Fort Walton Beach — Annual Comprehensive Financial Report, September 30, 2023 — reading text

151,799 147,074 132,013 113,192 112,112 104,557 102,214 101,886 96,591 Net investment income (3,684,483) 4,499,980 2,166,715 1,085,486 1,609,609 2,036,244 1,698,093 (538,198) 1,869,244 Benefit payments, including refunds of employee contributions (1,978,930) (1,900,983) (1,868,482) (1,851,074) (1,764,575) (1,821,727) (1,744,710) (1,655,069) (1,632,053) Administrative expenses (63,679) (52,862) (57,304) (64,930) (54,400) (39,184) (44,882) (25,084) (38,242) Net change in plan fiduciary net position (4,024,313) 4,149,242 1,397,361 236,502 935,827 1,039,504 769,582 (1,312,465) 1,307,296 Plan fiduciary net position – beginning 27,679,005 23,529,763 22,132,402 21,895,900 20,960,073 19,920,569 19,150,987 20,463,452 19,156,156 Plan fiduciary net position – ending (b) 23,654,692 27,679,005 23,529,763 22,132,402 21,895,900 20,960,073 19,920,569 19,150,987 20,463,452 Net pension liability – ending (a) – (b) $ 9,194,055 $ 4,432,024 $ 6,480,739 $ 5,966,891 $ 4,785,009 $ 6,041,930 $ 6,818,599 $ 5,831,737 $ 4,544,950 Plan fiduciary net position as a percentage of the total pension liability 72.01% 86.20% 78.41% 78.76% 82.07% 77.62% 74.50% 76.66% 81.83% Covered payroll $ 3,035,976 $ 2,941,480 $ 2,640,254 $ 2,263,844 $ 2,242,245 $ 2,091,146 $ 2,073,208 $ 2,037,716 $ 1,975,478 Net pension liability as a percentage of covered payroll 302.84% 150.67% 245.46% 263.57% 213.40% 288.93% 328.89% 286.19% 230.07% See notes to schedule on the next page. 89  CITY OF FORT WALTON BEACH, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS (UNAUDITED) – CONTINUED POLICE OFFICERS’ RETIREMENT FUND Notes: 1 Adjusted for actual contributions made. 2 As a result of Chapter 2015-157, Laws of Florida, the assumed rates of mortality were changed to the assumptions used by the Florida Retirement System in its July 1, 2019, actuarial valuation for special risk lives, with appropriate risk and collar adjustments made based on plan demographics. For the 2021 reporting date, changes of assumptions resulted from the changes in benefit terms discussed below; the retirement assumptions were updated to assume 25% probability of retirement between ages 52-54 with less than 25 year of service, as well as 50% probability of retirement upon completion of 25 years of service, and a 100% probability of retirement upon completion of 26 or more years of service. The investment rate of return assumption was lowered from 7.40% to 7.20% for the 2021 reporting date. The investment rate of return assumption was lowered from 7.20% to 7.00% for the 2022 reporting date. 3 For the 2021 reporting date, the plan was amended by Ordinance 2025 to provide the following benefit changes: 1) requirements for normal retirement eligibility to be the earlier of age 52 and 10 years of service or 25 years of service (regardless of age); 2) reduces the early retirement reduction from 6.00% to 3.00% per year for each year prior to normal retirement; and 3) increases the maximum benefit accrual rate from 2.75% to 3.00% of average final compensation per year for each year of service, up to a maximum of 75% of average final compensation. * This schedule is intended to show information for ten years. Additional years will be displayed as they become available. 90  CITY OF FORT WALTON BEACH, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS (UNAUDITED) FIREFIGHTERS’ RETIREMENT FUND Reporting Date * 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 Total Pension Liability Service cost $ 768,244 $ 645,171 $ 546,149 $ 513,466 $ 477,930 $ 494,032 $ 453,506 $ 478,365 $ 414,836 $ 384,107 Interest 2,229,203 2,115,954 2,063,083 1,978,589 1,864,720 1,830,663 1,645,954 1,554,072 1,425,875 1,367,809 Change in excess state money - - - - - - - - 89,886 2 Changes of benefit terms - - - (2,402) - - - 804,097 - - Differences between expected and actual experiences 790,469 397,047 231,328 98,199 513,043 (199,349) 261,007 (224,382) - - Contributions – buy back 22,695 - - - - 32,155 - 72,413 - - 1 Changes of assumptions 103,378 760,987 66,865 655,972 601,424 258,300 1,243,794 - - - Benefit payments, including refunds of employee contributions (1,633,458) (1,536,000) (1,459,394) (1,407,554) (1,318,156) (1,434,474) (1,237,389) (1,140,432) (1,071,302) (1,042,333) Net change in total pension liability 2,280,531 2,383,159 1,448,031 1,836,270 2,138,961 981,327 2,366,872 1,544,133 859,295 709,583 Total pension liability – beginning 31,894,238 29,511,079 28,063,048 26,226,778 24,087,817 23,106,490 20,739,618 19,195,485 18,336,190 17,626,607 Total pension liability – ending (a) 34,174,769 31,894,238 29,511,079 28,063,048 26,226,778 24,087,817 23,106,490 20,739,618 19,195,485 18,336,190 Plan Fiduciary Net Position Contributions – employer $ 1,390,710 $ 1,390,526 $ 1,231,466 $ 1,016,560 $ 1,089,746 $ 794,144 $ 744,019 $ 672,369 $ 715,439 $ 703,618 Contributions – state 256,006 235,435 209,723 219,901 195,017 204,568 201,904 205,007 214,272 204,226 Contributions – member 233,380 226,099 204,865 189,154 182,127 173,480 164,876 150,357 135,622 133,633 Contributions – buy back 22,695 - - - - 32,155 - 72,413 - - Net investment income (3,520,580) 3,874,693 1,922,011 564,309 1,430,717 1,401,324 969,107 15,563 1,201,162 1,099,298 Benefit payments, including refunds of employee contributions (1,633,458) (1,536,000) (1,459,394) (1,407,554) (1,318,156) (1,434,474) (1,237,389) (1,140,432) (1,071,302) (1,042,333) Administrative expenses (64,300) (44,086) (55,253) (66,388) (67,773) (28,449) (43,625) (47,088) (34,537) (33,706) Net change in plan fiduciary net position (3,315,547) 4,146,667 2,053,418 515,982 1,511,678 1,142,748 798,892 (71,811) 1,160,656 1,064,736 Plan fiduciary net position – beginning 23,759,893 19,613,226 17,559,808 17,043,826 15,532,148 14,389,400 13,590,508 13,662,319 12,501,663 11,436,927 Plan fiduciary net position – ending (b) 20,444,346 23,759,893 19,613,226 17,559,808 17,043,826 15,532,148 14,389,400 13,590,508 13,662,319 12,501,663 Net pension liability – ending (a) – (b) $ 13,730,423 $ 8,134,345 $ 9,897,853 $ 10,503,240 $ 9,182,952 $ 8,555,669 $ 8,717,090 $ 7,149,110 $ 5,533,166 $ 5,834,527 Plan fiduciary net position as a percentage of the total pension liability 59.82% 74.50% 66.46% 62.57% 64.99% 64.48% 62.27% 65.53% 71.17% 68.18% Covered payroll $ 2,917,251 $ 2,826,544 $ 2,560,508 $ 2,364,429 $ 2,276,592 $ 2,168,503 $ 2,060,954 $ 2,072,260 $ 2,054,879 $ 2,054,879 Net pension liability as a percentage of covered payroll 470.66% 287.78% 386.56% 444.22% 403.36% 394.54% 422.96% 344.99% 269.27% 283.94% Notes: 1 The investment rate of return assumption was lowered from 7.20% to 7.00% for the 2022 reporting date. The investment rate of return assumption was lowered from 7.40% to 7.20% for the 2021 reporting date. As a result of Chapter 2015-157, Laws of Florida, the assumed rates of mortality were changed to the assumptions used by the Florida Retirement System in its July 1, 2019, actuarial valuation for special risk lives, with appropriate risk and collar adjustments made based on plan demographics. 2 Effective July 1, 2019, Chapter 118.1816, Florida Statutes states that a death or disability for a firefighter due to the diagnosis of cancer or circumstances that arise out of the treatment of cancer will be treated as duty-related. *