
RECENT ffiSTORY OF VALUATION RESULTS
Number of Employe1· Normal Cost
Active Inactive Reported Annual Actuadal Value of
Valuation ]\'!embers Members Payroll Assets UAAL Amount
Date (in Thousands) (in Thousands) (in Thousands) (in Thousands) % ofPayroll
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
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
9/30/11 83 58 3,738 11,119 4,934 367 9.82
9/30/12 .. 63 63 3,072 12,465 4,134 274 8.90
9/30/13 56 67 2,733 13,816 3,466 251 9.17
9/30/14
.
48 71 2,398 15,167 4,856 282 11.76
9/30/15 43 77 2,075 15,959 4,983 259 12.50
*Reflects a change in assumptions or benefits.
**Reflects the Actuarial Impact Statement for Ordinance 58-13-37.
~
0 ~
GRS
Recent His to ry of N umber of Members
~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 0 ~ ~ '~ ~ ~o,\' ~o,\" ~d;-" ~o,\" ~d;-" ~d;-" ~o,\" ~o,\" ~d;-" ~d;-" ~o,\" ~o,\' ~o,\' r:::,o,\ r:::,o,\' r:::,d;-> r:::,ot\
Ac tua ri~ll Va lu atio n Date
c Ac li ve Members • I na cli ve Members
Recent Histo ry of Covered Ann ua l Payro ll
$5.0 ; -
$4.0 -,. ,. -,. ,.
$3.0 ,. ,. .. ---,.
$2.0
,. -,. ,.
$1.0
$0 .0 1-,_ -1-, 1-,_ ,_
Actuarial Valu a tion Date
,.
1;;.
City of At lant ic Beac h General Emp loyees'
Retirem ent System
9/30/20 15 Actuarial Va luati on I B-13
GRS
RECENT HISTORY OF REQUIRED AND ACTUAL CONTRIBUTIONS
End of Year To Required Contributions
Which Valuation Valuation
Applies % of Expected Actual
Amount Payroll Contributions
* 9/30/03 9/30/05 $ 464,893 15.02 % $ 464,893
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 16.60 722,769
* 9/30/10 9/30/12 998,516 24.53 998,516
9/30/11 9/30/13 1,044,392 26.34 1,044,392
** 9/30/12 9/30/14 950,980 29.19 950,980
9/30/13 9/30/15 863,613 31.59 863,613
* 9/30/14 9/30/16 1,112,344 46.39 ---
9/30/15 9/30/17 1,175,572 56.66 ---
*Reflects a change in assumptions or benefits.
**Reflects the Actuarial Impact Statement for Ordinance 58-13-37.
City of Atlantic Beach General Employees'
Retirement System
9/30/2015 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 detennined 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
accrued liability determines 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.
Economic Assumptions
The price inflation rate assumed in this valuation was 2.50% 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 assumed to be 7.0% per year,
net of investment-related expenses.
The rates of salary increases used in the valuation are illustrated in the following table (rates below include
2.5% price inflation).
Annual Rates for Salary Increase for Sample Ages
Age: 20 30 40 50 60
Expected Increase 13.5% 8.2% 6.0% 5.5% 5.0%
GRS City of Atlantic Beach General Employees'
Retirement System
9/30/2015 Actuarial Valuation I B-15
Demographic Assumptions
The mortality rates used were taken from the gender specific RP-2000 Combined Healthy Participant Mortality
Tables for males and females, with generational projections from the year 2000 Projection Scale AA. The
mortality table was set forward ten years for projecting the expected mortality of disabled lives. 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 2015) Men Women Men Women
50 0.16% 0.13% 34.35 35.68
55 0.27 0.24 29.23 30.71
60 0.53 0.47 24.29 25.93
65 1.03 0.90 19.68 21.44
70 1.77 1.55 15.48 17.32
75 3.06 2.49 11.68 13.59
80 5.54 4.13 8.45 10.28
Rates of disability among active members (0% of disabilities are assumed to be service-connected).
GRS
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%
City of Atlantic Beach General Employees'
Retirement System
9/30/2015 Actuarial Valuation I B-16
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:
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
10%
10%
10%
10%
20%
15%
15%
15%
20%
30%
40%
50%
50%
50%
100%
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 is used to yield the
probabilities of members remaining in employment.
GRS
Rates of Separation from Active Employment
Sample Years of
Ages Service
ALL 0
1
2
3
4
25 5 & Over
30
35
40
45
50
55
60
City of Atlantic Beach General Employees'
Retirement System
Assumptions
28.61%
20.78%
16.94%
11.67%
7.41%
3.70%
3.50%
3.20%
3.00%
2.70%
2.20%
2.00%
2.00%
9/30/2015 Actuarial Valuation I B-17
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 detennined based upon the age nearest
birthday and service nearest whole year on the date the decrement is
assumed to occur.
Vested members who terminate with a benefit worth 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 pmiicipants 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 reported
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
9/30/2015 Actuarial Valuation! B-18
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 mmtality, disability,
turnover, retirement, rate or rates of investment income and salary increases.
Decrement assumptions (rates of mmtality, 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
mmtality tables used by the plan.
The amount of funds presently required to provide a payment or series of
payments in the future. It is detennined 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
9/30/2015 Actuarial Valuation I B-19
SECTIONC
PENSION FUND INFORMATION
SUMMARY OF ASSETS
9/30/2015 9/30/2014
Cash and Securities-Market Value
Cash and Cash Equivalents $ 68,735 $ 27,899
ShoJi Term Investments 4,846,615 4,701,667
Treasury and Agency Bonds & Notes 96,412 251,173
Corporate Bonds 622,887 4,994,776
Common & Preferred Stocks 9,339,085 4,758,558
Pooled Equity Funds 0 0
Mutual or Pooled Bond Funds 0 0
Mutual Equity Funds 0 0
Other Securities-Pmticipant Directed 29,039 144,640
Total 15,002,773 14,878,713
Receivables and Accruals
Member Contribution 0 0
Additional Employer Contribution 0 0
Interest and Dividends 5,565 40,709
Interest Deposit for Late Contribution 0 0
Total 5,565 40,709
Payables
Benefits-DROP Reserve 0 0 *
Lump Sum Distributions 0 0
Expenses 0 0
Other 0 114
Total 0 114
Net Assets-Market Value $ 15,008,338 $ 14,919,308
* Beginning with 9/30/2014 valuation DROP balances are being included in Plan Assets for consistency
with GASB Statements 67 and 68.
GRS City of Atlantic Beach General Employees'
Retirement System
9/30/2015 Actuarial Valuation I C-1
PENSION FUND INCOME AND DISBURSEMENTS
Year Ending Year Ending
9/30/2015 9/30/2014
Market Value at Beginning of Period $ 14,919,308 $ 13,770,711
Income
Member Contributions 136,191 157,383
State Contributions 0 0
Employer Contribution 863,613 950,980
Interest and Dividends 88,632 286,651
Legal Settlement 0 0
Realized and Unrealized Gain (Loss) 152,159 468,942
Total Income 1,240,595 1,863,956
Disbursements
Monthly Benefit Payments 869,484 697,702
DROP Payments Held in Reserve 0 0
Lump Sum Distributions (from DROP) 161,707 0
Refund of Contributions 0 9,516
Investment Related Expenses 78,465 65,732
Other Administrative Expenses 41,909 31,529
Rollover of Employee Contributions to DC Plan 0 0
Total Disbursements 1' 151,565 804,479
Adjustment for Adopting New Accounting Principle* $ 0 89,120
Net Increase During Period $ 89,030 $ 1' 148,597
Market Value at End of Period $ 15,008,338 $ 14,919,308
* For consistency with GASB Statements 67 and 68 DROP balances are now being included in Plan Assets.
GRS City of Atlantic Beach General Employees'
Retirement System
9/30/2015 Actuarial Valuation I C-2
DEFERRED RETIREMENT OPTION PLAN (DROP)
BENEFITS HELD IN RESERVE
A reconciliation of the accumulated DROP account balances is provided in the table below.
GRS
RECONCILIATION OF DROP ACCOUNTS
Value at beginning ofyear
Payments credited to accounts
Investment Earnings credited
Withdrawals from accounts
Value at end of year
DROP PARTICIPATION ACTIVITY
Number as of September 30, 20 14
Number entered DROP during the year
Number exited DROP during the year
Number as of September 30,2015
Average Monthly Benefit as of September 30, 20 15
City of Atlantic Beach General Employees'
Retirement System
$ 273,114
+ 138,074
+ 3,239
161,707
252,720
6
0
(3)
3
$3,230
9/30/2015 Actuarial Valuation I C-3
ACTUARIAL VALUE OF ASSETS
As of September 30, 2015
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
9/30/2015 Actuarial Valuation I C-4
DEVELOPMENT OF FUNDING VALUE OF ASSETS AS OF SEPTEMBER 30
2013
A. Preliminaty actuarial value from prior year $ 12,465,289
B. Market value beginning of prior year 12,693,827
C. Market value end of prior year 13,770,711
D. Non-investment net cash flow
[ contributions-(benefits & expenses)] 343,020**
E. Investment return
1. Actual mm·ket value return net of investment
expenses: C-B - D 733,896
2. Expected return of7.00% (8.00% before 20 15) 1,029.227
3. Excess/(shortfall) to be phased-in: El -E2 (295,331)
F. Phased-in recognition of investment return
(4 Year Recognition)
1. Cu11'ent yeat": 25% ofE3 (73,833)
2. 25% of excess/( shortfall) fi·om first prior yem· 224,855
3. 25% of excess/( shortfall) from second prior year (273,334)
4. 25% of excess/(shortfall) from third prior year 52,867
5. Total phased-in recognition of investment return (69,445)
G. Actuarial value end ofyem·
1. Preliminary actuarial value end of year:
A+ D+ E2+ F5 13,815,833
2. Upper corridor limit: 120% of C 16,524,853
3. Lower corridor limit: 80% ofC 11,016,569
4. Adjustment to reflect retroactive plan closure 0
5. Actuarial value end ofyem· 13,815,833*
H. Difference between market value and actum·ial value (45,122)
I. Ratio of Funding Value to Mm·ket Value 100%
*Offietfor DROP Rese1w made prior to the calculation of valuation assets
**Reflects the Actuarial Impact Statement for Ordinance 58-13-3 7
***Includes adjustment for adopting new Accounting Principle.
GRS City of Atlantic Beach General Employees'
Retirement System
2014 2015 2016
$ 13,815,833 $ 15,167,400 $ 15,958,619
13,770,711 14,919,308 15,008,338
14,919,308 15,008,338
458,736*** (73,296)
689,861 162,326
1,123,571 1,041,786
(433,710) (879,460)
(108,428) (219,865)
(73,833) (108,428) (219,865)
224,855 (73,833) (108,428)
(273,334) 224,855 (73,833)
(230,740) (177,271) (402,126)
15,167,400 15,958,619
17,903,170 18,010,006
11,935,446 12,006,670
0 0
15,167,400 15,958,619
(248,092) (950,281)
102% 106%
9/30/2015 Actuarial Valuation I C-5
INVESTMENT RATE OF RETURN
The investment rate ofretum 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 nmmally called the Total Rate ofRetum.
Basis 2-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.
GRS
Investment Rate of Return
Year Ended Marl{et Value Actuarial Value
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
9/30/14
9/30/15
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
4.9 6.3
1.1 5.7
5.0% 6.0%
5.5% 6.2%
4.9% 5.8%
9/30/2015 Actuarial Valuation I C-6
SECTIOND
MISCELLANEOUS INFORMATION
GRS
RECONCILIATION OF MEMBERSHIP DATA
From9/30/141 From9/30/13
To 10/01/15 To 9/30/14
I A Active Members
1. Number Included in Last Valuation 48 56
2. New Members Included in CuiTent Valuation 0 0
3. Non-Vested Employment Terminations 0 (I)
4. Vested Employment Terminations (1) (1)
5. Service Retirements (4) (4)
6. Disability Retirements 0 0
7. Deaths 0 (I)
8. DROP Retirement 0 (I)
9. Transfer to the DC Plan 0 0 -- --10. Number Included in This Valuation 43 48
I B. Terminated Vested Membe1·s
I. Number Included in Last Valuation 12 11
2. Additions from Active Members I 1
3. Lump Sum Payments/Withdrawals 0 0
4. Payments Commenced (1) 0
5. Deaths 0 0
6. Other 0 0 -- --7. Number Included in This Valuation 12 12
I C. Service Retirees, Disability Retirees, Beneficiaries & DROP
I. Number Included in Last Valuation
2. Additions from Active Members
3. Additions entering the DROP
4. Additions from Tem1inated 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
City of Atlantic Beach General Employees'
Retirement System
59 56
4 4
0 I
I 0
0 (2)
(2) (1)
0 0
2 I ----64 59
9/30/2015 Actuarial Valuation I D-1
GRS
STATISTICAL DATA
Active Members as of September 30, 2015
Age Group 0-4 5-9 10-14 15-19
20-24 NO. 0 0 0 0
25-29NO. 0 0 0 0
30-34 NO. 0 1 0 0
35-39 NO. 0 0 0 0
40-44 NO. 0 3 2 0
45-49NO. 0 3 3 0
50-54 NO. 0 1 1 1
55-59 NO. 0 2 4 3
60-64 NO. 0 3 3 1
65&UPNO. 0 1 0 0 ---- --
TOT NO. 0 14 13
City of Atlantic Beach General Employees'
Retirement System
5
I I
20-24 25-29 30& Up Total
0 0 0 0
0 0 0 0
0 0 0 1
0 0 0 0
1 0 0 6
1 2 0 9
1 0 1 5
1 0 2 12
1 1 0 9
0 0 0 1
-- -----
5 3 3 43
9/30/2015 Actuarial Valuation I D-2
NUMBER ADDED TO AND REMOVED FROM ACTIVE MEMBERSHIP
Number
Added Terminations During Year Active
Year
Ended
September 30
1997
1998
I999
2000
200I
2002
2003
2004
2005
2006
2007
2008
2009
20IO
20II
2012
2013 *
2014 *
2015 *
5-yr. Totals
2011-2015
Expected
20I6
During
Year
A E
12 11
12 6
I4 I7
7 6
9 8
7 10
I2 II
12 10
IO I4
IO II
8 7
7 6
6 2
4 7
6 7
8 7
0 0
0 0
Q Q
14 I4
A Represents actual number.
Service
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
5 4.6
5 4.9
.1 3.9
2I 23.0
3.4
E Represents expected number.
Disability
Retirement
A E
1 0.2
0 0.2
I 0.2
0 0.1
0 0.1
0 0.2
0 0.2
0 0.2
0 0.2
0 O.I
1 0.2
0 0.1
0 0.1
0 0.1
1 O.I
0 0.2
0 0.2
0 0.1
Q 0.1
I 0.8
O.I
*No employees will be added following the closure of the plan.
GRS City of Atlantic Beach General Employees'
Retirement System
Died-in Withdrawal Members
Service Vested Other Total End of
A E A A A E Year
0 0.2 2 7 9 8.2 76
0 0.2 0 6 6 8.3 82
0 0.2 0 15 15 8.3 79
0 0.1 0 4 4 7.5 70
1 0.1 1 5 6 7.6 71
0 0.1 2 7 9 8.1 68
0 0.1 0 9 9 10.8 84
0 0.1 1 7 8 10.0 86
0 0.2 1 1I 12 9.4 82
0 0.2 0 6 6 8.5 81
0 0.2 1 4 5 8.1 82
0 0.2 1 5 6 7.8 83
0 0.2 I 1 2 6.9 87
0 0.2 0 3 3 6.8 84
0 0.3 1 0 1 5.7 83
1 0.2 2 2 4 4.8 63
0 0.2 0 2 2 S.I 56
I 0.2 I I 2 0.7 48
Q 0.1 ! Q ! 0.6 43
2 1.0 10 I6.9
O.I 0.6
9/30/2015 Actuarial Valuation I D-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
2001 6 78,522 3 32,513 3 46,009
2002 17,716 * I 17,716
2003 3 23,184 26,801 2 (3,617)
2004 2 32,159 5,889 26,270
2005 2 35,900 2 17,160 18,740
2006 3 47,505 5,774 2 41,730
2007 6 82,446 3 29,272 3 53,174
2008 3 51,425 3 51,425
2009 9,217 9,217
2010 2 17,424 2 5,992 11,432
2011 4 95,156 3 13,790 81,366
2012 9 105,409 1 14,326 8 91,083
2013 4 77,393 0 4 77,393
2014 6 160,587 12,284 5 148,303
2014 5 91,970 2 16,908 3 75,062
2015 5 162,151 0 5 162,151
Expected for
2016
* 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
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
59 909,464 1.3 15,651
64 1,071,615 1.3 15,644
1.4 18,241
9/30/2015 Actuarial Valuation I D-4
SECTION£
SUMMARY OF PLAN PROVISIONS
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. 58-13-37 passed
and adopted on June 10, 2013. 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
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 1,000 hours annually and who were not elected officials, temporary or
contractual employees, or executives or departments 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 parts of years. 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 taken. Compensation excludes payments of unused personal
leave, unifmm 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
9/30/2015 Actuarial Valuation I E-1
I. Normal Retirement
Eligibility:
Benefit:
Nonnal Form
of Benefit:
A pmticipant 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 April 24, 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:
Nmmal Form
of Benefit:
A member may elect to retire earlier than the Nmmal Retirement Eligibility upon attainment of
age 55 with 5 years of Credited Service.
The Normal Retirement Benefit is actuarially reduced (at 6% per year) 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 yem·s of Credited Service who becomes totally and
pennanently 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 Nmmal 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
9/30/2015 Actuarial Valuation I E-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 (1 00) 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 fonns 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 pmticipant has eamed 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 Nonnal Retirement Benefit as of the
date of termination. Benefit begins on the Nonnal or Early Retirement date.
GRS City of Atlantic Beach General Employees'
Retirement System
9/30/2015 Actuarial Valuation I E-3
Vested Termination-Continued
Nonnal 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%
1011/2010 16.60% 5.000% 21.60%
1011/2011 24.53% 5.000% 29.53%
1011/2012 26.34% 5.000% 31.34%
10/1/2013 29.19% 6.000% 35.19%
1011/2014 31.59% 6.000% 37.59%
10/1/2015 46.39% 6.000% 52.39%
1011/2016 56.66% 6.000% 62.66%
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
9/30/2015 Actuarial Valuation I E-4
X. Deferred Retirement Option Plan
Eligibility:
Benefit:
Maximum
Plan members are eligible for the DROP upon attaimnent 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 FAC are fi·ozen upon ently into the DROP. The monthly
retirement benefit as described under Nonnal 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:
Participants' 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
participants, DROP account balances will be credited or debited quarterly with interest based
on Plan's net investment eamings or losses for that quarter.
Lump Sum or roll-over to a qualified retirement account.
GRS City of Atlantic Beach General Employees'
Retirement System
9/30/2015 Actuarial Valuation I E-5
SECTIONF
COMPARATIVE SUMMARY OF PRINCIPAL
VALUATION RESULTS
COMPARATIVE SUMMARY OF
PRINCIPAL VALUATION RESULTS September 30, 2015 September 30, 2014
A. Participant Data
Number Included:
Actives 43 48
Service Retirees & Beneficiaries 61 55
Disability Retirees 3 4
Terminated Vested Members 12 12
Total Members and Beneficiaries 119 119
Total Annual Payroll (Excluding DROP Participants) $2,074,607 $2,397,875
Annual Valuation Payroll 2,074,607 2,397,875
Expected Annual Payroll in Contribution Year 2,074,607 2,397,875
Total Annualized Benefits
Service Retirees & Beneficiaries 1,024,754 853,087
Disability Retirees 46,861 56,377
Terminated Vested Members 164,653 122,575
B. Assets (Market Value)*
Cash and Short Term Investments 4,915,350 4,729,566
Treasury and Agency Bonds & Notes 96,412 251,173
Common and Preferred Stocks 9,339,085 4,758,558
Mutual or Pooled Bond Funds 0 0
Corporate Bonds 622,887 4,994,776
Other Securities 29,039 144,640
Net Receivables & Payables 5,565 40,595
Total 15,008,338 14,919,308
Funding (Actuarial) Value !5,958,619 15,167,400
Assets include:
Accumulated active member contributions 1,121,958 1,204,929
(with interest if applicable)
c. Actuarial present value of accrued benefits
(i) Vested accrued benefits
Retired members and benefitciaries (excl DROP balances) 11,205,658 9,629,899
Terminated members I ,438,314 998,673
DROP Balances 252,720 273,114
Active members (includes non-forfeitable members
contributions of 1,121,958 and 1,204,929) 5,785,984 6,741,139
Total 18,682,676 17,642,825
(ii) Non-vested accrued benefits 0 0
(iii) Total actuarial p.v. of accrued benefits 18,682,676 17,642,825
(iv) Actuarial p.v. of accrued benefits at begin. of year 17,642,825 15,181,382
(v) Changes attributable to:
Amendments none none
Method change (DROP treatment) 0 273,1 !4
Assumptions 0 1,675,679
Operation of decrements 2,071,042 1,219,868
Benefit payments (1,031,191) (707,218)
Other none none
(vi) Net change (PV AB measurement Method Change) 1,039,851 2,461,443
(vii) Actuarial p.v. of accr. beneftts at end of year 18,682,676 17,642,825
*DROP balances are included in Plan Assets beginning with 9/30/2014 valuation.
GRS City of Atlantic Beach General Employees'
Retirement System
9/30/2015 Actuarial Valuation I F-1
GRS
COMPARATIVE SUMMARY OF
PRINCIPAL VALUATION RESULTS September 30,2015 September 30,2014
D. Liabilities-Actuarial Present Value of Future Benefits
1. Active Members
Service Retirement Benefits
Vesting Benefits
Disability Benefits
Preretirement Death Benefits
Return of Member Contributions
Total Actives
2. Inactive Members
Service Retirees & Beneficiaries
Disability Retirees
Terminated Vested Members
Total Inactive Members
3. DROP Balances
3. Total Present Value for All Members
Total Present Value of:
Future Salaries
Future Employee Contributions
Future Contributions from Other Sources
Derivation of Current Employet·
Unfunded Actuarial Accrued Liability (UAA.L)
a. Total UAAL for Prior Valuation Date
b. Employer Normal Cost for this period
c. Interest acccrued on (a) and (b)
d. Contributions for this period
e. Interest accrued on (d)
f. Changes due to:
Plan Amendment
Assumption Changes
Asset Method
Actuarial (Gain) Loss
g. Total Current UAAL: a+b+c+d+e+f
$9,703,457 $I I ,057,889
390,470 319,225
244,497 250,285
233,309 256,659
9,093 41,929
10,580,826 I 1,925,987
10,738,561 9,104,369
467,097 525,530
1,438,314 998,673
12,643,972 10,628,572
252,720 273,II4
23,477,518 22,827,673
16,233,175 18,159,759
973,991 1,089,585
6,544,908 6,570,688
$4,856,100 $3,466,268
282,070 260,545
359,672 287,723
(863,613) (950,980)
(30,226) (38,039)
0 0
0 1,817,483
0 0
379,312 13,100
4,983,315 4,856 100
Original and Current Unfunded Actuarial Accmed Liabilities
Date Item Description
9/30/2012 Original UAAL *
9/30/20!3 Experience Gain
9/30/2014 Experience Loss
9/30/2014 Assumption Changes
9/30/2015 Experience Loss
TOTAL
Years
Remaining
7
8
9
9
10
Amortization
Payment
$523,991
(27,533)
1,805
250,4 I 5
50,472
$799,150
*Reflects the Actuarial Impact Statement for Ordinance 58-13-37.
City of Atlantic Beach General Employees'
Retirement System
Original Current
Amount Unfunded
$4,133,993 $3,021,6!3
(208,1 09) (!75,914)
13, I 00 12,583
1,817,483 1,745,721
379,312 379,312
$6,135,779 $4,983,315
9/30/2015 Actuarial Valuation I F-2
COMPARATIVE SUMMARY OF September 30, 2014 PRINCIPAL VALUATION RESULTS September 30, 2015
E. Pension Cost
Entry Age Normal Cost for:
Service Retirement Benefits $281,209 $334,107
Vesting Benefits 30,867 18,599
Disability Benefits 15,794 17,127
Preretirement Death Benefits 6,763 7,980
Return of Member Contributions 13,971 24,280
Total Actives 348,604 402,093
Administrative Expenses 41,909 31,529
Expected Member Contributions 131,134 151,552
Total Employer Normal Cost 259,379 282,070
Payment Required to Amortize Unfunded Actuarial
Accrued Liability 799,150 719,527
Total Contribution at Valuation Date 1,058,529 1,001,597
Total Contribution Adjusted for Frequency of
Payments and Interest to Next Following Fiscal Year 1,175,572 1,112,344
%of Expected Payroll 56.66% 46.39%
Amount Expected to be Contributed by Members Next FY 124,476 143,873
%of Expected Payroll 6.00% 6.00%
F. Past Contributions-For the Fiscal Years Ended September 30 of2014 and 2015
Required Contribution Determined in the Valuation as of September 30, 2013 September 30, 20 12
for the Fiscal Year Ending September 30,2015 September 30, 2014
by the Plan Sponsor $863,613 $950,980
by Members $164,006 $195,496
Actual Contribution for the Fiscal Year ended September 30, 2015 September 30, 2014
by the Plan Sponsor $863,613 950,980
by Members $136,191 157,383
$379,312 $13,100
H. I. Plan to Amortize Unfunded Actuarial Accrued Liability
10 year funding of the Original Unfunded Actuarial Accrued Liability,
I 0 year funding of any emerging Gains or Losses, or assumption changes.
2. Schedule Illustrating the Am01tization of the Unfunded Actuarial Accrued Liability (UAAL)
Year Projected UAAL
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
3. Action taken since last actuarial valuation.
GRS
Contribution sufficient to satisfY the total required contribution.
City of Atlantic Beach General Employees'
Retirement System
4,983,315
4,477,049
3,935,352
3,355,736
2,735,548
2,071,945
1,361,891
602,133
349,862
50,472
0
9/30/2015 Actuarial Valuation I F-3
COMPARATIVE SUMMARY OF PRINCIPAL VALUATION RESULTS
I. 1. Three-Year Comparison of Actual and Assumed Salary Increases (Annualized)
VearEnded
9/30/2013
9/30/2014
9/30/2015
Actual
1.3%
4.8%
3.3%
Ass
5.9%
5.9%
5.4%
2. Three-Year Comparison oflnvestment Retum (Actuarial Value)
Year Ended
9/30/2013
9/30/2014
9/30/2015
Actual I Assumed I
8.0% 8.0%
6.3%
5.7%
8.0%
7.0%
3. Average Annual Growth in Payroll, Last Ten Years (if applicable)
Valuation Date
9/30/2005
9/30/2006
9/30/2007
9/30/2008
9/30/2009
Total Payroll
3,182,450
3,194,700
3,475,757
3,726,713
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
9/30/2014 2,397,875
9/30/2015 2,074,607
Total %Increase Last Ten Years (34.81 )%
Annual % Increase ( 4.19)%
Thirty-year Forecast 0.00%
J. Benefits and Expenses of Plan not Explicitly or Implicitly Provided in Valuation
NONE
K. Trends not taken into Account but which are likely to Result in Future Cost Increases
GRS
NONE
City of Atlantic Beach General Employees'
Retirement System
9/30/2015 Actuarial Valuation I F-4