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

fiduciary net position 8,517,415 3,058,371 487,713 3,933,786 3,295,155 2,619,738 (1,155,355) 2,119,606 Plan fiduciary net position – beginning 51,481,652 48,423,281 47,935,568 44,001,782 40,706,627 38,086,889 39,242,244 37,122,638 Plan fiduciary net position – ending (b) $ 59,999,067 $ 51,481,652 $ 48,423,281 $ 47,935,568 $ 44,001,782 $ 40,706,627 $ 38,086,889 $ 39,242,244 Net pension liability – ending (a) – (b) $ (5,825,536) $ 254,223 $ 1,870,996 $ 2,494,923 $ 5,578,689 $ 8,059,390 $ 4,777,742 $ 3,487,967 Plan fiduciary net position as a percentage of the total pension liability 110.75% 99.51% 96.28% 95.05% 88.75% 83.47% 88.85% 91.84% Covered payroll $ 2,723,263 $ 2,957,684 $ 3,000,359 $ 3,162,762 $ 3,437,375 $ 4,045,350 $ 4,191,304 $ 4,255,801 Net pension liability as a percentage of covered payroll -213.92% 8.60% 62.36% 78.88% 162.30% 199.23% 113.99% 81.96% 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, 2019 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. * This schedule is intended to show information for ten years. Additional years will be displayed as they become available. 86  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 * 2022 2021 2020 2019 2018 2017 2016 2015 Total Pension Liability Service cost $ 699,264 $ 546,326 $ 384,431 $ 395,440 $ 334,061 $ 344,958 $ 336,234 $ 322,118 Interest 2,142,668 2,143,525 1,976,534 2,112,261 2,084,744 1,948,181 1,953,123 1,905,286 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 476,947 (211,485) 283,813 (833,418) (343,066) (425,107) (659,966) - Changes of assumptions 2 682,631 46,143 584,615 (251,695) - 1,633,122 - - Benefit payments, including refunds of employee contributions (1,900,983) (1,868,482) (1,851,074) (1,764,575) (1,821,727) (1,744,710) (1,655,069) (1,632,053) Net change in total pension liability 2,100,527 1,911,209 1,418,384 (321,094) 262,835 1,756,444 (25,678) 595,351 Total pension liability – beginning 30,010,502 28,099,293 26,680,909 27,002,003 26,739,168 24,982,724 25,008,402 24,413,051 Total pension liability – ending (a) $ 32,111,029 $ 30,010,502 $ 28,099,293 $ 26,680,909 $ 27,002,003 $ 26,739,168 $ 24,982,724 $ 25,008,402 Plan Fiduciary Net Position 1 Contributions – employer $ 1,232,753 $ 806,946 $ 732,187 $ 830,613 $ 569,215 $ 577,564 $ 628,975 $ 836,053 Contributions – state 223,280 217,473 221,641 202,468 190,399 181,303 175,025 175,703 Contributions – member 147,074 132,013 113,192 112,112 104,557 102,214 101,886 96,591 Net investment income 4,499,980 2,166,715 1,085,486 1,609,609 2,036,244 1,698,093 (538,198) 1,869,244 Benefit payments, including refunds of employee contributions (1,900,983) (1,868,482) (1,851,074) (1,764,575) (1,821,727) (1,744,710) (1,655,069) (1,632,053) Administrative expenses (52,862) (57,304) (64,930) (54,400) (39,184) (44,882) (25,084) (38,242) Net change in plan fiduciary net position 4,149,242 1,397,361 236,502 935,827 1,039,504 769,582 (1,312,465) 1,307,296 Plan fiduciary net position – beginning 23,529,763 22,132,402 21,895,900 20,960,073 19,920,569 19,150,987 20,463,452 19,156,156 Plan fiduciary net position – ending (b) $ 27,679,005 $ 23,529,763 $ 22,132,402 $ 21,895,900 $ 20,960,073 $ 19,920,569 $ 19,150,987 $ 20,463,452 Net pension liability – ending (a) – (b) $ 4,432,024 $ 6,480,739 $ 5,966,891 $ 4,785,009 $ 6,041,930 $ 6,818,599 $ 5,831,737 $ 4,544,950 Plan fiduciary net position as a percentage of the total pension liability 86.20% 78.41% 78.76% 82.07% 77.62% 74.50% 76.66% 81.83% Covered payroll $ 2,941,480 $ 2,640,254 $ 2,263,844 $ 2,242,245 $ 2,091,146 $ 2,073,208 $ 2,037,716 $ 1,975,478 Net pension liability as a percentage of covered payroll 150.67% 245.46% 263.57% 213.40% 288.93% 328.89% 286.19% 230.07% 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, 2019 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. * This schedule is intended to show information for ten years. Additional years will be displayed as they become available. 87  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 * 2022 2021 2020 2019 2018 2017 2016 2015 2014 Total Pension Liability Service cost $ 645,171 $ 546,149 $ 513,466 $ 477,930 $ 494,032 $ 453,506 $ 478,365 $ 414,836 $ 384,107 Interest 2,115,954 2,063,083 1,978,589 1,864,720 1,830,663 1,645,954 1,554,072 1,425,875 1,367,809 Change in excess state money - - - - - - - 89,886 Changes of benefit terms 2 - - (2,402) - - - 804,097 - - Differences between expected and actual experiences 397,047 231,328 98,199 513,043 (199,349) 261,007 (224,382) - - Contributions – buy back - - - - 32,155 - 72,413 - - Changes of assumptions 1 760,987 66,865 655,972 601,424 258,300 1,243,794 - - - Benefit payments, including refunds of employee contributions (1,536,000) (1,459,394) (1,407,554) (1,318,156) (1,434,474) (1,237,389) (1,140,432) (1,071,302) (1,042,333) Net change in total pension liability 2,383,159 1,448,031 1,836,270 2,138,961 981,327 2,366,872 1,544,133 859,295 709,583 Total pension liability – beginning 29,511,079 28,063,048 26,226,778 24,087,817 23,106,490 20,739,618 19,195,485 18,336,190 17,626,607 Total pension liability – ending (a)