11-24-1987 - Joint GEPB/PPB • 1111,
BOARD OF TRUSTEES OF THE CITY OF EDGEWATER
POLICE RETIREMENT PLAN
AND
GENERAL EMPLOYEES PENSION BOARD
REGULAR MEETING
TUESDAY, NOVEMBER 24, 1987
1:30 P.M.
COMMUNITY CENTER
Mayor Baugh called to order a regular meeting of the Board of Trustees
of the City of Edgewater Police Retirement Plan and General Employees
Pension Board at 1:37 P.M., Tuesday, November 24, 1987, in the Community
Center.
ROLL CALL:
Police Retirement Board: General Employees Pension Board:
Dan Grisell Absent Mayor Baugh Present
James Inman Present Connie Martinez Excused
Larry Jarkovsky Present Melvin Copeland Present
Nancy Swiney Absent Susan Wadsworth Present
Wallace Trickey Excused Karen Rickelman Present
Rev. Harvey Hardin Present
Also present were Jack Ascherl and Beverly Kinney, Secretary.
Mr. Ascherl reminded the Boards there had been a request to look at some
potential changes in the benefits of the plans.
Police Retirement Plan: Mr. Ascherl went through the Actuarial Review of
Proposed Pension Plan Changes. A copy is attached.
Mr. Ascherl added a seventh plan which was not included in the Actuarial
Review, which would benefit younger employees. The change would enable
a spouse or dependent children to collect of the employees current
compensation at the time of death. The benefits would be available to the
spouse for life or upon remarrying. The childrens' benefits would be avail-
able until the ages of eighteen (18) to twenty -one (21). The benefits would
be available immediately upon hire, and death may not have to be from a job
injury.
General Employee Pension Plan: Mr. Ascherl went through the Actuarial Review
of Proposed Pension Plan Changes. A copy is attached.
Mr. Ascherl felt the best way to change the plan is to give a better
definition of "average compensation" (ie: three (3) or five (5) years of
service), and maintain two per -cent (2 %) of pay, which is competitive.
The Board discussed the proposed pension plan changes and decided to meet
in mid December to try and come to a decision.
Mayor Baugh asked Karen Rickelman to get the figures together on what is
budgeted for retirement contributions for fiscal year 1988. Mr. Ascherl
added he would like to have the state contribution information for the
next melting.
Mr. Ascherl stated the Police Pension Plan, General Investment Account totals
$264,197.00 and is earning 11.03 %. The General Employees Pension, General
Investment Account totals $509,629.00, and is earning 11.03 %.
Mr. Ascherl went through the investment results for fixed income accounts and
equity accounts. A copy is attached.
There being no further business to come before the Boards, Mayor Baugh adjourned
the meeting at approximately 2:30 P.M.
Minutes respectfully submitted by:
Beverly Kinney, Board Secretary
NMMIK
' •
Actuarial Review
of Proposed
Pension Plan
Changes
PREPARED FOR:
City of Edgewater, Florida Police
GA 59448
PREPARED:
September 17, 1987
Principal Mutual life
thergrIF Insurance Company
`V/ Nor
This cost impact statement has been prepared in response to your request for
cost information to make various changes to your plan.
A. Data and Assumptions Used to Value Benefits
1. In preparing these calculations we have used the current valuation
assumptions of 8.07, interest earnings, a rate of withdrawal based on
Table 6 of the Actuary's Pension Handbook, and assumed salary increases
of 7.57e each year until retirement.
2. Assets of $200,493 were used in our calculation.
3. Our calculations are based on employee data as of October 1, 1986.
4. Liabilities have been redetermined to reflect the changes described
below.
B. Proposed Changes
The current plan provides the following benefits:
Normal Retirement Benefit
Eligibility: Attained age 60 with five years of plan participation,
but no later than attained age 65.
Form: Monthly annuity payable for life (optional forms may
be elected prior to retirement).
Amount
(Accrued Benefit): 2% of Average Compensation multiplied by Accrual Service.
Average
Compensation: The monthly average of an employee's fixed rate of
pay received for the ten compensation years prior to
Normal Retirement Date.
As a result of your request we have valued the following:
Plan 1
For this display the eligibility for Normal Retirement has been changed
to the earlier of_25 years of accrual service or attained age 55 with
years of accrual service.
Plan 2 ;0
9, 5 `o i"
For this display the eligibility for Normal Retirement is the same as
under Plan 1. In addition, the definition of Average Compensation has been c(, 5 ;)`
changed to the monthly average of total pay received for the three con- mo t '
secutive years out of the ten latest years which gives the highest average. (�'k
`rrr „
Plan 3
For this display the plan's retirement benefit has been changed to the sum
of (a) and (b) below:
(a) 2% of Average Compensation multiplied by years of service prior to
October 1, 1986.
(b) 37. of Average Compensation multiplied by years of service subsequent
to October 1, 1986.
The eligibility for Normal Retirement and the definition of Average Compen-
sation for this display are the same as they are under the current plan.
Plan 4
For this display the eligibility for Normal Retirement has been changed to
the earlier of 25 years of accrual service gr attained age 60 with 5 years
of plan participation but no later than attained age 65. Also, the plan's
retirement benefit has been changed to _2„..8%—of Average Compensation multi-
plied by years of service. The definition of Average Compensation remains
unchanged from the current plan.
Plan 5
This display reflects a change in the plan's retirement benefit to 3.0% of
Average Compensation multiplied by years of service. The eligibility for
Normal Retirement and the definition of Average Compensation are the same
as Plan 4.
Plan 6
This display reflects a change in the eligibility for Normal Retirement to
the earlier of 20 f accrual service or attained a e 60 with 5 years
of plan participation but no later than attained age 65. The plan's retire-
ment benefit has been changed to 2.570 of Average Compensation multiplied by
years of service. The definition off Average Compensation remains unchanged
from the current plan.
C. Display of Estimated Costs
The following display page illustrates costs as shown in the October 1, 1986
Actuarial Valuation Report and estimated costs for the proposed changes as
described above.
D. Comments
The estimates in this report are based upon the previously discussed Actu-
arial Assumptions. If, between now and the next valuation date, these
assumptions are not realized, costs may vary form these estimates.
Now Noe
City of Edgewater, Florida Police
GA 59448
Cost Estimates as of October 1, 1986
October 1, 1986
Actuarial Valuation Plan 1 Plan 2 Plan 3
Total Normal Cost $ 12,515 $ 14,800 $ 21,100 $ 16,200
Estimated Employee
Contributions 2,405 2,400 2,400 2,400
Employer Normal Cost 10,110 12,400 18,700 13,800
Minimum Deposit Required* 0 0 7,400 0
20 Year Funding 15,370 20,700 31,500 22,100
Frozen Initial Liability 64,594 92,300 132,000 92,000
Unfunded Frozen Initial
Liability 39,268 66,900 106,700 66,600
Annual Compensation 240,528 240,528 240,528 240,528
* The Minimum Deposits shown above reflect a credit balance in the Funding
Standard Account of $22,377. In the absence of this credit balance the
Minimum Deposit Required would have been $16,400 in the valuation, $21,300
for Plan 1, $31,600 for Plan 2, and $22,700 for Plan 3.
w
City of Edgewater, Florida Police
GA 59448
Cost Estimates as of October 1, 1986
Plan 4 Plan 5 Plan 6
Total Normal Cost $ 23,300 $ 24,600 $ 23,000
Estimated Employee
Contribution 2,400 2,400 2,400
Employer Normal Cost 20,900 22,200 20,600
Minimum Deposit Required* 11,200 13,800 11,900
20 Year Funding 35,500 38,200 36,300
Frozen Initial Liability 147,600 161,000 158,500
Unfunded Frozen Initial
Liability 122,300 135,700 133,200
Annual Compensation 240,528 240,528 240,528
* In the absence of the $22,377 credit balance, the Minimum Deposit Required
would have been $35,300 for Plan 4, $37,900 for Plan 5, and $36,100 for
Plan 6.
s ,
./
Actuarial Review
of Proposed
Pension Plan
Changes
PREPARED FOR:
City of Edgewater
General Employees' Retirement Plan
GA 59450
PREPARED:
September 17, 1987
Principal Mutual Lite
the • nncip Insurance Company
711 High Street
financial Des Moines, Iowa 50309
Group
Cost Impact Statement for
City of Edgewater General Employees' Retirement Plan
GA 59450
This cost impact statement has been prepared in response to your request for
cost information to change the plan's benefit formula and eligibility for
normal retirement.
A. Data and Assumptions Used to Value Benefits
1. In preparing these calculations we have used the current valuation
assumptions of 8.0% interest earnings, a rate of withdrawal based on
Table 11 of the Actuary's Pension Handbook, and assumed salary increases
of 7.5% each year until retirement.
2. Assets of $406,735 were used in our calculations.
3. Our calculations are based on employee data as of October 1, 1986.
B. Proposed Changes
The current plan provides the following retirement benefits:
Normal Retirement Benefit
Eligibility: Attained age 65 with five years of plan
participation, but no later than attained
age 70.
Form: Monthly annuity payable for life (optional
forms may be elected prior to retirement).
Amount
(Accrued Benefit): 2% of Average Compensation multiplied by
Accrual Service.
Average Compensation: The monthly average of an employee's fixed
rate of pay received for the ten compensa
tion years prior to Normal Retirement Date.
As a result of your request, we have valued the following:
Plan 1
For this display the eligibility for Normal Retirement has been changed
to the earlier of 30 years of accrual service or attained age 60 with
years of accrual service.
Principal Mutual Life
the • rincipa " Insurance Company
711 H,il St . i
financial D. 50 0
Group
*re ■Iire
Plan 2 3C�
AC . �.
For this display the eligibility for Normal Retirement is the same as under
Plan 1. In addition, the defintiion of Average Compensation has been changed
to the monthly average of total pay for the three consecutive years out
of the ten latest years which gives the highest average.
Plan 3
For this display the plan's retirement benefit has been changed to the
sum of (a) and (b) below:
(a) 2% of Average Compensation multiplied by years of service prior to
October 1 98 "
(b) 3 Average Compensation multiplied by years of service subsequent
to October 1 1986 —
The eligibility for Normal Retirement and the definition of Average Compen-
sation for this display are the same as they are under the current plan.
Plan 4
For this display the eligibility for Normal Retirement has been changed
to the earlier of 25 years of accrual service or attained age 65 with 5
years of plan participation but no later than attained age 70. Also the
plan's retirement benefit has been changed to 2.8% of Average Compensation
multiplied by years of service. The definition of Average Compensation
remains unchanged from the current plan.
Plan 5 s ICJ
This display reflects a change in the plan's retirement benefit to
of Average Compensation multiplied by years of service. The eligibility
for Normal Retirement and the definition of Average Compensation are the
same as Plan 4.
Plan 6
This display reflects a change in the eligibility for Normal Retirement
to the earlier of 20 years of accrual service or attained age 65 with 5
years of plan participation but no later than attained age 70. The plan's
retirement benefit has been changed to 2.5% of Average Compensation multi-
plied by years of service. The definiti n of Average Compensation remains
unchanged from the current plan.
Princ,pa/ Mutual Late
the ' rincipa Insurance Company
financial
Mo.1 l„vN, 5 ,u
Group-
' Noe
C. Display of Estimated Costs
The following display page illustrates costs as shown in the October 1,
1986 Actuarial Valuation Report and estimated costs for the proposed changes
as described above.
D. Comments
The estimates in this report are based upon the previously discussed Actu-
arial Assumptions. If, between now and the next valuation date, these
assumptions are not realized, costs may vary from these estimates.
The above information was prepared in the home office by your valuation
analyst, Dave Hardin. If you have quesitons concerning the review, please
contact Dave. (The phone number in the home office is 515 247 - 7803.)
Principal Mutual Life
the rincipa Insurance Company
711 H qr Strrvt
Financial Dec Muir s, io.va 5030+
Group
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