TOWN OF LANTANA POLICE RELIEF AND PENSION FUND ...

TOWN OF LANTANA POLICE RELIEF AND PENSION FUND ACTUARIAL VALUATION REPORT AS OF OCTOBER 1, 2015 ANNUAL EMPLOYER CONTRIBUTION FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2017

TABLE OF CONTENTS

Section A

Title Discussion of Valuation Results 1. 2.

B

6. 7. 8. 9. 10. 11.

5 6 7 8 9 10 17 18 19 21 25

Statement of Plan Assets at Market Value Reconciliation of Plan Assets Reconciliation of DROP Accounts Development of Actuarial Value of Assets Investment Rate of Return

28 29 30 31 32

FASB No. 35 GASB No. 67

33 34

Miscellaneous Information 1. 2. 3.

F

Participant Data Annual Required Contribution Actuarial Value of Benefits and Assets Calculation of Employer Normal Cost Liquidation of the Unfunded Actuarial Accrued Liability Actuarial Gains and Losses Recent History of Valuation Results Recent History of UAAL and Funded Ratio Recent History of Required and Actual Contributions Actuarial Assumptions and Cost Method Glossary of Terms

Financial Accounting Information 1. 2.

E

1 4

Pension Fund Information 1. 2. 3. 4. 5.

D

Discussion of Valuation Results State Contribution Reserve

Valuation Results 1. 2. 3. 4. 5.

C

Page

Reconciliation of Membership Data Active Participant Scatter Inactive Participant Scatter

Summary of Plan Provisions

39 40 41 42

SECTION A DISCUSSION OF VALUATION RESULTS

1 DISCUSSION OF VALUATION RESULTS

Comparison of Required Employer Contributions A comparison of the required employer contribution developed in this and the last actuarial valuations is as follows:

For FYE 9/30/2017 Based on 10/1/2015 Valuation

For FYE 9/30/2016 Based on 10/1/2014 Valuation

Required Employer/State Contribution As % of Covered Payroll

$

415,594 25.83 %

$

466,726 27.81 %

$

(51,132) (1.98) %

Allowable Credit for State Contribution As % of Covered Payroll

$

92,553 5.75 %

$

92,553 5.51 %

$

0 0.24 %

Required Employer Contribution As % of Covered Payroll

$

323,041 20.08 %

$

374,173 22.30 %

Increase (Decrease)

$

(51,132) (2.22) %

The required employer contribution has been adjusted for interest on the basis that contributions are made in equal payments at the end of each quarter. The contribution has also been computed under the assumption that the amount to be received from the State on behalf of police officers in 2016 and 2017 will be at least $92,553. If the actual payment from the State falls below this amount, then the Town must increase its contribution by the difference. The actual Employer and State contributions during the year ending September 30, 2015 were $408,040 and $92,553, respectively, for a total of $500,593. The annual required contribution was $500,593 for that year. Revisions in Benefits There were no revisions in benefits since the last valuation.

2

Revisions in Actuarial Assumptions or Methods Effective October 1, 2015, the mortality table was changed from the fully generational RP-2000 Combined Healthy Participant Mortality Table for males and females with mortality improvements projected to all future years from the year 2000 using Scale BB, to the mortality rates used by the Florida Retirement System (FRS). The current FRS mortality rates are based on the fully generational RP-2000 Mortality Table for Annuitants with white collar and blue collar adjustments. Mortality improvement continues to be projected from the year 2000 to all future years using Scale BB. This change was made in compliance with Florida House Bill 1309, which requires all public pension plans in Florida to use the same mortality tables used in either of the last two actuarial valuation reports of FRS effective no later than October 1, 2016. As a result of the change in the mortality assumption, the required contribution was reduced by $31,375 (1.95% of covered payroll). Actuarial Experience There was a net actuarial gain of $139,559 for the year which means that actual experience was more favorable than expected. The gain is primarily due to lower than expected salary increases and was partially offset by a recognized investment rate of return that was lower than expected. The return on market value of assets was -0.6% and the return on actuarial value of assets was 6.2%. The actuarial gain caused the employer contribution to decrease by 0.85% of covered payroll. Funded Ratio This year’s funded ratio is 91.7% compared to 88.0% last year. The ratio is equal to the actuarial value of assets divided by the actuarial accrued (past service) liability. The funded ratio before assumption change was 90.3%. Cost of Living Adjustment The cost of living adjustment is not payable to retirees and beneficiaries since there are cumulative net actuarial losses as of September 30, 2015 as shown on page 16.

3 Analysis of Change in Employer Contribution The components of change in the required employer contribution are as follows:

Contribution rate last year Change in assumptions/methods Change in Normal Cost Rate Amortization Payment on UAL Experience gain/loss Change in administrative expense Change in State revenue

22.30 % (1.95) 0.05 0.18 (0.85) 0.59 (0.24)

Contribution rate this year

20.08

Variability of Future Contribution Rates The Actuarial Cost Method used to determine the contribution rate is intended to produce contribution rates which are generally level as a percent of payroll. Even so, when experience differs from the assumptions, as it often does, the employer’s contribution rate can vary significantly from yearto-year. Over time, if the year-to-year gains and losses offset each other, the contribution rate would be expected to return to the current level, but this does not always happen. The Actuarial Value of Assets exceeds the Market Value of Assets by $376,514 as of the valuation date (see Section C). This difference will be gradually recognized over the next several years. In turn, the computed employer contribution rate will increase by approximately 2.3% of covered payroll over the same period in the absence of offsetting gains. Relationship to Market Value If Market Value had been the basis for the valuation, the Employer contribution rate would have been 22.41% and the funded ratio would have been 88.7%. In the absence of other gains and losses, the employer contribution rate should increase to that level over the next several years. Conclusion The remainder of this Report includes detailed actuarial valuation results, pension fund information, miscellaneous information and statistics, and a summary of plan provisions.

4 STATE CONTRIBUTION RESERVE Increments in Chapter revenue over that received in 1998 must first be used to fund the cost of compliance with minimum benefits. As of the valuation date, two the minimum benefits have not been met. The minimum serviceconnected disability benefit should be changed to the greater of the accrued benefit and 42% of average final compensation with eligibility from the date of hire. Also, the non-service-connected disability benefit should provide the accrued benefit as a minimum.

Actuarial Confirmation of the Use of State Chapter Money 1. Base Amount Previous Plan Year 2. Amount Received for Previous Plan Year 3. Benefit Improvements Made in Previous Plan Year 4. Excess Funds for Previous Plan Year 5. Accumulated Excess at Beginning of Previous Year 6. Prior Excess Used in Previous Plan Year

$

92,553 101,886 0 9,333 43,018 0

7. Accumulated Excess as of Valuation Date (Available for Benefit Improvements): (4) + (5) - (6)

52,351

8. Base Amount This Plan Year

92,553

The Accumulated Excess shown in line 7 (if any) is being held in reserve and is subtracted from Plan assets (see Section C of this Report). The Base Amount in line 8 is the amount the employer may take as a credit against its required contribution; however, in no event may the employer take credit for more than the actual amount of Chapter revenue received.

SECTION B VALUATION RESULTS

5

PARTICIPANT DATA October 1, 2015

October 1, 2014

ACTIVE MEMBERS Number Covered Annual Payroll Average Annual Payroll Average Age Average Past Service Average Age at Hire

$ $

24 1,547,076 64,462 40.8 11.7 29.1

$ $

25 1,613,718 64,549 41.2 11.6 29.6

RETIREES, BENEFICIARIES & DROP Number Annual Benefits Average Annual Benefit Average Age

$ $

15 445,693 29,713 60.8

$ $

0 0 0 0.0

$ $

5 63,256 12,651 54.1

$ $

13 321,330 24,718 61.4

$ $

0 0 0 0.0

$ $

6 123,460 20,577 52.5

DISABILITY RETIREES Number Annual Benefits Average Annual Benefit Average Age TERMINATED VESTED MEMBERS Number Annual Benefits Average Annual Benefit Average Age

6

ACTUARIALLY DETERMINED CONTRIBUTION (ADC)

A. Valuation Date

October 1, 2015

October 1, 2015

After Changes

Before Changes

B. ADC to Be Paid During Fiscal Year Ending C. Assumed Dates of Employer Contributions D. Annual Payment to Amortize Unfunded Actuarial Liability

$

October 1, 2014

9/30/2017

9/30/2017

9/30/2016

Quarterly

Quarterly

Quarterly

111,230

$

129,009

$

145,067

E. Employer Normal Cost

271,010

282,011

284,161

F. ADC if Paid on the Valuation Date: D+E

382,240

411,020

429,228

G. ADC Adjusted for Frequency of Payments

399,666

429,758

448,797

H. ADC as % of Covered Payroll I. Assumed Rate of Increase in Covered Payroll to Contribution Year J. Covered Payroll for Contribution Year K. ADC for Contribution Year: H x J L. Allowable Credit for State Revenue in Contribution Year M. Required Employer Contribution (REC) in Contribution Year N. REC as % of Covered Payroll in Contribution Year: M ÷ J

25.83 %

27.78 %

27.81 %

4.00 %

4.00 %

4.00 %

1,608,959

1,608,959

1,678,267

415,594

446,969

466,726

92,553

92,553

92,553

323,041

354,416

374,173

20.08 %

22.03 %

22.30 %

7

ACTUARIAL VALUE OF BENEFITS AND ASSETS

A. Valuation Date

October 1, 2014

October 1, 2015

October 1, 2015

After Changes

Before Changes

$ 7,583,088 810,210 266,778 213,822 33,630 8,907,528

$ 7,910,286 842,566 301,843 64,138 32,776 9,151,609

$ 8,143,994 879,979 308,432 67,505 33,693 9,433,603

5,097,886 0 581,180 5,679,066

5,136,461 0 592,249 5,728,710

3,653,777 0 1,264,517 4,918,294

14,586,594

14,880,319

14,351,897

C. Actuarial Accrued (Past Service) Liability under Entry Age Normal

12,357,632

12,552,475

11,942,528

D. Actuarial Value of Accumulated Plan Benefits per FASB No. 35

10,792,141

10,950,102

10,182,332

E. Plan Assets 1. Market Value 2. Actuarial Value

10,960,361 11,336,875

10,960,361 11,336,875

10,859,699 10,507,296

F. Unfunded Actuarial Accrued Liability

1,020,757

1,215,600

1,435,232

G. Actuarial Present Value of Projected Covered Payroll

10,670,699

10,786,492

11,233,775

H. Actuarial Present Value of Projected Member Contributions

746,949

755,054

786,364

906,956

906,956

902,731

B. Actuarial Present Value of All Projected Benefits for 1. Active Members a. Service Retirement Benefits b. Vesting Benefits c. Disability Benefits d. Preretirement Death Benefits e. Return of Member Contributions f. Total 2.

3.

I.

Inactive Members a. Service Retirees & Beneficiaries b. Disability Retirees c. Terminated Vested Members d. Total Total for All Members

Accumulated Contributions of Active Members

8

CALCULATION OF EMPLOYER NORMAL COST A. Valuation Date

October 1, 2015 After Changes

October 1, 2015 Before Changes

October 1, 2014

B. Normal Cost for 1. 2. 3. 4. 5. 6. 7.

Service Retirement Benefits Vesting Benefits Disability Benefits Preretirement Death Benefits Return of Member Contributions Total for Future Benefits Assumed Amount for Administrative Expenses 8. Total Normal Cost

$ 252,433 46,840 10,645 8,045 14,580 332,543

265,973 49,032 12,292 2,096 14,151 343,544

$ 277,814 50,287 12,509 2,208 14,688 357,506

46,762 379,305

46,762 390,306

39,615 397,121

C. Expected Member Contribution

108,295

108,295

112,960

D. Employer Normal Cost: B8-C

271,010

282,011

284,161

E. Employer Normal Cost as % of Covered Payroll

17.52 %

18.23 %

17.61 %

9 LIQUIDATION OF THE UNFUNDED ACTUARIAL ACCRUED LIABILITY

A. UAAL Amortization Period and Payments

Year Established 10/1/2010 10/1/2011 10/1/2011 10/1/2012 10/1/2012 10/1/2013 10/1/2013 10/1/2014 10/1/2015 10/1/2015

Original UAAL Amortization Period Source (Years) Initial UAAL (Gain)/Loss Assumption Change (Gain)/Loss Assumption Change (Gain)/Loss Assumption Change (Gain)/Loss (Gain)/Loss Assumption Change

20 20 20 20 20 20 20 20 20 20

Current UAAL

Amount

Years Remaining

$1,255,800 (219,482) 249,019 (31,824) 269,864 (170,866) 288,058 (131,291) (139,559) (194,843)

15 16 16 17 17 18 18 19 20 20

Amount $

Payment

1,133,677 $ (188,634) 214,019 (28,509) 241,752 (158,181) 266,671 (125,636) (139,559) (194,843)

119,471 (19,195) 21,778 (2,811) 23,838 (15,160) 25,558 (11,735) (12,735) (17,779)

1,020,757

111,230

B. Amortization Schedule The UAAL is being liquidated as a level dollar amount over the number of years remaining in the amortization period. The following schedule illustrates the expected amortization of the UAAL:

Amortization Schedule Year 2015 2016 2017 2018 2019 2020 2025 2030 2035

Expected UAAL $

1,020,757 977,744 931,503 881,793 828,356 770,910 412,219 (102,729) -

10 ACTUARIAL GAINS AND LOSSES The assumptions used to anticipate mortality, employment turnover, investment income, expenses, salary increases, and other factors have been based on long range trends and expectations.

Actual

experience can vary from these expectations. The variance is measured by the gain and loss for the period involved. If significant long term experience reveals consistent deviation from what has been expected and that deviation is expected to continue, the assumptions should be modified. The net actuarial gain (loss) for the past year is computed as follows: 1.

Last Year's UAAL

2.

Last Year's Employer Normal Cost

302,069

3.

Last Year's Contributions

500,593

4.

Interest at the Assumed Rate on: a. 1 and 2 for one year b. 3 from dates paid c. a - b

130,298 11,847 118,451

5. 6.

This Year's Expected UAAL Prior to Revision: 1 + 2 - 3 + 4c Change in UAAL Due to Plan Amendments and/or Changes in Actuarial Assumptions

$

1,435,232

1,355,159 (194,843)

7.

This Year's Expected UAAL: 5 + 6

1,160,316

8.

This Year's Actual UAAL

1,020,757

9.

Net Actuarial Gain (Loss): 7 - 8

139,559

10. Gain (Loss) Due to Investments

(141,918)

11. Gain (Loss) from Other Sources

281,477

11 Net actuarial gains in previous years have been as follows:

Year Ended 9/30/1992 9/30/1993 9/30/1994 9/30/1995 9/30/1996

Gain (Loss) $

44,072 141,584 (16,809) 145,649 134,931

9/30/1997 9/30/1998 9/30/1999 9/30/2000 9/30/2001

138,203 67,985 117,042 101,381 (95,175)

9/30/2002 9/30/2003 9/30/2004 9/30/2005 9/30/2006

(172,924) (115,119) (162,031) (23,944) 76,319

9/30/2007 9/30/2008 9/30/2009 9/30/2010 9/30/2011

(16,513) (157,717) (250,566) 292,556 219,482

9/30/2012 9/30/2013 9/30/2014 9/30/2015

31,824 170,866 131,291 139,559

12

1000

1000

900

900

800

800

700

700

600

600

500

500

400

400

300

300

200

200

100

100

0

0

-100

-100

-200

-200

-300

-300

-400

-400

-500

-500

-600

-600

Plan Year End Gain or Loss

Cumulative

Thousands

Thousands

Actuarial Gain (+) or Loss (-)

13 The fund earnings and salary increase assumptions have considerable impact on the cost of the Plan so it is important that they are in line with the actual experience. The following table shows the actual fund earnings and salary increase rates compared to the assumed rates for the last few years. Investment Return Year Ending

Actual

Assumed

Salary Increases Actual

Assumed

9/30/1991 9/30/1992 9/30/1993 9/30/1994 9/30/1995

N/A 12.9 % 10.6 5.6 6.6

8.00 % 8.00 8.00 8.00 8.00

9/30/1996 9/30/1997 9/30/1998 9/30/1999 9/30/2000

8.0 8.6 8.1 14.9 14.6

8.00 8.00 8.00 8.00 8.00

8.9 0.4 7.6 5.9 8.8

6.0 6.0 6.0 6.0 6.0

9/30/2001 9/30/2002 9/30/2003 9/30/2004 9/30/2005

8.2 3.3 4.0 1.8 2.8

8.00 8.00 8.00 8.00 8.00

10.1 5.5 4.4 4.2 9.7

6.0 6.0 6.0 6.0 6.0

9/30/2006 9/30/2007 9/30/2008 9/30/2009 9/30/2010

6.6 10.1 2.0 5.6 9.7

8.00 8.00 8.00 8.00 8.00

2.6 9.6 8.7 2.1 1.3

6.0 6.0 6.0 6.0 6.0

9/30/2011 9/30/2012 9/30/2013 9/30/2014 9/30/2015

7.6 8.0 8.6 8.2 6.2

7.875 7.75 7.625 7.50 7.50

1.6 4.2 4.6 1.8 1.8

6.0 6.0 6.0 6.0 6.0

Averages

7.6 %

---

16.5 % 4.9 8.3 9.2 12.9

6.2 %

7.0 % 7.0 7.0 7.0 7.0

---

The actual investment return rates shown above are based on the actuarial value of assets. The actual salary increase rates shown above are the increases received by those active members who were included in the actuarial valuations both at the beginning and the end of each year.

14

History of Investment Return Based on Actuarial Value of Assets 20%

20%

15%

15%

10%

10%

5%

5%

0%

0%

Plan Year End Actual

Assumed

History of Salary Increases 18%

18%

16%

16%

14%

14%

12%

12%

10%

10%

8%

8%

6%

6%

4%

4%

2%

2%

0%

0%

Plan Year End Compared to Previous Year Actual

Assumed

15

Actual (A) Compared to Expected (E) Decrements Among Active Employees

Year Ended

Number Added Normal & During DROP Disability Year Retirement Retirement A E A E A E

Death A E

Terminations Vested Other Totals A A A E

Active Members End of Year

9/30/2002 9/30/2003 9/30/2004 9/30/2005 9/30/2006

7 4 4 4 1

5 2 4 3 3

0 0 0 0 0

0 0 0 0 0

0 0 0 0 0

0 0 0 0 0

1 0 0 1 0

0 0 0 0 0

0 0 0 0 0

4 2 4 2 3

4 2 4 2 3

2 2 2 2 2

29 31 31 32 30

9/30/2007 9/30/2008 9/30/2009 9/30/2010 9/30/2011

2 2 0 0 1

1 3 0 2 1

1 1 0 1 1

0 0 0 0 0

0 0 0 0 0

0 0 0 0 0

0 0 0 0 0

0 0 0 0 0

0 1 0 1 0

0 1 0 0 0

0 2 0 1 0

2 2 2 1 1

31 30 30 28 28

9/30/2012 9/30/2013 9/30/2014 9/30/2015 9/30/2016

1 2 1 2

2 2 3 3

1 0 2 1

2 1 1 1 0

0 0 0 0

0 0 0 0 0

0 0 0 1

0 0 0 0 0

0 0 1 0

1 2 0 1

1 2 1 1

1 1 1 2 1

27 27 25 24

14 Yr Totals *

31

34

8

5

0

0

3

0

3

20

23

23

* Totals are through current Plan Year only.

16

Cumulative Actuarial Gains (Losses) Year Ending 9/30 2000 2001 2002 2003 2004

Balance at Beginning of Year $

0 101,381 14,316 (157,463) (285,179)

Interest $

Gain (Loss) for Year

0 $ 8,110 1,145 (12,597) (22,814)

101,381 (95,175) (172,924) (115,119) (162,031)

Balance at End of Year

COLA $

0 $ 0 0 0 0

101,381 14,316 (157,463) (285,179) (470,024)

2005 2006 2007 2008 2009

(470,024) (531,570) (497,777) (554,112) (756,158)

(37,602) (42,526) (39,822) (44,329) (60,493)

(23,944) 76,319 (16,513) (157,717) (250,566)

0 0 0 0 0

(531,570) (497,777) (554,112) (756,158) (1,067,217)

2010 2011 2012 2013 2014

(1,067,217) (860,038) (708,284) (731,352) (616,252)

(85,377) (67,728) (54,892) (55,766) (46,219)

292,556 219,482 31,824 170,866 131,291

0 0 0 0 0

(860,038) (708,284) (731,352) (616,252) (531,180)

2015

(531,180)

(39,839)

139,559

0

(431,460)

RECENT HISTORY OF VALUATION RESULTS Number of Active Inactive Valuation Members Members Date

Employer Normal Cost Covered Annual Payroll $

693,073 742,226 797,341 842,884 1,011,215

Actuarial Value of Assets $

Amount

UAAL

% of Payroll

10/1/91 10/1/92 10/1/93 10/1/94 10/1/95

23 24 25 26 30

10 10 10 12 12

10/1/96 10/1/97 10/1/98 10/1/99 10/1/00

27 25 23 22 25

12 13 9 9 10

995,933 912,644 895,347 893,096 1,020,463

1,063,750 1,271,036 1,368,123 1,647,026 1,947,011

0 0 0 0 0

92,104 74,766 63,019 50,998 66,834

9.25 8.19 7.04 5.71 6.55

10/1/01 10/1/02 10/1/03 10/1/04 10/1/05

27 29 31 31 32

11 12 10 10 11

1,192,651 1,252,026 1,457,905 1,466,225 1,599,814

2,174,946 2,415,505 2,704,054 2,952,595 3,303,351

0 0 0 0 0

193,927 222,380 281,342 319,702 374,348

16.26 17.76 19.30 21.80 23.40

10/1/06 10/1/07 10/1/08 10/1/09 10/1/10

30 31 30 29 28

9 10 12 13 14

1,560,307 1,729,150 1,801,385 1,758,203 1,677,543

3,776,705 4,670,639 5,168,480 5,792,687 6,709,645

0 0 0 0 1,255,800

349,172 388,739 415,173 464,062 268,596

22.38 22.48 23.05 26.39 16.01

10/1/11 10/1/12 10/1/13 10/1/14 10/1/15

28 27 27 25 24

15 16 16 19 20

1,690,206 1,662,329 1,725,851 1,613,718 1,547,076

7,596,301 8,484,349 9,491,707 10,507,296 11,336,875

1,365,873 1,557,110 1,626,159 1,435,232 1,020,757

285,529 278,344 302,069 284,161 271,010

16.89 16.74 17.50 17.61 17.52

488,819 587,561 705,418 777,357 872,768

$

0 0 0 0 0

$

61,060 62,736 53,830 63,887 100,418

8.81 % 8.45 6.75 7.58 9.93

17

RECENT HISTORY OF UAAL AND FUNDED RATIO

Actuarial Valuation Date

10/1/1991 10/1/1992 10/1/1993 10/1/1994 10/1/1995

Actuarial Accrued Liability (AAL) Entry Age (b)

Actuarial Value of Assets (a)

$

488,819 587,561 676,916 777,357 872,768

$

478,352 568,345 619,318 698,896 728,566

Unfunded AAL (UAAL) - Entry Age (b) - (a)

$

Funded Ratio (a) / (b)

Covered Payroll (c)

UAAL As % of Covered Payroll (b - a) / c

(10,467) (19,216) (57,598) (78,461) (144,202)

102.2 % $ 103.4 109.3 111.2 119.8

693,073 742,226 797,341 842,884 1,018,442

(1.5) % (2.6) (7.2) (9.3) (14.2)

10/1/1996 10/1/1997 10/1/1998 10/1/1999 10/1/2000

1,063,750 1,271,036 1,368,123 1,647,026 1,947,011

1,183,292 1,251,842 1,273,447 1,414,842 1,589,940

119,542 (19,194) (94,676) (232,184) (357,071)

89.9 101.5 107.4 116.4 122.5

995,933 912,644 895,347 893,096 1,020,463

12.0 (2.1) (10.6) (26.0) (35.0)

10/1/2001 10/1/2002 10/1/2003 10/1/2004 10/1/2005

2,174,946 2,415,505 2,704,054 2,952,595 3,303,351

2,434,688 2,821,087 3,283,969 415,988 4,284,717

259,742 405,582 579,915 698,034 981,366

89.3 85.6 82.3 80.9 77.1

1,192,651 1,252,026 1,457,905 1,466,225 1,599,814

21.8 32.4 39.8 47.6 61.3

10/1/2006 10/1/2007 10/1/2008 10/1/2009 10/1/2010

3,776,705 4,670,639 5,168,480 5,792,687 6,709,645

4,645,938 5,596,748 6,280,340 7,270,006 7,965,445

869,233 926,109 1,111,860 1,477,319 1,255,800

81.3 83.5 82.3 79.7 84.2

1,560,307 1,729,150 1,801,385 1,758,203 1,677,543

55.7 53.6 61.7 84.0 74.9

10/1/2011 10/1/2012 10/1/2013 10/1/2014 10/1/2015

7,596,301 8,484,349 9,491,707 10,507,296 11,336,875

8,962,174 10,041,459 11,117,866 11,942,528 12,357,632

1,365,873 1,557,110 1,626,159 1,435,232 1,020,757

84.8 84.5 85.4 88.0 91.7

1,690,206 1,662,329 1,725,851 1,613,718 1,547,076

80.8 93.7 94.2 88.9 66.0

18

RECENT HISTORY OF REQUIRED AND ACTUAL CONTRIBUTIONS

Valuation

End of Year To Which Valuation Applies

Required Contributions Employer & State Amount

10/1/91 10/1/92 10/1/93 10/1/94 10/1/95

9/30/92 9/30/93 9/30/94 9/30/95 9/30/96

10/1/96 10/1/97 10/1/98 10/1/99 10/1/00

9/30/97 9/30/98 9/30/99 9/30/00 9/30/01

96,575 78,395 66,078 53,474 70,078

10/1/01 10/1/02 10/1/03 10/1/04 10/1/04

9/30/02 9/30/03 9/30/04 9/30/05 9/30/06

10/1/05 10/1/06 10/1/07 10/1/08 10/1/09

$

64,024 65,781 56,443 66,988 105,293

% of Payroll 9.24 % $ 8.86 7.08 7.95 10.41

Estimated State Amount

% of Payroll

Net Employer Amount

% of Payroll

Actual Contributions Employer

State

Total

35,504 33,919 34,458 32,353 66,929

5.12 % $ 4.57 4.32 3.84 6.62

28,520 31,862 21,985 34,635 38,364

4.12 % $ 4.29 2.76 4.11 3.79

30,105 31,862 23,948 34,635 44,256

9.70 8.59 7.38 5.99 6.87

74,654 80,409 70,823 70,823 76,927

7.50 8.81 7.91 7.93 7.54

21,921 0 0 0 0

2.20 0.00 0.00 0.00 0.00

21,921 7,572 0 0 0

80,409 70,823 75,235 76,927 71,424

102,330 78,395 75,235 76,927 71,424

203,340 233,174 294,998 335,220 348,586

17.05 18.62 20.23 22.86 22.86

71,424 75,942 86,230 86,230 86,230

5.99 6.06 5.91 5.88 5.65

131,916 157,232 208,768 248,990 262,356

11.06 12.56 14.32 16.98 17.21

127,398 157,233 208,768 248,990 262,356

75,942 86,230 86,230 86,230 92,553

203,340 243,463 294,998 335,220 354,909

9/30/07 9/30/08 9/30/09 9/30/10 9/30/11

408,298 380,690 423,863 452,810 506,137

24.54 23.46 23.57 24.17 27.68

92,553 92,553 92,553 92,553 85,950

5.56 5.70 5.15 4.94 4.70

315,745 288,137 331,310 360,257 420,187

18.98 17.76 18.42 19.23 22.98

323,435 318,001 331,310 366,860 424,736

92,553 92,553 92,553 85,950 81,401

415,988 410,554 423,863 452,810 506,137

10/1/10 10/1/11 10/1/12 10/1/13 10/1/14

9/30/12 9/30/13 9/30/14 9/30/15 9/30/16

420,634 451,934 465,226 500,593 466,726

24.11 25.71 26.91 27.89 27.81

81,401 87,954 87,954 92,553 92,553

4.67 5.00 5.09 5.16 5.51

339,233 363,980 377,272 408,040 374,173

19.44 20.71 21.82 22.73 22.30

339,233 375,132 377,272 408,040 ---

92,553 87,954 92,553 92,553 ---

431,786 463,086 469,825 500,593 ---

10/1/15

9/30/17

415,594

25.83

92,553

5.75

323,041

20.08

---

---

---

$

33,919 34,458 32,495 33,464 74,654

$

64,024 66,320 56,443 68,099 118,910

19

20

Recent History of Required and Actual Contributions $550 $500 $450

Thousands

$400 $350 $300 $250 $200 $150 $100 $50 $0

Fiscal Year End Required Contribution

Actual Contribution

21

ACTUARIAL ASSUMPTIONS AND COST METHOD Valuation Methods Actuarial Cost Method - Normal cost and the allocation of benefit values between service rendered before and after the valuation date were determined using an Individual Entry-Age Actuarial Cost Method having the following characteristics: (i) the annual normal cost for each individual active member, payable from the date of employment to the date of retirement, is sufficient to accumulate the value of the member’s benefit at the time of retirement; (ii) each annual normal cost is a constant percentage of the member’s year by year projected covered pay. Actuarial gains/(losses), as they occur, reduce (increase) the Unfunded Actuarial Accrued Liability. Financing of Unfunded Actuarial Accrued Liabilities - Unfunded Actuarial Accrued Liabilities (full funding credit if assets exceed liabilities) were amortized by level (principal & interest combined) dollar contributions over a reasonable period of future years. Actuarial Value of Assets - The Actuarial Value of Assets phase in the difference between the expected return on actuarial value and actual return on market value of assets at the rate of 20% per year. The Actuarial Value of Assets will be further adjusted to the extent necessary to fall within the corridor whose lower limit is 80% of the Market Value of plan assets and whose upper limit is 120% of the Market Value of plan assets. During periods when investment performance exceeds the assumed rate, Actuarial Value of Assets will tend to be less than Market Value. During periods when investment performance is less than assumed rate, Actuarial Value of Assets will tend to be greater than Market Value. Valuation Assumptions The actuarial assumptions used in the valuation are shown in this Section. Economic Assumptions The investment return rate assumed in the valuation is 7.50% per year, compounded annually (net after investment expenses). The Wage Inflation Rate assumed in this valuation was 3.00% per year. The Wage Inflation Rate is defined to be the portion of total pay increases for an individual that are due to macro economic forces including productivity, price inflation, and labor market conditions. The wage inflation rate does not include pay changes related to individual merit and seniority effects. The assumed real rate of return over wage inflation is defined to be the portion of total investment return that is more than the assumed wage inflation rate. Considering other economic assumptions, the 7.50% investment return rate translates to an assumed real rate of return over wage inflation of 4.50%.

22

The rates of salary increase used for individual members are in accordance with the following table. This assumption is used to project a member’s current salary to the salaries upon which benefits will be based. % Increase in Salary Years of Service All

Merit and Seniority 3.0%

Base (Economic) 3.0%

Total Increase 6.0%

Demographic Assumptions The mortality table is the RP-2000 Mortality Table for annuitants with future improvements in mortality projected to all future years using Scale BB. For females, the base mortality rates include a 100% white collar adjustment. For males, the base mortality rates include a 90% blue collar adjustment and a 10% white collar adjustment. These are the same rates currently in use for Special Risk Class members of the Florida Retirement System (FRS) (and they are based on a statewide experience study). Sample Attained Ages (in 2015) 50 55 60 65 70 75 80

Probability of Dying Next Year Men Women 0.54 % 0.23 % 0.67 0.32 0.91 0.48 1.34 0.76 2.07 1.27 3.36 5.53

2.15 3.59

Future Life Expectancy (years) Men Women 33.67 38.11 29.02 33.09 24.45 28.20 20.05 23.46 15.95 19.02 12.25 9.08

14.96 11.36

This assumption is used to measure the probabilities of each benefit payment being made after retirement. For active members, the probabilities of dying before retirement were based upon the same mortality table as members dying after retirement. For disabled retirees, the mortality table used was 60% of the RP-2000 mortality and 40% of the RP2000 Mortality with a White Collar adjustment for disabled annuitants, set-back 4 years for males and setforward 2 years for females, with no provision being made for future mortality improvements. These are the same rates currently in use for Special Risk Class members of the Florida Retirement System (FRS) (and they are based on a statewide experience study). The rates of retirement used to measure the probability of eligible members retiring during the next year were as follows: Number of Years After First Eligibility for Normal Retirement 0 1 2 3 4 5

Probability of Normal Retirement 80 % 40 40 40 40 100

23 Rates of separation from active membership were as shown below (rates do not apply to members eligible to retire and do not include separation on account of death or disability). This assumption measures the probabilities of members remaining in employment.

Sample Ages 20 25 30 35 40

Years of Service All

% of Active Members Separating Within Next Year 9.3 % 8.8 7.9 6.2 4.3 2.6 1.1 0.5 0.4

45 50 55 60

Rates of disability among active members:

Sample Ages 20 25 30 35 40

% Becoming Disabled within Next Year 0.14 % 0.15 0.18 0.23 0.30

45 50

0.51 1.00

24

Miscellaneous and Technical Assumptions

Administrative & Investment Expenses

The investment return assumption is intended to be the return net of investment expense. Annual administrative expenses are assumed to be equal to the average of the expenses over the previous two years. Assumed administrative expenses are added to the Normal Cost.

Benefit Service

Exact fractional service is used to determine the amount of benefit payable.

Decrement Operation

Disability and mortality decrements operate during retirement eligibility.

Decrement Timing

Decrements of all types are assumed to occur at the beginning of the year.

Eligibility Testing

Eligibility for benefits is determined based upon the age nearest birthday and service nearest whole year on the date the decrement is assumed to occur.

Forfeitures

For vested separations from service, it is assumed that 0% of members separating will withdraw their contributions and forfeit an employer financed benefit. It was further assumed that the liability at termination is the greater of the vested deferred benefit (if any) or the member’s accumulated contributions.

Incidence of Contributions

Employer contributions are assumed to be made at the end of each calendar quarter. Member contributions are assumed to be received continuously throughout the year based upon the computed percent of payroll shown in this report, and the actual payroll payable at the time contributions are made.

Marriage Assumption

100% of males and 100% of females are assumed to be married for purposes of death-in-service benefits. Male spouses are assumed to be three years older than female spouses for active member valuation purposes.

Normal Form of Benefit

A life annuity with 10 years certain is the normal form of benefit.

Pay Increase Timing

Middle of fiscal year. This is equivalent to assuming that reported pays represent amounts paid to members during the year ended on the valuation date.

Service Credit Accruals

It is assumed that members accrue one year of service credit per year.

25 GLOSSARY OF TERMS

Actuarial Accrued Liability (AAL)

The difference between the Actuarial Present Value of Future Benefits, and the Actuarial Present Value of Future Normal Costs.

Actuarial Assumptions

Assumptions about future plan experience that affect costs or liabilities, such as: mortality, withdrawal, disablement, and retirement; future increases in salary; future rates of investment earnings; future investment and administrative expenses; characteristics of members not specified in the data, such as marital status; characteristics of future members; future elections made by members; and other items.

Actuarial Cost Method

A procedure for allocating the Actuarial Present Value of Future Benefits between the Actuarial Present Value of Future Normal Costs and the Actuarial Accrued Liability.

Actuarial Equivalent

Of equal Actuarial Present Value, determined as of a given date and based on a given set of Actuarial Assumptions.

Actuarial Present Value (APV)

The amount of funds required to provide a payment or series of payments in the future. It is determined by discounting the future payments with an assumed interest rate and with the assumed probability each payment will be made.

Actuarial Present Value of Future Benefits (APVFB)

The Actuarial Present Value of amounts which are expected to be paid at various future times to active members, retired members, beneficiaries receiving benefits, and inactive, nonretired members entitled to either a refund or a future retirement benefit. Expressed another way, it is the value that would have to be invested on the valuation date so that the amount invested plus investment earnings would provide sufficient assets to pay all projected benefits and expenses when due.

Actuarial Valuation

The determination, as of a valuation date, of the Normal Cost, Actuarial Accrued Liability, Actuarial Value of Assets, and related Actuarial Present Values for a plan. An Actuarial Valuation for a governmental retirement system typically also includes calculations of items needed for compliance with GASB No. 67.

Actuarial Value of Assets

The value of the assets as of a given date, used by the actuary for valuation purposes. This may be the market or fair value of plan assets or a smoothed value in order to reduce the year-to-year volatility of calculated results, such as the funded ratio and the Actuarially Determined Contribution (ADC).

26 Amortization Method

A method for determining the Amortization Payment. The most common methods used are level dollar and level percentage of payroll. Under the Level Dollar method, the Amortization Payment is one of a stream of payments, all equal, whose Actuarial Present Value is equal to the UAAL. Under the Level Percentage of Pay method, the Amortization Payment is one of a stream of increasing payments, whose Actuarial Present Value is equal to the UAAL. Under the Level Percentage of Pay method, the stream of payments increases at the rate at which total covered payroll of all active members is assumed to increase.

Amortization Payment

That portion of the plan contribution or ADC which is designed to pay interest on and to amortize the Unfunded Actuarial Accrued Liability.

Amortization Period

The period used in calculating the Amortization Payment.

Actuarially Determined Contribution (ADC)

The employer’s periodic required contributions, expressed as a dollar amount or a percentage of covered plan compensation. The ADC consists of the Employer Normal Cost and Amortization Payment.

Closed Amortization Period

A specific number of years that is reduced by one each year, and declines to zero with the passage of time. For example if the amortization period is initially set at 30 years, it is 29 years at the end of one year, 28 years at the end of two years, etc.

Employer Normal Cost

The portion of the Normal Cost to be paid by the employer. This is equal to the Normal Cost less expected member contributions.

Equivalent Single Amortization Period

For plans that do not establish separate amortization bases (separate components of the UAAL), this is the same as the Amortization Period. For plans that do establish separate amortization bases, this is the period over which the UAAL would be amortized if all amortization bases were combined upon the current UAAL payment.

Experience Gain/Loss

A measure of the difference between actual experience and that expected based upon a set of Actuarial Assumptions, during the period between two actuarial valuations. To the extent that actual experience differs from that assumed, Unfunded Actuarial Accrued Liabilities emerge which may be larger or smaller than projected. Gains are due to favorable experience, e.g., the assets earn more than projected, salaries do not increase as fast as assumed, members retire later than assumed, etc. Favorable experience means actual results produce actuarial liabilities not as large as projected by the actuarial assumptions. On the other hand, losses are the result of unfavorable experience, i.e., actual results that produce Unfunded Actuarial Accrued Liabilities which are larger than projected.

27 Funded Ratio

The ratio of the Actuarial Value of Assets to the Actuarial Accrued Liability.

GASB

Governmental Accounting Standards Board.

GASB No. 67 and GASB No. 68

These are the governmental accounting standards that set the accounting rules for public retirement systems and the employers that sponsor or contribute to them. Statement No. 68 sets the accounting rules for the employers that sponsor or contribute to public retirement systems, while Statement No. 67 sets the rules for the systems themselves.

Normal Cost

The annual cost assigned, under the Actuarial Cost Method, to the current plan year.

Open Amortization Period

An open amortization period is one which is used to determine the Amortization Payment but which does not change over time. In other words, if the initial period is set as 30 years, the same 30-year period is used in determining the Amortization Period each year. In theory, if an Open Amortization Period is used to amortize the Unfunded Actuarial Accrued Liability, the UAAL will never completely disappear, but will become smaller each year, either as a dollar amount or in relation to covered payroll.

Unfunded Actuarial Accrued Liability

The difference between the Actuarial Accrued Liability and Actuarial Value of Assets.

Valuation Date

The date as of which the Actuarial Present Value of Future Benefits are determined. The benefits expected to be paid in the future are discounted to this date.

SECTION C PENSION FUND INFORMATION

28

Statement of Plan Assets at Market Value September 30 2015

Item A. Cash and Cash Equivalents (Operating Cash) B. Receivables 1. Member Contributions 2. Employer Contributions 3. State Contributions 4. Investment Income and Other Receivables 5. Total Receivables C. Investments 1. Short Term Investments 2. Domestic Equities 3. International Equities 4. Domestic Fixed Income 5. International Fixed Income 6. Real Estate 7. Private Equity 8. Total Investments D. Liabilities 1. Benefits Payable 2. Accrued Expenses and Other Payables 3. Total Liabilities E. Total Market Value of Assets Available for Benefits F. Reserves 1. State Contribution Reserve 2. DROP Accounts 3. Total Reserves G. Market Value Net of Reserves H. Allocation of Investments 1. Short Term Investments 2. Domestic Equities 3. International Equities 4. Domestic Fixed Income 5. International Fixed Income 6. Real Estate 7. Private Equity 8. Total Investments

2014

$

5,276

$

-

$

4,078 26,838 30,916

$

10,717 10,717

181,231 5,723,649 1,461,708 3,803,195 $ 11,169,783

$

300,825 5,675,959 1,458,262 3,524,357 $ 10,959,403

$

$

$ $

$

(11,182) (5,275) (16,457)

$

$

(2,746) (2,746)

$ 11,189,518

$ 10,967,374

$

$

$

(52,351) (176,806) (229,157)

$ 10,960,361 1.6% 51.2% 13.1% 34.1% 0.0% 0.0% 0.0% 100.0%

$

(43,018) (64,657) (107,675)

$ 10,859,699 2.7% 51.8% 13.3% 32.2% 0.0% 0.0% 0.0% 100.0%

29

Reconciliation of Plan Assets September 30

Item A. Market Value of Assets at Beginning of Year B. Revenues and Expenditures 1. Contributions a. Employee Contributions b. Employer Contributions c. State Contributions d. Purchased Service Credit e. Total 2. Investment Income a. Interest, Dividends, and Other Income b. Net Realized/Unrealized Gains/(Losses)* c. Investment Expenses d. Net Investment Income 3. Benefits and Refunds a. Regular Monthly Benefits b. Refunds c. Lump Sum Benefits d. DROP Distributions e. Total

2014

2015

$

10,967,374

$

9,681,308

$

105,492 408,040 101,886 615,418

$

111,001 377,272 95,532 583,805

$

$

$

$

$

$

$

(247,244) (716) (247,960)

4. Administrative and Miscellaneous Expenses

$

(51,501)

$

(42,022)

5. Transfers

$

-

$

-

$

11,189,518

$

10,967,374

D. Reserves 1. State Contribution Reserve 2. DROP Accounts 3. Total Reserves

$

E. Market Value Net of Reserves

$

$

(52,351) (176,806) (229,157) 10,960,361

* The breakdown between realized and unrealized gains/(losses) is not available.

$

205,862 805,706 (19,325) 992,243

(270,957) (6,834) (277,791)

C. Market Value of Assets at End of Year

$

300,640 (334,921) (29,701) (63,982)

$

$ $ $

(43,018) (64,657) (107,675) 10,859,699

30

Reconciliation of DROP Accounts Year Ended 9/30 2014 2015

Balance at Beginning of Year $ $ 65,366

*Reflects an adjustment

Credits (Net of Expenses) $ 63,111 * $ 116,608

Interest $ 1,546 $ (5,168)

Distributions $ $

Balance at End of Year $ 64,657 $ 176,806

Development of Actuarial Value of Assets

A. B. C. D. E.

F.

G.

H. I. J. K.

Valuation Date – September 30 Actuarial Value of Assets Beginning of Year Market Value End of Year Market Value Beginning of Year Non-Investment/Administrative Net Cash Flow Investment Income E1. Actual Market Total: B-C-D E2. Assumed Rate of Return E3. Assumed Amount of Return E4. Amount Subject to Phase-In: E1–E3 Phased-In Recognition of Investment Income F1. Current Year: 0.2 x E4 F2. First Prior Year F3. Second Prior Year F4. Third Prior Year F5. Fourth Prior Year F6. Total Phase-Ins Actuarial Value of Assets End of Year G1. Preliminary Actuarial Value of Assets End of Year: A+D+E3+F6 G2. Upper Corridor Limit: 120%*B G3. Lower Corridor Limit: 80%*B G4. Actuarial Value of Assets End of Year G5. State Contribution Reserve G6. DROP Accounts G7. Final Actuarial Value of Assets End of Year Difference between Market and Actuarial Value of Assets Actuarial Rate of Return Market Value Rate of Return Ratio of Actuarial Value of Assets to Market Value

2014 $ 9,531,746 10,967,374 9,681,308 293,823

2015 $ 10,614,971 11,189,518 10,967,374 286,126

992,243 7.50% 725,899 266,344

(63,982) 7.50% 806,853 (870,835)

53,269 58,708 42,929 (122,657) 31,254 63,503

(174,167) 53,269 58,708 42,929 (122,657) (141,918)

2016

2017

2018

2019

7.50%

7.50%

7.50%

7.50%

(174,167) 53,269 58,708 42,929 (19,261)

(174,167) 53,269 58,708 (62,190)

(174,167) 53,269 (120,898)

(174,167) (174,167)

$ 10,614,971 $ 11,566,032 13,160,849 13,427,422 8,773,899 8,951,614 10,614,971 11,566,032 (43,018) (52,351) (64,657) (176,806) 10,507,296 11,336,875 352,403 (376,514) 8.16% 6.18% 10.10% -0.58% 96.79% 103.36%

31

32

Investment Rate of Return* Year Ending 9/30/1992 9/30/1993 9/30/1994 9/30/1995 9/30/1996

Market Value Basis 12.9 % 25.8 (13.8) 12.8 12.0

Actuarial Value Basis 12.9 % 10.6 5.6 6.6 8.0

9/30/1997 9/30/1998 9/30/1999 9/30/2000 9/30/2001

20.1 9.3 23.4 9.8 (7.7)

8.6 8.1 14.9 14.6 8.2

9/30/2002 9/30/2003 9/30/2004 9/30/2005 9/30/2006

(6.0) 11.8 3.5 10.2 11.1

3.3 4.0 1.8 2.8 6.6

9/30/2007 9/30/2008 9/30/2009 9/30/2010 9/30/2011

15.9 (11.0) 15.1 10.1 (0.9)

10.1 2.0 5.6 9.7 7.6

9/30/2012 9/30/2013 9/30/2014 9/30/2015

10.9 11.1 10.1 (0.6)

8.0 8.6 8.2 6.2

Average Returns: Last 5 Years Last 10 Years All Years

6.0 % 6.9 % 7.7 %

7.7 % 7.2 % 7.6 %

* Net of investment expenses after 2010

The above rates are based on the retirement systems financial information reported to the actuary. They may differ from figures that the investment consultant reports, in part because of differences in the handling of administrative and investment expenses, and in part because of differences in the handling of cash flows.

SECTION D FINANCIAL ACCOUNTING INFORMATION

33

FASB NO. 35 INFORMATION October 1, 2015

A. Valuation Date

October 1, 2014

B. Actuarial Present Value of Accumulated Plan Benefits 1. Vested Benefits a. b. c. d.

Members Currently Receiving Payments Terminated Vested Members Other Members Total

2. Non-Vested Benefits 3. Total Actuarial Present Value of Accumulated Plan Benefits: 1d + 2 4. Accumulated Contributions of Active Members

$

5,097,886 581,180 4,809,542 10,488,608

$

3,653,777 1,264,517 4,665,437 9,583,731

303,533

598,601

10,792,141

10,182,332

906,956

902,731

10,182,332

9,250,892

C. Changes in the Actuarial Present Value of Accumulated Plan Benefits 1. Total Value at Beginning of Year 2. Increase (Decrease) During the Period Attributable to: a. Plan Amendment b. Change in Actuarial Assumptions c. Latest Member Data, Benefits Accumulated and Decrease in the Discount Period d. Benefits Paid e. Net Increase 3. Total Value at End of Period D. Market Value of Assets E. Actuarial Assumptions - See page entitled Actuarial Assumptions and Methods

0 (157,961) 1,162,169 (394,399) 609,809

0 0 1,243,211 (311,771) 931,440

10,792,141

10,182,332

10,960,361

10,859,699

34

SCHEDULE OF CHANGES IN THE EMPLOYER’S NET PENSION LIABILITY AND RELATED RATIOS GASB Statement No. 67

Fiscal year ending September 30, Total pension liability Service Cost Interest Benefit Changes Difference between actual & expected experience Assumption Changes Benefit Payments Refunds Other (Increase in State Contribution Reserve) Net Change in Total Pension Liability Total Pension Liability - Beginning Total Pension Liability - Ending (a)

2016*

$

$

2015

343,544 $ 991,872 (298,613) (221,282) (349,066) (6,927) 9,333 468,861 13,059,412 13,528,273

$

2014

357,506 $ 928,071 (113,373) (270,957) (6,834) 9,333 903,746 12,155,666 13,059,412

$

390,463 853,826 (847) (247,244) (716) 2,279 997,761 11,157,905 12,155,666

Plan Fiduciary Net Position Contributions - Employer (from Town) Contributions - Employer (from State) Contributions - Member Net Investment Income Benefit Payments Refunds Administrative Expense 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 Total Pension Liability Covered Employee Payroll Net Pension Liability as a Percentage of Covered Employee Payroll

$

$

$

374,173 $ 101,886 108,295 846,024 (349,066) (6,927) (46,762) 1,027,623 11,189,518 12,217,141 $

408,040 $ 101,886 105,492 (63,982) (270,957) (6,834) (51,501) 222,144 10,967,374 11,189,518 $

377,272 95,532 111,001 992,243 (247,244) (716) (42,022) 1,286,066 9,681,308 10,967,374

1,311,132

1,869,894

1,188,292

90.31 % 1,547,076 $

85.68 % 1,507,029 $

90.22 % 1,585,729

84.75 %

124.08 %

74.94 %

* These figures are estimates only. Actual figures will be provided after the end of the fiscal year.

35

SCHEDULE OF THE EMPLOYER’S NET PENSION LIABILITY GASB Statement No. 67

FY Ending September 30,

Total Pension Liability

Plan Net Position

Net Pension Liability

Plan Net Position as a % of Total Pension Liability

Covered Employee Payroll

Net Pension Liability as a % of Covered Employee Payroll

2014 2015 2016*

$ 12,155,666 13,059,412 13,528,273

$ 10,967,374 11,189,518 12,217,141

$ 1,188,292 1,869,894 1,311,132

90.22% 85.68% 90.31%

$1,585,729 1,507,029 1,547,076

74.94% 124.08% 84.75%

* These figures are estimates only. Actual figures will be provided after the end of the fiscal year.

36

SCHEDULE OF CONTRIBUTIONS GASB Statement No. 67

FY Ending September 30, 2014 2015 2016*

Actuarially Determined Contribution

Actual Contribution

Contribution Deficiency (Excess)

$

$

$

465,226 500,593 466,726

469,825 500,593 466,726

(4,599) -

Covered Employee Payroll

Actual Contribution as a % of Covered Employee Payroll

$ 1,585,729 1,507,029 1,547,076

* These figures are estimates only. Actual figures will be provided after the end of the fiscal year.

29.63% 33.22% 30.17%

37

NOTES TO SCHEDULE OF CONTRIBUTIONS GASB Statement No. 67

Valuation Date: Notes

October 1, 2014 Actuarially determined contributions are calculated as of October 1, which is two years prior to the end of the fiscal year in which contributions are reported.

Methods and Assumptions Used to Determine Contribution Rates: Entry Age Normal Actuarial Cost Method Level Dollar, Closed Amortization Method Remaining Amortization Period 20 years 5-year smoothed market Asset Valuation Method 3.0% Inflation 6.0%, including inflation Salary Increases 7.5% Investment Rate of Return Experience-based table of rates Retirement Age Mortality RP-2000 Combined Healthy Participant Mortality Table for males and females with mortality improvement projected to all future years after 2000 using Scale AA Other Information: Notes

See Discussion of Valuation Results in the October 1, 2015 Actuarial Valuation Report

38

SINGLE DISCOUNT RATE GASB Statement No. 67 A single discount rate of 7.50% was used to measure the total pension liability. This single discount rate was based on the expected rate of return on pension plan investments of 7.50%. The projection of cash flows used to determine this single discount rate assumed that plan member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the difference between the total actuarially determined contribution rates and the member rate. Based on these 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 (7.50%) was applied to all periods of projected benefit payments to determine the total pension liability.

Regarding the sensitivity of the net pension liability to changes in the single discount rate, the following presents the plan’s net pension liability, calculated using a single discount rate of 7.50%, as well as what the plan’s net pension liability would be if it were calculated using a single discount rate that is 1-percentage-point lower or 1-percentage-point higher: Sensitivity of the Net Pension Liability to the Single Discount Rate Assumption*

$

1% Decrease 6.50% 3,194,550

Current Single Discount Rate Assumption $

7.50% 1,311,132

$

1% Increase 8.50% 138,966

* These figures are estimates projected to September 30, 2016. Actual figures will be provided after the end of the fiscal year.

SECTION E MISCELLANEOUS INFORMATION

39

RECONCILIATION OF MEMBERSHIP DATA From 10/1/14 To 10/1/15

From 10/1/13 To 10/1/14

A. Active Members 1. 2. 3. 4. 5. 6. 7. 8. 10.

Number Included in Last Valuation New Members Included in Current Valuation Non-Vested Employment Terminations Vested Employment Terminations Service Retirements Disability Retirements Deaths DROP Retirements Number Included in This Valuation

25 2 (1) 0 0 0 (1) (1) 24

27 1 0 (1) 0 0 0 (2) 25

6 0 0 (1) 0 0 5

5 1 0 0 0 0 6

2 1 0 0 0 3

0 2 0 0 0 2

11 0 1 0 0 0 0 12

11 0 0 0 0 0 0 11

B. Terminated Vested Members 1. 2. 3. 4. 5. 6. 7.

Number Included in Last Valuation Additions from Active Members Lump Sum Payments/Refund of Contributions Payments Commenced Deaths Other Number Included in This Valuation

C. DROP Plan Members 1. 2. 3. 4. 5. 6.

Number Included in Last Valuation Additions from Active Members Retirements Deaths Resulting in No Further Payments Other Number Included in This Valuation

D. Service Retirees, Disability Retirees and Beneficiaries 1. 2. 3. 4. 5. 6. 7. 8.

Number Included in Last Valuation Additions from Active Members Additions from Terminated Vested Members Deaths Resulting in No Further Payments Deaths Resulting in New Survivor Benefits End of Certain Period - No Further Payments Other Number Included in This Valuation

40

ACTIVE PARTICIPANT SCATTER Years of Service to Valuation Date 4-5 5-9 10-14 3-4

2-3

1-2

15-19

20-24

25+

Totals

Age Group

0-1

20-24 NO. TOT PAY AVG PAY

1 41,890 41,890

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

1 41,890 41,890

25-29 NO. TOT PAY AVG PAY

0 0 0

1 48,530 48,530

1 45,317 45,317

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

2 93,847 93,847

30-34 NO. TOT PAY AVG PAY

1 46,099 46,099

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

1 46,099 46,099

35-39 NO. TOT PAY AVG PAY

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

1 53,777 53,777

3 184,133 61,378

0 0 0

0 0 0

0 0 0

4 237,910 59,478

40-44 NO. TOT PAY AVG PAY

0 0 0

0 0 0

0 0 0

1 51,291 51,291

0 0 0

1 54,159 54,159

1 64,140 64,140

3 186,754 62,251

1 85,028 85,028

0 0 0

7 441,372 63,053

45-49 NO. TOT PAY AVG PAY

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

1 56,151 56,151

2 135,271 67,636

1 76,664 76,664

3 241,525 80,508

0 0 0

7 509,611 72,802

50-54 NO. TOT PAY AVG PAY

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

2 128,724 64,362

0 0 0

0 0 0

0 0 0

2 128,724 64,362

55-59 NO. TOT PAY AVG PAY

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

60-64 NO. TOT PAY AVG PAY

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

TOT NO. TOT AMT AVG AMT

2 87,989 43,995

1 48,530 48,530

1 45,317 45,317

1 51,291 51,291

0 0 0

3 164,087 54,696

8 512,268 64,034

4 263,418 65,855

4 326,553 81,638

0 0 0

24 1,499,453 62,477

41 INACTIVE PARTICIPANT DISTRIBUTION

Age Group Under 20 20-24 25-29 30-34 35-39

Terminated Vested Total Number Benefits -

Disabled Total Number Benefits -

Retired Total Number Benefits -

Deceased with Beneficiary Total Number Benefits -

40-44 45-49 50-54 55-59

1 1 1 -

18,286 25,740 12,439 -

-

-

3 4

173,842 117,892

-

-

60-64 65-69 70-74 75-79

2 -

6,791 -

-

-

3 2 2 -

74,504 35,656 23,423 -

1 -

20,376 -

80-84 85-89 90-94 95-99 100 & Over

-

-

-

-

-

-

-

-

Total

5

63,256

-

-

14

425,317

1

20,376

Average Age

54

N/A

61

61

SECTION F SUMMARY OF PLAN PROVISIONS

42

TOWN OF LANTANA POLICE RELIEF AND PENSION FUND SUMMARY OF PLAN PROVISIONS

A. Ordinances The Plan was established under the Code of Ordinances for the Town of Lantana, Florida, Chapter 14, Article IV, and Division 2 and was most recently amended under Ordinance No. O01-2014 passed and adopted on January 27, 2014. The Plan is also governed by certain provisions of Chapter 185, Florida Statutes, Part VII, Chapter 112, Florida Statutes and the Internal Revenue Code. B. Effective Date September 9, 1991; Restated November 14, 2005 C. Plan Year October 1 through September 30 D. Type of Plan Qualified, governmental defined benefit retirement plan; for GASB purposes it is a single employer plan. E. Eligibility Requirements All actively employed full-time police officers participate in the Plan as a condition of employment. F. Credited Service Service is measured as the total number of years and fractional parts of years for which a police officer made Member Contributions to the Plan. No service is credited for any periods of employment for which the member received a refund of their contributions. G. Compensation The total cash remuneration for services rendered to the Town as a police officer excluding overtime pay, lump sum payments of unused leave, bonuses and awards. H. Average Final Compensation (AFC) One twelfth of the average Compensation for the highest 5 years out of the last 10 years of Credited Service prior to termination or retirement.

43 I. Normal Retirement Eligibility:

A member may retire on the first day of the month coincident with or next following age 50 and 10 years of Credited Service.

Benefit:

3.0% of AFC multiplied by years of Credited Service plus a supplemental monthly benefit of $35 for each year of Credited Service.

Normal Form of Benefit: 10 Years Certain and Life thereafter; other options are also available. COLA:

In years when investment return exceeds 8% and a cumulative net actuarial gain has been determined, a COLA may be provided to retirees.

J. Early Retirement Not Applicable K. Delayed Retirement Same as Normal Retirement taking into account compensation earned and service credited until the date of actual retirement. L. Service Connected Disability Eligibility:

Any member who has 10 years of Credited Service and becomes totally and permanently disabled as a result from an act occurring in the performance of service for the Town is immediately eligible for a disability benefit.

Benefit:

2.0% of AFC multiplied by years of Credited Service with a minimum equal to 25% of AFC.

Normal Form of Benefit: Payable until death or recovery from disability; other options are also available. COLA:

In years when investment return exceeds 8% and a cumulative net actuarial gain has been determined, a COLA may be provided to retirees.

M. Non-Service Connected Disability Eligibility:

Any member who has 10 years of Credited Service and becomes totally and permanently disabled is immediately eligible for a disability benefit.

Benefit:

2.0% of AFC multiplied by years of Credited Service with a minimum equal to 25% of AFC.

Normal Form of Benefit: COLA:

Payable until death or recovery from disability; other options are also available. In years when investment return exceeds 8% and a cumulative net actuarial gain has been determined, a COLA may be provided to retirees.

44 N. Death in the Line of Duty Eligibility:

All members with 10 years of Credited Service are eligible for survivor benefits.

Benefit:

Beneficiary will receive the member’s accrued Normal Retirement Benefit based upon Credited Service and AFC as of the date of death. The benefit is payable beginning on the member’s Normal Retirement Date.

Normal Form of Benefit: Life only benefit to beneficiary. COLA:

In years when investment return exceeds 8% and a cumulative net actuarial gain has been determined, a COLA may be provided to retirees.

The beneficiary of a plan member with less than 10 years of Credited Service at the time of death will receive a refund of the member’s accumulated contributions. O. Other Pre-Retirement Death Eligibility:

All members with 10 years of Credited Service are eligible for survivor benefits.

Benefit:

Beneficiary will receive the member’s accrued Normal Retirement Benefit based upon Credited Service and AFC as of the date of death. The benefit is payable beginning on the member’s Normal Retirement Date.

Normal Form of Benefit: Life only benefit to beneficiary. COLA:

In years when investment return exceeds 8% and a cumulative net actuarial gain has been determined, a COLA may be provided to retirees.

The beneficiary of a plan member with less than 10 years of Credited Service at the time of death will receive a refund of the member’s accumulated contributions. P. Post Retirement Death Benefit determined by the form of benefit elected upon retirement. Q. Optional Forms In lieu of electing the Normal Form of benefit, the optional forms of benefits available to all retirees are a Single Life Annuity or the 50%, 66 2/3%, 75% and 100% Joint and Survivor options.

45 R. Vested Termination Eligibility:

A member has earned a non-forfeitable right to Plan benefits after the completion of 10 years of Credited Service.

Benefit:

The benefit is the member’s accrued Normal Retirement Benefit including a supplemental monthly benefit of $35 for each year of service as of the date of termination. Benefit begins at the member’s Normal Retirement Date.

Normal Form of Benefit: COLA:

10 Years Certain and Life thereafter; other options are also available. In years when investment return exceeds 8% and a cumulative net actuarial gain has been determined, a COLA may be provided to retirees.

Members terminating employment with less than 10 years of Credited Service will receive a refund of their own accumulated contributions. S. Refunds Eligibility:

All members terminating employment with less than 10 years of Credited Service are eligible. Optionally, vested members (those with 10 or more years of Credited Service) may elect a refund in lieu of the vested benefits otherwise due.

Benefit:

Refund of the member’s contributions.

T. Member Contributions 7.0% of Compensation U. State Contributions Chapter 185 Premium Tax Refunds V. Employer Contributions Any additional amount determined by the actuary needed to fund the Plan properly according to State laws. W. Cost of Living Increases In years when investment return exceeds 8% and a cumulative net actuarial gain has been determined, a COLA may be provided to retirees. X. 13th Check Not Applicable

46 Y. Deferred Retirement Option Plan Eligibility:

Plan members are eligible for the DROP upon the attainment of age 50 with 10 years of Credited Service.

Benefit:

The member’s Credited Service and AFC are frozen upon entry into the DROP. The monthly retirement benefit as described under Normal Retirement is calculated based upon the frozen Credited Service and AFC.

Maximum DROP Period: 60 months Interest Credited:

Normal Form of Benefit:

COLA:

The member's DROP account is credited with interest at a rate equal to the percentage earned or lost by the pension fund as a whole.

Lump Sum, three equal installments paid over three years, or an election to purchase an annuity to be paid monthly. In years when investment return exceeds 8% and a cumulative net actuarial gain has been determined, a COLA may be provided to retirees.

Z. Other Ancillary Benefits There are no ancillary retirement type benefits not required by statutes but which might be deemed a Town of Lantana Police Relief and Pension Fund liability if continued beyond the availability of funding by the current funding source. AA. Changes from Previous Valuation None