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HomeMy WebLinkAboutItem #10 Approval of Changes to the City of Ocoee Municipal General Employees' Retirement Trust Fund Relating to Retirement Age, Vesting and Various other Changes Affecting "Future" Employees Center of Good L/ •S be AGENDA ITEM COVER SHEET Meeting Date: 08/21/12 Item # tO Reviewed By: Contact Name: Gene Williford Department Director: Contact Number: 1032 City Manager:,/%/ Subject: Approval of changes to the City of Ocoee Municipal General Employees' Retirement Trust Fund relating to retirement age, vesting, and various other changes affecting "future" employees. Background Summary: With the continuing economic uncertainty staff has initiated these recommended changes in order for the current and long -term sustainability of the plan. With lower investment returns, reduced city revenues and an aging workforce these revisions are necessary for the future of the plan as well as the trend for public pension plans in general. Issue: Amendment to the General Employees' Pension Ordinance to include revisions necessitated by changes in state statute and continued financial viability of the plan. Recommendations: Staff respectfully recommends the Commission adopt the changes as amended in the attached Ordinance for the City of Ocoee Municipal General Employees' Retirement Trust Fund. Attachments: An Ordinance Amendment drafted by legal counsel for the General Employees' Pension Board, the Actuarial Report from Foster & Foster and a comparison of changes. Financial Impact: To provide for the future financial stability of the plan and the City's contributions. Type of Item: ❑ Public Hearing For Clerk's Dept Use: ❑ Ordinance First Reading ❑ Consent Agenda ❑ Ordinance Second Reading IR Public Hearing ❑ Resolution ❑ Regular Agenda ❑ Commission Approval ❑ Discussion & Direction ❑ Original Document/Contract Attached for Execution by City Clerk ❑ Original Document/Contract Held by Department for Execution Reviewed by City Attorney ❑ N/A Reviewed by Finance Dept. ❑ N/A Reviewed by ( ) 111 N/A Comparison of Proposed Changes to the City of Ocoee Municipal General Employees' Retirement Trust Fund Plan for "existing" employees Plan for "future" employees Normal Retirement Age 60 years 62 years Retirement/Years 60 years old 62 years old Of Service "no" minimum minimum of 7 years of service years of service Vesting 5 years 7 years Multiplier 3% 2.25% Maximum Benefit 81% of salary 70% of salary DROP Eligibility Age 60 Age 62 "no" minimum minimum of 10 years of service years of service DROP Period 84 months 60 months DROP Account 6.5% 3% Interest Rate ORDINANCE NO. AN ORDINANCE OF THE CITY OF OCOEE, FLORIDA, RELATING TO THE CITY OF OCOEE MUNICIPAL GENERAL EMPLOYEES' RETIREMENT TRUST FUND, ADOPTED AND RESTATED IN FULL BY ORDINANCE NUMBER 2009 -020; AS SUBSEQUENTLY AMENDED; AMENDING SECTION 1, DEFINITIONS AMENDING THE DEFINITION OF "SALARY "; AMENDING SECTION 6, BENEFIT AMOUNTS AND ELIGIBILITY; AMENDING SECTION 8, VESTING; AMENDING SECTION 25, DEFERRED RETIREMENT OPTION PLAN; PROVIDING FOR SEVERABILITY OF PROVISIONS; REPEALING ALL ORDINANCES IN CONFLICT HEREWITH AND PROVIDING AN EFFECTIVE DATE. SECTION 1: Authority. The City Commission of the City of Ocoee has the authority to adopt this ordinance pursuant to Article VIII of the Constitution of the State of Florida and Chapter 166, Florida Statutes. SECTION 2: That Ordinance No. 2009 -020, adopting the amended and restated City of Ocoee Municipal General Employees' Retirement Trust Fund, as subsequently amended, is hereby amended by amending Section 1, Definitions, definition of "Salary ", to read as follows: * * * ** Salary means the total compensation (and travel stipend for the Mayor and Commissioners) reported on the Member's W -2 form plus all tax deferred, tax sheltered or tax exempt items of income derived from elective employee payroll deductions or salary reductions. For service earned on or after July 1, 2011, Salary shall not include more than three hundred (300) hours of overtime per fiscal year. Provided however, in any event, payments for overtime in excess of three hundred (300) hours per year accrued as of July 1, 2011 and attributable to service earned prior to the July 1, 2011, may still be included in Salary for pension purposes even if the payment is not actually made until on or after July 1, 2011. In any event, with respect to unused paid time off accrued prior to July 1, 2011, Salary will include the lesser of the amount of paid time off accrued on July 1, 2011 or the actual amount of paid time off for which the Retiree receives credit or payment at the time of retirement, based upon the Retiree's then hourly rate of pay, regardless of whether the amount of paid time off was, at some time prior to retirement, reduced below the amount on July 1, 2011. Compensation in excess of limitations set forth in Section 401 (a)(17) of the Code as of the first day of the Plan Year shall be disregarded for any purpose, including employee contributions or any benefit calculations. The annual compensation of each member taken into account in determining benefits or employee contributions for any Plan Year beginning on or after January 1, 2002, may not exceed $200,000, as adjusted for cost -of- living increases in accordance with Code Section 401(a)(17)(B). Compensation means compensation during the fiscal year. The cost -of- living adjustment in effect for a calendar year applies to annual compensation for the determination period that begins with or within such calendar year. If the determination period consists of fewer than 12 months, the annual compensation limit is an amount equal to the otherwise applicable annual compensation limit multiplied by a fraction, the numerator of which is the number of months in the short determination period, and the denominator of which is 12. If the compensation for any prior determination period is taken into account in determining a Member's contributions or benefits for the current Plan Year, the compensation for such prior determination period is subject to the applicable annual compensation limit in effect for that prior period. The limitation on compensation for an "eligible employee" shall not be less than the amount which was allowed to be taken into account hereunder as in effect on July 1, 1993. "Eligible employee" is an individual who was a Member before the first Plan Year beginning after December 31, 1995. * * * ** Page 1 SECTION 3: That Ordinance No. 2009 -020, adopting the amended and restated City of Ocoee Municipal General Employees' Retirement Trust Fund, as subsequently amended, is hereby amended by amending Section 6, Benefit Amounts and Eligibility, subsections 1., 2. and 3., to read as follows: 1. Normal Retirement Date. A Member's (except a Mayor or Commissioner Member) who became a Member prior to (effective date) shall have a normal retirement date of 1101inal 1cti1cncnt dat , Tall LL. the first day of the month coincident with, or next following the attainment of age sixty (60) regardless of the years of Credited Service. A Member (except a Mayor or Commissioner Member) who became a Member on or after (effective date) shall have a normal retirement date of the first day of the month coincident with, or next following the attainment of age sixty -two (62) and the completion of seven (7) years of Credited Service. A Mayor or Commissioner Member's normal retirement date shall be the first day of the month coincident with, or next following the attainment of age sixty (60) and the completion of nine (9) years of Credited Service. A Member may retire on his or her normal retirement date or on the first day of any month thereafter, and each Member shall become 100% vested in his or her accrued benefit on the Member's normal retirement date. Normal retirement under the System is Retirement from employment with the City on or after the normal retirement date. 2. Normal Retirement Benefit. A Member who became a Member prior to (effective date) retiring hereunder on or after his or her normal retirement date shall receive a monthly benefit which shall commence on the first day of the month next following his or her Retirement and be continued thereafter during Member's lifetime, ceasing upon death, but with one hundred twenty (120) monthly payments guaranteed in any event. The monthly retirement benefit shall equal three percent (3 %) of Average Final Compensation, for each year of Credited Service, up to a maximum benefit not to exceed eighty -one percent (81 %) of Average Final Compensation of the Member. A Member who became a Member on or after (effective date) retiring hereunder on or after his or her normal retirement date shall receive a monthly benefit which shall commence on the first day of the month next following his or her Retirement and be continued thereafter during Member's lifetime, ceasing upon death, but with one hundred twenty (120) monthly payments guaranteed in any event. The monthly retirement benefit shall equal two and twenty -five hundredths percent (2.25 %) of Average Final Compensation, for each year of Credited Service, up to a maximum benefit not to exceed seventy percent (70 %) of Average Final Compensation of the Member. 3. Early Retirement Date. A Member (except a Mayor or Commissioner Member) who became a Member prior to (effective date) may retire on his or her early retirement date which shall be the first day of any month coincident with or next following the attainment of age fifty (50) and the completion of five (5) years of Credited Service. A Member (except a Mayor or Commissioner Member) who became a Member on or after (effective date) may retire on his or her early retirement date which shall be the first day of any month coincident with or next following the attainment of age fifty (50) and the completion of seven (7) years of Credited Service. A Mayor or Commissioner Member may retire on his or her early retirement date which shall be the first day of any month coincident with or next following the attainment of age fifty (50) and the completion of nine (9) years of Credited Service. Early retirement under the System is Retirement from employment with the City on or after the early retirement date and prior to the normal retirement date. * * * ** Page 2 SECTION 4: That Ordinance No. 2009 -020, adopting the amended and restated City of Ocoee Municipal General Employees' Retirement Trust Fund, as subsequently amended, is hereby amended by amending Section 8, Vesting, to read as follows: SECTION 8. VESTING. If a Member terminates his or her employment with the City, either voluntarily or by discharge, and is not eligible for any other benefits under this System, the Member shall be entitled to the following: 1. If the Member who became a Member prior to (effective date) has less than five (5) years Credited Service upon termination, the Member shall be entitled to a refund of his or her Accumulated Contributions or the Member may leave it deposited with the Fund. If the Member who became a Member on or after (effective date) has less than seven (7) years Credited Service upon termination, the Member shall be entitled to a refund of his or her Accumulated Contributions or the Member may leave it deposited with the Fund. 2. If the Member (except a Mayor or Commissioner Member) who became a Member prior to (effective date) has five (5) or more years of Credited Service or if the Member who became a Member on or after (effective date) has seven (7) or more years of Credited Service or if a Mayor or Commissioner Member has nine (9) or more years of Credited Service upon termination, the Member shall be entitled to a monthly retirement benefit, determined in the same manner as for normal or early retirement and based upon the Member's Credited Service, Average Final Compensation and the benefit accrual rate as of the date of termination, payable to him or her commencing at the Member's otherwise normal or early retirement date, provided he or she does not elect to withdraw his or her Accumulated Contributions and provided the Member survives to his or her normal or early retirement date. If the Member does not withdraw his or her Accumulated Contributions and does not survive to his or her otherwise normal or early retirement date, his or her designated Beneficiary shall be entitled to a benefit as provided herein for a deceased Member, vested or eligible for Retirement under Pre - Retirement Death. SECTION 5: That Ordinance No. 2009 -020, adopting the amended and restated City of Ocoee Municipal General Employees' Retirement Trust Fund, as subsequently amended, is hereby amended by amending Section 25, Deferred Retirement Option Plan, subsections 2. and 3., to read as follows: * * * ** 2. Participation. A. Eligibility to Participate. In lieu of terminating his or her employment as a General Employee, any Member who became a Member prior to (effective date) and who is eligible for normal retirement under the System may elect to defer receipt of such service retirement pension and to participate in the DROP. Any Member who became a Member on or after (effective date) must have a minimum of ten (10) years Credited Service and be eligible for normal retirement. B. Election to Participate. A Member's election to participate in the DROP must be made in writing in a time and manner determined by the Board and shall be effective on the first day of the first calendar month which is at least fifteen (15) business days after it is received by the Board. Page 3 C. Period of participation. A Member who became a Member prior to (effective date) who elects to participate in the DROP under subsection 2.B., shall participate in the DROP for a period not to exceed eighty -four (84) months beginning on the date which the Member first becomes eligible for normal retirement. A Member who became a Member on and after (effective date) who elects to participate in the DROP under section 2.B., shall participate in the DROP for a period not to exceed sixty (60) months beginning on the date which the Member first becomes eligible for normal retirement. An election to participate in the DROP shall constitute an irrevocable election to resign from the service of the City at the time of election into the DROP. A Member may participate only once. * * * ** 3. Funding. A. Establishment of DROP Account. A DROP Account shall be established for each Member participating in the DROP. A Member's whose DROP participation began prior to (effective date) shall have a DROP Account consisting DROP Accoant shalkonsist of amounts transferred to the DROP under subsection 3.B., and earnings or interest on those amounts. A Member whose DROP participation began on or after (effective date) shall have a DROP Account consisting of amounts transferred to the DROP under subsection 3.C. and interest on those amounts. B. Transfers From Retirement System. (1) As of the first day of each month of a Member's period of participation in the DROP, the monthly retirement benefit he or she would have received under the System had he or she terminated his or her employment as a General Employee and elected to receive monthly benefit payments thereunder shall be transferred to his or her DROP Account, except as otherwise provided for in subsection 2.D.(2). A Member's period of participation in the DROP shall be determined in accordance with the provisions of subsections 2.C. and 2.D., but in no event shall it continue past the date he or she terminates his or her employment as a General Employee. (2) Except as otherwise provided in subsection 2.D.(2), a Member's DROP Account under this subsection 3.B. shall be debited or credited after each fiscal year quarter with either: (a) Interest at an effective rate of six and one -half percent (6.5 %) per annum compounded monthly on the prior month's ending balance; or (b) Earnings, determined as follows: The average daily balance in a Member's DROP Account shall be credited or debited at a rate equal to the actual net rate of investment return realized by the System for that quarter. "Net investment return" for the purpose of this paragraph is the total return of the assets in which the Page 4 Member's DROP Account is invested by the Board net of brokerage commissions, transaction costs and management fees. Upon electing participation in the DROP, the Member shall elect to receive either interest or earnings on his or her account to be determined as provided above. The Member may, in writing, elect to change his or her election only once during his or her DROP participation. An election to change must be made prior to the end of a quarter and shall be effective beginning the following quarter. (3) A Member's DROP Account shall only be credited or debited with earnings or interest and monthly benefits while the Member is a participant in the DROP. A Member's final DROP account value for distribution to the Member upon termination of participation in the DROP shall be the value of the account at the end of the quarter immediately preceding termination of participation plus any monthly periodic additions made to the DROP account subsequent to the end of the previous quarter and prior to distribution. If a Member fails to terminate employment after participating in the DROP the permissible period of DROP participation, then beginning with the Member's 1st month of employment following the last month of the permissible period of DROP participation, the Member's DROP Account will no longer be credited or debited with earnings or interest, nor will monthly benefits be transferred to the DROP account. All such non - transferred amounts shall be forfeited and continue to be forfeited while the Member is employed by the City, and not cost -of- living adjustments shall be applied to the Member's credit during such period of continued employment. A Member employed by the City after the permissible period of DROP participation will still not be eligible for pre- retirement death or disability benefits, nor will he or she accrue additional Credited Service, except as provided for Section 24, Reemployment After Retirement. C. Transfers From Retirement System. As of the first day of each month of a Member's period of participation in the DROP, the monthly retirement benefit he or she would have received under the System had he or she terminated his or her employment as a General Employee and elected to receive monthly benefit payments thereunder shall be transferred to his or her DROP Account, except as otherwise provided for in subsection 2.D.(2). A Member's period of participation in the DROP shall be determined in accordance with the provisions of subsections 2.C. and 2.D., but in no event shall it continue past the date he or she terminates his or her employment as a General Employee. Except as otherwise provided in subsection 2.D.(2), a Member's DROP Account under this subsection 3.C. shall be credited with interest at an effective rate of three percent (3 %) per annum compounded monthly on the prior month's ending balance. A Member's DROP Account shall only be credited with interest and monthly benefits while the Member is a participant in the DROP. A Member's final DROP account value for distribution to the Member upon termination of participation in the DROP shall be the value of Page 5 the account at the end of the quarter immediately preceding termination ofparticipation plus any monthly periodic additions made to the DROP account subsequent to the end of the previous quarter and prior to distribution. If a Member fails to terminate employment after participating in the DROP the permissible period of DROP participation, then beginning with the Member's 1st month of employment following the last month of the permissible period of DROP participation, the Member's DROP Account will no longer be credited with interest, nor will monthly benefits be transferred to the DROP account. All such non - transferred amounts shall be forfeited and continue to be forfeited while the Member is employed by the City, and no cost -of- living adjustments shall be applied to the Member's credit during such period of continued employment. A Member employed by the City after the permissible period of DROP participation will still not be eligible for pre- retirement death or disability benefits, nor will he or she accrue additional Credited Service, except as provided for Section 24, Reemployment After Retirement. * * * ** SECTION 6. Repeal of Ordinances. All ordinances or parts of ordinances in conflict herewith are hereby repealed. SECTION 7. Effective Date. This ordinance shall be effective on the date of adoption; however, Section 2 of this ordinance shall be retroactively effective on July 1, 2011. PASSED AND ADOPTED this day of , 2012. APPROVED: ATTEST: CITY OF OCOEE, FLORIDA By: Beth Eikenberry, City Clerk S. Scott Vandergrift, Mayor (SEAL) ADVERTISED , 2012 READ FIRST TIME , 2012 READ SECOND TIME AND ADOPTED , 2012 FOR USE AND RELIANCE ONLY BY THE CITY OF OCOEE, FLORIDA APPROVED AS TO FORM AND LEGALITY THIS day of , 2012 Page 6 CHRISTIANSEN & DEHNER, P.A. Special Counsel By: APPROVED BY THE OCOEE CITY COMMISSION AT A MEETING HELD ON , 2012 UNDER AGENDA ITEM NO. ksh \ocoee \gen \06- 28- 12.ord Page 7 Foster&Foster.. Actuaries and Consultants July 5, 2012 VIA EMAIL AND MAIL Board of Trustees City of Ocoee Municipal General Employees' Retirement Trust Fund 150 N. Lakeshore Avenue Ocoee, FL 34761 Re: City of Ocoee Municipal General Employees' Retirement Trust Fund Dear Board: Enclosed is the following material, which has been prepared in support of the proposed benefit changes to the Fund: 1. Three (3) copies of the required Actuarial Impact Statement, which outlines the costs associated with implementing the proposed changes. 2. Draft of a transmittal letter to the Bureau of Local Retirement Systems. It will be necessary for the Chairman to sign one (1) copy of each Actuarial Impact Statement as the Plan Administrator and forward the Impact Statement, along with a copy of the proposed Ordinance, to the Bureau prior to adoption. If you have any questions concerning the enclosed material, please let me know. Sincerely, Doug(a zen DHUIke Enclosures 13420 Parker Commons Blvd., Suite 104 • Fort Myers, Florida 33912.239- 433 -5500 • Fax 239- 481 -0634 • www.foster- foster.com Mr. Keith Brinkman Division of Retirement Bureau of Local Retirement Systems P. O. Box 9000 Tallahassee, FL 32315 -9000 Re: Actuarial Impact Statement Dear Mr. Brinkman: The City of Ocoee is considering the implementation of amended retirement benefits for its General Employees. The amendments are described in the enclosed material. Pursuant to Section 22d -1.04 of the Agency Rules, we are enclosing the required Actuarial Impact Statement and a copy of the proposed Ordinance for your review. If you have any questions or if additional information is needed, please contact us. Sincerely, CITY OF OCOEE MUNICIPAL GENERAL EMPLOYEES' RETIREMENT TRUST FUND ACTUARIAL IMPACT STATEMENT July 5, 2012 Attached hereto is a comparison of the impact on the Total Required Contribution (per Chapter 112, Florida Statutes), and the Required City Contributions, resulting from implementation of the following changes: 1. Amending the definition of Salary to comply with the regulations set forth in . Senate Bill 1128. Effective July 1, 2011, Salary shall not include more than three hundred (300) hours of overtime per fiscal year. Additionally, Salary will include the lesser of the amount of unused paid time off accrued as of July 1, 2011, or the actual amount of unused paid time off for which the retiree receives payment at the time of retirement, based upon the Retiree's then hourly rate of pay. 2. Amending Normal Retirement Date for future hires (except a Mayor or Commissioner) to be attainment of age 62 and the completion of 7 years of Credited Service. 3. Reducing the benefit accrual rate for future hires to 2.25% of Average Final Compensation for each year of Credited Service, The maximum benefit shall not exceed 70% of Average Final Compensation. 4. Amending Early Retirement Date for future hires (except a Mayor or Commissioner) to be attainment of age 50 and the completion of 7 years of Credited Service. 5. Increasing the vesting provision for future hires (except a Mayor or Commissioner) to completion of 7 years of Credited Service, regardless of age. 6. Amending the DROP eligibility participation date for future hires to require a minimum of 10 years of Credited Service and having attained Normal Retirement eligibility. 7. Reducing the maximum DROP participation period for future hires which cannot exceed 60 months beginning on the date which the Member first becomes eligible for Normal Retirement. 8. Reducing the fixed interest DROP crediting rate for future hires to be 3.0% per annum, compounded monthly. Additionally, future hires shall not be allowed to elect the DROP crediting option which is equal to actual net rate of investment return realized by the System. The following assumptions are utilized for purposes of this Impact Statement: Current Credited Service I Change to Final Salary Increase Assumption 10 or more years No Change 1 to 10 years Reduced by 50% Less than 1 year Reduced by 100% (No Increase Assumed) It is important to point out that these assumptions are estimates, and are subject to further modification based on future experience. Subsequent changes will be reflected in future actuarial valuations. CITY OF OCOEE MUNICIPAL GENERAL EMPLOYEES' RETIREMENT TRUST FUND ACTUARIAL IMPACT STATEMENT July 5, 2012 (Page 2) The cost impact, determined as of October 1, 2011, as applicable to the fiscal year ending September 30, 2013, is as follows: Current Proposed Total Required Contribution of Total Annual Payroll 30.27% 29.89% Member Contributions (Est.) % of Total Annual Payroll 7.36% 7.36% Balance from City % of Total Annual Payroll 22.91% 22.53% Please note that adopting the proposed changes stated in Items 2 -8 on the previous page will have no immediate impact on the City's funding requirements since they are only applicable to future new hires. Please also note that the effective date of these changes has not been established, but if adopted, these changes shall be applicable to future new hires on and after the established effective date. The changes presented herein are in compliance with Part VII, Chapter 112, Florida Statutes and Section 14, Article X of the State Constitution. 1 C 7 Dougl - H. Loz- , :A, MAAA EnroIIe Actuary • 11 -7778 STATEMENT OF PLAN ADMINISTRATOR The prepared information presented herein reflects the estimated cost of the proposed changes. Chairman, Board of Trustees Comparative Summary of Principal Valuation Results New Benefits Old Benefits 10/1/2011 10/1/2011 A. Participant Data Number Included Actives 178 178 Service Retirees 59 59 Beneficiaries 5 5 Terminated Vested 38 38 Disability Retirees 0 0 DROP Retirees 5 5 Total 285 285 Total Annual Payroll $8,018,775 $8,018,775 Payroll Under Assumed Ret. Age 8,018,775 8,018,775 Annual Rate of Payments to: Service Retirees 828,124 828,124 Beneficiaries 33,446 33,446 Terminated Vested 318,794 318,794 Disability Retirees 0 0 DROP Retirees 124,445 124,445 B. Assets Actuarial Value 19,755,687 19,755,687 Market Value 18,919,352 18,919,352 C. Liabilities Present Value of Benefits Active Members Retirement Benefits 24,035,581 24,292,826 Disability Benefits 0 0 Death Benefits 394,468 397,715 Vested Benefits 1,676,516 1,684,936 Refund of Contributions 345,000 345,000 Service Retirees 7,841,700 7,841,700 Beneficiaries 224,914 224,914 Terminated Vested 1,565,236 1,565,236 Disability Retirees 0 0 DROP Retirees 1,313,389 1,313,389 Total 37,396,804 37,665,716 New Benefits Old Benefits 10/1 /2011 10/1 /2011 C. Liabilities - (Continued) Present Value of Future Salaries 64,150,576 64,150,576 Present Value of Future Member Cont. 4,722,932 4,722,932 Normal Cost (Entry Age Normal) Service Retirement 1,310,756 1,332,690 Disability Benefits 0 0 Death Benefits 18,105 18,376 Vested Benefits 60,315 60,845 Refunds 21,311 21,311 Total Normal Cost 1,410,487 1,433,222 Present Value of Future Normal Costs 9,413,625 9,574,942 Actuarial Accrued Liability Service Retirement 15,510,921 15,613,030 Disability Benefits 0 0 Death Benefits 247,785 248,956 Vested Benefits 1,051,379 1,055,694 Refunds 227,855 227,855 Inactives 10,945,239 10,945,239 Total Actuarial Accrued Liability 27,983,179 28,090,774 Unfunded Actuarial Accrued Liability 8,227,492 8,335,087 D. Actuarial Present Value of Accrued Benefits Vested Accrued Benefits Inactives 10,945,239 10,945,239 Actives 5,466, 511 5,466,511 Member Contributions 3,717,316 3,717,316 Total 20,129, 066 20,129,066 Non - vested Accrued Benefits 462,469 462,469 Total Present Value Accrued 20,591,535 20,591,535 Benefits Increase (Decrease) in Present Value of Accrued Benefits Attributable to: Plan Amendments 0 Assumption Changes 0 New Accrued Benefits 0 Benefits Paid (net of DROP lump sums) 0 Interest 0 Other 0 Total: 0 New Benefits Old Benefits Valuation Date 10/1/2011 10/1/2011 Applicable to Fiscal Year Ending 9/30/2013 9/30/2013 E. Pension Cost Normal Cost (with interest) % of Total Annual Payroll* 18.29 18.59 Expected Adminstrative Expense % of Total Annual Payroll* 0.65 0.65 Payment Required to Amortize Unfunded Actuarial Accrued Liability over 30 years (as of 10/1/11) of Total Annual Payroll* 10.95 11.03 Total Required Contribution % of Total Annual Payroll* 29.89 30.27 Expected Member Contributions % of Total Annual Payroll* 7.36 7.36 Expected City Contrib. % of Total Annual Payroll* 22.53 22.91 * Contributions developed as of 10/1/11 are expressed as a percentage of total annual payroll at 10/1/11 of $8,018,775. ACTUARIAL ASSUMPTIONS AND FUNDING METHODS Assumptions Mortality Rate RP2000 Combined Healthy Mortality Table (sex distinct). Interest Rate 8% per year compounded annually, net of investment related expenses. Retirement Age Age 60. Also, any Member who has reached Normal Retirement is assumed to continue employment for one additional year. Early Retirement Commencing with the earliest Early Retirement Age (50), Members are assumed to retire with an immediate subsidized benefit at the rate of 2% per year. Disability Rate See table below (1202). Termination Rate See table below (T -3). Salary Increases 6.0% per year until the assumed retirement age; see table below. Projected salary at retirement is increased 20% to account for non - regular compensation. Payroll Increases 3.3% per year. Administrative Expenses $50,468 annually. % Terminating % Becoming Disabled Current Salary as ck Age During the Year During the Year of Salary at age 60 20 50.0% 0.051% 9.7% 30 34.9 0.058 17.4 40 3.8 0.121 31.2 50 1.5 0.429 55.8 Funding Methods Entry Age Normal Actuarial Cost Method. SUMMARY OF PLAN PROVISIONS (Through Ordinance No. 2009 -020) Eligibility Full -time employees who are classified as General Employees participate as a condition of employment. Credited Service Total years and fractional parts of years of service with the City as a General Employee. Salary W -2 Compensation, plus tax - deferred, tax- exempt, and tax - sheltered items of income. Average Final Compensation Average Salary for the 5 best years of the 10 years immediately preceding retirement or termination. Member Contributions 7.4% of Salary. The Mayor and Commissioners are non- contributory participants. City Contributions Remaining amount required in order to pay current costs and amortize unfunded past service cost, if any, over 30 years. Normal Retirement Date Attainment of Age 60. Benefit 3.0% of Average Final Compensation times Credited Service. The maximum benefit is 81% of Average Final Compensation. Form of Benefit Ten Year Certain and Life Annuity (options available). Early Retirement Eligibility Age 50 and 5 Years of Credited Service. Benefit Accrued benefit, actuarially reduced. Vesting Schedule 100% after 5 years of Credited Service. Benefit Amount Member will receive the vested portion of his (her) accrued benefit payable at the otherwise Early or Normal Retire- ment Date. Death Benefits Pre - Retirement Vested Monthly accrued benefit payable to designated beneficiary for 10 years. Non - Vested Refund of accumulated contributions without interest. Post - Retirement Benefits payable to beneficiary in accordance with option selected at retirement. Board of Trustees a. Two City Commission appointees, b. Two Members of the Plan elected by the Membership, and c. Fifth Member elected by other 4 and appointed by City Commission. Deferred Retirement Option Plan Eligibility Within 12 months following satisfaction of Normal Retirement requirements (age 60). Deferred Retirement Option Plan (continued) Participation Not more than 60 months. Rate of Return At election of Member (may change once during DROP period) either: 1) actual net rate of investment return (total return net of brokerage commissions, transaction costs, and management fees), or 2) 6.5 %. Earnings are credited each fiscal quarter. Form of Distribution Cash lump sum (options available).