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 1 1 2. 6 6 4, 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 0 1 6
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. 112.664, F.S. and as further required pursuant to Ch. 60T-1.0035, 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. 112.664, 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, 2016. 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, 2017. Note: As required in Section 112.664(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.
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 112.664(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 112.664(1), F.S. and Section 60T-1.0035, 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
TABLE OF CONTENTS Title Page Ch. 112.664, F.S. Results Schedule of Changes in Net Pension Liability 1. Using financial reporting assumptions per GASB Statement No. 67 1 2. Using assumptions prescribed in Section 112.664(1)(a), F.S. 2 3. Using assumptions prescribed in Section 112.664(1)(b), F.S. 3 4. 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 112.664(1)(a), F.S. 6 3. Using assumptions prescribed in Section 112.664(1)(b), F.S. 7 4. Using the mandated mortality and funding interest rate +2% 8 Actuarially Determined Contribution 9
Schedule of Changes in the Employers' Net Pension Liability Using Financial Reporting Assumptions per GASB Statement No. 67 Fiscal year ending September 30, 2016 1. 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 $ 258,590,117 2. 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 $ 206,001,245 3. Net Pension Liability / (Asset) $ 52,588,872 Investment Return Assumption 7.50% Mortality Table RP-2000 fully generational using Scale BB -1-
Schedule of Changes in the Employers' Net Pension Liability Using Assumptions required under 112.664(1)(a), F.S. Fiscal year ending September 30, 2016 1. 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 $ 251,013,425 2. 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 $ 206,001,245 3. Net Pension Liability / (Asset) $ 45,012,180 Investment Return Assumption 7.50% Mortality Table RP-2000 fully generational using Scale AA -2-
Schedule of Changes in the Employers' Net Pension Liability Using Assumptions required under 112.664(1)(b), F.S. Fiscal year ending September 30, 2016 1. 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 $ 306,039,650 2. 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 $ 206,001,245 3. Net Pension Liability / (Asset) $ 100,038,405 Investment Return Assumption 5.50% Mortality Table RP-2000 fully generational using Scale AA -3-
Schedule of Changes in the Employers' Net Pension Liability Using Assumptions required under 112.664(1)(b), F.S. Except 2% higher investment return assumption Fiscal year ending September 30, 2016 1. 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 $ 211,081,661 2. 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 $ 206,001,245 3. Net Pension Liability / (Asset) $ 5,080,416 Investment Return Assumption 9.50% Mortality Table RP-2000 fully generational using Scale AA -4-
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 $ 202,107,641 2018 202,107,641 14,429,120 19,438,738 197,098,023 2019 197,098,023 14,030,273 20,055,422 191,072,875 2020 191,072,875 13,559,349 20,563,119 184,069,105 2021 184,069,105 13,017,908 20,993,990 176,093,024 2022 176,093,024 12,406,667 21,341,584 167,158,107 2023 167,158,107 11,725,696 21,630,999 157,252,804 2024 157,252,804 10,975,871 21,815,712 146,412,963 2025 146,412,963 10,159,964 21,893,554 134,679,373 2026 134,679,373 9,280,188 21,887,054 122,072,507 2027 122,072,507 8,337,573 21,809,726 108,600,354 2028 108,600,354 7,331,844 21,684,871 94,247,327 2029 94,247,327 6,261,744 21,514,823 78,994,248 2030 78,994,248 5,125,532 21,307,632 62,812,149 2031 62,812,149 3,921,478 21,051,562 45,682,065 2032 45,682,065 2,647,846 20,754,916 27,574,994 2033 27,574,994 1,302,367 20,420,206 8,457,155 2034 8,457,155-20,050,891-2035 - - 19,642,997-2036 - - 19,194,637-2037 - - 18,709,434-2038 - - 18,187,535-2039 - - 17,629,235-2040 - - 17,035,239-2041 - - 16,406,443-2042 - - 15,744,346 - 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: 17.42 Valuation Investment Return Assumption 7.50% Valuation Mortality Table RP-2000 fully generational using Scale BB -5-
Asset and Benefit Payment Projection Not Reflecting Any Contributions from the Employer, State or Employee Using Assumptions required under 112.664(1)(a), F.S. FYE (BOY) Expected Investment Return Projected Benefit Payments (EOY) 2017 $ 206,001,245 $ 14,751,263 $ 18,635,482 $ 202,117,026 2018 202,117,026 14,430,846 19,411,481 197,136,391 2019 197,136,391 14,034,902 20,008,728 191,162,565 2020 191,162,565 13,568,631 20,494,969 184,236,226 2021 184,236,226 13,033,894 20,901,938 176,368,182 2022 176,368,182 12,431,747 21,223,112 167,576,818 2023 167,576,818 11,762,650 21,482,966 157,856,502 2024 157,856,502 11,028,003 21,632,912 147,251,593 2025 147,251,593 10,231,197 21,671,258 135,811,532 2026 135,811,532 9,375,142 21,619,268 123,567,407 2027 123,567,407 8,461,659 21,490,577 110,538,489 2028 110,538,489 7,491,297 21,309,048 96,720,738 2029 96,720,738 6,463,671 21,076,914 82,107,494 2030 82,107,494 5,377,993 20,801,832 66,683,656 2031 66,683,656 4,233,557 20,472,460 50,444,753 2032 50,444,753 3,029,682 20,097,981 33,376,455 2033 33,376,455 1,765,204 19,680,814 15,460,844 2034 15,460,844 438,680 19,223,546-2035 - - 18,721,430-2036 - - 18,173,517-2037 - - 17,584,562-2038 - - 16,954,894-2039 - - 16,286,317-2040 - - 15,581,682-2041 - - 14,843,937-2042 - - 14,076,506 - 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: 17.83 Valuation Investment Return Assumption 7.50% Valuation Mortality Table RP-2000 fully generational using Scale AA -6-
Asset and Benefit Payment Projection Not Reflecting Any Contributions from the Employer, State or Employee Using Assumptions required under 112.664(1)(b), F.S. FYE (BOY) Expected Investment Return Projected Benefit Payments (EOY) 2017 $ 206,001,245 $ 10,817,593 $ 18,635,482 $ 198,183,356 2018 198,183,356 10,366,269 19,411,481 189,138,143 2019 189,138,143 9,852,358 20,008,728 178,981,773 2020 178,981,773 9,280,386 20,494,969 167,767,189 2021 167,767,189 8,652,392 20,901,938 155,517,643 2022 155,517,643 7,969,835 21,223,112 142,264,366 2023 142,264,366 7,233,759 21,482,966 128,015,159 2024 128,015,159 6,445,929 21,632,912 112,828,176 2025 112,828,176 5,609,590 21,671,258 96,766,507 2026 96,766,507 4,727,628 21,619,268 79,874,867 2027 79,874,867 3,802,127 21,490,577 62,186,417 2028 62,186,417 2,834,254 21,309,048 43,711,623 2029 43,711,623 1,824,524 21,076,914 24,459,233 2030 24,459,233 773,207 20,801,832 4,430,609 2031 4,430,609-20,472,460-2032 - - 20,097,981-2033 - - 19,680,814-2034 - - 19,223,546-2035 - - 18,721,430-2036 - - 18,173,517-2037 - - 17,584,562-2038 - - 16,954,894-2039 - - 16,286,317-2040 - - 15,581,682-2041 - - 14,843,937-2042 - - 14,076,506 - 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: 14.25 Valuation Investment Return Assumption 5.50% Valuation Mortality Table RP-2000 fully generational using Scale AA -7-
Asset and Benefit Payment Projection Not Reflecting Any Contributions from the Employer, State or Employee Using Assumptions required under 112.664(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 $ 206,050,696 2018 206,050,696 18,652,771 19,411,481 205,291,985 2019 205,291,985 18,552,324 20,008,728 203,835,581 2020 203,835,581 18,390,869 20,494,969 201,731,481 2021 201,731,481 18,171,649 20,901,938 199,001,191 2022 199,001,191 17,897,015 21,223,112 195,675,095 2023 195,675,095 17,568,693 21,482,966 191,760,822 2024 191,760,822 17,189,715 21,632,912 187,317,625 2025 187,317,625 16,765,790 21,671,258 182,412,156 2026 182,412,156 16,302,240 21,619,268 177,095,128 2027 177,095,128 15,803,235 21,490,577 171,407,786 2028 171,407,786 15,271,560 21,309,048 165,370,297 2029 165,370,297 14,709,025 21,076,914 159,002,408 2030 159,002,408 14,117,142 20,801,832 152,317,718 2031 152,317,718 13,497,741 20,472,460 145,342,999 2032 145,342,999 12,852,931 20,097,981 138,097,950 2033 138,097,950 12,184,467 19,680,814 130,601,602 2034 130,601,602 11,494,034 19,223,546 122,872,090 2035 122,872,090 10,783,581 18,721,430 114,934,241 2036 114,934,241 10,055,511 18,173,517 106,816,234 2037 106,816,234 9,312,276 17,584,562 98,543,948 2038 98,543,948 8,556,318 16,954,894 90,145,372 2039 90,145,372 7,790,210 16,286,317 81,649,265 2040 81,649,265 7,016,550 15,581,682 73,084,133 2041 73,084,133 6,237,906 14,843,937 64,478,102 2042 64,478,102 5,456,786 14,076,506 55,858,382 2043 55,858,382 4,675,600 13,283,083 47,250,898 2044 47,250,898 3,896,571 12,468,725 38,678,744 2045 38,678,744 3,121,597 11,639,667 30,160,673 2046 30,160,673 2,352,184 10,801,687 21,711,170 2047 21,711,170 1,589,436 9,960,535 13,340,071 2048 13,340,071 833,913 9,124,073 5,049,911 2049 5,049,911 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: 32.58 Valuation Investment Return Assumption 9.50% Valuation Mortality Table RP-2000 fully generational using Scale AA -8-
ACTUARIALLY DETERMINED CONTRIBUTION GASB No. 67 Assumptions 112.664(1)(a) F.S. Assumptions 112.664(1)(b) F.S. Assumptions 112.664(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 143.47 % 121.46 % 268.80 % 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 0 0 0 0 L. Member Contributions 287,695 287,695 287,695 287,695 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 138.59 % 116.58 % 263.92 % 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-