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10-01-2018 Atlantic Beach General Valuation Report CITY EM ANNU Y OF A PLOY UAL ACT ATLA EES’ R TUARIAL NTIC RETIR VALUAT BEAC REME TION AS CH GE NT SY OF OCTO ENERA YSTEM OBER 1, AL M 2018 ANNUAL EMPLOYER CONTRIBUTION IS DETERMINED BY THIS VALUATION TO BE PAID IN THE EMPLOYER FISCAL YEAR ENDING SEPTEMBER 30, 2020 May 8, 2019 Board of Tru City of Atlan General Emp Atlantic Bea Re: City of Actuar Dear Board M The results o Employees’ This report w and those de System only unauthorize The purpose employer co on for any p associated w be significan The contribu in Section B robust asses assessment This valuatio fund this pla outside our The findings valuation wa benefits, fina beneficiaries 9 ustees tic Beach ployees’ Reti ch, Florida f Atlantic Bea rial Valuation Members: of the Octobe Retirement S was prepared esignated or in its entiret d use of this es of the valu ontribution ra urpose other with the bene ntly different ution rate in t of this repor ssment of the of risks was o on assumed t an. A determ scope of exp in this repor as based upo ancial transa s. We checke rement Syste ach General E n as of Octob er 1, 2018 An System are p d at the requ approved by ty and only w report. uation are to ate for the fis r than the pu efits describe . this report is rt. This repor e risks of futu outside the s the continuin ination regar pertise and w rt are based on informatio actions, plan ed for intern em Employee’s R ber 1, 2018 an nnual Actuar presented in t uest of the Bo y the Board. with the perm measure the scal year end urposes desc ed in this rep s determined rt includes ri ure experien scope of this ng ability of t rding whethe was not perfo on data and on furnished provisions an al reasonabi Retirement S nd Actuarial ial Valuation this report. oard and is in This report m mission of the e System’s fu ding Septemb ribed herein ort for purpo d using the ac sk metrics in ce not meeti assignment. the plan spon er or not the rmed. other inform by the Plan A nd active me lity and year System Disclosures n of the City o ntended for u may be prov e Board. GRS unding progre ber 30, 2020 . Determina oses other th ctuarial assu n Section A bu ing the actua . nsor to make plan sponso mation throug Administrato embers, term r‐to‐year con of Atlantic Be use by the Re vided to parti S is not respo ess and to de . This report ations of fina han those ide mptions and ut does not i arial assumpt e the contrib or is actually gh Septembe or concerning minated mem sistency, but each Genera etirement Sy ies other tha onsible for etermine the should not b ncial results entified abov d methods dis nclude a mo tions. Additi utions neces able to do so er 30, 2018. g Retirement mbers, retiree t did not aud l ystem n the e be relied ve may sclosed ore ional ssary to o is The t System es and dit the The Board of May 8, 2019 Page 2 data. We ar Administrato This report w Statutes and Assumptions assumed mo by the Florid in this repor This report h retirement s fairly presen as of the val principles an and with app Nicolas Laha meet the Ac The signing a This actuaria supervision, are complet the requirem accepted act and/or paid otherwise ta increase in p Gabriel, Roe Trustees and Respectfully GABRIEL, RO By ________ Nicolas La Consultan Trustees re not respon or. was prepared d prescribed s and Cost M ortality rates da Statutes in t are reasona has been pre systems. To t nts the actua uation date. nd practices, plicable statu aye and Jame ademy’s Qua actuaries are al valuation a and we ackn e and accura ments and int tuarial princi from the pla aken into acc plan costs or eder, Smith & d to answer a submitted, OEDER, SMITH ___________ ahaye, FSA, EA nt & Actuary nsible for the d using certa by the Florid Method. The i detailed in t n accordance able for purp pared by act the best of ou rial position All calculati with the Act utes. es J. Rizzo are alification Sta e independen and/or cost d nowledge res ate. In our op tent of Part V ples and pra an’s assets fo count in the v required con & Company w any question H & COMPAN ___________ A, MAAA, FCA e accuracy or in assumptio da Statutes as nvestment r the Actuarial e with Florida poses of this tuaries who h ur knowledge of the City of ons have bee tuarial Stand e members o andards to re nt of the plan determinatio sponsibility f pinion, the te VII, Chapter 1 ctices. There or which liabi valuation. All ntribution rat will be please s pertaining NY ___ A completene ons approved s described i eturn assum Assumption a Statutes Ch valuation. have substan e the inform f Atlantic Bea en made in c ards of Pract of the Americ ender the act n sponsor. n was prepa or the result echniques an 112, Florida S e is no benef lities or curre l known even tes have bee d to review t to the valuat ______ James J Senior C ess of the info d by the Boar n the section mption was pr s and Cost M hapter 112.63 ntial experien ation contain ach General conformity w tice issued by can Academy tuarial opinio red and com ts. To the bes d assumptio Statutes, and it or expense ent costs hav nts or trends en taken into this valuation tion. ____________ . Rizzo, ASA, Consultant & ormation pro rd as authori n of this repo rescribed by Method sectio 3. All actuari nce valuing p ned in this re Employee’s with generally y the Actuari y of Actuaries ons containe mpleted by us st of our kno ns used are r d are based o e to be provi ve not been s which may r o account in t n and Report ___________ EA, MAAA & Actuary ovided by the ized under Fl ort entitled A the Board an on were pres al assumptio public employ eport is accu Retirement S y accepted ac ial Standards s. These actu ed herein. s or under ou wledge, the reasonable, on generally ded by the p established o require a ma the valuation t with the Bo _____ e Plan lorida Actuarial nd the scribed ons used yee rate and System ctuarial s Board, uaries ur direct results meet plan or aterial n. oard of This actuaria supervision, complete an requirement actuarial prin from the pla account in th required con al valuation a and I acknow d accurate. I ts and intent nciples and p n's assets for he valuation. ntribution rat State nd/or cost de wledge respo In my opinion of Part VII, C ractices. The r which liabili All known e tes have been ement by etermination nsibility for t n, the techniq hapter 112, F ere is no bene ties or curren vents or tren n taken into a y Enrolle n was prepare he results. T ques and ass Florida Statut efit or expen nt costs have nds which ma account in th Signatur May 8, Date 17‐0777 Enrollm ed Actua ed and comp To the best of umptions us tes, and are b se to be prov e not been es ay require a m e valuation. re , 2019 75 ent Number ary leted by me f my knowled ed are reaso based on gen vided by the stablished or material incre or under my dge, the resu nable, meet t nerally accept plan and/or otherwise ta ease in plan c direct lts are the ted paid aken into costs or TABLE OF CONTENT Section Title Page A Executive Summary 1. Executive Summary A‐1 2. Risks Associated With Measuring The Accrued Liability and Actuarially Determined Contribution A‐4 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 10/1/2018 Actuarial Valuation A‐1 GRS RetirementConsulting 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 $ 1,469,781 $ 1,546,712 $ (76,931) As % of Expected Payroll 77.49 % 75.92 % 1.57 % Expected Employee Contribution $ 113,808 $ 122,233 $ (8,425) As % of Covered Payroll 6.00% 6.00% 0.00% Required Employer Contribution (If Made in Equal Monthly Installments) $ 1,355,973 $ 1,424,479 $ (68,506) As % of Covered Payroll 71.49 % 69.92 % 1.57 % Required Employer Contribution (If Made in Whole at the Beginning of the Year) $ 1,308,144 1,374,233 (66,089) As % of Covered Payroll 68.97 % 67.46 % 1.51 % Based on 10/1/2018 (Decrease)Valuation Valuation IncreaseBased on 10/1/2017 For FYE 9/30/2020 For FYE 9/30/2019 Minimum Required Contribution As illustrated in the preceding chart, the City contribution necessary to support the current benefits for the General Employees is $1,355,973 for the fiscal year ending September 30, 2020. 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. City of Atlantic Beach General Employees’ Retirement System 10/1/2018 Actuarial Valuation A‐2 GRS RetirementConsulting Revisions in Benefits There were no revisions in benefits for the current year. Revisions in Actuarial Assumptions and Methods There were no revisions in assumptions or methods for the current year. Actuarial Experience There was a net actuarial gain of $144,346 for the year which means that actual experience was more favorable than expected. The actuarial gain was primarily due to a higher than expected recognized investment return on the actuarial value of assets (7.7% recognized vs. 6.75% assumed). The investment return on the market value of assets was 8.5%. There were also demographic experience gains primarily due to lower salary increases than expected. The net actuarial gain decreased the total required contribution by $21,057. Funded Ratio The funded ratio, one measure of the Plan’s financial health, is equal to the actuarial value of assets divided by the actuarial accrued (past service) liability. The funded ratio is 80.8% this year compared to 76.7% last year. Analysis of Change in Employer Contribution The components of change in the actuarially required contribution are as follows: Contribution last year 1,424,479$ Payment on UAAL (714) Experience (gain)/loss (21,057) Change in administrative expense (27,045) Change in normal cost before expenses (19,690) Revision in benefits 0 Revision in assumptions/methods 0 Contribution this year 1,355,973$ The decrease in the contribution since the prior year is attributable to the favorable plan experience during the year, a decreasing employer normal cost (due to a shrinking number of active members), and lower administrative expenses incurred this year than last year. Relationship to Market Value The market value of assets exceeds the actuarial value of assets by $679,499 as of the valuation date (see Section C). This difference will be gradually recognized over the next three years causing the required contribution to decrease, in the absence of offsetting losses. City of Atlantic Beach General Employees’ Retirement System 10/1/2018 Actuarial Valuation A‐3 GRS RetirementConsulting If the market value of assets had been used in the valuation instead of the actuarial value of assets, the City contribution would have been approximately $1,257,000 (assuming payment is made in equal monthly installments throughout the year) and the funded ratio would have been 83.6%. The funded ratio based on the market value of assets was 78.8% last year. Conclusion The remainder of this Report includes detailed actuarial valuation results, financial information, miscellaneous information and statistics, and a summary of plan provisions. City of Atlantic Beach General Employees’ Retirement System 10/1/2018 Actuarial Valuation A‐4 GRS RetirementConsulting RISKS ASSOCIATED WITH MEASURING THE ACCRUED LIABILITY AND ACTUARIALLY DETERMINED CONTRIBUTION The determination of the accrued liability and the actuarially determined contribution requires the use of assumptions regarding future economic and demographic experience. Risk measures, as illustrated in this report, are intended to aid in the understanding of the effects of future experience differing from the assumptions used in the course of the actuarial valuation. Risk measures may also help with illustrating the potential volatility in the accrued liability and the actuarially determined contribution that result from the differences between actual experience and the actuarial assumptions. 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 due to changing conditions; 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. Examples of risk that may reasonably be anticipated to significantly affect the plan’s future financial condition include: 1. Investment risk – actual investment returns may differ from the expected returns; 2. Contribution risk – actual contributions may differ from expected future contributions. For example, actual contributions may not be made in accordance with the plan’s funding policy or material changes may occur in the anticipated number of covered employees, covered payroll, or other relevant contribution base; 3. Salary and Payroll risk – actual salaries and total payroll may differ from expected, resulting in actual future accrued liability and contributions differing from expected; 4. Longevity risk – members may live longer or shorter than expected and receive pensions for a period of time other than assumed; 5. Other demographic risks – members may terminate, retire or become disabled at times or with benefits other than assumed resulting in actual future accrued liability and contributions differing from expected. The effects of certain trends in experience can generally be anticipated. For example if the investment return since the most recent actuarial valuation is less (or more) than the assumed rate, the cost of the plan can be expected to increase (or decrease). Likewise if longevity is improving (or worsening), increases (or decreases) in cost can be anticipated. The computed contribution shown on page 1 may be considered as a minimum contribution that complies with the Board’s funding policy. The timely receipt of the actuarially determined contributions is critical to support the financial health of the plan. Users of this report should be aware that contributions made at the actuarially determined rate do not necessarily guarantee benefit security. City of Atlantic Beach General Employees’ Retirement System 10/1/2018 Actuarial Valuation A‐5 GRS RetirementConsulting Plan Maturity Measures Risks facing a pension plan evolve over time. A young plan with virtually no investments and paying few benefits may experience little investment risk. An older plan with a large number of members in pay status and a significant trust may be much more exposed to investment risk. Generally accepted plan maturity measures include the following: 2018 2017 Ratio of the market value of assets to total payroll 10.4 9.0 Ratio of actuarial accrued liability to payroll 12.4 11.4 Ratio of actives to retirees and beneficiaries 0.5 0.5 Ratio of net cash flow to market value of assets ‐0.4%‐0.4% Duration of the actuarial accrued liability 11.1 11.2 Ratio of Market Value of Assets to Payroll The relationship between assets and payroll is a useful indicator of the potential volatility of contributions. For example, if the market value of assets is 2.0 times the payroll, a return on assets 5% different than assumed would equal 10% of payroll. A higher (lower) or increasing (decreasing) level of this maturity measure generally indicates a higher (lower) or increasing (decreasing) volatility in plan sponsor contributions as a percentage of payroll. Ratio of Actuarial Accrued Liability to Payroll The relationship between actuarial accrued liability and payroll is a useful indicator of the potential volatility of contributions for a fully funded plan. A funding policy that targets a funded ratio of 100% is expected to result in the ratio of assets to payroll and the ratio of liability to payroll converging over time. The ratio of liability to payroll may also be used as a measure of sensitivity of the liability itself. For example, if the actuarial accrued liability is 2.5 times the payroll, a change in liability 2% other than assumed would equal 5% of payroll. A higher (lower) or increasing (decreasing) level of this maturity measure generally indicates a higher (lower) or increasing (decreasing) volatility in liability (and also plan sponsor contributions) as a percentage of payroll. Ratio of Actives to Retirees and Beneficiaries A young plan with many active members and few retirees will have a high ratio of active to retirees. A mature open plan may have close to the same number of actives to retirees resulting in a ratio near 1.0. A super‐mature or closed plan may have significantly more retirees than actives resulting in a ratio below 1.0. Ratio of Net Cash Flow to Market Value of Assets A positive net cash flow means contributions exceed benefits and expenses. A negative cash flow means existing funds are being used to make payments. A certain amount of negative net cash flow is generally City of Atlantic Beach General Employees’ Retirement System 10/1/2018 Actuarial Valuation A‐6 GRS RetirementConsulting expected to occur when benefits are prefunded through a qualified trust. Large negative net cash flows as a percent of assets may indicate a super‐mature plan or a need for additional contributions. Duration of Actuarial Accrued Liability The duration of the actuarial accrued liability may be used to approximate the sensitivity to a 1% change in the assumed rate of return. For example, duration of 10 indicates that the liability would increase approximately 10% if the assumed rate of return were lowered 1%. Additional Risk Assessment Additional risk assessment is outside the scope of the annual actuarial valuation. Additional assessment may include scenario tests, sensitivity tests, stochastic modeling, stress tests, and a comparison of the present value of accrued benefits at low‐risk discount rates with the actuarial accrued liability. SECTION B VALUATION RESULTS City of Atlantic Beach General Employees’ Retirement System 10/1/2018 Actuarial Valuation B‐1 GRS RetirementConsulting ACTIVE MEMBERS Number 34 37 Covered Annual Payroll (non‐DROP) $ 1,896,794 $ 2,037,220 Average Annual Pay $ 55,788 $ 55,060 Average Age 54.6 54.3 Average Past Service 18.5 18.1 Average Age at Hire 36.1 36.2 RETIREES, BENEFICIARIES, & DROP MEMBERS Number 71 66 Annual Benefits $ 1,228,737 $ 1,088,338 Average Annual Benefit $ 17,306 $ 16,490 Average Age 70.1 69.7 DISABILITY RETIREES Number 3 3 Annual Benefits $ 46,861 $ 46,861 Average Annual Benefit $ 15,620 $ 15,620 Average Age 65.7 64.7 TERMINATED VESTED MEMBERS Number 7 10 Annual Benefits $ 94,987 $ 125,957 Average Annual Benefit $ 13,570 $ 12,596 Average Age 53.6 53.7 PARTICIPANT DATA October 1, 2018 October 1, 2017 City of Atlantic Beach General Employees’ Retirement System 10/1/2018 Actuarial Valuation B‐2 GRS RetirementConsulting A. Valuation Date B. ADC to Be Paid During Fiscal Year Ending 9/30/2020 9/30/2019 C. Assumed Date(s) of Employer Contribution Monthly Monthly D. Annual Payment to Amortize Unfunded Actuarial Liability if Paid on the Valuation Date $ 981,084 $ 1,000,759 E. Employer Normal Cost (including Administrative Expenses) if Paid on the Valuation Date 244,344 286,579 F. ADC if Paid on the Valuation Date: D + E 1,225,428 1,287,338 G. ADC Adjusted for Frequency of Payments and Interest to Required Time of Contribution 1,355,973 1,424,479 H. Payroll Expected for Contribution Year 1,896,794 2,037,220 I. ADC as % of Covered Payroll in Contribution Year: G ÷ H 71.49 % 69.92 % J. Actuarially Determined Contribution if Paid on the First Day of the Contribution Year 1,308,144 1,374,233 ACTUARIALLY DETERMINED CONTRIBUTION (ADC) October 1, 2018 October 1, 2017 City of Atlantic Beach General Employees’ Retirement System 10/1/2018 Actuarial Valuation B‐3 GRS RetirementConsulting A. Valuation Date B. Actuarial Present Value of All Projected Benefits for 1. Active Members a. Service Retirement Benefits $10,464,214 $11,107,001 b. Vesting Benefits 314,943 358,565 c. Disability Benefits 158,110 180,738 d. Preretirement Death Benefits 268,744 288,281 e. Return of Member Contributions 10,024 10,592 f. Total 11,216,035 11,945,177 2. Inactive Members a. Service Retirees & Beneficiaries 13,102,188 11,673,169 b. Disability Retirees 453,758 461,728 c. Terminated Vested Members 938,409 1,179,541 d. Total 14,494,355 13,314,438 3. DROP Balances 13,404 252,143 4. Total for All Members* 25,723,794 25,511,758 C. Actuarial Accrued (Past Service) Liability (Entry Age Normal)* 23,571,907 23,140,785 D. Actuarial Value of Accumulated Plan Benefits per FASB No. 35* 21,335,133 20,761,389 E. Plan Assets 1. Market Value* 19,714,297 18,243,134 2. Actuarial Value* 19,034,798 17,751,923 F. Unfunded Actuarial Accrued Liability (C ‐ E2)4,537,109 5,388,862 G. Actuarial Present Value of Projected Covered Payroll 13,303,423 14,602,036 H. Actuarial Present Value of Projected Member Contributions 798,205 876,122 ACTUARIAL VALUE OF BENEFITS AND ASSETS October 1, 2018 October 1, 2017 * Includes DROP balances for consistency with GASB Statements 67 and 68. City of Atlantic Beach General Employees’ Retirement System 10/1/2018 Actuarial Valuation B‐4 GRS RetirementConsulting 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 $ 1,260,183 $ 1,277,974 $ 1,187,253 2. APV of Projected Benefits in Pay Status and for Vested Terminations1 14,507,759 13,566,581 2 13,504,252 2 3. APV of Accrued Benefits for Active Participants (Employer Portion) 5,567,191 5,916,834 2 5,114,734 2 4. Total 21,335,133 20,761,389 19,806,239 5. Market Value of Assets1 19,714,297 18,243,134 16,524,333 6. Assets as % of Total 92% 88% 83% General Employees 10/1/2018 10/1/2017 9/30/2016 1 DROP balances are included. 2 Reflects changes in actuarial assumptions. City of Atlantic Beach General Employees’ Retirement System 10/1/2018 Actuarial Valuation B‐5 GRS RetirementConsulting 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 $24.0 2010 2011 2012 2013 2014 2015 2016 2017 2018 R a t i o Mi l l i o n s Actuarial Valuation Date 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 10/1/2018 Actuarial Valuation B‐6 GRS RetirementConsulting 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 10/1/17 *,*** 17,752 23,141 77 10/1/18 *** 19,035 23,572 81 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 10/1/2018 Actuarial Valuation B‐7 GRS RetirementConsulting 0% 50% 100% 150% 200% 250% 300% $0.0 $5.0 $10.0 $15.0 $20.0 $25.0 R a t i o Mi l l i o n s Actuarial Valuation Date Ratio of Actuarial Value of Assets to Actuarial Accrued Liability Actuarial Assets Accrued Liability Ratio City of Atlantic Beach General Employees’ Retirement System 10/1/2018 Actuarial Valuation B‐8 GRS RetirementConsulting 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 $5,388,862 2.Last Year's Employer Normal Cost 286,579 3. Last Year's Actual City Contibution 1,332,119 4.Interest at the assumed rate on: a. 1 for one year 363,748 b. 2 for one year 19,344 c. 3 from dates paid 44,959 d. a + b ‐ c 338,133 5. This Year's Expected UAAL 1 + 2 ‐ 3 + 4d 4,681,455 6. This Year's Actual UAAL (before any changes in benefits or assumptions) 4,537,109 7. Net Actuarial Gain (Loss): (5) ‐ (6) 144,346 8. Gain (Loss) due to investments 137,329 9. Gain (Loss) due to other sources 7,017 10. Amortization Payment Due to (Gain) Loss (19,030) Derivation of Experience Gain (Loss) City of Atlantic Beach General Employees’ Retirement System 10/1/2018 Actuarial Valuation B‐9 GRS RetirementConsulting 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) 9/30/2017 343,244 (2,218,272) 9/30/2018 144,346 (2,073,926) Actuarial Gain (Loss) Cumulative Gain (Loss) ($3) ($2) ($1) $0 $1 $2 $3 ($3) ($2) ($1) $0 $1 $2 $3 Mi l l i o n s Mi 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 10/1/2018 Actuarial Valuation B‐10 GRS RetirementConsulting 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 9/30/2017 6.6 7.0 2.6 5.3 9/30/2018 7.7 6.75 2.4 5.1 Average 5.9 %‐‐‐4.6 %‐‐‐ 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 10/1/2018 Actuarial Valuation B‐11 GRS RetirementConsulting ‐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 Ci t y of At l a n t i c Be a c h Ge n e r a l Em p l o y e e s ’ Re t i r e m e n t System 10 / 1 / 2 0 1 8 Ac t u a r i a l Valuation B ‐12 GR S Re t i r e m e n t Co n s u l t i n g Ac t i v e Me m b e r s In a c t i v e Me m b e r s 9/ 3 0 / 9 9 7 0 3 3 $ 2, 1 8 5 $ 4, 6 5 0 $ 1, 1 4 6 $ 19 9 9 . 1 0 % 9/ 3 0 / 0 0 7 1 3 7 2 , 3 3 0 5 , 2 2 9 1 , 2 3 3 2 1 3 9 . 1 4 9/ 3 0 / 0 1 * 75 4 0 2 , 4 6 2 5 , 5 8 7 1 , 3 9 9 2 2 6 9 . 1 7 9/ 3 0 / 0 2 8 3 4 0 2 , 7 6 8 5 , 7 4 7 1 , 7 3 2 2 6 7 9 . 6 6 9/ 3 0 / 0 3 * 84 4 1 2 , 8 5 6 5 , 9 5 1 2 , 2 3 5 2 8 4 9 . 9 3 9/ 3 0 / 0 4 8 6 4 2 3 , 0 5 1 6 , 2 7 3 2 , 7 3 2 3 0 0 9 . 8 2 9/ 3 0 / 0 5 * 82 4 5 3 , 1 8 2 6 , 8 0 2 3 , 0 2 0 2 3 5 7 . 3 7 9/ 3 0 / 0 6 * 81 4 8 3 , 1 9 5 7 , 6 0 9 2 , 8 9 6 2 3 3 7 . 2 8 9/ 3 0 / 0 7 8 2 5 1 3 , 4 7 6 8 , 5 9 4 3 , 0 7 4 2 5 2 7 . 2 6 9/ 3 0 / 0 8 * 83 5 2 3 , 7 2 7 9 , 2 0 9 3 , 4 1 5 2 6 9 7 . 2 2 9/ 3 0 / 0 9 8 7 5 0 4 , 0 1 9 9 , 8 4 1 3 , 8 4 1 3 1 4 7 . 8 2 9/ 3 0 / 1 0 * 84 5 1 3 , 8 3 8 1 0 , 6 1 8 4 , 5 6 2 3 6 4 9 . 4 9 9/ 3 0 / 1 1 8 3 5 8 3 , 7 3 8 1 1 , 1 1 9 4 , 9 3 4 3 6 7 9 . 8 2 9/ 3 0 / 1 2 ** 63 6 3 3 , 0 7 2 1 2 , 4 6 5 4 , 1 3 4 2 7 4 8 . 9 0 9/ 3 0 / 1 3 5 6 6 7 2 , 7 3 3 1 3 , 8 1 6 3 , 4 6 6 2 5 1 9 . 1 7 9/ 3 0 / 1 4 * 48 7 1 2 , 3 9 8 1 5 , 1 6 7 4 , 8 5 6 2 8 2 1 1 . 7 6 9/ 3 0 / 1 5 4 3 7 7 2 , 0 7 5 1 5 , 9 5 9 4 , 9 8 3 2 5 9 1 2 . 5 0 9/ 3 0 / 1 6 * 39 7 8 2 , 0 7 0 1 6 , 7 2 4 5 , 5 9 8 2 5 2 1 2 . 1 7 10 / 1 / 1 7 * 37 7 9 2 , 0 3 7 1 7 , 7 5 2 5 , 3 8 9 2 8 7 1 4 . 0 7 10 / 1 / 1 8 3 4 81 1, 8 9 7 1 9 , 0 3 5 4 , 5 3 7 2 4 4 1 2 . 8 8 Ac t u a r i a l Va l u e of As s e t s (i n Th o u s a n d s ) % of Payroll Am o u n t (i n Th o u s a n d s ) UA A L (i n Th o u s a n d s ) RE C E N T HI S T O R Y OF VA L U A T I O N RE S U L T S Nu m b e r of E m p l o y e r No r m a l Cost Re p o r t e d An n u a l Pa y r o l l (i n Th o u s a n d s ) Va l u a t i o n Da t e *R e f l e c t s a ch a n g e in as s u m p t i o n s or be n e f i t s . ** R e f l e c t s th e Ac t u a r i a l Im p a c t St a t e m e n t fo r Or d i n a n c e 58 ‐13 ‐37 . City of Atlantic Beach General Employees’ Retirement System 10/1/2018 Actuarial Valuation B‐13 GRS RetirementConsulting 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 Mi l l i o n s Actuarial Valuation Date Recent History of Covered Annual Payroll City of Atlantic Beach General Employees’ Retirement System 10/1/2018 Actuarial Valuation B‐14 GRS RetirementConsulting 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 1,175,572 9/30/16 *9/30/18 1,332,118 64.35 1,332,119 10/1/17 *9/30/19 1,424,479 69.92 ‐‐‐ 10/1/18 9/30/20 1,355,973 71.49 ‐‐‐ *Reflects a change in assumptions or benefits. **Reflects the Actuarial Impact Statement for Ordinance 58‐13‐37. RECENT HISTORY OF REQUIRED AND ACTUAL CONTRIBUTIONS Required Employer Contributions Actual Employer ContributionsValuation End of Year To Which Valuation Applies Amount % of Expected Payroll City of Atlantic Beach General Employees’ Retirement System 10/1/2018 Actuarial Valuation B‐15 GRS RetirementConsulting 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. With the exception of the mortality assumption, which is prescribed by Florida Statutes, all assumptions listed herein were established following the Assumption Study and Experience Review for the Seven Years Ended September 30, 2016, dated August 9, 2017. 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. The total rate of return is assumed to be 6.75% per year, net of investment‐related expenses. City of Atlantic Beach General Employees’ Retirement System 10/1/2018 Actuarial Valuation B‐16 GRS RetirementConsulting 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 9.5% 7.9% 5.7% 5.3% 4.8% Annual Rates for Salary Increase for Sample Ages 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 2018) Men Women Men Women 50 0.55 % 0.23 % 34.77 38.40 55 0.60 0.32 30.14 33.39 60 0.76 0.47 25.48 28.48 65 1.13 0.73 20.95 23.74 70 1.75 1.22 16.69 19.27 75 2.92 2.07 12.82 15.19 80 4.95 3.47 9.47 11.56 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 2018) Men Women Men Women 50 0.21 % 0.15 % 35.69 38.75 55 0.36 0.24 30.57 33.61 60 0.61 0.39 25.64 28.59 65 1.07 0.70 20.99 23.76 70 1.75 1.22 16.69 19.27 75 2.92 2.07 12.82 15.19 80 4.95 3.47 9.47 11.56 Probability of Future Life Dying Next Year Expectancy (years) This assumption is used to measure the probabilities of active members dying prior to retirement. City of Atlantic Beach General Employees’ Retirement System 10/1/2018 Actuarial Valuation B‐17 GRS RetirementConsulting 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. FRS Disabled Mortality for Regular Class Members Sample Attained Ages (in 2018) 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) 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 10/1/2018 Actuarial Valuation B‐18 GRS RetirementConsulting 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 shown below. Retirement Percent of Eligible Ages Employees Retiring 55 5% 56 5% 57 5% 58 10% 59 10% 60 30% 61 20% 62 15% 63 15% 64 15% 65 30% 66 40% 67 50% 68 50% 69 50% 70 100% Normal or Early Retirement/DROP Rates of separation from active membership are 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% Under 45 5 & Over 3.50% 45 ‐ 49 3.00% 50 and up 2.00% Rates of Separation from Active Employment City of Atlantic Beach General Employees’ Retirement System 10/1/2018 Actuarial Valuation B‐19 GRS RetirementConsulting 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 10/1/2018 Actuarial Valuation B‐20 GRS RetirementConsulting 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. City of Atlantic Beach General Employees’ Retirement System 10/1/2018 Actuarial Valuation B‐21 GRS RetirementConsulting 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 10/1/2018 Actuarial Valuation C‐1 GRS RetirementConsulting Cash and Securities ‐ Market Value Cash and Cash Equivalents $ 527,750 $ 98,214 Short Term Investments 0 1,363,846 Treasury and Agency Bonds & Notes 1,362,779 1,551,669 Corporate Bonds 2,863,901 2,749,194 Common & Preferred Stocks 11,118,327 10,289,649 Pooled Equity Funds 0 0 Mutual or Pooled Bond Funds 0 0 Mutual Equity Funds 3,945,712 2,131,975 Other Securities ‐ Participant Directed 0 55,232 Total 19,818,469 18,239,779 Receivables and Accruals Member Contribution 0 0 Employer Contribution 0 0 Interest and Dividends 28,927 21,984 Interest Deposit for Late Contribution 0 0 Total 28,927 21,984 Payables Lump Sum Distributions 0 0 Expenses 0 0 Other 133,099 18,629 Total 133,099 18,629 Net Assets ‐ Market Value $ 19,714,297 $ 18,243,134 SUMMARY OF ASSETS 9/30/2018 9/30/2017 Note: for consistency with GASB Statements 67 and 68 DROP balances are included in Plan Assets. City of Atlantic Beach General Employees’ Retirement System 10/1/2018 Actuarial Valuation C‐2 GRS RetirementConsulting Market Value at Beginning of Period $ 18,243,134 $ 16,524,333 Beginning of Year Adjustment 01,822 Income Member Contributions 117,536 124,024 State Contributions 0 0 Employer Contribution 1,332,119 1,175,572 Interest, Dividends, and Other Income 378,484 328,695 Realized and Unrealized Gain (Loss) 1,248,522 1,530,197 Total Income 3,076,661 3,158,488 Disbursements Monthly Benefit Payments 1,136,791 1,028,013 Lump Sum Distributions (from DROP) 345,132 268,627 Refund of Contributions 19,533 22,467 Investment Related Expenses 72,781 66,700 Other Administrative Expenses 31,261 55,702 Total Disbursements 1,605,498 1,441,509 Net Increase During Period $ 1,471,163 $ 1,718,801 Market Value at End of Period $ 19,714,297 $ 18,243,134 Year Ending 9/30/2017 Year Ending 9/30/2018 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 10/1/2018 Actuarial Valuation C‐3 GRS RetirementConsulting DEFERRED RETIREMENT OPTION PLAN (DROP) BENEFITS HELD IN RESERVE A reconciliation of the accumulated DROP account balances is provided in the table below. $ 252,143 + 93,956 + 12,437 ‐345,132 13,404Value at end of year Value at beginning of year RECONCILIATION OF DROP ACCOUNTS Payments credited to accounts Investment Earnings credited Withdrawals from accounts 2 2 (3) 1 Average Monthly Benefit as of September 30, 2018 $2,572 Number exited DROP during the year Number as of September 30, 2018 DROP PARTICIPATION ACTIVITY Number as of September 30, 2017 Number entered DROP during the year City of Atlantic Beach General Employees’ Retirement System 10/1/2018 Actuarial Valuation C‐4 GRS RetirementConsulting ACTUARIAL VALUE OF ASSETS As of September 30, 2018 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. Ci t y of At l a n t i c Be a c h Ge n e r a l Em p l o y e e s ’ Retirement System 10 / 1 / 2 0 1 8 Actuarial Valuation C ‐5 GR S Re t i r e m e n t Co n s u l t i n g 20 1 7 2 0 1 8 2 0 1 9 2 0 2 0 2 0 2 1 A. P r e l i m i n a r y ac t u a r i a l va l u e fr o m pr i o r ye a r 1 6 , 7 2 3 , 6 2 2 $ 17 , 7 5 1 , 9 2 3 $ 19 , 0 3 4 , 7 9 8 $ B. M a r k e t va l u e be g i n n i n g of ye a r 1 6 , 5 2 4 , 3 3 3 1 8 , 2 4 3 , 1 3 4 1 9 , 7 1 4 , 2 9 7 C. M a r k e t va l u e en d of ye a r 1 8 , 2 4 3 , 1 3 4 1 9 , 7 1 4 , 2 9 7 D. N o n ‐in v e s t m e n t ne t ca s h fl o w [c o n t r i b u t i o n s ‐(b e n e f i t s & ex p e n s e s ) ] ( 7 3 , 3 9 1 ) ( 8 3 , 0 6 2 ) E. I n v e s t m e n t re t u r n 1. A c t u a l ma r k e t va l u e re t u r n ne t of in v e s t m e n t ex p e n s e s : C ‐ B ‐ D 1, 7 9 2 , 1 9 2 1 , 5 5 4 , 2 2 5 2. A s s u m e d Ra t e of Re t u r n 7 . 0 0 % 6 . 7 5 % 6 . 7 5 % 6 . 7 5 % 6 . 7 5 % 3. A s s u m e d Am o u n t of Re t u r n 1 , 1 5 4 , 1 9 8 1, 2 2 8 , 6 0 8 4. E x c e s s / ( s h o r t f a l l ) to be ph a s e d ‐in : E1 ‐ E3 6 3 7 , 9 9 4 3 2 5 , 6 1 7 F. P h a s e d ‐in re c o g n i t i o n of in v e s t m e n t re t u r n (4 Ye a r Re c o g n i t i o n ) 1. C u r r e n t ye a r : 25 % of E4 1 5 9 , 4 9 9 8 1 , 4 0 4 2. 2 5 % of ex c e s s / ( s h o r t f a l l ) fr o m fi r s t pr i o r ye a r 1 1 6 , 2 8 8 1 5 9 , 4 9 9 8 1 , 4 0 4 3. 2 5 % of ex c e s s / ( s h o r t f a l l ) fr o m se c o n d pr i o r ye a r ( 2 1 9 , 8 6 5 ) 1 1 6 , 2 8 8 1 5 9 , 4 9 9 8 1 , 4 0 4 4. 2 5 % of ex c e s s / ( s h o r t f a l l ) fr o m th i r d pr i o r ye a r ( 1 0 8 , 4 2 8 ) ( 2 1 9 , 8 6 2 ) 1 1 6 , 2 9 0 1 5 9 , 4 9 7 8 1 , 4 0 5 5. T o t a l ph a s e d ‐in re c o g n i t i o n of in v e s t m e n t re t u r n ( 5 2 , 5 0 6 ) 1 3 7 , 3 2 9 3 5 7 , 1 9 3 2 4 0 , 9 0 1 8 1 , 4 0 5 G. A c t u a r i a l va l u e en d of ye a r 1. P r e l i m i n a r y ac t u a r i a l va l u e en d of ye a r : A + D + E3 + F5 1 7 , 7 5 1 , 9 2 3 1 9 , 0 3 4 , 7 9 8 2. U p p e r co r r i d o r li m i t : 12 0 % of C 2 1 , 8 9 1 , 7 6 1 2 3 , 6 5 7 , 1 5 6 3. L o w e r co r r i d o r li m i t : 80 % of C 1 4 , 5 9 4 , 5 0 7 1 5 , 7 7 1 , 4 3 8 4. A c t u a r i a l va l u e en d of ye a r 17 , 7 5 1 , 9 2 3 1 9 , 0 3 4 , 7 9 8 H. D i f f e r e n c e be t w e e n ma r k e t va l u e an d ac t u a r i a l va l u e 4 9 1 , 2 1 1 6 7 9 , 4 9 9 I. R a t i o of Fu n d i n g Va l u e to Ma r k e t Va l u e 9 7 % 9 7 % DE V E L O P M E N T OF FU N D I N G VA L U E OF AS S E T S AS OF SE P T E M B E R 30 City of Atlantic Beach General Employees’ Retirement System 10/1/2018 Actuarial Valuation C‐6 GRS RetirementConsulting 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 9/30/17 10.9 6.6 9/30/18 8.5 7.7 7.0 %6.2% 7.4 %5.8% 5.7 % 5.9 % 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 10/1/2018 Actuarial Valuation D‐1 GRS RetirementConsulting A. 1. Number Included in Last Valuation 37 39 2. New Members Included in Current Valuation 0 0 3. Non‐Vested Employment Terminations 0 0 4. Vested Employment Terminations 0 (2) 5. Service Retirements (2) 0 6. Disability Retirements 0 0 7. Deaths 0 0 8. DROP Retirement (1) 0 9. Transfer to the DC Plan 0 0 10. Number Included in This Valuation 34 37 B. 1. Number Included in Last Valuation 10 11 2. Additions from Active Members 0 2 3. Lump Sum Payments/Withdrawals (1) (1) 4. Payments Commenced (2) (2) 5. Deaths 0 0 6. Other 0 0 7. Number Included in This Valuation 710 C. 1. Number Included in Last Valuation 69 67 2. Additions from Active Members 2 0 3. Additions entering the DROP 10 4. Additions from Terminated Vested Members 2 2 5. Deaths Resulting in No Further Payments 0 0 6. Deaths Resulting in New Survivor Benefits (2) 0 7. End of Certain Period ‐ No Further Payments 0 0 8. Other ‐‐ New Survivor Payments for Death 2 0 9. Number Included in This Valuation 74 69 RECONCILIATION OF MEMBERSHIP DATA Active Members Service Retirees, Disability Retirees, Beneficiaries & DROP Terminated Vested Members From 9/30/16From 10/01/17 To 10/01/17To 10/01/18 City of Atlantic Beach General Employees’ Retirement System 10/1/2018 Actuarial Valuation D‐2 GRS RetirementConsulting STATISTICAL DATA Active Members as of October 1, 2018 Age Group 0‐4 5‐9 10‐14 15‐19 20‐24 25‐29 30 & Up Total 20‐24 NO.0000000 0 25‐29 NO.0000000 0 30‐34 NO.0000000 0 35‐39 NO.0010000 1 40‐44 NO.0012000 3 45‐49 NO.0030020 5 50‐54 NO.0021121 7 55‐59 NO.0032101 7 60‐64 NO.0052101 9 65&UP NO.0011000 2 TOT NO. 00168343 34 City of Atlantic Beach General Employees’ Retirement System 10/1/2018 Actuarial Valuation D‐3 GRS RetirementConsulting Active Year Members Ended Vested Other End of September 30AEAE AEAEA AAEYear 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 3.4 0 0.1 0 0.1 2 0 2 0.6 39 2017 * 0 0 0 2.7 0 0.1 0 0.1 2 0 2 0.5 37 2018 * 0 0 3 3.1 0 0.1 0 0.1 0 0 0 0.5 34 5‐yr. Totals 2014‐2018 0 0 14 18.0 0 0.5 1 0.6 72.9 Expected 2019 3.6 0.1 0.1 0.4 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 10/1/2018 Actuarial Valuation D‐4 GRS RetirementConsulting 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 2017 2 24,679 0 ‐ 2 24,679 69 1,135,199 1.5 20,268 2018 5 140,399 0 ‐ 5 140,399 74 1,275,598 1.6 22,095 Expected for 2019 1.8 25,258 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 10/1/2018 Actuarial Valuation E‐1 GRS RetirementConsulting 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 10/1/2018 Actuarial Valuation E‐2 GRS RetirementConsulting 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 10/1/2018 Actuarial Valuation E‐3 GRS RetirementConsulting 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 10 Years Certain and Life thereafter option, or 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. City of Atlantic Beach General Employees’ Retirement System 10/1/2018 Actuarial Valuation E‐4 GRS RetirementConsulting 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. 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% 10/1/2018 69.92% 6.000% 75.92% 10/1/2019 71.49% 6.000% 77.49% City of Atlantic Beach General Employees’ Retirement System 10/1/2018 Actuarial Valuation E‐5 GRS RetirementConsulting 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. 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 10/1/2018 Actuarial Valuation F‐1 GRS RetirementConsulting A. Participant Data Number Included: Actives 34 37 Service Retirees & Beneficiaries 71 66 Disability Retirees 3 3 Terminated Vested Members 7 10 Total Members and Beneficiaries 115 116 Total Annual Payroll (Excluding DROP Participants) $1,896,794 $2,037,220 Annual Valuation Payroll 1,896,794 2,037,220 Expected Annual Payroll in Contribution Year 1,896,794 2,037,220 Total Annualized Benefits Service Retirees & Beneficiaries 1,228,737 1,088,338 Disability Retirees 46,861 46,861 Terminated Vested Members 94,987 125,957 B. Assets (Market Value)* Cash and Short Term Investments 527,750 1,462,060 Treasury and Agency Bonds & Notes 1,362,779 1,551,669 Common and Preferred Stocks 11,118,327 10,289,649 Mutual or Pooled Bond Funds 3,945,712 2,131,975 Corporate Bonds 2,863,901 2,749,194 Other Securities 0 55,232 Net Receivables & Payables (104,172) 3,355 Total 19,714,297 18,243,134 Funding (Actuarial) Value 19,034,798 17,751,923 Assets include: Accumulated active member contributions 1,260,183 1,277,974 (with interest if applicable) C. Actuarial present value of accrued benefits (i) Vested accrued benefits Retired members and benefitciaries (excl DROP balances) 13,555,946 12,134,897 Terminated members 938,409 1,179,541 DROP Balances 13,404 252,143 Active members (includes non‐forfeitable members contributions of 1,260,183 and 1,277,974) 6,827,374 7,194,808 Total 21,335,133 20,761,389 (ii) Non‐vested accrued benefits 0 0 (iii) Total actuarial p.v. of accrued benefits 21,335,133 20,761,389 (iv) Actuarial p.v. of accrued benefits at begin. of year 20,761,389 19,806,239 (v) Changes attributable to: Amendments none none Assumptions 0 557,351 Operation of decrements 2,075,200 1,716,906 Benefit payments (1,501,456) (1,319,107) Other none none (vi) Net change (PVAB measurement Method Change) 573,744 955,150 (vii)Actuarial p.v. of accr. benefits at end of year 21,335,133 20,761,389 COMPARATIVE SUMMARY OF PRINCIPAL VALUATION RESULTS October 1, 2017October 1, 2018 * DROP balances are included. City of Atlantic Beach General Employees’ Retirement System 10/1/2018 Actuarial Valuation F‐2 GRS RetirementConsulting D. Liabilities‐ Actuarial Present Value of Future Benefits 1. Active Members Service Retirement Benefits $10,464,214 $11,107,001 Vesting Benefits 314,943 358,565 Disability Benefits 158,110 180,738 Preretirement Death Benefits 268,744 288,281 Return of Member Contributions 10,024 10,592 Total Actives 11,216,035 11,945,177 2. Inactive Members Service Retirees & Beneficiaries 13,102,188 11,673,169 Disability Retirees 453,758 461,728 Terminated Vested Members 938,409 1,179,541 Total Inactive Members 14,494,355 13,314,438 3. DROP Balances 13,404 252,143 3. Total Present Value for All Members 25,723,794 25,511,758 Total Present Value of: Future Salaries 13,303,423 14,602,036 Future Employee Contributions 798,205 876,122 Future Contributions from Other Sources 5,890,791 6,883,713 Derivation of Current Employer Unfunded Actuarial Accrued Liability (UAAL) a. Total UAAL for Prior Valuation Date $5,388,862 $5,598,433 b. Employer Normal Cost for this period 286,579 252,018 c. Interest acccrued on (a) and (b) 383,092 409,531 d. Contributions for this period (1,332,119) (1,175,572) e. Interest accrued on (d) (44,959) (41,145) f. Changes due to: Plan Amendment 0 0 Assumption Changes 0 688,841 Asset Method 0 0 Actuarial (Gain) Loss (144,346) (343,244) g. Total Current UAAL: a+b+c+d+e+f 4,537,109 5,388,862 COMPARATIVE SUMMARY OF PRINCIPAL VALUATION RESULTS October 1, 2018 October 1, 2017 Date Years Remaining 9/30/2012 Original UAAL 4 $527,245 $4,133,993 9/30/2013 Experience Gain 5 (27,632) (208,109) 9/30/2014 Experience Loss 6 1,808 13,100 9/30/2014 Assumption Changes 6 250,799 1,817,483 9/30/2015 Experience Loss 7 50,460 379,312 9/30/2016 Experience Loss 8 82,786 621,358 9/30/2016 Assumption Changes 8 69,104 518,668 10/1/2017 Experience Gain 9 (45,234) (343,244) 10/1/2017 Assumption Changes 9 90,778 688,841 10/1/2018 Experience Gain 10 (19,030) (144,346) TOTAL $981,084 $7,477,056 444,795 Amortization Payment Original Amount $4,537,109 $1,917,246 (317,978) (121,760) 9,269 1,286,043 292,846 638,135 532,859 (144,346) Original and Current Unfunded Actuarial Accrued Liabilities Item Description Current Unfunded City of Atlantic Beach General Employees’ Retirement System 10/1/2018 Actuarial Valuation F‐3 GRS RetirementConsulting E. Pension Cost Entry Age Normal Cost for: Service Retirement Benefits $267,176 $288,981 Vesting Benefits 32,448 34,581 Disability Benefits 12,165 13,104 Preretirement Death Benefits 8,232 9,036 Return of Member Contributions 12,652 13,636 Total Actives 332,673 359,338 Administrative Expenses 31,261 55,702 Expected Member Contributions 119,590 128,461 Total Employer Normal Cost 244,344 286,579 Payment Required to Amortize Unfunded Actuarial Accrued Liability 981,084 1,000,759 Total Contribution at Valuation Date 1,225,428 1,287,338 Total Contribution Adjusted for Frequency of Payments and Interest to Next Following Fiscal Year 1,355,973 1,424,479 % of Expected Payroll 71.49% 69.92% Amount Expected to be Contributed by Members Next FY 113,808 122,233 % of Expected Payroll 6.00% 6.00% F. Past Contributions‐ For the Fiscal Years Ended September 30 of 2017 and 2018 Required Contribution Determined in the Valuation as of September 30, 2016 September 30, 2015 for the Fiscal Year Ending September 30, 2018 September 30, 2017 by the Plan Sponsor $1,332,118 $1,175,572 by Members $124,201 $124,476 Actual Contribution for the Fiscal Year ended September 30, 2018 September 30, 2017 by the Plan Sponsor $1,332,119 1,175,572 by Members $117,536 124,024 G. Net experience (gain) loss during year: ($144,346) ($343,244) 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 2018 4,537,109 2019 3,796,063 2020 3,004,990 2021 2,160,520 2022 1,259,048 2023 859,561 2024 403,611 2025 186,542 2026 8,687 2027 0 3. Action taken since last actuarial valuation. Contribution sufficient to satisfy the total required contribution. COMPARATIVE SUMMARY OF PRINCIPAL VALUATION RESULTS October 1, 2017October 1, 2018 City of Atlantic Beach General Employees’ Retirement System 10/1/2018 Actuarial Valuation F‐4 GRS RetirementConsulting I. 1. Three‐Year Comparison of Actual and Assumed Salary Increases (Annualized) Actual Assumed 6.9 % 5.4% 2.6 % 5.3% 2.4 % 5.1% 2. Three‐Year Comparison of Investment Return (Actuarial Value) Actual Assumed 4.8% 7.0% 6.6% 7.0% 7.7% 6.75% 3. Average Annual Growth in Payroll, Last Ten Years (if applicable) Total % Increase Last Ten Years (49.10)% Annual % Increase (6.53)% 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 9/30/2008 9/30/2009 3,713,609 9/30/2010 9/30/2012 9/30/2011 3,738,277 3,837,512 2,397,875 2,074,607 1,896,794 4,018,667 10/1/2018 9/30/2013 9/30/2016 2,070,021 9/30/2014 9/30/2015 2,733,429 10/1/2017 2,037,220 3,726,713 COMPARATIVE SUMMARY OF PRINCIPAL VALUATION RESULTS Year Ended Total PayrollValuation Date 9/30/2016 9/30/2017 9/30/2018 Year Ended 9/30/2016 9/30/2017 9/30/2018