Fort Walton Beach — Annual Comprehensive Financial Report, September 30, 2022 — reading text

Plan is not available. 66  CITY OF FORT WALTON BEACH, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2022 8. DEFINED BENEFIT PENSION PLANS – CONTINUED Pension Expense and Deferred Outflows/Inflows of Resources Related to Pensions – FRF For the year ended September 30, 2022, the City recognized a pension expense of $1,285,274. On September 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Outflows of Inflows of Resources Resources City and State contributions subsequent to measurement date $ 1,646,716 $ - Net difference between projected and actual earnings on pension plan investments - 2,084,371 Changes of assumptions 1,024,893 - Differences between expected and actual experience 575,189 - Total $ 3,246,798 $ 2,084,371 Deferred outflows of resources related to pensions of $1,646,716 resulting from the City’s and State’s contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending September 30, 2023. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year ended September 30: 2023 $ 168,414 2024 (11,270) 2025 (382,489) 2026 (258,944) $ (484,289) Pension Expense For the fiscal year ended September 30, 2022, the City recognized an aggregate pension expense of $2,318,733 on all defined benefit pension plans. 67  CITY OF FORT WALTON BEACH, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2022 8. DEFINED BENEFIT PENSION PLANS – CONTINUED Fund Financial Statements The following are the financial statements for the individual pension trust funds (GERF, PORF and FRF) for the year ended September 30, 2022: COMBINING STATEMENT OF PLAN NET POSITION Employee Retirement Funds Total General Police Employee Employees' Officers' Firefighters' Retirement Retirement Retirement Retirement Funds ASSETS Cash and cash equivalents $ 2,019,690 $ 872,710 $ 513,740 $ 3,406,140 Accounts receivable - 25,833 4,250 30,083 Investments, at market U.S. Government and Agency obligations 5,619,662 2,762,364 2,292,514 10,674,540 Corporate obligations 1,589,275 905,367 675,795 3,170,437 Corporate equity 10,629,837 - - 10,629,837 Mutual and exchange-traded funds 18,751,665 14,348,378 12,785,503 45,885,546 External investment pools 2,530,397 1,401,282 1,248,884 5,180,563 Commingled real estate investment funds 7,325,821 3,372,031 2,962,239 13,660,091 Total investments, at market 46,446,657 22,789,422 19,964,935 89,201,014 TOTAL ASSETS 48,466,347 23,687,965 20,482,925 92,637,237 LIABILITIES Accounts payable 48,717 47,112 56,297 152,126 NET POSITION RESTRICTED FOR PENSIONS $ 48,417,630 $ 23,640,853 $ 20,426,628 $ 92,485,111 68  CITY OF FORT WALTON BEACH, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2022 8. DEFINED BENEFIT PENSION PLANS – CONTINUED Fund Financial Statements – Continued COMBINING STATEMENT OF CHANGES IN PLAN NET POSITION Employee Retirement Funds Total General Police Employee Employees' Officers' Firefighters' Retirement Retirement Retirement Retirement Funds ADDITIONS Contributions Employer $ 545,135 $ 1,370,660 $ 1,390,710 $ 3,306,505 Plan members 128,594 151,783 233,380 513,757 State of Florida - 236,729 256,006 492,735 Total contributions 673,729 1,759,172 1,880,096 4,312,997 Investment income (losses) (8,349,026) (3,595,828) (3,415,319) (15,360,173) Less investment expense (356,672) (57,478) (47,323) (461,473) Net investment income (losses) (8,705,698) (3,653,306) (3,462,642) (15,821,646) Miscellaneous revenue 735 - 22,695 23,430 TOTAL ADDITIONS (8,031,234) (1,894,134) (1,559,851) (11,485,219) DEDUCTIONS Benefits and refunds paid Retirement payments 3,349,572 1,822,057 1,591,831 6,763,460 Disability payments 33,583 156,874 5,894 196,351 Total benefits and refunds paid 3,383,155 1,978,931 1,597,725 6,959,811 Administrative expenses Legal 2,660 6,975 6,984 16,619 Contractual 79,238 70,111 68,812 218,161 Other 44,314 24,539 22,902 91,755 Total administrative expenses 126,212 101,625 98,698 326,535 TOTAL DEDUCTIONS 3,509,367 2,080,556 1,696,423 7,286,346 DECREASE IN PLAN NET POSITION (11,540,601) (3,974,690) (3,256,274) (18,771,565) NET POSITION RESTRICED FOR PENSIONS Beginning of year 59,958,231 27,615,543 23,682,902 111,256,676 End of year $ 48,417,630 $ 23,640,853 $ 20,426,628 $ 92,485,111 69  CITY OF FORT WALTON BEACH, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2022 9. DEFINED CONTRIBUTION PENSION PLAN City of Fort Walton Beach Defined Contribution Plan In December 2009, City Council closed the General Employees’ Defined Benefit Plan. All general, full-time employees hired on or after January 1, 2010, are members of the Defined Contribution Retirement Plan (Plan). The Plan is a money purchase defined contribution retirement plan administered by ICMA Retirement Corporation and Mission Square Retirement, with the City serving as trustee. All funds are held in the ICMA Retirement Corporation Governmental Money Purchase Plan & Trust in the name of each participant. The City finance director serves as the coordinator for the Plan. The Plan requires a 5% payroll contribution by the employee with a 5% employer (City) match. Employees can increase their contribution; however, only an additional 2½% is eligible for City match. Members of the General Employees’ Defined Benefit Pension Plan, who were not fully or partially vested at the time the Plan was opened, were permitted to transfer their contributions to the Plan as a one-time, irrevocable election. The Plan participants individually select and make changes in funding options, which are made available by the independent plan administrator. Since participants select the investment fund or funds in which their deferred compensation accounts are invested, the city has no liability for investment losses. The authority for establishing and amending the Plan’s provisions lies with the City Council. The City Council also has the authority for amending contribution requirements. Contributions made to the Plan by the employees and by the City were $303,464 and $303,475, respectively, for the fiscal year ending September 30, 2022. The City’s contributions vest 20% each year beginning after one year of employment. Participants are fully vested after 5 years of service. 10. DEFERRED COMPENSATION PLAN The City offers employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457 (Plan). The Plan is a tax-deferred supplemental retirement program that allows City employees to contribute a portion of their salary, before federal income taxes, to a retirement account. The assets are held in trust for the employees’ benefit. The Plan participants individually select and make changes in funding options, which are made available by the independent plan administrator. Since participants select the investment fund or funds in which their deferred compensation accounts are invested, the City has no liability for investment losses. The City’s fiduciary responsibility is to administer the Plan properly and to assure the investment alternatives made available are reasonable. Assets of the Plan have a fair value of $2,403,357 at September 30, 2022. Contributions made by Plan members during the fiscal year ended September 30, 2022, were $142,603. 70  CITY OF FORT WALTON BEACH, FLORIDA NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2022 11. OTHER POST EMPLOYMENT BENEFITS (OPEB) Plan Description The Fort Walton Beach’s Retiree Health Care Plan (the Plan) is a single employer defined benefit postemployment health care plan that covers eligible retired employees of the City. The Plan, which is administered by the City, allows employees who retire and meet retirement eligibility requirements under one of the City’s retirement plans to continue medical,