Fort Walton Beach Council agenda — 02-28-12 regular — reading text

2018 172, 341 2019 172, 781 2020 172, 990 2021 172, 969 2022 172, 717 2023 174,480 2024 173, 540 2025 172, 365 2026 173, 305 2027 173, 892 2028 174, 127 2029 174, 010 2030 173, 540 2031 172, 717 3, 467, 984 Long Tern Service Contracts / Pending Litigation" The City of Fort Walton Beach Police Department does not currently have any long -term service contracts or pending litigation. In response to the inquiry statement for " Any items you would deem appropriate in furtherance of your RFP:" No response at this time.  Contract Services Impact on Police Pension Plan City Police Pension Plan future liability for non -vested members would be eliminated. o City would need to consider the impact on non -vested police officers, especially those with over five years of service. City would be in a position to use the budget savings to bring the pension plan up to a fully funded level and stabilize contributions. As demonstrated by this table, pension trends do not look favorable ry- I City Contribution over prior yr change since Salary over prior yr change since 2001 2001 2010 36. 1% 1176% 2, 195, 529 14. 2°% 14. 7% 87. 5% 1. 1% EM225, 2009 2008 055 32. 9% 2. 8% M2, 2007 53. 0% 15. 3% 2006 42. 0% 7. 0% 2005 50. 9% 8. 1% 2004 51, 682 38. 4% 245, 042 1. 0% 2003 83, 839 293. 1% 2, 222, 145 7. 5% 21, 328 52. 6% 2, 066,386 8. 0% 2002 1 2001 44, 990 1, 913, 535 Police Officers FRS Employee contribution rate is 3% of Salary. o Current FWB employee contribution rate is 5 %. City has indicated that an 11% employee contribution is needed. Employees build a 3% return rate per service year with a maximum retirement benefit of 100% of your average final compensation with FRS. o FWB PPP provides for a 2. 75% return rate per service year with a maximum retirement benefit of 7S% of your average final compensation. Non -vested officers would be able to purchase their years of service into FRS. o Officer can purchase years for service at 2% return rate per year. Vested police officers can maintain their FWB Pension and start a new pension in FRS o Currently FRS members vest in 1 year for the investment plan and 8 years with the defined benefit plan.  CITY OF FORT WALTON BEACH POLICE OFFICERS' PENSION FUND ACTUARIAL VALUATION AS OF OCTOBER 1, 2010 REVISED MAY 4, 2011 CONTRIBUTIONS APPLICABLE TO THE PLAN/ FISCAL YEAR ENDED SEPTEMBER 30, 2012 rt, s DEC 21 2011 DEC 212011 = k CITY hIAG£ r,F_P, Foster &Foster,.. Actuaries and Consultants May 6, 2011 Board of Trustees c/ o Captain Rose Berry City of Fort Walton Beach Police Officers' Pension Fund 7 Hollywood Boulevard, Northeast Fort Walton Beach, FL 32548 Re: Police Officers' Pension Fund Dear Board We are pleased to present to the Board this revised report of the annual actuarial valuation of the City of Fort Walton Beach Police Officers' Pension Fund. The valuation was performed to determine whether the assets and contributions are sufficient to provide the prescribed benefits and to develop the appropriate funding requirements for the applicable plan year. The valuation has been conducted in accordance with generally accepted actuarial principles and practices, including the applicable Actuarial Standards of Practice as issued by the Actuarial Standards Board, and reflects laws and regulations issued to date pursuant to the provisions of Chapters 112 and 185, Florida Statutes, as well as applicable federal laws and regulations. In our opinion, the assumptions used in this valuation, as adopted by the Board of Trustees, represent reasonable expectations of anticipated plan experience. In conducting the valuation, we have relied on personnel, plan design, and asset information supplied by the Board of Trustees, financial reports prepared by the custodian bank, Salem Trust Company, and the actuarial assumptions and methods described in the Actuarial Assumptions section of this report. 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 undersigned is familiar with the immediate and long -term aspects of pension valuations, and meets 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. 13420 Parker commons Blvd., Suite 104 • Fort Myers, Flonda 33912 • 239 -433 -5500 • Fax 239 -481 -0634 • ww Josler-foster. com Board of Trustees May 6, 2011 Page Two To our knowledge, no associate of Foster & Foster, Inc. working on valuations of the program has any direct financial interest or indirect material interest in the City of Fort Walton Beach, nor does anyone at Foster & Foster, Inc. act as a member of the Board of Trustees of the City of Fort Walton Beach Police Officers' Pension Fund. Thus, there is no relationship existing that might affect our capacity to prepare and certify this actuarial report. If there are any questions, concerns, or comments about any of the items contained in this report, please contact me at 239- 433 -5500. Respectfully submitted, Foster & Foster, Inc. tL- rr By: Jason L. Franken, FSA, EA Enrolled Actuary # 08 -6888 JLF /Isw Enclosures  TABLE OF CONTENTS Section Title Page Introduction a. Discussion 1 b. Changes Since Prior Valuation 3 c. Requirements of Chapter 112, 4 Part VII, Florida Statutes II Valuation Results a. Actuarial Assumptions and 9 Funding Methods b. Valuation Notes 11 c. Partial History of 12 Premium Tax Refunds d. Excess State Monies Reserve 13 e. Derivation of VAAL 14 III Trust Fund 15 IV Member Statistics a. Eligibility for Retirement 20 and Vesting b. Statistical Data 21 c. Age and Service Distribution 22 d. Member Reconciliation 23 24 V Summary of Plan Provisions VI Governmental Accounting Standards 26 Board Disclosure Information  SECTION I INTRODUCTION AND SUMMARY  I INTRODUCTORY DISCUSSION The regular annual actuarial valuation of the City of Fort Walton Beach Police Officers' Pension Fund, performed as of October 1, 2010, has been completed, and the results are presented in this Report. The results of this valuation are applicable to the plan /fiscal year ended September 30, 2012. The contribution requirements developed in this valuation, compared with amounts developed in the October 1, 2009, actuarial valuation, are as follows: Valuation Date 10/ 112009 10/ 1/ 2010 Applicable Plan /Fiscal Yr. End 9/ 30/ 2011 9/ 3012012 Total Required Contribution of Total Annual Payroll 36. 5% 42. 6% Member Contributions ( Est.) of Total Annual Payroll 4. 4% 5. 0% City and State Required Contribution of Total Annual Payroll 32. 1% 37. 6% State Contribution " 165, 213 165, 213 of Total Annual Payroll 7. 5% 7. 5% Balance from City ' of Total Annual Payroll 24. 6% 301% The City may use up to $ 181, 576 in State Contributions for determining its minimum funding requirements. For budgeting purposes, the required Sponsor Contribution ( City and State) is 37.6% of Pensionable Earnings for the fiscal year ending September 30, 2012. The precise City requirement for the year is this amount, less actual State Contributions ( up to the maximum $ 181, 576). Additionally, the