2011 Police Pension Fund-Municipal Compliance Report rEi‘
ViLuAC£ OF
e"11 ° Village of Buffalo Grove Police Pension Fund-Municipal
iopp Compliance Report-December 31,2011. 11-E
Recommendation of Action
Staff recommends approval of the attached Pension Fund Report.
Overview
Illinois Compiled Statutes(Illinois Pension Code)requires that the Police Pension Fund Board of Trustees
submit a Municipal Compliance Report prior to the adoption of the Village's 2011 property tax levy
regarding fiscal condition. This Report has been prepared on behalf of the Village's Police Pension Fund
Board and acceptance is requested.
Attachments
Police Pension Compliance 2011.PDF
Trustee Liaison Staff Contact
Trustee Berman Scott D Anderson,Finance&GS
Monday, November 7, 2011 Consent Agenda: New Business -Item : 11-E
27VV457 WARRENVILLE ROAD•WARRENVILLE,ILLINOIS 60555-3902
Lauterbach & Amen, LLP PHONE(630)393-1483 i FAX(630)393-2516
CERTIFIED PUBUC ACCOUNTANT:,
September 29,2011
Members of the Pension Board of Trustees
Police Pension Fund of Buffalo Grove
Buffalo Grove, IL
Enclosed please find a copy of your Municipal Compliance Report for the Police Pension Fund
for the year ended December 31, 2010. We have prepared the report with the most recent
information available at our office. Should you have more current information, or notice any
inaccuracies, we are prepared to make any necessary revisions and return them to you.
The President and Secretary of the Pension Fund are required to sign the report on page 3. If not
already included with the enclosed report, please also include a copy of the Pension Fund's most
recent investment policy.
The signed House Bill 5088 - Municipal Compliance Report must be provided to the
Municipality before the tax levy is filed on the last Tuesday in December. We are sending the
report via email to promote an environmentally-friendly work atmosphere.
If you have any questions regarding this report please contact Dave Petschke at 630.393.1483.
Respectfully submitted,
Lh d
LAUTERBACH &AMEN, LLP
VILLAGE OF BUFFALO GROVE, ILLINOIS
POLICE PENSION FUND
HOUSE BILL 5088 -MUNICIPAL COMPLIANCE REPORT
FOR THE YEAR ENDED
DECEMBER 31, 2010
VILLAGE OF BUFFALO GROVE,ILLINOIS
POLICE PENSION FUND
House Bill 5088(Public Act 95-950)-Municipal Compliance Report
For the Year Ended December 31,2010
The Pension Board certifies to the Board of Trustees of the Village of Buffalo Grove on the condition of the
Pension Fund at the end of its most recently completed fiscal year the following information:
1) The total assets of the fund and their current market value of those assets:
Current Preceding
Fiscal Year Fiscal Year
Total Assets $ 41,442,739 $ 36,920,405
Market Value $ 41,442,739 $ 36,920,405
2) The estimated receipts during the next succeeding fiscal year from deductions from the salaries of police
officers and from other sources:
Estimated Receipts-Employee Contributions $ 618,429
Estimated Receipts-All Other Sources
Investment Earnings $ 1,307,804
Municipal Contributions $ 2,134,544
3) The estimated amount required during the next succeeding fiscal year to (a) pay all pensions and other
obligations provided in Article 3 of the Illinois Pension Code,and(b)to meet the annual requirements of
the fund as provided in Sections 3-125 and 3-127:
(a) Pay all Pensions and Other Obligations $ 1,766,120
(b) Annual Requirement of the Fund as Determined by:
Illinois Department of Insurance -Actuarial Report $ N/A
Private Actuary-Timothy W. Sharpe
Recommended Municipal Contribution $ 1,832,784
Statutory Municipal Contribution $ 1,736,958
Page 1
VILLAGE OF BUFFALO GROVE,ILLINOIS
POLICE PENSION FUND
House Bill 5088(Public Act 95-950)-Municipal Compliance Report
For the Year Ended December 31,2010
4) The total net income received from investment of assets along with the assumed investment return and
actual investment return received by the fund during its most recently completed fiscal year compared to
the total net income, assumed investment return, and actual investment return received during the
preceding fiscal year:
Current Preceding
Fiscal Year Fiscal Year
Net Income Received from Investment of Assets $ 3,426,079 $ 2,349,627
Assumed Investment Return
Illinois Department of Insurance-Actuarial Report N/A 7.00%
Private Actuary-Timothy W. Sharpe 7.50% 7.50%
Actual Investment Return 8.74% 6.65%
5) The total number of active employees who are financially contributing to the fund:
Number of Active Members 69
6) The total amount that was disbursed in benefits during the fiscal year, including the number of and total
amount disbursed to (i) annuitants in receipt of a regular retirement pension, (ii) recipients being paid a
disability pension,and(iii)survivors and children in receipt of benefits:
Total Amount
Number of Disbursed
(i) Regular Retirement Pension 25 $ 1,372,018
(ii) Disability Pension 2 $ 89,528
(iii) Survivors and Child Benefits 2 $ 98,534
Totals 29 $ 1,560,080
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VILLAGE OF BUFFALO GROVE,ILLINOIS
POLICE PENSION FUND
House Bill 5088(Public Act 95-950)-MunicipaI Compliance Report
For the Year Ended December 31,2010
7) The funded ratio of the fund:
Current Preceding
Fiscal Year Fiscal Year
Illinois Department of Insurance-Actuarial Report N/A 63.72%
Private Actuary-Timothy W. Sharpe 64.30% 60.20%
8) The unfunded liability carried by the fund,along with an actuarial explanation of the unfunded liability:
Unfunded Liability:
Illinois Department of Insurance-Actuarial Report $ N/A
Private Actuary-Timothy W.Sharpe $ 22,998,343
The accrued liability is the actuarial present value of the portion of the projected benefits that has been
accrued as of the valuation date based upon the actuarial valuation method and the actuarial
assumptions employed in the valuation. The unfunded accrued liability is the excess of the accrued
liability over the actuarial value of assets.
9) The investment policy of the Pension Board under the statutory investment restrictions imposed on the
fund.
Investment Policy- See Attached.
Please see notes attached.
CERTIFICATION OF MUNICIPAL POLICE
PENSION FUND COMPLIANCE REPORT
The Board of Trustees of the Pension Fund, based upon information and belief, and to the best of our
knowledge,hereby certify pursuant to §3-143 of the Illinois Pension Code 40 ILCS 5/3-143, that the preceding
report is true and accurate.
Adopted this day of ,2011
President Date
Secretary Date
Page 3
VILLAGE OF BUFFALO GROVE,ILLINOIS
POLICE PENSION FUND
House Bill 5088(Public Act 95-950)-Municipal Compliance Report
For the Year Ended December 31,2010
INDEX OF ASSUMPTIONS
1) Total Assets- as Reported in the Audited Financial Statements for the Years Ended December 31, 2010
and 2009.
Market Value- Same as Above.
2) Estimated Receipts-Employee Contributions as Reported in the Fiscal Year 2011 Budget.
Estimated Receipts-All Other Sources
Investment Earnings-Investment Revenue as Reported in the Fiscal Year 2011 Budget
Municipal Contributions - Transfers From Corporate Fund as Reported in the Fiscal Year 2011
Budget.
3) (a) Pay all Pensions and Other Obligations - Total Deductions as Reported in the Fiscal Year 2011
Budget.
(b) Annual Requirement of the Fund as Determined by:
Illinois Department of Insurance-Suggested Amount of Tax Levy as Reported in the December 31,
2009 Actuarial Valuation.
Private Actuary
Recommended Amount of Tax Levy as Reported by Timothy W. Sharpe in the January 1,
2011 Preliminary Actuarial Valuation.
Statutorily Required Amount of Tax Levy as Reported by Timothy W. Sharpe in the January
1,2011 Preliminary Actuarial Valuation.
Page 4
VILLAGE OF BUFFALO GROVE,ILLINOIS
POLICE PENSION FUND
House Bill 5088(Public Act 95-950)-Municipal Compliance Report
For the Year Ended December 31,2010
INDEX OF ASSUMPTIONS-Continued
4) Net Income Received from Investment of Assets - Investment Income(Loss) net of Investment Expense,
as Reported in the Audited Financial Statements for the Years Ended December 31,2010 and 2009.
Assumed Investment Return
Illinois Department of Insurance- Interest Rate Assumption as Reported in the December 31, 2009
Actuarial Valuation. No December 31, 2010 Actuarial Valuation available at the time of this
report.No December 31,2010 Actuarial Valuation available at the time of this report.
Private Actuary - Interest Rate Assumption as Reported in the January 1, 2011 Timothy W. Sharpe
Preliminary Actuarial Valuation.
Actual Investment Return - Net Income Received from Investments as Reported Above as a Percentage
of the Average of the Beginning and End of Year Cash and Cash Equivalents and Investments as
Reported in the Audited Financial Statements for the Years Ended December 31,2010,2009 and 2008.
5) Number of Active Members - Illinois Department of Insurance Annual Statement for December 31,
2010-Schedule P.
6) (i) Regular Retirement Pension - Illinois Department of Insurance Annual Statement for December 31,
2010- Schedule P for Number of Participants and Expense page I for Total Amount Disbursed.
(ii) Disability Pension - Same as above.
(iii) Survivors and Child Benefits-Same as above.
Page 5
VILLAGE OF BUFFALO GROVE,ILLINOIS
POLICE PENSION FUND
House Bill 5088(Public Act 95-950)-Municipal Compliance Report
For the Year Ended December 31,2010
INDEX OF ASSUMPTIONS -Continued
7) The funded ratio of the fund:
Illinois Department of Insurance - Net Present Assets as a percentage of Total Assets as Reported
in the December 31,2009 and 2008 Actuarial Valuations.
Private Actuary - Percent Funded as Reported in the January 1, 2010 and Preliminary 2011
Timothy W. Sharpe Actuarial Valuation.
8) Unfunded Liability:
Illinois Department of Insurance - Deferred Asset(Unfunded Accrued Liability) as Reported in the
December 31,2009 Actuarial Valuation.
Private Actuary - Unfunded Liability as Reported by Timothy W. Sharpe, Preliminary Actuarial
Valuation Report for January 1,2011.
Page 6