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ACTION AG ENDA ;
Board of Trustees of the Employees' Pension Fund
August 31, 1998 {1i
1. Call ,to order 1. 10:17 a.m. ?
2. Approval of. Minutes: 7113198 2. Approved
as submitted.
"
3• "
Accept, Actuary's Report for
3. Accepted.
t
'
Employees'.-Pension Plan for plan ?
?
`; . year beginning .1 /1 /9B
4. Other Business:
4: None. I
,'. •5, ° ',Adjournment v.' 10:18 a.m. ;
`
f
f 1
T
Employees Pension Plan
Agenda Cover Memorandum Final Agenda Item #
Meeting Date: --8/31 Z28
SUBJECT/RECOMMENDATION:
Accept the Actuary's Report for the Employees' Pension Plan for the plan year beginning 1/1/98 .
} and that the appropriate officials be authorized to execute same.
SUMMARY:
• The 1/1/98 actuarial report for the Employees' Pension Plan requires a City contribution of $1,299,185, However,
the City Ordinance governing the Pension plan requires that the city contribute at least 7% of the compensation of
all employees participating in the plan (estimated at $3,309,684).
• The difference between the required contribution of $3,309,684 and the actuarial determined contribution of
$1,299,185 will be added to the existing credit balance, currently at $3,932,987. The new credit balance is estimated to
be $5,943,486.
• The funded status of the plan increased from 151% at 1/1/97 to 165% at 1/1/98.
• The Employees' Pension Plan experienced a third year of excellent investment performance. The performance for
the last 3 years (1995, 1996, and 1997, respectively) has been 23.36°/x, 14.80%, and 17.49%.
• 'The draft Actuary Report is available in the City Clerk's Office for review.
Reviewed by: Originating Dept: Costs
Legal NIA Info Srvc NIA Finance wr,.4x? Total NIA
Budget.' Public Works NIA User Dept. Funding Source:
Purchasing NIA DCMIACM Current CI
FY
Risk Mgmt NIA Other NIA Attachments OP
Other
Submitted by:
City Manager ? Nona
Appropriation Code:
Printed on recycled paper Rev. 2196
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ACTUARY'S REPORT-FOR THE
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CITY
OF'CLEARWATER EMPLOYEES'.PENSION FLAN
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' As of January 1, 1998 +
to determine'annual contribift!ion
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Draft For Discussion Purposes Only-Subject to Revision-Not for Further Distribution Draft
Coopers Coopers Lybrand LLP.
iMyorand I a, bwforw."firm.
June 23, 1998
-City of Clearwater
P.O. Box 4748
Clearwater, FL 33758-4748
Ladies and Gentlemen:
This report presents the results of the January 1, 1998 actuarial valuation of the
City of Clearwater Employees' Pension Plan. It has been prep q",,'_;;pX'warily to
present to management the contribution requirements for 1998 an Vil?ii':1aie current
status of funding of accumulated plan benefits. Sectipn,, .#ls?of this report, includes
a presentation of the information required by the GbVdkrment Accountiri'''Standards
Board (GASH) Statements No. 25 and 27.
Our calculations were based on finandkdj data and emp3oyge data furnished%`-by the
City of Clearwater.
The valuation was basati,;upon generally :a repted,actuarial ingthods, and we performed
such tests as we cord dd I'd necessary oI u uxer'the accurac of the results. To our
knowledge there ars,..<no, bei i6 its or expe?ises," to,be",'provided by the- plan for which a
liabili,ty,.3 or current s,cpsL.- was not established. We certify that the amounts
prds n ii.4in the accnmpAAyi.n? report tig?r6 been appropriately determined according
?b.'•;the ac"}*i al assump, ..ions`,'tstaced herein.
Statement by Enrolled Actuary
ThisVActuaYial valuation and/or cost determination was prepared and completed by me
or urW4t.? my"direct supervision, and I acknowledge responsibility for the results.
To t14N%est of my knowledge, the results are complete and accurate,, and in'my
opinion, the techniques and assumptions uses are reasonable and meet the
requirements and intent of Part VII, Chapter 112, Florida Statutes, There is no
benefit or expense to be provided by the plan or paid from the plan's assets for
which liabilities or current costs have not been established or otherwise taken into
account in the valuation. All known events or trends which may require a mate.rial
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 96-4342
Mark K. Knecht
Associate of the Society of Actuaries
Enrolled Actuary Number 96-5471
Draft For Discussion Purposes Only-Subject to Revision-Not for Further Distribution
Draft
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CONTENTS' I
P.agegi I
SECTION I SUMMARY 1-6
SECTION II FUNDING 7-11
SECTION III ASSETS '12-15
SECTION IV ACCOUNTING t 16-17
SECTION V CENSUS DATA 8-20
SECTION VI. ASSUMPTIONS AND METHODS 1-22
SECTION VII SUMMARY OF PLAN PROVISIONS„ 3-24 t
SECTION VIII COMPARATIVE SUMMARY
PRINCIPAL VALUATION{
r 5-29
Daft For Discussion Purposes Only-Subject to Revision-Not for Farther Distribution
Draft I
?jlSers Coopers Lybrand LLP. rand a pmwtiorw ww1caa 1im
CITY OF CLEMWATER EMPLOYEES' PENSION PLAN
C IO I - SUMMARY
A. cWa . 's Co t
This report presents the highlights of the January 1, 1998 actuarial valuation
prepared to determine the contribution requirements for the 1998-99 fiscal year.
Since the last actuarial valuation of the plan on January 1, 1997, there have
been no changes in the actuarial assumptions and methods or the plan provisions.
For a detailed description of the-plan provisions, please see Section VII and
for a detailed description of the actuarial assumptions and methods, please see
Section'VI of this report. .z
.^? t?
?,<sfa ?? fiY
The minimum required City contribution for the 1998 plan ye 299,185
(excluding the credit balance) compared to $3,485,40.0,<'iC" 1997. As 'a}percentage
of payroll, this represents a decrease from 7.75 =:ts"°2 r 75%. The chtige in the
minimum required contribution is primarily due tehfJ;6 fpLllowing fa,??ars:
o an actuarial investment recur ` ct' .-,U3.74% in cotes'phil son to an asscxmpd rate
of 7.0%,
actual salary?ixtpr±eases of 5 t;in dtimparison to <axt assumed rate of 5.0%,
and t°•?sn?? i`',. F?:;f:'.
• actual expenses foiC;'the year were $40,78y less than expected.
?; :Tlie?•p!I°??s credi:;b`4TanceY is curkentl.y equal to more than a full year's
: antri Attion, meaning that'-,-the City could essentially skip several years'
.s"funding ` nd still catriply iilth State law (the ordinance, however, requires the
??tty to tit a contributions even if State law does not). The reconciliation of
t1i., miri required contribution from the 1997 plan year level to the 1998
11 1tx)e?% gas follows:
71^?•W"•
Minimum Contribution - 1997 $ 3,485,400
Increase/(Decrease) in Normal Cost (1,816,336)
Increase/(Decrease) in expected expenses (40,787)
(Increase)/Decrease in expected employee contributions (186,068)
Increase/(Decrease) in Net Interest (143 024)
Minimum Contribution - 1998 $ 1,299,185
In addition, the market value of assets of the plan exceeds the actuarial, value
by more than $49 million. Over the next four years this excess will be included
in the actuarial value and will help reduce the funding requirements.
The funded status of the plan increased compared to the prior year. The ratio
of assets at market value to the actuarial present value of accumulated plan
benefits increased from 151% at January 1, 1997 to 165% at January 1, 1998.
Draft For Discussion Purposes Only-Subject toiRevision-Nat for Further Distribution Draft
CITY OF CLEARWATER EMPLOYEES' PENSION PLAN
5ECTIO I„-SU*tMARY__Uontinued)
B,' Contribution, Requix-ements or_ the Plan__Year Ending December 31._1998
Minimum Required Em foyer Contribution
Florida Statutes $ 1,299,185*
7% of payroll $ 3,309,684
The employer contribution is assumed to be made uniformly during the First two
.quarters of the. fiscal year beginning on October 1, 1998.. Dif£e.?ehG in the
investment return due to contributions actually being made all, her time
will be recognized as an actuarial gain or loss in the followin?$ ar?gtion. The'
minimum required contribution represents a funding „le.'g;?which will`4isfy the
minimum funding .requirements.. under Part VII, C § ? del' 112, Florid ,;;"Statutes.
Please refer to Section VI and VII of the report f?f,?a summary of.th-',- otuarial
assumptions and plan provisions, respectively.";
* Less the ' Credit 'Balance, currently x$3;432.:987. ',.hR.
Draft For Discussion Purposes Only-Subject tozRevision-Not for Further Distribution Draft
CITY OF CLEARWATER EMPLOYEES' PENSION PLAN
SECTIQN I - SUMMARY (gontinued}
C. Comparative.-Summary Q£ PrinciRal Valuation Results
?Aetuarial Valuation Prepared as of:
(a) Participant Data
Humber Included
Active Members
Retirees and Beneficiaries
Terminated Vested Participants
Annual Payroll of Actives
Annualized Benefits
Retirees and Beneficiaries
Terminated Vested Participants
(b) Actuarial Reserves
Market Value 0**?
'ON
Actuarial Value
(c) ]?LAb?qities
fits:
Y?
Act-$ ants
Dis Benefits
Refund of Employee Contributions
Total Active
Terminated Vested Participants
Retirees and Beneficiaries
Total Present Value of
Expected Benefits
Liabilities Due and Unpaid
Jan 1. 1998 Jan 1. 1.997 Jan 1 ` 1996
1,476 1,461 1,422
451 427 399
13
?i' fps 8
's
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$ 47,281,198 $ 44,955, 3 $
<±, 20$ , 964
i 1, 54,
$ 7.,434,60'>'S 6,617,342 .-,x!42,148
$ 208,61 76,631 ' 72,64Q
IX
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C4s;:
s
903 $304"112,707
$267,213,161
133 $272,346,200 $244;744,488
$225,106,202 $216,762,21.1 $211,067,333
14,168,647 13,766,627 13,566,552
11,440,100 10,918,448 10,414,398
3,547,472 3,382,956 3,258,520
1.914.673 1,793,016, 1.675.348
$256,177,094 $246,623,258 $239,982,151
1,874,204 744,997 711,561,
82,152,143 73,744,516, 64,235,874
$340,203,441 $321,112,771 $304,929,586
$ 282,796 $ 270,977 $ 234,455
Draft For Discussion Purposes Only-Subject tgRevision-Not for Further Distribution
Draft
cooppers Coopers & Lylxsnd LLP.
Mybrand i . PMARWOW ,.M%40, fwM
I
CITY OF CLEARWATER EMPLOYEES' PENSION PLAN
SECT ION I.- SUMMARY (continued).
C. Coom a{ xatiy2 Summary of P rincipal Valuation Results, (continued)
Actuarial. Valuation Prepared as of: Jan, . 1998 Jan-1, 1997 Jan 1. 1996
(c) Liabilities'(continued)
Unfunded Actuarial Accrued Liability
Frozen Initial Liab. (FIL) - 111179 $ 3,069,696 $ 3,661,433 $ 4,214,458
Supplemental FIL - 1/1/79 1,533,681 1,637,295 ?e?'`34,131
Supplemental FIL - 1/1/81 251,850 264, 77pa" - ew276, 860
Supplemental FIL - 1/1/82 (3,079,694) Q ,218,A V,`1. ,348,786)
Supplemental FIL - 1/1/87 1,265,'30 ?; 296 , 9114 326 , 510
Supplemental ' FIL - 1/1,/88 1, 428 , 923.", ''?1, 461, 499 :?. 91,943
Supplemental FIL - 1/1/89 1,901,6 JOY 1,941,231 X;;9.78,253
Asset Valuation Method' - 1/1/94
t '`tyre?" i
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Change t". t¢« 3I5491242 .'!'-MT 5971
542
?fv.i`•;D (v .1
3 , 640 682
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Plan Amendment - 1/1/96
4
733.735 .904,370
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15__.06 842.
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Total
'?`$yJJ
4.5 265!+,359 $ L5,546
302
$ 26,379
893
,
. ,
(d) Fmtxxx tg Account
PtIbT Year Azi unt
Pr ar Year :r
R44Uired Ejj loye
Er I?_yer G t?itCributions Made
Ini ti-61;- "?'rCredit Balance
Curren 'Year Credit Balance
l'
(e) Actuarial Present Value of Accrued
Benefits (see Subsection IV for
detail)
Changes During Prior Year:
Value from Prior Year:
Benefits Paid
Interest, Aging and Benefits Accrued
Change in Assumptions
Change in Plan Provisions
Net Change `
Value at Current Year.
us
$ 3,503,365 $ 4,801,302 $ 5,304,094
(3,485,400) (4,960,244) (3,741,904)
3,669,786 3,326,216 2,667,825
- 245-236 336.091 3.71.287
$ 3,932,987 $ 3,503,365 $ 4,801,302
$216,607,963 $202,942,802 $190,506,777
$202,942,802 $190,506,777
(7,694,700) (6,705,679
21,359,861 19,141,704
0 0
0 0
$ 13,665,161 $ 12,436,025
$216,607,963 $202,942,802
$166,517,705
(6,070,370)
22,305,084
0
7.754.358
$ 23,989,072
$190,506,777
Daft For Discussion Purposes Only-Subject to;Revision-Not for Further Distribution Draft
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CITY OF CLEARWATER EMPLOYEES' PENSION PLAN
SECTION I SP MRYcontinued)
C. o Va luation-Results, (continued)
Actuarial Valuation Prepared as of: Jan 1. 1998 Jan 1. 1997 Jan-1- 1996
(f) Pension Cost for Year
Normal Cost $ 1,276,592 $ 3,092,928 $ 4,522,577
Amortization of Unfunded Frozen
Initial Liability 2,504,845 2,504,845 2504,845
Administrative Expenses 1,170,974 1,126,697 ?€?1,?997,356
"
Shortfall far Expenses in Prior Year 44 , 277 129 , 3?€1?3WN:?
`147 , 681
Interest Adjustment 84,993 228,017. ? 324.502-
T
C ?? fS?£fs
``
7
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'4
otal Required
ontribution $ 081, 828
$
5,081, 6
,
»K. •- . $
B
4 96 961
-As a Percentage of Payroll 10;7X 15.8% 19.2%
Anticipated Employee Contributions $}r 596,.428
3,782,49q- $ 3;;?.- 6,717
As a Percentage of Payroll ,
8.or",8.0% 8.0%
.S
'
City Required Contriaau',?e r, T
r
185 $ :.x}485,400 $ 4,9600244
As a Percentage of`VTO}rYCi74 . 2.77.. 7.8% 11.2%
NO' 1,
a .
t'
;Con
utions
(g) Prijox Year Actu
?J
j
Aployeo s y iz ..;n
$ 4,1.08,525 $ 3,898,840
$ 2,867,825
.otty 35 ?s, 3.669.786 3 , 326 , 216 2.867.825
?;?'Taa $ 7,778,311 $ 7,225,056 $ 5,735,650
y
s and Losses
(h) Ga N/A N/A N/A
(i) Other Present Values
Present Value o Future Sa.aries
At attained age $402,814,600 $388,169,500 $377,222,700
j At entry age $329,069,700 $316,245,800 $307,107,500
Draft For Discussion Purposes Only-Subject to5Revision-Not for Further Distribution
Draft
SF.•GTIDN I - aMMARY (continued)
C. Comparative Summ_ary.,of Rrinciyal Valuation-Results, (continued)
Actuarial Valuation Prepared as of: Jan 1 1998 Jan 1 1997 Jan 1. 1996
.(i) Other.Present Values (continued)
Present Value Of oRloyee Cont_ buti.ons
At attained age $ 32,170,725 $ 31,000,124 $ 30,126,481
At entry age 25,735,980 24,740,604-u?.24 025,915.
CITY OF'CLEARWATER EMPLOYEES' PENSION PLAN
Present Value of Future Normal Costs
Present Value of Benefits
Active Employees - at entry age
Q) Comparison. of A6tUii11, f h4 Assumed
ry Incre
Ys& Ended ? A s
Yi:?`a.n tr..r
.31.86° 7.4%
1 31* 7'? 5 : 9 %
12 -'Y/88 9.1%
12/31/89 8.7%
12/31/90 5.3%
12/31/91 6.1%
12/31/92 6.8%
12/31/93 1.2%
12/31/94 4.4%
12/31/95 6.4%
12/31/96 6.7%.
12/31/97 5.6%
$ 10, 885 , 936 ?$
??:., 721, 631 $';606 ,507
.
?? r ,???$`?,,67 , 892 , 002 ;,6-5,085,369 $ 62,771 ,642
aslap sr Investment_ Return_
Asa Actual Assumed
Market Actuarial
Value Value
5.0% 13.21% N/A 7.0%
5.0% 10.78% N/A 7.0%
5.0% 9.12% N/A 7.0%
5.0% 20.84% N/A 7.0%
5:0% 6.21`/. N/A 7.0%
5.0% 28.52%. N/A 7.0%
5.0% 6.49% N/A 7.0%
5.0% 9.29% 7.42% 7.0%
5.0% 01.89% 6.28% 7.0%
5.0% 23.36%. 9.14% 7.0%
5.0% 14,80% 11.54% 7.0%
5.0% 17.49%. 13.74% 7.0%
Draft
For Discussion Purposes Only-Subject tc6 Revision-Not for Further Distribution
Draft
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CITY OF CLEARWATER EMPLOYEES' PENSION PLAN
SECTION II MIANG
A. p&ve10J2mc,n of the T? ended Frozen Actug1gial Accrued__Li-abili.tY.
1.' Unfunded Frozen Actuarial Accrued Liability
as of January 1, 1997 $25,546,302
Interest to "December 31, ,1997. 1,788,241
$27,334,543
2. Employer Normal Cost* for Year with interest
805,216
to. December 3l, 1997
3, Required Employer Contributions for Period 3 485,400
?.
4, Unfunded Frozen Actuarial Accrued Liability, us;rf?
as of December 311 1997
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*^: a=
54.359
(Iteias 1 2 - 3) i.$? '•
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Includes Expep
Adjuscment
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Draft For Discussion Purposes Only-Subject to $evision-Nat for Further Distribution Draft
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CITY OF CLEARWATER EMPLOYEES' PENSION PLAN
5Fg11QN_ 11.--7 -FUNDING (continued)
B, v o Cos
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, 1998, January 1, 1997 and January 1, 1996 are determined
as follows:
Total. Projected Actuarial Liability:
Jan 1. 1998 Jan 1. 1997 Jan I_,_1996
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 $256, 177,09£$246 ,.623, 258 $239„82,1.51
• Terminated vested participants I:874,20'} r;< ?44,997 r I1,561
• " Retired and disabled participants •_, ' - 82.152, 2/+3 :744 , 516 641' ? 8 4
` participants { `0340,203,441.'$32;,112,771 $304,929,586
Total
Credit Balance: E?npl ay"y" "' ontributio fyf ry;?f - ? {•
or future idsii'•• "=>3 •9.32., 987 $ 3,503,365 $ 4',801,302
from prior years r6,serve"d`
Fund.;; iThq, ,actuarial v lUih: of fund assets
as` a $'tit beginning of: tlia .'plan year , Vx;- $308,596,133 $272,346,200 $244,744,488
Ezceels of T4;t1'1 . Projected;Actugrial
Lin?i?,.ty 0 7 i' the Fund-.Minus the Credit
Balai 11 Tkportion of the projected
total}, C 'al liability to be funded
in tho14 re. $ 35,540,295 $ 52,269,936 $ 64,986,400
This portion is divided into two components:
a. Unfunded Frozen Actuarial Accrued
Liability $ 24,654,359 $ 25,546,302 $ 26,379,893
b. Present value of future service
liability (funded over the expected
future service years of current
participants) $ 10,885,936 $ 26,723,634 $ 38,606,507
Present Value of Future Covered Payroll: $402,814,600 $388,169,500 $377,222,700
Draft For Discussion Purposes Only-Subject tcBRevision-Not for Further Distribution
Draft
L., '
..CITY OF CLEARWATER EMPLOYEES' PENSION PLAN
.' SECTION II - ' FuNDIN G (continued)
B. I?,M122ment of Normal Cost, (continued) ;
r
Jan 1. 1998 Jan 1. 7.947 'Jan 1- 1996
Normal Cost Rate: The ratio of the present
value Gf future service liability to 'the
•. Present'Value of Future Covered Payroll: 2.70% 6.88% 10.23%
• Annual Covered Payroll: The reported
. payroll for plan participants who have
$
t
i
d
i
t
d
h
. 208
44
47
955
964
281
198
rement age.
...no
at
a
e assume
ret
ne
t , . 4
$
,
,
,
,
' Normal Coat: L' The annual cost as of the beginning of the
lan year to fund the tl
r; }tea r
p
future service liability over the ,
?afipA a}?
expected future years of services of
current, participants . 1 276 592'3 , 092 , 928 $ 44
;9 , 577
s,Y
Draft For Discussion Purposes Only-Subject tcgRevision-Not for Further Distribution
Draft .
F
CITY OF CLEARWATER EMPLOYEES' PENSION PLAN
SEC119 II --FUNDING (continued)
C. P ayments
Initial Jan 1, 1998 Annual
Data Initial Amortization Unamortized Amortization
Established a Amount• Period (Years) Amount ParyMent_
1/l/79* Frozen Initial
Liability(FIL) $ 9,.726,419 24,5 $'3,069,696 $ 792,558
1/1/79 Supplemental FIL 2,707,962 30.0 1, 533, 68203, 949
• 1/1./81 Supplemental FIL 390,421 30.0 2511 850 : 29 , 404
.1/1/82 Supplemental FIL (4,521,985) 34.0 '3,079,694} 40,571)
€:f Qi
.'..
1/1/87 1
Supplemental FIL 1,51.9,1,42 30.0 k.
%:'.t -"11;265,308 14,413
,i. iU
1/1/88 Supplemental FIL ' 1, 673 30.0
y. 1, 4281923 126 , 057
'
89
1
1
S
l
L
xF>
0
30
177
2
77 2
901 616 -164 018
/
/ u
emen
, °zy
.
,
,
F
1./1/94 Asset ValUatitin.' ' 3i
:KY^r yty
Method Cheftu;.. 3,72430.0 3,549,242 280,493
Y
6 an Amenctt
a
pt` 063_.842 30.0
^5 14,733.Z35 1
1.34.524
l}
, .
s fk;z $36,983,592 $27,734,053 $2,845,416 .
s (4, 521, 985) (3,079,694) (340,571)
32 461 60 524,654,359 52,504,845
* Established July 1, 1963 and being amortized over a forty-year period beginning
on that date,
Draft
For Discussion Purposes Only-Subject tQdtevision-Nat for Further Distribution
Draft
CITY OF CLEARWATER EMPLOYEES' PENSION PLAN
C ?,TION-J1 -_.MNAING (continued}
g
D. Ant?j?vted Amortization Schedule
Shown below is the anticipated amortization schedule for the Unfunded Frozen
Actuarial Accrued Liability taking into account the plan's funding policy:
AnticLpated o ato c due
Unfunded Frozen
at Actuarial Accrued Liability
.• -
1998 24,654,359 1999 23,699,980 2000, 22,6 .8,,, 794 <<? ° £<y
2001 21, ? j? ';x!1.26
2026 t:?'? a1x
On July 1, 1963 the,I3ri? ded Frozen ctuaz" AX?,? ccrued I?ility. was established
equal to the di£feaen&?-;Is e een the ret utd iC:< '116n's accrued liability, determined
under the Entry Age;-Arma °F nding Me b&`"d tb 'actuarial value of plan assets.
Accor?_#g?tto the plan 4,t,ing policy r"the initial liability is to be amortized by
3 ??8Q1! Q f. level payi?aexits'.,over a £oiti:-year period. Subsequent changes in the
11trel. of ` ?§',,Frozen A4.ttta7G ;;Accrued Liability due to plan amendments or changes
itfi a tuaria`?:; sumptiorisEfare'tP', a amortized on a straight-line basis over a period
of } ity aix's. Bytk.cssntributing more than the stated funding policy, the
amot- atio the Unfunded Frozen Actuarial. Accrued Liability can be accelerated,
Draft For Discussion Purposes Only-Subject taRevision-Not for Further Distribution Draft
CITY OF CLEARWATER EMPLOYEES' PENSION PLAN
SECTION III - SSE15
Comparative Balance Sheet
As of December 31, 1997
Market Value
ASSES 12/31/97_
Cash $ 5,480,663
Money Market Accounts 25,223,136
Guaranteed Investment Contracts 15,000,000
Corporate Equity Securities 205,932,157
Treasury Items 61,508,244
Domestic Corporate Bonds 12,009,,830.
Federal.Agency Bonds 5,179,499,
Mortgage Backed Bonds 15 , 2966,f7"6,7:=r
Asset Backed Bonds 11_.2GOiziY
Total Investments
Receivables:
Interest - pooled cash
Employer Contributiai '
?
Total Assets,:{
itie
A'Gapunts ??:jr:able V°;: '
Total ilsir ? °13-ties
Actuarial Reserves:
Accumulated Member Contributions
Balance of Actuarial Reserves
Total Actuarial. Reserves
TOTAL LIABILITIES AND ACTUARIAL RESERVES
356,8
179 , 929:.+
}..?
AR:7"t'
-7^c
';756,699.
282.796
$ 282,796
30,662,054
327,811,649
358,473,903
S358,756,699
Market Value
12/31/96
$ 4,112,267
17,286,857
23,970,774
174,y608,,327
s ,
3:7"160238
015 , 620
l?a•;?3i,109
304 '$117,5'i3 , 839
r•
64,871
-1, 543 T74
$306,383,684
0 977
$ 270,977
28,871,966
277,240_,741
306,1121707
2306.38
r
t?
f•
Draft For Discussion Purposes Only-Subject tgiRevision-Not for Further Distribution Draft
CITY AF"CLEARWATER EMPLOYEES' PENSION PLAN
SECTION III - ASSETS (continued)
Schedule of Changes in Actuarial. Reserves
For.the Plan Year Ended December 31, 1997
Revenues:
'Empl'oyee Contributions
Employer Contributions-
Earnings on Investments:`
.Interest
Dividends
-Realized Net Gains on Securities
Transactions
Unrealized Appreciation (Depreciation
on Investments
Expenses :
Benefits Paid
's`aa $':kr
Refit of Contrilsui?ons.' Y
;1 s peal Fees f?s;;,4, ;'•,y
U,t?ier l:xi1`eises'f:ri'
l )iJt Jt V..
. Yy.? . ?•S??y X11 ?` ?4
Net nge4Actuarial Reserves
Actuaeserves at Beginning of Plan Year
Actuarial Reserves at End of Plan Year
Draft
A
0
Market Value
$ 4,108,525
3,669,786
61,226,870
--_8:865 674
52,361,196
306 ,1.12.707
$358,473,903
For Discussion Purposes Only-Subject tggevision-Not for Further Distribution
Draft .
$8,036,161
CITY OF CLEARWATER EMPLOYEES' PENSION PLAN
S TS ' a t ue )
Development of Actuarial Value of Assets
1. Actuarial Reserves at Beginning
of Plan Year
2. Time Weighted Employee'Contxibutions
(.5 x 4,108,525)
3, Time Weighted Employer Contributions
(.5 x .125 x 3,669,786)
4. Time Weighted Benefit Payments s L.,
> §
(11/24).x (7,694,700)'
5. Time Weighted Expenses enses ?N<-
ag
(.5 x 1,170,974),
6.. Time Weighted V4u '?i`f Actuarial ,
(Items 1 +t?p5--`.=y k?C - 5)i
7. Exper-ted Asset R Wrn-':
$ tual ae t Re tur>a; '
9.ereR of Expected Return over Actual Return
10. Acarial Reserves at End of Plan Year
11. Expected Actuarial Reserves at End of Plan Year
(Items 9 + 10)
12. Difference Between Actual and
Expected Asset Return (Items 10-11)
$306,112,707
2,054,263
$304,284,108
21,299,888
53,448,559
(32,148,671)
358,47.3,903
326,325,232
132.3 48 671
Draft For Discussion Purposes Only-Subject tq)Revision-Not far Further Distribution
Draft
i
Date .
'"_abl-ishgd
01/01/94.
01/01/95,
01/01/96
01/01/97
01/01/98
Ae
Ac
CITY 07 CLEARWATER EMPLOYEES' PENSION PLAN
SECTI ON 111 :?_ASSETS (co ntinued,)
Development of Actuarial Value of Assets (continued)
Amount Amount
Annual Excluded 'Excluded
Initial Amount- Prior Current
Amount Recognized Valuation Valuation
$ 4,655,370 $ '931,074 $ (931,074) 0
$(13,122,649) $(2,624,530) 059 6 2 4,529
$ 35,600,142 $ 7,
0,028 ' r
86)
(14--240
058)
J
J ?;? aye,. ,
f
t. f Kvr
,
$ 20,905,508 $ 4,
$(16X?72
,406)
$(12,543,304)
3v'l
Oio
$
' $ 6, $ 0 $(25,71$,937)
n
j
$(49,877,770)
serves
ifs
Value of Assets
$358,473,903
$308,596,133
Draft For Discussion Purposes Only-Subject tQRevision-Not for Further Distribution Draft
4` `S: .`?'1••1'r,' ? , to`r. ?I ......'> J e, 1 ., I. `S' If31 I,1 I. •} ., '? I i•,'.
I ppers Coopers Lybssnd LLP.
L
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' CITY OF CLEARWA TER EMPLOYEES' PENSION PLAN
' EECTION V - CCO13 T G
' • . A. Plan Descrigtjon and' Contribution I} fomarion
Membership of the plan consisted of the following at January 1, 1997, the date-of
' the latest actuarial valuation:
is Retirees and beneficiaries
..' receiving benefits 427
Terminated plan members entitled
to but not yet receiving benefits 8
Active plan members 1,461
Total
1 89
Number of participating employers yr
%;
R
5
f
Draft
f
1
S .
For Discussion Purposes Only-Subject tq.Revision-Not for Further Distribution
Draft
Coop ers Coopora & Lytand' LLP.
Uybrand (• r .j,,w ,nio., rM
CITY OF CLEARWATER ERPLOYEES' PENSION PLAN
SECTIQN IV - ACCOUNT NG (continued)
B. "e mixed SuRRIementary Information Scheduling of Funding Progress
Actuarial
Accrued UAAL as a
Actuarial Liability (AAL) Unfunded Percentage
Actuarial Value of Frozen Entry AAL Funded Covered of Covered
.Valuation Assets Age (UAAL) Ratio Payroll Payroll
Date (a) (b) b-a -.--(R/b)- (c)_ (_(b-a)/c)_
01/01/91 $14118651764 $152,118,075 $ 10,2521311 937: $34,532 30%
.«
01/01/92 $184,746,269 $194,550,126 $ 9,803,857 95% $36,fy G 4 '" 27%
01/01/93 $198,315,690 $207,639,701 $ 9,324,011. 96% $38,fi x;03 24x
01/01/94 $213,014,474 $225,549,346 $ 12,534,872 ;; $38,710,9 32%
01/01/95 .$225,482,726 $237,428,796 297:
$ 11,946,07V
!! ?.39t"' $41,371,33?
01/01%96 $244,744,488 $271,124,381 26,379,893
3$ ,
?
46VrA;;,44,208,964 607E
01/01/97 '$272,346;200 $297,892,502 >
(25,546,302 ?3%s? $44,955,348 Kk 57%
01/01/98. $308',596,133 $333,250,492 --,j416 54,359
F0-, 9.3$47,281,198 52%
4
The information pres,gntOZb n the requi 6W supplementary Sc1t?`}ules was determined as
part of the actuar?gm, ?11sAtions at th?;=ctatOW'4 &'gat ed. kdditional information as
of the latest actuax:l vtixlxation follatirs±`:% ?" i,°•rr
01/01/97
cost me.hod w,
Act r.
Frozen Entry Age
ion methodp Level Dol lar Closed
amortization periods Various
Asset valuation method Five Year Average*
Actuarial assumptions:
Investment rate of return 7.0%
Projected salary increases 5.0%
Include merit increases 2.0%
Cast-o£-living adjustments 3.0%
* Effective January 1, 1994 the asset valuation method was changed from market
value to a five year average method.
Draft For Discussion Purposes Only-Subject taRevision-Nat for Further Distribution Draft
CITY OF,CLEAAWATER EMPLOYEES',PENSION PLAN
.51ECTI9M, -V- - GENSUS_ DAT
A'. ROCOUQUIRILM-2f o ee Data
A summary of changes in the employee data from January 1, 1997 through January 1,
1998 follows. Employees who do not participate in the plan are not included.
Retired
Terminated Participants
Active' Vested and
Emplayees' Employees Beneficiaries lotal
Participants included in-the A
January 1, 1997 valuation 1,461 8 VIVO 1,896
Nonvested terminations
Data Revisions
Vested terminations
Deaths with, eligi
Deatba-without elizibl
Rer. iV m e n t s F
i
Cas s?pttle dtlts
Rehir `
New participants
(57).
(30)
2
105
2
105
Participants included in the
January 1, 1998 valuation 1,476 13 451 1,940
Active ParticiRants :
Fully vested 662
Partially vested 0
Non-vested ___794
Total 1,476
5
(56)
(1) (6) (7)
30
Draft For Discussion Purposes Only-Subject taRevision-Not for Further Distribution Draft
CITY OF.CLEARWATER EMPLOYEES' PENSION PLAN
SECTION V - CENSUS DATA (continued)
B'. Are - S Mzico Distribut-on,,of dative Participants as of January 1. 1998
Attained
Under 25
25 to 29
30 to 34
35. to 39
40 to 44
45 to 49
50 to 54
55 to-..59,
64
65 f '
Tota
?f
Year s- of Se ice
0 - 4 ? 9 10-14 15-19 20-24 25± Total
H2... Ng-, Ro__? N,. ? ? N-01 I.. Earnings
34 0. 0 0 0 • 0 34 ' $ 864,066
104. 24 1 0 0 0 105,945
?lSr G: h?•G.ly
113 63 31 2 0 ",e,01r. 209 6',989,104
71 66 90 30 1 0 258 $ 281 331
57 64 67 31 t'''{ Cz? " 288 $10""'31,302
38 44 48
157
53
A
254
$10,140,577
27 3f4;?t 2t:'; 35 13, 18" 158 $ 5,976,345
16 10 lb 86 $ 3,414,805
R' 9 0 11 2 9 44 $ 1,551,907
r, 0 0 ?6 S 524.310
x'470 324 282 203 140 57 1,476 $53,479,692
Active Participant, Statistics
Average Age 42,9 years
Average Service 10.3 years
Draft For Discussion Purposes Only-Subject tdRcvision-Not for Further Distribution
Draft
Terminated Vested'Participants 13 $ .208,617.
Retired Participants and•Bene:ficiaries 451 $7,434,602
CM,
w.
Draft
r
For Discussion Purposes Only-Subject tQ(Revision-Not for Further Distribution
Draft
CITY OF CLEARWATER EMPLOYEES` PENSION PLAN
F . .
SECT'ON V SSV I S AND 3 ET} ODS
A. As;tuarial_ Assumptions
In-vestment d: The investment rate of earnings is assumed to be 7% per annum.
Mortality; Mortality was based on the 1983 Group Annuity Mortality Table for Males
with female ages set back six years.
Withdrawal: 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 s?rn?ifi"
Affla a e Female r=`'ss,
M ° s3
' 20 14.9% .003
25 9.9% .2 ,4%
30 6 * 9%
35
.xFer 4.9% 0 .:y t 7?
fY r
4 8X y#X
.45 ?' r 's. iy
Cn 3 n p3, f>:
{?.aQ $nf?:.,?OVer 0.0%
Pre-re i em tit. inciden"of disability is assumed to occur in
act :q} dance t??h a staii#ard`?'scale of moderate disability rates (Class 1, 1952 Inter-
coy) . ila?es for files 'assumed to be double that for- males. Sample rates
fo axtt ,les a; 'hown befi
Age Incidence of Disabilit
20 .17%
25 .17%
30 .17%
35 .18%
40 .20%
45 .23%
50 .29%
55 .39%
60 .59%
65 1.04%
70 1.74%
Service vs. Non-service: All pre-retirement deaths are assumed to be non-service
related. All incidence of disability is assumed to he service related.
Salary tale: Future salaries are assumed to increase at the rate of 5% per year,
3% due to cost-of-living, and 2% due to merit increases.
Draft For Discussion Purposes Only-Subject tQ-Revision-Not for Further Distribution Draft
ybrand
Coopers a Lybrand LLP.
. prdetuane 60VIC" FM
CITY OF CLEARWATER' EMPLOYEES' PENSION PLAN
O V- S P Q S AND METHODS continued)
A. ct igl Agsumvtiona, (continued)
eti e t Rate: Each active participant is assumed to retire, on the later of the
actuarial valuation date or his Normal Retirement Date.
min of Co t ibutio : The employer 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.
f:mployees__Covered: All partLcipants as of the actuarial valuatiori:t.daLiYS:""
s ry ??[ F:`? ?
pogses-: Eighty-five percent (85X) of the active park dff.ants are asaum :. eci to be
married (or have dependents eligible for Survivor's Bdb6k-it ). FemaleAspouses are
assumed to be five years younger than male spouses,
Expenses: Expenses are assumed to eq a-.:last year's aCItu;ftx expenses.
'i zT
Com letenes of ssum do s: All bene tsx'aad expenses taibe provided by the Plan
are recognized in tY1erluation. Al zknn kvents are ;: aken into account; no
current trends are.'W ' iiiiti{`til to discont ilu inr a future. "
B.;v3,}dt` trluation 1416A. 'oil. R; ;y
TH'. YActuarf fl ;Value 0 .?i setS 'is based on a five year moving average of assets
valued at laement va'The statement value reflects an amortized value for
bo*dt value fo:r equity investments. From the statement value, actual and
expeCd?xtrn on investments is derived. Any difference between the actual return
on in • "t-,nts for a given year and the expected return is spread over five years.
After wive years the entire amount is fully recognized. However, the Actuarial
Value of Assets will never exceed 120% nor fall below 80% of the market value of
assets. The use of a derived value of plan assets rather than current market value
will produce a more stable funding pattern for the plan by partially eliminating the
effect of unusual.market fluctuations.
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 compensation 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,
22
Draft For Discussion Purposes Only-Subject to Rcvision-Not for Further Distribution Draft
I
L?p erS i Caopers 6 Lybmnd LLP
' Uybrand I a w,? r»+rba rrm
CITY OF CLEARWATER EMPLOYEES' PENSION PLAN
SECTION V11_ - SMMI&Y Of?_FLAN P9QVIS_1ONS
This summary is intended as an outline of plan provisions and does not alter the
intent or meaning of the provisions contained-in the contract and/or plan document,
a Yea : January I to December 31.
E.i ig biZfty.: Any permanent employee shall participate in the plan immediately.
2MXr9nt Employee Contributions: E.0% of wages and salaries actually paid to a
participant.
q?
ve a e lionthlY Co a sat o : The total Compensation es
received d five
years of service divided by sixty.
• d.?ry?
Accrued Benefit: A monthly benefit equal to 2.75% o .-A'vorage Monthly Cbih?ensation
multiplied by the number of years of service to date ""I
???
?;.??•, ,
Normal RetiremenC:
t
t D
W
i
ili
i (N
l
a.
a
e
a n
e
b
t
orma
et, rl-T"
• Non-Hazard {3 ITit .;? Completi r s#ai a y'kZ4tast 20 years of service and the
attainment rki'V-age-s`55, or the ?m e'C otl o£? 3 0 years of service.
'
(''
33
•?,
f?Y
, a y?'r'
,? ?
,, t?.sf as?dvus Duty.=4;'?Gompletivn a.`.20 years of
service.
yy
i}1??.??i.?y3Y YrY ??f w.???i^ `, ?T'.Jy`•Q$ :i"t:.. 1.~'?f
' '
n
}
. x:G.
•
?4..?' ?I rYi
b5$.,,.. orma ?i
$tfif:::.: The participant's Accrued Benefit payable as of his
l;ixPmert>
VltrtuaI ? :i.rement d 1= on or after his Normal Re tirement Date. No adjustment
li lies jai deferred retirement beyond his Normal Retirement Date.
*
?
orm_of_ Benefit: A monthly annuity for
C.
y the life of the participant.
A'°the Participant's death 100% of the Normal Retirement Benefit shall be
paid as a Survivor Annuity to the spouse for five years. After five years, such
Survivor Annuity is reduced to 50% of the original amount. The Survivor Annuity
ceases upon death or remarriage of the spouse.
Disability Benefit;
a. Eli its: Total and permanent disability. If the disability is non-service
connected, there is an additional requirement of the completion of 10 years of
service.
23
Draft
For Discussion Purposes Only-Subject to Revision-Not for Further Distribution
Draft
i
COoperS, OoopenT Lyt"nd LLA
E Lybrand I . w,.? w4ca lw,,,,
CITY OF CLEARWATER EMPLOYEES' PENSION PLAN
SECTION Y11-- SUMMARY OF PLAN PROVISIONS (continued)
Di-sability e e , continued:
b. Disability- Benefit: The participant's Accrued Benefit, payable immediately.
If the disability is service connected, the Disability Benefit must be at least
66.67% of Average Monthly Compensation.
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.
to
eat
3Y?31.?.tty?3.
• .'i!f fl'Sf
k%4.#kzq
a. Eligibility: Any actively-employed participant.
b, Death Benefit: The participant's Accrued Benefit; pa ble immedi Rly, if
death is service connected, the beat ;Benefit must % t'at?,Uast 66.G7X G :.< verage
Monthly Compensation. fy> ° ? n?' 7?r
c. Fo of a it: A monthly Surviv A ui? as desciAb d under the Normal From
...: 4:
of Benefit.
• ,?+t5??: k. ?.??L?Yi6: 4 ?.?•:1: ?.fr?:.; •,•K?i ?'F'y?•
Veste TeKmina?ti_on:4;
gy,: Coi*016tibn of 10 yeas of service.
b # 'g mina r Bene ` participant's Accrued Benefit payable as of his
'Vill4rmal a i.rement DAt provided Employee Contributions are not refunded.
A
C. ent: A monthly annuity for the life of the participant. After the
pC0ant's death, a Survivor Annuity is provided as described under the
No' a1 Form of Benefit, beginning at the latter of the participant's Normal
Retirement Date or date of death.
on-Vested a m nation:
a. Eligibility: Any actively-employed participant.
b. e e t: Refund of Employee Contributions with 5% interest.
c. Form of Benefit: Lump sum.
24
Draft For Discussion Purposes Only-Subject to Revision-Not for Further Distribution Draft
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