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Fire Actuarial Valuation Report 2008VILLAGE OF OAK BR00K OAK BR00K FIREFIGHTERS PENS10N FUND Actuarial Valuation Report For the Year Beginning January 1, 2008 And Ending December 31, 2008 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 _ INTRODUCTION Fire-sworn personnel of the Village of Oak Brook are covered by the Firefighters Pension Plan L 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, 2008, and ending December 3 1, 2008. The valuation results reported herein are based on plan provisions in effect as of January 1, 2008, 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 certiff that this report is complete and accurate and fairly presents the actuarial position of the Fund as of December 31,2007, in accordance with generally accepted actuarial principles and procedures. E In my opinion, the assumptions used are reasonably related to the experience of the Plan and to reasonable expectations. Respectfully subnlitted, ~ 乏壬/^ ‐ Im掘 胤t湖 鷺‰χ計 ‐ 7ろ ィッ -3- Date - 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 (2 new members, 0 terminations, 2 retirements, 1 incident of disability, annual payroll increase 0.7yo, average salary increase 6.4%). There were no unexpected changes with respect to the Fund's investments from the prior year (annual investment return 6.85%). > The Village's Tax Levy Requirement has increased from $584,629 last year to $648,186 this year (10.9%). The increase in the Tax Lery is due to the increase in salaries, the incident of disability and the two retirements. The Percent Funded has decreased from 78.8% last year to 77 .60/o this year. -4- SUMMARY OF RESULTS(Continucd) 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 Dccember 31 2008 648,186 $ 25.10% as of January l 2008 329,175 231,957 28,968,184 22,473,402 6,494,782 319,011 2007 584,629 22.81% 2007 305,357 230,249 27,373,120 21,567,521 5,805,599 279,272 TAX LEVY REQU:REMENT as of December 31 77.6% 2,582,069 $ I 2oo8 E zooz 78.8% 2,563,057 -5- ACTUARIAL VALUATION OF ASSETS as of _ January l 2008 2007 Cash and Equivalcnts $ 1,378,426 $ 834,882 Goverlment Securities ll,970,696 10,834,098 Mutual Funds 9,032,721 9,806,769 1nterest Receivable 100,927 97,738 Miscellaneous Recc市 able/(Payable) (9・ 368) (5.966) Actuarial Valuc of Assets $ 22_473.402 $ 21_567.521 SUMMARY OF ASSETS As OfJanuary l,2008 404% ― [lililiililll162% :i∥l爺 ∫::螺 ∥:S 535% -6- ASSET CHANGES DURING PRIOR YEAR Tmst Balance as ofJanuary l,2007 Contributions Village Employee Total Payments Beneflt Payments Expenses Total lnvestment lncome Trust Balance as ofJanuary l,2008 Approximate Arllllual Rate ofRetum 564,945 244.954 1,299,288 63,742 ASSET CHANGES DUR:NG PR10R YEAR 21,567,522 809,899 1,363,030 1.459.011 22_473.402 6.85% I Tru3t Bal.nce aB of January 1, 2007 I contributlons ! Payments E lnvestnent lncome I Tru3t Balance a. of January l, 2008 -7- The Normal Cost is the actuarial present value of the portion of the projected benefits that are s expected to accrue during the year based upon the actuarial valuation method and actuarial assumptions employed in the valuation. as of January I 2008 2007 Total Nollllal COSt S 561,132 $ 535,606 ~ Anticipated Employee Contributions 231.957 230.249 - Village NoHnal Cost 329_175 305.357 _ Nollllal COSt Payroll $ 2,582,069 $ 2,563,057 _ Village Nollllal COSt Rate 12.75% 11.91% Total Nollllal COSt Rate 21.73% 20.90% ヽ NORMAL COST As Of January l,2008 587% 413% I Anticipated Employee Contribution3 ! vittage Normal cost -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 2007 $ 11,601,687 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 Untunded Accrued Liability(Surplus) Percent Funded 2008 $ 10,893,933 22,899 7,712,208 9,438,4640 900.680 18,074,251 28,968,184 22.473.402 6_494_782 77.60/0 ! totat Accrued Liability ! Actuarial Value of Assets ! Unfunded Accrued Llability/(Surplue) 14,034 7,004,860 7,660,3200 1.092.219 15,771,433 27,373,120 219567.521 5_805_599 78.8% ヽ ACCRUED L:AB:LITY As Of January l,2008 -9‐ ヽ 25.10% TAX LEVY REQU:REMENT For Fiscal Year Ending December 31,2008 TAX LEVY REQUIREMENT The Tax Levy Requirement is determined as the annual contribution necessary to fund the normal cost, plus the amount to amortize the unfunded accrued liability as a level percentage of . payroll over a forty (40) year period which commenced in 1993. For Year Ending December 3l 2008 2007 Village Normal Cost as of Beginning of Year $ 329,175 $ 305,357 b Amortization of Unfunded 319.011 279.272 Accrued Liability/(SurPlus) Tax Levy Req」rcment as of End ofYear 648_186 584.629 ヽ ~ Arlnual Payroll ｀ Tax Levy Requirement as a Percentage ofPayroll ヽ ヽ ‐ ヽ $ 2,582,069 $ 2,563,057 22.81% ! vittage Normal cost I Amortlzetion of UAU(S) -10- SUMMARY OF PLAN PARTICIPANTS The actuarial valuation of the Plan is based upon the employee data furnished by the Village. The information provided for Active participants included: Name Sex Date of Birth Date of Hire Compensation Employee Contributions The information provided for Inactive participants included: Name Sex Date of Birth Date of Pension Commencement Monthly Pension Benefit Form of Payment Membership Current Employees Vested Nonvested Total Inactive Participants Children Disabled Employees Retired Employees Surviving Spouses Terminated Vesteds Total Annual Payroll Annual Bcneflts 14 $ 3,661 16 582,183 16 810,386 0 0 1 55,193 重 1_451.423 $ 2,582,069 2008 2007 2007 Alllllual Bencflts 9 $ 2,460 15 521,646 14 663,708 0 0 1 67.308 里 1_255_122 $ 2,563,057 SUMMARY OF PLAN PARTICIPANTS(Continucd) Age and Service Distribution O-4 5-9 10-14 15-19 20‐24SeⅣlce Age 20-24 25-29 30-34 35-39 40-44 45‐49 50-54 55-59 60+1211Total 墾≧ 二 4 二 Salary 57,850 72,105 71,521 83,434 30+Total Salary 3 60,042 8 66,093 4 58,030 7 74,744 3 93,131 4 83,848 3 91,679 1 99,251 2 塁≧ 74.342 110,432425-29 皇 重 89,185 Average Age: 41。2 Average SeⅣice: 12.5 DURATION(yearS) Act市 e Members: 14。4 Retired Members: 9.3 All Members: 11.2 PROJECTED PENSION PAYMENTS 2008 $1,796,436 2009 $1,846,191 2010 $1,998,840 2011 $2,044,238 I 2oos tr 2ooe! zoro I zott a zorz 2012 $2,097,652 PROJECTED PENSiON PAYMENTS -12- 2008‐20122 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 held on the last day of service. The pension shall be increased by (l/12) 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, orE 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 > 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 I,lgTT,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 amount of the pension payable at the time of the increase. - Employees are required to contribute (9.455%) of their base salary to the Firefighters'Pension plan. if an employee leaves covered employment with less than twenty (20) years of service, accumulated employee contributions may be refunded without accumulated interest. -13‐ 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 sufficiently 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. -14- ACTUARIAL ASSUMPTIONS The Actuarial Assumptions used for dete.11lining the Tax Levy Requirerncnt and GASB Statements No.258ι 27]Disclosure lnfolnation are the sarnc and havc not been changed from the prior year. The Actuarial Assumptions employed for this valuation are as fbllows: _ Valuation Date January l,2008 Asset Valuation Method ⅣIarket Value lnvcstinent Retllm 7.50% Salary Scale 5.25% Mortality 1984 Unisex Pensioners 14ortality Table Withdrawal Graduatcd Rates Disability Graduated Rates Rctirement Graduated Rates(100%by Age 69) NIIarital Status 85%ⅣIarried,Spouse Sarne Age ~ Plan Expenscs Nonc _ Sample Amual Rates Per 100 Participants △璧 MO■ditV 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 1.66 19.18 60 1.43 27.77 - 69 3.21 100・ 00 …15- GASB STATEMENTS NO。25&27 DISCLOSURE INFORNIIATION The Goverlmental Accounting Standards Board(GASB)isSued statements No。25&27 that established generally accepted accounting principles for the annual flnancial statemcnts fbr~ deflned beneflt pension planso The required infoll.lation is as fbllows: _ ヽ4embership in the plan consisted ofthe following as o全 December 31.2007 December 31.2006 ~ Retirees and beneflciaries 46 38 receiving beneflts _ Terlninated plan members entitled l l to but not yet receiving beneflts Active vested plan inembers 16 18~ Act市 e nonvested plan members 互 亜 Tota 型 曇 ― Number ofparticipating employers l l SCHEDULE OF FUNDING PROGuSS UAAL asa … Actuarial Actuarial Accrued Unfunded Percentage Actuarial Value of Liability(AAL) AAL Funded Covered ofCovered Valuation Assets ―Entry Age (UAAL) Ratio Payroll Payroll ― Dtte 0 0 (b―a) (a/b) 0 “ b―a)/C｀ 12/31/05 20,053,194 26,016,602 5,963,408 77.10/0 2,439,899 244.4% _ 12/31/06 21,567,521 27,373,120 5,805,599 78.80/0 2,563,057 226.5% 12/31/07 22,473,402 28,968,184 6,494,782 77.60/0 2,582,069 251.5% -16- -17‐ GASB STATEMENTS NO.25&27 DISCLOSURE INFORNIIATION(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 Increase (decrease) in net pension obligation Net pension obligation beginning of year Net pension obligation end of year THREE―YEAR TREND INFORNIIATION December 31.2007 564,94500 564,945 564.94500 Ω December 31.2006 584,38800 584,388 584.38800 Ω Fiscal Year Ending 12/31/05 12/31/06 12/31/07 Annual Penslon Cost(APC) 490,244 584,388 564,945 Pcrcentage of APC Contributed 100.0% 100.0% 100.0% Net Pension Oblieation 0 0 0 GASB STATEMENTS NO.25&27 DISCLOSURE INFORNIATION(Continued) FUNDING POLICY AND ANINUAL 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 return* Projected salary increases* *Includes inflation at Cost-of-living adjustments 21.880% 9.455% 564,945 564,945 12/31/2007 Entry age Level percentagc ofpay,closed 26 years Market 7.50% 5.25% 3.00% 3.00%per ycar 22.800% Same 584,388 584,388 12/31/2006 Same Same 27 ycars Sallnc Same Same Same Same -18-