June 25, 2019 
 
CONFIDENTIAL 
 
Ms. Erica T. Pascal‐Darling, CPA 
Finance Director 
City of Miami 
444 SW 2nd Avenue, 6th Floor 
Miami, FL 33130 
 
RE:  Actuarial Study for EORT – Benefit Accrual for Current Elected Officers 
 
Dear Erica: 
 
This will supersede Cowden correspondence dated June 17, 2019, which examined the cost of a draft 
plan amendment that was subsequently revised. 
 
The City has asked us to prepare an analysis of the cost to provide benefits under the City of Miami 
Elected Officers’ Retirement Trust (EORT) to current elected officers, in accordance with a proposed 
plan amendment, as attached.  Benefits and participation in the EORT were frozen in 2009. 
 
Benefit Provisions 
 
The amendment provides for the following: 
 
 Elected officers in office on or after October 1, 2018 are covered 
 
 For officers first elected after October 22, 2009 who are in office as of October 1, 2018: 
- Six years of service is required for benefit entitlement (previously seven) 
- The benefit formula is 50% of pay after six years of service (previously seven), with an 
additional 5% of pay for each year in excess of six, to a maximum of 100% of pay 
- Service prior to October 1, 2018 is not counted unless purchased by the member.  The 
member cost is 10% of compensation for each year of service purchased, plus interest at an 
annual rate of 3% as determined by the plan administrator. 
- Officers in this category must make an irrevocable election to participate in the EORT.  Such 
officers will cease participation in the City’s defined contribution plan for elected officers. 
 
 For officers first elected before October 22, 2009 who are in office as of October 1, 2018: 
- Benefits will be calculated under the prior plan formula (which required seven years for 
vesting) but reflect current compensation 
- Participation in City’s defined contribution plan for elected officers will continue. 
 
 For officers first elected after October 1, 2018: 
- Participation is automatic 
- The benefit formula is 50% of pay after seven years of service, with an additional 5% of pay 
for each year in excess of seven, to a maximum of 100% of pay 
- Such officers will not be eligible for the City’s defined contribution plan for elected officers. 
   
Ms. Erica T. Pascal‐Darling 
City of Miami 
June 25, 2019 
Page 2 
  
 
 The benefit is payable after service as an elected officer ends, as follows: 
- Beginning at age 55 for 10 or more years of service as an elected officer 
- Beginning at age 60 for service less than 10 years 
 
The individuals affected are the five current commissioners and the mayor. 
 
 Commissioners Hardemon, Reyes and Russell and Mayor Suarez will become new plan members 
upon election to participate. 
 
 Commissioners Carollo and Gort were previously receiving monthly benefits from the EORT.  
Those payments were suspended upon the return to office for each, and will resume upon 
completion of the final term in office.  The benefit amounts for each will be recalculated to reflect 
the provisions of the plan amendment. 
 
 Other individuals elected to Commissioner or Mayor in the future will become plan members. 
 
Cost Analysis 
 
To illustrate the cost for the proposed amendment, we have calculated the impact on the most 
recently‐prepared actuarial valuation for the EORT – which was prepared as of January 1, 2018 – 
presuming the plan change to have been recognized at that time. 
 
The actuarial assumptions, cost method and prior plan provisions used for this study are described in 
the January 1, 2018 Actuarial Valuation Report for the plan.  This includes previously‐employed 
assumptions that: 
 A Commissioner in his first term of office will complete a second term in office, in order to attain 
eligibility for vesting (6 years of service is required for current officers) 
 Determination of normal cost and accrued liability for active participants is in accordance with 
the Projected Unit Credit funding method 
 
Additionally we have assumed that each of the current officers will elect participation and will 
purchase all available pre‐October 1, 2018 service. 
 
We have included three alternatives – 5, 10 and 15 years – for amortization of the additional accrued 
liability resulting from the plan change.  The statement of funding assumptions does not include an 
amortization period for plan changes.  The City can choose a period it deems appropriate for 
budgeting of the additional contributions.  
 
Our calculations are shown in detail on an attached four‐page exhibit: 
 Page 1:  Basic information for current elected officers 
 Page 2:  Projection of individual benefits, purchase of service credit, and liability amounts for 
additional benefits 
 Page 3:  Additional first‐year contribution under three amortization alternatives 
 Page 4:  Changes to the liability and cost results of the January 1, 2018 actuarial valuation, and a 
projection of the additional City contribution through 2033 under the three amortization 
alternatives. 
Ms. Erica T. Pascal‐Darling 
City of Miami 
June 25, 2019 
Page 3 
 
 
 
Key results are summarized as follows: 
 
 The present value of projected benefits would increase by $3.2 million, from $8.5 million to $11.7 
million. 
 
 The member service purchase will reduce the additional liability by about $200,000. 
 
 The hypothetical increase to the City contribution for 2018 ranges from $444,000 to $668,000, 
depending on the amortization period used.  The 2018 City contribution was $366,358. 
 
 The year‐by‐year projection of the additional contribution is generally dependent on the 
amortization period.  The contribution includes a normal cost component, which drops off after 
the year in which each individual is assumed to leave office. 
 
Additional Comments           
 
 The estimated cost for the amendment has been illustrated in terms of changes to the January 1, 
2018 actuarial valuation, which is a known benchmark.  Actual cost changes will depend on the 
timing for recognition. 
 
 The Plan will incur liability on behalf of other individuals who are elected to the office of 
Commissioner or Mayor in the future.  This study does not reflect anticipated liability for future 
elected officials.  Projected future City contributions will generally be higher than the amounts 
displayed on exhibit page 4, reflecting normal costs for new elected officers.  
 
 Commissioners Reyes and Russell are currently in their first terms in office.  Consistent with prior 
actuarial valuations for the EORT, we have assumed that each will complete a second term in 
office in order to have enough service for benefit eligibility.  If the proposed benefit changes are 
made and either does not win re‐election to a second term, then: 
- For 2020, the Plan would experience an actuarial gain due to elimination of the projected 
liability on behalf of Mr. Russell.  For 2022, the Plan would experience an actuarial gain due 
to elimination of the projected liability on behalf of Mr. Reyes. 
▫ Actuarial experience gains or losses are amortized over 5 years under the current funding 
method.  The experience gains would reduce the City’s contribution for a five‐year 
period, beginning with the first year out of office for each. 
▫ Contributions that were made in anticipation of each becoming eligible for benefits 
would also reduce the City’s required contribution going forward. 
- Although the proposed amendment does not contain specific language, we presume that if 
Commissioner Reyes or Russell were to purchase prior credit but not win a second term in 
office, their service purchase amount would be refunded.  This would reduce the actuarial 
gain noted above.  
 
 This study does not reflect potential cost savings to the City from elimination of eligibility for 
participation in the City’s defined contribution plan for elected officers. 
   
Ms. Erica T. Pascal‐Darling 
City of Miami 
June 25, 2019 
Page 4 
 
 
 The proposed amendment does not spell out the timing for service purchases.  For purposes of 
this study, we have assumed that: 
- The service purchase will be made by way of a single payment and based on current 
compensation. 
- Interest will not be added to the purchase amount (reflecting a worst‐case scenario for the 
City). 
 
 This study reflects the actuarial assumptions used for the January 1, 2018 actuarial valuation.  We 
have recommended that the City reassess its long‐term investment allocation for the EORT.  
Assumption changes that could result from the City’s investment analysis are not reflected here. 
 
Likewise, Section 112.63(f) of the Florida Statutes requires the mortality assumption used for 
funding to mirror the assumption used in the most recent actuarial valuation reports for the 
Florida Retirement System.  Potential changes to that assumption are not reflected here. 
 
 This study presents changes to funding results for the Plan.  Changes to accounting disclosures as 
determined under GASB Statement 68 are not included. 
 
 Census information for the current Commissioners and Mayor was provided by the City.  Copies 
of prior benefit determinations for Commissioners Carollo and Gort were not available at this 
time.  However, we have been able to estimate the prior years of service for each from publicly 
available sources. 
 
 Section 112.63(g)(3) of the Florida Statutes requires the administrator of a local retirement 
system to issue a statement of the actuarial impact of a proposed change in benefits, before such 
change is agreed to by the local government.  This analysis is intended to address that 
requirement.  A copy of such statement is also required to be furnished to the FL Department of 
Management Services, Division of Retirement. 
 
We request that the City’s Legal Department review this provision to ensure compliance. 
 
Actuarial Certification 
 
Cowden Associates has prepared this analysis for the City of Miami for the purpose of providing an 
estimate of the cost to provide benefits under the City of Miami Elected Officers’ Retirement Trust 
(EORT) to current elected officers, in accordance with a proposed plan amendment, as attached.   
 
Census information for the current Commissioners was provided by the City.  Calculations have been 
prepared using the actuarial assumptions, cost methods and assumed benefit provisions as described 
in this correspondence and as referenced in the January 1, 2018 Actuarial Valuation Report for the 
Plan.  That document should be considered as part of the “actuarial report” presenting the results 
contained here.  This analysis should not be used for any other purposes. 
 
I meet the Qualification Standards of the American Academy of Actuaries to render the actuarial 
opinion contained in this report.   
 
Ms. Erica T. Pascal‐Darling 
City of Miami 
June 25, 2019 
Page 5 
 
 
Please contact me for follow‐up discussions or additional information as needed. 
 
Sincerely, 

Robert W. Hazy, EA, FCA, MAAA 
Senior Consultant and Actuary 
412.394.9990   
bobh@cowdenassociates.com 

Copy:   Kevin Jones, Christopher Rose – City of Miami 
  Frank Canonico, Christian Slates – Cowden Associates 
   
Enclosures: 
Results exhibit – four pages 
Proposed amendment – four pages 
 
W:\City of Miami\Actuarial\DB\Studies\Open Plan 2019\EORT Amendment June 2019 Revised.docx 
 City of Miami ‐ Elected Officers Retirement Trust

ADDITION OF ELECTED OFFICERS, IN OFFICE ON OR AFTER OCTOBER 1, 2018
Plan members
New plan members previously receiving benefits
Keon Manolo Ken Francis Joe Willy
Hardemon Reyes Russell Suarez Carollo Gort Total
Basic Information

Election to first term of office Nov. 2013 Nov. 2017 Nov. 2015 Nov. 2009 – –

Return to office, previously 
receiving payment from EORT – – – – Nov. 2017 Jan. 2010

Service required for vesting 6 years 6 years 6 years 6 years 7 years 7 years

End of term following attainment 
of vesting, assuming purchase
of service credit Dec. 2021 Dec. 2025 Dec. 2023 Dec. 2021 Dec. 2021 Dec. 2019

Projected Years of Service:
For period above:
Prior to 10/1/2018 4.833 0.833 2.833 8.833 0.833 8.750
After 10/1/2018 3.167 7.167 5.167 3.167 3.167 1.167
From prior terms in office 0.0 0.0 0.0 0.0 13.000 8.083
Total at end of assumed final term 8.000 8.000 8.000 12.000 17.000 18.000

Current Compensation $     103,455 $       89,857 $     101,915 $     128,478 $     100,700 $     101,857

Age (nearest birthday):
At 1/1/2018  (most recent valuation date) 34 74 45 40 63 77
At end of assumed final term 38 82 50 44 67 79

Please refer to actuarial assumptions, methods and plan provisions as described in accompanying correspondence.

Page 1 of 4 June 25, 2019      
 City of Miami ‐ Elected Officers Retirement Trust

ADDITION OF ELECTED OFFICERS, IN OFFICE ON OR AFTER OCTOBER 1, 2018
Plan members
New plan members previously receiving benefits
Keon Manolo Ken Francis Joe Willy
Hardemon Reyes Russell Suarez Carollo Gort Total
Projected benefit
assuming purchase of service credit
Payment age  60 82 60 55 67 79
Benefit formula percentage
50% for 1st 6 years + 5% for each year Reflects 7‐year vesting
thereafter, limited to 100% 60% 60% 60% 80% 100% 100%
Projected monthly benefit $         5,173 $         4,493 $         5,096 $         8,565 $         8,392 $         8,488
Monthly benefit previously payable                    0                    0                    0                    0           (7,072)           (1,329)
Additional monthly benefit 
resulting from plan amendment $         5,173 $         4,493 $         5,096 $         8,565 $         1,320 $         7,159
Purchase of service credit
Years to be purchased             4.833             0.833             2.833             8.833                 0.0                 0.0
Current Compensation $     103,455 $       89,857 $     101,915 $     128,478 n/a n/a
Purchase amount, at 10% of 
Compensation for each year $       50,000 $         7,485 $       28,873 $     113,485 $                 0 $                 0 $     199,843
Liability for additional benefits
valued as of January 1, 2018
Present value of additional benefit $     407,997 $     294,766 $     590,511 $ 1,084,618 $     186,512 $     666,087 $  3,230,491
Service purchase by member         (50,000)           (7,485)         (28,873)       (113,485)                    0                    0       (199,843)
Net additional present value $     357,997 $     287,281 $     561,638 $     971,133 $     186,512 $     666,087 $  3,030,648
Accrued liability = present value of
benefit reflecting service to date $     206,136 $         3,088 $     152,268 $     814,892 $       18,501 $     666,087 $  1,860,972
Service purchase by member         (50,000)           (7,485)         (28,873)       (113,485)                    0                    0       (199,843)
Net additional accrued liability $     156,136 $        (4,397) $     123,395 $     701,407 $       18,501 $     666,087 $  1,661,129
Normal cost $       50,465 $       36,460 $       73,041 $       67,431 $       59,298 $                 0 $     286,695
Please refer to actuarial assumptions, methods and plan provisions as described in accompanying correspondence.
Page 2 of 4 June 25, 2019      
 City of Miami ‐ Elected Officers Retirement Trust

ADDITION OF ELECTED OFFICERS, IN OFFICE ON OR AFTER OCTOBER 1, 2018
Plan members
New plan members previously receiving benefits
Keon Manolo Ken Francis Joe Willy
Hardemon Reyes Russell Suarez Carollo Gort Total

First year City additional contribution,
with alternative amortization periods

A.  5‐year amortization of accrued liability
Normal cost  $       50,465 $       36,460 $       73,041 $       67,431 $       59,298 $                 0 $     286,695
5‐year amortization of accd. liab.          33,568               (945)          26,529        150,795             3,978        143,202        357,127
Interest at 3.75% to year‐end             3,151             1,332             3,734             8,183             2,373             5,370          24,143
Total $       87,184 $       36,847 $     103,304 $     226,409 $       65,649 $     148,572 $     667,965

B.  10‐year amortization of accrued liability
Normal cost  $       50,465 $       36,460 $       73,041 $       67,431 $       59,298 $                 0 $     286,695
10‐year amortization of accd. liab.          18,324               (516)          14,482          82,317             2,171          78,172        194,950
Interest at 3.75% to year‐end             2,580             1,348             3,282             5,616             2,305             2,931          18,062
Total $       71,369 $       37,292 $       90,805 $     155,364 $       63,774 $       81,103 $     499,707

C.  15‐year amortization of accrued liability
Normal cost  $       50,465 $       36,460 $       73,041 $       67,431 $       59,298 $                 0 $     286,695
15‐year amortization of accd. liab.          13,300               (375)          10,511          59,747             1,576          56,738        141,497
Interest at 3.75% to year‐end             2,391             1,353             3,133             4,769             2,283             2,128          16,057
Total $       66,156 $       37,438 $       86,685 $     131,947 $       63,157 $       58,866 $     444,249

Please refer to actuarial assumptions, methods and plan provisions as described in accompanying correspondence.

Page 3 of 4 June 25, 2019      
 City of Miami ‐ Elected Officers Retirement Trust

ADDITION OF ELECTED OFFICERS, IN OFFICE ON OR AFTER OCTOBER 1, 2018

Effect on January 1, 2018 Valuation
Actuarial Valuation Results Refer to 1/1/2018 Additional Results
report Actuarial Cost for Including
page: Report Plan Change Plan Change
Present value of projected benefits 8 $    8,488,936 $    3,230,491 $  11,719,427
Accrued liability 8        8,488,936        1,860,972     10,349,908
Unfunded accrued liability 9        1,113,697        1,661,129        2,774,826
Normal cost 9               2,400           286,695           289,095
2018 City contribution : 9
A. 5‐year amortization for additional liability $        366,358 $        667,965 $    1,034,323
B. 10‐year amortization for additional liability           366,358           499,707           866,065
C. 15‐year amortization for additional liability           366,358           444,249           810,607

Projected Additional City Contribution
Amortization period for additional liability
Year 5 10 15
1 2018 $        667,965 $        499,707 $        444,249
2 2019           679,000           511,000           455,000
3 2020           691,000           522,000           467,000
4 2021           703,000           534,000           479,000
5 2022           502,000           334,000           278,000
6 2023           137,000           339,000           283,000
7 2024             47,000           249,000           194,000
8 2025             49,000           251,000           196,000
9 2026                       0           202,000           147,000
10 2027                       0           202,000           147,000
11 2028                       0                       0           147,000
Please refer to actuarial 
12 2029                       0                       0           147,000
assumptions, methods 
13 2030                       0                       0           147,000
and plan provisions as 
described in  14 2031                       0                       0           147,000
accompanying  15 2032                       0                       0           147,000
correspondence. 16 2033                       0                       0                       0
Page 4 of 4 June 25, 2019      
 AGENDA ITEM COVER PAGE
File ID: #5939
Ordinance
Sponsored by: Commissioner Keon Hardemon

AN ORDINANCE OF THE MIAMI CITY COMMISSION AMENDING CHAPTER

40/ARTICLE IV/DIVISION 4 OF THE CODE OF THE CITY OF MIAMI, FLORIDA, AS
AMENDED (“CITY CODE”), TITLED "PERSONNEL/PENSION AND RETIREMENT
PLAN/CITY OF MIAMI ELECTED OFFICERS RETIREMENT TRUST;" MORE
PARTICULARLY BY AMENDING SECTION 40-291, TITLED “DEFINITIONS”, AND
SECTION 40-296, TITLED "APPLICABLE BENEFITS"; CONTAINING A
SEVERABILITY CLAUSE; AND PROVIDING FOR AN IMMEDIATE EFFECTIVE DATE.
 City of Miami City Hall
3500 Pan American Drive
Legislation Miami, FL 33133
www.miamigov.com
Resolution
File Number: 5939 Final Action Date:

AN ORDINANCE OF THE MIAMI CITY COMMISSION AMENDING CHAPTER

40/ARTICLE IV/DIVISION 4 OF THE CODE OF THE CITY OF MIAMI, FLORIDA, AS
AMENDED (“CITY CODE”), TITLED "PERSONNEL/PENSION AND RETIREMENT
PLAN/CITY OF MIAMI ELECTED OFFICERS RETIREMENT TRUST;" MORE
PARTICULARLY BY AMENDING SECTION 40-291, TITLED “DEFINITIONS”, AND
SECTION 40-296, TITLED "APPLICABLE BENEFITS"; CONTAINING A
SEVERABILITY CLAUSE; AND PROVIDING FOR AN IMMEDIATE EFFECTIVE DATE.

BE IT ORDAINED BY THE COMMISSION OF THE CITY OF MIAMI, FLORIDA:

Section 1. Chapter 40, Article IV, Division 4 of the Code of the City of Miami, Florida, as
amended, is further amended in the following particulars:1

"CHAPTER 40

PERSONNEL

* * * *

ARTICLE IV. PENSION AND RETIREMENT PLAN

* * * *

DIVISION 4. CITY OF MIAMI ELECTED OFFICERS’ RETIREMENT TRUST

Sec. 40 -291. - Definitions

Unless a different meaning is plainly required by the context, the following words and phrases
as used in this division shall have the following meaning:

* * *

Compensation shall mean salary and emoluments paid to the elected officer; provided, any
back pay award shall be allocated to the period for which the award is applicable.

* * *

1Words and/or figures stricken through shall be deleted. Underscored words and/or figures shall be
added. The remaining provisions are now in effect and remain unchanged. Asterisks indicate omitted and
unchanged material.
Sec. 40-296. Applicable Benefits.
(a) Certain elected officers, who were elected officers for a period of ten (10) years or
more and who no longer serves as elected officers shall be entitled during the
remainder of their natural lives to a sum equal to one-half of their W-2
wagesCompensation for the highest of the last three (3) years of service of their term
of office and a single sum death benefit fully vested at date of death. Upon vesting and
each year thereafter of service as an elected officer, the retirement allowance shall be
five percent (5%) for each year of service to a maximum of 100one hundred percent
(100%) of the highest W-2 wagesCompensation.

(b) Elected officers in office on or after October 1, 2018 shall be eligible for a retirement
benefit as follows:

1. Elected officers who were first elected to office before October 22, 2009, who are in
office on October 1, 2018, and serve as an elected officer for a period of seven (7) or
more years shall be entitled, upon separation from employment and reaching age 55
with ten (10) or more years of service or age 60, to a sum equal to one-half of their
Compensation for the highest of the last three (3) years of service and a single sum
death benefit fully vested at date of death. Upon vesting and each year of service as
an elected officer thereafter, the retirement allowance shall increase by five percent
(5%) for each year of service to a maximum of one hundred percent (100%) of the
highest Compensation. Elected officers who are subject to the provisions of this
paragraph shall continue participating in the City’s defined contribution plan for elected
officers.

2. Elected officers who were first elected to office on or after October 22, 2009, who
are in office on October 1, 2018, and who serve as an elected officer for a period of six
(6) or more years on and after October 1, 2018 shall, upon making an irrevocable
election to participate in the Elected Officers Retirement Trust, be entitled upon
separation from employment and reaching age 55 with ten (10) or more years of
service or age 60, to a sum equal to one-half of their Compensation for the highest of
the last three (3) years of service and a single sum death benefit fully vested at date of
death. Upon vesting and each year of service as an elected officer thereafter, the
retirement allowance shall increase by five percent (5%) for each year of service to a
maximum of one hundred percent (100%) of the highest Compensation. Such elected
officers may purchase service credit under this plan for his or her period of service as
an elected officer prior to October 1, 2018 by paying ten percent of his or her
Compensation, plus three percent (3%) annual interest, for each year of service
purchased. The service credit purchased shall count for all purposes of vesting and
benefits and elected officers who purchase such service credit shall be fully vested
when their total years of service, including purchased service before October 1, 2018,
and service thereafter, equals six (6) or more years. Elected officers who are subject
to the provisions of this paragraph and irrevocably elect to participate in the Elected
Officers Retirement Trust shall thereafter participate in said Trust and not in the City’s
defined contribution plan for elected officers.

3. Elected officers who were first elected to office after October 1, 2018 and who
serve as an elected officer for a period of seven (7) or more years shall be entitled,
upon separation from employment and reaching age 55 with ten (10) or more years of
service or age 60, to a sum equal to one-half of their Compensation for the highest of
the last three (3) years of service and a single sum death benefit fully vested at date of
death. Upon vesting and each year of service as an elected officer thereafter, the
retirement allowance shall increase by five percent (5%) for each year of service to a
maximum of one hundred percent (100%) of the highest Compensation. Elected
officers who are subject to the provisions of this paragraph shall participate in the
 Elected Officers Retirement Trust and shall not be eligible for the City’s defined
contribution plan for elected officers.

or elected from October 1, 2001, until October 22, 2009, who were elected officers for
a period of seven years or more and who no longer serve as elected officers of the City
of Miami shall be entitled, upon reaching age, during the remainder of their natural
lives to a sum equal to one-half of their W-2 wages for the highest of the last three
years of service of their term of office and a single sum death benefit fully vested at
date of death. Upon vesting and each year thereafter of service as an elected officer,
the retirement allowance shall increase by five percent for each year of service to a
maximum of 100 percent of the highest W-2 wages.

(c) Any person elected to the office of mayor or commissioner after October 22, 2009,
shall not be eligible to receive the benefits outlined herein; except those elected
officers currently holding office who have not vested, but who serve for seven years or
more in the office they currently hold, irrespective of whether they served successive
terms.

* * * *”

Section 2. If any section, part of a section, paragraph, clause, phrase, or word of this
Ordinance is declared invalid, the remaining provisions of this Ordinance shall not be affected.

Section 3. This Ordinance shall become effective immediately upon its adoption and
signature of the Mayor.2

APPROVED AS TO FORM AND CORRECTNESS:

2This Ordinance shall become effective as specified herein unless vetoed by the Mayor within ten (10)
days from the date it was passed and adopted. If the Mayor vetoes this Ordinance, it shall become
effective immediately upon override of the veto by the City Commission or upon the effective date stated
herein, whichever is later.