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Agenda 06-18-15
BOYNTON BEACH FIREFIGHTERS' PENSION FUND SPECIAL BOARD MEETING Thursday, June 18, 2015 (&, 9:OOAM Renaissance Commons Executive Suites 1500 Gateway Blvd., Suite 220 Boynton Beach, FL 33426 AGENDA I. CALL TO ORDER — Luke Henderson, Chairman II. AGENDA APPROVAL - III. APPROVAL OF MINUTES — N/A IV. FINANCIAL REPORTS — N/A V. CORRESPONDENCE — N/A VI. OLD BUSINESS — N/A VII. NEW BUSINESS: A. Senate Bill 172 (SB 172) —175 Chapter updates — Review and discussion 1) Klausner Kaufman Jensen & Levinson — Memo of 5 -27 -2015 2) Gabriel Roeder Smith & Co — Pete Strong — Disclosures & Report under new State requirements, dated 6 -28 -2015 B. Benefit Changes — Discussion 1) DROP Loan program - C. Invoices for review and approval: 1. Klausner, Kaufinan, Jensen & Levinson — Service May 2015 - $2,855.25 VIII. PENSION ADMINISTRATOR'S REPORT — N/A IX. PUBLIC COMMENTS: X. ADJOURNMENT: Next Meeting Date — WEDNESDAY, August 5th, 2015 @ 9:00AM— Renaissance Commons Executive Suites If you cannot attend, please call Barbara @ 561/739 -7972. NOTICE IF A PERSON DECIDES TO APPEAL ANY DECISION MADE BY THE FIREFIGHTERS' PENSION BOARD WITH RESPECT TO ANY MATTER CONSIDERED AT THIS MEETING, HE /SHE WILL NEED A RECORD OF THE PROCEEDINGS AND, FOR SUCH PURPOSE, HE /SHE MAY NEED TO ENSURE THAT A VERBATIM RECORD OF THE PROCEEDING IS MADE, WHICH RECORD INCLUDES THE TESTIMONY AND EVIDENCE UPON WHICH THE APPEAL IS TO BE BASED. (F.S. 286.0105) THE CITY SHALL FURNISH APPROPRIATE AUXILIARY AIDS AND SERVICES WHERE NECESSARY TO AFFORD AN INDIVIDUAL WITH A DISABILITY AN EQUAL OPPORTUNITY TO PARTICIPATE IN AND ENJOY THE BENEFITS OF A SERVICE, PROGRAM, OR ACTIVITY CONDUCTED BY THE CITY. PLEASE CONTACT CITY CLERK'S OFFICE (561) 742 -6060 AT LEAST TWENTY -FOUR HOURS PRIOR TO THE PROGRAM OR ACTIVITY IN ORDER FOR THE CITY TO REASONABLY ACCOMMODATE YOUR REQUEST. THE BOARD (COMMITTEE) MAY ONLY CONDUCT PUBLIC BUSINESS AFTER A QUORUM HAS BEEN ESTABLISHED. IF NO QUORUM IS ESTABLISHED WITHIN TWENTY MINUTES OF THE NOTICED START TIME OF THE MEETING THE CITY CLERK OR DESIGNEE WILL SO NOTE THE FAILURE TO ESTABLISH A QUORUM AND THE MEETING SHALL BE CONCLUDED. BOARD MEMBERS MAY NOT PARTICIPATE FURTHER EVEN WHEN PURPORTEDLY ACTING IN AN INFORMAL CAPACITY. 1 ■ Ilk K1 AUSN1.R K At' 1- N1AN JEM:., E. N LEVINSON 'f , , Ft, C." New 'i: 3!VS,V t`• , MEMORANDUM To: All Florida Pension Clients From: Klausner Kaufman Jensen & Levinson Re: House Bill 1309 (amending Sections 112.63 and 112.664, Florida Statutes) Date: June 12, 2015 Overview All Florida governmental defined benefit pension plans should be aware that Governor Scott approved I -Iouse Bill 1309 (hereinafter "HB 1309 "), which was adopted during the regular session of the Florida Legislature this year. The new legislation applies to police, fire and general employee plans. HB 1309 builds on other recent legislation aimed at providing more uniformity among Florida governmental defined benefit plans. HB 1309 will require the adoption of mortality tables used by the Florida Retirement System ( "FRS "). It is expected that the use of the FRS mortality tables will impact contribution requirements for many plans, as will need to be calculated by the plan's actuary. In future years, as FRS amends its mortality tables, local plans will need to follow suit by using either of the two most recently published FRS tables. Amendment to Section 112.63's fundinO requirements By way of background, a defined benefit plan's annual funding requirements are determined by the regular actuarial valuations prepared by a plan's enrolled actuary. Section 112.63, Florida Statutes, sets forth the minimum requirements under Florida law, which are used to calculate the plan sponsor's annual contribution. HB 1309 amends Section 112.63 as follows: (f) Effective January 1, 2016, the mortality tables used in either of the two most recently published actuarial valuation reports of the Florida Retirement System, including the projection scale for mortality improvement. Appropriate risk and collar adjustments must be made based on plan demographics. The tables must be used for assumptions for preretirement and postretirement mortality. 7080 NORTHWEST 4TH STREET, PLANTATION, FLORIDA 33317 PHONE: (954) 916 -1202 • FAX: (954) 916 -1232 www.robertdklausner.com According to the latest available data, approximately two dozen governmental plans in Florida currently use the 1983 Group Mortality Table. Approximately another two dozen governmental plans use the 1994 Group Mortality Table. Approximately 440 plans use a version of the RP 2000 mortality table. The cost of implementing the new FRS mortality tables will depend on which mortality table a plan is currently using. Although HB 1309 is "effective January 1, 2016," it is unclear whether the new requirements apply to the October 1, 2015 valuation or the October 1, 2016 valuation. In most cases, the October 1, 2015 valuation is adopted in early 2016 and sets the contribution for the 10/1/16 through 9/30/17 fiscal year. By contrast, the October 1, 2016 valuation sets the contribution for the 10/1/17 through 9/30/18 fiscal year. We have requested guidance from the Division of Retirement and expect that HB 1309 will be interpreted as applying to the October 1, 2016 valuation (which will ordinarily be adopted in early 2017). If the Division of Retirement agrees with this interpretation that HB 1309 applies to the October 1, 2016 valuation, plans will have the option of early adopting the FRS tables in the October 1, 2015 valuation. Early adoption will enable boards to phase in higher costs over two years rather than fully implementing HB 1309 in a single year. Amendment to Section 112.664's reporting requirements Section 112.664 governs the controversial "reporting standards" for defined benefit plans, in contrast to the "funding" requirements under 112.63. Based on the regulations adopted by the Division of Retirement in April of this year, plans are required to begin complying with Section 112.664's reporting standards 60 days after the board approves its actuarial valuation. HB 1309 amends Section 112.664 to align reporting standards with funding standards. As a result, Section 112.664 reports will be based on the FRS tables rather than the RP 2000 Scale AA table. This amendment is effective plan years ending on or after December 31, 2015. Recommendation Actuaries around the state are already busy complying with the new reporting standards in Section 112.664. After the 112.664 reports are prepared and filed with the Division of Retirement, boards and plan sponsors are encouraged to consult with their actuary to determine the impact of HB 1309 on your plan and the schedule for compliance. r Klausner, Kaufman, Jensen & Levinson A Partnership of Professional Associations Attorneys At Law 7080 N.W. 4th Street Plantation, Florida 33317 Tel. (954) 916 -1202 www.robertdklausner.com Fax (954) 916 -1232 Tax I.D.: 45- 4083636 BOYNTON BEACH FIREFIGHTERS May 31, 2015 Attn: MRS. BARBARA LA DUE, ADMIN. Bill # 16838 1500 GATEWAY BOULEVARD, SUITE 220 BOYNTON BEACH, FL 33426 For Legal Services Rendered Through 05/31/15 CLIENT: BOYNTON BEACH FIREFIGHTERS PENSION FUND : BOYNTON MATTER: BOYNTON BEACH FIREFIGHTERS - GENERAL FILE :900334 Professional Fees Date Description Hours Amount 05/05/15 PREPARATION FOR MEETING 0.50 150.00 05/05/15 CALL TO ACTUARY; DRAFTED EMAIL TO ACTUARY; 1.50 450.00 ANALYSIS OF PRESERVATION OF BENEFITS FOR ASST CHIEF; REVIEW 175 COMPLIANCE ISSUE. 05/05/15 REVIEW MINUTES; REVIEW FILE. 1.00 300.00 05/06/15 ATTENDANCE AT BOARD MEETING 4.00 1,200.00 05/21/15 EVALUATING SB 172 COMPLIANCE ISSUES 0.50 150.00 05/22/15 EVALUATION OF PENDING ISSUES UNDER SB 172; 0.50 150.00 FORMULATION OF IMPLEMENTATION QUESTIONS. 05/26/15 DRAFTING MEMO RE SB 172 0.50 150.00 05/28/15 REVIEW 185 COMPLIANCE ISSUES POST SB 172 1.00 300.00 Total for Services 9.50 $2,850.00 Costs Date Description Amount PHOTOCOPIES thru 05/31/15 5.25 Total Costs $5.25 CURRENT BILL TOTAL AMOUNT DUE $ 2,855.25 Hoggatt Sr. Employee Type Current PD Number Last Name First Name Check Date - Calc Code Amount 3804 HOGGATT SR GREGORY 11/9/2012 PG $ 282.69 3804 HOGGATT SR GREGORY 11/21/2012 PG $ 282.69 3804 HOGGATT SR GREGORY 12/7/2012 PG $ 282.69 3804 HOGGATT SR GREGORY 12/21/2012 PG $ 282.69 3804 HOGGATT SR GREGORY 1/4/2013 PG $ 282.69 3804 HOGGATT SR GREGORY 1/18/2013 PG $ 313.49 3804 HOGGATT SR GREGORY 2/1/2013 PG $ 282.69 3804 HOGGATT SR GREGORY 2/15/2013 PG $ 298.09 3804 HOGGATT SR GREGORY 3/1/2013 PG $ 282.69 3804 HOGGATT SR GREGORY 3/15/2013 PG $ 282.69 3804 HOGGATT SR GREGORY 3/29/2013 PG $ 298.09 3804 HOGGATT SR GREGORY 4/12/2013 PG $ 282.69 3804 HOGGATT SR GREGORY 4/26/2013 PG $ 298.09 3804 HOGGATT SR GREGORY 5/10/2013 PG $ 282.69 3804 HOGGATT SR GREGORY 5/24/2013 PG $ 298.09 3804 HOGGATT SR GREGORY 6/7/2013 PG $ 282.69 3804 HOGGATT SR GREGORY 6/21/2013 PG $ 298.09 3804 HOGGATT SR GREGORY 7/5/2013 PG $ 282.69 3804 HOGGATT SR GREGORY 7/19/2013 PG $ 298.09 3804 HOGGATT SR GREGORY 8/2/2013 PG $ 282.69 3804 HOGGATT SR GREGORY 8/16/2013 PG $ 282.69 3804 HOGGATT SR GREGORY 8/30/2013 PG $ 298.09 3804 HOGGATT SR GREGORY 9/13/2013 PG $ 282.69 3804 HOGGATT SR GREGORY 9/27/2013 PG $ 298.09 3804 HOGGATT SR GREGORY 10/11/2013 PG $ 285.87 3804 HOGGATT SR GREGORY 10/25/2013 PG $ 306.57 3804 HOGGATT SR GREGORY 11/8/2013 PG $ 291.17 3804 HOGGATT SR GREGORY 11/22/2013 PG $ 306.57 3804 HOGGATT SR GREGORY 12/6/2013 PG $ 291.17 3804 HOGGATT SR GREGORY 12/20/2013 PG $ 306.57 3804 HOGGATT SR GREGORY 1/3/2014 PG $ 291.17 3804 HOGGATT SR GREGORY 1/17/2014 PG $ 291.17 3804 HOGGATT SR GREGORY 1/31/2014 PG $ 306.57 3804 HOGGATT SR GREGORY 2/14/2014 PG $ 291.17 3804 HOGGATT SR GREGORY 2/28/2014 PG $ 306.57 3804 HOGGATT SR GREGORY 3/14/2014 PG $ 291.17 3804 HOGGATT SR GREGORY 3/28/2014 PG $ 298.87 3804 HOGGATT SR GREGORY 4/11/2014 PG $ 291.17 3804 HOGGATT SR GREGORY 4/25/2014 PG $ 298.87 3804 HOGGATT SR GREGORY 5/9/2014 PG $ 291.17 Page 1 1 Hoggatt Sr. 3804 HOGGATT SR GREGORY 5/23/2014 PG $ 298.87 3804 HOGGATT SR GREGORY 6/6/2014 PG $ 291.17 3804 HOGGATT SR GREGORY 6/20/2014 PG $ 298.87 3804 HOGGATT SR GREGORY 7/3/2014 PG $ 291.17 3804 HOGGATT SR GREGORY 7/18/2014 PG $ 298.87 3804 HOGGATT SR GREGORY 8/1/2014 PG $ 291.17 3804 HOGGATT SR GREGORY 8/15/2014 PG $ 291.17 3804 HOGGATT SR GREGORY 8/29/2014 PG $ 298.87 3804 HOGGATT SR GREGORY 9/12/2014 PG $ 291.17 3804 HOGGATT SR GREGORY 9/26/2014 PG $ 298.87 3804 HOGGATT SR GREGORY 10/10/2014 PG $ 291.17 3804 HOGGATT SR GREGORY 10/24/2014 PG $ 298.87 3804 HOGGATT SR GREGORY 11/7/2014 PG $ 378.52 3804 HOGGATT SR GREGORY 11/21/2014 PG $ 298.87 3804 HOGGATT SR GREGORY 12/5/2014 PG $ 291.17 3804 HOGGATT SR GREGORY 12/19/2014 PG $ 298.87 3804 HOGGATT SR GREGORY 1/2/2015 PG $ 291.17 3804 HOGGATT SR GREGORY 1/16/2015 PG $ 291.17 3804 HOGGATT SR GREGORY 1/30/2015 PG $ 298.87 3804 HOGGATT SR GREGORY 2/13/2015 PG $ 346.79 3804 HOGGATT SR GREGORY 2/27/2015 PG $ 304.70 3804 HOGGATT SR GREGORY 3/13/2015 PG $ 297.00 3804 HOGGATT SR GREGORY 3/27/2015 PG $ 304.70 3804 HOGGATT SR GREGORY 4/10/2015 PG $ 297.00 3804 HOGGATT SR GREGORY 4/24/2015 PG $ 304.70 3804 HOGGATT SR GREGORY 5/8/2015 PG $ 297.00 3804 HOGGATT SR GREGORY 5/22/2015 PG $ 304.70 $ 19,829.85 Page 2 Hoggatt Sr. Current Fire Pension Additional Earnings Amt (12 %) Contribution Needed $ 4,038.48 $ 484.62 $ 201.93 $ 4,038.48 $ 484.62 $ 201.93 $ 4,038.48 $ 484.62 $ 201.93 $ 4,038.48 $ 484.62 $ 201.93 $ 4,038.48 $ 484.62 $ 201.93 $ 4,478.48 $ 537.42 $ 223.93 $ 4,038.48 $ 484.62 $ 201.93 $ 4,258.48 $ 511.02 $ 212.93 $ 4,038.48 $ 484.62 $ 201.93 $ 4,038.48 $ 484.62 $ 201.93 $ 4,258.48 $ 511.02 $ 212.93 $ 4,038.48 $ 484.62 $ 201.93 $ 4,258.48 $ 511.02 $ 212.93 $ 4,038.48 $ 484.62 $ 201.93 $ 4,258.48 $ 511.02 $ 212.93 $ 4,038.48 $ 484.62 $ 201.93 $ 4,258.48 $ 511.02 $ 212.93 $ 4,038.48 $ 484.62 $ 201.93 $ 4,258.48 $ 511.02 $ 212.93 $ 4,038.48 $ 484.62 $ 201.93 $ 4,038.48 $ 484.62 $ 201.93 $ 4,258.48 $ 511.02 $ 212.93 $ 4,038.48 $ 484.62 $ 201.93 $ 4,258.48 $ 511.02 $ 212.93 $ 4,083.90 $ 490.07 $ 204.20 $ 4,379.60 $ 525.55 $ 218.98 $ 4,159.60 $ 499.15 $ 207.98 $ 4,379.60 $ 525.55 $ 218.98 $ 4,159.60 $ 499.15 $ 207.98 $ 4,379.60 $ 525.55 $ 218.98 $ 4,159.60 $ 499.15 $ 207.98 $ 4,159.60 $ 499.15 $ 207.98 $ 4,379.60 $ 525.55 $ 218.98 $ 4,159.60 $ 499.15 $ 207.98 $ 4,379.60 $ 525.55 $ 218.98 $ 4,159.60 $ 499.15 $ 207.98 $ 4,269.60 $ 512.35 $ 213.48 $ 4,159.60 $ 499.15 $ 207.98 $ 4,269.60 $ 512.35 $ 213.48 $ 4,159.60 $ 499.15 $ 207.98 Page 3 Hoggatt Sr. $ 4,269.60 $ 512.35 $ 213.48 $ 4,159.60 $ 499.15 $ 207.98 $ 4,269.60 $ 512.35 $ 213.48 $ 4,159.60 $ 499.15 $ 207.98 $ 4,269.60 $ 512.35 $ 213.48 $ 4,159.60 $ 499.15 $ 207.98 $ 4,159.60 $ 499.15 $ 207.98 $ 4,269.60 $ 512.35 $ 213.48 $ 4,159.60 $ 499.15 $ 207.98 $ 4,269.60 $ 512.35 $ 213.48 $ 4,159.60 $ 499.15 $ 207.98 $ 4,269.60 $ 512.35 $ 213.48 $ 5,407.48 $ 648.90 $ 270.38 $ 4,269.60 $ 512.35 $ 213.48 $ 4,159.60 $ 499.15 $ 207.98 $ 4,269.60 $ 512.35 $ 213.48 $ 4,159.60 $ 499.15 $ 207.98 $ 4,159.60 $ 499.15 $ 207.98 $ 4,269.60 $ 512.35 $ 213.48 $ 4,954.09 $ 594.49 $ 247.70 $ 4,352.80 $ 522.34 $ 217.64 $ 4,242.80 $ 509.14 $ 212.14 $ 4,352.80 $ 522.34 $ 217.64 $ 4,242.80 $ 509.14 $ 212.14 $ 4,352.80 $ 522.34 $ 217.64 $ 4,242.80 $ 509.14 $ 212.14 $ 4,352.80 $ 522.34 $ 217.64 $ 283,285.39 $ 33,994.27 $ 14,164.42 Page 4 sue,° 41 F BOYNTON BEACH MUNICIPAL POLICE OFFICERS' PENSION FUND POLICY FOR PLAN LOANS ON DROP BALANCES Under the provisions of Ordinance 06 -036, effective June 20, 2006, loans from the DROP are available to members of the BOYNTON BEACH MUNICIPAL POLICE OFFICERS' PENSION FUND. Loans are available only after termination of employment, provided the member had participated in the DROP for a period of 12 months. Loans may only be made from a member's own account. There may be no more than one loan at a time The specific rules which will govern the issuance of these loans in accordance with Ordinance 06 -036 are as follows: 0.4.1azi, _eiesz Flee. 6/-63) a. Amounts of Loan - Loans may be made based on the funds available in a participant's individual DROP account as follows: 1. Maximum loan is 50% of the balance in the DROP account; or a maximum dollar amount of $50,000.00, whichever is Tess. 2. The minimum loan is $5,000.00. If a participant has had an outstanding loan balance during the preced g 12 months, the maximum loan may be further reduced by the am t of that loan. Limitations on loans shall be made from the amounts paid into the DROP and the earnings thereon. b. Term of Loans - All loans shall be issued for a minimum term of at least one (1) year and a maximum term of five (5) years and shall be repaid in full within this period. A loan may not be extended or renewed beyond its maturity date. c. Interest Rate - Interest Rate shall be fixed at the time the loan is originated for the entire term of the loan. The Interest Rate shall be equal to the prime rate published by an established local bank on the last day of each calendar quarter preceding the date of loan application. d. Defaults on Loans - Loans shall be in default if two consecutive months' repayments are missed or if a total of four months' repayments are missed. Upon default, the entire balance becomes due and payable immediately. if a loan in default is not repaid in full immediately, the loan may be canceled and the outstanding balance treated as a distribution, which may be taxable. Page 1 of 2 , POLICY FOR PLAN LOANS ON DROP BALANCES S Upon default of a loan, a member will not be eligible for additional loans. e. Loan Payments - Loan payments shall be deductions from monthly pension distributions. f. Documents and Miscellaneous Provisions - All loans shall be evidenced by a written loan agreement signed by the member and the Board of Trustees as follows: 1. The agreement shall contain a promissory note; 2. A member's spouse must consent in writing to the loan; 3. The consent shall acknowledge the effect of the loan on the member's account balance; 4. Loans shall be considered a general asset of the Fund 5. Loans shall be subject to administrative fees to be set by the Board of Trustees 6. Outstanding loan balances shall not be credited with earnings or losses. As the outstanding balance is repaid with interest, eamings and losses shall be applied to the payments and interest. g. Application Fee - A non - refundable fee is charged to cover the cost of processing all loan applications. This POLICY FOR PLAN LOANS ON DROP BALANCES is hereby adopted this day of , 2006. TRUSTEES Witnessed by: 1-1:16B 0188\Policies \LOANS\2006 DROP Loans.wpd July 21, 2006 Page 2 of 2 � v r IN I IDCHU - I (V1UNlUJPAL POLICE OFFICERS' PENSION FUND APPLICATION LOANS from the DROP PARTICIPANT INFORMATION Borrower's Name: Please Print Social Security Number: Address: Street Address City State Zip Code Mailing Address (If Different): 1. REQUEST FOR LOAN I hereby apply for a loan of $ from current value arising from my DROP balance in the BOYNTON BEACH MUNICIPAL POLICE OFFICERS' PENSION PLAN as directed below: 2. REPAYMENT OF LOAN My loan is to be repaid in payments. (Maximum of 60 payments.) Please deduct the monthly loan payments from my monthly pension payment until my loan (principal and interest) is repaid. I have completed an Authorization for Loan Payment Deductions (attached). 3. PLAN RULES RELATING TO LOANS Plan rules governing the operation of this loan program are explained in the Policy for Plan Loans on DROP Balances and the Pension Plan section attached hereto and made a part hereof by reference. 4. APPLICATION FEE NON - REFUNDABLE I understand that the application fee is not refundable. Page 1 of 2 V 1 •I • . 1 have read and understood all portions of the loan application including the attached addendum and affix my signature hereto as evidence thereof this day of 20 Participant's Signature: OFFICE USE ONLY LOAN APPROVED: Original Balance: $ Rate: No. Of Payments: Payment Amount: $ By: Date: Check No.: Dated: Issued by: Payroll deduction for above payment processed by: Date: H_ \BB 01881Policies \LOANSIAPP_wpd July 21, 2006 Page 2 of 2 LJ I \/ ' I BOYNTON BEACH MUNICIPAL POLICE OFFICERS' PENSION FUND SPOUSE'S CONSENT TO DROP LOAN Your spouse, as a Participant in the BOYNTON BEACH MUNICIPAL POLICE OFFICERS' PENSION PLAN, has applied for a loan from p this Ran to be secured by his /her DROP benefits under the Plan. The Plan is not able to make this loan without your consent as the Participant's spouse. As the spouse of the Participant you are entitled to certain survivor benefits under the Plan. If the Participant dies before benefits are distributed, then you, as the Participant's spouse, are ordinarily entitled to all of the Participant's benefits upon his /her death (unless there is a different beneficiary . desi nation 9 ) The loan agreement states that if a distribution from the DROP will reduce the DROP balance to an amount which is less than two times the outstanding loan, the total amounts outstanding on the loan (including accrued interest and other costs) will be subtracted from the Participant's DROP benefits under the Plan. This reduction may reduce the survivor benefits to which you are entitled. I, the Participant's spouse, have read this consent form and the promissory note to which it relates. I understand that I can refuse to consent to this loan. The Plan will make this loan only if I consent to it. I understanding my consent cannot be revoked or withdrawn once given. I understand that by making this loan to my spouse, my survivor benefits under the DROP only may be reduced or eliminated. Being fully apprised of these Page 1 of 2 SPOUSE'S CONSENT FORM facts 1 consent to this loan. SPOUSE'S SIGNATURE MUST BE NOTARIZED Participant's Name: Date: Print Name Spouse's Name: Date of Birth: Print Name 1 STATE OF FLORIDA COUNTY OF Sworn to (or affirmed) and subscribed before me this day of 20 by who is personally known to me or who rodu the cedt e following identification: Signature of Notary Public Print, type or stamp name of Notary above My Commission Expires: My Commission Number is: [ Notary Seal] H: \BB 0 BSJ /ka - July 21, 2006 Page 2 of 2 LOAN PROMISSORY NOTE BOYNTONBEACH MUNICIPAL POLICE OFFICERS' PENSION FUND Deferred Retirement Option Plan ( "DROP ") Collateral installment Promissory Note Loan Number: Date: Principal Amount:$ FOR VALUE RECEIVED, the undersigned hereby promises to pay to the order of the Board of Trustees for the BOYNTONBEACH MUNICIPAL POLICE OFFICERS' PENSION PLAN (the "Fund "), at the offices of the Pension Administrator, City of Boynton Beach, 100 East Boynton Beach Boulevard, Boynton Beach, Florida 33435 (or at such other place designated in writing by the Trustees), the principal sum of dollars ($ ), wifh interest on the principal balance remaining from time to time unpaid at the per annum rate of percent ( %) in ( consecutive, equal monthly installments of principal and interest of dollars ($ ) beginning on , 20 and continuing thereafter until paid. All payments on this note shall be applied first to the payment of interest due hereunder and second to the unpaid principal amount hereof. This note is being made pursuant to and shall be governed by the terms of the Pension Plan which are hereby incorporated by reference. Notwithstanding any provision of this note to the contrary, the unpaid balance of principal and interest of this note shall become immediately due and payable five years from the date of this note. If payment is not made within ten (10) days of when it is due, it is delinquent. If a payment is delinquent the Borrower must pay a penalty of $25 plus interest at the rate stated above to the date of payment. If payment is not made within sixty (60) days of when it is due or if four (4) total payments are missed, the loan is in default and the accrued interest and penalties shall be immediately due. Upon default, this Page 1 of 2 DROP LOANS - PROMISSORY NOTE total amount shall bear interest at the rate of 18 %, or if higher, the rate ate staled above. The Plan may take all actions necessary or desirable to collect what is due in the event of default including court costs and attorney fees. The Borrower hereby secures the loan by his /her DROP balance in the Plan under the Plan. If a loan is in default the Plan shall forfeit the Borrower's vested benefits under the DROP to the extent necessary for the Plan to recover all principal, interest, costs, and penalties. Such forfeiture shall be considered a distribution under the terms of the Pension Plan. If the Borrower requests a DROP distribution which would reduce the DROP balance below 2 times the outstanding loan balance, while this loan is still outstanding, the amount of principal, accrued interest and any other applicable expenses or costs to the date of distribution shall be paid in full before such distribution may be made. Prepayment may be made at any time for outstanding principal plus accrued interest without penalty. The attached spouse's consent is made a part of this promissory note. The application fee for this loan is non - refundable_ This note shall be considered a general asset of the Plan and not a directed investment of the Participant's account. This note is secured by the undersigned's assignment of his /her right, title and interest in and to all of his /her accounts in the Trust. Signature: ASSIGNMENT The undersigned hereby assigns to the Trustees of the BOYNTONBEACH MUNICIPAL POLICE OFFICERS' PENSION FUND as collateral to secure the payment of principal and interest due under the Collateral Installment Promissory ry ote above ( , his/her entire right, title and interest in and to the DROP account. Signature: Dated: H:IBB 01881Policies\LOANSINOTE.wpd July 21, 2006 Page 2 of 2 BOYNTON BEACH MUNICIPAL POLICE OFFICERS' PENSION FUND AUTHORIZATION OF LOAN PAYMENT DEDUCTIONS To: Boynton Beach Municipal Police Officers' Pension Plan Name of Participant: Social Security Number: I hereby authorize monthly deductions from my pension payment of $ for repayment of my DROP account loan. This payment will continue for five year or until the entire loan balance and interest are repaid. These deductions should begin with the pension payment. Participant's Signature STATE OF FLORIDA COUNTY OF SWORN TO (or affirmed) AND SUBSCRIBED before me this day of , 20 , by who is personally known to me or who produced: the following identification Signature, Notary Public Print, type or stamp name of Notary above Commission Expires: xp res. Commission Number is: [NOTARY SEAL] H:\BB 01881Policies\LOANS\DEDUCT.wpd Juiy 12, 2006 BOYNTON BEACH MUNICIPAL POLICE OFFICERS' PENSION FUND LOANS from the DROP NOTICE OF LOAN PAYOFF To: From: Boynton Beach Municipal Police Pension Fund Date: This is to provide notice that you have paid off your DROP account plan loan. Your last deduction in the amount of $ was taken on . Your original promissory note is attached. H: \BB 0188 \ Policies \ LOANS \PAYOFF.wpd BSJ /ka - July 24, 2006 BOYNTON BEACH MUNICIPAL POLICE OFFICERS' PENSION PLAN LOANS from the DROP LOAN PAY -DOWN FORM Name (please print): Social Security Number: Attached please find my check in the amount of $ to be applied to reduce or "pay- down" the amount of my DROP loan. Kindly adjust my account upon receipt by: (Please check one option below) ❑ reducing my monthly loan payment; or ❑ reducing the repayment period. Date: Signature: OFFICE USE ONLY Received by: Date: H:IBB 01881Policies \LOANS\PAYDOWN.wpd BSJ /ka - July 24, 2006 BOYNTON BEACH MUNICIPAL POLICE OFFICERS' PENSION FUND LOANS from the DROP VOLUNTARY LOAN PAYOFF To: Boynton Beach Municipal Police Pension Fund Board of Trustees From: Please Print Your Name Social Security No.: Payoff Date: Amount: Check Payable to: H :1BB 0188\Policies\LOANSIVOL PAYOFF.wpd BSJ/ka - July 24, 2006 HANSON, PERRY SC JENSEN, RA. 400 EXECUTIVE CENTER DRIVE, SUITE 207 — WEST PALM BEACH, FLORIDA 33401 -2922 L HANSON' TELEPHONE (561) 686 -6550 3nson ®hpjlaw.com FACSIMILE (561) 686 -2802 v H. PERRY rry©hpjlaw.com NNI SPATARA JENSEN nsen@hpilaw.com rAoMrrrEO IN N.Y. MEMORANDUM To: Board of Trustees Boynton Beach Police Pension Fund From: Bonni S. Jensen Hanson, Perry & Jensen, P.A. Subject: DROP Loans - Revised Forms Date: July 24, 2006 At the request of the Board at our meeting of July 17, 2006, I have revised the DROP Loan Policy and related forms to process the loans. Attached you will find the revised: 1. Policy for Plan Loans on DROP Balances 2. Application for Loans from the DROP 3. Loan Promissory Note 4. Spouse's Consent to DROP Loan 5. Authorization of Loan Payment Deductions 6. Notice of Loan Payoff (Use when loan is paid in full) 7. Loan Pay - Down Form (Use when member is making extra payment) 8. Notice of Voluntary Loan Payoff (Use when pay -off amount is requested) Please review these documents and let me know if you have any questions, comments or additional changes. BSJ /ka E opy: Administrator H:IBB 01881Poticies \LOANS \Memo revised forms.wpd . 33 K LAUSNER� KAUFMAN JENSEN LEVINSON 1 MEMORANDUM To: All Florida 175/185 Clients From: Klausner Kaufman Jensen & Levinson Re: Senate Bill 172 (Chapter 2015 -29, Laws of Florida) Date: May 27, 2015 Introduction: Last week, Governor Scott approved Senate Bill 172 (hereinafter "SB 172 ") which substantially amended Chapters 175 and 185, Florida Statutes. SB 172 passed unanimously through the Florida Senate and nearly unanimously through the Florida House of Representatives, following several years of bipartisan cooperation by Senators Bradley, Ring and Gaetz. The following memo is a high -level summary and does not necessarily cover all detailed provisions in the 44 page bill. While SB 172 is effective July 1, 2015, the premium tax provisions do not take effect until entering into the next collective bargaining agreement. For non - collectively bargained service SB 172 is effective October 1, 2015. We expect that several questions will need to be answered by the Division of Retirement in the corning months. We encourage Boards to work with their actuary, union and plan sponsor to translate and apply SB 172's requirements to your plan. It is noteworthy that the default provisions of SB 172 are flexible and may be modified by mutual consent of the parties in the next collective bargaining agreement. Boards are encouraged to place this item on the agenda for their next Board meeting. In particular, Boards that only meet quarterly will need to establish an administrative expense budget at their summer board meeting, effective October 1. 7080 NORTHWEST 4TH STREET, PLANTATION, FLORIDA 33317 PHONE: (954) 916 -1202 • FAX: (954) 916 -1232 www.robertdklausner.com New Definitions: The following new definitions apply to both firefighter and police plans, as amended by Sections 175.032 and 185.02. "Base premium tax revenues ": For a local law plan in effect on October 1, 2003, the revenues received by a municipality for the 2002 calendar year. For a local law plan created between October 1, 2003, and March 1, 2015, inclusive, the revenues received by a municipality based upon the tax collections during the second calendar year of participation. "Minimum benefits ": means the benefits specified in Sections 175.021- 175.341 and Sections 175.361 - 175.401 for firefighter plans and Sections 185.01- 185.341 and Sections 185.37 - 185.50 for police plans. "Minimum standards ": means the standards specified in Sections 175.021- 175.401 for firefighter plans and Sections 185.01- 185.50 for police plans. "Special benefits ": means benefits provided in a defined contribution plan component of a local law plan into which deposits, if any, of premium taxes are paid pursuant to Section 175.351 and 185.35. "Compensation" or "Salary ": For police plans the definition of compensation or salary has been clarified to provide that overtime is no longer a required minimum benefit for police. Detailed Accounting Report & Administrative Expense Budket: New Sections 175.061(8) and 185.05(8) require that all firefighter and police Boards of Trustees shall provide a detailed accounting report and operate under an administrative expense budget as follows: Detailed Accounting Report: The Board shall provide a detailed accounting report of its expenses for each fiscal year to the plan sponsor and the Department of Management Services. The Board is also required to make the report available to each member of the plan and post the report on the Board's website, if the Board has a website. Our office will be suggesting that future summary plan descriptions be amended to indicate that the detailed accounting report is available upon request. The report must include all administrative expenses that, for purposes of this subsection, are expenses relating to any legal counsel, actuary, plan administrator, and all other consultants, and all travel and other expenses. This requirement is likely effective on July 1, 2015. Administrative Expense Budget: The Board shall operate under an administrative expense budget each fiscal year. A copy of the budget shall be provided to the plan sponsor and made available to plan members before the beginning of the fiscal year. If the Board amends the administrative expense budget, the Board must provide a copy of the amended budget to the plan sponsor and make available a copy of the amended budget to plan members. For plans that use a September 30 — October 1 fiscal year, the new administrative expense budget must be prepared and made available prior to October 1, 2015. Minimum 2.75% multiplier: Effective July 1, the new minimum multiplier is 2.75 %. Plans with a multiplier Less than 2.75% are grandfathered and need not raise their multiplier in effect on July 1, 2015. If the multiplier is raised to 2.75% (or higher), the grandfathered plan may not thereafter decrease the multiplier to less than 2.75 %. Requirement to create Share Plan/Supplemental Defined Contribution Plan: SB 172 requires that each plan sponsor must create a share plan/supplemental defined contribution plan (hereinafter "share plan") within the local law plan for the payment of special benefits. The new share plan must be adopted upon entering into a collective bargaining agreement on or after July 1, 2015, or by October 1, 2015, for non - collectively bargained service. Depending upon the application of Section 175.351 and 185.35 to your plan, the new share plan may or may not receive any funding. Any share plan in existence on March 1, 2015, shall be deemed to be a defined contribution plan in compliance with Sections 175.351(6) and 185.35(6). Compromise on usage of premium taxes: Perhaps the most far reaching feature of SB 172 is the underlying "compromise" regarding the use of premium tax revenues. We recommend that Boards request that their actuaries evaluate their premium tax status in light of the new definition of base premium tax revenue and the new calendar year 2012 threshold. An additional feature of this compromise provides that half of additional premium taxes received above the 2012 level must be split between special benefits paid into a share plan, with the other 50% being used by the plan sponsor to offset defined benefit plan costs. The parties are permitted to deviate from this default outcome by mutual consent. Structurally, SB 172 establishes three separate outcomes for the use of premium tax revenue. First, share plans in existence on December 1, 2000 are exempt from SB 172. Second, the parties can mutually agree to use their premium taxes as they see fit. Third, if the parties do not mutually agree upon the use of premium tax revenue the default provisions in Section 175.351 and 185.35 are triggered as set forth below. Default use of Premium Tax Revenue: SB 172 substantially amends Sections 175.351 and 185.35 as follows: Effective upon entering into the next collective bargaining agreement (or October 1, 2015 for noncollectively bargained service): (a) Base premium tax revenues must be used to fund minimum benefits or other retirement benefits in excess of minimum benefits. (b) Of the additional premium tax revenues received that are in excess of the amount received for the 2012 calendar year, 50 percent must be used to fund minimum benefits or other retirement benefits in excess of the minimum benefits, and 50 percent must be placed in a share plan to fund special benefits. (c) Additional premium tax revenues not described in paragraph (b) must be used to fund benefits that are not included in the minimum benefits. If the additional premium tax revenues subject to this paragraph exceed the full annual cost of benefits provided through the plan which are in excess of the minimum benefits, any amount in excess of the full annual cost must be used as provided in paragraph (b). (d) Of any accumulations of additional premium tax revenues which have not been allocated to fund benefits in excess of the minimum benefits, 50 percent of the amount of the accumulations must be used to fund special benefits and 50 percent must be applied to fund any unfunded actuarial liabilities of the plan; provided that any amount of accumulations in excess of the amount required to fund the unfunded actuarial liabilities must be used to fund special benefits. Ability to Deviate from Premium Tax Allocation by Mutual Consent: Yet another example of the underlying compromise reflected in SB 172 is the ability of the parties to deviate from the requirements of Sections 175.351 and 185.35 by mutual consent. Importantly, the use of premium tax revenues above the 2012 calendar year level, including any accumulations of additional premium tax revenues which have not been allocated to fund benefits in excess of minimum benefits, need not be allocated 50 — 50 as long as: 1) the plan sponsor and union mutually consent to use the premium tax differently, and 2) the plan continues to meet minimum benefits and minimum standards. Exemption for Share/Supplemental Plans in existence on December 1, 2000: Any share plan in existence on December 1, 2000 is grandfathered from the 50 — 50 premium tax split set forth in Section 175.351 and 185.35. Grandfatherinz of amendments in reliance on Naples letters: SB 172 prospectively reverses the Division of Retirement's August 12, 2012 Naples letter, but grandfathers any plan amendments adopted on or before March 3, 2015 in reliance upon a "Naples letter ". Changes to the local law plan which are otherwise contrary to minimum benefits and minimum standards may continue in effect until the earlier of October 1, 2018, or the effective date of a collective bargaining agreement that is contrary to the changes. Conclusion: SB 172 substantially amends Chapters 175 and 185. The legislation will have a different impact on different plans and will need to be carefully studied. All plans will need to comply with SB 172's expense reporting and budgeting requirements prior to the end of this fiscal year. The parties will have until the next collective bargaining agreement to decide whether or not to abide by SB 172's default provisions governing the use of premium tax revenue. The following initial questions for your actuary and plan attorney will help facilitate the application of SB 172 to your plan: 1) Does your plan have any unallocated accumulations of additional premium tax revenue? 2) Does your plan have an existing share plan? Was it created prior to December 1, 2000? 3) Was your plan amended in reliance upon a "Naples letter "? 4) How much premium tax was received by your plan for the 2012 calendar year? 5) When does the current union contract expire? We welcome any questions or comments and look forward to discussing this memo with you. Trustees should feel free to share this memo with their respective plan sponsor and union. Barbara Ladue From: Pete.Strong @gabrielroeder.com Sent: Monday, June 08, 2015 3:06 PM To: ladueb @bbpdpension.com Cc: adam @robertdklausner.com; c100560 @gabrielroeder.com Subject: Boynton Beach Fire - Chapter 112.664 (Rule 60T- 1.0035) Report Attachments: Boynton Beach Fire - Chapter 112.664 Compliance Report.pdf Good afternoon Barbara, We have completed the required disclosures and prepared a report which complies with the new requirements under Chapter 112.664, Florida Statutes (Rule 60T- 1.0035) for the City of Boynton Beach Municipal Firefighters' Pension Trust Fund. We are still testing the data upload, so the data upload to the Department of Management Services will be completed within the next couple weeks (but prior to the deadline of June 29, 2015). A link to this report, as well as links to the 10/1/2014 actuarial valuation report and the plan's financial statement, will need to be placed on the City's website since the Pension Plan does not have its own website. The investment consultant will also need to provide certain information to be included on the City's website (the asset allocation and 5 -year history of actual versus assumed investment returns). Please let me know if you have questions. Best regards, Pete Strong Peter N. Strong, FSA, EA, FCA, MAAA Senior Consultant and Actuary Gabriel, Roeder, Smith & Company One East Broward Boulevard Suite 505 Fort Lauderdale, FL 33301 -1804 Telephone: (954) 527 -1616 (ext. 2102) Direct: (954) 713 -2102 Fax: (954) 525 -0083 pete.strong@gabrielroeder.com Circular 230 Notice: Pursuant to regulations issued by the IRS, to the extent this communication (or any attachment) concerns tax matters, it is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax- related penalties under the Internal Revenue Code or (ii) marketing or recommending to another party any tax - related matter addressed within. Each taxpayer should seek advice based on the individual's circumstances from an independent tax advisor. The above communication shall not be construed to provide tax advice, legal advice or investment advice. Notice of Confidentiality: This transmission contains information that may be confidential and that may also be privileged. Unless you are the intended recipient of the message (or authorized to receive it for the intended recipient), you may not copy, forward, or otherwise use it, or disclose its contents to anyone else. If you have received this transmission in error, please not 5 the sender immediately and delete it from your system. Please consider the environment before printing this e-mail. 1 Barbara Ladue From: Kevin quinn <kquinn87 @att.net> Sent: Tuesday, May 19, 2015 10:42 AM To: ladueb @bbpdpension.com Subject: Drop loan provision. Hi Barbara, I understand the PD drop program has a loan provision in it and was wondering if we (FD drop) could look into getting this provision added to our program? Thank you for looking into this. Kevin Quinn 1 G IR.S Gabriel Roeder Smith & Company Consultants & Actuaries CITY OF BOYNTON BEACH MUNICIPAL FIREFIGHTERS' PENSION TRUST FUND Chapter 112.664, F.S. Compliance Report In Connection with the October 1, 2014 Funding Actuarial Valuation Report And the Plan's Financial Reporting for the Year Ending September 30, 2014 GRS ' h Gabriel Roeder Smith & Company One East Broward Blvd. 954.527.1616 phone • Consultants Lac: Actuaries Suite 505 954.525.0083 fax Ft. Lauderdale, FL 33301 -1804 www.gabrielroeder.com June 8, 2015 Board of Trustees City of Boynton Beach Municipal Firefighters Pension Fund Boynton Beach, Florida Dear Board Members: Gabriel, Roeder, Smith & Company (GRS) has been engaged by the City of Boynton Beach Municipal Firefighters Pension Fund (System) to prepare a disclosure report to satisfy the requirements set forth in Ch. 112.664, F.S. and as further required pursuant to Ch. 60T- 1.0035, F.A.C. This report was prepared at the request of the Board and is intended for use by the Retirement Board and those designated or approved by the Board. This report may be provided to parties other than the System only in its entirety and only with the permission of the Board. The purpose of the report is to provide the required information specified in Ch. 1 12.664, F.S. as well as supplement this information with additional exhibits. This report should not be relied on for any purpose other than the purpose described above. The findings in this report are based on data or other information through September 30, 2014. 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 this engagement does not include an analysis of the potential range of such measurements. This report was based upon information furnished by the City and the Board concerning Plan benefits, financial transactions, plan provisions and active members, terminated members, retirees and beneficiaries. We checked for internal and year -to -year consistency, but did not otherwise audit the data. We are not responsible for the accuracy or completeness of the information provided by the City. Except as otherwise indicated as required for the disclosures contained herein, this report was prepared using certain assumptions selected by the Board as described in our October 1, 2014 actuarial valuation report. This report is also based on the Plan Provisions, census data, and financial information as summarized in our October 1, 2014 actuarial valuation report. Please refer to the October I, 2014 actuarial valuation report, dated February 20, 2015, for summaries and descriptions of this information. The use of an investment return assumption that is 2% higher than the investment return assumption used to determine the funding requirements does not represent an estimate of future Plan experience nor does it reflect an observation of future return estimates inherent in financial market data. The use of this investment return assumption is provided as a counterpart to the Chapter 112.664, Florida Statutes requirement to utilize an investment return assumption that is 2% lower than the assumption used to determine the funding requirements. The inclusion of the additional exhibits showing the effect of using a 2% higher investment return assumption shows a more complete assessment of the range of possible results as opposed to showing a one -sided range as required by Florida Statutes. The undersigned are members of the American Academy of Actuaries and meet the Qualification Standards of the American Academy of Actuaries to render the actuarial opinions contained herein. The signing actuaries are independent of the plan sponsor. This report has been prepared by actuaries who have substantial experience valuing public employee retirement systems. To the best of our knowledge the information contained in this report is accurate and fairly presents the actuarial position of the Retirement Plan as of the valuation date. All calculations have been made in conformity with generally accepted actuarial principles and practices, with the Actuarial Standards of Practice issued by the Actuarial Standards Board and with applicable statutes. With respect to the reporting standards for defined benefit retirement plans or systems contained in Section 1 12.664(1) F.S., the actuarial disclosures required under this section were prepared and complete 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, and in my opinion, meet the requirements of Section 112.664(1), F.S. and Section 60T- 1.0035, F.A.C. Respectful ly submitted, GABRIEL, ROEDER, SMITH AND COMPANY By �,t%//�+ / , , `'� By l tC. _ -t,C9C C (�--t ' }- Peter N. Strong, FSA, M I A, FCA Melissa R. Algayer, IbfAAt Enrolled Actuary No. 14 -.975 Enrolled Actuary No. 14 -06467 Senior Consultant & Actuary Consultant & Actuary Gabriel Roeder Smith & Company TABLE OF CONTENTS Title Page Ch. 112.664, F.S. Results Schedule of Changes in Net Pension Liability 1. Using financial reporting assumptions per GASB Statement No. 67 1 2. Using assumptions prescribed in Section 112.664(1)(a), F.S. 2 3. Using assumptions prescribed in Section 112.664(1)(b), F.S. 3 4. Using the mandated mortality and funding interest rate +2% 4 Assets Versus Benefit Payments Projections 1. Using funding assumptions 5 2. Using assumptions prescribed in Section 112.664(1)(a), F.S. 6 3. Using assumptions prescribed in Section 112.664(1)(b), F.S. 7 4. Using the mandated mortality and funding interest rate +2% 8 Actuarially Determined Contribution 9 GRS CH. 112.664, Florida Statutes RESULTS GRS 1 1 Schedule of Changes in the Employers' Net Pension Liability Using Financial Reporting Assumptions per GASB Statement No. 67 Fiscal year ending September 30, 2014 1. Total pension liability a. Service Cost $ 2,772,724 b. Interest 8,188,369 c. Benefit Changes - d. Difference between actual & expected experience & Other 627,719 e. Assumption Changes - f. Benefit Payments (4,292,070) g. Contribution Refunds (50,673) h. Net Change in Total Pension Liability 7,246,069 i. Total Pension Liability - Beginning 108,781,854 j. Total Pension Liability - Ending $ 116,027,923 2. Plan Fiduciary Net Position a. Contributions - Employer $ 3,522,147 b. Contributions - Non - Employer Contributing Entity 1,016,561 c. Contributions - Member 1,291,773 d. Net Investment Income 7,187,580 e. Benefit Payments (4,292,070) f. Contribution Refunds (50,673) g. Administrative Expense (122,390) h. Other 343,843 i. Net Change in Plan Fiduciary Net Position 8,896,771 j. Plan Fiduciary Net Position - Beginning 69,382,320 k. Plan Fiduciary Net Position - Ending $ 78,279,091 3. Net Pension Liability / (Asset) 37,748,832 Certain Key Assumptions Valuation Date 10/01/2013 Measurement Date 09/30/2014 Investment Return Assumption 7.65% Mortality Table 1983 Group Annuity Mortality Table GRS 2 Schedule of Changes in the Employers' Net Pension Liability Using Assumptions required under 112.664(1)(a), F.S. Fiscal year ending September 30, 2014 1. Total pension liability a. Service Cost $ 2,992,511 b. Interest 8,612,499 c. Benefit Changes - d. Difference between actual & expected experience & Other 627,719 e. Assumption Changes - f. Benefit Payments (4,292,070) g. Contribution Refunds (50,673) h. Net Change in Total Pension Liability 7,889,986 i. Total Pension Liability - Beginning 114,106,250 j. Total Pension Liability - Ending $ 121,996,236 2. Plan Fiduciary Net Position a. Contributions - Employer $ 3,522,147 b. Contributions - Non - Employer Contributing Entity 1,016,561 c. Contributions - Member 1,291,773 d. Net Investment Income 7,187,580 e. Benefit Payments (4,292,070) f. Contribution Refunds (50,673) g. Administrative Expense (122,390) h. Other 343,843 i. Net Change in Plan Fiduciary Net Position 8,896,771 j. Plan Fiduciary Net Position - Beginning 69,382,320 k. Plan Fiduciary Net Position - Ending $ 78,279,091 3. Net Pension Liability / (Asset) 43,717,145 Certain Key Assumptions Valuation Date 10/01/2013 Measurement Date 09/30/2014 Investment Return Assumption 7.65% Mortality Table RP -2000 fully generational using Scale AA GRS 3 Schedule of Changes in the Employers' Net Pension Liability Using Assumptions required under 112.664(1)(b), F.S. Fiscal year ending September 30, 2014 1. Total pension liability a. Service Cost $ 4,720,908 b. Interest 8,163,639 c. Benefit Changes - d. Difference between actual & expected experience & Other 807,780 e. Assumption Changes - f. Benefit Payments (4,292,070) g. Contribution Refunds (50,673) h. Net Change in Total Pension Liability 9,349,584 i. Total Pension Liability - Beginning 144,285,351 j. Total Pension Liability - Ending $ 153,634,935 2. Plan Fiduciary Net Position a. Contributions - Employer $ 3,522,147 b. Contributions - Non - Employer Contributing Entity 1,016,561 c. Contributions - Member 1,291,773 d. Net Investment Income 7,187,580 e. Benefit Payments (4,292,070) f. Contribution Refunds (50,673) g. Administrative Expense xP ense (122,390) h. Other 343,843 i. Net Change in Plan Fiduciary Net Position 8,896,771 j. Plan Fiduciary Net Position - Beginning 69,382,320 k. Plan Fiduciary Net Position - Ending $ 78,279,091 3. Net Pension Liability / (Asset) 75,355,844 Certain Key Assumptions Valuation Date 10/01/2013 Measurement Date 09/30/2014 Investment Return Assumption 5.65% Mortality Table RP -2000 fully generational using Scale AA GRS 4 Schedule of Changes in the Employers' Net Pension Liability Using Assumptions under 112.664(lxb), F.S. except 2% higher investment return assumption Fiscal year ending September 30, 2014 1. Total pension liability a. Service Cost $ 1,971,243 b. Interest 8,794,305 c. Benefit Changes - d. Difference between actual & expected experience & Other 447,657 e. Assumption Changes - f. Benefit Payments (4,292,070) g. Contribution Refunds (50,673) h. Net Change in Total Pension Liability 6,870,462 i. Total Pension Liability - Beginning 93,678,529 j. Total Pension Liability - Ending $ 100,548,991 2. Plan Fiduciary Net Position a. Contributions - Employer $ 3,522,147 b. Contributions - Non - Employer Contributing Entity 1,016,561 c. Contributions - Member 1,291,773 d. Net Investment Income 7,187,580 e. Benefit Payments (4,292,070) f. Contribution Refunds (50,673) g. Administrative Expense (122,390) h. Other 343,843 i. Net Change in Plan Fiduciary Net Position 8,896,771 j. Plan Fiduciary Net Position - Beginning 69,382,320 k. Plan Fiduciary Net Position - Ending $ 78,279,091 3. Net Pension Liability / (Asset) 22,269,900 Certain Key Assumptions Valuation Date 10/01/2013 Measurement Date 09/30/2014 Investment Return Assumption 9.65% Mortality Table RP -2000 fully generational using Scale AA GRS 5 Asset and Benefit Payment Projection Not Reflecting Any Contributions from the Employer, State or Employee Using Financial Reporting Assumptions per GASB Statement No. 67 Market Value of Expected Projected Benefit Market Value of FYE Assets (BOY) Investment Return Payments Assets (EOY) 2015 65,148,932 4,682,905 5,420,395 64,411,442 2016 64,411,442 4,621,322 5,587,630 63,445,134 2017 63,445,134 4,539,932 5,825,406 62,159,660 2018 62,159,660 4,423,880 6,349,199 60,234,341 2019 60,234,341 4,260,712 6,849,704 57,645,349 2020 57,645,349 4,051,842 7,241,577 54,455,614 2021 54,455,614 3,785,784 7,956,995 50,284,402 2022 50,284,402 3,458,430 8,344,003 45,398,830 2023 45,398,830 3,064,182 9,086,141 39,376,870 2024 39,376,870 2,596,010 9,526,802 32,446,079 2025 32,446,079 2,043,622 10,395,570 24,094,131 2026 24,094,131 1,392,749 11,048,286 14,438,594 2027 14,438,594 636,709 11,898,281 3,177,022 2028 3,177,022 - 12,502,961 - 2029 - - 12,827,745 - 2030 - - 13,447,528 - 2031 - - 13,694,504 - 2032 - - 13,932,691 - 2033 - - 14,044,500 - 2034 - - 14,453,366 - 2035 - - 14,689,033 - 2036 - - 14,758,274 - 2037 - - 14,727,028 - 2038 - - 14,663,832 - 2039 - - 14,593,160 - 2040 - - 14,474,880 - Number of years for which current market value of assets are adequate to sustain the payment of expected retirement benefits, reflecting no contributions from the Employer, Employee or State, contrary to Florida Statues and Plan provisions: 13.25 Certain Key Assumptions Valuation Investment return assumption 7.50% Valuation Mortality Table 1983 Group Annuity Mortality Table Note: As required in Section 112.664(c) of the Florida Statutes, the projection of the Fund assets do not include contributions from the Employer, Employee or State, which is contrary to Florida Statutes and Plan provisions. For this reason, these projections should not be viewed as a representation of the amount of time the Fund can sustain benefit payments. Under the GASB standards which DO include contributions from the employer, employee and State, the Fund is expected to be able to sustain the benefit payment demands in the near -term and long -term future. GRS 6 Asset and Benefit Payment Projection Not Reflecting Any Contributions from the Employer, State or Employee Using Assumptions required under 112.664(1)(a), F.S. Market Value of Expected Projected Benefit Market Value of FYE Assets (BOY) Investment Return Payments Assets (EOY) 2015 65,148,932 4,682,837 5,422,201 64,409,568 2016 64,409,568 4,620,825 5,597,140 63,433,253 2017 63,433,253 4,538,345 5,843,965 62,127,634 2018 62, 127,634 4,420,377 6,378,547 60,169,464 2019 60,169,464 4,254,222 6,893,010 57,530,675 2020 57,530,675 4,041,061 7,299,736 54,272,000 2021 54,272,000 3,768,971 8,038,097 50,002,874 2022 50,002,874 3,433,398 8,448,467 44,987,805 2023 44,987,805 3,028,355 9,219,473 38,796,688 2024 38,796,688 2,546,513 9,686,359 31,656,842 2025 31,656,842 1,977,289 10,585,966 23,048,165 2026 23,048,165 1,305,716 11,277,226 13,076,656 2027 13,076,656 524,374 12,170,011 1,431,018 2028 1,431,018 - 12,826,208 - 2029 - - 13,205,615 - 2030 - - 13,885,458 - 2031 - - 14,207,201 - 2032 - - 14,515,108 - 2033 - - 14,714,263 - 2034 - - 15,211,143 - 2035 - - 15,553,465 - 2036 - - 15,725,888 - 2037 - - 15,814,408 - 2038 - - 15,870,926 - 2039 - - 15,918,527 - 2040 - - 15,935,904 - Number of years for which current market value of assets are adequate to sustain the payment of expected retirement benefits, reflecting no contributions from the Employer, Employee or State, contrary to Florida Statues and Plan provisions: 13.08 Certain Key Assumptions Valuation Investment return assumption 7.50% Valuation Mortality Table RP -2000 fully generational using Scale AA Note: As required in Section 112.664(c) of the Florida Statutes, the projection of the Fund assets do not include contributions from the Employer, Employee or State, which is contrary to Florida Statutes and Plan provisions. For this reason, these projections should not be viewed as a representation of the amount of time the Fund can sustain benefit payments. Under the GASB standards which DO include contributions from the employer, employee and State, the Fund is expected to be able to sustain the benefit payment demands in the near -term and long -term future. GRS 7 Asset and Benefit Payment Projection Not Reflecting Any Contributions from the Employer, State or Employee Using Assumptions required under 112.664(1)(b), F.S. Market Value of Expected Projected Benefit Market Value of FYE Assets (BOY) Investment Return Payments Assets (EOY) 2015 65,148,932 3,434,081 5,422,201 63,160,812 2016 63,160,812 3,319,923 5,597,140 60,883,595 2017 60,883,595 3,187,889 5,843,965 58,227,519 2018 58,227,519 3,027,103 6,378,547 54,876,075 2019 54,876,075 2,828,626 6,893,010 50,811,692 2020 50,811,692 2,593,900 7,299,736 46,105,856 2021 46,105,856 2,314,774 8,038,097 40,382,533 2022 40,382,533 1,988,706 8,448,467 33,922,773 2023 33,922,773 1,612,217 9,219,473 26,315,517 2024 26,315,517 1,180,979 9,686,359 17,810,136 2025 17,810,136 688,443 10,585,966 7,912,614 2026 7,912,614 125,070 11,277,226 - 2027 - - 12,170,011 - 2028 - - 12,826,208 - 2029 - - 13,205,615 - 2030 - - 13,885,458 - 2031 - - 14,207,201 - 2032 - - 14,515,108 - 2033 - - 14,714,263 - 2034 - - 15,211,143 - 2035 - - 15,553,465 - 2036 - - 15,725,888 - 2037 - - 15,814,408 - 2038 - - 15,870,926 - 2039 - - 15,918,527 - 2040 - - 15,935,904 - Number of years for which current market value of assets are adequate to sustain the payment of expected retirement benefits, reflecting no contributions from the Employer, Employee or State, contrary to Florida Statues and Plan provisions: 11.67 Certain Key Assumptions Valuation Investment return assumption 5.50% Valuation Mortality Table RP -2000 fully generational using Scale AA Note: M required in Section 112.664(c) of the Florida Statutes, the projection of the Fund assets do not include contributions from the Employer, Employee or State, which is contrary to Florida Statutes and Plan provisions. For this reason, these projections should not be viewed as a representation of the amount of time the Fund can sustain benefit payments. Under the GASB standards which DO include contributions from the employer, employee and State, the Fund is expected to be able to sustain the benefit payment demands in the near -term and long -term future. GRS 8 Asset and Benefit Payment Projection I Not Reflecting Any Contributions from the Employer, State or Employee Using Assumptions under 112.664(1)(b), F.S. except 2% higher investment return assumption Market Value of Expected Projected Benefit Market Value of FYE Assets (BOY) Investment Return Payments Assets (EOY) 2015 65,148,932 5,931,594 5,422,201 65,658,325 2016 65,658,325 5,971,677 5,597,140 66,032,862 2017 66,032,862 5,995,534 5,843,965 66,184,430 2018 66,184,430 5,984,540 6,378,547 65,790,423 2019 65,790,423 5,922,672 6,893,010 64,820,085 2020 64,820,085 5,811,171 7,299,736 63,331,520 2021 63,331,520 5,634,685 8,038,097 60,928,108 2022 60,928,108 5,386,868 8,448,467 57,866,509 2023 57,866,509 5,059,393 9,219,473 53,706,429 2024 53,706,429 4,642,009 9,686,359 48,662,079 2025 48,662,079 4,120,064 10,585,966 42,196,177 2026 42,196,177 3,472,969 11,277,226 34,391,920 2027 34,391,920 2,689,157 12,170,011 24,911,066 2028 24,911,066 1,757,306 12,826,208 13,842,164 2029 13,842,164 687,739 13,205,615 1,324,288 2030 1,324,288 - 13,885,458 - 2031 - - 14,207,201 - 2032 - - 14,515,108 - 2033 - - 14,714,263 - 2034 - - 15,211,143 - 2035 - - 15,553,465 - 2036 - - 15,725,888 - 2037 - - 15,814,408 - 2038 - - 15,870,926 - 2039 - - 15,918,527 - 2040 - - 15,935,904 - Number of years for which current market value of assets are adequate to sustain the payment of expected retirement benefits, reflecting no contributions from the Employer, Employee or State, contrary to Florida Statues and Plan provisions: 15.08 Certain Key Assumptions Valuation Investment return assumption 9.50% Valuation Mortality Table RP -2000 fully generational using Scale AA Note: As required in Section 112.664(c) of the Florida Statutes, the projection of the Fund assets do not include contributions from the Employer, Employee or State, which is contrary to Florida Statutes and Plan provisions. For this reason, these projections should not be viewed as a representation of the amount of time the Fund can sustain benefit payments. Under the GASB standards which DO include contributions from the employer, employee and State, the Fund is expected to be able to sustain the benefit payment demands in the near -term and long -term future. GRS ` 9 ACTUARIALLY DETERMINED CONTRIBUTION 112.664(1)(b) F.S. except 2% higher GASB No. 67 112.664(1)(a) F.S. 112.664(1)(b) F.S. investment return Assumptions Assumptions Assumptions assumption A. Valuation Date October 1, 2014 October 1, 2014 October 1, 2014 October 1, 2014 B. Actuarial Determined Contribution (ADC) to Be Paid During Fiscal Year Ending 9/30/2016 9/30/2016 9/30/2016 9/30/2016 C. Assumed Dates of Employer Contributions 10/1/2015 10/1/2015 10/1/2015 10/1/2015 D. Annual Payment to Amortize Unfunded Actuarial Liability $ 2,842,385 $ 3,157,368 $ 3,965,060 $ 2,313,115 1 E. Employer Normal Cost 2,014,298 2,269,111 4,214,300 1,123,978 F. ADC if Paid on Valuation Date: D + E 4,856,683 5,426,479 8,179,360 3,437,093 G. ADC Adjusted for Frequency of Payments 4,856,683 5,426,479 8,179,360 3,437,093 H. Adjusted for Frequency of as % of Covered Payroll 49.44 % 55.24 % 83.26 % 34.99 % I. Assumed Rate of Increase in Covered Payroll to Contribution Year N/A % N/A % N/A % N/A J. Covered Payroll for Contribution Year 9,469,072 * 9,469,072 * 9,469,072 * 9,469,072 * K. Covered Payroll per Valuation 9,823,480 9,823,480 9,823,480 9,823,480 L. ADC for Contribution Year: H x J, but 4,856,683 5,426,479 8,179,360 3,437,093 not less than G M. Allowable Credit for State Revenue in Contribution Year 704,322 704,322 704,322 704,322 N. ADC in Contribution Year 4,152,361 4,722,157 7,475,038 2,732,771 O. ADC as % of Covered Payroll in in Contribution Year: 42.27 % 48.07 % 76.09 % 27.82 % N - (MaxofJandK) P. Certain Key Assumptions Investment Return Assumption 7.50% 7.50% 5.50% 9.50% Mortality Table 1983 Group RP -2000 fully RP -2000 fully RP -2000 fully Annuity generational generational generational Mortality Table using Scale AA using Scale AA using Scale AA *Estimated payroll from Finance Department. Actual contributions should be no less than the listed percentage of payroll multiplied by actual covered payroll. 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ElH 'suuld aaXordtua leaaua0 pare aag. `aarrod of sagdde uoileisi9ai mau att1, •auaic snp aantuis! o'1 upiaol:I atojo uotssas .reinSaa alp uunp paldopu sum tianim `C,60£ I EIH„ aalJuuiaxaq) 60E I MEI asnoi,l panoxdde Itoas aouxanoo imp ase e aq prnogs suuid uoisuad ujauaq paupap lutuatuu.rana upuoid IId marnaanp g 10 `Zl atrn£ :01EG (salnluiS ep!aoi3 `i79971, I Pm £971 1 suollaas 2uipuaure) 60E! IIIH asnoH :311 uosurn77 :g uasuar uuuapnex aausnul?i :t.tio.tA sluailp uorsuad epuold try :o.L lilfl0 1st b2IO JAI 3IAI r NOSNIA31 ■ISNI[ XVNA11V)1 11 :I NSflV1N According to the latest available data, approximately two dozen governmental plans in Florida currently use the 1983 Group Mortality Table. Approximately another two dozen governmental plans use the 1994 Group Mortality Table. Approximately 440 plans use a version of the RP 2000 mortality table. The cost of implementing the new FRS mortality tables will depend on which mortality table a plan is currently using. Although HB 1309 is "effective January 1, 2016," it is unclear whether the new requirements apply to the October 1, 2015 valuation or the October 1, 2016 valuation. In most cases, the October 1, 2015 valuation is adopted in early 2016 and sets the contribution for the 10/1/16 through 9/30/17 fiscal year. By contrast, the October 1, 2016 valuation sets the contribution for the 10/1/17 through 9/30/18 fiscal year. We have requested guidance from the Division of Retirement and expect that HB 1309 will be interpreted as applying to the October 1, 2016 valuation (which will ordinarily be adopted in early 2017). If the Division of Retirement agrees with this interpretation that HB 1309 applies to the October 1, 2016 valuation, plans will have the option of early adopting the FRS tables in the October 1, 2015 valuation. Early adoption will enable boards to phase in higher costs over two years rather than fully implementing HB 1309 in a single year. Amendment to Section 112.664's reporting requirements Section 112.664 governs the controversial "reporting standards" for defined benefit plans, in contrast to the "funding" requirements under 112.63. Based on the regulations adopted by the Division of Retirement in April of this year, plans are required to begin complying with Section 112.664's reporting standards 60 days after the board approves its actuarial valuation. HB 1309 amends Section 112.664 to align reporting standards with funding standards. As a result, Section 112.664 reports will be based on the FRS tables rather than the RP 2000 Scale AA table. This amendment is effective plan years ending on or after December 31, 2015. Recommendation Actuaries around the state are already busy complying with the new reporting standards in Section 112.664. After the 112.664 reports are prepared and filed with the Division of Retirement, boards and plan sponsors are encouraged to consult with their actuary to determine the impact of HB 1309 on your plan and the schedule for compliance.