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Fire Actuarial Valuation Report 2011ⅥLLAGE OF OAK BR00K OAK BR00K FIREFIGHTERS PENSION FUND Actuarial Valuation Report For the Year Beginning January l, 20ll And Ending December 3l,20ll η “ ο′わ′″Sttα ろρθ,И ε″α4乃 G`″θソα,I乙 “ 3の 262-θ 6θ θ TABLE OF CONTENTS Introduction Summary of Results Actuarial Valuation of Assets Asset Changes During Prior Year Normal Cost Accrued Liability Tax Lely 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 - 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 1,2011, and ending December 31,2011. The valuation results reported herein are based on plan provisions in effect as of January I,2011, 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 certit/ that this report is complete and accurate and fairly presents the actuarial position of the Fund as of December 31,2010, 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. Respectfully submitted, L Timothy W. Sharpe, EA, MAAA Enrolled Actuary No. 08-4384 tヱ んで/Date -3- SUMMARY OF RESULTS The provisions of Public Act 096-1495 are reflected in this actuarial report, including changes to > benefit provisions (page 13), the actuarial methods (page 14), and the amortization period and method (page 10). There was a change with respect to Actuarial Assumptions from the prior year to reflect revised expectations with respect to future interest rates and salary increases. The interest rate assumption has been decreased to 6.75Yo from 7.00%, and the salary increase assumption has been reducedto 3.75Yo from 4.00%o. There were no unexpected changes with respect to the participants included in this actuarial - valuation (1 new member, 1 termination, 3 retirements, 0 incidents of disability, annual payroll increase 3.7o , average salary increase 7.5%). There were no unexpected changes with respect to the Fund's investments from the prior year (annual investment retum 12.49%). The Village's Tax Levy Requirement has decreased from $1,009,401 last year to $858,380 this year (l5.|Yo). The decrease in the Tax Lely is due to many of the changes referenced above and > also due to the investment return was greater than assumed. The Percent Funded has decreased slightly from 63.3Yo last year to 62.40/o 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 Decernber 31 2011 858,380 $ 32.17% as of January l 2011 376,419 252,318 35,703,633 22,275,797 13,427,836 481,961 2010 1,009,401 39.22% 2010 327,721 233,983 32,813,804 20,779,262 12,034,542 681,680 62.4% 2,668,624 63.30/0 2,573,691 TAX LEVY REQUiREMENT as of December 31 I zot'r E zoto -5- Sl,200 Sl,000 3800 3600 3400 S200 30 _ ACTUARIAL VALUATION OF ASSETS as of … January l 2011 2010 - Cash and Money lИ arkets S 435,263 $ 688,889 _ Certiflcates ofDeposit 103,279 103,902 Goverlment Securities ll,157,921 10,162,201 Mutual Funds 10,475,968 9,728,939 1nterest Receivable 107,344 100,857 Miscellaneous Rece市 able/(Payable) (3.977) (5、526) Actuarial Value ofAssets S 22.275^797 $ 20_779_262 SuMMARY OF ASSETS As Of January l,2011 ″ンフでΨ::鰊 T絆 I Government Securities I Mutual Funds -6- 503% ASSET CHANGES DURING PRIOR YEAR Trust Balance as ofJanuary l,2010 Contributions Villagc Employec Total Payments Beneflt Payments Expcnses Total lnvestrnent lncome Tnlst Balance as ofJanuary l,2011 Approxilnate Annual Rate ofRetum S25 320 2S15 =310 35 30 933,925 286.282 1,845,870 32.318 ASSET CHANGES DURING PR:OR YEAR 20,779,262 1,220,207 1,878,188 2.154.516 22_275_797 10.54% ! Truet Balance as of January l, 2OlO I Contributions ! Payments E lnvertment lncome ! Trust Balance aE ofJanuary 1,2011 ‐7‐ _ NOWALCOST The No.11.al COSt is the actuarial present value ofthe portion ofthe pr●ected beneits that are ― expected to accrue during the year based upon the actuanal valuation rncthod and actuanal assumptions employed in the valuation. ~ as of January l 2011 2010 Total Nolll■al COSt $ 628,737 $ 561,704 Anticipated Employee Contributions 252.318 233.983 Village Normal Cost - Normal Cost Payroll b Village Normal Cost Rate ? Total Normal Cost Rate 376.419 327_721 $ 2,668,624 $ 2,573,691 12.73% 21.82% NORMAL COST As Of January l,2011 599% 14.H% 23.56% I Anticipated Employoe contributiong ! vittage Normal cost -8- 401% 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 I 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 2011 12,902,142 17,039 7,951,084 14,578,155 255,2130 22,801,491 35,703,633 22.275。797 13_427_836 62.4% ! fotat Accrued Liability ! Actuarial valuo of Asset3 ! Unfunded Accrued Liability/(Surplus) 2010 10,421,407 19,864 8,057,201 14,315,33200 22,392,397 32,813,804 20.779.262 12_034_542 63.30/0 ACCRUED L:AB:L:TY As Of January l,2011 340 S30 320 S10 30 -9- 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 excess (if any) of ninety percent (90%) of the accrued liability over the actuarial value of assets as a level percentage of payroll over a thirty (30) year period which commenced in 201 l. Prior to 201l, the amortization amount was equal to 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 31 2011 376,419 $ 481、961 2010 327,721 681.680 1_009_401 2,573,691 39。22% Village Normal Cost as of Beginning of Year $ Amortization of Unfunded Accrued Liability(Surplus) Tax Levy Requirement as of End of Year Annual Payroll Tax Levy Requirement as a Percentage ofPayroll 858_380 2,668,624 32.17% TAX LEW REQU:REMENT For Fiscai Year Ending December 31,2011 5610/O ! vittage Normal Cost I Amortization of UAU(S) -10- _ SUMMARY OF PLAN PARTICIPANTS The actllarlal valuation ofthe Plan is based upon the employee data fumished by the Village. ― The info.11lation provided for Active participants included: Nalne~ Sex Date ofBirth Date ofHire~ Compensation Employee Contributions ~ The infollllation provided for lnactive participants included: Narne Sex Date ofBirth _ Date ofPension Commencement Monthly Pension Beneflt Fo.111 0fPayment Membership 20H 20H 2010 2010 Cllrrent Employees Vested 20 15 Nonvested 12 17 Total 12 12 ~ Inactive Participants Allnual Beneflts Arlnual Beneflts Children 12 $ 3,048 13 $ 3,310 - E)isabled Employees 15 594,872 16 619,847 Retired Employees 20 1,198,347 20 1,166,227 _ Surviving Spouses 1 34,161 0 0 Tellllinated Vesteds O Ω Ω Ω Totd 墾 1_830_428 里 1_789_384 Amual Payron $ 2,668,624 $ 2,573,691 SUMMARY OF PLAN PARTICIPANTS(Continued) Age and Sewice Dist五 bution O-4 5…9 10-14 15-19 20-24 25-29 30+Total SalarySeⅣlce Age 20…24 25-29 30‐34 35-39 40-44 45‐49 50…54 55-59 60+ Total Salary 2011 $2,224,450 2012 $2,283,754 2014 $2,333,779 2 65,372 6 75,733 7 75,152 6 86,531 3 79,991 4 110,169 4 89,396 ■2 83ヽ 394 2015 $2,374,477221123123113211重 重 二 二 21旦 66,945 72,897 83,096 95,074 86,114 143,783 88,789 Average Age: 41.6 Average Service: 12.6 DURATION(yearS) Act市 c Members: 16.6 Retired Members: 8。9 All Members: 11.8 PROJECTED PENSION PAYMENTS PROJECTED PENS:ON PAYMENTS S2,500 S2,000 程Sl,500 運 31,000 3500 30 2013 $2,333,978 lzottI zorzI zolr E zotrI zors 2011‐2015 ‐12- SUMMARY OF PLAN PROVISIONS The Village of Oak Brook Firefighters Pension Fund was created and is administered as prescribed by "Article 4. Firefighters'Pension Fund - Municipalities 500,000 and Under" of the Illinois Pension Code (Illinois Compiled Statutes, Chapter 40). A brief summary of the plan provisions is provided below. Employees attaining the age of (50) or more with (20) or more years of creditable service are entitled to receive an annual retirement benefit of one-half of the salary attached to the rank held onthelastdayofservice. Thepensionshallbeincreasedby(lll2)ot(2.5%)ofsuchmonthly salary for each additional month of service over (20) years up to (30) years, to a maximum of (75%) of such monthly salary. Employees with at least (10) years but less than (20) years of credited service may retire at or after age (60) and receive a reduced benefit ranging from (15%) of final salary for (10) years of service to (45.6%) for 19 years of service. Surviving spouses receive (100%) of final salary for fatalities resulting from an act of duty, or otherwise the greater of (54%) of final salary or the monthly retirement pension that the deceased firefighter was receiving at the time of death. Surviving children receive (12%) of final salary. The maximum family survivor benefit is (75%) of final salary. Employees disabled in the line of duty receive (65%) of final salary. The monthly pension of a covered employee who retired with (20) or more years of service after January l,lg77, shall be increased annually, following the first anniversary date of retirement and be paid upon reaching the age of at least (55) years, by (3%) of the amount of the pension payable at the time of the increase. Employees are required to contrib$e (9.455Yo) 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. For Employees hired after January 1,2011, the annual retirement benefit is (2.5%) of final average salary for each year of service up to (30) yeirs, to a maximum of (7 5o/o) of such salary, the Normal Retirement age is attainment of age 55 and completion of 10 years of service; Early Retirement age is attainment of age 50, completion of 10 years of service and the Early Retirement Factor is 6%oper year; the Employee's Accrued Benefit is based on the Employee's final 8-year average salary not to exceed $106,800 (as indexed); Cost-of-living adjustments are simple increases (not compounded) of the lesser of 3o/o or 50Yo of CPI beginning the later of the annir...ury date and age 60 Surviving Spouse's Benefits are 66 2l3o/o of the Employee's benefit at the time of death. -1 3- ACTUARIAL METHODS The Actuarial Methods employed for this valuation is as follows: Projected Unit Credit Cost Method (for years beginning on or after 2011) Under the Projected Unit Credit Cost Method, the Normal Cost is the present value of the projected benefit (including projected salary increases) eamed during the year. The Accrued Liability is the present value of the projected benefit (including projected salary increases) earned as of the actuarial valuation date. 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. Entry Age Normal Cost Method (for years beginning prior to 2011) 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) 175% 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 deterlnining thc Tax Levy Requirernent and GASB ― Statemcnts No。25&27 Disclosure lnfolll.ation are the salne and have been changed froln the prior year(diSCussion at page 4).The Actuarial Assllmptions employed for this valuation are as follows: Valuation Date January l,2011 Asset Valuation Nlethod ⅣIarket Value lnvestinent Retum 6.75% ~ Salary Scale 3.75% ~ Mortality 1984 Unisex Pensioners Mo■ality Table ― Withdrawal C}raduated Rates _ Disability Graduated Rates Retirement Graduated Rates(100°/Oby Age 62) ヽ4arital Status 85%ヽ 4arried,Spouse Salne Age Plan Expenses None SaFnDle Amual Ratcs Per 100 Participants Att MO■alitv 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 20.00 ヽ 60 1.43 83.33 62 1.70 100.00 _ -15- _ GASB STATEMENTS NO。25&27 DISCLOSURE INFORMATION The Goverlmental Accolmting Standards Board(GASB)isSued statements No。25&27 that _ established generally accepted accounting p五 nciples for the annual flnancial statements for deflned beneflt pension plans. The required infol...ation is as fbllows: ― NIlembership in the plan consisted ofthe fonowing as o食 December 31.2010 December 31.2009 Retirees and beneflciaries 48 49 receiving beneflts ― Tel.1.inated plan inembers entitled 0 0 to but not yet receiving beneflts Active vested plan lnembers 20 15 Active nonvested plan inembers 12 17 Totd 塁 塁 Nllmber ofparticipating employers l l SCHEDULE OF FUNDING PROGuSS UAAL asa … Actuarial Actuarial Accrued Uninded PerCentage Actuarial Value of Liability(AAL) AAL Funded Covered of Covered Valuation Assets ―Entry Age (UAAL) Ratio Payroll PayToll~ Date 0 0 (b―a) fa/b) 壼) ((b―ayc) 12/31/08 19,118,652 31,239,022 12,120,370 61.20/0 2,804,818 432.10/0 - 12/31/09 20,779,262 32,813,804 12,034,542 63.30/0 2,573,691 467.6% 12/31/10 22,275,797 36,057,657 13,781,860 61.80/0 2,668,624 516.4% -16- GASB STATEMENTS NO.25&27 DISCLOSUM INFORMATION(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 THuE‐YEAR TREND INFORNIIATION December 31.2010 933,92500 933,925 933.92500 ‐QDecember 31.2009 839,55000 839,550 839、55000 Ω -17- Fiscal Ycar Ending 12/31/08 12/31/09 12/31/10 Amual Penslon Cost(APC) 671,683 839,550 933,925 Percentage of APC Contributed 100.0% 100.0% 100.0% Net Pension Obligation 0 0 0 GASB STATEMENTS NO.25&27 DISCLOSURE INFORNIATION(Continued) FIINDING 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 return* Projected salary increases* *Includes inflation at Cost-of-living adj ustments 34.997% 9.455% 933,925 933,925 12/31/2010 Entry age Level percentage ofpay,closed 30 years Market 6。75% 3.75% 3.00% 3.00%per year 32.620% Salne 839,550 839,550 12/31/2009 Salne Sallne 24 years Salne 7.00% 4.00% Sallne Sarne -18-