Ord No 18-21-2408ORDINANCE NO. 18-21-2408
An Ordinance amending the South Miami Pension Plan; by Amending Section 16-12,
"Definitions"; by Amending Section 16-14, "Pension benefits and retirement dates";
and by Amending Section 16-17, "Termination".
WHEREAS, the City established the South Miami Pension Plan ("Plan") for City employees
in 1965, and has amended the Plan on numerous occasions; and
WHEREAS, the City adopted Ordinance 23-19-2336 on June 18, 2019, implementing
several changes to the Plan, including a reduction in the normal retirement age for AMSC
members from age 65 with three years of service to age 60 with five years of service; however,
there was no change to the early retirement date of age 55 with ten years of service; and
WHEREAS, The Plan currently differentiates in certain benefits provided to members in
different employee groups and membership tiers; and
WHEREAS, the City has determined that it is in the best interest of employees to provide
greater consistency in the benefits provided to members in different employee groups and
membership tiers; and
WHEREAS, the City is recommending a change in the vesting period for Administrative
Management Service Class ("AMSC") members hired in the future from five years to ten years of
continuous service, consistent with the vesting period for First Tier and Second Tier members;
and
WHEREAS, the City is recommending a change in the final average compensation period
for AMSC members from eight years to five years, consistent with the final average compensation
period for police officers; and
WHEREAS, the City is recommending that the option of retiring early upon reaching age
55 with ten years of service and receiving a reduced early retirement benefit be eliminated for
AMSC members, consistent with Second Tier members; and
WHEREAS, the City is recommending that the normal retirement date for AMSC members
be revised to include retirement at age 55 with twenty years of service; and
WHEREAS, the City Commission has received and reviewed actuarial impact statements
related to such amendments; and
WHEREAS, the City Commission deems it to be in the public interest to provide these
changes to the South Miami Pension Plan in order to continue to meet the City's objectives of
attracting and retaining the best talent as City employees, and managing employee turnover;
1
Ord. No. 18-21-2408
NOW, THEREFORE, BE IT HEREBY ORDAINED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF SOUTH MIAMI, FLORIDA, THAT:
Section 1: The foregoing recitals are hereby ratified and incorporated by reference as
if fully set forth herein and as the legislative intent of this Ordinance.
Section 2: Chapter 16, Article II, of the City of South Miami Code of Ordinances is
hereby amended by amending Section 16-12, "Definitions" as follows:
Final average compensation shall mean the participant's annual compensation, as
determined by the employer, acting in a uniform and nondiscriminatory manner. For general
employees, except for Second Tier Members and AMSC Members effective October 1, 2011, final
average compensation shall be averaged over the last five-year period, provided however final
average compensation over the last five-year period shall not be less than the final average
compensation as of September 30, 2011, under the definition of final average compensation
which existed as of September 30, 2011. For Second Tier Members, final average compensation
will be the average of the highest eight (8) years of credited service. For AMSC Members, final
average compensation will be the average of the highest eight (9) five 5 years of credited
service. In the event an AMSC Member has less than a (9) five 5 years of credited service,
final average compensation will be the average of all the participant's annual compensation over
the period for which the Member received credited service. For members covered under the
police officers and sergeants collective bargaining agreement, final average compensation shall
be the best five-year period of the police officer or sergeant's career with the City of South Miami,
provided however final average compensation over the best five-year period shall not be less
than the final average compensation as of September 30, 2011, under the definition of final
average compensation which existed as of September 30, 2011. The best five (5) years is defined
as the highest five (5), twenty-six (26) consecutive pay periods within a police officer or sergeant's
career and such consecutive year periods shall not overlap one another. For all other members,
final average compensation shall be averaged over the last three-year period - but not less than
the average of the participant's five (5) best years of annual compensation during the last ten
(10) years of service. For all members final average compensation will end on the participant's
retirement date, date of disability, date of termination of employment or the date of termination
of the plan, whichever is applicable.
Section 3: Chapter 16, Article II, of the City of South Miami Code of Ordinances is
hereby amended by amending Section 16-14, "Pension benefits and retirement date" as follows:
(a) Retirement date. The normal retirement date with full unreduced pension
benefits for a participant, shall be as follows:
2
Ord. No. 18-21-2408
(3) AMSC Members. The normal retirement date for AMSC Members hired before
effective date of this Ordinance shall be the earlier of (a) age 60 and completion of five (5) years
of credited service; or b a e 55 and completion of twenty 20 ears of credited service,• or (bc)
completion of thirty-three (33) years of credited service. The normal retirement date for AMSC
Members hired on or after effective date of this Ordinance shall be the earlier of a age 60 and
completion of ten (10) years of credited service; or (b) age 55 and completion of twenty (20
years of credited service; or (c) completion of thirty-three (33) years of credited service.
(A) Early retirement.
(1) A general employee participant as of September 30, 2011,a,,d " SC
PaFti6p s-may elect an early retirement date which may be the first day of any calendar
month coincident with, or subsequent to the participant's fifty-fifth (55th) birthday and
completion of ten (10) years of credited service. The pension benefits payable to any such
participant on early retirement date shall be equal to an actuarial equivalent, determined
in accordance with the table below, to the amount of pension to which is entitled up to
early retirement date in accordance with subsection (b).
Table —General Employee participant as of September 30, 2011, ANISC paFIie;pants —
Percentages for early retirement date
Years prior to normal retirement date
Percentage
1
93.33
2
86.67
3
80.00
4
73.33
5
66.67
6
63.33
7
60.00
8
56.67
9
53.33
10
50.00
3
Ord. No. 18-21-2408
(2) Police officers. Shall be the completion of twenty-five (25) years of credited police
service, regardless of age, or attainment of age sixty (60) and completion often (10) years
of credited police service.
(3) Vesting of benefits upon normal retirement date. Any provision of this plan to the
contrary notwithstanding, a member's accrued benefit shall become one hundred (100) percent
vested upon the attainment of the normal retirement date.
Section 4: Chapter 16, Article II, of the City of South Miami Code of Ordinances is
hereby amended by amending Section 16-17 "Termination of Employment" as follows:
(a) If the employment of a participant is terminated except by retirement, transfer to
ineligible status or death, the participant's interest and rights under this plan shall be limited to
those contained in the following sections of this section.
(b) Any such participant shall be entitled to elect Option 1 or Option 2, as described
below, except that Option 2 shall be automatically considered as having been elected by the
Participant unless Option 1 is elected before the participant's normal retirement date.
Option 1: A cash payment of an amount equal to the aggregate of the contributions made
by the participant prior to termination of employment. Provided that police officer participants
eligible to withdraw their contributions from this pension plan may only withdraw their
contributions without interest.
Option 2: For vested participants, pension Pension benefits commencing on what
otherwise would have been the normal retirement date of the participant in an amount equal to
the greater of that which can be provided by the aggregate of the contributions made by the
participant prior to the termination of employment, with credited interest compounded annually
at the rate of three (3) percent per annum from the end of the year of payment to the date on
which pension benefits commence; or an amount determined by multiplying the.,..,.,,,.,} hf
in accordance with subsection 16-14(a) or 16-14(b),
whichever is applicable
n the ba ..f the lelm rth of.r.Fedited s Fyic_a
W rw beF of ..ea F-s of r.Fedited seFyir_o
Derintagc
I., rthap 0
g
44
2-9
i3
30
i4
40
i-5
-50
44
69
477
7'8
479
go
49
90
12
Ord. No. 18-21-2408
Police officer participants, including bargaining unit employees, shall be one hundred
(100) percent vested in the retirement plan upon completion of ten (10) years continuous full-
time sworn police service. Accordingly, effective October 1, 1993, all police officer participants,
including members of the bargaining unit, who are in this plan effective October 1, 1993 and have
between ten (10) years and twenty (20) years of continuous sworn police service will be one
hundred (100) percent vested.
All general employees shall be one hundred (100) percent vested in the pension plan upon
completion of ten (10) years of continuous credited service. All Second Tier Members shall be
one hundred (100) percent vested in the pension plan upon completion of ten (10) years of
continuous credited service. AMSC members hired on or after (effective date of this Ordinance
shall be 100% vested in the pension plan upon completion of ten 10 ears of continuous
credited service. AMSC Members who are employed on the [effective date of this Ordinance]
shall be one hundred (100) percent vested in the pension plan upon eempleeyi.44 4f,„n (5) y aF5
Of G^IR:0AI OUS SeFY'Ge. General employees and AMSC Members who opt to join the defined
contribution plan of the City of South Miami shall vest in the defined contribution plan after one
(1) year of service. Accordingly, effective October 1, 1995, all general employees who are in this
plan as of October 1, 1995 and have ten (10) years or more of continuous service will be one
hundred (100) percent vested.
Section 5. Severability. If any section, clause, sentence, or phrase of this ordinance is for
any reason held invalid or unconstitutional by a court of competent jurisdiction, this holding shall
not affect the validity of the remaining portions of this ordinance.
Section 6. Ordinances in Conflict. All ordinances or parts of ordinances and all section
and parts of sections of ordinances in direct conflict herewith are hereby repealed. However, it
is not the intent of this section to repeal entire ordinances, or parts of ordinances, that give the
appearance of being in conflict when the two ordinances can be harmonized or when only a
portion of the ordinance in conflict needs to be repealed to harmonize the ordinances. If the
ordinance in conflict can be harmonized by amending its terms, it is hereby amended to
harmonize the two ordinances. Therefore, only that portion that needs to be repealed to
harmonize the two ordinances shall be repealed.
Section 7. Codification. The provisions of this ordinance will become and be made part of
the City of South Miami Land Development Code as amended; that the sections of this ordinance
may be renumbered or re -lettered to accomplish such intention; and that the word "ordinance"
may be changed to "section" or other appropriate word.
Section 8. Effective Date. This ordinance shall become effective upon enactment.
PASSED AND ADOPTED this 7th day of September, 2021.
5
Ord. No. 18-21-2408
ATTEST:
Q GCS
CITY 6ERK
V Reading - 8/17/21
2nd Reading - 9/7/21
READ AND AP * OVED AS TO FORM,
LANGUAG , LEG . UTY, AND
EXECUT HEREOF
Cl TTORNEY
9
APPROVED:
MAYOR
COMMISSION VOTE:
5-0
Mayor Philips:
Yea
Commissioner Harris:
Yea
Commissioner Gil:
Yea
Commissioner Liebman:
Yea
Commissioner Corey:
Yea
Agenda Item No: 18.
City Commission Agenda Item Report
Meeting Date: September 7, 2021
Submitted by: Alfredo Riverol
Submitting Department: Finance Department
Item Type: Ordinance
Agenda Section:
Subject:
An Ordinance amending the South Miami Pension Plan; by Amending Section 16-12, "Definitions"; by Amending
Section 16-14, "Pension benefits and retirement dates"; and by Amending Section 16-17, "Termination". 3/5
(City Manager -Finance Dept.)
Suggested Action:
Attachments:
Memo Updated Pension Revisions -Avg Comp - Early Retire Out) DRAFT.docx
FinalAMSC_Pension_Ordinance_rev_8.19.21_revised (5).docx
South Miami AMSC Projection Study 10-1-2020 Report (60 10 NRD).pdf
Res. No. 146-01-11294 (GRS).pdf
October 12020- Summary of Retirement Plan Costs.pdf
Ord_Amending_Ch_16_re AMSCChanges_(Approved on 1st).pdf
GRS Actuarial Impact Statement 2021.pdf
1
CITY OF SOUTH MIAMI
OFFICE OF THE CITY MANAGER
Sout Miami INTER -OFFICE MEMORANDUM
THE CITY OF PLEASANT LIV'
To: The Honorable Mayor & Members of the City Commission
From: Shari Karnali, ICMA-CM, City Manager
Via: Alfredo Riverol, CPA, CGFM, CRFAC, CGMA
Date: September 7, 2021
Subject: An Ordinance amending the South Miami Pension Plan; by Amending Section 16-
12, "Definitions"; by Amending Section 16-14, "Pension benefits and retirement
dates"; and by Amending Section 16-17, "Termination"; and providing for
Severability; Providing for Inclusion in the Code; Providing for a Repealer; and
Providing for an Effective Date.
BACKGROUND
The City on June 4, 2019, adopted Ordinance 23-19-2336 reducing the normal retirement age for
AMSC members from 65 to 60, however the City of South Miami never amended Chapter 16
Article II, Section 16-14(A), "Early Retirement." to reflect the change. The City must eliminate
the outdated section and update it in order to bring it into compliance.
Furthermore, the City of South Miami currently has a few different benefits within the multiple
classes of pension participant tiers and groups. The City is looking to eliminate some of those
different benefits to provide consistency among the various groups. The City is looking to make
the vesting period 10-years for all tiers and groups and have the final average compensation for
Administrative Management Service Class (AMSC) members mirror the final average
compensation provided to police. Currently, the AMSC members have a vesting period of 5-
years, the proposal amends the vesting period of new AMSC members to 10-years, like all other
tiers and groups.
Before any amendment can be adopted, a statement of actuarial impact is required by Section
112.63(3), F.S. An Actuarial Impact Statement means a statement setting forth the actuarial
liabilities and contribution requirements of a proposed change in the provisions of a local
retirement system certified by an enrolled actuary.
The City requested that the City's Pension Plan Actuary, Gabriel Roeder Smith & Company (GRS),
complete the required Actuarial Impact Statement. GRS issued their Actuarial Impact Statement
before second reading and adoption of the Ordiance. The Actuarial Impact Statement is prepared
reflecting the impact to the South Miami Pension Plan.
The Florida Administrative Code (60T-1.004(3)(a)) states that an Actuarial Impact Statement must
be certificated and signed and dated by the Plan Administrator and contain the following
information:
Page 1 of 2 2
a. A description of the proposed amendment and a statement that the actuary was provided
the information necessary to evaluate the proposed amendment;
b. An estimate of the cost of implementing the amendment, signed and dated by an enrolled
actuary, which discloses, at a minimum, sufficient information on both the before and
after amendment basis, so that another actuary, unfamiliar with the situation, would be
able to appraise the estimate. If any actuarial assumptions, techniques or methods are
also changed, additional information disclosing the effect of such actuarial changes must
be provided;
c. A statement indicating whether the proposed change is in compliance with Part VII,
Chapter 112, F.S. and Section 14, Article X of the State Constitution.
No unit of local government shall agree to a proposed change in the retirement benefits or
liabilities of a local system, unless the administrator of the system, prior to adoption of the
change by the governing body, has issued a statement of actuarial impact of the proposed change
upon the local retirement system prior to the last public hearing.
Based on the projection study provided by the City's Pension Plan Actuary, (GRS), the estimated
cost in adoptingthe Ordinance amendingthe City's Pension Plan is; an estimated average amount
of $20,000 annually over a 30-year period, with the City actually beginning to save money after
year 24.
ATTACHMENTS
— Proposed Ordinance
— GRS Projection Study
— Res. No 146-01-11294 — GRS
— Summary of Retirement Plan Costs as of October 1, 2020
— GRS Actuarial Impact Statement
Page 2 of 2 3
GRS
August 12, 2021
Mr. Alfredo Riverol
Finance Director
City Hall, 15t Floor
6130 Sunset Drive
South Miami, Florida 33143
Re: Actuarial Projection Study
South Miami Pension Plan—AMSC Members
Dear Alfredo:
P: 954.527.1616 ? F:954.525.0083 1 www.grsconsultirvg.com
As requested, we are pleased to enclose our Updated Actuarial Projection Study including thirty
(30) year projections beginning October 1, 2020 for AMSC members of the South Miami Pension Plan
illustrating the financial impact of the current and proposed provisions.
The update reflects the change of Normal Retirement eligibility from attainment of age 60 and
completion of 5 years of credited service to attainment of age 60 and completion of 10 years of credited
service for all future AMSC members.
Census data and financial information is reported as of October 1, 2020.
If you should have any question concerning the above or if we may be of further assistance with this
matter, please do not hesitate to contact us.
Sincerest regards,
Jennifer M. Borregard, E.A., M.A.A.A., F.C.A.
Consultant and Actuary
Enclosure
�x�& ju-�-
Shelly L. Jones, A.S.A, E.A., M.A.A.A., F.C.A.
Consultant and Actuary
South Miami Pension Plan
Updated Actuarial Projection Study For Administration
Management Service Class (AMSC) Employees as of
October 1, 2020
Prepared: August 12, 2021
4 w
12
TABLE OF CONTENTS
Page
ExecutiveSummary.......................................................................................................... 1
ProjectionResults............................................................................................................ 5
Outline of Principal Provisions of the Retirement Plan ................................................... 7
Actuarial Assumptions and Cost Methods.....................................................................13
Glossary........................................................................................
`GRS
.................... 17
13
EXECUTIVE SUMMARY
As requested, we have completed updated thirty (30) year projections illustrating the financial impact of
proposed changes to the benefit provisions of the South Miami Pension Plan (Plan) for Administration
Management Service Class (AMSC) Employees. The update reflects the change of normal retirement
eligibility from attainment of age 60 and completion of 5 years of credited service to attainment of age 60
and completion of 10 years of credited service for future AMSC members hired after adoption of the
ordinance.
Background
Currently, the Plan provides the following for AMSC members:
➢ Normal retirement eligibility is (a) attainment of age 60 and completion of 5 years of credited service
or (b) completion of 33 years of credited service
➢ Early (reduced) retirement eligibility is attainment of age 55 and completion of 10 years of credited
service
➢ Final Average Compensation is the average of the highest 8 years of credited service
➢ 100% vesting upon completion of 5 years of credited service
Proposed Changes
We understand the City is interested in an analysis of providing the following for AMSC members:
➢ Normal retirement eligibility is (a) attainment of age 60 and completion of 10 years of credited service
(for current AMSC members, attainment of age 60 and completion of 5 years of credited service), (b)
attainment of age 55 and completion of 20 years of credited service or (c) completion of 33 years of
credited service
➢ Eliminate early (reduced) retirement eligibility
➢ Final Average Compensation is the average of the highest 5 years of credited service
➢ 100% vesting upon completion of 10 years of credited service for new members; all current AMSC
members will become 100% vested upon adoption of the ordinance.
Results
The following table shows the current City cost over the next five (5), ten (10) and thirty (30) years for the
baseline (current plan) and for the proposed benefit changes described above both as a dollar amount and
as a percentage of projected covered payroll, respectively.
G R S South Miami Pension Plan 1
14
Summary of Costs for AMSC Employees I$1,000sj
Current Plan
Proposed Changes
increase /
Amount
Amount
(Decrease)
Next Year
Projected Payroll
$1,251 1
$1,251
$0
City Cost $
$202
$235
$34
City Cost %
16.1%
18.8%
2.7%
Next 5 Years
Projected Payroll
$7,091
$7,091
$0
City Cost $ 1
$1,209
$1,344
$135
City Cost %
17.0%
18.9%
1.9%
Next 10 Years
Projected Payroll
$15,716
$16,089
$372
City Cost $
$2,853
$3,104
$251
City Cost %
18.2%
19.3%
1.1%
Next 30 Years
Projected Payroll
$61,663
$68,295
$6,632
City Cost $
$12,307
$12,939
$631
City Cost %
20.0%
18.9%
-1.0%
The increase in the present value of benefits based on the proposed Plan provision changes is $385,594 as
of October 1, 2020. The amount accumulated with interest would be $411,593 if paid in September 2021.
Actuarial Assumptions and Methods Plan Provisions Financial Data and Member Census Data
Actuarial assumptions and methods, financial data and member census data employed for purposes of our
Actuarial Projection Study are the same actuarial assumptions and methods, financial data and member
census data utilized for the October 1, 2020 Actuarial Valuation with the following exception:
AMSC— Normal and Early Retirement Rates
Age
Current
Proposed
Change
Less than 33 years of service
55 - 59
10%
25%
60 - 61
25%
25%
62 - 64
35%
35%
65 - 66
35%
35%
67 & above
1 100%
100%
With 33 or more years of service
Under 62
25%
25%
62 - 66
67
100%
100%
The Plan provisions employed for purposes of our Actuarial Projection Study are the same Plan provisions
utilized in the October 1, 2020 Actuarial Valuation with the exception of the proposed changes described
above.
�tG R S South Miami Pension Plan 2
15
The following projection assumptions have been included:
AMSC employees are assumed to be hired each year at a rate sufficient to maintain a constant active
headcount — stationary population. New AMSC employees are assumed to have the same average
demographic characteristics (age, gender, salary — adjusted each year for inflation) as those
employees hired for AMSC employees over the past five years, respectively.
Expenses paid by the City are assumed to be 0.3% of the projected market value of assets during the
projection period.
Projections are deterministic —throughout the projection period experience is expected to match the
assumptions — including a 7.375% annual market value investment return for fiscal year ended
September 30, 2021 and thereafter.
This Actuarial Projection Study only reflects experience through October 1, 2020. It does not reflect the
recent and still developing impact of COVID-19, which may significantly impact the demographic and
economic experience seen in future actuarial valuations.
Risk Assessment
Risk assessment may include scenario tests, sensitivity, or stress tests, stochastic modeling, and a comparison
of the present value of benefits at low -risk discount rates. We are prepared to perform such assessment to
aid in the decision -making process. Please refer to the October 1, 2020 Actuarial Valuation Report dated
March 16, 2021 for additional discussion regarding the risks associated with measuring the liability and the
minimum funding payment.
Other Considerations
Under Governmental Accounting Standards Board (GASB) Statement Number 68, we understand the cost of
benefit changes must be recognized immediately in pension expense (accounting not funding). Therefore,
pension expense is expected to increase the first year and then is expected to return to lower levels in fiscal
years following initial recognition of the benefit change.
This Actuarial Projection Study is intended to describe the estimated future financial effects of the proposed
benefit changes on the Plan and is not intended as a recommendation in favor of the change nor in opposition
to the change.
These calculations are based upon assumptions regarding future events. However, the Plan's long term costs
will be determined by actual future events, which may differ materially from the assumptions made.
If you have reason to believe the assumptions used are unreasonable, the Plan provisions are incorrectly
described or referenced, important Plan provisions relevant to this Actuarial Projection Study are not
described or that conditions have changed since the calculations were made, you should contact the
undersigned prior to relying on information in this Actuarial Projection Study. If you have reason to believe
that the information provided in this Actuarial Projection Study is inaccurate, or is in any way incomplete, or
if you need further information in order to make an informed decision on the subject matter of this report,
please contact the undersigned prior to making such decision.
If all actuarial assumptions are met and if all future minimum required contributions are paid, Plan assets will
be sufficient to pay all Plan benefits, future contributions are expected to remain relatively stable as a percent
GR S South Miami Pension Plan 3
16
of payroll and the funded status is expected to improve. Plan minimum required contributions are determined
in compliance with the requirements of the Florida Protection of Public Employee Retirement Benefits Act with
normal cost determined as a level percent of covered payroll and a level percent amortization payment using an
initial amortization period of 25 years.
Future actuarial measurements may differ significantly from the current measurements presented in this
report due to such factors as the following: Plan experience differing from that anticipated by the economic
or demographic assumptions; changes in economic or demographic assumptions; increases or decreases
expected as part of the natural operation of the methodology used for these measurements (such as the end
of an amortization period or additional cost or contribution requirements based on the Plan's funded status);
and changes in Plan provisions or applicable law. Due to the limited scope of the actuary's assignment, the
actuary did not perform an analysis of the potential range of such future measurements.
This report should not be relied on for any purpose other than the purpose described in the primary
communication. Determinations of the financial results associated with the benefits described in this report
in a manner other than the intended purpose may produce significantly different results.
This report was prepared using ProVal's valuation model, a software product of Winklevoss Technologies.
We are relying on the ProVal model. We performed tests of the ProVal model with this assignment and made
a reasonable attempt to understand the developer's intended purpose of, general operation of, major
sensitivities and dependencies within, and key strengths and limitations of the ProVal model. In our
professional judgment, the ProVal valuation model has the capability to provide results that are consistent
with the purposes of the valuation and has no material limitations or known weaknesses.
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.
The signing actuaries are independent of the Plan sponsor.
The undersigned are Members of the American Academy of Actuaries and meet the Qualification Standards
of the American Academy of Actuaries to render the actuarial opinion contained herein.
If you should have any question concerning the above or if we may be of further assistance with this matter,
please do not hesitate to contact us.
Sincerest regards,
Jennifer M. Borregard, E.A., M.A.A.A., F.C.A.
Consultant and Actuary
GRS
U
Shelly L. Jones, A.S.A., E.A., M.A.A.A., F.C.A.
Consultant and Actuary
South Miami Pension Plan 4
17
PROJECTION RESULTS
The Plan adds normal retirement eligibility of age 55 and completion of 20 years, amends normal retirement
eligibility of age 60 and completion of 5 years to age 60 and completion of 10 years for new hires, eliminates
reduced early retirement eligibility of age 55 and completion of 10 years, amends Final Average
Compensation to 5 years and provides 10 year vesting schedule for new hires for AMSC Employees. The
change applies to all current and future active members.
The following Table shows projected covered payroll, comparison of projected City cost and Unfunded
Actuarial Accrued Liabilities (UAAL) under the baseline forecast versus the Study - ($1,000s).
Current Plan
Proposed
Changes
Increase /
Cumulative
Increase /
Fiscal
Projected
Projected
Projected
Projected
(Decrease)
Inc./(Dec.)
(Decrease)
Year
Annual
Net City Cost
Annual
Net City Cost
in Net
in Net
in
End
Payroll
Amount
% of Pay
UAAL
Payroll
Amount
%ot Pay
UAAL
City Cost
City Cost
UAAL
2022
1,251
202
16.1%
1,108
1,251
235
18.8%
1,409
34
34
301
2023
1,338
222
16.6%
1,159
1,338
252
18.8%
1,458
30
63
299
2024
1,407
241
17.2%
1,226
1,407
268
19.1%
1,522
27
90
296
2025
1,505
262
17.4%
1,263
1,505
286
19.0%
1,553
24
114
291
2026
1,590
282
17.7%
1,301
1,590
302
19.0%
1,584
21
135
283
2027
1,685
298
17.7%
1,343
1,685
316
18.8%
1,616
19
154
273
2028
1,680
314
18.7%
1,382
1,704
333
19.5%
1,644
19
173
262
2029
1,714
330
19.2%
1,418
1,777
351
19.7%
1,669
21
194
251
2030
1,747
344
19.7%
1,451
1,858
369
19.9%
1,694
25
219
243
2031
1,798
359
20.0%
1,479
1,973
392
19.9%
1,717
33
251
238
2032
1,836
372
20.3%
1,503
2,056
401
19.5%
1,740
29
280
236
2033
1,854
386
20.8%
1,519
2,064
414
20.1%
1,750
28
308
231
2034
1,888
399
21.1%
1,529
2,087
427
20.5%
1,751
29
337
222
2035
1,927
415
21.5%
1,531
2,136
442
20.7%
1,743
27
364
212
2036
1,985
432
21.8%
1,523
2,216
460
20.8%
1,724
28
392
201
2037
2,013
446
22.2%
1,508
2,271
474
20.8%
1,699
28
419
191
2038
2,065
462
22.4%
1,483
2,344
491
20.9%
1,665
29
448
182
2039
2,106
476
22.6%
1,451
2,408
506
21.0%
1,624
30
478
173
2040
2,147
490
22.8%
1,409
2,445
520
21.3%
1,567
30
507
158
2041
2,212
507
22.9%
1,356
2,512
535
21.3%
1,497
28
535
141
2042
2,294
506
22.1%
1,295
2,598
533
20.5%
1,415
27
562
120
2043
2,355
523
22.2%
1,243
2,670
549
20.6%
1,340
27
589
97
2044
2,405
422
17.6%
1,181
2,734
449
16.4%
1,253
27
616
72
2045
2,466
488
19.8%
1,214
2,827
516
18.2%
1,264
27
643
50
2046
2,560
495
19.3%
1,195
2,934
494
16.8%
1,219
-1
643
24
2047
2,605
505
19.4%
1,184
2,988
505
16.9%
1,205
0
642
21
2048
2,678
516
19.3%
1,168
3,079
514
16.7%
1,186
-2
640
18
2049
2,760
526
19.0%
1,152
3,171
523
16.5%
1,167
-3
638
15
2050
2,855
539
18.9%
1,138
3,280
536
16.3%
1,150
-3
635
12
2051
2,936
549
18.7%
1,122
3,384
546
16.1%
1,132
-3
631
10
5 Year 7,091 1,209 17.0% 7,091 1,344 18.9% 135
Total
10 Year 15,716 2,853 18.2% 16,089 3,104 19.3% 251
Total
30 Year 61,663 12,307 20.0% 68,295 12,939 18.91% 631
Total
dCG R S South Miami Pension Plan 5
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OUTLINE OF PRINCIPAL PROVISIONS OF THE PLAN
PRIOR TO ANY PROPOSED CHANGES INCLUDED IN THIS STUDY
A. Effective Date:
October 1, 1965. Most recently amended by Ordinance 38-19-2351 adopted December 3, 2019.
B. Eligibility Requirements:
1. General Employees
Tier 1:
Regular full-time employee hired before October 1, 2011 is eligible to enter the Plan following the
completion of six months of Credited Service and attainment of age 20.
Tier 2:
Regular full-time employee hired on or after October 1, 2011 and not participating in the Plan as of
October 1, 2016 who elects to join or fails to make any election within ninety (90) days from September
20, 2016 is eligible to enter the Plan as a Tier 2 employee as of October 1, 2016.
Regular full-time employee hired on or after October 1, 2016 who elects to join or fails to make any
election within ninety (90) days from date of hire is eligible to enter the Plan as a Tier 2 employee as of
their date of hire.
Any regular full-time employee who previously entered into the Defined Contribution (DC) Plan may
opt -out of the DC Plan and elect to join the Plan as a Tier 2 member or as their respective classification
at the time they elect to join the Plan during an annual open enrollment period.
2. Police Officers
Regular full-time Police Officer is eligible to enter the Plan as of date of employment.
3. Administration Management Service Class (AMSQ
Employees of the City with the following positions who do not elect to participate in a defined
contribution Plan of the City:
City Manager
City Attorney
City Clerk
Assistant / Deputy City Manager
Finance Director/Chief Financial Officer
Chief of Police
Planning and Zoning Director
Building Director
Director of Public Works
C,G R S
Chief Administrative Officer (currently Finance Office Mani
Chief Procurement Officer (currently Purchasing Manager)
Parks and Recreation Director
Assistant Director of Parks and Recreation
Community Redevelopment Agency Director
Personnel Manager
Project Manager
Special Assistant to the Manager
Superintendent of Maintenance
South Miami Pension Plan 7
20
C. Credited Service:
1. General 'Employees and AMSC
Continuous employment. Credited service shall exclude continuous employment prior to Plan
participation as follows: (1) If employed prior to October 1, 1973, credited service shall exclude the
first two years of continuous employment and any additional year of continuous employment prior
to attainment of age 25. (2) If employed on or after October 1, 1973, credited service shall exclude
the first six (6) months of continuous employment and continuous employment priorto age 20.
Credited service for Tier 2 employees and AMSC will be continuous employment from the date of
hire for all purposes except for benefit accruals which will be from the later of date of Plan entry
election date or date of hire.
2. Police Officers
Continuous employment. For Police Officers who did not participate when first eligible for the Plan,
Credited Service shall exclude continuous employment prior to Plan participation as follows: (1) If
employed prior to October 1, 1973, Credited Service shall exclude the first two years of continuous
employment and any additional year of continuous employment priorto attainment of age 25. (2) If
employed on or after October 1, 1973, Credited Service shall exclude the first six (6) months of
continuous employment and continuous employment priorto age 20.
D. Final Monthly Compensation JFMC):
Final Average Compensation is 1/36th of the final 36 consecutive months of compensation. For Police
Officers, not less than 1/5th of the highest five (5) years out of the last (10) ten years of compensation.
Compensation shall mean regular wages and salaries, excluding bonuses, vacation, sick leave and other
additional compensation.
Effective October 1, 2011, Final Average Compensation for General Employees is 1/60th of the final 60
consecutive months of basic compensation, provided it is not less than the Final Average Compensation
as of September 30, 2011 based on the definition above. Basic compensation shall mean base wages and
salaries, excluding commissions, overtime pay, bonuses and any other forms of additional compensation
earned outside of base wages.
Effective October 1, 2011, Final Average Compensation for members covered under the Police Officers
and Sergeants collective bargaining agreement is the best five (5) years of basic compensation, provided
it is not less than the Final Average Compensation as of September 30, 2011 based on the definition
above. Basic compensation shall mean base wages and salaries, including up to 300 hours of overtime in
a fiscal year and excluding payments for accrued unused sick or annual leave, extra duty or special detail
work, shift differential, assignment pay, bonuses and any other forms of additional compensation
earned outside of base wages.
Q;S
South Miami Pension Plan S
21
D. Final Monthly Compensation (FMC) (cont'd :
Effective October 1, 2016, Final Average Compensation for members covered under the Miami -Dade
County Police Benevolent Association Upper -Collective Bargainning Union (Lieutenants & Captains)
collective bargaining agreement is the best five (5) years of basic compensation, provided it is not less
than the Final Average Compensation as of September 30, 2016 based on the definition above. Basic
compensation shall mean base wages and salaries, including up to 300 hours of overtime in a fiscal year
and excluding payments for accrued unused sick or annual leave, extra duty or special detail work, shift
differential, assignment pay, bonuses and any other forms of additional compensation earned outside of
base wages.
Final Average Compenation for Tier 2 General Employees and AMSC shall be the average of the highest
eight (8) years of credit service.
E. Normal Retirement:
1. Eligibility-,
a. General Employees: Attainment of age 55 and completion of ten (10) years of Credited Service
for benefits accrued as of September 30, 2011.
Attainment of age 60 and completion of ten (10) years of Credited Service
for benefits accrued after September 30, 2011, including increases in the
accrued benefit as of September 30, 2011 due to increases in the Final
Average Compensation.
Attainment of age 65 and completion of ten (10) years of Credited Service
or completion of thirty-three (33) years of Credited Service regardless of
age for Tier 2 General Employees.
b. Police Officers: Attainment of age 55 and completion of ten (10) years of Credited Service
or completion of twenty-five (25) years of Credited Service regardless of
age.
c. AMSC: Attainment of age 60 and completion of five (5) years of Credited Service or
completion of thirty-three (33) years of Credited Service regardless of age.
2. Benefit:
The monthly Plan benefit is the product of:
a. FMC,
b. Credited Service during the appropriate period and
c. The appropriate benefit percentage
The appropriate benefit percentages are:
a. General Employees For Credited Service Percentage
Through September 30, 1999 2.50%
October1, 1999through September30, 2011 2.75%
October 1, 2011 and thereafter 2.25%
s , G R South Miami Pension Plan 9
22
E. Normal Retirement (cont'd):
2. Benefit:
b. Police Officers
c. General Employees (Tier 2)
d. AMSC
F. Supplemental Benefit:
For Credited Service
Pe rce nta
Through September 30,1995 2.00%
October 1, 1995 through September 30, 1996 2.25%
October 1, 1996through September 30, 1997 2.50%
October 1, 1997through September 30, 2001 2.75%
October 1, 2001through September 30, 2002 2.80%
October 1, 2002through September 30, 2003 2.90%
October 1, 2003 and thereafter 3.00%
For Credited Service Percentage
October 1, 2016 and thereafter 1.60%
For Credited Service Percentage
October 1, 2016 and thereafter 3.00%
A cost -of -living supplemental benefit based upon the consumer price index is provided upon retirement.
The annual increase is limited to 3%.
No cost -of -living supplemental benefit is provided for Tier 2 General Employees and AMSC members who
retired or entered the DROP prior to October 1, 2019. No cost -of -living supplemental benefit is provided
on the portion of the benefit accrued after September 30, 2011 for Tier 1 General Employees who retired
or entered the DROP priorto October 1, 2019.
G. Early Retirement:
1. Eligibility:
a. Police Officers:
b. AMSC:
2. Benefit:
a. Police Officers.
tv
Attainment of age 50 and completion of 10years of Credited Service.
Attainment of age 55 and completion of 10years of Credited Service.
Accrued benefit based upon FMC and Credited Service as of Early
Retirement Date, reduced 3% for each year that the benefit
commencement date precedes Normal Retirement.
South Miami Pension Plan 10
23
G. Early Retirement fcont'd
2. Benefit:
b. AMSC: Accrued benefit based upon FMC and Credited Service as of Early Retirement Date,
reduced 1/15 for each of the first five years and 1/30 for the next five years that the
benefit commencement date precedes Normal Retirement.
H. Delayed Retirement:
1. Eligibility: Retirement subsequent to Normal Retirement Date.
2. Benefit: Accrued benefit based upon FMC and Credited Service as of Delayed Retirement
Date.
I. Disability Retirement:
1. Eligibility: Totally and permanently disabled for a six month period while actively employed.
2. Benefit: Accrued benefit based upon FMC and Credited Service as of date of disability,
actuarially reduced as for Early Retirement for early commencement.
I Pre -Retirement Death Benefit:
The beneficiary shall receive the member's accumulated Employee Contributions.
K. Benefit Upon Termination of Service:
1. Benefit payable at Normal Retirement equal to the greater of:
a. Accrued benefit based upon FMC and Credited Service as of date oftermination times the
vesting percentage shown below, or
b. Benefit which can be supported by the accumulated Member Contributions with interest
to Normal Retirement Date.
No supplemental benefit shall be payable to vested terminees.
2. Vesting Schedule:
All employees except AMSC:
Years of
Credited Service
Less than 10
10 or more years
Vesting
Percentage
0%
100%
G R 5 South Miami Pension Plan 11
24
K. Benefit Upon Termination of Service cont'd :
AMSC:
Years of
Vesting
Credited Service
Percentage
Less than 5
O%
5 or more years
100•ia
AMSC members who have completed three (3) years of continuous Credited Service as of June 18, 2019
are 100% vested.
3. Refund Option:
A terminated member may elect to receive a refund of Accumulated Contributions without interest in
lieu of receiving any other Plan benefits.
L. MemberContributions:
Members contribute 7.0% (3.0% for Tier 2 General Employees and 7.5% for Police Officers) of member's
basic annual compensation.
Should the City contribution for General Employees be actuarially determined to exceed 7.0%, not
including expenses, both the City and the General Employees (other than Tier 2 General Employees and
AMSC) will share equally in the amount in excess of 7.0%. General Employees (other than Tier 2 General
Employees and AMSC) Contributions are capped at 10% of basic annual compensation as of October 1, 2016.
Should the City contribution for Police Officers be actuarially determined to exceed 7.5%, not including
expenses, both the City and the Police Officers will share equally in the amount in excess of 7.5% but not
more than 12.0%.
M. Normal Form of Retirement Income:
The normal form of payment shall be a life annuity with a guarantee of a refund of accumulated Employee
Contributions.
N. Deferred Retirement Option Plan (DROP):
1. Eligibility: Attainment of normal retirement date.
2. The maximum period of participation in the DROP is sixty (60) months.
3. A member's account in the DROP shall be credited monthly with interest in an amount equal to 50% of
the net (gross return minus investment expense) yearly interest earned by the Plan for the preceding
fiscal year, up to a maximum of 5% and a minimum of 0%.
4. No payment may be made from the DROP until the member actually separates from service with the
City. The DROP account balance may be distributed in a lump sum, periodic payments, an annuity or a
combination thereof.
O. Changes Since Previous Actuarial Valuation:
None.
4 GW
South Miami Pension Plan 12
25
ACTUARIAL ASSUMPTIONS AND METHODS
PRIOR TO ANY PROPOSED CHANGES INCLUDED IN THIS STUDY
A. Mortality
General Employees including AMSC Mortality Assumptions:
For healthy participants during employment, PUB-2010 Headcount Weighted General Below Median
Employee Mortality Table, separate rates for males and females, set back 1 year for males, with fully
generational mortality improvements projected to each future decrement date with Scale MP-2018.
For healthy participants post employment, PUB-2010 Headcount Weighted General Below Median Healthy
Retiree Mortality Table, separate rates for males and females, set back 1 year for males, with fully
generational mortality improvements projected to each future decrement date with Scale MP-2018.
For disabled participants, PUB-2010 Headcount Weighted General Disabled Retiree Mortality Table,
separate rates for males and females, both set forward 3 years, without projected mortality
improvements.
Sample
Ages
(2020)
55
60
62
Sample
Ages
(2040)
Pre -retirement
Future Life
Expectancy (Years)
Male Female
32.58 35.02
27.74 30.00
25.85 28.02
Pre -retirement
Future Life
Expectancy (Years)
Male Female
55 34.22 36.50
60 29.30 31.44
62 27.37 29.43
Police Officer Mortality, Assumptions:
Post -retirement
Future Life
Expectancy (Years)
Male Female
28.63 32.38
24.55 27.84
22.93 26.02
Post -retirement
Future Life
Expectancy (Years)
Male Female
30.64 34.15
26.40 29.51
24.72 27.63
For healthy participants during employment, PUB-2010 Headcount Weighted Safety Employee Female
Mortality Table and Safety Below Median Employee Male Mortality Table, both set forward 1 year, with
fully generational mortality improvements projected to each future decrement date with Scale MP-2018.
For healthy participants post employment, PUB-2010 Headcount Weighted Safety Healthy Retiree Female
Mortality Table and Safety Below Median Healthy Retiree Male Mortality Table, both set forward 1 year,
with fully generational mortality improvements projected to each future decrement date with Scale MP-
2018.
For disabled participants, 80% PUB-2010 Headcount Weighted General Disabled Retiree Mortality Table /
20% PUB-2010 Headcount Weighted Safety Disabled Retiree Mortality Table, separate rates for males and
females, without projected mortality improvements.
CR S
South Miami Pension Plan 13
26
A. Mortality (cont'd)
Sample
Ages
55
60
62
Sample
Ages
55
60
62
Pre -retirement
Future Life
Expectancy (Years)
30.45
34.32
25.51
29.26
23.58
27.25
Pre -retirement
Future Life
Expectancy
(Years)
Male
Female
32.09
35.81
27.08
30.70
25.11
28.67
Post -retirement
Future Life
Expectancy (Years)
27.59 31.17
23.01 26.39
21.28 24.55
Post -retirement
Future Life
Expectancy (Years)
29.48
33.00
24.79
28.13
23.00
26.25
B. Investment Return to be Earned by Fund
7.375% (net of investment expenses), compounded annually - includes inflation at 2.75%.
C. Allowances for Expenses or Contingencies
Actual expenses paid in previous year.
D. Employee Withdrawal Rates
Withdrawal rates for males and for females were used in accordance with the following
illustrative example based upon number of years of service:
4vithdrawal Rates
Per 100 Employees
Servit"O
Police Genera! JAMSC
1-2
12.GO 20.00
3-6
3.00 9.25.
7 - 10
S.w 5.(0
11 & Over
3.0 5.L)0
E. Disability Rates
1985 Disability Study, Class 1 with separate rates for females.
-('G R South Miami Pension Plan 14
27
F. Marital Assumptions
100% of active members are assumed to be married. Where applicable, females are assumed to be
three years younger than theirmale spouses.
G. Salary Increase Factors
Current salary is assumed to increase in accordance with the following table based upon number of
years of service - includes wage inflation of 3.25%.
Service
Police
General 1 AMSC
0-9
5.25%
5.25°/0
10 - 14
3.75%
4.75°%
15 - 19
3.75%
4.25%
IL 20 & over
3.75%
3.75%
H. Increase in Covered Payroll
4.0% per year, limited to average annual increase over most recent ten years (0.7%) but not less than
0.0% for Police Officers. No increase in covered payroll is assumed for General Employees including
AMSC.
I. Retirement Rates
Rates of Early Retirement for Police Officers were used in accordance with the following table.
Years Preceding
Normal Retirement Police
1-6 5%
7-10 10%
Rates of Normal Retirement were used in accordance with the following tables.
Age
Police
General *
AMSC **
55 - 59
25%
10%
10%
60 - 61
25%
10%
25%
62 - 64
40%
25%
35%
65 - 66
100%
25%
35%
67 & above
100%
100%
100%
Service Police
25 years 100%
* Rates are 25% for Tier 2 members for each year upon meeting 33 years of service until 100% at age 67.
** Includes Early Retirement. Rates are 25% below the age of 62 and 35% between the ages of 62 and
66 upon meeting 33 years of service until 100% at age 67.
General Employees who retire priorto age sixty (60) but afterattainment often (10) years of Credited
Service (55 & 10) are assumed to receive an actuarially reduced benefit payable immediately upon
retirement.
p �+ South Miami Pension Plan 15
28
J. Cost of Living Increases
Future cost of living increases for General Employees (other than Tier 2 General Employees and AMSQ and
Police Officers are assumed to be 3.0% per annum.
K. Valuation of Assets
The method used for determining the smoothed value of assets phases in the deviation between the
expected and actual return on assets at the rate of 20% per year. The smoothed value of assets will be
further adjusted to the extent necessary to fall within the corridor whose lower limit is 80% of the fair
market value of Plan assets and whose upper limit is 120% of the fair market value of Plan assets.
L. Cost Methods
Normal Retirement, Termination, Disability and Pre -Retirement Death Benefit:
Entry -Age -Actuarial Cost Method
Under this method the normal cost for each active employee is the amount which is calculated to be a
level percentage of pay that would be required annually from his date of hire to his retirement age to fund
his estimated benefits, assuming the Plan had always been in effect. The normal cost for the Plan is the
sum of the individual normal costs for all active employees. The actuarial accrued liability as of any
valuation date for each active employee or inactive employee who is eligible to receive benefits under
the Plan is the excess of the actuarial present value of estimated future benefits over the actuarial present
value of current and future normal costs. The unfunded actuarial accrued liability as of any valuation date
is the excess of the actuarial accrued liability overthe smoothed value of assets of the Plan.
Vested Normal Retirement, Termination, Disability. and Death Benefits: Unit Credit Cost Method
Under this method, the actuarial present value of vested accrued benefits is an amount calculated to be
the sum of the present values of each individual's vested accrued or earned benefit under the Plan as of
the valuation date. Each individual's calculation is based on pay and service as of the valuation date.
M. Changes Since Previous Actuarial Valuation
None.
R S South Miami Pension Plan 16
29
GLOSSARY
Actuarial Accrued Liability. 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. 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 of Future Benefits. 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, non -retired 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. 67.
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.
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.
RS South Miami Pension Plan 17
30
Amortization Payment. That portion of the plan contribution 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. The employer's periodic required contributions, expressed as a
dollar amount or a percentage of covered plan compensation. The annual required contribution
consists of the Employer Normal Cost and Amortization Payment plus interest adjustment.
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 actual experience and that
expected based upon a set of Actuarial Assumptions, during the period between two actuarial
valuations. To the extent that actual experience differs from that assumed, Unfunded Actuarial
Accrued Liabilities emerge which may be larger or smaller than projected. Gains are due to
favorable experience, e.g., the assets earn more than projected, salaries do not increase as fast
as assumed, members retire later than assumed, etc. Favorable experience means actual results
produce actuarial liabilities not as large as projected by the actuarial assumptions. Losses are
the result of unfavorable experience, i.e., actual results that produce Unfunded Actuarial Accrued
Liabilities which are larger than projected.
Funded Ratio. The ratio of the Actuarial Value of Assets to the Actuarial Accrued Liability.
GASB. Governmental Accounting Standards Board.
p C South Miami Pension Plan 18
z,, - 1i J
31
GASB No. 67 and GASB No. 68. These are the governmental accounting standards that set the
accounting rules for public retirement plans and the employers that sponsor or contribute to
them. Statement No. 67 sets the accounting rules for the plans themselves, while Statement No.
68 sets the accounting rules for the employers that sponsor or contribute to public retirement
plans.
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 overtime. 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.
GR S South Miami Pension Plan 19
RESOLUTION NO. 146-01 —1 1 294
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
SOUTH MIAMI, FLORIDA, RELATING TO PENSION ACTUARIAL CONSULTING
SERVICES, AUTHORIZING THE CITY MANAGER TO SIGN A THREE-YEAR
CONTRACT WITH GABRIEL, ROEDER, SMITH & COMPANY(GRS), WITH THE
OPTION FOR RENEWAL FOR ADDITIONAL YEARS.
WHEREAS, the City of South Miami employee Pension Fund currently utilizes
WATSON WYATT as the actuarial consulting firm; and
WHEREAS, Watson Wyatt (actuaries) has advised the City that effective August 31,
2001, it reached an alliance with Gabriel, Roeder & Company (GRS); and
WHEREAS, the City sought to conduct a formal search for actuarial services from
different companies and received proposals from four of them; and
WHEREAS, the pension board reviewed the proposals submitted and interviewed
representatives of the four companies that responded; and
WHEREAS, the pension board has recommended that the service contract be awarded to
Gabriel, Roeder & Company, and the pension attorney concurred that the company is premier in
the industry.
NOW THEREFORE BE IT RESOLVED BY THE MAYOR AND CITY
COMMISSION OF SOUTH MIAMI, FLORIDA, THAT:
Section I Effective immediately, Gabriel, Roeder & Company (GRS) will serve as the actuarial
consulting firm in accordance with the terms and conditions of the City pension plan.
Section 2 The City Manager is authorized to sign a three-year contract with the option for
renewals for additional years with the company for pension actuarial services.
Section 3 This resolution shall take effect immediately upon approval.
PASSED AND ADOPTED this 2nd day of October 2001.
APPROVE[.}-.__-'--` ^'
JULIU IROBICTNA, .
ATTEST:
COMMISSION VOTE: 4-0
Mayor Robaina: Yea
CIfY CLERK Vice Mayor Feliu: Yea
Commissioner Bethel: Yea
READ AND APPROVED AS TO FORM: Commissioner Wiscombe: not preser.
! pp Commissioner Russell: Yea
CITY ATTORNEY
33
TO Mayor and City Commission
FROM' Charles D. Scurr
City Manager �' �• f
The Reuuest
DATE: September 26, 2001
Re: AGENDA ITEM #
Transfer of Actuarial Consulting Services
from Watson Wyatt to Gabriel, Roeder,
Smith & Company
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF SOUTH
MIAMI, FLORIDA, RELATING TO PENSION ACTUARIAL CONSULTING SERVICES,
AUTHORIZING THE CITY MANAGER TO SIGN A THREE YEAR CONTRACT WITH
GABRIEL, ROEDER) SMITH & COMPANY (HEREINAFTER GRS) WITH RENEWAL
OPTION FOR ADDITIONAL YEARS.
Background and Analysis
Recently, the City pension board made a business decision to solicit bids for actuarial services
from different companies with the intention of reducing the total cost of administering the pension
plan. Four companies submitted proposals in response to the solicitation_ These four companies
are as follows'
Gabriel, Roeder, Smith & Company (Watson Wyatt)
Buck Consultants
AON Consulting Services
Segal Company
The four proposals were reviewed by the pension board members, and the representatives of each
company were given the opportunity to respond to questions posed by the board members with
regards to the proposals submitted. After careful deliberations, the pension board unanimously
agreed to award the service contract to Gabriel, Roeder, Smith & Company (GRS). The company
recently formed an alliance with Watson Wyatt. It is a private corporation that has been in
business since 1938. It provides benefit consulting services to over 500 public and private sector
clients nationwide with an emphasis on the public sector retirement system.
Just for your information, the pension attorney concurred that GRS is a premier company in the
industry.
Attached with the resolution is the schedule of services that will be provided and fee to be
charged by the company for the next three years. The payment of the fee will be charged directly
34
against the pension fund bank account.
RECOMMENDATION
I recommend approval.
35
SCOPE OF SERVICES AND FEE PROPOSAL
1. FIXED FEE SERVICES
Based upon our experience with similar Plans and based upon our discussions, we propose a
comprehensive fixed -fee services that the Boards can be expected to require. We have then
determined our fees based upon our analysis of these comprehensive regular recurring services.
The advantages of this fixed fee approach to the Boards include knowing in advance the annual
cost for all anticipated recurring services and the ability to budget and to prevent any surprises
after the work has been performed. Further, we will guarantee this fixed fee amount for two
years. The fixed fee amount will be increased only by inflation as measured by the Consumer
Price Index for the third and subsequent years.
The fixed fee services may be summarized as follows:
Preparation and delivery of the annual Actuarial Valuation Report including attendance at
a Pension Board meeting to present the results of our valuation and respond to any questions,
Our report will include the following requested services:
�✓ Collection and reconciliation of Member census data,
✓ Recommendation of actuarial assumptions and methods,
✓ Calculation and reconciliation of actuarial value of assets,
✓ Determination of liabilities in accordance with State, actuarial and
Government Accounting Standards Board (GASB) requirements,
✓ Determination of required contributions,
✓ GASB expense and disclosure exhibits (GASB #25 and#27) and
✓ Compliance with Chapters 112 and 185, Florida Statutes.
® Preparation and delivery of Individual Employee Benefit Statements. We recommend that
we prepare one copy to be distributed to active members and a second copy to be retained in
the Plan records.
8 Preparation and delivery of actuarial studies to determine financial effect of plan changes or
changes in actuarial assumptions or methods (up to 2 per annum),
0 Preparation and delivery of Actuarial Impact Statements to be filed with the State after
passage of amending City Ordinances after passage at first reading but prior to passage at
second reading. (up to 2 per annum),
8 Attendance at up to two additional Comnuttee Meeting.
a Response to any inquiries from the State relating to our Actuarial Valuation Report.
S Response to auditor's confirmation request and coordination with other service providers.
a Biennial preparation of SPD financial addendum.
a Triennial review of actuarial equivalence definition for determining optional forms of
payment including preparation of revised option factor tables upon any update.
a Review of plan experience in comparison to actuarial assumptions.
a Preparation of benefit calculations for retiring or terminating employees (up to 6 per
annum).
a Calculation of buy-back amounts (up to 6 per annurn)
a Telephone conversations on pending or anticipated issues that may affect our Actuarial
Valuation Report that do not result in a work assignment
a Review legislation that may impact plan in coordination with Plan Attorney.
a Review compliance with State and Federal regulations in coordination with Plan Attorney
Our fixed fee for these comprehensive services will be $15,600 annually. We will bill for our
fixed fee services quarterly at the rate o£ $3,900 per quarter_
SCOPE OF SERVICES AND FEE PROPOSAL (CONTINUED)
2. OTHER SERVICES
While the breadth of fixed fee services is quite comprehensive, additional services of a non-
recurring nature will be based upon our hourly rates. These rates would apply to any actuarial
studies or impact statements in excess of the two per annum included under the fixed fee
arrangement. .
Our hourly rates are determined based upon the experience and abilities of our employees. The
following are our current hourly rates reflecting the South Miami Team members.
• Senior Consultant and Actuary: $285
® Consultant and Actuary $150
• Analyst $125
• Administrative Assistant $ 85
Our hourly rates are quite competitive in the industry. Further, we will not increaser] these
hourly rates for two years, In the third and subsequent years our hourly rates will be increased
only by inflation as measured by the Consumer Price Index for the third and subsequent years
Unlike some other firms, our hourly rates include our overhead. We do not load our fees for
technical and administrative services.
3. BENEFIT CALCULATIONS AND BUY BAC%_CALCULTIUIYS (IN EXCESS Ur SIX EACH
FER rANN[TM
While we do not anticipate a volume of calculations in excess of the six each covered under the
fixed fee arrangement, our fees for excess benefit calculations and buy —backs will be determined
based upon hourly rates and we will agree to a not -to -exceed basis. That is, to the extent that our
costs based upon our hourly rates are lower than the not -to -exceed amounts, we will bill our
costs. To the extent that our costs based upon our hourly rates equals or exceeds the not -to -
exceed amount, we will bill the not -to -exceed amount. We anticipate that our costs may be less
than the not -to -exceed amount when verifications, calculations or buy -backs are batched
(requested in groups).
The following are our not -to -exceed amounts:
Benefit verifications: $150 per verification
® Benefit calculations: $250 per calculation
S Buy-back calculations: $275 per calculation.
Our hourly rates are shown above.
37
GABRIEL, ROEDER, SMITH & COMPANY
Comuttants 14 Actuaries
Septetmber 26, 2001 301 East Las Glas Btvd. ® S•i10 200 u Ft. Lau cerdale, PL 33301 ® 954.527-,E.8 m FAX 954-525-0Q83
Ms. 3eanette Enrixo-Navarro
Pension Administrator
General and Police Pension Funds
Cary of South Miami
6130 Sunset Drive
South Miami, Florida 33143-5093
Dear Jeanette,
As discussed, we are cor_firning cur oral advice agreeing to ar. expansion of the sereices covered
under our fixed -fee proposal.
As you are aware, our initial fixed -fee proposal provided for up to two (2) actuarial cost studies plus
up to ttvo (2) actuarial impact statements per annurn. We had previously agreed to expand these
services to include a total of eight (9) actuarial cost szudies or actuarial impact statements in any
combination during each period of too (2) years. We now confirm that we will expand our fixed.
fee senices to include a tots` of nine (9) actuarial cost studies or actumr d impact statements in any
combination during each period of two (2) years
that is to say, for the period from date ofircepdon (i.e. October I ''("Ji) to the"Secohd arniversa_v-
of the date of inception (i.e. October 1. 2W3), we wi , perabrrr up to a total of rune (9) actuarial
studies or actuarial impact stat"rt, ents. During the subsequent zwo-year period (i.e. October 1, 2003
— October 1; 2005), the fixed -fee weul.d cover nine (9) aoftiarial cost studies or actuarial impact
statements in any combination. For exwnple, during the two year period, The Board could request.
sip. (6) actuarial cost studies and three (3) actuarial impact statements; or some other combination
totaling nine (9), Without incurring additional fees.
We trust that the Pension Boards and Ci +v will find our clarification worthwhile., We remain
excited about the opportuniy to work Nvith you.
Sincetestregards,
Lawrence F. Wilson, A.S,A,
Senior Consultant and A&Lary
Table I
Summary of Retirement Plan Costs as of October 1, 2020
General Employees Tier 1
Cost
% of
Data
Payroll
A. Participant Data Summary
1. Active employees
15
N/A
2. Terminated vested
5
N/A
3. Receiving benefits (excluding DROPs)
25
N/A
4. DROP participants
4
N/A
5. Annual payroll of active employees
$
907,685
100.0%
B. Total Normal Costs
1. Age retirement benefits
$
65,115
7.2%
2. Termination benefits
20,111
2.2%
3. Death benefits
685
0.1%
4. Disability benefits
6,303
0.7%
5. Estimated administrative expenses
51,460
5.7%
6. Total annual normal costs
$
143,674
15.8%
C. Total Actuarial Accrued Liability
1. Age retirement benefits active employees
$
4,034,813
444.5%
2. Termination benefits active employees
138,642
15.3%
3. Death benefits active employees
14,386
1.6%
4. Disability benefits active employees
212,204
23.4%
5. Retired or terminated vested participants
receiving benefits excluding DROP participants
6,957,382
766.5%
6. DROP participants
1,360,944
149.9%
7. Terminated vested participants entitled to
future benefits
824,475
90.8%
8. Deceased participants whose beneficiaries
are receiving benefits
167,205
18.4%
9. Disabled participants receiving benefits
0
0.0%
10. Miscellaneous liability
83,178
9.2%
11. Total actuarial accrued liability
$
13,793,229
1519.6%
D. Market Value of Assets (Table V)
$
17,126,850
1886.9%
E. Smoothed Value of Assets (Table V)
$
17,318,262
1908.0%
F. Unfunded Actuarial Accrued Liability (C. - E.)
$
(3,525,033)
(388.4%)
GR5
South Miami Pension Plan 39
Table I
(Cont'd)
Summary of Retirement Plan Costs as of October 1, 2020
General Employees Tier 1
Cost
% of
Data
Payroll
G. Preliminary Minimum Required Contribution
1. Total normal cost
$
143,674
15.8%
2. Amortization of unfunded liability
(331,035)
(36.5%)
3. Interest adjustment
(6,663)
(0.7%)
4. Total preliminary required contribution
$
(194,024)
(21.4%)
H. Minimum Required Contribution (F.S., 112.66 (13))
(Greater of G.1. and G.4.)
$
143,674
15.8%
I. Contribution Sources for Fiscal Year Ending September 30, 2022
1. City
$
80,136
8.8%
2. Member
63,538
7.0%
3. State
N/A
N/A
4. Total minimum funding requirement
$
143,674
15.8%
J. Actuarial Present Value of Vested Accrued Benefits
1. Retired, terminated vested, beneficiaries and
disabled receiving benefits excluding DROPS
$
7,124,587
784.9%
2. DROP participants
1,360,944
149.9%
3. Terminated vested participants entitled to
future benefits and miscellaneous
907,653
100.0%
4. Active participants entitled to future benefits
3,062,003
337.3%
5. Total actuarial present value of vested
accrued benefits
$
12,455,187
1372.2%
K. Unfunded Actuarial Present Value of Vested
Accrued Benefits (J. - D., not less than zero)
$
0
0.0%
L. Vested Benefit Security Ratio (D. - J.)
137.5%
N/A
GRS
South Miami Pension Plan 40
Table I
(Cont'd)
Summary of Retirement Plan Costs as of October 1, 2020
General Employees Tier 2
Cost
% of
Data
Payroll
A. Participant Data Summary
1. Active employees
27
N/A
2. Terminated vested
1
N/A
3. Receiving benefits (excluding DROPS)
0
N/A
4. DROP participants
0
N/A
5. Annual payroll of active employees
$
1,264,549
100.0%
B. Total Normal Costs
1. Age retirement benefits
$
68,633
5.4%
2. Termination benefits
22,599
1.8%
3. Death benefits
567
0.0%
4. Disability benefits
5,725
0.5%
5. Estimated administrative expenses
1,798
0.1%
6. Total annual normal costs
$
99,322
7.9%
C. Total Actuarial Accrued Liability
1. Age retirement benefits active employees
$
438,606
34.7%
2. Termination benefits active employees
108,735
8.6%
3. Death benefits active employees
2,954
0.2%
4. Disability benefits active employees
32,724
2.6%
5. Retired or terminated vested participants
receiving benefits excluding DROP participants
0
0.0%
6. DROP participants
0
0.0%
7. Terminated vested participants entitled to
future benefits
9,941
0.8%
8. Deceased participants whose beneficiaries
are receiving benefits
0
0.0%
9. Disabled participants receiving benefits
0
0.0%
10. Miscellaneous liability
18,199
1.4%
11. Total actuarial accrued liability
$
611,159
48.3%
D. Market Value of Assets (Table V)
$
650,209
51.4%
E. Smoothed Value of Assets (Table V)
$
664,846
52.6%
F. Unfunded Actuarial Accrued Liability (C. - E.)
$
(53,687)
(4.2%)
GRS
South Miami Pension Plan 41
Table I
(Cont'd)
Summary of Retirement Plan Costs as of October 1, 2020
General Employees Tier 2
Cost
% of
Data
Payroll
G. Preliminary Minimum Required Contribution
1. Total normal cost
$
99,322
7.9%
2. Amortization of unfunded liability
(3,763)
(0.3%)
3. Interest adjustment
3,398
0.3%
4. Total preliminary required contribution
$
98,957
7.8%
H. Minimum Required Contribution (F.S., 112.66 (13))
(Greater of G.1. and G.4.)
$
99,322
7.9%
I. Contribution Sources for Fiscal Year Ending September 30, 2022
1. City
$
61,386
4.9%
2. Member
37,936
3.0%
3. State
N/A
N/A
4. Total minimum funding requirement
$
99,322
7.9%
J. Actuarial Present Value of Vested Accrued Benefits
1. Retired, terminated vested, beneficiaries and
disabled receiving benefits excluding DROPs
$
0
0.0%
2. DROP participants
0
0.0%
3. Terminated vested participants entitled to
future benefits and miscellaneous
28,140
2.2%
4. Active participants entitled to future benefits
221,065
17.5%
5. Total actuarial present value of vested
accrued benefits
$
249,205
19.7%
K. Unfunded Actuarial Present Value of Vested
Accrued Benefits (J. - D., not less than zero)
$
0
0.0%
L. Vested Benefit Security Ratio (D. =J.)
260.9%
N/A
GRS
South Miami Pension Plan 42
Table I
(Cont'd)
Summary of Retirement Plan Costs as of October 1, 2020
AMSC
Cost
% of
Data
Payroll
A. Participant Data Summary
1. Active employees
11
N/A
2. Terminated vested
0
N/A
3. Receiving benefits (excluding DROPs)
3
N/A
4. DROP participants
0
N/A
5. Annual payroll of active employees
$
1,298,985
100.0%
B. Total Normal Costs
1. Age retirement benefits
$
125,726
9.7%
2. Termination benefits
8,024
0.6%
3. Death benefits
673
0.1%
4. Disability benefits
7,485
0.6%
5. Estimated administrative expenses
7,697
0.6%
6. Total annual normal costs
$
149,605
11.5%
C. Total Actuarial Accrued Liability
1. Age retirement benefits active employees
$
2,396,028
184.5%
2. Termination benefits active employees
462,976
35.6%
3. Death benefits active employees
7,023
0.5%
4. Disability benefits active employees
90,912
7.0%
5. Retired or terminated vested participants
receiving benefits excluding DROP participants
857,450
66.0%
6. DROP participants
0
0.0%
7. Terminated vested participants entitled to
future benefits
0
0.0%
8. Deceased participants whose beneficiaries
are receiving benefits
0
0.0%
9. Disabled participants receiving benefits
0
0.0%
10. Miscellaneous liability
0
0.0%
11. Total actuarial accrued liability
$
3,814,389
293.6%
D. Market Value of Assets (Table V)
$
2,675,349
206.0%
E. Smoothed Value of Assets (Table V)
$
2,726,874
209.9%
F. Unfunded Actuarial Accrued Liability (C. - E.)
$
1,087,515
83.7%
GRS
South Miami Pension Plan 43
Table I
(Cont'd)
Summary of Retirement Plan Costs as of October 1, 2020
AMSC
Cost
% of
Data
Payroll
G. Preliminary Minimum Required Contribution
1. Total normal cost
$
149,605
11.5%
2. Amortization of unfunded liability
93,793
7.2%
3. Interest adjustment
8,656
0.7%
4. Total preliminary required contribution
$
252,054
19.4%
H. Minimum Required Contribution (F.S., 112.66 (13))
(Greater of G.1. and G.4.)
$
252,054
19.4%
I. Contribution Sources for Fiscal Year Ending September 30, 2022
1. City
$
161,125
12.4%
2. Member
90,929
7.0%
3. State
N/A
N/A
4. Total minimum funding requirement
$
252,054
19.4%
J. Actuarial Present Value of Vested Accrued Benefits
1. Retired, terminated vested, beneficiaries and
disabled receiving benefits excluding DROPs
$
857,450
66.0%
2. DROP participants
0
0.0%
3. Terminated vested participants entitled to
future benefits and miscellaneous
0
0.0%
4. Active participants entitled to future benefits
1,696,329
130.6%
5. Total actuarial present value of vested
accrued benefits
$
2,553,779
196.6%
K. Unfunded Actuarial Present Value of Vested
Accrued Benefits (J. - D., not less than zero)
$
0
0.0%
L. Vested Benefit Security Ratio (D. =J.)
104.8%
N/A
GRS
South Miami Pension Plan 44
Table I
(Cont'd)
Summary of Retirement Plan Costs as of October 1, 2020
Police Officers
Cost
% of
Data
Payroll
A.
Participant Data Summary
1. Active employees
45
N/A
2. Terminated vested
5
N/A
3. Receiving benefits (excluding DROPs)
22
N/A
4. DROP participants
3
N/A
5. Annual payroll of active employees
$
3,281,847
100.0%
B.
Total Normal Costs
1. Age retirement benefits
$
454,233
13.8%
2. Termination benefits
78,055
2.4%
3. Death benefits
2,277
0.1%
4. Disability benefits
17,576
0.5%
5. Estimated administrative expenses
82,497
2.5%
6. Total annual normal costs
$
634,638
19.3%
C.
Total Actuarial Accrued Liability
1. Age retirement benefits active employees
$
11,771,263
358.7%
2. Termination benefits active employees
474,397
14.5%
3. Death benefits active employees
16,738
0.5%
4. Disability benefits active employees
177,952
5.4%
5. Retired or terminated vested participants
receiving benefits excluding DROP participants
11,551,649
352.0%
6. DROP participants
21676,496
81.6%
7. Terminated vested participants entitled to
future benefits
673,430
20.5%
8. Deceased participants whose beneficiaries
are receiving benefits
0
0.0%
9. Disabled participants receiving benefits
0
0.0%
10. Miscellaneous liability
64,748
2.0%
11. Total actuarial accrued liability
$
27,406,673
835.1%
D.
Market Value of Assets (Table V)
$
27,678,257
843.4%
E.
Smoothed Value of Assets (Table V)
$
28,113,521
856.6%
F.
Unfunded Actuarial Accrued Liability (C. - E.)
$
(706,848)
(21.5%)
GRS
South Miami Pension Plan 45
Summary of Retirement Plan Costs as of October 1, 2020
Police Officers
G. Preliminary Minimum Required Contribution
1. Total normal cost $
2. Amortization of unfunded liability
3. Interest adjustment
4. Total preliminary required contribution $
H. Minimum Required Contribution (F.S., 112.66 (13))
(Greater of G.1. and G.4.) $
I. Expected Payroll of Active Employees for Fiscal Year Ending 2022
(A.5. x 1.007) $
J. Contribution Sources for Fiscal Year Ending September 30, 2022
(% of projected payroll of active employees for fiscal year ending 2022)
Table I
(Cont'd)
Cost % of
Data Payroll
634,638
(59,985)
21,846
596,499
634,638
3,304,820
1. City $ 311,990
2. Member 247,862
3. State 79,228
4. Total required contribution $ 639,080
K. Actuarial Present Value of Vested Accrued Benefits
1. Retired, terminated vested, beneficiaries and
disabled receiving benefits excluding DROPs
2. DROP participants
3. Terminated vested participants entitled to
future benefits and miscellaneous
4. Active participants entitled to future benefits
5. Total actuarial present value of vested
accrued benefits
L. Unfunded Actuarial Present Value of Vested
Accrued Benefits (K. - D., not less than zero)
M. Vested Benefit Security Ratio (D. _ K.)
19.3%
(1.8%)
0.7 %
18.2%
19.3%
100.7%
9.4%
7.5%
2.4%
19.3%
$ 11,551,649
352.0%
21676,496
81.6%
738,178
22.5%
7,889,496
240.4%
$ 22,855,819 696.4%
$ 0 0.0%
121.1% N/A
GRS
South Miami Pension Plan 46
Table I
(Cont'd)
Summary of Retirement Plan Costs as of October 1, 2020
All Participants
Cost % of
Data Payroll
A. Participant Data Summary
1. Active employees 98 N/A
2. Terminated vested 11 N/A
3. Receiving benefits (excluding DROPS) 50 N/A
4. DROP participants 7 N/A
5. Annual payroll of active employees $ 6,753,066 100.0%
B. Total Normal Costs
1. Age retirement benefits
$
713,707
10.6%
2. Termination benefits
128,789
1.9%
3. Death benefits
4,202
0.1%
4. Disability benefits
37,089
0.5%
5. Estimated administrative expenses
143,452
2.1%
6. Total annual normal costs
$
1,027,239
15.2%
C. Total Actuarial Accrued Liability
1. Age retirement benefits active employees
$
18,640,710
276.0%
2. Termination benefits active employees
1,184,750
17.5%
3. Death benefits active employees
41,101
0.6%
4. Disability benefits active employees
513,792
7.6%
5. Retired or terminated vested participants
receiving benefits excluding DROP participants
19,366,481
286.8%
6. DROP participants
4,037,440
59.8%
7. Terminated vested participants entitled to
future benefits
1,507,846
22.3%
8. Deceased participants whose beneficiaries
are receiving benefits
167,205
2.5%
9. Disabled participants receiving benefits
0
0.0%
10. Miscellaneous liability
166,125
2.5%
11. Total actuarial accrued liability
$
45,625,450
675.6%
D. Market Value of Assets (Table V)
$
48,130,665
712.7%
E. Smoothed Value of Assets (Table V)
$
48,823,503
723.0%
F. Unfunded Actuarial Accrued Liability (C. - E.)
$
(3,198,053)
(47.4%)
GRS
South Miami Pension Plan 47
Summary of Retirement Plan Costs as of October 1, 2020
All Participants
G. Preliminary Minimum Required Contribution
1. Total normal cost $
2. Amortization of unfunded liability
3. Interest adjustment
4. Total preliminary required contribution $
H. Minimum Required Contribution (F.S., 112.66 (13)) $
I. Expected Payroll of Active Employees for Fiscal Year Ending 2022
($907,685 x 1.000 + $1,264,549 x 1.000 + $1,298,985 x 1.000
+ $3,281,847 x 1.007) $
J. Contribution Sources for Fiscal Year Ending September 30, 2022
(% of projected payroll of active employees for fiscal year ending 2022)
Cost
Data
1,027,239
(300,990)
27,237
753,486
1,129, 688
6,776,039
1. City $ 614,637
2. Member 440,265
3. State 79,228
4. Total required contribution $ 1,134,130
K. Actuarial Present Value of Vested Accrued Benefits
1. Retired, terminated vested, beneficiaries and
disabled receiving benefits excluding DROPs
2. DROP participants
3. Terminated vested participants entitled to
future benefits and miscellaneous
4. Active participants entitled to future benefits
5. Total actuarial present value of vested
accrued benefits
L. Unfunded Actuarial Present Value of Vested
Accrued Benefits (K. - D., not less than zero)
M. Vested Benefit Security Ratio (D. - K.)
Table I
(Cont'd)
% of
Payroll
15.2%
(4.5 %)
0.4%
11.2%
16.7%
100.3%
9.1%
6.5%
1.2%
16.7%
$ 19,533,686
289.3%
4,037,440
59.8%
1,673,971
24.8%
12,868,893
190.6%
$ 38,113,990
564.4%
$ 0
0.0%
126.3%
N/A
GIBS
-.: South Miami Pension Plan 48
P; 954.527,1616 F; 954.525,0083 1 www.grsconsultirvgcom
August 31, 2021
Ms. Edemir K. Estrada
Pension Administrator
Gabriel, Roeder, Smith & Company
One East Broward Blvd.
Suite 505
Fort Lauderdale, Florida 33301-1804
Re: South Miami Pension Plan
Actuarial Impact Statement
Dear Edemir:
As requested, we are pleased to enclose twelve (12) copies of our Actuarial Impact Statement as
of October 1, 2020 for the proposed Ordinance under the South Miami Pension Plan (Plan) with
the State of Florida (copy enclosed) prior to second reading.
Background
Currently, the Plan provides Administration Management Service Class (AMSC) members the
following provisions:
➢ Normal Retirement eligibility upon the earlier of:
(a) Attainment of age sixty (60) and completion of five (5) years of Credited Service
(b) Completion of thirty-three (33) years of Credited Service regardless of age
➢ Early (reduced) Retirement eligibility is attainment of age fifty-five (55) and completion of
ten (10) years of Credited Service
➢ Final Average Compensation is the average of the highest eight (8) years of Credited
Service
➢ Vesting —100% vesting upon completion of five (5) years of Credited Service. AMSC
members who have completed three (3) years of Credited Service as of June 18, 2019 are
100% vested
Ms. Edemir K. Estrada
August 31, 2021
Page Two
Proposed Ordinance —The proposed Ordinance provides AMSC members with following:
➢ Normal Retirement eligibility upon the earliest of:
(a) Attainment of age sixty (60) and completion of ten (10) years of Credited Service
(attainment of age sixty (60) and completion of five (5) years of Credited Service if an
AMSC member prior to the adoption of the proposed Ordinance)
(b) Attainment of age fifty-five (55) and completion of twenty (20) years of Credited
Service
(c) Completion of thirty-three (33) years of Credited Service regardless of age
➢ Eliminate Early (reduced) Retirement eligibility
➢ Final Average Compensation is the average of the highest five (5) years of Credited Service
➢ Vesting —100% vesting upon completion of ten (10) years of Credited Service. AMSC
members on the date of adoption of the Ordinance are 100% vested immediately.
Cost —The total impact of the proposed Ordinance results in an expected increase in the first year
Net City Annual Required Contribution of $36,550 (0.5% as a percentage of expected covered
payroll - $6,776,039).
Filing Requirements — We have prepared the Actuarial Impact Statement for filing with the State
of Florida. Please note that this Statement must be signed and dated on behalf of the Board of
Trustees. Copies of the Ordinance upon passage at first reading along with the signed and dated
Actuarial Impact Statement are generally required to be filed with the State at the following
address:
Mr. Douglas E. Beckendorf, A.S.A.
Bureau of Local Retirement Services
Division of Retirement
Building 8
Post Office Box 9000
Tallahassee, Florida 32315-9000
We understand the State requires funding any increases in costs no later than the fiscal year
next following the effective date of the Ordinance.
Please forward a copy of the Ordinance upon passage at second reading to update our files.
RS
Ms. Edemir K. Estrada
August 31, 2021
Page Three
Actuarial assumptions and methods, Plan provisions, financial data and member census data —
The actuarial assumptions and methods, financial data and member census data employed for
purposes of our Actuarial Impact Statement are the same actuarial assumptions and methods,
financial data and member census data utilized for the October 1, 2020 Actuarial Valuation with
the following exception:
AMSC — Retirement Rates
Age Valuation Proposed
rc
Less than 33 years of Credited Service
55 - 59
10%
25%
60 - 61
25%
25%
62 - 66
35%
35%
67 & above
100%
100%
With 33 years or more years of Credited Service
Under 62
25%
25%
62 - 66
35%
35%
67 & above
100%
100%
The Plan provisions employed for purposes of our Actuarial Impact Statement are the same Plan
provisions utilized in the October 1, 2020 Actuarial Valuation with the exception of the proposed
changes described above.
This Actuarial Impact Statement only reflects experience through October 1, 2020. It does not
reflect the recent and still developing impact of COVID-19, which may significantly impact the
demographic and economic experience seen in future actuarial valuations.
Risk Assessment — Risk assessment may include scenario tests, sensitivity, or stress tests,
stochastic modeling, and a comparison of the present value of benefits at low -risk discount rates.
We are prepared to perform such assessment to aid in the decision -making process. Please refer
to the October 1, 2020 Actuarial Valuation Report dated March 16, 2021 for additional discussion
regarding the risks associated with measuring the liability and the minimum funding payment.
Other Considerations — Under Governmental Accounting Standards Board (GASB) Statement
Number 68, we understand the full cost of benefit changes must be recognized immediately in
pension expense (accounting not funding). Therefore, the pension expense is expected to
increase the first year and then is expected to decrease to a lower level in fiscal years following
initial recognition of the plan change.
Ms. Edemir K. Estrada
August 31, 2021
Page Four
This Actuarial Impact Statement is intended to describe the estimated future financial effects of
the proposed benefit changes on the Plan and is not intended as a recommendation in favor of
the benefit changes nor in opposition to the benefit changes.
If all actuarial assumptions are met and if all current and future minimum required contributions
are paid, Plan assets will be sufficient to pay all Plan benefits, future contributions are expected to
remain relatively stable as a percent of payroll and the funded status is expected to improve. Plan
minimum required contributions are determined in compliance with the requirements of the
Florida Protection of Public Employee Retirement Benefits Act and Police Officers Retirement
Chapter 185 with normal cost determined as a level percent of covered payroll and a level
percent amortization payment using an initial amortization period of 25 years.
The Unfunded Actuarial Accrued Liability (UAAL) may not be appropriate for assessing the
sufficiency of Plan assets to meet the estimated cost of settling benefit obligations but may be
appropriate for assessing the need for or the amount of future contributions. The UAAL would be
different if it reflected the market value of assets rather than the smoothed value of assets.
These calculations are based upon assumptions regarding future events. However, the Plan's long
term costs will be determined by actual future events, which may differ materially from the
assumptions made. These calculations are also based upon present and proposed Plan provisions
that are outlined or referenced in this Actuarial Impact Statement.
If you have reason to believe the assumptions used are unreasonable, the Plan provisions are
incorrectly described or referenced, important Plan provisions relevant to this Actuarial Impact
Statement are not described or that conditions have changed since the calculations were made,
you should contact the undersigned prior to relying on information in this Actuarial Impact
Statement.
If you have reason to believe that the information provided in this Actuarial Impact Statement is
inaccurate, or is in any way incomplete, or if you need further information in order to make an
informed decision on the subject matter of this report, please contact the undersigned prior to
making such decision.
Future actuarial measurements may differ significantly from the current measurements presented
in this report due to such factors as the following: Plan experience differing from that anticipated
by the economic or demographic assumptions; changes in economic or demographic
assumptions; increases or decreases expected as part of the natural operation of the
methodology used for these measurements (such as the end of an amortization period) and
changes in Plan provisions or applicable law. Due to the limited scope of our assignment, we did
not perform an analysis of the potential range of such future measurements.
.LG R S
Ms. Edemir K. Estrada
August 31, 2021
Page Five
This Actuarial Impact Statement should not be relied upon for any purpose other than the
purpose described in the primary communication. Determinations of the financial results
associated with the benefits described in this report in a manner other than the intended purpose
may produce significantly different results.
This report was prepared using ProVal's valuation model, a software product of Winklevoss
Technologies. We are relying on the ProVal model. We performed tests of the ProVal model with
this assignment and made a reasonable attempt to understand the developer's intended purpose
of, general operation of, major sensitivities and dependencies within, and key strengths and
limitations of the ProVal model. In our professional judgment, the ProVal valuation model has the
capability to provide results that are consistent with the purposes of the valuation and has no
material limitations or known weaknesses.
This Actuarial Impact Statement 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.
This Actuarial Impact Statement may be provided to parties other than the Board only in its
entirety and only with the permission of an approved representative of the Board.
The signing actuaries are independent of the Plan sponsor.
The undersigned are Members of the American Academy of Actuaries and meet the Qualification
Standards of the American Academy of Actuaries to render the actuarial opinion contained
herein.
If you should have any question concerning the above or if we may be of further assistance with
this matter, please do not hesitate to contact us.
Sincerest regards,
�A4x-(, 4nAx-da4& T�L j-o�
Jennifer M. Borregard, EA, MAAA, FCA Shelly L. Jones, ASA, EA, MAAA, FCA
Consultant and Actuary Consultant and Actuary
Enclosures
cc: Mr. Alfredo Riverol
Rev.8.19.21
ORDINANCE NO.
An Ordinance amending the South Miami Pension Plan;
by Amending Section 16-12, "Definitions"; by Amending
Section 16-14, "Pension benefits and retirement dates";
and by Amending Section 16-17, "Termination"; and
providing for Severability; Providing for Inclusion in the
Code; Providing for a Repealer; and Providing for an
Effective Date.
WHEREAS, the City established the South Miami Pension Plan ("Plan") for City employees in
1965, and has amended the Plan on numerous occasions; and
WHEREAS, the City adopted Ordinance 23-19-2336 on June 18, 2019, implementing several
changes to the Plan, including a reduction in the normal retirement age for AMSC members from age
65 with three years of service to age 60 with five years of service; however, there was no change to the
early retirement date of age 55 with ten years of service; and
WHEREAS, The Plan currently differentiates in certain benefits provided to members in
different employee groups and membership tiers; and
WHEREAS, the City has determined that it is in the best interest of employees to provide greater
consistency in the benefits provided to members in different employee groups and membership tiers;
and
WHEREAS, the City is recommending a change in the vesting period for Administrative
Management Service Class ("AMSC") members hired in the future from five years to ten years of
continuous service, consistent with the vesting period for First Tier and Second Tier members; and
01529379-2
1
60
Rev.8.19.21
Whereas, the City is recommending a change in the final average compensation period for
AMSC members from eight years to five years, consistent with the final average compensation period
for police officers; and
WHEREAS, the City is recommending that the option of retiring early upon reaching age 55 with
ten years of service and receiving a reduced early retirement benefit be eliminated for AMSC members,
consistent with Second Tier members; and
WHEREAS, the City is recommending that the normal retirement date for AMSC members be
revised to include retirement at age 55 with twenty years of service; and
WHEREAS, the City Commission has received and reviewed actuarial impact statements related
to such amendments; and
WHEREAS, the City Commission deems it to be in the public interest to provide these changes
to the South Miami Pension Plan in order to continue to meet the City's objectives of attracting and
retaining the best talent as City employees, and managing employee turnover;
NOW, THEREFORE, BE IT HEREBY ORDAINED BY THE MAYOR AND CITY COMMISSION
OF THE CITY OF SOUTH MIAMI, FLORIDA, THAT:
Section 1: The foregoing recitals are hereby ratified and incorporated by reference as if fully
set forth herein and as the legislative intent of this Ordinance.
Section 2: Chapter 16, Article II, of the City of South Miami Code of Ordinances is hereby
amended by amending Section 16-12, "Definitions" as follows:
01529379-2
2
61
Rev.8.19.21
Final average compensation shall mean the participant's annual compensation, as determined
by the employer, acting in a uniform and nondiscriminatory manner. For general employees, except
for Second Tier Members and AMSC Members effective October 1, 2011, final average compensation
shall be averaged over the last five-year period, provided however final average compensation over
the last five-year period shall not be less than the final average compensation as of September 30,
2011, under the definition of final average compensation which existed as of September 30, 2011. For
Second Tier Members, final average compensation will be the average of the highest eight (8) years of
credited service. For AMSC Members, final average compensation will be the average of the highest
eight (9) five 5 years of credited service. In the event an AMSC Member has less than eight (8) five
(5) years of credited service, final average compensation will be the average of all the participant's
annual compensation over the period for which the Member received credited service. For members
covered under the police officers and sergeants collective bargaining agreement, final average
compensation shall be the best five-year period of the police officer or sergeant's career with the City
of South Miami, provided however final average compensation over the best five-year period shall not
be less than the final average compensation as of September 30, 2011, under the definition of final
average compensation which existed as of September 30, 2011. The best five (5) years is defined as the
highest five (5), twenty-six (26) consecutive pay periods within a police officer or sergeant's career and
such consecutive year periods shall not overlap one another. For all other members, final average
compensation shall be averaged over the last three-year period - but not less than the average of the
participant's five (5) best years of annual compensation during the last ten (10) years of service. For all
01529379-2 3
62
Rev.8.19.21
members final average compensation will end on the participant's retirement date, date of disability,
date of termination of employment or the date of termination of the plan, whichever is applicable.
Section 3: Chapter 16, Article II, of the City of South Miami Code of Ordinances is hereby
amended by amending Section 16-14, "Pension benefits and retirement date" as follows:
(a) Retirement date. The normal retirement date with full unreduced pension benefits for
a participant, shall be as follows:
(3) AMSC Members. The normal retirement date for AMSC Members hired before
[effective date of this Ordinance] shall be the earlier of (a) age 60 and completion of five (5) years of
credited service; or (b) age 55 and completion of twenty (20) years of credited service; or (bc)
completion of thirty-three (33) years of credited service. The normal retirement date for AMSC
Members hired on or after effective date of this Ordinancel shall be the earlier of a age 60 and
completion of ten 10 ears of credited service- or b age 55 and completion of twenty 20 ears of
credited service; or c completion of thirty-three 33 ears of credited service.
01529379-2
(A) Early retirement.
(1) A general employee participant as of September 30, 2011,a„d AIVISC
PaFtieipaRts may elect an early retirement date which may be the first day of any calendar
month coincident with, or subsequent to the participant's fifty-fifth (55th) birthday and
rd
63
Rev.8.19.21
completion of ten (10) years of credited service. The pension benefits payable to any such
participant on early retirement date shall be equal to an actuarial equivalent, determined in
accordance with the table below, to the amount of pension to which is entitled up to early
retirement date in accordance with subsection (b).
Table —General Employee participant as of September 30, 2011, AMSC RaFtir'�4s —Percentages for
early retirement date
Years prior to normal retirement date Percentage
1 93.33
2 1 86.67
3
80.00
4
73.33
5
6
66.67
63.33
7
60.00
g
56.67
9
53.33
10
50.00
5
64
Rev.8.19.21
(2) Police officers. Shall be the completion of twenty-five (25) years of credited police
service, regardless of age, or attainment of age sixty (60) and completion of ten (10) years of
credited police service.
(3) Vesting of benefits upon normal retirement date. Any provision of this plan to the
contrary notwithstanding, a member's accrued benefit shall become one hundred (100) percent vested
upon the attainment of the normal retirement date.
Section 4: Chapter 16, Article ll, of the City of South Miami Code of Ordinances is hereby
amended by amending Section 16-17 "Termination of Employment" as follows:
(a) If the employment of a participant is terminated except by retirement, transfer to ineligible
status or death, the participant's interest and rights under this plan shall be limited to those contained
in the following sections of this section.
(b) Any such participant shall be entitled to elect Option 1 or Option 2, as described below,
except that Option 2 shall be automatically considered as having been elected by the Participant unless
Option 1 is elected before the participant's normal retirement date.
Option 1: A cash payment of an amount equal to the aggregate of the contributions made by
the participant prior to termination of employment. Provided that police officer participants eligible to
withdraw their contributions from this pension plan may only withdraw their contributions without
interest.
1.1
65
Rev. B.19.21
Option 2: For vested Participants, pension PPRsieR benefits commencing on what otherwise
would have been the normal retirement date of the participant in an amount equal to the greater of
that which can be provided by the aggregate of the contributions made by the participant prior to the
termination of employment, with credited interest compounded annually at the rate of three (3)
percent per annum from the end of the year of payment to the date on which pension benefits
commence, or an amount determined by ""ulfipl`ft the """";'f^eF;SiS" to whir' %he pa nicipant
0 r, PR**t'Pdinaccordancewith subsection 16-14(a) or 16-14(b), whichever is applicable by a peFceAt Qe
Percentage
Less 10
8
-14
4
39
43
44
49
&Q
4-5
- 6
60
4-7
7V
419
9Q
1
20 eF R;eFe
xvv
01529379-2
7
66
Rev.8.19.21
Police officer participants, including bargaining unit employees, shall be one hundred (100)
percent vested in the retirement plan upon completion of ten (10) years continuous full-time sworn
police service. Accordingly, effective October 1, 1993, all police officer participants, including members
of the bargaining unit, who are in this plan effective October 1, 1993 and have between ten (10) years
and twenty (20) years of continuous sworn police service will be one hundred (100) percent vested.
All general employees shall be one hundred (100) percent vested in the pension plan upon
completion of ten (10) years of continuous credited service. All Second Tier Members shall be one
hundred (100) percent vested in the pension plan upon completion of ten (10) years of continuous
credited service. AMSC members hired ❑n or after [effective date of this ❑rdinance] shall be 100%
vested in the pension plan upon completion of ten (10) years of continuous credited service. AMSC
Members who are employed on the effective date of this Ordinance shall be one hundred (100)
percent vested in the pension plan ulagn eempletien of five (5) yeBFS Of ^ RtiAweus se,Lo. General
employees and AMSC Members who opt to join the defined contribution plan of the City of South
Miami shall vest in the defined contribution plan after one (1) year of service. Accordingly, effective
October 1, 1995, all general employees who are in this plan as of October 1, 1995 and have ten (10)
years or more of continuous service will be one hundred (100) percent vested.
Section 5. Severability. If any section, clause, sentence, or phrase of this ordinance is for any
reason held invalid or unconstitutional by a court of competent jurisdiction, this holding shall not affect
the validity of the remaining portions of this ordinance.
01529379-2 O
67
Rev.8.19.21
Section 6. Ordinances in Conflict. All ordinances or parts of ordinances and all section and
parts of sections of ordinances in direct conflict herewith are hereby repealed. However, it is not the
intent of this section to repeal entire ordinances, or parts of ordinances, that give the appearance of
being in conflict when the two ordinances can be harmonized or when only a portion of the ordinance
in conflict needs to be repealed to harmonize the ordinances. If the ordinance in conflict can be
harmonized by amending its terms, it is hereby amended to harmonize the two ordinances. Therefore,
only that portion that needs to be repealed to harmonize the two ordinances shall be repealed.
Section 7. Effective Date. This ordinance shall become effective upon enactment.
PASSED AND ADOPTED this day of
ATTEST:
CITY CLERK
READ AND APPROVED AS TO FORM,
LANGUAGE, LEGALITY, AND
EXECUTION THEREOF
CITY ATTORNEY
01529379-2
001
2021.
APPROVED:
MAYOR
COMMISSION VOTE:
Mayor Philips:
Commissioner Harris:
Commissioner Gil:
Commissioner Liebman:
Commissioner Corey:
68
Actuarial Impact Statement as of October 1, 2020
A. Description of Proposed Amendment
Final Average Compensation
Final average compensation for AMSC members is the average of the highest 5 years of Credited Service
Normal Retirement Efijgjbilit
For AMSC members: the earliest of attainment of age 60 and completion of 10 years of Credited Service
(attainment of age 60 and completion of 5 years of Credited Service if an AMSC member prior to the adoption
of the proposed Ordinance), attainment of age 55 and completion of 20 years of Credited Service or completion
of 33 years of Credited Service.
Early Retirement Eligibility
Early retirement eligibility for AMSC members is eliminated.
Vesting Schedule
AMSC members are 100% vested upon completion of 10 years of Credited Service. AMSC members on the date
of adoption of the Ordinance are 100% vested immediately.
B. An estimate of the cost implementing this amendment (see attachment)
C. In my opinion, the proposed changes are in compliance with Part VII, Chapter 112, Florida Statutes and Section
14, Article X of the Statement Constitution.
Chairman, Pension Board
Date
69
Actuarial Impact Statement as of October 1, 2020
[All Participants]
A. Participant Data
1. Active participants
2. Retired participants and beneficiaries
receiving benefits excluding DROPS
3. DROP participants
4. Disabled participants receiving benefits
5. Terminated vested participants
6. Annual payroll of active participants
7. Expected payroll of active employees for the
following year
8. Annual benefits payable to those currently
receiving benefits excluding DROPS
9. Annual benefits payable to DROPs
B. Assets
1. Market Value of Assets
2. Smoothed Value of Assets
C. Liabilities
1. Actuarial present value of future expected benefit
payments for active members
a. Retirement benefits
b. Vesting benefits
c. Death benefits
d. Disability benefits
e. Refunds
f. Total
2. Actuarial present value of future expected benefit
payments for terminated vested members
3. Actuarial present value of future expected benefit
payments for members currently receiving benefits
a. Service retired
b. DROP participants
c. Disability retired
d. Beneficiaries
e. Miscellaneous
f. Total
Valuation
10/01/2020
Actuarial Impact
Statement
10/01/2020
98 98
50
50
7
7
0
0
11
11
$
6,753,066
$
6,753,066
$
6,776,039
$
6,776,039
$
1,603,894
$
1,603,894
$
244,787
$
244,787
$
48,130,665
$
48,130,665
$
48,823,503
$
48,823,503
$ 23,402,980
$ 23,693,294
1,857,500
1,956,361
67,402
66,525
749,941
754,067
255,641
248,811
$ 26,333,464
$ 26,719,058
$ 1,507,846 $ 1,507,846
$ 19,366,481
4,037,440
0
167,205
166,125
$ 19,366,481
4,037,440
0
167,205
166,125
$ 23,737,251 $ 23,737,251
GRS
South Miami Pension Plan 1
70
Actuarial Impact Statement as of October 1, 2020
(All Participants)
4. Total actuarial present value of future
expected benefit payments
5. Actuarial accrued liabilities
6. Unfunded actuarial accrued liabilities
D. Statement of Accumulated Plan Benefits
1. Actuarial present value of accumulated
vested benefits
a. Participants currently receiving benefits
including DROP participants
b. Other participants
c. Tota 1
2. Actuarial present value of accumulated non -
vested Plan benefits
3. Total actuarial present value of accumulated
Plan benefits
E. Pension Cost
1. Total normal cost (including expenses)
2. Payment required to amortize unfunded liability
3. Interest adjustment
4. Total preliminary required contribution
5. Total required contribution
6. Item 5 as a percentage of payroll
7. Estimated member contributions
8. Item 7 as a percentage of payroll
9. Estimated State contributions
10. Item 9 as a percentage of payroll
11. Net amount payable by City
12. Item 11 as a percentage of payroll
Percent of expected 2021-2022 covered payroll ($6,776,039)
Valuation
10/01/2020
Actuarial Impact
Statement
10/01/2020
$ 51,578,561
$
51,964,155
$ 45,625,450
$
45,891,756
$ (3,198,053)
$
(2,931,747)
$ 23,571,126 $ 23,571,126
14, 542, 864 14, 673,469
$ 38,113,990 $ 38,244,595
1,914,206 1,903,690
$ 40,028,196 $ 40,148,285
$ 1,027,239
(300,990)
27,237
$ 1,040,527
(278,984)
28,493
$
753,486
$
790,036
$
1,129,688
$
1,166,238
16.7 %
17.3
$
440,265
$
440,265
6.5% 1
6.5% 1
$
79,228
$
79,228
1.2% 1
1.2% 1
$
614,637
$
651,187
9.1% 1
9.6% 1
R.
South Miami Pension Plan 2
71
Actuarial Impact Statement as of October 1, 2020
(All Participants)
Actuarial Impact
Valuation Statement
10/01/2020 10/01/2020
F. Disclosure of Following Items:
1. Actuarial present value of future salaries - attained age $ 46,470,683 $ 46,251,034
2. Actuarial present value of future employee contributions
- attained age $ 2,917,279 $ 2,901,904
3. Actuarial present value of future contributions
from other sources N/A N/A
4. Amount of active members' accumulated contributions $ 4,993,866 $ 4,993,866
5. Actuarial present value of future salaries and
future benefits at entry age N/A N/A
6. Actuarial present value of future employee
contributions at entry age N/A N/A
GRS
South Miami Pension Plan 3
72
Actuarial Impact Statement as of October 1, 2020
Unfunded Actuarial
Current Unfunded
Amortization
Remaining Funding
Accrued Liabilities
Liabilities
Payment
Period
General Employees
Tier 1
10/01/2015
Combined Bases *
$
(1,339,699)
$
(145,891)
14 years
10/01/2016
Actuarial Loss / (Gain)
(475,200)
(42,082)
21 years
10/01/2016
Assumption Change
490,348
43,424
21 years
10/01/2017
Actuarial Loss / (Gain)
(322,884)
(28,037)
22 years
10/01/2018
Actuarial Loss / (Gain)
(1,482,664)
(126,448)
23 years
10/01/2018
Plan Amendment - Ord. #35-19-2348
761,159
64,915
23 years
10/01/2019
Actuarial Loss / (Gain)
(847,185)
(71,072)
24 years
10/01/2019
Assumption Change
(252,790)
(21,207)
24 years
10/01/2020
Actuarial Loss / (Gain)
(56,118)
(4,637)
25 years
TOTAL
$
(3,525,033)
$
(331,035)
General Employees
Tier 2
10/01/2017
Initial Base
$
89,877
$
7,959
21 years
10/01/2018
Actuarial Loss / (Gain)
28,804
2,457
23 years
10/01/2018
Plan Amendment - Ord. #35-19-2348
107,661
9,182
23 years
10/01/2019
Actuarial Loss / (Gain)
(161,584)
(13,556)
24 years
10/01/2019
Assumption Change
(13,628)
(1,143)
24 years
10/01/2020
Actuarial Loss / (Gain)
(104,817)
(8,662)
25 years
TOTAL
$
(53,687)
$
(3,763)
AMSC
10/01/2017
Combined Bases *
$
204,282
$
18,091
21 years
10/01/2018
Actuarial Loss / (Gain)
531,090
45,293
23 years
10/01/2018
Plan Amendment - Ord. #23-19-2336
240,969
20,551
23 years
10/01/2018
Plan Amendment - Ord. #35-19-2348
525,546
44,821
23 years
10/01/2019
Actuarial Loss / (Gain)
(508,066)
(42,622)
24 years
10/01/2019
Assumption Change
(65,942)
(5,532)
24 years
10/01/2020
Actuarial Loss / (Gain)
159,636
13,191
25 years
10/01/2020
Plan Amendment
266,306
22,006
25 years
TOTAL
$
1,353,821
$
115,799
* Combined per Internal Revenue Code Regulation 1.412(b)-1
GRS
.: South Miami Pension Plan 4
73
Actuarial Impact Statement as of October 1, 2020
Unfunded Actuarial Current Unfunded Amortization Remaining Funding
Accrued Liabilities Liabilities Payment Period
Police Officers
10/01/2018
Combined Bases * $
(487,880) $
(43,044)
19 years
10/01/2018
Plan Amendment - Ord. #38-19-2351
343,941
27,714
23 years
10/01/2019
Actuarial Loss / (Gain)
274,937
21,753
24 years
10/01/2019
Assumption Change
(925,610)
(73,236)
24 years
10/01/2020
Actuarial Loss / (Gain)
87,764
6,828
25 years
TOTAL $ (706,848) $ (59,985)
* Combined per Internal Revenue Code Regulation 1.412(b)-1
This actuarial valuation and/or cost determination was prepared and completed by us or under our direct supervision,
and we acknowledge responsibility for the results. To the best of our knowledge, the results are complete and accurate,
and in our opinion, the techniques and assumptions used are reasonable and meet the requirements and intent of Part
VII, Chapter 112, Florida Statutes. Based upon our understanding of the Plan, there is no benefit or expense to be
provided by the Plan and/or paid from the Plan's assets for which liabilities or current costs have not been established or
other wise provided for in the valuation. All known events or trends which may require material increase in Plan costs or
required contribution rates have been taken into account in the valuation.
jV"-d- 4mAx-daAd-
Shelly L. Jones, A.S.A.
Enrollment Number: 20-08646
Dated: August 31, 2021
'GRS
Jennifer M. Borregard, E.A.
Enrollment Number: 20-07624
South Miami Pension Plan 5
74
Outline of Principal Provisions of the Retirement Plan
A. Effective Date:
October 1, 1965. Most recently amended by Ordinance 38-19-2351 adopted December 3, 2019.
B. ElieibilitV Requirements:
1. General Employees
Tier 1:
Regular full-time employee hired before October 1, 2011 is eligible to enter the Plan following the completion
of six months of Credited Service and attainment of age 20.
Tier 2:
Regular full-time employee hired on or after October 1, 2011 and not participating in the Plan as of October
1, 2016 who elects to join or fails to make any election within ninety (90) days from September 20, 2016 is
eligible to enter the Plan as a Tier 2 employee as of October 1, 2016.
Regular full-time employee hired on or after October 1, 2016 who elects to join or fails to make any election
within ninety (90) days from date of hire is eligible to enter the Plan as a Tier 2 employee as of their date of
hire.
Any regular full-time employee who previously entered into the Defined Contribution (DC) Plan may opt -out
of the DC Plan and elect to join the Plan as a Tier 2 member or as their respective classification at the time
they elect to join the Plan during an annual open enrollment period.
2. Police Officers
Regular full-time Police Officer is eligible to enter the Plan as of date of employment.
3. Administration Mana ement Service Class IAM SC
Employees of the City with the following positions who do not elect to participate in a defined contribution
Plan of the City:
City Manager
City Attorney
City Clerk
Assistant / Deputy City Manager
Finance Director / Chief Financial Officer
Chief of Police
Planning and Zoning Director
Building Director
Director of Public Works
Chief Administrative Officer (currently Finance Office Manager)
Chief Procurement Officer (currently Purchasing Manager)
Parks and Recreation Director
Assistant Director of Parks and Recreation
Community Redevelopment Agency Director
Personnel Manager
Project Manager
Special Assistant to the Manager
Superintendent of Maintenance
GRS
South Miami Pension Plan 6
75
Outline of Principal Provisions of the Retirement Plan
C. Credited Service:
1. General Employees and AMSC
Continuous employment. Credited service shall exclude continuous employment prior to Plan participation
as follows: (1) If employed prior to October 1, 1973, credited service shall exclude the first two years of
continuous employment and any additional year of continuous employment prior to attainment of age 25.
(2) If employed on or after October 1, 1973, credited service shall exclude the first six (6) months of
continuous employment and continuous employment prior to age 20.
Credited service for Tier 2 employees and AMSC will be continuous employment from the date of hire for all
purposes except for benefit accruals which will be from the later of date of Plan entry election date or date of
hire.
2. Police Officers
Continuous employment. For Police Officers who did not participate when first eligible for the Plan, Credited
Service shall exclude continuous employment prior to Plan participation as follows: (1) If employed prior to
October 1, 1973, Credited Service shall exclude the first two years of continuous employment and any
additional year of continuous employment prior to attainment of age 25. (2) If employed on or after
October 1, 1973, Credited Service shall exclude the first six (6) months of continuous employment and
continuous employment prior to age 20.
D. Final Monthiy Compensation (FMC):
Final Average Compensation is 1/36th of the final 36 consecutive months of compensation. For Police Officers,
not less than 1/5th of the highest five (5) years out of the last (10) ten years of compensation. Compensation
shall mean regular wages and salaries, excluding bonuses, vacation, sick leave and other additional
compensation.
Effective October 1, 2011, Final Average Compensation for General Employees is 1/60th of the final 60
consecutive months of basic compensation, provided it is not less than the Final Average Compensation as of
September 30, 2011 based on the definition above. Basic compensation shall mean base wages and salaries,
excluding commissions, overtime pay, bonuses and any other forms of additional compensation earned outside
of base wages.
Effective October 1, 2011, Final Average Compensation for members covered under the Police Officers and
Sergeants collective bargaining agreement is the best five (5) years of basic compensation, provided it is not less
than the Final Average Compensation as of September 30, 2011 based on the definition above. Basic
compensation shall mean base wages and salaries, including up to 300 hours of overtime in a fiscal year and
excluding payments for accrued unused sick or annual leave, extra duty or special detail work, shift differential,
assignment pay, bonuses and any other forms of additional compensation earned outside of base wages.
GRS
South Miami Pension Plan 7
76
Outline of Principal Provisions of the Retirement Plan
D. Final Monthly Compensation (FMC) (cont'd
Effective October 1, 2016, Final Average Compensation for members covered under the Miami -Dade County
Police Benevolent Association Upper -Collective Bargainning Union (Lieutenants & Captains) collective
bargaining agreement is the best five (5) years of basic compensation, provided it is not less than the Final
Average Compensation as of September 30, 2016 based on the definition above. Basic compensation shall
mean base wages and salaries, including up to 300 hours of overtime in a fiscal year and excluding payments
for accrued unused sick or annual leave, extra duty or special detail work, shift differential, assignment pay,
bonuses and any other forms of additional compensation earned outside of base wages.
Final Average Compenation for Tier 2 General Employees shall be the average of the highest eight (8) years of
credited service.
Final Average Compenation for AMSC shall be the average of the highest five (5) years of credited service.
E. Normal Retirement:
1. Eligibility:
a. General Employees: Attainment of age 55 and completion of ten (10) years of Credited Service for
benefits accrued as of September 30, 2011.
Attainment of age 60 and completion of ten (10) years of Credited Service for
benefits accrued after September 30, 2011, including increases in the accrued
benefit as of September 30, 2011 due to increases in the Final Average
Compensation.
Attainment of age 65 and completion of ten (10) years of Credited Service or
completion of thirty-three (33) years of Credited Service regardless of age for
Tier 2 General Employees.
b. Police Officers: Attainment of age 55 and completion of ten (10) years of Credited Service or
completion of twenty-five (25) years of Credited Service regardless of age.
c. AMSC: Attainment of age 60 and completion of ten (10) years of Credited Service
(attainment of age 60 and completion of five (5) years of Credited Service if an
AMSC member prior to the adoption of the proposed Ordinance), attainment of
age 55 and completion of twenty (20) years of Crediited Service or completion
of thirty-three (33) years of Credited Service regardless of age.
2. Benefit:
The monthly Plan benefit is the product of:
a. FMC,
b. Credited Service during the appropriate period and
c. The appropriate benefit percentage
GRS
South Miami Pension Plan 8
77
Outline of Principal Provisions of the Retirement Plan
E. Normal Retirement (cont'd):
2. Benefit (cont'd)_
The appropriate benefit percentages are:
a. General Employees For Credited Service
b. Police Officers
c. General Employees (Tier 2)
d. AMSC
F. Supplemental Benefit:
Percentage
Through September 30, 1999
2.50%
October 1, 1999 through September 30, 2011
2.75%
October 1, 2011 and thereafter
2.25%
For Credited Service
Percentage
Through September 30, 1995
2.00%
October 1, 1995 through September 30, 1996
2.25%
October 1, 1996 through September 30, 1997
2.50%
October 1, 1997 through September 30, 2001
2.75%
October 1, 2001 through September 30, 2002
2.80%
October 1, 2002 through September 30, 2003
2.90%
October 1, 2003 and thereafter
3.00%
For Credited Service Percentage
October 1, 2016 and thereafter 1.60%
For Credited Service Percentage
October 1, 2016 and thereafter 3.00%
A cost -of -living supplemental benefit based upon the consumer price index is provided upon retirement. The
annual increase is limited to 3%.
No cost -of -living supplemental benefit is provided for Tier 2 General Employees and AMSC members who retired
or entered the DROP prior to October 1, 2019. No cost -of -living supplemental benefit is provided on the portion
of the benefit accrued after September 30, 2011 for Tier 1 General Employees who retired or entered the DROP
prior to October 1, 2019.
G. Early Retirement for Police Officers_:
1, EligibilitV: Attainment of age 50 and completion of 10 years of Credited Service.
2. Benefit: Accrued benefit based upon FMC and Credited Service as of Early
Retirement Date, reduced 3% for each year that the benefit commencement
date precedes Normal Retirement.
GRS
South Miami Pension Plan 9
78
Outline of Principal Provisions of the Retirement Plan
H. Delayed Retirement:
1. Eligibility: Retirement subsequent to Normal Retirement Date.
2. Benefit: Accrued benefit based upon FMC and Credited Service as of Delayed Retirement Date.
I. Disability Retirement:
1. Eligibility: Totally and permanently disabled for a six month period while actively employed.
2. Benefit: Accrued benefit based upon FMC and Credited Service as of date of disability, actuarially
reduced as for Early Retirement for early commencement.
J. Pre -Retirement Death Benefit:
The beneficiary shall receive the member's accumulated Employee Contributions.
K. Benefit Upon Termination of Service:
1. Benefit payable at Normal Retirement equal to the greater of:
a. Accrued benefit based upon FMC and Credited Service as of date of termination times the
vesting percentage shown below, or
b. Benefit which can be supported by the accumulated Member Contributions with interest to
Normal Retirement Date.
No supplemental benefit shall be payable to vested terminees.
2. Vesting Schedule:
Years of
Credited Service
Less than 10
10 or more years
Vesting
Percentage
0%
100
AMSC members who have completed three (3) years of continuous Credited Service as of June 18, 2019
are 100% vested. AMSC members on the date of adoption of the Ordinance are 100% vested
immediately.
3. Refund Option:
A terminated member may elect to receive a refund of Accumulated Contributions without interest in
lieu of receiving any other Plan benefits.
GRS
South Miami Pension Plan 10
79
Outline of Principal Provisions of the Retirement Plan
L. Member Contributions:
Members contribute 7.0% (3.0% for Tier 2 General Employees and 7.5% for Police Officers) of member's
basic annual compensation.
Should the City contribution for General Employees be actuarially determined to exceed 7.0%, not including
expenses, both the City and the General Employees (other than Tier 2 General Employees and AMSC) will
share equally in the amount in excess of 7.0%. General Employees (other than Tier 2 General Employees
and AMSC) Contributions are capped at 10% of basic annual compensation as of October 1, 2016.
Should the City contribution for Police Officers be actuarially determined to exceed 7.5%, not including
expenses, both the City and the Police Officers will share equally in the amount in excess of 7.5% but not
more than 12.0%.
M. Normal Form of Retirement Income:
The normal form of payment shall be a life annuity with a guarantee of a refund of accumulated Employee
Contributions.
N. Deferred Retirement Option Plan (DROP):
1. Eligibility: Attainment of normal retirement date.
2. The maximum period of participation in the DROP is sixty (60) months.
3. A member's account in the DROP shall be credited monthly with interest in an amount equal to 50% of
the net (gross return minus investment expense) yearly interest earned by the Plan for the preceding
fiscal year, up to a maximum of 5% and a minimum of 0%.
4. No payment may be made from the DROP until the member actually separates from service with the
City. The DROP account balance may be distributed in a lump sum, periodic payments, an annuity or a
combination thereof.
QWSouth Miami Pension Plan 11
80
Outline of Principal Provisions of the Retirement Plan
O. Changes Since Previous Actuarial Valuation.
1. Final Average Compensation for AMSC was:
Final Average Compenation for AMSC shall be the average of the highest eight (8) years of credited
service.
2. Normal Retirement eligibility for AMSC was:
Attainment of age 60 and completion of five (5) years of Credited Service or completion of thirty-three
(33) years of Credited Service regardless of age.
3. Early retirement for AMSC was:
Eligibility: Attainment of age 55 and completion of 10 years of Credited Service.
Benefit: Accrued benefit based upon FMC and Credited Service as of Early Retirement Date,
reduced 1/15 for each of the first five years and 1/30 for the next five years that the
benefit commencement date precedes Normal Retirement.
4. Vesting schedule for AMSC was:
100% vesting upon completion of 5 years of credited service.
GRS
- South Miami Pension Plan 12
81
Actuarial Assumptions and Methods
Used in the Actuarial Impact Statement
A. Mortality
General Employees including AMSC Mortality Assumptions:
For healthy participants during employment, PUB-2010 Headcount Weighted General Below Median
Employee Mortality Table, separate rates for males and females, set back 1 year for males, with fully
generational mortality improvements projected to each future decrement date with Scale MP-2018.
For healthy participants post employment, PUB-2010 Headcount Weighted General Below Median Healthy
Retiree Mortality Table, separate rates for males and females, set back 1 year for males, with fully
generational mortality improvements projected to each future decrement date with Scale MP-2018.
For disabled participants, PUB-2010 Headcount Weighted General Disabled Retiree Mortality Table, separate
rates for males and females, both set forward 3 years, without projected mortality improvements.
Pre -retirement
Post -retirement
Sample
Future Life
Future Life
Ages
Expectancy (Years)
Expectancy (Years)
(2020)
Male Female
Male Female
55
32.58 35.02
28.63 32.38
60
27.74 30.00
24.55 27.84
62
25.85 28.02
22.93 26.02
Pre -retirement
Post -retirement
Sample
Future Life
Future Life
Ages
Expectancy (Years)
Expectancy (Years)
(2040)
Male Female
Male Female
55
34.22 36.50
30.64 34.15
60
29.30 31.44
26.40 29.51
62
27.37 29.43
24.72 27.63
Police Officer M o rta lity Assum ptions:
For healthy participants during employment, PUB-2010 Headcount Weighted Safety Employee Female
Mortality Table and Safety Below Median Employee Male Mortality Table, both set forward 1 year, with fully
generational mortality improvements projected to each future decrement date with Scale MP-2018.
For healthy participants post employment, PUB-2010 Headcount Weighted Safety Healthy Retiree Female
Mortality Table and Safety Below Median Healthy Retiree Male Mortality Table, both set forward 1 year, with
fully generational mortality improvements projected to each future decrement date with Scale MP-2018.
For disabled participants, 80% PUB-2010 Headcount Weighted General Disabled Retiree Mortality Table /
20% PUB-2010 Headcount Weighted Safety Disabled Retiree Mortality Table, separate rates for males and
females, without projected mortality improvements.
GRS
South Miami Pension Plan 13
82
Actuarial Assumptions and Methods
Used in the Actuarial Impact Statement
A. Mortality (ont'_d)
Police Officer Mortality Assumptions (cont'd):
Pre -retirement
Sample Future Life
Ages Expectancy (Years)
(2020)
Male Female
55
30.45 34.32
60
25.51 29.26
62
23.58 27.25
Pre -retirement
Sample
Future Life
Ages
Expectancy (Years)
(2040)
Male Female
Post -retirement
Future Life
Expectancy (Years)
Male Female
27.59 31.17
23.01 26.39
21.28 24.55
Post -retirement
Future Life
Expectancy (Years)
55 32.09 35.81 29.48 33.00
60 27.08 30.70 24.79 28.13
62 25.11 28.67 23.00 26.25
B. Investment Return to be Earned by Fund
7.375% (net of investment expenses), compounded annually - includes inflation at 2.75%
C. Allowances for Expenses or Contingencies
Actual expenses paid in previous year.
D. Employee Withdrawal Rates
Withdrawal rates for males and for females were used in accordance with the following illustrative example
based upon number of years of service:
Withdrawal Rates
Per 100 Employees
Service
Police General J AMSC
1- 2
12.00 20.00
3-6
8.00 9.25
7 - 10
8.00 5.00
11 & Over
3.50 5.00
E. Disability Rates
1985 Disability Study, Class 1 with separate rates for females.
'GRS
South Miami Pension Plan 14
83
Actuarial Assumptions and Methods
Used in the Actuarial Impact Statement
F. Marital Assumptions
100% of active members are assumed to be married. Where applicable, females are assumed to be three years
younger than their male spouses.
G. Salary Increase Factors
Current salary is assumed to increase in accordance with the following table based upon number of years of
service - includes wage inflation of 3.25%.
Service
Police
General 1 AMSC
0-9
5.2.51.'11-
5,25%
10 -14
3.75f,-
4.75fJ'
15 - I9
3.75,111)
4.251.
,0 & ovf�r
3.75`r,,
3.75,.
H. Increase in Covered Payroll
4.0% per year, limited to average annual increase over most recent ten years (0.7%) but not less than 0.0% for
Police Officers. No increase in covered payroll is assumed for General Employees including AMSC.
I. Retirement Rates
Rates of Early Retirement for Police Officers were used in accordance with the following table.
Years Preceding
Normal Retirement Police
1.6 5:n
/ - 10 10 f.i
Rates of Normal Retirement were used in accordance with the following tables.
Age
Police
General *
AMSC
55 - 59
25%
10%
25%
60 - 61
25%
10%
25%
62 - 64
40%
25%
35%
65 - 66
1001Y0
25%
35%
67 & above
100°Io
100%
100%
Sgn'xice Polite
25 years 100%
* Rates are 25% for Tier 2 members for each year upon meeting 33 years of service until 100% at age 67.
** Rates are 25% below the age of 62 and 35% between the ages of 62 and 66 upon meeting 33 years of service
until 100% at age 67.
General Employees who retire prior to age sixty (60) but after attainment of ten (10) years of Credited Service
(55 & 10) are assumed to receive an actuarially reduced benefit payable immediately upon retirement.
GRS
South Miami Pension Plan 15
- 84
Actuarial Assumptions and Methods
Used in the Actuarial Impact Statement
J. Cost of Living Increases
Future cost of living increases for General Employees (including Tier 1 and Tier 2 General Employees), AMSC and
Police Officers are assumed to be 3.0% per annum.
K. Valuation of Assets
The method used for determining the smoothed value of assets phases in the deviation between the expected and
actual return on assets at the rate of 20% per year. The smoothed value of assets will be further adjusted to the
extent necessary to fall within the corridor whose lower limit is 80% of the fair market value of Plan assets and
whose upper limit is 120% of the fair market value of Plan assets.
L. Cost Methods
Normal Retirement, Termination, Disability and Pre -Retirement_ Death_ Benefit:
Entry. -Ape -Actuarial Cost Method
Under this method the normal cost for each active employee is the amount which is calculated to be a level
percentage of pay that would be required annually from his date of hire to his retirement age to fund his estimated
benefits, assuming the Plan had always been in effect. The normal cost for the Plan is the sum of the individual
normal costs for all active employees. The actuarial accrued liability as of any valuation date for each active
employee or inactive employee who is eligible to receive benefits under the Plan is the excess of the actuarial
present value of estimated future benefits over the actuarial present value of current and future normal costs. The
unfunded actuarial accrued liability as of any valuation date is the excess of the actuarial accrued liability over the
smoothed value of assets of the Plan.
Vested Normal Retirement, Termination, Disability,and Death Benefits: Unit Credit Cost Method
Under this method, the actuarial present value of vested accrued benefits is an amount calculated to be the sum of
the present values of each individual's vested accrued or earned benefit under the Plan as of the valuation date.
Each individual's calculation is based on pay and service as of the valuation date.
M. Changes Since Previous Actuarial Valuation
AMSC Retirement Rates were:
AAe
AMSC
55 - 59
10%
60 - 61
25%
62 - 64
35%
65 - 66
35%
67 & above
100%
* Includes Early Retirement.
GRS
South Miami Pension Plan 16
85