Police Actuarial Valuation Report 2019Village of Oak Brook Police Pension Fund
GASB Nos.67 & 68 Report as of FiscalYear Ending December 31,2019
Table of Contents
Actuaria:CertincatiOn
summary
Statement of Fiduciary Net POSition
Statement of Changes in Fiduciary Net Position
Schedu:o of Changes in Net Pension Liabi:ity and Reiated Ratios
Penslon Expense
Deferred Outfiows of Resources and Deferred:nflows Of Resources Related to Pollsions
Rate of Retum
Discount Rate and Net POnsion Liability Sensitivity
Schedule o'Contributions
Actua"a:Assumptions for Tota:Pension Liabi:ity
Actua∥a:Assumptions for Actuarially Determined Contributions
P:an pr●vislons356789 10
12
13
21Page ⑪∩yhOrt
Village of Oak Brook Police Pension Fund
GASB Nos, 67 & 68 Report as of Fiscal Year Ending December 3'1, 2019
Actuarial Certification
This report is prepared in accordance with our understanding of GASB Nos. 67 & 68 for the purpose of disclosing pension plans in financial statements.
Determinations for purposes other than meeting these requirements may be signiflcantly differenl from the results contained in this report.
The information presented in this repo( is based on:. the actuarial assumptions included in this report;. the plan provisions;. participant informalion furnished to us by the Plan Administrator;. asset information fumished to us by the Plan Trustee.
We have reviewed the provided data for reasonableness when compared to prior information provided, but have not audited the data. Where relevant data may be
missing, we may have made assumptions we believe are reasonable for the purpose of the measuremenl. We are not aware of any signiflcant issues with and have
relied on the data provided. Any errors in the data provided may result in a different result than those provided in this report.
The interest rate, other economic assumptions, and demographic assumptions have been selected by the plan sponsor wilh our recommendations. The assumptions
used, in our opinion, are reasonable and represent a reasonable expectation of future experience under the plan. All calculations have been made in accordance with
qenerally accepted actuarial principles and practice
A summary of any assumptions not included in this report, the plan provisions and the participant information is included in the Actuarial Valuation Report for funding
purposes.
Future actuarial measurements may differ significantly from lhe cunent measurements presented in this report due to such factors as the following:
. plan experience differing from that anticipated by lhe economic or demographic assumptions;
. changes in economic or demographic assumptions;
. increases or decreases expected as part of the natural operation ot the melhodology 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.
We did not perform an analysis of the potential range of future measurements due to the limited scope of our engagement.
3 1 ⑪∩yhO rt
Village of Oak Brook Police Pension Fund
GASB Nos. 67 & 68 Reporl as of FiscalYear Ending December 31, 2019
Actuarial Certification
The undersigned are compliant wilh the continuing education requirements of the Qualification Standards for Actuaries lssuing Statements of Actuarial
Opinion in the United States.
To our knowledge there have been no significant events prior to the current year's measurement date or as of the date of this report which could
materially affect the results contained herein.
Neither Nyhart nor any of its employees have any relationships with the plan or plan sponsor which could impair or appear to impair the objectivity of this
report.
Nyharl
′″
′バ
〈f(′
・
′り
くマ
`「
口‐
1::::::キ
|“
¨――
・
く 03/17′2020
Mike Zurek,EA,MAAA Scott Cav n,FSA,EA,MAAA
41 ⑪∩yhOrヒ
Vi∥age of Oak Brook Police Pension Fund
GASB Nos 67&68 RepOrt as of Fisca:Year Ending December 31,2019
Summary
Net Pension Liability
The components of the net pension liability at Oecember 31
Total pension liability
Plan fiduciary net position
Net pension liability
Plan fiduciary net position as a percent of the total pension liability
Pension Expense for the Fiscal Year Ended December 31
Actuarial Assumptions
The lolal pension liability was delermined using lhe following actuarial
assumptions
lnflation
Salary increases, including inflation
lnvestment rate of return. including inflation, and net of investment expense
Plan Membership
The total pension liability was determined based on the plan membership as
of December 31
lnactive plan members and beneficiaries currently receiving benelits
lnactive plan members entitled to but not yet receiving beneflts
Active plan members
Total members
12731′2019 12′31′2018
63,107,741
(41,183.345)
60.472,616
(35,164,644)
21,924,396
6526%
3,092,993
25,307.972
5815%
3,442,566
250%
375%
675%
250%
375%
675%
391
39
51 ‐①∩yhOrし
84 79
Vi:lage of Oak Brook Police Pension Fund
CASB Nos 67&68 Report as of Fiscal Year Ending December 31,2019
Statement of Fiduciary Net Position
Assets
Cash and deposits
Securities lending cash collateral
Total cash
Receivables:
Contributions
Due rrom broker for investments sold
lnvestment income
Other
Total receivables
lnvestments:
Money Market Mutual Funds
Fixed lncome
Stock Equities
Mutual Funds
Total investments
Totalassets
Liabilities
Payables:
lnvestment management fees
Due to broker for investments purchased
Collateral payable for securities lending
Other
Total liabilities
Net position restricted for pensions
127,6770 113,2810
127,67700
97,229
3,144
113,28100
118,926
3,202
100,373
2,833,731
11,255,9400
26,888,453
122,128
1,507.606
11,577.5520
21,855,588
34,940,746
35.176,155
$ 000
11,541
S ll.511
$ 35,164,644
40,978,124
41,206,174000
22.329
22,329
41,183,345
12′31′2019 12′31′2018
61 q∋∩yhorヒ
Village ofOak Brook Police Pension Fund
GASB Nos. 67 & 68 Report as of Fiscal Year Ending December 31, 20'19
Statement of Changes in Fiduciary Net Position
12′31′2019 12′31′2018
Additions
Contributions:
Employer
lvlember
Nonemployer contributing entity
Total contributions
lnvestment income:
Net increase in tair value of investments
lnterest and dividends
Less investment expense, other than ,rom securities lending
Net income other than from securities lending
Securities lending income
Less securities lending expense
Net income from securilies lending
Net investment income
Other
Total additions
Deductions
Benefit payments, including retunds of member contributions
Administrative expense
Other
Total deduclions
Net increase in net position
Net position restricted for pensions
Beginning of year
End of year
$ 2,435,811
s 5,439,789
1,167,022
(77,639)
S 6,529,172002,057,112
378,6990
S O
S 6.529,1720
8,964,983
2,904,890
41,3920 S 2,357,030
S (4,664,192)
2.353.265
(74,705)
$ (2,385,632)00$ 0
S (2,385,632)0(28,602)
2.531,903
54,6670
2.586.570
(2,615,172)
37,779,816
35,164.644
1,946,714
410,3160
2,946.282
6.018,701
35,164,644
41,183,345
7 1 q∋∩yhorヒ
Village of Oak Brook Police Pension Fund
GASB Nos. 67 & 68 Report as of Fiscal Year Ending December 31, 2019
Schedule of Changes in Net Pension Liability and Related Ratios
12ノ 31ノ 2019 12′31′2018 12ノ 31′2017 12′31ノ 2016 12ノ 31′2015
Total pension liability
Service cost
lnterest
Changes of benefit terms
Differences between expected and actual experience
Changes of assumptions
Benefit payments, including refunds of member contributions
Net change in total pension liability
Total pension liability - beginning
Tota! pension liability - ending (a)
Plan fiduciary net position
Contributions - employer
Contributions - member
Contributions - nonemployer contributing member
Net investment income
Benefit payments, including refunds of member contributions
Administrative expenses
Other
Net change in plan fiduciary net position
Plan fiduciary net position - beginning
Plan fiduciary net position - ending (b)
Net pension liability - ending (a) - (b)
Plan fiduciary net position as a percentage of the total
pension liability
Covered-employee payroll
Net pension liability as percentage of covered-
employee payroll
852,541 $
4,041,408
63,841
778,897
(196,672)
(2,904,890)
890,871 $
3,902,7220
199,802
(182,060)
(2,531,903)
833,296 $
3,650,6330
(347,589)
1,964,218
(2,315,047)
800,389 $
3,563,1450
(856,825)
96,439
(2,364,839)
816,276
3,338,2380
(48,037)
1,597,133
(2,346,686)
2,635,125
60,472,616
2,279,432
58,193,184
3,785,511
54,407,673
1,238,309
53,169,364
3,356,924
49,812,440
63,107,741 s
2,057,112
378,6990
6,529,172
(2,904,890)
(41,392)01,946,714
410,3160
(2,385,632)
(2,531,903)
(54,667)01,748,025
386,7270
4,461,837
(2,315,047)
(35,776)01,527,927
383,2380
2,176,018
(2,364,839)
(39,522)053,169,364
1,336,683
358,4990
(429,965)
(2,346,686)
(38,647)060,472,616 $58,193,184 $54,407,673 $
6,018,701
35,164,644
(2,615,172)
37,779,816
4,245,766
33,534,050
1,682,822
31,851,228
(1,120,116)
32,971,344
41,183,345 S 35,164,644 $37,779,316 $33,534,050 $31,851,228
21,924,396
65.26%
3,932,044
557.58%
25,307,972
58.15%
3,849,863
657.37%
20,413,368
64.92%
3,892,216
524.47%
20,873,623
6163%
3,829,224
545.11%
21,318,136
59.91%
3,735,548
570.68%
81 q∋∩yho rt$$
village of Oak Brook Police Pension Fund
GASB Nos. 67 & 68 Report as of Fiscal Year Ending December 31, 2019
Pension Expense
Fiscal year ending
Service cosl
lnterest on total pension liability
Projected earnings on pension plan investments
Changes of benefit terms
Employee contributions
Pension plan administrative expense
Other changes
Cunent period recognition of deferred outflows/(inflows) of resources
Differences between Expected & Actual Experience
in measurement of the Total Pension Liability
Changes of assumptions
Differences between Projected & Actual Earnings on
Pension Plan lnvestments
Total
12′31′2019 12′31′2018
S 852,541 S 890,871
4,041,408
(2,356,385)
63,841
(378,699)
41,3920 3,902,722
(2,542,391)0(410,316)
54,6670
695,147
1,062.396
S (54,753) S (210,530)
655,811
227,837
$ 3p%rr3 $ 3341566
9 1 個)∩yhOrし
Village of Oak Brook Police Pension Fund
GASB Nos. 67 & 68 Report as of Fiscal Year Ending December 31, 2019
Deferred Outflows of Resources and Deferred lnflows of Resources Related to Pensions
Differences between expected and actual experience in
measurement of the total pension liability for fiscal year ending:
lnitial
Balance
!nitia!
Amortizalon Penod
Annual
Recognition
12/31/2019
Balance
December 31,2019
December 31,2018
December 31,2017
December 31,2016
December 31,2015$$$$$778,897
199,802
(347,589)
(856,825)
(48,037)
lnitial
Balance
5.0
5.0
5.0
5.0
5.0
lnitial
Amortization Period
155,779
39,960
(69,518)
(171,365)
(9,609)
623,118
119,882
(139,035)
(171,365)0$$$$$Changes in assumptions for fiscal year ending:
(54,753)
Annual
Recognition
432,600
12/31/2019
Ba:ance
December 31,2019
December 31,2018
December 31,2017
December 31,2016
December 31,2015
Differences between projected and actual earnings on pension
plan investments for fiscal year ending:
(196,672)
(182,060)
1,964,218
96,439
1,597,133
!nitia!
Ba!ance
lnitial
Amortization Period
5.0
5.0
5.0
50
5.0
(39,334)
(36,412)
392,844
19,288
319,425
655,811
Annua!
Recognition
(157,338)
(109,236)
785,686
19,2870
538,399
12/31/2019
Balance
December 31,2019
December 31,2018
December 31,2017
December 31,2016
December 31,2015
(4,172,787)
4,928,023
(2,205,581)
(42,705)
2,632,238
50
5.0
5.0
5.0
5.0
(834,557)
985,605
(441,116)
(8,541)
526,446
(3,338,230)
2,956,813
(882,233)
(8,541)0$$$$$227,837 (1,272,191)
101P a g ①∩yhOrt
Village of Oak Brook Police Pension Fund
GASB Nos. 67 & 68 Report as of Fiscal Year Ending December 31, 2019
Deferred Outflows of Resources and Deferred lnflows of Resources Related to Pensions
Deferred Outflows Deferred lnflows
of Resources of Resources
Differences beh″een expected and actual experience $ 743,000 S (310,400)
Changes of Assumptions S 804,973 S (266,574)
Net difFerence beh″een praected and actual earnings on pension p:an investments S 2,956,813 S (4,229,004)
$ 4,504,786 $ (4,805,978)
The balances as of December 31,2019 ofthe deferred outOows/(in10ws)of reSOurces wi:!be recognized in pension expense fbrthe Flscal year ending
December 31.
2020
2021
2022
2023
2024
Thereafter
S(7,368)
$153,249
$271,041
$(718,114)
$0
$0
111Page q∋∩yhorヒ
vinage Of oak Brook Po!ice Pension Fund
CASB Nos 67&68 Report as of Fisca:Year Ending December 31,2019
Rate of Return
The long-term expected rate of return on pension plan investments was determined usang a building-block method in which expected future real rates of return
(expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These expected future real rales of return are
combined to produce the long-term expected rate of return by weighting the expected ,uture real rates of return by the target asset allocation percentage and by adding
expected inflation. Best estimates of arithmetac real rates of return lor each major asset class included in the pension plan's target asset allocation as of December 31 ,
2019 are summarized in the following table:
lvloney Market Mutual Funds
Fixed lncome
Stock Equities
lrrulual Funds
Cash
Total
Long-lerm expected rate of return is 6.75%.
Money-weighted rate of return is '18.71%.
70%
280%
00%
650%
00%
050%
250%
550%
550%
000%
1000%
121Page 個)∩yhOrし
Village of Oak Brook Police Pension Fund
GASB Nos.67 & 68 Report as of FiscalYear Ending December 3'1,2019
Discount Rate and Net Pension Liability Sensitivity
Discount rate
The discount rate used to measure the total pension liability was 6.75%. The projection of cash flows used to determine lhe discount rate assumed that plan member
contributions will be made at the current contribution rate and that conlributions will be made at rates equalto the difference between actuarially determined
contribution rates and the member rate. Professional judgment on future conlributions has been applied in those cases where coniribution patterns deviate from the
actuarially determined rates. 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 long-term expected rate of return on pension plan investments was applied to all periods of proiected benefit
payments to determine the total pension liability.
Sensitivity ofthe net pension liabi“ty to changes in the discount rate
The fo∥owing presents the net pension liab∥ity,oalculated using the discOunt rate of 6 75%,as we∥as whatthe net pension∥ab∥ty would be ifit were calculated using
a discount rate thatis l‐percentage‐pointlower(575%)o「1‐percentage―point higher(775%)than the curentrate:
1%Decrease Current Discount l%increase
(575%) Rate(675%) (775%)
Net pension∥ab∥ity S 30,948,190 $ 21,924,396 S 14,591,916
13 | P a !r e CD∩yhO rt
Village of Oak Brook Police Pension Fund
GASB Nos. 67 & 68 Report as of Fiscal Year Ending December 3'1, 2019
Schedule ot Contributions
2018 2017 2016
Actuarially determined contribution
Contributions in relation to the actuarially determined contribution
Contrlbution dericiency (excess)
covered-employee payroll
Conlributions as a percentage of covered-employee payroll
Actuarially determined contribution
Contributions in relation to the actuarially determined contribution
Contrlbution defi ciency (excess)
Covered-employee payroll
Contributions as a percentage of covered-employee payroll
2,057.112
2,057,112
1,946,714
1,946,714
1,748,025 S
l,748,025
1,708,330
1,527,927
1.550,233
1.336,6830
3,849,863
5343%03,892,216
5002%03,829,224
4565%
2012
180,403
3,735,548
4090%
213,550
3,631,184
3681%
201020132011
1,485,673
1,259,824
1,205,519
1,171,537
969,024
977,367
885,339
674,170
225,349
3,598,016
3501%
33,982
3,646,309
3213%
(8,343)
3,340,998
2952%
211,169
3,288,064
2050%
14 lP aqe 咽∋∩yhOrt
2019 2015
2014
Village of Oak Brook Police Pension Fund
GASB Nos. 67 & 68 Report as of Fiscal Year Ending December 3'1, 2019
Actuarial Assumptions for Tolal Pension Liability
The total pension liability as of December 31, 2019 was dstermined using the following actuarial assumptions:
Acluarial Cosl llethod Entry Age Method
Asset Method Market Value of Assets
lnteresl Rates
Discounl Rate
Expected Long Term Raie of Relurn
Municipal Bond Rate
lnflation
Annual Pay lncreases
Measurement Date
675%
675%
N′A250%
375%
December 31,2019
Ad-hoc Cost-of-Living lncreases 3.0% (1.25% for those hired on or after January 1, 20111
Mortality Rates
Healthy RP-2014 Mortality Table with a blue collar adjustment, with generational
improvement scale MP-2019 applied from 2013
Disabled 115"/" of the RP-2014 Mortality Table with a blue collar adjustment, with
generational improvement scale MP-20'19 applied from 2013
All other assumptions As described in lhe assumptions section of the actuarial determined contribution
Experienqe Study An acluarial experience sludy was provided October 5, 2017 lo the Department of
lnsurance reflecting experience for the years 2011 - 2016 from numerous Funds valued by
the Department of lnsurance, including the Village of Oak Brook.
15 | P a g e q∋∩yhorヒ
Village of Oak Brook Police Pension Fund
GASB Nos. 67 & 68 Report as of Fiscal Year Ending December 31,2019
Actuarial Assumptions for Actuarially Determined Contributions
Actuarial Cost Method Entry Age Normal Cost Method
Arnortization Method closed leve!percentage of payro∥amortization of 1 000/。ofthe Unfunded Actuaria:Accrued
Liability using a 2.500/O payro∥growth assumption overthe period ending on December 31,
2040(22‐year amortization in 201 9)
Asset Method 5 year smoothing of asset gains and losses
interest Rates 6.75%,net ofinvestrnent and administrative expenses
:nflation 2 50%
Annual Pay increases 3.75%
Ad‐hoc Cost‐of‐iiving]ncreases 3.0%(1.25%forthose hired after 1/1/2011)
Mortality Rates
Heaithy RP‐2014 Mortal“y Tab:e with a blue collar adiustment,with generatlona:
:rnprovement Scale MP‐2018 app∥ed from 2013
Disabled l15%ofthe RP‐2014 Mortanty ttable wnha blue cO∥ar attuStment,wtth generalona:
:rnprovement scale MP-2018 app:ied from 2013
10°/O of deaths are assumed to be in the line or duty
Retirement Rates Recommended rates from the 2017 1E)Ol experience study:
丁ier! Tier∥
Age Rate Age Rate
50‐51 150/0 50¨54 5%
52‐54 20% 55 40%
55‐64 25% 56-64 25%
65-69 40% 65‐69 40%
70+ 100% 70+ 100%
161 q∋∩yhort
Village of Oak Brook Police Pension Fund
GASB Nos. 67 & 68 Report as of Fiscal Year Ending December 31, 2019
Actuarial Assumptions for Actuarially Determined Contributions
Disab∥ny Rates
Termination Rates
Marital Status and Ages
Expense Load
Recommended rates from the 2017 1DO!expenence study Sample rates include:
Age Rate
20 000%
30 014%
40 042%
50 071%
60%of disab∥nies are assumed to be in the∥ne of duty
Recommended rates from the 2017 1DOl experience study Samp!e rates include:
Age Rate
20 1040%
30 560%
40 190%
50 150%
80%of participants are assumed to be married、″ith female spouses 3 years younger
Equalto the administrative expenses paid in the prlor year
171Page ⑪∩yhO rt
Vi∥age of Oak Brook Po:ice Pension Fund
CASB Nos 67&68 RepOrt as of Fisca:Vear Ending December 31,2019
P:an Provisions
Eligibility for Participation
Police Officers of the Village of Oak Brook
Accrual of Benefits
For employees hired prior to Januayl, 201 1 , the normal retirement benelit is equal to 50% of the linal salary plus 2.5% of any service over 20 years (with a
maximum o, 30) times the final salary. There is a minimum benefit of $1,000 per month. The benefit is paid as a 100% joint and survivor benefit with the
spouse, children under 18, or dependent parents of the participant as the survivor.
For employees hired on or after January 1, 2011, the normal retirement benefit is equal to 2.5% of the final average salary times benefit service (maximum
30 years). The benefit is paid as a 66.67% joint and survivor benefit with the spouse, children under 18, or dependent parenis of the participant as lhe
survivor.
Benefits
Normal Retirement
Eligibility For employees hired prior to January 1, 2011, the normal reliremenl date is the lirst day of the month on or afrer complelion of 20
years of service and attainment of age 50.
For employees hired on or after January 1, 2011, the normal retirement date is the first day of the month on or atter completion of 10
years of service and attainment of age 55.
Benefit Unreduced Accrued Benefit payable immediately.
Early Retirement
Eligibility For employees hired prior to January 1, 201 1 and terminating with less than 20 years of service
For employees hired on or after January '1, 2011 who has attained age 50 and has 10 years of service.
Benefit For those hired prior to January 1, 201 'l the Accrued Benetit of 2.5% of final salary times service shall be paid at age 60.
For those hired on or alter January 1, 2011 the Accrued Benefit is reduced by 0.5% for each month prior to age 55.
Termination
E∥gibinty Participants terminaung befOre 20 years of service
Benent Refund of Contributions
181 個)∩yhO rt
village of Oak Brook Police Pension Fund
GASB Nos. 67 & 68 Report as of Fiscal Year Ending December 31, 2019
Plan Provisions
Disability in The Line of Duty
E∥gb∥ity
Benent
Disability Notln The Line of Duty
E∥gib∥ity
Benent
For participants who become disabled in the line of duty.
The greater ol 65% of the final salary or accrued benefit
For participants who become disabled outside of the line of duty.
50% of the final salary
Death ln the Lln€ of Duty
Eligibility For participants who die in the line of duty.
Benefit The benefit is 100% oflinalsalary paid to the survivor.
Death Not ln th8 Lino of Duty
Eligibility For participants who die outside of the line of duty.
Benefit For those hired before January 1, 201'l and grealer than 20 years of service, a benelit of 100% of the accrued benefit is paid to the
survivor. For those with more lhan 10 years of service, but less than 20 years of service, a benefit of 50% of the linal salary is
Provided to the survivor.
For those hired on or afrer January 1, 2011, a benefit equal to the greater ol 54o/o ot final salary and ol 66-213o/0 of the accrued
benelit is paid to the survivor.
Compensatlon
Final Salary is the salary altached io the rank held on the last day of service, or one year prior to the last day, whichever is greater.
Final Average Salary is the average monthly salary obtained by dividing the total salary of the police officer during lhe 48 consecutive months of service within
lhe last 60 months of service in which the total salary was the highest by the number of months of service in that period. Salary will not exceed $106,800
adjusled from January 1, 20'11 with the lesser of 3% and 50o/o ('100% effective 11112020\ ol lhe CPI on November 1.
191 a)∩yhorヒ
Village of Oak Brook Police Pension Fund
GASB Nos.67 & 68 Report as ol FiscalYear Ending Decsmber 31,20'19
Plan Provisions
Credited Service
For Vesting and 8enefit Accrual purposes, pension service credit is based on elapsed time ,rom date of hire.
Employee Contrlbutlons
9.91% of Compensation
COLA
Eligibility All Participants
Benefit For employees hired prior to January 1, 2011, a compound COLA of 3% is granted each year after attainment of age 55 and 1 year
of payments.
For employees hired atter or on Januayl, 2011, a simple COLA of the lesser of 3% and 50% o, the CPI on November I is granled
each year after attainment of age 60 and 1 year of payments.
For disabled employees, a simple COLA is available after attainment of age 60 and 1 year of payments. For employees hired prior
to January '1, 201 1, the COLA is 3%. For employees hired after Januayl, 2011 , the COLA is the lesser of 3% and 50% of lhe CPI
on November'1.
Plan Provisions Not lncluded
We are not aware of any plan provisions not included in the valuation
Adrustments Made for Subsequent Events
We are not aware of any event following the measurement date and prior to the date of this report that would materially impacl the results of this report.
20 lPage q∋∩yhorヒ