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Fire Actuarial Valuation Report 20154303 Pttlc,rca Sお ke,IL 60076‐H57 Phonc(847)674.8700F欲 :1847)674.8118 E‐mali lnet@dSalbergassodtteJtd.com VILLAGE OF OAK BROOK FIREFIGHTERSI PENSiON FUND ACTUARIAL VALUAT10N REPORT FOR THE PER!OD 」ANUARY l,2015to DECEMBER 31,2015 〃 TABLE OF CONTENTS Summary of Repon…………………………………………………………………………………………………………………3-4 Statement of Actuanal opinion……………………………………………………………………………5Assumption and Review Since Prior Actuarial RepOrt… …… … … ……… …………… …… 6 Comparatlve Summary of P雨 ncipal Valualon ResuLs _ … … … … … … …… … 7‐9Prolection of Benent Payments ……………… …… … ………………… … … …… … … 10 Reconc∥ia∥on of Actua∥al Unfunded Accrued Liab∥ity … …… ……… ………… ……… 11 Actuanal Assumptions … … … … … ………… … … … …………… … ………… 12 Actuanal cOst Methods………… ………… …… ……… …………… …… ………… ………………13 ReCOnc∥ialon of Plan AssetS(Market Value) …… … … …… …… … …… … …… 14 Reconc∥iatlon of Actua∥al Assets… …… ………… ……… … …… … … …… … …… 15 Actua∥al Asset Valualon……… ……………… ……………………… ……… …… ………………16 Statistical Data¨ … …… … … … … ……… …… … ……… …… …… … …… … … 17 Age and Service Dist∥buJOn … …… … …… … …… ……… … … … …………… … 18 Valua∥on Member Reconc∥ialon ¨……… …… ………… ……… … …… … …… … …19 summary of Pian Provisions_ … … …… … ……… … … … ……… …… … … 20-21 GASB Appendix… …… ……… … … … ……… ………………… … … … … … … … …22-32 SUMMARY OF REPORT The regular annual actuarial valuation of the Village of Oak Brook Firefighters' Pension Fund, performed as of January 1, 2015, has been completed and the results are presented in the Report. The contribution amounts set forth herein are applicable to the plan/fiscal year ended December 31 , 2015. The contribution requirements, compared to those set forth in the January 1,2014 actuarial report, are as follows: Valuation Date Applicable Plan/Fiscal Year End Total Required Contribution % of Total Annual Payroll Member Contributions (Est.) % of Total Annual Payroll Village Required Contribution % of Total Annual Payroll 01/01ノ 2014 12/31/2014 Sl,950,402 756% 251,998 98% 1,698,405 659% 01/01′2015 12/31′2015 S2,092,086 770% 265,449 98% 1,826,637 659% P9 3 Economic Assumptions: The actuarial assumptions included in this valuation have been determined based upon discussions with the Village Finance Manager, a review of the most recent collective bargaining agreement for estimates of projected salary increases and payroll growth rate. A statewide Actuarial Experience Study was performed by the State of lllinois, prepared by my esteemed colleagues at the firm of Foster & Foster. The experience study was performed at the end of 2012.Ihe data is credible although the population size was limited to available date. A thorough investment analysis on funds of this size and their asset allocations were closely examined. The assumptions reflect our best estimate of future experience. The 2011 actuarial valuation indicates a change in interest assumption from 7% to 6.75%. We do not recommend an increase in that assumption. Demographic Assumptions: Essentially, all of the assets in the plan are dedicated to cover the liabilities of the currently retired participants. Further, pension disbursements on an annual basis are expected to be approximately $2.3M and investment earnings are currently insufficient to provide for these payments on an ongoing basis. The balance of this Report contains additional details ofthe acluarial valuation and the general operation of the fund. An appendix at the end of the report includes GASB 27 ' 67 and 68 in accordance with the new GASB standards. we are pleased to meet with the village Board to discuss this report and answer any questions concerning its contents. P94 STATEMENT OF ACTUARhL OPINION The results shown in this report have been calculated by a Qualified Actuary, as defined in 40 ILCS 5/4-118(e) and 40 ILCS 5/1A-111(b). All results are based on information provided by the Village of Oak Brook Firefighters' Pension Fund, financial data submitted by the Village of Oak Brook and, applications of actuarial assumptions and methods in accordance with Actuarial Standards of Practice. ln our opinron, all the results comply with the requirements of the applicable State statute, Actuarial Standards of Practice and Statements of Governmental Accounting Standards, as applicable. ln our opinion, the actuarial assumptions used are reasonable both individually and in the aggregate, taking into account the experience of the plan and future expectations. The costs, actuarial liabilities and other information presented in this report, in our opinion, fully and fairly disclose the actuarial position of the plan. The undersigned, are Enrolled Actuaries in good standing under the Employee Retirement lncome Security Act of 1974 and a Members of the Academy of Actuaries who meets the Qualification Standards of the American Academy of Actuaries to render this Actuarial Opinion. There is no relationship between the Village, Firefighters' Fund and Eisenberg Associates, Ltd., which could impair our objectivity. Respectfully submitted, Janet S. Eisenberg, F.S.P.A., E.A., M.A.A.A. Dated: Pg 5 Assumption Review Since Prior Actuarial Report Actuarial cost method changes Prior year funding method: Projected Unit Credit Cost Method Current year funding method: Entry Age Normal Cost Method The Village Financial Manager has requested illustrations under both ofthe above funding methods. Our recommendation will be based on the Entry Age Normal Cost Method. The Projected Unit Credit Cost Method will be shown for the purpose of determining the State of lllinois statutory funding requirements. Assumption Changes There have been no actuarial assumption changes since the prior valuation. P9 6 Comparative Summary of Principal Valuation Results A. Participant Data Number included Active Retired Spousal beneflciary and minor annuitants Disabled Terminated Total Total Annual Payoll. Payroll for participants under age 62 Retirement Benefits Disability Benefits Death Benefits Vested Benefits Accrued Liabilig Active Members lnactives 丁otal Actuanal Accrued Liability Funded Percentage Unfunded Actuaria:Accrued Liability Years remaining to amortize UAAL 1/1/2015 1/1/2015 1/1/2014 32 32 21 21 18 18 17 17 4 4 92 92 2,818,219 2,818,219 2,674,017 2,715,837 2,715,837 2,578,216 12,218,460 11,143,618 11,203,623 870,077 1,546,869 1,336,471 143,174 187,863 155,194 20,568 41,778 42,992 13,252,279 12,920,128 12,738,280 45,602,453 45,270,302 43,174,124 5530/0 5570/0 563% 20,403,479 20,071,328 18,851,982 26 26 27 82 Annua:Benefit Payments Retired l,484,946 1,484,946 1,371,269 Spousa!Benenciary 172,785 172,785 172,785 Disabled 735,138 735,138 581,417 MinOrs receiving temporary payments 2,523 2,523 2,283 Totai 2,395,392 2,395,392 2,127,755 B Assets Actuarial Value 25,198,974 25,198,974 24,322,142 Market Value 25,046,128 25,046,128 24,489,992 C Liabilties(PrOlected UnI Credl) EAN PUC PUC Accrued Liab∥ity Active Members Retirees 20,396,007 20,396,007 19,264,931Beneficiaries 1,568,143 1,568,143 1,483,370 Term return (return of contribution) 34,536 34,536 28,514 Disabili$ Retirees 10,351,488 10,351,488 9,659,023 Accrued Liability lnactive Members 32,350,114 32,350,174 30,435,844 Pg 7 Comparative Summary of Principal Valuation Results Normal Cost (Total) Retirement Benefits Disability Benefits Death Benefits Vested Benefits Total Normal Cost Village Normal Cost Pension Costs Normal Cost (end of year) % of Total Payroll (members under age 62) Administrative Expenses (end of year) % of Total Payroll (members under age 62) Payment Required to Amortize UAAL (end of yr) over remaining years Total Required Contribution (end of year) % of Total Payroll (members under age 62) Expected Member Contributions % oftotal Payroll2014 expected, 2013 actual Expected Village Contribution % of Total Payroll (members under age 62) Past Contributions Plan year ending Total Required Contribution Village Requirement Actual Contributions Made Members Village Net Actuarial (Gain)/Loss Actuarial (Gain)/Loss (Gain)/Loss due to change in methods 566,429 197,432 48,499 9,766 822,126 556,677 586,869 191,911 39,915 4,418 823,113 557,664 878,673 324% 80,474 30% 1,194,696 440% 2,073,369 763% 265,449 98% 1,807,920 666% 12ノ 31/2014 1,950,402 1,698,405 267,458 1,570,742 1,065,630 N/A 603,269 110,659 11,199 4,041 729,168 477,170 877,620 323% 80,474 30% 1,214,466 447% 2,092,086 770% 265,449 98% 1,826,637 673% 778,387 302% 58,958 23% 1,172,015 455% 1,950,402 756% 251,998 98% 1,698,405 659%EF12/31/2015 2,092,086 1,826,637 267,458 1,570,742 1,065,630 332,151 12/31/2013 1,334,363 1,072,568 258,613 1,057,081 839,099 4,027,933 P9 8 Connparat:ve Summary of P∥ncipal Valualon Resuns C Schedu!el∥ustratlng the Amortizatlon ofthe ttotal Unfunded Actuanal Accrued Liability as oi 20,4031479 20,071,328 20,484,271 20,150,805 20,534,864 20,200,574 20,552,239 20,217,667 20,533,148 20,198,886 18,046,845 17,753,058 61548,080 6,441,483 2041 0 (i)3 Year CompansOn Of Actual and Assumed lncreases in Pensionabie Compensalon Year 2015 2016 2017 2018 2019 2028 2038 (ii) 3 Year Comparison of lnvestment Return on Actuarial Value Year Ended 12/31/2014 12/31/2013 12/31/2012 Year ttnded 12/31/2014 12/31/2013 12/31/2012 Actual 2,818,219 2,674,017 2,762,080 Assumed 2,774,293 2,865,658 2,787,832 Assumed 675% 675% 675% P99 V∥lage of Oak Brook Firef ghters'Pension Fund PRO」ECT10N OF BENEFIT PAYMENTS Year 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 2051 2052 2053 2054 165,032 258.600 302,457 376.349 443,467 522,409 601,453 674,453 743,219 830,725 938,325 1,086.036 1,247.329 4,429,375 11605,617 4,775,485 11956,455 2,123,430 2,273,079 2,399,070 2.588,258 2,715,841 2,856,468 2,957.889 3,074,397 3.190,344 3,266,448 3,330,715 3,395,494 3,469,977 3.528,420 3.577,648 3,626.301 3,678.331 3,699,368 3,706,231 3,732,478 3,712,723 3.678,478 3.633,046 2,323,600 2,332,548 2.362.861 2.389,675 2,442,886 2,439,686 2.456,329 2,484,300 2,506,745 2,519,683 2,539,280 2.534,648 2,523,535 2,505,586 2,480,565 2,448,331 2,408,823 2,362,040 2,308,082 2,247.084 2,201,685 2,128,899 2.050,074 1,965,644 1,876,467 1,732,334 1,684,891 1,584,694 1.482,882 1,380,693 1,279,286 1,179,776 1,083,076 989,974 901,068 816,951 738,056 664,381 595,844 532,442 Payments for Current Actives Payments for Current lnactives Total Payments 2,488,632 2,591,148 2,665,048 2,766,024 2,866,353 2,962,094 3,057,782 3,158,753 3,249,964 3,350,408 3,477,605 3,620,684 3,770,864 3,934,961 4,086,182 4,223,816 4,365,278 4,485,470 4,581,161 4,646,154 4,789,943 4,844,740 4,906,542 4,923,533 4,950,564 4,972,645 4,951,339 4,915,409 4,878,376 4,850,670 4,807,706 4,757.394 4,709,377 4,668,305 4,600,436 4,523,482 4,470,534 4,377,104 4,274,322 4,165,458 P9 10 Village of Oak Brook Firefighters' Pension Fund Reconciliation of Unfunded Actuarial Accrued Liabilities (1 ) Unfunded Actuarial Accrued Liability (2) Village NormalCost (3) lnterest on (1) and (2) January 1,2014 (4) Sponsor Contributions during the year ending December 31,2014 (5) lnterest on (4) (expected paid throughout year) January 1,2015 (6) Expected Unfunded ActuarialAccrued Liability (PUC) (7) Changes due to Actuarial Gain/Loss (8) Actual Unfunded ActuarialAccrued Liability (PUC) (9) Changes due to Change in Methods (10) Unfunded Actuarial Accrued Liabitity January 1,2015 P9 11 18,851,982 477,170 1,304,718 1,570,742 57,430 19,005,698 1,065,630 20,071,328 332,151 20,403,479 Village of Oak Brook Firefighters' Pension Fund Actuarial Assumptions January'ltt 6.7SYo 3.75o/o 2.75o/o Tier I 3%; Tier ll 1.25o/o RP 2000 Combined Healthy Mortality Table with Blue Collar Adjustment; Disability Mortality Table - RP 2000 Retiree Disabled Table. 85% married; Spousal age difference - female spouses 3 years younger than male annuitants. 90% of disabilities are assumed to be in the line of duty 61 200 62 192 63 184 64 176 65 168 66 161 67 154 68 147 69 140 丁urnover rates 20 397% 25 272% 30 146% 35 136% 40 042% 45 021% 50 004% Valuation date: lnterest rate: Salary increases: Payroll growth rate: Cost of living increases: Mortality tables: Marital status: Disability: All other decrements 014% 011% 016% 021% 039% 056% lnvestment gains and losses are recognized over a S-year period P9.12 Asset valuation method: Village of Oak Brook Firefighters' Pension Fund RECONCILIATION OF PLAN ASSETS (Market Value) December 31,2014 Plan Assets Cash and Cash Equivalents lnvestments, at Fair Value Money Market Mutual Funds Fixed lncome Mutual Funds Subtotal Funds Total Cash and lnvestments Accrued lnterest Prepaids Total Assets Liabilities Expenses Due/Unpaid Net Plan Assets Additions Contributions Employer contributions Employee contributions Subtotal contributions lnvestment lncome lnterest and Dividends Change in Market Value Subtotal lnvestment lncome Less: lnvestment Expenses Total Additions Deductions Administrative Expenses Benefit Payments Total Deductions Excess of lncome over Expenses Net Plan Assets as of December 31. 2013 Net Plan Assets as of December 31,2014 (A) Market Value of Plan Assets, December 31, 2013 24,489,992(B) Market Value of Plan Assets, December 31,2014 25,046,128(i) Net lnvestment lncome Rate of Return on Actuarial Assets 2 * i /(A + g - ;; 1,178,813 425,226 10,179,108 14,293,678 1,570,742 267,458 1,146,395 97,070 47,277 24,898,012 24,945,289 104,866 2,073 25,052,228 6,099 25,046,128 1,838,199 1,243,465 (64,652) 3,017,013 75,386 2,385,491 2,460,877 556,136 24,489,992 25,046,128 Calculation of Asset Earninos lnterest and Dividends Change in Market Value lnvestment Expenses Net lnvestment lncome 1,146,395 97,070 o4,650 1,178,813 P9 13 488% V∥iage of Oak Brook Firefighters Pension Fund AcruARrAL Cosr METHoDS INDUTDUAL ENTRY AcE NoRMAL AcruARrAL Cosr METHoD (cAsB REpoRTtNG) A method under which the actuarial present value of the projected benefits of each individual included in an actuarial valuation is allocated on a level basis over the earnings of the individual between entry age and assumed exit age(s). The portion of this actuarial present value allocated to a valuation year is called the normal cost. The portion of this actuarial present value not provided for at a valuation date by the actuarial present value of future normal costs is called the actuarial accrued liability. The actuarial present value of projected benefit payments is required to be attributed to periods of employee service using the entry age actuarial cost method with each period's service cost determined as a level percentage of pay. The actuarial present value is required to be attributed for each employee individually, from the period when the emplovee first accrues pensions throuqh the oeriod when the emolovee retires. PRoJECTED UNlT CREDtT Cosr METHoD (PUc) (FUNDING poLtcY 2014) The PUC funding method is a standard actuarial funding method. The annual cost of benefits under PUC is comprised of two components: . Normal cost . Amortization of the unfunded actuarial accrued liability The PUC normal cost equals the difference between the accrued liabillty at the beginning and end of the year. Projected Unit Credit (PUC) Liability The portion ofthe Actuarial Present Value of future benefits attributable to service credit that has been earned to date (past service). Pg 44 Plan Assets Cash and Cash Equivalents lnvestments, at Fair Value Money Market Mutual Funds Fixed lncome Mutual Funds Subtotal Funds Total Cash and lnvestments Accrued lnterest Prepaids Total Assets Liabltitios Expenses Due/Unpaid Net Plan Assets Additions Contributions Employer contributions Employee contributions Subtotal contributions lnvestment lncome lnterest and Dividends Change in Market Value Change in Actuarial Value Subtotal lnvestment lncome Less: lnvestment Expenses Total Additions Deductions Administrative Expenses Benefit Payments Total Deductions Excess of lncome over Expenses Net Actuarial Assels as of December 31 , 201 3 Net Actuarial Assets as of December 3'l,2014 V∥!age of Oak BЮ ok Firenghters'Pension Fund RECONCiLIAT:ON ACTUAR!AL ASSETS December 31,2014 425,226 10,179,108 14,293,678 1,570,742 267,458 1,146,395 97,070 332,606 75,386 2,385,491 47,277 24,898,012 24,945,289 104,866 2,073 25,052,228 6,099 25,046,128 1,838,199 1,576,071 (64,652) 3,349,619 2,460,877 888,742 24,310,232 25,198,974 P9 15 12/31/2011 12ノ 31/2012 12/31/2013 12/31/2014 Annual Amount (195,896) 92,069 73,836 (90,649) Original Base (979,479) 460,345 369,181 (453,246) 2016 92,069 147,672 (271,948) 2017 73,836 (181,298) (107,462) 24,489,992 (622,677) 1,178,813 (453,246) 25,046,128 152,846 25,198,974 24,322,142 25,198,974 1,511,419 630% 2018 (90,649) (90,649) V∥lage of Oak Brook F reFghters'Pension Fund ACTUARIAL ASSET VALUAT10N December 31,2014 2012 2013 2014 2015 (783,583) (587,687) (391,792) (195,896) 368,276 276.207 184,138 295,345 221.509 (362.597) Unrecognized G/L (783,583) (219,4'11) Develooment of lnvestment Gain/(Loss) Market Value of Plan Assets, December31,2013 Contributions Less: Benefit Payments Less: Administrative Expenses Subtotal Actual lnvestment Earnings Actuarial lnvestment Gain/(Loss) 2014 Development of Actuarial Value of Assets Market Value of Plan Assets, December 31 , 2014 Unrecognized (Gains)/Losses ActuarialValue of Assets, December 31, 2014 (A)Actua“al Value of Assets,December 31,2013 (B) Actua“al Value of Assets, December 31,2014 (D Actuanal Netlnvestmentlncome Rate of Return on Actua∥al Assets 2￢′(A+B―り 179,760 (152,846) (32.206) 1,338,199 (2,385,491) (75,386) Calculation of Actuarial Asset Exoerience lnterest and Oividends Change in Market Value Change in Sum of Outstanding Actuarial Bases lnvestment Expenses Actuarial Net lnvestment lncome 1,146,395 97,070 332,606 (64,652) 1,511,41Q16 1 :r f r f f f Active Tier I Members Number Average Current Age Average Age at Employment Average Past Service Average Annual Compensation Active Tier ll Members Number Average Current Age Average Age at Employment Average Past Service Average Annual Compensation Retirees Number Average Current Age Average Annual Benefit Disability Retirees Number Average Current Age Average Annual Benefit Surviving Soouses Number Average Current Age Average Annual Benefit Minor Children (Disabled Ret) Number Average Current Age Average Annual Benefit Terminated Members Number Average Age Terminated Retirement Elioible Number Average Current Age Average Annual Benefit STAT:STICAL DATA 1/1ノ 2014 28 445 291 154 88,7913 293 27 23 62,622 14 654 41,5304 69 43,196 1/1/2015 27 446 298 148 92,3775 282 27 12 64,808 21 687 70,7124 70 43,1964 3125234 P9 17 |I I i 「 I I I : 1 1 l f I I i r i l i I AGE AND SER∨ICE D:STRIBUT10N PAST SERVICE 5-9 10-14 15-19 20-24 25-29 30+ Totalく 1 1 2 3 4 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65+ Total112223322 2 2213777168 Pg 18 2 2 VALUAT10N MEMBER RECONCILIAT10N 1.Active Lives a. Number in of active members on January 1, 2014 b. New Entrants c. Terminations d. RetirediDisabled e. Number in of active members on January 1, 2015 Data Reconciliation ACTiVE December 31, 2013 New Minor New Hires Active - Terminated Active - Retired Active - Disabled Retirement Eligible 3l (2) (2) 32 31 5 (2\ (1) (1) RETIREMENT December 31. 2014 32 2114 Pg. 19 trtttttt〕tt ltt tlt tt Village of Oak Brook Firefighters' Pension Fund SUMiIARY OF PLAN PROVISIONS Retirement Benefits The Firefighters' Pension Plan provides retirement benefits through two tiers of benefits as well as death and disability benefits. Tier I employees (those hired prior to January 1, 201 1) attaining the age of 50 or older with 20 or more years of creditable service are entitled to receive an annual retirement benefit equal to one- half of the salary attached to the rank held at the date of retirement. The annual benefit shall be increased by 2.50% of such salary for each additional year of service over 20 years up to 30 years to a maximum of 75.00% of such salary. Employees with at least ten years but less than 20 years of credited service may retire at or after age 60 and receive a reduced benefit. The monthly benefit of a covered employee who retired with 20 or more years of service after January 1, 1977 shall be increased annually, following the first anniversary date of retiremenl and be paid upon reaching the age of at least 55 years, by 3.00% of the original pension and 3.00% compounded annually thereafter. Tier ll employees (those hired on or after January 1 , 201'l) aftaining the age of 55 or older with ten or more years of creditable service are entitled to receive an annual retirement benefit equal to the average monthly salary obtained by dividing the total salary of the firefighter during the 96 consecutive months of service within the last 120 months of service in which the total salary was the highest by the number of months of service in that period. Firefighters' salary for pension purposes is capped at $106,800, plus the lesser of % of the annual change in the Consumer Price lndex or 3.00% compounded. The annual benefit shall be increased by 2.50o/o of such salary for each additional year of service over 20 years up to 30 years to a maximum of 75.00% of such salary. Employees with at least ten years may retire at or after age 50 and receive a reduced benefit (i.e., Yz o/o for each monlh under 55). The monthly benefit of a Tier ll firefighter shall be increased annually at age 60 on the January 1st after the firefighter retires, or the first anniversary of the pension starting date, whichever is later. Non-compounding increases occur annually, each January thereafter. The increase is the lesser of 3.00% or % of the change in the Consumer Price lndex for the proceeding calendar year. Covered employees are required to contribute 9.455% of their base salary to the Firefighters' Pension Plan. lf an employee leaves covered employment with less than 20 years of service, accumulated employee contribution s may be refunded without accumulated interest. The Village is required to finance the plan and the administrative costs as actuarially determined by an enrolled actuary. Effective January 1 , 201 1, the Village has until the year 2040 to fund 90% of the past services costs for the Firefighters ' Pension Plan. Village of Oak Brook has adopted funding policy: Under the Projected Unit Credit funding method, 100% of the Unfunded Acluarial Accrued Liability is to be fully funded by the year 2040. The contributions will be based upon the Village's Normal Cost plus the amortization of the Unfunded Actuarial Accrued Liability as a percentage of payroll. Disability Benefits Line of Duty is the maximum of 650/0 of salary attached to the rank held by Member on the last day of service or the monthly retirement benefit that the member is entitled lo recieve if the Member retired immediately. Non Duty disability 50% of salary attached to the rank held by Member on the last day of service. Pre-Retirement Death Benefit Line of Duty is 100o/o of salary attached to the rank held by Member on the last day of service. Non Service Related is the maximum 54% of salary attached to the rank held by Member on the last day of service or the monthly pension earned at date of death payable immediately P9.20 Termination Benefits Employment terminations with less than 10 years of service are entitled to a refund of Member conlrabutions. Terminations with 10 years or more of service is salary attached to the rank held by Member on the last day of service and payable at age 60 in accordance with the following schedule: 10 11 12 13 14 15 16 17 18 19 1500% 1760% 2040% 2340% 2660% 3000% 3360% 37400/0 4140% 4560% P9 21 DISCLOSURE STATEMENTS UNDER GOVERNMENT ACCOUNTING STANDARDS BOARD APPENDIX DISCLOSUREINFORMAT10N PER STATEMENT N0 27 0F THE GOVERNMENT ACCOUNTING STANDARD BOARD Contribution .ales as ol 1213112014 Village Plan Members Actuarial Pension Cost Contributions made Actuarial Valuation Date Actuarial cost method Amortization method Remaining amortization period Actuarial assumptions: lnvestment rate of retum. Projected salary increase* 'lncludes inflation rate Cost-of-living ad.,ustments Asset valuation method 58741% 9455% 1,698,405 1,570,742 12/31/2014 Prolected Unl Credl Level°/O of pay,closed 26 Years(aS Of1/1/2015) 675% 375% 300% 300% 5-year smoothed Annual Pension Cost (APC) 1,698,405 1,057,081 1,001,528 THREE TREND INFORMAT10N 12/31/2014 12/31/2013 12′31/2012 Percentage of APC Cont∥buted 9248% 92320/0 9402% Net Penslon Ob∥galon 376,934 246,983 152,621 P923 DISCLOSUREINFORMAT10N PER STATEMENT N0 27 0F THE GOVERNMENTAL ACCOUNTING STANDARDS BOARD DEVELOPMENT OF NET PENSION OBLIGAT10N(NPO) The recent development ofthe Net Pension obligation is as fo∥owsI Actuarially Determined Contribution (A) lnterest on NPO Adjustment to (A) Annual Pension Cost Contribuiton Made (Village) lncrease in NPO NPO Beginning of Year NPO End of Year 12/31/2013 1,144,966 10,302 (3,825) 12/31/2014 1,698,405 16,671 (14,384) 1,151,443 1,057,081 1,700,692 1,570,742 94,362 152,621 246,983 129,951 246,983 P9 24 PENS10N EXPENSE/(INCOME) Under CASB Statement No 68 (Forthe Year Ended December 31,2014) 1)SeⅣ Ce cost 2)interest on Total Pens on L ab∥ity 3)Current Period Benent changes 4)Employee Contributlons 5)ProleCted Earnings on Plan investments 6)Other Changes n Plan F duc ary Net Posた on(Transfers) 7)Recogni∥on Of Ounow Of Resouces Due to Liabllties 3)Recognに on of Ounow Of Resouces Due to Assets 9)Admin stralve Expenses 10)TOtal Pension Expense/(lnCOme) 746,748 2,926,8480 (267,458) (1,632,059)0110,445 105,726 75,386 2,065,636 P9 25 SCHEDULE OF CHANESIN NET PENSiON L:AB:LI丁 Y AND RELATED RAT10S CURRENT PER10D A Total Pension Liabilty 1. Service Cost 2. lnterest 3. Changes in Benefit Terms 4. Actual Experience 5. Changes in Assumptions Benefit Payments, lncluding Refunds of 6. Employee Contributions 7. Net Changes in total pension liability 8. Total pension liability - beginning 9 Total pension liability - ending B. Outflows (lnflows) of Resources due to Assets Contributions - Employer Contributions - Employee Net lnvestment lncome Benefit Payments, lncluding Refunds of Employee Contributions Administrative Expenses position Plan fiduciary net position - beginning Plan fiduciary net position - ending C. Net pension liability (asset) D. Plan fiduciary net position as a percentage of the total pension liability E. Covered Payroll F. Net pension liability as a percentage of covered payroll Current1o/o DiscountDecrease Rate 746,748 2,926,8480 507,6370 (2,385,491) 1,795,742 43,806,712 45,602,454 1,570,742 267,458 1,178,813 (2,385,491) 仔5,38o 556,136 24,489,992 25,046,128 20,556,326 5492% 2,818,219 72941% 1Yo lncrease SENSI丁 iVI丁 Y OF NEtt PENS10N LIABILITY/(ASSE丁 )TO THE SINGLE DiSCO∪NT RATE ASSUMP丁 10N 575% 675%775% 40,690,140 丁otal Pension liability 51,560,759 45,602,454 The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that sponsor contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the longterm expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. P9 26 STATEMENT OF OUTFLOllVS ANDINFLOWS AR!SING FROM CURRENT YEAR REPORTING PER10D A. Outflows (lnflows) of Resources due to Liabilities '1. Difference between expected and actual experience ofthe Total Pension Liability (gains) or losses 507,637 2. Assumption changes (gains) or losses 0 3. Recognition period for Liabilities: Average ofthe expected remaining servic€ lives ofall employees 4.5963 4. Outflow (lnflow) of Resources due to Liabilities to be recognized in current pension expense for the difference between expected and actual experience ofthe Total Pension Liability 110,445 5. Outflow (lnflow) of Resources due to Liabilities to be recognized in current pension expense for the assumption changes 0 6. Outflow (lnflow) of Resources due to Liabilities to be recognized in current pension expense due to Liabilities 110,445 7. Deferred Outflow (lnflow) of Resources to be recognized in future pension expense for the Difference between expected and actual experience ofthe Total Pension Liability 397,192 8. Deferred Outflow (lnflow) of Resources be recognized in future pension expense for Assumption changes 0 9. Deferred Outflow (lnflow) of Resources to be recognized in future pension expenses due to Liabilities 397,192 B. Outflows (lnflows) of Resources due to Assets L Net difference between projected and actual earnings on pension plan investments (gains) losses 528,631 2. Recognition period for Assets 5.0000 3. Outflow (lnflow) of Resources to be recognized in current pension expense for the due to Assets 105,726 4. Deferred Outflow (lnflow) of Resources to be recognized in future pension expense due to Assets 422,905 P9 27 STATEMENT OF OUTFLOVVS AND INFLO1/VS ARISING FROM CURRENT AND PR10R REPORTINC PER10DS A. Outflows lnflows of Resources due to Liabilities and Assets to be recognized in current pension expense B. Outflows lnflows of Resources by Source to be recognized in current pension expense Outflows of Resourc€s-------------' 0-------------- 1. Due to Liabilities 2. Due to Assets 3. Total 4. Total D Deferred Outflows and Deferred lnflows of Resources (110,445) (105,726) (216,171) lnnclws of Resources (110,445)0(105,726) (216.171) Net Outnows of Resources 140,445 Outflows of Resources Net Outflows of Resources 1. Differences between Actual and Expected 2. Assumption Changes 3. Net Difference between projected and actual earnings on pension investments 4. Total 1. Differences between Actual and Expected 2. Assumption Changes 3. Net Difference between projected and actual earnings on pension investments (397.192)0(422,905) (820,097) lnflows of Resources by Year to be recognized in future pension expense 110,4450 105,726 246.474 C Deferred Outflows and Deferred lnflows of Resources by Source to be recognized in future pension expense Deferred Outflows Deferred lnflows Net Deferred Outflows of Resources of Resources of Resources 397,1920 422,905 820,097 2015 2016 2017 2048 2019 2020 216,171 246.171 216,171 171.58400 820,097 Pg 28 NOTES TO FINANCIAL STATEMENTS (For the Year Ended December 31,2014) Plan Description Plan Administration The Plan is administered by a Board of Trustees comprised of: a.) Two members appointed by the Village, b.) Two active Members of the Fire Department elected by the Membership, andE c.) One retired Member of the Fire Department elected by the Membership. Plan Membership as of January 1, 2015: lnactive Plan Members or Beneficiaries Currently Receiving Benefits lnactive Plan Members Entitled to but Not Yet Receiving Benefits Active Plan Members Total Plan Members Benefits Provided The Plan provides retirement, termination, disability and death benefits. Normal Retirement: Retirement Benefits: Age: Tier 1: Age 50 and 20 years of service. Tier 2: Age 55 with 20 years of service The annual benefit shall be increased by 2.50o/o of such salary for each additional year of service over 20 years up - to 30 years to a maximum ol75.0Oo/o of such salary. Termination Benefits: Employment terminatlons with less than 10 years of service are entitled to a refund of Member contributions. Terminations with 10 years or more of service is salary attached to the rank held by Member on the last day of service and payable at age 60 in accordance with a vesting schedule. Disabilitv Benefits: Line of Duty is the maximum ol 650/o of salary attached to the rank held by Member on the last day of - service or the monthly retirement benefit that the member is entitled to recieve if the Member retired immediately. Non Dug disabilig 50% of salary attached to the rank held by Member on the last day of service. Pre-Retirement Death Benefit: Line of Duty is 100% of salary attached to the rank held by Member on the last day of service. Non Service Related is the maximum 54o/o of salary attached to the rank held by Member on the last day of service or the monthly pension - earned at date of death payable immediately Cost-of - Liv i no Ad i u stm e nts: Tier 1: Retirees - 3% per year upon attaining age 55. For retirements prior to age 55, 1112 of 3o/o per month benefit commences prior to reaching age 55. Disabled Retirees - annual increase of 3olo of the original benefit amount upon attaining age 60. For disablements prior to age 60 3% of original benefit per year benefit commenced prior to age 60. Tier 2: An annual increase equal to the lesser of 3% per year or 'l12 the annual unadjusted percentage increase in the consumer price index-u for the 12 months ending with the September preceding each November 1, of the original _ pension after attaining age 60. P9 29 NET PENS10N L:ABILITY OF THE SPONSOR The components of net pension liab∥ity ofthe sponsor on December were as fo∥ows: Total Pension Liabiity 45,602,454 P!an Fiduciary Net Postion(FMV assets) (25,046,128) Sponsoris Net Pension Liabi!ity 20,556,326 Plan Fiduciary Net Position as a percentage of Total Pension Liability 54.92o/o ActuaialAssumptions: The total pension liability was determined by an actuarial as of January 1,2015 using the following actuarial assumptions applied to all measurement periods. lnflation 3.00% Salary lncreases 3.75o/o lnvestment Rate of Return 6.750/o Mortality Table: RP-2000 Blue Collar Adjustment without projection. The demographic assumptions used in the January 1,2015 using the following actuarial assumptions applied to all measurement periods. The long-term expected rate of return on pension plan investments was determined using a building- block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expenses and inflation) are developed for each major asset class. These ranges are combined to produce the long term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation as of December 31,2014 are summarized in the following table: Asset Class Domestic Equity lnternational Equity Bonds Real Estate Hedge Cash Long Term Expected Real Rate of Return 818% 862% 300% 800% N/A 100% 丁arget AIlocalon 2350% 2150% 4300% 1000% N/A 200% Pg 30 SCHEDULE OF CONTRIBUT10NS Last 40 Fiscal Years 12/34/2014 1,698,405Actuarially Determined Contribution Contribution relating to Actuarially Determined Contributions Contribution Deficiency (Excess) Covered Payroll Cotribution as a Percentage of Covered Employee Payroll Funding Method: Amortzalon Method: Remaining Amortizauon PenOd: Actuanal Asset Method: lnflation: Salary lncreases: Payroll Growth Rate: Retirement Rates: Termination Rates: 1,570,742 127,663 2,348,219 5574% Entry Age Normal Level percentage of pay, closed. 27 Yearc (as ol 'll1l2O14). All assets are valued at market value with an adjustment made to uniformly spread actuarial investment gains and losses (as measured by actual market value investment return against expected market value investment return) over a five-year period. 3.00% per year. 3.75o/o Per \ear. 2.75o/o Per \ear. See Table Below. See Table Below. 54 52 53 54 55 56 57 58 59 64 62 63 64 65 66 67 68 69 200 192 184 176 168 161 154 147 140 288 279 270 261 252 243 234 225 217 014% 011% 016% 021% 039% 056% 272% 146% 136% 042% 021% 004% 20% 20% 20% 83% 83% 100% Pg 31 Dsab∥″Ratts Ⅷthdrawal Rdes 20 013% 20 397% Ret Юmett des 50 20% 56 20% SCHEDULE OFINVESTMENT RETURNS Last 1 0 Fiscal Years Annual Money-Weighted Rate of Return Net of lnvestment Expenses 12/31/2014 4870/0 Pg 32