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 9, 2017 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 27, 2017 and the GASB Statement No. 67 report dated February 7, 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 9, 2017 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, FCA, MAAA Jeffrey T. Tebeau ASA, EA, MAAA BLA/JTT:ah

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 $ 1,214,603 b. Interest 18,596,530 c. Benefit Changes - d. Difference between actual & expected experience 125,015 e. Assumption Changes 27,374 f. Benefit Payments (17,400,071) g. Contribution Refunds (39,598) h. Other - i. Net Change in Total Pension Liability 2,523,853 j. Total Pension Liability - Beginning 256,066,264 k. Total Pension Liability - Ending $ 258,590, Plan Fiduciary Net Position a. Contributions - Employer $ 7,858,415 b. Contributions - Non-Employer Contributing Entity - c. Contributions - Member 384,000 d. Net Investment Income 16,354,093 e. Benefit Payments (17,400,071) f. Contribution Refunds (39,598) g. Administrative Expense (134,271) h. Other (233,553) i. Net Change in Plan Fiduciary Net Position 6,789,015 j. Plan Fiduciary Net Position - Beginning 199,212,230 k. Plan Fiduciary Net Position - Ending $ 206,001, Net Pension Liability / (Asset) $ 52,588,872 Investment Return Assumption 7.50% Mortality Table RP-2000 fully generational using Scale BB -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 $ 1,220,102 b. Interest 18,071,108 c. Benefit Changes - d. Difference between actual & expected experience 103,999 e. Assumption Changes - f. Benefit Payments (17,400,071) g. Contribution Refunds (39,598) h. Other - i. Net Change in Total Pension Liability 1,955,540 j. Total Pension Liability - Beginning 249,057,885 k. Total Pension Liability - Ending $ 251,013, Plan Fiduciary Net Position a. Contributions - Employer $ 7,858,415 b. Contributions - Non-Employer Contributing Entity - c. Contributions - Member 384,000 d. Net Investment Income 16,354,093 e. Benefit Payments (17,400,071) f. Contribution Refunds (39,598) g. Administrative Expense (134,271) h. Other (233,553) i. Net Change in Plan Fiduciary Net Position 6,789,015 j. Plan Fiduciary Net Position - Beginning 199,212,230 k. Plan Fiduciary Net Position - Ending $ 206,001, Net Pension Liability / (Asset) $ 45,012,180 Investment Return Assumption 7.50% 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 $ 2,022,801 b. Interest 16,327,392 c. Benefit Changes - d. Difference between actual & expected experience 559,024 e. Assumption Changes - f. Benefit Payments (17,400,071) g. Contribution Refunds (39,598) h. Other - i. Net Change in Total Pension Liability 1,469,548 j. Total Pension Liability - Beginning 304,570,102 k. Total Pension Liability - Ending $ 306,039, Plan Fiduciary Net Position a. Contributions - Employer $ 7,858,415 b. Contributions - Non-Employer Contributing Entity - c. Contributions - Member 384,000 d. Net Investment Income 16,354,093 e. Benefit Payments (17,400,071) f. Contribution Refunds (39,598) g. Administrative Expense (134,271) h. Other (233,553) i. Net Change in Plan Fiduciary Net Position 6,789,015 j. Plan Fiduciary Net Position - Beginning 199,212,230 k. Plan Fiduciary Net Position - Ending $ 206,001, Net Pension Liability / (Asset) $ 100,038,405 Investment Return Assumption 5.50% 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 $ 755,461 b. Interest 19,053,123 c. Benefit Changes - d. Difference between actual & expected experience (188,549) e. Assumption Changes - f. Benefit Payments (17,400,071) g. Contribution Refunds (39,598) h. Other - i. Net Change in Total Pension Liability 2,180,366 j. Total Pension Liability - Beginning 208,901,295 k. Total Pension Liability - Ending $ 211,081, Plan Fiduciary Net Position a. Contributions - Employer $ 7,858,415 b. Contributions - Non-Employer Contributing Entity - c. Contributions - Member 384,000 d. Net Investment Income 16,354,093 e. Benefit Payments (17,400,071) f. Contribution Refunds (39,598) g. Administrative Expense (134,271) h. Other (233,553) i. Net Change in Plan Fiduciary Net Position 6,789,015 j. Plan Fiduciary Net Position - Beginning 199,212,230 k. Plan Fiduciary Net Position - Ending $ 206,001, Net Pension Liability / (Asset) $ 5,080,416 Investment Return Assumption 9.50% 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) 2017 $ 206,001,245 $ 14,750,924 $ 18,644,528 $ 202,107, ,107,641 14,429,120 19,438, ,098, ,098,023 14,030,273 20,055, ,072, ,072,875 13,559,349 20,563, ,069, ,069,105 13,017,908 20,993, ,093, ,093,024 12,406,667 21,341, ,158, ,158,107 11,725,696 21,630, ,252, ,252,804 10,975,871 21,815, ,412, ,412,963 10,159,964 21,893, ,679, ,679,373 9,280,188 21,887, ,072, ,072,507 8,337,573 21,809, ,600, ,600,354 7,331,844 21,684,871 94,247, ,247,327 6,261,744 21,514,823 78,994, ,994,248 5,125,532 21,307,632 62,812, ,812,149 3,921,478 21,051,562 45,682, ,682,065 2,647,846 20,754,916 27,574, ,574,994 1,302,367 20,420,206 8,457, ,457,155-20,050, ,642, ,194, ,709, ,187, ,629, ,035, ,406, ,744,346 - 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 7.50% Valuation Mortality Table RP-2000 fully generational using Scale BB -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) 2017 $ 206,001,245 $ 14,751,263 $ 18,635,482 $ 202,117, ,117,026 14,430,846 19,411, ,136, ,136,391 14,034,902 20,008, ,162, ,162,565 13,568,631 20,494, ,236, ,236,226 13,033,894 20,901, ,368, ,368,182 12,431,747 21,223, ,576, ,576,818 11,762,650 21,482, ,856, ,856,502 11,028,003 21,632, ,251, ,251,593 10,231,197 21,671, ,811, ,811,532 9,375,142 21,619, ,567, ,567,407 8,461,659 21,490, ,538, ,538,489 7,491,297 21,309,048 96,720, ,720,738 6,463,671 21,076,914 82,107, ,107,494 5,377,993 20,801,832 66,683, ,683,656 4,233,557 20,472,460 50,444, ,444,753 3,029,682 20,097,981 33,376, ,376,455 1,765,204 19,680,814 15,460, ,460, ,680 19,223, ,721, ,173, ,584, ,954, ,286, ,581, ,843, ,076,506 - 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 7.50% 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) 2017 $ 206,001,245 $ 10,817,593 $ 18,635,482 $ 198,183, ,183,356 10,366,269 19,411, ,138, ,138,143 9,852,358 20,008, ,981, ,981,773 9,280,386 20,494, ,767, ,767,189 8,652,392 20,901, ,517, ,517,643 7,969,835 21,223, ,264, ,264,366 7,233,759 21,482, ,015, ,015,159 6,445,929 21,632, ,828, ,828,176 5,609,590 21,671,258 96,766, ,766,507 4,727,628 21,619,268 79,874, ,874,867 3,802,127 21,490,577 62,186, ,186,417 2,834,254 21,309,048 43,711, ,711,623 1,824,524 21,076,914 24,459, ,459, ,207 20,801,832 4,430, ,430,609-20,472, ,097, ,680, ,223, ,721, ,173, ,584, ,954, ,286, ,581, ,843, ,076,506 - 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 5.50% 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) 2017 $ 206,001,245 $ 18,684,933 $ 18,635,482 $ 206,050, ,050,696 18,652,771 19,411, ,291, ,291,985 18,552,324 20,008, ,835, ,835,581 18,390,869 20,494, ,731, ,731,481 18,171,649 20,901, ,001, ,001,191 17,897,015 21,223, ,675, ,675,095 17,568,693 21,482, ,760, ,760,822 17,189,715 21,632, ,317, ,317,625 16,765,790 21,671, ,412, ,412,156 16,302,240 21,619, ,095, ,095,128 15,803,235 21,490, ,407, ,407,786 15,271,560 21,309, ,370, ,370,297 14,709,025 21,076, ,002, ,002,408 14,117,142 20,801, ,317, ,317,718 13,497,741 20,472, ,342, ,342,999 12,852,931 20,097, ,097, ,097,950 12,184,467 19,680, ,601, ,601,602 11,494,034 19,223, ,872, ,872,090 10,783,581 18,721, ,934, ,934,241 10,055,511 18,173, ,816, ,816,234 9,312,276 17,584,562 98,543, ,543,948 8,556,318 16,954,894 90,145, ,145,372 7,790,210 16,286,317 81,649, ,649,265 7,016,550 15,581,682 73,084, ,084,133 6,237,906 14,843,937 64,478, ,478,102 5,456,786 14,076,506 55,858, ,858,382 4,675,600 13,283,083 47,250, ,250,898 3,896,571 12,468,725 38,678, ,678,744 3,121,597 11,639,667 30,160, ,160,673 2,352,184 10,801,687 21,711, ,711,170 1,589,436 9,960,535 13,340, ,340, ,913 9,124,073 5,049, ,049,911 85,427 8,301,354 - 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 9.50% Valuation Mortality Table RP-2000 fully generational using Scale AA -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, 2016 September 30, 2016 September 30, 2016 September 30, 2016 B. Actuarial Determined Contribution (ADC) to Be Paid During Fiscal Year Ending 9/30/2018 9/30/2018 9/30/2018 9/30/2018 C. Assumed Dates of Employer Contributions Quarterly Quarterly Quarterly Quarterly D. Annual Payment to Amortize Unfunded Actuarial Liability $ - $ - $ - $ - E. Total Normal Cost 8,458,281 7,160,731 15,846,708 20,838 F. ADC: D + E $ 8,458,281 $ 7,160,731 $ 15,846,708 $ 20,838 G. As a % of Covered Payroll % % % 0.35 % 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 5,895,388 5,895,388 5,895,388 5,895,388 J. ADC for Contribution Year: G x I 8,458,281 7,160,731 15,846,708 20,838 K. Allowable Credit for State Revenue in Contribution Year L. Member Contributions 287, , , ,695 M.Employer ADC in Contribution Year $ 8,170,586 $ 6,873,036 $ 15,559,013 $ - N. Employer ADC as % of Covered Payroll in Contribution Year: M I % % % 0.00 % O. Investment Return Assumption 7.50% 7.50% 5.50% 9.50% Mortality Table RP-2000 fully generational using Scale BB RP-2000 fully generational using Scale AA RP-2000 fully generational using Scale AA RP-2000 fully generational using Scale AA -9-