general employees pension board regular meeting agenda … · 2019-01-11 · investment portfolio...

General Employees Pension BoardRegular Meeting Agenda

January 15, 2019 At 7:00 AM

Bal Harbour Village Hall • 655 - 96th Street • Bal Harbour • Florida 33154

I. CALL TO ORDER/ PLEDGE OF ALLEGIANCE

II. APPROVAL OF MINUTES: Deferred

III. NEW BUSINESS

Investment Consultant RFPcomplete RFP for Consultant_Jan11_2019.pdf

IV. ADJOURNMENT

One or more members of any Village Committee/Board may attend this meeting of the Council and may discussmatters which may later come before their respective Boards/Committees.

The New Business and Council Discussion Section includes a section for Public Comment. On public commentmatters, any person is entitled to be heard by this Council on any matter; however, no action shall be taken by theCouncil on a matter of public comment, unless the item is specifically listed on the agenda, or is added to theagenda by Council action.

Any person who acts as a lobbyist, pursuant to Village Code Section 2-301 (Lobbyists), must register with theVillage Clerk, prior to engaging in lobbying activities before Village staff, boards, committees, and/or the VillageCouncil. A copy of the Ordinance is available in the Village Clerk’s Office at Village Hall.

If a person decides to appeal any decision made by the Village Council with respect to any matter considered at ameeting or hearing, that person will need a record of the proceedings and, for such purpose, may need to ensurethat a verbatim record of the proceedings is made, which record includes the testimony and evidence upon whichthe appeal is to be based (F.S. 286.0105).

https://legistarweb-production.s3.amazonaws.com/uploads/attachment/pdf/293678/complete_RFP_for_Consultant_Jan11_2019.pdf

Bal Harbour General Employees Pension Board Regular Meeting Agenda —January 15, 2019

P a g e | 2

In accordance with the Americans with Disabilities Act of 1990, all persons who are disabled and who needspecial accommodations to participate in this proceeding because of that disability should contact the VillageClerk’s Office (305-866-4633), not later than two business days prior to such proceeding.

All Village Council meeting attendees, including Village staff and consultants, are subject to security screeningutilizing a metal detector and/or wand, prior to entering the Council Chamber, Conference Room, or other meetingarea located within Village Hall. This is for the safety of everyone. Thanks for your cooperation.

GENERAL EMPLOYEES’ RETIREMENT BOARD

January 15, 2019

Mr. Mike Welker AndCo Consulting 4901 Vineland Road, Suite 600 Orlando, FL 32811

Dear Mr. Welker:

The Board of Trustees for the Village of Bal Harbour General Employees’ Pension Fund is in the process of conducting a Request for Proposal for Consulting Services. Attached please find a copy of the current Investment Policy and the Actuarial Valuation Report as of 10/1/2017.

Also attached is a Questionnaire. Please submit one electronic copy and eight (8) Original Copies before @5:00pm.

Thank you for your time and should you have any questions, please contact our office.

Sincerely,

Pete Prior

President

PP/lg

Enclosures

Village of Bal Harbour General Employees Pension Plan

2019

INTRODUCTION AND DECLARATION

The Board of Trustees of the Village of Bal Harbour General Employees Pension Fund a hereby gives notice that proposals will be accepted from all individuals or firms interested in providing professional investment evaluation services in accordance with all applicable local, state and federal rules, codes, regulations and/or laws.

The Board will select the successful submission on the basis of the written proposal and an oral presentation to the Board. Presentations shall only be scheduled with those individuals or firms whom the Board feels are best qualified to perform the required services. The Board reserves the right to withdraw this Request for Proposal (“RFP”) at any time to protect its best interest and the right to reject any non-conforming or unresponsive proposals.

The request and submittal of your proposal shall in no way be construed as an obligation on the part of the Board to provide you with compensation for your efforts or to contract with your firm. However, all proposals shall be considered a binding and an irrefutable offer for a period of sixty (60) days after the proposal due date. The firm ultimately selected shall be required to enter into a Consulting Agreement with the Retirement System based on the terms substantially similar to the draft agreement attached to this RFP.

BACKGROUND

The General Employees Pension Fund is a tax-exempt qualified Florida municipal governmental plan. It currently employs 1 investment manager responsible for investing of the pension fund’s assets. The approximate asset value of the total investment portfolio is $13 Million. Copies of the most current investment performance and asset allocation are attached for your information and review.

CRITICAL DATE

TIME IS OF THE ESSENCE! Submit eight copies of your proposal in writing to arrive ON OR BEFORE . All proposals received after that date and time shall be recorded as “late.” The Boards may reject late proposals.

Please place the proposal in a sealed envelope identified on the outside of the envelope by “Sealed Proposal,” indicate prominently on a cover letter if you are seeking

consideration from the General Employees Pension Fund Board and mail to:

Benefits USAPete Prior, Plan Administrator Bal Harbour General Employees Pension Plan 3810 Inverrary Blvd. Ste. 303Lauderhill, Fl 33319

DO NOT ATTEMPT TO CONTACT ANYONE ASSOCIATED WITH THE BOARDS OR ANY REPRESENTATIVE OF THE BOARDS CONCERNING INFORMATION OVER AND ABOVE THAT WHICH HAS BEEN PROVIDED IN THIS REQUEST FOR PROPOSAL.

SELECTION CRITERIA

The following criteria will be used to evaluate bid responses and to select the winning proposer:

A. Complete response to all response items;

B. Ability to meet service requirements;

C. Experience, financial performance and results in providing similar servicesto government and corporate clients;

D. Commitment of the firm or individual to provide pension evaluation services;

E. Qualifications and experience of individuals to be assigned to thisengagement; (the representative making the presentation should be theperson who will be regularly reporting to the Boards and attending Boardsmeetings)

F. Quality, method and format of written proposal;

G. Quality, method and format of oral presentation;

H. Aggregate service cost.

When the Board has tentatively selected a candidate, a meeting will be required to formulate plans in greater detail, to clarify any unclear items, and to otherwise complete negotiations prior to the formal award. At any time during the meeting, the Board may choose to modify its choice of a selected candidate if, in its discretion, such change is in the best interest of the Board.

TERMS AND CONDITIONS

A. The Boards reserves the right to reject any and all proposals and has theright to waive any irregularities or informalities in a proposal at any timeduring the selection process until a contract has been executed.

B. The award will be to the proposal whose bid, in the opinion of the Boards,is the best proposal, taking into consideration all aspects of the proposer’sresponse, including the total net cost to the Boards.

C. In the event that the bidder to whom the bid is tentatively awarded does notexecute a contract within 30 days after notification of selection, the Boardsmay give notice to such bidder of intent to award to the next most qualifiedbidder or to call for new bids, and may proceed to act accordingly.

D. The Boards will not be responsible for any expenses incurred in thepreparation of proposals or presentations, or costs incurred during contractnegotiations.

REQUESTED SERVICES RELATING TO EVALUATION OF MANAGER PERFORMANCE

A. Quarterly written reports are to be provided.

B. An oral briefing to the Pension Boards is to be provided quarterly for thepurpose of interpreting, explaining, and summarizing all quarterlyevaluations and performance reports. One of these briefings shall relate tothe fiscal year end quarterly report.

C. Reports shall be provided within at least 45 days of the end of quarter withupdated preliminary figures/reporting through the most current periodallowable.

D. The report provided to the Boards should contain information which istypical or standard for such reports provided to the firm's other pension fundevaluation clients. At a minimum, the report should provide the following:

1. Summary statistical information on the market value of assets andasset allocation.

2. Total time-weighted return for each asset class for the most recentlycompleted quarter, 12 months, 3 years and 5 years (and 10 year ifavailable).

3. Separate detailed analysis for each investment manager’sperformance and risk metrics and their corresponding effect on the

portfolio as a whole.

4. Comparisons of actual returns with generally recognized indices, andwith an appropriate comparable universe of other similarly situatedpension fund managers.

5. Information presented in both table and graph form.

6. Calculations which allocate the total return between general marketforces and management decisions of the fund manager.

7. Evaluation of investment performance relative to the fund’s writteninvestment policies and guidelines and all major market indices andbenchmarks.

8. An indication of whether the manager is meeting the Boards’ goalsand adhering to adopted investment guidelines and legalrequirements.

9. Transaction costs.

REQUESTED SERVICES RELATING TO ESTABLISHMENT OF INVESTMENT GUIDELINES, GOALS, AND APPROPRIATE ASSET ALLOCATION

A. It is the Boards’ intention to select an evaluation firm fully capable ofproviding this type of service.

B. The selected firm should be prepared to act as consultant in the reviewand/or development of a written statement of Investment Guidelines andGoals and the development of a corresponding Asset Allocation Analysis.In developing a statement and plan, consideration should be given to:

1. The Boards’ willingness and ability to assume investment risk.

2. Identification of asset classes which should be considered forinvestment.

3. Evaluation of the effect that alternate asset class mixes have onexpected long term return and risk.

4. Evaluation and recommendation concerning the plan's liquidityrequirements and long term investment goals.

C. The selected firm must review the fund’s investment performance andensure the Boards’ ongoing compliance with the written statement ofInvestment Guidelines and Goals. The selected firm must communicate any

failure to meet policy goals.

D. The selected firm is expected to educate trustees on investment relatedmatters and products so that the trustees may make informed investmentdecisions.

REQUESTED SERVICES RELATING TO INVESTMENT MANAGER AND CUSTODIAN SEARCH

A. The Board views this as a service which may or may not be separatelypriced. It is the Boards’ intention to select an evaluation firm fully capableof providing this type of service, even though it may not be initially ordered.

B. Services to be provided, if the Boards chooses to utilize this service, shallinclude:

1. Analysis leading to identification of appropriate investment stylesconsistent with the Boards’ long-term investment objectives.

2. Development and distribution of a Request for Proposal (RFP) tooutside investment managers within investment space universe withappropriate investment style/track record.

3. Clarifying the RFP to potential investment managers.

4. Receive proposals from potential investment managers.

5. Clarify and evaluate the proposals from potential investmentmanagers for the Boards.

6. Assist the Boards in interviewing, selecting and negotiating fees withinvestment managers.

7. Review and recommend contract providers and reportingrequirements.

8. Advise the Boards in appropriate procedures for transferringmanagement of assets to new managers.

C. The selected firm shall render advice and recommendations in the review,search, and selection of custodial banks for pension fund assets.

REQUIRED CONTENTS OF PROPOSALS IN RESPONSE TO THIS RFP

A. General Information:

1. Name of Firm, address and telephone number of firm representative.General description of the firm and statement indicating the firm'scommitment to providing defined benefit pension fund financialevaluation and consulting services. Please identify firm owners andchanges in ownership since January 2014. Please disclose allaffiliations with brokerage, investment management, custodial andconsulting firms.

2. Names and resumes of key personnel who will be responsible forthis engagement and all changes in key personnel since January2014.

3. List of all pension fund consulting/evaluation clients served by thepersonnel listed in response to item 2 above, including contactreference name, telephone number and approximate total fund size.Indicate type of service provided to each (i.e. financialconsulting/evaluation, investment manager search, investmentguidelines). List all clients added and terminated from January 2015to present. Please highlight all Florida-based municipal clients.

4. Explain the size, composition and source of your investmentmanager database. Is your database of prospective managersdeveloped in-house or purchased from outside vendors? Whatindices are used for relative comparisons?

5. Does your firm maintain or utilize a public fund universe? If so, howmany public funds are included and what is the median size and totalassets of this universe? If a public fund universe is not used, whatuniverse(s) is/are used to rank total returns?

6. Are peer universes also maintained for assets classes and formanager style? If so, list the universes that you currently maintain.Are these universe returns reported by plan sponsors or investmentmanagers?

7. Explain if your software systems were developed entirely in-house orpurchased from outside services.

8. Statement that the firm can provide all services as requested, or,alternatively, a statement taking exception to certain services whichcannot be provided as requested.

9. Provide information on how the fee for the following services will bedetermined:

a. Evaluation of Investment Manager Performance.

b. Establish Investment Guidelines, Goals and correspondingAsset Allocation.

c. Investment Manager Searches.

Provide an estimated fee for each service. Fees will be paid in "hard" dollars.

10. How much fiduciary liability insurance does your firm have?

B. Information regarding evaluation of investment manager performance:

1. Provide a complete sample report which illustrates the types ofinformation and format of quarterly reports which will be provided tothe Boards.

2. Provide a discussion of your general approach, philosophy,capabilities and experience in providing performance evaluationservices.

C. Information regarding establishment of investment guidelines, goals andasset allocation:

Provide a discussion of your general approach, philosophy, capabilities andexperience in providing consulting services for the establishment ofinvestment guidelines, goals and asset allocation.

D. Information regarding manager search services:

Provide a discussion of your general approach, philosophy, capabilities andexperience in providing manager search consulting services.

E. Disclosure and Conflicts of Interest.

Provide complete responses to the attached DOL/SEC Pension ConsultantQuestionnaire.

MISCELLANEOUS

A. Please state whether you are willing to acknowledge that you are a fiduciaryof the fund as defined in the Employee Retirement Income Security Act of1974 ("ERISA") and Section 112.656, Florida Statutes.

B. Please state whether you agree that the agreement shall be construedunder the laws of the state of Florida and federal law where applicable.

C. Please state whether you agree to venue for any judicial proceeding to bein the county in which the Boards sits (i.e. Palm Beach County).

D. Please submit form ADV Part II including schedule F, a copy of Floridaregistration as an investment adviser pursuant to Section 517.12, FloridaStatutes, and if you are an out-of-state business entity, a copy of anauthorization to do business in Florida pursuant to Section 605.0902 or607.1503, Florida Statutes.

E. Please confirm that your firm qualifies as “independent” by, at aminimum: a) Providing his or her services on a flat-fee basis; b) yourfirm is not associated in any manner with the money managers for thepension fund; c) makes calculations according to the AmericanBanking Institute method of calculating time-weighted rates of return. Allcalculations must be made net of fees; and d) Has 3 or more years ofexperience working in the public sector.

FOR YOUR INFORMATION:

Section 287.133, Florida Statutes, provides that a person or affiliate who has been placed on the convicted vendor list following a conviction for a public entity crime may not submit a bid on a contract to provide any goods or services to a public entity, may not submit a bid on a contract with a public entity for the construction or repair of a public building or public work, may not submit bids on leases of real property to a public entity, may not be awarded or perform work as a contractor, supplier, subcontractor, or consultant under a contract with any public entity, and may not transact business with any public entity in excess of the threshold amount provided in Section 287.017, Florida Statutes, for CATEGORY TWO for a period of 36 months from the date of being placed on the convicted vendor list.

DOL / SEC Pension Consultant Questionnaire

Are you registered with the SEC or a state securities regulator as an investment adviser? If so, have you provided your clients with all the disclosures required under those laws (including Part II of Form ADV)?

1. Do you or a related company have relationships with money managers that yourecommend, consider for recommendation, or otherwise mention to the plan forconsideration? If so, describe those relationships.

2. Do you or a related company receive any payments from money managers yourecommend, consider for recommendation, or otherwise mention to the plan forconsideration? If so, what is the extent of these payments in relation to your otherincome (revenue)?

3. Do you have any policies or procedures to address conflicts of interest or to preventthese payments or relationships from being considered when you provide adviceto your clients?

4. If you allow plans to pay your consulting fees using the plan’s brokeragecommissions, do you monitor the amount of commission paid and alert plans whenconsulting fees have been paid in full? If not, how can a plan make sure it doesnot over-pay its consulting fees?

5. If you allow plans to pay your consulting fees using the plan’s brokeragecommissions, what steps do you take to ensure that the plan receives bestexecution for its securities trades?

6. Do you have any arrangements with broker-dealers under which you or a relatedcompany will benefit if money managers place trades for their clients with suchbroker-dealers?

7. If you are hired, will you acknowledge in writing that you have a fiduciary obligationas an investment advisor to the plan while providing the consulting services we areseeking?

8. Do you consider yourself a fiduciary under ERISA with respect to therecommendations you provide the plan?

9. What percentage of your plan clients utilize money managers, investment funds,brokerage services or other providers from whom you receive fees?

Please have the firm’s Chief Compliance Officer certify that the responses above are true and correct.

BAL HARBOUR VILLAGE GENERAL EMPLOYEES’ PENSION PLAN AND TRUST FUNDACTUARIAL VALUATION REPORT AS OF OCTOBER 1, 2017 FOR FUNDING DURING THE YEAR ENDING SEPTEMBER 30, 2019

ANNUAL EMPLOYER CONTRIBUTION

IS DETERMINED BY THIS VALUATION

FOR THE PLAN YEAR ENDING

SEPTEMBER 30, 2018

TO BE PAID DURING THE CONTRIBUTION YEAR ENDING

SEPTEMBER 30, 2019

February 13, 2018 Bal Harbour Pension Board/Committee Bal Harbour Village 655 96th Street Bal Harbour Village, FL 33154 Board/Committee Members: The results of the October 1, 2017 Annual Actuarial Valuation of the Bal Harbour Village General Employees’ Pension Plan are presented in this report. The computed contribution rate shown on page 1 may be considered as a minimum contribution rate that complies with the Board’s funding policy. Users of this report should be aware that contributions made at that rate do not guarantee benefit security. Given the importance of benefit security to any retirement system, we suggest that contributions to the Plan in excess of those presented in this report be considered. The contribution rate in this report is determined using the actuarial assumptions and methods disclosed in Section A of this report. This report includes risk metrics in Section B but does not include a more robust assessment of the risks of future experience not meeting the actuarial assumptions. Additional assessments of risks were outside the scope of this assignment. We encourage a review and assessment of investment and other significant risks that may have a material effect on the Plan’s financial condition. This report was prepared at the request of the Board and is intended for use by the Retirement Plan and those designated or approved by the Board. This report may be provided to parties other than the Plan only in its entirety and only with the permission of the Board. GRS is not responsible for unauthorized use of this report. The purposes of the valuation are to measure the Plan’s funding progress and to determine the employer contribution rate for the fiscal year ending September 30, 2019. This report should not be relied on for any purpose other than the purposes described herein. Determinations of financial results associated with the benefits described in this report, for purposes other than those identified above may be significantly different. The findings in this report are based on data or other information through September 30, 2017. Future actuarial measurements may differ significantly from the current measurements presented in this report due to such factors as the following: plan experience differing from that anticipated by the economic or demographic assumptions; changes in economic or demographic assumptions; increases or decreases expected as part of the natural operation of the methodology used for these measurements (such as the end of an amortization period or additional cost or contribution requirements based on the plan’s funded status); and changes in plan provisions or applicable law. The scope of an actuarial valuation does not include an analysis of the potential range of such future measurements. This valuation assumed the continuing ability of the plan sponsor to make the contributions necessary to fund this plan. A determination regarding whether or not the plan sponsor is actually able to do so is outside our scope of expertise and was not performed.

Bal Harbour Pension Board/Committee February 13, 2018 Page 2

The valuation was based upon information furnished by the Plan Administrator concerning Plan benefits, financial transactions, plan provisions and active members, terminated members, retirees and beneficiaries. We checked for internal reasonability and year-to-year consistency, but did not otherwise audit the data. We are not responsible for the accuracy or completeness of the information provided by the Plan Administrator. In addition, this report was prepared using certain assumptions prescribed by the Board and prescribed by the Florida Statutes as described in the section of this report entitled Actuarial Assumptions and Cost Method. The prescribed assumptions are the assumed mortality rates detailed in the Actuarial Assumptions and Cost Method section in accordance with Florida House Bill 1309 (codified in Chapter 2015-157). This report has been prepared by actuaries who have substantial experience valuing public employee retirement systems. To the best of our knowledge the information contained in this report is accurate and fairly presents the actuarial position of the Bal Harbour Village General Employees’ Pension Plan as of the valuation date. All calculations have been made in conformity with generally accepted actuarial principles and practices, with the Actuarial Standards of Practice issued by the Actuarial Standards Board and with applicable statutes. James J. Rizzo and Piotr Krekora are members of the American Academy of Actuaries. These actuaries meet the Academy’s Qualification Standards to render the actuarial opinions contained herein. The signing actuaries are independent of the plan sponsor. Gabriel, Roeder, Smith & Company will be pleased to review this valuation report with the Board of Trustees and to answer any questions pertaining to the valuation. Respectfully submitted, GABRIEL, ROEDER, SMITH AND COMPANY

James J. Rizzo, ASA, MAAA Senior Consultant & Actuary

Piotr Krekora, ASA, MAAA Consultant & Actuary

Statement by Enrolled Actuary This actuarial valuation and/or cost determination was prepared and completed by me or under my direct supervision, and I acknowledge responsibility for the results. To the best of my knowledge, the results are complete and accurate. In my opinion, the techniques and assumptions used are reasonable, meet the requirements and intent of Part VII, Chapter 112, Florida Statutes, and are based on generally accepted actuarial principles and practices. There is no benefit or expense to be provided by the plan and/or paid from the plan's assets for which liabilities or current costs have not been established or otherwise taken into account in the valuation. All known events or trends which may require a material increase in plan costs or required contribution rates have been taken into account in the valuation.

Signature February 13, 2018 Date 17-03355 Enrollment Number

T A B L E O F C O N T E N T S

SECT ION TITLE PAGE

A D I S C U S S I O N O F V A L U A T I O N R E S U L T S A-1

B V A L U A T I O N R E S U L T S

1. Participant Data B-1

2.

3.

Actuarially Determined Contribution Comparison of Change in Actuarially Determined Contribution Attributable to Assumption Change

B-2

B-3

4. Actuarial Value of Benefits and Assets B-4

5. Financial Position of the Plan B-5

6. Actuarial Gains and Losses B-8

7. Recent History of Valuation Results B-13

8. Recent History of Required and Actual Contributions B-15

9. Actuarial Assumptions and Cost Method B-16

C P E N S I O N F U N D I N F O R M A T I O N

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 M I S C E L L A N E O U S I N F O R M A T I O N

1. Reconciliation of Membership Data D-1

2. Statistical Data D-2

E S U M M A R Y O F P L A N P R O V I S I O N S E-1

F C O M P A R A T I V E S U M M A R Y O F P R I N C I P A L V A L U A T I O N R E S U L T S

F-1

SECTION A

DISCUSSION OF VALUATION RESULTS

Bal Harbour Village General Employees’ Pension Plan A-1

DISCUSSION OF VALUATION RESULTS

Comparison of Actuarially Determined Contribution

The following is a comparison of required contributions developed in this year's and the last actuarial valuations:

Actuarially Determined Contribution $ 957,499 $ 793,089 $ 164,410As % of Expected Payroll 55.68 % 57.24 % (1.56) %

Based on 10/01/17

(Decrease)Valuation Valuation

IncreaseBased on 10/01/16

For FYE 9/30/2019 For FYE 9/30/2018

Minimum Required Contribution

As can be seen in the preceding chart, the Village contribution necessary to support the current benefits for the General Employees is $957,499 for the fiscal year beginning October 1, 2018. Please note that the Actuarially Determined Contribution for that fiscal year is assumed to be deposited during the first quarter of the contribution year, consistent with the recent practice. The contribution shown above may be considered as a minimum contribution that complies with the Board’s funding policy and the State Statute. Users of this report should be aware that contributions made at that rate do not guarantee benefit security. Given the importance of benefit security to any retirement system, we suggest that contributions to the System in excess of those presented in this report be considered.

Revisions in Funding Policy

There were no revisions in funding policy for the current year.

Revisions in Benefits

There were no revisions in benefits for the current year.

Revisions in Actuarial Assumptions or Methods

The expected rate of return on plan assets has been lowered from 6.25% to 6.00% annually. This is closer to the mainstream consensus of the 50th percentile expectations of compound returns for the mid-term, using this plan’s current asset allocations. Major national investment consulting and forecasting firms are not as optimistic about returns over the next 10 years (or more) as they had been in the past. This change increased the required contribution by $72,066 or 4.19% of pay.

Actuarial Experience

For the current year, the Plan experienced an actuarial loss. Actuarial gains occur in a year whenever the experience of the plan is more favorable than was assumed. For example, if investment performance were better than the level being assumed in the actuarial valuation and costing process, then an actuarial gain results and would have the effect of lowering the Actuarially Determined Contribution for the year. Actuarial

Bal Harbour Village General Employees’ Pension Plan A-2

gains occur whenever more employees terminate employment than were assumed would terminate or when fewer than expected employees are to actually retire from the Village. Actuarial losses occur in a year whenever the experience of the plan is less favorable than was assumed. In the examples given above, if the reverse were to occur, then actuarial losses would result. As another example, if salaries increased in one year higher than was assumed, an actuarial loss would occur.

The actuarial valuation cost method which determines the Actuarially Determined Contribution is designed to produce contribution requirements which remain level as a percent of payroll whenever the experience of the plan matches the actuarial assumptions used. Contribution requirements are also level whenever actuarial losses exactly offset actuarial gains.

The plan experienced a net actuarial loss this year, primarily due to an increase in the number of active members. Furthermore, salaries for continuing employees increased on average at 7.0% which is higher than the assumed average 5.1%. The liability losses were partially offset by an investment gain due to the rate of return on valuation asset exceeding the expected return (7.3% actual vs. 6.25% assumed).

Analysis of Change in Actuarially Determined Contribution

The Actuarially Determined Contribution expressed as a percent of payroll is less than determined in the prior valuation. The components of change in the Determined Contribution are as follows:

Contribution rate last year 57.24 %

Payment on UAAL prior to changes (if any) (6.68)

Experience (gain)/loss 2.21

Change in administrative expense (0.67)

Change in normal cost before expenses (0.61)

Revision in benefits 0.00

Revision in assumptions/methods 4.19

Contribution rate this year 55.68

It is worth noting that the payment to amortize the Unfunded Actuarial Accrued Liability before recognizing this year’s experience decreased when expressed as a percent of payroll. However, this is a result of an increase in the valuation payroll without significant change in the dollar amount.

The remainder of this Report includes detailed actuarial valuation results, financial information, miscellaneous information and statistics, and a summary of plan provisions.

Excess Benefit Plan

Internal Revenue Code (IRC) Section 415 limits benefits payable by the Plan to an annual amount actuarially adjusted based on the age of the retiree at the date of distribution and the form of benefit. Contribution requirements and liabilities reported herein are based on the benefits that are limited according to those restrictions. The Village has created the Excess Benefit Plan to avoid reductions in the benefits otherwise payable to participants. The Excess Benefit Plan will pay the difference between the total benefit contractually promised to a member and the limit imposed on the pension fund by IRC Section 415. The Excess Benefit Plan will be paying a significant portion of the total annual benefit payable to now-retired Village Manager in accordance with IRC Section 415 and the Plan’s Ordinance. This portion, which is a liability of the Village, is the subject of separate Actuarial Valuation Report. No other employees are currently subject to the IRC Section 415 limits.

SECTION B

VALUATION RESULTS

Bal Harbour Village General Employees’ Pension Plan B-1

ACTIVE MEMBERS

Number 25 21

Covered Annual Payroll $ 1,653,391 $ 1,332,178

Average Annual Payroll $ 66,136 $ 63,437

Average Age 42.1 45.7

Average Past Service 6.2 7.6

Average Age at Hire 35.9 38.1

RETIREES, BENEFICIARIES, & DROP MEMBERS

Number 29 26

Annual Benefits $ 710,932 $ 641,289

Average Annual Benefit $ 24,515 $ 24,665


DISABILITY RETIREES

Number 1 1




TERMINATED VESTED MEMBERS

Number 8 8




PARTICIPANT DATA

October 1, 2017 October 1, 2016


A. Valuation Date October 1, 2017 October 1, 2017 October 1, 2016

After Change

in Assumption

Before Change

in Assumption

B. ADC to Be Paid During

Fiscal Year Ending 9/30/2019 9/30/2019 9/30/2018

C. Assumed Date(s) of Employer Contrib. 12/31/2018 12/31/2018 12/31/2017

D. Annual Payment to Amortize

Unfunded Actuarial Liability $ 468,939 $ 427,401 $ 402,267

E. Employer Normal Cost 421,300 393,413 332,943

F. ADC if Paid on the Valuation

Date: D+E 890,239 820,814 735,210

G. ADC Adjusted for Frequency of

Payments and Interest to Required Time

of Contribution 957,499 885,433 793,089

J. Projected Covered Payroll for Contribution Year 1,719,527 1,719,527 1,385,465

H. ADC as % of Expected Payroll 55.68 % 51.49 % 57.24 %

ACTUARIALLY DETERMINED CONTRIBUTION (ADC)


After

Assumption

Change

Before

Assumption

Change

A. Actuarial Present Value of All Projected

Benefits for:

1. Active Members

a. Service Retirement Benefits $5,108,782 $4,827,335

b. Vesting Benefits 1,813,134 1,683,481

c. Disability Benefits 162,942 155,332

d. Preretirement Death Benefits 56,221 54,545

e. Return of Member Contributions 0 0

f. Total 7,141,079 6,720,693

2. Inactive Members

a. Service Retirees & Beneficiaries 11,847,892 11,498,484

b. Disability Retirees 30,196 29,808

c. Terminated Vested Members 1,841,638 1,761,661

d. Total 13,719,726 13,289,953

3. Total for All Members 20,860,805 20,010,646

B. Present Value of Future Normal Cost 3,512,434 3,263,904

C. Actuarial Accrued Liability (A-B) 17,348,371 16,746,742

D. Actuarial Value of Assets 12,070,474 12,070,474

E. Unfunded Actuarial Accrued Liability (C-D) 5,277,897 4,676,268

F. Entry Age Normal Cost 497,177 469,203

Adminstrative Expenses 52,595 52,533

Expected Member Contributions 128,473 128,322

Total Employer Normal Cost 421,299 393,414

G. ADC Adjusted for Frequency of Payments

and Interest to Time of Contribution 957,499 885,433

H. Expected Payroll in Contribution Year 1,719,527 1,719,527

I. ADC as % of Expected Payroll 55.68% 51.49%

J. Year to Which Contribution Applies:

1. Plan Year Ending 9/30/2017 9/30/2017

2. Employer Fiscal Year Ending 9/30/2018 9/30/2018

K. Funded Ratio of the Plan 70% 72%

COMPARISON OF CHANGE IN OCTOBER 1, 2017 ACTUARIALLY

DETERMINED CONTRIBUTION (ADC) ATTRIBUTABLE TO

ASSUMPTION CHANGE


A. Valuation Date

B. Actuarial Present Value of All Projected

Benefits for

1. Active Members

a. Service Retirement Benefits $5,108,782 $4,562,169

b. Vesting Benefits 1,813,134 1,214,753

c. Disability Benefits 162,942 112,497

d. Preretirement Death Benefits 56,221 51,266

e. Return of Member Contributions 0 0

f. Total 7,141,079 5,940,685

2. Inactive Members

a. Service Retirees & Beneficiaries 11,847,892 10,481,309

b. Disability Retirees 30,196 30,638

c. Terminated Vested Members 1,841,638 1,544,612

d. Total 13,719,726 12,056,559

3. Total for All Members 20,860,805 17,997,244

C. Actuarial Accrued (Past Service)

Liability per Entry Age Normal Cost Method 17,348,371 15,576,714

D. Actuarial Value of Accumulated Plan

Benefits per FASB No. 35 16,038,112 14,497,136

E. Plan Assets

1. Market Value 12,452,690 11,114,499

2. Actuarial Value 12,070,474 11,165,130

F. Actuarial Present Value of Projected

Covered Payroll 11,605,835 8,436,819

G. Actuarial Present Value of Projected

Member Contributions 928,467 674,945

ACTUARIAL VALUE OF BENEFITS AND ASSETS

October 1, 2017 October 1, 2016


FINANCIAL POSITION OF THE PLAN

The purpose of this portion of the Report is to provide certain measures which indicate the financial position of the program. Measures presented below illustrate short-term and long term position of the plan.

The various percentages listed in this Section as of a single valuation date are not overly significant standing alone. What is more significant is the trend of the rates over a period of years. It is also important to keep in mind that each time there are revised benefits or assumptions, 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 Position

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. Accumulated contributions of active members of the program,

2. The actuarial present value (APV) of projected benefits payable to those already receiving benefits and tovested terminations, and

3. The employer financed portion of the actuarial present value of accrued benefits payable to activeparticipants. This amount is based on benefits earned to date without future credited service or salaryincreases.

The total of the first two items should generally be fully covered by assets. The portion of the third item covered by assets should increase over time. Increases in benefits will, of course, adversely affect the trend in the years when such increases are first reflected in the actuarial values.

1. Accumulated Contributionsof Active Members $ 428,510 $ 422,026 $ 570,524

2. APV of Projected Benefits inPay Status and for VestedTerminations 13,719,726 12,056,559 9,665,189

3. APV of Accrued Benefits forActive Participants(Employer Portion) 1,889,876 2,018,551 2,895,796

4. Total 16,038,112 14,497,136 13,131,509

5. Market Value of Assets 12,452,690 11,114,499 10,100,606

6. Assets as % of Total 78 % 77 % 77 %

General Employees

09/30/17 09/30/16 09/30/15


0%

20%

40%

60%

80%

100%

120%

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

$14.0

$16.0

2009 2010 2011 2012 2013 2014 2015 2016 2017

Ra

tioM

illi

on

s

Actuarial Valuation Date (September 30)

Ratio of Market Value of Assets toPresent 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 with all active members future careers modeled using the valuation assumptions.


Long Term Position 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" but it should not be used to assess a settlement value. Its derivation differs from the short term solvency value derivation in several ways, but mainly due to the fact that future salary increases are included in the AAL. 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.

10/1/17 * $ 12,070,474 $ 17,348,371 70 %10/1/16 * 11,165,130 15,576,714 7210/1/15 * 10,338,487 14,162,244 7310/1/14 * 9,621,224 13,672,298 7010/1/13 * 8,563,819 12,061,936 7110/1/12 7,711,844 10,810,052 7110/1/11 7,613,990 10,674,098 7110/1/10 8,199,480 10,022,134 82

Valuation Date

Actuarial Value of

Assets

Actuarial Accrued

Liability

% of AAL Covered

by Assets

*Reflects change in benefits, actuarial assumptions and/or asset method.

0%

20%

40%

60%

80%

100%

120%

140%

160%

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

$14.0

$16.0

$18.0

2009 2010 2011 2012 2013 2014 2015 2016 2017

Ra

tioM

illi

on

s

Actuarial Valuation Date (September 30)

Ratio of Actuarial Value of Assetsto Actuarial Accrued Liability

Actuarial Assets Accrued Liability Ratio


ACTUARIAL GAINS AND LOSSES

The assumptions used to anticipate mortality, employment turnover, investment income, expenses, salary increases, and other factors have been based on long range trends and expectations. Actual experience can vary from these expectations. The variance is measured by the gain and loss for the period involved. If significant long term experience reveals consistent deviation from what has been expected and that deviation is expected to continue, the assumptions should be modified. The net actuarial gain (loss) for the past year is computed as follows:

1. Last Year's UAAL $4,411,584

2. Last Year's Employer Normal Cost 332,943

3. Last Year's Actual City Contibution 745,601

4. Interest at the assumed rate on:

a. 1 and 2 for one year 296,533

b. 3 from dates paid 43,058

c. a - b 253,475

5. This Year's Expected UAAL

1 + 2 - 3 + 4c 4,252,401

6. This Year's Actual UAAL (before any

changes in benefits or assumptions) 4,676,268

7. Net Actuarial Gain (Loss): (5) - (6) (423,867)

8. Gain (Loss) due to investments 114,825

9. Gain (Loss) due to other sources (538,692)

Derivation of Experience Gain (Loss)


Net actuarial gains in previous years have been as follows:

Year Ended

9/30/1988 9,191 9,191

9/30/1989 (96,738) (87,547)

9/30/1990 (292,201) (379,748)

9/30/1991 4,854 (374,894)

9/30/1992 235,232 (139,662)

9/30/1993 299,330 159,668

9/30/1994 463,889 623,557

9/30/1995 52,365 675,922

9/30/1996 (217,428) 458,494

9/30/1997 768,764 1,227,258

9/30/1998 909,627 2,136,885

9/30/1999 846,636 2,983,521

9/30/2000 1,040,844 4,024,365

9/30/2001 (601,070) 3,423,295

9/30/2002 (858,781) 2,564,514

9/30/2003 (561,182) 2,003,332

9/30/2004 (316,223) 1,687,109

9/30/2005 (1,061,935) 625,174

9/30/2006 (200,559) 424,615

9/30/2007 26,255 450,870

9/30/2008 (411,027) 39,843

9/30/2009 44,224 84,067

9/30/2010 321,083 405,150

9/30/2011 (1,371,441) (966,291)

9/30/2012 (58,645) (1,024,936)

9/30/2013 228,327 (796,609)

9/30/2014 57,037 (739,572)

9/30/2015 657,337 (82,235)

9/30/2016 (243,347) (325,582)

9/30/2017 (423,867) (749,449)

Actuarial Gain (Loss)

Cumulative Gain

(Loss)


($3)

($2)

($1)

$0

$1

$2

$3

$4

$5

$6

$7

$8

($3)

($2)

($1)

$0

$1

$2

$3

$4

$5

$6

$7

$8

Mil

lio

ns

Mil

lio

ns

Plan Year End

Actuarial Gain (+) or Loss (-)

Gain or Loss Cumulative


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:

9/30/1986 22.4 7.0 4.7 7.09/30/1987 20.1 7.0 6.0 7.09/30/1988 12.9 7.0 7.8 7.09/30/1989 11.1 7.0 7.3 7.09/30/1990 6.5 7.0 9.6 7.09/30/1991 8.2 7.0 6.2 7.09/30/1992 21.7 7.0 4.2 7.09/30/1993 19.6 7.0 3.9 7.09/30/1994 9.8 7.0 4.6 5.09/30/1995 7.3 7.0 5.7 5.09/30/1996 9.8 7.0 4.3 5.09/30/1997 25.4 7.0 4.2 5.09/30/1998 23.9 7.0 3.9 5.09/30/1999 29.1 7.0 2.0 5.09/30/2000 25.3 7.0 6.0 5.09/30/2001 2.8 8.0 4.4 4.59/30/2002 (0.4) 8.0 5.0 4.59/30/2003 3.1 8.0 5.3 4.59/30/2004 3.9 8.0 5.0 4.59/30/2005 2.1 8.0 9.2 4.59/30/2006 6.9 8.0 6.8 4.59/30/2007 9.2 8.0 5.9 5.09/30/2008 5.0 8.0 5.9 5.09/30/2009 2.0 7.5 1.7 5.09/30/2010 2.1 7.5 3.1 5.09/30/2011 1.2 7.5 1.6 5.09/30/2012 1.6 7.5 0.7 5.09/30/2013 7.9 7.5 5.3 5.09/30/2014 9.1 7.0 3.1 5.09/30/2015 6.6 6.5 5.4 5.09/30/2016 7.8 6.5 10.5 5.09/30/2017 7.3 % 6.25 % 7.0 % 5.1 %

Averages10-Year 5.0 % --- 4.4 % ---

All Years Shown 10.1 % --- 5.2 % ---

Salary Increases

Actual

Investment Return

Year Ending Actuarial Assumed Assumed

The actual investment return rates shown above are based on the Actuarial Value of Assets. As illustrated on pages C-4 and C-5, the Actuarial Value is often different than the Market 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.


-5%

0%

5%

10%

15%

20%

-5%

0%

5%

10%

15%

20%

Plan Year End Compared to Previous Year

History of Salary Increases

Actual Increase Assumed Increase

-5%

0%

5%

10%

15%

20%

25%

30%

35%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

Plan Year End

History of Investment Return - Actuarial Value of Assets

Actual Return Assumed Return


Active

Members

Inactive

Members

10/1/09 31 22 1,267,020 7,935,153 2,130,911 265,926 26.74 2

10/1/10 31 23 1,337,979 8,199,480 1,822,654 199,891 14.94 3

10/1/11 26 23 1,203,183 7,613,990 3,060,108 194,117 16.13 3

10/1/12 21 26 1,026,671 7,711,844 3,098,208 174,084 16.96 3

10/1/13 1 24 26 1,130,179 8,563,819 3,498,117 208,150 18.42 3

10/1/14 1 22 29 1,068,585 9,621,224 4,051,074 219,955 20.58 3

10/1/15 1 23 31 1,251,987 10,338,487 3,823,757 341,935 27.31 3

10/1/16 1 21 35 1,332,178 11,165,130 4,411,584 332,943 24.99 3

10/1/17 1 25 38 1,653,391 12,070,474 5,277,897 421,299 25.48 3

% of PayrollAmountUAAL

RECENT HISTORY OF VALUATION RESULTS

Number of Employer Normal Cost

Valuation

Date

Reported Annual

Payroll

Actuarial Value of

Assets

1 Reflects a change in assumptions. 2 As a % of Payroll under Assumed Retirement Age. 3 As a % of total Reported Active Payroll.


0

10

20

30

40

50

60

70

Actuarial Valuation Date

Recent History of Number of Members

Active Members Inactive Members

$0.0

$0.5

$1.0

$1.5

$2.0

Mil

lio

ns

Actuarial Valuation Date

Recent History of Covered Annual Payroll

Bal Harbour Village General Employees’ Pension Plan

B-15

10/1/09 9/30/11 $455,286 35.93 $455,286

10/1/10 9/30/12 361,228 25.96 432,342

10/1/11 9/30/13 485,448 38.80 524,284

10/1/12 9/30/14 497,853 46.63 671,605

10/1/13 1 9/30/15 565,619 48.12 565,619

10/1/14 1 9/30/16 622,677 56.03 622,677

10/1/15 1 9/30/17 745,642 57.27 745,642

10/1/16 1 9/30/18 793,089 57.24 793,089

10/1/17 1 9/30/19 957,499 55.68 ---

RECENT HISTORY OF REQUIRED AND ACTUAL CONTRIBUTIONS

Actuarially Determined

Contributions

Actual

Contributions

Valuation

End of Year To

Which

Valuation

AppliesAmount

% of Expected

Payroll

1 Reflects a change in assumptions.


B-16

ACTUARIAL ASSUMPTIONS AND COST METHOD

A. Cost Method Individual Entry Age Normal Actuarial Cost Method with normal costs developed using a level percent of pay,

B. Amortization of the UAAL Layered, 20-year, closed amortization. Payments developed

using level percent of pay method with the rate of payroll growth assumption limited under Ch.112.64 (5) (a), F.S.

C. Investment Earnings* 6.25% per year compounded annually, net of investment-

related expenses. This is different than 6.5% assumed previously.

D. Salary Increases* See Table on the following page. E. Inflation 2.25%, this is different than 2.5% assumed previously. F. Retirement Ages See Table on the following page. G. Turnover Rates See Table on the following page. H. Mortality Rates 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 Florida House Bill 1309.

For disabled retirees, the mortality table was the RP-2000

mortality for disabled annuitants, set-forward 4 years for males and set-back 2 years for females, with no provision being made for future mortality improvements.

I. Disability Rates See Table on the following page. J. Asset Value See Section entitled “Actuarial Value of Assets.” K. Administrative Expenses Actual prior year’s Administrative expenses, other than those

for investment management. L. Payroll Growth Assumption 3.0% in a long term, payroll growth rate used in the

amortization of the unfunded liability for the October 1, 2017 valuation limited to 0.35% for use in the in accordance with Ch.112.64 (5) (a), F.S.


B-17

M. Post Retirement Benefit Increase 2.5% N. Changes Since Last Valuation See Revisions in Actuarial Assumptions or Methods section in

the Discussion of Valuation Results section of the report. O. Present Value of Accrued Benefits Present Value of Accrued Benefits is measured using Unit Credit

Cost Method which does not take into consideration any future service or salary increases.

Age

Employment

Turnover Rates

Disability Rates

Salary Increase

Rates*

20 25 30 35 40 45 50 55 60 65

16.0% 14.8 12.2 10.4 9.4 7.8 6.4 4.2 2.4 1.4

0.14% 0.15 0.18 0.23 0.30 0.51 1.00 1.55 --- ---

6.75%

6.75 6.15 5.75 5.75 5.15 4.75 4.45 3.95 3.15

*Includes Inflation

Normal Retirement Rates

First Eligibility Ages after First Eligibility until Age 66 Age 67 and Over

80% 20 100

Early Retirement Rates

Age 55 56

3.0% 3.0


B-18

GLOSSARY OF TERMS

Actuarial Accrued Liability

The difference between (i) the actuarial present value of future plan benefits, and (ii) the actuarial present value of future normal cost. Sometimes referred to as “accrued liability” or “past service liability.”

Accrued Service The service credited under the plan which was rendered before the date of the

actuarial valuation. Actuarial Assumptions Estimates of future plan experience with respect to rates of mortality, disability,

turnover, retirement, rate or rates of investment income and salary increases. Decrement assumptions (rates of mortality, disability, turnover and retirement) are generally based on past experience, often modified for projected changes in conditions. Economic assumptions (salary increases and investment income) consist of an underlying rate in an inflation-free environment plus a provision for a long-term average rate of inflation.

Actuarial Cost Method

A mathematical budgeting procedure for allocating the dollar amount of the “actuarial present value of future plan benefits” between the actuarial present value of future normal cost and the actuarial accrued liability. Sometimes referred to as the “actuarial funding method.”

Actuarial Equivalent A single amount or series of amounts of equal value to another single amount or

series of amounts, computed on the basis of the rate(s) of interest and mortality tables used by the plan.

Actuarial Present Value

The amount of funds presently required to provide a payment or series of payments in the future. It is determined by discounting the future payments at a predetermined rate of interest, taking into account the probability of payment.

Amortization Paying off an interest-bearing liability by means of periodic payments of interest and

principal, as opposed to paying it off with a lump sum payment. Experience Gain (Loss) A measure of the difference between actual experience and that expected based

upon a set of actuarial assumptions during the period between two actuarial valuation dates, in accordance with the actuarial cost method being used.

Normal Cost The annual cost assigned, under the actuarial funding method, to current and

subsequent plan years. Sometimes referred to as “current service cost.” Any payment toward the unfunded actuarial accrued liability is not part of the normal cost.

Reserve Account An account used to indicate that funds have been set aside for a specific purpose and

is not generally available for other uses. Unfunded Actuarial Accrued Liability

The difference between the actuarial accrued liability and valuation assets. Sometimes referred to as “unfunded accrued liability.”

Valuation Assets The value of current plan assets recognized for valuation purposes. Generally based

on market value plus a portion of unrealized appreciation or depreciation.

SECTION C

PENSION FUND INFORMATION

Bal Harbour Village General Employees’ Pension Plan C-1

Cash and Securities - Market Value

Cash and Savings Accounts $ 0 $ 0

Short Term Investments 640,440 562,800

Government Agency Bond Fund 0 0

Corporate Bonds 4,405,799 3,942,549

Common & Preferred Stocks 0 0

Equity Funds 7,598,838 6,760,033

Total 12,645,077 11,265,382

Receivables and Accruals

Member Contribution 7,108 0

Employer Contribution 0 0

Interest and Dividends 310 0

Prepaid Insurance 3,990 0

Total 11,408 0

Payables

Benefits-DROP Reserve 188,930 150,883

Lump Sum Distributions/Refunds 0 0

Expenses 0 0

Other 14,865 0

Total 203,795 150,883

Net Assets - Market Value $ 12,452,690 $ 11,114,499

SUMMARY OF ASSETS

9/30/2017 9/30/2016

Year Ending Year Ending


Market Value at Beginning of Period $ 11,114,499 $ 10,100,606

Income

Member Contributions 103,551 78,154

State Contributions 0 0

Employer Contribution 745,642 622,677

Adjustment to Beginning of Year Market Value (41)

Interest and Dividends 246,925 188,353

Realized Gain (Loss) 293,656 (29,842)

Unrealized Gain (Loss) 756,204 882,466

Total Income 2,145,937 1,741,808

Disbursements

Monthly Benefit Payments 580,345 492,963

DROP Payments Held in Reserve 38,047 70,606

Lump Sum Distributions & DROP Payouts 84,857 66,203

Refund of Contributions 6,163 4,488

Investment Related Expenses 44,184 41,358

Other Administrative Expenses 54,150 52,297

Total Disbursements 807,746 727,915

Net Increase During Period $ 1,338,191 $ 1,013,893

Market Value at End of Period $ 12,452,690 $ 11,114,499

Year Ending

9/30/2016

Year Ending

9/30/2017

SUMMARY OF FUND'S INCOME AND DISBURSEMENTS


DEFERRED RETIREMENT OPTION PLAN (drop) BENEFITS HELD IN RESERVE and Activity

State Statutes require that the value of assets be offset by the total accumulated balance of DROP payments being held in reserve for those participating in the DROP plan. A reconciliation of the accumulated balance to be recognized is provided in the table below.

$ 150,883

+ 117,131

+ 5,773

- 84,857

$ 188,930Value at end of year

Value at beginning of year

RECONCILIATION OF DROP ACCOUNTS

Payments credited to accounts

Investment Earnings credited

Withdrawals from accounts

7

+ 2

- 3

6Number as of October 1, 2017

DROP PARTICIPATION ACTIVITY

Number as of October 1, 2016

Number Entered During the Year

Number Exited During the Year


ACTUARIAL VALUE OF ASSETS

As of October 1, 2017

Valuation assets are calculated using a smoothed market value over a period of five (5) 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 4 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.


2017 2018 2019 2020 2021

A. Preliminary actuarial value from prior year 11,165,130$ 12,070,474$

B. Market value beginning of prior year 11,114,499 12,452,690

C. Market value end of prior year 12,452,690

D. Non-investment net cash flow 91,404

E. Investment return

1. Actual market value return net of investment

expenses: C - B - D 1,246,787

2. Expected return of 6.25% 691,740

3. Excess/(shortfall) to be phased-in: E1 - E2 555,047

F. Phased-in recognition of investment return

1. Current year: 20% of E3 111,009

2. 20% of excess/(shortfall) from first prior year 68,498 111,009

3. 20% of excess/(shortfall) from second prior year (148,434) 68,498 111,009

4. 20% of excess/(shortfall) from third prior year 29,549 (148,434) 68,498 111,009

5. 20% of excess/(shortfall) from fourth prior year 61,578 29,549 (148,434) 68,498 111,011

6. Total phased-in recognition of investment return 122,200 60,622 31,073 179,507 111,011

G. Actuarial value end of year

1. Preliminary actuarial value end of year:

A + D + E2 + F6 12,070,474

2. Upper corridor limit: 120% of C 14,943,228

3. Lower corridor limit: 80% of C 9,962,152

4. Actuarial value end of year * 12,070,474

H. Difference between market value and actuarial value 382,216

DEVELOPMENT OF FUNDING VALUE OF ASSETS AS OF OCTOBER 1

* Offset for DROP Reserve made prior to the calculation of valuation assets.


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.

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.

Rates of return for years ended prior to September 30, 2000 are based on the combined assets of the General Employees and Police Officers’ Pension Plan.

9/30/17 11.2 % 7.3 %9/30/16 9.9 7.8 9/30/15 (0.8) 6.6 9/30/14 8.6 9.1 9/30/13 11.3 7.9 9/30/12 18.8 1.6 9/30/11 0.4 1.2 9/30/10 10.2 2.1 9/30/09 0.5 2.0 9/30/08 (12.2) 5.0 9/30/07 14.4 9.2 9/30/06 7.2 6.9 9/30/05 9.5 2.1 9/30/04 6.2 3.9 9/30/03 25.4 3.1 9/30/02 (10.7) (0.4)9/30/01 (12.7) 2.8 9/30/00 16.9 25.3 9/30/99 26.1 29.1 9/30/98 12.1 23.9 9/30/97 29.5 25.4 9/30/96 14.7 9.8 9/30/95 17.8 7.3 9/30/94 - 9.8 9/30/93 11.4 19.6 9/30/92 15.9 21.7 9/30/91 28.9 8.2 9/30/90 3.7 6.5 9/30/89 23.1 11.1 9/30/88 (11.0) 12.9 9/30/87 28.4 20.1 9/30/86 26.5 22.4

10.0 % 10.1 %

5.4 5.0

Market Value

Average

Compounded Rate

of Return for Last 10

Actuarial ValueYear Ended

Investment Rate of Return

Average Compounded

Rate of Return for All

Years Shown

SECTION D

MISCELLANEOUS INFORMATION

Bal Harbour Village General Employees’ Pension Plan D-1

A.

1. Number Included in Last Valuation 21 23

2. New Members Included in Current Valuation 7 5

3. Non-Vested Employment Terminations 0 (2)

4. Vested Employment Terminations 0 (1)

5. Service Retirements (1) (1)

6. Disability Retirements 0 0

7. Deaths 0 0

8. DROP Retirement (2) (3)

9. Rehired 0 0

10. Number Included in This Valuation 25 21

B.


2. Additions from Active Members 0 1

3. Lump Sum Payments 0 0

4. Payments Commenced or Moved to DROP 0 0

5. Deaths 0 0

6. Other - Determined Not Vested 0 (1)

7. Number Included in This Valuation * 8 8

C.


2. Additions from Active Members 1 1

3. Additions entering the DROP 2 3

4. Additions from Terminated Vested Members 0 0

5. Deaths Resulting in No Further Payments 0 0

6. Deaths Resulting in New Survivor Benefits 0 0

7. End of Certain Period - No Further Payments 0 0

8. Other -- Lump Sum Distributions 0 0

9. Number Included in This Valuation 30 27

* Includes 2 Dual Service and 6 Vested Terminated Members as of 10/1/17.

To 10/01/17

RECONCILIATION OF MEMBERSHIP DATA

Active Members

Service Retirees, Disability Retirees, Beneficiaries & DROP

Terminated Vested Members

From10/01/15From10/01/16To 10/01/16

Bal Harbour Village General Employees’ Pension Plan D-2

STATISTICAL DATA

Active Members as of October 1, 2017

Age Group 0-1 1-2 2-3 3-4 4-5 5-9 10-14 15-19 20-24 25-29 30-34 35 & Up Totals

20-24 NO. 0 1 0 0 0 0 0 0 0 0 0 0 1

25-29 NO. 0 1 0 1 0 0 0 0 0 0 0 0 2

30-34 NO. 0 2 0 0 0 1 1 0 0 0 0 0 4

35-39 NO. 0 0 1 1 0 0 0 1 0 0 0 0 3

40-44 NO. 0 2 1 1 0 0 1 1 0 0 0 0 6

45-49 NO. 0 1 1 0 0 0 0 0 0 0 0 0 2

50-54 NO. 0 0 1 0 0 1 1 0 0 0 0 0 3

55-59 NO. 0 0 0 1 0 0 0 1 1 0 0 0 3

60-64 NO. 0 0 1 0 0 0 0 0 0 0 0 0 1

65-69 NO. 0 0 0 0 0 0 0 0 0 0 0 0 0

TOT NO. 0 7 5 4 0 2 3 3 1 0 0 0 25

Years of Service to Valuation Date

SECTION E

SUMMARY OF PLAN PROVISIONS

Plan Provisions – General Employees

Bal Harbour Village General Employees’ Pension Plan E-1

A. Ordinances:

Plan established under the Code of Ordinances for the Village of Bal Harbour, Florida, Part II, Chapter 13, Article II, and was most recently amended and restated under Ordinance No. 509 passed and adopted on July 18, 2006. 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

October 1, 1955 C. Plan Year

October 1 through September 30

D. Type of Plan

Qualified, governmental defined benefit retirement plan; for GASB purposes it is a single employer plan. E. Eligibility Requirements

Any Person other than a Police Officer who is employed by the Village as a regular, full-time employee will become a participant on October 1st following the completion of at least one (1) year of continuous employment with the Village.

F. Credited Service

Service is measured as the total number of years and completed months of Continuous Employment with the Village beginning on the date of employment and ending on the date of termination or retirement. No service will be credited for any periods of employment for which the participant received a refund of their employee contributions.

G. Compensation

Basic compensation, defined as compensation actually paid to a participant excluding overtime pay, shift differentials, bonuses and all other extraordinary pay.

H. Final Average Compensation (FAC)

Average monthly rate of Compensation during the highest 36 consecutive months out of the last 120 months preceding the date of termination or retirement.



I. Normal Retirement Eligibility: A participant may retire on the first day of the month coincident with or next following the

earlier of:

(1) age 57 regardless of Credited Service, or (2) age 55 with 25 years of Credited Service, or (3) 30 years of Credited Service regardless of age.

Benefit: 3.0% of FAC times Credited Service. Normal Form of Benefit: 10 Years Certain and Life thereafter; other options are also available.

COLA: 2.5% compounded COLA commencing on the one-year anniversary of the retirement date and each year thereafter for participants who retire after March 21, 2006. Not payable to participants who elect lump sum distributions.

Supplemental Benefit: Any pension benefits earned in excess of Internal Revenue Code Section 415 limits will be

paid from the Excess Benefit Plan. J. Early Retirement Eligibility: A participant may elect to retire earlier than the Normal Retirement Eligibility upon

attainment of age 55 with 10 years of Credited Service. Benefit: The Normal Retirement Benefit is actuarially reduced (1/15th-1/30th method) for each year

by which the Early Retirement date precedes the Normal Retirement date. Normal Form of Benefit: 10 Years Certain and Life thereafter; other options are also available.


Supplemental

Benefit: Any pension benefits earned in excess of Internal Revenue Code Section 415 limits will bepaid from the Excess Benefit Plan.

K. Delayed Retirement

Same as Normal Retirement taking into account compensation earned and service credited until the date of actual retirement.



L. Service Connected Disability Not Applicable M. Non-Service Connected Disability

Eligibility: Any participant who becomes totally and permanently disabled and unable to render useful

and efficient service to the Village for a period of at least 6 months is eligible for a disability benefit.

Benefit The participant becomes fully vested on the date of disability. The benefit is calculated as

if the participant was eligible for Early Retirement and retired on the date of disability. Normal Form of Benefit: 10 Years Certain and Life thereafter; other options are also available. COLA: 2.5% compounded COLA commencing on the one-year anniversary of the retirement date

and each year thereafter for participants who retire after March 21, 2006. Not payable to participants who elect lump sum distributions.

Supplemental Benefit: Any pension benefits earned in excess of Internal Revenue Code Section 415 limits will be

paid from the Excess Benefit Plan. N. Death in the Line of Duty

Eligibility: Any participant that dies as a direct result of an occurrence arising in the performance of service to the Village.

Benefit: 50% of the participant’s base rate of pay in effect at the time of death payable to the

designated beneficiary.

Normal Form of Benefit: 10 Years Certain; minimum amount shall be equal to the deceased participant’s own contributions.

COLA: 2.5% compounded COLA commencing on the one-year anniversary of the retirement date


Supplemental Benefit: Any pension benefits earned in excess of Internal Revenue Code Section 415 limits will be paid from the Excess Benefit Plan.



O. Other Pre-Retirement Death Eligibility: Any participant that dies not as a direct result of an occurrence arising in the performance of service to the Village.

Benefit: Calculated as if the participant was eligible for Early Retirement and retired immediately preceding the participant’s death. Normal Form

of Benefit: 10 Years Certain; minimum amount shall be equal to the deceased participant’s own contributions.

COLA: 2.5% compounded COLA commencing on the one-year anniversary of the retirement date


Supplemental Benefit: Any pension benefits earned in excess of Internal Revenue Code Section 415 limits will be paid from the Excess Benefit Plan. P. Post Retirement Death Benefit determined by the form of benefit elected upon retirement. Q. Optional Forms In lieu of electing the Normal Form of benefit, the following options are available.

1. Joint and last survivor 2. Life annuity 3. Other: Determined as actuarial equivalent benefit. 4. Lump sum: Participants hired on or before January 29, 1985 may request payment of their retirement

benefit in a lump sum benefit. A lump sum payment exceeding $50,000 may be delayed for up to six months by the Board. Participants hired after January 29, 1985 may request payment of their retirement benefit in a lump sum as long as it does not exceed $5,000.

Optional forms (other than lump sums) are calculated using 7% interest and the UP-1984 Mortality Table, with ages set ahead five years in the case of disability retirees. Lump sum distributions are calculated with the same mortality and the PBGC’s lump sum interest rates for private sector plans. If the payment is made within six months of the participant’s termination, the rate used shall be the rate in effect 90 days prior to the participant’s date of termination. If the payment is made later than six months after termination, the rate used shall be the rate in effect 90 days prior to the date of distribution.



R. Vested Termination Eligibility: A participant has earned a non-forfeitable right to Plan benefits after the completion of 1 year of Credited Service (see vesting table below). In addition, any participant who is eligible for Early, Normal or Disability Retirement is automatically 100% vested.

YEARS OF CREDITED SERVICE

% OF NORMAL RETIREMENT BENEFITS

Less Than 1

1 2 3 4 5 6 7 8 9

10 or more

0 % 10 20 30 40 50 60 70 80 90 100

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 Retirement date. Normal Form of Benefit: 10 Years Certain and Life thereafter; other options are also available.


Supplemental Benefit: Any pension benefits earned in excess of Internal Revenue Code Section 415 limits will be paid from the Excess Benefit Plan. Participants terminating employment with less than 1 year of Credited Service will receive a refund of their own accumulated contributions with interest.



S. Refunds Eligibility: All participants leaving covered employment are eligible. Optionally, vested participant may withdraw their contributions plus interest in lieu of the deferred benefits otherwise due.

Benefit: The participant who terminates employment receives a lump-sum payment of their employee contributions plus interest. Interest is currently credited at 5% compounded annually. T. Member Contributions 8% of Compensation U. Employer Contributions The amount determined by the actuary needed to fund the plan properly according to State laws. V. Cost of Living Increases


W. Changes from Previous Valuation See the Discussion of Valuation Results Section of this report under the Revisions in Benefits heading. X. 13th Check Not applicable. Y. Deferred Retirement Option Plan Eligibility: Plan members are eligible for the DROP upon the attainment of the earlier of: (1) age 57 regardless of Credited Service, or

(2) age 55 with 25 years of Credited Service, or (3) 30 years of Credited Service regardless of age.

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.



Deferred Retirement Option Plan - Continued

Maximum DROP Period: 5 years Interest Credited: Upon entering the DROP and annually (calendar year basis) thereafter, the participant

elects to receive earnings based upon one of the following options:

(1) the actual quarterly net investment return realized by the Fund, or (2) 4% per annum.

Normal Form of Benefit: Lump Sum


Supplemental Benefit: Any pension benefits earned in excess of Internal Revenue Code Section 415 limits will be paid from the Excess Benefit Plan. Z. Other Ancillary Benefits There are no ancillary benefits-retirement type benefits not required by statutes but which might be deemed a Bal Harbour Village Employees’ Pension Plan liability if continued beyond the availability of funding by the current funding source.

Plan Provisions – Dual Service Employees


A. Ordinances: Plan established under the Code of Ordinances for the Village of Bal Harbour, Florida, Part II, Chapter 13, Article II, and was most recently amended and restated under Ordinance No. 516 passed and adopted on April 13, 2007. 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 October 1, 1955 C. Plan Year October 1 through September 30 D. Type of Plan Qualified, governmental defined benefit retirement plan; for GASB purposes it is a single employer plan. E. Eligibility Requirements Any former employee who subsequently became a participant in the Bal Harbour Village Police Officers’ Pension Plan and Trust with no interruption of employment with the Village and who has less than six years Credited Service and no right to any benefit under the Village Employees’ plan, except a return of contributions, which has not been exercised. F. Credited Service Service is measured as the total number of years and completed months of Continuous Employment with the Village beginning on the date of employment and ending on the date of transfer. No service will be credited for any periods of employment for which the member received a refund of their employee contributions. G. Compensation Basic compensation, defined as compensation actually paid to a participant excluding overtime pay, shift differentials, bonuses and all other extraordinary pay. H. Final Average Compensation (FAC) Average monthly rate of Compensation during the highest 36 consecutive months out of the last 120 months preceding the date of termination or retirement.



I. Normal Retirement Eligibility: A participant may retire on the first day of the month coincident with or next following

the earlier of:

(1) age 57 regardless of Credited Service, or (2) age 55 with 10 years of Credited Service, or (3) age 52 with 25 years of Credited Service, or (4) 20 years of Credited Service regardless of age.

Benefit: 3.5% of FAC times Credited Service. Normal Form of Benefit: 10 Years Certain and Life thereafter; other options are also available. COLA: 2.5% compounded COLA commencing on the one-year anniversary of the retirement

date and each year thereafter for participants who retire after March 21, 2006. Not payable to participants who elect lump sum distributions.

Supplemental Benefit: Any pension benefits earned in excess of Internal Revenue Code Section 415 limits will

be paid from the Excess Benefit Plan. J. Early Retirement Eligibility: A participant may elect to retire earlier than the Normal Retirement Eligibility upon attainment of age 50 with 10 years of Credited Service. Benefit: The Normal Retirement Benefit is actuarially reduced for each year, not to exceed 3% per year, by which the Early Retirement date precedes the Normal Retirement date. Normal Form of Benefit: 10 Years Certain and Life thereafter; other options are also available. COLA: 2.5% compounded COLA commencing on the one-year anniversary of the retirement date and each year thereafter for participants who retire after March 21, 2006. Not payable to participants who elect lump sum distributions. Supplemental Benefit: Any pension benefits earned in excess of Internal Revenue Code Section 415 limits will

be paid from the Excess Benefit Plan.



K. Delayed Retirement Not applicable L. Service Connected Disability Not applicable M. Non-Service Connected Disability Eligibility: Any participant who becomes totally and permanently disabled and unable to render useful and efficient service to the Village. Benefit: Refund of Contributions with interest. N. Death in the Line of Duty Eligibility: Any participant that dies as a direct result of an occurrence arising in the performance of service to the Village. Benefit: Refund of contributions with interest. O. Other Pre-Retirement Death Eligibility: Any participant that dies not as a direct result of an occurrence arising in the performance of service to the Village. Benefit: Refund of contributions with interest. P. Post Retirement Death Not Applicable Q. Optional Forms In lieu of electing the Normal Form of benefit, the following options are available.

1. Joint and last survivor 2. Life annuity 3. Other: Determined as actuarial equivalent benefit.

Optional forms (other than lump sums) are calculated using 7% interest and the UP-1984

Mortality Table, with ages set ahead five years in the case of disability retirees.

R. Vested Termination Not applicable



S. Refund Eligibility: All members leaving covered employment are eligible. Optionally, vested members may withdraw their assessments plus interest in lieu of the deferred benefits otherwise due.

Benefit: The member who withdraws receives a lump-sum payment of his/her employee assessments, plus the interest credited on these contributions. Interest is credited at 5%.

T. Member Contributions Not applicable U. Employer Contributions The amount determined by the actuary needed to fund the plan properly according to State laws. V. Cost of Living Increases 2.5% compounded COLA commencing on the one-year anniversary of the retirement date and each year thereafter for participants who retire after March 21, 2006. Not payable to participants who elect lump sum distributions. W. Changes from Previous Valuation See the Discussion of Valuation Results Section of this report under the Revisions in Benefits heading. X. 13th Check Not applicable Y. Deferred Retirement Option Plan Eligibility: Plan members are eligible for the DROP upon the attainment of the earlier of: (1) age 57 regardless of Credited Service, or

(2) age 55 with 10 years of Credited Service, or (3) age 52 with 25 years of Credited Service, or (4) 20 years of Credited Service regardless of age.

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.



Maximum DROP Period: 5 years Interest Credited: Upon entering the DROP and annually (calendar year basis) thereafter, the participant

elects to receive earnings based upon one of the following options:

(1) the actual quarterly net investment return realized by the Fund, or (2) 4% per annum.

Normal Form of Benefit: 2.5% compounded COLA commencing on the one-year anniversary of the retirement

date and each year thereafter for participants who retire after March 21, 2006. Not payable to participants who elect lump sum distributions.

COLA: None Z. Other Ancillary Benefits

There are no ancillary benefits-retirement type benefits not required by statutes but which might be deemed a Bal Harbour Village Employees’ Pension Plan liability if continued beyond the availability of funding by the current funding source.

SECTION F

COMPARATIVE SUMMARY OF PRINCIPAL VALUATION RESULTS

Bal Harbour Village General Employees’ Pension Plan F-1

A. Participant Data

Number Included:

Actives 25 25 21

Service Retirees & Beneficiaries 29 29 26

Disability Retirees 1 1 1

Terminated Vested Members 8 8 8

Total Members and Beneficiaries 63 63 56

Total Annual Payroll $1,653,391 $1,653,391 $1,332,178

Expected Annual Payroll in Contribution Year 1,719,527 1,719,527 1,385,465

Total Annualized Benefits

Service Retirees & Beneficiaries 710,932 710,932 641,289

Disability Retirees 4,550 4,550 4,550

Terminated Vested Members 125,321 125,321 124,481

B. Assets (Market Value)

Cash and Short Term Investments 640,440 640,440 562,800

Government Agency Bond Fund 0 0 0

Corporate Bonds 4,405,799 4,405,799 3,942,549

Equity Funds 7,598,838 7,598,838 6,760,033

Mid and Small Cap Equity Funds 0 0 0

Other Securities 0 0 0

Net Receivables & Payables (DROP Balances) (192,387) (192,387) (150,883)

Total 12,452,690 12,452,690 11,114,499

Actuarial Value 12,070,474 12,070,474 11,165,130

Assets include:

Accumulated active member contributions 428,510 428,510 422,026

(with interest if applicable)

COMPARATIVE SUMMARY OF PRINCIPAL VALUATION

RESULTS

October 1, 2016

October 1, 2017

After Change in

Assumption

October 1, 2017

Before Change in

Assumption


C. Liabilities- Actuarial Present Value of Future Benefits

1. Active Members

Service Retirement Benefits $5,108,782 $4,827,335 $4,562,169

Vesting Benefits 1,813,134 1,683,481 1,214,753

Disability Benefits 162,942 155,332 112,497

Preretirement Death Benefits 56,221 54,545 51,266

Return of Member Contributions 0 0 0

Total Actives 7,141,079 6,720,693 5,940,685

2. Inactive Members

Service Retirees & Beneficiaries 11,847,892 11,498,484 10,481,309

Disability Retirees 30,196 29,808 30,638

Terminated Vested Members 1,841,638 1,761,661 1,544,612

Total Inactive Members 13,719,726 13,289,953 12,056,559

3. Total Present Value for All Members 20,860,805 20,010,646 17,997,244

Total Present Value of:

Future Salaries 11,605,835 11,458,627 8,436,819

Future Employee Contributions 928,467 916,690 674,945

Future Contributions from Other Sources 7,861,864 7,023,482 6,157,169

Derivation of Current Employer

Unfunded Actuarial Accrued Liability (UAAL)

a. Total UAAL for Prior Valuation Date $4,411,584 $4,411,584 $3,823,757

b. Employer Normal Cost for this period 332,943 332,943 341,935

c. Interest acccrued on (a) and (b) 296,533 296,533 270,770

d. Employer Contributions for this period 745,601 745,601 622,677

e. Interest accrued on (d) 43,058 43,058 3,339

f. Changes due to:

Assumptions 601,629 0 357,791

Plan Amendment 0 0 0

Cost Method (Asset Method) 0 0 0

Actuarial (Gain) Loss 423,867 423,867 243,347

g. Total Current UAAL: a+b+c-d-e+f 5,277,897 4,676,268 4,411,584

COMPARATIVE SUMMARY OF PRINCIPAL

VALUATION RESULTS October 1, 2016

October 1, 2017

Before Change in

Assumption

October 1, 2017

After Change in

Assumption


DateOriginal Years

(reset in 2012)

Years

Remaining

A

m

o

r

t

Original

Amount

Current

Amount

10/1/2005 Original 20 15 $116,710 $114,803 $1,308,766 $1,256,027

10/1/2006 Experience Loss 20 15 15,212 15,000 200,559 157,640

10/1/2006 Assumption/Method Change 20 15 (38,488) (37,951) (507,430) (398,846)

10/1/2007 Experience Gain 20 15 (1,793) (1,768) (26,255) (18,583)

10/1/2008 Experience Loss 20 15 27,809 27,421 411,027 288,174

10/1/2008 Assumption Change 20 15 40,519 39,954 598,898 419,891

10/1/2009 Experience Gain 20 15 (3,352) (3,306) (44,224) (34,739)

10/1/2010 Experience Gain 20 15 (24,181) (23,843) (321,083) (250,579)

10/1/2011 Experience Loss 20 15 110,359 108,819 1,371,441 1,143,621

10/1/2012 Experience Loss 20 15 4,738 4,672 58,645 49,099

10/1/2013 Experience Gain 20 16 (18,580) (18,305) (228,327) (200,421)

10/1/2013 Assumption Change 20 16 N/A 59,657 58,774 733,118 643,514

10/1/2014 Experience Gain 20 17 N/A (4,831) (4,755) (57,037) (54,044)


10/1/2015 Experience Gain 20 18 N/A (55,142) (54,238) (657,337) (637,772)


10/1/2016 Experience Loss 20 19 19,837 19,497 243,347 236,528

10/1/2016 Assumption Change 20 19 29,166 28,666 357,791 347,764

10/1/2017 Experience Loss 20 20 34,570 33,951 423,867 423,867

10/1/2017 Assumption Change 20 20 N/A 48,189 601,629 601,629

TOTAL $427,401 $468,939 $5,832,397 $5,277,897

Original and Current Unfunded Actuarial Accrued Liabilities

Amortization

Payment After

Change in

Assumption

Item Description

Amortization

Payment Before

Change in

Assumption


D. Pension Cost

Entry Age Normal Cost for:

Service Retirement Benefits $351,375 $332,655 $284,195

Vesting Benefits 126,473 117,866 85,900

Disability Benefits 13,335 12,802 10,310

Preretirement Death Benefits 5,605 5,486 4,880

Return of Member Contributions 389 393 314

Total Actives 497,177 469,202 385,599

Administrative Expenses 52,595 52,533 50,736

Expected Member Contributions 128,473 128,322 103,392

Total Employer Normal Cost 421,300 393,413 332,943

Payment Required to Amortize Unfunded Actuarial

Accrued Liability 468,939 427,401 402,267

Total Contribution at Valuation Date 890,239 820,814 735,210

Total Contribution Adjusted for Frequency of

Payments and Interest to Next Following Fiscal Year 957,499 885,433 793,089

% of Expected Payroll 55.68% 51.49% 57.24%

Amount Expected to be Contributed by Members 137,562 137,562 110,837

% of Expected Payroll 8.00% 8.00% 8.00%

E. Past Contributions- For the Fiscal Year Ended September 30 2017 2016

Required Contribution Determined in the Valuation as of October 1 2015 2014

by the Plan Sponsor 745,642 622,677

by Members 105,003 88,906

Actual Contribution for the Fiscal Year ended September 30 2017 2016by the Plan Sponsor 745,642 622,677

by Members 103,551 78,154

F. 1. Plan to Amortize Unfunded Actuarial Accrued Liability

20 year funding of the Original Unfunded Actuarial Accrued Liability and 20 year funding

of any adjustments thereto.

2. Schedule Illustrating the Amortization of the Unfunded Actuarial Accrued Liability (UAAL)

Year

2017 (peak) $5,277,897

2018 5,094,328

2019 4,901,611

2020 4,695,603

2021 4,475,501

2026 3,131,915

2031 1,284,021

2036 87,723

2037 0

3. Action taken since last actuarial valuation.

Contribution sufficient to satisfy the total required contribution.

COMPARATIVE SUMMARY OF PRINCIPAL

VALUATION RESULTS October 1, 2016

October 1, 2017

After Change in

Assumption

Projected UAAL

October 1, 2017

Before Change in

Assumption


G. Net experience (gain) loss during year: $423,867

H. 1. Three-Year Comparison of Actual and Assumed Salary Increases (Annualized)

Actual Assumed

7.0% 5.1%

10.5% 5.0%

5.4% 5.0%

2. Three-Year Comparison of Investment Return (Actuarial Value)

Actual Assumed

7.3% 6.25%

7.8% 6.50%

6.6% 6.50%

3. Average Annual Growth in Payroll, Last Ten Years (if applicable)

Total % Increase Last Ten Years 3.52%

Annual % Increase 0.35%

Thirty-year Forecast (Annualized) 3.00%

I. Benefits and Expenses of Plan not Explicitly or Implicitly Provided in Valuation

NONE

J. Trends not taken into Account but which are likely to Result in Future Cost Increases

NONE

10/1/2017 $1,653,391

1,332,178

1,251,987

10/1/2012

10/1/2015

10/1/2014

10/1/2007

10/1/2010

10/1/2016

1,203,18310/1/2011

1,068,585

1,130,179

1,026,671

COMPARATIVE SUMMARY OF PRINCIPAL VALUATION RESULTS

Year Ended

Total PayrollValuation Date

9/30/2017

9/30/2015

9/30/2016

9/30/2015

Year Ended

9/30/2017

9/30/2016

10/1/2013

10/1/2009

10/1/2008 1,476,784

1,597,150

1,337,979

1,267,020

general employees pension board regular meeting agenda … · 2019-01-11 · investment portfolio...

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