City of Orlando Firefighter Pension Fund

Transcription

1 October 1, 2017 Actuarial Valuation Report Nyhart Actuary & Employee Benefits 2000 RiverEdge Pkwy., Suite 900, Atlanta, GA

2 Table of Contents Actuarial Certification 3 Executive Summary 5 Summary Results 5 Changes Since Prior Valuation and Key Notes 6 Assets and Liabilities 7 Present Value of Future Benefits 7 Accrued Liabilities 8 Asset Information 9 Reconciliation of Gain/Loss 11 Contribution Requirements 12 Development of Recommended Contribution 12 Demographic Information 13 Participant Reconciliation 15 Plan Provisions 17 Actuarial Assumptions 21 Appendix 24 Reconciliation of Unfunded Actuarial Liability 25 Asset Information 26 Schedule of Amortizations 28 Florida State Requirements 29 Reserve Account Under Supplemental CAFR Information 40 Schedule of Funding Progress and Employer Contributions 43 Page 2

3 Actuarial Certification At the request of the plan sponsor, this report summarizes the Firefighter Pension Fund for the City of Orlando as of October 1, The purpose of this report is to communicate the following results of the valuation: Determine Funded Status; and Determine Recommended Contribution for the fiscal year October 1, 2017 through September 30, 2018; This report has been prepared in accordance with the applicable Federal and State laws. Consequently, it may not be appropriate for other purposes. Please contact Nyhart prior to disclosing this report to any other party or relying on its content for any purpose other than that explained above. Failure to do so may result in misrepresentation or misinterpretation of this report. The results in this report were prepared using information provided to us by other parties. The census information has been provided to us by the employer. Asset information has been provided to us by the trustee. We have reviewed the provided data for reasonableness when compared to prior information provided, but have not audited the data. Where relevant data may be missing, we have made assumptions we believe to be reasonable. We are not aware of any significant issues with and have relied on the data provided. Any errors in the data provided may result in a different result than those provided in this report. A summary of the data used in the valuation is included in this report. The actuarial assumptions and methods were chosen by the Board. In our opinion, all actuarial assumptions and methods are individually reasonable and in combination represent our best estimate of anticipated experience of the plan. 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); and changes in plan provisions or applicable law. We did not perform an analysis of the potential range of future measurements due to the limited scope of our engagement. This report has been prepared in accordance with generally accepted actuarial principles and practice. This actuarial valuation and/or cost determination was prepared and completed by me or under my direct supervision, and I acknowledge responsibility for the results. To the best of my knowledge, the results are complete and accurate, and in my opinion, the techniques and assumptions used are reasonable and meet the requirements and intent of Part VII, Chapter 112, Florida Statutes. There is no benefit or expense to be provided by the plan and/or paid from the plan s assets for which liabilities or current costs have not been established or otherwise taken into account in the valuation. All known events or trends which may require a material increase in plan costs or required contribution rates have been taken into account in the valuation. Page 3

4 Actuarial Certification With respect to reporting standards for defined benefit retirement plans or systems contained in Section (1), Florida Statutes, the actuarial disclosures required under this section were prepared and completed by me or under my direct supervision, and I acknowledge responsibility for the results. To the best of my knowledge, the results are complete and accurate, and in my opinion, meet the requirements of Section (1), Florida Statutes, and Rule 60T , Florida Administrative Code. Neither Nyhart nor any of its employees have any relationship with the plan or its sponsor which could impair or appear to impair the objectivity of this report. To the extent that this report or any attachment concerns tax matters, it is not intended to be used and cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed by law. The undersigned are compliant with the continuing education requirements of the Qualification Standards for Actuaries Issuing Statements of Actuarial Opinion in the United States and are available for any questions. Nyhart Tayt Odom, FSA, MBA Carter M. Angell, FSA, EA May 2, 2018 Date Copies of this Report are to be furnished to the Division of Retirement within 60 days of receipt from the actuary at the following addresses: Ms. Sarah Carr Mr. Keith Brinkman Benefits Administrator Bureau Chief, Bureau of Local Retirement Systems Municipal Police Officers & Florida Department of Management Services Firefighters Trust Funds Division of Retirement Division of Retirement Department of Management Services Post Office Box 3010 P. O. Box 9000 Tallahassee, FL Tallahassee, FL Page 4

5 Executive Summary Summary Results The actuarial valuation s primary purpose is to produce a scorecard measure displaying the funding progress of the plan toward the ultimate goal of paying benefits at retirement. The accrued liability is based on an entry age level percentage of pay. October 1, 2016 October 1, 2017 Funded Status Measures Accrued Liability $462,270,068 $475,842,722 Actuarial Value of Assets 365,768, ,325,521 Unfunded Accrued Liability $96,501,719 $85,517,201 Funded Percentage (AVA) 79% 82% History of Funded Ratio Funded percentage (MVA) 75% 80% 100.0% Cost Measures Recommended Contribution $18,541,649 $19,028,110 Recommended Contribution (as a percentage of expected payroll) 42.5% 44.2% 90.0% 80.0% 92% 82% Asset Performance Market Value of Assets 346,924, ,634, % Actuarial Value of Assets 365,768, ,325,521 Actuarial Value/Market Value 105.4% 102.3% 60.0% Member Information Active Members Terminated Vested Members 3 3 Retirees, Beneficiaries, and Disabled Members DROP Participants Total Payroll $41,973,977 $41,399,503 Expected Payroll $43,652,936 $43,055,483 Page 5

6 Executive Summary Changes since Prior Valuation and Key Notes The assumption on future payroll growth for the amortization payments was lowered to 2.89% to stay at or below the 10 year average of historical pay growth. The assumed rate of return (interest rate) has been lowered from 7.75% to 7.70% per the glide path adopted by the Board. The interest rate will continue to decrease 5bps until reaching 7.50% at 10/1/2021. Page 6

7 Assets and Liabilities Present Value of Future Benefits The Present Value of Future Benefits represents the discounted value of all future benefits expected to be payable to current members, considering future service and compensation not yet earned. October 1, 2017 Present Value of Future Benefits Active members Retirement $298,363,672 Disability 39,728,142 Death 9,742,871 Termination 1,281,638 Return of contributions 446,744 Total active $349,563,067 Inactive members Retired members $179,335,259 DROP members 2,780,017 Beneficiaries 15,200,108 Disabled members 56,823,747 Terminated vested members 564,227 Total inactive $254,703,358 Total $604,266,425 Breakdown of Present Value of Future 19% 2% 42% 37% Inactive Liability Active Liability Normal Cost Future Benefits Present value of future payrolls $368,063,866 Page 7

8 Assets and Liabilities Accrued Liabilities The Accrued Liability measures the present value of benefits earned as of the valuation date, using a specified set of actuarial assumptions. It is not a long-term snapshot of the liabilities. October 1, 2017 Accrued Liabilities Active members Retirement $203,900,844 Disability 11,593,196 Death 5,129,296 Termination 457,376 Refund of contributions 58,652 Total Active $221,139,364 Inactive members Retired members $179,335,259 DROP members 2,780,017 Beneficiaries 15,200,108 Disabled members 56,823,747 Terminated vested members 564,227 Total Inactive $254,703,358 Total $475,842, % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 55.9% History of the Percentage of Inactive Liability 52.3% 51.8% 54.1% 56.7% 55.8% 55.1% 53.9% 54.4% 53.5% Normal Cost $14,132,856 Page 8

9 Assets and Liabilities Asset Information The amount of assets backing the pension promise is the most significant driver of volatility and future costs within a pension plan. The investment performance of the assets directly offsets the ultimate cost. October 1, 2017 Market Value Reconciliation Market value of assets, beginning of prior year $358,610,651 Contributions Employer $16,562,106 Employee 3,117,933 Non-Employer 2,104,643 Total 21,784,682 Millions $500 $400 $300 $200 $100 $0 History of Assets Investment income, net expenses 38,096,451 Benefit payments and refunds (24,146,618) Administrative expenses (157,904) Other expenses (9,655) Market value of asset, beginning of current year $394,177,607 Return on Market Value 10.45% Share Plan Assets $12,543,076 Market value of assets available for pension benefits $381,634,531 Market Assets Actuarial Assets Actuarial value of plan assets Value at beginning of current year $390,325,521 Page 9

10 Assets and Liabilities Asset Information (continued) Plan Assets are used to develop funded percentages and contribution requirements. October 1, Expected actuarial value of assets (a) Actuarial value of assets, beginning of prior year (b) Contributions (c) Benefit payments (d) Refund of Contributions (e) Expenses (f) Expected return (g) Expected actuarial value of assets, beginning of current year $365,768,349 21,784,682 (23,618,267) (109,767) (167,559) 28,840,830 $392,498, Market value of assets, beginning of current year $381,634, Amount subject to phase in [(2)-(1g)] ($10,863,737) 4. Phase in of asset gain/(loss) 20% x ($10,863,737) ($2,172,747) 5. Preliminary actuarial value of assets, beginning of current year [(1g)+(4)] $390,325, % Market value of assets $305,307, % Market value of assets $457,961, Adjusted actuarial value of assets $390,325, Return on actuarial value of assets 7.29% Page 10

11 Assets and Liabilities Reconciliation of Gain/Loss October 1, 2017 Liability (gain)/loss Actuarial liability, beginning of prior year $462,270,068 Normal cost 14,059,252 Benefit payments (23,728,034) Expected Interest 36,013,217 Assumption Changes 2,759,850 1-year lag adjustment (1,164,577) Expected actuarial liability, beginning of current year $490,209,776 Actual actuarial liability $475,842,722 Liability (gain)/loss $(14,367,054) Asset (gain)/loss Actuarial value of assets, beginning of prior year $365,768,349 Contributions 21,784,682 Benefit payments and expenses (23,895,593) Expected Investment return 28,840,830 Expected actuarial value of assets, beginning of current year $392,498,268 Actual actuarial value of assets, beginning of current year (before accumulated reserve adjustment) $390,325,521 Asset (gain)/loss $2,172,747 Total (gain)/loss $(12,194,307) Page 11

12 Contribution Requirements Development of Recommended Contribution The minimum recommended contribution is the annual amount necessary to fund the plan according to funding policies and/or applicable laws. The recommended contribution is composed of the normal cost, administrative expenses, plus an amortization charge. Funded Position October 1, Entry age accrued liability $475,842, Actuarial value of assets 390,325, Unfunded actuarial accrued liability (UAAL) $85,517,201 Employer Contributions 1. Normal Cost (a) Total normal cost $14,132,856 (b) Expected participant contributions 3,100,823 (c) Net normal cost $11,032, Administrative expenses 167, Amortization of UAAL 8,705, Applicable interest 1,532, Total required contribution $21,438, Expected state contribution (2,410,006) 7. Total recommended contribution (1) $19,028,110 As a percentage of current payroll 45.96% As a percentage of expected payroll 44.19% Millions 40% 30% 20% 10% 0% $20.0 $15.0 $10.0 $5.0 $ % History of Contributions 25.1% $ % $ % $ % $ % $ % $ % $15.70 History of Recommended Contributions (% of Payroll) 38.7% $ % $ % (1) Lump sum payment to be made October 1, 2018 FYE 9/30 Page 12

13 Demographic Information Demographic Information The foundation of a reliable actuarial report is the participant information provided by the plan sponsor. Monitoring trends in demographic information is crucial for long-term pension planning. October 1, 2017 Participant Counts Active Participants 498 Retired Participants 276 Beneficiaries 62 Disabled Participants 111 Terminated Vested Participants 3 DROP Participants 17 Millions $45 $40 $35 $30 $25 $20 History of Covered Payroll $34.2 $35.7 $36.7 $36.5 $36.3 $38.7 $39.0 $40.4 $42.0 $41.4 Total Participants 967 Active Participant Demographics Average Age Average Service Average Compensation $83,132 Covered Payroll $41,399,503 Page 13

14 Demographic Information Demographic Information (continued) October 1, 2017 Retiree Statistics Average Age Average Monthly Benefit $4,147 Beneficiary Statistics Average Age Average Monthly Benefit $1,921 Disabled Participants Statistics Average Age Average Monthly Benefit $3,726 Terminated Participants Statistics Average Age Average Monthly Benefit $1,616 DROP Participants Statistics Average Age Average Monthly Benefit $5,537 Page 14

15 Participant Reconciliation Participant Reconciliation Active Terminated Vested Disabled Retired Beneficiaries Totals Prior Year Active To Disabled 0 To Retired (5) 5 0 To Terminated Vested 0 Terminated Vested To Retired 0 Disabled To Death (2) (2) Retired To Death 0 Survivor To Death (8) (8) Additions Departures (4) (1) (5) Current Year Page 15

16 Participant Reconciliation Active Participant Schedule Active participant information grouped based on age and service. Age Group Under to to to to to to to to to & up Total Years of Service Under 1 1 to 4 5 to 9 10 to to to to to to & Up Total Average Pay , , , , , , , , , , ,132 Page 16

17 Plan Provisions Plan Status Special Acts beginning in 1945 and ordinances codified in Chapter 12, Articles II and III, Orlando City Code, and Fire Pension Ordinance with coding Eligibility for Participation All officers and firefighters regularly and continuously employed in the Fire Department, excluding secretaries, stenographers, and switchboard operators. Membership starts immediately upon hire. Accrual of Benefits A participant shall accumulate a benefit payable at normal retirement date based on credited service as of the date of determination and the accrual rate associated with their credited service. The total benefit shall not exceed 100% of Average Monthly Salary. Benefits Credited Service Accrual per Year of Credited Service % % (maximum 85%) % (maximum 85%) + 2% for service over 42.5 Normal Retirement Eligibility Completion of 20 Years of Credited Service or attainment of age 47 and completion of 10 Years of Credited Service. Benefit Unreduced Accrued Benefit payable immediately Early Retirement Eligibility Benefit Completion of 20 Years of Credited Service or attainment of Age 47 and completion of 10 years of Credited Service. Accrued retirement benefit Late Retirement Eligibility Participation continues after normal retirement date. Benefit Accrued retirement benefit Page 17

18 Plan Provisions Death before Retirement In Line of Duty Eligibility Participant dies while performing duties. Benefit Members with less than 10 years of service Beneficiary receives 75% of 80% of the member s Average Monthly Salary until death. Death before Retirement Not In Line of Duty Members with 10 years of service Beneficiary receives 100% of accrued benefit for 10 years and 75% of member s 80% of the Average Monthly Salary. The 80% may be increased 3.4% for each year of service over years (up to maximum of 85%) and an additional 2% for each year of service over 42.5 years (up to maximum of 100%). 25% of the surviving spouses pension is directed toward any surviving child under 18. Eligibility Benefit Participant dies while not in line of duty. Members with less than 10 years of service accumulated contributions without interest paid to Beneficiary. Death during Qualified Military Service Members with 10 years of service - Beneficiary receives 100% of Accrued Benefit for 10 years and 65% (75% if members reached normal retirement) of the Accrued Benefit after 10 years until death. Starting January 1, 2007, the beneficiary of a member who dies while performing qualified military service will be entitled to non-line of duty death benefits, subject to repayment of any withdrawn employee contributions. Termination Benefit Eligibility Benefit Fully vested after 10 years of Credited Service. Less than 20 years of service 2% of Average Monthly Salary per Years of Service Disability Benefit In Line of Duty More than 20 years of service service retirement benefit Benefit payable at age 47. If the participant terminates prior to 10 years of service a refund of accumulated contributions without interest will be issued Eligibility Immediately upon permanent disability Benefit 80% of average monthly salary plus 2% for credited service between 40 and 50 years. Benefit terminates upon death or recovery. Page 18

19 Plan Provisions Disability Benefit Not In Line of Duty Eligibility Immediately upon permanent disability Benefit Less than 10 years of service 3% of Average Monthly Salary per year years of service 4% of Average Monthly Salary per year (maximum 60%) More than 20 years of service - same as service retirement benefit Compensation Salary All employees base pay, EMT and paramedic pay, longevity pay, incentive pay, and fixed monthly remuneration, including pick-up contributions, but excluding overtime pay, education advancement pay, and any other form of compensation. Average Monthly Salary Average Monthly Salary during the last 3 years of Credited Service, or the 5 best years of last 10 years if greater. Credited Service For Vesting and Benefit Accrual Continuous service credited under Pension Fund, from most recent date of employment. Upon reemployment a member may restore pre-breach service upon repayment of amount withdrawn plus interest. Periods of Disability in Line of Duty are credited upon returning to service. After employment, active military service (maximum of 5 years) after March 12, 1999 is included in Credited Service. Employee Contributions DROP 1% (basic),.05% for 20 and out, 6.32% for COLA, totaling 7.37% of Compensation;.12% for DROP (not explicit in ordinance). Eligibility Eligible for service retirement and completion of 20 years of service. Benefit Forward Deferred Retirement Option Plan for up to 60 months or a retroactive Deferred Retirement Option Program for up to 60 months. Interest credited is 8.0% Combined years of credited service and DROP participation may not exceed 360 months. Beneficiaries of DROP participants are not entitled to preretirement death benefits and DROP participants are not eligible for disability benefits. Page 19

20 Plan Provisions COLA Eligibility Benefit Members who retire with 20 or more years of service, or beneficiaries of these members. 5.0% triennial cost-of-living increase beginning 3 years after retirement or DROP exit. Additional cost of benefit is paid by members. Members terminating and not for COLA are not entitled to a refund of contributions to fund the COLA. Payment Forms Normal Form 10 year Certain and Life Optional Forms 50%, 66 2/3%, 75%, and 100% Joint and Survivor Annuity (reduction on first death); Single Life Annuity Married participants may retain the 75% Joint and Survivor Annuity with 10 years certain Plan Provisions Not Included We are not aware of any plan provisions not included in the valuation. Adjustment Made for Subsequent Events We are not aware of any event following the measurement date and prior to the date of this report that would materially impact results. Changes Since Prior Report There have been no changes since the prior valuation report. Page 20

21 Actuarial Assumptions Cost Method Entry Age Method Amortization Method Fresh Start of UAAL amortization over 20 years as of 09/30/2006. All new bases are to be amortized over a 20-year closed period with a 4.0% payroll assumption. This assumption was adjusted to 2.89% for 2017 to remain with the Florida 10-year average requirement. Asset Valuation Method 20% Write-Up method. Expected actuarial value of assets, adjusted by 20% of the difference between expected actuarial value and actual market value. Interest Rates 7.70% net of investment expenses Annual Pay Increases 3.75% plus merit increases (sample below). Age Rates % % % % % The assumed interest rates are based on a study of actuarial experience for the plan during See the experience study report dated November 19, 2015 as prepared by Nyhart. The assumed annual pay increases are based on a study of actuarial experience for the plan during See the experience study report dated November 19, 2015 as prepared by Nyhart. Expense and/or Contingency Loading One-year term cost method, based on expenses for the previous year. Mortality Rates Healthy Florida Retirement System special risk mortality projected with Scale BB generationally Disabled Florida Retirement System disabled mortality projected with Scale BB generationally 75% of assumed deaths are expected to be in Line of Duty. Those on Qualified Military Service have rates 2.5 times the healthy rates. As the plan is not large enough to have credible experience, mortality rates are based on a professional judgement and expectation for the general population adjusted as necessary for the specific provisions of the plan. Page 21

22 Actuarial Assumptions Retirement Rates After completion of 20 years of credited service with the following rates. Service at Retirement Rates % 24 20% 25 40% % 29 70% % Disability Rates Age Rates % % % % The assumed retirement rates are based on a study of actuarial experience for the plan during See the experience study report dated November 19, 2015 as prepared by Nyhart. Disability rates cease upon attainment of 23 years of service. 75% of disabilities are assumed to be In Line of Duty and no offsets are included in any disability benefits. No probabilities of recovery are used. The assumed disability rates are based on a study of actuarial experience for the plan during See the experience study report dated November 19, 2015 as prepared by Nyhart. Page 22

23 Actuarial Assumptions Withdrawal Rates Age Rates % % % % % If not vested upon termination, it is assumed that members withdraw their contribution balances. The assumed withdrawal rates are based on a study of actuarial experience for the plan during See the experience study report dated November 19, 2015 as prepared by Nyhart. Marital Status and Ages 80% of active Members are assumed to be married with female spouses assumed to be 3 years younger than male spouses. Cost-of-Living All members retiring with 20 or more years of service are assumed to receive a 5% costof-living increase every 3 years. State Contributions Premium tax revenues under Chapter 175 are assumed to be $2,410,006. Changes Since Prior Report The assumption on future payroll growth for the amortization payments was lowered to 2.89% to stay at or below the 10 year average of historical pay growth. Page 23

24 Other Measurements The actuarial report also shows the necessary items required for plan reporting and the any state requirements. Reconciliation of unfunded actuarial liability Statement of changes in plan net assets Distribution of assets Schedule of amortizations Florida State requirements Comparative Summary of Principal Valuation Results Comparison of Payroll Growth, salary increases and investment results Requirements under Florida Statute and F.A.C. 60T Reserve account for benefit improvements under F.L and SB 172 Supplemental CAFR information Schedule of Funding Progress and Employer Contributions Page 24

25 Other Measurements Reconciliation of Unfunded Actuarial Liability October 1, Unfunded Actuarial Accrued Liability beginning of prior year $96,501, Normal Cost 14,059, Expenses 167, Employer Contributions (16,562,106) 5. Non-Employer Contributions (5,222,576) 6. Interest 7,172, year lag adjustment (1,164,577) 8. Expected Unfunded Actuarial Accrued Liability, beginning of current year $94,951, Liability changes due to: (a) Amendments $0 (b) Assumptions 2,759,850 (c) Funding Methods 0 (d) (Gain)/Loss (12,194,307) (e) Total $(9,434,457) 10. Unfunded Actuarial Liability beginning of current year $85,517,201 Page 25

26 Other Measurements Statement of Changes in Plan Net Assets September 30, 2016 September 30, Additions (a) Contributions: (i) Employer $13,481,066 $16,562,106 (ii) Member 3,097,389 3,117,933 (iii) Nonemployer contributing entity 2,379,840 2,104,643 (iv) Excess premium tax 0 0 (v) Total $18,958,295 $21,784,682 (b) Investment income (i) Net increase in fair value of investments $25,676,217 $36,121,028 (ii) Interest and dividends 3,195,094 3,546,395 (iii) Investment expense, other than from securities lending (1,105,663) (1,312,614) (iv) Securities lending income 132,508 (81,534) (v) Securities lending expense (59,900) (176,824) (vi) Total $27,838,256 $38,096,451 (c) Other 0 0 (d) Total additions [(a)+(b)+(c)] $46,796,551 $59,881, Deductions (a) Benefit payments, including refunds of member contributions $24,268,282 $24,146,618 (b) Administrative expense 123, ,904 (c) Other 26,510 9,655 (d) Total deductions $24,418,042 $24,314, Net increase [(1d)-(2d)] $22,378,509 $35,566, Net assets held in trust for pension benefits, beginning of year 336,232, ,610, Net assets held in trust for pension benefits, end of year [(3)+(4)] $358,610,651 $394,177,607 Page 26

27 Other Measurements Distribution of Assets September 30, 2016 September 30, 2017 Cash and deposits $1,234,989 $4,721,254 Securities lending cash collateral 23,764,963 25,908,933 Total cash $24,999,952 $30,630,187 Receivables Contributions $0 $0 Other 26, ,579 Total receivables $26,536 $305,579 Investments Domestic Equities $85,269,168 $96,466,154 Fixed Income 116,509, ,548,537 International Equities 48,888,405 68,215,079 Global Asset Allocation 35,327,443 39,714,375 Share Plan Mutual Fund 11,606,947 12,463,224 Real Estate 23,626,123 24,893,078 Hedge Funds 16,902,374 16,600,590 Short-term Investments/Asset Bonded Securities 2,284,206 1,101,121 Private Debt 12,424,885 15,033,687 Private Equity 4,668,107 4,560,925 Total investments $357,506,665 $389,596,770 Payables Investment management fees $0 $0 Due to broker for investments purchased 0 0 Collateral payable for securities lending 23,764,963 25,908,933 Other 157, ,996 Total liabilities $23,922,502 $26,354,929 Reserved Assets Balance in Share fund $(11,686,039) $(12,543,076) Assets available for benefits $346,924,612 $381,634,531 Page 27

28 Other Measurements Schedule of Amortizations October 1, 2017 Original Remaining Period Remaining Annual Date Established Description Original Amount Period Years Balance Payment 9/30/2005 Fresh Start Base 18,321, ,030,039 2,192,512 9/30/2006 Actuarial (Gain)/Loss (4,506,959) 20 9 (3,945,675) (522,674) 9/30/2007 Actuarial (Gain)/Loss (4,698,623) (4,386,715) (534,192) 9/30/2007 Plan Amendment 809, ,167 90,012 9/30/2008 Actuarial (Gain)/Loss 10,730, ,144,584 1,146,914 9/30/2009 Plan Amendment 8,133, ,882, ,094 9/30/2009 Actuarial (Gain)/Loss 14,877, ,853,707 1,677,627 9/30/2010 Actuarial (Gain)/Loss 7,047, ,600, ,922 9/30/2010 Assumption Changes 4,950, ,338, ,390 9/30/2011 Actuarial (Gain)/Loss 6,486, ,045, ,877 9/30/2012 Actuarial (Gain)/Loss (3,644,397) (3,968,270) (357,256) 9/30/2013 Actuarial (Gain)/Loss (1,136,396) (1,235,832) (106,431) 9/30/2014 Actuarial (Gain)/Loss (1,834,540) (1,990,358) (164,588) 9/30/2015 Actuarial (Gain)/Loss 6,029, ,056, ,484 9/30/2015 Assumption Change 13,660, ,723,398 1,093,246 9/30/2016 Actuarial (Gain)/Loss 11,623, ,665, ,886 9/30/2016 Assumption Change 9,364, ,398, ,418 9/30/2017 Actuarial (Gain)/Loss (12,194,307) (12,194,307) (909,207) 9/30/2017 Assumption Change 2,759, ,759, ,774 Total: $85,517,201 $8,705,808 Page 28

29 Other Measurements Information to Comply with Florida 60T-1.003(4)(i) Comparative Summary Of Principal Valuation Results 10/1/ /1/ /1/ % 7.75% 7.75% (current methods & assumptions) (prior methods & assumptions) Participant Data Active members Total annual payroll $41,399,503 $41,399,503 $41,973,977 Members in DROP Total annualized benefit $1,129,457 $1,129,457 $1,232,830 Retired members and beneficiaries Total annualized benefit $15,162,474 $15,162,474 $14,662,803 Disabled members receiving benefits Total annualized benefit $4,962,967 $4,962,967 $4,979,267 Terminated vested members Total annualized benefit $58,180 $58,180 $58,180 Assets Actuarial value of assets $390,237,707 $390,237,707 $365,768,349 Market value of assets $381,634,531 $381,634,531 $346,924,612 Page 29

30 Other Measurements Information to Comply with Florida 60T-1.003(4)(i) Comparative Summary Of Principal Valuation Results (continued) Liabilities, present value of all future expected benefit payments 10/1/ /1/ /1/ % 7.75% 7.75% (current methods & assumptions) (prior methods & assumptions) Active members Retirement benefits $298,363,672 $295,492,077 $290,307,072 Vesting benefits 1,281,638 1,269,569 1,325,204 Disability benefits 39,728,142 39,412,194 40,795,823 Death benefits 9,742,871 9,663,012 9,817,120 Return of contribution 446, , ,056 Total $349,563,067 $346,282,365 $342,548,275 Terminated vested members $564,227 $560,552 $519,220 Retired members and beneficiaries $197,315,384 $196,394,948 $193,931,787 Disabled members $56,823,747 $56,558,731 $57,157,279 Total $604,266,425 $599,796,596 $594,156,561 Liabilities due and unpaid $0 $0 $0 Actuarial accrued liability $475,842,722 $473,082,872 $462,270,068 Unfunded actuarial accrued liability $85,517,201 $82,757,351 $96,501,719 Page 30

31 Other Measurements Information to Comply with Florida 60T-1.003(4)(i) Comparative Summary Of Principal Valuation Results (continued) Actuarial present value of accrued benefits 10/1/ /1/ /1/ % 7.75% 7.75% (current methods & assumptions) (prior methods & assumptions) Statement of actuarial present value of all accrued benefits Vested accrued benefits Inactive members and beneficiaries $254,703,358 $253,514,231 $251,608,286 Active members 146,581, ,507, ,611,328 Total value of all vested accrued benefits $401,284,680 $399,021,561 $379,219,614 Non-vested accrued benefits 11,414,191 11,248,703 16,404,701 Total actuarial present value of all accrued benefits $412,698,871 $410,270,264 $395,624,315 Actuarial present value of accrued benefits, beginning of year $395,624,315 $395,624,315 $360,451,209 Increase (decrease) during year Benefits accumulated $8,612,952 $8,612,952 $22,205,247 Plan amendment Changes in actuarial assumptions 2,428, ,760,866 Interest 29,761,031 29,761,031 27,029,087 Benefits paid (23,728,034) (23,728,034) (23,822,094) Other changes Net increase (decrease) $17,074,556 $14,645,949 $35,173,106 Actuarial present value of accrued benefits, end of year $412,698,871 $410,270,264 $395,624,315 Page 31

32 Other Measurements Information to Comply with Florida 60T-1.003(4)(i) Comparative Summary Of Principal Valuation Results (continued) 10/1/ /1/ /1/ % 7.75% 7.75% (current methods & assumptions) (prior methods & assumptions) Pension cost Normal Cost $14,132,856 $13,981,911 $14,059,252 Member contributions $3,100,823 $3,100,823 $3,143,851 Expected plan sponsor contribution $19,028,110 $18,675,904 $18,541,649 As % of expected payroll 44.19% 43.38% 42.48% Member Contributions as % of payroll 7.49% 7.49% 7.49% Past contributions 9/30/2017 9/30/2017 9/30/2016 Required plan sponsor contribution $18,666,749 $18,666,749 $15,860,906 Required member contribution $3,117,933 $3,117,933 $3,097,389 Actual contributions made by: Plan's sponsor $16,562,106 $16,562,106 $13,481,066 Members $3,117,933 $3,117,933 $3,097,389 Other $2,104,643 $2,104,643 $2,379,840 Net actuarial (gain)/loss (if applicable) $(12,194,307) $(12,194,307) $11,623,470 Other disclosures (where applicable) Present value of active member Future salaries at attained age $368,063,866 $367,046,521 $384,857,320 Future contributions at attained age $25,104,735 $25,037,900 $26,352,769 Accumulated Member Contributions $36,942,812 $36,942,812 $30,272,316 Page 32

33 Other Measurements Information to Comply with Florida 60T-1.003(3)(f) September 30, 2017 Historical Salary Increases and Asset Performance Year Ending Payroll Growth Salary Growth Expected Salary Growth Asset Return (Market) Asset Return (Actuarial) Asset Return (Expected) 9/30/ % -1.84% 5.60% 10.45% 7.29% 7.75% 9/30/ % 8.17% 6.14% 8.21% 6.55% 7.75% 9/30/ % 6.50% 5.00% 0.10% 6.27% 8.00% 9/30/ % 2.70% 5.00% 9.00% 7.80% 8.00% 9/30/ % 4.90% 5.00% 11.00% 7.40% 8.00% 9/30/2012 (0.60%) 3.00% 5.00% 16.00% 6.50% 8.00% 9/30/2011 (0.40%) 3.70% 5.00% 2.40% 4.40% 8.00% 9/30/ % 5.40% 5.00% 10.80% 4.90% 8.00% 9/30/ % 6.50% 5.00% 0.00% 2.60% 8.00% 9/30/ % 6.10% 5.00% (16.70%) 4.20% 8.00% Averages 3-year 6.16% 6.70% 5-year 7.68% 7.06% 10-year 2.89% 4.73% 5.78% 22-year 7.52% 7.83% Amortization of Unfunded Actuarial Accrued Liability UAAL Amortization 10/1/2017 $85,517,201 $8,705,808 10/1/2018 $82,725,870 $8,957,406 10/1/2019 $79,448,636 $9,216,275 10/1/2020 $75,640,253 $9,482,625 10/1/2036 $0 $0 Page 33

34 Other Measurements Information to Comply with Florida Statute and Florida Administrative Code 60T October 1, 2017 Valuation bp 2 Funding Rate bp % 5.70% 7.70% 9.70% Total pension liability Service Cost $14,059,252 $14,059,252 $14,059,252 $14,059,252 Interest 35,514,530 35,514,530 35,514,530 35,514,530 Benefit changes Difference between expected and actual experience (8,819,643) (8,819,643) (8,819,643) (8,819,643) Changes in assumptions 0 137,229,597 2,759,850 (92,415,785) Benefit payments (23,728,034) (23,728,034) (23,728,034) (23,728,034) Contribution refunds Net change in pension liability $17,026,105 $154,255,702 $19,785,955 $(75,389,680) Total pension liability, beginning of year $456,056,767 $456,056,767 $456,056,767 $456,056,767 Total pension liability, end of year $473,082,872 $610,312,469 $475,842,722 $380,667,087 Plan fiduciary net position Contributions - Employer $16,562,106 $16,562,106 $16,562,106 $16,562,106 Contributions - Member 3,117,933 3,117,933 3,117,933 3,117,933 Contributions - State 2,104,643 2,104,643 2,104,643 2,104,643 Net investment income 36,820,830 36,820,830 36,820,830 36,820,830 Benefit payments, including refunds of member contributions (23,728,034) (23,728,034) (23,728,034) (23,728,034) Administrative expense (157,904) (157,904) (157,904) (157,904) Other (9,655) (9,655) (9,655) (9,655) Net change in plan fiduciary net position 3 $34,709,919 $34,709,919 $34,709,919 $34,709,919 Plan fiduciary net position, beginning of year $346,924,612 $346,924,612 $346,924,612 $346,924,612 Plan fiduciary net position, end of year $381,634,531 $381,634,531 $381,634,531 $381,634,531 Net pension liability/(asset) $91,448,341 $228,677,938 $94,208,191 $(967,444) Funded ratio 80.67% 62.53% 80.20% % Years that Assets support expected benefit payments Estimated city contribution Annual dollar value $18,675,904 $35,354,013 $19,028,110 $6,188,893 Percentage of payroll 43.38% 82.11% 44.19% 14.37% 1 Includes DROP assets and liabilities 2 Based on valuation assumption with the following changes -interest rate (as noted) 3 Figures may not add due to rounding Page 34

35 Other Measurements Information to Comply with Florida Statute and Florida Administrative Code 60T October 1, 2017 Sustainment of Expected Benefit Payments Mortality Valuation Interest 7.75% Year Market Value of Assets Investment Return Benefit Payments 1 $381,634,531 $28,557,745 $26,794,958¹ 2 383,397,318 28,741,365 25,558, ,579,800 28,943,822 26,720, ,802,791 29,033,301 28,898, ,937,790 28,963,816 31,000, ,900,897 28,713,843 33,423, ,191,702 28,255,319 35,883, ,563,592 27,579,399 38,111, ,031,105 26,669,929 40,562, ,138,208 25,505,125 42,879, ,763,623 24,058,030 45,524, ,297,361 22,273,395 48,706, ,864,519 20,131,555 51,159, ,836,452 17,622,895 53,894, ,565,246 14,718,437 56,351, ,932,372 11,417,150 58,316, ,032,799 7,745,419 59,290, ,488,126 3,665,145 61,540, ,613,147 63,414,189 1 Benefit payments include the DROP balance at 9/30/2017 Page 35

36 Other Measurements Information to Comply with Florida Statute and Florida Administrative Code 60T October 1, 2017 Sustainment of Expected Benefit Payments Mortality FRS Mortality Scale BB Generational Interest 7.70% Year Market Value of Assets Investment Return Benefit Payments 1 $381,634,531 $28,373,382 $26,794,958¹ 2 383,212,955 28,541,627 25,558, ,195,699 28,727,393 26,720, ,202,261 28,799,620 28,898, ,103,579 28,712,580 31,000, ,815,450 28,444,863 33,423, ,837,275 27,968,575 35,883, ,922,421 27,274,927 38,111, ,085,462 26,347,869 40,562, ,870,505 25,165,772 42,879, ,156,567 23,701,870 45,524, ,334,145 21,901,310 48,706, ,529,218 19,744,627 51,159, ,114,223 17,222,347 53,894, ,442,469 14,305,774 56,351, ,396,932 10,994,002 58,316, ,074,211 7,313,373 59,290, ,097,492 3,226,145 61,540, ,783,513 63,414,189 1 Benefit payments include the DROP balance at 9/30/2017 Page 36

37 Other Measurements Information to Comply with Florida Statute and Florida Administrative Code 60T October 1, 2017 Sustainment of Expected Benefit Payments Mortality FRS Mortality Scale BB Generational Interest 5.70% Year Market Value of Assets Investment Return Benefit Payments 1 $381,634,531 $21,000,095 $26,794,958¹ 2 375,839,668 20,704,527 25,558, ,985,312 20,395,172 26,720, ,659,653 19,973,412 28,898, ,734,763 19,405,605 31,000, ,139,659 18,676,604 33,423, ,393,225 17,766,908 35,883, ,276,704 16,671,636 38,111, ,836,454 15,380,658 40,562, ,654,286 13,880,158 42,879, ,654,734 12,152,857 45,524, ,283,299 10,161,257 48,706, ,738,319 7,895,240 51,159, ,473,937 5,352,318 53,894, ,932,154 2,516,376 56,351, ,097,219 58,316,723 1 Benefit payments include the DROP balance at 9/30/2017 Page 37

38 Other Measurements Information to Comply with Florida Statute and Florida Administrative Code 60T October 1, 2017 Sustainment of Expected Benefit Payments Mortality FRS Mortality Scale BB Generational Interest 9.70% Year Market Value of Assets Investment Return Benefit Payments 1 $381,634,531 $35,749,067 $26,794,958¹ 2 390,588,640 36,676,178 25,558, ,705,935 37,699,505 26,720, ,684,609 38,661,273 28,898, ,447,580 39,508,674 31,000, ,955,545 40,219,182 33,423, ,751,689 40,761,840 35,883, ,630,100 41,129,467 38,111, ,647,681 41,306,053 40,562, ,390,908 41,268,377 42,879, ,779,575 40,986,784 45,524, ,242,067 40,395,892 48,706, ,931,722 39,473,553 51,159, ,245,653 38,210,451 53,894, ,562,003 36,572,720 56,351, ,783,412 34,561,080 58,316, ,027,769 32,210,667 59,290, ,948,344 29,477,361 61,540, ,885,581 26,278,484 63,414, ,749,876 22,567,451 65,712, ,605,228 18,302,882 67,390, ,517,190 13,534,181 67,542, ,509,300 8,209,478 69,355, ,362,830 70,086,244 1 Benefit payments include the DROP balance at 9/30/2017 Page 38

39 Other Measurements Reserve Account For Future Benefit Improvements Under F.L Adjusted Base Amount at 10/1/2017 Year Established Description Ch. 175 Fire Suppl. Fire Total 1998 Base Year Premium Tax Distribution $1,065,707 $72,788 $1,138, All 99-1 Benefits 221, , Multiplier Increase 1,123, ,123,274 Adjusted Base Amount $2,410,006 $72,788 $2,482,794 Reserve Account for 2016/2017 Ch. 175 Fire Suppl. Fire Total 1. Reserve Account (a) Reserve Account at September 30, 2016 $0 $0 $0 (b) Interest on (a) for full year (c) Distribution to Fire Share Plan (d) Reserve Account at September 30, 2017 before 2016 Distribution $0 $0 $0 2. Increase in Reserve Account (a) Premium Tax Distribution for 2016 $2,104,643 $0 2,104,643 (b) Amount Available 2,410,006 72,788 2,482,794 (c) Increase in Reserve Distribution (d) Share Plan Allocation $0 $0 $0 3. Reserve Account at September 30, 2017 [(2d)+ (3d)] $0 $0 $0 Page 39

40 Other Measurements Supplemental CAFR Information Withdrawal From Active Employment Before Age and Service Retirement Eligibility and Pay Increase Assumptions Percent of Active Members Separating Pay Increase Assumption Annual Pay Percent Sample Ages Expected Separations Within Next Year Sample Ages Increase % % % % % % % % % % % % % % % % Page 40

41 Other Measurements Supplemental CAFR Information Schedule of Active Members' Valuation Data Valuation Date Number Annual Payroll Annual Average Payroll % Increase In Average Pay 9/30/ ,178,875 67, % 9/30/ ,659,515 72, % 9/30/ ,668,848 75, % 9/30/ ,505,732 75, % 9/30/ ,279,975 76, % 9/30/ ,746,701 77, % 9/30/ ,030,560 78, % 9/30/ ,382,106 81, % 9/30/ ,973,977 87, % 9/30/ ,399,503 83, % Schedule of Retirees and Beneficiaries Valuation Data Valuation Date Number Added to Rolls Removed From Rolls Rolls End of Year Annual Allowances Number Annual Allowances Number Annual Allowances % Increase in Annual Allowances Average Annual Allowances 9/30/ , , ,781, % 34,826 9/30/ , , ,397, % 35,443 9/30/ ,084, , ,262, % 36,292 9/30/ ,655, , ,841, % 38,357 9/30/ ,488, , ,192, % 39,797 9/30/ , , ,914, % 40,902 9/30/ , , ,475, % 41,518 9/30/ ,239, , ,457, % 42,765 9/30/ ,816, , ,834, % 44,329 9/20/ , , ,254, % 45,611 Page 41

42 Other Measurements Supplemental CAFR Information Solvency Test Valuation Date Active Member Contributions Aggregate Accrued Liabilities Retirees and Beneficiaries Active and Inactive Members (Employer Financed Portion) Actuarial Value of Assets Portion of Accrued Liabilities Covered by Reported Assets Active Member Contributions Retirees and Beneficiaries Employer Financed Portion 9/30/ ,895, ,945,311 98,975, ,157, % % 79.13% 9/30/ ,147, ,277, ,793, ,467, % % 63.48% 9/30/ ,798, ,081, ,769, ,617, % % 57.04% 9/30/ ,599, ,766, ,499, ,231, % % 50.85% 9/30/ ,819, ,644, ,170, ,995, % % 51.53% 9/30/ ,626, ,527, ,670, ,624, % % 55.95% 9/30/ ,702, ,744, ,867, ,357, % % 60.27% 9/30/ ,338, ,243, ,425, ,252, % % 53.88% 9/30/ ,272, ,608, ,389, ,768, % % 46.50% 9/30/ ,942, ,703, ,196, ,325, % % 53.57% Equivalent Single Period Remaining Investment Return Assumption 7.70% Payroll Growth Assumption 2.89% Equivalent Level Dollar Discount Rate 4.67% Unfunded Actuarial Accrued Liability $85,517,201 Amortization Payment (BOY) $8,705,808 Weighted Amortization Factor Equivalent Single Amortization Period (yrs.) 14 Page 42

43 Other Measurements Schedule of Funding Progress Valuation Date Actuarial Value of Assets Actuarial Accrued Liability (AAL) Entry Age Unfunded AAL Funded Ratio Active Member Covered Payroll Unfunded AAL as a Percentage of Active Member Covered Payroll 9/30/ % % 9/30/ % % 9/30/ % % 9/30/ % % 9/30/ % % 9/30/ % % 9/30/ % % 9/30/ % % 9/30/ % % 9/30/ % % Schedule of Employer Contributions Valuation Date Fiscal Year Ending Annual Required Contribution Percentage Contributed Payment Information 9/30/2006 9/30/2008 $8,553, % 4 monthly contributions and a lump sum payment 9/30/2007 9/30/2009 9,957, % Lump Sum on October 1, /30/2008 9/30/ ,305, % 2 Lump Sum payments 9/30/2009 9/30/ ,752, % Lump Sum on October 1, /30/2010 9/30/ ,308, % Lump Sum on October 1, /30/2011 9/30/ ,962, % Lump Sum on October 1, /30/2012 9/30/ ,349, % Lump Sum on October 1, /30/2013 9/30/ ,695, % Lump Sum on October 1, /30/2014 9/30/ ,860, % Lump Sum on October 1, /30/2015 9/30/ ,666, % Lump Sum on October 1, 2016 Page 43