(1) Each plan
sponsor shall on its own or through the administrator or trustees of the plan
have an actuarial report prepared for each of its defined benefit retirement
plans or systems by an enrolled actuary at least every three (3) years
commencing from the date of the last actuarial report of the plan or system on
October 1, 1980, if no actuarial report has been issued within the three year
period prior to October 1, 1979. In addition, actuarial cost determinations
recommending the contribution amount, rate or other basis applicable to periods
for which an actuarial valuation has not been specifically prepared are to be
also provided to the Division within 60 days of receipt by the plan
administrator. No actuarial report is required for defined contribution
retirement plans or systems. However, the plan sponsor of each defined
contribution plan shall provide such information and financial statements, as
are necessary to gather, catalog, and maintain complete information on all
public employee retirement systems to the Division upon its request.
(2) The results of each actuarial report
shall be filed with the plan administrator within 60 days after completion and
certification by the actuary and made available for inspection upon request.
Also, the system or plan shall provide a copy of each actuarial report to the
Division within 60 days of receipt from the actuary.
(3) Actuarial reports shall contain all data
required by Section
112.63(1),
F.S., which consist of the following:
(a) The
values of the present assets, based on market value and "statement value":
Cash
Bonds
Stocks
Other (specify)
Disclose the derivation of the actuarial asset value used in
determining the annual funding requirement.
(b) A plan to amortize any unfunded liability
pursuant to Section 112.64, F.S.
(c) A schedule illustrating the amortization
of unfunded liabilities as they exist on the date of the valuation, on an
annual basis for the three years immediately following the current valuation
date and the final year of the amortization schedule must be disclosed, as well
as a statement as to how the method was derived.
(d) A description of actions taken by the
governmental entity to reduce the unfunded liability, especially those taken
since the last actuarial report.
(e) A description and explanation of all
actuarial assumptions.
(f) A
comparative review illustrating the rates of salary increases granted and
investment return realized over the three-year period preceding the current
actuarial report with the assumptions used. The actual salary increase rate may
be determined for the period between the immediately preceding actuarial
valuation date and the current valuation date; however, such rate shall be
shown on an annualized basis. Rate of actual salary increases shall be
determined by using the aggregate of actual salary increases granted, excluding
new entrants and terminations. Investment return rates shall be determined for
each year and reported on a consistent basis for each year in the three-year
period. There should also be an explanation of how the investment return rate
was determined.
(g) A statement by
the enrolled actuary, in the form of a certification signed and dated by the
actuary, as follows:
Statement by Enrolled Actuary "This actuarial valuation
and/or cost determination was prepared and completed by me or under my direct
supervision, and I acknowledge responsibility for the results. To the best of
my knowledge, the results are complete and accurate, and in my opinion, the
techniques and assumptions used are reasonable and meet the requirements and
intent of Part VII, Chapter 112, Florida Statutes. There is no benefit or
expense to be provided by the plan and/or paid from the plan's assets for which
liabilities or current costs have not been established or otherwise taken into
account in the valuation. All known events or trends which may require a
material increase in plan costs or required contribution rates have been taken
into account in the valuation."
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_____________________
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Signature
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_____________________
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Date
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_____________________
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Enrollment Number
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(4) Actuarial valuation reports shall, at a
minimum, disclose such information that another actuary, unfamiliar with the
situation, would find the information sufficient to appraise the reports'
conclusions and to arrive at reasonably similar results. In order for the
Division to determine the completeness, accuracy, and reasonableness of the
assumptions, such information shall, at a minimum, include the following items:
(a) The date as of which the valuation was
prepared, and the beginning and ending dates of the period for which the
recommended contributions are applicable.
(b) The overall valuation results, the
adequacy of employer and employee contribution rates in meeting the levels of
employee benefits provided in the system and changes, if any, needed in such
rates to achieve or preserve a level of funding deemed adequate to enable
payment through the indefinite future of the benefit amounts prescribed by the
system.
(c) A brief summary of the
retirement plan provisions.
(d) The
funding method explained in sufficient detail so that another actuary could,
using the same method, arrive at similar results.
(e) For actuarial valuation reports which
cover more than one employee group, benefit program, and/or more than one plan,
and the valuation calculations are made separately, the applicable valuation
results shall be disclosed separately.
(f) Disclosure of any benefit and expense to
be provided by the plan and/or paid from the plan's assets for which no
liabilities or current costs have been established or otherwise provided for,
including an explanation of the omission and the cost effect thereof.
(g) Disclosure of any event which the actuary
has not taken into account and any trend which, for purposes of the actuarial
assumptions used, was not assumed to continue in the future, but only if, to
the best of the actuary's knowledge, such event or trend may require a material
increase in plan costs or required contribution rates.
(h) Disclosure, for each plan year, of the
derivation of the current unfunded actuarial accrued liability from the amount
established as of the immediately preceding valuation date. (Unfunded actuarial
accrued liabilities are amortized by nonemployee contributions in excess of
normal cost and interest requirements.) The disclosure shall, minimally,
include the following:
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1.
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Total unfunded actuarial accrued liability for the
immediately prior actuarial valuation date (state date)
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$______
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2.
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Plan sponsor normal cost for this plan year
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$______
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3.
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Interest accrued on 1. and 2.
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$______
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4.
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Plan sponsor contributions for this plan year
(including amounts expected to be paid)
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$______
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5.
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Interest on 4.
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$______
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6.
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Changes due to a. + b. + c. + d
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$______
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a.
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assumptions
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$______
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b.
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funding method
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$______
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c.
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plan amendments
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$______
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d.
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actuarial gain/loss
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$______
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7.
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Total current unfunded actuarial accrued liability 1.
+ 2. + 3. - 4. - 5. + 6.
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$______
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(i) Demographic
and financial statistics on the members (active, terminated with rights to
deferred benefits, and retired and beneficiaries) in the retirement system
including but not limited to an age and service distribution table for active
members. This section shall provide a reconciliation between current data and
data in the most recent state approved valuation of the active, terminated with
rights to deferred benefits, and retired membership (and beneficiaries). (A
projection of emerging liabilities/cash flow needs for the next 10-15 years
would be beneficial.)
(j) An annual
reconciliation of the plan's assets from the balance determined as of the
immediately preceding valuation date to the balance as of the current valuation
date. If the reconciliation is done on a basis other than that used for annual
funding requirements, the reconciliation shall show the dollar relationship to
actuarial value of assets as used in determining the annual funding
requirements. The reconciliation should show separately, at a minimum:
Contributions by source
Interest and dividends
Realized gains (losses)
Increase (decrease) in unrealized appreciation, if applicable
(net)
Pension payments
Contribution refunds
Expenses
Other receipts (identify)
Other disbursements (identify)
(k) The amount of active members accumulated
contributions (with interest, if provided by plan).
(l) A comparative summary of principal
valuation results, essentially in the following format:
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COMPARATIVE SUMMARY OF PRINCIPAL VALUATION
RESULTS
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(Not a required format - to be used as a guide
only)
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Actuarial Valuation Prepared as of
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1.
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Participant Data
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Current Date
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Prior Date
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Active members
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#_________
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#_________
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Total annual payroll
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$_________
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$_________
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Retired members and beneficiaries (other than
disabled)
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#_________
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#_________
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Total annualized benefit
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$_________
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$_________
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Disabled members receiving benefits
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#_________
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#_________
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Total annualized benefit
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$_________
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$_________
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Terminated vested members
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#_________
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#_________
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Total annualized benefit
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$_________
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$_________
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2.
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Assets
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$_________
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$_________
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Actuarial value of assets
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$_________
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$_________
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Market value of assets
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$_________
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3.
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Liabilities
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Present value of all future expected benefit
payments:
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Active members
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$_________
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$_________
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Retirement benefits
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$_________
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$_________
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Vesting benefits
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$_________
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$_________
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Disability benefits
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$_________
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$_________
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Death benefits
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$_________
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$_________
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Return of contribution
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$_________
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$_________
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Total
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$_________
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$_________
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Terminated vested members
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$_________
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$_________
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Retired members and beneficiaries:
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Retired (other than disabled) and
beneficiaries
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$_________
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$_________
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Disabled members
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$_________
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$_________
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Total
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$_________
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$_________
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Total present value of all future expected
benefit
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$_________
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$_________
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Payments
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$_________
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$_________
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Liabilities due and unpaid
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$_________
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$_________
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*Actuarial accrued liability
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$_________
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$_________
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*Unfunded actuarial
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*Refers to liabilities not funded by future normal
cost contributions. Show amount, date and amortization period at establishment,
and current amount of each such liability not amortized
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4.
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Actuarial present value of accrued benefits (to be
determined in accordance with a. and b. below)
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Statement of actuarial present value of all accrued
benefits
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Vested accrued benefits
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$_________
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$_________
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Inactive members and beneficiaries
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$_________
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$_________
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Active members (includes nonforfeitable accumulated
member contributions in the amount of _____)
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$_________
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$_________
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Total value of all vested accrued benefits
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$_________
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$_________
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Non-vested accrued benefits
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$_________
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$_________
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Total actuarial present value of all accrued
benefits
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$_________
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$_________
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Statement of changes in total actuarial present value
of all accrued benefits
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$_________
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$_________
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Actuarial present value of accrued benefits at
beginning of year
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$_________
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$_________
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Increase (decrease) during year attributable to
(where applicable):
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Plan amendment
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$_________
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$_________
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Changes in actuarial assumptions
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$_________
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$_________
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Increase for interest and probability of payment due
to decrease in discount period and benefits accrued
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$_________
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$_________
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Benefits paid
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$_________
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$_________
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Other changes (identify and state amount)
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$_________
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$_________
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Net increase (decrease)
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$_________
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$_________
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Actuarial present value of accrued benefits at end of
year
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$_________
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$_________
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a. Accrued
benefits are those future promised benefits that are determined in accordance
with the plan's provisions based on the service members have rendered to the
actuarial valuation date. Accrued benefits are those payable under all
applicable plan circumstances - retirement, death, disability, and termination
of employment - to the extent they are deemed attributable to member service
rendered to the valuation date. Benefits to be provided by insured contracts
for which the plan sponsor has no future liability and which are excluded from
plan assets are to be excluded from plan benefits.
b. All determinations are to be on a
consistent basis. Any change is to be disclosed, together with an explanation.
The exhibit entries for the actuarial valuation date as of which a change is
made shall show the entries on a before and after change basis.
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5.
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Pension cost (specify applicable funding
period)
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Normal cost (show cost for each benefit if so
calculated and amount for administrative expenses, if applicable)
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$_________
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$_______
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Payment to amortize unfunded liability
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$_________
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$_______
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Expected plan sponsor contribution (including normal
cost, amortization payment and interest, as applicable)
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$_________
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$_______
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As % of payroll
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__________%
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________%
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Amount to be contributed by members
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$_________
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$_______
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As % of payroll
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__________%
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________%
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6.
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Past contributions For each plan year since last
report:
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Required plan sponsor contribution
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$_________
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$_________
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Required member contribution
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$_________
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$_________
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Actual contributions made by:
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Plan's sponsor
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$_________
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$_________
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Members
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$_________
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$_________
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Other (e.g., Chapters 175 or 185, F.S.)
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$_________
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$_________
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7.
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Net actuarial gain (loss) (if applicable)
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$_________
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$_________
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8.
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Other disclosures (where applicable)
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$_________
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$_________
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Present value of active member:
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Future salaries at attained age
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$_________
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$_________
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at entry age
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$_________
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$_________
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Future contributions at attained age
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$_________
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$_________
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at entry age
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$_________
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$_________
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Present value of future
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$_________
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$_________
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contributions from other sources (identify)
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$_________
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$_________
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Present value of future expected benefit payments for
active members at entry age
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$_________
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$_________
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(5) The actuarial cost methods utilized for
establishing the amount of the annual actuarial normal cost to support the
promised benefits shall only be those methods approved in the Employee
Retirement Income Security Act of 1974, and as permitted under regulations
prescribed by the Secretary of the Treasury.
The funding method utilized for the actuarial report and the
resulting recommendation for contributions required to fund the retirement plan
shall minimally provide a contribution sufficient to meet the normal cost and
to amortize the unfunded liability, if any, in accordance with Section
112.64, F.S.
(6) Actuarial assumptions selected for the
actuarial valuation report should reflect the actuary's best judgment of future
events. They should take into account the actual experience of the covered
group. The actuary should consider the impact of inflation on appropriate
assumptions. The preferred approach in selecting actuarial assumptions is the
use of explicit assumptions which more nearly represent the actuary's best
estimates of anticipated plan experience under each assumption. Actuarial
assumptions which consistently generate experience gains or losses are prima
facie indications of unreasonable actuarial assumptions.
(7) Whenever an actuarial valuation is based
on actuarial assumptions or cost methods different from those used in the
preceding valuation, the current valuation must clearly indicate the effect on
projected liabilities and costs resulting from the new assumptions and/or
funding methods.
(8) Administrative
expenses paid from the funds being accumulated to support the promised benefits
shall be paid on a current basis in addition to the annual funding costs
otherwise determined.
(9) Annual
funding costs or cost contribution rates determined as of a valuation date but
to be paid at a later date or applicable to a period beginning at a later date
are to be appropriately adjusted to reflect the intervening time interval. The
adjustment shall provide for, but not be limited to, adjustments to account for
interest and/or salary increase, as appropriate.
(10) Recommended changes in contributions or
contribution rates determined as of a valuation date shall be effective not
later than the first of the next fiscal year following the valuation
date.
(11) Unless otherwise
indicated or contrary to Chapter 112, F.S., all actuarial procedures and
determinations are to be in accordance with commonly accepted procedures and
determinations. Internal Revenue Service publications should be used as the
standard.
