HomeMy WebLinkAboutLetter FR/SRStanley,
Holcombe
& Associates, Inc.
September 2, 2009
Mr. Robert Suarez, President (rsuarez@iaff587.ore)
IAFF Local 587
2980 NW South River Drive
Miami, FL 33125
Miami FIPO Stabilization
Dear Robert:
The purpose of this letter is to update my April 6, 2009 letter, concerning FIFO
contribution stabilization as it relates to firefighters.
The ordinance defines a goal of 37% or less of pensionable payroll by September 30
of each year.
Table D of our March 4, 2009 Stabilization Draft 45 showed relatively low
probabilities of City contributions below 37%, in conjunction with the Entry Age
Cost Method, reflecting actual investment returns through December 31, 2008,
unless there was substantial initial funding of the Stabilization Trust. Tables E and F
showed, as would be expected, significantly higher probabilities of success if the
37% target were increased to 45% or 52%.
Our August 24, 2009 Draft #6 showed a projected October 1, 2009 valuation result
of 54.8% for the fiscal year beginning October 1, 2010, based on the current
(Aggregate) actuarial cost method.
Consequently, the 37% stabilization target does not appear to be attainable for the
fiscal year beginning October 1, 2009. In addition, it appears unlikely for the fiscal
year beginning October 1, 2010.
2006 RiverEdge Parkway/Suite 546 • Atlanta, CA 303213
(776) 933-1933 0 Fax (770) 9.33-139113 • www.stanleyholconilmcom
Mr. Robert Suarez, President (rsuarez@iaff587.orc)
IAFF Local 587
Re: Miami FIFO Stabilization
September 2, 2009
Page Two
Whether, or when, the funding target could be achieved is currently unknown.
However, given the amount of time and effort expended by all parties to get to Drafts
#5 and #6, I would recommend that the stabilization framework should continue to
be pursued.
Sincerely,
J4-' 1"6
Randall L. Stanley, FSA, MA.A.A, EA
Consulting Actuary and Principal
RLS/di
Miami 90-92B
cc: Armando Aguilar (miamifop20@aol.com)
Board of Trustees (dania@miamifipo.org
Mr. Michael J. Tierney, ASA,(mitierney@actuarialconcepts.com)