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

SCHEDULE OF PENSION CONTRIBUTIONS (UNAUDITED) LAST TEN FISCAL YEARS Reporting Date 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 General Employees' Retirement Fund Actuarially determined contribution $ 1,024,247 $ 1,419,339 $ 1,602,192 $ 1,771,147 $ 1,120,584 $ 1,197,424 $ 1,286,744 $ 1,187,794 $ 1,268,253 $ 1,258,659 Contributions in relation to the actuarially determined contributions 1,024,247 1,419,339 1,751,654 2,006,925 1,254,097 1,280,082 1,355,041 1,296,450 1,318,790 1,306,268 Contribution deficiency (excess) $ - $ - $ (149,462) $ (235,778) $ (133,513) $ (82,658) $ (68,297) $ (108,656) $ (50,537) $ (47,609) 1 Covered payroll $ 2,723,263 $ 2,957,684 $ 3,000,359 $ 3,162,762 $ 3,437,375 $ 4,045,350 $ 4,191,304 $ 4,255,801 $ 4,259,070 $ 4,542,537 Contributions as a percentage of covered payroll 37.61% 47.99% 58.38% 63.45% 36.48% 32.33% 32.33% 30.46% 30.96% 28.76% Police Officers' Retirement Fund Actuarially determined contribution $ 1,456,033 $ 1,024,419 $ 837,623 $ 928,289 $ 650,347 $ 709,037 $ 772,294 $ 932,426 $ 881,697 $ 875,055 Contributions in relation to the actuarially determined contributions 1,456,033 1,024,419 913,763 1,033,081 750,791 790,573 772,294 1,011,756 925,589 968,003 Contribution deficiency (excess) $ - $ - $ (76,140) $ (104,792) $ (100,444) $ (81,536) $ - $ (79,330) $ (43,892) $ (92,948) 1 Covered payroll $ 2,941,480 $ 2,640,254 $ 2,263,844 $ 2,242,245 $ 2,091,146 $ 2,073,208 $ 2,037,716 $ 1,975,478 $ 2,038,886 $ 2,178,847 Contributions as a percentage of covered payroll 49.50% 38.80% 40.36% 46.07% 35.90% 38.13% 37.90% 51.22% 45.40% 44.43% Firefighters' Retirement Fund Actuarially determined contribution $ 1,534,814 $ 1,293,057 $ 1,127,832 $ 1,138,295 $ 899,929 $ 816,138 $ 748,086 $ 824,007 $ 817,997 $ 700,045 Contributions in relation to the actuarially determined contributions 1,625,961 1,441,189 1,236,461 1,284,763 998,712 945,923 877,376 839,825 829,245 784,705 Contribution deficiency (excess) $ (91,147) $ (148,132) $ (108,629) $ (146,468) $ (98,783) $ (129,785) $ (129,290) $ (15,818) $ (11,248) $ (84,660) 1 Covered payroll $ 2,826,544 $ 2,560,508 $ 2,364,429 $ 2,276,592 $ 2,168,503 $ 2,060,954 $ 2,072,260 $ 2,121,613 $ 2,153,568 $ 1,946,811 Contributions as a percentage of covered payroll 57.52% 56.29% 52.29% 56.43% 46.06% 45.90% 42.34% 39.58% 38.51% 40.31% ¹ As of 2014, the Covered payroll numbers shown are in compliance with GASB Statement No. 82. See notes to the schedule of contributions. 91  CITY OF FORT WALTON BEACH, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF INVESTMENT RETURNS SEPTEMBER 30, 2021 Measurement Date 9/30/2020 9/30/2019 9/30/2018 9/30/2017 9/30/2016 9/30/2015 9/30/2014 General Employees' Retirement Fund Annual Money-Weighted Rate of Return Net of Investment Expense 10.25% 3.78% 11.43% 12.45% 10.78% -0.01% 8.82% Police Officers' Retirement Fund Annual Money-Weighted Rate of Return Net of Investment Expense 10.01% 5.08% 7.82% 10.52% 9.12% -2.69% 9.96% Firefighters' Retirement Fund Annual Money-Weighted Rate of Return Net of Investment Expense 11.01% 3.33% 9.24% 9.88% 7.25% 0.12% 9.72% Note: This information is not available for previous years. 92  CITY OF FORT WALTON BEACH, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION NOTES TO THE SCHEDULE OF PENSION CONTRIBUTIONS (UNAUDITED) GENERAL EMPLOYEES’ RETIREMENT FUND Valuation Date: October 1, 2019 Notes: Actuarially determined contribution rates are calculated as of October 1, which is two years prior to the end of the fiscal year in which contributions are reported. Methods and Assumptions Used to Determine Contribution Rates: Funding method: Entry-Age Actuarial Cost Method Mortality rates: Healthy lives: Female: RP2000 Generational, 100% Annuitant White Collar, Scale BB Male: RP2000 Generational, 50% Annuitant White Collar / 50% Annuitant Blue Collar, Scale BB Disabled lives: Female: 100% RP2000 Disabled Female set forward two years Male: 100% RP2000 Disabled Male set back four years Interest rate: 7.60% per year, compounded annually, net of investment related expenses Inflation: 2.50% Termination rates: Age-based rates. Sample rates as follows: Sample Ages Probability 25 7.724% 30 7.397% 35 6.858% 40 6.113% 45 5.163% 50 4.316% 55 4.371% 60 5.631% Disability rates: Age-based rates. Sample rates as follows: Sample Ages Probability 20 0.07% 30 0.11% 40 0.19% 50 0.51% 60 1.66% 93  CITY OF FORT WALTON BEACH, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION NOTES TO THE SCHEDULE OF PENSION CONTRIBUTIONS (UNAUDITED) – CONTINUED GENERAL EMPLOYEES’ RETIREMENT FUND Salary increases: Age-based increase table, as follows: Age Increase* Under 25 6.50% 25-34 5.50% 35-44 4.50% 45+ 3.50% *Increase shown is inclusive of a 3% wage inflationary assumption. Retirement age: 100% probability of retirement upon attaining age 62 and ten years of service, along with probabilities of retiring with a subsidized benefit prior to age 62 at the following rates: Age Probability 52 4.218% 53 4.249% 54 4.293% 55 4.371% 56 4.500% 57 4.688% 58 4.941% 59 5.258% 60 5.631% 61 6.053% Payroll growth: None (closed plan) for purposes of amortizing the Unfunded Actuarial Accrued Liability. Actuarial asset All assets are valued at fair value with an adjustment made to uniformly spread method: actuarial investment gains and losses (as measured by actual fair value investment return against expected fair value investment return) over a five-year period. 94  CITY OF FORT WALTON BEACH, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION NOTES TO THE SCHEDULE OF PENSION CONTRIBUTIONS (UNAUDITED) POLICE OFFICERS’ RETIREMENT FUND Valuation Date: October 1, 2019 Notes: Actuarially determined contribution rates are calculated as of October 1, which is two years prior to the end of the fiscal year in which contributions are reported. Methods and Assumptions Used to Determine Contribution Rates: Funding method: Entry-Age Normal Actuarial Cost Method Mortality rates: Healthy lives: Female: RP2000 Generational, 100% Annuitant White Collar, Scale BB Male: RP2000 Generational, 10% Annuitant White Collar / 90% Annuitant Blue Collar, Scale BB Disabled lives: Female: 60% RP2000 Disabled Female set forward two years / 40% Annuitant White Collar with no set back, no projection scale Male: 60% RP2000 Disabled Male set back four years / 40% Annuitant White Collar with no set back, no projection scale Interest rate: 7.40% per year, compounded annually, net of investment related expenses Retirement age: Member Age Retirement Probability 55 10.0% 56 10.0% 57 33.3% 58 50.0% 59 50.0% 60+ 100.0% In addition to the above table, 50% are assumed to retire upon completion of 30 years of service, and 100% are assumed to retire upon completion of 31 years of service. Early retirement: Service Years Retirement Probability Less than 25 5.0% 25-27 10.0% 28-29 25.0% Cost-of-living increase: 2.50% per year beginning at