Fort Walton Beach — Comprehensive Financial Report September 30, 2017 — reading text

INFORMATION SCHEDULE OF PENSION CONTRIBUTIONS (UNAUDITED) LAST TEN FISCAL YEARS 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 General Employees' Retirement Fund Actuarially determined contribution $ 1,197,424 $ 1,286,744 $ 1,187,794 $ 1,268,253 $ 1,258,659 $ 1,091,338 $ 1,477,933 $ 1,268,428 $ 1,268,019 $ 1,231,003 Contributions in relation to the actuarially determined contributions 1,280,082 1,355,041 1,296,450 1,318,790 1,306,268 1,159,438 1,477,777 1,268,260 1,267,864 1,231,003 Contribution deficiency (excess) $ (82,658) $ (68,297) $ (108,656) $ (50,537) $ (47,609) $ (68,100) $ 156 $ 168 $ 155 $ - Covered employee payroll1 $ 4,045,350 $ 4,191,304 $ 4,255,801 $ 4,259,070 $ 4,542,537 $ 5,004,486 $ 5,595,076 $ 7,252,396 $ 7,521,520 $ 8,199,930 Contributions as a percentage of covered employee payroll 31.64% 32.33% 30.46% 30.96% 28.76% 23.17% 26.41% 17.49% 16.86% 15.01% Police Officers' Retirement Fund Actuarially determined contribution $ 709,037 $ 772,294 $ 932,426 $ 881,697 $ 875,055 $ 682,860 $ 665,220 $ 578,670 $ 488,381 $ 516,528 Contributions in relation to the actuarially determined contributions 790,573 772,294 1,011,756 925,589 968,003 682,860 665,220 578,670 488,381 516,528 Contribution deficiency (excess) $ (81,536) $ - $ (79,330) $ (43,892) $ (92,948) $ - $ - $ - $ - $ - Covered employee payroll1 $ 2,073,208 $ 2,037,716 $ 1,975,478 $ 2,038,886 $ 2,178,847 $ 2,239,545 $ 2,195,529 $ 2,557,811 $ 5,230,182 $ 2,602,616 Contributions as a percentage of covered employee payroll 38.13% 37.90% 51.22% 45.40% 44.43% 30.49% 30.30% 22.62% 9.34% 19.85% Firefighters' Retirement Fund Actuarially determined contribution $ 816,138 $ 748,086 $ 824,007 $ 817,997 $ 700,045 $ 675,386 $ 708,063 $ 555,720 $ 326,864 $ 299,027 Contributions in relation to the actuarially determined contributions 945,923 877,376 839,825 829,245 784,705 675,386 708,063 555,720 358,840 299,027 Contribution deficiency (excess) $ (129,785) $ (129,290) $ (15,818) $ (11,248) $ (84,660) $ - $ - $ - $ (31,976) $ - Covered employee payroll1 $ 2,060,954 $ 2,072,260 $ 2,121,613 $ 2,153,568 $ 1,946,811 $ 1,961,080 $ 2,116,516 $ 1,988,762 $ 1,632,275 $ 1,409,038 Contributions as a percentage of covered employee payroll 45.90% 42.34% 39.58% 38.51% 40.31% 34.44% 33.45% 27.94% 21.98% 21.22% ¹ As of 2014, the Covered employee payroll numbers shown are in compliance with GASB Statement No. 82. See notes to the schedule of contributions. 88  CITY OF FORT WALTON BEACH, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF INVESTMENT RETURNS SEPTEMBER 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 10.78% -0.01% 8.82% Police Officers' Retirement Fund Annual Money-Weighted Rate of Return Net of Investment Expense 9.12% -2.69% 9.96% Firefighters' Retirement Fund Annual Money-Weighted Rate of Return Net of Investment Expense 7.25% 0.12% 9.72% Note: This information is not available for previous years. See notes to the schedule of contributions. 89  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, 2015 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: Non-disabled lives: RP-2000 Sex-Distinct Healthy Mortality Table, without projection Disabled lives: Social Security Study #74 Mortality Table, without projection Interest rate: 7.9% per year, compounded annually, net of investment related expenses 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% Salary increases: Age-based increase table, as follows: Age Increase* Under 25 6.5% 25-34 5.5% 35-44 4.5% 45+ 3.5% *Increase shown is inclusive of a 3% wage inflationary assumption. 90  CITY OF FORT WALTON BEACH, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION NOTES TO THE SCHEDULE OF PENSION CONTRIBUTIONS (UNAUDITED) – CONTINUED GENERAL EMPLOYEES’ RETIREMENT FUND 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 market value with an adjustment made to uniformly spread method: actuarial investment gains and losses (as measured by actual market value investment return against expected market value investment return) over a five-year period. 91  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, 2015 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 Amortization method: Level percentage of pay, closed Remaining amortization period: 30 years Mortality: RP-2000 Sex-Distinct Combined Healthy Table with a five year set forward for disabled lives. Based on a study of over 650 public safety funds, this table reflects a 10% margin for future mortality improvements. Interest rate: 8.00% per year, compounded annually, net of investment related expenses Retirement age: Member Age Retirement Probability 55 10.0% 56 10.0% 57 25.0% 58 20.0% 59 33.3% 60+ 100.0% In addition to the above table, 100% retirement is assumed upon completion of 30 years of service. Early retirement: Earlier of 1) Age 50 and ten years of service, or 2) 25 years of service, regardless of age, Members are assumed to retire with an immediate subsidized benefit at the rate of 4% per year. Salary increases: Member Age Assumption 30 or less 10.0% 31-35 8.5% 36-40 7.0% 41-45 6.0% 45-50 4.5% 51-55 4.0% 56+ 3.0% In addition to the above table, projected salary at retirement is increased 20% to account for non-regular compensation. Valuations prior to October 1, 2013: 7.5% per year until the assumed retirement age.