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Fire Actuarial Valuation Report 2005ⅥLLAGE OF OAK BR00K OAK BR00K FIREFIGHTERS PENS10N FUND Actuarial Valuation Report For the Year Beginning January 1, 2005 And Ending December 31, 2005 Timothy W. Sharpe, Actuary, Genevo, IL (630) 262-0600 TABLE OF CONTENTS Introduction Summary of Results Actuarial Valuation of Assets Asset Changes During Prior Year Normal Cost Accrued Liability Tax Levy Requirement Summary of Plan Participants Duration Projected Pension Payments Summary of Plan Provisions Actuarial Methods Actuarial Assumptions GASB Statements No. 25 &27 Disclosure Paee J 4 6 7 8 9 l0 11 t2 t2 13 t4 15 t6 INTRODUCTION Fire-sworn personnel of the Village of Oak Brook are covered by the Firefighters Pension Plan that is a defined-benefit, single-employer pension plan. The purpose of this report is to disclose the Tax Levy Requirement and GASB Statements No. 25 &,27 financial information and related actuarial information for the year beginning January 1,2005, and ending December 31, 2005. The valuation results reported herein are based on plan provisions in effect as of January 1,2005, the employee data furnished by the Village, the financial data provided by the Fund's trustee and - the actuarial methods and assumptions described later in this report. I hereby certifr that this report is complete and accurate and fairly presents the actuarial position of the Fund as of December 31,2004, in accordance with generally accepted actuarial principles and procedures.- In my opinion, the assumptions used are reasonably related to the experience of the Plan and to _ reasonable expectations. Respecti11ly subllnitted, ´に ∠ _ Timothy Wo Sharpe,EA,MAAA Enrolled Actuary No.05…4384 ャ/7を -3- SUMMARY OF RESULTS There were no changes with respect to Plan Provisions, Actuarial Methods, or Actuarial Assumptions from the prior year. There were no unexpected changes with respect to the participants included in this actuarial valuation (3 new members, 0 terminations, 0 retirements, 2 incidents of disability, annual payroll increase 6.6yo, average salary increase 6.10/o). There were no unexpected changes with respect to the Fund's investments from the prior year (annual investment return 8.29%). - The Village's Tax Levy Requirement has increased from $470,219last year to $492,598 this year (4.8%). The increase in the Tax Levy is due to the increase in salaries. The Percent Funded has decreased from 81 .3o/olastyear to 80.4% this year. -4- SUMMARY OF RESULTS (Continued) Tax Levy Requirement Tax Levy as a Percentage of Payroll Village Normal Cost Anticipated Employee Contributions Accrued Liability Actuarial Value of Assets Unfunded Accrued Liability(Surplus) Amortization of Unfunded Accrued Liability(Surplus) Percent Funded Annual Payroll For Year Ending December 31 2005 492,598 $ 21.430/0 as of January l 2005 272,616 206,492 24,131,120 19,395,277 4,735,843 219,982 2004 470,219 21.80% 2004 281,168 173,262 22,439,963 18,254,770 4,185,193 189,051 80.4% 2,298,601 81.3% 2,156,811 TAX LEVY REQU:REMENT I 2oo5 D zool as of December 31 ‐5- ACTUARIAL VALUATION OF ASSETS Cash and Equivalents Certificates of Deposit Government Securities Insurance Contracts Mutual Funds Interest Receivable Miscellaneous Receivable/(Payable) Actuarial Value of Assets as of January l 2005 547,746 $09,430,0950 9,331,550 87,940 (2.054) 19_395_277 2004 440,023 200,000 8,391,922 609,898 8,514,347 109,934 (11.354) 18.254.770 SUMMARY OF ASSETS As OfJanuary l,2005 4830/●ン ´~~~~~~~｀__ 28% //´%4880/O I Castr and EguivalenG ! Government Securities E Mutual Funds -6- ASSET CHANGES DURING PRIOR YEAR Trust Balance as of January 1,2004 Contributions Village Employee Total Payments Benefit Payments Expenses Total lnvestment lncome Trust Balance as of January 1,2005 Approximate Annual Rate of Retum 325 320 2315 =310 35 30 ASSET CHANGES DUR:NG PR:OR YEAR 490,612 200.477 986,709 63.129 ! Trust Balance es of January l, 2004 I contrlbutions ! eayments n lnvestment lncome I Trust Balance as of January 1, 2005 18,254,771 691,089 1,049,838 1.499.255 $ 19.395.277 -7- LL NORMALCOST L 螺柵蹴麗濫 冨蹴熙紺 朧盤霜llml蹴 鴛:ml認r assmptiolls employed h the valuation.Las of January lL 型 型 Total Normal Cost $ 479,108 $ 454,430 Anticipated Employee Contributions 206.492 ~ Village Nollllal COSt ~ Nol.1.al COSt Payroll 、 Village Normal Cost Rate _ Total No.1.lal COSt Rate 272.616 173、262 281.168 $ 2,298,601 $ 2,156,811 NORMAL COST As Of January l,2005 5690/o 11.86% 20。84% I Anticipated Employee Contributions I vitlage Nomal cost 13.04% 21.07% -8- ACCRUED LIABILITY The Accrued Liability is the actuarial present value of the portion of the projected benefits that has been accrued as of the valuation date based upon the actuarial valuation method and actuarial assumptions employed in the valuation. The Unfunded Accrued Liability is the excess of the Accrued Liability over the Actuarial Value of Assets. as of January l 2004 $ 10,505,145 Accrued Liability Active Employees Children Annuities Disability Annuities Retirement Annuities Surviving Spouse Annuities Terminated Vested Annuities Total Annuities Total Accrued Liability Actuarial Value of Assets Unfunded Accrued Liability(Surplus) Percent Funded 2005 $ 10,870,398 9,599 6,247,951 7,003,17200 13,260,722 24,131,120 19.395.277 9,903 4,933,751 6,991,16400 11,934,818 22,439,963 18.2543770 4_185_193 81.3% ACCRUED L:AB!L:TY As Of January l,2005 4_735_843 80。4% ! totat lccrued Liabillty ! Actuariat value ofAssets ! UntunOea lccrued Liabillty/(Surplus) -9- _ TAX LEVY REQUIREMENT The Tax Levy Requirernentis detel.1.ined as the armual contribution necessary to ttmd the ― nomal cost,plus the alnount to alnortize the―ded accrued liability as a level percenね ge of payroll over a fo吻 (40)ycar peHOd which commenced in 1993. ~ For Year Ending December 31 2005 2004 Village No....al COSt as ofBegiming ofYear $ 272,616 $ 281,168 Amortization ofUnhnded 219.982 189.051 Accrued Liability/KSurplus) Tax Levy Requirement as ofEnd ofYear 492.598 470.219 Amual Payroll $ 2,298,601 $ 2,156,811 Tax Levy Requirement > as a Percentage ofPayroll 21.43% TAX LEVY REQU:REMENT For Fisca:Vear Ending December 31,2005 21.80% I Mllage ilorma! co3t I lmortzaton of UAU{S} -10… ― SUMMARY OF PLAN PARTICIPANTS The actuarial valuation ofthe Plan is based upon the employee data n田 肛通shed by the Village. ― The infollllation provided for Active participants included: Name~ Sex Date ofBirth Date ofHire~ Compensation Employee Cont五 butions ~ The info.11lation provided for lnactive participants included: Nalne Sex Date ofBirth _ Date ofPension Comencernent Monthly Pension Beneflt Folll1 0fPayment Membership 2005 2005 2004 2004 Cllrrent Employees Vested 19 20 Nonvested 里 12~ Total 五 2 - Inactive Participants Amual Beneflts Amual Beneflts Children 7 $ 1,680 6 $ 1,440 _ E)isabled Employees 14 463,642 12 371,245 Retired Employees 13 574,072 13 558,498 _ llrviving Spouses 0 0 0 0 Te.11linated Vesteds Ω Ω Ω Ω To協 1 望 1.039.394 里 931.183 Amual Payroll S 2,298,601 $ 2,156,811 SUMMARY OF PLAN PARTICIPANTS(Continued) Age and SeⅣice Dist五 bution O-4 5-9 10…14 15-19 20-24SeⅣlce Age 25-29 30‐34 35‐39 40‐44 45-49 50‐54 55-59 Total Salary1432311 2 ■ 6 52,907 62,961 68,684 量 生 全 二 78,039 69,450 78,185 25-29 30+Total Salary 3 60,993 4 51,990 7 60,661 4 66,208 4 81,330 7 73,727 4 65,533 二 66.1804 Average Age: 43.1 Average Service: 14.4 DURATION(yearS)Act市 c Member∬ 14.3 Retired Members: 9。4 All Memberま 11.6 PROJECTED PENSION PAYMENTS 2005 $1,540,426 2006 $1,542,496 2007 $1,602,365 2008 $1,612,724 2009 $1,623,604 PROJECTED PENS!ON PAYMENTS 2005‐2009 I zoosI zoosI zwt E 2oo8 I zoog -12- - SUMMARY OF PLAN PROVISIONS The Plan Provisions have been changed from the prior year increasing the surviving spouse - benefit and increasing the Employees contribution rate. The Village of Oak Brook Firefighters Pension Fund was created and is administered as prescribed by "Article 4. Firefighters'Pension Fund - Municipalities 500,000 and Under" of the Illinois Pension Code (Illinois Compiled Statutes, 1992, Chapter 40). A brief summary of the _ plan provisions is provided below. Employees attaining the age of (50) or more with (20) or more years of creditable service are entitled to receive an annual retirement benefit of one-half of the salary attached to the rank heldL on the last day of service. The pension shall be increasedby (lll2) of (2.5%) of such monthly salary for each additional month of service over (20) years up to (30) years, to a maximum of > (75%) of such monthly salary. Employees with at least (10) years but less than (20) years of credited service may retire at or > after age (60) and receive a reduced benefit ranging from (15%) of final salary for (10) years of service to (45.6%) for 19 years of service. Surviving spouses receive (100%) of final salary for fatalities resulting from an act of duty, or otherwise the greater of $a%) of final salary or the monthly retirement pension that the deceased firefighter was receiving at the time of death. Surviving children receive (12%) of final b salary. The maximum family survivor benefit is (75%) of final salary. _ Employees disabled in the line of duty receive (65%) of final salary. The monthly pension of a covered employee who retired with (20) or more years of service after January l,1977, shall be increased annually, following the first anniversary date of retirement - and be paid upon reaching the age of at least (55) years, by (3%) of the artount of the pension payable at the time of the increase. b Employees are required to contribute (9.455o/o) of their base salary to the Firefighters'Pension Plan. If an employee leaves covered employment with less than twenty (20) years of service, b accumulated employee contributions may be refunded without accumulated interest. -13- -14‐ ACTUARIAL METHODS The Actuarial Methods used for determining the Tax Levy and GASB Statements No.25 &27 financial disclosure have not been changed from the prior year. The Actuarial Method employed for this valuation is as follows: Entrv Ase Normal Cost Method Under the Entry Age Normal Cost Method the Normal Cost for each participant is computed as the level percentage of pay which, if paid from the earliest age the participant is eligible to enter the plan until retirement or termination, will accumulate with interest to sufftciently fund all benefits under the plan. The Normal Cost for the plan is determined as the greater of a) the sum of the Normal Costs for all active participants, and b) 17.5% of the total payroll of all active participants. The Accrued Liability is the theoretical amount that would have accumulated had annual contributions equal to the Normal Cost been paid. The Unfunded Accrued Liability is the excess of the Accrued Liability over the plan's assets. Experience gains or losses adjust the Unfunded Accrued Liability. ― ACTUARIAL ASSUMPTIONS The Actuarial Ass画 叩tiOns used for detellllining the Tax Levy Requirement and GASB ― Statements No.25∂こ27 1Disclosllre lnfol.1.ation are the salne and have not been changed ilom the pHor year. The Actuanal Asstlmptions employed for this valuation are as fbllows: ~ Valuation Date January l,2005 - Asset Valuation Method Market Value _ Invesunent Rem 7.50% _ Salary Scale 5.25% Mortality 1984 Unisex Pensioners Mortalitv Table Withdrawal Graduated Rates Disability Graduated Rates Retirement Graduated Rates(100%by Age 69) Marital Status 850/O Married,Spouse Sarne Age Plan Expenses None Sample Amual Rates Per 100 Participants 量 MOrtalitv Withdrawal Disabilitv Retirement 20 0.13 3。97 0.02 30 0。11 1.46 0.25 40 0。21 0.42 0.65 50 0.56 60 1.43 69 3.21 1.66 19。18 27.77 100.00 -15- _ GASB STATEMENTS NO。25&27 DISCLOSURE INFORMATION The Govemental Accolnting Standards Board(GASB)isSued statements No。25&27 that ― established generally accepted accounting principles fbr the annual flnancial statements fbr deflned beneflt pension plans. The required infollllation is as follows: ― Membership in the plan consisted ofthe fbllowing as o全 Dcccmber 31.2004 Decembcr 31.2003 Retirees and beneflciaries 34 31 receiving beneflts ― Tellllinated plan rnembers entitled 0 0 to but not yet receiving beneflts _ Active vested plan inembers 19 20 Active nonvcsted plan lnembers 14 12 Total 璽 曇 Nllmber ofparticipating employers l l ― SCHEDULE OF FUNDING PROGttSS UAAL asa~ Actuanal Actuarial Accrued Untted Percentage Actuarlal Value of Liability(AAL) AAL Fllnded Covered ofCovered Valuation Assets ―Entry Age oAAL) Ratio Payroll Payroll~ Date 0 0 (b‐a) (a/b) 0 ((b‐a)/C) 12/31/02 16,240,617 20,878,039 4,637,422 77.80/0 2,222,646 208。6% - 12/31/03 18,254,770 22,439,963 4,185,193 81.30/0 2,156,811 194.0% 12/31/04 19,395,277 24,131,120 4,735,843 80。40/0 2,298,601 206.0% -16- -17- GASB STATEMENTS NO.25&27 DISCLOSURE INFORNIATION(Continued) ANNUAL PENSION COST AND NET PENSION OBLIGATION Annual required contribution Interest on net pension obligation Adjustment to annual required contribution Annual pension cost Contributions made lncrease (decrease) in net pension obligation Net pension obligation beginning of year Net pension obligation end of year THREE―YEAR TREND INFORNIIATION December 31.2004 490,61200 490,612 490.61200 Ω December 31.2003 481,88700 481,887 481、88700 -Q Fiscal Year Ending 12/31/02 12/31/03 12/31/04 Amual Penslon Cost(APC) 417,022 481,887 490,612 Percentage ofAPC Cont五 buted 100.0% 100.0% 100.0% Net Pension Obligation 0 0 0 GASB STATEMENTS NO。25&27 DISCLOSURE INFORMATION(Continued) FUNDING POLICY AND ANNUAL PENSION COST Contribution rates: Village Plan members Annual pension cost Contributions made Actuarial valuation date Actuarial cost method Amortization period Remaining amortization period Asset valuation method Actuarial assumptions : Investment rate of refum* Projected salary increases* *Includes inflation at Cost-of-living adj ustments 21.344% 9.4550/0 490,612 490,612 12/31/2004 Entry age Level percentage ofpay,closed 29 years Market 7.50% 5。25% 3.00% 3.00%per year 22.343% 8.455% 481,887 481,887 12/31/2003 Salne Same 30 years Salrne Salne Salne Salne Salne -18-