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04/15/2013 PENSION TRUSTEES AGENDA Location: Council Chambers - City Hall Date: 4/15/2013- 1:00 PM 1. Call to Order 2. Approval of Minutes 2.1Approve the minutes of the March 18, 2013 Pension Trustees meeting as submitted in written summation by the City Clerk. Attachments 3. Citizens to be Heard re Items Not on the Agenda 4. Pension Trustee Items 4.1Accept the Actuary's Report for the Employees' Pension Plan for the plan year beginning January 1, 2013. Attachments 4.2Determine Trustees' expected rate of return for the pension plan's investments for the current year, for each of the next several years, and for the long term thereafter. Attachments 4.3Approve the request of the new hires for acceptance into the Pension Plan as listed. Attachments 4.4Approve the request of employee John Cavaliere, Police Department for a regular pension as provided by Sections 2.416 and 2.424 of the Employees’ Pension Plan. Attachments 4.5Approve the City of Clearwater Employee Pension Plan as lead plaintiff in litigation against Maxwell Technologies, Inc regarding investment losses to the Plan; retain Saxena White, P.A. as legal counsel in this regard and authorize staff to negotiate a retainer agreement with Saxena White, P.A. Attachments 5. Other Business 6. Adjourn Pension Trustees Agenda Council Chambers - City Hall Meeting Date:4/15/2013 SUBJECT / RECOMMENDATION: Approve the minutes of the March 18, 2013 Pension Trustees meeting as submitted in written summation by the City Clerk. SUMMARY: Review Approval: Cover Memo Item # 1 Pension Trustees 2013-03-18 1 TRUSTEES OF THE EMPLOYEES’ PENSION FUND MEETING MINUTES CITY OF CLEARWATER March 18, 2013 Present: Chair/Trustee George N. Cretekos, Trustee Doreen Hock-DiPolito, Trustee Bill Jonson, and Trustee Jay E. Polglaze. Also Present: William B. Horne II - City Manager, Jill S. Silverboard - Assistant City Manager, Rod Irwin - Assistant City Manager, Pamela K. Akin - City Attorney, Rosemarie Call - City Clerk, and Nicole Sprague - Official Records and Legislative Services Coordinator. To provide continuity for research, items are listed in agenda order although not necessarily discussed in that order. Unapproved 1. Call to Order - Chair George N. Cretekos The meeting was called to order at 1:28 p.m. at City Hall. 2. Approval of Minutes 2.1 Approve the minutes of the February 19, 2013 Pension Trustees meeting as submitted in written summation by the City Clerk. Trustee Bill Jonson moved to approve the minutes of the February 19, 2013 Pension Trustees meeting as submitted in written summation by the City Clerk. The motion was duly seconded and carried unanimously. 3. Citizens to be Heard re Items Not on the Agenda - None. 4. Pension Trustee Items 4.1 Approve the request of the new hires for acceptance into the pension plan as listed. Pension Name, Job. Class, and Dept./Div . Hire Date Elig. Date Vicki Hendrix, Parking Enforcement Spec., Parking Sys Dept 12/31/12 12/31/12 Brian Meade, Fleet Mechanic, General Services Department 12/31/12 12/31/12 Justin Fletcher, Solid Waste Worker, Solid Waste Dept 12/31/12 12/31/12 Robert Burnett, Utilities Mechanic, Public Utilities Dept 12/31/12 12/31/12 D raft Attachment number 1 \nPage 1 of 4 Item # 1 Pension Trustees 2013-03-18 2 Glenn Ferris, Park Service Tech I, Parks and Rec Dept 12/31/12 12/31/12 Tricia Terry, Library Assistant, Library Department 12/31/12 12/31/12 Daniel Gardner, Gas Technician I, Gas Department 12/31/12 12/31/12 Belinda Darcy, Police Social Service Specialist, Police Dept 12/31/12 12/31/12 Jon Bolger, Gas Technician I, Gas Department 12/31/12 12/31/12 Cameron Darby, Gas Technician I, Gas Dept 12/31/12 12/31/12 Samantha Favire, Library Assistant, Library Department 01/12/13 01/12/13 Amanda Bearkland, Parks Service Tech I, Parks and Rec Dept 01/14/13 01/14/13 Brian Lennon, Parks Service Tech I, Parks and Rec Dept 01/14/13 01/14/13 David Pirages, Police Comm Op Trainee, Police Dept 01/14/13 01/14/13 Jerome Budde, Police Comm Op Trainee, Police Dept 01/14/13 01/14/13 Christin Brash Paquette, Police Comm Op Trainee, Police Dept 01/14/13 01/14/13 Trustee Doreen Hock-DiPolito moved to approve the request of the new hires for acceptance into the pension plan as listed. The motion was duly seconded and carried unanimously. 4.2 Approve the request of employees Don March, Fire Department; Robert Going, Fire Department; and John Pickart, Police Department for a regular pension as provided by Sections 2.415 and 2.424 of the Employees’ Pension Plan. Don March, Fire Lieutenant, Fire Department, was employed by the City on November 24, 1986, and his pension service credit is effective on that date. His pension will be effective February 1, 2013. Based on an average salary of approximately $80,539.52 per year over the past five years, the formula for computing regular pensions, and Mr. March’s selection of the 75% Joint and Survivor Annuity, this pension will approximate $57,998.04 annually. Robert Going, Fire Lieutenant, Fire Department, was employed by the City on June 29, 1987 and his pension service credit is effective on that date. His pension will be effective February 1, 2013. Based on an average salary of approximately $64,807.40 per year over the past five years, the formula for computing regular pensions, and Mr. Going’s selection of the 100% Joint and Survivor Annuity, this pension will approximate $44,608.32 annually. John Pickart, Police Officer, Police Department, was employed by the City on August 10, 1992 and his pension service credit is effective on that date. His pension will be effective February 1, 2013. Based on an average salary of approximately $76,807.95 per year over the past five years, the formula for computing regular pensions, and Mr. Pickart’s selection of the 100% Joint and Survivor Annuity, this pension will approximate $43,370.88 annually. D raft Attachment number 1 \nPage 2 of 4 Item # 1 Pension Trustees 2013-03-18 3 Section 2.416 provides for normal retirement eligibility when a participant has completed twenty years of credited service or has reached age 55 and completed ten years of credited service in a type of employment described as hazardous duty. Mr. March, Mr. Going and Mr. Pickart qualify under the hazardous duty criteria. Trustee Jay Polglaze moved to approve the request of employees Don March, Fire Department; Robert Going, Fire Department; and John Pickart, Police Department for a regular pension as provided by Sections 2.415 and 2.424 of the Employees’ Pension Plan. The motion was duly seconded and carried unanimously. 4.3 Robert Scott Sullivan, Land Resource Specialist, Planning Department, was employed by the City on July 29, 1991, and began participating in the Pension Plan on that date. Mr. Sullivan terminated from City employment on December 14, 2012. Approve the request of employee Robert Scott Sullivan of the Planning Department to vest his pension as provided by Section 2.419 of the Employees’ Pension Plan. The Employees’ Pension Plan provides that should an employee cease to be an employee of the City of Clearwater or change status from full-time to part-time after completing ten or more years of creditable service (pension participation), such employee shall acquire a vested interest in the retirement benefits. Vested pension payments commence on the first of the month following the month in which the employee normally would have been eligible for retirement. Section 2.416 provides for normal retirement eligibility when a participant has reached age 55 and completed twenty years of credited service, has completed 30 years of credited service, or has reached age 65 and completed ten years of credited service. Mr. Sullivan would have completed at least 20 years of service and will reach age 55 on April 12, 2019. Trustee Paul Gibson moved to approve the request of employee Robert Scott Sullivan of the Planning Department to vest his pension as provided by Section 2.419 of the Employees’ Pension Plan. The motion was duly seconded and carried unanimously. D raft Attachment number 1 \nPage 3 of 4 Item # 1 Pension Trustees 2013-03-18 4 5. Other Business - None. 6. Adjourn The meeting adjourned at 1:30 p.m. Chair Employees’ Pension Plan Trustees Attest City Clerk D raft Attachment number 1 \nPage 4 of 4 Item # 1 Pension Trustees Agenda Council Chambers - City Hall Meeting Date:4/15/2013 SUBJECT / RECOMMENDATION: Accept the Actuary's Report for the Employees' Pension Plan for the plan year beginning January 1, 2013. SUMMARY: Per the actuary report dated January 1, 2013, a minimum City employer contribution of $19.6 million, or 26.33% of covered payroll, is required for fiscal year 2014. This is a decrease of $1.3 million over the fiscal 2013 required contribution of $20.9 million, or 27.97% of covered payroll. The decrease in the required contribution is primarily due to savings from the changes to the pension plan effective January 1, 2013, partially offset by increased costs due to changes in plan assumptions, along with an investment loss due to a 5.5% investment return on the actuarial value of assets. The savings from the change in plan benefits, effective January 1, 2013, totaled approximately $4.9 million. These savings were offset by an increase in the required contribution due to the assumptions changes, also effective with the January 1, 2013 actuarial valuation, totaling $2.3 million. Finally, the final year of the "phase-in" of the calendar 2008 investment losses resulted in an investment return of 5.5%, based on the actuarial value of assets,, versus the assumed rate of 7.5% (gross of fees). This negative investment return performance increased the required employer contribution, and further offset the $4.9 million savings, by approximately $1.3 million. The calendar year 2012 investment return was 13.92% gross of fees, versus the assumed rate of 7.5% gross of fees. This resulted in an improvement in the investment return based on the actuarial value of assets from 4.46% for the prior year to 5.50% for the current year valuation. This is the final year of the five year "smoothing", or amortization, of the 2008 investment losses (negative 27.01% return). Calendar 2009 thru 2012 investment returns were 30.93%, 17.50%, (0.32)%, and 13.92%, respectively. If the plan meets its assumed rate of return of 7% net of fees for calendar 2013, investment gains will lower next year's required contribution to approximately 21% of covered payroll per the actuary's estimate. The plan's credit balance, which reflects actual contributions in excess of actuarially required contributions for prior years, decreased from $6,565,156 to $6,343,864 during calendar 2012. This $224,000 decrease was the result of budgeting to use approximately $625,000 of the credit balance for fiscal 2013 contributions, offset by interest earnings on the credit balance. The Plan's funded ratio is 92.2% versus 97.4% for the prior year. The funded ratio after the plan design changes had improved to 101.2%. However the changes in the plan assumptions increased the unfunded actuarial accrued liability by approximately $66 million (amortized over 30 years) resulting in the decrease in the funded ratio to 92.2%. For comparability to other plans, the actuary notes in the report that the current funded ratio is 88.9% based on the more commonly used Entry Age Normal funding method. The Actuarial Value of Assets exceeds the Market Value of Assets by $47.0 million as of January 1, 2013. If Market Value had been the valuation basis, the required contribution rate would have been 21.24% of covered payroll. Review Approval: 1) Office of Management and Budget 2) Financial Services 3) Office of Management and Budget 4) Legal 5) Clerk 6) Assistant City Manager 7) City Manager 8) Clerk Cover Memo Item # 2 CITY OF CLEARWATER EMPLOYEES’ PENSION PLAN ACTUARIAL VALUATION REPORT AS OF JANUARY 1, 2013 ANNUAL EMPLOYER CONTRIBUTION FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2014 Attachment number 1 \nPage 1 of 61 Item # 2 Attachment number 1 \nPage 2 of 61 Item # 2 Attachment number 1 \nPage 3 of 61 Item # 2 Attachment number 1 \nPage 4 of 61 Item # 2 TABLE OF CONTENTS Section Title Page A Discussion of Valuation Results 1 B Valuation Results 1. Participant Data 6 2. Annual Required Contribution 7 3. Actuarial Value of Benefits and Assets 8 4. Calculation of Employer Normal Cost 9 5. Reconciliation of Credit Balance 10 6. Liquidation of the Unfunded Actuarial Accrued Liability 11 7. Actuarial Gains and Losses 13 8. Recent History of Valuation Results 17 9. Recent History of Contributions 18 10. Actuarial Assumptions and Cost Method 19 11. Glossary of Terms 26 C Pension Fund Information 1. Statement of Plan Assets at Market Value 29 2. Reconciliation of Plan Assets 30 3. Development of Actuarial Value of Assets 31 4. Investment Rate of Return 32 D Financial Accounting Information 1. FASB No. 35 33 2. GASB No. 25 34 E Miscellaneous Information 1. Reconciliation of Membership Data 37 2. Active Participant Distribution 38 3. Inactive Participant Distribution 41 F Summary of Plan Provisions 42 Attachment number 1 \nPage 5 of 61 Item # 2 SECTION A DISCUSSION OF VALUATION RESULTS Attachment number 1 \nPage 6 of 61 Item # 2 1 DISCUSSION OF VALUATION RESULTS Comparison of Required Employer Contributions The required employer contribution developed in this year's valuation is compared below to last year's results: Required Employer/State Contribution$19,608,078$20,925,720$(1,317,642) As % of Covered Payroll26.35%27.99%(1.64)% Estimated State Contribution12,00012,0000 As % of Covered Payroll0.02%0.02%0.00% Required Employer Contribution19,596,07820,913,720(1,317,642) As % of Covered Payroll26.33%27.97%(1.64)% Credit Balance6,343,8646,568,156(224,292) For FYE 9/30/2014For FYE 9/30/2013 Based onBased on Increase Valuation 1/1/20121/1/2013 Valuation(Decrease) The contribution has been adjusted for interest on the basis that payments are made uniformly during the first two quarters of the City’s fiscal year. The required employer contribution has been computed under the assumption that the amount to be received from the State on behalf of police officers and firefighters in 2013 will be $12,000. If the actual payment from the State falls below this amount, then the City must increase its contribution by the difference. The actual Employer and State contributions during the year ending December 31, 2012 were $20,196,816 and $12,000, respectively, for a total of $20,208,816. After $716,904 of the credit balance is included, the total is equal to the annual required contribution of $20,925,720 for that year. The minimum required City contribution is 7% of covered payroll. Attachment number 1 \nPage 7 of 61 Item # 2 2 Revisions in Benefits Under Ordinance No. 8333-12, the changes in plan provisions listed below were implemented effective January 1, 2013. These changes do not apply to members who were eligible for normal retirement as of January 1, 2013. Hazardous Duty Members  The 1.5% Cost of Living Adjustment is eliminated for benefits accrued after January 1, 2013.  The amount of overtime that is included in pensionable earnings has been limited to 300 hours per year.  The employee contribution rate has been increased from 8% to 10%. Non-Hazardous Duty Members  The normal form of benefit has been changed to a Life Annuity.  Overtime and additional pay above the base rate of pay is excluded from pensionable earnings.  Application of the Cost of Living Adjustment is delayed until five years after retirement for benefits accrued after January 1, 2013.  The minimum duty disability benefit is changed from 66 2/3% to 42% of Average Final Compensation.  For Non-Hazardous Duty Members hired after January 1, 2013: • The multiplier is lowered to 2.00% per year. • The “30 and out” normal retirement eligibility criterion is eliminated, and the “age 55 with 20 years of service” normal retirement eligibility criterion is replaced with normal retirement eligibility at age 60 with 25 years of service. Revisions in Actuarial Assumptions or Methods There have been revisions made to the actuarial assumptions since the last actuarial valuation. An Experience Study covering the five years ended December 31, 2011 was completed on November 29, 2012, and all recommended changes were adopted, as follows: Attachment number 1 \nPage 8 of 61 Item # 2 3  The investment return assumption was changed from 7.50% gross of investment expenses to 7.00% net of investment expenses.  The mortality assumption was changed to reflect current and future generational mortality improvements using Scale BB.  The salary increase assumption was changed from 6.00% per year to the service-based tables shown in the Actuarial Assumptions and Cost Method section, which range from 3.5% to 7.9% based on years of service.  The assumed rate of inflation was lowered from 3.00% to 2.50%.  The assumed rates of future retirement, employment termination, and disability were changed to the tables shown in the Actuarial Assumptions and Cost Method section, based on observed experience. Actuarial Experience There was a net actuarial experience loss of $7,015,253 during the year, which means that actual experience was less favorable than expected. The loss is primarily due to recognized investment return (on the smoothed actuarial value of assets) below the assumed rate of 7.5%. The investment return was 13.92% based on the market value of assets and 5.50% based on the actuarial value of assets. The investment loss was partially offset by gains due to lower than expected salary increases (4.48% versus 6.0% assumed). This net actuarial loss increased the required employer contribution by 1.24% of covered payroll. Analysis of Change in Employer Contribution The components of change in the required City contribution are as follows: Contribution Rate Last Year27.97% Change in Benefits(5.74) Change in Assumptions and Methods3.06 Amortization Payment on UAAL(0.10) Experience Gain/Loss1.24 Change in Investment and Administrative Expenses(0.10) Change in State Revenue0.00 Contribution Rate This Year26.33 Attachment number 1 \nPage 9 of 61 Item # 2 4 Funded Ratio One measure of the Plan’s funding progress is the ratio of the actuarial value of assets to the actuarial accrued liability. The funded ratio is 92.2% this year compared to 97.4% last year. This year’s funded ratio was 97.7% before the changes in actuarial assumptions and plan provisions, and it was 101.2% after recognition of the plan changes but before recognition of the assumption changes. The primary cause of the decrease in the funded ratio to 92.2% is the change in the valuation interest rate from 7.5% to 7.0%. If 7.5% had been used in combination with all the other plan changes and assumption changes, the funded ratio would have been 98.2%. For information purposes, this year’s funded ratio is 88.9% under the Entry Age Normal funding method. The Entry Age Normal funding method is the method required under the new GASB Nos. 67 and 68 requirements (GASB No. 67 becomes effective September 30, 2014). If the Entry Age Normal funding method were used for this actuarial valuation, the City’s contribution requirement would have been 23.16%. Variability of Future Contribution Rates The Actuarial Cost Method used to determine the contribution rate is intended to produce contribution rates which are generally level as a percent of payroll. Even so, when experience differs from the assumptions, as it often does, the employer’s contribution rate can vary significantly from year- to-year. Over time, if the year-to-year gains and losses offset each other, the contribution rate would be expected to return to the current level, but this does not always happen. The Market Value of Assets exceeds the Actuarial Value of Assets by $47,047,678 as of the valuation date (see Section C). This difference will be phased in over the next few years in the absence of offsetting losses. In turn, the computed employer contribution rate is projected to decline. If there are no other experience gains or losses and the return on the market value of assets is 7.0% in 2013 (net of investment expenses) as assumed, it is projected that the City contribution requirement as of January 1, 2014 for the fiscal year ending September 30, 2015 will be approximately 21% of covered payroll. Attachment number 1 \nPage 10 of 61 Item # 2 5 Relationship to Market Value If Market Value had been the basis for the valuation (under a method change), the City contribution rate would have been 21.24% and the funded ratio would have been 98.5%. Conclusion The remainder of this Report includes detailed actuarial valuation results, financial information, miscellaneous information and statistics, and a summary of plan provisions. Attachment number 1 \nPage 11 of 61 Item # 2 SECTION B VALUATION RESULTS Attachment number 1 \nPage 12 of 61 Item # 2 6 ACTIVE MEMBERS Number1,4741,4741,4741,468 Covered Annual Payroll$74,422,344$74,422,344$76,522,038$74,765,020 Average Annual Payroll$50,490$50,490$51,915$50,930 Average Age44.744.744.744.7 Average Past Service11.211.211.211.5 Average Age at Hire33.533.533.533.2 RETIREES & BENEFICIARIES Number926926926872 Annual Benefits$30,933,396$30,933,396$30,933,396$28,620,770 Average Annual Benefit$33,405$33,405$33,405$32,822 Average Age65.065.065.064.6 DISABILITY RETIREES Number137137137138 Annual Benefits$3,484,574$3,484,574$3,484,574$3,431,327 Average Annual Benefit$25,435$25,435$25,435$24,865 Average Age62.762.762.762.3 TERMINATED VESTED MEMBERS Number64646462 Annual Benefits$1,391,286$1,391,286$1,391,286$1,238,456 Average Annual Benefit$21,739$21,739$21,739$19,975 Average Age51.051.051.051.2 PARTICIPANT DATA January 1, 2013January 1, 2012January 1, 2013January 1, 2013 After Plan &After Plan ChangesBefore Changes Assumption Changes Attachment number 1 \nPage 13 of 61 Item # 2 7 A.Valuation Date B.ARC to Be Paid During Fiscal Year Ending9/30/20149/30/20149/30/20149/30/2013 C.Assumed Date of Employer Contrib.Evenly during firstEvenly during firstEvenly during firstEvenly during first two quarters oftwo quarters oftwo quarters oftwo quarters of fiscal yearfiscal yearfiscal yearfiscal year D.Annual Payment to Amortize Unfunded Actuarial Liability$5,479,806$453,036$2,387,554$2,401,686 E.Employer Normal Cost12,845,50115,665,91418,277,29917,064,100 F.ARC if Paid on the Valuation Date: D+E18,325,30716,118,95020,664,85319,465,786 G.ARC Adjusted for Frequency of Payments19,608,07817,327,87122,214,71720,925,720 H.ARC as % of Covered Payroll26.35%23.28%29.03%27.99% I.Assumed Rate of Increase in Covered Payroll to Contribution Year0.00%0.00%0.00%0.00% J.Covered Payroll for Contribution Year74,422,34474,422,34476,522,03874,765,020 K.ARC for Contribution Year: H x J19,608,07817,327,87122,214,71720,925,720 L.Estimate of State Revenue in Contribution Year12,00012,00012,00012,000 M.Required Employer Contribution (REC) in Contribution Year19,596,07817,315,87122,202,71720,913,720 N.REC as % of Covered Payroll in Contribution Year: M ÷ J26.33%23.27%29.01%27.97% O.Credit Balance6,343,8646,343,8646,343,8646,568,156 ANNUAL REQUIRED CONTRIBUTION (ARC) After Plan &Before Changes January 1, 2013January 1, 2013January 1, 2012January 1, 2013 After Plan Changes Assumption Changes Attachment number 1 \nPage 14 of 61 Item # 2 8 A.Valuation Date B.Actuarial Present Value of All Projected Benefits for 1.Active Members a. Service Retirement Benefits$ 342,143,347$ 316,265,988$ 347,613,624$ 344,147,221 b. Vesting Benefits36,896,909 40,076,626 45,114,380 45,410,839 c. Disability Benefits15,225,720 16,381,820 21,669,831 21,373,056 d. Preretirement Death Benefits5,914,691 5,819,625 6,106,297 6,093,298 e. Return of Member Contributions2,381,831 2,683,721 2,652,636 2,641,367 f. Total402,562,498 381,227,780 423,156,768 419,665,781 2.Inactive Members a. Service Retirees & Beneficiaries422,898,007 381,098,239 381,098,239 354,487,718 b. Disability Retirees47,555,489 44,948,519 44,948,519 44,680,068 c. Terminated Vested Members16,774,341 14,913,700 14,913,700 12,624,011 d. Total487,227,837 440,960,458 440,960,458 411,791,797 3. Total for All Members889,790,335822,188,238864,117,226831,457,578 C.Actuarial Accrued (Past Service) Liability per GASB No. 25 (FEA Method)746,701,092 680,608,117 705,169,082 681,871,531 D.Actuarial Accrued Liability under EAN Method774,749,811 708,656,836 733,217,801 702,438,432 E.Actuarial Value of Accumulated Plan Benefits per FASB No. 35 1.Based on Plan's Interest Rate729,923,831656,272,289667,961,928637,554,568 2. Based on FRS Interest Rate667,384,541N/AN/A619,817,749 F.Plan Assets 1.Market Value735,778,899735,778,899735,778,899656,705,582 2. Actuarial Value688,731,221688,731,221688,731,221664,087,199 G.Actuarial Present Value of Projected Covered Payroll577,759,869592,827,777610,022,027601,832,076 H.Actuarial Present Value of Projected Member Contributions51,147,74252,322,10148,801,76348,146,565 I.Funded Ratio Based on Plan's Funding Method (FEA) = F.2. / C.92.24%101.19%97.67%97.39% J.Funded Ratio Based on EAN Method = F.2. / C.88.90%97.19%93.93%94.54% ACTUARIAL VALUE OF BENEFITS AND ASSETS January 1, 2013 Before ChangesAfter Plan & January 1, 2013January 1, 2012January 1, 2013 After Plan Changes Assumption Changes Attachment number 1 \nPage 15 of 61 Item # 2 9 A.Valuation Date B.Actuarial Present Value of Projected Benefits$889,790,335$822,188,238$864,117,226$831,457,578 C.Credit Balance6,343,8646,343,8646,343,8646,568,156 D.Actuarial Value of Assets688,731,221688,731,221 688,731,221664,087,199 E.Unfunded Actuarial Accrued Liability 57,969,871 (8,123,104) 16,437,861 17,784,332 F.Actuarial Present Value of Projected Member Contributions51,147,74252,322,10148,801,76348,146,565 G.Actuarial Present Value of Projected Employer Normal Costs: B+C-D-E-F98,285,36595,601,884116,490,245108,007,638 H.Actuarial Present Value of Projected Covered Payroll577,759,869592,827,777610,022,027601,832,076 I.Employer Normal Cost Rate: G/H17.01%16.13%19.10%17.95% J.Covered Annual Payroll74,422,34474,422,34476,522,03874,765,020 K.Employer Normal Cost: I x J12,659,24112,004,32414,615,70913,420,321 L.Assumed Amount of Expenses186,2603,661,5903,661,5903,643,779 % of Covered Payroll0.25%4.92%4.79%4.87% M.Total Employer Normal Cost: K + L12,845,50115,665,91418,277,29917,064,100 N.Employer Normal Cost as % of Covered Payroll17.26%21.05%23.89%22.82% Before ChangesAfter Plan ChangesAfter Plan & Assumption Changes CALCULATION OF EMPLOYER NORMAL COST January 1, 2013January 1, 2013January 1, 2012January 1, 2013 Attachment number 1 \nPage 16 of 61 Item # 2 10 $6,568,156 -20,913,720 +20,196,816 +492,612 6,343,864 Interest on Credit Balance Credit Balance at End of Year Credit Balance at Beginning of Year Required Employer Contribution Employer Contribution Made Reconcilation of Credit Balance Attachment number 1 \nPage 17 of 61 Item # 2 11 LIQUIDATION OF THE UNFUNDED ACTUARIAL ACCRUED LIABILITY 1.Last Year's UAAL$17,784,332 2.Employer Normal Cost for Contribution Year17,064,100 3.Last Year's Contributions20,925,720* 4. Interest at the Assumed Rate on: a.1 and 2 for one year2,613,632 b.3 from dates paid98,483 c. a - b2,515,149 5.This Year's UAAL Prior to Revision: 1 + 2 - 3 + 4c16,437,861 6.Change in UAAL Due to Plan Amendment(24,560,965) 7.Change in UAAL Due to Changes in Actuarial Assumptions and Methods66,092,975 8.This Year's Revised UAAL: 5 + 6 + 757,969,871 A. Derivation of the Current UAAL * Includes portion of credit balance used for year. B. UAAL Amortization Period and Payments Date EstablishedSourceAmount Years RemainingAmount After Plan & Assumption Changes After Plan Changes Before Changes 1/1/1987Supplemental FIL1,519,142$ 4402,948$ 111,179$ 111,914$ 111,914$ 1/1/1988Supplemental FIL1,673,738 5540,370 123,169 124,242 124,242 1/1/1989Supplemental FIL2,177,772 6820,497 160,876 162,607 162,607 1/1/1994Method Change3,724,296 112,226,057 277,439 283,066 283,066 1/1/1996Plan Amendment15,063,842 1310,047,124 1,123,502 1,150,178 1,150,178 1/1/2000Plan Amendment52,921,724 1741,272,248 3,950,764 4,069,637 4,069,637 1/1/2002Assumption Changes(30,846,502) 19(25,468,246) (2,302,925) (2,378,874) (2,378,874) 1/1/2007Assumption Changes(14,695,526) 24(13,403,137) (1,092,156) (1,135,216) (1,135,216) 1/1/2013Plan Amendment(24,560,965) 30(24,560,965) (1,849,794) (1,934,518) N/A 1/1/2013Assumption Changes66,092,975 3066,092,975 4,977,752 N/AN/A 73,070,496 57,969,871 5,479,806 453,036 2,387,554 Original UAAL Payment Current UAAL Attachment number 1 \nPage 18 of 61 Item # 2 12 C. Amortization Schedule The UFAAL is being liquidated as a level dollar amount over the number of years remaining in the amortization period. The expected amortization schedule is as follows: 2013$57,969,871 201456,164,353 201554,232,465 201652,165,345 201749,953,527 201847,705,843 202335,397,364 202822,166,208 203319,549,012 203813,723,013 2043- Amortization Schedule YearExpected UAAL Attachment number 1 \nPage 19 of 61 Item # 2 13 ACTUARIAL GAINS AND LOSSES The assumptions used to anticipate mortality, employment turnover, investment income, expenses, salary increases, and other factors have been based on long range trends and expectations. Actual experience can vary from these expectations. The variance is measured by the gain and loss for the period involved. If significant long term experience reveals consistent deviation from what has been expected and that deviation is expected to continue, the assumptions should be modified. The net actuarial gain (loss) for the past year is computed as follows: A.Employer Normal Cost as a Percentage of Covered Payroll 1. Last Valuation17.95% 2. Current Valuation (Before Changes)19.10 3. Difference: 1 - 2(1.15) B.Actuarial Present Value of Projected Covered Payroll (Before Changes)610,022,027$ C.Net Actuarial Gain (Loss): A3 x B(7,015,253) D. Gain (Loss) due to Investments(12,619,941) E. Gain (Loss) due to other sources5,604,688 Gains (losses) in previous years have been as follows: Year EndingGain 12/31(Loss) 2009$32,358,262(4.89)% 20102,311,412(0.37) 2011(13,721,771)2.28 2012(7,015,253)1.15 Change in NC Rate Attachment number 1 \nPage 20 of 61 Item # 2 14 The fund earnings and salary increase assumptions have considerable impact on the cost of the Plan so it is important that they are in line with the actual experience. The following table shows the actual fund earnings and salary increase rates compared to the assumed rates for the last few years: 12/31/1986N/A7.00%7.40%5.00% 12/31/1987N/A7.005.905.00 12/31/1988N/A7.009.105.00 12/31/1989N/A7.008.705.00 12/31/1990N/A7.005.305.00 12/31/1991N/A7.006.105.00 12/31/1992N/A7.006.805.00 12/31/19937.42%7.001.205.00 12/31/19946.287.004.405.00 12/31/19959.147.006.405.00 12/31/199611.547.006.705.00 12/31/199713.747.005.605.00 12/31/199815.287.007.405.00 12/31/199917.967.004.205.00 12/31/200012.427.005.805.00 12/31/20017.407.005.905.00 12/31/2002(1.85)7.505.806.00 12/31/20037.457.506.406.00 12/31/20042.187.506.386.00 12/31/20054.587.505.496.00 12/31/20067.877.505.156.00 12/31/200710.687.506.626.00 12/31/2008(10.61)7.504.256.00 12/31/200916.537.503.296.00 12/31/20105.987.501.276.00 12/31/20114.467.502.566.00 12/31/20125.507.504.486.00 Averages7.50%---5.49%--- Investment Return Year EndingActualAssumedAssumed Salary Increases Actual The actual investment return rates shown above are based on the actuarial value of assets. The actual salary increase rates shown above are the increases received by those active members who were included in the actuarial valuations both at the beginning and the end of each year. Attachment number 1 \nPage 21 of 61 Item # 2 15 History of Investment Return Based on Actuarial Value of Assets -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% -15% -10% -5% 0% 5% 10% 15% 20% 25% 30% Plan Year End ActualAssumed History of Salary Increases 0% 5% 10% 15% 0% 5% 10% 15% Plan Year End Compared to Previous Year ActualAssumed Attachment number 1 \nPage 22 of 61 Item # 2 16 Active Members YearVestedOtherEnd of EndedAEAEAEAEAAAEYear 12/31/20094911054570602104656931,567 12/31/20107813768512632154964851,508 12/31/20118412443496602116475841,468 12/31/201211911351523612184058811,474 12/31/2013423279 4 Yr Totals *33048421620911244854199253343 * Totals are through current Plan Year only. Actual (A) Compared to Expected (E) Decrements Among Active Employees Number Added Terminations YearRetirementRetirementDeathTotals DuringServiceDisability Year EndedNumberNumber 12/31/200912$142,606 16$313,189 12/31/201012139,508 18363,242 12/31/201113220,877 19416,467 12/31/201212232,755 20466,010 12/31/201320480,787 Actual (A) Compared to Expected (E) Deaths Among Retirees and Beneficiaries Actual During Year Annual Pensions Annual Pensions Expected During Year Attachment number 1 \nPage 23 of 61 Item # 2 Active Members Inactive Members 1/1/071,692 819 $79,385,090 $559,830,590 $22,417,537$9,192,40711.58% 1/1/081,641 878 80,371,617 610,979,087 21,580,6666,920,4008.61 1/1/091,628 903 82,104,837 536,834,473 20,681,03020,005,23824.37 1/1/101,567 955 80,443,199 618,444,906 19,664,44315,879,62819.74 1/1/111,508 1,024 76,505,599 646,956,800 18,744,67515,461,72520.21 1/1/121,468 1,072 74,765,020 664,087,199 17,784,33217,064,10022.82 1/1/131,474 1,127 74,422,344 688,731,221 57,969,87112,845,50117.26 Unfunded Actuarial Liability RECENT HISTORY OF VALUATION RESULTS Number ofEmployer Normal Cost Valuation Date Covered Annual Payroll Actuarial Value of Assets% of PayrollAmount Results before January 1, 2010 are from the January 1, 2009 Report prepared by PricewaterhouseCoopers. 17 Attachment number 1 \nPage 24 of 61 Item # 2 1/1/079/30/08$12,532,39915.79%$12,0000.02%$12,520,39915.77%$12,520,399$12,000$12,532,399 1/1/089/30/0910,086,97812.5512,0000.0110,074,97812.5410,074,97812,00010,086,978 1/1/099/30/1023,960,58629.1812,0000.0123,948,58629.1723,948,58612,00023,960,586 1/1/109/30/1119,373,99224.0812,0000.0119,361,99224.0719,361,99212,00019,373,992 1/1/119/30/1218,898,56724.7012,0000.0118,886,56724.6918,886,56712,00018,898,567 1/1/129/30/1320,925,72027.9912,0000.0220,913,72027.9720,913,72012,00020,925,720 1/1/139/30/1419,608,07826.3512,0000.0219,596,07826.33 --- --- --- RECENT HISTORY OF REQUIRED AND ACTUAL CONTRIBUTIONS Estimated State Required Contributions Employer & StateNet Employer % of PayrollEmployerState Valuation End of Year To Which Valuation Applies Amount Actual Contributions % of PayrollTotalAmount % of PayrollAmount Results before January 1, 2010 are from the January 1, 2009 Report prepared by PricewaterhouseCoopers. 18 Attachment number 1 \nPage 25 of 61 Item # 2 19 ACTUARIAL ASSUMPTIONS AND COST METHOD Valuation Methods Actuarial Cost Method - Normal cost and the allocation of benefit values between service rendered before and after the valuation date were determined using the Frozen Entry-Age Actuarial Cost Method. The excess of the Actuarial Present Value of Projected Benefits of the group included in the valuation, over the sum of the Actuarial Value of Assets, the Unfunded Frozen Actuarial Accrued Liability and the Actuarial Present Value of Future Member Contributions (if any) is allocated as a level percentage of earnings of the group between the valuation date and the assumed retirement age. This allocation is performed for the group as a whole, not as a sum of individual allocations. The portion of this Actuarial Present Value allocated to a specific year is called the Employer Normal Cost. Under this method, actuarial gains (losses) reduce (increase) future Normal Costs. Financing of Unfunded Actuarial Accrued Liabilities - Unfunded Actuarial Accrued Liabilities (full funding credit if assets exceed liabilities) were amortized by level (principal & interest combined) dollar amount contributions over a reasonable period of future years. Actuarial Value of Assets - The Actuarial Value of Assets phase in the difference between the expected and actual return on market value of assets at the rate of 20% per year. The Actuarial Value of Assets will be further adjusted to the extent necessary to fall within the corridor whose lower limit is 80% of the Market Value of plan assets and whose upper limit is 120% of the Market Value of plan assets. During periods when investment performance exceeds the assumed rate, Actuarial Value of Assets will tend to be less than Market Value. During periods when investment performance is less than assumed rate, Actuarial Value of Assets will tend to be greater than Market Value. Valuation Assumptions The actuarial assumptions used in the valuation are shown in this Section. Economic Assumptions The investment return rate assumed in the valuations is 7.00% per year, compounded annually (net rate after investment expenses). The Wage Inflation Rate assumed in this valuation was 2.50% per year. The Wage Inflation Rate is defined to be the portion of total pay increases for an individual that are due to macro economic forces including productivity, price inflation, and labor market conditions. The wage inflation rate does not include pay changes related to individual merit and seniority effects. The assumed real rate of return over wage inflation is defined to be the portion of total investment return that is more than the assumed wage inflation rate. Considering other economic assumptions, the 7.00% investment return rate translates to an assumed real rate of return over wage inflation of 4.50%. The rate of salary increase used for individual members can be seen in the tables below. Part of the assumption is for merit and/or seniority increase, and 2.50% recognizes wage inflation, including price inflation, productivity increases, and other macroeconomic forces. This assumption is used to project a member’s current salary to the salaries upon which benefits will be based. Attachment number 1 \nPage 26 of 61 Item # 2 20 Years of Service 12.50%7.90% 22.50%7.70% 32.50%7.00% 42.50%5.25% 5 - 142.50%4.25% 15 and Higher2.50%3.50%1.00% % Increase in Salary - Hazardous Duty 1.75% Merit and Seniority Base (Inflation) Total Increase 5.40% 5.20% 4.50% 2.75% Years of Service 12.50%7.90% 22.50%5.75% 32.50%5.00% 42.50%4.50% 5 - 92.50%4.00% 10 and Higher2.50%3.50% 2.50% 2.00% 1.50% 1.00% % Increase in Salary - Non-Hazardous Duty Merit and Seniority Base (Inflation) Total Increase 5.40% 3.25% Demographic Assumptions The mortality table was the RP-2000 Combined Healthy Participant Mortality Table for males and females. The provision for future mortality improvements is being made using Scale BB after 2000. This assumption is used to measure the probabilities of each benefit payment being made after retirement. For active members, the probabilities of dying before retirement were based upon the same mortality table as members dying after retirement. All deaths before retirement are assumed to be non-service connected. Sample Attained Ages (in 2013)MenWomenMenWomen 500.21%0.16%35.2537.70 550.350.2530.1232.55 600.620.4425.1727.53 651.090.8320.5122.78 701.821.4316.2118.40 753.112.4012.3714.45 805.293.929.0710.97 Probability of Future Life Dying Next YearExpectancy (years) Attachment number 1 \nPage 27 of 61 Item # 2 21 The rates of retirement used to measure the probability of eligible members retiring under normal and early retirement eligibility during the next year were as follows: Years of Probability of ServiceAgeRetirement 10 - 1950 - 5910% 60 - 6450 65 & Over100 20 & OverUnder 4520 45 - 4915 50 - 5425 55 - 5935 60 - 6450 65 & Over100 Hazardous Duty Retirement Years ofProbability of ServiceAgeRetirement 10 - 1965 - 6945% 70 - 7450 75 & Over100 20 - 2955 - 5920 60 - 6425 65 - 6945 70 & Over100 30 & OverUnder 6540 65 - 6950 70 & Over100 Non-Hazardous Duty Retirement Attachment number 1 \nPage 28 of 61 Item # 2 22 Rates of separation from active membership were as shown below (rates do not apply to members eligible to retire and do not include separation on account of death or disability). This assumption measures the probabilities of members remaining in employment. Years of % of Active Members ServiceAgeSeparating Within Next Year Under 1All Ages12.8% 1All Ages5.7 2All Ages4.8 3 & OverUnder 304.0 30 - 491.0 50 & Over0.0 Hazardous Duty Withdrawal - Males and Females Years of % of Active MembersYears of % of Active Members ServiceAgeSeparating Within Next YearServiceAgeSeparating Within Next Year Under 1Under 3025.0%Under 1Under 2535.0% 30 - 3420.025 - 3430.0 35 - 4915.035 - 3925.0 50 - 5910.040 - 4920.0 60 & Over5.050 - 5915.0 60 & Over5.0 1Under 6015.0 60 & Over10.01Under 3025.0 30 - 5915.0 2Under 4510.060 & Over10.0 45 & Over5.0 2Under 4515.0 3Under 2515.045 - 597.5 25 - 3412.560 & Over6.5 35 & Over5.0 3Under 3020.0 4Under 3015.030 - 5910.0 30 - 4410.060 & Over5.0 45 & Over5.0 4Under 3015.0 5 & OverUnder 3012.530 - 3412.5 30 - 347.035 - 4410.0 35 - 396.045 & Over5.0 40 - 445.0 45 - 493.55 & OverUnder 307.5 50 - 544.030 - 396.5 55 - 595.040 - 445.0 60 & Over7.545 & Over4.0 Non-Hazardous Duty Withdrawal - MalesNon-Hazardous Duty Withdrawal - Females Attachment number 1 \nPage 29 of 61 Item # 2 23 Rates of disability among active members (100% of disabilities are assumed to be service-connected). Sample Ages 200.25%0.375% 250.250.375 300.250.375 350.300.450 400.400.600 450.500.750 500.550.825 550.600.900 600.751.125 651.001.500 701.752.625 MalesFemales Disabled Within Next Year % of Active Members Becoming Hazardous Duty Disability Sample Ages 200.05%0.05% 250.050.05 300.050.05 350.060.06 400.070.07 450.090.09 500.120.12 550.170.17 600.270.27 650.420.42 700.670.67 Non-Hazardous Duty Disability % of Active Members Becoming Disabled Within Next Year MalesFemales Attachment number 1 \nPage 30 of 61 Item # 2 24 Miscellaneous and Technical Assumptions Administrative & Investment Expenses Effective January 1, 2013, the investment return assumption is intended to be the net return after investment expenses. Annual administrative expenses are assumed to be equal to the administrative expenses of the previous year. Assumed administrative expenses are added to the Normal Cost. (Previously, the investment return assumption was intended to be the gross return before investment expenses, and assumed administrative and investment expenses were added to the Normal Cost.) Benefit Service Exact fractional service is used to determine the amount of benefit payable. Cost of Living Increases The adjustment is 1.5% annually commencing on each April 1 for all retirees and beneficiaries who have received at least 6 monthly benefit payments. There is a five-year delay in the COLA for non- grandfathered non-hazardous duty members for benefits accrued after January 1, 2013. There is no COLA for non-grandfathered hazardous duty members for benefits accrued after January 1, 2013. Decrement Operation Disability and mortality decrements operate during retirement eligibility. Decrement Timing Decrements of all types are assumed to occur at the beginning of the year. Eligibility Testing Eligibility for benefits is determined based upon the age nearest birthday and service nearest whole year on the date the decrement is assumed to occur. Forfeitures For vested separations from service, it is assumed that 0% of members separating will withdraw their contributions and forfeit an employer financed benefit. It was further assumed that the liability at termination is the greater of the vested deferred benefit (if any) or the member’s accumulated contributions. Incidence of Contributions Employer contributions are assumed to be made in equal installments during the first two quarters of the fiscal year. Member contributions are assumed to be received continuously throughout the year based upon the computed percent of payroll shown in this report, and the actual payroll payable at the time contributions are made. Marriage Assumption 85% of males and 85% of females are assumed to be married for purposes of death-in-service benefits. Male spouses are assumed to be five years older than female spouses for active member valuation purposes. Attachment number 1 \nPage 31 of 61 Item # 2 25 Normal Form of Benefit The normal form of benefit is a life annuity for non-grandfathered non-hazardous duty members. For all other members, the normal form of benefit is a life annuity that includes a survivor benefit where after the participant’s death, 100% is payable to the spouse for five years, after which the benefit is reduced to 50%. Pay Increase Timing End of fiscal year. This is equivalent to assuming that reported pays represent the annual rate of pay on the valuation date. The pay used for the valuation is equal to the greater of the actual pay for the plan year increased by the salary scale assumption rate (which varies by years of service) and the annual rate of pay on the valuation date. Service Credit Accruals It is assumed that members accrue one year of service credit per year. Attachment number 1 \nPage 32 of 61 Item # 2 26 GLOSSARY Actuarial Accrued Liability (AAL) The difference between the Actuarial Present Value of Future Benefits, and the Actuarial Present Value of Future Normal Costs. Actuarial Assumptions Assumptions about future plan experience that affect costs or liabilities, such as: mortality, withdrawal, disablement, and retirement; future increases in salary; future rates of investment earnings; future investment and administrative expenses; characteristics of members not specified in the data, such as marital status; characteristics of future members; future elections made by members; and other items. Actuarial Cost Method A procedure for allocating the Actuarial Present Value of Future Benefits between the Actuarial Present Value of Future Normal Costs and the Actuarial Accrued Liability. Actuarial Equivalent Of equal Actuarial Present Value, determined as of a given date and based on a given set of Actuarial Assumptions. Actuarial Present Value (APV) The amount of funds required to provide a payment or series of payments in the future. It is determined by discounting the future payments with an assumed interest rate and with the assumed probability each payment will be made. Actuarial Present Value of Future Benefits (APVFB) The Actuarial Present Value of amounts which are expected to be paid at various future times to active members, retired members, beneficiaries receiving benefits, and inactive, nonretired members entitled to either a refund or a future retirement benefit. Expressed another way, it is the value that would have to be invested on the valuation date so that the amount invested plus investment earnings would provide sufficient assets to pay all projected benefits and expenses when due. Actuarial Valuation The determination, as of a valuation date, of the Normal Cost, Actuarial Accrued Liability, Actuarial Value of Assets, and related Actuarial Present Values for a plan. An Actuarial Valuation for a governmental retirement system typically also includes calculations of items needed for compliance with GASB No. 25, such as the Funded Ratio and the Annual Required Contribution (ARC). Actuarial Value of Assets The value of the assets as of a given date, used by the actuary for valuation purposes. This may be the market or fair value of plan assets or a smoothed value in order to reduce the year-to-year volatility of calculated results, such as the funded ratio and the actuarially required contribution (ARC). Attachment number 1 \nPage 33 of 61 Item # 2 27 Amortization Method A method for determining the Amortization Payment. The most common methods used are level dollar and level percentage of payroll. Under the Level Dollar method, the Amortization Payment is one of a stream of payments, all equal, whose Actuarial Present Value is equal to the UAAL. Under the Level Percentage of Pay method, the Amortization Payment is one of a stream of increasing payments, whose Actuarial Present Value is equal to the UAAL. Under the Level Percentage of Pay method, the stream of payments increases at the rate at which total covered payroll of all active members is assumed to increase. Amortization Payment That portion of the plan contribution or ARC which is designed to pay interest on and to amortize the Unfunded Actuarial Accrued Liability. Amortization Period The period used in calculating the Amortization Payment. Annual Required Contribution (ARC) The employer’s periodic required contributions, expressed as a dollar amount or a percentage of covered plan compensation, determined under GASB No. 25. The ARC consists of the Employer Normal Cost and Amortization Payment. Closed Amortization Period A specific number of years that is reduced by one each year, and declines to zero with the passage of time. For example if the amortization period is initially set at 30 years, it is 29 years at the end of one year, 28 years at the end of two years, etc. Employer Normal Cost The portion of the Normal Cost to be paid by the employer. This is equal to the Normal Cost less expected member contributions. Equivalent Single Amortization Period For plans that do not establish separate amortization bases (separate components of the UAAL), this is the same as the Amortization Period. For plans that do establish separate amortization bases, this is the period over which the UAAL would be amortized if all amortization bases were combined upon the current UAAL payment. Experience Gain/Loss A measure of the difference between the normal cost rate from last year and the normal cost rate from this year. Funded Ratio The ratio of the Actuarial Value of Assets to the Actuarial Accrued Liability. GASB Governmental Accounting Standards Board. GASB No. 25 and GASB No. 27 These are the governmental accounting standards that set the accounting rules for public retirement systems and the employers that sponsor or contribute to them. Statement No. 27 sets the accounting rules for the employers that sponsor or contribute to public retirement systems, while Statement No. 25 sets the rules for the systems themselves. Attachment number 1 \nPage 34 of 61 Item # 2 28 Normal Cost The annual cost assigned, under the Actuarial Cost Method, to the current plan year. Open Amortization Period An open amortization period is one which is used to determine the Amortization Payment but which does not change over time. In other words, if the initial period is set as 30 years, the same 30-year period is used in determining the Amortization Period each year. In theory, if an Open Amortization Period is used to amortize the Unfunded Actuarial Accrued Liability, the UAAL will never completely disappear, but will become smaller each year, either as a dollar amount or in relation to covered payroll. Unfunded Actuarial Accrued Liability The difference between the Actuarial Accrued Liability and Actuarial Value of Assets. Valuation Date The date as of which the Actuarial Present Value of Future Benefits are determined. The benefits expected to be paid in the future are discounted to this date. Attachment number 1 \nPage 35 of 61 Item # 2 SECTION C PENSION FUND INFORMATION Attachment number 1 \nPage 36 of 61 Item # 2 29 Statement of Plan Assets at Market Value 20122011 A.Cash and Cash Equivalents (Operating Cash)-$ -$ B.Receivables: 1.Member Contributions-$ -$ 2.Employer Contributions10,749,771 9,615,795 3.Investment Income and Other Receivables1,972,565 2,093,552 4.Total Receivables12,722,336$ 11,709,347$ C.Investments 1.Short-Term Investments35,028,246$ 35,371,258$ 2.Domestic Equities363,569,880 321,443,792 3.International Equities106,375,862 87,568,707 4.Commodities- 1,165,360 5.Domestic Fixed Income184,631,350 174,176,875 6.International Fixed Income- - 7.Real Estate34,251,338 25,996,447 8.Private Equity- - 9.Total Investments723,856,676$ 645,722,439$ D.Liabilities 1.Benefits Payable-$ -$ 2.Accrued Expenses and Other Payables(800,113) (726,204) 3.Total Liabilities(800,113)$ (726,204)$ E.Total Market Value of Assets Available for Benefits735,778,899$ 656,705,582$ F.Allocation of Investments 1.Short-Term Investments4.84%5.48% 2.Domestic Equities50.22%49.78% 3.International Equities14.70%13.56% 4.Commodities0.00%0.18% 5.Domestic Fixed Income25.51%26.97% 6.International Fixed Income0.00%0.00% 7.Real Estate4.73%4.03% 8.Private Equity0.00%0.00% 9.Total Investments100.00%100.00% December 31 Item Attachment number 1 \nPage 37 of 61 Item # 2 30 Reconciliation of Plan Assets 20122011 A.Market Value of Assets at Beginning of Year656,705,582$ 670,340,014$ B.Revenues and Expenditures 1.Contributions a.Employee Contributions5,853,385$ 5,796,620$ b.Employer Contributions20,196,816 17,809,019 c.State Contributions12,000 12,000 d.Total26,062,201$ 23,617,639$ 2.Investment Income a.Interest, Dividends, and Other Income14,808,280$ 14,447,428$ b.Net Realized Gains/(Losses)20,545,170 22,674,910 c.Net Unrealized Gains/(Losses)55,272,612 (39,262,170) d.Investment Expenses(3,475,330) (3,473,458) e.Net Investment Income87,150,732$ (5,613,290)$ 3.Benefits and Refunds a.Refunds(693,088)$ (827,529)$ b.Regular Monthly Benefits(33,260,268) (30,640,931) c.Partial Lump-Sum Benefits Paid- - d.Total(33,953,356)$ (31,468,460)$ 4.Administrative and Miscellaneous Expenses(186,260)$ (170,321)$ 5.Transfers-$ -$ C.Market Value of Assets at End of Year735,778,899$ 656,705,582$ December 31 Item Attachment number 1 \nPage 38 of 61 Item # 2 Development of Actuarial Value of Assets Valuation Date - December 31201120122013201420152016 A.Actuarial Value of Assets Beginning of Year646,956,800$ 664,087,199$ B.Market Value End of Year656,705,582 735,778,899 C.Market Value Beginning of Year670,340,014 656,705,582 D.Non-Investment/Administrative Net Cash Flow(11,494,600) (11,552,745) E.Investment Income E1. Actual Market Total: B-C-D(2,139,832) 90,626,062 E2. Assumed Rate of Return7.50%7.50%7.00%7.00%7.00%7.00% E3. Assumed Amount of Return*49,358,434 48,263,087 E4. Amount Subject to Phase-In: E1–E3(51,498,266) 42,362,975 F.Phase-In Recognition of Investment Income F1. Current Year: 0.2 x E4(10,299,653) 8,472,595 F2. First Prior Year11,581,278 (10,299,653) 8,472,595 F3. Second Prior Year20,893,703 11,581,278 (10,299,653) 8,472,595 F4. Third Prior Year(42,714,243) 20,893,703 11,581,278 (10,299,653) 8,472,595 F5. Fourth Prior Year(194,520) (42,714,243) 20,893,703 11,581,278 (10,299,653) 8,472,595 F6. Total Phase-Ins(20,733,435) (12,066,320) 30,647,923 9,754,220 (1,827,058) 8,472,595 G.Actuarial Value of Assets End of Year G1. Preliminary Actuarial Value of Assets 664,087,199$ 688,731,221$ G2. Upper Corridor Limit: 120%*B788,046,698$ 882,934,679$ G3. Lower Corridor Limit: 80%*B525,364,466$ 588,623,119$ G4. Funding Value End of Year664,087,199$ 688,731,221$ H.Recognized Investment Earnings28,624,999$ 36,196,767$ I.Difference between Market & Actuarial Value(7,381,617)$ 47,047,678$ J.Actuarial Rate of Return*4.46%5.50% K.Market Value Rate of Return*-0.32%13.92% L.Ratio of Actuarial Value of Assets to Market Value 101.12%93.61% * Before investment expenses The Actuarial Value of Assets recognizes assumed investment return (line E3) fully each year. Differences between actual and assumed investment income (Line E4) are phased-in over a closed 5-year period. During periods when investment performance exceeds the assumed rate, Actuarial Value of Assets will tend to be less than Market Value. During periods when investment performance is less than the assumed rate, Actuarial Value of Assets will tend to be greater than Market Value. If assumed rates are exactly realized for 5 consecutive years, Actuarial Value of Assets will become equal to Market Value. 31 Attachment number 1 \nPage 39 of 61 Item # 2 32 Investment Rate of Return Plan Year Ending December 31 198613.21 % N/A 198710.78N/A 19889.12N/A 198920.84N/A 19906.21N/A 199128.52N/A 19926.49N/A 19939.297.42% 19940.896.28 199523.369.14 199614.8011.54 199717.4913.74 199816.7415.28 199918.6117.96 2000(3.43)12.42 2001(5.16)7.40 2002(8.83)(1.85) 200320.087.45 20049.732.18 20056.674.58 200611.807.87 20077.2910.68 2008(27.01)(10.61) 200930.9316.53 201017.505.98 2011(0.32)4.46 201213.925.50 Average returns: Last five years:4.98 % 4.00 % Last ten years:7.95 % 5.25 % All years:9.27 % 7.50 % ActuarialMarket The above rates are based on the retirement system’s financial information reported to the actuary. They may differ from figures that the investment consultant reports, in part because of differences in the handling of administrative and investment expenses, and in part because of differences in the handling of cash flows. Attachment number 1 \nPage 40 of 61 Item # 2 SECTION D FINANCIAL ACCOUNTING INFORMATION Attachment number 1 \nPage 41 of 61 Item # 2 33 A.Valuation Date B.Actuarial Present Value of Accumulated Plan Benefits 1.Vested Benefits a.Members Currently Receiving Payments$470,453,496$399,167,786 b.Terminated Vested Members16,774,34112,624,011 c.Other Members224,439,825208,733,024 d.Total711,667,662620,524,821 2.Non-Vested Benefits18,256,16917,029,747 3.Total Actuarial Present Value of Accumulated Plan Benefits: 1d + 2729,923,831637,554,568 4.Accumulated Contributions of Active Members54,638,46754,042,120 C.Changes in the Actuarial Present Value of Accumulated Plan Benefits 1.Total Value at Beginning of Year637,554,568604,992,896 2.Increase (Decrease) During the Period Attributable to: a.Plan Amendment(11,689,639)0 b.Change in Actuarial Assumptions73,651,5420 c.Latest Member Data, Benefits Accumulated and Decrease in the Discount Period64,360,71664,030,132 d.Benefits Paid(33,953,356)(31,468,460) e.Net Increase92,369,26332,561,672 3.Total Value at End of Period729,923,831637,554,568 D. a.Vested652,956,258603,958,570 b.Non-Vested14,428,28315,859,179 c.Total667,384,541619,817,749 E.Market Value of Assets735,778,899656,705,582 F.Funded Ratio Using FRS Interest Rate (7.75%)110.25%105.95% G.Actuarial Assumptions - See page entitled Actuarial Assumptions and Methods Actuarial Present Value of Accumulated Plan Benefits Using FRS Interest Rate (7.75%) FASB NO. 35 INFORMATION January 1, 2013January 1, 2012 Attachment number 1 \nPage 42 of 61 Item # 2 SCHEDULE OF FUNDING PROGRESS (GASB Statement No. 25) 1/1/1991$141,865,764$152,118,075$10,252,31193.3%$34,532,753 29.7 % 1/1/1992 184,746,269194,550,1269,803,85795.036,626,332 26.8 1/1/1993198,345,690207,639,7019,294,01195.538,731,039 24.0 1/1/1994213,014,474225,549,34612,534,87294.438,710,974 32.4 1/1/1995225,482,726237,428,79611,946,07095.041,371,332 28.9 1/1/1996 244,744,488271,124,38126,379,89390.344,208,964 59.7 1/1/1997272,346,200297,892,50225,546,30291.444,955,348 56.8 1/1/1998308,596,133333,250,49224,654,35992.647,281,198 52.1 1/1/1999354,088,751377,788,73123,699,98093.749,666,523 47.7 1/1/2000414,826,422490,426,94075,600,51884.650,937,403 148.4 1/1/2001461,724,610535,672,20873,947,59886.254,864,584 134.8 1/1/2002491,859,015533,191,48741,332,47292.258,929,582 70.1 1/1/2003477,541,459517,933,49540,392,03692.265,150,820 62.0 1/1/2004507,256,663546,915,62739,658,96492.769,907,473 56.7 1/1/2005510,265,274549,136,18438,870,91092.973,836,304 52.6 1/1/2006 525,573,824563,597,580 38,023,75693.3 76,010,269 50.0 1/1/2007559,830,590582,248,127 22,417,53796.1 79,385,090 28.2 1/1/2008610,979,087632,559,753 21,580,66696.6 80,371,617 26.9 1/1/2009536,834,473557,515,50320,681,03096.382,104,837 25.2 1/1/2010618,444,906638,109,34919,664,44396.980,443,199 24.4 1/1/2011646,956,800665,701,47518,744,67597.276,505,599 24.5 1/1/2012664,087,199681,871,53117,784,33297.474,765,020 23.8 1/1/2013 (b)688,731,221705,169,08216,437,86197.776,522,038 21.5 1/1/2013 (a1)688,731,221680,608,117(8,123,104)101.274,422,344 (10.9) 1/1/2013 (a2)688,731,221746,701,09257,969,87192.274,422,344 77.9 Actuarial Valuation Date UAAL As % of Covered Payroll (b - a) / c Covered Payroll (c) Funded Ratio (a) / (b) Actuarial Value of Assets (a) Unfunded AAL (UAAL) (b) - (a) Actuarial Accrued Liability (AAL) - FEA (b) Results before January 1, 2010 are from the January 1, 2009 Report prepared by PricewaterhouseCoopers. (a) = after changes (b) = before changes 34 Attachment number 1 \nPage 43 of 61 Item # 2 35 SCHEDULE OF CONTRIBUTIONS FROM EMPLOYER AND THE STATE OF FLORIDA (GASB Statement No. 25) Fiscal Year Ended September 30 2008$12,532,399$12,532,399100.0% 200910,086,97810,086,978100.0 201023,960,58623,960,586100.0 201119,373,99219,373,992100.0 201218,898,56718,898,567100.0 201320,925,72020,925,720100.0 Percentage Contributed Annual Required ContributionContribution Actual Attachment number 1 \nPage 44 of 61 Item # 2 36 REQUIRED SUPPLEMENTARY INFORMATION GASB Statement No. 25 and No. 27 The information presented in the required supplementary schedules was determined as part of the actuarial valuations at the dates indicated. Additional information as of the latest actuarial valuation: Valuation Date January 1, 2013 Contribution Rates Employer (and State) 26.35% Plan members Hazardous: 10.00% (8.00% if grandfathered) Non-Hazardous: 8.00% Actuarial Cost Method Frozen Entry Age Normal Amortization Method Level dollar, closed Remaining Amortization Period 30 years Asset Valuation Method Phase-in of 20% of difference between actual and expected return on market value of assets. Actuarial Assumptions Investment rate of return 7.00% (net of investment expenses) Projected salary increases 3.50% - 7.90% based on service Includes inflation and other general increases at 2.50% Cost of Living adjustments 1.50% each year on April 1 (For benefits accrued after January 1, 2013: five-year delay for non-grandfathered non-hazardous duty members, and no COLA for non- grandfathered hazardous duty members) Attachment number 1 \nPage 45 of 61 Item # 2 SECTION E MISCELLANEOUS INFORMATION Attachment number 1 \nPage 46 of 61 Item # 2 37 A. 1.Number Included in Last Valuation1,468 1,508 2.New Members Included in Current Valuation11882 3.Non-Vested Employment Terminations(40)(64) 4.Vested Employment Terminations(18)(11) 5.Service Retirements(51)(43) 6.Disability Retirements(3)(6) 7.Deaths(1)0 8.Data Corrections/Rehired Members12 9.Number Included in This Valuation1,474 1,468 B. 1.Number Included in Last Valuation6268 2.Additions from Active Members1811 3.Lump Sum Payments/Refund of Contributions(4)(2) 4.Payments Commenced(10)(16) 5.Deaths(1)0 6.Conversion from Disability/Rehired Members(1)0 7.Data Corrections01 8.Number Included in This Valuation6462 C. 1.Number Included in Last Valuation1,010 956 2.Additions from Active Members5449 3.Additions from Terminated Vested Members1016 4.Deaths Resulting in No Further Payments(12)(13) 5.Deaths Resulting in New Survivor Benefits10 6.End of Certain Period - No Further Payments(1)(1) 7.Data Correction/Waiver of Benefits13 8.Number Included in This Valuation1,063 1,010 RECONCILIATION OF MEMBERSHIP DATA Active Members Service Retirees, Disability Retirees and Beneficiaries Terminated Vested Members From 1/1/2011From 1/1/2012 To 1/1/2012To 1/1/2013 Attachment number 1 \nPage 47 of 61 Item # 2 38 ACTIVE PARTICIPANT DISTRIBUTION ALL ACTIVE MEMBERS Age Group0-1 1-2 2-3 3-4 4-5 5-9 10-14 15-19 20-24 25-29 30-34 35+Totals 20-24 NO.156332000000029 TOT PAY349,056180,668114,168126,48657,8720000000828,250 AVG PAY23,27030,11138,05642,16228,936000000028,560 25-29 NO.2720791344100000121 TOT PAY848,488748,826217,024387,350476,5762,068,33126,260000004,772,855 AVG PAY31,42537,44131,00343,03936,66047,00826,2600000039,445 30-34 NO.1210683891100000139 TOT PAY407,109354,684187,112425,849169,6534,330,492632,130000006,507,029 AVG PAY33,92635,46831,18553,23156,55148,65757,4660000046,813 35-39 NO.101312477567140000202 TOT PAY320,887451,411491,896141,561320,2163,982,9593,768,898985,597000010,463,425 AVG PAY32,08934,72440,99135,39045,74553,10656,25270,400000051,799 40-44 NO.1086586161566000221 TOT PAY296,092311,478246,397195,806364,3173,070,5884,057,0414,063,178402,47600013,007,373 AVG PAY29,60938,93541,06639,16145,54050,33866,50972,55767,07900058,857 45-49 NO.144656374357361210221 TOT PAY582,766153,168200,122169,888191,1731,642,3122,149,7463,711,8032,613,831873,73067,351012,355,890 AVG PAY41,62638,29233,35433,97831,86244,38749,99465,11972,60672,81167,351055,909 50-54 NO.187426454441353750244 TOT PAY676,206204,501200,42667,813218,8591,683,4351,998,9822,025,9122,394,2772,212,791384,252012,067,454 AVG PAY37,56729,21450,10633,90636,47637,41045,43149,41268,40859,80576,850049,457 55-59 NO.75421313133261950164 TOT PAY279,233170,341167,03787,84727,4641,196,9101,310,1471,589,9541,531,2641,229,486307,42307,897,106 AVG PAY39,89034,06841,75943,92427,46438,61042,26348,18058,89564,71061,485048,153 60-64 NO.34202221921131431104 TOT PAY67,140146,13277,774064,966983,997852,660993,496859,988918,996205,07546,0625,216,286 AVG PAY22,38036,53338,887032,48344,72744,87747,30966,15365,64368,35846,06250,157 65+ NO.11100944440129 TOT PAY31,14123,85523,33300351,743198,956198,648224,677204,213050,1101,306,676 AVG PAY31,14123,85523,3330039,08349,73949,66256,16951,053050,11045,058 TOT NO.11778513848413281226120861421,474 TOT AMT3,858,1182,745,0641,925,2891,602,6001,891,09619,310,76714,994,82013,568,5888,026,5135,439,216964,10196,17274,422,344 AVG AMT32,97535,19337,75142,17439,39846,75753,36260,03866,88863,24768,86448,08650,490 Years of Service to Valuation Date Attachment number 1 \nPage 48 of 61 Item # 2 39 ACTIVE PARTICIPANT DISTRIBUTION HAZARDOUS DUTY MEMBERS Age Group0-1 1-2 2-3 3-4 4-5 5-9 10-14 15-19 20-24 25-29 30-34 35+Totals 20-24 NO.0112000000004 TOT PAY055,05056,91795,63100000000207,598 AVG PAY055,05056,91747,8160000000051,900 25-29 NO.660421800000036 TOT PAY269,050344,4600231,934119,2971,210,0790000002,174,820 AVG PAY44,84257,410057,98459,64967,22700000060,412 30-34 NO.210723750000054 TOT PAY98,05879,8740398,137121,0142,471,053423,591000003,591,727 AVG PAY49,02979,874056,87760,50766,78584,7180000066,513 35-39 NO.02112383210000086 TOT PAY0119,14159,01148,888127,1702,550,7072,449,817823,53400006,178,268 AVG PAY059,57159,01148,88863,58567,12476,55782,353000071,840 40-44 NO.011222540342000107 TOT PAY050,91058,688100,039135,7941,721,0593,118,3252,994,893216,3070008,396,015 AVG PAY050,91058,68850,02067,89768,84277,95888,085108,15400078,467 45-49 NO.4000099242040070 TOT PAY295,0330000613,239722,8302,132,1921,787,822399,885005,951,001 AVG PAY73,758000068,13880,31488,84189,39199,9710085,014 50-54 NO.401013241453037 TOT PAY288,3860113,331060,613189,744161,707343,7431,245,352439,217285,46303,127,556 AVG PAY72,0970113,331060,61363,24880,85485,93688,95487,84395,154084,529 55-59 NO.20000131121011 TOT PAY147,554000074,830240,89477,62180,488206,44878,3230906,158 AVG PAY73,777000074,83080,29877,62180,488103,22478,323082,378 60-64 NO.0000040111108 TOT PAY00000339,636092,05488,95686,941115,3690722,956 AVG PAY0000084,909092,05488,95686,941115,369090,370 65+ NO.0000000000000 TOT PAY0000000000000 AVG PAY0000000000000 TOT NO.181141691359174381250413 TOT AMT1,098,081649,435287,947874,629563,8889,170,3477,117,1646,464,0373,418,9251,132,491479,155031,256,099 AVG AMT61,00559,04071,98754,66462,65467,92878,21187,35289,97294,37495,831075,681 Years of Service to Valuation Date Attachment number 1 \nPage 49 of 61 Item # 2 40 ACTIVE PARTICIPANT DISTRIBUTION NON-HAZARDOUS DUTY MEMBERS Age Group 0-1 1-2 2-3 3-4 4-5 5-9 10-14 15-19 20-24 25-29 30-34 35+Totals 20-24 NO.155212000000025 TOT PAY349,056125,61857,25130,85557,8720000000620,652 AVG PAY23,27025,12428,62630,85528,936000000024,826 25-29 NO.211475112610000085 TOT PAY579,438404,366217,024155,416357,279858,25226,260000002,598,035 AVG PAY27,59228,88331,00331,08332,48033,01026,2600000030,565 30-34 NO.1096115260000085 TOT PAY309,051274,810187,11227,71248,6391,859,439208,539000002,915,302 AVG PAY30,90530,53431,18527,71248,63935,75834,7570000034,298 35-39 NO.10111135373540000116 TOT PAY320,887332,270432,88592,673193,0461,432,2521,319,081162,06300004,285,157 AVG PAY32,08930,20639,35330,89138,60938,71037,68840,516000036,941 40-44 NO.1075363621224000114 TOT PAY296,092260,568187,70995,767228,5231,349,529938,7161,068,285186,1690004,611,358 AVG PAY29,60937,22437,54231,92238,08737,48744,70148,55846,54200040,451 45-49 NO.10465628343316810151 TOT PAY287,733153,168200,122169,888191,1731,029,0731,426,9161,579,611826,009473,84567,35106,404,889 AVG PAY28,77338,29233,35433,97831,86236,75341,96847,86751,62659,23167,351042,416 50-54 NO.147325424237213220207 TOT PAY387,820204,50187,09567,813158,2461,493,6911,837,2751,682,1691,148,9251,773,57498,78908,939,898 AVG PAY27,70129,21429,03233,90731,64935,56443,74545,46454,71155,42449,395043,188 55-59 NO.55421302832251740153 TOT PAY131,679170,341167,03787,84727,4641,122,0801,069,2531,512,3331,450,7761,023,038229,10006,990,948 AVG PAY26,33634,06841,75943,92427,46437,40338,18847,26058,03160,17957,275045,692 60-64 NO.3420218192012132196 TOT PAY67,140146,13277,774064,966644,361852,660901,442771,032832,05589,70646,0624,493,330 AVG PAY22,38036,53338,887032,48335,79844,87745,07264,25364,00444,85346,06246,806 65+ NO.11100944440129 TOT PAY31,14123,85523,33300351,743198,956198,648224,677204,213050,1101,306,676 AVG PAY31,14123,85523,3330039,08349,73949,66256,16951,053050,11045,058 TOT NO.99674722392781901528274921,061 TOT AMT2,760,0372,095,6291,637,342727,9711,327,20810,140,4207,877,6567,104,5514,607,5884,306,725484,94696,17243,166,245 AVG AMT27,87931,27834,83733,09034,03136,47641,46146,74056,19058,19953,88348,08640,684 Years of Service to Valuation Date Attachment number 1 \nPage 50 of 61 Item # 2 41 INACTIVE PARTICIPANT DISTRIBUTION DisabledRetired TotalTotalTotalTotal Age GroupNumberBenefitsNumberBenefitsNumberBenefitsNumberBenefits Under 20- - - - - - 8 124,415 20-24- - - - - - - - 25-29- - - - - - - - 30-34- - 1 38,782 - - - - 35-394 71,731 - - - - - - 40-4410 170,700 4 149,287 8 314,415 3 59,118 45-4914 332,182 7 245,321 22 911,094 3 40,387 50-5423 566,850 19 609,669 57 2,716,131 3 75,480 55-595 83,694 24 573,991 174 7,068,197 15 318,218 60-648 166,129 26 677,593 191 7,485,622 7 128,214 65-69- - 26 591,530 165 5,382,935 17 371,733 70-74- - 14 328,961 77 2,588,244 21 355,762 75-79- - 10 174,864 54 1,479,975 22 273,186 80-84- - 4 87,591 21 427,164 11 263,867 85-89- - 2 6,985 17 266,958 15 122,766 90-94- - - - 8 138,611 4 12,167 95-99- - - - 1 4,369 2 4,368 100 & Over- - - - - - - - Total64 1,391,286 137 3,484,574 795 28,783,715 131 2,149,681 Average Age51 63 64 69 Terminated Vested Deceased with Beneficiary Attachment number 1 \nPage 51 of 61 Item # 2 SECTION F SUMMARY OF PLAN PROVISIONS Attachment number 1 \nPage 52 of 61 Item # 2 42 SUMMARY OF PLAN PROVISIONS A. Ordinances The Plan was established under the Code of Ordinances for the City of Clearwater, Florida, Chapter 2, Article V, Division 3 and was most recently amended under Ordinance No. 8333-12 passed and adopted on July 19, 2012 and enacted by public referendum in November 2012. The Plan is also governed by certain provisions of Part VII, Chapter 112, Florida Statutes (F.S.) and the Internal Revenue Code. B. Effective Date Restated Plan Effective Date: January 1, 2013 (previous restated Plan Effective Date was January 1, 1996). C. Plan Year January 1 through December 31. D. Type of Plan Qualified, governmental defined benefit retirement plan; for GASB purposes it is a single employer plan. E. Eligibility Requirements All full-time permanent employees of the City are required to participate and become participants on their date of hire. F. Grandfathered Members Members who are eligible for normal retirement as of January 1, 2013 are grandfathered in the plan provisions in effect before Ordinance No. 8333-12. G. Credited Service Credited Service is measured as the total number of years and fractional parts of years from the date of employment to the date of termination or retirement. No service is credited for any periods of employment for which a participant received a refund of their contributions. H. Compensation The total compensation for services rendered to the City reportable on the participant’s W-2 form, plus all tax deferred, tax sheltered or tax exempt items of income derived from elective employee payroll deductions or salary reductions, but excluding any lump sum payments of unused vacation and sick leave, pay for off-duty employment, and clothing, car or meal allowances. Effective January 1, 2013: For non-grandfathered hazardous duty members, the amount of overtime included in Compensation is limited to 300 hours per year; For non-grandfathered non-hazardous duty members, Compensation excludes overtime and additional pay above the base rate of pay. Attachment number 1 \nPage 53 of 61 Item # 2 43 I. Average Monthly Compensation (AMC) One-twelfth of the average of Compensation during the highest 5 years out of the last 10 years preceding termination or retirement. J. Normal Retirement Eligibility: For Non-Hazardous Duty Employment A participant hired before January 1, 2013 may retire on the first day of the month coincident with or next following the earliest of: (1) age 55 with 20 years of Credited Service, or (2) 30 years of Credited Service regardless of age, or (3) age 65 with 10 years of Credited Service. A participant hired on or after January 1, 2013 may retire on the first day of the month coincident with or next following the earliest of: (1) age 60 with 25 years of Credited Service, or (2) age 65 with 10 years of Credited Service For Hazardous Duty Employment-Police Officers and Firefighters A participant may retire on the first day of the month coincident with or next following the earlier of: (1) age 55 with 10 years of Credited Service, or (2) 20 years of Credited Service regardless of age. Benefit: 2.75% of AMC multiplied by years of Credited Service. For Non-Hazardous Duty participants hired on or after January 1, 2013, 2.00% of AMC multiplied by years of Credited Service. Normal Form of Benefit: For Non-Hazardous Duty Employment (Non-Grandfathered) A monthly annuity is paid for the life of the participant. For Hazardous Duty Employment-Police Officers and Firefighters (and Grandfathered Non-Hazardous Duty Employment) A monthly annuity is paid 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 for 5 years. After 5 years, such survivor annuity is reduced to 50% of the original amount. The survivor annuity ceases upon death or remarriage of the spouse. 120 monthly payments are guaranteed for police officers and firefighters. Optional forms of benefits are available. Attachment number 1 \nPage 54 of 61 Item # 2 44 COLA: For Non-Hazardous Duty Employment 1.5% annually commencing on each April 1 for all retirees and beneficiaries who have received at least 6 monthly benefit payments. For non-grandfathered members (not eligible for normal retirement on January 1, 2013), there is a five-year delay (after the retirement date) until this COLA is applied to benefits accrued after January 1, 2013. For Hazardous Duty Employment-Police Officers and Firefighters 1.5% annually commencing on each April 1 for all retirees and beneficiaries who have received at least 6 monthly benefit payments. For non-grandfathered members (not eligible for normal retirement on January 1, 2013), there is no COLA for benefits accrued after January 1, 2013. K. Early Retirement Eligibility: Police Officers and Firefighters may elect to retire earlier than the Normal Retirement Eligibility upon the attainment of age 50 with 10 years of Credited Service. Benefit: The Normal Retirement Benefit is reduced by 3.0% for each year by which the Early Retirement date precedes age 55. Normal Form of Benefit: A monthly annuity is paid 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 for 5 years. After 5 years, such survivor annuity is reduced to 50% of the original amount. The survivor annuity ceases upon death or remarriage of the spouse. 120 monthly payments are guaranteed for police officers and firefighters. Optional forms of benefits are available. COLA: 1.5% annually commencing on each April 1 for all retirees and beneficiaries who have received at least 6 monthly benefit payments. For non-grandfathered members (not eligible for normal retirement on January 1, 2013), there is no COLA for benefits accrued after January 1, 2013. L. Delayed Retirement Same as Normal Retirement taking into account Compensation earned and service credited until the date of actual retirement. M. Service Connected Disability Eligibility: Any participant who becomes totally and permanently disabled due to an illness or injury contracted in the line of duty and is deemed to be unable to perform useful and efficient service to the City is immediately eligible for a disability benefit. Benefit: For Non-Hazardous Duty Employment Participant’s accrued Normal Retirement Benefit taking into account Compensation earned and service credited until the date of disability. Benefit is guaranteed to be no less than 42% of the participant’s AMC (66 2/3% of the participant’s AMC if grandfathered). Disability benefits, when combined with Worker’s Compensation Attachment number 1 \nPage 55 of 61 Item # 2 45 benefits, cannot exceed and will be limited to 100% of the participant’s AMC on the date of disability. For Hazardous Duty Employment-Police Officers and Firefighters Participant’s accrued Normal Retirement Benefit taking into account Compensation earned and service credited until the date of disability. Benefit is guaranteed to be no less than 66 2/3% of the participant’s AMC. Disability benefits, when combined with Worker’s Compensation benefits, cannot exceed and will be limited to 100% of the participant’s AMC on the date of disability. Normal Form of Benefit: For Non-Hazardous Duty Employment (Non-Grandfathered) A monthly annuity is paid for the life of the participant. For Hazardous Duty Employment-Police Officers and Firefighters (and Grandfathered Non-Hazardous Duty Employment) A monthly annuity is paid 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 for 5 years. After 5 years, such survivor annuity is reduced to 50% of the original amount. The survivor annuity ceases upon death or remarriage of the spouse. 120 monthly payments are guaranteed for police officers and firefighters. Optional forms of benefits are available. COLA: For Non-Hazardous Duty Employment 1.5% annually commencing on each April 1 for all retirees and beneficiaries who have received at least 6 monthly benefit payments. For non-grandfathered members (not eligible for normal retirement on January 1, 2013), there is a five-year delay (after the retirement date) until this COLA is applied to benefits accrued after January 1, 2013. For Hazardous Duty Employment-Police Officers and Firefighters 1.5% annually commencing on each April 1 for all retirees and beneficiaries who have received at least 6 monthly benefit payments. For non-grandfathered members (not eligible for normal retirement on January 1, 2013), there is no COLA for benefits accrued after January 1, 2013. N. Non-Service Connected Disability Eligibility: Any participant who has 10 or more years of Credited Service and becomes totally and permanently disabled and is deemed to be unable to perform useful and efficient service to the City is immediately eligible for a disability benefit. Attachment number 1 \nPage 56 of 61 Item # 2 46 Benefit: Participant’s accrued Normal Retirement Benefit taking into account Compensation earned and service credited until the date of disability. Disability benefits, when combined with Worker’s Compensation benefits, cannot exceed and will be limited to 100% of the participant’s AMC on the date of disability. Normal Form of Benefit: For Non-Hazardous Duty Employment (Non-Grandfathered) A monthly annuity is paid for the life of the participant. For Hazardous Duty Employment-Police Officers and Firefighters (and Grandfathered Non-Hazardous Duty Employment) A monthly annuity is paid 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 for 5 years. After 5 years, such survivor annuity is reduced to 50% of the original amount. The survivor annuity ceases upon death or remarriage of the spouse. 120 monthly payments are guaranteed for police officers and firefighters. Optional forms of benefits are available. COLA: For Non-Hazardous Duty Employment 1.5% annually commencing on each April 1 for all retirees and beneficiaries who have received at least 6 monthly benefit payments. For non-grandfathered members (not eligible for normal retirement on January 1, 2013), there is a five-year delay (after the retirement date) until this COLA is applied to benefits accrued after January 1, 2013. For Hazardous Duty Employment-Police Officers and Firefighters 1.5% annually commencing on each April 1 for all retirees and beneficiaries who have received at least 6 monthly benefit payments. For non-grandfathered members (not eligible for normal retirement on January 1, 2013), there is no COLA for benefits accrued after January 1, 2013. O. Death in the Line of Duty Eligibility: Any participant whose employment is terminated by reason of death in the line of duty is eligible for survivor benefits. Benefit: Beneficiary will be paid the participant’s accrued benefit based upon Credited Service and AMC as of the date of death. Benefit is guaranteed to be no less than 66 2/3% of the participant’s AMC. Normal Form of Benefit: 100% of the participant’s accrued benefit shall be paid as a survivor annuity to the spouse for 5 years. After 5 years, such survivor annuity is reduced to 50% of the original amount. The survivor annuity ceases upon death or remarriage of the spouse. 120 monthly payments are guaranteed for police officers and firefighters. Attachment number 1 \nPage 57 of 61 Item # 2 47 COLA: For Non-Hazardous Duty Employment 1.5% annually commencing on each April 1 for all retirees and beneficiaries who have received at least 6 monthly benefit payments. For non-grandfathered members (not eligible for normal retirement on January 1, 2013), there is a five-year delay (after the retirement date) until this COLA is applied to benefits accrued after January 1, 2013. For Hazardous Duty Employment-Police Officers and Firefighters 1.5% annually commencing on each April 1 for all retirees and beneficiaries who have received at least 6 monthly benefit payments. For non-grandfathered members (not eligible for normal retirement on January 1, 2013), there is no COLA for benefits accrued after January 1, 2013. In lieu of the benefits described above, the participant’s beneficiary can elect to receive a refund of participant’s accumulated contributions with interest. P. Other Pre-Retirement Death Eligibility: Any participant who dies with 10 or more years of Credited Service is eligible for survivor benefits. Benefit: Beneficiary will be paid the participant’s accrued benefit based upon Credited Service and AMC as of the date of death. Normal Form of Benefit: 100% of the participant’s accrued benefit shall be paid as a survivor annuity to the spouse for 5 years. After 5 years, such survivor annuity is reduced to 50% of the original amount. The survivor annuity ceases upon death or remarriage of the spouse. 120 monthly payments are guaranteed for police officers and firefighters. COLA: For Non-Hazardous Duty Employment 1.5% annually commencing on each April 1 for all retirees and beneficiaries who have received at least 6 monthly benefit payments. For non-grandfathered members (not eligible for normal retirement on January 1, 2013), there is a five-year delay (after the retirement date) until this COLA is applied to benefits accrued after January 1, 2013. For Hazardous Duty Employment-Police Officers and Firefighters 1.5% annually commencing on each April 1 for all retirees and beneficiaries who have received at least 6 monthly benefit payments. For non-grandfathered members (not eligible for normal retirement on January 1, 2013), there is no COLA for benefits accrued after January 1, 2013. In lieu of the benefits described above, a participant’s beneficiary can elect to receive a refund of the participant’s accumulated contributions with interest. Accumulated contributions, plus interest, will be refunded for all participants with less than 10 years of Credited Service. Attachment number 1 \nPage 58 of 61 Item # 2 48 Q. Post Retirement Death Benefit determined by the form of benefit elected upon retirement. R. Optional Forms In lieu of electing the Normal Form of benefit, the optional forms of benefits available to all retirees are a Single Life Annuity, a 10 Year Certain and Life Annuity, or the 50%, 66 2/3% (for police officers and firefighters), 75% or 100% Joint and Survivor options. Members may also elect a partial lump sum equal to 10%, 20%, or 30% of the value of the normal retirement benefit with the remaining monthly retirement benefit reduced accordingly. S. Vested Termination Eligibility: A participant has earned a non-forfeitable right to Plan benefits after the completion of 10 years of Credited Service provided employee contributions are not refunded. Vesting is determined in accordance with the following table. Years of Credited Service % of Normal Retirement Benefits Less Than 10 10 or more 0% 100% Benefit: The participant’s accrued Normal Retirement Benefit as of the date of termination. Benefit begins on the member’s Normal Retirement date. Alternatively, police officers and firefighters may elect to receive an actuarially reduced Early Retirement Benefit any time after age 50. Normal Form of Benefit: For Non-Hazardous Duty Employment (Non-Grandfathered) A monthly annuity is paid for the life of the participant. For Hazardous Duty Employment-Police Officers and Firefighters (and Grandfathered Non-Hazardous Duty Employment) A monthly annuity is paid 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 for 5 years. After 5 years, such survivor annuity is reduced to 50% of the original amount. The survivor annuity ceases upon death or remarriage of the spouse. 120 monthly payments are guaranteed for police officers and firefighters. Optional forms of benefits are available. Attachment number 1 \nPage 59 of 61 Item # 2 49 COLA: For Non-Hazardous Duty Employment 1.5% annually commencing on each April 1 for all retirees and beneficiaries who have received at least 6 monthly benefit payments. For non-grandfathered members (not eligible for normal retirement on January 1, 2013), there is a five-year delay (after the retirement date) until this COLA is applied to benefits accrued after January 1, 2013. For Hazardous Duty Employment-Police Officers and Firefighters 1.5% annually commencing on each April 1 for all retirees and beneficiaries who have received at least 6 monthly benefit payments. For non-grandfathered members (not eligible for normal retirement on January 1, 2013), there is no COLA for benefits accrued after January 1, 2013. Plan participants with less than 10 years of Credited Service will receive a refund of their own accumulated contributions with interest. T. Refunds Eligibility: All participants terminating employment with less than 10 years of Credited Service are eligible. Optionally, vested members (those with 10 or more years of credited service) may elect a refund in lieu of the vested benefits otherwise due. Benefit: Refund of the member’s contributions with 5% simple interest paid in a single lump sum. U. Member Contributions 8% of Compensation for Non-Hazardous Duty participants. 10% of Compensation for Hazardous Duty participants (8% of Compensation if grandfathered). V. Employer Contributions Each plan year, the Employer must contribute a minimum of 7% of the Compensation of all employees participating in the plan, plus any additional amount determined by the actuary needed to fund the plan properly according to State laws. W. Cost of Living Increases For Non-Hazardous Duty Employment 1.5% annually commencing on each April 1 for all retirees and beneficiaries who have received at least 6 monthly benefit payments. For non-grandfathered members (not eligible for normal retirement on January 1, 2013), there is a five-year delay (after the retirement date) until this COLA is applied to benefits accrued after January 1, 2013. Attachment number 1 \nPage 60 of 61 Item # 2 50 For Hazardous Duty Employment-Police Officers and Firefighters 1.5% annually commencing on each April 1 for all retirees and beneficiaries who have received at least 6 monthly benefit payments. For non-grandfathered members (not eligible for normal retirement on January 1, 2013), there is no COLA for benefits accrued after January 1, 2013. X. 13th Check Not Applicable Y. Deferred Retirement Option Plan Not Applicable Z. Other Ancillary Benefits There are no ancillary retirement type benefits not required by statutes but which might be deemed a City of Clearwater Employees’ Pension Plan liability if continued beyond the availability of funding by the current funding source. AA. Changes from Previous Valuation See the Introduction section for a summary of the changes in plan provisions since the previous valuation. Attachment number 1 \nPage 61 of 61 Item # 2 h : ti 20 15 ca o, w0 v n 10 z 5 BenchmarkingAnalysis ContiributionVolatiilityIndicator MarketValueofAssetsdividedCoveredPayroll TheContributionVolatilityIndicatorfor theCityofClearwaterEmployees' Pension Planist3.£39asofJanuary1, 2013. 11 7 0 , 0-1l-22-33-4 GroupsCovered Includesopenplansonly. FloridaplansservicedbyGRS. 4/10/2013 17 3 i i j i I i 14 6 5 3 4-55-66-77-88-9 >9 ContributionVolatility [ndicator GabrielRoederSmith & Company 8 f. m___. _ w._. _ j \, Y c-' — R Gabriel RoederSmith & Compaziy Consultants & Actuaries CITYOFCLEARWATEREMPLOYEES' PENSIONPLAN ACTUARIALVALUATIONREPORTASOFJANUARY1, 2013 ANNCJALEMPLOYERCONTRIBUTIONFORTHEFISCALYEARENDINGSEPTEMBER30, 2014 3 n ` R Apri14, 2013 GabrielRoeder Smith & Company OneEastBrowardBlvd. 954.527.1616 ;phone Consultants & Actuaries Suite505954.525.0083f'ax Ft. Lauderdale, FL33301-1804 www.gabrielroeder.com BoardofTrustees CityofClearwaterEmployees' PensionPlan Clearwater, Florida DearBoardMembers: TheresultsoftheJanuary1, 2013AnnualActuarialValuationoftheCityofClearwaterEmployees' PensionPlanarepresentedinthisreport. ThisreportwaspreparedattherequestoftheBoardandisintendedforusebytheRetirementSystem andthose designated orapproved by theBoard. Thisreportmaybeprovidedtopartiesotherthanthe System only in its entirety and only with the permission of the Board. ThepurposeofthevaluationistomeasuretheSystem'sfundingprogress, todeterminetheemployer contributionrateforthefiscalyearendingSeptember30, 2014, andtodeterminetheactuarial informationforGovernmentalAccountingStandardsBoard (GASB) StatementNo. 25andNo. 27. This report should not be relied on for any purpose other than the purpose described above. ThefindingsinthisreportarebasedondataorotherinformationthroughDecember31, 2012. Future actuarialmeasurementsmaydiffersignificantlyfromthecurrentmeasurementspresentedinthisreport duetosuchfactorsasthefollowing: planexperiencedifferingfromthatanticipatedbytheeconomicor demographicassumptions; changesineconomicordemographicassumptions; increasesordecreases expectedaspartofthenaturaloperationofthemethodologyusedforthesemeasurements (suchasthe endofanamortizationperiodoradditionalcostorcontributionrequirementsbasedontheplan'sfunded status); andchangesinplanprovisionsorapplicablelaw. ThevaluationwasbaseduponinformationfurnishedbytheCityconcerningRetirementPlanbenefits, financial transactions, plan provisionsandactivemembers, terminated members, retireesand beneficiaries. Wecheckedforinternalandyear-to-yearconsistency, butdidnototherwiseauditthedata. WearenotresponsiblefortheaccuracyorcompletenessoftheinformationprovidedbytheCity. ThisreportwaspreparedusingcertainassumptionsprescribedbytheBoardasdescribedinSectionB. TheundersignedactuaryisamemberoftheAmericanAcademyofActuariesandmeetstheQualification StandardsoftheAmericanAcademyofActuariestorendertheactuarialopinionscontainedherein. The signingactuariesareindependentoftheplansponsor. Thisreporthasbeenpreparedbyactuarieswhohavesubstantialexperiencevaluingpublicemployee retirementsystems. Tothebestofourknowledgetheinformationcontainedinthisreportisaccurateand fairly presentsthe actuarialpositionof theRetirementPlan as ofthe valuationdate. Allcalculations havebeenmadeinconformitywithgenerallyacceptedactuarialprinciplesandpractices, withthe Actuarial Standards of Practiceissued by the Actuarial StandardsBoard andwith applicablestatutes. Thisactuarialvaluationand/orcostdeterminationwaspreparedandcompletedbymeorundermydirect supervision, andIacknowledgeresponsibilityfortheresults. Tothebestofmyknowledge, theresultsar. completeandaccurate. Inmyopinion, thetechniyuesandassumptionsusedarereasonable, meetth; requirementsandintentofPartVII, Chapter112, FloridaStatutes, andarebasedongenerallyaccepteci actuarialprinciplesandpractices. There is no benefit or expense to be provided by the plan and/or paici fromtheplan'sassetsforwhichliabilitiesorcurrentcostshavenotbeenestablishedorotherwisetakeninto accountinthevaluation. Allknowneventsortrendswhichmayrequireamaterialincreaseinplancostso requiredcontributionrateshavebeentakenintoaccountinthevaluation. Respectfullysubmitted, GABRIEL, ROEDER, SMITHANDCOMPANY PeterN. Strong, ASA, MA EnrolledActuary No. 11-6 5 JffrAmrose, MAAA nroledActuaryNo. 11-6599 Gabriel RoederSmith & Company TABLE OF CONTENTS Section Title A DiscussionofValuationResults B ValuationResults 1. ParticipantData 2. AnnualRequiredContribution 3. ActuarialValueofBenefitsandAssets 4. CalculationofEmployerNormalCost 5. ReconciliationofCreditBalance 6. LiquidationoftheUnfundedActuarial AccruedLiability 7. ActuarialGainsandLosses 8. RecentHistoryofValuationResults 9. RecentHistoryofContributions 10. ActuarialAssumptionsandCostMethod 11. GlossaryofTerms CPensionFundInformation 1. StatementofPlanAssetsatMarketValue 2. ReconciliationofPlanAssets 3. DevelopmentofActuarialValueofAssets 4. InvestmentRateofReturn D FinancialAccountingInformation 1. FASBNo. 35 2. GASBNo. 25 E MiscellaneousInformation 1. ReconciliationofMembershipData 2. ActiveParticipantDistribution 3. InactiveParticipantDistribution F SummaryofPlanProvisions GRS Pae 1 6 7 9 10 11 13 17 18 19 26 29 30 31 32 33 34 37 38 41 42 GRS SECTIONA DISCUSSION OFVALUATIONRESULTS i 1 DISCUSSIONOFVALUATIONRESULTS ComparisonofRequiredEmploverContributions Therequiredemployercontributiondevelopedinthisyear'svaluationiscomparedbelowtolast year'sresults: ForFYE9/30/2014 ForFYE9/30/2013 Based on Basedon 1/1/2013 1/1/2012Increase ValuationValuation (Decrease) RequiredEmployer/StateContribution $ 19,608,078 $ 20,925,720 $(1,317,642) As % of CoveredPayroll 26.35 % 27.99 % (1.64) % EstimatedStateContribution 12,000 12,000 0 As % of CoveredPayroll 0.02 % 0.02 °/a 0.00 % RequiredEmployerContribution 19,596,078 20,913,720 (1,317,642) As % of CoveredPayroll 26.33 % 27.97 % (1.64) % CreditBalance 6,343,864 6,568,156 (224,292) Thecontributionhasbeenadjustedforinterestonthebasisthatpaymentsaremadeunifornllv during thefirst two quartersof the City'sfiscal year. Therequiredemployercontributionhasbeei: computedundertheassumptionthattheamounttobereceivedfromtheStateonbehalfofpoliceofficers and firefighters in 2013 will be $12,000. If the actual payment from the State falls below this amount, theri. theCitymustincreaseitscontributionbythedifference. TheactualEmployerandStatecontributionsduringtheyearendingDecember31, 2012were 20,196,816 and $12,000, respectively, for a total of $20,208,816. After $716,904ofthecreditbalanceis included, thetotalisequaltotheannualrequiredcontributionof $20,925,720forthatyear. The minimumrequired City contributionis7% ofcoveredpayroll. GRS 2 RevisionsinBenefits UnderOrdinanceNo. 8333-12, thechangesinplanprovisionslistedbelowwereimplemented effectiveJanuary1, 2013. Thesechangesdonotapplytomemberswhowereeligiblefornormalretirement asofJanuary1, 2013. HazardousDutyMembers The1.5% CostofLivingAdjustmentiseliminatedforbenefitsaccruedafterJanuary1, 2013. Theamountofovertimethatisincludedinpensionableeaniingshasbeenlimitedto300hours peryear. The employeecontribution ratehasbeenincreasedfrom 8% to10%. Non-HazardousDutyMembers ThenormalformofbenefithasbeenchangedtoaLifeAnnuity. Overtimeandadditionalpayabovethebaserateofpayisexcludedfrompensionableearnings. ApplicationoftheCostofLivingAdjustmentisdelayeduntilfiveyearsafterretirementfor benefitsaccntedafterJanuary1, 2013. The minimum dutydisability benefitis changed from662/3% to42% ofAverageFinal Compensation. ForNon-HazardousDutyMembershiredafterJanuary1, 2013: The multiplier islowered to2.00% peryear. The "30 and out" normal retirement eligibility criterion is eliminated, and the "age 55 with 20 yearsofservice" normalretirementeligibilitycriterionisreplacedwithnormal retirementeligibilityatage60with25yearsofservice. RevisionsinActuarialAssumnNonsorMethods Therehavebeenrevisionsmadetotheactuarialassumptionssincethelastactuarialvaluation. An ExperienceStudycoveringthefiveyearsendedDecember31, 2011wascompletedonNovember29, 2012, andallrecommendedchangeswereadopted, asfollows: GRS 3 The investment returnassumptionwas changed from 7.50% grossofinvestmentexpensesto 7.00% netofinvestmentexpenses. Themortalityassumptionwaschangedtoreflectcurrentandfuturegenerationalmortalit:y improvementsusingScaleBB. The salary increase assumption waschanged from 6.00% peryeartotheservice-basedtables shownin the ActuarialAssumptions and CostMethod section, whichrange from 3.5% to7.9°0 basedonyearsofservice. The assumedrateof inflation waslowered from3.00% to 2.50%. Theassumedratesoffutureretirement, employmentternunation, anddisabilitywerechanged tothetablesshownintheActuarialAssumptionsandCostMethodsection, basedonobserve:l expenence. ActuarialExperience Therewasanetactuarialexperiencelossof $7,015,253duringtheyear, whichmeansthatactual experiencewaslessfavorablethanexpected. Thelossisprimarilyduetorecognizedinvestmentreturn (ox. the smoothedactuarialvalueofassets) below the assumedrate of 7.5%. Theinvestmentreturnwa:; 13.92% based onthe marketvalueofassets and5.50% based on the actuarialvalueofassets. The: investmentloss was partially offset by gainsdue tolower than expected salary increases (4.48% versus 6.0% assumed). This netactuarial lossincreased the requiredemployercontribution by 1.24% ofcovered payroll. AnalvsisofChanEeinEmploverContribution ThecomponentsofchangeintherequiredCitycontributionareasfollows: C .._ ContributionRateLastYear ChangeinBenefits ChangeinAssumptionsandMethods AmortizationPaymentonUAAI. ExperienceGain/Loss ChangeinInvestmentandAdministrativeExpenses ChangeinStateRevenue ContributionRateThisYear 27.97 % 5.74) 3.06 0.10) 1.24 0.10) 0.00 26.33 4 FundedRatio OnemeasureofthePlan'sfundingprogressistheratiooftheactuarialvalueofassetstothe actuarialaccrued liability. Thefunded ratiois92.2% this yearcomparedto 97.4% lastyear. Thisyear's funded ratiowas97.7% beforethechangesinactuarialassumptionsandplanprovisions, anditwas101.2% afterrecognitionoftheplanchangesbutbeforerecognitionoftheassumptionchanges. Theprimarycause ofthedecreasein thefunded ratioto92.2% is the changein the valuationinterest ratefrom7.5% to7.0%. If7.5°/ahadbeenusedincombinationwithalltheotherplanchangesandassumptionchanges, thefunded ratiowouldhavebeen98.2%. Forinformation purposes, this year's funded ratio is88.9% undertheEntryAgeNormalfunding method. TheEntryAgeNormalfundingmethodisthemethodrequiredunderthenewGASBNos. 67and • 68 requirements (GASBNo. 67becomes effectiveSeptember30, 2014). IftheEntryAgeNormalfunding methodwereusedforthisactuarialvaluation, theCity'scontributionrequirementwouldhavebeen23.16%. VariabilitvofFutureContributionRates TheActuarialCostMethodusedtodeternunethecontributionrateisintendedtoproduce contributionrateswhichare generally level asapercentofpayroll. Evenso, whenexperiencediffers fromtheassumptions, asitoftendoes, theemployer'scontributionratecanvarysignificantlyfromyear- . to-year. Overtime, iftheyear-to-yeargainsandlossesoffseteachother, thecontributionratewouldbe expectedtoreturntothecurrentlevel, butthisdoesnotalwayshappen. TheMarketValueofAssetsexceedstheActuarialValueofAssetsby $47,047,678asofthe valuationdate (seeSection C). Thisdifferencewillbephasedinoverthenextfewyearsintheabsenceof . offsettinglosses. Inturn, thecomputedemployercontributionrateisprojectedtodecline. Ifthereareno otherexperiencegainsor losses andthe returnonthe marketvalue ofassetsis7.0% in2013 (netof investmentexpenses) asassumed, itisprojectedthattheCitycontributionrequirementasofJanuary1, 2014for thefiscal year ending September30, 2015 willbe approximately 21 % ofcoveredpayroll. GRS 5 RelationshiptoMarketValue IfMarketValuehadbeen the basis for the valuation (underamethod change), theCit:y contribution ratewouldhavebeen21.24% andthefundedratiowouldhavebeen98.5%. Conclusion TheremainderofthisReportincludesdetailedactuarialvaluationresults, financialinformatioia, miscellaneousinformationandstatistics, andasummaryofplanprovisions. w GRS H z o z U G PARTICIPANTDATA January 1, 2013 January 1, 2013 January 1, 2013January1, 2012 After Plan & AfterPlan ChangesBeforeChanges AssumtionChanes ACTiVEMEMBERS Number 1,4741,474 1,474 1,468 Covered AnnualPayroll $ 74,422,344 $ 74,422,344 $ 76,522,038 $ 74, i65,020 AverageAnnualPayroll $ 50,490 $ 50,490 $ 51,915 $ 50,930 AverageAge 44.7 44.744.7 44.7 AveragePast Service 11.211.2 11.2 11.5 AverageAge at Hire 33.5 33.5 33.5 33.2 RETIREES & BENEFICIARIES Number 926 926 926 g'72 AnnualBenefits $ 30,933,396 $ 30,933,396 $ 30,933,396 $ 28,6'?0,770 Average AnnualBenefit $ 33,405 $ 33,405 $ 33,405 $ 32,822 AverageAge 65.065.065.0 64.6 DISABILITYRETIREES Number 137137 137 138 AnnualBenefits $ 3,484,574 $ 3,484,574 $ 3,484,574 $ 3,431,327 AverageAnnualBenefit $ 25,435 $ 25,435 $ 25,435 $ 24,865 AverageAge 62J62.7 62.7 623 TERMINATED VESTED MEMBERS Number 64 64 64C2 AnnualBenefits $ 1,391,286 $ 1,391,286 $ 1,391,286 $ 1,238,456 Average AnnualBenefit $ 21,739 $ 21,739 $ 21,739 $ 19,975 AverageAge 51.0 51.0 51.0 51.2 GRS ANNUALREQUIREDCONTRIBUTION (ARC) A. Valuation DateJanuary 1, 2013 January 1, 2013 January 1, 2013 January1, 2012 AfterPlan & AfterPlanChanges BeforeChanges AssumptionChanges B. ARCtoBePaidDuring FiscalYearEnding 9/30/2014 9/30/20149/30/20149/30/2013 C. AssumedDate of EmployerContrib. Evenlyduring fust Evenlyduring firstEvenlyduring first Evenlyduringfust two quartersof two quartersof twoquartersof twoquartersof fiscal year fiscal year fiscal year fiscalyear D. AnnualPaymenttoAmortize UnfundedActuarialLiability $ 5,479,806 $ 453,036 $ 2,387,554 $ 2,401,686 E. EmployerNormalCost 12,845,50115,665,914 18,277,29917,064,100 F. ARCifPaidontheValuation Date: D+E18,325,307 16,118,95020,664,853 19,465,786 G. ARCAdjustedforFrequencyof Payments 19,608,07817,327,87122,214,71720,925,720 H. ARC as % of CoveredPayroll26.35 % 23.28 % 29.03 % 27.99 % I. AssumedRateofIncreaseinCovered PayrolltoContribution Year0.00 % 0.00 % 0.00 % 0.00 % J. CoveredPayrollforContribution Year 74,422,34474,422,34476,522,038 74,765,020 K. ARCforContrbutionYear. H x J19,608,07817,327,87122,214,717 20,925,720 L. EstimateofStateRevenuein Contrbution Year12,000 12,00012,000 12,000 M. RequiredEmployerContrbution (REC) inContribution Year19,596,078 17,315,87122,202,717 20,913,720 N. REC as % ofCoveredPayrollin ContnbutionYear: M= J 26.33 % 23.27 °/a 29.01 % 27.97 % O. CreditBalance6,343,864 6,343,8646,343,8646,568,156 GRS ACTUARIALVALUEOFBENEFITSANDASSETS A. ValuationDate January 1, 2013January 1, 2013January l, 2013 lanuary1, 2012 AfterPlan & AfterPlanChanges BeforeChanges AssumptionChanges B. ActuarialPresentValueofAllProjected Benefitsfor 1. ActiveMembers a. ServiceRetirementBenefits $ 342,143,34 $ 316,265,988 $ 347,613,624 $ 344,14'i,221 b. VestingBenefits 36,896,909 40,076,62645,114,38045,410,839 c. Disability Benefits 15,225,72016,381,82021,669,831 21,37:3,056 d. PreretirementDeath Benefits5,914,691 5,819,625 6,106,2976,093,298 e. Return of MemberContrbutions2,381,8312,683,721 _ 2,652,636 2,64:1,367 f. Total402,562,498 381,227,780 423,156,768419,66:i,781 2. InactiveMembers a. ServiceRetirees & Beneficiaries 422,898,007381,098,239381,098,239 354,48',718 b. Disability Retirees 47,555,489 44,948,51944,948,51944,680,068 c. Terminated VestedMembers16,774,34114,913,700 14,913,700 12,624,011 d. Total 487,227,837440,960,458440,960,458 411,791,797 3. TotalfarAllMembers 889,790,335822,188,238 864,117,226 831,45;,578 C. Actuaria] Accrued (PastService) Liability perGASBNo. 25 (FEA Method) 746,701,092680,608,117705,169,082681,871,531 D. ActuarialAccruedLiabilityunder EANMethod 774,749,811708,656,836733,217,801 702,438,432 E. ActuarialValueofAccumulatedPlan BeneftsperFASBNo. 35 1. Based on Plan's InterestRate729,923,831 656,272,289667,961,928 637,554;.568 2. Based onFRSInterestRate667,384,541N/A N/A619,817,749 F. PlanAssets 1. MarketValue 735,778,899735,778,899 735,778,899656,705,582 2. ActuarialValue688,731,221688,731,221688,731,221 664,087,199 G. ActuarialPresentValueofProjected CoveredPayroll 577,759,869 592,827,777610,022,027 601,832,076 H. ActuarialPresentValueofProjected MemberContnbutions 51,147,74252,322,10148,801,763 48,146,565 I. FundedRatioBasedonPlan'sFunding Method (FEA) = F.2. / C. 92.24% 101.19% 97.67% 9739% J. FundedRatioBasedonEAN Method = F.2. / C. 88.90% 97.19% 93.93% 94..54% GRS CALCULATIONOFEMPLOYERNORMALCOST A. ValuationDate January l, 2013 January 1, 2013 January 1, 2013 January1, 2012 AfterPlan & After PlanChangesBeforeChanges AssumptionChanges B. ActuarialPresentValueofProjected Benefits $ 889,790,335 $ 822,188,238 $ 864,117,226 $ 831,457,578 C. CreditBalance 6,343,864 6,343,8646,343,864 6,568,156 D. ActuarialValue ofAssets688,731,221 688,731,221688,731,221664,087,199 E. Unfunded ActuarialAccrued Liability 57,969,871 (8,123,104) 16,437,86117,784,332 F. ActuarialPresentValueofProjected MemberContributions 51,147,742 52,322,10148,801,76348,146,565 G. ActuarialPresentValueofProjected EmployerNormalCosts: B+C-D-E-F98,285,36595,601,884 116,490,245 108,007,638 H. ActuarialPresentValueofProjected CoveredPayroll 577,759,869 592,827,777610,022,027601,832,076 I. EmployerNormalCostRate: G/H 17.01 % 16.13 % 19.10 % 17.95 % J. CoveredAnnualPayroll 74,422,344 74,422,34476,522,03874,765,020 K. EmployerNormalCost: I xJ 12,659,241 12,004,32414,615,70913,420,321 L. Assumed Amount of Expenses 186,2603,661,5903,661,590 3,643,779 of Covered Payroll 0.25 % 4.92 % 4.79 % 4.87 % M. TotalEmployerNormalCost: K+ L 12,845,50115,665,914 18,277,299 17,064,100 N. EmployerNormalCostas °/aof CoveredPayroll 17.26 % 21.05 % 23.89 % 22.82 % GRS C nofCredit CreditBalanceatBeginningofYear RequiredEmployerContribution EmployerContributionMade InterestonCreditBalance CreditBalanceatEndofYear 6,568,156 20,913,720 20,196, 816 492,612 6,343,864 10 LIQUIDATIONOFTHEUNFUNDEDACTUARIALACCRUEDLIABII,ITY A. DerivationoftheCurrentUAAL 1. LastYear'sUAAL 2. EmployerNormalCostforContributionYear 3. LastYear'sContributions 4. InterestattheAssumedRateon: a. 1and2foroneyear b. 3fromdatespaid c. a-b 5. ThisYear'sUAALPriortoRevision: 1+2-3+4c 6. ChangeinUAALDuetoPlanAmendment 7. ChangeinUAAI. DuetoChangesinActuarialAssumptions andMethods 8. ThisYear's RevisedUAAL,: 5+ 6+ 7 Includesportionofcreditbalanceusedforyear. 17,784,332 17,064,100 20,925,720 * 2,613,632 98,483 2,515,149 16,437,861 24,560,965) 66,092,975 57,969,871 11 B. UAALAmortizationPeriodandPaments OriinalUAAL CurrentUAAL Pament AfterPlancc Date Years Assumption AfterPlanBefore Established SourceAmount Remaining AmountChanges Changes Changes 1/1/1987SupplementalFIL $ 1,519,1424 $ 402,948 $ 111,179 $ 111,914 $ 111,914 1/1/1988SupplementalFIL1,673,7385 540,370123,169 124,242 124,242 1/1/1989SupplementalFIL 2,177,7726 820,497160,876162,607162,607 1/1/1994MethodChange 3,724,296112,226,057 277,439283,066 283,066 1/1/1996P1anAmendment 15,063,8421310,047,1241,123,502 1,150,1781,150,178 1/1/2000PlanAmendment52,921,7241741,272,2483,950,764 4,069,637 4,069,637 1/1/2002AssumptionChanges (30,846,502) 19 (25,468,246) (2,302,925) (2,378,874) (2,378,874) 1/1/2007AssumptionChanges (14,695,526) 24 (13,403,137) (1,092,156) (1,135,2161,135,216) 1/1/2013PlanAmendment (24,560,965) 30 (24,560,965) (1,849,794) (1,934,518) N/A 1/1/2013AssumptionChanges66,092,975 3066,092,9754,977,752N/A N/A 73,070,496 57,969,8715,479,806 453,036 2,387,554 GRS l.2 C. AmortizationSchedule TheiIFAAI, isbeingliquidatedasaleveldollaramountoverthenumberofyearsremaininginthe amortizationperiod. Theexpectedamortizationscheduleisasfollows: GRS AmortizationSchedule Year ExpectedUAAI. 2013 $ 57,969,871 2014 56,164,353 2015 54,232,465 2016 52,165, 345 2017 49,953,527 2018 47,705,843 2023 35,397,364 2028 22,166,208 2033 19,549,012 2038 13,723,013 2043 _ 13 ACTUARIALGAINSANDLOSSES Theassumptionsusedtoanticipatemortality, employmentturnover, investmentincome, expenses, salaryincreases, andotherfactorshavebeenbasedonlongrangetrendsandexpectations. Actualexperience canvaryfromtheseexpectations. Thevarianceismeasuredbythegainandlossfortheperiodinvolved. If significantlongtermexperiencerevealsconsistentdeviationfromwhathasbeenexpectedandthatdeviation isexpectedtocontinue, theassumptionsshouldbemodified. Thenetactuarialgain (loss) forthepastyearis computedasfollows: A. EmployerNormalCostasaPercentage ofCoveredPayroll 1. LastValuation 2. CurrentValuation (BeforeChanges) 3. Difference: 1 - 2 B. ActuarialPresentValueofProjected CoveredPayroll (BefareChanges) C. NetActuarialGain (Loss): A3xB D. Gain (Loss) duetoInvestments E. Gain (Loss) duetoothersources Gains (losses) inpreviousyearshavebeenasfollows: YearEnding 12/31 2009 2010 2011 2012 GRS Gain Loss) 32,358,262 2,311,412 13,721,771) 7,015,253) 17.95 % 19.10 1.15) 610,022,027 7,015,253) 12,619,941) 5,604,688 Changein NCRate 4.89) % 0.37) 2.28 1.15 14 The fund earnings and salary increase assumptions have considerable impact on the cost of the Plan so itisimportant that they arein line with the actual experience. Thefollowingtableshowstheactualfiind earningsandsalaryincreaseratescomparedtotheassumedratesforthelastfewyears: InvestmentReturn SalaryIncreases Year Ending ActualAssumedActualAssumed 12/31/1986N/A7. 00 % 7.40 % 5.00 % 12/31/1987N/A 7.00 5.905.00 12/31/1988N/A7.00 9.105.00 12/31/1989 N/A7. 008.705.00 12/31/1990N/A7.00 5.305.00 12/31 / 1991N/A7. 00 6.105. 00 12/31/1992N/A7.006.805.00 12/31/19937.42 % 7.00 1.205.00 12/31/19946.287.00 4.405.00 12/31/19959.14 7.006.405.00 12/31/1996 11.547.006.705.00 12/31/199713.747.005.60 5.00 12/31/1998 15.287.00 7.405.00 12/31/199917.967.004.20 5.00 12/31/200012.427.00 5.805.00 12/31 /20017.40 7.005. 905.00 12/31/ 2002 (1.85) 7.505.80 6.00 12/31 /20037.45 7. 50 6.406.00 12/31/20042.18 7.506.386.00 12/31/20054.58 7.50 5.496.00 12; 31 /2006 7. 87 7. 505.156.00 12/ 31 /200710. 687. 506. 62 6.00 12/31/2008 (10.61) 7.50 4.256.00 12/31/200916.537.50 3.296.00 12/31/20105.98 7.501.276.00 12/31/20114.467.50 2.566.00 12/31 /20125.50 7.504.486.00 Averages7.50 % --- 5.49 % --- Theactualinvestmentretumratesshownabovearebasedontheactuarialvalueofassets. Theactu.al salaryincreaseratesshownabovearetheincreasesreceivedbythoseactivememberswhowereincludedin theactuarialvaluationsbothatthebeginningandtheendofeachyear. GRS 30% 25% 20% 15% 10% 5% 0% 5% Q% 15% ti ti%' ti' titi ti ti ` ti .ti % titi ' ' ti ' ' HistoryofInvestmentReturnBasedonActuarialValueofAssets 15% 10% 5% q o, qtio' qao`' o,' o00 oti o, oap5 obo p pq o ti ti y ti 'v `'a ti ti ti ' ti ti ,ti ti ti ti ,' '', ' ^, , ti ti , ti ` ti ' ti GRS P1anYearEnd f-- Actual - Assuined HistoryofSalaryIncreases PlanYearEndComparedtoPreviousYear Actual -- Assumed 30% 25% 20% 15% 10% 5 °/a 0% 5% 1% 15% 15% 10% 5% a 15 16 Actual (A) ComparedtoExpected (E) Decrements AmongActiveEmployees Number Added Active During Service Disability Terminations Members YearYear RetirementRetirement DeathVestedOther TotalsEndof Ended AEAE AEAE AAAE Year 12/31/20094911054 57060 2104656 93 1,567 12/31/2010 7813768512 63215 496485 1,508 12/31/20118412443 49660 21164 7584 1,468 12/31/2012 11911351523 612 18405881 1,474 12/31/2013 42 32 79 4YrTotals * 330484 21620911244 854199 253 343 TotalsarethroughcurrentPlanYearonly. Actual (A) ComparedtoExpected (E) Deaths AmongRetireesandBeneficiaries Actual DurinYearExectedDurinYear Year AnnualAnnual EndedNumber PensionsNumber Pensions 12/31/2009 12 $ 142,60616 $ 313,189 12/31/201012 139,50818363,242 12/31/2011 13220,87719 416,467 12/ 31/2012 12232,75520 466,010 12/31/2013 20480,787 GRS J C/ RECENTHISTORYOFVALUATIONRESULTS Number of EmployerNormalCost Unfunded Valuation ActiveInactive CoveredAnnualActuarialValue ofActuarial Date MembersMembers Pa roll AssetsLiabilit Amount % ofParoll 1/1/071,692819 $ 79,385,090 $ 559,830,590 $ 22,417,537 $ 9,192,40711.58 % 1/1/08 1,64187880,371,617610,979,08721,580,6666,920,4008.61 1/1/091,62890382,104,837536,834,47320,681,03020,005,23824.37 1/1/101,56795580,443,199 618,444,90619,664,44315,879,62819.74 1/1/111,5081,02476,505,599646,956,800 18,744,67515,461,72520.21 1/1/121,468 1,07274,765,020664,087,19917,784,332 17,064, 10022.82 1/1/131,4741,12774,422,344688,731,22157,969,871 12,845,50117.26 ResultsbeforeJanuary1, 2010arefromtheJanuary1, 2009ReportpreparedbyPricewaterhouseCoopers. s ir s Cl RECENTHISTORYOFREQUIREDANDACTUALCONTRIBUTIONS End of RequiredContributions YearTo Employer & StateEstimatedState Net Employer Actual Contributions ValuationWhich Valuation % of % of % of A.pplies ountPa rollAmountPa rollAmountPa oll Emlo er State Total 1/1/079/30/08 $ 12,532,39915.79 %$ 12,0000.02 %$ 12,520,39915.77 %$ 12,520,399 $ 12,000 $ 12,532,399 1/1/089/30/0910,086,978 12.55 12, 0000.01 10,074,97812.5410,074,97812,00010,086,978 1/1/099/30/1023,960,58629.1812,0000.0123,948,58629.17 23,948,58612,00023,960,586 1/1/10 9/30/1119,373,99224.08 12, 0000.01 19,361,99224.0719,361,99212,00019,373,992 1/1/119/30/1218,898,56724.7012,000OA118,886,56724.6918,886,56712,00018,898,567 1/1/129/30/1320,925,72027.9912, 0000.0220,913,72027.97 20,913,72012,00020,925,720 1/1/139/30/1419,608,078263512,0000.0219,596,0782633 --- --- --- ResultsbeforeJanuary 1, 2010 arefrom theJanuary 1, 2009Report prepared by PricewaterhouseCoopers. 19 ACTUARIAL ASSUMPTIONS AND COST METHOD ValuationMethods Actuarial CostMethod - Normalcostandtheallocationofbenefitvaluesbetweenservicerendered beforeandafterthevaluationdateweredeternunedusingtheFrozenEntry-AgeActuarialCost Method. TheexcessoftheActuarialPresentValueofProjectedBenefitsofthegroupincludedinthe valuation, overthesumoftheActuarialValueofAssets, theUnfundedFrozenActuarialAccruedLiability andtheActuarialPresentValueofFutureMemberContributions (ifany) isallocatedasalevelpercentage of earningsofthe group between the valuation date and the assumed retirementage. Thisallocationis performed for the goup as awhole, not asasumof individual allocations. TheportionofthisActuarial PresentValueallocatedtoaspecificyeariscalledtheEmployerNormalCost. Underthismethod, actuarialgains (losses) reduce (increase) futureNormalCosts. Financing of UnfundedActuarial AccruedLiabilities - UnfundedActuarialAccruedLiabilities (full funding credit if assets exceed liabilities) were amortized by level (principal & interestcombined) dollar amountcontributionsoverareasonableperiodoffutureyears. Actuarial i alueofAssets - TheActuarialValueofAssetsphaseinthedifferencebetweentheexpected andactualreturnonmarket valueofassetsat the rateof20% peryear. TheActuarialValueofAssets willbefurther adjusted tothe extent necessary to fall within the corridorwhose lowerlimitis80% of the Market Value ofplanassetsandwhoseupper limitis120% oftheMarketValueofplanassets. During periodswheninvestmentperformanceexceedstheassumedrate, ActuarialValueofAssetswilltendtobe less thanMarket Value. Duringperiodswheninvestmentperformanceislessthanassumedrate, ActuarialValueofAssetswilltendtobegreaterthanMarketValue. ValuationAssumptions TheactuarialassumptionsusedinthevaluationareshowninthisSection. EconomicAssumptions Theinvestment returnrateassumed in the valuationsis7.00% peryear, compoundedannually (netrate after investment expenses). TheWageInflationRate assumedin this valuationwas2.50% peryear. TheWageInflationRateis definedtobetheportionoftotalpayincreasesforanindividualthatareduetomacroeconomicforces including productivity, price inflation, and labor marketconditions. Thewageinflationratedoesnot includepaychangesrelatedtoindividualmeritandseniorityeffects. Theassumedrealrateofreturnoverwageinflationisdefinedtobetheportionoftotalinvestment returnthatis more than the assumedwage inflation rate. Consideringothereconomicassumptions, the 7.00% investmentreturnratetranslatestoanassumedrealrateofreturnoverwageinflationof4.50%. Therateofsalaryincreaseusedforindividualmemberscanbeseeninthetablesbelow. Partofthe assumption isfor meritand/or seniority increase, and2.50% recognizeswageinflation, includingprice inflation, productivityincreases, andothermacroeconomicforces. Thisassumptionisusedtoprojecta member'scurrentsalarytothesalariesuponwhichbeneiitswillbebased. GRS i 2;0 IncreaseinSalary - HazardousDuty Years of Merit and Base Total Service Seniority (Inflation) Increase 15.40% 2.50% 7.90% 25.20% 2.50% 7.70% 34.50% 2.50% 7.00% 42.75% 2.50% 5.25% 5- 141.75% 2.50% 4.25% 15 and Higher1.00% 2.50% 3.50% IncreaseinSalary - Non-HazardousDuty Years of Merit and Base Total Service Seniority (Inflation) Increase 15.40% 2.50% 7.90% 2 3.25% 2.50% 5.75% 32.50% 2.50% 5.00% 42.00% 2.50% 4.50% 5- 91.50% 2.50% 4.00% 10 andHigher1.00% 2.50% 3.50% DemographicAssumptions ThemortalitytablewastheRP-2000CombinedHealthyParticipantMortalityTableformalesand females. TheprovisionforfuturemortalityimprovementsisbeingmadeusingScaleBBafter2000. Thisassumptionisusedtomeasuretheprobabilitiesofeachbenefitpaymentbeingmadeafterretirement. Foractivemembers, theprobabilitiesofdyingbeforeretirementwerebaseduponthesamemortalitytable asmembersdyingafterretirement. Alldeathsbeforeretirementareassumedtobenon-serviceconnected. GRS Sample Probability of FutureLife AttainedDyin Next YearExpectancy (years) A es ( in2013) Men WomenMen Women 500.21 % 0.16 % 35.25 37.70 550.35 0.2530.1232.55 600.62 0.4425.1727.53 651.090.83 20.5122.78 701.821.43 75 3.112.40 805.293.92 16.2118.40 12.3714.45 9.07 10.97 21 Theratesofretirementusedtomeasuretheprobabilityofeligiblemembersretiringundernormaland earlyretirementeligibilityduringthenextyearwereasfollows: HazardousDutyRetirement Years of Probabilityof ServiceAge Retirement 10-1950-5910% 60 - 6450 65 & Over100 , 20 & OverUnder45 20 45 - 49 15 50 - 54 25 55 - 59 35 60 - 64 50 65 & Over 100 Non-HazardousDutyRetirement Years of Probabilityof Service Age Retirement 10 - 1965 - 6945 % 70 - 74 50 75 & Over100 , 20 - 29 55 - 5920 60 - 6425 65 - 6945 70 & Over 100 r 30 & Over Under65 40 , 65 - 6950 70 & Over100 GRS , i 2 Ratesofseparationfromactivemembershipwereasshownbelow (ratesdonotapplytomembers eligible to retireand do not include separation onaccountof death or disability). Thisassumption measurestheprobabilitiesofinembersremaininginemployment. Hazardous DutyWithdrawal - MalesandFemales Years of % of Active Members Service A e Separatin WithinNextYear Under 1AllAges 12.8 % 1 AllAges 2 AllAges 3 & OverUnder30 30-49 50 & Over Non-HazardousDutyWithdrawal - Males Years of % ofActiveMembers Service AgeSeparatingWithinNextYear Under1 Under30 25.0 % 30 - 34 20.0 35 - 49 15.0 50 - 5910.0 60 & Over 5.0 1 Under6015.0 60 & Over 10.0 2 Under4510.0 45 & Over 5.0 3Under25 15.0 25 - 3412.5 35 & Over 5.0 4 Under3015.0 30 - 44 10.0 45 & Over 5.0 5& Over Under 30 12.5 30 - 34 7.0 35 - 396.0 40 - 445.0 45 - 49 3.5 50 - 544.0 55 - 595.0 60 & Over 7.5 GRS 5.7 4.8 4.0 1.0 0.0 Non-HazardousDutvWithdrawal - Females Years of % ofActiveMembers Service A e Separatin WithinNextYear Under1Under25 35.0 % 25 - 34 30.0 35 - 39 25.0 40 - 49 20.0 50 - 59 I5.0 60 & Over 5.0 1 Under30 25.0 30 - 59 15.0 60 & Over10.0 2Under45 15.0 45 - 59 7.5 60 & Over 6.5 3Under30 20.0 30 - 59 10.0 60 & Over 5.0 4 Under30 15.0 30 - 34 12.5 35 - 4410.0 45 & Over 5.0 5& OverUnder30 7.5 30 - 39 6.5 40 - 44 5.0 45 & Over 4.0 Rates of disability among activemembers ( 100% ofdisabilitiesareassumedtobeservice-connected). GRS HazardousDutyDisability ofActiveMembersBecoming SampleDisabledWithinNextYear AgesMales Females 200.25 % 0.375 % 250.250.375 300.25 0.375 350.300.450 400.40 0.600 450.50 0.750 500.55 0.825 550.600.900 600.75 1.125 651.00 1.500 701.752.625 Non-HazardousDutyDisability ofActiveMembersBecoming SampleDisabledWithinNextYear A es MalesFemales 200.05 % 0.05 % 250.05 0.05 300.05 0.05 350.06 0.06 400.07 0.07 450.090.09 50 0.120.12 55 0.170.17 60 0.270.27 650.420.42 700.67 0.67 23 24 MiscellaneousandTechnicalAssumptions Administrative & InvestmentEffective January 1, 2013, theinvestmentreturnassumptioni.s Expensesintended to be the netreturnafter investment expenses. Annual administrativeexpensesareassumedtobeequaltotheadministrative expensesofthe previous year. Assumedadministrativeexpensesare addedtotheNormalCost. (Previously, theinvestmentreturn assumptionwasintendedtobethegrossreturnbeforeinvestmerit expenses, andassumedadministrativeandinvestmentexpenseswere addedtotheNormalCost.) BenefitServiceExactfractionalserviceisusedtodeterminetheamountofbenefi.t. payable. Cost of Living IncreasesThe adjustmentis 1.5% annuallycommencingoneachApril1fora]_l retireesandbeneficiarieswhohavereceivedatleast6monthlybenefit payments. Thereisafive-yeardelayintheCOLAfornon- grandfatherednon-hazardousdutymembersforbenefitsaccruedafter January1, 2013. ThereisnoCOLAfornon-grandfatheredhazardous dutymembersforbenefitsaccruedafterJanuary1, 2013. DecrementOperation DecrementTiming EligibilityTesting Disabilityandmortalitydecrementsoperateduringretirement eligibility. Decrementsofalltypesareassumedtooccuratthebeginningofthe year. Eligibilityforbenefitsisdeternunedbasedupontheagenearest birthdayandservicenearestwholeyearonthedatethedecrementi:; assumedtooccur. ForfeituresFor vestedseparationsfrom service, itis assumedthat0% ofinembers separatingwillwithdrawtheircontributionsandforfeitanemployer financedbenefit. Itwasfurtherassumedthattheliabilityar. terminationisthegreaterofthevesteddeferredbenefit (ifany) orthe: member'saccumulatedcontributions. Incidence ofContributionsEmployercontributionsareassumedtobemadeinequalinstallments duringtheiirsttwoquartersofthefiscalyear. Membercontribution areassumedtobereceivedcontinuouslythroughouttheyearbased. uponthecomputedpercentofpayrollshowninthisreport, andthe actualpayrollpayableatthetimecontributionsaremade. Marriage Assumption85% ofmales and85% offemalesareassumedtobemarriedfox purposesofdeath-in-servicebenefits. Malespousesareassumedtobe iiveyearsolderthanfemalespousesforactivemembervaluation. purposes. 25 NormalForm ofBenefit Thenormalformofbenefitisalifeannuityfornon-grandfathered non-hazardousdutymembers. Forallothermembers, thenormalform ofbenefitisalifeannuitythatincludesasurvivorbenefitwhereafter the participant's death, 100% ispayabletothespouseforfiveyears, afterwhichthebeneiitisreducedto50%. PayIncrease Timing Endoffiscalyear. Thisisequivalenttoassumingthatreportedpays representthe annualrate of pay onthe valuation date. Thepayused forthevaluationisequaltothegreateroftheactualpayfortheplan yearincreasedbythesalaryscaleassumptionrate (whichvariesby yearsofservice) andtheannualrateofpayonthevaluationdate. ServiceCreditAccruals i \ w' Itis assumedthat members accrueoneyearof servicecreditper year r i i ActuarialAccruedLiability AAL) 26 GLOSSARY ThedifferencebetweentheActuarialPresentValueofFutureBenefits, andtheActuarialPresentValueofFutureNormalCosts. ActuarialAssumptions Assumptionsaboutfutureplanexperiencethataffectcostsorliabilitie;s, suchas: mortality, withdrawal, disablement, and retirement; futui•e increasesinsalary; futureratesofinvestmentearnings; futureinvestment andadministrativeexpenses; characteristicsofinembersnotspecifiedin thedata, suchasmaritalstatus; characteristicsoffuturemembers; future electionsmadebymembers; andotheritems. Actuarial CostMethod AprocedureforallocatingtheActuarialPresentValueofFutureBenefits betweentheActuarialPresentValueofFutureNormalCostsandthe ActuarialAccruedLiability. ActuarialEquivalent OfequalActuarialPresentValue, deternunedasofagivendateandbaser.l onagivensetofActuarialAssumptions. ActuarialPresentValue The amount of funds required to provide a payment or series of payment,; APi inthefuture. Itisdeternunedbydiscountingthefuturepaymentswithan assumedinterestrateandwiththeassumedprobabilityeachpaymentwill _ bemade. Actuarial PresentValue of TheActuarialPresentValueofamountswhichareexpectedtobepaidat FutureBenefits (APVFB) variousfuturetimestoactivemembers, retiredmembers, beneficiaries receivingbenefits, andinactive, nonretiredmembersentitledtoeithera refundorafutureretirementbenefit. Expressedanotherway, itisthe; valuethatwouldhavetobeinvestedonthevaluationdatesothatthe; amountinvestedplusinvestmenteamingswouldprovidesufficientasset:; topayallprojectedbenefitsandexpenseswhendue. ActuarialYaluation Thedeternunation, asofavaluationdate, oftheNormalCost, Actuarial AccruedLiability, ActuarialValueofAssets, andrelatedActuarial'. PresentValuesforaplan. AnActuarialValuationforagovernmental. retirementsystemtypicallyalsoincludescalculationsofitemsneededfor compliance with GASB No. 25, such as the Funded Ratio and the Annual. RequiredContribution (ARC). Actuarial Yalue ofAssets Thevalueoftheassetsasofagivendate, usedbytheactuaryfor valuation purposes. Thismaybethemarketorfairvalueofplanassets orasmoothedvalueinordertoreducetheyear-to-yearvolatilityof' calculatedresults, suchasthefundedratioandtheactuariallyrequired contribution (ARC). GRS 27 AmortizationMethodAmethodfordetenniningtheAmortizationPayment. Themostcommon methodsusedareleveldollarandlevelpercentageofpayroll. Underthe LevelDollarmethod, theAmortizationPaymentisoneofastreamof payments, allequal, whoseActuarialPresentValueisequaltotheUAAI,. UndertheLevelPercentageofPaymethod, theAmortizationPaymentis oneofastreamofincreasingpayments, whoseActuarialPresentValueis equaltotheUAAL. UndertheLevelPercentageofPaymethod, the streamofpaymentsincreasesattherateatwhichtotalcoveredpayrollof allactivemembersisassumedtoincrease. AmortizationPayment AmortizationPeriod ThatportionoftheplancontributionorARCwhichisdesignedtopay interestonandtoamortizetheUnfundedActuarialAccruedLiability. TheperiodusedincalculatingtheAmortizationPayment. Annual Required Theemployer'speriodicrequiredcontributions, expressedasadollar Contribution (ARC) amountorapercentageofcoveredplancompensation, deternunedunder GASB No. 25. TheARCconsistsoftheEmployerNormalCostand AmortizationPayment. ClosedAmortizationPeriod Aspecificnumberofyearsthatisreducedbyoneeachyear, anddeclines tozerowiththepassageoftime. Forexampleiftheamortizationperiodis initiallysetat30years, itis29yearsattheendofoneyear, 28yearsatthe endoftwoyears, etc. EmployerNormalCostThe portionofthe NormalCost to be paid by the employer. Thisis equaltotheNormalCostlessexpectedmembercontributions. EquivalentSingleFor plansthat do notestablish separateamortization bases (separate Amortization Period componentsoftheUAAL), thisisthesameastheAmortizationPeriod. Forplansthatdoestablishseparateamortizationbases, thisistheperiod overwhichtheUAALwouldbeamortizedifallamortizationbaseswere combineduponthecurrentUAALpayment. ExperienceGain/Loss FundedRatio Ce'lIC`7;3 Ameasureofthedifferencebetweenthenormalcostratefromlastyear andthenormalcostratefromthisyear. TheratiooftheActuarialValueofAssetstotheActuarialAccrued Liability. GovernmentalAccountingStandardsBoard. GASBNo. 25 and Thesearethegovernmentalaccountingstandardsthatsettheaccounting GASBNo. 27 rulesforpublicretirementsystemsandtheemployersthatsponsoror contributetothem. StatementNo. 27setstheaccountingrulesforthe employersthatsponsororcontributetopublicretirementsystems, while StatementNo. 25setstherulesforthesystemsthemselves. GRS NormalCost g Theannualcostassigned, undertheActuarialCostMethod, tothecurreit planyear. OpenAmortization Period Anopenamortizationperiodisonewhichisusedtodeterminethe AmortizationPaymentbutwhichdoesnotchangeovertime. Inothr words, iftheinitialperiodissetas30years, thesame30-yearperiodis usedin determining the Amortization Period eachyear. Intheory, ifan OpenAmortizationPeriodisusedtoamortizetheUnfundedActuarial Accrued Liability, the UAAI, will never completely disappear, but wi1.1 becomesmallereachyear, eitherasadollaramountorinrelationto coveredpayroll. UnfundedActuarialAccrued ThedifferencebetweentheActuarialAccruedLiabilityandActuarial Liability ValueofAssets. ValuationDate ThedateasofwhichtheActuarialPresentValueofFutureBenefitsare deternuned. Thebenefitsexpectedtobepaidinthefuturearediscounted tothis date. z0F U O U W wz0zwa rs StatementofPlanAssetsatMarketValue Item December31 2012 2011 A. CashandCashEquivalents (OperatingCash) $ _ B. Receivables: 1. MemberContributions 2. EmployerContributions 3. InvestmentIncomeandOtherReceivables 4. TotalReceivables C. Investments 1. Short-TermInvestments 2. DomesticEquities 3. InternationalEquities 4. Commodities 5. DomesticFixedIncome 6. InternationalFixedIncome 7. RealEstate 8. PrivateEquity 9. TotalInvestments D. Liabilities 1. BenefitsPayable 2. AccruedExpensesandOtherPayables 3. TotalLiabilities E. TotalMarketValueofAssetsAvailableforBenefits F. AllocationofInvestments 1. Short-TermInvestments 2. DomesticEquities 3. InternationalEquities 4. Commodities 5. DomesticFixedIncome 6. InternationalFixedIncome 7. RealEstate 8. PrivateEquity 9. TotalInvestments GRS 10, 749, 771 1,972,565 12,722,336 35,028,246 363,569,880 106,375,862 184,631,350 34,251,338 723,856,676 800,113) 800,113) 735,778,899 4. 84% 50.22% 14.70% 0.00% 25.51 % 0.00% 4.73% 0.00% 100.00% 9,615,795 2,093,552 11,709,347 35,371,258 321,443,792 87,568,7(17 1,165,3E0 174,176, 8 / S 25, 996,447 645,722,439 726,204) 726,204) 656,705,582 5.48'% 49.78''io 13.56'% 0.1S'?/o 26.97'% 0.00'% 4.03'% 0.00°,% 100.00% Item ReconciliationofPlanAssets A. Market Value of Assets at Beginning of Year B. RevenuesandExpenditures 1. Contributions a. Employee Contributions b. EmployerContributions c. StateContributions d. Total 2. InvestmentIncome a. Interest, Dividends, and Other Income b. NetRealizedGains/(Losses) c. NetUnrealizedGams1(Losses) d. InvestmentExpenses e. NetInvestmentIncome 3. BenefitsandRefunds a. Refunds b. RegularMonthlyBenefits c. PartialLump-SumBenefitsPaid d. Total 4. AdministrativeandMiscellaneousExpenses 5. Transfers C. MarketValueofAssetsatEndofYear y December31 2012 2011 656,705,582 $ 670,340,014 5,853,385 $ 5,796,620 20,196,81617,809,019 12,00012,000 26,062,201 $ 23,617,639 14,808,280 $ 14,447,428 20,545,17022,674,910 55,272,612 (39,262,170) 3,475,330) (3,473,458) 87,150,732 $ (5,613,290) 693,088) $ (827,529) 33,260,268) (30,640,931) 33,953,356) $ (31,468,460) 186,260) $ (170,321) 735,778,899 $ 656,705,582 30 J ValuationDate - December31 A. Actuarial Value of Assets Beginning of Year B. MarketValueEndofYear C. MarketValueBeginningofYear D. Non-Investment/Adininistrative Net Cash Flow E. InvestmentIncome E1. ActualMarketTotal: B-C-D E2. AssumedRateofReturn E3. AssumedAmountofReturn* E4. AmountSubjecttoPhase-In: E1—E3 F. Phase-InRecognitionofInvestmentIncome F1. CurrentYear: 0.2xE4 F2. FirstPriorYear F3. SecondPriorYear F4. ThirdPriorYear F5. FourthPriorYear F6. TotalPhase-Ins G. ActuarialValueofAssetsEndofYear G1. PreliminaryActuarialValueofAssets G2. UpperCorridorLimit: 120%*B G3. Lower CorridorLimit: 80%*B G4. FundingValueEndofYear DevelopmentofActuarialValueofAssets 201120122013 646,956,800 $664,087,199 656,705,582 735,778,899 670,340,014656,705,582 11,494,600) (11,552,745) 2,139,832) 90,626,062 7.50% 7.50% 7.00% 49,358,43448,263,087 51,498,266) 42,362,975 H. RecognizedInvestmentEarnings I. DifferencebetweenMarket & ActuarialValue J. ActuarialRateofRetum* K. MarketValueRateofReturn* L. RatioofActuarialValueofAssetstoMarketValue Beforeinvestnentexpenses 2014 7.00% 7.00% 2016 7.00% 10,299,653) 8,472,595 11,581,278 (10,299,653) 8,472,595 20,893,703 11,581,278 (10,299,653) 8,472,595 42,714,243) 20, 893,70311,581,278 (10,299,653) 8,472,595 194,520) (42,714,243) 20,893,70311,581,278 (10,299,653) 8,472,595 20,733,435) (12,066,320) 30,647,9239,754,220 (1,827,058) 8,472,595 664,087,199 $ 688,731,221 788,046,698 $882,934,679 525,364,466 $ 588,623,119 664,087,199 $688,731,221 28,624,999 $ 36,196,767 7,381,617) $ 47,047,678 4.46% 5.50% 0.32% 13.92% 101.12% 93.61% TheActuarialValueofAssetsrecognizesassumedinvestmentreturn (lineE3) fullyeachyear. Differencesbetweenactualandassunedinvestmentincome (LineE4) are phased-inoveraclosed5-yearperiod. Duringperiodswheninvesrinentperformanceexceedstheassumedrate, ActuarialValueofAssetswilltendtobelessthanMarketValue. Duringperiodswheninvesrinentperformanceislessthantheassumedrate, ActuarialValueofAssetswilltendtobegreaterthanMarketValue. Ifassuinedratesareexactly realizedfor5consecutiveyears, ActuarialValueofAssetswillbecomeequaltoMarketValue. w PlanYearEnding December31 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Averagereturns: Lastfiveyears: Lasttenyears: Allyears: InvestmentRateofReturn Market 13.21 % 10.78 9.12 20.84 6.21 28.52 6.49 9.29 0.89 23.36 14.80 17.49 16.74 18.61 3.43) 5.16) 8.83) 20.08 9.73 6.67 11.80 7.29 27.01) 30.93 17.50 0.32) 13.92 4.98 % 7.95 % 9.27 °/a Actuarial N/A N/A N/A N/A N/A N/A N/A 7.42 % 6.28 9.14 11.54 13.74 15.28 17.96 12.42 7.40 1.85) 7.45 2.18 4.58 7.87 10.68 10.61) 16.53 5.98 4.46 5.50 4.00 % 5.25 % 7.50 % 32 The aboveratesarebased on the retirementsystem'sfinancialinfortnation reportedtothe actuary. They maydifferfromfiguresthattheinvestmentconsultantreports, inpartbecauseofdifferencesinthehandling ofadministrativeandinvestmentexpenses, andinpartbecauseofdifferencesinthehandlingofcashflows. GRS z00w a z o UW OUUdUw rh V i ....... ... GRS FASBNO. 35INFORMAITON A. Valuation Date B. ActuarialPresentValueofAccumulated PlanBenefits 1. VestedBenefits a. Members Currently Receiving Payments b. TerminatedVestedMembers c. OtherMembers d. Total 2. Non-VestedBenefits 3. TotalActuarialPresentValueofAccumulated PlanBenefits: ld + 2 4. AccumulatedContributionsofActiveMembers C. ChangesintheActuarialPresentValueof AccumulatedPlanBenefits 1. TotalValueatBeginningofYear 2. Increase (Decrease) DuringthePeriod Attributableto: a. Plan Amendment b. ChangeinActuarialAssumptions c. LatestMemberData, BenefitsAccumulated andDecreaseintheDiscountPeriod d. BenefitsPaid e. NetIncrease 3. Total Value at End of Period D. ActuarialPresentValueofAccumulatedPlanBenefits UsingFRSInterestRate (7.75%) a. Vested b. Non-Vested c. Total E. MarketValueofAssets F. FundedRatioUsingFRSInterestRate (7.75%) G. ActuarialAssumptions - Seepageentitled ActuarialAssumptionsandMethods January 1, 2013 January1, 2012 470,453,496 16, 774, 341 224,439,825 711,667,662 18,256,169 729,923,831 54,638,467 637,554,568 11,689,639) 73,651,542 64,360,716 33,953,356) 92,369,263 729,923,831 652,956,258 14,428,283 667,384,541 735,778,899 110.25% 399,167,786 12,624,011 208,733,024 620,524,821 17,029,747 637,554,568 54,042,120 604,992,896 0 0 64,030,132 31,468,460) 32,561,672 637,554,568 603,958,570 15,859,179 619,817,749 656,705,582 105.95% 33 4J SCHEDULEOFFUNDINGPROGRESS GASBStatementNo. 25) UAAI. As % of ActuarialActuarialValue of ActuarialAccruedUnfundedAALCovered ValuationAssets Liability (AAL) - FEA (UAAL) FundedRatioCoveredPayrollPayroll Date (a) (b) (b) - (a) (a) / ( b) (c) ( b - a) / c 1/1/1991 $ 141,865,764 $ 152,118,075 $ 10,252,31193.3 %$ 34,532,753 29.7 % 1/1/1992 184,746,269194,550,1269,803,85795.036,626,332 26.8 1/1/1993 198,345,690207,639,7019,294,01195.538,731,03924.0 1/1/1994 213,014,474225,549,34612,534, 87294.438,710,974 32.4 1/1/1995 225,482,726237,428,79611,946,07095.041,371,33228.9 1/1/1996244,744,488271,124,38126,379,89390.344,208,96459J 1/1/1997 272, 346,200297,892,50225,546,30291.444,955,34856.8 1/1/1998 308, 596,133333,250,49224,654, 359 92.6 47,281,19852.1 1/i/1999354,088,751 377,788,731 23,699,980 93.749,666,52347.7 1/1/2000414,826,422490,426,94075,600,51884.650,937,403148.4 1/1/2001461,724,610535,672,20873,947,59886.254,864,584134.8 1/1/2002 491,859,015533,191,48741,332,47292.258,929,58270.1 1/1/2003 477, 541,459517,933,49540,392, 036 92.265,150, 82062.0 1/1/2004507,256,663546,915,62739,658,964 92.7 69,907,473 56.7 1/1/2005510,265,274549,136,18438,870,91092.973,836,30452.6 1/1/2006525,573,824563,597,580 38,023,75693.3 76,010,269 50.0 1/1/2007559, 830,590582,248,127 22,417,53796.1 79,385,090 28.2 1/1/2008610,979,087632,559,753 21,580, 66696.6 80,371,617 26.9 1/1/2009536,834,473557,515,503 20,681, 030 96.3 82,104,837 25.2 1/1/2010618,444,906638,109,34919,664,44396.980,443,19924.4 U1/2011646,956,800 665,701,475 18,744, 67597.276,505, 59924.5 1/1/2012664,087,199681,871,53117,784,33297.474,765,02023.8 1/1/2013 (b) 688,731,221705,169,08216,437,861 97.776,522,038 21.5 1/1/2013 (al) 688,731,221 680,608,117 ( 8,123, 104) 101.274,422,344 (10.9) 1/1/2013 (a2) 688,731,221746,701,092 57,969,871 92.2 74,422,34477.9 ResultsbeforeJanuary1, 2010arefromtheJanuary1, 2009ReportpreparedbyPricewaterhouseCoopers. a) = after changes W b) = before changes GRS SCHEDULEOFCONTRIBUTIONSFROMEMPLOYER ANDTHESTATEOFFLORIDA GASBStatementNo. 25) FiscalYearEnded AnnualRequired ActualPercentage Setember 30Contribution Contribution Contributed 2008 $ 12,532,399 $ 12,532,399 100.0 % 2009 10,086,978 10,086,978100.0 201023,960,58623,960,586100.0 2011 19,373,99219,373,992100.0 2012 18,898,56718,898,567100.0 201320,925,72020,925,720100.0 35 36 REQUIltEDSUPPLEMENTARYINFORMATION GA5BStatementNo. 25andNo. 2 Theinformationpresentedintherequiredsupplementaryscheduleswasdetemunedaspartofthe actuarialvaluationsatthedatesindicated. Additionalinformationasofthelatestactuarialvaluation: Valuation Date ContributionRates Employer (andState) Planmembers ActuarialCostMethod AmortizationMethod Remaining Amortization Period AssetValuationMethod ActuarialAssumptions Investmentrateofreturn Projectedsalaryincreases Includesinflationandothergeneralincreasesat CostofLivingadjustments January1, 2013 26.35% Hazardous: 10.00% (8.00% ifgrandfathered) Non-Hazardous: 8.00% FrozenEntryAgeNormal Leveldollar, closed 30years Phase-in of20% ofdifferencebetweenactual andexpectedreturnonmarketvalueofassets. 7.00% (netofinvestmentexpenses) 3.50% - 7.90% basedonservice 2.50% 1.50% eachyearon April1(Forbenefits accruedafter January 1, 2013: five-yeardelay fornon-grandfatherednon-hazardousduty members, andnoCOLAfor non- grandfathered hazardous duty members) s w GRS SECTIONE MISCELLANEOUSINFORMATION GRS RECONCILIATIONOFMEMBERSHIPDATA From1/1/2012From1/1/2011 To 1/1/2013To1/1/2012 A. ActiveMembers 1. Number IncludedinLastValuation 1,468 1,508 2. NewMembers IncludedinCurrent Valuation 11882 3. Non-VestedEmployrnent Terminations (40) (64) 4. VestedEmployment Terminations (18 ) (11) 5. ServiceRetirements (51) (43) 6. DisabilityRetirements (3) (6) 7. Deaths (1) 0 8. DataCorrections/RehiredMembers 12 9. NumberIncludedinThisValuation 1,4741,468 B. TerminatedVestedMembers 1. Number Includedin LastValuation 62 68 2. AdditionsfromActiveMembers 18 11 3. Lump SumPayments/Refund of Contributions (4) (2) 4. PaymentsCommenced (10) (16) 5. Deaths (1) 0 6. Conversion from Disability/RehiredMembers (1) 0 7. DataCorrections 0 1 8. NumberIncludedinThisValuation 64 62 C. ServiceRetirees, DisabilityRetireesandBeneficiaries 1. NumberIncludedinLastValuation 1,010956 2. Additionsfrom ActiveMembers 54 49 3. AdditionsfromTerminatedVested Members10 16 4. Deaths Resulting inNoFurther Payments (12) (13) 5. Deaths Resulting inNew SurvivorBene ts10 6. End of Certain Period - NoFurtherPayments (1) (1) 7. Data Correction/Waiver of Benefts 13 8. NumberIncludedin ThisValuation 1,0631,010 37 0-24NO. COTPAY AVGPAY 5-29NO. COTPAY VGPAY t0-34NO. COTPAY 1VGPAY 5-39NO. OTPAY VGPAY Q44NO. OTPAY VGPAY 5-49NO. OTPAY VGPAY 0-54NO. OTPAY VGPAY 5-59NO. OTPAY VGPAY 164NO. OTPAY VGPAY q+ NO. OTPAY VGPAY 156 349,056180,668 2327030,111 2720 848,488748,826 31,42537,441 1210 407,109354,684 33,92635,468 10 13 32Q887451,411 32,089 34,724 108 296,092 311,498 29,60938,935 14 4 582,766153,168 41,62638,292 187 676,206204,501 37,567 29,214 75 279,233170,341 39,89034,068 3 4 67,140146,132 22,38036,533 I1 31,14123,855 31,14123,855 ACTIVEPARTICIPANTDISTRIBUTION 2-33-4 3 114,168 38,056 7 217,024 31,003 6 187.112 31,185 12 491,896 40,991 6 246,397 41,066 6 200,122 33,354 4 20Q426 SQ106 4 67,037 41,759 2 77,774 38,887 1 23,333 23,333 ALLACTIVEMEMBERS toValuationDate 0-1415-19 30-34 3 20000 00 126,48657,87200 00 00 42,16228,936 000 000 9 134410 000 387,3504'16,5762,06833126,2600000 43,03936,660 47,008 26,26000 00 8389 1100 00 425,849 169,653 4,330,492 632,1300 000 53,23156,55148,657 57,46600 00 4775 671400 0 141,561320,2163,982,9593,768,898985,597 00 0 35,39045,74553,10656,252 70,40000 0 58 6161 56600 195,806364,3173,070,5884,057,0414,063,178402,476 00 39,16145,54050,33866,50972,557 67,07900 56 374357 3612I i 169,888191,1731,642312 2,149,7463,711,8032,613,831873,73067,351i 33,97831,86244,38749,99465,119 72,60672,81167,351 i 2 6454441 35375 I 67,813 218,8591,683,435 1,998,982 2,025,912 294,2772,212,791384,252 1 33,90636,47637,410 45,43149,41268,408 59,80576,850 I 213131 332619 5 ( 87,84727,4641,196,9101,310,1471,589,9541,531,2641,229,486307,423 ( 43,92427,46438, 610 42,26348,180 58,89564,71061,485 ( 0 2221921 13143 ] 064,966983,997852,660 993,496859,988918,996 205,07546,06: 032,48344,72744,8774'7,309 66,15365,643 68,35846,06: 00 944 440 I 0 0351,743198,956 ]98,648224,677204,213 0SO,llC 00 39,08349,73949,662 56,16951,0530SQllC NO. 117 785138 48413281 22612086 14 AMT3,858,1182,745,0641,925,2891,602,600 1,891,09619,310,76714,994,820 13,568,5888,026,5135,439,216964,101 GRS 38 12 4,772.85: 39,44: 13! 6,507,025 46,81: 20: 10,463,42` 51,79', 22] 13,007,37? 58,85i 221 12,355,89G 55,909 244 12,067,454 49,457 164 7,897,106 48,153',. 1 5216,28 50,157 29 1306.67 ACTIVEPARTICIPANTDISTRIBUTION HAZARDOUSDUTYMEMBERS YearsotServicetoValuationDate 4 e Grou0-11-22-33-44-5 5-910-1415-19 20-2425-29 3034 0-24 NO. 01l2 00 000 00 COTPAY 055,05056,91795,631 000 0000 VGPAY0 55,05056,91747,8160 000 000 15-29NO. 6604 2180 0000 COTPAY269,050344,460 0231,934119,2971,210,07900 000 VG PAY44,84257,410057,984 59,64967,2270 0000 IO-34NO. 21 07237 50 000 OTPAY98,05879,8740398,137 121,0142,471,053423,5910 000 VGPAY49,029 79, 874 056,87760,50766,78584,7180 000 5-39NO. 0211 2383210 000 OTPAY0119,141 59,01148,888127,1702,550,7072,449,817823,534 000 VGPAY059,57159,011 48,88863,58567,12476,557 82,35300 0 0-44NO. 01 12225 403420 0 OT PAY0SQ91058,688100,039 135,7941,721,0593,118,325 2,994,893 216,30700 VGPAY0 50,91058,68850,02067,89768,842 77,95888,085108,1540 0 5-49NO. 4 0 000 9924 2040 OTPAY295,03300 00613,239722,8302,132,1921,787,822399,8850 VGPAY73,758000 068,13880,31488,84189,39199,9710 D-54NO. 40 I0 1324 1453 OTPAY288,386 0113,331060,613189,744 161,707343,7431,245,352439,217285,463 VGPAY72,0970ll3,3310 60,61363,24880,85485,93688,95487,84395,154 i-59NO. 200 0013 112 1 OTPAY147,554000 074,830240,89477,62180,488 206,44878,323 VGPAY73,77700 0074,830 80,29877,62180,488 ]03,22478,323 l64NO. 0000 0401 111 OTPAY00 000339,6360 92,05488,956 86,941I15,369 VGPAY0000 084,909092,054 88,95686,941ll5,369 i+NO. 0000 000 0000 OT PAY0000 0000 000 VGPAY00 00000 000 0 JTNO. 18114 16913591 743812 5 JTAMT1,098,081649,435287,947874,629563,8889,170,347 7,117,1646,464,0373,418,9251,132,491479,155 VGAMT61,005 59,040 71,987 54,66462,654 67.9287821I57352R997 9437495R' GRS Totals 207,5! 51,9( 2,174,8: 6Q4] 3,591,7 66,51 8 6,178,2b 71,84 10 8,396,01 78,46 7 5,951,00 85,01 3' 3,127,SSi 84,52! 1 906,151 31 0-24NO. COTPAY AVGPAY 5-29NO. COTPAY VGPAY f0-34NO. fOTPAY 1VGPAY 5-39NO. OTPAY VGPAY 0-44NO. OTPAY VGPAY 5-49NO. OTPAY VGPAY 0-54NO. OTPAY VGPAY 5-59NO. OTPAY VGPAY 64NO. OTPAY VG PAY i+ NO. OTPAY VGPAY 0-1 155 349,056125,618 23,27025,124 21 14 579,438404,366 27,59228,883 09 309,051274,810 30,90530,534 1011 32Q887332,270 32,08930,206 107 296,092260,568 29,60937,224 10 4 287,733153,168 28,'77338,292 147 387,820204,501 27,70129,214 55 131,679170,341 26,336 34,068 3 4 67,140146,132 22,38036,533 11 31,147 23,855 31,14123,855 ACTIVEPARTICIPANTDISTRIBUTION NON-HAZARDOUSDUTYMEMBERS 2 57,251 28,626 7 217,024 31,003 6 187,ll2 31,185 11 432,885 39,353 5 187,709 37,542 6 200,122 33,354 3 87,095 29,032 4 167,037 41,759 2 77,774 38,887 1 23,333 23,333 NO. 9967 47 AMT2,76Q0372,095,6291,637,342 GRS YearsofServicetoValuationDate 455-9 10-14 12 00000 0 30,85557,872000 000 30,85528,9360 0 000 0 51126 1000 0 155,416357,279858,252262600 000 31,08332,48033,01026260 000 0 11526 0000 27,71248,6391,859,439 208,539 000 0 27,71248,63935,75834,7570 000 353735 4000 92,673193,0461,432,2521,319,081162,0630 00 30,89138,60938,71037,68840,516 0 00 i 36 36 21224 00 i 95,767228,5231,349,529938,7161,068,285 ]86,1690 0i 31,92238,08737,487 44,70148,55846,542 00 I 5628 343316 81 I 169,888 191,1731,029,0731,426,916 1,579,611826,009 473,84567,351 1 33,97831,86236,75341,96847,86751,626 59,23167,351 ( 2 54242 372132 2 ( 67,813158,2461,493,691 1,837,2'751,682,1691,148,925 ],773,57498,789 ( 33,907 31,64935,56443,74545,464 54,71155,42449,395 ( 2 130283225 174 ( 87,84727,4641,122,0801,069,2531,512,3331,450,7761, 023,038 229,100 ( 43,92427,46437,403 38,188 47,260 58,031 60,17957,275 ( 0218 192012 132l 0 64,966644,361852,660901,442 771,032832,05589,706 46,062 032,48335,79844,87745,07264,25364,00444,85346,062 0094 44 401 00351,743198,956 198,6A8 224,677 20413050,110 0 039,08349,739 49,66256,169 51,053 050,110 2239 278190152 82749 727,971 1,327,208 ]0,140,4207,877,6567,104,5514,607,5884,306,725 484,94696,1 33,09034,031 36,476_ 41,46146,740 56.19058.19953_RR3axn 40 Totals m I1 4,611,35 40,45 42,41 43,1 w w INACTIVEPARTICIPANTDISTRIBUTION 41 Deceasedwith TerminatedVestedDisabled Retired Beneficiar Total TotalTotal Tatal Age Group Number BenefitsNumberBenefits NumberBenefitsNumberBen.eiits Under20 - - - - - - 8 124,415 20-24 - - - - - - - - 25-29 - - - - - - - - 30-34 - - 138,782 - - - _ 35-394 71,731 - - - - _ _ 40-4410170,7004 149,2878314,415 35),118 45-4914332,1827245,32122 911,094340,387 50-54 23566,85019609,669 572,716,1313 7`i,480 55-59583,694 24573,9911747,068,19715318,218 60-648166,129 26677,593191 7,485,6227128,214 65-69 - - 26591,530 1655,382,935 17371,733 70-74 - - 14328,96177 2,588,24421355,762 75-79 - - 10174,864 541,479,9752227?',186 80-84 - - 487,591 21427,16411 263,867 85-89 - - 2 6,98517 266,95815122,766 90-94 - - - - 8138,611412;,167 95-99 - - - - 14,3692 4,368 100 & Over - - - - _ _ _ _ Total64 1,391,2861373,484,574 79528,783,715131 2,149,681 Avera e e51 6364 69 GRS J O ' dn O z z 0 0 z A. Ordinances SUMMARYOFPLANPROVISIONS 42 rThePlanwasestablishedundertheCodeofOrdinancesfortheCityofClearwater, Florida, Chapter ', ArticleV, Division3andwasmostrecentlyamendedunderOrdinanceNo. 8333-12passedand adoptedonJuly19, 2012andenactedbypublicreferenduminNovember2012. ThePlanisalso governed by certainprovisionsofPart VII, Chapter112, FloridaStatutes (F.S.) andtheInternal RevenueCode. B. EffectiveDate RestatedPlanEffectiveDate: January1, 2013 (previousrestatedPlanEffectiveDatewasJanuary ], 1996). C. PlanYear January1throughDecember31. D. TypeofPlan Qualified, governmentaldefinedbenefitretirementplan; forGASBpurposesitisasingleemployer plan. E. EligibilityRequirements Allfizll-timepermanentemployeesoftheCityarerequiredtoparticipateandbecomeparticipantson theirdateofhire. F. GrandfatheredMembers MemberswhoareeligiblefornormalretirementasofJanuary1, 2013aregrandfatheredintheplan provisionsineffectbeforeOrdinanceNo. 8333-12. G. CreditedService CreditedServiceismeasuredasthetotalnumberofyearsandfractionalpartsofyearsfromthedateo:l' employmenttothedateofterminationorretirement. Noserviceiscreditedforanyperiodso:l' employmentforwhichaparticipantreceivedarefundoftheircontributions. H. Compensation ThetotalcompensationforservicesrenderedtotheCityreportableontheparticipant'sW-2form, plus alltaxdeferred, taxshelteredortaxexemptitemsofincomederivedfromelectiveemployeepayroll deductionsorsalaryreductions, butexcludinganylumpsumpaymentsofunusedvacationandsick: leave, payforoff-dutyemployment, andclothing, carormealallowances. EffectiveJanuary 1, 2013: Fornon-gandfatheredhazardousdutymembers, theamountofovertime: includedinCompensationislimitedto300hoursperyear; Fornon-grandfatherednon-hazardousduty members, Compensationexcludesovertimeandadditionalpayabovethebaserateofpay. GRS i 43 I. AverageMonthlyCompensation (AMC) One-twelfthoftheaverageofCompensationduringthehighest5yearsoutofthelast10years precedingterminationorretirement. J. NormalRetirement Eligibility: Benefit For Non-Hazardous Dut mployment AparticipanthiredbeforeJanuaryl, 2013mayretireonthefirstdayofthemonth coincidentwithornextfollowingtheearliestof: 1) age55with20yearsofCreditedService, or 2) 30yearsofCreditedServiceregardlessofage, or 3) age65with10yearsofCreditedService. AparticipanthiredonorafterJanuary1, 2013mayretireonthefirstdayofthemonth coincidentwithornextfollowingtheearliestof: 1) age60with25yearsofCreditedService, or 2) age65with10yearsofCreditedService ForHazardousDutvEmloyment-PoliceOfficersandFirefighters Aparticipantmayretireonthefirstdayofthemonthcoincidentwithornext followingtheearlierof 1) age55with10yearsofCreditedService, or 2) 20yearsofCreditedServiceregardlessofage. 2.75% ofAMCmultipliedbyyearsofCreditedService. ForNon-Hazardous Duty participants hired onorafter January 1, 2013, 2.00% of AMCmultipliedbyyearsofCreditedService. NormalForm of Benefit: ForNon-HazardousDutyEmployment (Non-Grandfathere Amonthlyannuityispaidforthelifeoftheparticipant. ForHazardousDutvEmplovment-PoliceOfficersandFirefighters (andGrandfathered Non-HazardousDutyEmployment) Amonthlyannuityispaidforthelifeoftheparticipant. Aftertheparticipant'sdeath, 100% oftheNormalRetirementBenefitshallbepaidasasurvivorannuitytothe spousefor5 years. After 5 years, suchsurvivor annuity is reduced to 50% ofthe originalamount. Thesurvivorannuityceasesupondeathorremarriageofthespouse. 120monthlypaymentsareguaranteedforpoliceofficersandfirefighters. Optional forms of benefits areavailable. 44 COLA: ForNon-HazardousDutvEmplo nt 1.5% annuallycommencingoneachApril1forallretireesandbeneficiarieswhohave receivedatleast6 monthly benefit payments. Fornon-grandfatheredmembers (not eligiblefornormalretirementonJanuary1, 2013), thereisafive-yeardelay (afterth.e retirementdate) untilthisCOLAisappliedtobenefitsaccruedafterJanuary1, 2013. ForHazardousDutvEmployment-PoliceOfficersandFirefihters 1.5% annuallycommencingoneachApril1forallretireesandbeneficiarieswhohave received at least6 monthly benefit payments. Fornon-grandfatheredmembers (not eligiblefor normal retirementon January 1, 2013), thereisnoCOLAforbenefits accruedafterJanuary1, 2013. K. EarlyRetirement Eligibility: Benefit: NormalForm ofBenefit: PoliceOfficersandFirefightersmayelecttoretireearlierthantheNormalRetiremen.t Eligibility upon the attainment of age 50 with 10 years of Credited Service. TheNormalRetirementBenefitis reduced by 3.0% foreachyearbywhichtheEarly Retirementdateprecedesage55. Amonthlyannuityispaidforthelifeoftheparticipant. Aftertheparticipant'sdeath, 100% oftheNormalRetirementBenefitshallbepaidasasurvivorannuitytothe spousefor5 years. After5 years, suchsurvivor annuity is reducedto50% ofthe; originalamount. Thesurvivorannuityceasesupondeathorremarriageofthespouse. 120monthlypaymentsareguaranteedforpoliceofficersandfirefighters. Optional forms of benefits are available. COLA: 1.5% annuallycommencingoneachApril1forallretireesandbeneficiarieswhohave receivedat least 6 monthly benefit payments. Fornon-grandfatheredmembers (nox eligiblefor normalretirementon January 1, 2013), thereisnoCOLAforbenefits accruedafterJanuary1, 2013. L. DelayedRetirement SameasNormalRetirementtakingintoaccountCompensationeamedandservicecrediteduntilthe dateofactualretirement. M. ServiceConnectedDisability Eligibility: Anyparticipantwhobecomestotallyandpermanentlydisabledduetoanillnessor injurycontractedinthelineofdutyandisdeemedtobeunabletoperformusefuland efficientservicetotheCityisimmediatelyeligibleforadisabilitybenefit. Benefit: ForNon-HazardousDutyEmployment Participant'saccruedNormalRetirementBenefittakingintoaccountCompensation earnedandservicecrediteduntilthedateofdisability. Benefitisguaranteedtobeno less than 42% of the participant's AMC (662/3% oftheparticipant'sAMCif grandfathered). Disability benefits, when combined with Worker's Compensation GRS NormalForm ofBenefit: COLA: 45 benefits, cannotexceedandwill belimited to100% oftheparticipant'sAMConthe dateofdisability. ForHazardousDutyEmplovment-PoliceOfficersandFirefighters Participant'saccruedNormalRetirementBenefittakingintoaccountCompensation earnedandservicecrediteduntilthedateofdisability. Benefitisguaranteedtobeno less than662/3% oftheparticipant'sAMC. Disabilitybenefits, whencombinedwith Worker's Compensationbenefits, cannotexceedandwill belimited to100% ofthe participant'sAMConthedateofdisability. ForNon-HazardousDutvEmployment (Non-Grandfathered Amonthlyannuityispaidforthelifeoftheparticipant. ForHazardous DutvEmployment-PoliceOfficers andFirefiters (andGrandfathered Non-HazardousDutyEmployment) A monthly annuity is paid for the life of the participant. After the participant's death, 100% oftheNormalRetirementBenefitshallbepaidasasurvivorannuitytothe spousefor5 years. After5 years, suchsurvivor annuity is reduced to50% ofthe originalamount. Thesurvivorannuityceasesupondeathorremarriageofthespouse. 120monthlypaymentsareguaranteedforpoliceofficersandfirefighters. Optional formsofbenefitsareavailable. ForNon-HazardousDutvEmployent 1.5% annuallycommencingoneachApril1forallretireesandbeneficiarieswhohave receivedat least6 monthly benefit payments. Fornon-grandfatheredmembers (not eligiblefornormalretirementonJanuary1, 2013), thereisafive-yeardelay (afterthe retirementdate) untilthisCOLAisappliedtobenefitsaccruedafterJanuary1, 2013. ForHazardousDut ployxnent- PoliceOfficers and Firefiters 1.5% annually commencing on each April 1 for all retirees and beneficiaries who have receivedatleast6 monthly benefit payments. Fornon-grandfatheredmembers (not eligiblefor normalretirementon January 1, 2013), thereisnoCOLAforbenefits accruedafterJanuary1, 2013. N. Non-ServiceConnectedDisability Eligibility: Anyparticipantwhohas10ormoreyearsofCreditedServiceandbecomestotallyand permanently disabled and is deemed to be unable to perform useful and efficient servicetotheCityisiinmediatelyeligibleforadisabilitybenefit. GRS L 6 Benefit: Participant'saccruedNormalRetirementBenefittakingintoaccountCompensaticn earnedandservicecrediteduntilthedateofdisability. Disabilitybenefits, whe;n combinedwithWorker'sCompensationbenefits, cannotexceedandwillbelimitedt:o 100% oftheparticipant'sAMConthedateofdisability. NormalForm of Benefit: ForNon-Hazardous Duty Employmenton-Grandfathered Amonthlyannuityispaidforthelifeoftheparticipant. ForHazardous Dutv Emplovment-PoliceOfficers andFirefi ters (andGrandfathered Non-HazardousDutvEmplovment) Amonthlyannuityispaidforthelifeoftheparticipant. Aftertheparticipant'sdeath, 100% oftheNormalRetirementBenefitshallbepaidasasurvivorannuitytothe spouse for5 years. After5 years, suchsurvivor annuity is reducedto50% ofthe originalamount. Thesurvivorannuityceasesupondeathorremarriageofthespouse:. 120monthlypaymentsareguaranteedforpoliceofficersandfirefighters. Optiona.l formsofbenefitsareavailable. L L_J COLA: ForNon-HazardousDutyEmloyment 1.5% annuallycommencingoneachApril1forallretireesandbeneficiarieswhohav receivedatleast6 monthly benefit payments. Fornon-grandfatheredmembers (not eligible for normalretirementon January 1, 2013), thereisafive-yeardelay (afterth retirement date) until this COLA is applied to benefits accrued after January 1, 2013. ForHazardousDutvEmplovment-PoliceOfficersandFirefighters 1.5% annuallycommencingoneachApril1forallretireesandbeneficiarieswhohave: receivedatleast 6 monthly benefit payments. Fornon-grandfatheredmembers (not eligiblefor normalretirementon January 1, 2013), thereisnoCOLAforbenefit:; accruedafterJanuary1, 2013. O. DeathintheLineofDuty Eligibility: Anyparticipantwhoseemploymentisterminatedbyreasonofdeathinthelineofduty iseligibleforsurvivorbenefits. Benefit: Beneficiarywillbepaidtheparticipant'saccruedbenefitbaseduponCreditedService and AMC as of the date of death. Benefitis guaranteed tobe noless than662/3% oi' theparticipant'sAMC. NormalForm ofBenefit: 100% oftheparticipant'saccruedbenefitshallbepaidasasurvivorannuitytothe spousefor 5 years. After5 years, such survivorannuity is reducedto50% ofthe originalamount. Thesurvivorannuityceasesupondeathorremarriageofthespouse. 120 monthly paymentsareguaranteed for police officersandfirefighters. 47 COLA: ForNon-HazardousDutvEmplovment 1.5% annuallycommencingoneachApril1forallretireesandbeneficiarieswhohave receivedatleast6 monthly benefit payments. Fornon-grandfatheredmembers (not eligiblefornormalretirementonJanuary1, 2013), thereisafive-yeardelay (afterthe retirementdate) untilthisCOLAisappliedtobenefitsaccruedafterJanuary1, 2013. ForHazardousDutvEmployment-PoliceOfficersandFirefihters 1.5% annuallycommencingoneachApril1forallretireesandbeneficiarieswhohave receivedatleast 6 monthly benefit payments. Fornon-grandfatheredmembers (not eligiblefor normalretirementon January l, 2013), thereisnoCOLAforbenefits accruedafterJanuaryl, 2013. Inlieuofthebenefitsdescribedabove, theparticipant'sbeneficiarycanelecttoreceivearefundof participant'saccumulatedcontributionswithinterest. P. OtherPre-RetirementDeath Eligibility: Benefit: NormalForm ofBenefit: COLA: Anyparticipantwhodieswith10ormoreyearsofCreditedServiceiseligiblefor survivorbenefits. Beneficiarywillbepaidtheparticipant'saccruedbenefitbaseduponCreditedService andAMCasofthedateofdeath. 100% oftheparticipant'saccruedbenefitshallbepaidasasurvivorannuitytothe spouse for 5 years. After5 years, suchsurvivor annuity is reducedto50% ofthe originalamount. Thesurvivorannuityceasesupondeathorremarriageofthespouse. 120monthlypaymentsareguaranteedforpoliceofficersandfirefighters. ForNon-HazardousDutyEmployment 1.5% annuallycommencingoneachApril1forallretireesandbeneficiarieswhohave receivedatleast 6 monthly benefit payments. Fornon-grandfatheredmembers (not eligible for normal retirement on January 1, 2013), there is a five-year delay (after the retirementdate) untilthisCOLAisappliedtobenefitsaccruedafterJanuary1, 2013. ForHazardous Dut ployment- PoliceOfficers andFirefiters 1.5% annuallycommencingoneachApril1forallretireesandbeneficiarieswhohave received atleast6 monthly benefit payments. Fornon-grandfatheredmembers (not eligiblefor normal retirementon January 1, 2013), thereisnoCOLAforbenefits accruedafterJanuary1, 2013. Inlieuofthebeneiitsdescribedabove, aparticipant'sbeneficiarycanelecttoreceivearefundofthe participant'saccumulatedcontributionswithinterest. Accumulatedcontributions, plusinterest, will be refundedfor all participantswithless than10 yearsof CreditedService. Q. PostRetirementDeath Benefitdeternunedbytheformofbenefitelecteduponretirement. R. OptionalForms 4 8 InlieuofelectingtheNormalFormofbenefit, theoptionalformsofbenefitsavailabletoallretireesare a Single Life Annuity, a10YearCertain and Life Annuity, or the 50%, 662/3% (forpoliceofficersand firefighters), 75% or 100% JointandSurvivoroptions. Membersmayalsoelectapartiallumpsurn equalto 10%, 20%, or 30% ofthevalueofthenormalretirementbenefitwiththeremainingmonthl,y retirementbenefitreducedaccordingly. S. VestedTerminallon Eligibility: Aparticipanthasearnedanon-forfeitablerighttoPlanbenefitsafterthecompletionof 10yearsofCreditedServiceprovidedemployeecontributionsarenotrefunded. Vestingisdeternunedinaccordancewiththefollowingtable. ofNormal Years of Credited Retirement ServiceBenefits Less Than100% 10 ormore 100% Benefit: Theparticipant'saccruedNormalRetirementBenefitasofthedateofternunation. Benefitbeginsonthemember'sNormalRetirementdate. Alternatively, policeofficers andfirefightersmayelecttoreceiveanactuariallyreducedEarlyRetirementBenefil: anytimeafterage50. NormalForm of Benefit: ForNon-HazardousDutyEmployment (Non-Grandfathered GRS Amonthlyannuityispaidforthelifeoftheparticipant. ForHazardousDutvEmplovment-PoliceOfficersandFirefighters (andGrandfathered Non-HazardousDutyEmployment) Amonthlyannuityispaidforthelifeoftheparticipant. Aftertheparticipant'sdeath, 100% oftheNormalRetirementBenefitshallbepaidasasurvivorannuitytothe spouse for 5 years. After5 years, suchsurvivor annuity is reducedto50% ofthe original amount. The survivor annuity ceases upon death or remarriage of the spouse. 120monthlypaymentsareguaranteedforpoliceofficersandfirefighters. Optional forms of benefits areavailable. COLA: 49 ForNon-HazardousDutyEmployment 1.5% annuallycommencingoneachApril1forallretireesandbeneficiarieswhohave receivedat least6 monthly benefit payments. Fornon-gandfatheredmembers (not eligiblefornormalretirementonJanuary1, 2013), thereisafive-yeardelay (a$erthe retirementdate) untilthisCOLAisappliedtobenefitsaccruedafterJanuary1, 2013. ForHazardousDutyEmplovment-PoliceOfficersandFirefiters 1.5% annuallycommencingoneachApril1forallretireesandbeneficiarieswhohave receivedat least 6 monthly benefit payments. Fornon-grandfatheredmembers (not eligiblefor normalretirementon January 1, 2013), there is no COLA for benefits accruedafterJanuary1, 2013. Planparticipantswithlessthan10yearsofCreditedServicewillreceivearefundoftheirown accumulatedcontributionswithinterest. T. Refunds Eligibility: Allparticipantsterminatingemploymentwithlessthan10yearsofCreditedService areeligible. Optionally, vestedmembers (thosewith10ormoreyearsofcredited service) mayelectarefundinlieuofthevestedbenefitsotherwisedue. Benefit: Refund of the member'scontributions with5% simpleinterestpaidinasinglelump sum. U. MemberContributions 8% ofCompensationforNon-HazardousDutyparticipants. 10% of Compensationfor Hazardous Duty participants (8% ofCompensationifgrandfathered). V. EmployerContributions Each planyear, the Employer mustcontribute aminimumof7% oftheCompensationofallemployees participatingintheplan, plusanyadditionalamountdeterminedbytheactuaryneededtofundtheplan properly according to State laws. W. CostofLivingIncreases ForNon-HazardousDutvEmlovment 1.5% annuallycommencingoneachApril1forallretireesandbeneficiarieswhohavereceivedatleast 6 monthly benefit payments. Fornon-grandfatheredmembers (noteligiblefornormalretirementon January 1, 2013), thereisafive-yeardelay (aftertheretirementdate) untilthisCOLAisappliedto benefitsaccruedafterJanuary1, 2013. GRS ForHazardousDutvEmplovment-PoliceOfficersandFirefihters r 1.5% annuallycommencingoneachApril1forallretireesandbeneficiarieswhohavereceivedatleast 6 monthly benefit payments. Fornon-grandfatheredmembers (noteligiblefornormalretirementon January1, 2013), thereisnoCOLAforbenefitsaccruedafterJanuary1, 2013. X. 13'hCheck NotApplicable Y. DeferredRetirementOptionPlan NotApplicable Z. OtherAncillaryBenefits Therearenoancillaryretirementtypebenefitsnotrequiredbystatutesbutwhichmightbedeemeda CityofClearwaterEmployees' PensionPlanliabilityifcontinuedbeyondtheavailabilityoffundingby thecurrentfundingsource. AA. ChangesfromPreviousValuation SeetheIntroductionsectionforasurnmaryofthechangesinplanprovisionssincetheprevious valuation. GRS Pension Trustees Agenda Council Chambers - City Hall Meeting Date:4/15/2013 SUBJECT / RECOMMENDATION: Determine Trustees' expected rate of return for the pension plan's investments for the current year, for each of the next several years, and for the long term thereafter. SUMMARY: Florida Statutes 112.661(9) requires an annual determination of expected rates of return be filed with the Florida Department of Management Services, with the plan's sponsor, and with the consulting actuary. Staff is recommending the current plan investment rate of return assumption of 7.0%, net of investment-related fees, as the expected annual rate of return for the current year; for each of the next several years, and for the long term thereafter. Review Approval:1) Office of Management and Budget 2) Legal 3) Clerk 4) Assistant City Manager 5) City Manager 6) Clerk Cover Memo Item # 3 Pension Trustees Agenda Council Chambers - City Hall Meeting Date:4/15/2013 SUBJECT / RECOMMENDATION: Approve the request of the new hires for acceptance into the Pension Plan as listed. SUMMARY: Pension Name, Job. Class, & Dept./Div. Hire Date Elig. Date Dwayne Randall, Parks Serv Tech I, Parks and Rec Dept 01/28/2013 01/28/2013 Clifton Whitaker, Solid Waste Worker, Solid Waste Dept 01/28/2013 01/28/2013 Mark Snurr, Licensed Electrician, GS/Solid Waste Dept 02/11/2013 02/11/2013 Mercedes McBride, Police Comm Oper Trainee, Police Dept 02/25/2013 02/25/2013 James Blackwell, Police Comm Oper Trainee, Police Dept 02/25/2013 02/25/2013 Jamie Duplain, Police Comm Oper Trainee, Police Dept 02/25/2013 02/25/2013 Paige Szymaniak, Police Comm Oper Trainee, Police Dept 02/25/2013 02/25/2013 Jeremy Curvan, Police Officer, Police Department 02/25/2013 02/25/2013 Scott Penna, Police Officer, Police Department 02/25/2013 02/25/2013 Daniel Marschel, Police Officer, Police Department 02/25/2013 02/25/2013 Stacie Gonzalez, Cust Service Rep, Customer Service Dept 02/25/2013 02/25/2013 Tony Gordon, Solid Waste Worker, Solid Waste Dept 02/25/2013 02/25/2013 Review Approval: Cover Memo Item # 4 Pension Trustees Agenda Council Chambers - City Hall Meeting Date:4/15/2013 SUBJECT / RECOMMENDATION: Approve the request of employee John Cavaliere, Police Department for a regular pension as provided by Sections 2.416 and 2.424 of the Employees’ Pension Plan. SUMMARY: John Cavaliere, Police Officer, Police Department, was employed by the City on September 24, 1990 and his pension service credit is effective on that date. His pension will be effective April 1, 2013. Based on an average salary of approximately $80,653.64 per year over the past five years, the formula for computing regular pensions, and Mr. Cavaliere’s selection of the 100% Joint and Survivor Annuity, this pension will approximate $48,859.44 annually. Section 2.416 provides for normal retirement eligibility when a participant has completed twenty years of credited service or has reached age 55 and completed ten years of credited service in a type of employment described as “hazardous duty”. Mr. Cavaliere qualifies under the hazardous duty criteria. Review Approval: Cover Memo Item # 5 Recommend approval of the request of employee John Cavaliere, Police Department for a regular pension as provided by Sections 2.416 and 2.424 of the Employees’ Pension Plan. John Cavaliere, Police Officer, Police Department, was employed by the City on September 24, 1990 and his pension service credit is effective on that date. His pension will be effective April 1, 2013. Based on an average salary of approximately $80,653.64 per year over the past five years, the formula for computing regular pensions, and Mr. Cavaliere’s selection of the 100% Joint and Survivor Annuity, this pension will approximate $48,859.44 annually. Section 2.416 provides for normal retirement eligibility when a participant has completed twenty years of credited service or has reached age 55 and completed ten years of credited service in a type of employment described as “hazardous duty”. Mr. Cavaliere qualifies under the hazardous duty criteria. Attachment number 1 \nPage 1 of 1 Item # 5 Pension Trustees Agenda Council Chambers - City Hall Meeting Date:4/15/2013 SUBJECT / RECOMMENDATION: Approve the City of Clearwater Employee Pension Plan as lead plaintiff in litigation against Maxwell Technologies, Inc regarding investment losses to the Plan; retain Saxena White, P.A. as legal counsel in this regard and authorize staff to negotiate a retainer agreement with Saxena White, P.A. SUMMARY: In December 2011, the City Employees’ Pension Plan Trustees approved contracts retaining Kessler, Topaz, Melzer, and Cheek, LLP, and Saxena White, P.A., to provide monitoring of securities in the Pension Plan investment portfolio in connection with claims for damages suffered by the Pension Plan, at no cost to the Plan. Saxena White has recommended that the Pension Plan move for lead plaintiff status in a litigation action against Maxwell Technologies, based in San Diego, California. Maxwell develops, manufactures, and markets products and services for purification and information technologies and power-conversion systems and components. Maxwell has announced it must restate its financial statements by millions of dollars because it recognized revenue prematurely, that the company lacked internal controls, and was notified it was no longer in compliance with NASDAQ listing rules. The company auditor subsequently resigned because it could no longer rely on management representations. This has devastated Maxwell's common stock price resulting in a loss of 44% in the value of such stock since March 7, 2013. The Clearwater Employee Pension plan has sustained losses in excess of $220,000. Pursuing lead plaintiff status will serve to ensure the Trustees and Plan administrators are fulfilling their fiduciary responsibilities while conveying a strong message to the public and corporate world that the City is doing its due diligence in ensuring that the Plan assets are protected. The cost of litigation will result in no out of pocket expenses to the Plan and the retainer agreement will stipulate as much. Review Approval: Cover Memo Item # 6 Attachment number 1 \nPage 1 of 11 Item # 6 Attachment number 1 \nPage 2 of 11 Item # 6 Attachment number 1 \nPage 3 of 11 Item # 6 Attachment number 1 \nPage 4 of 11 Item # 6 Attachment number 1 \nPage 5 of 11 Item # 6 Attachment number 1 \nPage 6 of 11 Item # 6 Attachment number 1 \nPage 7 of 11 Item # 6 Attachment number 1 \nPage 8 of 11 Item # 6 Attachment number 1 \nPage 9 of 11 Item # 6 Attachment number 1 \nPage 10 of 11 Item # 6 Attachment number 1 \nPage 11 of 11 Item # 6