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01/14/2019Monday, January 14, 2019 9:00 AM City of Clearwater City Hall 112 S. Osceola Avenue Clearwater, FL 33756 Council Chambers - Main Library Pension Trustees Meeting Agenda January 14, 2019Pension Trustees Meeting Agenda 1. Call To Order 2. Approval of Minutes 2.1 Approve the November 13, 2018 Pension Trustees Meeting Minutes as submitted in written summation by the City Clerk. 3. Citizens to be Heard Regarding Items Not on the Agenda 4. New Business Items 4.1 Accept the actuary’s recommendations for changes to plan actuarial assumptions and methods, as amended for phase-in of change in net investment return assumption to 6.50%, per the Experience Investigation completed by Gabriel Roeder Smith and Company for the five-year period ending December 31, 2017. 4.2 Approve the new hires for acceptance into the Pension Plan as listed. 4.3 Approve the following request of employee Wendy Aspinwall, Fire Department, to vest their pension as provided by Section 2.419 of the Employees’ Pension Plan. 4.4 Approve the following request of employee William New, Public Utilities Department, for a regular pension as provided by Sections 2.416 and 2.424 of the Employees’ Pension Plan. 4.5 Approve the new hires for acceptance into the Pension Plan as listed. 4.6 Approve the following request of employees Brian Craig, Police Department and Diane Devol, Planning and Development Department, to vest their pensions as provided by Section 2.419 of the Employees’ Pension Plan. 4.7 Approve the following request of employees Karen Cunkle, City Auditor Department, and Brett Faulk, Police Department, for a regular pension as provided by Sections 2.416 and 2.424 of the Employees’ Pension Plan. 5. Director's Report 6. Adjourn Page 2 City of Clearwater Printed on 1/4/2019 Cover Memo City of Clearwater City Hall 112 S. Osceola Avenue Clearwater, FL 33756 File Number: ID#18-5495 Agenda Date: 1/14/2019 Status: Agenda ReadyVersion: 1 File Type: MinutesIn Control: Pension Trustees Agenda Number: 2.1 SUBJECT/RECOMMENDATION: Approve the November 13, 2018 Pension Trustees Meeting Minutes as submitted in written summation by the City Clerk. SUMMARY: APPROPRIATION CODE AND AMOUNT: USE OF RESERVE FUNDS: Page 1 City of Clearwater Printed on 1/4/2019 Pension Trustees Meeting Minutes November 13, 2018 Page 1 City of Clearwater City of Clearwater City Hall 112 S. Osceola Avenue Clearwater, FL 33756 Meeting Minutes Tuesday, November 13, 2018 9:00 AM Council Chambers Pension Trustees Draft Pension Trustees Meeting Minutes November 13, 2018 Page 2 City of Clearwater Roll Call Present 5 - Chair George N. Cretekos, Trustee Doreen Caudell, Trustee Bob Cundiff, Trustee Hoyt Hamilton, and Trustee David Allbritton Also Present – William B. Horne – City Manager, Jill S. Silverboard – Deputy City Manager, Micah Maxwell – Assistant City Manager, Pamela K. Akin – City Attorney, Rosemarie Call – City Clerk, Nicole Sprague – Official Records and Legislative Services Coordinator, and Joe Roseto – Human Resources Director To provide continuity for research, items are listed in agenda order although not necessarily discussed in that order. Unapproved 1. Call to Order – Mayor Cretekos The meeting was called to order at 9:04 a.m. at City Hall. 2. Approval of Minutes 2.1 Approve the minutes of the October 15, 2018 Pension Trustees Meeting as submitted in written summation by the City Clerk. Trustee Allbritton moved to approve the minutes of the October 15, 2018 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 Regarding Items Not on the Agenda – None. 4. New Business Items 4.1 Approve the new hires for acceptance into the Pension Plan as listed. Name//Job Classification/Department Pension Eligibility Date Logan Weinzierl,, Beach Lifeguard, Parks and Recreation 09/01/2018 Thomas Lanni, Parks Service Technician I, Parks and Recreation 09/01/2018 Jordan McGee, Solid Waste Worker, Solid Waste 09/01/2018 Louis Arnold, Gas Technician I, Gas 09/04/2018 Savannah Lopez, Customer Service Rep., Planning and Development 09/04/2018 Cody Keers, Water Distribution Operator Trainee, Public Utilities 09/04/2018 Draft Pension Trustees Meeting Minutes November 13, 2018 Page 3 City of Clearwater Vincent Ramirez, Public Utilities Technician I, Public Utilities 09/04/2018 Michael Lang, Parks Service Technician I, Parks and Recreation 09/04/2018 Michelle Leach, Recreation Supervisor I, Parks and Recreation 09/04/2018 Irin Gomez, Housing Specialist, Economic Development and Housing 09/17/2018 Kara Grande, Senior Staff Asst., Economic Development and Housing 09/17/2018 Alejandro Vasquez, Field Service Representative I, Customer Service 09/17/2018 Paul Kuhar, Radio Communications Analyst, General Services 09/17/2018 Ajene Snow, Aquatic Programmer, Parks and Recreation 09/17/2018 Eric Harris, Recreation Specialist, Parks and Recreation 09/17/2018 Jo-Anna Gamble, Police Property Clerk, Police 09/17/2018 Trustee Caudell moved to approve the new hires for acceptance into the Pension Plan as listed. The motion was duly seconded and carried unanimously. 4.2 Approve the following request of employees Michelle Kutch, Human Resources Department and Andrew Leeth, Fire Department, to vest their pensions as provided by Section 2.419 of the Employees’ Pension Plan. Michelle Kutch, Human Resources Manager, Human Resources Department, was employed by the City on Feb 22, 2005, and began participating in the Pension Plan on that date. Ms. Kutch terminated from City employment on September 22, 2018. Andrew Leeth, Fire Medic, Fire Department, was employed by the City on March 19, 2007, and began participating in the Pension Plan on that date. Mr. Leeth terminated from City employment on May 19, 2018. 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 for non-hazardous duty employees hired prior to the effective date of this reinstatement (January 1, 2013), a member shall be eligible for retirement following the earlier of the date on which a participant has reached the age of fifty-five years and completed twenty years of credited service; the date on which a participant has reached age sixty-five years and completed ten years of credited service; or the date on which a member has completed thirty years of service regardless of age. For non-hazardous duty employees hired on or after the effective date of this restatement, a member shall be eligible for retirement following the earlier of the Draft Pension Trustees Meeting Minutes November 13, 2018 Page 4 City of Clearwater date on which a participant has reached the age of sixty years and completed twenty-five years of credited service; or the date on which a participant has reached the age of sixty-five years and completed ten years of credited service. Ms. Kutch will meet the non-hazardous duty criteria and begin collecting a pension in July 2030. Section 2.416 provides for normal retirement eligibility for hazardous duty employees, a member shall be eligible for retirement following the earlier of the date on which the participant has completed twenty years of credited service regardless of age, or the date on which the participant has reached fifty-five years and completed ten years of credited service. Mr. Leeth will meet the hazardous duty criteria and begin collecting pension in April 2027. Trustee Cundiff moved to approve the following request of employees Michelle Kutch, Human Resources Department and Andrew Leeth, Fire Department, to vest their pensions as provided by Section 2.419 of the Employees’ Pension Plan. The motion was duly seconded and carried unanimously. 4.3 Approve the following request of employees Albert Granville, Police Department, Robert Hallett, Engineering Department and Raymond Roby, Fire Department, for a regular pension as provided by Sections 2.416 and 2.424 of the Employees’ Pension Plan. Albert Granville, Police Officer, Police Department, was employed by the City on October 26, 1998, and his pension service credit is effective on that date. His pension will be effective November 1, 2018. Based on an average salary of approximately $77,835.75 over the past five years, the formula for computing regular pensions and Mr. Granville’s selection of the 100% Joint and Survivor Annuity, this pension benefit will be approximately $42,466.20 annually. Robert Hallett, Survey Party Chief, Engineering Department, was employed by the City on May 3, 1993, and his pension service credit is effective on that date. His pension will be effective November 1, 2018. Based on an average salary of approximately $45,151.23 over the past five years, the formula for computing regular pensions and Mr. Hallett’s selection of the 100% Joint and Survivor Annuity, this pension benefit will be approximately $28,948.92 annually. Raymond Roby, Fire Assistant Chief, Fire Department, was employed by the City on August 6, 2007, and his pension service credit is effective on that date. His pension will be effective November 1, 2018. Based on an average salary of approximately $99,729.50 over the past five years, the formula for computing regular pensions and Mr. Roby’s selection of the 100% Joint and Survivor Annuity, this pension benefit will be approximately $29,513.28 annually. Draft Pension Trustees Meeting Minutes November 13, 2018 Page 5 City of Clearwater Section 2.416 provides for normal retirement eligibility for non-hazardous duty employees hired prior to the effective date of this reinstatement (January 1, 2013), a member shall be eligible for retirement following the earlier of the date on which a participant has reached the age of fifty-five years and completed twenty years of credited service; the date on which a participant has reached age sixty-five years and completed ten years of credited service; or the date on which a member has completed thirty years of service regardless of age. For non-hazardous duty employees hired on or after the effective date of this restatement, a member shall be eligible for retirement following the earlier of the date on which a participant has reached the age of sixty (60) years and completed twenty-five years of credited service; or the date on which a participant has reached the age of sixty-five years and completed ten years of credited service. Mr. Hallett has met the non-hazardous duty criteria. Section 2.416 provides for normal retirement eligibility for hazardous duty employees, a member shall be eligible for retirement following the earlier of the date on which the participant has completed twenty years of credited service regardless of age, or the date on which the participant has reached fifty-five years and completed ten years of credited service. Mr. Granville and Mr. Roby have met the hazardous duty criteria. Trustee Hamilton moved to approve the following request of employees Albert Granville, Police Department, Robert Hallett, Engineering Department and Raymond Roby, Fire Department, for a regular pension as provided by Sections 2.416 and 2.424 of the Employees’ Pension Plan. The motion was duly seconded and carried unanimously. 5. Director's Report – None. 6. Adjourn The meeting adjourned at 9:06 a.m. Chair Employees’ Pension Plan Trustees Attest City Clerk Draft Cover Memo City of Clearwater City Hall 112 S. Osceola Avenue Clearwater, FL 33756 File Number: ID#19-5553 Agenda Date: 1/14/2019 Status: Agenda ReadyVersion: 1 File Type: Action ItemIn Control: Pension Trustees Agenda Number: 4.1 SUBJECT/RECOMMENDATION: Accept the actuary’s recommendations for changes to plan actuarial assumptions and methods, as amended for phase-in of change in net investment return assumption to 6.50%, per the Experience Investigation completed by Gabriel Roeder Smith and Company for the five-year period ending December 31, 2017. SUMMARY: The Plan’s actuaries, Gabriel Roeder Smith & Company (GRS), have completed an Experience Investigation study for the pension plan and have provided recommendations of changes to the assumptions and methods used in the plan’s annual actuarial valuation. The pension plan ordinance requires a study of the actuarial assumptions every six years. The ordinance further states (Section 2.413 (i)), “Taking into account the result of such investigation, the trustees shall adopt for the retirement plan such mortality, service and other tables as are necessary and proper.” It has been six years since completion of the last experience study for the Clearwater Employees’ Pension Plan, with changes adopted by the Trustees in December 2012. The impact of the proposed changes in assumptions is highly dependent on the funded ratio as of the valuation date of implementation, as there is no unfunded liability amortization payment if the funded ratio remains above 100% (the required contribution impact is equal to the change in the normal cost only). Once the funded ratio falls below 100%, the cost impact of the proposed changes is significantly higher because there is an unfunded liability amortization payment in addition to the change in the normal cost. Assuming no changes in the funded ratio as of January 1, 2018, which was 104.47%, the net effect of all staff-recommended changes would be an increase in the annual required contribution to the plan of $1,138,770. Again, assuming no change in the baseline funded ratio (104.47%), the increase in the contribution requirement for the next three years thereafter would be approximately $0.45 million, $1.0 million, and then $0.65 million, respectively. Any change in the baseline funded ratio from 104.47% would change these cost impact estimates significantly. The recommended changes include changes to the salary increase assumption, assumed rates of future retirements, assumed rates of future separation from employment, assumed rates of future disability, assumed probability of married at retirement, and a change in the investment return assumption phase-in over a four-year period. Staff recommends approval of all recommended changes to more accurately determine the pension plan liability and required funding levels, per the professional advice of the plan’s actuaries. Page 1 City of Clearwater Printed on 1/4/2019 File Number: ID#19-5553 Page 2 City of Clearwater Printed on 1/4/2019 Exhibit 1 Staff recommends implementing all actuary-recommended assumption changes, with the qualification that the investment return assumption be lowered to the 6.5% alternative offered by the actuary. Additionally, staff recommends lowering to the 6.5% level decrementally over a four-year period to allow the City to better manage the financial impact. Recommendations: Lower the investment return assumption rate decrementally over a four year period, utilizing plan credit balance as possible to minimize the impact on the City budget. Year Rate Estimated Cost FY2019 7.00%n/a FY2020 6.75%1,138,770$ FY2021 6.65%450,000 FY2022 6.55%1,000,000 FY2023 6.50%650,000 3,238,770$ Staff Recommendations for Actuarial Assumption Changes Per Experience Investigation for the Five Years Ended December 31, 2017           City of Clearwater Employees’  Pension Plan    EXPERIENCE INVESTIGATION FOR THE FIVE YEARS  ENDED DECEMBER 31, 2017            December 6, 2018    Board of Trustees  City of Clearwater Employees’ Pension Plan  Clearwater, Florida    Re:      Experience Investigation for the Five‐Year Period Ending December 31, 2017    Dear Board Members:    Gabriel, Roeder, Smith & Company is pleased to provide the results of our experience investigation for the  City of Clearwater Employees’ Pension Plan.  The period covered by this study is January 1, 2013 through  December 31, 2017.  Based upon the results, certain changes in actuarial assumptions for valuation purposes  are recommended.    The Table of Contents, which immediately follows, sets out the material contained in this report.    This Report was prepared at the request of the Board and is intended for use by the Pension Plan (Plan)  and those designated or approved by the Board.  This Report may be provided to parties other than the  Plan only in its entirety and only with the permission of the Board.    The purpose of this Report is to evaluate the assumptions and methods to be used for the January 1, 2019  and subsequent years’ Actuarial Valuations, and to describe the financial effect of the recommended  assumption and method changes based on our findings.  This Report should not be relied on for any  purpose other than the purpose described above.    The study was performed on the basis of participant data and financial information supplied by the City in  connection with the valuations performed during the years studied.  We checked for internal and year‐to‐ year consistency, but did not audit this data.  We are not responsible for the accuracy or completeness of  the information provided by the City.    The enclosed calculations are based upon the Plan provisions as summarized in the January 1, 2018  Actuarial Valuation Report dated March 28, 2018.  If you have reason to believe the assumptions used are  unreasonable, the Plan provisions are incorrectly described or referenced, or that important Plan  provisions relevant to this study are not described, you should contact the undersigned prior to relying on  this information.    The valuation date used for calculating the financial effect of the assumption and method changes was  January 1, 2018.  Future actuarial measurements may differ significantly from the current measurements  presented in this Report due to such factors as the following: plan experience differing from that  anticipated by the economic or demographic assumptions; changes in economic or demographic  Board of Trustees, City of Clearwater Employees’ Pension Plan  December 6, 2018  Page 2    assumptions; increases or decreases expected as part of the natural operation of the methodology used  for these measurements (such as the end of an amortization period or additional cost or contribution  requirements based on the plan’s funded status); and changes in plan provisions or applicable law.    Peter N. Strong and Trisha Amrose are members of the American Academy of Actuaries and meet the  Qualification Standards of the American Academy of Actuaries to render the actuarial opinions contained  herein.  The signing actuaries are independent of the plan sponsor.    This Report has been prepared by actuaries who have substantial experience valuing public employee  retirement systems.  To the best of our knowledge the information contained in this report is accurate  and fairly presents the actuarial position of the Plan as of the valuation date.  All calculations have been  made in conformity with generally accepted actuarial principles and practices, with the Actuarial  Standards of Practice issued by the Actuarial Standards Board and with applicable statutes.    Gabriel, Roeder, Smith & Company will be pleased to review this Report with the Board of Trustees and to  answer any questions pertaining to the valuation.    Respectfully submitted,    GABRIEL, ROEDER, SMITH & COMPANY   By                                                                           By                                                                                 Peter N. Strong, FSA, MAAA, FCA                        Trisha Amrose, MAAA         Enrolled Actuary No. 17‐6975             Enrolled Actuary No. 17‐8010  TABLE OF CONTENTS        Item       Page No.           Section A ‐ Summary of Findings       1            Section B ‐ Assumption Study and Experience Review Results                    Methodology      3            Basic Results and Conclusions       4  Rates of Salary Increase       4  Rates of Retirement     5  Rates of Separation     6  Rates of Disability     9  Rates of Marriage and Spouse Age Differences      10  Rates of Mortality      11  Rate of Investment Return      12            Section C ‐ Appendices           Appendix A: Comparison of Actual and Expected Annual Salaries  19 Appendix B: Comparison of Actual and Expected Retirements  21 Appendix C:  Comparison of Actual and Expected Separations  22  Appendix D: Comparison of Actual and Expected Disabilities  25  Appendix E: Purpose of an Actuarial Valuation  26   Role of the Actuarial Assumptions  26  Appendix F:    Risks Associated with Measuring the Accrued Liability and  Actuarially Determined Contribution   27                                                                                    0 SECTION A  SUMMARY OF FINDINGS    City of Clearwater Employees’ Pension Plan  Five‐Year Experience Investigation  1  GRS RetirementConsulting SUMMARY OF FINDINGS  The five‐year period (January 1, 2013 to December 31, 2017) covered by this experience  investigation period provided sufficient data to form a basis for recommending updates in the  following demographic and financial assumptions used in the actuarial valuation of the Pension  Plan.      Recommended changes in actuarial assumptions resulting from this experience investigation,  including the approximate first‐year impact on the required City contributions as a dollar amount  and as a percent of covered payroll and the approximate first year impact on the funded ratio, are  summarized below.  If these changes are made in the January 1, 2019 Actuarial Valuation Report,  the impact on the FY 2020 City contribution and funded ratio as of January 1, 2019 may vary to  some extent from what is shown below.    For comparison purposes, the estimated net required City contribution for the fiscal year ending  September 30, 2019 was 10.69% of covered payroll, or approximately $8.8 million, and the funded  ratio as of January 1, 2018, not including the credit balance in the actuarial value of assets, was  104.47%.  The credit balance as of January 1, 2018 was $22.8 million.    Our recommendations are as follows:     Update the future salary increase assumption to reflect higher than expected real salary increases  for hazardous employees and somewhat lower than expected real salary increases for non‐ hazardous employees.    Estimated First Year Impact on: Required Employer Contribution Funded Ratio  +$565,380 or +0.65% of covered payroll (0.02)%    Update assumed future retirement rates to reflect generally lower observed retirement  experience than expected.     Estimated First Year Impact on: Required Employer Contribution Funded Ratio  ($259,031) or (0.32)% of covered payroll +0.74%    Update assumed rates of future separation from employment to reflect generally higher than  expected separation experience for hazardous employees and slightly lower than expected  separation experience for non‐hazardous employees.     Estimated First Year Impact on: Required Employer Contribution Funded Ratio  ($133,132) or (0.17)% of covered payroll (0.16)%     City of Clearwater Employees’ Pension Plan  Five‐Year Experience Investigation  2  GRS RetirementConsulting  Update assumed rates of future disability to reflect somewhat higher observed disability  experience than expected.     Estimated First Year Impact on: Required Employer Contribution Funded Ratio  +$119,312 or +0.14% of covered payroll +0.01%    Update the assumed probability that a member is married when they retire to reflect lower  observed rates of marriage than expected and adjust the assumed age difference between  members and their spouses to reflect actual observed data for recent retirees.     Estimated First Year Impact on: Required Employer Contribution Funded Ratio  ($151,241) or (0.19)% of covered payroll (0.38)%    Combined effect of all of the above assumption changes (salary increase rates, retirement rates,  separation rates, disability rates, and marriage rates and spouse age differences).    Estimated First Year Impact on: Required Employer Contribution Funded Ratio  +$88,770 or +0.07% of covered payroll +0.18%    Combined effect above PLUS change the net investment return assumption from 7.0% to 6.5%.   This includes a fresh start of the Unfunded Actuarial Accrued Liability amortization bases to avoid  negative amortization.    Estimated First Year Impact on: Required Employer Contribution Funded Ratio  +$3,081,009 or +3.70% of covered payroll (5.82)%    Combined effect above PLUS change the net investment return assumption from 7.0% to 6.25%.   This includes a fresh start of the Unfunded Actuarial Accrued Liability amortization bases to avoid  negative amortization.    Estimated First Year Impact on: Required Employer Contribution Funded Ratio  +$6,514,360 or +7.86% of covered payroll (8.77)%     Note:  The sum of the individual cost impacts does not equal the impact of all changes combined due  to the interaction of Plan provisions and actuarial assumptions with one another and the effect that  one assumption change can have on the impact of another assumption change.  SECTION B  EXPERIENCE INVESTIGATION RESULTS    City of Clearwater Employees’ Pension Plan  Five‐Year Experience Investigation  3  GRS RetirementConsulting Methodology    The methodology, basic results and conclusions of the five‐year experience investigation of the  actuarial assumptions are described below.    The expected salaries at the end of each year were obtained by use of the salary scale assumption  used in the January 1, 2018 actuarial valuation.  The resulting expected salaries were then  compared with the actual salaries reported.    The number of members exposed to risk during each period was tabulated (exposure) and the  expected incidence of separation (separation of members not eligible for normal retirement),  retirement and disability were obtained by use of the retirement, separation and disability rates  employed in the January 1, 2018 actuarial valuation.  The actual number of retirements, separations  and disabilities was tabulated and compared with those expected.    For the marriage assumption and spouse age difference assumption, actual marital status and  spouse/beneficiary data was collected for retirements that have occurred during the past 3 years.   This data was tabulated and reviewed.    Finally, an evaluation of the Plan’s investment return assumption was conducted, using forward‐ looking capital market assumptions (of expected investment returns and volatilities for various  asset classes) collected from 13 different investment consultants.    Consideration was given to the size of the group. Over the 5‐year experience study period reviewed,  there were a total of 7,459 exposures (each active member compared from one year to the  subsequent year). This number of exposures is sufficient to provide partial credibility to the  observed experience, but it is insufficient to be considered fully credible. Therefore, some weight  was given to the current assumptions while developing our recommended demographic  assumptions going forward.      City of Clearwater Employees’ Pension Plan  Five‐Year Experience Investigation  4  GRS RetirementConsulting Basic Results and Conclusions    Rates of Salary Increase    Observed rates of real salary increases (net of inflation) during the experience investigation period  were generally higher than expected for hazardous employees and somewhat lower than expected  for non‐hazardous employees based on the current salary increase assumption.    We propose revised assumed rates of salary increase based on completed years of service as shown  in the tables below.  Actual versus expected salary increase experience is shown in Appendix A  starting on page 19.    Years Promotion, Total Promotion, Total of Assumed Productivity Current Assumed Productivity Proposed Service Inflation & Seniority Rates Inflation & Seniority Rates 1 2.50% 5.40% 7.90% 2.25% 5.35% 7.60% 2 2.50% 5.20% 7.70% 2.25% 5.35% 7.60% 3 2.50% 4.50% 7.00% 2.25% 4.00% 6.25% 4 2.50% 2.75% 5.25% 2.25% 4.00% 6.25% 5 ‐ 9 2.50% 1.75% 4.25% 2.25% 3.25% 5.50% 10 ‐ 14 2.50% 1.75% 4.25% 2.25% 3.00% 5.25% 15 & Over 2.50% 1.00% 3.50% 2.25% 2.25% 4.50% SALARY INCREASE ASSUMPTION ‐ HAZARDOUS EMPLOYEES Proposed Salary Increase RatesCurrent Salary Increase Rates     Years Promotion, Total Promotion, Total of Assumed Productivity Current Assumed Productivity Proposed Service Inflation & Seniority Rates Inflation & Seniority Rates 1 2.50% 5.40% 7.90% 2.25% 4.25% 6.50% 2 2.50% 3.25% 5.75% 2.25% 3.35% 5.60% 3 2.50% 2.50% 5.00% 2.25% 2.25% 4.50% 4 2.50% 2.00% 4.50% 2.25% 1.50% 3.75% 5 ‐ 9 2.50% 1.50% 4.00% 2.25% 1.50% 3.75% 10 ‐ 14 2.50% 1.00% 3.50% 2.25% 1.30% 3.55% 15 ‐ 19 2.50% 1.00% 3.50% 2.25% 0.80% 3.05% 20 & Over 2.50% 1.00% 3.50% 2.25% 0.50% 2.75% SALARY INCREASE ASSUMPTION ‐ NON‐HAZARDOUS EMPLOYEES Current Salary Increase Rates Proposed Salary Increase Rates     City of Clearwater Employees’ Pension Plan  Five‐Year Experience Investigation  5  GRS RetirementConsulting Rates of Retirement    The observed number of retirements (including DROP entries) during the experience investigation  period was generally lower than expected based on the current assumed rates of retirement (in the  January 1, 2018 actuarial valuation).    The current and proposed retirement rates are shown in the following tables.  Actual versus  expected experience is shown in Appendix B on page 21.  Years of Expected Expected Service Age Current Proposed 10 ‐ 19 50 ‐ 54 10% 5% 55 ‐ 59 10% 15% 60 ‐ 64 50% 40% 65 & Over 100% 100% 20 & Over Under 45 20% 15% 45 ‐ 49 15% 15% 50 ‐ 54 25% 15% 55 ‐ 59 35% 30% 60 ‐ 64 50% 40% 65 & Over 100% 100% RETIREMENT RATES ‐ HAZARDOUS EMPLOYEES Years of Expected Expected Service Age Current Proposed 10 ‐ 19 65 ‐ 69 45% 30% 70 ‐ 74 50% 30% 75 & Over 100% 100% 20 ‐ 29 55 ‐ 59 20% 20% 60 ‐ 64 25% 20% 65 ‐ 69 45% 30% 70 & Over 100% 100% 30 & Over Under 55 40% 45% 55 ‐ 59 40% 20% 60 ‐ 64 40% 30% 65 ‐ 69 50% 50% 70 & Over 100% 100% RETIREMENT RATES ‐ NON‐HAZARDOUS EMPLOYEES   City of Clearwater Employees’ Pension Plan  Five‐Year Experience Investigation  6  GRS RetirementConsulting Rates of Employment Separation    The observed rates of employment separations during the experience investigation period were  generally higher than expected for hazardous employees and slightly lower than expected for non‐ hazardous employees.    The current and proposed separation (withdrawal) rates are shown in the following table.  Actual  versus expected experience is shown in Appendix C starting on page 22.  Years of Service Age Current Rates Proposed Rates Under 1All Ages 12.8% 8.5% 1All Ages 5.7% 7.5% 2 ‐ 5 Under 40 4.5% 40 & Over 2.5% 6 & Over Under 40 1.0% ‐ 4.0% 2.0% 40 & Over 1.0% 1.5% SEPARATION RATES HAZARDOUS EMPLOYEES ‐ Males 4.8% grading down to 1.0% Years of Service Age Current Rates Proposed Rates Under 1All Ages 12.8% 20.0% 1 & Over All Ages 5.7% grading down to 1.0% 4.0% SEPARATION RATES HAZARDOUS EMPLOYEES ‐ Females   City of Clearwater Employees’ Pension Plan  Five‐Year Experience Investigation  7  GRS RetirementConsulting Rates of Employment Separation (Continued)    Years of Service Age Current Rates Proposed Rates Under 1 Under 35 20.0% to 25.0% 25.0% 35 & Over 5.0% to 15.0% 11.0% 1 ‐ 2All Ages 15.0% grading down to 5.0% 16.0% 3 ‐ 4 Under 40 11.0% 40 & Over 5.0% 5 ‐ 9 Under 30 12.5% 12.5% 30 ‐ 49 3.5% to 7.0% 5.0% 50 ‐ 59 4.0% to 5.0% 3.0% 60 & Over 7.5% 7.5% 10 & Over Under 35 7.0% to 12.5% 7.5% 35 ‐ 39 6.0% 4.0% 40 ‐ 44 5.0% 3.5% 45 ‐ 49 3.5% 3.5% 50 ‐ 54 4.0% 2.0% 55 ‐ 59 5.0% 3.0% 60 & Over 7.5% 4.5% SEPARATION RATES NON‐HAZARDOUS EMPLOYEES ‐ Males 15.0% grading down to 5.0%   City of Clearwater Employees’ Pension Plan  Five‐Year Experience Investigation  8  GRS RetirementConsulting Rates of Employment Separation (Continued)    Years of Service Age Current Rates Proposed Rates Under 3 Under 30 15.0% to 35.0% 22.0% 30 ‐ 34 15.0% to 30.0% 15.0% 35 ‐ 44 15.0% to 25.0% 5.0% 45 ‐ 49 7.5% to 20.0% 14.0% 50 ‐ 59 7.5% to 15.0% 18.0% 60 & Over 5.0% to 10.0% 25.0% 3 ‐ 4 Under 30 15.0% to 20.0% 18.0% 30 ‐ 39 10.0% to 12.5% 14.0% 40 ‐ 59 5.0% to 10.0% 5.0% 60 & Over 5.0% 20.0% 5 ‐ 9 Under 35 6.5% to 7.5% 5.0% 35 ‐ 44 5.0% to 6.5% 6.0% 45 ‐ 59 4.0% 4.5% 60 & Over 4.0% 3.0% 10 & Over Under 40 6.5% to 7.5% 6.0% 40 ‐ 44 5.0% 5.0% 45 ‐ 49 4.0% 3.75% 50 ‐ 54 4.0% 3.25% 55 ‐ 59 4.0% 2.75% 60 & Over 4.0% 6.0% SEPARATION RATES NON‐HAZARDOUS EMPLOYEES ‐ Females   City of Clearwater Employees’ Pension Plan  Five‐Year Experience Investigation  9  GRS RetirementConsulting Rates of Disability    The actual number of disabilities was somewhat higher than the number of expected disabilities,  more so for female hazardous employees than for any other group.  As a result, we recommend  modest changes to the assumed rates of disability, as shown below.  Actual versus expected  experience is shown in Appendix D on page 25.  Age Males Females Males Females 20 0.25% 0.38% 0.250% 0.500% 25 0.25% 0.38% 0.250% 0.500% 30 0.25% 0.38% 0.250% 0.750% 35 0.30% 0.45% 0.300% 1.000% 40 0.40% 0.60% 0.450% 1.250% 45 0.50% 0.75% 0.600% 1.500% 50 0.55% 0.83% 0.600% 1.500% 55 0.60% 0.90% 0.600% 1.500% 60 0.75% 1.13% 0.750% 1.500% 65 1.00% 1.50% 1.000% 1.500% 70 1.75% 2.63% 1.500% 1.500% DISABILITY RATES ‐ HAZARDOUS EMPLOYEES Expected Current Rates Expected Proposed Rates Age Males Females Males Females 20 0.05% 0.05% 0.03% 0.03% 25 0.05% 0.05% 0.03% 0.03% 30 0.05% 0.05% 0.03% 0.03% 35 0.06% 0.06% 0.04% 0.04% 40 0.07% 0.07% 0.07% 0.07% 45 0.09% 0.09% 0.10% 0.10% 50 0.12% 0.12% 0.14% 0.14% 55 0.17% 0.17% 0.24% 0.24% 60 0.27% 0.27% 0.29% 0.29% 65 0.42% 0.42% 0.34% 0.34% 70 0.67% 0.67% 0.44% 0.44% DISABILITY RATES ‐ NON‐HAZARDOUS EMPLOYEES Expected Current Rates Expected Proposed Rates      City of Clearwater Employees’ Pension Plan  Five‐Year Experience Investigation  10  GRS RetirementConsulting   Rates of Marriage and Spouse Age Differences    For the purposes of determining eligibility for the Joint and Survivor normal form of payment for  married members, an assumption for the probability that members are married when they retire is  made.  This assumption is also used to determine eligibility for death‐in‐service benefits.  Under the  current valuation assumptions, 85% of active members are assumed to be married.    Additionally, an assumption is made for the difference in ages between retirees and their  beneficiaries.  Under the current valuation assumptions, for all future retirees and for current  retirees who became inactive after January 1, 2009, males are assumed to be five years older than  their beneficiaries and female are assumed to be five years younger than their beneficiaries.  For  members who became inactive on or before January 1, 2009, beneficiary ages are based on the  assumed beneficiary dates of birth provided by the prior actuary.      It is our understanding that beneficiary dates of birth for all retirees are not readily available and  are not stored in a database that could be extracted.  To analyze these assumptions, data was  collected for retirements that have occurred during the past 3 years.  This data included 189  retirees.  Lower rates of marriage than expected were observed.  According to the data, 68.3% of  members who retired during the past 3 years were married.  Generally, lower age differences  between retirees and their beneficiaries were observed.  According to the data, males retirees were  an average of 1.4 years older than their beneficiaries and females retirees were an average of 0.3  years younger than their beneficiaries.      Since a small sample of the total retiree population was used in this analysis, we recommend giving  some weight to the current assumptions and adjusting them to reflect the observed experience.   We recommend the following assumptions for the probability that members are married when they  retire and the difference in ages between retirees and their beneficiaries:     Assume 75% of active members are married when they retire.     Assume that male retirees are 3 years older than their beneficiaries and that female retirees  are 3 years younger than their beneficiaries.  For members who have retired during the past  3 years, use their actual beneficiaries’ dates of birth and continue to use actual dates as  members retire going forward.          City of Clearwater Employees’ Pension Plan  Five‐Year Experience Investigation  11  GRS RetirementConsulting Rates of Mortality  The mortality assumption used in the Plan’s January 1, 2016 Actuarial Valuation was mandated  under Florida state law to be the mortality assumption used by the Florida Retirement System (FRS)  for Regular Class members. We are therefore not proposing any changes to the mortality  assumption. FRS usually updates their mortality assumption once every five years after an  experience study is completed. FRS' mortality assumption was last updated (with a minor change)  effective with their July 1, 2016 actuarial valuation. The last FRS experience study covered the  period 2008 – 2013, and the resulting changes in assumptions were effective in the July 1, 2014  actuarial valuation. The current FRS mortality assumption (and the mortality assumption used in the  January 1, 2016 Actuarial Valuation) is described below:  Healthy Mortality   Hazardous Employees  RP‐2000 Combined Healthy Participant Mortality Table (for pre‐retirement mortality) and the RP‐ 2000 Mortality Table for Annuitants (for post‐retirement mortality), with mortality improvements  projected to all future years after 2000 using Scale BB. For males, the base mortality rates include a  90% blue collar adjustment and a 10% white collar adjustment. For females, the base mortality  rates include a 100% white collar adjustment.  Non‐Hazardous Employees  RP‐2000 Combined Healthy Participant Mortality Table (for pre‐retirement mortality) and the RP‐  2000 Mortality Table for Annuitants (for post‐retirement mortality), with mortality improvements  projected to all future years after 2000 using Scale BB. For males, the base mortality rates include a  50% blue collar adjustment and a 50% white collar adjustment. For females, the base mortality  rates include a 100% white collar adjustment.  Disabled Mortality   Hazardous Employees   For disabled retirees, 60% of the RP‐2000 Mortality Table for Disabled Annuitants was used, with  ages set back 4 years for males and set forward 2 years for females, and 40% of the RP‐2000  Healthy Annuitant Mortality Table with a while collar adjustment and no age setback, both with no  provision being made for future mortality improvements.   Non‐Hazardous Employees   For disabled retirees, the RP‐2000 Mortality Table for Disabled Annuitants was used, with ages set  back 4 years for males and set forward 2 years for females, with no provision being made for future  mortality improvements.     City of Clearwater Employees’ Pension Plan  Five‐Year Experience Investigation  12  GRS RetirementConsulting Rate of Investment Return    The selection of the actuarial assumed rate of return is a major decision.  It has even been a  controversial topic for many pension boards and outside observers at times.    HOW TO DETERMINE THE ACTUARIAL ASSUMED RATE OF RETURN    The assumed net long‐term expected rate of return is the Plan fiduciaries’ best estimate of the  future compound investment return of the fund, net of investment‐related expenses.    A building block approach should be used, in which the expected real returns (net of inflation) for  each asset class in which the Plan is invested are estimated and multiplied by the asset allocation  percentage of that asset class.    City of Clearwater Employees’ Pension Plan Asset Allocation    The Plan’s target asset allocation is as follows:    Asset Class Target  Domestic Equity Securities        Large Cap (equally divided between Value and Growth) 26.0%       Mid Cap (equally divided between Value and Growth) 8.0%       Small Cap (equally divided between Value and Growth) 5.0%  International Equity Securities 14.0%  Emerging Market Equity Securities 4.0%    Total Equity 57.0%  Broad Market Intermediate Term Fixed Income 28.0%    Total Fixed Income 28.0%  Private Real Estate (Core) 7.0%  U.S. REITS 1.5%  Alternative Assets – Global Infrastructure 3.0%  Alternative Assets – Timber 3.5%    Total Real Estate & Alternatives 15.0%           City of Clearwater Employees’ Pension Plan  Five‐Year Experience Investigation  13  GRS RetirementConsulting FORWARD‐LOOKING CAPITAL MARKET ASSUMPTIONS     Best practice for selecting the net investment return assumption considers a fund’s asset allocation  and reliable forecasts for capital market assumptions for each relevant asset class.    GRS is not an investment consulting firm and does not provide investment consulting or forecasting  services.  But GRS maintains a survey of the forecasts of capital market assumptions from the following  twelve (12) major national investment consulting and forecasting firms to obtain a consensus:    Twelve Major National Investment Consultants and  Forecasters  Aon/Hewitt  NEPC  BNY/Mellon  Callan  Pension Consulting Alliance  R. V. Kuhns & Associates  J. P.Morgan Summit  Marquette Associates VOYA  Mercer Wilshire    In addition to the above, we also obtained the capital market assumptions from CapTrust, the  investment consultant for the City of Clearwater Employees’ Pension Plan.  Of these 13 investment  consultants, ten (including CapTrust) provided only short to mid‐term capital market assumptions  (over the next 5‐15 years), while three (Aon/Hewitt, Mercer, and NEPC) provided long‐term capital  market assumptions (over the next 20‐30 years).  We have included the short to mid‐term  forecasts, the long‐term forecasts, and a blend of the two (a “single equivalent” forecast using the  projected cash flows for the City of Clearwater Employees’ Pension Plan).       Mapping the Asset Allocation    The investment consultants do not all provide their capital market assumptions in exactly the same  asset classes as expressed on the previous page, so we have mapped the Plan’s target asset  allocation to the “best fit” asset classes of each investment consultant.      Build‐up of Comparable Net Expected Returns    The following tables show the results of applying the mapping and calculation process of the  nominal returns for each of the investment consultants.  The expected nominal returns are called  the “arithmetic means”.  The first table shows the results of the short to mid‐term capital market  assumptions.  The second table shows the results of the long‐term capital market assumptions  (from the three investment consultants who provided long‐term assumptions). The results from  using CapTrust’s capital market assumptions are highlighted in yellow.    City of Clearwater Employees’ Pension Plan  Five‐Year Experience Investigation  14  GRS RetirementConsulting Short to Mid‐Term Capital Market Assumptions    (1) (2) (3) (4) (5) (6) (7) (8) (9) 1 5.52% 2.20% 3.32% 2.25% 5.57% 0.00% 5.57% 11.45% 2 5.78% 2.25% 3.53% 2.25% 5.78% 0.00% 5.78% 9.95% 3 5.92% 2.21% 3.70% 2.25% 5.95% 0.00% 5.95% 12.29% 4 6.26% 2.50% 3.76% 2.25% 6.01% 0.00% 6.01% 11.96% 5 6.14% 2.26% 3.88% 2.25% 6.13% 0.00% 6.13% 10.61% 6 6.05% 2.00% 4.05% 2.25% 6.30% 0.00% 6.30% 10.33% 7 6.62% 2.50% 4.12% 2.25% 6.37% 0.00% 6.37% 12.72% 8 6.25% 2.00% 4.25% 2.25% 6.50% 0.00% 6.50% 11.38% 9 6.55% 2.25% 4.30% 2.25% 6.55% 0.00% 6.55% 12.76% 10 6.63% 2.31% 4.32% 2.25% 6.57% 0.00% 6.57% 11.82% 11 7.03% 2.26% 4.77% 2.25% 7.02% 0.00% 7.02% 13.93% 12 6.91% 1.95% 4.96% 2.25% 7.21% 0.00% 7.21% 12.34% 13 7.45% 2.00% 5.45% 2.25% 7.70% 0.00% 7.70% 11.30% Average 6.39% 2.21% 4.19% 2.25% 6.44% 0.00% 6.44% 11.76% Standard Deviation of Expected Return (1-Year) Expected Nominal Return Net of Expenses (6)-(7) Investment Consultant Investment Consultant Expected Nominal Return Investment Consultant Inflation Assumption Expected Real Return (2)–(3) Actuary Inflation Assumption Investment Expenses Expected Nominal Return (4)+(5)   Long‐Term Capital Market Assumptions    (1) (2) (3) (4) (5) (6) (7) (8) (9) 1 6.93% 2.31% 4.62% 2.25% 6.87% 0.00% 6.87% 12.11% 2 6.83% 2.20% 4.63% 2.25% 6.88% 0.00% 6.88% 12.29% 3 8.18% 2.75% 5.43% 2.25% 7.68% 0.00% 7.68% 12.72% Average 7.31% 2.42% 4.89% 2.25% 7.14% 0.00% 7.14% 12.37% Investment Expenses Expected Nominal Return Net of Expenses (6)-(7) Standard Deviation of Expected Return (1-Year) Investment Consultant Investment Consultant Expected Nominal Return Investment Consultant Inflation Assumption Expected Real Return (2)–(3) Actuary Inflation Assumption Expected Nominal Return (4)+(5) Normalizing for Inflation     Since each investment consultant uses slightly different inflation assumptions, in columns (3)  through (6) the returns are normalized for inflation so that each investment consultant’s gross 1‐ year returns includes the same inflation assumption.       City of Clearwater Employees’ Pension Plan  Five‐Year Experience Investigation  15  GRS RetirementConsulting Returns Net of Investment‐related Expenses    Investment consultants and forecasters generally provide their expected returns gross of active  management investment‐related expenses.  However, for funding and financial reporting purposes,  the actuarial return assumption is net of investment‐related expenses, so that the investment  earnings assumed to accumulate over time are net of the fees and costs needed to generate the  amounts available to pay benefits.  The investment‐related expenses for the Plan’s fund are  approximately 0.6%, including asset custody fees, investment consultant fees, hard dollar  investment management fee from individually‐managed portfolios and other investment fees.    The Actuarial Standards of Practice suggests the use of an assumption that is net of the expenses  that would be required for an equivalent passive investment approach.  Added value from active  management can be recognized in excess of that, but not for more than the difference between  active and passive management fees.  While excess “alpha” returns may be expected by some to be  achieved by the Plans’ current and future investment managers and investment consultant, we  cannot add alpha value in our assessment or development of our recommendation for the net  investment return assumption.  We have assumed excess returns will be generated by active  management that are sufficient to cover the investment expenses incurred, and we have assumed  that the fees that would be involved with a passive management approach are reflected in the  expected returns provided.    Column (8) shows the expected nominal (i.e., including inflation) return for any given 1‐year period,  net of investment‐related expenses.  These are called the expected “arithmetic means”.      Arithmetic and Geometric Returns     Arithmetic expected returns represent the investment forecaster’s expectation for any one given  year. Geometric expected returns represent the investment forecaster’s expectation for the  average compound return over a given horizon period.  Everything in the tables on the previous  page relates to arithmetic means.    Geometric compounded average returns are always lower than arithmetic average returns.   Actuarial valuations use compounding for measuring costs and liabilities.  That is why the expected  compound average return (geometric mean) is more appropriate for an actuarial investment return  assumption.    As an investment return assumption, the geometric expected return is the return assumption that  has a 50% chance of being achieved as a compound average over time.  The geometric expected  returns for the investment consultants who provided capital market assumptions, including  CapTrust (highlighted in yellow) are shown in the following tables.  The first table shows the  geometric expected returns using the short to mid‐term capital market assumptions.  The second  table shows the geometric expected returns using the long‐term capital market assumptions (from  the three investment consultants who provided long‐term assumptions).       City of Clearwater Employees’ Pension Plan  Five‐Year Experience Investigation  16  GRS RetirementConsulting Short to Mid‐Term Capital Market Assumptions    Probability of exceeding Probability of exceeding Probability of exceeding Probability of exceeding 40th 50th 60th 7.00% 6.50% 6.25% 6.00% (1) (2) (3) (4) (5) (6) (7) (8) 1 4.31% 4.95% 5.60% 21.20% 27.24% 30.55% 34.05% 2 4.75% 5.31% 5.87% 22.43% 29.64% 33.62% 37.81% 3 4.56% 5.25% 5.94% 26.16% 32.38% 35.71% 39.16% 4 4.67% 5.34% 6.01% 26.71% 33.17% 36.63% 40.20% 5 5.01% 5.61% 6.21% 27.85% 35.30% 39.29% 43.40% 6 5.22% 5.80% 6.38% 30.13% 38.03% 42.22% 46.51% 7 4.91% 5.62% 6.34% 31.31% 37.78% 41.17% 44.64% 8 5.26% 5.90% 6.54% 33.15% 40.55% 44.42% 48.34% 9 5.09% 5.80% 6.52% 33.60% 40.21% 43.65% 47.15% 10 5.26% 5.92% 6.59% 34.09% 41.27% 45.00% 48.79% 11 5.35% 6.13% 6.91% 38.88% 45.19% 48.41% 51.65% 12 5.82% 6.51% 7.20% 42.84% 50.09% 53.74% 57.36% 13 6.48% 7.11% 7.75% 51.82% 59.72% 63.55% 67.26% Average 5.13% 5.79% 6.45% 32.32% 39.27% 42.92% 46.64% Investment Consultant Distribution of 20-Year Average Geometric Net Nominal Return     Long‐Term Capital Market Assumptions    Probability of exceeding Probability of exceeding Probability of exceeding Probability of exceeding 40th 50th 60th 7.00% 6.50% 6.25% 6.00% (1) (2) (3) (4) (5) (6) (7) (8) 1 5.51% 6.19% 6.87% 38.17% 45.40% 49.10% 52.82% 2 5.50% 6.18% 6.88% 38.25% 45.38% 49.03% 52.69% 3 6.22% 6.93% 7.65% 49.08% 56.15% 59.64% 63.07% Average 5.74% 6.44% 7.13% 41.83% 48.98% 52.59% 56.19% Investment Consultant Distribution of 20-Year Average Geometric Net Nominal Return   As shown in the first table, the average short to mid‐term expected geometric return (or the 50th  percentile of long‐term compound average returns) is 5.79%.  The short to mid‐term forecasting  period is generally the next 10 years, so this means there is a 50‐50 chance of achieving a 5.79% net  compound average investment return over the next 10 years.  Among the three investment  consultants who provided long‐term capital market assumptions, the average long‐term expected  geometric return is 6.44%.  This means the consensus opinion is that there is a 50‐50 chance of  achieving a 6.44% net compound average investment return over the next 20 to 30 years.    City of Clearwater Employees’ Pension Plan  Five‐Year Experience Investigation  17  GRS RetirementConsulting   Blend – Single Equivalent Expected Net Compound Average Investment Return    Of the three investment consultants who provided long‐term capital market assumptions, two of  them described them as 30‐year assumptions and one described them as 20‐year assumptions.  The  average long‐term forecasting period is 27 years.  If the next 10 years are expected to produce a net  compound average return of 5.79% and the next 27 years are expected to produce a net compound  average return of 6.44%, then the net compound average return in years 11 through 27 will need to  be 6.82% per year in order to bring the overall 27‐year compound average up to 6.44%.    Using the projected benefit payments from the City of Clearwater Employees’ Pension Plan, a single  equivalent rate can be calculated for the next 27 years which is neutral to the Plan earning 5.79%  during the first 10 years and 6.82% in years 11 through 27.  This single equivalent rate is 6.22%.   We believe this assumed rate of return is the “most appropriate rate” for the City of Clearwater  Employees’ Pension Plan.  Please see the following chart:    6.82% 5.79% 6.44% 6.22% 5.0% 5.5% 6.0% 6.5% 7.0% 7.5% $0 $10 $20 $30 $40 $50 $60 $70 $80 20192024202920342039204420492054205920642069Forecasted Rates of ReturnAnnual BenefitsMillionsCity of Clearwater Employees' Pension Plan Single Equivalent Cashflow‐adjusted Investment Return Forecast Accrued Benefits To All Current Members Present Value of Accrued Benefits Select and Ultimate Horizon Returns Cumulative Compound Annual Return Single Equiv Cashflow‐adjusted Rate 6.22% = SingleEquivalent Rate       City of Clearwater Employees’ Pension Plan  Five‐Year Experience Investigation  18  GRS RetirementConsulting Recommendation    Based on the information provided above, including the short‐term and long‐term capital market  assumptions and single‐equivalent rate of return of 6.22% based on the Plan’s benefit payment  projections, our recommendation is to lower the investment return assumption from the current  level of 7.0% to either 6.50% or 6.25%.  We recognize that the capital market assumptions of each  investment consultant surveyed vary by up to 50 basis points from the averages and that this  analysis is not an exact science.  Therefore, we have a range of reasonability around what we  believe to be the “most appropriate rate” (6.25%) of +/‐ 50 basis points.  This means we believe a  reasonable range for the net compound average investment return is 5.75% to 6.75%.    The Plan’s current investment return of 7.0%, net of investment expenses, does not fall significantly  outside of this reasonable range, but our recommendation is to lower the assumption to at least  6.50% and to consider lowering it to what we consider to be the “most appropriate rate” of 6.25%.   The cost impact of lowering the net investment return assumption to either 6.50% or 6.25% is  shown on page 2.    SECTION C  APPENDICES      City of Clearwater Employees’ Pension Plan  Five‐Year Experience Investigation  19  GRS RetirementConsulting APPENDIX A    COMPARISON OF ACTUAL AND EXPECTED ANNUAL MEMBER SALARIES    Years of Service Prior Year Expected % Incr  Assumed Real Incr Actual % Incr  Actual Inflation   Actual Real Incr   Proposed  Real Incr  1 ‐ 2 $8,027,167 $8,654,805 7.82% 5.32% $8,572,483 6.79% 1.43% 5.36%5.35% 3 ‐ 4 6,097,316      6,470,673      6.12% 3.62% 6,442,513      5.66% 1.43% 4.23%4.00% 5 ‐ 9 35,056,224    36,546,113    4.25% 1.75% 36,785,572    4.93% 1.43% 3.50%3.25% 10 ‐ 14 36,356,005    37,901,135    4.25% 1.75% 38,024,586    4.59% 1.43% 3.16%3.00% 15 & Over 48,726,966    50,432,410    3.50% 1.00% 50,609,116    3.86% 1.43% 2.43%2.25% Total 134,263,678 140,005,136 4.28% 1.78% 140,434,270 4.60% 1.43% 3.17% 2.98% ANNUAL SALARY INCREASES ‐ HAZARDOUS EMPLOYEES By Years of Service Actual ExperienceCurrent Assumption Age Prior Year Expected % Incr  Assumed Real Incr Actual % Incr  Actual Inflation   Actual Real Incr  Under 30 $10,312,240 $10,903,681 5.74% 3.24% $11,015,871 6.82% 1.43% 5.39% 30 ‐ 34 17,242,222    18,092,668    4.93% 2.43% 18,070,820    4.81% 1.43% 3.38% 35 ‐ 39 26,725,550    27,891,683    4.36% 1.86% 27,926,559    4.49% 1.43% 3.06% 40 ‐ 44 35,132,195    36,543,194    4.02% 1.52% 36,496,408    3.88% 1.43% 2.45% 45 ‐ 49 28,371,698    29,450,178    3.80% 1.30% 29,677,398    4.60% 1.43% 3.17% 50 & Over 16,479,773    17,123,732    3.91% 1.41% 17,247,214    4.66% 1.43% 3.23% Total 134,263,678 140,005,136 4.28% 1.78% 140,434,270 4.60% 1.43% 3.17% By Attained Age (For Informational Purposes only) ANNUAL SALARY INCREASES ‐ HAZARDOUS EMPLOYEES Current Assumption Actual Experience   City of Clearwater Employees’ Pension Plan  Five‐Year Experience Investigation  20  GRS RetirementConsulting APPENDIX A (Continued)  Years of Service Prior Year Expected % Incr  Assumed Real Incr Actual % Incr  Actual Inflation   Actual Real Incr   Proposed  Real Incr  1 $9,524,629 $10,277,075 7.90% 5.40% $10,045,962 5.47% 1.43% 4.04%4.25% 2 8,030,759      8,492,528      5.75% 3.25% 8,417,351      4.81% 1.43% 3.38%3.35% 3 6,776,048      7,114,850      5.00% 2.50% 7,021,322      3.62% 1.43% 2.19%2.25% 4 ‐ 9 44,611,739    46,428,861    4.07% 1.57% 45,920,880    2.93% 1.43% 1.50%1.50% 10 ‐ 14 37,192,213    38,493,941    3.50% 1.00% 38,217,874    2.76% 1.43% 1.33%1.30% 15 ‐ 19 34,427,457    35,632,418    3.50% 1.00% 35,161,306    2.13% 1.43% 0.70%0.80% 20 & Over 35,440,976    36,681,410    3.50% 1.00% 36,060,123    1.75% 1.43% 0.32%0.50% Total 176,003,821 183,121,083 4.04% 1.54% 180,844,818 2.75% 1.43% 1.32% 1.38% ANNUAL SALARY INCREASES ‐ NON‐HAZARDOUS EMPLOYEES Current Assumption Actual Experience By Years of Service Age Prior Year Expected % Incr  Assumed Real Incr Actual % Incr  Actual Inflation   Actual Real Incr  Under 30 $11,293,565 $11,908,505 5.45% 2.95% $11,789,141 4.39% 1.43% 2.96% 30 ‐ 34 12,991,273    13,583,526    4.56% 2.06% 13,475,430    3.73% 1.43% 2.30% 35 ‐ 39 16,090,321    16,778,701    4.28% 1.78% 16,664,340    3.57% 1.43% 2.14% 40 ‐ 44 21,721,655    22,621,752    4.14% 1.64% 22,350,843    2.90% 1.43% 1.47% 45 ‐ 49 28,293,992    29,388,443    3.87% 1.37% 28,923,716    2.23% 1.43% 0.80% 50 ‐ 54 35,158,625    36,494,287    3.80% 1.30% 35,843,680    1.95% 1.43% 0.52% 55 ‐ 59 29,250,582    30,346,705    3.75% 1.25% 29,970,985    2.46% 1.43% 1.03% 60 & Over 21,203,808    21,999,164    3.75% 1.25% 21,826,683    2.94% 1.43% 1.51% Total 176,003,821 183,121,083 4.04% 1.54% 180,844,818 2.75% 1.43% 1.32% ANNUAL SALARY INCREASES ‐ NON‐HAZARDOUS EMPLOYEES By Attained Age (For Informational Purposes only) Current Assumption Actual Experience   City of Clearwater Employees’ Pension Plan  Five‐Year Experience Investigation  21  GRS RetirementConsulting APPENDIX B    COMPARISON OF ACTUAL AND EXPECTED RETIREMENTS    Current Proposed Expected Years of Assumed Expected Actual Actual Retirement Retirements Service Age Exposure Rates Ret.'s Ret.'s Rates Rates (New Rates) 10 ‐ 19 50 ‐ 54 63 10% 6.3 2 3.2%5% 3.2 55 ‐ 59 20 10% 2.0 3 15.0%15% 3.0 60 ‐ 64 13 50% 6.5 5 38.5%40% 5.2 65 & Over 2 100% 2.0 1 50.0%100% 2.0 20 +Under 45 47 20% 9.4 7 14.9%15% 7.1 45 ‐ 49 149 15% 22.4 22 14.8%15% 22.4 50 ‐ 54 125 25% 31.3 16 12.8%15% 18.7 55 ‐ 59 27 35% 9.5 7 25.9%30% 8.1 60 ‐ 64 9 50% 4.5 3 33.3%40% 3.6 65 & Over 0 100% 0.0 0 N/A 100% 0.0 Total 455 20.6% 93.9 66 14.5% 15.4% 73.3 RETIREMENT EXPERIENCE ‐ HAZARDOUS EMPLOYEES Current Proposed Expected Years of Assumed Expected Actual Actual Retirement Retirements Service Age Exposure Rates Ret.'s Ret.'s Rates Rates (New Rates) 10 ‐ 19 65 ‐ 69 79 45% 35.6 20 25.3%30% 23.7 70 ‐ 74 9 50% 4.5 1 11.1%30% 2.7 75 & Over 1 100% 1.0 0 0.0%100% 1.0 20 ‐ 29 55 ‐ 59 268 20% 53.6 50 18.7%20% 53.6 60 ‐ 64 161 25% 40.3 29 18.0%20% 32.2 65 ‐ 69 46 45% 20.7 13 28.3%30% 13.8 70 & Over 12 100% 12.0 3 25.0%100% 12.0 30 +Under 55 35 40% 14.0 16 45.7%45% 15.8 55 ‐ 59 28 40% 11.2 4 14.3%20% 5.6 60 ‐ 64 23 40% 9.2 6 26.1%30% 6.9 65 ‐ 69 5 50% 2.5 2 40.0%50% 2.5 70 & Over 2 100% 2.0 2 100.0%100% 2.0 Total 669 30.9% 206.6 146 21.8% 24.6% 171.8 RETIREMENT EXPERIENCE ‐ NON‐HAZARDOUS EMPLOYEES   City of Clearwater Employees’ Pension Plan  Five‐Year Experience Investigation  22  GRS RetirementConsulting APPENDIX C    COMPARISON OF ACTUAL AND EXPECTED SEPARATIONS  (Males) Years of  Service Age Exposures Expected  W/D's Expected % Actual W/D's Actual % Proposed % Expected W/D's  (Proposed Rates) Under 1All Ages 73 9.34 12.8% 6 8.2% 8.5%6.21 1All Ages 91 5.19 5.7% 7 7.7% 7.5%6.83 2 ‐ 5 Under 40 172 5.21 3.0% 8 4.7% 4.5%7.74 40 & Over 37 0.69 1.9% 1 2.7% 2.5%0.93 6 & Over Under 40 481 6.10 1.3% 11 2.3% 2.0%9.62 40 & Over 614 5.89 1.0% 12 2.0% 1.5%9.21 Total 1,468 32.42 2.2% 45 3.1% 2.8% 40.54 SEPARATION / WITHDRAWAL (W/D) EXPERIENCE ‐ HAZARDOUS EMPLOYEES (Females) Years of  Service Age Exposures Expected  W/D's Expected % Actual W/D's Actual % Proposed % Expected W/D's  (Proposed Rates) Under 1All Ages 12 1.54 12.8% 4 33.3% 20.0%2.40 1 & Over All Ages 165 3.14 1.9% 7 4.2% 4.0%6.60 Total 177 4.68 2.6% 11 6.2% 5.1% 9.00 SEPARATION / WITHDRAWAL (W/D) EXPERIENCE ‐ HAZARDOUS EMPLOYEES   City of Clearwater Employees’ Pension Plan  Five‐Year Experience Investigation  23  GRS RetirementConsulting APPENDIX C (Continued)  Years of  Service Age Exposures Expected  W/D's Expected % Actual W/D's Actual % Proposed % Expected W/D's  (Proposed Rates) Under 1 Under 35 104 24.25 23.3% 28 26.9% 25.0%26.00 35 & Over 77 9.95 12.9% 8 10.4% 11.0%8.47 1 ‐ 2All Ages 581 70.60 12.2% 97 16.7% 16.0%92.96 3 ‐ 4 Under 40 182 21.10 11.6% 19 10.4% 11.0%20.02 40 & Over 161 9.20 5.7% 7 4.3% 5.0%8.05 5 ‐ 9 Under 30 92 11.51 12.5% 12 13.0% 12.5%11.50 30 ‐ 49 410 22.90 5.6% 19 4.6% 5.0%20.50 50 ‐ 59 147 6.52 4.4% 4 2.7% 3.0%4.41 60 & Over 71 5.33 7.5% 6 8.5% 7.5%5.33 10 & Over Under 35 79 5.64 7.1% 6 7.6% 7.5%5.93 35 ‐ 39 138 8.28 6.0% 4 2.9% 4.0%5.52 40 ‐ 44 217 10.85 5.0% 6 2.8% 3.5%7.60 45 ‐ 49 294 10.29 3.5% 12 4.1% 3.5%10.29 50 ‐ 54 367 14.68 4.0% 6 1.6% 2.0%7.34 55 ‐ 59 212 10.60 5.0% 6 2.8% 3.0%6.36 60 & Over 97 7.28 7.5% 4 4.1% 4.5%4.37 Total 3,229 248.98 244 244.65 SEPARATION / WITHDRAWAL (W/D) EXPERIENCE ‐ NON‐HAZARDOUS EMPLOYEES (Males)   City of Clearwater Employees’ Pension Plan  Five‐Year Experience Investigation  24  GRS RetirementConsulting APPENDIX C (Continued)  Years of  Service Age Exposures Expected  W/D's Expected % Actual W/D's Actual % Proposed % Expected W/D's  (Proposed Rates) Under 3 Under 30 111 27.15 24.5% 23 20.7% 22.0%24.42 30 ‐ 34 48 9.15 19.1% 7 14.6% 15.0%7.20 35 ‐ 44 58 9.35 16.1% 1 1.7% 5.0%2.90 45 ‐ 49 42 5.75 13.7% 6 14.3% 14.0%5.88 50 ‐ 59 71 9.01 12.7% 14 19.7% 18.0%12.78 60 & Over 16 1.14 7.1% 6 37.5% 25.0%4.00 3 ‐ 4 Under 30 21 3.75 17.9% 4 19.0% 18.0%3.78 30 ‐ 39 33 3.45 10.5% 5 15.2% 14.0%4.62 40 ‐ 59 61 5.00 8.2% 2 3.3% 5.0%3.05 60 & Over 7 0.35 5.0% 2 28.6% 20.0%1.40 5 ‐ 9 Under 35 64 4.32 6.8% 3 4.7% 5.0%3.20 35 ‐ 44 83 4.72 5.7% 5 6.0% 6.0%4.98 45 ‐ 59 135 5.40 4.0% 6 4.4% 4.5%6.08 60 & Over 33 1.32 4.0% 1 3.0% 3.0%0.99 10 & Over Under 40 79 5.18 6.6% 5 6.3% 6.0%4.74 40 ‐ 44 60 3.00 5.0% 3 5.0% 5.0%3.00 45 ‐ 49 138 5.52 4.0% 5 3.6% 3.75%5.18 50 ‐ 54 188 7.52 4.0% 6 3.2% 3.25%6.11 55 ‐ 59 119 4.76 4.0% 3 2.5% 2.75%3.27 60 & Over 93 3.72 4.0% 6 6.5% 6.0%5.58 Total 1,460 119.56 113 113.16 (Females) SEPARATION / WITHDRAWAL (W/D) EXPERIENCE ‐ NON‐HAZARDOUS EMPLOYEES   City of Clearwater Employees’ Pension Plan  Five‐Year Experience Investigation  25  GRS RetirementConsulting APPENDIX D    COMPARISON OF ACTUAL AND EXPECTED DISABILITIES    Average Expected Expected Expected Actual Actual Proposed Disabilities Gender Exposure Disabilities Avg Rates Disabilities Rates Rates (New Rates) Males 1,910 8.1 0.426% 9 0.471%0.466% 8.9 Females 191 1.0 0.529% 3 1.571%1.046% 2.0 Total 2,101 9.1 0.435% 12 0.571%0.519% 10.9 DISABILITY EXPERIENCE ‐ HAZARDOUS EMPLOYEES Average Expected Expected Expected Actual Actual Proposed Disabilities Gender Exposure Disabilities Avg Rates Disabilities Rates Rates (New Rates) Males 3,649 4.9 0.133% 5 0.137%0.139% 5.1 Females 1,709 2.7 0.160% 3 0.176%0.166% 2.8 Total 5,358 7.6 0.142% 8 0.149%0.148% 7.9 DISABILITY EXPERIENCE ‐ NON‐HAZARDOUS EMPLOYEES   City of Clearwater Employees’ Pension Plan  Five‐Year Experience Investigation  26  GRS RetirementConsulting  APPENDIX E    Purpose of the Actuarial Valuation  In a defined benefit pension plan, an employer makes a promise to its employees of a lifetime  pension.  The amount of the monthly pension is determined by a benefit formula which is often  based upon a multiplier percentage and the number of years of service and the average final  earnings of the employee.    The employer must design and follow a systematic plan for advance‐funding this obligation.  That is  accomplished by establishing a pension fund and performing annual actuarial valuations to measure  the liabilities associated with the obligation and to calculate how much the employer must  contribute to the pension fund in order to make good on its promise.    The calculations in the actuarial valuation are performed each year to re‐measure the liabilities.   The stakeholders need to know how the plan is doing in its goal of systematically financing the  promised benefits.  So it is important to make the actuarial calculations in accordance with the  professional actuarial standards of practice and the accounting standards.    Role of Actuarial Assumptions  The nature of the pension promise and its systematic funding require long term projections of the  employee workforce (using demographic assumptions) and long term projections of the salaries  and investment returns (using economic assumptions).  The entire actuarial valuation process  depends on the selection and use of reasonable actuarial assumptions as to future demographics  and future economics.  There are many different actuarial assumptions employed in an actuarial  valuation.  The primary actuarial assumptions include:    1. Rates of Salary Increases  2. Rates of Retirement  3. Rates of Mortality  4. Rates of Employment Separation  5. Rates of Disability  6. Rate of Investment Return    The actuary and plan management must be comfortable with the actuarial assumptions.  The  assumptions must be reasonable.  Without a level of confidence in the reasonableness of the  actuarial assumptions, the stakeholders and users of the valuation results cannot have confidence  in the results.  However, there is no way to have confidence in the actuarial assumptions unless an  actuarial experience study is performed to assess the reasonableness of the current assumptions or  to change them to be more in line with past experience and with future expectations.    For this reason the Board has requested that we undertake an actuarial experience study to  recommend changes to the actuarial assumptions used in the annual actuarial valuation.         City of Clearwater Employees’ Pension Plan  Five‐Year Experience Investigation  27  GRS RetirementConsulting APPENDIX F    Risks Associated with Measuring the Accrued Liability and Actuarially  Determined Contribution    The determination of the accrued liability and the actuarially determined contribution requires the  use of assumptions regarding future economic and demographic experience.  Risk measures are  intended to aid in the understanding of the effects of future experience differing from the  assumptions used in the course of the actuarial valuation. Risk measures may also help with  illustrating the potential volatility in the accrued liability and the actuarially determined  contribution that result from the differences between actual experience and the actuarial  assumptions.    Future actuarial measurements may differ significantly from the current measurements presented  in this report due to such factors as the following: Plan experience differing from that anticipated by  the economic or demographic assumptions; changes in economic or demographic assumptions due  to changing conditions; increases or decreases expected as part of the natural operation of the  methodology used for these measurements (such as the end of an amortization period, or  additional cost or contribution requirements based on the Plan’s funded status); and changes in  Plan provisions or applicable law.  The scope of an actuarial valuation does not include an analysis  of the potential range of such future measurements.    Examples of risk that may reasonably be anticipated to significantly affect the Plan’s future financial  condition include:    1. Investment risk – actual investment returns may differ from the either assumed or  forecasted returns;  2. Contribution risk – actual contributions may differ from expected future contributions.  For  example, actual contributions may not be made in accordance with the Plan’s funding policy  or  material changes may occur in the anticipated number of covered employees, covered  payroll, or other relevant contribution base;  3. Salary and Payroll risk – actual salaries and total payroll may differ from expected, resulting  in actual future accrued liability and contributions differing from expected;  4. Longevity risk – members may live longer or shorter than expected and receive pensions for  a period of time other than assumed;  5. Other demographic risks – members may terminate, retire or become disabled at times or  with benefits other than assumed resulting in actual future accrued liability and  contributions differing from expected.     The effects of certain trends in experience can generally be anticipated.  For example if the  investment return is less (or more) than the assumed rate, the cost of the Plan can be expected to  increase (or decrease).  Likewise if longevity is improving (or worsening), increases (or decreases) in  cost can be anticipated.       City of Clearwater Employees’ Pension Plan  Five‐Year Experience Investigation  28  GRS RetirementConsulting   The computed contribution amounts may be considered as a minimum contribution that complies  with the pension Board’s funding policy and the State statutes.  The timely receipt of the actuarially  determined contributions is critical to support the financial health of the Plan.  Users of this report  should be aware that contributions made at the actuarially determined rate do not necessarily  guarantee benefit security.    Risk Assessment    Risk assessment was outside the scope of this report.  Risk assessment may include scenario tests,  sensitivity tests, stochastic modeling, stress tests, and a comparison of the present value of accrued  benefits at low‐risk discount rates with the actuarial accrued liability. We are prepared to perform  such assessment to aid the Board in the decision making process.    Cover Memo City of Clearwater City Hall 112 S. Osceola Avenue Clearwater, FL 33756 File Number: ID#18-5327 Agenda Date: 1/14/2019 Status: Agenda ReadyVersion: 2 File Type: Action ItemIn Control: Pension Trustees Agenda Number: 4.2 SUBJECT/RECOMMENDATION: Approve the new hires for acceptance into the Pension Plan as listed. SUMMARY: Name/Job Classification/Department Pension Eligibility Date Aline Watson, Library Assistant, Library 09/29/2018 Michael Cammarata, Fire Medic, Fire 10/01/2018 Michael Shuster, Fire Medic, Fire 10/01/2018 Timothy Titus, Fire Medic, Fire 10/01/2018 Jacob Williams, Fire Medic, Fire 10/01/2018 Curtis Fivecoat, Fire Medic, Fire 10/01/2018 Shawn Markussen, Fire Medic, Fire 10/01/2018 Raymond Pang, Fire Medic, Fire 10/01/2018 Matthew Kristof, Field Service Representative I, Customer Service 10/01/2018 Gail Shaloy, Senior Accountant, Finance 10/01/2018 Ottoniel Ojeda, Engineering Technician, Gas 10/01/2018 Keon Burden, Aquatic Programmer, Parks and Recreation 10/01/2018 George Hages, Water Distribution Operator Trainee, Public Utilities 10/01/2018 Nathan Hamel, Wastewater Treatment Plant Operator Trainee, Public Utilities 10/01/2018 Jhon Morera Sarrazola, Solid Waste Worker, Solid Waste 10/01/2018 Amy Dodson, Aquatic Programmer, Parks and Recreation 10/01/2018 Kevin Moran, Heavy Equip. Operator, Parks and Recreation 10/01/2018 Hoseazell Durant, Parks Service Technician I, Parks and Recreation 10/01/2018 Robert Jefferson, Parks Service Technician I, Parks and Recreation 10/01/2018 Marcia Terry, Recreation Leader, Parks and Recreation 10/01/2018 Orlando Rivas, Water Distribution Operator, Public Utilities 10/01/2018 Richard Foster, Stormwater Technician I, Engineering 10/15/2018 Justin Wilson, Stormwater Technician I, Engineering 10/15/2018 Diane Burge, Senior Accountant, Finance 10/15/2018 Valerie Gillespie, Customer Service Representative, Gas 10/15/2018 Holden Hamm, Recreation Supervisor I, Parks and Recreation 10/15/2018 Diego Guevara Casallas, Senior Planner, Planning and Development 10/15/2018 Michelle McCarthy, Accounting Technician, Public Utilities 10/15/2018 Ricky Palmer, Solid Waste Equipment Operator, Solid Waste 10/15/2018 Brian Tobin, Parks Service Technician III, Parks and Recreation 10/15/2018 Page 1 City of Clearwater Printed on 1/4/2019 File Number: ID#18-5327 APPROPRIATION CODE AND AMOUNT: N/A USE OF RESERVE FUNDS: N/A Page 2 City of Clearwater Printed on 1/4/2019 Interoffice Correspondence Sheet TO: Pension Advisory Committee FROM: Joseph Roseto, Human Resources Director SUBJECT: Recommendation for Acceptance into Pension Plan DATE: Subject/Recommendation: Recommend approval of the new hires for acceptance into the Pension Plan as listed. Name Job Classification Department Pension Eligibility Date Aline Watson Library Assistant Library 09/29/2018 Michael Cammarata Fire Medic Fire 10/01/2018 Michael Shuster Fire Medic Fire 10/01/2018 Timothy Titus Fire Medic Fire 10/01/2018 Jacob Williams Fire Medic Fire 10/01/2018 Curtis Fivecoat Fire Medic Fire 10/01/2018 Shawn Markussen Fire Medic Fire 10/01/2018 Raymond Pang Fire Medic Fire 10/01/2018 Matthew Kristof Field Service Representative I Customer Service 10/01/2018 Gail Shaloy Senior Accountant Finance 10/01/2018 Ottoniel Ojeda Engineering Technician Gas 10/01/2018 Keon Burden Aquatic Programmer Parks and Recreation 10/01/2018 George Hages Water Distribution Operator Trainee Public Utilities 10/01/2018 Nathan Hamel Wastewater Treatment Plant Operator Trainee Public Utilities 10/01/2018 Jhon Morera Sarrazola Solid Waste Worker Solid Waste 10/01/2018 Amy Dodson Aquatic Programmer Parks and Recreation 10/01/2018 Kevin Moran Heavy Equip. Operator Parks and Recreation 10/01/2018 Hoseazell Durant Parks Service Technician I Parks and Recreation 10/01/2018 Robert Jefferson Parks Service Technician I Parks and Recreation 10/01/2018 Marcia Terry Recreation Leader Parks and Recreation 10/01/2018 Orlando Rivas Water Distribution Operator Public Utilities 10/01/2018 Richard Foster Stormwater Technician I Engineering 10/15/2018 Justin Wilson Stormwater Technician I Engineering 10/15/2018 Diane Burge Senior Accountant Finance 10/15/2018 Valerie Gillespie Customer Service Representative Gas 10/15/2018 Holden Hamm Recreation Supervisor I Parks and Recreation 10/15/2018 Diego Guevara Casallas Senior Planner Planning and Development 10/15/2018 Michelle McCarthy Accounting Technician Public Utilities 10/15/2018 Ricky Palmer Solid Waste Equipment Operator Solid Waste 10/15/2018 Brian Tobin Parks Service Technician III Parks and Recreation 10/15/2018 Cover Memo City of Clearwater City Hall 112 S. Osceola Avenue Clearwater, FL 33756 File Number: ID#18-5328 Agenda Date: 1/14/2019 Status: Agenda ReadyVersion: 2 File Type: Action ItemIn Control: Pension Trustees Agenda Number: 4.3 SUBJECT/RECOMMENDATION: Approve the following request of employee Wendy Aspinwall, Fire Department, to vest their pension as provided by Section 2.419 of the Employees’ Pension Plan. SUMMARY: Wendy Aspinwall, Firefighter/Driver-Operator, Fire Department, was employed by the City on March 19, 2007, and began participating in the Pension Plan on that date. Ms. Aspinwall terminated from city employment on October 24, 2018. 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 for hazardous duty employees, a member shall be eligible for retirement following the earlier of the date on which the participant has completed twenty years of credited service regardless of age, or the date on which the participant has reached fifty-five years and completed ten years of credited service. Ms. Aspinwall will meet the hazardous duty criteria and begin collecting pension in April 2027. APPROPRIATION CODE AND AMOUNT: N/A USE OF RESERVE FUNDS: N/A Page 1 City of Clearwater Printed on 1/4/2019 Cover Memo City of Clearwater City Hall 112 S. Osceola Avenue Clearwater, FL 33756 File Number: ID#18-5329 Agenda Date: 1/14/2019 Status: Agenda ReadyVersion: 2 File Type: Action ItemIn Control: Pension Trustees Agenda Number: 4.4 SUBJECT/RECOMMENDATION: Approve the following request of employee William New, Public Utilities Department, for a regular pension as provided by Sections 2.416 and 2.424 of the Employees’ Pension Plan. SUMMARY: William New, Wastewater Treatment Plant Operator A, Public Utilities Department, was employed by the City on April 18, 1988, and his pension service credit is effective on that date. His pension will be effective January 1, 2019. Based on an average salary of approximately $70,396.97 over the past five years, the formula for computing regular pensions and Mr. New’s selection of the 100% Joint and Survivor Annuity, this pension benefit will be approximately $58,518.24 annually. Section 2.416 provides for normal retirement eligibility for non-hazardous duty employees hired prior to the effective date of this reinstatement (January 1, 2013), a member shall be eligible for retirement following the earlier of the date on which a participant has reached the age of fifty-five years and completed twenty years of credited service; the date on which a participant has reached age sixty-five years and completed ten years of credited service; or the date on which a member has completed thirty years of service regardless of age. For non-hazardous duty employees hired on or after the effective date of this restatement, a member shall be eligible for retirement following the earlier of the date on which a participant has reached the age of sixty years and completed twenty-five years of credited service; or the date on which a participant has reached the age of sixty-five years and completed ten years of credited service. Mr. New has met the non-hazardous duty criteria. APPROPRIATION CODE AND AMOUNT: N/A USE OF RESERVE FUNDS: N/A Page 1 City of Clearwater Printed on 1/4/2019 Cover Memo City of Clearwater City Hall 112 S. Osceola Avenue Clearwater, FL 33756 File Number: ID#18-5486 Agenda Date: 1/14/2019 Status: Agenda ReadyVersion: 2 File Type: Action ItemIn Control: Pension Trustees Agenda Number: 4.5 SUBJECT/RECOMMENDATION: Approve the new hires for acceptance into the Pension Plan as listed. SUMMARY: Name/Job Classification/Department Pension Eligibility Date Cory Ewing, Parking Assistant, Engineering 10/27/2018 Aleah Hoggatt, Personnel/Payroll Technician, Parks and Recreation 10/29/2018 Nikomi Thompson, Police Communications Operator Trainee, Police 10/29/2018 Ashley Webb, Police Communications Operator Trainee, Police 10/29/2018 Victoria Magee, Police Communications Operator Trainee, Police 10/29/2018 Jonathan Mullen, Recreation Leader, Parks and Recreation 11/10/2018 Kristina Simi, System Analyst, Customer Service 11/13/2018 Kaylynn Price, Engineering Specialist I, Engineering 11/13/2018 Hector Hernandez, Engineering Specialist I, Engineering 11/13/2018 Corissa Stevenson, Parking Enforcement Specialist, Engineering 11/13/2018 Brian Devlin, Parking Enforcement Specialist, Engineering 11/13/2018 Caley Conard, Accounting Technician, Public Utilities 11/13/2018 James Atkisson, Parking Enforcement Specialist, Engineering 11/26/2018 Alexandra Chandler, Public Information Specialist, Public Communications 11/26/2018 Kerri Ackerman, Accounting Technician, Finance 11/26/2018 Courtney Beasley, Police Office Specialist, Police 11/26/2018 Sheri Cullen, Police Information Technician I, Police 11/26/2018 Anthony Humphries, Service Dispatcher, Gas 11/26/2018 Miguel Valle Sanchez, Rec. Program Support Tech., Parks and Recreation 11/26/2018 APPROPRIATION CODE AND AMOUNT: N/A USE OF RESERVE FUNDS: N/A Page 1 City of Clearwater Printed on 1/4/2019 Interoffice Correspondence Sheet TO: Pension Advisory Committee FROM: Joseph Roseto, Human Resources Director SUBJECT: Recommendation for Acceptance into Pension Plan DATE: Subject/Recommendation: Recommend approval of the new hires for acceptance into the Pension Plan as listed. Name Job Classification Department Pension Eligibility Date Cory Ewing Parking Assistant Engineering 10/27/2018 Aleah Hoggatt Personnel/Payroll Technician Parks and Recreation 10/29/2018 Nikomi Thompson Police Communications Operator Trainee Police 10/29/2018 Ashley Webb Police Communications Operator Trainee Police 10/29/2018 Victoria Magee Police Communications Operator Trainee Police 10/29/2018 Jonathan Mullen Recreation Leader Parks and Recreation 11/10/2018 Kristina Simi System Analyst Customer Service 11/13/2018 Kaylynn Price Engineering Specialist I Engineering 11/13/2018 Hector Hernandez Engineering Specialist I Engineering 11/13/2018 Corissa Stevenson Parking Enforcement Specialist Engineering 11/13/2018 Brian Devlin Parking Enforcement Specialist Engineering 11/13/2018 Caley Conard Accounting Technician Public Utilities 11/13/2018 James Atkisson Parking Enforcement Specialist Engineering 11/26/2018 Alexandra Chandler Public Information Specialist Public Communications 11/26/2018 Kerri Ackerman Accounting Technician Finance 11/26/2018 Courtney Beasley Police Office Specialist Police 11/26/2018 Sheri Cullen Police Information Technician I Police 11/26/2018 Anthony Humphries Service Dispatcher Gas 11/26/2018 Miguel Valle Sanchez Recreation Program Support Technician Parks and Recreation 11/26/2018 Cover Memo City of Clearwater City Hall 112 S. Osceola Avenue Clearwater, FL 33756 File Number: ID#18-5487 Agenda Date: 1/14/2019 Status: Agenda ReadyVersion: 2 File Type: Action ItemIn Control: Pension Trustees Agenda Number: 4.6 SUBJECT/RECOMMENDATION: Approve the following request of employees Brian Craig, Police Department and Diane Devol, Planning and Development Department, to vest their pensions as provided by Section 2.419 of the Employees’ Pension Plan. SUMMARY: Brian Craig, Police Programming Specialist, Police Department, was employed by the City on May 17, 1999, and began participating in the Pension Plan on September 23, 2000. Mr. Craig terminated from city employment on October 11, 2018. Diane Devol, Code Enforcement Inspector, Planning and Development Department, was employed by the City on October 1, 2007, and began participating in the Pension Plan on that date. Ms. Devol terminated from city employment on November 3, 2018. 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 for non-hazardous duty employees hired prior to the effective date of this reinstatement (January 1, 2013), a member shall be eligible for retirement following the earlier of the date on which a participant has reached the age of fifty-five years and completed twenty years of credited service; the date on which a participant has reached age sixty-five years and completed ten years of credited service; or the date on which a member has completed thirty years of service regardless of age. For non-hazardous duty employees hired on or after the effective date of this restatement, a member shall be eligible for retirement following the earlier of the date on which a participant has reached the age of sixty years and completed twenty-five years of credited service; or the date on which a participant has reached the age of sixty-five years and completed ten years of credited service. Mr. Craig will meet the non-hazardous duty criteria and begin collecting a pension in October 2030. Ms. Devol will meet the non-hazardous duty criteria and begin collecting a pension in October 2027. Section 2.416 provides for normal retirement eligibility for hazardous duty employees, a member shall be eligible for retirement following the earlier of the date on which the participant has completed twenty years of credited service regardless of age, or the date on which the participant has reached fifty-five years and completed ten years of credited service. Page 1 City of Clearwater Printed on 1/4/2019 File Number: ID#18-5487 APPROPRIATION CODE AND AMOUNT: N/A USE OF RESERVE FUNDS: N/A Page 2 City of Clearwater Printed on 1/4/2019 Cover Memo City of Clearwater City Hall 112 S. Osceola Avenue Clearwater, FL 33756 File Number: ID#18-5488 Agenda Date: 1/14/2019 Status: Agenda ReadyVersion: 2 File Type: Action ItemIn Control: Pension Trustees Agenda Number: 4.7 SUBJECT/RECOMMENDATION: Approve the following request of employees Karen Cunkle, City Auditor Department, and Brett Faulk, Police Department, for a regular pension as provided by Sections 2.416 and 2.424 of the Employees’ Pension Plan. SUMMARY: Karen Cunkle, Senior Auditor, City Auditor Department, was employed by the City on March 20, 1995, and her pension service credit is effective on that date. Her pension will be effective December 1, 2018. Based on an average salary of approximately $65,471.14 over the past five years, the formula for computing regular pensions and Ms. Cunkle’s selection of the Single Life Annuity, this pension benefit will be approximately $42,645.84 annually. Brett Faulk, Police Officer, Police Department, was employed by the City on May 27, 1997, and his pension service credit is effective on July 20, 1998. His pension will be effective December 1, 2018. Based on an average salary of approximately $82,214.88 over the past five years, the formula for computing regular pensions and Mr. Faulk’s selection of the 100% Joint and Survivor Annuity, this pension benefit will be approximately $45,458.64 annually. Section 2.416 provides for normal retirement eligibility for non-hazardous duty employees hired prior to the effective date of this reinstatement (January 1, 2013), a member shall be eligible for retirement following the earlier of the date on which a participant has reached the age of fifty-five years and completed twenty years of credited service; the date on which a participant has reached age sixty-five years and completed ten years of credited service; or the date on which a member has completed thirty years of service regardless of age. For non-hazardous duty employees hired on or after the effective date of this restatement, a member shall be eligible for retirement following the earlier of the date on which a participant has reached the age of sixty years and completed twenty-five years of credited service; or the date on which a participant has reached the age of sixty-five years and completed ten years of credited service. Ms. Cunkle has met the non-hazardous duty criteria. Section 2.416 provides for normal retirement eligibility for hazardous duty employees, a member shall be eligible for retirement following the earlier of the date on which the participant has completed twenty years of credited service regardless of age, or the date on which the participant has reached fifty-five years and completed ten years of credited service. Mr. Faulk has met the hazardous duty criteria. APPROPRIATION CODE AND AMOUNT: N/A Page 1 City of Clearwater Printed on 1/4/2019 File Number: ID#18-5488 USE OF RESERVE FUNDS: N/A Page 2 City of Clearwater Printed on 1/4/2019