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

OT Ol 00 OJO W Z 4—°)N NZ WWNN a Q Z' 0 r r r m(I W a O c J l] N tC M ZR w 23 N C D W m N > Q o mu v nv mm 00 0`° o M 0 J1 9 K mM vM z nNNn M UU dd o0o 0 Ld jjy(p WOJmNN Cf W NaE 00000 O W N N N N N mm U L OLO 2Um o omw` o g 11o 00000 0  2727 DISCLOSURE INFORMATION PER STATEMENT NO. 27 OF THE GOVERNMENTAL ACCOUNTING STANDARDS BOARD ANNUAL PENSION COSTS AND RELATED INFORMATION Contribution rates as of 9130/ 10 City 20. 3% Plan Members 5. 0% until 75% maximum accrual and 0. 5% thereafter Actuarially Determined Contribution 500, 007 Contributions made 500, 007 Actuarial valuation date 10/ 1/ 2008 Actuarial cost method Entry Age Normal Amortization method Level percentage of pay, closed Remaining amortization period 30 years ( as of 101112010) Asset valuation method 4 Year Smooth ( Market) Actuarial assumptions: Investment rate of return 8. 0% Projected salary increase' 7. 5% Includes inflation at 3. 0% Post Retirement COLA 3. 0% THREE YEAR TREND INFORMATION Actuarially Percentage NetNet Year Determined of APC' PensionPension Ending Contribution Contributed ObligationObligation 9/ 30/2010 500, 007 100% 38,38, 438)438) 9/ 30/2009 407, 159 100% 41,41, 030)030) 9/ 30/ 2008 306, 805 100% 41,41, 485)485) AnnualAnnual PensionPension CostCost fromfrom CityCity sources.sources.  28 DISCLOSURE INFORMATION PER STATEMENT NO. 27 OF THE GOVERNMENTAL ACCOUNTING STANDARDS BOARD DEVELOPMENT OF NET PENSION OBLIGATION ( NPO) This municipal Defined Benefit Plan has been subject to the minimum funding standards since the adoption of the " Florida Protection of Public Employee Retirement Benefits Act' ( Part VII of Chapter 112, Florida Statutes) in 1980. Accordingly, the sponsor has funded the actuarially determined required contribution for all years from October 1, 1987, through the transition date, October 1, 1997. Thus, the NPO on October 1, 1997, is 0. The recent development of the Net Pension Obligation is as follows: 9/ 30107 9/ 30108 9130/ 09 9/ 30/ 10 Actuarially Determined Contribution ( A) 306, 805 407, 159 500, 007 Interest on NPO 3, 356) 3, 319) 3, 282) Adjustment to (A) 3, 816 3, 774 5, 874 Annual Pension Cost 307,265 407,614 502, 599 Contributions Made 306,805 407, 159 500, 007 Increase in NPO 460 455 2, 592 I Beginning of Year 41, 945) 41, 485) 41, 030) I End of Year ( 41, 945) ( 41, 485) 41, 030) 38, 438)  N N 0 o o cz p F E a C1 w O C: C V O O N @O O N @ O 0 co ca Y Y O L a) Y 0 y co p OL 0 c @ c dT N 6 @O O.O Q @ L N O U OO ON 0 a- O Lo a) V @ L C @ 4% a U O N... t+ C 0_ 0- O N j @ C 0. UI C N N +- N O II N oc ago @_ N 0 oN a m p 1 i Q- N CL p co . C O O." N @ 0 -6 O U Q. C r_C C N O U O m D U 0) o @ c c o O E sa IL T C o> N 4 N a) L @ 3°' 5 we N . r— C0 @ U O E E O@ N aE @N p @ E— Ca) rn @ N C i— m w3 @ a L N a Also Thursday, the council unanimously approved the first reading of an ordinance that will withdraw the town from the 175 and 185 revenue- sharing programs with the state. It will have to be approved on second reading next month before taking effect. Under the programs, participating local governments receive a portion of the state excise tax on property and casualty insurance premiums collected in their jurisdiction to help fund pension benefits for firefighters and police officers. But Town Manager Peter Elwell has said the programs come with strings attached that require the town to provide certain benefits and to have separate retirement boards for the police and firefighters. By leaving the 175/ 185 programs, the town will be able to dissolve the three trustee boards that oversee retirement investments for police, firefighters, and general employees, respectively. The town will create one trustee board to oversee a consolidated investment pool of around $ 150 million. The single -board system will be more efficient, Elwell said. The pension changes are planned to go into effect around May 1. Ocala mulls pension options By Susan Latham Carr, Ocala Star Banner, 2122 City of Ocala employees may end up paying more into their pensions and getting less in return as the Ocala City Council looks at ways of curbing the ballooning costs of its pension plans. Next year, the total contributions for the three plans are expected to grow to $ 17 million. That is an 153 percent increase from 2006, .when the total contributions for the three plans was $ 6. 7 million. Pension attorney James Linn of Lewis Longman & Walker, P. A., told the City Council recently that the city will pay $ 14. 4 million to the plans this year. Of that, $ 10 million will go toward the Ocala General Employees' Retirement System, $ 2. 57 million will go toward the Police Officers' Retirement System and 1. 85 million will go to the Firefighters' Retirement Plan. Making matters worse, the plans are not sufficiently funded to meet the city' s longterm pension benefit obligations. For example, the Florida Retirement System is funded at 87 percent. By contrast, the city' s general employee plan is funded at 46. 8 percent, the police plan is funded at 65. 9 percent, and the firefighter plan is funded at 66 percent. As of Oct. 1, the city' s debt on the three plans totaled $ 131 million. By law, the city is responsible for paying out those pensions, even if an employee leaves the city or the plans are closed, frozen or terminated. Part of the reason for the crunch is that the plans are generous. Another problem is that the city and employee contributions that the city has invested are not earning as much in this up- and -downmarket." During a workshop Friday, the council focused solely on the general employees plan. The consultants" are still reviewing the police and fire plans. There are other factors, but the amount of