HomeMy WebLinkAbout2021-082 CCR Member Graves introduced the following resolution and moved its adoption:
RESOLUTION NO. 2021-82
RESOLUTION APPROVING AN AMENDMENT TO THE BROOKLYN CENTER
FIRE DEPARTMENT RELIEF ASSOCIATION BY-LAWS
WHEREAS, the Brooklyn Center Fire Department Relief Association has
requested City approval of a benefit increase for retirees; and
WHEREAS, such benefit increase would require an amendment of the City of
Brooklyn Center Fire Department Relief Association By-laws; and
WHEREAS, Van Iwaarden and Associates has conducted an actuarial valuation
and benefit study and determined that the anticipated assets available for benefits would be
sufficient to support an increase in the annual benefit due to the fact cash and contingency
funding balance exceeds the recommended balance of 100% of anticipated needs; and
WHEREAS, BakerTilly public finance advisors for the City has reviewed the
assumptions and projections used in the report prepared by Van Iwaarden and Associates and has
compared those assumptions and projections with information from their detailed analysis
performed in 2021 and believe the information to be accurate; and
WHEREAS, the actuarial analysis completed by Van Iwaarden and Associates and
reviewed by BakerTilly conclude an increase of$1,500 to the lump sum benefit from $8,500 per
year to $10,000 per year of qualified service would not likely have an adverse effect on the fund
viability.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Brooklyn Center, Minnesota that an amendment to the By-laws of the City of Brooklyn Center Fire
Department Relief Association to increase the lump sum benefit to $10,000 per year.
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June 28, 2021 -
Date . Mayor
ATTEST: b ,I,���[�,�(/��'�l.K-�i�'
City Clerk
The motion for the adoption of the foregoing resolution was duly seconded by member
Lawrence-Anderson
and upon vote being taken thereon, the following voted in favor thereof:
Butler, Elliott, Graves, Lawrence-Anderson, Ryan
and the following voted against the same: None
whereupon said resolution was declared duly passed and adopted.
May 4, 2021
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Reggie Edwards, Acting City Manager • (
City of Brooklyn Center - �--
6301 Shingle Creek Parkway
Brooklyn Center, MN 55430 \�� •
Re: $1500 Increase to Fire Service Benefit �
Dear Mr. Edwards,
Enclosed please find information relative to a request to increase the current firefighter pension benefit
amount from the current$8,500 per-year-of-service to$10,000 per-year-of-service.At its meeting on
May 2, 2021,the Brooklyn Center Firefighters Relief Association (BCFRA) membership approved this
increase and directed the board to make a formal request for city approval.
Background of the Association
Relief associations are governmental entities that receive and manage public money to provide
retirement benefits for individuals providing the governmental services of firefighting and emergency
first response. Relief associations are required under Minnesota Statutes, chapters 356 and 424A,to
report annually financial, investment, and plan administration information to the Office of the State
Auditor(OSA), and the State Auditor is required to provide a detailed report to the Legislature under
Minnesota Statutes, sections 6.72 and 356.219.
The BCFRA is made up of the active paid-on-call members of the Brooklyn Center Fire Department.The
purpose of the association is to provide retirement, disability and death benefits to the members or
beneficiaries of inembers of the department.The pension benefit is not only a recruitment tool, but also
a way to encourage the part-time/paid-on-call members to "stay on the job" and supports retention.
The State of Minnesota has provided the major share of funding for the association through distribution
of the money collected from a gross earnings tax on fire insurance premiums sold in the state, also
known as "2% Money".The funds are allocated back to the departments based on the population and
property values in the area served by that department.There is a strong relationship between state fire
aid and the number of fire-related calls a fire department responds each year.The state fire aid was
established in 1885 and has been the most stable source of funding. The City has not needed to
financially support the Relief Association in many years and does not normally need to do so.
State law requires that a relief association be governed by a nine-member board of trustees.The BCFRA
is directed by six trustees elected by members of the relief association,the fire chief, the city Finance
Director, and the Mayor.
Type of Pension
The members of the BCFRA are covered by a defined benefit plan. A defined-benefit retirement plan
provides a retirement benefit that is predetermined based on a formula.The unknown variable for a
defined-benefit retirement plan is the amount of funding needed to support the predetermined
benefits. Benefits are funded through a combination of fire state aid, municipal contributions, and
investment earnings.The City of Brooklyn Center has never added an ongoing municipal contribution.
1
Most defined-benefit relief associations in Minnesota are lump-sum plans (including the BCFRA plan),
meaning they pay benefits as a one-time lump-sum payment to members upon their retirement. In
lump-sum plans, benefits are paid to members based on an annual benefit level in effect at the time of
the member's separation from active service and membership. Lump-sum plans are the most common
plan type because they are generally easier to administer and have fewer associated administrative
costs.
Investments
The relief association's assets are invested through The Parr-McKnight Wealth Management Group, of
Wells Fargo Advisors.The relief association has adopted an Investment Policy Statement for the
investment for our pension fund. Our target investment allocation is sixty percent in stocks,thirty-five
percent in bonds and five percent in cash. We rebalance to our target allocation annually. The BCFRA
Board believes in long-term investing and has resisted attempting to time market moves.
Action Requested
The BCFRA is requesting to increase in our pension amount from $8,500 to $10,000 per-year-of-service.
This is an excellent way to increase the fire fighter compensation package without impacting the city
budget.The last pension increase was $800 in 2018,which brought us to the current$8,500 per-year-of-
service. Enclosed please find the January 2021 actuarial report from Van Iwaarden Associates as well as
a supplemental report from March 2021 specifically regarding this potential increase.
The supplemental study includes increase scenarios of$9,000, $9,500 and $10,000; all using a 5%
investment return and a constant 40 active firefighters. More specifically, it shows that an increase to
$10,000 requires no contribution needed from the City throughout the entire length of the benefit
study and it allows us to remain funded in excess of our goal of 110%.
Please note that the fire department has not been at the full complement of 40 members for many
years. However,the study used the authorized number of 40. In addition, we feel strongly that a 5%
investment return is an appropriate rate to use in this analysis, and was also used in the last analysis.
This request is in line with our guideline to remain at least 110%funded, as well as our goal of pursuing
increases in the per-year-of-service pension amount with monies above 110%, to continue to move
toward the state allowed maximum of$15,000.
The BCFRA board believes that it has fiduciary responsibilities to both the membership and to the
Council.The responsibility to the membership is to seek the highest financially sound benefit level.The
responsibility to the Council is to not expose the city to any financial risk which could lead to mandatory
contributions. Based on the analysis,there does not appear to be a financial risk.
We respectfully request that the City of Brooklyn Center approve this increase and suggest it be
instituted on the 1st of the month following its adoption.Thank you in advance for your consideration
and support.
Sincerely,
G�a��' �
President Chris Kummer
2
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bakert�lly
MUNICIPAL ADVISORS
Memo
To: Mark Ebensteiner
City of Brooklyn Center, Minnesota
From: Patty Kettles, Director
Date: June 17, 2021
Subject: Fire Relief Association Pension Increase Impacts
The City has requested Baker Tilly evaluate the potential fiscal impacts on the City's contributions for increasing
the Fire Relief Association retirement benefits from their current level of$8,500/year of service to $10,000/year
of service. The goal was to evaluate if the annual benefit could be increased to$10,000 while keeping the relief
association funded at 110%.
The review was developed based on financial projections based on actuarial analyses. They are intended to
provide the City with a context for considering these changes to the pension benefit.
The assumptions used in this analysis included the following:
• The current active membership, retired members, surviving spouses, and deferred vested
members as listed in the Brooklyn Center Firefighter's Relief Association January 1, 2021
Actuarial Valuation of Statutory Funding Requirements report ("Report") and the
supplemental analysis letter dated March 24, 2021
• Retirement at the later of 20 years of service or age 50
• An increase in the number of active members to 40
• When an active member retires, a new member is added to maintain active membership at
40
• Contributions from the State will remain at their 2020 level of$180,079
• Expenses will increase at 3.5% per year
• City contributions (if any)will be projected to maintain funding at 110%. 110°/o is a "goal" of
the BCFRA and not included in their by-laws. Minnesota State Statue 424A.092 defines
when a City must provide financial support to the FRA to be when the FRA does not have a
surplus over full funding. Therefore, should funding fall below 100%, City contributions may
occur.
We have reviewed the data provided by the Actuary and have used their annual Actuarial Accrued Liability and
Expected Benefit Payments amounts in our analysis.
Based on our review of the Report, we believe increasing the annual benefit to $10,000 will not result in
additional City funding over the 15-year planning period. However, the Report assumes, as allowed per
Minnesota State Statues, a 5°/o return on investments. Should the annual return on investments fall below
City of Brooklyn Center, Minnesota
June 17, 2021
4.35%, the City may be required to contribute funds in the later years. Information on the Office of the State
Auditor website indicates that as of February 2021, those FRA plans administered by the PERA with
investments managed by the State Board of Investments, assume a long-term expected return of six percent.
The State Auditor Report, Financial and Investment Report of Volunteer Fire Relief Associations for the year
ended December 21, 2019, indicates the following investment returns for the BCFRA:
5-year—5.1%
10-year—5.9%
20-year—4.8%
A rate of return on investments of 5.0%-6.0% provides a certain level of confidence that the City may not be
required to make a contribution at the $10,000 annual benefit level. However, projecting forward interest rates
is an uncertain science as many factors affect these rates. If economic conditions cause investment rates to
decline the City may be required to make a contribution. Our determination that an annual investment rate of
return below 4.35% indicates the City may be required to make a contribution. Another indication of the volatility
of investment rates of return is the investment rate of return for each of the past seven years for the Brooklyn
Center Fire Relief Association as shown below:
• 2020 5.8%
• 2019 16.2%
• 2018 -6.2%
• 2017 15.3%
• 2016 8.3%
• 2015 -5.2%
• 2014 4.2%
The important take away is that there is no guarantee of future investment interest rates. The City should
understand that it may be called upon to make a contribution to support an increase in annual benefits to
$10,000. However, the current funded status of 138% is very strong and a good indication of stability of the
fund in the near future.
Baker Tilly Municipal Advisors, LLC is a registered municipal advisor and controiled subsidiary of Baker Tilly US, LLP,an accounting
firm.Baker Tilly US,LLP,trading as Baker Tiliy, is a member of the global network of Baker Tilly International Ltd.,the members of which
are separate and independent legal entities.02021 Baker Tiily Municipal Advisors, LLC
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BROOKLYN CENTER FIREFIGHTER'S RELIEF
ASSOCIATION
January 1, 2021
Actuariaf Valuation of Statutory Funding Requirements
February 19, 2021
VAfd(WAARDEN ASSOQATES ONE HUNDRED SOUTH FIFTH STREET,SUI7f'I9OO MINNE�4�� , +'���+ 5`�+U/ �; � �IIIII�
612.596.5960 to((free:888.596.5960 ww�v.varaiwnnROEh.c�_��- � �-�� � � ���
BROOKLYN CENTER FIREFIGHTER'S RELIEF ASSOCIATION
January 1, 2021 Actuarial Valuation
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Page
Introduction and summary
Introduction and Actuarial Certification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Valuation of the Current Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Fundin� basis results
Reconciliation of Plan Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Changes in the Unfunded Actuarial Accrued Liability . . . . . . . . . . . . . . . . . . . . . . . . . 5
Average Available Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Valuation data
Summary of Changes in Membership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Summary of Participant Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Supplementary information
Summary of Plan Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Summary of Actuarial Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Summary of Actuarial Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Selection of Economic Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Selection of Non-Economic Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Assessment and Disclosure of Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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BROOKLYN CENTER FIREFIGHTER'S RELIEF ASSOCIATION �
January 1, 2021 Actuarial Valuation
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Purposes of the valuation
This report presents the results of the January 1, 2021 statutory fundin� valuation for the Brooklyn Center
Firefighter's Relief Association. Its sole purpose is to determine the annual municipal obligation to the plan and
should not be used for any other purpose. Computations for other purposes, such as plan accounting, may differ
significantly from the results shown in this report.
This report may not be used for any other purpose, and Van Iwaarden Associates is not responsible for the
consequences of any unauthorized use. Its content may not be modified, incorporated into or used in other material,
or otherwise provided, in whole or in part, to any other person or entity, without our permission.
Sources of data
The Relief Association supplied the January 1, 2021 data for all active, terminated, and retired members, and asset
data for the special fund. We have relied on that data in preparing this report.
ChanQes from the previous valuation
The prior actuarial valuation of the plan was prepared as of January 1, 2019. Changes to the plan provisions and
actuarial assumptions reflected in this valuation are described at the end of each of those sections in this report.
These chan�es include:
• The lump sum benefit multiplier was increased from $7,700 to $8,500 per year of service.
• Mortality rates were changed to those used in the most recent Minnesota PERA Police £t Fire Plan actuarial
valuation.
Summary of valuation results
The actuarial accrued liability used for determining the minimum required contribution decreased from $2,809,184
as of January 1, 2019 to $2,572,996 as of January 1, 2021 primarily due to benefits paid from the plan. Special Fund
assets increased from $3,405,643 as of January 1, 2019 to $3,545,920 as of December 31, 2020. As a result, the
plan's funded status increased from 121.23% to 137.81%.
The annual statutory contribution based on the results of this report before any offset for State Aid is $48,372, down
from $67,773 determined by the 2019 valuation.
The State Aid amount is not yet known, but if the amount stays at the level paid in 2020 ($180,079), the remaining
municipal obli�ation would be $0 annually for fiscal years ending 2022 and 2023.
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BROOKLYN CENTER FIREFIGHTER'S RELIEF ASSOCIATION 2
January 1, 2021 Actuarial Valuation
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Actuarial certification
To the best of our knowledge, this report is complete and accurate and all Relief Association liabitities were
determined in accordance with generally accepted actuarial principles and practices. Upon receipt of the report, the
Relief Association should notify us if you disagree with any information contained in the report or if you are aware of
any information that would affect the results that has not been communicated to us. The report will be deemed final
and acceptable to the City and the Relief Association unless you notify us otherwise.
Chapter 356.216 of Minnesota Statues requires that an actuarial valuation of the fund be conducted periodically. The
State Auditor has determined that a valuation must be conducted at least every two years. An actuarial valuation is
a calculation to determine the normal cost and accrued liability of the fund and includes a determination of the
payment necessary to amortize the unfunded liability over the stated period.
The actuarial assumptions and methods are the responsibility of the plan sponsor with the exception of the discount
rate which is set by statute and is only appropriate to comply with statutory funding. We have reviewed the other
assumptions and believe that they are reasonable estimates of future plan experience, both individually and in the
aggregate.
We are available to answer questions on the material contained in this report or to provide explanations or further
details on the results. The undersigned credentialed actuary is a consulting actuary for Van Iwaarden Associates and
meets the Qualifications Standards of the American Academy of Actuaries to render the actuariat opinion contained
herein. In addition, the undersigned actuary meets the requirements of an "approved actuary" under Minnesota
statutes, Section 356.215, Subdivision 1, Paragraph (c). We are not aware of any direct or material indirect financial
interest or relationship that could create a conflict of interest or impair the objectivity of our work.
Respectfully submitted,
~Ul�
Emily M. Knutson, FSA, EA, MAAA
Consulting Actuary
February 19, 2021
L/D/C/R: 4/ctl/emk/bkh
v.12/29/2020
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BROOKLYN CENTER FIREFIGHTER'S RELIEF ASSOCIATION 3
January 1, 2021 Actuariat Valuation
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2021 2019
A. Actuarial accrued liability (AAL)
1. Active members $ 1,286,836 $ 1,506,172
2. Vested terminated members 1,084,190 1,017,939
3. Retired members 88,155 106,445
4. Spouses receiving benefits 113,815 178,628
5. Disabled members receiving benefits 0 0
6. Total actuarial accrued liability $ 2,572,996 $ 2,809,184
B. Special fund assets $ 3,545,920 $ 3,405,643
C. Unfunded actuarial accrued liability $ (972,924) $ (596,459)
D. Creditfor surplus $ (97,292) $ (59,646)
E. Amortization payment
1. Amortization period N/A N/A
2. Payment $ 0 $ 0
F. Normal cost $ 128,007 $ 111,161
G. Annual contribution payable: 2022, 2023 2020, 2021
1. Preliminary contribution (D. + E. + F.) $ 30,715 $ 51,515
2. Administrative expense (previous year x 1.035) 17,657 16,258
3. Annual contribution (1. + 2.) $ 48,372 $ 67,773
4. Estimated State Aid (180,079) (159,147)
5. Estimated municipal contribution (3. + 4., not less than zero) $ 0 $ 0
H. Funded Status 137.81% 121.23%
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BROOKLYN CENTER FIREFIGHTER'S RELIEF ASSOCIATION 4
January 1, 2021 Actuarial Valuation
. . .
2020 2019
Additions
Contributions
State aid $ 180,079 $ 165,652
Municipal contributions 0 0
Outside donations and other income 0 0
Member contributions 0 0
Total contributions 180,079 165,652
Investment income
Net appreciation in fair value of investments 145,515 468,283
Interest and dividends 101,136 86,470
Lessinvestment expense (46,746) (51,539)
Net investment income 199,905 503,214
Other additions (e.g. receivables) 0 581
Total additions 379,984 669,447
Deductions
Benefits paid during the year (520,165) (350,222)
Administrative Expense (17,060) (21,707)
Other deductions (e.g. payables) 0 0
Total deductions (537,225) (371,929)
Net increase in net position (157,241) 297,518
Net position restricted for pensions
Beginning of year 3,703,161 3,405,643
End of year $ 3,545,920 $ 3,703,161
Investment return for the measurement year
By year 5.8% 16.2%
Two year period 10.7%
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BROOKLYN CENTER FIREFIGHTER'S RELIEF ASSOCIATION 5
January 1, 2021 Actuarial Valuation
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A. Liability gain or loss
1. Expected actuarial accrued liability (AAL)
a. AAL as of January 1, 2019 $ 2,809,184
b. Normal cost 2019 111,161
c. Normal cost 2020 111,161
d. Benefit payments 2019 (350,222)
e. Benefit payments 2020 (520,165)
f. Interest to December 31, 2020 on a. through e. 265,455
g. Expected AAL on December 31, 2020 (sum of a. through f.) 2,426,574
2. Actual AAL on January 1, 2021
a. Before any assumption, method or plan changes 2,447,378
b. After assumption and method changes, but before plan changes 2,451,881
c. After assumption, method and plan changes 2,572,996
3. Difference from the expected AAL
a. (Gain) or loss due to plan experience diff from that expected (2.a. - 1.g.) 20,804
b. Due to changes in actuariat assumptions and methods (2.b. - 2.a.) 4,503
c. Due to plan changes (2.c. - 2.b.) 121,115
d. Total (a. + b. + c.) 146,422
B. Asset gain or loss
1. Expected value of assets
a. Value of assets on January 1, 2019 3,405,643
b. Benefit payments (870,387)
c. Contributions 345,731
d. Interest to December 31, 2020 on a., b. and c. 321,556
e. Expected assets on December 31, 2020 (sum of a. through d.) 3,202,543
2. Actual assets as of December 31, 2020 3,545,920
3. (Gain) or loss due to plan experience different from expected (1.e. - 2.) (343,377)
C. Changes in the unfunded actuarial accrued liability
1. Unfunded AAL on January 1, 2019 (A.1.a. - B.1.a.) (596,459)
2. Expected unfunded AAL on December 31, 2020 (A.1.g. - B.1.e.) (775,969)
3. Chan�es
a. Actuarial (gain) or loss (A.3.a. + B.3.) (322,573)
b. Changes in actuarial methods and assumptions (A.3.b.) 4,503
c. Changes in plan provisions (A.3.c.) 121,115
d. Total change (196,955)
4. Unfunded AAL on December 31, 2020 (972,924)
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BROOKLYN CENTER FIREFIGHTER'S RELIEF ASSOCIATION 6
January 1, 2021 Actuarial Valuation
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State City Credit for Active Average
Aid Contrib Surptus Total Members Financing
2018 $ 164,147 $ 0 $ 59,646 $ 223,793 31 $ 7,219
2019 165,652 0 99,578 265,230 28 9,472
2020 180,079 0 97,292 277,371 31 8,947
Average available financing for 2021: $ 8,546
Minimum Average Available Financing required for $8,500 lump sum multiplier: 4,587
Maximum lump sum multiplier permitted: 15,000
Notes:
• The State Aid and City Contributions shown are those made durin� the calendar year indicated.
• The number of active members is provided by the Relief Association for the year indicated, that is, the number
as of December 31.
• The average available financing for 2021 is the average for the three years preceeding 2021 (2018 to 2020). See
Minnesota Statutes §424A.02.
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BROOKLYN CENTER FIREFIGHTER'S RELIEF ASSOCIATION
7
January 1, 2021 Actuarial Valuation
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Terminated
Active Vested Retired Beneficiaries Disabled Total
A. Members on January 1, 2019
31 11 5 12 0 59
B. Changes in the member group 9
1. New active members 9
0
2. Retirements p
3. Separation, deferred lump sum (5) 5 �4�
4. Separation, not vested (4) �
5. Separation, disability benefit �4� (4)
6. Deaths �4�
7. Lump sum distributions (2) �2� 2
8. Rehire �
9. Total chan�es
p 3 0 �4) 0 ��)
C. Members on January 1, 2021 31
14 5 8 0 58
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BROOKLYN CENTER FIREFIGHTER'S RELIEF ASSOCIATION $
January 1, 2021 Actuarial Valuation
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January 1, 2021 January 1, 2019
A. Active Members
1. Number 31 31
2. Average A�e 39.5 41.5
3. Average years of service 6.4 8.1
B. Vested terminated members
1. With deferred benefits
a. Number 14 11
b. Total annual deferred benefits $0 $0
c. Average annual benefit 0 0
d. Total lump sum benefits 1,321,850 1,251,471
e. Average lump sum benefit 94,418 113,770
C. Retirees and beneficiaries
1. Number
a. Retirees 5 5
b. Beneficiaries 8 12
c. Disabled retirements 0 0
d. Total 13 17
2. Total annual benefits being paid $36,084 $47,556
3. Average annual benefit being paid 2,776 2,797
D. Total number of participants (A.1. + 6,1. + C.1.) 58 59
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BROOKLYN CENTER FIREFIGHTER'S RELIEF ASSOCIATION 9
January 1, 2021 Actuarial Valuation
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A. Eligibility Active or probationary member of the Retief Association.
B. Service Compteted months.
C. Lump Sum Pension The later of a�e 50 or after completion of 20 years of service.
The lump sum pension is based on completed months of service.
The current lump sum pension is based on $8,500 per year of service
plus a Supplemental Benefit of 10% of the regular lump sum
distribution, but not more than $1,000.
If a member is both age 50 and has completed 10 years of service,
but not 20 years of service, the lump sum pension will be reduced by
4% for each year of service less than 20 years.
D. Deferred Lump Sum Pension Termination prior to age 50 with at least 10 years of service.
The deferred lump sum pension payable at age 50 is based on the
lump sum pension formula and service at date of termination
reduced for less than 20 years of service.
If a deferred vested member dies before payment, the benefit will
be paid to the participant's beneficiary.
E. Disability Lump Sum Pension The disabitity pension payable immediately is based on the lump
sum pension formula and service at date of disability without regard
to vesting.
F. Survivor Benefit Years of service times the lump sum rate in effect at the time of
death with regard to vesting, payable to named beneficiary plus a
Supplemental Survivor Benefit in the amount of 20% of the total
benefit paid, but not more than $2,000.
G. Plan Changes Since Prior Valuation The lump sum benefit muttiplier was increased from $7,700 to
$8,500 per year of service.
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BROOKLYN CENTER FIREFIGHTER'S RELIEF ASSOCIATION �o
January 1, 2021 Actuariat Valuation
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A. Actuarial Cost Method The Entry Age Normal level percent of pay cost method. Under this method, the
service cost for an individual participant is the level percentage of pay required
to accumulate the funds needed to pay the participant's projected benefits by
their assumed retirement age, beginning on the date of entry and ending at last
age with any future benefits.
B. Actuarial Value of Assets The actuarial value of assets is equal to the market value of assets.
C. Benefits Valued All benefits summarized in the plan provisions section of this report with the
exception of the supplemental lump sum benefits. The State reimburses the
Special Fund for those benefits, so these payments and reimbursements will be
recognized in plan assets as they occur.
D. Data Methods The Relief Association provided census and financial information for the
valuation and we have relied on this data in preparing the results in this report.
The data was reviewed for reasonableness and consistency, but we have not
performed a complete audit.
To the extent that census data was collected as of a date tater than January 1,
2021, we have assumed that it is reasonably representative of the plan census on
the valuation date and used it with only minor adjustments.
E. Models Used The results in this report are based on an actuarial valuation model with three
components as outlined in Actuarial Standard of Practice No. 56 - Modeling (ASOP
56):
1. Information inputs including the data, assumptions, methods, and plan
provisions outlined in this report,
2. Processing by the ProValO software developed by Winklevoss Technolo�ies,
and
3. Our report template which translates the ProVal� output into valuation
resutts.
The model is intended to convert the information input above to usable actuarial
valuation results. We have reviewed the ProVal� software's output for
reasonableness, and have independently checked sample one-person output
where appropriate, but have otherwise relied on it.
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BROOKLYN CENTER FIREFIGHTER'S RELIEF ASSOCIATION 11
January 1, 2021 Actuarial Valuation
. . .
A. Discount Rate 5% as required by Minnesota statutes
B. Mortality Rates used in the July 1, 2020 Minnesota PERA Police £r Fire Plan actuarial
valuation as described below.
Healthy Pre-retirement: RP-2014 employee �enerational mortality table
projected with mortality improvement scale MP-2019, from a base year of 2006.
Healthy Post-retirement: RP-2014 annuitant generational mortatity table
projected with mortality improvement scale MP-2019 from a base year of 2006.
Male rates are adjusted by a factor of 0.96.
Disabled: RP-2014 annuitant generational mortality table projected with
mortality improvement scale MP-2019 from a base year of 2006. Male rates are
adjusted by a factor of 0.96.
C. Withdrawal Select and ultimate rates used in the July 1, 2020 Minnesota PERA Police �t Fire
Plan actuarial valuation. Select rates are as follows:
First through Third Years
3.0%
Ultimate Rates
Age Male Female
20 3.00% 3.00%
25 2.60% 2.60%
30 2.10% 2.10%
35 1.60% 1.60%
40 1.25% 1.25%
45 1.25% 1.25%
50 0.00% 0.00%
D. Disability Age-related rates used in the July 1, 2020 Minnesota PERA Police �t Fire Plan
actuarial valuation. All incidences are assumed to be duty-related. Select Rates
are as follows:
Age Rate
20 0.11%
25 0.13%
30 0.16%
35 0.19%
40 0.29%
45 0.54%
50 1.04%
55 2.03%
60 0.00% � -
' 1 1�
. . .
BROOKLYN CENTER FIREFIGHTER'S RELIEF ASSOCIATION 12
January 1, 2021 Actuarial Valuation
. . . . -.
E. Retirement
Active members We have assumed 50% of active members will retire when reaching retirement
eligibility (later of age 50 and 20 years of service); then 50% retire each
subsequent year until 100% retirement at the earlier of age 65 or 30 years of
service.
Less than 20 years With 20-29 years With 30 years of
Age of service of service service
50-64 0% 50% 100%
65 100% 100% 100%
Vested terminated The later of current age and age 50.
F. Beneficiary information 100% of inembers are assumed to have a beneficiary who will receive survivor
benefits.
G. Spouse age difference Wives are assumed to be 3 years younger than husbands.
H. Form of payment All future retirees are assumed to elect a lump sum payment.
I. Supplemental benefits We have not vatued the liability associated with supplemental lump sum benefits
in this funding valuation since the State reimburses the Special Fund for those
benefits. These payments and reimbursements will be reco�nized in plan assets
as they occur.
J. Changes since prior Mortality rates were changed to those used in the most recent Minnesota PERA
valuation Police � Fire Plan actuarial valuation.
� _ , i �
BROOKLYN CENTER FIREFIGHTER'S RELIEF ASSOCIATION 13
January 1, 2021 Actuarial Valuation
. . . . . .
The Actuarial Standards Board (A5B) provides coordinated guidance for measuring pension and retiree �roup benefit
obligations through a series of Actuarial Standards of Practice (ASOPs). ASOP No. 27, Selection of Economic
Assumptions for Measuring Pension Obligations, requires that the actuary disclose the rationale used in selecting
each non-prescribed economic assumption and any changes to non-prescribed economic assumptions.
There are no non-prescribed economic assumptions used in this valuation. The discount rate is the only economic
assumption and it is prescribed by State statute. It is only appropriate for complying with statutory funding
requirements.
� ��
BROOKLYN CENTER FIREFIGHTER'S RELIEF ASSOCIATION 14
January 1, 2021 Actuarial Valuation
. . . . . . .
The Actuariat Standards Board (ASB) provides coordinated guidance for measuring pension and retiree �roup benefit
obligations through a series of Actuarial Standards of Practice (ASOPs). ASOP No. 35, Selection of Demo�raphic and
Other Noneconomic Assumptions for Measuring Pension Obli�ations, requires that the actuary disclose the rationale
used in selecting each non-prescribed non-economic assumption and any chan�es to non-prescribed non-economic
assumptions.
The table below summarizes the rationale for selecting the non-prescribed non-economic assumptions. The rationale
for assumption changes, alon� with a description of the assumptions themselves, is included in the Actuariat
Assumption and Methods section of the report.
. � � . . . . - � - �
Assumption Rationale for Selecting Assumption
Mortality Rates used in the most recent Minnesota PERA Police �t Fire Plan actuarial
valuation.
Retirement Due to limited plan-specific data, based on plan's earliest retirement age with
allowance for some delayed retirement.
Termination of Employment Rates used in the most recent Minnesota PERA Police � Fire Plan actuarial
valuation.
Disability Rates used in the most recent Minnesota PERA Police �t Fire Plan actuarial
valuation.
Percentage Married and Spouse Based on standard pension plan assumptions. These assumptions have an
Ages insignificant impact on plan costs.
� _ ____ �,� �
BROOKLYN CENTER FIREFIGHTER'S RELIEF ASSOCIATION 15
January 1, 2021 Actuarial Valuation
. � . - .
Actuarial Standard of Practice Number 51, Assessment and Disclosure of Risk Associated with Measurin� Pension
Obligations and Determining Pension Plan Contributions (ASOP 51), requires actuaries to identify and assess certain
risks that may affect a plan's future financial condition. Some of the primary risks are summarized and defined in
the table below.
. - . � - .
Investment risk The potential that investment returns will be different than expected
Asset/liability mismatch risk The potential that changes in asset values are not matched by changes in
liability values
Interest rate risk The potential that interest rates will be different than expected
Longevity and other demographic The potential that mortality or other demographic experience will be
risks different than expected
Contribution risk The potential that state aid or municipal contribution rates are different
than what is ultimately required to fund plan benefits
ASOP 51 requires that actuaries qualitatively or quantitatively assess the potential effect of these risks on the plan's
future financial condition. Methods to assess the risks include scenario tests, sensitivity tests, stress tests, and
calculation of actuarial liabilities using a discount rate based on minimal-risk investments. Practical considerations
include the usefulness, reliability, timeliness, and cost efficiency of the risk assessment measurements.
In addition to the risk assessment parameters above, ASOP 51 requires that actuaries (1) calculate various plan
maturity measures and (2) disdose relevant historical information that are significant to understanding plan risks.
This report contains basic risk assessment information for the plan in accordance with ASOP 51. However, we
recommend that employers consider additional pension risk analyses to better understand retirement plan volatility
and the potential impact on the organization. We would be glad to discuss potential additional analyses upon
request.
Plan Maturity Measures
Maturity measures describe how much plan liability is attributable to current employees vs. former employees (e.g.,
retirees) and the size of plan assets and liabilities relative to overall payroll. These measures include:
Participant Maturity Ratio (PMR) Number of retirees divided by total participants
Liability Maturity Ratio (LMR) Retiree liability divided by total plan liability
� '�'9i
BROOKLYN CENTER FIREFIGHTER'S RELIEF ASSOCIATION 16
January 1, 2021 Actuarial Valuation
. � . - . . -.
A recent history of maturity measures is shown below. Some of the primary risks are summarized and defined in the
table below.
Participant Maturity Ratios
ioo�i
8o�io
60% Active participants
�' ■Vested terminated
40% �'
20% s Receiving payments
,� .�
0%
2010 2011 2013 2015 2017 2019 2021
Liability Maturity Ratios
iooro
so�ro
60% Active participants
,�
- ■Vested terminated
40% � ,�
�Receiving payments
20% •
0% b ,' •
2010 2011 2013 2015 2017 2019 2021
Observations:
• The retiree counts and liabilities are steadily decreasing while vested terminated counts and liabilities are
steadily increasin� as a percent of the plan's totals. This is because lifetime annuities have been replaced with
lump sum payments.
� .�
:�, �
<. . � �
BROOKLYN CENTER FIREFIGHTER'S RELIEF ASSOCIATION ��
January 1, 2021 Actuarial Valuation
. � . . . -.
Historical Plan Information
Historicat plan information can provide insight about evolving pension risks, especially as plans mature. Below are
historical values for some relevant plan results.
Historical Funded Status Information
Actual Assumed
Actuarial Accrued Market Value of Funded Investment Investment
Liability Assets Percent Return Return
2021 $ 2,572,996 $ 3,545,920 137.81% 5.81% 5.00%
2019 2,809,184 3,405,643 121.23% -6.22% 5.00%
2017 3,287,811 3,673,474 111.73% 15.28% 5.00%
2015 3,084,717 3,508,210 113.73% 4.20% 5.00%
2013 3,279,231 3,282,317 100.09% 8.30� 5.00%
2011 3,253,686 3,303,595 101.53% 11.80% 5.00%
2010 3,113,981 2,91'6,962 93.67% N/A 5.00%
Observations
• The plan's funded status has steadily increased in recent years. Liabilities have remained relatively stable.
� xi�-
BROOKLYN CENTER FIREFIGHTER'S RELIEF ASSOCIATION �8
January 1, 2021 Actuarial Valuation
. � . - . . -.
Defined benefit plans like this one are subject to statutory minimum funding rules. These impose stringent
requirements on when and how much money must be contributed to the plan trust. This means that many pension
risks are less applicabte to Retief Association defined benefit plans.
The table below provides analysis of some potential plan risks. Please note that the list of risks and the risk
assessments shown are not exhaustive. We would be glad to provide a more detailed risk assessment upon request.
Investment risk If future investment returns are higher or tower than assumed, then future
contributions may need to be increased or decreased to compensate. The
plan currently uses an investment return assumption based on statutory
requirements of 5%.
Asset/liability mismatch risk Per state statues, plan funding liabilities are determined using a 5% interest
rate. Since plan assets are invested in a mix of equity and fixed income
securities, there is a risk that changes in assets values are not matched by
changes in liability values.
Interest rate risk There is a risk that interest rates could be different than expected under
current statutory minimum funding rules. Statutory funding interest rates are
currently "stabilized" at 5%.
Longevity and other demographic The plan demographic assumptions reflect best estimates of future plan
risks experience. However, retirees receivin� monthly payments may live longer
than expected which would change plan liabilities.
Contribution risk Statutory minimum funding rules are relatively conservative and statutorily-
mandated, so there is less risk that the plan sponsor will not make the
necessary contributions than in other types of plans.
�___ _ -�i
�
� � � � �
Retirement plan�iing for employers
March 24, 2021
Mr. Chris Hughes
Treasurer-Brooklyn Center Firefighter's Relief Association
6250 Brooklyn Boulevard
Brooklyn Center, MN 55429
Re: Pension Plan Projections with Benefit Increase
Dear Chris:
We have prepared a projection of the pension plan assets and liabilities at the following benefit
levels: $9,000, $9,500, and $10,000. Estimated future municipal contributions are not required
under these scenarios. The projections reflect a constant active membership of 40 firefighters.
Background
We were hired by the Relief Association to prepare a projection of the pension plan's liabilities,
assets and funded status under five different benefit levels. The projections include a constant
active membership of 40 firefighters to provide results comparable to the 2019 projections dated
April 4, 2019.
This letter documents the results of the projections.
Projection and Assumptions
The actuarial accrued liability and normal cost for each year of the projection were calculated
using the discount rate, mortality, retirement, disability and withdrawal assumptions stated in the
January l, 2021 valuation report dated February 19, 2021. When a member died, retired or
terminated, a new firefighter was added. Each new firefighter was assumed to be 33 years old.
The Special Account asset balance for each year of the projection was calculated using the
benefit payments generated from the liability projection, a constant State Aid contribution of
$180,079 (the 2020 actual State Aid contribution), expenses increasing at 3.5% per year, and an
assumed rate of return of 5%. All transactions (contributions and distributions) were assumed to
occur mid-year.
The municipal contribution, if any, was determined as the normal cost for the year plus/minus
the amortization of any unfunded accrued liability/surplus plus expenses less the State Aid
contribution.
VAN IWAARDEN ASSOCIATES ONE HUNDRED SOUTH FIFfH STREET,SUITE�900 MINNEAPOLIS,MN 5S4OZ
612.596.5960 toll free:888.596.5960 WWW.VANIWAARDEN.COM
March 24, 2021
Page 2 of 2
� Results
• Estimated future municipal contributions are not required under the $9,000, $9,500, and
$10,000 scenarios.
The attached exhibits for each benefit level show the details of the calculations.
Please let me know if you have any questions or if there are other projections you'd like us to
run.
Sincerely,
�
Emily M. Knutson, FSA, EA, MAAA
Consulting Actuary
L/D/C/R:3/ctl/emk/bkh
VAN IWaARDEN ASSOCIATES ONE HUNDRED SOUTH FIFTH STREEI',SUITE 1900 MWNEAPOLIS,MN 55402
612.596.5960 toll jree:888.596.5960 WWW.VANIWAARDEN.COM
BROOKLYN CENTER FIREFIGHTER'S RELIEF
ASSOCIATION PROJECTION
$9,000 Lump Sum Pension
Valuation Year 2021 2022 2023 2024 2025 2026 2027 2028 2029
Lump sum multiplier 8,500 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000
A.Actuarial Accrued LiabilitV(AAL)
1.AAL $2,572,996 $2,158,967 $2,417,314 $2,404,943 $2,298,956 $2,234,997 $2,214,889 $2,428,323 $2,678,881
2. Normal Cost 128,007 186,418 186,426 185,617 185,425 184,339 184,695 184,877 184,108
B.Special Fund Assets
1. Investment return 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%
2.Assets at valuation date 3,545,920 3,174,019 3,453,665 3,469,820 3,396,218 3,364,690 3,377,956 3,619,779 3,898,594
3. Expected Benefit Payments (698,224) (43,809) (313,874) (401,569) (356,245) (310,297) (87,227) (62,174) (71,121)
4. Expected Contributions 180,079 180,079 180,079 180,079 180,079 180,079 180,079 180,079 180,079
5. Expected Expenses (17,657) (18,275) (18,915) (19,577) (20,262) (20,971) (21,705) (22,465) (23,251)
6. Interest to end of val year 163,901 161,651 168,865 167,464 164,900 164,455 170,676 183,375 197,072
7.Assets at end of val year 3,174,019 3,453,665 3,469,820 3,396,218 3,364,690 3,377,956 3,619,779 3,898,594 4,181,373
C. Unfunded AAL(A.1-6.2.) 0 0 0 0 0 0 0 0 0
D. Credit forsurplus(6.2.-A.1)x 10% 97,292 101,505 103,635 106,488 109,726 112,969 116,307 119,146 121,971
E.Amortization Payment
1. Amortization Period 0 0 0 0 0 0 0 0 0
2. Payment 0 0 0 0 0 0 0 0 0
F.Annual Contribution Payable
1. Preliminary Contribution (A.2.+E.-D.) 30,715 84,913 82,791 79,129 75,699 71,370 68,388 65,731 62,137
2.Administrative Expense 17,657 18,275 18,915 19,577 20,262 20,971 21,705 22,465 23,251
3.Annual Contribution(1.+2.) 48,372 103,188 101,706 98,706 95,961 92,341 90,093 88,196 85,388
4. Estimated State Aid 18( 0,079) 18( 0,p79) 18( 0,079) 180 079 180 079 180 079 180 079 180 079 180 079
5. Estimated Municipal Contribution (3.+4.) 0 0 0 0 0 0 0 0 0
G.Funded Status(6.2./A.1.) 138% 147% 143% 144% 148% 151% 153% 149% 146%
Assumptions
• 5% investment return
• Contributions and distributions occur mid-year
• Expenses increase at 3.5°/o per year
• Constant 40 active firefighters for years 2022 and
later;2021 based on current membership as of
1/1/2021
• State Aid remains constant at$180,079
• Lump sum multiplier of$9,000 effective 1/1/2022
UD/C/R:4/ctUemk/bkh 3/24/2021
' '�� " �
BROOKLYN CENTER FIREFIGHTER'S RELIEF
ASSOCIATION PROJECTION
$9,000 Lump Sum Pension
Valuation Year 2030 2031 2032 2033 2034 2035 2036
Lump sum multiplier 9,000 9,000 9,000 9,000 9,000 9,000 9,000
A.Actuarial Accrued Liahility(AAL)
1.AAL $2,931,725 $3,123,066 $3,278,163 $3,519,088 $3,649,310 $3,880,175 $3,835,467
2. Normal Cost 184,318 183,570 183,128 178,577 182,386 182,233 181,012
B, Special Fund Assets
1. Investment return 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%
2.Assets at valuation date 4,181,373 4,404,897 4,594,811 4,870,020 5,042,929 5,311,535 5,312,479
3. Expected Benefit Payments (141,912) (184,763) (109,940) (222,268) (136,406) (409,676) (389,373)
4. Expected Contributions 180,079 180,079 180,079 180,079 180,079 180,079 180,079
5. Expected Expenses (24,065) (24,907) (25,779) (26,681) (27,615) (28,582) (29,582)
6. Interest to end of val year 209,421 219,505 230,850 241,779 252,548 259,122 259,652
7.Assets at end of val year 4,404,897 4,594,811 4,870,020 5,042,929 5,311,535 5,312,479 5,333,255
C. Unfunded AAL(A.1-8.2.) 0 0 0 0 0 0 0
D. Credit forsurplus(6.2.-A.1)x 10% 124,965 128,183 131,665 135,093 139,362 143,136 147,701
E.Amorfization Payment
1.Amortization Period 0 0 0 0 0 0 0
2. Payment 0 0 0 0 0 0 0
F.Annual Contribution Pavable
1. Preliminary Contribution (A.2.+E.-D.) 59,353 55,387 51,463 43,484 43,024 39,097 33,311
2.Administrative Expense 24,065 24,907 25,779 26,681 27,615 28,582 29,582
3. Annual Contribution(1.+2.) 83,418 80,294 77,242 70,165 70,639 67,679 62,893
4. Estimated State Aid 180 079 18( 0,079) 18( 0,p79) 18( 0,079) 180 079 180 079 180 079
5. Estimated Municipal Contribution(3.+4.) 0 0 0 0 0 0 0
G.Funded Status(6.2,/A.1.) 143% 141% 140% 138% 138°/o 137% 139%
Assumptions
• 5%investment return
• Contributions and distributions occur mid-year
• Expenses increase at 3.5%per year
• Constant 40 active firefighters for years 2022 and
later; 2021 based on current membership as of
1/1/2021
• State Aid remains constant at$180,079
• Lump sum multiplier of$9,000 effective 1/1/2022
L/D/C/R:4/ctl/emk/bkh 3/24/2021 ;,
� `�: : r ��
BROOKLYN CENTER FIREFIGHTER'S RELIEF
ASSOCIATION PROJECTION
$9,500 Lump Sum Pension
Valuation Year 2021 2022 2023 2024 2025 2026 2027 2028 2029
Lump sum multiplier 8,500 9,500 9,500 9,500 9,500 9,500 9,500 9,500 9,500
A.Actuarial Accrued Liability(AAL)
1.AAL $2,572,996 $2,214,277 $2,485,496 $2,486,504 $2,389,813 $2,337,879 $2,326,782 $2,552,450 $2,817,206
2. Normal Cost 128,007 196,775 196,783 195,929 195,726 194,581 194,956 195,148 194,336
B. Special Fund Assets
1. Investment return 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%
2.Assets at valuation date 3,545,920 3,174,019 3,452,915 3,468,150 3,388,988 3,353,844 3,359,845 3,596,728 3,871,663
3. Expected Benefit Payments (698,224) (44,540) (314,736) (406,911) (359,421) (316,855) (91,164) (64,834) (74,380)
4. Expected Contributions 180,079 150,079 180,079 180,079 180,079 180,079 180,079 180,079 180,079
5. Expected Expenses (17,657) (18,275) (18,915) (19,577) (20,262) (20,971) (21,705) (22,465) (23,251)
6. Interest to end of val year 163,901 161,633 168,806 167,247 164,459 163,749 169,673 182,156 195,644
7.Assets at end of val year 3,174,019 3,452,915 3,468,150 3,388,988 3,353,844 3,359,845 3,596,728 3,871,663 4,149,756
C. Unfunded AAL(A.1-6.2.) 0 0 0 0 0 0 0 0 0
D. Credif for surplus(6.2.-A.1)x 10% 97,292 95,974 96,742 98,165 99,918 101,596 103,306 104,428 105,446
E.Amortization Payment
1.Amortization Period 0 0 0 0 0 0 0 0 0
2. Payment 0 0 0 0 0 0 0 0 0
F.Annual Contribution Pavable
1. Preliminary Contribution (A.2.+E.-D.) 30,715 100,801 100,041 97,764 95,808 92,985 91,650 90,720 88,890
2.Administrative Expense 17,657 18,275 18,915 19,577 20,262 20,971 21,705 22,465 23,251
3.Annual Contribution(1.+2.) 48,372 119,076 118,956 117,341 116,070 113,956 113,355 113,185 112,141
4. Estimated State Aid 18( 0,079) 1 SO 079 180 079 180 079 180 079 180 079 180 079 180 079 180 079
5. Estimated Municipal Contribution(3.+4.) 0 0 0 0 0 0 0 0 0
G. Funded Status(6.2./A.1.) 138% 143% 139% 139% 142% 143% 144% 141% 137%
Assumptions
• 5%investment return
• Contributions and distributions occur mid-year
• Expenses increase at 3.5%per year
• Constant 40 active firefighters for years 2022 and
later; 2021 based on current membership as of
1/1/2021
• State Aid remains constant at$180,079
• Lump sum multiplier of$9,500 effective 1/1/2022
L/D/C/R:4/ctl/emk/bkh 3/24/2021 ` �g
� ,�` �' A. ���7�
BROOKLYN CENTER FIREFIGHTER'S RELIEF
ASSOCIATION PROJECTION
$9,500 Lump Sum Pension
Valuation Year 2030 2031 2032 2033 2034 2035 2036
Lump sum multiplier 9,500 9,500 9,500 9,500 9,500 9,500 9,500
A.Actuarial Accrued Liability(AAL)
1.AAL $3,084,283 $3,286,356 $3,450,093 $3,704,351 $3,841,686 $4,085,189 $4,044,321
2. Normal Cost 194,558 193,768 193,302 188,498 192,518 192,357 191,069
B.Special Fund Assets
1. Investment return 5.00% 5.00% 5.00% 5.00°/a 5.00% 5.00% 5.00%
2.Assets at valuation date 4,149,756 4,364,232 4,542,123 4,808,895 4,966,481 5,223,826 5,203,747
3. Expected Benefit Payments (149,196) (194,509) (115,602) (234,236) (143,663) (425,907) (407,407)
4. Expected Contributions 180,079 180,079 180,079 180,079 180,079 180,079 180,079
5. Expected Expenses (24,065) (24,907) (25,779) (26,681) (27,615) (28,582) (29,582)
6. Interest to end of val year 207,658 217,228 228,074 238,424 248,544 254,331 253,765
7.Assets at end of val year 4,364,232 4,542,123 4,808,895 4,966,481 5,223,826 5,203,747 5,200,601
C. Unfunded AAL(A.1-6.2.) 0 0 0 0 0 0 0
D. Credit for surplus(6.2.-A.9)x 10% 106,547 107,788 109,203 110,454 112,479 113,864 115,943
E.Amortization Payment
1.Amortization Period 0 0 0 0 0 0 0
2. Payment 0 0 0 0 0 0 0
F.Annual Contribution Pavable
1. Preliminary Contribution(A.2.+E.-D.) 88,011 85,980 84,099 78,044 80,039 78,493 75,126
2.Administrative Expense 24,065 24,907 25,779 26,681 27,615 28,582 29,582
3.Annual Contribution(1.+2.) 112,076 110,887 109,878 104,725 107,654 107,075 104,708
4. Estimated State Aid 180 079 180 079 180 079 18( 0,079) 18( 0,079) 180 079 180 079
5. Estimated Municipal Contribution(3.+4.) 0 0 0 0 0 0 0
G.Funded Status(6.2./A.1.) 135% 133% 132% 130% 129% 128% 129%
Assumptions
• 5%investment return
• Contributions and distributions occur mid-year
• Expenses increase at 3.5% per year
• Constant 40 active firefighters for years 2022 and
later; 2021 based on current membership as of
1/1/2021
• State Aid remains constant at$180,079
• Lump sum multiplier of$9,500 effective 1/1/2022
L/D/C/R:4/ctl/emk/bkh 3/24/2021 � ' a , , r „
, w .. �. � \
BROOKLYN CENTER FIREFIGHTER'S RELIEF
ASSOCIATION PROJECTION
$10,000 Lump Sum Pension
Valuation Year 2021 2022 2023 2024 2025 2026 2027 2028 2029
Lump sum multiplier 8,500 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000
A.Actuarial Accrued LiabilitV(AAL)
1.AAL $2,572,996 $2,269,587 $2,553,678 $2,568,065 $2,480,670 $2,440,761 $2,438,674 $2,676,577 $2,955,531
2. Normal Cost 128,007 207,132 207,140 206,241 206,028 204,822 205,217 205,419 204,564
8. Special Fund Assets
1. Investment return 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%
2.Assets at valuation date 3,545,920 3,174,019 3,452,166 3,466,480 3,381,759 3,342,998 3,341,735 3,573,676 3,844,733
3. Expected Benefit Payments (698,224) (45,271) (315,598) (412,253) (362,596) (323,414) (95,101) (67,494) (77,640)
4. Expected Contributions 180,079 180,079 180,079 180,079 180,079 180,079 180,079 180,079 180,079
5. Expected Expenses (17,657) (18,275) (18,915) (19,577) (20,262) (20,971) (21,705) (22,465) (23,251)
6. Interest to end of val year 163,901 161,614 168,747 167,030 164,018 163,042 168,669 180,937 194,216
7.Assets at end of val year 3,174,019 3,452,166 3,466,480 3,381,759 3,342,998 3,341,735 3,573,676 3,844,733 4,118,137
C. Unfunded AAL(A.1-6.2.) 0 0 0 0 0 0 0 0 0
D. Credit for surplus(B.2.-A.1)x 10% 97,292 90,443 89,849 89,841 90,109 90,224 90,306 89,710 88,920
E.Amortization Payment
1.Amortization Period 0 0 0 0 0 0 0 0 0
2. Payment 0 0 0 0 0 0 0 0 0
F.Annual Contribution PaVable
1. Preliminary Contribution (A.2.+E.-D.) 30,715 116,689 117,291 116,400 115,919 114,598 114,911 115,709 115,644
2.Administrative Expense 17,657 18,275 18,915 19,577 20,262 20,971 21,705 22,465 23,251
3.Annual Contribution(1.+2.) 48,372 134,964 136,206 135,977 136,181 135,569 136,616 138,174 138,895
4. Estimated State Aid 180 079 18( 0,079) 180 079 180 079 180 079 180 079 180 079 18( 0,079) 180 079
5. Estimated Municipal Contribution(3.+4.) 0 0 0 0 0 0 0 0 0
G.Funded Status(6.2./A.1.) 138% 140% 135% 135% 136% 137% 137% 134% 130%
Assumptions
• 5% investment return
• Co�tributions and distributions occur mid-year
• Expenses increase at 3.5% per year
• Constant 40 active firefighters for years 2022 and
later;2021 based on current membership as of
1/1/2021
• State Aid remains constant at$180,079
• Lump sum multiplier of$10,000 effective 1/1/2022
UD/C/R:4/ctl/emk/bkh 3/24/2021
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BROOKLYN CENTER FIREFIGHTER'S RELIEF
ASSOCIATION PROJECTION
$10,000 Lump Sum Pension
Valuation Year 2030 2031 2032 2033 2034 2035 2036
Lump sum multiplier 10,000 10,000 10,000 10,000 10,000 10,000 10,000
A.Actuarial Accrued Liability(AAL)
1.AAL $3,236,842 $3,449,647 $3,622,022 $3,889,614 $4,034,063 $4,290,204 $4,253,175
2. Normal Cost 204,798 203,966 203,476 198,419 202,651 202,481 201,125
B. Special Fund Assets
1. Investment return 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%
2.Assets at valuation date 4,118,137 4,323,567 4,489,434 4,747,767 4,890,029 5,136,113 5,095,012
3. Expected Benefit Payments (156,480) (204,256) (121,264) (246,205) (150,920) (442,137) (425,441)
4. Expected Contributions 180,079 180,079 180,079 180,079 180,079 180,079 180,079
5. Expected Expenses (24,065) (24,907) (25,779) (26,681) (27,615) (28,582) (29,582)
6. Interest to end of val year 205,895 214,951 225,298 235,068 244,540 249,540 247,877
7.Assets at end of val year 4,323,567 4,489,434 4,747,767 4,890,029 5,136,113 5,095,012 5,067,945
C. Unfunded AAL(A.1-6.2.) 0 0 0 0 0 0 0
D. Credit forsurplus(B.2.-A.1)x 10% 88,130 87,392 86,741 85,815 85,597 84,591 84,184
E.Amortization Payment
1.Amortization Period 0 0 0 0 0 0 0
2. Payment 0 0 0 0 0 0 0
F.Annual Contribution Payable
1. Preliminary Contribution (A.2.+E.-D.) 116,668 116,574 116,735 112,604 117,054 117,890 116,941
2.Administrative Expense 24,065 24,907 25,779 26,681 27,615 28,582 29,582
3.Annual Contribution(1.+2.) 140,733 141,481 142,514 139,285 144,669 146,472 146,523
4. Estimated State Aid 180 079 180 079 18( 0,079) 18( 0,p79) 180 079 180 079 180 079
5. Estimated Municipal Contribution(3.+4.) 0 0 0 0 0 0 0
G. Funded Status(6.2./A.1.) 127% 125% 124% 122% 121% 120% 120%
Assumpfions
• 5%investment return
• Contributions and distributions occur mid-year
• Expenses increase at 3.5%per year
• Constant 40 active firefighters for years 2022 and
later; 2021 based on current membership as of
1/1/2021
• State Aid remains constant at$180,079
• Lump sum multiplier of$10,000 effective 1/1/2022
L/D/C/R:4/ctl/emk/bkh 3/24/2021 � � r