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City of Lansing
Police and Fire Retirement System
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Actuarial Valuation
For Funding and Contributions
as of December 31,2014
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City of Lansing Police and Fire Retirement System December 31, 2014
Actuarial Funding Valuation
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Table of Contents
EXECUTIVESUMMARY......................................................................................„ 3
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PLAN ASSET INFORMATION................................................................................................................. 5
TrustFund Statement.............................—.............................................................................. &
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Allocation of Net Plan Assets as of December 31, 2014.......................................................... b
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Development of Actuarial Value of Assets.............................................................................. 7
PARTICIPANT SUMMARY.................................................................................................................... 8
Reconciliation of Plan Participants from Prior Year................................................................ 9
Distribution of Active Participants and Average Compensation 10
VALUATION SUMMARY.................................................................................................................... 11
Development of Funding Ratio and City Contribution........................................................... 12
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ACTUARIAL ASSUMPTIONS AND METHODS.......................................................................................... 13
SUMMARY OF PLAN BENEFITS........................................................................................................... 16
GLOSSARY OF TERMS........................................................................................ 20
APPENDIX I: 2O YEAR PROJECTION OF FUNDING AND CONTRIBUTIONS................
APPENDIX II: HISTORY OF EMPLOYER CONTRIBUTIONS AND FUNDING PROGRESS........................................ 22
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City of Lansing Police and Fire Retirement System December 31,2014
Actuarial Funding Valuation
September 10,2015
City of Lansing Police and Fire Retirement System
124 W. Michigan Avenue
8th Floor
Lansing, MI 48933
Executive Summary
` Members of the Board:
The following report sets forth the Actuarial Valuation of the City of Lansing Police and Fire Retirement
System (the System) as of December 31, 2014. The report is based on participant data and asset
summary as of December 31, 2014 as submitted by the Plan Administrator and City finance department.
We relied on this information without auditing it.
INVESTMENT PERFORMANCE:
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The total Market Value of Plan Assets for the plan year ending December 31, 2014 was $325,637,582,
' Plan assets exclude from this a reserve for healthcare benefits. The total yield of the fund for the plan
year ending December 31, 2014 was 6.2%on the market value of assets and 9.6% on an actuarial basis,
taking into account asset smoothing.
The Plan uses a smoothing method to determine the City's contributions. Under this method, asset gains
or losses are spread over a 5-year period. The gains and losses are determined every year by comparing
actual investment returns with expected asset performance.
Details of the development of the Actuarial Asset Value are shown on page 8.
FUNDING RECOMMENDATIONS:
The total recommended City contribution for fiscal year 2015 is $10,884,312. Last year the total
recommended contribution was $11,050,091. Changes in the Employee Contributions and the change in
Plan provisions for the new hires in Fire and Police - Non Supervisor groups, resulted in a slight decrease
in the City Contribution.
FUNDING PROGRESS:
The Actuarial Accrued Liability as of December 31, 2014 is $395,089,321 compared to the Actuarial
Value of Assets of $288,785,965, resulting in a plan funded ratio of 73.1%. Using the market value of
assets,this ratio is 75.7%.
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City of Lansing Police and Fire Retirement System December 31,2014
Actuarial Funding Valuation
The purposes of this report are to establish the City contribution for the next fiscal year, and to evaluate
the funding progress of the System.
The accounting report for the System, under GASB 67 and 68, is provided under separate cover, and
serves a different purpose. All the figures presented in this report are to be used for funding and
contribution purposes.
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This report is prepared in accordance with generally accepted actuarial principles and practices. In the
opinion of the Retirement Board and its actuary,the actuarial assumptions used are reasonable related
to Retirement System experience and expectations, and represent the best estimate of Retirement
System experience.
The undersigned below are members of the American Academy of Actuaries, and are qualified to render
the actuarial opinions presented in this report.
Respectfully Submitted,
BOOMERSHINE CONSULTING GROUP, L.L.C.
gory M.4Stum�p, A, MAAA, FCA Sunita K. Bhatia,ASA, EA, MAAA
Chief Actuary Senior Consultant
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City of Lansing Police and Fire Retirement System December 31,2014
Actuarial Funding Valuation
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Plan Asset Information
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City of Lansing Police and Fire Retirement System December 31, 2014
Actuarial Funding Valuation
Trust Fund Statement
I Market Value of Total Fund as of January 1, 2014 $319,630,880
Receipts:
Employer Contribution, 11,298,948
Employer Contribution- Healthcare Reserve 940,000
Member Contributions 1,858,941
Adjustments Investment Income
Interest 1,203,476.
Dividends 1,146,480
i Market`Appreciation 17,082,.577
Total Additions $34,530,422
Disbursements:
Member Refund 18,093
Distributions to Participants/Beneficiaries 27,278,253
1 Administrative•Expenses and.Othe-r 119z035
Investment Expenses 1,108,339
Total Disbursements $28,523,720
Net Increase/(Decrease) in Assets $6,006,702
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Market Value of Total Fund as of December 31,2014 $325,637,582
Allocation of Net:Plan Assets as of December 31,2014
Asset Class Market Value %of Total
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i Cash:andiShortTerm Investments $30,665;518 9:4%
Equity 184,651,534 56.7%
Fixed,lncom :e 93,431180 28.7%
Real Estate 18,042,030 5.6%
Accounts payable 5 ,68 ::Q.4%
` f TOTAL ASSETS $325,637,582 100.0%
i Estimated Rate of Return on Market Value for 2014 6.2%
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City of Lansing Police and Fire Retirement System December 31,2014
Actuarial Funding Valuation
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Development of Actuarial Value of Assets
i I Market Value of Total Fund as of December 31, 2013 $ 319,630,880
Plus. Contributions 15,097,889
Less: Benefit Payments, Refunds 27,296,346
v Less:Admin Expenses 119,035
Plus:'Expected Return during 20.144 7.6%) 23,550,712
' Expected Asset Value $330,864,1.00
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Actual Market'Value of Total,Fund as of December 31,"20 4 $325,637,582
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Asset Gain/(Loss}for 214 Plan Year (5,226,518)
Actuarial Value'
Market Value of Total Fund as of December 31, 2014 $325,637,582
Less; 80%%of 20.14'G all nAL05s)i 80%* (5,226,518) (4,191,214)
Less: 60%of 2013 Gain/(Lass) 60%* 25,936,548 15,561,929
Less":40%of"201:2,Q]MLoss) 40%* -0 0
i Less: 20%of 2011 Gain/(Loss) 20%* 01 0
Total"Deferred Gain/(Loss) 11,380,71:5
Actuarial Value of, ets,Total Fund -December 31,2014 $314,256,967
(Market'Valu:&, less�td al deferred)
as%of Market Value of Assets 96.5%
J Healthcare Reserve.as of'becem:ber 31, 2014 $2.6,391,982
Adjusted Healthcare Reserve .25;470,902
Actuarial Value of Assets,Pension Plan-December 31 2014 $288,785,965
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Estimated Rate:of Return on the Actuarial Value:is 9..6%
1 20107 2012 Investment Experience fully recognized as of 12/31/2013
iz Takes into account asset smoothing
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City of Lansing Police and Fire Retirement System December 31,2014
Actuarial Funding Valuation
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f Participant Summary
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City of Lansing Police and Fire Retirement System December 31,2014
Actuarial Funding Valuation
Reconciliation of Plan Participants from Prior Year
r I Active Ter, ifitfid% esel " x
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Participants, Due efunds Tefiti5riatifyi s etl Disabl.eti. Beneflc ar., Tatai
Participants as of December 31,2013 352 15 23 495 64 140 1,089
Correctlarr 0 0 0 0 0 0 0.
Retired (21) 0 (1) 22 0 0 0
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Terminated Vested (2) 0 2 ..0 0 0 0
Terminated Non-Vested(Member (2) 0 0 0 0 0 (2)
Contributions refunded)
Disabled {1) 0 0 0 1 0
Deceased 0 0 0 (12) 0 (7) (19)
New'Beneficiary/EDRO 0 0 0 0 0 8 8
Rehired 0 0 0 0 0 0 0
Terminated-:Nan-Tested(Mem.be.r 0 0 0 =0 .0; ; 0 0
Cohtributloris to-be refunded)
Transfers In from ERS 0 0 0 0 0 0 0
New Wires 36 0 0 0 0 0 36
Data Adjustments 0 0 0 0 0 D 0
Participants as of December$1,2014 362. .15 24 505 65 141. 1,112
*Includes distinction made between retiree EDROs and beneficiary EDROs
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Inactive Participants 12/31/2013 12/31/2014
Fire Police Total Fire Police Total.
Number of Retired Participants 212 283 495 215 290 505
Average Age 65.3. 65:4 65.4 65..4 65'a 653.
Average Annual Benefit $47,634 $43,121 $45,054 $49,777 $43,742 $46,311
Number of Disabled Participants 39 25 64 40 25 65
j Average Age 54,0 52,5 53A 54.7 53.5 54,.2
Average Annual Benefit $41,463 $37,342 $39,853 $41,084 $39,701 $40,552
Number of Beneficiaries/EDROs 57 83 140 68 73 141
Average Age 76,8 72.1 74:0 76.4 72A 74.3
Average Annual Benefit $15,016 $16,606 $15,959 $16,455 $16,226 $16,336
Number of Deferred Vested 4 19 23 5 19 24
Participants
Average Age 4:2.7 47A 47.3 42.7 47.9 46.8
Average Annual Benefit $34,032 $26,246 $27,600 $34,519 $27,173 $28,703
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City of Lansing Police and Fire Retirement System December 31,2014
Actuarial Funding Valuation
Distribution of Active Participants and Average Compensation
r Nearest -----Completed Years of Service from Date of Hire-----
Age <1 1 2 4 5 9 10 14 15 - 19 20 - 24 25+ Total
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20-24 9 4 13
15,125 44,725 24,233
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25-29 17 6 4 4 31
13,355 47,280 63,823 76,048 34,523
1 30-34 9 1 7 25 13 55
J 17,981 57,130 67,457 71,820 65,622 60,723
35-39 1 4 10 30 18 63
10,372 66,643 70,491 72,812 69,815 70,205
40-44 2 2 18 53 8 83
61,059 76,181 73,097 74,018 79,024 74,041
45-49 1 2 3 26 33 2 67
66,968 80,444 71,800 75,021 80,175 88,731 77,867
50-54 1 5 15 23 2 46
68,606 78,233 73,998 80,807 80,430 78,025
55-59 2 1 3
76,963 77,418 77,114
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60-64 1 1
76,884 76,884
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Total 36 11 18 44 69 114 66 4 362
14,871 47,247 65,731 72,420 71,881 73,633 80,164 84,580
Males Females Total
Total Compensation 20,736,997 3,592,922 24,407,740
Average Compensation 67,547 60,536 67,425
Arithmetic Averages:
Nearest Age 40.1 40.0 40.0
Completed Years of Service 12.9 13.5 12.9
Salary-Weighted Averages:
Nearest Age 41.8 41.0 41.6
Completed Years of Service 14.5 14.5 14.5
Number of Participants 307 54 362
Percent male/female 84.8% 14.9% 100.0%
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City of Lansing Police and Fire Retirement System December 31,2014
Actuarial Funding Valuation
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Valuation Summary
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City of Lansing Police and Fire Retirement System December 31,2014
Actuarial Funding Valuation
®evelopiment of Funding Ratio and City Contribution
12/31/2013 12/31/2014
i 1) Total Entry Age Normal:Cost $6,577,961 $A,548,75'2
2) Estimated Employee Contributions 2,240,606 2,486,995
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3) Net-,City Normal Cost: (1)--(2) $4.,337,355 $4,0611757'
i 4) Valuation Payroll $25,636,626 $26,264,214
i 5) City Normal Cost Rate (%of pay);(3) (4) 1.6.9% 15..5%
Actuarial Accrued Liability
Active Employees $ 104,601,312 $104,149,553
TermInated Vested' 4,2.28,451 4,701,287
Retirees and Beneficiaries 275,049,517 286,238,481
6) Total ActuwIalAccrueftiability:(sum of above) $383,879,280 $395,089,321
I 7) Actuarial'Value.of Assets 277.1267,947 288,785,965
8) Net Unfunded Actuarial Accrued Liability: (6)—(7) 106,611,332 106,303,356
9) PI"an Funding Ratio:.(7)+ (6) 72,2% 711%
10) Amortization of Unfunded Actuarial.Accrued'Liabi'lity $.6,390,889 $6,495,2:87
11) Amortization Rate (%of Pay): (10):(4) 24.9% 24.7%
12) Total Contribution Rate: (5)+(11) 41.8% 40.2%
13) Projected Fiscal Payroll $26,405,725 $27,078,405
I 14) Total City Contribution:(12)x(13) $ 11,050,091 $10,884,312
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1 Estimated Cash Flow for Next Five Years
J Member Benefit
Fiscal Year City Contributions Contributions Payments
.2017 10,90{,oc)o Z600000 28,400,000
1 2018 10,800,000 2,600,000 29,000,000
2019 10,800,000 2,700,000 2%60.0,000
2020 11,200,000 2,800,000 30,000,000
1 2021 11,500,000 2,900,000 30,500;000
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City of Lansing Police and Fire Retirement System December 31,2014
Actuarial Funding Valuation
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Actuarial Assumptions and Methods
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City of Lansing Police and Fire Retirement System December 31,2014
Actuarial Funding Valuation
Funding Method: Entry Age Normal Actuarial Cost Method. The contribution equals the sum
of the normal cost and the amount necessary to amortize the unfunded
actuarial liability as a level percent of payroll over a closed period of thirty
years, decreasing by 1 year to an ultimate period of 15 years (27 years
remaining as of December 31, 2014).
Asset Smoothing Method: Investment gains and losses are determined annually and each is spread
over a 5-year period. This is done on a total fund basis. The value of the
healthcare reserve is then excluded from the valuation assets.
Investment Return: 7.60%compounded annually, net of investment expenses
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Cost of Living(inflation): The cost of living as measured by the Consumer Price Index(CPI) is assumed
to increase at the rate of 3.10% per year.
Salary Increases: Increases in salary are assumed to be equal to inflation, plus 7.00% for
those with less than 5 years of service or 0.75%for all others
Mortality: RP2000 with Blue Collar adjustments for males and females. For Disabled
i members, the disabled version of these tables are assumed with a 5 year
age setback for males. Each of these tables is projected to 2008 using Scale
BB. Future improvements in mortality for non disabled members are
anticipated by projecting these tables an additional 15 years using 50% of
Scale BB.
Percent Married: 90%of participants are assumed to be married. Male spouses are assumed
-..J to be three years olderthan their female spouse.
Disability: Rates of disability vary based on the age of the member. 95%of disabilities
i are assumed to be duty related.
Sample rates are shown below:
Age Rate
20 0.0800%
30 0.4000%
40 0.6250%
50 0.7500%
60 0.0000%
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City of Lansing Police and Fire Retirement System December 31, 2014
Actuarial Funding Valuation
Termination: Rates of termination vary based on the service of the member.
Sample Rates are shown below:
Years of Service Fire Police
0 4.0% 5.0%
1 3.2% 4.3
5 1.3% 2.2%
10 0.4% 1.0%
15 0.1% 0.4%
20 0.0% 0.0%
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Retirement: Rates of retirement vary based on the service of the member as shown
below.
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Years of Service Fire Police
I I 10-24 5.0% 5.0%
25 80.0% 80.0%
26-29 60.0% 25.0%
30+ 100.0% 100.0%
:l The demographic assumptions above are based on the most recent experience study, covering 2005
through 2011. The next study is scheduled for 2016,
Changes in assumptions and methods
There have been no changes in assumptions since the prior valuation.
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City of Lansing Police and Fire Retirement System December 31,2014
Actuarial Funding Valuation
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Summary®f flan Benefits
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City of Lansing Police and Fire Retirement System December 31,2014
r Actuarial Funding Valuation
All benefits are subject to the language in the City Ordinance and relevant collective bargaining agreements.
Employee Group Covered: Police Officers and Fire Fighters
l Normal Retirement: Age 55 or 25 years of service; For FOP-NS,full retirement is at age 50
i with 25 years of service
Mandatory Retirement: Age 60 for Police and age 70 for Firefighters
Normal Form of Benefit: Monthly life annuity with 50%of the benefit payable to the spouse upon
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the member's death.
Contribution Rate
Gr' oua ON of Pa
i Member Contribution Rates: Fire(IAFF) 9.08% (10.00%as of
05/19/2014)
Police,Supervisor(FOP-S) 9.52%
Police,Non Supervisor(FOP-NS) 8.50% (9.00%as of
07/01/2015)
Hires after 5/19/2014 Fire(IAFF) 7.00%
Hires after 08/01/2014 Police,Non Supervisor(FOP-NS) 7.00%
Included Compensation: For a police officer member, Included Compensation is defined as annual
base salary, overtime pay (including holiday pay), longevity, gun
allowance, clothing allowances, sick leave reimbursement (buy-back),
shift premium and retroactive pay (prorated by effective date). For a
` Police Supervisory Division Unit member, the definition also includes
compensatory time buy-back (up to a maximum of 160 hours), provided
that the compensatory time was earned in the same 24 months on which
} � final average compensation is based. For a firefighter member, included
Compensation is defined as annual base salary, overtime pay,acting pay,
ambulance wage differential pay, longevity, holiday pay, field training
instructor pay and retroactive pay(prorated by effective date),
1 Final Average Compensation: Final Average Compensation means the monthly average of the
member's final compensation that is included in included Compensation,
paid during the period of the member's 24 highest consecutive months of
credited service as a police officer, or firefighter. If the member has less
than 24 months of credited service, the member's final average
compensation shall be the monthly average of the Included
Compensation paid for his or her total period of credited service.
Normal Retirement Benefit Formula: 3.2%of Final Average Compensation times years of credited service,not
L J to exceed 25 years. Maximum benefit is 80%of Final Average
Compensation. Pension benefit is capped at 110%of Base Wage for IAFF
and FOP-NS
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Benefit Multiplier is changed to 2,5% and Pension Benefit is capped at
100% of Base Wage for hires on or after May 19, 2014 for IAFF and
August 1,2014 for FOP-NS
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City of Lansing Police and Fire Retirement System December 31,2014
Actuarial Funding Valuation
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Termination Prior to Retirement
Eligibility Vesting is after 10 years of credited service
i Benefit Amount Benefit is payable beginn'ng at age 55 and computed in the same manner
as the Normal Retirement Benefit, but based on credited service and
Final Average Compensation at date of termination.
I Duty Disability
Eligibility Members are eligible for Duty Disability Retirement benefits immediately
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upon employment.
I Benefit Amount(Before The Duty Disability Retirement Benefit payable to members is equal to
Retirement Eligibility) 2/3 of Final Average Compensation.
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Benefit Amount(After Benefit is paid at the effective date of disability retirement as a Life
Retirement Eligibility) Annuity and is equal to the accrued Retirement Benefit. In computing the
benefit amount, credited service is increased to include the period of
disability, and Final Average Compensation is calculated using current
{ rates of compensation for those with similar rank.
The Disability Benefit will be offset by any workers' compensation
1 payable on account of the disability.
Non Duty Disability
Eligibility Members are eligible for Non Duty Disability Retirement benefits after
completing 10 years of service.
j Benefit Amount Benefit is paid at the effective date of disability retirement as a Life
Annuity and is equal to the accrued Retirement benefit,with a maximum
benefit equal to 2/3 of the annual rate of compensation of either a full-
paid patrolman or a full-paid firefighter as of the date of retirement,
whichever is higher.
Death incurred in the Line of Duty
Eligibility The Death in Line of Duty Benefit is payable to the survivors of a member
who died as a result of an injury or disease arising out of and in the
course of duty.
Benefit Amount-Fire A benefit, equal to 1/3 of the deceased member's Final Compensation, is
payable to the widow or widower. In addition, unmarried children under
the age of 21 will receive a benefit equal to 1/4 of the deceased
member's Final Compensation,divided equally among children.
Benefit Amount-Police A benefit is payable to the widow or widower, equal to the greater of
80% of the deceased member's Final Average Compensation, or 80% of
the top paid base salary for the rank the officer held at the time of his or
jher death. Benefit is paid to surviving children if there is no surviving
spouse.
Non Duty Pre-Retirement Death
Eligibility The non-duty pre-retirement death benefit is payable upon the death of
a member after earning 10 years of credited service.
Benefit Amount 50%of the accrued retirement benefit,computed in the same manner as
the Retirement Benefit payable as a Life Annuity.
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City of Lansing Police and Fire Retirement System December 31,2014
Actuarial Funding Valuation
Optional Benefit Forms
Prior to retirement,a member may elect a reduced benefit of either 93%or 86%of the original amount,thereby
increasing the spouse benefit to either 75%or 86%,respectively.
Ad Hoc Cost-of-Living Adlustments
One-time cost of living increases were granted in 1973, 1984 and 1987.
Post Retirement Benefit Adlustments
Effective January 1, 1995 and each January 1 thereafter,the annual benefit amount will be increased by$525 for each
retiree who meets each of the following conditions:
1)25 or more years of credited service at the time of retirement
If'
2)Age 60 as of the January 1 increase date
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3) Has been retired at least 6 months as of the January 1 increase date
The$525 amount is reduced for retirees who elected the 75%or 86%optional forms of benefit($488.25 and$451.50,
respectively).
Spouses of deceased members are also eligible for benefit increases each January 1 if:
1)The deceased member had at least 25 years of credited service at the time of retirement
2)The deceased member would have attained at least age 60 as of the January 1 increase date
3)The deceased member had been deceased at least 6 months as of the January 1 increase date.
The spouse's annual benefit increase amount is adjusted based on the form of payment elected by the deceased
member, according to the following schedule:
Spouse Benefit% Annual Benefit Increase
50% $262.50
t 75% $393.75
86% $451.50
The benefit increases accumulate from year to year, but cumulative benefit increases shall not exceed cumulative
increases in the Consumer Price Index.
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Changes in Plan provisions since the prior valuation
This Valuation takes into effect the change in Employee Contribution rate for the Fire and Police - Non
Supervisor groups and the new Plan provisions for new hires in the Fire and Police - Non Supervisor
groups.
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City of Lansing Police and Fire Retirement System December 31,2014
Actuarial Funding Valuation
Glossary of Terms
Actuarial Accrued Liability The portion of benefits deemed to be accrued by participants based on
(AAL): past service. The AAL serves as the asset funding target,when annual
contributions are determined.
Actuarial Value of Assets(AVA): The smoothed value of assets, used to compute the Unfunded AAL.
The purpose of the AVA is to control volatility in annual cash
contributions.
Amortization of Unfunded The portion of the annual cash contribution that represents a portion
Liability: of the Unfunded AAL. The amortization can be positive or negative.
Actuarially Determined The contribution determined by the actuary for funding purposes.
Employer Contribution (ADEC):
Market Value of Assets (MVA): The total value of Plan assets available to pay benefits.
Normal Cost: That portion of the annual contribution that represents one year's
accrual of benefits. In funding calculations, this is known as the
' Service Cost.
Unfunded Actuarial Accrued The difference between the Actuarial Value of Assets and the Actuarial
Liability: Accrued Liability, used for funding purposes.
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City of Lansing Police and Fire Retirement system December 31,2014
Actuarial Funding Valuation
Appendix is 20 Year Projection of Funding and Contributions
The graphs below show a projection of expected funding progress and City pension contributions to the
Fund.The actual funding progress and contributions over this time period will differ from what is shown
here, due to the actual experience of the Plan. However, we can see that the Plan is on a path to
decreasing the unfunded liability (top graph, red line) and improving the funding ratio by about 13%
over 20 years. During this time, the City contribution rate is expected to decrease from its current level
` to less than 30%of pay. All recent benefit changes have been taken into account far these projections.
Protection of Funding Progress
120,000,000 .....__. ___,_._ -_ ------
Funding RatioUnfunded AAL(AVA)
8� `6"� .g a as R6 85%86%
80 000 000 - 76%J.Z4�Z796 78%7935 78%79%79%80%81%8-
r;
121
Or
fit3,000,000 - �,
40,000,000
j
20,000,000
I x ?`
2014 2017 2020 2023 2026 2029 2032
Projection of City Contributions
20,000,000 45
i T6MAmortization t...�:.:.INormalCost �city contrb(%Pay)
j 118,000,000
. 1 I
16,000,000 _ =--x'�'.—�.-..r-.ram---� -----
� 35%
14,000,000
i 30%
i ) !12,000,000 .,.. ...._ .� ..__ .._.
25%
i I10,000,000 .. ._
I 20%
--
� 15%�
6,000,000 - -
i 4,000,000 _. ___ .._. ° .. _._ __ .._..
2,000,000 , 5%
2015 2%F 2021 2024 2027 2030 2033
i I CUMMING GROLP,gAx
._.._._____....��,.. 21 ..a..__.__.. ..._».--
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City of Lansing Police and Fire Retirement System December 31,2014
Actuarial Funding Valuation
Appendix li: History of Employer Contributions and Funding Progress
Historical Employer Contributions
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Actuarially Determined Actual Employer
Fiscal Year Ending Employer Contribution Contribution
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i 6/30/2007 5,385,960 5,385,960
6/30/2008 6,520,974 6,520,974
6/30/2009 6,094,397 6,483,000 (1)
` 6/30/2010 7,179,360 6,790,757 (1)
i 6/30/2011 8,240,688 8,240,688
6/30/2012 9,242,173 9,057,080 (2)
6/30/2013 10,133,599 10,133,599 (3)
6/30/2014 11,248,857 11,248,857
6/30/2015 11,050,091 11,050,091 (4)
6/30/2016 10,884.312 To Be determined
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(1) The City contributed in excess of its FY 2009 ADEC. The City`s FY 2010 contribution was
reduced by the dollar amount of the FY 2009 overpayment.
(2) The FY 2012 City contribution was reduced by $185,093 in recognition of additional
contributions by International Association of Firefighters (IAFF) employees, which were
negotiated and contributed after the establishment of the June 30, 2012 ADEC from the
December 31, 2010 valuation.
(3) Fiscal year 2013 ADEC reflects changes made to actuarial assumptions based on an
Experience Study. Changes included a decrease in the assumed rate of return from 8.0% to
7.8%. A dosed amortization period was also adopted as of 12/31/2011, beginning at 30 years
` and decreasing each year until 15 years is reached.
(4) Fiscal year 2015 ADEC reflects changes made to assumed return and inflation from 7.8% and
3.3% to 7.6% and 3.1%, respectively. ADEC also reflects change in asset smoothing to
immediately recognize all investment gains and losses prior to 12/31/2012.
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City of Lansing Police and Fire Retirement System December 31, 2014
Actuarial Funding Valuation
Historical Funding Progress
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Actuarial Value Actuarial Accrued Percentage Unfunded Actuarial
Valuation Date of Assets(AVA) Liability(AAL) Funded Accrued Liability
12/31/2005 275,216,000 290,299,000 94.8% 15,083,000
12/31/2006 278,839,000 308,193,000 90.5% 29,354,000
12/31/2007 293,571,000 315,635,000 93.0% 22,064,000
12/31/2008 297,394,000 326,673,000 88.0% 39,279,000
12/31/2009 280,342,000 337,315,000 83.1% 56,973,000
12/31/2010 276,377,041 359,293,016 76.9% 82,915,975
12/31/2011 264,492,738 372,547,509 71.0% 108,054,771 (5)
12/31/2012 257,898,061 373,083,911 69.1% 115,185,850
12/31/2013 277,267,947 383,879,280 72.2% 106,611,333 (6)
'12/31/2014 288,785,965 395,089,321 73.1% 106,303,356
(5)Reflects changes made to actuarial assumptions, based on Experience Study, including a reduction in the
i assumed return 8.0%to 7.8%.
1 (6) Reflects changes made to assumed return and inflation from 7.8%and 3.3%to 7.6%and 3.1%,
respectively. AVA also reflects change in asset smoothing to immediately recognize all investment gains
and losses prior to 12/31/2012.
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