HomeMy WebLinkAboutCity of Pasco Old Firemens GASB 67 Report 2016City of Pasco
GASB 67 and 68 Firefighters'
Pension Fund Valuation
Report as of January 1, 2016
March 21, 2016
ealthcare
Ac t u a r i e s
16519 107th Place NE
Bothell, Washington 98011
t: (425) 939-7444 f: (425) 939-0089
www.HealthcareActuaries.com
ealtlleare
ctu aT es
Using Technology to Provide Cast -Effective Consulting
March 21, 2016
Mr. Ron Musson
Interim Finance Manager
City of Pasco
525 North Third Avenue
Pasco, Washington 99301
16519 107th Place NE I Bothell, VILA 98011
t (425) 939-7444 1 f (425) 939-0089
w www.HealtheareActuaries.com
Re: GASB 67 and 68 Firefighters' Pension Fund Valuation Report as of January 1, 2016
Dear Ron:
At your request, we completed an actuarial valuation of the Firefighters' Pension Fund (FPF) as of December
31, 2015. This valuation is based on input from the City of Pasco, as well as our understanding of GASB
Statement No. 67 "Financial Reporting for Pension Plans" and GASB Statement No. 68 "Accounting and
Financial Reporting for Pensions" (GASB 68).
As we understand it, the City adopted GASB 67 and 68 for the fiscal year ending December 31, 2015. In
addition, the City elected to perform full valuations every two years and projected valuations in between
the full valuations. This valuation represents a full valuation.
We greatly appreciate your business. If you have any questions, please feel free to call us at (425) 939-
7444.
Best Regards,
-4,-" -�;2 &-z�
Roger T. Burton, FSA, FCA, MAAA
Health & Welfare Benefits Consulting. Actuarial Valuations. Strategic Benefits Planning. Flexible Benefits
Executive Summary
Overview
Accounting Summary
Accounting Information
Statement of Fiduciary Net Position for the Fiscal Year Ending December 31, 2015
Statement of Changes in Fiduciary Net Position for the Fiscal Year Ended December
31, 2015
Changes in the Net Pension Liability
Calculation of Expense Under GASB 68
Calculation of the Actuarially Determined Contribution
Projection of Fiduciary Net Position
FPF Cash -Flow Projections
Projected Cash -Flow Chart
Schedule of Changes in the City's Net Pension Liability and Related Ratios
Schedule of Contributions
Schedule of Investment Returns
Draft Notes to the Financial Statements
Basis of Valuation
Substantive Plan
Participant Summary
Actuarial Assumptions
Page i
Contents
1
3
4
5
6
7
8
9
10
11
12
13
14
15
19
21
22
Executive Summary
Overview
Purpose of the Report
Healthcare Actuaries prepared this report to meet employer financial accounting requirements under GASB
Statements No. 67 and 68 "Accounting and Financial Reporting for Pensions" (GASB 67 and 68), issued in
June 2012. This report includes information with respect to the obligation to provide ongoing pension
benefits for retired firefighters for the fiscal year ending December 31, 2015.
Changes Since the Prior Valuation
The prior actuarial valuation was completed for fiscal year ending December 31, 2010. Due to the length
of time between valuations, no prior valuation results or assumptions have been included in this report.
Actuarial Certification
Our determinations reflect the provisions and methods prescribed by GASB 67 and 68. In preparing this
report, we relied on employee census, plan design, and plan assets provided directly or indirectly by the
plan sponsor. We based the results in this report on this information, along with the actuarial assumptions
and methods that we used. The plan sponsor, with the concurrence of its auditors, selected or agreed with
the actuarial assumptions used. In our opinion, the assumptions used represent reasonable expectations of
anticipated plan experience. We reviewed the census information for reasonableness, but we did not audit
it.
Actuarial computations under GASB 67 and 68 fulfill plan and employer accounting, and financial reporting
requirements. The calculations are on a basis consistent with our understanding of GASB 67 and 68.
Determinations for purposes other than meeting employer financial accounting requirements may be
significantly different from the results in our report. Accordingly, additional determinations may be
necessary for other purposes, such as judging benefit security at termination or the adequacy of funding
for an on-going plan.
The Board has the final decision regarding the appropriateness of the assumptions.
Healthcare Actuaries' work is prepared solely for the internal business use of the City of Pasco. To the
extent that Healthcare Actuaries' work is not subject to disclosure under applicable public record laws, our
work may not be provided to third parties without Healthcare Actuaries' prior written consent.
No third -party recipient of Healthcare Actuaries' work product should rely on Healthcare Actuaries' work
product. Any third -party recipient should engage qualified professionals for advice appropriate to their own
needs.
Page 1
Overview
There is no relationship between Healthcare Actuaries, its owner, subcontractors, or staff, and the City of
Pasco beyond the contractual services that we perform for the City of Pasco.
On the basis of the foregoing, we hereby certify that, to the best of our knowledge and belief, the report is
complete and accurate and we prepared it in accordance with generally recognized and accepted actuarial
principles and practices which are consistent with the applicable "Actuarial Standards of Practice" and
"Actuarial Compliance Guidelines" as promulgated by the American Academy of Actuaries.
The undersigneds are members of the American Academy of Actuaries and meet the Qualification
Standards of the American Academy of Actuaries to render the actuarial opinion contained herein.
Nadine J Pileggi, ASA, MAAA
Associate of the Society of Actuaries (ASA)
Member of the American Academy of Actuaries (MAAA)
Old
Roger T. Burton, FSA, FCA, MAAA
Fellow of the Society of Actuaries (FSA)
Member of the American Academy of Actuaries (MAAA)
Fellow of the Conference of Consulting Actuaries (FCA)
Page 2
March 21, 2016
Date
March 21, 2016
Date
A summary of the key valuation results follows.
Accounting Summary
For Fiscal Year Ending
Funded Status 12/31/2015
Total Pension Liability $ 1,145,274
Fiduciary Net Position 4,779,063
Net Pension Liability $ (3,633,789)
Plan fiduciary net position as a percentage of the total pension liability 417.29%
Covered payroll n/a
UAAL as a percentage of covered payroll n/a
2015 Expense $ (286,941)
2016 Expense $ (174,028)
2016 Actuarially Determined Contribution $ (620,000)
Page 3
Accounting Information
Liabilities
Payables:
Investment management fees $
Due to broker for investments purchased
Collateral payable for securities lending
Other
Total Liabilities $
Net Position Restricted for Pensions $ 4,779,063
Page 4
Statement of Fiduciary Net Position
Fiscal Year Ending December 31, 2015
Assets
Cash and deposits
$ 120,567
Securities lending cash collateral
-
Totalcash
120,567
Receivables:
Contributions
-
Due from broker for investments sold
Investment income (interest on investments)
-
Other
40,301
Total receivables
40,301
Investments:
Domestic fixed income securities
-
Domestic equities
4,618,195
International equities
-
Real estate
-
Total Investments
4,618,195
Total Assets
$ 4,779,063
Liabilities
Payables:
Investment management fees $
Due to broker for investments purchased
Collateral payable for securities lending
Other
Total Liabilities $
Net Position Restricted for Pensions $ 4,779,063
Page 4
Statement of Changes in Fiduciary Net Position
for the Fiscal Year Ended December 31, 2015
2015
Additions
Contributions:
Employer
$
54,506
Member
-
Total contributions
54,506
Investment income:
Net appreciation in fair value of investments
($307,653)
Interest and dividends
175,688
Less investment expense, other than from securities lending
-
Net income from investing, other than from securities lending
(131,965)
Securities lending income
Less securities lending expense
Net income from securities lending
Net investment income
(131,965)
Other
Total additions
$
(77,459)
Deductions
Benefit payments, including refund of member contributions
$
116,770
Administrative expense
3,398
Other
-
Total deductions
$
120,168
Net increase in net position
$
(197,627)
Net Position Restricted for Pensions
Beginning of year
$
4,976,690
End of year
$
4,779,063
Page 5
Changes in the Net Pension Liability
The funded status of the Plan as of fiscal year-end as well as other required disclosure information follows.
Balances at January 1, 2015
Changes for the year:
Service Cost
Interest
Differences between expected and actual
experience
Change in assumptions
Contributions — employer
Contributions — employee
Net investment income
Benefit payments, including refunds of employee
contributions
Administrative expense
Other changes
Net changes
Balances at December 31, 2015
Increase (Decrease)
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability
(a) (b) (a) — (b)
$ 1,178,068 $ 4,976,690 $ (3,798,622)
83,976 83,976
54,506 (54,506)
(131,965) 131,965
(116,770) (116,770) -
(3,398) 3,398
$ (32,794)
$
(197,627)
$
164,833
$ 1,145,274
$
4,779,063
$
(3,633,789)
Page 6
Calculation of Expense Under GASB 68
Expense 2016 2015
Service Cost $ - $ -
Interest (on liabilities) 81,814 83,976
Interest (on assets) (356,418) (370,917)
Differences between expected and actual experience* -
Differences between expected and actual earnings** 100,576
Total Expense $ (174,028) $ (286,941)
*Amounts to include in expense are calcuated as follows: 2016 2015
Expected Liabilities $ 1,145,274 n/a
Actual Liabilities 1,145,274 n/a
Difference $ - n/a
*As there are no active members, all differences between expected and actual demographic and economic experience
are recognized immediately. GASB 68 was adopted for the 2015 fiscal year, with liabilities measured as of December 31,
2015; therefore there are no differences in liability experience to be included for FYE 2016.
**Amounts to include in expense are calculated as follows: 2016 2015
Expected Earnings (prior year) $ 370,917 $ -
Actual Earnings (prior year, net of administrative and investment expenses) (131,965) -
Difference 502,882
Straight-line amortization over 5 years $ 100,576 $
Differences between expected and actual experience
Changes of assumptions
Net difference between projected and actual earnings on pension plan
investments
Total
12/31/2015 12/31/2015
Deferred Outflows Deferred Inflows
of Resources of Resources
502,882
$ 502,882 $
Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be
recognized in pension expense as follows:
Year ended December 31:
2016 $
100,576
2017
100,576
2018
100,576
2019
100,576
2020
100,576
Page 7
Calculation of Statutorially Determined Contribution
Expense 2016 2015
Actuarial Value of Assets $ 4,779,063 $ 4,976,690
Actuarial Liability 1,145,274 1,178,068
Unfunded Actuarial Liability (3,633,789) (3,798,622)
10 -year closed amortization beginning January 1, 2014 (620,000) (595,000)
Projected Expenses
Actuarially Determined Contribution $ (620,000) $ (595,000)
Page 8
Projection of Fiduciary Net Position
Page 9
Projected
Beginning
Projected
Projected
Projected
Fiduciary Net
Projected Total
Benefit
Administrative
Investment
Projected Ending
Calendar
Position
Contributions
Payments
Expense
Earnings
Fiduciary Net Position
Year
(a)
(b)
(c)
(d)
(e)
(f) _ (a)+(b)-(c)-(d)+(e)
2016
$ 4,779,063
$ (620,000) $
108,852
$ 3,483 $
330,967 $
4,377,695
2017
4,377,695
(611,817)
107,949
3,570
301,202
3,955,561
2018
3,955,561
(606,811)
106,901
3,659
269,766
3,507,956
2019
3,507,956
(601,062)
105,737
3,751
236,451
3,033,857
2020
3,033,857
(594,196)
104,478
3,845
201,195
2,532,534
2021
2,532,534
(585,476)
103,148
3,941
163,969
2,003,938
2022
2,003,938
(573,068)
101,764
4,039
124,838
1,449,904
2023
1,449,904
(549,702)
100,334
4,140
84,211
879,939
2024
879,939
4,350
98,862
4,244
62,292
843,476
2025
843,476
4,458
97,354
4,350
59,614
805,844
2026
805,844
4,570
95,807
4,458
56,850
766,998
2027
766,998
4,684
94,208
4,570
53,996
726,901
2028
726,901
4,801
92,544
4,684
51,052
685,526
2029
685,526
4,921
90,799
4,801
48,014
642,861
2030
642,861
5,044
88,956
4,921
44,883
598,911
2031
598,911
5,170
86,995
5,044
41,661
553,703
2032
553,703
5,300
84,900
5,170
38,349
507,281
2033
507,281
5,432
82,659
5,300
34,951
459,706
2034
459,706
5,568
80,263
5,432
31,473
411,052
2035
411,052
5,707
77,705
5,568
27,920
361,406
2036
361,406
5,850
74,987
5,707
24,299
310,861
2037
310,861
5,996
72,111
5,850
20,616
259,512
2038
259,512
6,146
69,091
5,996
16,878
207,449
2039
207,449
6,300
65,930
6,146
13,092
154,765
2040
154,765
6,457
62,642
6,300
9,264
101,544
2041
101,544
6,619
59,242
6,457
5,400
47,864
2042
47,864
6,784
55,754
6,619
1,505
(6,219)
2043
(6,219)
6,954
52,201
6,784
(2,418)
(60,668)
2044
(60,668)
7,128
48,603
6,954
(6,366)
(115,464)
2045
(115,464)
7,306
44,981
7,128
(10,340)
(170,606)
2046
(170,606)
7,488
41,345
7,306
(14,339)
(226,108)
2047
(226,108)
7,676
37,720
7,488
(18,366)
(282,006)
2048
(282,006)
7,867
34,138
7,676
(22,423)
(338,376)
2049
(338,376)
8,064
30,629
7,867
(26,519)
(395,328)
2050
(395,328)
8,266
27,232
8,064
(30,663)
(453,021)
2051
(453,021)
8,472
23,979
8,266
(34,868)
(511,662)
2052
(511,662)
8,684
20,906
8,472
(39,151)
(571,506)
2053
(571,506)
8,901
18,035
8,684
(43,531)
(632,855)
2054
(632,855)
9,124
15,364
8,901
(48,032)
(696,029)
2055
(696,029)
9,352
12,909
9,124
(52,678)
(761,387)
2056
(761,387)
9,586
10,677
9,352
(57,496)
(829,326)
2057
(829,326)
9,825
8,684
9,586
(62,516)
(900,287)
2058
(900,287)
10,071
6,933
9,825
(67,772)
(974,746)
2059
(974,746)
10,323
5,424
10,071
(73,300)
(1,053,219)
2060
(1,053,219)
10,581
4,147
10,323
(79,137)
(1,136,245)
2061
(1,136,245)
10,845
3,095
10,581
(85,325)
(1,224,400)
2062
(1,224,400)
11,117
2,252
10,845
(91,904)
(1,318,285)
2063
(1,318,285)
11,394
1,594
11,117
(98,921)
(1,418,522)
2064
$ (1,418,522)
$ 11,679 $
1,093
$ 11,394 $
(106,419) $
(1,525,749)
Page 9
FPF Cash -Flow Projections
The following shows the FPF cash flow projections for the next twenty years.
Projected Pension
Calendar Year
Payments
2016
$ 108,852
2017
107,949
2018
106,901
2019
105,737
2020
104,478
2021
103,148
2022
101,764
2023
100,334
2024
98,862
2025
97,354
2026
95,807
2027
94,208
2028
92,544
2029
90,799
2030
88,956
2031
86,995
2032
84,900
2033
82,659
2034
80,263
2035
$ 77,705
Page 10
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
Projected Pension Payments
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
■ Projected Pension Payments
Page 11
Schedule of Changes in the City's Net Pension Liability and Related Ratios
GASB 68 requires a disclosure of the changes in Net Pension Liability for the last 10 fiscal years, or as many
years as are available
Total Pension Liability 2015
Service Cost $
Interest 83,976
Changes of benefit terms -
Differences between expected and actual experience
Changes of assumptions
Benefit payments, included refunds of employee contributions (116,770)
Net change in total pension liability (32,794)
Total pension liability — beginning 1,178,068
Total pension liability — ending (a) $ 1,145,274
Plan Fiduciary Net Position
Contributions — employer
$ 54,506
Contributions — employee
-
Net investment income
(131,965)
Benefit payments, including refunds of employee contributions
(116,770)
Administrative expense
3,398
Other
-
Net change in plan fiduciary net position
(190,831)
Plan fiduciary net position — beginning
4,976,690
Plan fiduciary net position — ending (b)
4,785,859
City's net pension liability — ending (a) — (b)
$ (3,640,585)
Plan fiduciary net position as a percentage of the total pension liability
417.88%
Covered -employee payroll
$ -
City's net pension liability as a percentage of covered -employee payroll
n/a
Notes to schedule:
The following assumptions were adopted as of 1/1 /2015: discount rate 7.5%, salary increases 3.00%, CPI
2.50%, mortality tables updated to RP -2014 with Scale MP -2014 projections.
Prior years are not shown due to the length of time between actuarial valuations.
Page 12
Schedule of Contributions
GASB 68 requires a schedule of Contributions for the last 10 fiscal years, or as many years as are available.
Statutorially Determined Contribution
Less: Contributions Made
Contribution deficiency (excess)
Covered -employee payroll
Contributions as a percentage of covered -employee payroll
Notes to Schedule:
Contribution came from State Fire Insurance Premiums.
Page 13
2015
$ (595,000)
54,506
(649,506)
n/a
Schedule of Investment Returns
Annual money -weighted rate of return, net of investment expense
2015
-2.67%
Ten-year schedule required. However, until a full ten years are available, information is presented for
those years where information is available.
Page 14
Draft Notes to the Financial Statements
A draft of the required notes to the City's financial statements, based on the requirements of GASB 67 and
68 and our understanding of the City's Firefighters Pension Plan, follows.
Notes to the Financial Statements
for the Year Ended December 31, 2015
Summary of Significant Accounting Policies
Method used to value investments. Investments are reported at fair value.
Plan Description
Plan Administration: The Firefighters" Pension Fund is administered by the City of Pasco. The plan is a
single -employer defined benefit pension plan that provides pensions for firefighters that were hired prior to
1970.
The municipal firefighters' pension board consists of the following five members, ex officio, the mayor, or
in a city of the first class, the mayor or a designated representative who shall be an elected official of the
city, who shall be chairperson of the board, the city comptroller or clerk, the chairperson of finance of the
city council, or if there is no chairperson of finance, the city treasurer, and in addition, two regularly
employed or retired firefighters elected by secret ballot of those employed and retired firefighters who are
subject to the jurisdiction of the board. The members to be elected by the firefighters shall be elected
annually for a two year term. The two firefighters elected as members shall, in turn, select a third eligible
member who shall serve as an alternate in the event of an absence of one of the regularly elected
members. In case a vacancy occurs in the membership of the firefighters or retired members, the members
shall in the same manner elect a successor to serve the unexpired term. The board may select and appoint
a secretary who may, but need not be a member of the board. In case of absence or inability of the
chairperson to act, the board may select a chairperson pro tempore who shall during such absence or
inability perform the duties and exercise the powers of the chairperson. A majority of the members of the
board shall constitute a quorum and have power to transact business.
Plan Membership: Plan membership is limited to active members of the Firefighters' Pension Fund (FPF) as
of March 1, 1970. On that date, the Washington Law Enforcement Officers' and Firefighters' System (LEOFF)
was established. FPF is responsible for paying the pensions of those members retired prior to March 1, 1970
and for providing the "excess benefit", the excess of FPF formula benefits over the LEOFF benefits.
Therefore, the plan is closed to new members. At December 31, 2015, FPF membership consisted of the
following:
Inactive plan members retired prior to March 1, 1970: 0
Inactive plan members retired March 1, 1970 or after: 11
Active Plan Members: 0
Page 15
Draft Notes to the Financial Statements
Benefits provided. All benefit terms are in statutes RCW 41.16, 41.18, and 41.26. FPF provides retirement,
disability, and death benefits. Each firefighter in service on March 1, 1970 receives the greater of the
benefit payable under the Washington Law Enforcement Officers' and Firefighters' Retirement System and
the benefits available under the provisions of prior law. Where benefits under the old law exceed those
under the new law for any firefighter, the excess benefits are paid from the FPF of the city employing the
member on March 1, 1970.
All members are retired and drawing benefits. Benefit terms provide for cost -of -living adjustments to each
member's retirement benefit. There are two types of increases: escalation by salary in proportion to the
current salary of the rank from which the firefighter retired, or an increase proportionate to the increase in
the Seattle -area CPI, with the change computed annually. Regardless of the increase (or decrease) in the
CPI, the benefits are increased at least 2% each year. The former applies to firefighters who retired from
service after 1969, their survivors, and to firefighters who retired for duty disability (but not their
survivors) after 1969. The latter applies to all other types of monthly benefits.
Contributions. As long as the FPF provides for benefits to covered members, the City will be eligible to
receive a share of the State's distribution of the fire insurance premium taxes. The amount the City
receives is 25% of all monies received by the State from taxes on fire insurance premiums. Contributions
can also come from taxes paid pursuant to the provisions of RCW 41.16.060. This statute require that each
municipality levy up to $0.45 (only $0.225 of which can be in excess of the property tax limit pursuant to
RCW 84.52.043) per $1,000 of assessed valuation, based on reports by a qualified actuary, to maintain the
fund.
Page 16
Draft Notes to the Financial Statements
Investments
The City of Pasco does not have a investment policy for pension fund assets.
Rate of Return. For the year ended December 31, 2015, the annual money -weighted rate of return on
pension plan investments, net of pension plan investment expense, was -2.67%. The money -weighted rate
of return expresses investment performance, net of investment expense, adjusted for the changing amount
actually invested.
City's Net Pension Liability
The components of the City's net pension liability at December 31, 2015 are as follows:
Total pension liability
Less: Plan fiduciary net position
City's net pension liability
Plan fiduciary net position as a percentage
of the total pension liability
$ 1,145,274
4,785,859
$ (3,640,585)
417.88%
Page 17
Draft Notes to the Financial Statements
Actuarial Assumptions: The total pension liability was determined by an actuarial valuation as of
December 31, 2015, using the following actuarial assumptions, applied to all periods included in the
measurement:
Inflation
Salary increases
Investment rate of return
2.50%
3.00%
7.50%
Healhthy life mortality rates were based on the RP -2014 mortality table, total dataset, fully generational
projected with Scale MP -2014, set back one year for males and set forward one year for females. Disabled
life mortality rates were based ont the RP -2014 mortality table, total dataset, fully generational projected
with Scale MP -2014, set back two years for males and females.
The long-term expected rate of return on pension plan investments assumption was based on the nature
and mix of current and expected pension plan assets over a period of time representative of the expected
length of time between the first day of service and date of the last benefit payment.
Discount rate. The discount rate used to measure the total pension liability was 5.00%. The projection of
cash flows used to determine the discount rate assumed City contributions were equal to the actuarially
calculated contribution of a 10 -year closed amortization of the unfunded actuarial liability at January 1,
2014 plus assumed administrative expenses. This amount includes revenue received from Fire Insurance
premiums. Based on this assumption, the pension plan's fiduciary net position was projected to be
available to make all projected future benefit payment for current plan members. Therefore, the long-
term expected rate of return on pension plan investments was applied to all periods of projected benefit
payments to determine the total pension liability.
Sensitivity of the net pension liability to changes in the discount rate. The following presents the net
pension liability of the City, calculated using the discount rate of 5.00%, as well as what the City's net
pension liability would be if it were calculated using a discount rate that is one -percentage -point lower,
6.00%, or one -percentage point higher, 4.00%, than the current rate:
Current Discount
City's net pension liablity: 1% Decrease Rate 1% Increase
1,145, 274 $ 1,145, 274 $ 1,145, 274
Page 18
Basis of Valuation
Substantive Plan
A general summary of the substantive plan used as the basis of the valuation follows.
GENERAL INFORMATION
Applicable Statutes RCW 41.16, 41.18, 41.26
Benefits Each firefighter in service on March 1, 1970 receives the greater of the benefit
payable under LEOFF or FPF. Where benefits under the old law exceed those
under the new for any firefighter, the excess benefits are paid from the FPF of
the city employing the member on March 1, 1970.
Service Retirement Benefit
Member Eligibility: age 50 and 25 years of service (RCW 41.18.040) or Age 50 and five
years of service (RCW 41.26.090).
Amount of benefit: 50% of salary plus an additional 2% for each year of service
in excess of 25 years. Maximum benefit of 60% of salary (does not apply for
those retiring after July 1, 2006).
Survivor Eligibility: spouse or child
Amount of benefit: continuation of the firefighter's benefit. (If spouse — same,
plus additional 5% of salary per child. If no spouse — 30% of salary for first
child, 10% for each additional child. Maximum of 60% of salary).
Duty Disability Retirement Benefit
Member Eligibility: disabled after six-month waiting period.
Amount of benefit: determined the same as Service Retirement Benefit.
Recovery: restoration to service.
Survivor Monthly pension equal to the amount of the monthly pension such retired
firefighter was receiving at the time of his or her death.
Non -Duty Disability Retirement Benefit
Member Eligibility: disabled after 90 -day waiting period.
Amount of benefit: 50% of salary, or service retirement benefit, if greater.
Recovery: see Duty Disability Retirement.
Limitations: no benefits payable if firefighter employed elsewhere when
disabled.
Survivor Eligibility: spouse or child
Amount of benefit:
33.3% to widow or children only.
45.8% to widow and one child.
47.6% to widow and two children.
50.0% to widow and three children.
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Substantive Plan
Duty Death Benefit Eligibility: spouse or child
Amount of benefit: If spouse — 50% of salary plus an additional 5% of salary per
child; maximum benefit of 60% of salary. If no spouse — 50% of salary to
children.
Non Duty Death Benefit Eligibility: spouse or child
Amount of benefit: provisions the same as Survivor's Benefit under Non -Duty
Disability Retirement.
Special Provisions Under disability or death benefits, a surviving spouse may elect a lump -sum
payment of $5,000 in lieu of future monthly benefits.
Vesting Termination after 20 years of service (RCW 41.18.130) or five years of service
(RCW 41.26.090).
Deferred Benefit Commences: when a firefighter would have had 25 years of service (RCW
41.18.130) or age 50 (RCW 41.26.090).
Amount of benefit: 2% of salary for each year of service. Other provisions
apply, see statutes.
Death while vested prior to commencement of benefits: payment of
firefighter's deferred benefit to spouse or child.
Postretirement Increase
Benefits Payable Under Annual increase proportionate to the increase in the Seattle -area CPI.
LEOFF Minimum increase at least 2% each year.
Benefits Payable Under
FPF
Type 1 Escalation by salary in proportion to current salary or rank from which the
firefighter retired.
Type 2 Annual increase proportionate to the increase in the Seattle -area CPI.
Minimum increase at least 2% each year.
Applicability Type 1 applies to firefighters who retired from service after 1969, their
survivors, and to firefighters who retired for duty disability (but not their
survivors) after 1961. Type 2 applies to all other types of monthly benefits
Minimum Benefit After April 25, 1973, a minimum benefit of $300 per month to all retired
firefighters and their survivors. This minimum is increased by the CPI.
Funeral Benefit $500 RCW 41.18.140, no provision under RCW 41.26.
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Participant Summary
January 1, 2016
Age and service determined as of the census date.
Monthly Pension Amounts as of December 31, 2014
Paid by City: $ 17,197
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LEOFF Plan 1 Inactive Participants
Service
Disabled
Surviving
Age
Retirees
Retirees
Spouses
Total
< 65
0
0
0
0
65-69
1
0
0
1
70-74
1
0
0
1
75-79
0
2
0
2
80-84
1
6
2
9
85-89
0
3
3
6
90+
3
0
1
4
Total
6
11
6
23
Monthly Pension Amounts as of December 31, 2014
Paid by City: $ 17,197
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Actuarial Assumptions
A summary of the actuarial assumptions used for this valuation follows. We considered the reasonableness
of each assumption independently based on its own merits, consistent with each other assumption, and
the combined impact of all assumptions.
Assumption
Rates
Actuarial Cost Method Entry Age
Asset Valuation Method Fair Market Value
Measurement Date January 1, 2016
Discount Rate (or We based the long-term expected rate of return on pension plan
Investment Return) investments assumption on the nature and mix of current and expected
pension plan assets over a period of time representative of the expected
length of time between the first day of service and date of the last
benefit payment. The rate of 5.00% was selected.
Cost of Living 2.50%, based on SSA OASDI 2015 report and City input.
Salary Increases (for
calculated benefit increases
based on rank) 3.00%, based on City input.
Healthy Mortality RP -2014 mortality table, total dataset, fully generational with mortality
improvement scale MP -2014 set back one year for males and set forward
one year for females.
Disabled Mortality
RP -2014 mortality table, total dataset, fully generational with mortality
improvement scale MP -2014 set forward two years for males and females.
Turnover n/a
Disability n/a
Retirement n/a
Spouse Age We assumed that wives are three years younger than husbands.
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