9-30-2016 Atlantic Beach General Valuation Report
CITY OF ATLANTIC BEACH GENERAL
EMPLOYEES’ RETIREMENT SYSTEM
ANNUAL ACTUARIAL VALUATION AS OF SEPTEMBER 30,
2016
ANNUAL EMPLOYER CONTRIBUTION
IS DETERMINED BY THIS VALUATION
TO BE PAID IN THE EMPLOYER FISCAL YEAR ENDING
SEPTEMBER 30, 2018
May 9, 2017
The Board of Trustees
City of Atlantic Beach
General Employees’ Retirement System
Atlantic Beach, Florida
Dear Board Members:
We are pleased to submit herein our September 30, 2016 Actuarial Valuation Report for the City of Atlantic Beach
General Employees’ Retirement System. The contribution results apply to the City's fiscal year ending September
30, 2018.
This report was prepared at the request of the Board of Trustees and is intended for use by the Retirement System
and those designated or approved by the Board of Trustees. This report may be provided to parties other than the
Retirement System only in its entirety and only with the permission of the Board of Trustees. GRS is not
responsible for unauthorized use of this report.
The purpose of the valuation is to measure the Plan’s funding progress, to determine the employer contribution rate
for the fiscal year ending September 30, 2018 and certain state reporting requirements under F.S. Ch. 112.63.
This report should not be relied on for any purpose other than the purpose described above. Determinations of
financial results associated with the benefits described in this report, for purposes other than those identified above
may be significantly different.
The computed contribution rate shown on page A-1 may be considered as a minimum contribution rate that
complies with the Board’s funding policy and the State statute. Users of this report should be aware that
contributions made at that rate do not guarantee benefit security. Given the importance of benefit security to any
retirement system, we suggest that contributions to the Trust in excess of those presented in this report be
considered.
The contribution rate in this report is determined using the actuarial assumptions and methods disclosed in the
section of this report entitled “Actuarial Assumptions and Cost Method”. This report does not include a robust
assessment of the risks of future experience not meeting the actuarial assumptions. Additional assessment of risks
was outside the scope of this assignment. We encourage a review and assessment of investment and other
significant risks that may have a material effect on the plan’s financial condition.
The developed findings included in this report consider data or other information through September 30, 2016.
Future actuarial measurements may differ significantly from the current measurements presented in this report due
to such factors as the following: plan experience differing from that anticipated by the economic or demographic
assumptions; changes in economic or demographic assumptions; increases or decreases expected as part of the
natural operation of the methodology used for these measurements (such as the end of an amortization period or
additional cost or contribution requirements based on the plan’s funded status); and changes in plan provisions or
applicable law. The scope of an actuarial valuation does not include an analysis of the potential range of such
future measurements.
The Board of Trustees
May 9, 2017
Page 2
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 performed.
In addition, this report was prepared using assumptions approved by the Board and prescribed by the Florida
Statues as described in the section of this report entitled “Actuarial Assumptions and Method”. The prescribed
assumptions are the assumed mortality rates detailed in the Actuarial Assumptions and Cost Method section in
accordance with Florida House Bill 1309 of 2015 (codified into Florida Statutes Chapter 112.63).
The valuation was based upon information furnished by the City, concerning Plan benefits, financial transactions,
plan provisions and active members, terminated members, retirees and beneficiaries. We checked for internal and
year-to-year consistency, but did not otherwise audit the data. We are not responsible for the accuracy or
completeness of the information provided by the City.
The 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 report. If you have reason to believe that the assumptions
that were used are unreasonable, that the plan provisions are incorrectly described, or that conditions have changed
since the calculations were made, you should contact the author of this report prior to relying on information in the
report.
Nicolas Lahaye 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 report has been prepared by actuaries who have substantial experience valuing public employee retirement
systems. To the best of our knowledge the information contained in this report is accurate and fairly presents
the actuarial position of the Retirement Plan as of the valuation date. All calculations have been made in
conformity with generally accepted actuarial principles and practices, with the Actuarial Standards of Practice
issued by the Actuarial Standards Board and with applicable statutes.
Gabriel, Roeder, Smith & Company will be pleased to answer questions pertaining to the valuation and to meet
with you to review this Report.
Respectfully submitted,
GABRIEL, ROEDER, SMITH AND COMPANY
Nicolas Lahaye, FSA, EA, MAAA
Consultant & Actuary
Piotr Krekora, ASA, EA, MAAA
Consultant & Actuary
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
May 9, 2017
Date
17-07775
Enrollment Number
TABLE OF CONTENTS
S ECTION TITLE PAGE
A EXECUTIVE SUMMARY A-1
B VALUATION RESULTS
1. Participant Data B-1
2. Actuarially Determined 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 MISCELLANEOUS INFORMATION
1. Reconciliation of Membership Data D-1
2. Statistical Data D-2
E SUMMARY OF PLAN PROVISIONS E-1
F COMPARATIVE SUMMARY OF PRINCIPAL
VALUATION RESULTS
F-1
SECTION A
EXECUTIVE SUMMARY
City of Atlantic Beach General Employees’
Retirement System
9/30/2016 Actuarial Valuation | A-1
EXECUTIVE SUMMARY
Closed Plan
In reviewing this Report, 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:
Gross Contribution Requirement $1,456,319 $1,300,048 $156,271
As % of Expected Payroll 70.35 %62.66 %7.69 %
Expected Employee Contribution $124,201 $124,476 $(275)
As % of Covered Payroll 6.00 %6.00 %0.00 %
Required Employer Contribution
(If Made in Equal Monthly Installments)$1,332,118 $1,175,572 $156,546
As % of Covered Payroll 64.35 %56.66 %7.69 %
Required Employer Contribution
(If Made in Whole at the Beginning of the Year)$1,283,454 1,132,626 150,828
As % of Covered Payroll 62.00 %54.59 %7.41 %
Based on 9/30/16
(Decrease)Valuation Valuation
IncreaseBased on 9/30/15
For FYE 9/30/2018 For FYE 9/30/2017
Minimum Required Contribution
As illustrated in the preceding chart, the City contribution necessary to support the current benefits for the General
Employees is $1,332,118 for the fiscal year ending September 30, 2018. 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.
City of Atlantic Beach General Employees’
Retirement System
9/30/2016 Actuarial Valuation | A-2
Revisions in Actuarial Assumptions and Methods
The mortality assumption was changed from the RP-2000 Combined Healthy Participant Mortality Table for males
and females with mortality improvements projected to all future years after 2000 using Scale AA to the mortality
assumption used by the Florida Retirement System (FRS) for Regular Class members in the actuarial valuation as
of July 1, 2016. The current FRS mortality tables for healthy lives are the RP-2000 Combined Healthy Participant
Mortality Table (for pre-retirement mortality) and the RP-2000 Mortality Table for Annuitants (for post-retirement
mortality), with mortality improvements projected to all future years after 2000 using Scale BB. For males, the
base mortality rates include a 50% blue collar adjustment and a 50% white collar adjustment. For females, the base
mortality rates include a 100% white collar adjustment. This change was made in compliance with Ch. 112.63
F.S., which requires all public pension plans in Florida to use the same mortality tables used in either of the last
two actuarial valuations reports of FRS no later than October 1, 2016. The assumption change described above
increased the total required contribution by 3.91% of covered payroll.
Recommendations
We recommend a review of demographic assumptions including salary 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
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 (4.8% recognized, compared to the 7.0% assumed). The recognized return
was low, despite a 10.1% market value return for the year, due to the recognition of deferred investment losses
from the past three years. Another contributing factor to the loss was the delayed payment of a death benefit lump
sum from plan assets of over $200,000 for a deceased member who was previously removed from the valuation.
Higher than expected salary increases and lower than expected mortality also added to the experience loss. These
losses were partially offset by higher than expected withdrawals during the year.
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 56.66 %
Payment on UAAL (0.09)
Experience (gain)/loss 4.44
Change in administrative expense (0.50)
Change in normal cost before expenses (0.07)
Revision in benefits 0.00
Revision in assumptions/methods 3.91
Contribution rate this year 64.35 %
Conclusion
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
9/30/2016 Actuarial Valuation | B-1
ACTIVE MEMBERS
Number 39 43
Covered Annual Payroll (non-DROP)$2,070,021 $2,074,607
Average Annual Pay $53,077 $48,247
Average Age 53.3 52.6
Average Past Service 16.9 15.4
Average Age at Hire 36.4 37.2
RETIREES, BENEFICIARIES, & DROP MEMBERS
Number 64 61
Annual Benefits $1,063,659 $1,024,754
Average Annual Benefit $16,620 $16,799
Average Age 69.0 68.3
DISABILITY RETIREES
Number 3 3
Annual Benefits $46,861 $46,861
Average Annual Benefit $15,620 $15,620
Average Age 63.7 62.7
TERMINATED VESTED MEMBERS
Number 11 12
Annual Benefits $146,053 $164,653
Average Annual Benefit $13,278 $13,721
Average Age 54.3 53.8
PARTICIPANT DATA
September 30, 2016 September 30, 2015
City of Atlantic Beach General Employees’
Retirement System
9/30/2016 Actuarial Valuation | B-2
A.Valuation Date September 30, 2016
B.ADC to Be Paid During
Fiscal Year Ending 9/30/2018 9/30/2018 9/30/2017
C.Assumed Date(s) of Employer Contrib.Monthly Monthly Monthly
D.Annual Payment to Amortize
Unfunded Actuarial Liability
if Paid on the Valuation Date $947,471 $878,455 $799,150
E.Employer Normal Cost
(including Administrative Expenses)
if Paid on the Valuation Date 252,018 248,147 259,379
F.ADC if Paid on the Valuation
Date: D+E 1,199,489 1,126,602 1,058,529
G.ADC Adjusted for Frequency of
Payments and Interest to Required Time
of Contribution 1,332,118 1,251,172 1,175,572
H.Payroll Expected for Contribution Year 2,070,021 2,070,021 2,074,607
I.ADC as % of Covered Payroll in
Contribution Year: G ÷ H 64.35 %60.44 %56.66 %
J.Actuarially Determined Contribution
if Paid on the First Day of the Contribution Year 1,283,454 1,205,465 1,132,626
ACTUARIALLY DETERMINED CONTRIBUTION (ADC)
After Changes Before Changes
September 30, 2016 September 30, 2015
City of Atlantic Beach General Employees’
Retirement System
9/30/2016 Actuarial Valuation | B-3
A.Valuation Date
B.Actuarial Present Value of All Projected
Benefits for
1.Active Members
a. Service Retirement Benefits $10,397,951 $10,215,395 $9,703,457
b. Vesting Benefits 363,646 368,855 390,470
c. Disability Benefits 197,465 232,732 244,497
d. Preretirement Death Benefits 278,398 241,687 233,309
e. Return of Member Contributions 10,286 9,289 9,093
f. Total 11,247,746 11,067,958 10,580,826
2.Inactive Members
a. Service Retirees & Beneficiaries 11,305,499 10,978,934 10,738,561
b. Disability Retirees 460,468 456,899 467,097
c. Terminated Vested Members 1,347,705 1,326,687 1,438,314
d. Total 13,113,672 12,762,520 12,643,972
3. DROP Balances 390,580 390,580 252,720
4. Total for All Members 24,751,998 24,221,058 23,477,518
C.Actuarial Accrued (Past Service)
Liability (Entry Age Normal)*22,322,055 21,803,387 20,941,934
D.Actuarial Value of Accumulated Plan
Benefits per FASB No. 35 19,806,239 19,350,931 18,682,676
E.Plan Assets
1.Market Value*16,524,333 16,524,333 15,008,338
2. Actuarial Value*16,723,622 16,723,622 15,958,619
F.Actuarial Present Value of Projected
Covered Payroll 15,515,963 15,560,087 16,233,175
G.Actuarial Present Value of Projected
Member Contributions 930,958 933,605 973,991
ACTUARIAL VALUE OF BENEFITS AND ASSETS
September 30, 2016September 30, 2016 September 30, 2015
Before ChangesAfter Changes
* Includes DROP balances for consistency with GASB Statements 67 and 68.
City of Atlantic Beach General Employees’
Retirement System
9/30/2016 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.
1.Accumulated Contributions
of Active Members $1,187,253 $1,121,958 $1,204,929
2.APV of Projected Benefits in
Pay Status and for Vested
Terminations1 13,504,252 2 12,896,692 10,901,686 2
3.APV of Accrued Benefits for
Active Participants
(Employer Portion)5,114,734 2 4,664,026 5,536,210 2
4.Total 19,806,239 18,682,676 17,642,825
5.Market Value of Assets1 16,524,333 15,008,338 14,919,308
6.Assets as % of Total 83 %80 %85 %
General Employees
9/30/16 9/30/15 09/30/14
1 DROP balances are included.
2 Reflects changes in actuarial assumptions.
City of Atlantic Beach General Employees’
Retirement System
9/30/2016 Actuarial Valuation | B-5
0%
100%
200%
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
$16.0
$18.0
$20.0
$22.0
2010 2011 2012 2013 2014 2015 2016
R
a
t
i
o
Mi
l
l
i
o
n
s
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
Increases in benefits will, of course, adversely affect the trend in the years when such increases are first reflected
in the actuarial values. Although different actuarial assumptions would be used in the event of a termination of the
program, this test shows how much of the benefits accrued to date might be covered by assets in the event of a plan
freeze using the valuation assumptions.
City of Atlantic Beach General Employees’
Retirement System
9/30/2016 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
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
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
9/30/16 *,***16,724 22,322 75
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.
** 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
9/30/2016 Actuarial Valuation | B-7
0%
50%
100%
150%
200%
250%
300%
$0.0
$5.0
$10.0
$15.0
$20.0
R
a
t
i
o
M
i
l
l
i
o
n
s
Actuarial Valuation Date (September 30)
Ratio of Actuarial Value of Assets
to Actuarial Accrued Liability
Actuarial Assets Accrued Liability Ratio
City of Atlantic Beach General Employees’
Retirement System
9/30/2016 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 $4,983,315
2.Last Year's Employer Normal Cost 259,379
3.Last Year's Actual City Contibution 1,112,344
4.Interest at the assumed rate on:
a. 1 for one year 348,832
b. 2 for one year 18,157
c. 3 from dates paid 38,932
d. a + b - c 328,057
5.This Year's Expected UAAL
1 + 2 - 3 + 4d 4,458,407
6.This Year's Actual UAAL (before any
changes in benefits or assumptions)5,079,765
7.Net Actuarial Gain (Loss): (5) - (6)(621,358)
8.Gain (Loss) due to investments (285,838)
9.Gain (Loss) due to other sources (335,520)
10.Amortization Payment Due to (Gain) Loss 82,680
Derivation of Experience Gain (Loss)
City of Atlantic Beach General Employees’
Retirement System
9/30/2016 Actuarial Valuation | B-9
Net actuarial gains in previous years have been as follows:
Year Ended
9/30/1994 (157,358) (157,358)
9/30/1995 447,291 289,933
9/30/1996 (162,663) 127,270
9/30/1997 252,238 379,508
9/30/1998 58,540 438,048
9/30/1999 108,195 546,243
9/30/2000 (55,470) 490,773
9/30/2001 (18,145) 472,628
9/30/2002 (280,151) 192,477
9/30/2003 (355,383) (162,906)
9/30/2004 (395,109) (558,015)
9/30/2005 (364,305) (922,320)
9/30/2006 131,266 (791,054)
9/30/2007 (170,383) (961,437)
9/30/2008 (178,856) (1,140,293)
9/30/2009 (482,223) (1,622,515)
9/30/2010 (171,358) (1,793,873)
9/30/2011 (364,563) (2,158,436)
9/30/2012 402,582 (1,755,854)
9/30/2013 208,109 (1,547,746)
9/30/2014 (13,100) (1,560,846)
9/30/2015 (379,312) (1,940,158)
9/30/2016 (621,358) (2,561,516)
Actuarial Gain (Loss)
Cumulative Gain
(Loss)
($3)
($2)
($1)
$0
$1
$2
$3
($3)
($2)
($1)
$0
$1
$2
$3
M
i
l
l
i
o
n
s
M
i
l
l
i
o
n
s
Plan Year End
Actuarial Gain (+) or Loss (-)
Gain or Loss Cumulative
City of Atlantic Beach General Employees’
Retirement System
9/30/2016 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:
9/30/1999 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
9/30/2016 4.8 7.0 6.9 5.4
Average 5.7 %---4.8 %---
Salary Increases
Actual
Investment Return (AVA)
Year Ending Actual Assumed 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
9/30/2016 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
-5%
0%
5%
10%
15%
-5%
0%
5%
10%
15%
Plan Year End Compared to Previous Year
History of Salary Increases
Actual Assumed
C
i
t
y
o
f
A
t
l
a
n
t
i
c
B
e
a
c
h
G
e
n
e
r
a
l
E
m
p
l
o
y
e
e
s
’
R
e
t
i
r
e
m
e
n
t
S
y
s
t
e
m
9
/
3
0
/
2
0
1
6
A
c
t
u
a
r
i
a
l
V
a
l
u
a
t
i
o
n
|
B
-
1
2
Active
Members
Inactive
Members
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
9/30/16 *39 78 2,070 16,724 5,598 252 12.17
Actuarial Value of
Assets
(in Thousands)% 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)
*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
9/30/2016 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
M
i
l
l
i
o
n
s
Actuarial Valuation Date
Recent History of Covered Annual Payroll
City of Atlantic Beach General Employees’
Retirement System
9/30/2016 Actuarial Valuation | B-14
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 1,112,344
9/30/15 9/30/17 1,175,572 56.66 ---
9/30/16 *9/30/18 1,332,118 64.35 ---
*Reflects a change in assumptions or benefits.
RECENT HISTORY OF REQUIRED AND ACTUAL CONTRIBUTIONS
Required Employer Contributions
Actual Employer
ContributionsValuation
End of Year To
Which
Valuation
Applies
Amount
% of Expected
Payroll
**Reflects the Actuarial Impact Statement for Ordinance 58-13-37.
City of Atlantic Beach General Employees’
Retirement System
9/30/2016 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
accrued liability determines the unfunded actuarial accrued liability.
Financing of Unfunded 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).
Age:20 30 40 50 60
Expected Increase 13.5%8.2%6.0%5.5%5.0%
Annual Rates for Salary Increase for Sample Ages
City of Atlantic Beach General Employees’
Retirement System
9/30/2016 Actuarial Valuation | B-16
Demographic Assumptions
The mortality table for healthy lives is the RP-2000 Combined Healthy Participant Mortality Table (for pre-
retirement mortality) and the RP-2000 Mortality Table for Annuitants (for post-retirement mortality), with
mortality improvements projected to all future years after 2000 using Scale BB. For males, the base mortality
rates include a 50% blue collar adjustment and a 50% white collar adjustment. For females, the base mortality
rates include a 100% white collar adjustment. These are the same rates currently in use for Regular Class
members of the Florida Retirement System (FRS), as mandated by Ch. 112.63 F.S.
FRS Healthy Post-Retirement Mortality for Regular Class Members
Sample
Attained
Ages (in 2016)Men Women Men Women
50 0.55 %0.23 %34.55 38.21
55 0.60 0.32 29.92 33.19
60 0.77 0.48 25.25 28.29
65 1.16 0.75 20.73 23.56
70 1.81 1.25 16.49 19.10
75 3.01 2.12 12.64 15.04
80 5.10 3.55 9.33 11.43
Probability of Future Life
Dying Next Year Expectancy (years)
This assumption is used to measure the probabilities of each benefit payment being made after retirement.
FRS Healthy Pre-Retirement Mortality for Regular Class Members
Sample
Attained
Ages (in )Men Women Men Women
50 0.21 %0.15 %35.47 38.56
55 0.36 0.24 30.35 33.42
60 0.62 0.40 25.42 28.40
65 1.10 0.71 20.77 23.58
70 1.81 1.25 16.49 19.10
75 3.01 2.12 12.64 15.04
80 5.10 3.55 9.33 11.43
Probability of Future Life
Dying Next Year Expectancy (years)
This assumption is used to measure the probabilities of active members dying prior to retirement.
For disabled lives, the RP-2000 Mortality Table for Disabled Annuitants was used, with a two year set forward
for females and a four year setback for males, with no provision being made for future mortality improvements.
These are the same rates currently in use for Regular Class members of the Florida Retirement System (FRS),
as mandated by Ch. 112.63 F.S.
City of Atlantic Beach General Employees’
Retirement System
9/30/2016 Actuarial Valuation | B-17
FRS Disabled Mortality for Regular Class Members
Sample
Attained
Ages (in )Men Women Men Women
50 2.38 %1.35 %20.25 23.74
55 3.03 1.87 17.78 20.46
60 3.67 2.41 15.55 17.43
65 4.35 3.13 13.44 14.58
70 5.22 4.29 11.39 11.96
75 6.58 5.95 9.43 9.65
80 8.70 8.23 7.65 7.66
Probability of Future Life
Dying Next Year Expectancy (years)
In the previous valuation, the mortality tables were the RP-2000 Mortality Tables for Combined Healthy
Participants for males and females with mortality improvements projected to all future years from the year 2000
using Scale AA. For disabled retirees, the regular mortality tables were set forward 10 years in ages to reflect
impaired longevity.
Rates of disability among active members (0% of disabilities are assumed to be service-connected).
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
City of Atlantic Beach General Employees’
Retirement System
9/30/2016 Actuarial Valuation | B-18
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 Percent of Eligible
Ages Employees Retiring
55 15%
56 10%
57 10%
58 10%
59 10%
60 20%
61 15%
62 15%
63 15%
64 20%
65 30%
66 40%
67 50%
68 50%
69 50%
70 100%
Normal or Early Retirement/DROP
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.
Sample Years of
Ages Service Assumptions
ALL 0 28.61%
1 20.78%
2 16.94%
3 11.67%
4 7.41%
25 5 & Over 3.70%
30 3.50%
35 3.20%
40 3.00%
45 2.70%
50 2.20%
55 2.00%
60 2.00%
Rates of Separation from Active Employment
City of Atlantic Beach General Employees’
Retirement System
9/30/2016 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.
City of Atlantic Beach General Employees’
Retirement System
9/30/2016 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
9/30/2016 Actuarial Valuation | C-1
Cash and Securities - Market Value
Cash and Cash Equivalents $160,615 $68,735
Short Term Investments 1,355,124 4,846,615
Treasury and Agency Bonds & Notes 2,212,092 96,412
Corporate Bonds 1,995,100 622,887
Common & Preferred Stocks 9,079,730 9,339,085
Pooled Equity Funds 0 0
Mutual or Pooled Bond Funds 0 0
Mutual Equity Funds 1,673,035 0
Other Securities - Participant Directed 39,466 29,039
Total 16,515,162 15,002,773
Receivables and Accruals
Member Contribution 0 0
Employer Contribution 10 0
Interest and Dividends 9,161 5,565
Interest Deposit for Late Contribution 0 0
Total 9,171 5,565
Payables
Benefits-DROP Reserve *0 0
Lump Sum Distributions 0 0
Expenses 0 0
Other 0 0
Total 0 0
Net Assets - Market Value $16,524,333 $15,008,338
SUMMARY OF ASSETS
9/30/2016 9/30/2015
* DROP balances are included in Plan Assets for consistency with GASB Statements 67 and 68.
City of Atlantic Beach General Employees’
Retirement System
9/30/2016 Actuarial Valuation | C-2
Market Value at Beginning of Period $15,008,338 $14,919,308
Income
Member Contributions 128,204 136,191
State Contributions 0 0
Employer Contribution 1,112,344 863,613
Interest and Dividends 249,557 88,632
Realized and Unrealized Gain (Loss)1,298,058 152,159
Total Income 2,788,163 1,240,595
Disbursements
Monthly Benefit Payments 968,525 869,484
DROP Payments Held in Reserve 0 0
Lump Sum Distributions (delayed death benefit payout)207,381 161,707
Refund of Contributions 31,898 0
Investment Related Expenses 31,869 78,465
Other Administrative Expenses 32,495 41,909
Total Disbursements 1,272,168 1,151,565
Net Increase During Period $1,515,995 $89,030
Market Value at End of Period $16,524,333 $15,008,338
Year Ending
9/30/2015
Year Ending
9/30/2016
PENSION FUND INCOME AND DISBURSEMENTS
Note: for consistency with GASB Statements 67 and 68 DROP balances are included in Plan Assets.
City of Atlantic Beach General Employees’
Retirement System
9/30/2016 Actuarial Valuation | C-3
DEFERRED RETIREMENT OPTION PLAN (DROP)
BENEFITS HELD IN RESERVE
A reconciliation of the accumulated DROP account balances is provided in the table below.
$245,662
+116,271
+28,647
-0
390,580Value at end of year
Value at beginning of year*
RECONCILIATION OF DROP ACCOUNTS
Payments credited to accounts
Investment Earnings credited
Withdrawals from accounts
* Adjusted from the prior year.
3
0
0
3
Average Monthly Benefit as of September 30, 2016 $3,230
Number exited DROP during the year
Number as of September 30, 2016
DROP PARTICIPATION ACTIVITY
Number as of September 30, 2015
Number entered DROP during the year
City of Atlantic Beach General Employees’
Retirement System
9/30/2016 Actuarial Valuation | C-4
ACTUARIAL VALUE OF ASSETS
As of September 30, 2016
Valuation assets are calculated using a smoothed market value over a period of four (4) years, as prescribed
under Internal Revenue Procedure 2000-40. The asset value determined under this method will be adjusted to
be no greater than 120% and no less than 80% of the fair market value.
Under this method, the actuarial value of assets is equal to the market value of assets less a decreasing fraction
(1/nth per year, where n equals the number of years in the smoothing period) of the gain or loss for each of the
preceding 3 years.
Under this method, a gain or loss for a year is determined by calculating the difference between the expected
market value of the assets at the valuation date and the actual market value of the assets at the valuation date.
The expected value of the assets for the year is the market value of the assets at the valuation date for the prior
year brought forward with interest at the valuation interest rate to the valuation date for the current year plus
contributions minus disbursements (i.e., benefits paid and expenses), all adjusted with interest at the valuation
rate to the valuation date for the current year. If the expected value is less than the market value, the difference
is a gain. Conversely, if the expected value is greater than the market value, the difference is a loss.
Calculation of Valuation Assets is shown on the following page.
City of Atlantic Beach General Employees’
Retirement System
9/30/2016 Actuarial Valuation | C-5
2014 2015 2016 2017
A.Preliminary actuarial value from prior year 13,815,833$ 15,167,400$ 15,958,619$ 16,723,622$
B.Market value beginning of year 13,770,711 14,919,308 15,008,338 16,524,333
C.Market value end of year 14,919,308 15,008,338 16,524,333
D.Non-investment net cash flow
[contributions-(benefits & expenses)]458,736*(73,296)249
E.Investment return
1.Actual market value return net of investment
expenses: C - B - D 689,861 162,326 1,515,746
2.Expected return of 7.00% (8.00% before 2015)1,123,571 1,041,786 1,050,592
3.Excess/(shortfall) to be phased-in: E1 - E2 (433,710)(879,460)465,154
F.Phased-in recognition of investment return
(4 Year Recognition)
1.Current year: 25% of E3 (108,428)(219,865)116,288
2.25% of excess/(shortfall) from first prior year (73,833)(108,428)(219,865)116,288
3.25% of excess/(shortfall) from second prior year 224,855 (73,833)(108,428)(219,865)
4.25% of excess/(shortfall) from third prior year (273,334)224,855 (73,833)(108,428)
5.Total phased-in recognition of investment return (230,740)(177,271)(285,838)(212,005)
G.Actuarial value end of year
1.Preliminary actuarial value end of year:
A + D + E2 + F5 15,167,400 15,958,619 16,723,622
2.Upper corridor limit: 120% of C 17,903,170 18,010,006 19,829,200
3.Lower corridor limit: 80% of C 11,935,446 12,006,670 13,219,466
4.Adjustment to reflect retroactive plan closure 0 0 0
5.Actuarial value end of year 15,167,400 15,958,619 16,723,622
H.Difference between market value and actuarial value (248,092)(950,281)(199,289)
I.Ratio of Funding Value to Market Value 102%106%101%
DEVELOPMENT OF FUNDING VALUE OF ASSETS AS OF SEPTEMBER 30
City of Atlantic Beach General Employees’
Retirement System
9/30/2016 Actuarial Valuation | C-6
INVESTMENT RATE OF RETURN
The investment rate of return has been calculated on the following bases:
Basis 1 - Market Value: Interest, dividends, realized gains (losses) and unrealized appreciation (depreciation)
divided by the beginning market value of the fund, adjusted for cash flow during the year. This figure
is normally called the Total Rate of Return.
Basis 2 - Actuarial Value: Investment earnings recognized in the Actuarial Value of Assets divided by the
weighted average of the Actuarial Value of Assets during the year.
9/30/99 8.0 %11.0 %
9/30/00 4.3 9.7
9/30/01 (1.9) 5.1
9/30/02 (6.7) 1.5
9/30/03 10.1 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 14.7 10.0
9/30/08 (11.9) 4.9
9/30/09 9.7 4.2
9/30/10 9.9 5.0
9/30/11 (2.4) 2.1
9/30/12 16.4 8.0
9/30/13 5.7 8.0
9/30/14 4.9 6.3
9/30/15 1.1 5.7
9/30/16 10.1 4.8
7.5 %6.5 %
5.5 %5.9 %
5.2 %5.7 %
Actuarial ValueYear Ended
Investment Rate of Return
Average Compounded
Rate of Return for
5 Years
10 Years
Market Value
All Years
SECTION D
MISCELLANEOUS INFORMATION
City of Atlantic Beach General Employees’
Retirement System
9/30/2016 Actuarial Valuation | D-1
A.
1.Number Included in Last Valuation 43 48
2.New Members Included in Current Valuation 0 0
3.Non-Vested Employment Terminations 0 0
4.Vested Employment Terminations (2)(1)
5.Service Retirements (2)(4)
6.Disability Retirements 0 0
7.Deaths 0 0
8.DROP Retirement 0 0
9.Transfer to the DC Plan 0 0
10.Number Included in This Valuation 39 43
B.
1.Number Included in Last Valuation 12 12
2.Additions from Active Members 2 1
3.Lump Sum Payments/Withdrawals (2)0
4.Payments Commenced (1)(1)
5.Deaths 0 0
6.Other 0 0
7.Number Included in This Valuation 11 12
C.
1.Number Included in Last Valuation 64 59
2.Additions from Active Members 2 4
3.Additions entering the DROP 0 0
4.Additions from Terminated Vested Members 1 1
5.Deaths Resulting in No Further Payments 0 0
6.Deaths Resulting in New Survivor Benefits 0 (2)
7.End of Certain Period - No Further Payments 0 0
8.Other -- New Survivor Payments for Death 0 2
9.Number Included in This Valuation 67 64
RECONCILIATION OF MEMBERSHIP DATA
Active Members
Service Retirees, Disability Retirees, Beneficiaries & DROP
Terminated Vested Members
From 9/30/14From 9/30/15
To 9/30/15To 9/30/16
City of Atlantic Beach General Employees’
Retirement System
9/30/2016 Actuarial Valuation | D-2
STATISTICAL DATA
Active Members as of September 30, 2016
Age Group 0-4 5-9 10-14 15-19 20-24 25-29 30 & Up Total
20-24 NO.0 0 0 0 0 0 0 0
25-29 NO.0 0 0 0 0 0 0 0
30-34 NO.0 0 1 0 0 0 0 1
35-39 NO.0 0 0 0 0 0 0 0
40-44 NO.0 3 1 1 0 0 0 5
45-49 NO.0 2 3 0 0 3 0 8
50-54 NO.0 0 1 1 1 1 1 5
55-59 NO.0 0 4 4 0 0 2 10
60-64 NO.0 2 4 1 2 1 0 10
65&UP NO.0 0 0 0 0 0 0 0
TOT NO.0 7 14 7 3 5 3 39
City of Atlantic Beach General Employees’
Retirement System
9/30/2016 Actuarial Valuation | D-3
Active
Year Members
Ended Vested Other End of
September 30 A E A E A E A E A A A E Year
1997 12 11 1 0.5 1 0.2 0 0.2 2 7 9 8.2 76
1998 12 6 0 0.5 0 0.2 0 0.2 0 6 6 8.3 82
1999 14 17 1 0.8 1 0.2 0 0.2 0 15 15 8.3 79
2000 7 6 2 0.8 0 0.1 0 0.1 0 4 4 7.5 70
2001 9 8 1 1.2 0 0.1 1 0.1 1 5 6 7.6 71
2002 7 10 1 1.2 0 0.2 0 0.1 2 7 9 8.1 68
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 86
2005 10 14 2 0.8 0 0.2 0 0.2 1 11 12 9.42 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 0.13 0 0.21 1 1 2 6.94 87
2010 4 7 4 4.4 0 0.13 0 0.21 0 3 3 6.8 84
2011 6 7 5 5.3 1 0.14 0 0.25 1 0 1 5.69 83
2012 8 7 2 4.3 0 0.2 1 0.2 2 2 4 4.8 63
2013 *0 0 5 4.6 0 0.2 0 0.2 0 2 2 5.1 56
2014 *0 0 5 4.9 0 0.1 1 0.2 1 1 2 0.7 48
2015 *0 0 4 3.9 0 0.1 0 0.1 1 0 1 0.6 43
2016 *0 0 2 3.9 0 0.1 0 0.1 2 0 2 0.6 39
5-yr. Totals
2012-2016 8 7 18 21.6 0 0.7 2 0.8 11 11.8
Expected
2017 2.7 0.1 0.1 0.5
A Represents actual number.
E Represents expected number.
NUMBER ADDED TO AND REMOVED FROM ACTIVE MEMBERSHIP
Number
Added Terminations During Year
Year Retirement Retirement Service Total
During Service Disability Died-in Withdrawal
*Plan is closed to new entrants
City of Atlantic Beach General Employees’
Retirement System
9/30/2016 Actuarial Valuation | D-4
Year Ended
September 30 No.
Annual
Pensions No.
Annual
Pensions No.
Annual
Pensions No.
Annual
Pensions No.
Annual
Pensions
2000 6 78,522 3 32,513 3 46,009 26 220,022 0.6 4,196
2001 1 17,716 *1 17,716 27 237,738 0.6 4,543
2002 3 23,184 1 26,801 2 (3,617) 29 234,121 0.7 5,355
2003 2 32,159 1 5,889 1 26,270 30 260,391 0.9 6,159
2004 2 35,900 2 17,160 18,740 30 279,131 1.0 6,956
2005 3 47,505 1 5,774 2 41,730 32 320,861 1.0 7,331
2006 6 82,446 3 29,272 3 53,174 35 374,035 1.0 7,917
2007 3 51,425 3 51,425 38 425,460 1.1 8,798
2008 1 9,217 1 9,217 38 425,460 1.3 10,328
2009 2 17,424 2 5,992 11,432 38 436,892 1.3 11,534
2010 4 95,156 3 13,790 1 81,366 39 518,258 1.2 11,854
2011 9 105,409 1 14,326 8 91,083 47 609,341 1.2 12,414
2012 4 77,393 0 - 4 77,393 51 686,734 1.2 12,623
2013 6 160,587 1 12,284 5 148,303 56 834,402 1.3 14,605
2014 5 91,970 2 16,908 3 75,062 59 909,464 1.3 15,651
2015 5 162,151 0 - 5 162,151 64 1,071,615 1.3 15,644
2016 3 38,905 0 - 3 38,905 67 1,110,520 1.4 18,241
Expected for
2017 1.5 20,268
*Includes a one-time 5.0% cost-of-living increase.
Retired Members and Beneficiary Data
Historical Schedule
Expected
Added Removed Net Increase End of Year Removals
SECTION E
SUMMARY OF PLAN PROVISIONS
City of Atlantic Beach General Employees’
Retirement System
9/30/2016 Actuarial Valuation | E-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. 58-13-37 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, 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
9/30/2016 Actuarial Valuation | E-2
I. Normal Retirement
Eligibility: 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.
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: A member may elect to retire earlier than the Normal Retirement Eligibility upon attainment of
age 55 with 5 years of Credited Service.
Benefit: 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.
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 employment termination.
L. Service Connected Disability
Eligibility: 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.
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
9/30/2016 Actuarial Valuation | E-3
M. Non-Service Connected Disability
Eligibility: 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.
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.
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%, 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: A participant has earned a non-forfeitable right to Plan benefits after the completion of 5 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.
City of Atlantic Beach General Employees’
Retirement System
9/30/2016 Actuarial Valuation | E-4
Vested Termination-Continued
Normal Form
of Benefit: Life Annuity; other options are also available.
R. Refunds
Eligibility: 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 with interest.
S. Member Contributions
6% 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:
Contribution
Year
Beginning City Member Total
10/1/2009 14.84%5.000%19.84%
10/1/2010 16.60%5.000%21.60%
10/1/2011 24.53%5.000%29.53%
10/1/2012 26.34%5.000%31.34%
10/1/2013 29.19%6.000%35.19%
10/1/2014 31.59%6.000%37.59%
10/1/2015 46.39%6.000%52.39%
10/1/2016 56.66%6.000%62.66%
10/1/2017 64.35%6.000%70.35%
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
9/30/2016 Actuarial Valuation | E-5
X. Deferred Retirement Option Plan
Eligibility: Plan members are eligible for the DROP upon attainment of age 55 with 5 years of Credited
Service.
All members must make a written election to participate in the DROP.
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: 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 earnings or losses for that quarter.
Normal Form
of Benefit: Lump Sum or roll-over to a qualified retirement account.
SECTION F
COMPARATIVE SUMMARY OF PRINCIPAL
VALUATION RESULTS
City of Atlantic Beach General Employees’
Retirement System
9/30/2016 Actuarial Valuation | F-1
A.Participant Data
Number Included:
Actives 39 39 43
Service Retirees & Beneficiaries 64 64 61
Disability Retirees 3 3 3
Terminated Vested Members 11 11 12
Total Members and Beneficiaries 117 117 119
Total Annual Payroll (Excluding DROP Participants)$2,070,021 $2,070,021 $2,074,607
Annual Valuation Payroll 2,070,021 2,070,021 2,074,607
Expected Annual Payroll in Contribution Year 2,070,021 2,070,021 2,074,607
Total Annualized Benefits
Service Retirees & Beneficiaries 1,063,659 1,063,659 1,024,754
Disability Retirees 46,861 46,861 46,861
Terminated Vested Members 146,053 146,053 164,653
B.Assets (Market Value)*
Cash and Short Term Investments 1,515,739 1,515,739 4,915,350
Treasury and Agency Bonds & Notes 2,212,092 2,212,092 96,412
Common and Preferred Stocks 9,079,730 9,079,730 9,339,085
Mutual or Pooled Bond Funds 1,673,035 1,673,035 0
Corporate Bonds 1,995,100 1,995,100 622,887
Other Securities 39,466 39,466 29,039
Net Receivables & Payables 9,171 9,171 5,565
Total 16,524,333 16,524,333 15,008,338
Funding (Actuarial) Value 16,723,622 16,723,622 15,958,619
Assets include:
Accumulated active member contributions 1,187,253 1,187,253 1,121,958
(with interest if applicable)
C.Actuarial present value of accrued benefits
(i)Vested accrued benefits
Retired members and benefitciaries (excl DROP balances)11,765,967 11,435,833 11,205,658
Terminated members 1,347,705 1,326,687 1,438,314
DROP Balances 390,580 390,580 252,720
Active members (includes non-forfeitable members
contributions of 1,187,253 and 1,121,958)6,301,987 6,197,831 5,785,984
Total 19,806,239 19,350,931 18,682,676
(ii)Non-vested accrued benefits 0 0 0
(iii)Total actuarial p.v. of accrued benefits 19,806,239 19,350,931 18,682,676
(iv)Actuarial p.v. of accrued benefits at begin. of year 18,682,676 18,682,676 17,642,825
(v)Changes attributable to:
Amendments none none none
Method change (DROP treatment)0 0 0
Assumptions 455,308 none 0
Operation of decrements 1,876,059 1,876,059 2,071,042
Benefit payments (1,207,804)(1,207,804)(1,031,191)
Other none none none
(vi)Net change (PVAB measurement Method Change)1,123,563 668,255 1,039,851
(vii)Actuarial p.v. of accr. benefits at end of year 19,806,239 19,350,931 18,682,676
COMPARATIVE SUMMARY OF
PRINCIPAL VALUATION RESULTS September 30, 2015September 30, 2016 September 30, 2016
After Changes Before Changes
* DROP balances are included.
City of Atlantic Beach General Employees’
Retirement System
9/30/2016 Actuarial Valuation | F-2
D.Liabilities- Actuarial Present Value of Future Benefits
1. Active Members
Service Retirement Benefits $10,397,951 $10,215,395 $9,703,457
Vesting Benefits 363,646 368,855 390,470
Disability Benefits 197,465 232,732 244,497
Preretirement Death Benefits 278,398 241,687 233,309
Return of Member Contributions 10,286 9,289 9,093
Total Actives 11,247,746 11,067,958 10,580,826
2. Inactive Members
Service Retirees & Beneficiaries 11,305,499 10,978,934 10,738,561
Disability Retirees 460,468 456,899 467,097
Terminated Vested Members 1,347,705 1,326,687 1,438,314
Total Inactive Members 13,113,672 12,762,520 12,643,972
3. DROP Balances 390,580 390,580 252,720
3. Total Present Value for All Members 24,751,998 24,221,058 23,477,518
Total Present Value of:
Future Salaries 15,515,963 15,560,087 16,233,175
Future Employee Contributions 930,958 933,605 973,991
Future Contributions from Other Sources 7,097,418 6,563,831 6,544,908
Derivation of Current Employer
Unfunded Actuarial Accrued Liability (UAAL)
a.Total UAAL for Prior Valuation Date $4,983,315 $4,983,315 $4,856,100
b.Employer Normal Cost for this period 259,379 259,379 282,070
c.Interest acccrued on (a) and (b)366,989 366,989 359,672
d.Contributions for this period (1,112,344)(1,112,344)(863,613)
e.Interest accrued on (d)(38,932)(38,932)(30,226)
f.Changes due to:
Plan Amendment 0 0 0
Assumption Changes 518,668 0 0
Asset Method 0 0 0
Actuarial (Gain) Loss 621,358 621,358 379,312
g.Total Current UAAL: a+b+c+d+e+f 5,598,433 5,079,765 4,983,315
COMPARATIVE SUMMARY OF
PRINCIPAL VALUATION RESULTS September 30, 2016 September 30, 2016 September 30, 2015
After Changes Before Changes
Date
Years
Remaining
Amortization
Payment
Original
Amount
9/30/2012 Original UAAL*6 $521,593 $4,133,993
9/30/2013 Experience Gain 7 (27,421)(208,109)
9/30/2014 Experience Loss 8 1,798 13,100
9/30/2014 Assumption Changes 8 249,501 1,817,483
9/30/2015 Experience Loss 9 50,304 379,312
9/30/2016 Experience Loss 10 82,680 621,358
9/30/2016 Assumption Changes 10 69,016 518,668
TOTAL $947,471 $7,275,805 $5,598,433
Original and Current Unfunded Actuarial Accrued Liabilities
Item Description Current Unfunded
$2,660,227
621,358
(158,125)
11,490
1,594,134
350,681
518,668
*Reflects the Actuarial Impact Statement for Ordinance 58-13-37.
City of Atlantic Beach General Employees’
Retirement System
9/30/2016 Actuarial Valuation | F-3
E.Pension Cost
Entry Age Normal Cost for:
Service Retirement Benefits $282,530 $278,220 $281,209
Vesting Benefits 31,573 31,660 30,867
Disability Benefits 13,620 16,237 15,794
Preretirement Death Benefits 8,829 6,680 6,763
Return of Member Contributions 13,779 13,663 13,971
Total Actives 350,331 346,460 348,604
Administrative Expenses 32,495 32,495 41,909
Expected Member Contributions 130,808 130,808 131,134
Total Employer Normal Cost 252,018 248,147 259,379
Payment Required to Amortize Unfunded Actuarial
Accrued Liability 947,471 878,455 799,150
Total Contribution at Valuation Date 1,199,489 1,126,602 1,058,529
Total Contribution Adjusted for Frequency of
Payments and Interest to Next Following Fiscal Year 1,332,118 1,251,172 1,175,572
% of Expected Payroll 64.35%60.44%56.66%
Amount Expected to be Contributed by Members Next FY 124,201 124,201 124,476
% of Expected Payroll 6.00%6.00%6.00%
F.Past Contributions- For the Fiscal Years Ended September 30 of 2015 and 2016
Required Contribution Determined in the Valuation as of September 30, 2014 September 30, 2013
for the Fiscal Year Ending September 30, 2016 September 30, 2015
by the Plan Sponsor $1,112,344 $863,613
by Members $143,873 $164,006
Actual Contribution for the Fiscal Year ended September 30, 2015 September 30, 2015
by the Plan Sponsor $1,112,344 863,613
by Members $128,204 136,191
G.Net experience (gain) loss during year:$621,358 $379,312
H.1. Plan to Amortize Unfunded Actuarial Accrued Liability
10 year funding of the Original Unfunded Actuarial Accrued Liability,
10 year funding of any emerging Gains or Losses, or assumption changes.
2. Schedule Illustrating the Amortization of the Unfunded Actuarial Accrued Liability (UAAL)
Year Projected UAAL
2016 5,598,433
2017 4,976,537
2018 4,311,100
2019 3,599,083
2020 2,837,225
2021 2,022,037
2022 1,149,786
2023 774,581
2024 343,772
2025 151,696
2026 0
3. Action taken since last actuarial valuation.
Contribution sufficient to satisfy the total required contribution.
COMPARATIVE SUMMARY OF
PRINCIPAL VALUATION RESULTS September 30, 2015September 30, 2016 September 30, 2016
Before ChangesAfter Changes
City of Atlantic Beach General Employees’
Retirement System
9/30/2016 Actuarial Valuation | F-4
I.1. Three-Year Comparison of Actual and Assumed Salary Increases (Annualized)
Actual Assumed
4.8 %5.9%
3.3 %5.4%
6.9 %5.4%
2. Three-Year Comparison of Investment Return (Actuarial Value)
Actual Assumed
6.3%8.0%
5.7%7.0%
4.8%7.0%
3. Average Annual Growth in Payroll, Last Ten Years (if applicable)
Total % Increase Last Ten Years (35.20)%
Annual % Increase (4.25)%
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
NONE
9/30/2006
9/30/2007
3,837,512
9/30/2008
9/30/2010
9/30/2009 4,018,667
3,726,713
3,713,609
2,733,429
2,070,021
3,475,757
9/30/2016
9/30/2011
9/30/2014 2,397,875
9/30/2012
9/30/2013
3,738,277
9/30/2015 2,074,607
3,194,700
COMPARATIVE SUMMARY OF PRINCIPAL VALUATION RESULTS
Year Ended
Total PayrollValuation Date
9/30/2014
9/30/2015
9/30/2016
Year Ended
9/30/2014
9/30/2015
9/30/2016