Fort Walton Beach — Comprehensive Financial Report September 30, 2015 — reading text

2008 2007 2006 General Employees' Retirement Fund Actuarially determined contribution $ 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 $ 1,070,599 Contributions in relation to the actuarially determined contributions 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 1,071,742 Contribution deficiency (excess) $ (68,297) $ (108,656) $ (50,537) $ (47,609) $ (68,100) $ 156 $ 168 $ 155 $ - $ (1,143) Covered employee payroll $ 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 $ 7,715,643 Contributions as a percentage of covered employee payroll 32.33% 30.46% 30.96% 28.76% 23.17% 26.41% 17.49% 16.86% 15.01% 13.89% Police Officers' Retirement Fund Actuarially determined contribution $ 772,294 $ 932,426 $ 881,697 $ 875,055 $ 682,860 $ 665,220 $ 578,670 $ 488,381 $ 516,528 $ 433,829 Contributions in relation to the actuarially determined contributions 772,294 1,011,756 925,589 968,003 682,860 665,220 578,670 488,381 516,528 433,829 ¹Contribution deficiency (excess) $ - $ (79,330) $ (43,892) $ (92,948) $ - $ - $ - $ - $ - $ - Covered employee payroll $ 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 $ 2,257,286 Contributions as a percentage of covered employee payroll 37.90% 51.22% 45.40% 44.43% 30.49% 30.30% 22.62% 9.34% 19.85% 19.22% Firefighters' Retirement Fund Actuarially determined contribution $ 748,086 $ 824,007 $ 817,997 $ 700,045 $ 675,386 $ 708,063 $ 555,720 $ 326,864 $ 299,027 $ 240,332 Contributions in relation to the actuarially determined contributions 877,376 839,825 829,245 784,705 675,386 708,063 555,720 358,840 299,027 240,332 Contribution deficiency (excess) $ (129,290) $ (15,818) $ (11,248) $ (84,660) $ - $ - $ - $ (31,976) $ - $ - Covered employee payroll $ 2,072,260 $ 4,255,801 $ 2,153,568 $ 1,946,811 $ 1,961,080 $ 2,116,516 $ 1,988,762 $ 1,632,275 $ 1,409,038 $ 1,807,962 Contributions as a percentage of covered employee payroll 42.34% 19.73% 38.51% 40.31% 34.44% 33.45% 27.94% 21.98% 21.22% 13.29% ¹ Employer contributions of $31,706 are considered prepaid at 9/30/15. See notes to the schedule of contributions. 85  CITY OF FORT WALTON BEACH, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION NOTES TO THE SCHEDULE OF CONTRIBUTIONS (UNAUDITED) GENERAL EMPLOYEES’ RETIREMENT FUND Valuation Date: October 1, 2013 Notes: Actuarially determined contribution rates are calculated as of October 1, which is three years prior to the end of the fiscal year in which contributions are reported Methods and Assumptions Used to Determine Contribution Rates: Actuarial cost method: Individual Entry-Age Actuarial Cost Method Financing of Unfunded Unfunded Actuarial Accrued Liabilities (full funding credit if assets exceed liabilities) Actuarial Accrued were amortized by level (principal & interest combined) dollar contributions over a Liabilities: reasonable period of future years. Remaining amortization period: 15 years Wage Inflation Rate: 3.0% per year Mortality: RP-2000 Combined Healthy Participant Mortality Tables for males and females. There is no provision for future mortality improvements after 2000 being made. Disabled Lives: Social Security Study #74 Mortality Tables. There is no provision for future mortality improvements being made. Investment rate of return: 7.90% 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: 100% of disabilities are assumed to be service-connected. Age-based rates. Sample rates as follows: Sample Ages Probability 20 0.070% 30 0.110% 40 0.190% 50 0.005% 60 1.660% 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. 86  CITY OF FORT WALTON BEACH, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION NOTES TO THE SCHEDULE OF CONTRIBUTIONS (UNAUDITED) – CONTINUED GENERAL EMPLOYEES’ RETIREMENT FUND Normal retirement: 100% probability of retirement upon attaining age 62 and 10 years of service. Early retirement: Rates as shown below: 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% Actuarial value of assets: The Actuarial Value of Assets phases in the difference between the expected return on the actuarial value of assets and the actual return on the market value of the assets at the rate of 20% per year. The Actuarial Value of Assets will be further adjusted to the extent necessary to fall within the corridor whose lower limit is 80% of the Market Value of plan assets and whose upper limit is 120% of the Market Value of plan assets. During periods when investment performance exceeds the assumed rate, Actuarial Value of Assets will tend to be less than Market Value. During periods when investment performance is less than assumed rate, Actuarial Value of Assets will tend to be greater than Market Value. As of October 1, 2013, the actuarial value of assets was set market value. Recognition of annual differences between the expected and actuarial investment returns will be recognized prospectively. 87  CITY OF FORT WALTON BEACH, FLORIDA REQUIRED SUPPLEMENTARY INFORMATION NOTES TO THE SCHEDULE OF CONTRIBUTIONS (UNAUDITED) POLICE OFFICERS’ RETIREMENT FUND Valuation Date: October 1, 2013 Notes: Actuarially determined contribution rates are calculated as of October 1, which is two year(s) 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 Inflation: 3.00% per year Mortality: RP-2000 Combined Healthy Table (sex distinct) 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 morality improvements. Interest rate: 8.00% per year, compounded annually, net of investment related expenses Retirement age: Member Age Retirement Probability 55 10.00% 56 10.00% 57 25.00% 58 20.00% 59 33.30% 60+ 100.00% In addition to the above table, 100% retirement is assumed upon completion of 30 years of service. Valuations prior to October 1, 2013. Earlier of: 1) Age 55, or 2) 30 years of service, regardless of age. Also any member who has reached normal retirement is assumed to continue employment for one additional year. Early retirement: Earlier of 1) Age 50 and 10 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 10.00% 31-35 8.50% 36-40 7.00% 41-45 6.00% 45-50 4.50% 51-55 4.00% 56+ 3.00%