C I T Y O F O R L A N D O G E N E R A L E M P L O Y E E S P E N S I O N F U N D C H A P T E R , F. S. C O M P L I A N C E R E P O R T S E

Transcription

1 C I T Y O F O R L A N D O G E N E R A L E M P L O Y E E S P E N S I O N F U N D C H A P T E R , F. S. C O M P L I A N C E R E P O R T S E P T E M B E R 3 0,

2 June 29, 2015 Board of Trustees City of Orlando General Employees Pension Fund Orlando, Florida Dear Board Members: Gabriel, Roeder, Smith & Company (GRS) has been engaged by the City of Orlando General Employees Pension Fund to prepare a disclosure report to satisfy the requirements set forth in Ch , F.S. and as further required pursuant to Ch. 60T , F.A.C. This report was prepared at the request of the Board and is intended for use by the Retirement Board and those designated or approved by the Board. This report may be provided to parties other than the City and the Board only in its entirety and only with the permission of the City and the Board. The purpose of the report is to provide the required information specified in Ch , F.S. as well as supplement this information with additional exhibits. This report should not be relied on for any purpose other than the purpose described above. The findings in this report are based on data or other information through September 30, Future actuarial measurements may differ significantly from the current measurements presented in this report due to such factors as the following: plan experience differing from that anticipated by the economic or demographic assumptions; changes in economic or demographic assumptions; increases or decreases expected as part of the natural operation of the methodology used for these measurements (such as the end of an amortization period or additional cost or contribution requirements based on the plan s funded status); and changes in plan provisions or applicable law. The scope of this engagement does not include an analysis of the potential range of such measurements. This report was based upon information furnished by the City and the Board concerning Fund benefits, financial transactions, plan provisions and active members, terminated members, retirees and beneficiaries. We checked for internal and year-to-year consistency, but did not otherwise audit the data. We are not responsible for the accuracy or completeness of the information provided by the City. This report was prepared using certain assumptions prescribed by the Board as described in the final actuarial valuation report dated March 10, 2015 and the GASB 67 report dated January 28, Note: As required in Section (c) of the Florida Statutes, the projections of the Fund assets on pages 5-8 do not include contributions from the employer, employee or state. For this reason, these projections should not be viewed as a representation of the amount of time the Fund can sustain benefit payments. Under the GASB standards which do include contributions from the employer, employee and State, the Fund is expected to be able to sustain the benefit payment demands in the near-term and long-term future.

3 The Board of Trustees June 29, 2015 Page 2 This report has been prepared by actuaries who have substantial experience valuing public employee retirement systems. To the best of our knowledge the information contained in this report is accurate and fairly presents the actuarial position of the Pension Fund as of the valuation date. All calculations have been made in conformity with generally accepted actuarial principles and practices, with the Actuarial Standards of Practice issued by the Actuarial Standards Board and with applicable statutes. The signing actuaries are independent of the plan sponsor. With respect to the reporting standards for defined benefit retirement plans or systems contained in Section (1) F.S., the actuarial disclosures required under this section were prepared and completed by the signed actuaries or under their direct supervision, and they acknowledge responsibility for the results. To the best of their knowledge, the results are complete and accurate, and in their opinion, meet the requirements of Section (1), F.S. and Section 60T , F.A.C. Brad Lee Armstrong and Jeffrey T. Tebeau are Members of the American Academy of Actuaries (MAAA) and meet the Qualification Standards of the American Academy of Actuaries to render the actuarial opinion contained herein. Respectfully submitted, Brad L. Armstrong ASA, EA, MAAA Jeffrey T. Tebeau ASA, MAAA BLA/JTT:

4 TABLE OF CONTENTS Title Page Ch , F.S. Results Schedule of Changes in Net Pension Liability 1. Using financial reporting assumptions per GASB Statement No Using assumptions prescribed in Section (1)(a), F.S Using assumptions prescribed in Section (1)(b), F.S Using the mandated mortality and funding interest rate +2% 4 Asset Versus Benefit Payments Projections 1. Using funding assumptions 5 2. Using assumptions prescribed in Section (1)(a), F.S Using assumptions prescribed in Section (1)(b), F.S Using the mandated mortality and funding interest rate +2% 8 Actuarially Determined Contribution 9

5 Schedule of Changes in the Employers' Net Pension Liability Using Financial Reporting Assumptions per GASB Statement No. 67 Fiscal year ending September 30, Total pension liability a. Service Cost $ 1,417,366 b. Interest 17,584,829 c. Benefit Changes - d. Difference between actual & expected experience - e. Assumption Changes - f. Benefit Payments (14,335,291) g. Contribution Refunds - h. Other - i. Net Change in Total Pension Liability 4,666,904 j. Total Pension Liability - Beginning 226,269,321 k. Total Pension Liability - Ending $ 230,936, Plan Fiduciary Net Position a. Contributions - Employer $ 9,056,797 b. Contributions - Non-Employer Contributing Entity - c. Contributions - Member 508,575 d. Net Investment Income 17,015,603 e. Benefit Payments (14,335,291) f. Contribution Refunds - g. Administrative Expense (110,530) h. Other - Includes Share Accounts - i. Net Change in Plan Fiduciary Net Position 12,135,154 j. Plan Fiduciary Net Position - Beginning 195,879,490 k. Plan Fiduciary Net Position - Ending $ 208,014, Net Pension Liability / (Asset) $ 22,921,581 Investment Return Assumption 8.00% Mortality Table 1994 Group Annuity Table -1-

6 Schedule of Changes in the Employers' Net Pension Liability Using Assumptions required under (1)(a), F.S. Fiscal year ending September 30, Total pension liability a. Service Cost $ 1,496,854 b. Interest 18,099,990 c. Benefit Changes - d. Difference between actual & expected experience - e. Assumption Changes - f. Benefit Payments (14,335,291) g. Contribution Refunds - h. Other - i. Net Change in Total Pension Liability 5,261,553 j. Total Pension Liability - Beginning 232,669,098 k. Total Pension Liability - Ending $ 237,930, Plan Fiduciary Net Position a. Contributions - Employer $ 9,056,797 b. Contributions - Non-Employer Contributing Entity - c. Contributions - Member 508,575 d. Net Investment Income 17,015,603 e. Benefit Payments (14,335,291) f. Contribution Refunds - g. Administrative Expense (110,530) h. Other - Includes Share Accounts - i. Net Change in Plan Fiduciary Net Position 12,135,154 j. Plan Fiduciary Net Position - Beginning 195,879,490 k. Plan Fiduciary Net Position - Ending $ 208,014, Net Pension Liability / (Asset) $ 29,916,007 Investment Return Assumption 8.00% Mortality Table RP-2000 fully generational using Scale AA -2-

7 Schedule of Changes in the Employers' Net Pension Liability Using Assumptions required under (1)(b), F.S. Fiscal year ending September 30, Total pension liability a. Service Cost $ 2,460,696 b. Interest 16,739,536 c. Benefit Changes - d. Difference between actual & expected experience - e. Assumption Changes - f. Benefit Payments (14,335,291) g. Contribution Refunds - h. Other - i. Net Change in Total Pension Liability 4,864,941 j. Total Pension Liability - Beginning 284,929,559 k. Total Pension Liability - Ending $ 289,794, Plan Fiduciary Net Position a. Contributions - Employer $ 9,056,797 b. Contributions - Non-Employer Contributing Entity - c. Contributions - Member 508,575 d. Net Investment Income 17,015,603 e. Benefit Payments (14,335,291) f. Contribution Refunds - g. Administrative Expense (110,530) h. Other - Includes Share Accounts - i. Net Change in Plan Fiduciary Net Position 12,135,154 j. Plan Fiduciary Net Position - Beginning 195,879,490 k. Plan Fiduciary Net Position - Ending $ 208,014, Net Pension Liability / (Asset) $ 81,779,856 Investment Return Assumption 6.00% Mortality Table RP-2000 fully generational using Scale AA -3-

8 Schedule of Changes in the Employers' Net Pension Liability Using Assumptions required under (1)(b), F.S. Except 2% higher investment return assumption Fiscal year ending September 30, Total pension liability a. Service Cost $ 935,293 b. Interest 18,813,500 c. Benefit Changes - d. Difference between actual & expected experience - e. Assumption Changes - f. Benefit Payments (14,335,291) g. Contribution Refunds - h. Other - i. Net Change in Total Pension Liability 5,413,502 j. Total Pension Liability - Beginning 194,835,003 k. Total Pension Liability - Ending $ 200,248, Plan Fiduciary Net Position a. Contributions - Employer $ 9,056,797 b. Contributions - Non-Employer Contributing Entity - c. Contributions - Member 508,575 d. Net Investment Income 17,015,603 e. Benefit Payments (14,335,291) f. Contribution Refunds - g. Administrative Expense (110,530) h. Other - Includes Share Accounts - i. Net Change in Plan Fiduciary Net Position 12,135,154 j. Plan Fiduciary Net Position - Beginning 195,879,490 k. Plan Fiduciary Net Position - Ending $ 208,014, Net Pension Liability / (Asset) $ (7,766,139) Investment Return Assumption 10.00% Mortality Table RP-2000 fully generational using Scale AA. -4-

9 Asset and Benefit Payment Projection Not Reflecting Any Contributions from the Employer, State or Employee Using Financial Reporting Assumptions per GASB Statement No. 67 FYE (BOY) Expected Investment Return Projected Benefit Payments (EOY) 2015 $ 208,014,644 $ 15,976,098 $ 16,626,839 $ 207,363, ,363,903 15,888,689 17,510, ,742, ,742,001 15,730,809 18,213, ,259, ,259,037 15,507,634 18,827, ,939, ,939,452 15,220,744 19,360, ,799, ,799,883 14,874,320 19,741, ,932, ,932,436 14,472,585 20,050, ,354, ,354,777 14,017,285 20,277, ,094, ,094,631 13,510,858 20,417, ,187, ,187,669 12,957,330 20,442, ,702, ,702,918 12,361,207 20,375, ,688, ,688,460 11,725,947 20,228, ,186, ,186,170 11,054,819 20,001, ,239, ,239,134 10,350,311 19,720, ,868, ,868,948 9,613,958 19,388, ,093, ,093,956 8,846,893 19,015, ,925, ,925,255 8,050,422 18,589,971 99,385, ,385,706 7,226,011 18,121,148 88,490, ,490,568 6,374,768 17,611,931 77,253, ,253,405 5,497,586 17,067,171 65,683, ,683,820 4,595,369 16,483,426 53,795, ,795,762 3,669,213 15,861,193 41,603, ,603,782 2,720,038 15,206,626 29,117, ,117,194 1,748,479 14,522,415 16,343, ,343, ,991 13,811,738 3,286, ,286,511-13,078,304 - Number of years for which current market value of assets are adequate to sustain the payment of expected retirement benefits reflecting no contributions from the Employer, Employee or State: Valuation Investment return assumption 8.00% Valuation Mortality Table 1994 Group Annuity Table -5-

10 Asset and Benefit Payment Projection Not Reflecting Any Contributions from the Employer, State or Employee Using Assumptions required under (1)(a), F.S. FYE (BOY) Expected Investment Return Projected Benefit Payments (EOY) 2015 $ 208,014,644 $ 15,975,983 $ 16,629,707 $ 207,360, ,360,920 15,887,818 17,526, ,722, ,722,357 15,727,843 18,248, ,201, ,201,555 15,500,607 18,887, ,814, ,814,225 15,207,006 19,453, ,567, ,567,935 14,850,497 19,873, ,545, ,545,000 14,434,552 20,226, ,753, ,753,360 13,960,093 20,504, ,209, ,209,063 13,428,647 20,701, ,935, ,935,772 12,843,366 20,787, ,991, ,991,748 12,207,872 20,786, ,412, ,412,913 11,524,688 20,708, ,228, ,228,971 10,796,120 20,554, ,470, ,470,162 10,023,624 20,349, ,144, ,144,056 9,207,634 20,097, ,254, ,254,415 8,348,160 19,804, ,797, ,797,741 7,445,351 19,461,705 90,781, ,781,388 6,499,464 19,076,183 78,204, ,204,669 5,510,389 18,649,618 65,065, ,065,440 4,477,826 18,185,232 51,358, ,358,033 3,401,531 17,677,793 37,081, ,081,771 2,281,468 17,126,836 22,236, ,236,403 1,117,421 16,537,272 6,816, ,816,552-15,909, ,246, ,551,398 - Number of years for which current market value of assets are adequate to sustain the payment of expected retirement benefits reflecting no contributions from the Employer, Employee or State: Valuation Investment return assumption 8.00% Valuation Mortality Table RP-2000 fully generational using Scale AA -6-

11 Asset and Benefit Payment Projection Not Reflecting Any Contributions from the Employer, State or Employee Using Assumptions required under (1)(b), F.S. FYE (BOY) Expected Investment Return Projected Benefit Payments (EOY) 2015 $ 208,014,644 $ 11,981,987 $ 16,629,707 $ 203,366, ,366,924 11,676,224 17,526, ,516, ,516,767 11,303,547 18,248, ,571, ,571,669 10,867,662 18,887, ,551, ,551,394 10,369,485 19,453, ,467, ,467,582 9,811,852 19,873, ,406, ,406,002 9,197,574 20,226, ,377, ,377,384 8,527,511 20,504, ,400, ,400,505 7,802,972 20,701, ,501, ,501,539 7,026,471 20,787, ,740, ,740,620 6,200,836 20,786,707 99,154, ,154,749 5,328,026 20,708,630 83,774, ,774,145 4,409,801 20,554,930 67,629, ,629,016 3,447,249 20,349,730 50,726, ,726,535 2,440,674 20,097,274 33,069, ,069,935 1,390,051 19,804,834 14,655, ,655, ,458 19,461, ,076, ,649, ,185, ,677, ,126, ,537, ,909, ,246, ,551,398 - Number of years for which current market value of assets are adequate to sustain the payment of expected retirement benefits reflecting no contributions from the Employer, Employee or State: Valuation Investment return assumption 6.00% Valuation Mortality Table RP-2000 fully generational using Scale AA -7-

12 Asset and Benefit Payment Projection Not Reflecting Any Contributions from the Employer, State or Employee Using Assumptions required under (1)(b), F.S. Except 2% higher investment return assumption FYE (BOY) Expected Investment Return Projected Benefit Payments (EOY) 2015 $ 208,014,644 $ 19,969,979 $ 16,629,707 $ 211,354, ,354,916 20,259,173 17,526, ,087, ,087,707 20,496,338 18,248, ,335, ,335,400 20,689,143 18,887, ,136, ,136,607 20,840,996 19,453, ,524, ,524,306 20,958,759 19,873, ,609, ,609,633 21,049,654 20,226, ,433, ,433,095 21,118,090 20,504, ,046, ,046,794 21,169,582 20,701, ,514, ,514,438 21,212,074 20,787, ,939, ,939,123 21,254,577 20,786, ,406, ,406,993 21,305,268 20,708, ,003, ,003,631 21,372,617 20,554, ,821, ,821,318 21,464,645 20,349, ,936, ,936,233 21,588,760 20,097, ,427, ,427,719 21,752,530 19,804, ,375, ,375,415 21,964,456 19,461, ,878, ,878,167 22,234,008 19,076, ,035, ,035,992 22,571,118 18,649, ,957, ,957,492 22,986,488 18,185, ,758, ,758,748 23,491,985 17,677, ,572, ,572,939 24,100,952 17,126, ,547, ,547,056 24,827,842 16,537, ,837, ,837,625 25,688,271 15,909, ,616, ,616,056 26,699,264 15,246, ,068, ,068,483 27,879,278 14,551, ,396,364 Number of years for which current market value of assets are adequate to sustain the payment of expected retirement benefits reflecting no contributions from the Employer, Employee or State: N/A* Valuation Investment return assumption 10.00% Valuation Mortality Table RP-2000 fully generational using Scale AA * The Fund is not projected to run out of money under the 10.00% interest rate assumption. -8-

13 ACTUARIALLY DETERMINED CONTRIBUTION GASB No. 67 Assumptions (1)(a) F.S. Assumptions (1)(b) F.S. Assumptions (1)(b) F.S. except 2% higher investment return assumption A. Valuation Date September 30, 2014 September 30, 2014 September 30, 2014 September 30, 2014 B. Actuarial Determined Contribution (ADC) to Be Paid During Fiscal Year Ending 9/30/2016 9/30/2016 9/30/2016 9/30/2016 C. Assumed Dates of Employer Contributions Quarterly Quarterly Quarterly Quarterly D. Annual Payment to Amortize Unfunded Actuarial Liability $ - $ - $ - $ - E. Total Normal Cost 8,562,928 10,993,953 27,058, ,224 F. ADC: D + E $ 8,562,928 $ 10,993,953 $ 27,058,738 $ 396,224 G. As a % of Covered Payroll % % % 4.88 % H. Assumed Rate of Increase in Covered Payroll to Contribution Year 0.00 % 0.00 % 0.00 % 0.00 % I. Covered Payroll for Contribution Year 8,119,345 8,119,345 8,119,345 8,119,345 J. ADC for Contribution Year: G x I 8,562,928 10,993,953 27,058, ,224 K. Allowable Credit for State Revenue in Contribution Year L. Member Contributions 396, , , ,224 M.Employer ADC in Contribution Year $ 8,166,704 $ 10,597,729 $ 26,662,514 $ - N. Employer ADC as % of Covered Payroll in Contribution Year: M I % % % 0.00 % O. Investment Return Assumption 8.00% 8.00% 6.00% 10.00% Mortality Table 1994 Group Annuity Table RP-2000 fully generational using Scale AA RP-2000 fully generational using Scale AA RP-2000 fully generational using Scale AA -9-