Finance Commission

Agenda Village of Glen Ellyn Finance Commission Meeting Friday, February 13, 2026 7:00 AM Glen Ellyn Civic Center, Room 301 Visitors are most welcome to attend all meetings of the Finance Commission and can find copies of the Agenda at the meeting or online at www.glenellyn.org prior to the meeting. Any individual with a disability requiring reasonable accommodation in order to participate in a meeting should contact The Village of Glen Ellyn ADA Coordinator, 630-469-5000, at least five (5) business days in advance of the next scheduled meeting. All matters on the Agenda may be discussed, amended, and acted upon. A. Call to Order B. Roll Call C. Public Comment D. Approval of Minutes 1) December 12, 2025 meeting E. Financial Reports 1) Q4 2025 Financial Report F. Police Pension Funding Policy 1) Police Pension Funding Policy G. Staff Report H. Chairperson's Report I. Trustee Liaison's Report J. Other Business Civility Pledge - In the interest of civility, I pledge to promote civility by listening, being respectful of others, acknowledging that we are striving to support and improve our community, and understanding that we each may have different ideas for achieving that objective. Page 1 of 26 Finance Commission Agenda February 13, 2026 Page 2 K. Reminders L. Adjourn Village of Glen Ellyn Page 2 of 26 Village of Glen Ellyn Minutes Village of Glen Ellyn Finance Commission Regular Meeting December 12, 2025 7:00AM Glen Ellyn Civic Center Board or Finance Date: December 12, 2025 Commission: Meeting: Regular Called to 7:00 a.m. Order: Quorum: Yes Adjourned: 7:45 a.m. MEMBER ATTENDANCE: Chris Goodman Chair Present Lea Dan Vice-Chair Present Anne Arnold Commissioner Present Mike Graham Commissioner Present Leo Hoerdemann Commissioner Absent Grant Lavery Commissioner Present Kevin Moffitt Commissioner Present Brian Niksa Commissioner Present Scott Waldbusser Commissioner Absent Also Present: Patrick Brankin Finance Director Kelli Christiansen Village Trustee Elisa Pollina Recording Secretary A. CALL TO ORDER The December 12, 2025 regular meeting of the Finance Commission was called to order by Chairman Goodman at 7:00 AM at the Glen Ellyn Civic Center. B. PUBLIC COMMENT – None C. APPROVAL OF MINUTES FROM NOVEMBER 14, 2025 MEETING MOVE TO APPROVE THE MINUTES OF FINANCE COMMISSION FROM 11/14/2025 RESULT: Motion Unanimously Carried MOVER: Commissioner Moffitt SECONDER: Commissioner Dan AYES: 7 Page 3 of 26  Finance 2 December 12, 2025 D. 2026 AGENDA PLANNING 1. 2026 Agenda Planning – Chairman Goodman reported that he met with Village Manager Franz and Finance Director Brankin to discuss items for the Commission’s 2026 agenda. Topics identified include completing the scorecard and taking a deeper review of facilities needs as they relate to Village finances. Commissioner Moffitt asked for clarification on what “facilities’ needs” would encompass. Chairman Goodman explained that this includes items such as lead service line replacements, fire stations and the Public Works facility, which is nearing obsolescence. Trustee Christiansen added that with respect to fire stations, additional considerations include where a station would be located if an existing facility is demolished and how fire services would be temporarily relocated. She also noted the ongoing need for fire stations on both the north and south sides of the railroad tracks, as fire service areas extend beyond Geneva Road. Finance Director Brankin stated that construction on a fire station would not begin in 2026 and that the Village is already generating revenues to be used for this purpose. Chairman Goodman emphasized that the Public Works facility is a high priority due to its small size and deteriorated condition. Commissioner Niksa asked whether the Village has identified facility needs that must be addressed within the next ten years. Trustee Christiansen responded that while there have been general discussions, the Village Board will be holding a strategic planning session to establish priorities. Commissioner Niksa stated a preference for receiving direction from the Board to help shape the Commission’s agenda. Finance Director Brankin noted that expenditures related to lead service line replacement are funded for 2025 and 2026. He added that the final inventory is due in 2026, at which point water fees can be reevaluated. Trustee Christiansen added that the number of lead service lines continues to decrease, which is encouraging, and that replacements will be coordinated with street repair projects. Brankin also mentioned that police pension assumptions will be another topic of discussion in 2026. Chairman Goodman concluded by summarizing the proposed 2026 agenda items, which include the scorecard, facilities’ needs, fire stations, fees, and police pension assumptions, in addition to the Commission’s regular items such as quarterly financial reports. He noted that a calendar will be developed for the upcoming year. E. STAFF REPORT – Finance Director Brankin provided a staff report, stating that there will be no meeting in January, with the next meeting scheduled for February 13, 2026. He also reported that the Finance Department is in the process of hiring a part-time accountant and has identified a strong candidate. In addition, the department is seeking to fill a staff accountant position. Page 4 of 26  Finance 3 December 12, 2025 F. CHAIRPERSON’S REPORT – Chairman Goodman thanked the Commission for their work over the past year. G. TRUSTEE LIAISON’S REPORT – Trustee Christiansen provided several updates. She reported that demolition at the hotel site is ongoing. She also noted that the Village Board approved the Historic Preservation Commission’s incentive pilot program. In addition, the Board granted several variances at Monday’s meeting. H. OTHER BUSINESS – None I. REMINDERS – Next meeting, Friday, February 13, 2026 at 7:00 a.m. J. ADJOURNMENT– Commissioner Niksa motioned to adjourn the meeting and Commissioner Dan seconded the motion. The meeting was adjourned at 7:45 a.m. Submitted by Elisa Pollina, Recording Secretary Reviewed by Patrick Brankin, Finance Director Page 5 of 26  Glen Ellyn Finance Commission Meeting 2/13/2026 7:00 AM 535 Duane Street Department: Finance Glen Ellyn, IL 60137 Department Head: Category: Report Prepared By: AGENDA ITEM (ID # 2026-118) DOC ID: 2026-118 Q4 2025 Financial Report Statement of the Issue: Analysis: Budget Impact: Contribution to Strategic Plan Action Requested: Attachments: Page 6 of 26 Glen Ellyn Police Pension Fund Cost Impact of Interest Rate Changes Baseline: Scenario 1: Scenario 2: 6.5% Interest 6.75% Interest 7.00% Interest Plan Funding Impact Funded Status Total Actuarial Accrued Liability (AL) $68,296,635 $66,043,813 $63,907,632 Actuarial Value of Assets (AVA) 42,052,296 42,052,296 42,052,296 Unfunded Actuarial Accrued Liability (UAAL) 26,244,339 23,991,517 21,855,336 Funded Ratio (AVA / AL) 61.6% 63.7% 65.8% Change from Baseline 2.1% 4.2% Actuarial Recommended Contribution Normal Cost $1,301,002 $1,217,811 $1,140,960 Administrative Expenses 66,212 66,368 66,523 Payment Required to Amortize UAAL 2,181,669 2,031,297 1,884,374 Total Recommended Contribution 3,548,883 3,315,476 3,091,857 Expected Member Contributions (526,883) (526,883) (526,883) Expected Village Contribution 3,022,000 2,788,593 2,564,974 Change from Baseline (233,407) (457,026) Accounting Impact Net Pension Liability Total Pension Liability (TPL) $67,703,303 $65,476,225 $63,362,894 Plan Fiduciary Net Position 41,484,269 41,484,269 41,484,269 Net Pension Liability (NPL) 26,219,034 23,991,956 21,878,625 Funded Ratio (AVA / AL) 61.3% 63.4% 65.5% Change from Baseline 2.1% 4.2% Assumptions and Methods Interest Rate 6.50% 6.75% 7.00% Funded Target 100% 100% 100% Amortization Years 1 16 16 16 Payroll Growth Assumption 3.25% 3.25% 3.25% Cost Method EAN EAN EAN Valuation Date 1/1/2025 1/1/2025 1/1/2025 Applicable to Fiscal Year Ending 12/31/2026 12/31/2026 12/31/2026 Page 7 of 26  Village of Glen Ellyn Police Pension Fund GASB Disclosure Information Statements 67/68 Measurement Date: December 31, 2024 GASB 68 Expense Reporting Date: December 31, 2024 Page 8 of 26 April 28, 2025 Patrick Brankin, CPA Village of Glen Ellyn Police Pension Fund Re: GASB Statements 67/68 – Village of Glen Ellyn Police Pension Fund Dear Mr. Brankin, We are pleased to present this report of the GASB Statements 67/68 measured as of December 31, 2024. GASB 68 Expense is determined for the reporting period ending December 31, 2024. The calculation of the liability associated with the benefits referenced in this report was performed to satisfy the requirements of GASB 67/68 and is not applicable for other purposes, such as determining the plan’s funding requirements. Use of the results for other purposes may not be applicable and may produce significantly different results. The total pension liability, net pension liability, and certain sensitivity information shown in this report are based on an actuarial valuation performed as of January 1, 2025. It is our opinion that the assumptions used for this purpose are internally consistent, reasonable, and comply with the requirements under GASB 67/68. DATA AND ASSUMPTIONS In conducting the valuation, we have relied on personnel, plan design, and asset information supplied by the Village. While we cannot verify the accuracy of all this information, the supplied information was reviewed for consistency and reasonableness. As a result of this review, we have no reason to doubt the substantial accuracy of the information and believe that it has produced appropriate results. This information, along with any adjustments or modifications, is summarized in various sections of this report. The actuarial assumptions and methods are described in the Assumptions section of this report. DISCLOSURES AND LIMITATIONS Future actuarial measurements may differ significantly from the current measurements presented in this report due to factors such as the following: plan experience differing from that anticipated by the economic or demographic assumptions; changes in economic or demographic assumptions; increases or decreases expected as part of the natural operation of the methodology used for these measurements (such as the end of an amortization period); and changes in plan provisions or applicable law. Due to the limited scope of this report, we did not provide an analysis of these potential differences. 2 Page 9 of 26 In performing the analysis, we used third-party software to model (calculate) the underlying liabilities and costs. These results are reviewed in the aggregate and for individual sample lives. The output from the software is either used directly or input into internally developed models to generate the costs. All internally developed models are reviewed as part of the process. As a result of this review, we believe that the models have produced reasonable results. We do not believe there are any material inconsistencies among assumptions or unreasonable output produced due to the aggregation of assumptions. ACTUARIAL CERTIFICATION The valuation has been conducted in accordance with all applicable laws and regulations, as well as generally accepted actuarial principles and practices, including the applicable Actuarial Standards of Practice as issued by the Actuarial Standards Board. The undersigned are familiar with the immediate and long-term aspects of pension valuations and meet the Qualification Standards of the American Academy of Actuaries necessary to render the actuarial opinions contained herein. All of the sections of this report are considered an integral part of the actuarial opinions. To our knowledge, no associate of Foster & Foster, Inc. working on this report has any direct financial interest or indirect material interest in Village of Glen Ellyn Police Pension Fund, nor does anyone at Foster & Foster, Inc. act as a member of the Board of Trustees of the Village of Glen Ellyn Police Pension Fund. Thus, there is no relationship existing that might affect our capacity to prepare and certify this actuarial report. Respectfully submitted, Foster & Foster, Inc. ________________________________ ________________________________ Jason L. Franken, FSA, EA, MAAA Heidi Andorfer, FSA, EA, MAAA 3 Page 10 of 26 Village of Glen Ellyn Police Pension Fund GASB Disclosure Information TABLE OF CONTENTS SUMMARY................................................................................................................................5 Schedule of Changes in Net Pension Liability ............................................................................... 6 Sensitivity to Changes in Discount Rate ....................................................................................... 7 Pension Expense Year-End December 31, 2024 ........................................................................... 8 Pension Deferred Outflows/Inflows - Year-End December 31, 2024 ........................................... 9 SUPPLEMENTARY GASB 68 EXPENSE DETAIL .................................................................................. 10 ADDITIONAL EXHIBITS ............................................................................................................... 13 Schedule of Contributions ..........................................................................................................13 ASSUMPTIONS......................................................................................................................... 14 SUMMARY OF CURRENT PLAN ..................................................................................................... 16 4 Page 11 of 26 Village of Glen Ellyn Police Pension Fund GASB Disclosure Information SUMMARY Valuation Date 01/01/2025 01/01/2024 GASB 67/68 Measurement Date 12/31/2024 12/31/2023 GASB 68 Reporting Date 12/31/2024 12/31/2023 PLAN MEMBERSHIP Inactives Currently Receiving Benefits 38 38 Inactives Not Yet Receiving Benefits 11 13 Active Plan Members 45 43 Total 94 94 Covered Payroll $ 4,995,590 $ 4,493,047 NET PENSION LIABILITY/(ASSET) Total Pension Liability $ 67,703,303 $ 64,998,211 Plan Fiduciary Net Position 41,484,269 38,269,224 Net Pension Liability/(Asset) $ 26,219,034 $ 26,728,987 Plan Fiduciary Net Position As a % of Total Pension Liability 61.27% 58.88% Net Pension Liability/(Asset) As a % of Covered Payroll 524.84% 594.90% Total Pension Expense/(Income) $ 3,477,129 $ 2,953,933 Development of Single Discount Rate Single Discount Rate 6.50% 6.50% Long-Term Expected Rate of Return 6.50% 6.50% High-quality Municipal Bond Rate 4.28% 4.00% Number of Years Future Benefit Payments Are Expected to be Paid All Years All Years 5 Page 12 of 26 Village of Glen Ellyn Police Pension Fund GASB Disclosure Information SCHEDULE OF CHANGES IN NET PENSION LIABILITY GASB 67/68 Measurement Date 12/31/2024 12/31/2023 GASB 68 Reporting Period Ending 12/31/2024 12/31/2023 TOTAL PENSION LIABILITY Service Cost 1,130,581 1,019,899 Interest 4,198,488 3,785,354 Changes in Benefit Terms 0 0 Experience Gains/Losses 385,631 4,286,273 Changes of Assumptions 0 0 Contributions – Buy Back 63,745 117,266 Benefit Payments (3,073,353) (2,853,792) Net Change in Total Pension Liability 2,705,092 6,355,000 Total Pension Liability – Beginning 64,998,211 58,643,211 Total Pension Liability – Ending (a) $ 67,703,303 $ 64,998,211 PLAN FIDUCIARY NET POSITION Contributions – Employer 2,152,200 2,082,300 Contributions – Employee 495,063 445,261 Contributions – Buy Back 63,745 117,266 Net Investment Income 3,639,561 4,556,704 Benefit Payments (3,073,353) (2,853,792) Administrative Expense (62,171) (68,181) Other 0 0 Net Change in Plan Fiduciary Net Position 3,215,045 4,279,558 Plan Fiduciary Net Position – Beginning 38,269,224 33,989,666 Adjustment to beginning of year 0 0 Plan Fiduciary Net Position – Ending (b) $ 41,484,269 $ 38,269,224 Net Pension Liability – Ending (a) – (b) $ 26,219,034 $ 26,728,987 Plan Fiduciary Net Position As % of Total Pension Liability 61.27% 58.88% Covered Payroll $ 4,995,590 $ 4,493,047 Net Pension Liability As % of Covered Payroll 524.84% 594.90% 6 Page 13 of 26 Village of Glen Ellyn Police Pension Fund GASB Disclosure Information SENSITIVITY TO CHANGES IN DISCOUNT RATE GASB 67/68 Measurement Date 12/31/2024 12/31/2023 GASB 68 Reporting Date 12/31/2024 12/31/2023 Discount Rate 6.50% 6.50% + 1% Discount Rate 7.50% 7.50% - 1% Discount Rate 5.50% 5.50% Sponsor's Net Pension Liability Current Discount Rate $ 26,219,034 $ 26,728,987 1% Increase in Discount Rate 17,997,202 18,796,728 1% Decrease in Discount Rate 36,388,493 36,554,107 7 Page 14 of 26 Village of Glen Ellyn Police Pension Fund GASB Disclosure Information PENSION EXPENSE YEAR-END DECEMBER 31, 2024 For the year ended December 31, 2024, the Sponsor will recognize a Pension Expense/(Income) of $3,477,129. Below is a summary of the components of the Pension Expense. Fiscal Year End 12/31/2024 Beginning of Measurement Period 01/01/2024 End of Measurement Period 12/31/2024 Service Cost $ 1,130,581 Interest on Total Pension Liability 4,198,488 Changes in Benefit Terms 0 Contributions – Employee (495,063) Projected Earnings on Investments (2,473,703) Administrative Expenses 62,171 Recognition of deferred outflows/(inflows) Experience Gains/Losses 712,576 Assumption Changes 100,836 Investment Returns 241,243 Total Pension Expense $ 3,477,129 8 Page 15 of 26 Village of Glen Ellyn Police Pension Fund GASB Disclosure Information PENSION DEFERRED OUTFLOWS/INFLOWS - YEAR-END DECEMBER 31, 2024 On December 31, 2024, the Sponsor will report deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Differences between actual and expected experience 3,970,901 606,017 Changes of assumptions 0 123,342 Net difference between projected and actual earnings on pension plan investments 249,451 0 Total $ 4,220,352 $ 729,359 Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year-ended December 31: 2025 $ 949,566 2026 1,471,271 2027 14,086 2028 333,565 2029 667,415 Thereafter 55,090 9 Page 16 of 26 Village of Glen Ellyn Police Pension Fund GASB Disclosure Information SUPPLEMENTARY GASB 68 EXPENSE DETAIL AMORTIZATION SCHEDULE – EXPERIENCE Initial Recognition Year Base Period 2024 2025 2026 2027 2028 Thereafter 2024 $ 385,631 7 $ 55,091 $ 55,090 $ 55,090 $ 55,090 $ 55,090 $ 110,180 2023 4,286,273 7 612,325 612,325 612,325 612,325 612,325 612,325 2022 (704,748) 7 (100,678) (100,678) (100,678) (100,678) (100,678) 0 2021 1,350,386 7 192,912 192,912 192,912 192,912 0 0 2020 (1,219,830) 6 (203,305) (203,305) 0 0 0 0 2019 367,487 6 61,248 0 0 0 0 0 2018 664,880 7 94,983 0 0 0 0 0 Net Increase/(Decrease) in Pension Expense $ 712,576 $ 556,344 $ 759,649 $ 759,649 $ 566,737 $ 722,505 10 Page 17 of 26 Village of Glen Ellyn Police Pension Fund GASB Disclosure Information AMORTIZATION SCHEDULE – CHANGES OF ASSUMPTIONS Initial Recognition Year Base Period 2024 2025 2026 2027 2028 Thereafter 2021 $ (287,796) 7 $ (41,114) $ (41,114) $ (41,114) $ (41,114) $ 0 $ 0 2018 993,650 7 141,950 0 0 0 0 0 Net Increase/(Decrease) in Pension Expense $ 100,836 $ (41,114) $ (41,114) $ (41,114) $ 0 $ 0 11 Page 18 of 26 Village of Glen Ellyn Police Pension Fund GASB Disclosure Information AMORTIZATION SCHEDULE – INVESTMENTS Initial Recognition Year Base Period 2024 2025 2026 2027 2028 Thereafter 2024 $ (1,165,858) 5 $ (233,170) $ (233,172) $ (233,172) $ (233,172) $ (233,172) $ 0 2023 (2,356,383) 5 (471,277) (471,277) (471,277) (471,277) 0 0 2022 7,285,922 5 1,457,185 1,457,185 1,457,185 0 0 0 2021 (1,592,002) 5 (318,400) (318,400) 0 0 0 0 2020 (965,475) 5 (193,095) 0 0 0 0 0 Net Increase/(Decrease) in Pension Expense $ 241,243 $ 434,336 $ 752,736 $ (704,449) $ (233,172) $ 0 12 Page 19 of 26 Village of Glen Ellyn Police Pension Fund GASB Disclosure Information ADDITIONAL EXHIBITS SCHEDULE OF CONTRIBUTIONS Contributions in Relation to Contrib. Actuarially the Actuarially Contribution as % of Plan Year Determined Determined Deficiency Covered Covered Ended Contribution Contributions (Excess) Payroll Payroll 12/31/2024 $ 2,152,136 $ 2,152,200 $ (64) $ 4,995,590 43.08% 12/31/2023 $ 2,082,272 $ 2,082,300 $ (28) $ 4,493,047 46.34% The following assumptions were used to determine the Actuarially Determined Contribution for the plan year ended December 31, 2024: Calculation Timing The Actuarially Determined Contribution is calculated using a January 1, 2023 valuation date. Interest Rate 6.50% Assumptions All other assumptions and methods used for determining the Actuarially Determined Contribution can be found in the January 1, 2023 Actuarial Valuation Report for the Village of Glen Ellyn Police Pension Fund prepared by Foster & Foster Actuaries and Consultants. 13 Page 20 of 26 Village of Glen Ellyn Police Pension Fund GASB Disclosure Information ASSUMPTIONS Valuation Date January 1, 2025 GASB 67/68 Measurement Date December 31, 2024 GASB 68 Reporting Date December 31, 2024 Discount Rate 6.50% Long-Term Rate of Return 6.50% Cost Method Entry Age Normal Latest Experience Study Date 2022 Mortality Active Lives: PubS-2010 Employee mortality, unadjusted, with generational improvements with most recent projection scale (currently Scale MP-2021). 10% of active deaths are assumed to be in the line of duty. Inactive Lives: PubS-2010 Healthy Retiree mortality, adjusted by a factor of 1.15 for male retirees and unadjusted for female retirees, with generational improvements with most recent projection scale (currently Scale MP-2021). Beneficiaries: PubS-2010 Survivor mortality, unadjusted for male beneficiaries and adjusted by a factor of 1.15 for female beneficiaries, with generational improvements with most recent projection scale (currently Scale MP-2021). Disabled Lives: PubS-2010 Disabled mortality, adjusted by a factor of 1.08 for male disabled members and unadjusted for female disabled members, with generational improvements with most recent projection scale (currently Scale MP-2021). Salary Scale Service-based rates Inflation 2.50% A summary of other assumptions reflected in the valuation can be found in the January 1, 2025 Actuarial Valuation Report for the Village of Glen Ellyn Police Pension Fund prepared by Foster & Foster Actuaries and Consultants. 14 Page 21 of 26 Village of Glen Ellyn Police Pension Fund GASB Disclosure Information CHANGES IN ASSUMPTIONS Total Pension Liability as of the December 31, 2024 measurement date reflects no assumption changes. DEVELOPMENT OF THE DISCOUNT RATE The projection of cash flows used to determine the Discount Rate assumed that current Plan Member contributions will be made at the current contribution rate and that Sponsor contributions will be made at rates equal to the difference between actuarially determined contribution rates and the Member rate. Based on those assumptions, the Pension Plan's Fiduciary Net Position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the Long-Term Expected Rate of Return on Pension Plan investments (6.50 percent) was applied to all periods of projected benefit payments to determine the Total Pension Liability. No projected benefit payments were discounted using a high-quality municipal bond rate of 4.28 percent. The high-quality municipal bond rate was based on the daily rate closest to, but not later than the measurement date of the S&P Municipal Bond 20-Year High Grade Rate Index. The single equivalent Discount Rate was 6.50 percent. 15 Page 22 of 26 Village of Glen Ellyn Police Pension Fund GASB Disclosure Information SUMMARY OF CURRENT PLAN PLAN DESCRIPTION The Plan is a single employer defined benefit pension plan administered by a Board of Trustees comprised of: a.) Two members appointed by the Municipality, b.) Two active members of the Police Department elected by the Membership. c.) One retired member of the Police Department elected by the Membership. BENEFITS PROVIDED The Plan provides retirement, termination, disability and death benefits. A summary of the benefit provisions can be found in the Actuarial Valuation as of January 1, 2025 for the Village of Glen Ellyn Police Pension Fund prepared by Foster & Foster Actuaries and Consultants. BENEFIT CHANGES No benefit changes have been reflected since the prior year. 16 Page 23 of 26  VILLAGE OF GLEN ELLYN POLICE PENSION FUNDING POLICY Updated by the Village Board on 11-28-2022 1.0 Applicability This policy applies to the calculation of the Village of Glen Ellyn’s “annual required contribution” (ARC) to the Glen Ellyn Police Pension Fund, a police pension trust fund organized under Article III of the Illinois Pension Code. 2.0 Background The financial objective of a defined benefit pension plan is to fund the long-term cost of benefits provided to the plan participants. In order to assure that the plan is financially sustainable, the plan should accumulate adequate resources in a systematic and disciplined manner over the active service life of benefitting employees. This funding policy outlines the method the Village will utilize to determine its actuarially determined contribution to the Glen Ellyn Police Pension Fund to fund the long-term cost of benefits to the plan participants and annuitants. The Village believes that this funding policy meets the guidelines for state and local governments set by the Pension Funding Task Force convened by the Center for State and Local Government Excellence. The guidelines set by this task force outline the following objectives for pension funding policy: • Actuarially Determined Contributions. A pension funding plan should be based upon an actuarially determined annual required contribution (ARC) that incorporates both the cost of benefits in the current year and the amortization of the plan’s unfunded actuarial accrued liability. • Funding Discipline. A commitment to make timely, actuarially determined contributions to the retirement system is needed to ensure that sufficient assets are available for all current and future retirees. • Intergenerational equity. Annual contributions should be reasonably related to the expected and actual cost of each year of service so that the cost of employee benefits is paid by the generation of taxpayers who receives services from those employees. • Contributions as a stable percentage of payroll. Contributions should be managed so that employer costs remain consistent as a percentage of payroll over time. • Accountability and transparency. Clear reporting of pension funding should include an assessment of whether, how, and when the plan sponsor will ensure sufficient assets are available for all current and future retirees. Page 1 Page 24 of 26 3.0 Policy 3.1 Village Annual Required Contribution (ARC) The Village will determine its ARC to the Glen Ellyn Police Pension Fund using the following principles: a. The ARC will be calculated by an enrolled actuary. b. The ARC will include the normal cost for current service and amortization to collect or refund any under- or over-funded amount. c. The normal cost will be calculated using the entry age normal level of percentage of payroll actuarial cost method using the following assumptions: i. The investment rate of return assumption will be 6.50%. ii. Other factors, such as salary increases, payroll growth, rates of separation, disability, retirement, mortality, etc., shall be determined by Village management in consultation with the actuary to reflect current experience. d. The Village will transition to a 15-year open amortization period beginning in 2022. The transition will be in one-year increments with a target completion date of 2027. e. Actuarial assets will be set to market value as of the January 1, 2022 valuation. Thereafter, the assets will be determined using a smoothing method to reduce the effects of market volatility on the Village’s contributions. A 5‐year smoothed market value method will be used to recognize variances from actuarial assumptions compared to actual market returns. 3.2 Transparency and Reporting Funding of the Glen Ellyn Police Pension Fund should be transparent to vested parties including plan participants, annuitants, the Glen Ellyn Police Pension Fund Board of Trustees, the Village Board, and Glen Ellyn residents. In order to achieve this transparency, the following information shall be distributed: a. A copy of the annual actuarial valuation for the Glen Ellyn Police Pension Fund shall be made available to the Village Board and the Glen Ellyn Police Pension Fund Board of Trustees. b. The Village’s Annual Comprehensive Financial Report shall be published on its website. This report includes information on the Village’s annual contribution to the Glen Ellyn Police Pension Fund, and funded status of the Glen Ellyn Police Pension Fund. c. Each year, the Village Board shall approve the Village’s annual contribution to the Glen Ellyn Police Pension Fund. d. The Village’s annual operating budget shall include the Village’s contribution to the Glen Ellyn Police Pension Fund as well as a budget for the Glen Ellyn Police Pension Fund. The budget for the Glen Ellyn Police Pension Fund is controlled by the Glen Ellyn Police Pension Fund Board of Trustees, in accordance with state law. The budget document Page 2 Page 25 of 26  shall be published on the Village website and made available for public inspection at the Civic Center and Glen Ellyn Public Library. 3.3 Review of Funding Policy Funding a defined benefit pension plan requires a long-term horizon. Assumptions and inputs into the policy should focus on long-term trends, not year-to-year shifts in the economic or non- economic environments. Generally, assumptions or inputs should be evaluated and changed if long-term economic or noneconomic inputs have fundamentally changed or are no longer reasonable. As such, the Village will review this policy at least every five years to determine if changes to this policy are needed to ensure adequate resources are being accumulated in the Glen Ellyn Police Pension Fund. The Village reserves the right to make changes to this policy at any time if it is deemed appropriate. Page 3 Page 26 of 26