Actuarial Valuation Report as of - gese.org

CITY OF MIAMI GENERAL EMPLOYEES’

AND SANITATION EMPLOYEES’ RETIREMENT TRUST

STAFF PENSION PLAN

Actuarial Valuation Report

as of

October 1, 2018

TABLE OF CONTENTS

CITY OF MIAMI GENERAL EMPLOYEES’ AND

SANITATION EMPLOYEES’ RETIREMENT TRUST

Page

Number

Letter to the Board of Trustees 1

Liabilities

Table I Summary of Valuation Results 4

Table II Gain and Loss Analysis 5

Table III Unfunded Liability Bases 6

Table IV Additional Disclosures 7

Table V Present Value of Accrued Benefits 8

Table VI Information Req. by Florida Statute (Chap.112) 9

Assets

Table VIIa Development of Actuarial Value of Assets 12

Table VIIb Assets of the Fund 13

Table VIIc Historical Asset Information 14

Data

Table VIIIa Summary of Member Data 15

Table VIIIb Data Reconciliation 16

Table VIIIc Active Data 17

Table VIIId Age-Service Salary Table 18

Table VIIIe Retiree Data 19

Table VIIIf Comprehensive Annual Financial Report Information

20

Assumptions

Table IXa Actuarial Assumptions and Methods 22

Table IXb Assumption and Method Changes 26

Plan Provisions

Table Xa Plan Provisions 28

Table Xb Plan Amendments 31

January 25, 2019

Board of Trustees

City of Miami General Employees’ and

Sanitation Employees’ Retirement Trust Staff Pension Plan

2901 Bridgeport Avenue

Coconut Grove, Florida 33133

Dear Members of the Board:

This report presents the results of the actuarial valuation of the City of Miami General Employees’ and

Sanitation Employees’ Retirement Trust Staff Pension Plan for the plan year beginning October 1, 2018.

The purpose of this report is to provide a summary of the funded status of the plan as of October 1, 2018

and to determine the minimum required contribution amount for the 2019/2020 fiscal year and to satisfy

State requirements. In addition, this report provides a record of any plan amendments or other plan

changes affecting the financial status of the fund. Our calculations were prepared based on member data

and financial information provided by the Retirement Trust office.

The asset values used to determine unfunded liabilities are not market values but less volatile market

related values. A smoothing technique is applied to market values to determine the market related values.

The unfunded liability amounts using the market value of assets would be different. The interest rate used

for determining liabilities is based on the expected return on assets. Therefore, liability amounts in this

report cannot be used to assess a settlement of the obligation.

Summary of Valuation Results

Currently, the trust receives contributions from the City of Miami and from active members. The amount

of the City contributions varies from year to year, while the member contributions are equal to 10.00% of

payroll. After taking into account expected member contributions, the total required contribution from the

City is $221,616, or 69.10% of covered payroll, for the 2020 fiscal year payable on October 1, 2019. In

comparison, the required contribution for the 2019 fiscal year was $232,280, or 82.83% of covered payroll.

The City Ordinance requires that as a minimum, all fiscal year contributions made by the City to the

Retirement Trust shall be made quarterly, in equal payments, on the first day of each quarter. On this

basis, the total required City contribution for the 2019/2020 fiscal year is $227,740, and the City is required

to make minimum quarterly contributions of $56,935 beginning on October 1, 2019.

The valuation is based on a series of actuarial assumptions, including an interest rate of 7.60% per year

and annual pay increases of 6.00%. Experience gains and losses result when the actual experience of the

plan (such as asset return, pay increases, turnover, deaths, etc.) is different from that expected by the

actuarial assumptions.

Off

Cavanaugh Macdonald CC OO NN SS UU LL TT II NN GG,, LL LL CC

The experience and dedication you deserve

3550 Busbee Pkwy, Suite 250, Kennesaw, GA 30144Phone (678) 388-1700 • Fax (678) 388-1730

www.CavMacConsulting.com Offices in Kennesaw, GA • Bellevue, NE

The plan’s unfunded liability was projected to be $1,285,303 as of October 1, 2018, taking into account

expected contributions from the City of $232,280 based on the October 1, 2017 valuation. The actual

unfunded liability is $1,137,557. The decrease of $147,746 in the unfunded liability is mainly due to

favorable asset experience. The total decrease in City contribution to amortize the unfunded liability is

$20,027 per year. A summary of the amortization payments is presented in Table III.

A summary of the results of the valuation and the contribution requirements is presented in Table I. The

disclosure information required by Chapter 112, Florida Statutes, is presented in Table VI. Tables VIIa

through VIIc provide information about the fund’s assets and historical contributions. In particular, Table

VIIa provides an asset reconciliation between October 1, 2017 and October 1, 2018 and calculation of the

actuarial value of assets. Table VIIb provides a breakdown of the fund assets by investment type and

Table VIIc provides a historical record of the asset growth. Tables VIIIa through VIIIe provide a variety

of useful information concerning the participant population. Table VIIIf provides information to be

included in the Comprehensive Annual Financial Report.

Discussion of Valuation Assumptions, Assets, Methods, Plan Provisions

HB 1309 passed by the Florida Legislature requires the use of the mortality tables used by the Florida

Retirement System. A description of the tables can be found in Table IXa.

To promote stability in annual required contributions amounts to the Staff Plan, the actuarial asset method

used for valuation purposes is a smoothed market value average over three years. The assets used in the

valuation are based on an actuarial value of $4,115,851 as of October 1, 2018. The market value of assets

as of October 1, 2018 reported by the Retirement Trust Office is $4,262,009. Table VIIa presents a

calculation of the actuarial value of assets.

A summary of the actuarial assumptions and methods used in our valuation is presented in Table IXa; the

enclosed Table Xa presents a summary of the plan provisions of the Staff Pension Plan. There have been

no changes in the actuarial assumptions or benefit provisions of the Plan since the previous valuation.

Florida Requirements and Accounting Information

The information required under Florida Statutes, Chapter 112 is presented in Table VI.

The enclosed Table IV presents additional disclosure information including the Schedule of Funding

Progress.

Actuarial Certification

This actuarial valuation was prepared and completed by me or under my direct supervision and I

acknowledge responsibility for the results. To the best of my knowledge, the results are complete and

accurate and, in my opinion, the techniques and assumptions used are reasonable and meet the

requirements and intent of Part VII, Chapter 112, Florida Statutes. There is no benefit or expense to be

provided by the plan and/or paid from the plan’s assets for which liabilities or current costs have not been

established or otherwise taken into account in the valuation. All known events or trends which may require

a material increase in plan costs or required contribution rates have been taken into account in the

valuation.

This is to certify that the independent consulting actuary is a member of the American Academy of

Actuaries and has experience in performing valuations for public retirement systems, that the valuation

was prepared in accordance with principles of practice prescribed by the Actuarial Standards Board, and

that the actuarial calculations were performed by qualified actuaries in accordance with accepted actuarial

procedures, based on the current provisions of the Retirement Trust and on actuarial assumptions that are

internally consistent and reasonably based on the actual experience of the Retirement Trust.

Future actuarial results may differ significantly from the current results 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. Since the potential impact of such factors is outside the

scope of a normal annual actuarial valuation, an analysis of the range of results is not presented herein.

The undersigned are members of the American Academy of Actuaries and meet the Qualification

Standards of the American Academy of Actuaries to render actuarial opinions contained herein.

Respectfully submitted,

Todd B. Green, ASA, FCA, MAAA Micki R. Taylor, ASA, EA, FCA, MAAA

Principal and Consulting Actuary Consulting Actuary

Enrolled Actuary No. 17-5975

TBG/mrt

\\CAVAN-VM-FILE01\Shared\2018\Miami GESE\Valuation\Miami GESE STAFF Valuation Report 2018.Docx

SUMMARY OF VALUATION RESULTS TABLE I


SANITATION EMPLOYEES’ RETIREMENT TRUST STAFF PENSION

PLAN PAGE 4

As of As of

October 1, 2017 October 1, 2018

1.

a. 4 5

b. 1 1

c. 0 0

d.

i. Non-disabled 7 7

ii. Disabled 0 0

iii. Beneficiaries 0 0

iv. Sub-total 7 7

e. 12 13

2. $280,425 $320,720

3. $300,789 $304,814

4. Derivation of Normal Cost

a. $5,707,104 $5,959,669

b. $3,720,759 $4,115,851

c. $5,092,724 $5,253,408

d. $268,843 $294,704

e. $345,537 $411,557

f. $2,688,428 $2,947,041

g. 14.74% 15.81%

h. $41,349 $50,712

5. Unfunded Liability

a. $5,092,724 $5,253,408

b. $3,720,759 $4,115,851

c. $1,371,965 $1,137,557

6. Total Required Minimum City Contribution 2018/2019 Fiscal Year 2019/2020 Fiscal Year

a. Normal Cost $41,349 $50,712

b. Amortization of Unfunded Liability $190,931 $170,904

c. Minimum Required Contribution $232,280 $221,616

As a percentage of covered payroll 82.83% 69.10%

7. Total Recommended Contribution

Payable Quarterly $238,699 $227,740

Quarterly $59,675 $56,935

On October 1, 2018 October 1, 2019

Fiscal Year 2019 2020

Number of Members

Actuarial Accrued Liability

Actuarial Value of Assets

Present Value of Future Benefits

Actuarial Value of Assets

Actuarial Accrued Liability

PV of Future Member Contributions

Normal Cost

Normal Cost Accrual Rate

PV of Future Normal Costs

Active Members

Inactive Members (due contribs. refund)

Total Annual Benefit Payments

Deferred Vested Members

Retired Members:

Total Annual Compensation

Unfunded Liability

(item 5.a. minus 5.b., not less than zero)

Present Value of Future Payroll

Total Members

GAIN AND LOSS ANALYSIS TABLE II



PLAN PAGE 5

1. Actual Unfunded Accrued Liability as of October 1, 2017 $1,371,965

2. Plan sponsor normal cost for this plan year $38,428

3. Interest on 1. and 2. $107,190

4. Plan sponsor contribution for this plan year (including amounts expected to be paid) ($233,242)

5. Interest on 4. ($8,863)

6. Changes due to a. + b. + c. +d.

a. assumptions/methods $0

b. plan amendments $0

c. actuarial (gain)/loss ($137,921)

($137,921)

7. Total current unfunded actuarial accrued liability 1. + 2. + 3. + 4. + 5. + 6. $1,137,557

8. Items Affecting Calculation of Accrued Liability

a. Plan provisions reflected in the unfunded accrued liability (see Table Xa on page 28)

b. Plan amendments reflected in item 6.c. above (see Table Xb on page 31)

c. Actuarial assumptions and methods used to determine actuarial accrued liability and

normal cost (see Table IXa on page 22)

d. Changes in actuarial assumptions and methods reflected in items 6.a. and 6.b. above

(see Table IXb on page 26)

UNFUNDED LIABILITY BASES TABLE III


SANITATION EMPLOYEES’ RETIREMENT TRUST STAFF PENSION PLAN PAGE 6

Date

Established

Original

Amount

Outstanding

Balance as of

October 1, 2017

2017/2018

Amortization

Payment

Outstanding

Balance as of

October 1, 2018

2018/2019

Amortization

Payment

Years

Remaining as of

October 1, 2018

Initial Unfunded $358,553 $251,248 $31,092 $239,250 $31,092 12

2001/02 Experience Loss $134,832 $0 $0 $0 $0 0

2001/02 Change in Asset Method ($36,383) ($14,756) ($3,657) ($12,220) ($3,657) 4

2002/03 Experience Loss $27,414 $2,957 $3,182 $0 $0 0

2003/04 Experience Gain ($204,021) ($42,355) ($23,621) ($21,953) ($23,621) 1

2004/05 Experience Gain ($65,047) ($19,511) ($7,516) ($13,478) ($7,517) 2

2005/06 Experience Loss $61,473 $23,692 $7,090 $18,403 $7,089 3

2005/06 Method Change ($179,695) ($113,942) ($17,938) ($104,664) ($17,938) 8

2006/07 Experience Loss $301,646 $140,129 $34,727 $116,052 $34,727 4

2007/08 Method Change $25,806 $18,695 $2,568 $17,548 $2,568 10

2007/08 Experience Gain ($56,365) ($30,313) ($6,478) ($26,139) ($6,478) 5

2008/09 Experience Loss $149,129 $90,305 $17,109 $80,059 $17,108 6

2009/10 Experience Loss $440,911 $294,657 $50,499 $266,552 $50,499 7

2009/10 Assumption Change $12,123 $9,722 $1,203 $9,258 $1,203 12

2010/11 Experience Loss $14,196 $10,311 $1,623 $9,472 $1,623 8


2011/12 Experience Loss $903,668 $705,170 $103,203 $655,560 $103,203 9


2012/13 Experience Loss $29,884 $24,820 $3,410 $23,296 $3,409 10


2013/14 Experience Gain ($71,073) ($50,084) ($6,509) ($47,381) ($6,509) 11


2013/14 Change EAN ($13,991) ($12,276) ($1,595) ($11,614) ($1,595) 11

2014/15 Experience Gain ($669,753) ($616,929) ($76,346) ($587,470) ($76,346) 12


2015/16 Experience Gain ($72,337) ($69,589) ($8,246) ($66,632) ($8,246) 13

2015/16 Plan Change-Active $19,748 $19,297 $1,952 $18,812 $1,952 18

2015/16 Plan Change-Inactive $408,645 $393,120 $46,582 $376,415 $46,582 13


2016/17 Experience Loss $32,238 $32,238 $3,675 $31,013 $3,675 14

2017/18 Experience Gain ($147,746) $0 $0 ($147,746) ($16,842) 15

$1,756,929 $1,371,965 $190,931 $1,137,557 $170,904

Projected

Unfunded

Date Liability

October 1, 2018 $1,137,557

October 1, 2019 $1,053,108

October 1, 2020 $938,621

October 1, 2021 $807,913

October 1, 2036 $0

*The total experience loss (gain) for the 2017/2018 plan year of $(137,921) is offset by contribution timing differences adjusted for interest equal to $(9,825).

ADDITIONAL DISCLOSURES TABLE IV



PLAN PAGE 7

1. Schedule of Funding Progress

Actuarial UAAL

Actuarial Actuarial Accrued Unfunded as % of

Valuation Value of Liability AAL Funded Covered Covered

Date Assets (AAL) (UAAL) Ratio Payroll Payroll

(a) (b) (b) - (a) (a)/(b) (c) [(b) - (a)]/(c)

10/1/2014 3,062,215 4,852,691 1,790,476 63.10% 164,547 1088.12%

10/1/2015 3,269,345 4,335,005 1,065,660 75.42% 172,459 617.92%

10/1/2016 3,467,469 4,901,160 1,433,691 70.75% 225,148 636.78%

10/1/2017 3,720,759 5,092,724 1,371,965 73.06% 280,425 489.24%

10/1/2018 4,115,851 5,253,408 1,137,557 78.35% 320,720 354.69%

2. Method and assumptions used in calculations of actuarially determined contributions

Valuation date: October 1, 2018

Actuarial cost method: Entry Age Normal

Amortization method: Level dollar amounts, closed

Remaining amortization period: 1 to 18 years

Asset valuation method: 3 year smoothed market

Actuarial assumptions:

Investment rate of return* 7.60%

Projected salary increases* 6.00%

*Includes inflation at 3.50%

Cost of living adjustments 4% per year, with $54 per year minimum and $400

per year maximum

PRESENT VALUE OF ACCRUED BENEFITS TABLE V



PLAN PAGE 8

Shown below is the development of the Total Present Value of Accrued Benefits for the Plan. The calculations

were performed using the Plan’s discount rate of 7.6% which was adopted in April 2012 and first used in the

October 1, 2015 valuation.

1. Actuarial Present Value of Accrued Benefits

As of As of


a. Vested Accrued Benefits:

i. Retired members, beneficiaries,

and deferred vested members $4,397,343 $4,443,412

ii. Active and inactive members* $493,980 $575,473

iii. Sub-total $4,891,323 $5,018,885

b. Non-vested Accrued Benefits $4,915 $6,250

c. Total Benefits $4,896,238 $5,025,135

2. Statement of Changes in Total Actuarial Present Value of All Accrued Benefits

a. Actuarial Present Value as of October 1, 2017 $4,896,238

b. Increase (Decrease) During 2017/2018 Plan Year Attributable to:

i. Interest $372,114

ii. Benefits accumulated/experience $65,544

iii. Benefits paid ($308,761)

iv. Plan amendments $0

v. Changes in actuarial assumptions or methods $0

vi. Net increase (decrease) $128,897

c. Actuarial Present Value as of October 1, 2018 $5,025,135

3. Items Affecting Calculation of Actuarial Present Value of Accrued Benefits

a. Plan provisions reflected in the accrued benefits (see Table Xa on page 28)

b. Plan amendments reflected in item 2.b.iv. above (see Table Xb on page 31)

c. Actuarial assumptions and methods used to determine present values (see Table IXa on page 22)

d. Changes in actuarial assumptions and methods reflected in item 2.b.v. above (see Table IXb on page 26)

* The actuarial present value of vested benefits for active and inactive members includes nonforfeitable accumulated

member contributions in the amount of $192,415 as of October 1, 2017 and $224,747 as of October 1, 2018.

INFORMATION REQ. BY FLORIDA STATUTE (CHAPTER 112) TABLE VI



PLAN PAGE 9


1. Participant Data

a. Active members:

i. Number 4 5

ii. Total annual payroll $280,425 $320,720

b. Retired members (other than disableds):

i. Number 7 7

ii. Total annualized benefit $300,789 $304,814

c. Beneficiaries receiving benefits:

i. Number 0 0

ii. Total annualized benefit $0 $0

d. Disabled members receiving benefits:

i. Number 0 0


e. Terminated vested and inactive members:

i. Number 1 1


2. Assets

a. Actuarial value of assets $3,720,759 $4,115,851

b. Market value of assets $3,880,536 $4,262,009

3. Liabilities

a. Present value of all future expected benefit payments:

i. Active and inactive members:

Retirement benefits $1,270,593 $1,472,107

Return of contributions $39,168 $44,150

Total $1,309,761 $1,516,257

ii. Terminated vested members $0 $0

iii. Retired members and beneficiaries:

Retired (other than disabled) and beneficiaries $4,397,343 $4,443,412

Disabled members $0 $0

Total $4,397,343 $4,443,412

iv. Total present value of all future expected $5,707,104 $5,959,669

Actuarial Valuation prepared as of:




PLAN PAGE 10

(CONTINUED)


b. Actuarial accrued liability $5,092,724 $5,253,408

c. Unfunded actuarial accrued liability $1,371,965 $1,137,557

(please reference Table III for details concerning the unfunded

liability bases and schedule of amortization payments)

4. Actuarial Present Value of Accrued Benefits $4,896,238 $5,025,135

(please reference Table V for details concerning

the present value of accrued benefits)

5. Pension Cost

a. Normal cost contributed by City $41,349 $50,712

b. Payment to amortize unfunded liability $190,931 $170,904

c. Subtotal (not less than zero) $232,280 $221,616

d. Normal cost contributed by members $28,043 $32,072

e. Total required contribution $260,323 $253,688

As a percentage of payroll: 92.83% 79.10%

f. Amount to be contributed by members $28,043 $32,072


g. Amount to be contributed by City $232,280 $221,616


6. Past Contributions 2016/2017 2017/2018

a. Required contribution $271,991 $265,863

b. Actual contribution made by:

i. City of Miami $247,449 $233,242

ii. Members $24,542 $32,621


Fiscal Year




PLAN PAGE 11

(CONTINUED)


7. Other disclosures

a. Present value of active members':

i. Future salaries:

at attained age $2,688,428 $2,947,041

at entry age N/A N/A

ii. Future contributions:

at attained age $268,843 $294,704

at entry age N/A N/A

b. Present value of future normal contributions from City $345,537 $411,557

c. Present value of future expected benefit payments for

active members at entry age N/A N/A

d. Amount of active and inactive members'

accumulated contributions $192,415 $224,747


DEVELOPMENT OF ACTUARIAL VALUE OF ASSETS TABLE VIIa



Valuation Date October 1: 2017 2018 2019 2020

A. Actuarial Value Beginning of Year $3,467,469 $3,720,759

B. Market Value End of Year 3,880,536 4,262,009

C. Market Value Beginning of Year 3,465,231 3,880,536

D. Cash Flow

D1. Contributions 271,991 $265,863

D2. Benefit Payments (295,460) (308,761)

D3. Other Expenses 0 0

D4. Investment Expenses 0 0

D5. Net (23,469) (42,898)

E. Investment Income

E1. Market Total: B. - C. - D5. 438,774 424,371

E2. Assumed Rate 7.60% 7.60%

E3. Amount for Immediate Recognition 262,466 293,291

E4. Amount for Phased-In-Recognition 176,308 131,080

F. Phased-In-Recognition of Investment Income

F1. Current Year: 33 1/3% x E4. 58,769 43,693 $0 0

F2. First Prior Year 42,237 58,769 43,693 $0

F3. Second Prior Year (86,713) 42,237 58,769 43,694

F4. Total Recognized Investment Gain 14,293 $144,699 $102,462 $43,694

G. Actuarial Value End of Year

A. + D5. + E3. + F4. 3,720,759 4,115,851

H. Difference Between Market & Actuarial Values 159,777 146,158 $43,694 $0

I. Market Value Rate of Return 12.71% 11.00%

J. Actuarial Value Rate of Return 8.01% 11.84%

ASSETS OF THE FUND TABLE VIIb



As of As of


1. Market Value of Assets*

a. Cash equivalents (0%) $0 $0

b. U.S. government & agency securities (0%) $0 $0

c. Corporate bonds (23.8%) $1,017,075 $1,016,069

d. Corporate stock (74.2%) $2,766,180 $3,164,224

e. Real estate fund (0%) $0 $0

f. Total invested assets (98.1%) $3,783,255 $4,180,293

g. Cash (1.8%) $93,310 $77,745

h. Fixed assets (0%) $0 $0

i. Receivable member contributions (0%) $0 $0

j. Accrued interest and other receivable (0.1%) $5,000 $5,000

k. Accounts payable (0%) ($1,029) ($1,029)

l. Other payables (0%) $0 $0

m. Market value of assets (100%) $3,880,536 $4,262,009

* The percentages in parentheses indicate the proportion of assets committed to each type of investment as of

October 1, 2018.

Year Ending

October 1, 2017

Year Ending

October 1, 2018

Realized gains

and (losses) 45,542 $29,899

Unrealized gains

and (losses) $315,017 $310,244

HISTORICAL ASSET INFORMATION TABLE VIIc



-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

$4,500,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Retu

rn

$M

illi

on

s

Plan Year (Assets as of October 1)

Historical Market Value

Assets & Return

Market Assets Market Return

Market Actuarial City and Market Actuarial

Plan Value as of Value as of Benefit O ther Member Value Value

Year O ctober 1 O ctober 1 Payments Expenses Contributions Return Return

2007/2008 $1,141,279 $1,138,655 $0 $0 $175,891 (14.41)% 0.61%

2008/2009 $1,140,033 $1,313,407 $0 $0 $234,637 3.09% 0.61%

2009/2010 $1,413,563 $1,556,718 ($4,156) $0 $258,944 9.67% 1.37%

2010/2011 $1,817,316 $1,834,613 ($32,781) $0 $244,827 1.09% 4.65%

2011/2012 $2,050,377 $2,136,978 ($210,582) $0 $318,782 19.16% 9.59%

2012/2013 $2,561,830 $2,455,245 ($281,818) $0 $248,154 12.57% 10.89%

2013/2014 $2,848,086 $2,687,241 ($311,388) $0 $315,345 11.87% 13.80%

2014/2015 $3,190,324 $3,062,215 ($340,299) $0 $310,925 (0.49)% 7.76%

2015/2016 $3,145,336 $3,269,345 ($332,554) $0 $288,370 11.66% 7.11%

2016/2017 $3,465,231 $3,467,469 ($295,460) $0 $271,991 12.71% 8.01%

2017/2018 $3,880,536 $3,720,759 ($308,761) $0 $265,863 11.00% 11.84%

2018/2019 $4,262,009 $4,115,851

SUMMARY OF MEMBER DATA TABLE VIIIa



As of

October 1, 2017

As of October 1, 2018

1. Active Members 4 5 2. Non-active, Non-Retired Members

a. Fully vested 0 0

b. Non-vested 1 1

c. Sub-total 1 1

3. Retired Members

a. Non-disabled 7 7

b. Disabled 0 0

c. Beneficiaries 0 0

d. Sub-total 7 7

4. Total Members 12 13

DATA RECONCILIATION TABLE VIIIb



Active

Non-Active

Non-Retired

Retired

Total

1. Number of members as of October 1, 2017 4 1 7 12

2. Change in status during the plan year:

a. Actives who became inactive

b. Actives/Inactive who retired

c. Active/Inactive who became disabled

d. Inactives who became active 1 1

e. Non Vested Terms (1) (1)

f. Returned to work

3. No longer members due to:

a. Death

b. Refund of contributions

c. Correction in status

4. New member due to

a. Initial membership 1 1

b. Death of another member

c. Omitted last year

5. Number of members as of October 1, 2018 5 1 7 13

Retired group contains 0 members in DROP as of October 1, 2018.

ACTIVE DATA TABLE VIIIc



Active Members as of October 1, 2018

Number

Annual

Compensation

Males 2

$ 186,330

Females 3 $ 134,389

Total 5 $ 320,719

Average Annual Compensation $64,144

Average Entry Age 34.20

Average Years of Service 5.60

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

10/1/14 10/1/15 10/1/16 10/1/17 10/1/18

Per

cen

atg

e In

crea

se

Av

era

ge

Sa

lary

Historical Salary Rate

Average Salary Actual Salary Increase

Date

Average

Salary

Actual

Salary

Increase

Assumed

Salary

Increase

10/1/14 54,849 0.00% 6.00%

10/1/15 57,486 4.81% 6.00%

10/1/16 75,049 33.48% 6.00%

10/1/17 70,106 5.68% 6.00%

10/1/18 64,144 4.36% 6.00%

AGE-SERVICE-SALARY TABLE TABLE VIIId



Under 1 1 to 4 5 to 9 10 to 14 15 to 19 20 to 24 25 to 29 30 to 34 35 to 39 40 & Up Total

Under 25 0 0 0 0 0 0 0 0 0 0 0

Avg. Pay* 0 0 0 0 0 0 0 0 0 0 0

25 to 29 0 0 0 0 0 0 0 0 0 0 0

Avg. Pay* 0 0 0 0 0 0 0 0 0 0 0

30 to 34 0 0 0 0 0 0 0 0 0 0 0

Avg. Pay* 0 0 0 0 0 0 0 0 0 0 0

35 to 39 1 0 0 2 0 0 0 0 0 0 3

Avg. Pay* 30,908 0 0 105,258 0 0 0 0 0 0 80,474

40 to 44 1 1 0 0 0 0 0 0 0 0 2

Avg. Pay* 33,280 46,016 0 0 0 0 0 0 0 0 39,648

45 to 49 0 0 0 0 0 0 0 0 0 0 0

Avg. Pay* 0 0 0 0 0 0 0 0 0 0 0

50 to 54 0 0 0 0 0 0 0 0 0 0 0

Avg. Pay* 0 0 0 0 0 0 0 0 0 0 0

55 to 59 0 0 0 0 0 0 0 0 0 0 0

Avg. Pay* 0 0 0 0 0 0 0 0 0 0 0

60 to 64 0 0 0 0 0 0 0 0 0 0 0

Avg. Pay* 0 0 0 0 0 0 0 0 0 0 0

65 & Up 0 0 0 0 0 0 0 0 0 0 0

Avg. Pay* 0 0 0 0 0 0 0 0 0 0 0

Total 2 1 0 2 0 0 0 0 0 0 5

Avg. Pay* 32,094 46,016 0 105,258 0 0 0 0 0 0 64,144

Attained

Age

Completed Years of Service

*The average pay shown is the average of the annual rate of pay as of October 1, 2018 excluding any overtime pay or other special compensation.

RETIREE DATA TABLE VIIIe



Average benefit being paid to non-disabled retirees is $3,628.74 per month.

0 1 2 3 4 5

50

45 - 49

40 - 44

30 - 39

0

Number of Retirees

Ag

e A

t R

etir

emen

t

Non Disabled Retirees

COMPREHENSIVE ANNUAL FINANCIAL REPORT INFORMATION TABLE VIIIf



Solvency Test

Valuation Date

Active

Member

Contributions

Retirants and

Beneficiaries

Active

Member

(Employer

Financed

Portion)

Reported Assets

Actuarial Value

(1) (2) (3) (1) (2) (3)

September 30, 2010 $778,535 $0 $2,048,447 $1,834,613 100% 0% 52%

September 30, 2011 $752,812 $559,199 $1,827,888 $2,136,978 100% 100% 45%

September 30, 2012 $276,713 $3,270,956 $816,923 $2,455,245 100% 67% 0%

September 30, 2013 $253,063 $3,657,009 $681,550 $2,687,241 100% 67% 0%

September 30, 2014 $127,242 $4,420,898 $304,551 $3,062,215 100% 66% 0%

September 30, 2015 $149,193 $3,822,502 $363,310 $3,269,345 100% 82% 0%

September 30, 2016 $159,339 $4,319,323 $422,498 $3,467,469 100% 77% 0%

September 30, 2017 $192,415 $4,397,343 $502,966 $3,720,759 100% 80% 0%

September 30, 2018 $224,747 $4,443,412 $585,249 $4,115,851 100% 88% 0%

Portion of Accrued Liabilities Covered by

Reported Assets

Aggregate Accrued Liabilities for

COMPREHENSIVE ANNUAL FINANCIAL REPORT INFORMATION TABLE VIIIf



(CONTINUED)

Analysis of Financial Experience

Gains & Losses in Accrued Liabilities During Year Ending September 30

Resulting from Differences Between Assumed Experience & Actual Experience

$ Gain (or Loss) For Year Ending September 30 2018

Age & Service Retirements $ 6,680 If members retire at older ages or with lower final average pay than

assumed, there is a gain. If younger ages or higher average pay, a loss.

Disability Retirements (46) If disability claims are less than assumed, there is a gain. If more claims,

a loss.

Death-In-Service Retirements (652) If survivor claims are less than assumed, there is a gain. If more claims,

a loss.

Withdrawal From Employment 14,273 If more liabilities are released by withdrawals than assumed, there is a

gain. If smaller releases, a loss.

Pay Increases and Data Adjustments (18,775) If there are smaller pay increases than assumed, there is a gain. If

greater increases, a loss.

Contribution Income 5,541 If more contributions are received than expected, there is a gain. If less,

a loss.

Investment Income 156,842 If there is greater investment income than assumed, there is a gain. If

less income, a loss.

Death After Retirement (2,817) If retirants live longer than assumed, there is a loss. If not as long, a

gain.

New Members (9,774)

Other Miscellaneous gains and losses resulting from timing of financial

transactions, valuation methods, increase in maximum benefit limits, etc.

$ (3,526)

Gain (or Loss) During Year From Financial Experience $ 147,746

Non-Recurring Items 0

Adjustments for plan amendments, assumption changes, etc. Composite Gain (or Loss) During Year $ 147,746

ACTUARIAL ASSUMPTIONS AND METHODS TABLE IXa



1. Actuarial Cost Method

The modified individual entry age normal cost method. Under this method, normal costs are

determined on the individual entry age normal method. However, if the actuarial value of assets

exceeds the entry age accrued liability, the individual entry age normal cost rate for the Plan shall be

adjusted by the excess actuarial value of assets divided by the present value of future payroll, in

order for the unfunded accrued liability to not be less than zero.

2. Decrements

Pre-Retirement Mortality

Female: RP2000 Generational, 100% Combined Healthy White Collar, Scale BB

Male: RP2000 Generational, 50% Combined Healthy White Collar / 50% Combined Healthy Blue

Collar, Scale BB

Post-Retirement Healthy Mortality

Female: RP2000 Generational, 100% Annuitant White Collar, Scale BB

Male: RP2000 Generational, 50% Annuitant White Collar / 50% Annuitant Blue Collar, Scale BB

Post-Retirement Disabled Mortality

Female: RP2000, 100% Disabled Female set forward two years, no projection scale

Male: RP2000, 100% Disabled Male setback four years, no projection scale

Disability

Representative values of the assumed annual rates of disability among members in active service

are set forth in the following table. Disability decrements do not compete with retirement.

Age Rate Age Rate Age Rate Age Rate

20 0.03% 30 0.04% 40 0.07% 50 0.17%

25 0.03% 35 0.05% 45 0.10% 55 0.25%




(CONTINUED)

Permanent Withdrawal from Active Status

Representative values of the assumed annual rates of withdrawal among members in active

service are set forth in the following table.

Age Completed Years of Service

0 1 2 3 4 5 or more

20 12.0% 10.5% 9.0% 7.2% 6.0% 5.3%

25 12.0% 10.5% 9.0% 7.2% 6.0% 4.6%

30 12.0% 10.5% 9.0% 7.2% 6.0% 4.0%

35 12.0% 10.5% 9.0% 7.2% 6.0% 3.4%

40 11.4% 9.9% 8.4% 6.6% 5.4% 2.6%

45 10.8% 9.3% 7.8% 6.0% 4.8% 2.0%

50 10.2% 8.7% 7.2% 5.4% 4.2% 1.3%

55 9.9% 8.4% 6.9% 5.1% 3.9% 1.0%

Retirement

Representative values of the assumed annual rates of retirement among members in active

service are set forth in the following table.

Age Rate Age Rate Age Rate Age Rate Age Rate

45 15% 50 20% 55 30% 60 20% 65 20%

46 15% 51 20% 56 20% 61 20% 66 20%

47 15% 52 20% 57 20% 62 20% 67 20%

48 15% 53 20% 58 20% 63 20% 68 20%

49 15% 54 20% 59 20% 64 20% 69 20%

70 100%

20% is added to the rates in the table when the member first reaches Rule of 70 eligibility.

3. Interest Rate

7.60% per annum, compounded annually, including inflation.




(CONTINUED)

4. Salary Increases

Salaries are assumed to increase at the rate of 6.00% per annum, including inflation. There is no

assumed total active member payroll increase.

5. Inflation

3.5% per annum.

6. Spouses

40% of active members are assumed to be married with the husband 3 years older than his wife

7. Expenses

The City shall provide for the non-investment expenses of the Plan. However, there may be some

non-investment expenses during the Plan year which will be reimbursed by the City after the end of

the year. An allowance for other expenses is made in that the interest rate assumption is net of

investment expenses.

8. Assets

The actuarial value of assets is based on a moving market value averaged over three years. Each

year, the market value is projected forward at the valuation date based on actual contributions and

benefit payments at the assumed interest assumption. One third of the difference between the

projected market value and the market value plus prior deferrals is added to the projected actuarial

value. The remaining two thirds is deferred to each of the next two years as future adjustments to

the actuarial value. The result cannot be greater than 120% of market value or less than 80% of

market value.

As of October 1, 2000 the actuarial value is equal to the estimated present value of employee

payments to purchase credit for service to the effective date of the Plan (July 1, 2001).




(CONTINUED)

9. Funding Period (Pursuant to Chapter 112, Florida Statutes)

The following amortization periods apply all as level dollar amounts:

Benefit improvements for actives 20 years

Benefit improvements for retirees 15 years

Actuarial gain/loss 15 years

Change in assumptions and methods 20 years

The Plan’s initial unfunded actuarial accrued liability as of October 1, 2000 is amortized over 30

years.

10. Maximum Benefit

The valuation reflects the maximum benefit limits under Internal Revenue Code Section 415,

indexed in future years at the 3.5% per year assumed rate of inflation.

ASSUMPTION AND METHOD CHANGES TABLE IXb



The following assumptions have been changed during the last few plan years:

Effective October 1, 2006:

Upgrade in actuarial valuation software and change to a more standard version of the entry age actuarial

cost method.


Retirement rates were updated to reflect the adoption of a Deferred Retirement Option Program (DROP).

Rates were changed from 50% to 65% for the Pension Administrator upon reaching Rule of 70 eligibility;

20% was added to the current rates upon reaching Rule of 70 eligibility for other members.

The marriage assumption was changed from 80% for all members to 0% for the Pension Administrator and

40% for all other members.


The interest rate assumption was lowered from 8.10% to 8.00%. The interest rate assumption of 8.00% will

be first reflected in the development of the actuarial value of assets as of October 1, 2012.

7.75% interest rate in the calculation of the present value of accrued benefits in accordance with Florida

Statues Chapter 2011-216.


The interest rate assumption was lowered from 8.00% to 7.90%. The interest rate assumption of 7.90%

will be first reflected in the development of the actuarial value of assets as of October 1, 2013.










ASSUMPTION AND METHOD CHANGES TABLE IXb




The mortality assumptions used by the Florida Retirement System were adopted as required by HB 1309.

The updated assumptions are as follows:

Pre-Retirement Mortality

Female: RP2000 Generational, 100% Combined Healthy White Collar, Scale BB

Male: RP2000 Generational, 50% Combined Healthy White Collar / 50% Combined Healthy Blue

Collar, Scale BB

Post-Retirement Healthy Mortality

Female: RP2000 Generational, 100% Annuitant White Collar, Scale BB

Male: RP2000 Generational, 50% Annuitant White Collar / 50% Annuitant Blue Collar, Scale BB

Post-Retirement Disabled Mortality

Female: RP2000, 100% Disabled Female set forward two years, no projection scale

Male: RP2000, 100% Disabled Male setback four years, no projection scale

The actuarial value of asset method was updated to reflect differences in the projected market value and

the actual market value rather than differences in the projected actuarial value versus the actual market

value.

PLAN PROVISIONS TABLE Xa



1. Plan Effective Date

The original plan effective date is July 1, 2001.

2. Membership

An administrative staff employee of the City of Miami GESE Retirement Trust becomes a member upon

employment unless he/she is a member of any other pension or retirement system supported wholly or in

part by the City. An employee ceases to be a member if (i) he/she is absent from service for more than

three years of any five consecutive year period, (ii) he/she withdraws his/her contributions, (iii) he/she

becomes a member of any other City-sponsored retirement Plan or (iv) he/she becomes a beneficiary or

dies.

3. Membership Service

Service as an employee for which contributions were made.

4. Creditable Service

Sum of Membership Service, Prior Service, and Military Service.

5. Compensation

Employee’s base salary, including pick-up contributions. Compensation for pension purposes does not

include the cash payment at retirement for accumulated unused leaves, such as, vacation and sick leave.

6. Member Contributions

10% of compensation.

7. Average Final Compensation

Average annual compensation during highest two years of membership service.

8. Basic Retirement Benefit

3% of Average Final Compensation multiplied by Creditable Service. In addition the benefit is increased

by 5% at retirement.




(CONTINUED)

9. Normal Retirement

Eligibility

10 years of continuous Creditable Service.

Benefit Amount

The basic retirement benefit.

Forms of Payment

Normal Forms of Payment

Option 6(a): Lump sum payment of member’s accumulated contributions plus a

monthly service retirement benefit equal to 50% of the amount to which he would

have been otherwise entitled;

Option 6(b): Monthly service retirement benefit for member’s lifetime equal to 105%

of the amount to which he would have been otherwise entitled;

Option 6(c): Monthly service retirement benefit for member’s lifetime equal to the

amount to which he was entitled, provided that, upon his death, 40% of that

amount would continue to be paid to his surviving spouse for the lifetime of such

spouse.

Actuarially Reduced Forms of Payment

Option 2 – Equal Payment Survivor Annuity: Reduced joint and 100% survivor annuity;

Option 3 – One-Half Payment Survivor Annuity: Reduced joint and 50% survivor annuity

10. Minimum Retired Death Benefit

A retired member who dies prior to having received 12 monthly retirement payments and prior to

having an optional allowance becoming effective will have a lump sum equal to the excess, if

any, of 12 times the monthly payments over the actual payments received paid to his designated

beneficiary.




(CONTINUED)

11. Return of Contributions

A member who terminates employment and is not eligible for any other benefit shall receive a

refund of his accumulated contributions. If a member dies in active service, his beneficiary shall

receive a refund of his accumulated contributions except as otherwise noted in this section.

12. Deferred retirement option program ("DROP"):

Any employee who has 10 or more years of service is eligible to participate in the DROP. Upon

election of participation, a member's creditable service, accrued benefits, and compensation

calculation are frozen and the DROP payment is based on the member's average final compensation.

The member's contribution and the City contribution to the retirement plan for that member ceases as

no further service credit is earned. The member does not acquire additional pension credit for the

purposes of the pension plan but may continue City employment for up to a maximum of 48 months.

Once the maximum participation has been achieved, the participant must terminate employment.

Upon termination of employment, a participant may receive payment from the DROP account in a

lump sum distribution; or periodic payments. A participant may elect to rollover the balance to another

qualified retirement plan, individual retirement account, an Internal Revenue Code Section 457 Plan,

or an annuity. A participant may defer payment until the latest date authorized by Section 401(a)(9)

of the Internal Revenue Code. DROP participation will not affect any other death or disability benefit

provided under law or applicable collective bargaining agreement. If a participant dies before the

account balances are paid out in full, the beneficiary will receive the remaining balance.

13. Cost-of-Living Adjustment

Effective October 1, 2016, the annual cost-of-living benefit will be 4% of the total benefit with minimum

increases of $54 per year and maximum increases of $400 per year deferred five years from date of retirement

or DROP entry date.

PLAN AMENDMENTS TABLE Xb



1. Miami GESE Retirement Trust Staff Pension Plan implemented a Deferred Retirement Option

Plan (DROP) for any employees having 10 or more years of service, which was approved by the

Board of Trustees at its meeting on March 26, 2010.

2. Miami GESE Retirement Trust Staff Pension Plan approved a cost of living adjustment effective

October 1, 2016 equal to 4% of the total benefit with minimum increases of $54 per year and

maximum increases of $400 per year deferred five years from date of retirement or DROP entry date.

Documents

Actuarial Valuation Report as of - gese.org