The City of Tampa Pension Fund for Firefighters and Police Officers

Actuarial Valuation Report as of October 1, 2015

May 2016

Table of Contents Page Number Discussion

1

Liabilities Table I Table Ia Table II Table III Table IV Table IVa Table IVb

Summary of Valuation Results Breakdown of Membership by Fire and Police Gain and Loss Analysis Present Value of Accrued Benefits Information Required by Florida Statute (Chap. 112) Unfunded Liability Bases Cumulative Actuarial (Gains) Losses

5 6 7 8 9 11 12

Assets Table V Table VIa Table VIb Table VIc Table VId Table VIe Table Vif Table VII

Assets Reconciliation of Total Account Make-up of Prior Investment Losses in Base Plan Reconciliation of Base Account Reconciliation of PRAA Account Reconciliation of 13th Check Account Reconciliation of DROP Account Historical Asset Information - Base Plan

13 14 15 16 18 19 20 21

Summary of Member Data Active Data Retiree Data - Age at Retirement Inactive Data - Current Age Data Reconciliation Age-Service-Salary Table Active Data - Current Age

22 23 24 25 26 27 28

Data Table VIII Table VIIIa Table VIIIb Table VIIIc Table VIIId Table VIIIe Table VIIIf

Assumptions Table IX Table IXa

Actuarial Assumptions and Methods................................................................................. 29 Assumption and Method Changes................................................................................. 33

Plan Provisions Table X Table Xa

Plan Provisions....................................................................................... Plan Amendments.......................................................................................

35 43

Joseph Griffin Principal

May 23, 2016 Board of Trustees The City of Tampa Pension Fund for Firefighters and Police Officers c/o Ms. Tiffany Ernst 3001 North Boulevard Tampa, FL 33603

Buck Consultants, LLC 200 Galleria Parkway SE Suite 1900 Atlanta, GA 30339 [email protected] tel 770-857-4049 fax 770-933-8336

October 1, 2015 Actuarial Valuation Dear Board Members: This report presents the results of the actuarial valuation of the City of Tampa Pension Fund for Firefighters and Police Officers as of October 1, 2015. The purposes of this report are to provide a summary of the funded status of the plan as of October 1, 2015, to determine the minimum required contribution amount for the fiscal year October 1, 2016 to September 30, 2017, and to satisfy State reporting requirements. In addition, this report provides a record of any changes in actuarial assumptions and methods, and plan amendments affecting the financial status of the fund. Information for prior periods is shown in the report for comparison purposes and to meet State reporting requirements. Use of this report for any other purpose may not be appropriate and may result in mistaken conclusions due to failure to understand applicable assumptions, methodologies, or inapplicability of the report for that purpose. Because of the risk of misinterpretation of actuarial results, you should ask Buck to review any statement you wish to make on the results contained in this report. Buck will accept no liability for any such statement made without prior review by Buck. Summary of Valuation Results The total required contribution to the Base Plan for the fiscal year ending September 30, 2017 is 38.19% of projected payroll or $39,686,413. For the fiscal year October 1, 2016 to September 30, 2017, the contribution rate is determined as a percentage of projected payroll of $103,925,811. This projected payroll is calculated by increasing the payroll as of the valuation of $99,928,664 by 4%. In comparison, the required contribution for the fiscal year ending September 30, 2016 was calculated last year as $35,383,649 or 35.92% of projected payroll. The valuation and required contributions are based upon Base Plan benefits only. Separate accounting of assets is maintained to support cost of living (COLA) benefits, the deferred retirement option program (DROP) and for the 13th Check Program. These other programs do not directly impact the funding for the Base Plan benefits. Beginning October 1, 2015, Base Plan assets and liabilities include the value of the DROP accounts. The Base Plan cost is to be met by Member, City and State contributions. The required contribution less the State contribution is split between the Members and the City at a ratio of 1 to 1.34. The active Members contribute based upon a graduated schedule (Full Scale Contribution Rate, FSCR) of covered pay. The Member contribution rate as a percentage of the FSCR is developed through the actuarial valuation. The City matches 134% of the Members’ contributions deposited at the end of each quarter.

Pension Fund for Firefighters and Police Officers The City of Tampa

May 23, 2016 Page 2

Below we present a breakdown of the expected contribution requirements by source for the fiscal year from October 1, 2016 to September 30, 2017.

As a percentage of projected payroll

Amount

As a percentage of FSCR

Member contributions

$14,188,755

13.65%

60.78%

City contributions Estimated State contributions Total

19,012,932 6,484,726 $39,686,413

18.30% 6.24% 38.19%

N/A N/A N/A

Table X provides the FSCR according to the schedule of covered pay. Contributions must be adjusted if cumulative actual State contributions are less than cumulative expected State contributions. The funded percentage of the Plan decreased from 93.9% as of October 1, 2014 to 92.5% as of October 1, 2015 on an actuarial value of assets basis. Where presented, references to “funded percentage” and “unfunded actuarial accrued liability” are measured on an actuarial value of assets basis. It should be noted that the same measurements using market value of assets would result in different funded percentages and unfunded actuarial accrued liabilities. Moreover, the funded percentage is appropriate for evaluating the need and level of future contributions but makes no assessment regarding the funded status of the plan were a settlement being considered. Discussion of Valuation Results The valuation is based on a series of actuarial assumptions, including an interest rate (actuarial asset return) of 8.50% per year for the Base Plan and annual pay increases ranging from 4.0% to 12.0% per year. Actuarial Experience For the year ending September 30, 2015 the actual return on the total fund was ($92,192,334) and was allocated across accounts as follows: Investment Return Allocation

Approximate Investment Return

Base Plan

$ (48,964,256)

(5.03%)

Postretirement Adjustment Account Subtotal Base + PRAA DROP th 13 Check Total

(41,177,916) $ (90,142,172) (2,050,162) 0 $ (92,192,334)

(5.02%) (5.03%)

The actuarial value of assets for the Base Plan returned 5.51%.

Pension Fund for Firefighters and Police Officers The City of Tampa

May 23, 2016 Page 3

Actuarial gains and losses result when the actual experience of the plan (such as asset return, pay increases, turnover, and deaths) is different from that expected under the actuarial assumptions. The Base Plan experienced a loss of $22,100,911 which is amortized over 15 years. The amortization payment is $2,661,402 or 2.56% of projected payroll.

13th Check In order for investment returns to fund the 13th Check Account, three conditions must be met: (1) (2) (3)

The investment return for the fiscal year exceeds 10%, The amount of the benefit is definitely determinable (within the meaning of the Internal Revenue Code), and The Fund’s actuary certifies that the allocation does not exceed the amount of cumulative actuarial experience gains in the plan, and that the amount of the payment will be funded on a sound actuarial basis.

Based on information in the financial statement for the Fund, and using methodology consistent with prior years, the investment return on the Base plus PRAA accounts for the year ended September 30, 2015 was an investment loss of 5.03%, which is less than the 10% required return. Therefore, the first condition has not been th satisfied and there is no 13 Check benefit is payable for fiscal 2016 based on the results of the October 1, 2015 actuarial valuation. Development of the cumulative actuarial gain is presented in Table IVb and reconciliation of the 13th Check Account is presented in Table VIe. Changes in Actuarial Assumptions and Methods There have been no changes in the actuarial assumptions and methods since the previous valuation. Table IX summarizes the actuarial assumptions and methods used in the valuation. Changes in Plan Benefit Provisions There have been no changes in the benefit provisions of the plan since the previous valuation. Table X summarizes the plan provisions used in the valuation. Financial and Member Data This valuation was performed using externally audited financial statements by Moore Stephens Lovelace, P.A. and Member data and other financial information provided by the Pension Fund administration office. Buck did not audit this data, although it was reviewed for reasonableness and consistency with the prior year’s information. The results of this valuation are dependent on the accuracy of the data. Tables VIII through VIIIf provide a summary of the data used in the valuation. Contents of the Report

Pension Fund for Firefighters and Police Officers The City of Tampa

May 23, 2016 Page 4

A summary of the valuation results and the contribution requirements are presented in Table I. Table Ia presents a breakdown of the plan population between Police Officers and Firefighters. Information for the auditors can be found in Table III. Information required under Governmental Accounting Standards No. 67 and 68 are provided under a separate report. The disclosure information required by Chapter 112, Florida Statutes, is presented in Table IV. Tables V through VII provide information about the fund’s assets. Table VII provides a historical record of the growth, expenses, revenues, annual returns and contributions of the Base Plan. Tables VIII through VIIIf provide information concerning the participant population. Certification This actuarial valuation was prepared 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 Base Plan and/or paid from the Base 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 as of October 1, 2015 that may require a material increase in Base Plan costs or required contribution rates have been taken into account in the valuation. This valuation was performed in accordance with the standards of practice prescribed by the Actuarial Standards Board, based on the current provisions of the Pension Fund. The assumptions used in the valuation are internally consistent and were selected in conjunction with the Board based upon the actuarial experience of the Fund. Future actuarial measurements may differ significantly from current measurements due to plan experience differing from that anticipated by the economic and demographic assumptions, changes expected as part of the natural operation of the methodology used for these measurements, and changes in plan provisions, applicable law or regulations. An analysis of the potential range of such future differences is beyond the scope of this report. I am a Member of the American Academy of Actuaries and meet the Academy’s qualification standards to issue this Statement of Actuarial Opinion. BUCK CONSULTANTS. LLC

Joseph L. Griffin, ASA, EA, MAAA, FCA Principal, Retirement Consulting Actuary Enrollment No. 14-06938

Summary of Valuation Results

Table I October 1, 2015

1. Number of Members a. Active Members b. Deferred Vested Members c. Retired Members: i. Service ii. Disabled iii. Beneficiaries iv. Subtotal d. Total Members

1,360 23 1,437 317 306 2,060 3,443

2

1,425 325 297 2,047 3,374

$ $

99,928,664 103,925,811

$ $

94,709,386 98,497,761

3. Total Retired Member Benefits

$

74,206,509

$

72,104,466

d. e. f. g.

6.

1,317 10

1

2. Valuation Payroll a. Total Covered Payroll Under Assumed Ret. Age b. Valuation Payroll

4. Annual Cost as of Valuation Date a. Entry Age Normal Accrued Liability b. Actuarial Value of Assets c. Unfunded Accrued Liability d. Funded Percentage

5.

October 1, 2014

$ $

Unfunded Liability Payment Entry Age Normal Cost & Administrative Expense Interest Adjustment Total Annual Cost as of the Valuation Date

$

1,169,572,192 1,082,056,353 87,515,839 92.5%

$ $

$

$

8,704,260 29,019,169 1,962,984 39,686,413

Minimum Required Contribution as of the Valuation Date a. Total Required Contribution $ b. Estimated Member Contributions c. Net Amount Payable by City d. Estimated State Contributions

39,686,413 14,188,755 19,012,932 6,484,726

$

Minimum Required Contribution (as a % of Valuation Payroll) a. Total Required Contribution b. Estimated Member Contributions c. Net Amount Payable by City d. Estimated State Contributions

1 2 3

Includes 13 nonvested Members due a refund of contributions. Includes 192 Members in DROP. Includes 239 Members in DROP.

5

38.19% 13.65% 18.30% 6.24%

$

1,074,419,281 1,008,559,574 65,859,707 93.9% 6,042,855 27,590,635 1,750,159 35,383,649

35,383,649 12,389,410 16,601,809 6,392,430

35.92% 12.58% 16.86% 6.49%

3

Summary of Valuation Results

Table Ia

Breakdown of Membership by Fire and Police Firefighters 1.

Number of Members as of October 1, 2015 a. Active Members b. Deferred Vested Members c. Retired Members: i. Service ii. Disabled iii. Beneficiaries iv. Subtotal d. Total Members

Number of Members as of October 1, 2014 a. Active Members b. Deferred Vested Members c. Retired Members: i. Service ii. Disabled iii. Beneficiaries iv. Subtotal d. Total Members 1 2 3

Includes 13 nonvested Members due a refund of contributions. Includes 192 Members in DROP. Includes 239 Members in DROP.

6

Total

542 6

818 17

1,360 23 ¹

586 147 159 892 1,440

851 170 147 1,168 2,003

1,437 ² 317 306 2,060 3,443

Firefighters 2.

Police

Police

Total

537 1

780 9

1,317 10

592 149 152 893 1,431

833 176 145 1,154 1,943

1,425 325 297 2,047 3,374

3

Gain and Loss Analysis

Table II

1. Unfunded Accrued Liability as of October 1, 2014

$

65,859,707

$

13,494,500 6,745,108

2. Expected Change in Unfunded Liability During the 2014/2015 Year a. b.

Due to Normal Cost and Administrative Expenses ¹ Due to Interest on the Unfunded Liability, NC and Admin. Expenses

c. d. e.

Actual City and State Contributions Due to Interest on City and State Contributions Total Expected Change

$

($23,562,009) (1,226,078) (4,548,479)

3. Expected Unfunded Accrued Liability as of October 1, 2015

$

61,311,228

$

$

0 0 0 26,204,611 26,204,611

$

87,515,839

$

65,414,928 0 0 26,204,611 (4,103,700) 87,515,839

4. Change in Unfunded Accrued Liability During the 2014/2015 Year Due to: a. b. c. d. e.

Benefit improvements Assumption changes Plan amendments Experience (Gain)/Loss Total Change

5. Unfunded Accrued Liability as of October 1, 2015 6. Development of Outstanding Amortization Obligations as of October 1, 2015 a. b. c. d. e. f.

Expected Outstanding Obligations as of October 1, 2015 Assumption Changes Plan Amendments Experience (Gain)/Loss (Gain)/Loss due to Contribution Timing Total Outstanding Obiligation as of October 1, 2015

$

7. Items Affecting Calculation of the Unfunded Accrued Liability a. b. c. d.

¹

Plan provisions reflected in the accrued benefits (see Table X on page 35) Plan amendments reflected in item 4.c. above (see Table Xa on page 43) Actuarial assumptions and methods used to determine present values (see Table IX on page 29) Changes in actuarial assumptions and methods reflected in item 4.a. and 4.b. above (see Table IXa on page 33)

As requested by the State Actuary, the normal cost represents the employer portion only net of actual employee contributions and includes actual administrative expenses.

7

Present Value of Accrued Benefits

Table III

Interest Rate Basis: Plan Funding Rate

8.50%

1. Actuarial Present Value of Accrued Benefits As of October 1, 2015 a.

b. c. d. e.

Vested Benefits: i. Members Currently Receiving Benefits ii. Other members iii. Subtotal Non-vested Benefits Total Benefits Market Value of Assets¹ Percentage Funded

$ $ $

As of October 1, 2014

844,939,442 201,408,537 1,046,347,979 53,393,516 1,099,741,495 ($961,999,944) 87.5%

$ $ $ $

2. Statement of Change in Actuarial Present Value of Accrued Benefits a.

Actuarial Present Value as of October 1, 2014

b.

Increase (Decrease) During 2014/2015 Plan Year Due to: i. Interest ii. Benefits accumulated iii. Benefits paid iv. Plan amendments v. Changes in actuarial assumptions or methods vi. Net increase (decrease)

c.

$ 1,010,803,531

Actuarial Present Value as of October 1, 2015

$

$

82,814,559 23,149,550 ($73,029,199) 0 56,003,054 ² 88,937,964

$ 1,099,741,495

3. Items Affecting Calculation of Actuarial Present Value of Accrued Benefits a. b. c. d.

Plan provisions reflected in the accrued benefits (see Table X on page 35) Plan amendments reflected in item 2.b.iv. above (see Table Xa on page 43) Actuarial assumptions and methods used to determine present values (see Table IX on page 29) Changes in actuarial assumptions and methods reflected in item 2.b.v. above (see Table IXa on page 33)

¹ Base plan only. Beginning in 2015, DROP Account assets are included. ² Represents the inclusion of DROP Account assets as liablities.

8

769,165,516 191,546,620 960,712,136 50,091,395 1,010,803,531 (992,031,914) 98.1%

Information Req. By Florida Statute (Chap. 112) Valuation date: Contribution for fiscal year beginning:

Table IV

October 1, 2015 October 1, 2016

October 1, 2014 October 1, 2015

Participant Data 1.

2.

Active Members a. Number b. Valuation Payroll

$

1,360 99,928,664

$

1,317 94,709,386

Retired Members a. Number on service retirement (including DROP) b. Annual benefits

$

1,437 62,752,001

$

1,425 61,007,849

c. d.

Number on disability retirement Annual benefits

$

317 7,757,034

$

325 7,813,092

e. f.

Number of beneficiaries of deceased members Annual benefits

$

306 3,697,474

$

297 3,283,525

g. h.

Number of deferred vested members Annual benefits¹

$

23 397,012

$

10 343,361

Assets² 3.

a. b.

Actuarial value of assets Market value of assets

$1,082,056,353 $961,999,944

$1,008,559,574 992,031,914

Liabilities² 4.

Present value of prospective benefits payable with respect to: a. Retired members and beneficiaries: i. Present retirees on svc. ret. drawing allow. $ ii. Present beneficiaries drawing allowances iii. Present ret. on dis. ret. now drawing allow. iv. Subtotal $ b.

Former act. members eligible for deferred benefits

c.

Present active members: i. Service retirement benefits ii. Deferred vested benefits iii. Disability benefits iv. Death benefits v. Return of contributions vi. Subtotal

d.

Total present value of all prospective benefits

733,749,058 31,642,150 79,548,234 844,939,442

$

$

660,939,872 27,852,264 80,373,380 769,165,516

$

3,885,200

$

3,080,649

$

$

$

479,425,064 8,321,801 34,885,344 4,463,220 1,713,992 528,809,421

$

453,722,540 7,917,058 33,435,663 4,304,496 1,592,320 500,972,077

$

1,377,634,063

$

1,273,218,242

¹ 2015 results include 13 deferred vested members who terminated nonvested in their employer-provided benefit, but are due a refund of employee contributions. The annual benefits shown are only for those due an annuity in the future. ² Values for 2015 and later include DROP Account assets.

9

Information Req. By Florida Statute (Chap. 112)

Valuation date: Contribution for fiscal year:

Table IV ( continued )

October 1, 2015 October 1, 2016

October 1, 2014 October 1, 2015

5.

Present value of accrued benefits

$

1,099,741,495

$

1,010,803,531

6.

Entry age normal accrued liability

$

1,169,572,192

$

1,074,419,281

7.

Unfunded prior service liability

$

87,515,839

$

65,859,707

8.

Normal cost and administrative expenses

$

29,019,169

$

27,590,635

9.

Present value of active members': $

851,245,229 14,927,361

$

809,339,038 14,166,918

$

76,120,302

$

68,531,490

a. b.

Future salaries Future contributions

10. Accumulated Member Contributions Contribution 11. Normal cost contribution rate: (excludes unfunded liability) a. From Members b. From City (including interest) c. Total

11.93% 15.99% 27.92%

11.97% 16.04% 28.01%

12. Required contributions as % of compensation (including interest) a. Member b. City c. Estimated State d. Total

13.65% 18.30% 6.24% 38.19%

12.58% 16.86% 6.49% 35.93%

13. Required contributions (including interest) a. Estimated Member b. Estimated City c. Estimated State d. Total

$ $ $

14. Prior fiscal year's contribution (cash basis) a. Actual and Required Member b. Required City and State c. Actual City and State

$

10

14,188,755 19,012,932 6,484,726 39,686,413 2014/2015 12,763,962 23,562,009 23,562,009

$ $ $

$

12,389,410 16,601,809 6,392,430 35,383,649 2013/2014 12,820,847 23,572,781 23,572,781

Unfunded Liability Bases Description Initial Unfunded Liability Actuarial (Gain)/Loss Change in Asset Method Actuarial (Gain)/Loss Actuarial (Gain)/Loss Change in Assumptions Benefit Improvement Actuarial (Gain)/Loss * Actuarial (Gain)/Loss * Actuarial (Gain)/Loss * Actuarial (Gain)/Loss Change in Assumptions Actuarial (Gain)/Loss Actuarial (Gain)/Loss Actuarial (Gain)/Loss Change in Assumptions Actuarial (Gain)/Loss Change in Assumptions Benefit Improvement Actuarial (Gain)/Loss Actuarial (Gain)/Loss Actuarial (Gain)/Loss Actuarial (Gain)/Loss Total

Original Amount

Table IVa Outstanding Balance as of Oct. 1, 2014

Actual Outstanding Expected Amortization Balance as of Amortization Payment Oct. 1, 2015 Payment

$ (42,104,914) $ (9,223,953) $ (5,207,995) $ (4,799,994) $ (5,207,993) 118,611,565 26,727,798 15,090,950 13,908,711 15,090,951 (66,959,307) (56,578,888) (6,411,066) (54,977,027) (6,411,066) 80,023,466 25,848,989 10,120,894 17,925,259 10,120,894 (87,420,039) (36,008,170) (10,992,858) (28,076,006) (10,992,858) 8,574,823 7,560,291 815,766 7,387,150 815,766 73,835,879 65,099,984 7,024,380 63,609,103 7,024,379 (121,326,766) (59,787,008) (15,171,895) (49,697,009) (15,171,895) (32,620,807) (18,475,650) (4,057,383) (15,988,697) (4,057,384) 9,433,884 5,974,995 1,167,330 5,315,540 1,167,330 3,662,854 2,543,158 450,980 2,308,346 450,980 (8,119,095) (7,699,523) (762,020) (7,591,962) (762,020) 71,888,724 53,901,215 8,808,737 49,674,081 8,808,737 125,685,458 100,583,442 15,329,692 93,803,343 15,329,692 (57,961,330) (49,049,016) (7,038,187) (46,179,995) (7,038,187) 13,010,339 12,693,829 1,213,025 12,559,779 1,213,026 7,622,396 6,769,217 921,648 6,422,952 921,648 131,353,815 129,148,982 12,222,548 127,904,097 12,222,548 1,908,075 1,876,048 177,547 1,857,965 177,548 (139,051,210) (128,782,047) (16,744,611) (122,983,910) (16,744,611) (9,353,164) (9,021,871) (1,126,312) (8,662,418) (1,126,312) 1,757,885 1,757,885 211,685 1,695,620 211,685 22,100,911 22,100,911 2,661,402 $65,859,707 $6,042,855 87,515,839 8,704,260

* Actuarial gain/loss bases in these years were adjusted for FYE 9/30/2004 13th Check.

Projected Unfunded Liability $87,515,839 $86,250,425 $94,760,411 $114,114,640 $0

Date October 1, 2015 October 1, 2016 October 1, 2017 October 1, 2018 October 1, 2042

11

Years Remaining Oct. 1, 2015 1 1 16 2 3 18 18 4 5 6 7 23 8 9 10 26 11 27 27 12 13 14 15

Cumulative Actuarial (Gains) Losses Year Ending 9/30

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Balance at Beginning of Year

$

0 118,611,565 194,901,878 100,856,730 (25,006,218) (58,798,214) (49,625,936) (46,547,770) 24,582,513 147,171,076 81,847,365 83,195,404 (62,997,505) (75,590,753) (77,017,067) (58,433,277)

Plus Interest

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $

Minus Amortization Payment

Table IVb Plus (Gain) Loss for Year¹

Minus Impact of 13th Check on (Gain) Loss²

Balance at End of Year

0 $ 0 $ 118,611,565 N/A $ 118,611,565 11,861,157 15,594,310 80,023,466 N/A $ 194,901,878 19,490,188 26,115,297 (87,420,039) N/A $ 100,856,730 10,085,673 14,621,855 (128,921,932) $ (7,595,166) $ (25,006,218) (2,500,622) (1,329,433) (32,620,807) N/A $ (58,798,214) (5,879,821) (5,618,215) 9,433,884 N/A $ (49,625,936) (4,962,594) (4,377,906) 3,662,854 N/A $ (46,547,770) (4,654,777) (3,896,336) 71,888,724 N/A $ 24,582,513 2,458,251 5,555,146 125,685,458 N/A $ 147,171,076 14,717,108 22,079,489 (57,961,330) N/A $ 81,847,365 8,184,737 14,459,094 7,622,396 N/A $ 83,195,404 8,319,540 15,461,239 (139,051,210) N/A $ (62,997,505) (5,354,788) (2,114,704) (9,353,164) N/A $ (75,590,753) (6,425,214) (3,241,015) 1,757,885 N/A $ (77,017,067) (6,546,451) (3,029,330) 22,100,911 N/A $ (58,433,277)

¹ This gain/loss for the year is calculated before any allocation to the 13th Check Account. ² 13th Check allocation generally does not impact Base Plan gain or loss (impact at 10/1/2004 was due to outstanding make-up to Base).

12

Assets

Table V

Market Value of Assets As of October 1, 2015 a. b. c. d. e. f. g. h. i. j. k. l. m.

Cash and cash equivalents (7%) U.S. government bonds & notes (6%) Corporate bonds (12%) Equities (73%) Other government bonds and notes (0%) Real estate (0%) Accrued income receivable (0%) Partnerships (3%) Other payables (-1%) Preliminary market value of assets Contributions receivable (0%) Benefits payable (0%) Market value of assets

$

$

$

(Percentage of assets shown as of October 1, 2015)

13

116,790,400 98,040,644 206,644,576 1,261,348,782 0 516,382 8,426,722 53,627,100 (17,865,382) 1,727,529,224 0 0 1,727,529,224

As of October 1, 2014 $

$

$

49,394,965 92,251,770 197,108,341 1,467,743,287 0 546,299 7,740,375 100,778,950 (6,085,261) 1,909,478,726 409,150 0 1,909,887,876

Reconciliation of Total Account

Table VIa

1. Market Value of Assets as of October 1, 2014 a. Excluding contributions receivable/benefits payable b. Including contributions receivable/benefits payable 2. Increases Due to: a. Contributions: i. Members ii. City iii. Employee buyback iv. State v. Total contributions b. Investment income (interest and dividends) c. Net appreciation in fair value of investments d. Total increases

$ $

$

$

$

3. Decreases Due to: a. 13th check benefit b. Benefit payments c. Refund of Member contributions d. Administrative expenses e. Total decreases

$

$

4. Market Value of Assets as of October 1, 2015 a. Market Value of Assets as of October 1, 2015 (excluding receivables) b. Contributions receivable c. Final Market Value of Assets as of October 1, 2015 (item 1.b. + item 2.d. + item 3.e.) 5. Return on Total Account (not including receivables or payables)

14

1,909,478,726 1,909,887,876

12,763,962 17,077,283 1,280,181 6,484,726 37,606,152 41,182,874 (133,375,208) (54,586,182)

(18,798,434) (106,756,237) (162,512) (1,646,137) (127,363,320)

$

1,727,529,224 0

$

1,727,529,224 -4.94%

Make-up of Prior Investment Losses in Base Plan

Plan Year 10/1/2007-9/30/2008 10/1/2008-9/30/2009 10/1/2009-9/30/2010 10/1/2010-9/30/2011 10/1/2011-9/30/2012 10/1/2012-9/30/2013 10/1/2013-9/30/2014 10/1/2014-9/30/2015

Market value Market value of of Base Plan PRAA Assets Assets (BOY) (BOY) 719,097,961 934,239,630 584,699,200 784,499,273 518,870,559 723,101,511 636,967,389 700,985,350 638,032,360 678,612,090 886,637,394 655,137,559 945,570,541 753,555,435 992,031,914 834,278,107

Market value of Base + PRAA Benefits and Assets (BOY) Contributions¹ expenses 1,653,337,591 12,569,135 65,614,562 1,369,198,473 13,973,973 70,619,460 1,241,972,070 21,778,015 76,558,537 1,337,952,739 37,250,280 84,536,461 1,316,644,450 37,406,332 87,719,948 1,541,774,953 38,954,110 91,346,894 1,699,125,976 37,642,185 96,556,356 1,826,310,021 37,606,152 102,227,716

Cumulative make-up payment due as of valuation date

Table VIb Expected 5% return allocation to Base Plan 81,340,744 67,043,786 60,729,091 65,715,482 64,574,382 75,778,928 83,483,445 89,699,962

Base Plan (Investment Actual return loss)/Makeup allocation to payment in Base Plan year (100,511,234) (181,851,978) (30,140,703) (97,184,489) 150,761,191 90,032,100 25,825,808 (39,889,674) 278,826,704 214,252,322 90,420,647 14,641,719 83,483,445 0 (48,964,256) (138,664,218) (138,664,218)

¹ 2009 contribution has been adjusted for reversal of contribution receivable at beginning of year.

15

Reconciliation of Base Account

Table VIc

1. Assets as of October 1, 2014 a. excluding contributions receivable b. including contributions receivable 2. Increases Due to: a. Contributions: i. Members ii. City of Tampa iii. Employee buyback iv. State of Florida v. Total Contributions b. Investment Return (interest, dividends, realized & unrealized gains/(losses), investment expenses)

Market

Projected Actuarial

$991,622,764 $992,031,914

$1,008,559,574

$12,763,962 $17,077,283 $1,280,181 $6,484,726 $37,606,152

$12,763,962 $17,077,283 $1,280,181 $6,484,726 $37,606,152

($48,964,256)

c. Adjustment¹

$351,507

d. Total Increases 3. Decreases Due to: a. Benefit Payments b. Refund of Member Contributions c. DROP Allocations d. Administrative Expenses e. Total Decreases

N/A

$351,507

($11,006,597)

$37,957,659

($58,779,339) ($162,512) ($14,087,348) ($1,590,078) ($74,619,277)

($58,779,339) ($162,512) ($14,087,348) ($1,590,078) ($74,619,277)

4. Projected Increase [8.50% x item 1. + 4.25% x (item 2.d. + item 3.e.))]

N/A

$84,169,445

5. Allocation of Investment Return (Make-up of prior investment losses)

N/A

$0

6. Assets as of October 1, 2015 a. Preliminary Assets b. Contribution receivables - buybacks in progress c. Preliminary assets as of October 1, 2015 (item 1.a.+item 2.d.+item 3.e.+item 4.+item 5. + item 6.b. ) d. DROP Account liabilities e. Assets as of October 1, 2015

¹

$905,996,890 $0 $905,996,890

$1,056,067,401

$56,003,054 $961,999,944

$56,003,054 $1,112,070,455

Adjustment reflects the outcome of litigation/recoveries/abandonments/opt outs

16

Reconciliation of Base Account

Table VIc ( continued ) Projected Actuarial ($150,070,511)

7. Gain or (Loss) (Item 6.e. Market - Projected Actuarial) 8. 20% Adjustment towards Market (.20 x item 7)

($30,014,102)

9. Preliminary Actuarial Value of Assets (item 6. Projected Actuarial + item 8.)

$1,082,056,353

10. Actuarial Value of Assets Corridor a. 120% of Market ( item 6.c.) b. 80% of Market ( item 6.c.)

$1,154,399,932 $769,599,956

11. Actuarial Value of Assets as of October 1, 2015 (item 9. not less than 10.b., not more than 10.a.)

$1,082,056,353

12. State Contribution Reserve

$0

13. Actuarial Value of Assets as of October 1, 2015 Adjusted for State Contribution Reserve (item 11. +item 12.)

$1,082,056,353

17

Reconciliation of PRAA Account

Table VId

Postretirement Adjustment Account 1. Market Value of Assets as of October, 1, 2014

$834,278,107

2. Credit During Period a. Allocated investment return

(41,177,916)

3. Debits During Period a. Pension payments b. DROP allocations c. Total debits

$

($26,949,707) ($658,732) (27,608,439)

4. Market Value of Assets as of October 1, 2015

$

765,491,752

5. Present Value of Benefits currently in payment status, including COLA increases granted January 1, 2016

$

682,929,052

6. PRAA Investment Return

-5.02%

18

Reconciliation Of 13th Check Account

Table VIe

13th Check Account 1. Market Value of Assets as of October, 1, 2014

$20,396,589

2. Increases Due to: a. Allocated investment return b. Total credits during period

$

3. Decreases Due to: a. Benefit payments b. DROP allocations c. Adjustment¹ d. Total decreases

($18,798,434) ($1,209,120) ($351,507) ($20,359,061)

4. Market Value of Assets as of October 1, 2015 (item 1. + item 2.b. + item 3.c.) ¹ 2

0 0

$

Adjustment reflects the outcome of litigation/recoveries/abandonments/opt outs Includes outstanding amounts due to estates

19

37,528

2

Reconciliation of DROP Account

Table VIf

DROP Accounts 1. Market Value of Assets as of October, 1, 2014

$63,181,266

2. Adjustment

$0

3. Increases Due to: a. Contributions: i. 13th Check distributions ii. Base benefits iii. COLA benefits iv. Total benefits b. Investment Return c. Total increases

$1,209,120 $14,087,348 $658,732 $15,955,200 (2,050,162) $13,905,038

3. Decreases Due to: a. Pension payments b. Contribution deductions c. Administrative expenses d. Total decreases

$

($21,027,191) 0 (56,059) (21,083,250)

4. Market Value of Assets as of October 1, 2015 (item 1. + item 2. + item 3.c. + item 4.d.)

$

56,003,054

20

Historical Asset Information - Base Plan

Table VII

Historical Asset Value & Returns $1,200

50%

$1,000

40% 30% 20%

Return

$ Millions

$800 $600

10% $400

0%

$200

-10%

$0

-20%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Plan Year Beginning October 1 Market Value

Plan Year Beginning 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Note:

Market Value as of October 1 $ 581,961,971 $ 642,566,368 $ 679,660,947 $ 719,097,961 $ 584,699,201 $ 518,870,559 $ 636,967,389 $ 637,880,076 $ 886,642,307 $ 945,571,129 $ 992,031,914 $ 961,999,944

Actuarial Value

Actuarial Value as of October 1 $ 618,035,421 $ 671,425,128 $ 703,389,182 $ 739,323,050 $ 701,639,041 $ 622,644,671 $ 719,908,405 $ 740,168,390 $ 919,393,763 $ 964,408,155 $1,008,559,574 $1,082,056,353

Market Return

Benefit Payments¹ $ 33,498,757 $ 36,192,503 $ 40,053,990 $ 44,988,716 $ 48,158,657 $ 53,004,372 $ 60,688,558 $ 62,513,400 $ 64,728,514 $ 68,587,881 $ 73,029,199

Actuarial Return

Market Actuarial Value Value Return Return

Admin. Expenses Contributions² $ $ $ $ $ $ $ $ $ $ $

1,390,849 1,415,621 1,151,970 1,467,945 1,503,255 1,438,004 1,474,843 1,367,017 1,491,611 1,372,155 1,590,078

$ $ $ $ $ $ $ $ $ $ $

29,758,589 8,711,649 13,353,621 12,569,135 13,973,973 21,778,015 37,250,280 37,406,332 38,954,110 37,642,185 37,606,152

11.35% 10.51% 10.11% -14.31% -5.32% 30.00% 4.14% 44.06% 9.88% 8.48% -5.04%

Market and Actuarial Values of assets in 2004, 2005 and 2006 have been adjusted for FYE 9/30/2004 13th Check. ¹ Including contribution refunds and DROP payments ² Including contribution receivable for October 1, 2007 and October 1, 2008 plan years, reflecting reversal of receivable in 2008

21

9.51% 9.26% 9.25% -0.53% -6.33% 21.43% 6.39% 28.30% 7.98% 8.06% 5.51%

Summary Of Member Data

Table VIII

Total Number of Members as of October 1 3,600 3,400 3,200 3,000 2,800 2,600 2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Breakdown by Category

100% 80% 60% 40% 20% 0% Actives

Deferred Vested

Retirees

As of October 1, 2015 1,360

As of October 1, 2014 1,317

10 0 13 0 23

10 0 0 0 10

3. Inactive Members in Receipt a. Retirees (including DROP) b. Disabled c. Beneficiaries d. Subtotal

1,437 317 306 2,060

1,425 325 297 2,047

4. Total Members

3,443

3,374

1. Active Members 2. Non-active, non-retired Members a. Fully vested b. Partially vested c. Nonvested, due a refund of contributions d. Beneficiaries e. Subtotal

22

Active Data

Table VIIIa Historical Average Age & Service

50

0

Years

40 30

Average Service Average Age

20 10 0 2005

2006

2007

2008

2009 2010 2011 As of October 1

As of October 1 2005 2006 2007 2008 2009

Average Service 11.22 11.18 10.93 10.89 10.83

2010 2011 2012 2013 2014 2015

9.53 9.56 9.74 10.07 9.94 10.03

2012

2013

$76,000 $74,000 $72,000 $70,000 $68,000 $66,000 $64,000 $62,000 $60,000 $58,000

2014

2015

Average Attained Age 38.64 38.84 38.74 38.86 38.82 37.86 37.96 37.94 38.29 38.24 38.27 20% 15% Average Salary

10%

Assumed Increase Actual Increase

5% 0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 As of October 1 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Average Salary $64,022 $64,385 $66,994 $68,749 $73,822 $70,057 $70,509 $71,608 $71,196 $72,404 $74,102

Actual Salary Increase 17.58% * 3.59% 8.09% 5.62% 10.83% 1.43% 3.89% 5.64% 1.81% 5.88% 5.89%

¹ Includes increase in covered payroll due to including items such as overtime up to 300 hours. 23

Retiree Data - Age at Retirement

Table VIIIb

Number of Retirees 0

200

400

600

800

1000

Less than 30 30-39 40-49 50 51 52 53

Age at Retirement

54 55 56 57 58 59 60 61 62 63 64 65 Over 65 Non-disabled retirees

Disabled retirees

Average benefit being paid to non-disabled retirees is $43,669 per year. Average benefit being paid to disabled retirees is $24,470 per year. Average benefit being paid to beneficiaries is $12,083 per year.

24

1200

1400

Service Retirements

25

Deferred Vested Beneficiaries Disabled

Greater than 85

Age 80 to 84

75 to 79

70 to 74

65 to 69

60 to 64

55 to 59

50 to 54

45 to 49

40 to 44

35 to 39

30 to 34

25 to 29

Less than 25

Number of Retirees

Inactive Data - Current Age Table VIIIc

400

350

300

250

200

150

100

50

0

Data Reconciliation

Table VIIId

Non-active, Non-retired1

Active 1. Number of participants as of October 1, 2014

1,317

2. Change in status during the plan year: a. Actives who became inactive b. Actives who retired c. d. e.

(14) (45)

Inactives who became active Inactives who retired Retirees who became active

1

2,047

1

(54)

(55)

(1)

(1)

103

1,360

23

As of October 1, 2015, includes 13 nonvested Members due a refund

26

3,374

45

(1)

4. New participant due to: a. Initial participation b. Death of another participant c. Omitted in error last year

Total

14

(1)

3. No longer participating due to: a. Death b. Permanent break-in-service c. Receipt of lump sum payment d. Expiration of certain period e. Forfeiture

5. Number of participants as of October 1, 2015

10

Retired

22

103 22

2,060

3,443

Age-Service-Salary Table Attained Age Under 1 1 to 4 Under 25 19 14 Avg.Pay 43,350 51,972

Table VIIIe

Completed Years of Service 5 to 9 10 to 14 15 to 19 20 to 24 25 to 29 30 to 34 35 to 39 40 & up

Total

1

0

0

0

0

0

0

0

34 47,320

25 to 29 Avg.Pay

28 117 61 46,688 55,284 60,719

0

0

0

0

0

0

0

206 55,725

30 to 34 Avg.Pay

18 87 122 29 50,223 57,037 64,584 75,948

1

0

0

0

0

0

257 62,361

145

18

0

0

0

0

0

290

58,386 66,331 83,354

94,455

26 56 94 60,561 69,918 85,372

104 94,948

13 98,123

0

0

0

0

293 84,181

35 to 39

6

Avg.Pay

43

78

75,083

40 to 44 Avg.Pay

0

45 to 49 Avg.Pay

0

4

21 43 66,961 84,751

69 94,530

36 96,996

4

0

0

0

177 88,833

50 to 54 Avg.Pay

0

2

10 12 72,230 89,287

38 12 94,646 101,954

6

3

0

0

83 92,318

55 to 59 Avg.Pay

0

0

1

5

9

3

0

1

0

0

19 92,179

60 to 64 Avg.Pay

0

0

0

0

1

0

0

0

0

0

1

65 & over Avg.Pay

0

0

0

0

0

0

0

0

0

0

0

71 293 350 328 47,016 56,724 65,537 83,652

240 94,467

64 10 98,161 101,712

4

0

0

1,360 74,102

Total Avg.Pay

27

Age

28 65 & over

60 to 64

55 to 59

50 to 54

45 to 49

40 to 44

35 to 39

30 to 34

25 to 29

Less than 25

Number of Employees

Active Data - Current Age Table VIIIf

350

300

250

200

150

100

50

0

Actuarial Assumptions and Methods

Table IX

The plan’s actuary selected the valuation interest rate, retirement rates, withdrawal rates, salary increase rates, and inflation assumption based on an experience study conducted in April, 2013. 1.

Actuarial Cost Method The entry age normal cost method. Under this method, the cost of future normal cost benefits is funded as a level percentage of the Members’ future payroll. The unfunded actuarial accrued liability is amortized over periods up to 30 years. Changes in unfunded liabilities are calculated on a level dollar basis.

2.

Funding Period (Pursuant to Chapter 112, Florida Statutes) The initial unfunded liability as a result of the change in actuarial cost method from the aggregate cost method to the entry age normal cost method is being amortized over 16 years beginning on October 1, 2000. The following amortization periods will apply to future changes in the unfunded actuarial accrued liability: Benefit improvements Actuarial gain/loss Changes in assumptions and methods

3.

30 years 15 years 30 years

Decrements 

Mortality for actives and inactive participants other than beneficiaries: RP-2000 Fully Generational Mortality Table with Blue Collar adjustment (male and female) and projection Scale AA. 20% of deaths among active Members are assumed to be service incurred, and 80% are assumed to be non-service incurred.



Mortality for beneficiaries: RP-2000 Fully Generational Mortality Table (male and female) with projection Scale AA. The plan’s experience is too small to form the basis of a reliable assumption. However, the assumption remains appropriate given historical gain and loss experience of the plan.



Disability: Representative values of the assumed annual rates of disability among Members in active service are set forth in the following table. 95% of disabilities are assumed to be service incurred, and 5% are assumed to be non-service incurred. The rates below were increased by 12.5% to reflect the removal of the pre-existing conditions exclusion for disability benefit eligibility: Firefighters Age

Rate

Age

Rate

Age

Rate

Age

Rate

20

0.10%

30

0.25%

40

1.12%

50

2.52%

25

0.10%

35

0.56%

45

1.82%

55

2.80%

29

Actuarial Assumptions and Methods

Table IX (continued)

Police Officers Age

Rate

Age

Rate

Age

Rate

Age

Rate

20

0.10%

30

0.16%

40

0.85%

50

0.85%

25

0.10%

35

0.59%

45

0.85%

55

0.85%

The plan’s experience is too small to form the basis of a reliable assumption. However, the assumption remains appropriate given historical gain and loss experience of the plan. 

Permanent Withdrawal from Active Status: Representative values of the assumed annual rates of withdrawal among Firefighters and Police Officers in active service for causes other than retirement, death or disability are set forth in the following tables: Firefighters Age

Rate

Age

Rate

Age

Rate

20

1.70%

30

1.30%

40

0.60%

25

1.70%

35

0.90%

41+

0.00%

Police Officers Age

Rate

Age

Rate

Age

Rate

Age

Rate

20

4.95%

30

2.60%

40

1.60%

50

0.70%

25

3.60%

35

2.00%

45

1.05%

55

0.00%

It is assumed that 50% of the Members terminating with between 10 and 15 years of service will elect to withdraw their Member contributions. The other 50% are assumed to begin receiving a service retirement benefit at the later of age 46 or age at termination. •

Retirement: Representative values of the assumed annual rates of retirement among Members in active service are set forth in the following tables. At Least 20 Years of Service Service

Rate

Service

Rate

Service

Rate

20

35%

23

35%

26-29

45%

21-22

25%

24-25

50%

30+

100%

30

Actuarial Assumptions and Methods

Table IX (continued)

Less Than 20 Years of Service

4.

Age

Firefighters

Police Officers

40-59

6.00%

6.50%

60

100%

100%

Interest and Investment Return Rate 8.50% per annum, compounded annually, including inflation to determine the present value of liabilities under the Base Plan. The Base Plan assumes the allocation of a 5% per annum rate of return on the entire fund (Base Plan assets plus Postretirement Adjustment Account assets). It is assumed over a long period that this will produce approximately an 8.5% return on the Base Plan. This assumption will be reviewed periodically as the size of the Base and PRAA accounts change over time.

5.

Salary Increases Firefighters with Less Than 8 Years of Service Age

Rate

Age

Rate

Age

Rate

20

12.00%

30

10.00%

40

9.50%

25

11.00%

35

9.50%

45+

9.00%

Age

Rate

Firefighters with at Least 8 Years of Service Age

Rate

Age

Rate

20

7.50%

30

7.50%

40

6.50%

25

7.50%

35

6.50%

45+

5.00%

Police Officers with Less Than 8 Years of Service Age

Rate

Age

Rate

Age

Rate

20

8.00%

30

8.00%

40

8.00%

25

8.00%

35

8.00%

45+

7.00%

Police Officers with at Least 8 Years of Service Age

Rate

Age

Rate

Age

Rate

20

9.00%

30

6.00%

40

4.00%

25

8.00%

35

4.75%

45+

4.00%

31

Actuarial Assumptions and Methods

Table IX (continued)

The assumed salary increases include inflation. There is no assumed total active Member payroll increase used in the amortization of the unfunded accrued liability. For purposes of determining the plan’s contribution rate as a percentage of projected payroll, aggregate payroll is projected to increase by 4.0% to the following fiscal year. 6.

Inflation 3.0% per annum.

7.

Spouses 85% of active Members assumed to be married with the husband 4 years older than his wife. No remarriages of surviving spouses of retirees are assumed as benefits cease upon remarriage under the normal form of benefit for married Members. Optional forms of payment are available to Members retiring or entering the DROP on or after October 1, 2002 on an actuarial equivalent basis.

8.

Expenses Administrative expenses are paid from Base Plan assets. It is assumed expenses will average 1.4% of Member payroll over future years. No administrative expenses are currently assessed against the Postretirement Adjustment Account or 13th Check Program. Administrative expenses of the DROP are separately determined.

9.

Assets The actuarial value of assets is based on a moving market value averaged over five years. Each year, the actuarial asset value is projected forward at the valuation date based on actual contributions and benefit payments at the assumed interest assumption. One-fifth of the difference between the projected actuarial value and the market value is added to the projected actuarial value. The remaining four-fifths is deferred as future adjustments to the actuarial value. The result cannot be greater than 120% of market value or less than 80% of market value.

10.

State Contributions It is assumed future State tax revenue paid to the plan will not increase from the current level.

32

Assumption and Method Changes

Table IXa

The following assumptions have changed:

1. Effective October 1, 1999: • • •

Decrease in salary increase assumption 0.50% per year. Decrease in inflation rate 0.50% per year. Assumed future State tax revenue paid to the plan will not increase from the current level.

2. Effective October 1, 2000: •

Change to the entry age normal actuarial cost method from the aggregate cost method.

3. Effective October 1, 2001: •

The asset method was changed from market value to a moving market value averaged over five years.

4. Effective October 1, 2003: • • •

Salary Increases for Firefighters and Police Officers DROP participation rates Assumed rates of disability

5. Effective October 1, 2007: •

The requirement that there be no make-up payment to the Base was removed as a condition for th allocation to the 13 Check Account. This resulted in a restatement of prior actuarial valuation results beginning with the 10/1/2004 actuarial valuation and adjustments to the Base Plan, th Postretirement Adjustment Account and 13 Check Account to accommodate this change.

6. An experience study was conducted in October of 2008 and resulted in changes in the following assumptions: • • • •

Mortality Permanent Withdrawal from Active Status Retirement Salary Increase

7. Effective October 1, 2011: •

The Mortality assumption was changed to RP-2000 Fully Generational Mortality Table with blue collar adjustment for actives and inactive participants, and to RP-2000 Fully Generational Mortality Table for beneficiaries.

33

Assumption and Method Changes

Table IXa (continued)

8. An experience study was conducted in April of 2013 and resulted in changes in the following assumptions: • • • • •

Interest and Investment Return Rate Permanent Withdrawal from Active Status Retirement Salary Increase Inflation

In selecting economic assumptions, the interest rate of 8.5% is based upon a review of the existing portfolio structure, a review of recent experience, and information from the Board. The salary increase assumption is based on actual experience and future expectations of inflation, merit, and productivity components. * Note: Assumption changes that have been reflected for the first time in this valuation are indicated in bold print.

34

Plan Provisions 1.

Table X

Plan Effective Date Established by Chapter 21590, Laws of Florida, Special Act of 1941. Most recent amendments reflected are adopted under Chapters 2000-485, 2001-288, 2002-369, 2004-427, 2007-304, 2011-240, and 2012-235. Laws of Florida, and Local Ordinance 2001 133 and 2003-22.

2.

Plan Eligibility A City Firefighter or Police Officer is a Member of the Fund if, at the time of appointment, he or she has passed a medical examination and has met all the requirements of the City’s Civil Service Board except the probationary period.

3.

Credited Service A Member will be credited with a year of service for each year of active employment as a City Firefighter or Police Officer and for each year of paid leave of absence for which Member contributions are made. In addition, service in the armed forces of up to five years, or as mandated by Law, may be counted as years of Credited Service. A Member who is awarded a disability pension after becoming disabled in the line of duty and returns to active service prior to eligibility for service retirement may receive Credited Service for the period of disability. To receive credit for service during the disability the Member must remain in active service for two years and must pay within 18 months after returning to active service for the Member contributions due to the Fund based on his Earnings when the disability began. Former Division B Members are credited with a year of service for benefit credit for service on and after October 16, 1992. Division B Members are credited with service for eligibility for vesting purposes from their original date of hire by the City. Chapter 2002-369 authorized the “Older Workers” the ability to buy-back their time in the “City of Tampa Pension Fund for Firefighters and Police Officers” for the time in the “General Employee’s B Pension Plan”. The “Older Workers” buy-back was designed to have no actuarial impact on the pension fund.

4.

Earnings Base salary or wages, including regular longevity bonuses and overtime up to 300 hours per year.

5.

Average Monthly Earnings (AME) The average of the Member’s Earnings during the highest three years during the final ten years of service.

35

Plan Provisions

Table X (continued)

6.

Final Earnings A Member’s Final Earnings is the Member’s Earnings during the last year of active employment prior to termination.

7.

Normal Retirement •

Eligibility: Earlier of completion of 20 years of service or age 46 with ten or more years of service.

•

Benefit Amount: 3.15% of AME times years of Credited Service, subject to a maximum of 100% of AME. This benefit is effective October 1, 2004 and is applicable only to plan Members actively employed as Firefighters or Police Officers in the City of Tampa on or after October 1, 2003.

8.

Disability Retirement •

Eligibility: –

Service Incurred Permanent incapacity to perform regular and continuous duty. Permanent incapacity must be caused by and attributable to the performance of the employee’s duties as a member of the Fire or Police Department.

– Non-Service Incurred Permanent incapacity to perform regular and continuous duty after completion of 10 years of Service. Permanent incapacity not caused or attributable to the performance of the employee’s duties as a member of the Fire or Police Department. •

Benefit: –

Service Incurred Monthly income payable while so disabled equal to 65% of the Member’s monthly salary in effect at the date of disability plus one-twelfth of any other pensionable earnings received within one year prior to the date of disability.

–

Non-Service Incurred •

Monthly income payable while so disabled equal to 2% of AME times years of Credited Service – maximum 25 years. Minimum benefit is greater of 25% of AME, or accrued benefit at disability date.

•

A Member who is receiving a non-service incurred disability, may elect to receive longevity benefits equal to 3.15% of AME times years of Credited Service upon attainment of age 46. This benefit is effective October 1, 2004 and is applicable only to Non-Service Incurred disabled Members actively employed as Firefighters or

36

Plan Provisions

Table X (continued)

Police Officers in the City of Tampa on or after October 1, 2003. Election must be in writing at least 30 days prior to attainment of age 46.

9.

Pre-Retirement Death Benefit •

Eligibility: –

Service Incurred Death while in, or due to causes from, the performance of duties as a member of the Fire or Police Department.

–

Non-Service Incurred Death after completing 10 years of service resulting from causes unrelated to duties as a member of the Fire or Police Department.

•

Benefit: –

–

Service Incurred •

Benefit (payable monthly to the surviving spouse until death) equal to an annual amount of 65% of Final Earnings.

•

Benefit (payable monthly to each surviving unmarried child until the earlier of death, age 18 or 23 if a full-time student, or marriage) equal to an annual amount of 15% of Final Earnings.

•

The sum of benefit payments in subparagraphs (1) and (2) may not exceed 95% of Final Earnings. If the surviving spouse dies leaving eligible surviving children, each child’s share shall increase from 15% to 30% - maximum total payout may not exceed 60% of Final Earnings.

•

Minimum benefit is accrued benefit payable for ten years certain commencing as of normal retirement date.

Non-Service Incurred •

Benefit (payable monthly until death or remarriage of surviving spouse) equal to an annual income of 65% of the retirement income, which the Member had accrued to the date of death.

•

Benefit (payable monthly to each surviving unmarried child until the earlier of death, age 18 or marriage) equal to an annual amount of 7.5% of Final Earnings.

•

The sum of benefit payments in subparagraphs (1) and (2) may not exceed 65% of Final Earnings. If the surviving spouse dies leaving eligible surviving children, each child’s share shall increase from 7.5% to 15% - maximum total payout may not exceed 50% of Final Earnings.

•

Election must be in writing at least 30 days before the deceased would have attained age 46.

37

Plan Provisions

Table X (continued)

10.

•

The sum of benefit payments may not exceed 50% of Final Earnings. If the surviving spouse dies leaving eligible surviving children, each child’s share shall increase from 7.5% to 15% - maximum 50% of Final Earnings.

•

Minimum benefit is accrued benefit payable for ten years certain commencing as of normal retirement date.

Deferred Vested Benefit •

Eligibility: A Member is eligible for a separation benefit upon leaving service as a Firefighter or Police Officer in the City of Tampa.

•

Benefit: Separation from service before earning ten or more years of service. Refund of employee contributions without interest. If the Member separates after earning between 10 and 20 years of service, the annual deferred vested benefit payable monthly at age 46 is an annual amount of 3.15% of AME times Credited Service. This benefit is effective October 1, 2004 and is applicable only to plan Members who were actively employed as Firefighters or Police Officers in the City of Tampa on or after October 1, 2003. Alternatively, the Member may elect refund of employee contribution without interest.

11.

Deferred Vested Death Benefit •

Eligibility: A vested deferred death benefit is payable if a Member has earned ten or more years of service, has separated his employment as a Firefighter or Police Officer in the City, and dies prior to commencement of his benefits.

•

Benefit: When the Member would have reached age 46, the eligible surviving spouse is entitled to receive a benefit equal to 65% of the Member’s Normal Retirement benefit earned to the date of separation. Each eligible child will receive a benefit of 7.5% of the Member’s Final Earnings. The total benefit payable to the eligible surviving spouse and eligible children will not exceed 50% of the Member’s Final Earnings. If there are no eligible survivors, the Member’s contributions without interest will be paid to the Member’s estate. Minimum accrued benefit payable for ten years certain commencing as of normal retirement date.

38

Plan Provisions

Table X (continued)

12.

Deferred Retirement Option Plan (DROP) •

Eligibility: A Member who has earned at least 20 years of service but no more than 30 years of service is eligible to elect to participate in DROP. The Member may participate in DROP for the lesser of five years or until the Member would have earned 30 years of service. An election to participate in DROP is irrevocable.

•

Benefit: When the Member leaves active service at the end of the DROP participation period, the Member receives a benefit equal to what would have been the Member’s benefit payments and Postretirement Adjustment Account payments, and 13th Check accruals as credited with net investment returns on Fund assets less administrative expenses. Net returns are computed from the date payment would have been made (had the Member actually retired rather than enter DROP) to the date of departure from active service at the end of the DROP participation period. The Member’s annual DROP benefit commencing at the end of the DROP participation period and payable monthly is equal to an annual income of 3.15% of AME times Credited Service, subject to a maximum of 100% of AME, where AME and Credited Service are computed as of entry into the DROP (Effective October 1, 2004, for all DROP participants who were actively employed as Firefighters or Police Officers in the City of Tampa on or after October 1, 2003. The increase in multiplier from 2.50% to 3.15% would be prospective only).

13.

Member Contributions Member contributions are determined as a percentage of the Full Scale Contribution Rate (FSCR) on the basis of the annual actuarial valuation of the Base Plan. Below we present the FSCR and the Member contribution rates for the year beginning October 1, 2015 applied to the schedule of covered earnings.

39

Plan Provisions

Table X (continued)

Member Contribution Rate Year Beginning October 1, 2016

FSCR 6%

Base 60.78% of FSCR 3.6470%

Next $1,000

7%

4.2549%

Next $1,000

8%

4.8627%

Next $1,000

9%

5.4705%

Next $1,000

10%

6.0784%

Next $1,000

11%

6.6862%

Next $1,000

12%

7.2940%

Next $2,500

15%

9.1175%

Excess Over $12,500

25%

15.1959%

Earnings in the Twelve Month Period Commencing October 1st First $4,000

Member contributions for the Older Workers will be reduced by the Social Security OASDI Contributions, which they must pay. If the City’s contribution exceeds 40% of Member pay, the Member contributions above will be increased by the ratio of the City’s contribution to the 40% of Member pay. Members who have elected the Deferred Retirement Option Program (DROP) do not contribute.

14.

City Contributions The City’s contribution to the Base Plan will be determined as the amount required, in addition to Member contributions, contributions by the State of Florida, and other sources of revenue, to pay the actuarially determined normal cost of the Fund, exclusive of post-retirement cost of living adjustments, pursuant to the funding requirements of Chapters 112, 175, and 185 of the Florida th Statutes. There are no contributions from the City to the 13 Check Program. Unless otherwise determined by the parties, the City’s contribution to the Base Plan will be at least 133% of the Member contributions, but if the combined City and Member contribution level is in excess of actuarial requirements, Member contributions will be proportionately reduced from the levels shown above to a level such that Member contributions, plus 133% of such Member contributions (contributed by the City), plus State of Florida contributions, plus contributions from other sources will total a sum sufficient to meet actuarial requirements. The 133% is adjusted to 134% to reflect timing of payments (quarterly installments).

40

Plan Provisions

Table X (continued)

15.

13th Check Program th

Effective October 1, 2007, the 13 Check Program will be funded by investment returns in excess of 10% (limited to 1%) on the base plan plus the Postretirement Adjustment Account market value of assets at each fiscal year ending September 30. No individual accounts are maintained. The th 13 Check Program incorporates no liabilities beyond those attributable to its segregated assets. th

There are no contributions to the 13 Check Program. th

Future 13 Check benefits shall be determined according to rules adopted by the Board of Trustees, applicable state laws, and the payment of which are on a sound actuarial basis.

16.

Postretirement Adjustment Account (PRAA) The Postretirement Adjustment Account is funded by investment returns in excess of 5% on the th Fund (exclusive of the 13 Check account). While the basic retirement benefits payable to members and beneficiaries are paid from the Base Fund, cost-of-living adjustments are paid from the PRAA.

17.

Normal Form of Retirement Income The benefit begins at retirement and continues for the Member’s life but guaranteed for the first 120 months. At Social Security Normal Retirement Age, the benefit for Former Division B Members will decrease to 60% of the benefit amount computed for normal retirement. This new benefit will be payable for the rest of the Member’s life but guaranteed for the first 120 months. Upon the Member’s death, if there is a spouse who has been married to the Member during some period of the Member’s employment and at retirement, that spouse will receive a benefit equal to 65% of the Member’s benefit, commencing with the Member’s death and payable for the rest of the spouse’s life or until remarriage. However the Member’s benefit is guaranteed for the first 120 months. If there is no spouse, any unpaid portion of the Member’s contributions without interest will be paid to the Member’s heirs. Commencing on January 1 after the initial October 1 of a Member’s retirement, benefits will be increased in step with the cost of living to the extent that such increases can be funded from the Postretirement Adjustment Account, which is in turn funded from investment returns on all Fund assets, excluding the DROP Fund and the 13th Check Program Fund, in excess of 5% per year.

41

Plan Provisions

Table X (continued)

18.

Optional Forms of Retirement Income The following optional forms of retirement income are available based on Actuarial Equivalence: • • • • •

Option 2 - Single Life Annuity Option 3a - 100% Joint and Survivor Annuity st Option 3b - 75% Joint and Survivor Annuity, reduces upon 1 Death st Option 3c - 66 2/3% Joint and Survivor Annuity, reduces upon 1 Death st Option 3d - 50% Joint and Survivor Annuity, reduces upon 1 Death

42

Plan Amendments

Table Xa

The following plan amendments have been recently adopted:

1. Effective during fiscal year beginning October 1, 1999 (adopted July 2001 retroactive to June 2000): •

Minimum pre-retirement and deferred vested death benefit is accrued benefit payable for ten years certain commencing as of normal retirement date.

•

Minimum non-service incurred disability benefit is the greater of (1) 25% of AME and (2) accrued benefit.

•

Older workers offset not less than minimums.

•

Crediting of military leave service.

2. Effective during fiscal year beginning October 1, 2001: Chapter 2002-369 authorized the “Older Workers” the ability to buy-back their time in the “City of Tampa Pension Fund for Firefighters and Police Officers” for the time in the “General Employee’s B Pension Plan”.

3. Below we present a summary of the various proposed benefit improvements effective October 1, 2004, except for the last item, which was effective October 1, 2003. •

Implementing a 3.15% multiplier only to plan Members actively employed as Firefighters or Police Officers in the City of Tampa on or after October 1, 2003. The increases in multiplier for DROP participants would be prospective only.

•

Providing a minimum pension benefit to certain retirees and beneficiaries whose benefits are currently less than 100% of federal Poverty Level.

•

Redefining pensionable pay to include up to 300 hours of overtime to comply with Chapter 99-1, Florida Statutes. We understand the revised pensionable pay will apply to firefighters although it is not required under Chapter 99-1. It is also our understanding the new pensionable pay definition will not apply to current DROP participants in the recalculation of their benefit to reflect the 3.15% multiplier.

•

The adoption of a ten-year certain and life normal form of benefit (in conjunction with the current 65% joint and survivor benefit for married participants, if applicable), to comply with Chapter 99-1, Florida Statutes.

4. Effective during fiscal year beginning October 1, 2007: 13th Check Program will be funded by investment returns in excess of 10% (limited to 1%) on the base plan plus the Postretirement Adjustment Account market value of assets at each fiscal year ending September 30.

43

Plan Amendments

Table Xa (continued)

5. Effective during fiscal year beginning October 1, 2011: Active police officers or firefighters may purchase up to 5 additional years of service based upon service as a full-time certified firefighter or police officer employed by a city, county, state, federal, or other public agency or military service in the Armed Forces of the United States.

6. Effective during fiscal year beginning October 1, 2012: The Pre-retirement Death Benefit •

Benefit Service Incurred –

Benefit (payable monthly to the surviving spouse until death) equal to an annual amount of 65% of Final Earnings.

–

Benefit (payable monthly to each surviving unmarried child until the earlier of death, age 18 or 23 if a full-time student, or marriage) equal to an annual amount of 15% of Final Earnings.

–

The sum of benefit payments in subparagraphs (1) and (2) may not exceed 95% of Final Earnings. If the surviving spouse dies leaving eligible surviving children, each child’s share shall increase from 15% to 30% - maximum total payout may not exceed 60% of Final Earnings.

–

Minimum benefit is accrued benefit payable for ten years certain commencing as of normal retirement date.

7. 13th Check Eligibility Eligibility for the 13th check is extended to include joint annuitants who are surviving spouses

* Note: Amendment that has been reflected in this valuation is indicated in bold print.

44