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07-13-1992
0095 T 1f:00 P.M. :. 1. Call to order 2. Approval of Minutes of 611192 3. Request for acceptance into membership: a) Jay R. Schmitt . b) Peter E. Lopez c) Vickie Davenport d) David Caseley e) Marcus D. Lane f) Robert P. Berger g) Michael A. Cavallo, h) Robert L. Pease 0 Joseph.l. Walden j) Dwight D. Terry k) John G. Pickart 4. Pension(s) to be granted: Job-Connected Disability Josephine M. Robinson 5. Authorize a continuation of the 8% employee contibution through 12/31/92 and designate a City ;contribution for fiscal year 1993 which is equal to the actual employee contributions for calendar year 1992 6. Authorization for City Manager to spend up to $20,000,for special actuarial analyses regarding pension benefit changes to be considered during the upcoming collective bargaining discussions PF 7/13/92 1 ¢?. .. f•`<i :• t, it •. ,if .;li :.',, .5- r ^.' .. !, i .i (' rf?tl -{r ¢:lti • ';11. ?r „ tr tI NO ° }!1'-. ,?.y .ti, ' S: 1 t ; ,.. ' _ .fvi,» ¢,4. .a• c. ..a• • o a 1 . , . - 4' wr. ,5 r.'{}Y jyyj?(ity?{Y {'¢r'fi..v,'T, y a.,'ls: 'rr ???i veil j}Mir^9 ,i„ ..`Fi i:V'?.,,f; i•,'n?"/. C, I1`r,ya,. o<< .?,: .:`l ?:s•. .. c..w:•I R:" Y%a,T.ir 1. R?1: 3(. W ie.vn..•. . ... .. .. al,?....••a.w?...1 R:, ..5 ?' 'I': t Sr, ', , '.'{.vi r r{.,,.r fit, S 1 ,yr3j>3i T , ' • r 1 ' , , r 7. .Approve expenditure of not to exceed 85,000 for the City's actuary, Coopers &'Lybrand to . per orm. a special actuarian ' analyses estimating costs of giving retroactive pension credit to employees who were originally ' excluded from 'pension participation on,the basis of age i 8. Approve the recommendation of Eichoff Pieper and Willoughby to z increase the plans investment in . •; bonds managed by Shields Asset Management, Inc, to 50% of the total fixed income portion of the '.` pension plan portfolio 9. Other Business: 10. Adjournment: el r r ' r PF 7/13/92 2 .k CLEARWATER CITY COMMISSION i Agenda. Coven Memorandum Ir a TtA??? Trustees of the Emplcsyccs' Pension Fund Item N Meeting Dale: 7/13/92 Subject: Membership in Employees' Pension Plan Recommendation/Motion: Employee(s) listed below be accepted into the Employees' Pension Plan as recommended by the Pension Advisory Committee, a and that the appropriate officials be authorized to execute same. BACKGROUND: Date Seniority Pension NaMg-gild Job Class Wept./Div. Date Effective Jay R., Schmitt, Firefighter Fire 5-18-92 5-18-92 Peter E. Lopez, Firefighter Fire 5-18-92 5-18-92 Vickie Davenport, Staff Asst. I Pub. Wks./Trans. 5-15-89 6-17-91 Do vid Cawley, Welder I Pub. Wks./Sot. 'Waste 5-18-92 5-18-92 Marcus. D. Lane, Police Officer Police 6-1-92 6-1-92 Robert P Berger, Police Recruit II Police 6-1-92 6-1-92 Michael A. Cavallo, Police Recruit I Police 8-24-92 8-24-92 Robert L. Pease, Police Recruit II Police 6-1-92 6-1-92 Joseph 1. Walden, Equip. Oper. I Parks & Rec. 4-27-87 5-28-92 Dwight D. Terry, Pub. Ser, Tech. Pub, Wks,/Pub. Ser. 6-15-92 6-15-92 John G. Pickart, Police Recruit I Police 8-10-92 8-10-92 Reviewed by: Originating Dept.: Vv t_ogal Human Resourc /%/,+ Budget Purchasing IV User Dept.: Risk Mgmt.66:4-7 DIS - ACM Advertised: Other Date: Submitted by: Paper: Us Not required Affected parties L1 Notified City Manager Not required (oats: A26= Commission Action: Total Approved Approved wlcondilions Current FY Denied L7 Continued to: Funding Source: Capt. Imp, L7 Operating Attachments: ? Other Letter(s) Appropriation Code: ? None L, CITY OF CLEARWATER EMPLOYEES' PE=NSION PLAN PENSION ADVISORY COMMITTEE TO: Pension Trustees FROM: Pension Advisoy Committee SUBJECT: Recommendation for Acceptance Into Pension Plan. DATE: June 24, 1992 As Trustees of the City of Clearwater Employees' Pension Fund, you are hereby notified that the employees listed below have been duly examined' by a local physician and each has been designated as a "first class risk; t These employees are eligible for pension membership as noted in the Pension Eligibility Date column below, and It is the recommendation of the Pension Advisory Committee that they be accepted into membership. } Name. Jots toss. & Del2t•lDly. 13 Date_ Irth LCqDate_ Pe nsion Elq ,Date , _ . Jay R. Schmitt, Firefighter, Fire 02-17-63 _ 05-18-92 , 05-18-92 Peter E, Lopez, Firefighter,. Fire 11-26-65 05-18.92 05-18-92 Vickie Davenport, Staff Asst.I, PW/Transp. 09.03-54 05-15-89 06-17-91 ('Employee transferred from PIT to FIT on this date, but inadvertently overlooked) David Caseley, Welder 1, PW/Solid Waste 03.10-48 05-18-92 05-18-92 -1- ? ' (11-1.5 a 6?- Marcus D. Lane, Police Officer, Police 11-04-59 9,4.9 2 0 05-? 92 Robert P. Berger, Police Recruit 11, Police 12-16-56 06-01-92 06.01 -92 Michael A. Cavallo, Police Recruit 11, Police 01-07-61 08-24-92 08-24-92 Robert L. Pease, Police Recruit 11, Police 09-05-67 06-01-92 06-01 -92 Joseph 1. Walden, Equip. Oper. I, Parks & Rec 08.01-58 04-27-87 05-28-92' (' Employee originally rejected from pension. Reexamined on 05-28.92) Dwight D. Terry, Public Svc. Tech„ P.W.linir 05.14-64 06-15-92 06-15-92 Jahn G, Pickart, Police Recruit II, Police 04-17.68 08-10-92 08-10-92 lF+ CILEARWIATER CITY COMMISSION Agenda Cover Memorandum item # s? ' `ate Meeting Dale: 7/13/92 TER. Trustees of the Employees' Pension Fund Subject: Pension(s) To Be Granted RecommendationlMotion: The approval of a job-connected disability by the Pension Advisory Committee (PAC) for Josephine ' M. Robinson, Department of Administrative Scrviccs/Computer Information Services, be remanded to the PAC for consideration as a non-job-connceted disability pension. ? and that the appropriate officials be authorized to execute same. BACKGROUND: Rama Josephine M. Robinson, Systems Analyst/Programmer, Department of Administrative Services/Computer Information Services, was employed by the City on November 13, 1967, and began participating in the Pension Plan on that date. She suffers from ulcerative colitis which resulted in her application for a job-connceted disability pension. Ms. Robinson has submitted letters from Dr. F. Byron Smitherman (dated January 34, 1992) and Dr. Yael ' Y Ellis (dated May 12, 1992) in support of her request for a job-connected disability pension. The report from Dr. Smitherman states that Ms. Robinson "is troubled at this time with a flare-up of chronic ulcerative colitis. It is my impression this has flared because of stress, which is incurred in her occupation. There apparently is no way to change the stress involved in her job and I have recommended, therefore, that because of the serious nature of her difficulty that she plan on medical retirement." The report from Dr. Ellis states "She has suffered from. severe ulcerative colitis which has been quiescent for many years and then flared related to multiple stressors of her job...As a result of many factors, I have recommended that she take an early medical retirement on disability as she is unable to continue to work with all of her medical problems," Ms. Robinson's disability pension was approved as job-connected by the Pension Advisory Committee at its meeting of June 24, 1992. Bused on an average salary of approximately $36,969 over the past five years and the seventy-five percent (75%) minimum disability benefit, Ms. Robinson's pension will approximate $27,727 annually. Charts from Finance which take into consideration mortality rates and age reflect the "present value cost of financing" this pension will be approximately $267,933. City staff believes that the issue of job-relatedness based on job stress is not sufficiently documented with a reasonable degree of medical certainty to support a job-connected disability pension. /1 - -- - - Reviewed by: Legal A1,11- Budget "AI- Purchasing IV/!- Risk Mgmt. _ A- DIS /VA- ACM ? c Other A) k Submitted by: City Manager Originating Dept.W IV Human Resources User Dept.: Advertised: Date: Paper: O.Not required Affected parties ? Notified Z Not required Total Current FY Funding Source: U Capt. Imp. L1 Operating ? Other_ Appropriation Code: Commission Action: ? Approved [.? Approved w/conditions 0 I]onied 0 Continued to: Attachments: Letter(s) Request Form 0 None .._-. ?•i Personnel Department 482.8870 C I .TY Q F C L E A R W AT E.R POST OFFICE BOX 4748 CLEARWATER, FLORIDA 344'610-4748 'ISO: Honorable Mayor and Members of the City Commission as Trustees of the Employees' Pension Plan FROM; Pension Advisory Committee COPIES: Josephine Robinson; Risk Management; Dan Deignan, Assistant Director of Administrative Scrvices/Finance Director; Employee's File SUBJECT: Pension for Josephine Robinson-Job-Connected Disability Pension DATE: June 24, 1992 The Pension Advisory Committee (PAC) received an application for disability pension from Josephine Robinson on February 20, 1992.. Ms. Robinson has. been determined by the Pension Advisory Committee to meet the requirements of the Pension Plan for a job-connected disability pension. She was employed by the City on November 13, 1967, and began participating in the Pension Plan on November 13, 1967. Further, she has submitted medical documentation, copies of which are attached, relative to her disability which has been reviewed and approved by the PAC. By motion made and duly carried at its meeting of June 24, 1992. the Pension Advisory Committee approved/recommended the granting of a job-connected disability pension to Ms. Robinson in accordance with provisions of Section 26.35 of the City Code. This pension is to be effective on a date to be determined. The amount of Ms. Robinson's pension will be calculated by the Finance Department according to the formula in the Pension Plan for job-connnected disability pension at such time as her last five years of service and salary can be computed. I hereby certify that the Pension Advisory Committee has approved the granting of a job-connected disability pension . for Josephine Robinson and the above dates are correct. c U 2. Chairman, Pension viso Committee "Equal Employment and Affirmative Action Employer'' 1 PENSION REQUEST FORM j Josephine Robinson do hereby apply ti for retirement from the .City of Clearwater General, Employees' Pension Plan. . My benefits date is 11-13-67 -(Entry, date into pension plan) My date of hire is 11-13-67 My birthday is 06-27-30 ' My' Job classification is , Sys_tems__Analyst/Programmer _and I work in the WAS Department, CIS Division. M y resignation date is_ to be determined . 'The type of pension for which I am applying is (check only one ): Regular Pension based on years of service Job-connected Disability Pension Non-jab-connected Disability Pension My spouse's name is: _ .., n.La _ Dependent children under the age of 18 and residing in my household are: nla (Print Child's Full Name) (Child's Date of Birth) I hereby certify all of the above to be true and correct: ? t L j 0 A a[ S Signat rc) d,0X1_1 02-20-92 Date) (Nota y Public) !iY CC.".;tit3t?1; Ew ,11:x•= 3:l, 11j93 DWINJ 71I%?J CUM AL It+S. U110. s CITY OF CLEARWATER GENERAL EMPLOYEES' PENSION PLAN 'OPTIONS -.GENERAL EMPLOYEES OPTION #1: Employees can receive a lump sum payment for vacation and holiday pay' and 1/2 of accrued sick leave at the time of separation from the City. There will be no ' 817 deduction for pension from, ; this lump sum payment nor will this amount count as earnings in the ' calculation of the pension. -The last day of work will' be the termination date and pension benefits will begin the following day. OPTION #2: Employee can extend termination date by the time due (Only available to for vacation, holiday pay, and 1/2 of, accrued sick leave. employees ' hired Termination date will be the final day of extended time. prior 'to 1011190) Pension benefits will begin the following day. L. Josephine Robinson an employee of the City' of Clearwater, hereby apply for pension benefits under the General Employees' Pension Plan. I hereby certify that I fully understand the two options offered to me, l choose to retire using Option 2 and wish my benefits to be calculated under this option. I understand that once this form is signed, my ' decision is irrevocable. EMPLOYEE'S SIGNATURE:- SOCIAL SECURITY 17 --24-7 71 ADDRESS' _ 1352 Whispering Pines Drive ` Clearwater, FL 34624 r)2J7WUA?ATE• „ February 20, 1992 F. BYRON SMITHERMAN, Jn,, M,D:, P.A. 1000 LAKEVIEW RD,, SUITE 6 CLEARWATER, FLOMDA 34616 INTERNAL MEbIGI14C January' 3O, 1992 RE:' Mrs. Josephine Robinson Dear Sir: Mrs. Josephine Robinson is troubled at this time with a flare--up of chronic ulcerative colitis. It 'is my impression this has flared because of stress. which is incurred in her ,occupation. There,apparently is,no way to change the stress 'involved in her job and I have recommended, therefore, that because of the serious nature of her difficulty that she plan on'medical retirement. I do not anticipate the condition will improve unless she makes that change. She is unable to work in a full time capacity in the ordinary.way because of the-disease above- mentioned. I do not think her job will improve or her dis- ease will improve unless she terminates her employment. In addition to the above-mentioned problem, she has a kidney stone which has to be removed, probable carcinoma of the right kidney which will require removal of the right kidney, and the well known problem of partial blindness associated with chronic retinal difficulties. It is important to add though, that for many years she, got along very well with her colitis and seemed to be very effective in her work as best I. could tell. She certainly did like her work very much and had no intention of stopping her work. Only recently has she developed this exacerbation of chronic ulcerative colitis and she needed special con- sideration and the above are my recommendations. Sincerely, F. Byron Smitherman, Jr., M.D. FBS:amt/rdz ATtESTtrElIOLOOY M.rs? AI. o 14 AID, Jarffrlw J. t r MA habrrl A. LaawAM M M ' Arxk" Pron. M.D, J0rW` n B. Raday Ar.Q CARDIOVASCULAR AND THORACIC SURGERY K Chrln C&m9W, M o DERMATOLDGY Fred a, QUrWMW% M D. Linda J. U*yt M.D. iritrn O. Tdrrd AI O. FAMILY PRACTICE Jam" E. Lae, K M.D, GENERAL AND VASCULAR SURGERY Rancho 0. Cana. MD. Jana T. Eew % M D. Mley+aa E Nang. M 0. INTERNAL MEO LINE R. GtwVw Bawdy M D. Yaal Y. ETa 6 M.D. Man, S Morganmm". M,O. Sham M. OdML M.D. Euparfa a hayndcr M o. Jamaa F. w.w,tfarfr 1114 M.D. Ttcberl N. Shaer. AAA MM:h4al J, Thw pw^ M.D. Richard F. Rmmdw, M 0. L%" E TnMnb. M.D. Jahn & Vaic- x M.O. RUERNAL MEDICINE A CARDIOLOGY Fedarfcw L• Lens MI Dar" W, Mason, at. M 0. Jarray S. Saar, M.D. Suph+n D. Turks, Ko. INTERNAL MEDICINE A ENDO=hOLOGY Vriaam P. Croons MD. ' MMANA1 AIEOCNE a GASTROENTEROLOGY brace A. S&4w, M.D. Jaaam K Wa=an. M 0. INTERNAL a GERIATRIC LIEWCWE Cyr" A. Papan+nl M.D. Jams TL Stop. M.D. INTERNAL MEDICINE i NEPHAOLOGY Crmola Fruaa, M.O. INTERNAL MEDICINE a ONCOLOGY . Darld E. Lorgaaa, M.D. 047F3ITIAL MEDICINE a PULMONARY DISEASES Franca J. AnFA MD. Rwald E. Boars. M.D. Wawa J, Acnrdt Jr. M,D. WTERNAL MEDICNE A RHEUMATOLOGY i Witham M. Woo M.D. NEUROLOGY U chats 8. Evans, M.D. ' Cynthia Hultman. M.D. Dr..d M. 50at". MO. OBSTtT RrC&GY NE COLOGY Jun" E. Doran, M 0. Robyn J. How, M.o. Jaraph O, Kuabel, II. M D. CPHTHALMOLOGY15URGERY A O150RDER9 OF THE EYE . Edv.rd M. Deutltner, M.O. Juswa A. RoWrM M.D. ORT14OPELIC SURGERY WMaarn J, Nor. M.O. Mark 0. Torkr. M 0. Garden Zuanderlr. M D. OTOLARYNGOLOGT! EAR, NOSE A THROAT Garter G. Dry. M 0. Goan K. Hoban. M 0 PATHOLOGY Gadee 0. L04al. M 0. "Mom Vaal M.O PEDIATRICS A. Frank Gam". M.D. A. Robert Mosel, U-0. P.Orf Motor, M.D. Jdw C. Vlwao. M D. PLASTIC SURGERY hobw P. Mtcurw M 0. RAOtOLDGY A DIAGNOSTIC IMAGING M. lrnrn Mw berL M 0. Vramer Knwf. M 0 Ykq T. Loa, M M Howard B Ruhrry M.O. UROLOGYa UROLOOICAL SURDERY Jun" a Cdd. M 0. Bruve A. Y. 6A0. AOMM5TRATION Aobart R. DlpWV ACV Ion1 DIAG'OSI'1CCLINIC May 12, 1992 TO WHOM IT MAY CONCERN: Re: ROBINSON, JOSEPHINE .21 91 18 I have evaluated Josephine Robinson for multiple medical problems. She has suffered from severe ulcerative colitis which has been quiescent for many years and then flared related to multiple stressors in her job. She also was recently found to have a renal calculus and underwent a nephrectomy for tumor of the kidney. As well she suffers from retinitis pigmentosa with partial blindness. As a result of many factors, I have recommended that she take an early medical retirement on disability as she is unable to continue to work with all of her medical problems. Her ulcerative colitis to be sure would be expected to worsen should she go back into a stressful situation. YaeI Y. llis, D. YYE : LYO 1551 West Bay Drive, Large, Florida 94640 Phone: (81315811. 167 3131 McMullen Booth Road. Cleerwaler, Florida 54621 Phone; 1813172"871 501 S. Lincoln AVonue. Suste 112, Clearwater, Florida 34616 Phone, 18131 443-4502 CENTER FOR OUTPATIENT SURGERY 1401 west Bay Drive, Largo. Florida 34640 Phone:1813) 585-9300 t t,- 't'rustees of the General Employees' Pension Plan Agenda Cover Memorandum Itcm # _ Meeting Date: 7113192 SUBJECT: Determination of pension contribution amounts for fiscal year 1993. RECOMMENDATION/MOTION: Authorize a continuation of the 8% employee contribution through December 31, 1992 and designate a City contribution for fiscal year 1993 which is equal to the actual employee contributions for calendar year 1992. X and that the appropriate officials be authorized to execute same. w BACKGROUND: As indicated in the recent annual investment performance summary memo (copy attached) pension fund investment returns for calendar 1991 were significantly higher than anticipated, including all annualized return of 48.2% for equities and an increase in total assets from $141.9 million on January 1, 1991 to $184.7 million on January 1, 1992. As a result of this phenomenal asset growth, the attached actuarial report indicates a significant drop in the required annual contribution. As shown on page 4 of the report, the 19W required contribution decreased from $6,357,852 last year to $3,377,997 this year, from a projected 18.4% of payroll last year to a projected 9.2% of payroll this year. The pension ordinance provides for a minimum 6% contribution by the employees and the City, and further grants the Trustees the authority to increase the employees contribution by up to 2% additional, providing the City's contribution is increased by a like amount. To further complicate the process, the employees' contributions are considered on a calendar year basis, whereas the City's corresponding contribution is budgeted and paid during the ensuing fiscal year. The table below summarizes the historical contribution percentages for each of the last ten fiscal years, taken from the annual actuarial report. As required by ordinance, in no year has the City contribution been less than the amount contributed by the employees. (continued on next page) Rvik*ect b1: Legal . B d t Originating I3epL• / WAS ge _ u Purchasing NIA Urcr Dcpt: Rlsk Mgmt. NIA NIA cis . _ , AGM /,V Advertised: Other Date; Paper. Subtahted by-, 0 Not Rcquired Affected Partics City Manager 0 Notified 0 Not Required Costs: Total Current FY Funding Source: 0 Capital Imp. ? Operating ? Other Appropriation Cale: Commission Action: 0 Approved D Approved w1condillons ? Dented ? Continued to: Attachmcntz 4?6?92 Memo 1 9 Actuary's Report: 0 None nrrri. Year Employee Contribution Percentage (Calendar Year) ' 1982 8.0% 1983 8.0% 1984 8.0% 1985 8.0% 1986. 8.0% 1987 8.0% 1988 8.0% 1989 .8.0% 1990 8.0% 1991 8.0% Proposed for 1992 8.0% Actuarial Estimate of City Contribution Percentage (Ensuing Fiscal Year) 12.5% 11.7% 11.7%* 11.7%* 12.1% 11.3% 11.0%a 12.1% 9.4% 10.4% 8.0% Contribution rates for 84 and 85 were based on 1983 actuarial study. The 8% contribution rates proposed will produce a contribution totaling approximately $5,860,214, or $2,482,217 in excess of the state required minimum contribution. This excess will be. added to the existing credit balance of $925,885 (see page 3). The combined credit balance of $3,408,102 is available to offset unanticipated future increases in required contribution levels beyond the current 8% level. Despite the unusually good news regarding the state required minimum contribution, we are recommending that the employee contribution rate be maintained at 8%, at least through December 31, 1992. We believe a conservative approach is warranted due to the potentially volatile nature of the investment markets, and also due to the uncertainty surrounding the eventual outcome of the "Snair" lawsuit. City management has begun discussions with the City's labor unions to explore the possibility of adding some type of annual benefit adjustment based on above average performance. A separate agenda item recommends appointment of the actuary to determine what type of benefit adjustments could be funded without impacting; a matching 8% City/employee contribution. If the current project to "qualify" the plan is successful, this will reduce the impact of the employees' contribution by deferring the federal income tax liability on this amount. , If additional benefits are not agreed to, we will likely return with a subsequent recommendation to lower the employee (and the City's) contribution rate effective January 1, 1993. CITY-OF CLEARWATER INTERDEPARTMENT CORRESPONDENCE TO: Trustees of the General Employees Pension Plan FROM: Dan Deignan, Finance Director, COPIES: Michael Wright, City Manager Kathy Rice, Deputy city Manager Betty Deptula, Assistant City Manager Jeff Harper, Director of Administrative Services SUBJECT: Pension Plan Performance for Year Ended December 31, 1991. DATE: April 6, 1992 The Investment Committee recently met with our pension investment advisors and the four pension asset managers to discuss performance for the quarter and year ended December 31, 1991. As indicated on the attached summary, 1991 was a very successful year for our plan. Total market value of the plan assets was $182.6 million as of December 31, 1991, as compared with $138.8 million on December 31, 1990. When new contributions are factored out, this produces an overall rate of return of 29.5% for the year. All three equity managers produced above average returns, which ranged from 37.9% to an astonishing 68.7%. These returns compare favorably with the Standard and Poor's 500 Index (+30.6%) and the Callan Equity Database Median (+32.2$). In terms of relative performance, our three equity managers ranked in the 5th, 8th, and 21st percentiles when compared against managers of their own investment styles. Relative performance of our new bond manager, Shields Asset Management, is not included due to the short period of time (since October 1991) that they have had assets under management. Nevertheless, the $15 million which we had invested with them had grown to $15.4 million by the end of the year. Their performance will be measured beginning with the first quarter of 1992. In short, 1991 was an excellent year for our pension fund investments. Even though much of the success was due to the overall-market performance, the relative performance of our equity managers seems to justify our recent diversification and our manager selection and review process. .I will be happy to,respond to any questions that you may have or to provide you with any additional information that you request. . T. ., •i. r 11.???? '?! •M1V„ ?? yr 1. ,. ?.".. 4.? . lri: •.11...r^'L.....'.h.Y:: . s3.. 'a: i.`.;-,?1'f?1'..:ai 3.'r. i?.': '?. _ . _'?.:'•....... .:7'-r:'"."ir%':-.:`'.;'.??:t`, i. 7! 'MA r,'wll1:1'?.1 1. - ! f 1:• ! ii+ - 1 it ! 14WIIr"iIfif'fl A +57 N •"ss:,4 X,: +.,ff'G ,:x ?3 : i;w ',x?c *,s ';i::, ,res :' •F'. :.e' ,,v'. _.y ' :. ;rr:'.? ' e 4?R• 1k ?'{' Map rf: F if %.Y S, i. t,..l. :.F 't..?, *t} ,Rr ..'"k. E 'din 'i•i' I. .r; r'e' ';.. : t??.` "S'1' i..:.1`I?J'.'' '(`. 1•,? r+'.", a, >l?;v';:ti ?19'?'ri ..„.i. )t> l 5 -?• ti,eS' ':v; ,.4 p.C: 7.„•M1; ?'. '. 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Jf. , } ;{,;. i:J.'V`- ' S: iF ±1'' f? f,?r. ? , t."+i'•`j .' .; r'.-' '.C' i ? - `+` .k f•? • z'` rrt..:: ,. ?r.,:?t it •a; ?i'. , !. ?(??:. ,,I:s'' ,? .1,, .:, eit' +;1._•a ? 6;::?,: ..?;.'.;i.•,. , ?: .,r., b: .; i,. r: '`e. 1 >?'.!",i.•,? .? .1,' '.4i;. !n. '{,E'+,. •-3 '1'i, 'fc`. ,?!•`,?' lr ,r:z;,''?. .r}/.>k' :r.;'Y?iiS •.'r''?. .r. j' ?'?`'w { !' 'sl .p.. ,r: ! j.j .1,? rt!%, 1; .r„ f;'°j: l,! ri{` •{.? ?'I ;1' r ?r?,'.g if )„ •e,r, ,h?:al:i,t x' _ 4' rGl: ,t'F. ii•, s ,'1,, ?+4 'r:,(?. ft?'ASir;'?C.•rsir?w,..vs.•r;nf,w:.:.w,..'wi•.+.Sava...?.,,'r::?-.:,::7.:?....:;.. ,... k...,.,.-a•'..r-;:.:..r.:t..,w«.,r:.•,M,rYk4.aru:e..,.+..r?;,::..,.,rr.....,..,.1::,,...:.,..? City of Clcanvater ' Employees' Pension Plan Plan Year: 01/01/92 - 12/31/92 . . IT - N 4, ,"r .ii ! .?, 'v , is .1. l•?#: •. 'i:•• 1!Y•.' 1 .. , f ' F • I ? . i ?1 . ?'1' .., i .?? fv ???.?' ? ? ? ? .. .. ll. f j??kp,?? , ? .1 y ? 5t? rr ? ? ?r ` ??? ` yA „ 1 ?i ' • r ? ?. ,3 ` ? • t • t q ' f . ? ? ?y ypJwy a+ . ??`t,S'.S>i'R ? Lw.A4+I La ?T^?:r.'e. c?`i??i-? 'IA:r .1' `K?7 ws. i.I?;V1'!&?5iW1•?xrHtww..J,.. ,. ..... .. .. .. ...".... ..... 1_. ... .. ,. f .,.,? u . sr. e.fr....0. ... f.1ew....v.F ....?, r.A. •., t.v ... .. .. .,1. .....• '', Fail 1 • r •. ? ' ' , AC TUARY!S,'REPORT FOR THE CITY OF CLEARWATER EMPLOYEES' PENSION PLAN ' As of'January 1, 1992 r to determine-annual contribution for the Plan Year: 1/1/92 - 12/31/92 :,. to'be paid,in the Fiscal year: 10/1/92- 9/30/93 candied public accountants ,L hers raid actuarial benel?ta i.., Y and Compensalion Consulting division ' June 23, 1992 Suite 1500 101 E. Kennedy Blvd. Tampa, Florida 33602 Tampa (613) 229.0221 Pinellas (813) 461.1560 Fax(813)229.3646 In principal areas of the world ?t City of Clearwater P.O. Sox'4748 it Clearwater', FL 33518-4748 Ladies and Gentlemen: This report presents the results of the January 1, 1992 actuarial valuation of the City of Clearwater Employees' Pension Plan. It has been prepared primarily to present to management the contribution requirements for 1992 and also the current status of funding of accumulated plan benefits,. Section IV of this report includes the plan's Projected Benefit Obligation as required by the Government Accounting Standards Board (GASB) Statement No. 5. Our calculations were based on'financial data and employee data furnished by the City of Clearwater. The valuation was based upon generally accepted actuarial, methods, and we performed U such tests as we considered necessary to assure the accuracy of the results. To our knowledge there are no benefits or expenses to be provided by the plan for which a Fri liability or current cost was not established. We certify that the amounts presented in the accompanying report have been appropriately determined according to the actuarial assumptions stated herein. t= Statement by Enrolled Actuary This actuarial valuation is complete and accurate and in my opinion, the techniques and assumptions used are reasonable and meet the requirements and intent of Part w4 VII, Chapter 112, Florida Statutes. 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 provided for 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. Respectfully submitted, ~ Stephen M. Metz Associate of the Society of Actuaries Enrolled Actuary Number 90.4342 i ' Phillip B. Funk J Associate of the Society of Actuaries ' Enrolled Actuary Number .90-3332 tom..... , •li., Vii' .'tv _rt' _ Y; '1 FV'. r0. ' .t' ,. -. :f. ... .. 1 . ,. ._ ., . i?? r?i???f ''° l}?a? ??i s : ' ?+ ? ? ?? ' ? ' ?? ? ' i• 1>` I. .. , . ; ts s S<S ,-{,tw IT.. ? .sF. .4.t , i:zfr e ti??s rrr?.... t • .2, C 0 N T E N T S „ ,. Pages SECTION I SUMMARY 1--5 SECTION 11, FUNDING :. 6-10 ' SECTION III ASSETS -12- SECTION IV ACCOUNTING I3-15 SECTION V CENSUS DATA 16-18 ' SECTION VI ASSUMPTIONS AND METHODS 19-20 SECTION VII SUMMARY OF PLAN PROVISIONS 21-22 SECTION VIII COMPARATIVE SUMMARY-OF PRINCIPAL VALUATION RESULTS 23-27 ,•,.. 1..?:1?4`.}..:i:S?4?•#?ST.S^\)'??t/T {'.r?'?r.''f §I.s,l,,.•.?_,• v CITY OF CLEARWATER EMPLOYEESo PENSION PLAN SECTION SUM aY +J A. Cont bu c is for-the Pla ear Ending DeceMbe 31, 2 *+? Minimum Reguired Employer Contribution, Florida Statutes $ 44'7,890* ' 6% of payroll $ 2,197,580 .8% of payroll $ 2,930,107 The employer contribution is assumed to,be made uniformly during the first two quarters of the fiscal year beginning on October 1, 1992, Differences in the 'rJ investment return due to contributions, actually 'being made at any other time will be recognized as an actuarial gain or, loss in the following valuation. The minimum required contribution represents a funding level which will satisfy the minimum funding requirements under Part VII, Chapter 112, Florida Statutes, There were no changes in actuarial assumptions or plan provisions. r B. Fu ded,Status of Pension Benefit Obl_i at-Ion--as of January 1, 1992 Present Value of Credited Projected Plan Benefits; p.n Vested $124,477,295 Nonvested 16.685,813 ., Total $141.163,108 Net Assets Available for Benefits 184,746 264 ~µ? *Before application of the credit balance of $990,697 ($925,885 as of January 1, 1992 plus interest to December 31, 1992), :_J ,rte Ls.. , 1 -. 5"v .i.:.a;8'-.'. ?:': i`J"'<' _?.?1'v,.i:'',i"?''?!'?`?drY?r; %?.i•: ??1:y!`1.=1a.':4` . .. .., i ' • 71 CITY OF CLEARWATER. EMPLOYEES' PENSI ON,PLAN C 10 - Sit Y (continued) C. Compagative ar a i ci a Valuation ResuD l' i Actuar a Valuation Prepared as of: Jan 1. 1992 Jan 1. 1991 Jan 1._1990 ." -(6) Participant Data' Number Included Active Members Retirees and Beneficiaries 1,282 318 1,233 306 1,196 287 Terminated Vested Participants 6 7 5 Annual Payroll of Actives $ 36,626,332 $ 34,532,753 $ 32,649,987 Annualized Benefits Retirees and Beneficiaries $ 3,705,557 $ 3,469,214 $ 3,027,297 ' Terminated Vested Participants $ 48,706 $ 52,306 $ 28,392 (b) Actuarial Reserves Market Value $184,746,269 $141,865,764 $131,082,389 Statement Value $184,746,269 $141,865,764 $131,082,389 Actuarial Value $184,746,269 $141,865,764 $131,082,389 (c) Liabilities ?j Present Value of Expected Benefits:, Active Participants: Retirement Benefits $140,546,332 $128,158,638 $118,920,494 "V! Termination Benefits 10,642,601 10,119,305 9,852,166 Disability Benefits 8,923,041 8,197,272 7,174,178 Death Benefits 2,494,395 2,265,717 1,997,485 Refund of Employee Contributions _ 1618,381 1.571,606 1,546,688 Total Active $164,224,750 $150,312,538 $139,491,011 Terminated Vested.Participants 382,385 360,367 222,034 Retirees and Beneficiaries 4.1.989,648 39,631,711 34,937,969 Total Present Value of Expected Benefits $206,596,783 $190,304,616 $174,651,014 Liabilities Due and Unpaid .$ 145,355 $ 95,725 $ 114,650 2 ' ' ' 1111 I , j " • i ' ' I ' CITY OF CLEARWATER EMPLOYEES' PENSION PLAN S CTIO - SUMM ARY (continued) C. Corn a at v Su mar o Princi al Valuation Results, (continued) '.: Actuarial Valuation Prepared as of: Jan-l. 1992 Jan 1. 1991 Jan 1 7 90 (c) Liabilities (continued) l Unfunded Actuaria Accrued Liability Frozen Initial Liab. (FIL) - 1/1/79 $ 6,087,670 $ 6,481,969. $ 6,850,473 Supplemental FIL -- 1/1/79 2,062,135 2,131,178 2,195,704 Supplemental FIL. - 1/1/81 317,785 326,399 334,450 Supplemental FIL -- 1/1/82 (3,789,109). (3,881,794) (3,968,416) I? Supplemental FIL - l/l/87 1,426,657' 1,447,739 1,467,440 Supplemental FIL - 1/1/88 1,595,066 1,616,772 1,637,059 Supplemental FIL - 1/1/89 2,103,653 2,130,048 2,154,717 Total $ 9,803,857 $ 10,252,311 $ 1.0,671,427 (d) Funding Account Credit Balance Prior Year Amount $ 865,313 $ 0 $ 0 Prior Year: Required Employer Contributions (3,595,232) (3,071,590) (3,663,616) Employer Contributions Made 3,595,232 3,936,903 3,663,616 Interest on Credit Balance 60,572 0 0 Current Year Credit Balance 925,885 $ 865,323 $ 0 (e) Actuarial Present Value of Accrued ' Benefits (see Subsection IV for detail) $123,602,656 $ 112,903,362 $101,150,784 Changes During Prior. Year: Value from Prior Year: $112,903,362 $ 101,150,784 $ 87,769,141 Benefits Paid - (3,843,861) (3,783,737) (3,230,015) Interest, Aging and Benefits Accrued 14,543,155 15,536,315 16,611,658 Change in Assumptions 0 0 O Change in Plan Provisions 0 0 0 Net Change $ 10,699,294 $ 11,752,578 $ 13,381,643 -"` Value at Current Year $123,602,656 $112,903,362 $101,150,784 3 CITY OF CLEARWATER EMPLOYEES' PENSION'PLAN ,SECTION Y - SUMMARY (continued) C. ve m Va u o e u s, (continued) Actuarial Valuation Prepared as of; Jan 1. 1992 Jan'1. 1991 Jan 1. 1990 (f) Pension Cost for Year Normal Cost $ 1,523,655 $ 4,606,669 $ 3,872,288 Amortization of Unfunded'Frozen Initial Liability 1,089,828 1,089,828 1,089,828 .Administrative Expenses 568,695 402,177. 378,201 Shortfall for Expenses in Prior Year 166,518 23,976 142,327 Interest Adjustment 29,301 235.202 200.945 Total Required Contribution $ 3,377,997 $ 6,357,852, $ 5,683,589 As a Percentage.of Payroll 9.28 18.48 17,48 Anticipated Employee Contributions $ 2,930,107 $ 2,762,620 $ 2,611,999 As a Percentage of Payroll 8.08 8.08 8,08 City Required Contribution $ '447,890 $ 3,595,232 $ 3,071,590 As a Percentage of Payroll 1.28 10.48 9.48 (g) Prior Year Actual Contributions' made by Employees $ 2,936,909 $, 2,812,291 $ 2,631,614 City 3,595,232 ____3,!36,903 3.633.616 Lea Total $ 6,532,141 $ 6,749,194 $ 6,265,230 (h) Gains and Losses N/A N/A N/A (i) Other Present Values j --? Present Value of Future Salaries ' At attained age $312,022,400 $292,668,600 $ 277,413,500 At entry age $251,378,500 $236,788,200 $ 222,904,700 4 .a , t I ay.if i r, I? .1 --i w t i a F • i W CITY OF CLEARWATER EMPLOYEES' PENSION PLAN SECS I'- SUMMARY co t ued) C. Comparative Summary--of-Principal-Valuation Results, (continued) Actuarial Valuation Prepared as'of: Jan 1. 1992 Jan 1. 1991 Jan 1. 1990 (i) Other Present Values (continued) Present ValtAe of Employee Contributions At attained age $ 23,707,729 $ 22,228,820 $ 21,063,442 At entry age 18,926,893 17,820,951 16,767,882 Present Value of Future Normal. Costs Present'Value of-Benefits Active Employees - at entry age $ 12,972,542 $ 39,051,854 $ 32,897,198 $ 47,492,724 $ 44,663,911 $ 41,852,829 (j) Comparison of Actual and Assumed Salary Increases Year. Ended Actual Assumed 12/31/86 7.48 5.08 12/31/87 5.98 5.08 12/31/B8 9.18 5.08 12/31/B9 8.7% 5.08 12/31/90 5.38 5,08 12/31/91 6.1% 5.08 5 Investment Retur Actual Assumed 13.21% 7,08 10.788 7.08 9.12% 7.08 20.84% 7.08 6.21% 7.0% 28,328 7.08 I ?_,1•' •to A'111y'7 {q.Y.?SI y„)'.,,,?..... ...''.. •' . . -,l ,. :.,i,%•*SI"3''4:°: •?:'?°°.?;FS??. ..?'?qJf''.'' :??::.f?l?#. w???'??.?2F%??: S?4itX:`r;['c?r>..» » ..,.,,.,. .. ,..• .. ..< ... .. .. .... ._ .. .. .. ,.. ........... .. .< .. •s.:... CITY OF CLEARWATER EMPLOYEES' .PENSION PLAN SECTION 11 -,FUNDI NG A. Development of the Unfunded Frozen Actuarial Accrued Liability. 1. Unfunded Frozen Actuarial Accrued Liability, as of January 1,,1991 $10,252,311 ' Interest to'December 31, 1991 717.662' $10 969 973 , , 2: Employer Normal Cost* for Year with interest to December 31, 1991 2,429,116 3. Required Employer Contributions for Period _ 3.595.232 4.? Unfunded Frozen Actuarial Accrued Liability . as of December 31, 1991 (Items 1 + 2 -? 3) A 85,,N7 $-9-803 + * Includes Expenses and Adjustments wJ , 6 .yam u 5 ' I CITY OF CLEARWATER EMPLOYEES' PENSION PLAN II - FUNDING (continued) B. Deve opment_of Normal Cost The'Normal Cost is the portion of the cost of projected benefits which is allocated to the current-year by the actuarial cost method. The Normal Cost for the plan years beginning January 1, 1992, January 1, 1991 and January 1, 1990 are determined as. follows : Jan--I-.---199Z Jan--l. -19.9-1 J. -an--I,19 90 Total Projected Actuarial Liability: The present value as'of the beginning of the.plan year. of all benefits expected to be paid in the future to current participants. • Active participants $164,224,750 $150,312,538 $139,491,011 • Terminated vested participants 382,385 360,367 222,034L. • Retired.and disabled participants 41,989,648 39.631.'711 ' 34.937.969 • Total participants $206,596,783 $190,304,616 $174,651,014 Credit Balance: Employer contributions from prior years reserved for future use. $ 925,885 $ ' 865,313 $ 0 Fund: The actuarial value of fund assets as of the beginning of the plan year, $184,746,269,$141,865,764 $131,082,389 Excess of Total Projected Actuarial Liability Over the Fund Minus the Credit Balance: The portion of the projected total actuarial liability to be funded in the future. $ 22,776,399 $ 49,304,165 $ 43,568,625 This portion is divided into two components: a.' Unfunded Frozen Actuarial Accrued Liability $ 9,803,857 $ 10,252,311 $ 10,671,427 b, Present value of future service liability (funded over the expected future service years of current participants) .$ 12,972,542 $ 39,051,854 $ 32,897,198 Present Value of Future Covered Payroll: $312,022,400 $292,668,600 $277,413,500 7 • !• ? ' I P , .. f ;.1, . ?? 1r 'Ise f'1.: ' f? ?. ..{ ? .? ? ri t ! r ?i• l'' ' 1 .' I ? ?? ' ' ? ? . . ( f. tS .." ., .. . . ; $ ' '•.*kF?.• #'t ?;4;'?§"3t'..f;•`5"•n;a?Y.° +R jig: tr ??h k?'9i°f: l? ' « i ; , . r a.u ?.... ...,. . ..... .. , . .. . . ? .. . . ._a r-. « a.. m?w.i ...,,.. ! ., +a.»...:-• ` CITY OF CLEARWATER EMPLOYEES' -PENSION PLAN C 0 I - ING continued), B. eve a ment of Normal Cost, (continued) ; Jan, 1. 1992 Jan 1. 1991 1990 ? Normal Cost Rate:' The ratio of the present . t value of future service liability to the Present Value of Future Covered Payroll, 4.16% 13.34% ll'.86% Annual,-Covered Payroll: The reported, payroll for plan participants who have not attained the assumed retirement age, $ 36,626,332 $ 34,532,753 $ 32,649,987 Normal Cost: The annual cost as of the beginning of the plan year to fund the future service liability over the expected future years of service of the current participants, $ 1,523,655 $ 4,606,669 $ 3;872,288 ' r 8 CITY OF CLEARWATER EMPLOYEES' PENSION PLAN SECT ION II - FUNDIN G (continued ) C. 5chedu 12-o,f rtiza tion Payments Initial Jan 1, 1992 Annual Bate Initial Amortization Unamortized Amortization Established Reason mou t Pe riod' (Years) Amount ? Pa, meat ..1/1/79* Frozen Initial Liability (FIL) $ 9,726,419 24.5 $ 6;087.,670 $ 792,558 1/1/79' Supplemental FIL 2,707,962 30.0 2,062,135 203;949 l/l/81 Supplemental FIL' 390,421 30.0 317,785 29,404 1/1/82 Supplemental FIL (4,521,985) 30,0 (3,789,109) .(340,571) 1/1/87 Supplemental FIL 1,519,142 30.0 1,426,657 114,413 1/1/88 Supplemental FIL 1,673,738 30.0 1,595,066 126,057 1/1/89 Supplemental FIL 2,177 772 30.0 _2_,103,653 164 018 Total Charges $18,195,454 $13,592,966 $1,430,399 Total Credits (4,521,985) (3.789,109) (340.571) Total 513,673,469 $ 9,803.857 $1,089,828 * Established July 1, 1963 and being amortized over a forty-year period beginning on that date. 9 CITY OF CLEARWATER EMPLOYEES' PENSION PLAN ?. SECTION II - FUNDING (continued) D. nt ci ated ortizatf n Schedule ' vie Shown below is the anticipated amortization schedule for the Unfunded Frozen Actuarial?Accrued-Liability taking.into account the plan's funding policy. i ..?'Antic_iQated Amortization Schedule Unfunded Frozen Date Actuarial Accrued Liability 1992 $9,803,857 1993 9,324,011 1994 8,810,576 ' 1995 8,261,200 2019 0 On July 1, 1963 the Unfunded Frozen Actuarial Accrued Liability was established equal to the difference between the retirement, plan's accrued liability, determined under the Entry Age Normal Funding Method, and the actuarial'iralue of plan assets. According to the plan's funding policy the initial liability is to be amortized by, [ a series of level payments over a forty-year period. Subsequent changes in the level of the Frozen Actuarial Accrued,Liability due to plan amendments or changes in actuarial assumptions are to be amortized on a straight-line basis over a period of thirty years. . By contributing' more than the stated funding policy, the amortization of the Unfunded Frozen Actuarial'Accrued Liability can be accelerated. i ?E SECTION III - ASSETS Comparative Balance Sheet As of December 31, 1991 Statement Value Statement'Value ?S5 - _121_37L91 12/31190 Total Cash $ 2,366 $ 30506 r# Receivables:, Employer Contributions 1,887,086 2,231,800, Accrued Income 3 004 9 2 _ ...3 , 3321404 Total Receivables 4,892,058 5,564,204 Investments:- U.S. Government Securities Short-Term 3,562,612 18,935,333 Pooled/Mutual Funds: Treasury Fund. 2,147,350 0 Government Funds 5,442,905 0 Cash & Equity Corporate Debt Instruments 6,062,214 :0 5,182,757 0 Corporate Stocks: .Preferred 0 0 Common 102,595,169 54,448,844 Bonds 5,436,950 76,645 Total Investments 125,247,200 78,643,779 Other Assets: GIC's and Insurance Contracts 54,750,000 57,750,000 3 TOTAL ASSETS $184,891,624 ?141_,_96_1,489 "i LIABILITIES AND ACTUARIAL. RESERVES Liabilities: Payables Plan Claims $ 968 $ 968 Accounts Payable 144,387 94,757 Total Liabilities. 145,355 95,725 Actuarial Reserves: Accumulated Member Contributions 20,376,247 18,207,577 i Balance of Actuarial Reserves 164,370,022 123,658,187 Total Actuarial Reserves 184, 746,269 141,865,764 TOTAL LIABILITIES AND ACTUARIAL. RESERVES 2184,891,624 .$141.961,489 ` j. 11 t,3 :i. j?ktG•'s , Sw .? i .t: 'I ' fig. :I?. 5.,, i.' 1. .. ';: ?j;`,? ?• ?;,... - . , . ? t < , ' i ` `' a ' • ' ... ' f • . ? ' .:, ? A {f?r? , . v.S,yyy'.rra.a#?•?k?i ??" ,l'?[?I?•??p? !I '}} ?y ;;jj :d?titi(/ ? } , .1 ?N'!?Y''$?' .?V???',:.X.fSv.i ?f ?:..:F1?.E.L???'.i.?.:Y?{[g`wMl..tN+'.fif/,la ??b?!??,{WJ.f-?.?'?.,.. n.+u..., .... . •n. ,... _,_... i ? ,. .. _. ... ..,s ,,, A,. .. R ,-ff... ?r I , ,•1.fi I??.;....i-?N •1.'f ...-I;?., t.,. •-.. ....... .... ?. CITY OF CI,EARWATER'EMPLOYEES',PENSION PLAN #7' SECTION III - ASSETS '(continued) , Schedule of Changes in Actuarial Reserves For the Plan Year Ended December 31, 1991 Revenues: Employee.Contributions Employer Contributions Earnings on Investments: 'Interest Dividends Realized Net Gains-on Securities- Transactions ' Unrealized Appreciation (Depreciation) on Investments i ' Expenses:. M Benefits Paid' Refunds of Contributions Professional Fees Other Expenses Net Change in Actuarial Reserves Actuarial Reserves-at Beginning of Plan Year .-? Actuarial,Reserves at End of Plan Year -$6,355,427 1,531,275 6.320.363 $3,596,021 247,840 566,229 466 5• Statement Value $ 2;936,909 3,595,232 14,207,065 26,553,855, 47,293,'061 4,412:1556. 42,880,505 141,865,764 $184,746,269 CITY OF CLEARWATER EMPLAYEES' PENSION PLAN EE-C-'ION IV - ACCOUNTING A. at a al Present Value of Credited Pro ected Benefits*, J_ an L 1992 l., Pension.Bene£it Obligation: Retirees and beneficiaries receiving benefits $ 41,989,648 Former participants 382,385 Current participants; Employee vested 20,376,247 Employer vested 61,729,015 Employer nonvested 16 685 3 Total $141,163,108 2. Market value of plan assets at beginning of year $184_.746.269 3.' Unfunded Pension Benefit Obligation [(1) -- (2)J $(43,5831161) B. Two-Year Historical Trend Informa U on 1. Market value of plan assets as a Jan 1 199 $ 39,631,711 360,367 18,207,577 55,760,685 15.679.371 $129,639,711 5.764 $141,865,764 $(12.226.053) Jan 1. 1992, Jan 1. 1991 percentage of PBO 130.98 109.4% 2. Unfunded Pension Benefit Obligation as a percentage of covered payroll (119.0)$ (35.4)$ 3. City contributions as a percentage of covered payroll 1.28 10.4$ * The pension benefit obligation is a standardized disclosure measure of the present value of pension benefits, adjusted for the effects of projected salary increases and any step-rate benefits, estimated to be payable in the future as a result of service to date. The measure is independent of the plan's actuarial funding method used in determining the annual funding requirement. The above present values were computed using the applicable actuarial assumptions summarized in Section VI of.this report. 13 CITY,OF CLEARWATER EMPLOYEES' PENSION PLAN : SECTION IV ?- ACCOUNTING. (continued), B. h tuarial Present Value of c umulated,Pla Benefits Jan 1 1992 Jan 1. .1291 1., Present'value of accumulated plan benefits. Vested: Retirees'and beneficiaries receiving benefits $ 41,989,648 $ 39,631,711 Terminated participants 382,385 360,367 Active participants 67.508.514 60.160.403 Total Vested 109,880,547 100,152,481 Nonvested.' _13_,22.109 12,Z50,881 Total $123,6021656 112. 903,362 2. Market value of assets at beginning of plan year $184.746.269 $1411865764 14 "Y?I 4=•11?????r•' .i? ;f•r ?. ? , ? ?1 a I., 'fi s.lt. ', ?`I' ? 'Sf '??+ .1 ?'' e ...•? II ,3 ? f .. i ??[ii???t?.'Y'}°+?<?-....•• ...Y•i-.;RF1',5,1'`.•;"..:.Y':!+..,il".'?a..,GiN,'?k`?,n.17 `^33,rr.,..iti..:w ............. _"., e. .. -. .,, .. ..i.r.,,-.rte.. ,.lr..t?b .. .r .. CITY OF CLEARWATER EMPLOYEES' PENSION PLAN SECT-ION ACCOPNTING (con tinued) ,C, Statement o ghanees in-Projected Rene fit Oblig _at _ori The changes in projected plan benefits from January 1,1991 to January 1, 1992 are presented below: 1. Actuarial present value of projected plan benefits at January 1, 1991 $129,639,711• 2. Increase/(decrease) during the plan year attributable to: Benefits paid (3,843,861) 'Benefits accumulated and-increase for interest due.to the decrease in the discount period 15,367,258 Change in actuarial assumptions N/A Change in plan provisions N/A Net increase/(decrease), S 11,523,397 3, Actuarial present value'of projected plan benefits at January 1, 1992 y9141,163,`108 15 '4: ai i`:?ti'f: rr .,r,- ,r}, Ir .' ... .' •7' • 1 `t,. oi.7w.S;EK _ CITY OF CLEARWATER EMPLOYEES' PENSION PLAN t' SE9 1102 V -C ENSUS DATA ,'aFxi A,.' Reconciliation of m jo e6 Data' A summary of changes.in the employee data from January 1, 1991 through January 1, ' ' 1992 follows. Employees who do not partic ipate in the pl an are not included,- Retired* Terminated Participants Active Vested and Employees Employees Bene_fic-dries Total Participants Included in the January 1 „ 1991 valuation 1,233 7 306 1,546 Nonvested terminations (35) (35) } D R i i 1 gin ev ata s ons ( ) (1) Vested terminations Deaths with eligible beneficiary (1) 1 Deaths'without eligible beneficiary (7) (7). Retirements (18) 18 Cash settlements -? Rehires 4 4 New participants 99 99 ' Participants included in the January 1, 1992 valuation 1,282 6 .318 1,606 Active Participants: Fully vested 554 Partially vested 0 I?al Non-vested 28 , Total 1,282 I` E 16 ?? . ?•e'??`?•?a?L?}SF?r?1?'°.r;'?,.??%•,^.?t,J`y?lst;a? ;.r,?r .. ? .. ? ? ? ? 4 - - v.l•.e. ? ? ?- ?e?'?.. w.r rrefi'.i- r d.• h ?:a .. dY:.... ?..Y?/ ..Cv9 tjr-.t sr.•.... s...- ... .,...... ?...-. .... .... ?.?Y .. ? .. M,. ...3? ...? <...? ? e CITY OF CLEARWATER EMPLOYEES' PENSION'PLAN SECTION V -- CENSUS DATA (continued) ' B. Age•- Service Distribution of Active Participants as of January 1• X992 Years of Service' _s r "i S Attained Age Under 25 25 to 29 30 to 34 35 0 39 40 to 44 45 to 49 50 to 54 55 to 59 60 to 64 65 + Total 0 - 4' .5 - 9 10-14 15-19 20-24 25+ Total &0. N-OL- N-O . No.' Earnings 40 0 0 0" 0 0 40 924,866 92 42 2 0 0 0 136 3,494,081 90 99 28 0 0 0 217 6,133,863 76 73 96 41 •2 0 288 8,969,419 44 47 68 7.1 17 0 247 8,299,258 31 25 33 44 25 6 164 5,486,225 17 12 20 ,21 16 9 95 3,214,227 21 1 8 14 9 4 57 1,785,042 17 0 0 10 3 0 30 961,487 5 0 1 0 0 2 8 229,761 433 .299 256 201 72 21 1,282 39,498,229 Active Participant'Statistics Average Age 40.2 years Average Service 9.6 years 17 ?'•'.a'':Si'>"1?,;:?.: r:t ,;ia ••t.r {• .:}., ?.q V; ?t ?f,)?::7? :,Z:: . S 2r.r. r.;i ti.t tai". I.- {,, .,? `:} i ?•? . 'i3',: .-4; ?,1' h `g ,'? ':F`+ . s. g' ,st°o- ?•i.'' .i" 'i 1'1 i 4a. ' Y' r,! .. ... e t Y? .? rq 5• 4_r .. 1 t •11, i<l' ,•f' , :A , ?. a'•?•t? 7.is? ? t', 4. 'fir: :. C 4: .SrC` r ?;?•, °rr .11. :•l y_,7. ?.??' .:i `J'i'J, Fy,.. ?!` k' ''' ,'I< !' r [ .. t ?:?F`-?z{t ,'?fy1?1,i r't a' .'T`: I',in" `t.': i.• ,t? .. '.1, -i' ?t 1' }.s~ti?f•'s'.'N:i '?.?' .ti. !?7r tt('.:yt? f ll: ai y ,1 rl. So' Q. I ?!- i:•. •G:f'"?6 :1 [ to {.; tt 7 •3 .'`i''?6'?- ..fir ':IC,? %'i' r };::Sa ""3;.} .t•. 'r f?' 'e 4 ' •, 1' ?7 r •5 ? , "1 i,•"°. Sx'. .t i:? .'1.'„?, sN Si O? ?f?' _ S,a, ? •, 1] .l. .? 'E;: •C`y ?}}'. i?, ..r .... .?.._..f, :f, 'rl it ... ... ,> !i? .. W.. ?.. ?,?Y?,???3i T-ait??,l.rr? - .... _•!•. r, .r:.c ..?-r43r"firti-F.'.Slal.i:c.ir'.:^!:MUtHt,af,..r...". +... .... ., .. 1 CITY M CLEARWATER EMPLOYEES'. PENSION PLAN; SECTION V -CENSUS DATA (continued) i , 'Pxrticprt Count and Ieefits as of -Ja_ uary 1,_19 C. lnactive I Number of Annual. atciats Benefit, ,Terminated'Vested,Participants 6 $ 48,705 ',',Retired .Participants.a and Beneficiaries . " 318 $3,705,557.' r? 18 i } • i..,?l.. , ,,p ._-:::; ??{j? i°?.;?;??:°:'?'?; .. ,..» ?.:.. .... ,e _ .. ....... ......... .... .._.?,. ... ? ? ... .. ... _ .. .......... ??. ........, .... .. ? , . ? ., .. .. CITY OF.CLEARWATER EMPLOYEES' PENSION PLAN StMON VI _ ASSUMPTIONS'MD METHODS A. t u t o Investment eld: The investment rate of earnings is assumed to be 78 per annum, doXtality: Mortality was based on the 1983 Group Annuity Mortality Table fox Males with female ages set back six years. Jai hdrawal: Pre-retirement withdrawals are assumed to occur in accordance with standard scales of moderate turnover rates (Scale 255) for males and heavy turnover rates,(Scale 355) for females. Sample rates are shown below: Rate of Withdrawal Male Female 20 14.98 37.4% 25 9.98 22.48 30 6.98 14.9% . 35. 4.98 10.48 40 2.88 7.48 45 1.78 4.38 50 0:48 2.78 55 0.08 0.98 60 and 'over 0.08 0.08 Disability; Pre-retirement incidence of disability is assumed to occur- in accordance.with a standard scale of moderate disability rates (Class 1, 1952 Inter- Company). Rates for females are assumed to be double that for males. Sample rates for.males are shown below: Age Incidence of Disability 20 .178 25 .178 30 .178 35 .188 40 .208 45 .238 50 .298 55 .398 60 .598 65 1'.04% 70 1.748 Service vs. Hon-service: All pre-retirement deaths are assumed to be non-service related. All incidence of disability is'.assumed to be service related. Salary'Scale: Future salaries are assumed to increase at the rate of 58 per year, 38 due to cost-of-living, and 28 due to merit increases. 19 :?r CITY OF CLEARWATER EMPLOYEES` PENSION PLAN SECTION VI - AS5UMETIONS AND METHODS (continued) t; :# A. Actuar ial asjumRtiom, (continued) ';. Be i.rement Rate: Each 'active participant is assumed to retire on the. lator of the ' actuarial valuation date:or his Normal Retirement Date, Timing of Contributio The contribution is assumed to be made uniformly during the first two quarters of the fiscal year beginning on the October 1 following the valuation date. mployees Covered: All participants as of-the actuarial valuation date. Spouses: Eighty-five percent (85%) of the active participants are assumed to be married (or have dependents eligible for Survivor's Benefits), Female spouses are assumed to be five years younger than male spouses. Expenses: Expenses are assumed to equal last year's actual expenses. Completeness of Assumptions: All benefits and expense to be provided by the Plan are recognized in the valuation. All known events are taken into account; no current trends are assumed to discontinue in the future, B. Asset Valuation Method Assets are valued at statement value, which is amortized value for bonds and market value for equity investments. C.- Actuarial-Cost Method The actuarial cost method is the Frozen Entry Age Actuarial Cost Method, Under this method the excess of the actuarial present value of projected benefits over the sum of the actuarial value of assets plus the Unfunded Frozen Actuarial Accrued Liability is funded on a level basis over the future compensati,on'of active employees,' The portion of this' excess allocated to the current year is called the Normal Cost. The Frozen Actuarial-Accrued Liability is determined using the Entry Age Actuarial Cost Method. This Frozen Actuarial Accrued Liability is adjusted from time to time to reflect changes in the Plan or in the actuarial assumptions, The Unfunded Frozen'Actuarial Accrued Liability is separately amortized over a fixed number of years. r• y t CITY OF CLEARWATER EMPLOYEES' PENSION PLAN _ f This summary is intended as an outline of 1nn provisions and does of alt P not alter the intsnt or meaning of the provisions contained in the contract and/or plan document, flan Year: January 1 to December 31. B,iglbility: Any permanent employee shall participate in the plan immediately. Current Employee Contributions: Wages and salaries actually paid to a participant, from which Employee Contributions are withheld. average Monthly Compensation: The total. Compensation received during the last five years of service divided by sixty. 6ccrued Benefit: A monthly benefit equal to 2.5% of Average Monthly.Compensation multiplied by the-number of years of service to date. Normal Retirement: a. Eligibility (Normal Retirement Date): + Non-Hazardous Duty: Completion of at least 20 years of service and the attainment of age 55, or the completion of 30 years of service. • Hazardous Duty: Completion of 20 years of service. b. Normal'Retirement Benefit: The participant's Accrued Benefit payable as of his actual retirement date on or after his Normal Retirement Date. No adjustment applies for deferred retirement beyond his Normal Retirement Date. The minimum Normal Retirement Benefit is $300 per month. ? i c. Normal Form of Benefit: A monthly annuity for the life of the participant. . After the participant's death, 100% of the Normal Retirement Benefit shall be paid as a Survivor Annuity to the spouse, dependent children under 18, or dependent parent(s) for five years. After five years, such Survivor Annuity is reduced to 50% of the original amount (and the $300 minimum is no longer controlling), The Survivor Annuity ceases upon death or remarriage of the spouse or dependent parent(s) or attainment of age 18 by the dependent children. Disability Benefit: a. Eligibility: Total and permanent disability. If the disability its non--service -'' connected, there is an additional requirement of the completion of 10 years of service. -: 21 1lt' . 'CITY OF CLEARWATER EMPLOYEES' PENSION PLAN SEUT-10 Y_11 - SUMMARY 4F PLAN PROVISIONS (continued) Disability Benefit, continued: b. pisability Bene it: The participant's Accrued Benefit, payable immediately. If the disability is service connected, the Disability Benefit must be at least 75% of Average Monthly Compensation. The minimum Disability Benefit is $300 per month. The Disability Benefit is increased by 158 of'such benefit for each dependent child under 18, but such increments cannot exceed 100% of the original Disability'Benefit. c. Form of Benefit: A monthly annuity for the life of the participant. After the participant's death, a Survivor Annuity is provided as described under the Normal Form of Benefit. The 158 increments for dependent children under 18 continues to the participant's spouse after his death as song as the'children `so qualify. Deat : a. Eligibility: Any actively--employed participant. b. Deat Benefit: The participant's Accrued Benefit, payable immediately. If death is service connected, the Death Benefit must be at'least 758,o€ Average Monthly Compensation. The minimum Death Benefit is $300 per month. C. Form of Benefit: A monthly Survivor Annuity as described under the Normal From r of Benefit. 1 11 7 i • ?f 3 Vested Termination: a. Eligibility: Completion of 10 years of service, b. Termination Benefits: The participant's Accrued Benefit payable as of his Normal Retirement Date, provided Employee Contributions are not refunded. The minimum Termination Benefit is $300 per month. c. Form of Payment: A monthly annuity for the life of the participant. After the participant's death, a Survivor Annuity is provided as described under the Normal Form of Benefit, beginning at the latter of the participant's Normal Retirement Date or date of death. Non-Vested Termination: a. Eligibility: Any actively-employed participant. b. Benefit: Refund of Employee Contributions without interest. c. Form of Benefit: ' Lump sum, 22 > 1' Ir I I 1 .r ? ? , ' ! .? ? .. •,['' I ' , r 1 , t ? ? i ? 'S ? , r r r 1 .` ,I. 1 ' it ? ? `) ? • ? ,• ?I ..? .. ?1. ? • 1 fi • , ' ' ' , r'` I ,? • ? ?1 ' r . i !? rF..?'?• MII. r y' ? ? !• I :}'1? 4 ? • ? 1. . ' • .Ir .?Z. tip: l'?.I?L°» . ... . . . _ .. .. .. .. .. -1 ? ... ... s .... «., it r. ..?.. ...f.l (??. '{" ...Sr ..i• ?f.. «. .. ?n p ? N ? 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' q L. b V V M '? ?.+ N .-. W V ?p • ro C t! 4 fa+ u 6 ?C o? W d C U Lw - l y o C 0. W t L u q tJ .c1 `C w c n C b y a .•'? x H U 4 V 7 N q .L1? V- 9 d CpNl1 a V ?6y a 0 cc ' V CCj 6 d t? d. O O d C d CO G C 1 aL+ L L, In K GJ ?GrOCO 1» S ?- ?? W 0.U+ m G = O V X N S s? 25 ?? 1 ?'?.: ,fi . ??,y„i"(e'?''4?"?l`T°'°//x..??iA?rr??o'1'??.Y,?' ?I i't ??l ii 3.y???'m,C/ 1 ? + . ?4: '' r ?r ,r i [ t rr r k ,r ? r. ? + Ir i '+. n;4' r..Ft.' .. rl. .. a ? ... . ...... . a .r - .. .r ,. ... •r. ?..+?.. i .,. ^r, f .... r ?r.?. 90 V% N .fir °N C7 P ? 11'1 6 .• ' a Ct] I • O. i N w V M N Iw ?: O.C ?O ... ?} M w Y1 N M ? N M' M N .p , ' r M N _ 3 V?1 O N 7 h yy`?? P r 4 x ON. (y j j hmi O N to p. y? o[ t OpN.,1{{ MM . P q p? 0p 1A M Qw Q. p6 r pp I ? VN N P w C. O' I N v: C O G .O UN w N M v ,? O.I ? O` N O ? M r In h r n Lnn Q I n H m N ? ? N? N N M N Qp ? N N N p 4A . W r YID! F. t r'•j J M6 la . 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L b ? !r, u d 0 ti w M N J?I/'? ^ r N O p co M G ? L W v D ?pM. ?lu? ' = 111 1` tqop 1z W N W (fl M Lr N d . L ' 1 N N W L M W T .H.t I m L Y L ? ..J i i d } u L a + - a G c m • C CJ a 61 1 ? i ry y O N '4 a nl V • L G ? L -K u E- s '>r., . ?+ = 7 m 4 i d LU a C it ! . 11 ` C) M N M M V Y W a y. Co x n Lma cc q 4u ysokv L we# wK u x a` LPL W W « 27 1.11 • ? ? I .Trustees of the General Employees' Pension Plan Agenda Cover Memorandum Item # Meeting Dale: _7/13/92 SUBJECT: Actuarial work related to pension related collective bargaining issues RECONIMENDA.TIONIMOTION: Authorize the City Manager to spend up to $20,000 for special actuarial analyses regarding pension benefit changes to be considered during the upcoming collective bargaining discussions X and that the appropriate officials be authorized to execute same. BACKGROUND: As we embark on the collective bargaining process, possible modifications to pension plan benefits will be one area of major focus for both the City and the employee unions. For example, the addition of an annual benefit adjustment has been consistently requested by the employees, but has always been rejected due to excessive actuarial cost impact. As mentioned in a previous agenda item, the extraordinary performance of our plan assets in 1991 has put the plan in a position where we now believe that some form of annual benefit adjustment can be offered without increasing the employee or City required contribution percentage beyond the currently recommended 8%. As indicated on the attached proposal letter, Coopers & Lybrand has agreed to examine this special potential benefit for a total fee not to exceed $3,000 which will represent our initial expenditure. Given your approval to proceed, the remaining $17,000 of authorized expenditures will be allocated, if needed and at the City Managers discretion, for additional cost studies for benefit modifications which are proposed during the collective bargaining process. Reviewed by: Originating Dept: . Legal OA Budget Purchasing N/A _ User Dept: Risk Mgmt. N/A CIS N/A ACM Advertised: Other Date: Paper: Submitted by: EI Not Requires! Affected Parties Citv Mannecr ? Notified ® Not Required Costs Total Currcut FY Funding Source, ? Capital Imp. Q operating ® Other Pension Fund Appropriation Code: 646-7410.301-585 Commission Action: ? Approved ? Approved w/eonditions 11 Denied ? Continued to: Attachments: Coopers & Lybrand proposal letter ? None L tr Coo ers &LYrand carlliled public socounlanls actuarlel bermfils 111 and compensation { consulting dlvfelon GLIHO 1800 lot 0. Kennedy Olvd. 7ampe, Florida 33802 tamps (013) 229.0221 Meting (813) 401-1500 Fax (013) 229.3848 In principal areas of the world June 29, 1:992 Mr. Daniel Deignan Finance Director, - City of Clearwater. 112 S. Osceola Ave. Clearwater, FL 34618-4748 Dear Dan: As you requested, this letter will serve as our proposal to perform additional actuarial valuations of the City's pension plan. We will determine the increase in the City's annual funding requirements to provide annual benefit increases to retirees (performance bonuses) based on the following provisions Retirees will receive an adjustment in benefits each year of up'to 3%a. This adjustment will be either an increase or decrease depending on the City's funding requirements. Retirees'will receive an increase of up to 3% as long as the City's funding requirement sloes not exceed 80'0 of payroll. They will receive a reduction of up to 3%, if necessary, in order to reduce the City's funding requirements to 8%a of payroll. -However, in no event will a retiree's benefit be reduced below the amount lie was initially entitled to at his date of retirement. We will determine the impact on the City's funding requirements of this change, prepare a written report summarizing the results, and prepare an actuarial impact statement as required by Florida Statutes. We have also budgeted time for discussions with City management regarding the workings of the adjustment, and discussions with the State • Division of Retirement. We recommend that you discuss this issue with legal counsel, since it involves the possible reduction of retiree's benefits from one year to the next. Imo: 5 ,+ ? .'r i ` 1 ? ? 1 • . ? l ! \? ? ? ? 1 lr Trustees of the General Employees' Pension Plan Agenda Cover Memorandum Itetn # Meeting Date: 2/13/92 SUBJECT: Special actuarial study regarding retroactive pension credit RECOMMENDATION/MOTION: Approve the expenditure of not to exceed $5,000 for the City's actuary, Coopers & Lybrand, to perform a special actuarial analyses estimating costs of giving retroactive pension credit to employees who were originally excluded from pension participation on the basis of age. X and that the appropriate officials be authorized to execute same. BACKGROUND: Thompson, Sizemore and Gonzales, outside counsel representing the City in the "Snair".case, have requested a study by our actuary estimating a "worst case" cost estimate in the unlikely event that the plaintiffs would prevail in obtaining full retroactive credit. The request of Thompson, Sizemore. and Gonzales was communicated to our actuary, Coopers & Lybrand, who has indicated their willingness to perform the requested study for a fee not to exceed $3,000. Although we are hopeful that this proposed study will suffice, we are requesting authorization for an additional $2,000 in the event that follow-up or clarification analysis is required. Any additional expenditure will be approved by the City Manager following.a specific request for additional data from Thompson, Sizemore and Gonzales. Reviewed by: • ? Originating Dept: - Legal ( / OA 2 f d 2 get Bu Purchasing _NIA User Dept: Risk Mgmt. NIA s NIA Ci ACM Advertised: Other Date: Pa cr• Subinitted by: City Manager p 1-p 0 Not Required Affected Parties F-I Notified © Not Required Costs: $5.000 'T'otal Current FY Funding Source: ? Capital imp. ? Operating ? Other Pension Fund Appropriation Code: 646-7410-301.585 Commission Action: ? Approved ? Approved wlcondilions ? Denied ? Continued to: Attachments: Coopers & Lybrand proposal letter ? Done COO G1 ?7 cedllt)d public accountants ? Suite 1600 In principal arnae of tho world 101 E, Kennedy Blvd. D _ ?? f?r?? actuarial benefits Tampa, Florida 33402 Q( y ! ` and compensation consutilnq division : Tampa {013) 220.0224 Pinellas (813) 401.1580 Fax (013) 229.36413 PFRSONAL_Re CONE IDENTIAL June 15, 1992 Mr. Daniel Deignan Finance Director City of Clearwater 112 S. Osceola Ave. Clearwater, FL 34618-4748 Dear Dan: As you requested, this letter will provide our fee requirements, to perform an actuarial impact study for the City of Clearwater Employees' Pension Plan. We will estimate the annual cost to the City to include the employees covered by the Snair lawsuit in the pension plan on the following basis: o The employees receive full credit for service with the City back to their date of hire. o The City will recover past contributions from these employees, and.will also recover past Social Security contributions. We will estimate the cost of the changes described above, and provide a report including the 'actuarial impact statements required by Florida Statutes. Our fees will not. exceed $3,000. Prior to beginning this projr.-ct, we will need to confirm exactly how to value these employees, and whether any of the actuarial assumptions should be revised. If you have any questions or comments, please give me a call. Very truly yours, Stephen M. Metz Senior. Consultant SMM!Imd Trustees of the General Employees' Pension Plan Q Agenda Cover Memorandum Item # UU Meeting Date: 7113192 SUBJECT: Increase bond investments with Shields Asset Management to 50% of total fixed income investments. RECOMMENDATION/MOTION: Approve the recommendation of Eichof€ Pieper and Willoughby to increase the plans investment in bonds managed by Shields Asset Management, Inc., to 50% of the total fixed income portion of the pension plan portfolio X and that the appropriate officials be authorized to execute same. BACKGROUND: On 10-14-91, the Trustees approved our recommendation to appoint Shields Asset Management, Inc., of White Plains, New York to manage a portion of the fixed income portion of the pension plan portfolio. Currently, fixed income investments total $77,198,626, or approximately 43% of our total $178,359,425 plan assets as of 5-31-92. Of this amount, $15,525,773 is currently under management of Shields Asset Management, $4,076,468 is invested as a part of the City's Consolidated Cash Pool, and $57,596,385 is invested in GIC contracts managed by Eichoff, Pieper, and Willoughby. Based on our successful experience with Shields, and based on the recommendation of Eichoff, Pieper, and Willoughby (attached), the investment committee recommends an increase in the amount allocated to Shields Asset Management to 50% of the total fixed income portion of the portfolio. With your approval to proceed, this increase will be accomplished gradually, beginning with the amount in the Consolidated Cash Pool which is not considered necessary to meet current expenses. This will be followed by interest payments received on GIC contracts, as well as principal on maturing GIC contracts as they mature. In no event will GIC contracts be liquidated prior to maturity unless such liquidation is recommended by Eichoff, Pieper and Willoughby for reasons other than achieving the recommended bond allocation. Once accomplished, this will bring the amount invested in bonds equal to the amount invested in GIC's, and we will maintain this 50.50 allocation until modified by subsequent action of the Trustees. As indicated in the attached recommendation letter, this reallocation will increase the liquidity and diversification of fixed income assets to the level that the investment committee and our advisors believe is both reasonable and prudent. Reviewed by: /f Legal Budget 'NZ Purchasing Risk Mgmt. N/A Cis N/A ACM Other Submitted by: City Managcr Originating Dept: Dept: Advertised: Date: Papcr: ? Not Required Afrcctcd Parties ? Notili d ? Not Required Costs: NIA Total Current FY Funding Source: ? Capital Imp, ? Operating ? other _ Appropriution Code: Cotmnission Action: ? Approved ? Approved wlconditions ? Denied ? Continued to: Attachments: Eichorf, Pieper and Willoughby letter ? None i 4. May l9, 1992 ExcKnoFlF', HPIEpER & Wl[LLVUGHEVj INC. 1NVPf4TA1RrVr ATANAf)rsn+VNIr M. Daniel J. Deignan Finance IDirector/Treasurrer City of Clearwater Florida Post Office Boas 4748 Clearwater, Florida 33518 RECEIVED MAY 21 1992 VINANCE DIV. Re: City of Clearwater Employees' Pension Trust Dear Dan: As of this writing, the diversification of the fixed-income portion of referenced portfolio into marketable bond securities has reached a level of approximately $15 million. This is in line with the original goal of the Finance Committee to reduce GIC holdings and build bond holdings to an initial.level of 25 percent of total fixed insole. The selection of Shields Asset Management, Inc., the transfer of funds and investment of same appears to have proceeded smoothly. Having successfully accomplished this "first step" diversification, we recommend that the City continue to expand the marketable (bond) portion of the Pension portfolio until it approximates fifty percent of all fixed-income assets by transfer of additional funds to Shields Asset Management, Inc. under the City's existing agreement with that firm. The reasons which prompted our recommendation to diversify the fixed-income portfolio from investment exclusively in insurance contracts still appears valid, i.e., to acccoplish wider diversification as the Pension portfolio increased in size and to acknowledge the proposed revisions of the Financial. Accounting Standards Board (Statement 35) which stipulates that GIC's must be carried at "fair market value" and not "book value" in defined benefit plans. We continue to recommend, as of this writing, that the remaining fifty percent of the fixed-income portfolio be invested in existing insurance contmacts and, as funds. from these maturing contracts beomrie available, into new versions of bank and insurance. company contracts which have become available in the last several years. 'T'hese newer type instrtmments have been created by the issuing companies in response to the changes occurring in the marketplace. Many of these investment vehicles offer more liquidity, more diversity, and higher quality than "traditional" GIC's. While from a valuation standpoint these new contracts will likely be accounted for by a market value type formula, they will provide the Pension portfolio with additional diversification, opportunities and characteristics different from bonds. First Florida Tower / 111 Madison Street / Suite 1550 / Tampa, Florida 33602 / Telephone (813) 229-2180 Gulf Life Tower-Suite 223 / 1301 Gulf Life Drive / Jacksonville, Florida 32207 / Telephone (904) 396.6226 WATS (800) 274.2180 / Telecopy (813) 223.7646 ''Y::1'i't1 ir:r?hr?,'1;±?r(r?l-T_s :?'Z:--.:t?!yi:Y?tr.?fr.?r•,E. ! - .:k, . ff+GK 'G°"I .'i.'?if: r.tt .(•. ..91 r;' i'::. .''['r.., r. .. er:D°«e'r .r- •r.?;.t: '.r.,, ,fr:i. .i- ,,.1 •.r. r . r DeIgnan, Dan may 19, '1992 Page Two ..i As the capital markets are ccmtinuously evolving, we would -expect that additicntal opportunities for' diversity among fixed inccm?e (and equity) styles, techniques, and products will emerge in the years ahead. Please note that the exist ed diversification into bonds and, newer versions 'of investment . L cts and is being achi.eEv-ed- by cash on r bas hand and f=n maturing instt mtients rather than by sale of existing assets. Please let me kncxr if you have questions or need additional, information. very truly yours, J P. Willoughby JPW/cMt ; cc: Mrs. Barbara Weston ??r ? "`y ?S 'i4??1'?`?'??'''?:.5'?iiy??i'?;`????a>a'';?:?{.ir,F.??iii'•'"..;,'??,f ie:' ? , .. '. ' .li'?''i''r'S'.-'t, .It??:'°.-f: •.. s{:. _.?. ,.,i '. W,1,V,i ?.S? .yS`r `?J,'"5i-Sr?..vt...r .:. .. ..... . •.. .,... -? ., .r>?p-+5`'?:..c. ..Ls.>. .,t„1,.. t.Y,<.... M1.r ... , 1611 CITY OF CLEARWATER EMPLOYEES PENSION FUND uarter and Year Ended March 31 1.992 Review • Employees Pension Fund Asset Allocation (3/31/92) Amount (Million % of Portfolio . Equity $ 98 54.1% Fixed Income 20 10.9% GIC Accounts 59 32.6% Cash Equivalents 4 2.4% $181 100% • The market value of the Fund decreased from $183 million on December 31, 1991 to $181 million on March 31, 1992. • Fund Performance to Date' uarter One Year .,Aetna Life Insurance (Equity) -5.8% 13.6% Denver Investment Advisors (Equity) -1.9% 28.4% Hanson Investment Management (Equity) -4.0% 10.6% Shields Asset Management (Fixed Income) 0.5% - Eickhoff, Pieper, & Willoughby (GIC) 2.3% - Total Fund -1.5% 13.9% • The Market Climate Quarter One Year Inflation/CPI 0.8% 3.0% Equity/S&P 500 -2,6% 11.0% Median - Equity Database -1.4% 13.2% Fixed Income/LB Govt/Corp -1.5%- 11.4% Median - Fixed Income Database -1.1% 11.8% Median - Public Plan Sponsor Database -1.5% 13.9%' Callan Associates Inc.