Fort Walton Beach — Annual Comprehensive Financial Report, September 30, 2025 — reading text

162.30% 199.23% 113.99% 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 in its July 1, 2021, actuarial valuation for non- special risk lives, with appropriate risk and collar adjustments made based on plan demographics. The investment rate of return assumption was lowered from 7.60% to 7.30% for the 2021 reporting date. The investment rate of return assumption was lowered from 7.30% to 7.00% for the 2022 reporting date. 82  CITY OF FORT WALTON BEACH, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS (UNAUDITED) POLICE OFFICERS’ RETIREMENT FUND Reporting Date * 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016 Total Pension Liability Service cost $ 902,915 $ 784,364 $ 748,564 $ 699,264 $ 546,326 $ 384,431 $ 395,440 $ 334,061 $ 344,958 $ 336,234 Interest 2,280,478 2,284,699 2,230,909 2,142,668 2,143,525 1,976,534 2,112,261 2,084,744 1,948,181 1,953,123 Change in excess state money - - - - (172,843) 40,065 20,893 8,823 - - 3 Changes of benefit terms - - - - 1,428,025 - - - - - Differences between expected and actual experiences 1,333,735 (1,184,359) (262,825) 476,947 (211,485) 283,813 (833,418) (343,066) (425,107) (659,966) 2 Changes of assumptions - - - 682,631 46,143 584,615 (251,695) - 1,633,122 - Benefit payments, including refunds of employee contributions (2,138,041) (1,989,100) (1,978,930) (1,900,983) (1,868,482) (1,851,074) (1,764,575) (1,821,727) (1,744,710) (1,655,069) Net change in total pension liability 2,379,087 (104,396) 737,718 2,100,527 1,911,209 1,418,384 (321,094) 262,835 1,756,444 (25,678) Total pension liability – beginning 32,744,351 32,848,747 32,111,029 30,010,502 28,099,293 26,680,909 27,002,003 26,739,168 24,982,724 25,008,402 Total pension liability – ending (a) 35,123,438 32,744,351 32,848,747 32,111,029 30,010,502 28,099,293 26,680,909 27,002,003 26,739,168 24,982,724 Plan Fiduciary Net Position 1 Contributions – employer $ 1,760,809 $ 1,426,703 $ 1,314,250 $ 1,232,753 $ 806,946 $ 732,187 $ 830,613 $ 569,215 $ 577,564 $ 628,975 Contributions – state 288,411 267,370 236,730 223,280 217,473 221,641 202,468 190,399 181,303 175,025 Contributions – member 187,008 176,319 151,799 147,074 132,013 113,192 112,112 104,557 102,214 101,886 Net investment income 5,236,088 2,537,574 (3,684,483) 4,499,980 2,166,715 1,085,486 1,609,609 2,036,244 1,698,093 (538,198) Benefit payments, including refunds of employee contributions (2,138,041) (1,989,100) (1,978,930) (1,900,983) (1,868,482) (1,851,074) (1,764,575) (1,821,727) (1,744,710) (1,655,069) Administrative expenses (74,185) (89,557) (63,679) (52,862) (57,304) (64,930) (54,400) (39,184) (44,882) (25,084) Net change in plan fiduciary net position 5,260,090 2,329,309 (4,024,313) 4,149,242 1,397,361 236,502 935,827 1,039,504 769,582 (1,312,465) Plan fiduciary net position – beginning 25,984,001 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 Plan fiduciary net position – ending (b) 31,244,091 25,984,001 23,654,692 27,679,005 23,529,763 22,132,402 21,895,900 20,960,073 19,920,569 19,150,987 Net pension liability – ending (a) – (b) $ 3,879,347 $ 6,760,350 $ 9,194,055 $ 4,432,024 $ 6,480,739 $ 5,966,891 $ 4,785,009 $ 6,041,930 $ 6,818,599 $ 5,831,737 Plan fiduciary net position as a percentage of the total pension liability 88.96% 79.35% 72.01% 86.20% 78.41% 78.76% 82.07% 77.62% 74.50% 76.66% Covered payroll $ 3,740,162 $ 3,526,388 $ 3,035,976 $ 2,941,480 $ 2,640,254 $ 2,263,844 $ 2,242,245 $ 2,091,146 $ 2,073,208 $ 2,037,716 Net pension liability as a percentage of covered payroll 103.72% 191.71% 302.84% 150.67% 245.46% 263.57% 213.40% 288.93% 328.89% 286.19% See notes to schedule on the next page. 83  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, 2021, 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. 84  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 * 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016 Total Pension Liability Service cost $ 763,298 $ 784,668 $ 768,244 $ 645,171 $ 546,149 $ 513,466 $ 477,930 $ 494,032 $ 453,506 $ 478,365 Interest 2,484,595 2,387,337 2,229,203 2,115,954 2,063,083 1,978,589 1,864,720 1,830,663 1,645,954 1,554,072 Share plan allocation and excess funds 58,611 64,159 - - - - - - - - 2 Changes of benefit terms - - - - - (2,402) - - - 804,097 Differences between expected and actual experiences 70,616 (111,725) 790,469 397,047 231,328 98,199 513,043 (199,349) 261,007 (224,382) Contributions – buy back - 13,921 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 (1,745,932) (1,709,241) (1,633,458) (1,536,000) (1,459,394) (1,407,554) (1,318,156) (1,434,474) (1,237,389) (1,140,432) Net change in total pension liability 1,631,188 1,429,119 2,280,531 2,383,159 1,448,031 1,836,270 2,138,961