Fort Walton Beach — Comprehensive Financial Report September 30, 2021 — reading text

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. 88  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 * 2021 2020 2019 2018 2017 2016 2015 2014 Total Pension Liability Service cost $ 546,149 $ 513,466 $ 477,930 $ 494,032 $ 453,506 $ 478,365 $ 414,836 $ 384,107 Interest 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 231,328 98,199 513,043 (199,349) 261,007 (224,382) - - Contributions – buy back - - - 32,155 - 72,413 - - 1 Changes of assumptions 66,865 655,972 601,424 258,300 1,243,794 - - - Benefit payments, including refunds of employee contributions (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 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 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) $ 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 $ 1,231,466 $ 1,016,560 $ 1,089,746 $ 794,144 $ 744,019 $ 672,369 $ 715,439 $ 703,618 Contributions – state 209,723 219,901 195,017 204,568 201,904 205,007 214,272 204,226 Contributions – member 204,865 189,154 182,127 173,480 164,876 150,357 135,622 133,633 Contributions – buy back - - - 32,155 - 72,413 - - Net investment income 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 (1,459,394) (1,407,554) (1,318,156) (1,434,474) (1,237,389) (1,140,432) (1,071,302) (1,042,333) Administrative expenses (55,253) (66,388) (67,773) (28,449) (43,625) (47,088) (34,537) (33,706) Net change in plan fiduciary net position 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 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) $ 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) $ 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 66.46% 62.57% 64.99% 64.48% 62.27% 65.53% 71.17% 68.18% Covered payroll $ 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 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 7.40% 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. * This schedule is intended to show information for ten years. Additional years will be displayed as they become available. 89  CITY OF FORT WALTON BEACH, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN NET OPEB LIABILITY AND RELATED RATIOS (UNAUDITED) FORT WALTON BEACH RETIREE HEALTH CARE PLAN Reporting Date * 2021 2020 2019 2018 2017 Total OPEB Liability Service cost $ 230,648 $ 190,791 $ 91,714 $ 105,139 $ 85,100 Interest 228,430 235,597 205,213 187,954 195,814 Differences between expected and actual experience 2 (1,195,507) - (494,909) - - Changes of assumptions 1 1,699,860 519,859 288,811 (639,051) 702,672 Benefit payments (250,893) (232,308) (151,409) (139,227) (139,227) Net change in total OPEB liability 712,538 713,939 (60,580) (485,185) 844,359 Total OPEB liability - beginning 6,274,415 5,560,476 5,621,056 6,106,241 5,261,882 Total OPEB liability - ending (a) 6,986,953 6,274,415 5,560,476 5,621,056 6,106,241 Plan Fiduciary Net Position Contributions - employer 253,893 242,108 154,409 148,727 141,727 Benefit payments 3 (250,893) (232,308) (151,409) (139,227) (139,227) Administrative expenses (3,000) (9,800) (3,000) (9,500) (2,500) Net change in plan fiduciary net position - - - - - Plan fiduciary net position - beginning - - - - - Plan fiduciary net position - ending (b) - - - - - Sponsor's total OPEB liability - ending (a) - (b) $ 6,986,953 $ 6,274,415 $ 5,560,476 $ 5,621,056 $ 6,106,241 Plan fiduciary net position as a percentage of total OPEB liability ** 0.00% 0.00% 0.00% 0.00% 0.00% Covered payroll (projected) $ 12,085,491 $ 11,392,366 $ 10,891,364 $ 7,927,323 $ 7,520,263 City's total OPEB liability as a percentage of covered payroll 57.81% 55.08% 51.05% 70.91% 81.20% Notes: 1 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 to match the pension plan assumptions. Changes of assumptions and other inputs also reflect the changes in the discount rate each period. The following are the discount rates used in each period: FY 2021: 2.14% FY 2020: 3.58% FY 2019: 4.18% In addition, there were changes to actuarial assumptions for updated health care costs and premiums, health care trend rates, mortality rates, retirement rates, and disability rates. 2 Differences between expected and actual experience reflects the impact of changes to the census data from the prior valuation to the valuation as of 9/30/2020. * This schedule is intended to show information for ten years. Additional years will be displayed as they become available. **There are no OPEB plan assets accumulated in a GASB compliant trust to pay for related plan benefits. 90  CITY OF FORT WALTON BEACH, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION