1 / 14

City of Hallandale Beach Retirement Plan

This actuarial review analyzes the City of Hallandale Beach's retirement plan, including the annual required contribution, participant contributions, analysis of actuarial experience, development of actuarial value of assets, funded status, and actuarial history. The review provides valuable insights for plan sponsors in a challenging environment.

stroud
Download Presentation

City of Hallandale Beach Retirement Plan

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. City of Hallandale Beach Retirement Plan Actuarial Review March 17, 2014

  2. October 1, 2012 Valuation Review

  3. Basic Funding Equation

  4. The Annual Required Contribution (ARC) for the 2013 and 2014 fiscal year is $3,940,595 and $3,659,156. • The 2013 ARC is equal to 53.46% of estimated participant compensation. • The 2014 ARC is equal to 48.83% of estimated participant compensation. • Expected employee contributions for the 2013 fiscal year are $221,137. • Expected employee contributions for the 2014 fiscal year are $224,795.

  5. Analysis of Actuarial Experience • Total Normal Cost increased from $ 3,895,351 for the 2013 fiscal year to $3,636,595 for the 2014 fiscal year. As a percentage of estimated payroll, the decrease was from 52.85% to 48.53%. • Participant salaries were slightly lower than expected. The expected increase for active participants was 5.02%; the actual increase was 4.61%. • The actuarial value of plan assets increased approximately 9.41% due to investment earnings assuming mid-year cash flow. We anticipated an increase of 7.25%. The market value of assets increased approximately 8.9%.

  6. Development of Actuarial Value of Assets • Smooth unexpected investment return over 4 years • Reduces volatility of ARC

  7. Development of Actuarial Value of Assets continued….

  8. Deferred Asset Gains/(Losses)

  9. Valuation History Deposit calculations are based on the plan’s actuarial funding method and the City’s funding policy. The City’s funding policy has been to calculate the Annual Required Contribution equal to the City’s Normal Cost.

  10. Funded Status The funded status is a measurement of the plan’s assets compared to the benefit liabilities. The value of these benefit liabilities on either an “accrued” or “projected” basis. • Present Value of Accrued Benefits: The comparison uses the asset values divided by the present value of all benefits accrued to date. The liability measure does not include a provision for future service accruals or salary increases. • Present Value of Future Benefits: Ultimately, the plan will need to fund the Present Value of Future Benefits. This present value assumes future salary increases and service credits. It is the present value of the projected benefit payable at retirement for each current plan participant. Another measure that we have not shown includes the plan termination liabilities. The actual cost to terminate the plan would be based on annuity purchase rates at the time of termination.

  11. Funded Status

  12. Actuarial History

  13. Actuarial History

  14. Defined Benefit Plan Sponsors are in a Challenging Environment Forecasting & Projections Plan Design Review Asset Liability Modeling Frozen Plan Solutions Bundled Services Law changes Accounting Changes Market Conditions Administrative Complexity PlanSponsor Principal Financial Group

More Related