HomeMy WebLinkAboutItem 05 Second Reading of Ordinance Amending the City of Ocoee Municipal Police Officers'and Firefighters' Retirement Trust Fund
City of Ocoee ▪ 1 N. Bluford Avenue ▪ Ocoee, Florida 34761
Phone: (407) 905-3100 ▪ www.ocoee.org
STAFF REPORT
Meeting Date: March 7, 2023
Item #: 5
Contact Name: Melanie Sibbitt Department Director: Melanie Sibbitt
Contact Number: Ext. 1026 City Manager: Robert Frank
Subject: Second Reading of Ordinance Amending the City of Ocoee Municipal Police Officers'
and Firefighters' Retirement Trust Fund. (Pension Board Attorney Herrera)
Background Summary:
The First Reading was held at the February 21, 2023, City Commission meeting. The Pension Board for the
City of Ocoee Municipal Police Officers’ and Firefighters’ Retirement Trust Fund is governed by City of Ocoee
Ordinances and State Statutes. The City of Ocoee and the City of Ocoee Professional Firefighters Union,
International Association of Firefighters, Local No. 3623 (“IAFF”), as well as the Florida Police Benevolent
Association, Inc. (collectively the “Bargaining Units”) have negotiated new terms to be included in the
governing Collective Bargaining Agreement that include certain changes to pension benefits as provided for
herein. Pursuant to the terms of the recently ratified Collective Bargaining Agreement with each respective
bargaining unit, the pension ordinance requires amendment to codify such new benefit structures.
Issue:
Pursuant to applicable provisions of F.S. 440, 175, 185 and 112, the terms of the recently ratified Collective
Bargaining Agreement between the City and the Bargaining Units are required to be enacted by the City
Commission, effectively amending the governing city ordinance to conform to the newly agreed upon pension
benefits.
Recommendations:
Staff respectfully recommends the Honorable Mayor and City Commissioners adopt the changes as amended
in the Ordinance for the City of Ocoee Municipal Police Officers’ and Firefighters’ Retirement Trust Fund.
Attachments:
1. Ordinance
2. Actuarial Impact Statement
3. Advertisement
Financial Impacts:
Actuarial Impact Statement Attached.There are no new financial impacts to the City since the ratification of the
governing Collective Bargaining Agreement is between the City and the Bargaining Units.
Type of Item: Second Reading
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ORDINANCE NO. 2023 -
AN ORDINANCE OF THE CITY OF OCOEE, FLORIDA,
RELATING TO THE CITY OF OCOEE MUNICIPAL POLICE
OFFICERS' AND FIREFIGHTERS' RETIREMENT TRUST
FUND; AMENDING ORDINANCE NUMBER 2010-019, AS
SUBSEQUENTLY AMENDED; AMENDING SECTION 1,
DEFINITIONS, BY AMENDING THE DEFINITION OF
“AVERAGE FINAL COMPENSATION” AND “SALARY”;
AMENDING SECTION 8, DISABILITY; AMENDING
SECTION 27, DEFERRED RETIREMENT OPTION PLAN;
AMENDING SECTION 30, SUPPLEMENTAL BENEFIT
COMPONENT FOR SPECIAL BENEFITS, CHAPTERS 175
AND 185 SHARE ACCOUNTS; PROVIDING FOR
SEVERABILITY OF PROVISIONS; REPEALING ALL
ORDINANCES IN CONFLICT HEREWITH AND PROVIDING
AN EFFECTIVE DATE.
WHEREAS, the City of Ocoee and the City of Ocoee Professional Firefighters
Union, International Association of Firefighters, Local No. 3623 (“IAFF”) have negotiated
new terms to be included in the governing collective bargaining agreement that include
certain changes to pension benefits as provided for herein; and
WHEREAS, the City of Ocoee and the Florida Police Benevolent Association, Inc.,
have negotiated new terms to be included in the governing collective bargaining
agreement that include certain changes to pension benefits as provided for herein; and
WHEREAS, an amendment to the City of Ocoee Municipal Police Officers’ and
Firefighters’ Retirement Trust Fund (“the Fund”) is necessary to permit such new
obligations and conditions; and
WHEREAS, the trustees of the Fund have requested and approved the
amendments provided herein as being in the best interests of the participants and
beneficiaries and improving the administration of the Fund, and
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WHEREAS, the City Commission has received and reviewed an actuarial impact
statement related to this change and attached as such; and
WHEREAS, the City Commission deems it to be in the public interest to provide
this change to the Retirement System for its firefighters and police officers;
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF OCOEE,
FLORIDA;
SECTION 1. Authority. The City Commission of the City of Ocoee has the
authority to adopt this ordinance pursuant to Article VIII of the Constitution of the State of
Florida and Chapter 166, Florida Statutes.
SECTION 2. That the City of Ocoee Municipal Police Officers' and Firefighters'
Retirement Trust Fund adopted by Ordinance No. 2010-019, as subsequently amended,
is hereby further amended by amending Section 1, Definitions, by amending the
definitions of “Average Final Compensation” and “Salary,” to read as follows:
* * *
Average Final Compensation means one-twelfth (1/12) of the
average Salary of the five (5) best years of the last ten (10) years of Credited
Service prior to Retirement, termination, or death, or the career average as
full-time Police Officer or Firefighter, whichever is greater. A year shall be
twelve (12) consecutive months. For Police Officer Members, effective
October 1, 2012, accrued paid time off paid to such Members at separation
of employment shall not be included in their Average Final Compensation
calculation. For Firefighter Members, accrued paid time off paid to such
Member at separation of employment shall not be included in his or her
calculation of Average Final Compensation.
* * *
Salary means the total compensation for services rendered to the
City as a Police Officer or Firefighter reported on the Member’s W-2 form,
plus all tax deferred or tax sheltered items of income derived from elective
employee payroll deductions or salary reductions, excluding pay for police
officers’ extra duty details and employers contribution into the Voluntary
Employee Benefit Account (VEBA). Any paid time off unused at the time of
termination of employment with the City of Ocoee as a Police Officer or
Firefighter will not be used in the pension credit calculation. For service
earned on or after October 1, 2012, Salary shall not include more than three
Page 366 of 392
3
hundred (300) hours of overtime per calendar year. Provided, however, in
any event, payments for overtime in excess of three hundred (300) hours
per year accrued as of October 1, 2012 and attributable to service earned
prior to the October 1, 2012, may still be included in Salary for pension
purposes even if the payment is not actually made until on or after October
1, 2012. Pursuant to F.S. 175.032(5), up to three hundred (300) hours of
overtime per year shall be included as pensionable for Firefighter Members,
however, payments for accrued unused paid leave shall be excluded for
pension benefit purposes. Compensation in excess of the limitations set
forth in Section 401(a)(17) of the Code as of the first day of the Plan Year
shall be disregarded for any purpose, including employee contributions or
any benefit calculations. The annual compensation of each member taken
into account in determining benefits or employee contributions for any Plan
Year beginning on or after January 1, 2002, may not exceed $200,000, as
adjusted for cost-of-living increases in accordance with Code Section
401(a)(17)(B). Compensation means compensation during the fiscal year.
The cost-of-living adjustment in effect for a calendar year applies to annual
compensation for the determination period that begins with or within such
calendar year. If the determination period consists of fewer than 12 months,
the annual compensation limit is an amount equal to the otherwise
applicable annual compensation limit multiplied by a fraction, the numerator
of which is the number of months in the short determination period, and the
denominator of which is 12. If the compensation for any prior determination
period is taken into account in determining a Member's contributions or
benefits for the current Plan Year, the compensation for such prior
determination period is subject to the applicable annual compensation limit
in effect for that prior period. The limitation on compensation for an "eligible
employee" shall not be less than the amount which was allowed to be taken
into account hereunder as in effect on July 1, 1993. "Eligible employee” is
an individual who was a Member before the first Plan Year beginning after
December 31, 1995.
SECTION 3. That the City of Ocoee Municipal Police Officers' and Firefighters'
Retirement Trust Fund adopted by Ordinance No. 2010-019, as subsequently amended,
is hereby further amended by amending Section 8, Disability, subsection 1, Disability
Benefits In-Line of Duty, subparagraph A. (1) and (2) to read as follows:
SECTION 8. – DISABILITY.
1. Disability Benefits In-Line of Duty.
A. Firefighter Members.
(1) Any Member hired prior to October 1, 2015 who shall
become totally and permanently disabled to the extent
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that he or she is unable, by reason of a medically
determinable physical or mental impairment, to render
useful and efficient service as a Firefighter, which
disability was directly caused by the performance of his
or her duty as a Firefighter, shall, upon establishing the
same to the satisfaction of the Board, be entitled to a
monthly pension equal to three and one-half percent
(3.5%) of his or her Average Final Compensation
multiplied by the total years of Credited Service, up to
a maximum benefit not to exceed ninety-one percent
(91%) of Average Final Compensation of the Member
hired on or after October 1, 2012, but in any event the
minimum amount paid to the Member shall be forty-two
percent (42%) of the Average Final Compensation of
the Member. Effective October 1, 2021, the minimum
amount paid to the Member shall be no less than
fifty-five (55%) percent of the Average Final
Compensation of the Member. Eligibility requirements
for disability benefits are set forth in subsection 8.,
below.
(2) Any Member hired on or after October 1, 2015 who
shall become totally and permanently disabled to the
extent that he or she is unable, by reason of a medically
determinable physical or mental impairment, to render
useful and efficient service as a Firefighter, which
disability was directly caused by the performance of his
or her duty as a Firefighter, shall, upon establishing the
same to the satisfaction of the Board, be entitled to a
monthly pension equal to three and one quarter
percent (3.25%) of his or her Average Final
Compensation multiplied by the total years of Credited
Service, up to a maximum benefit not to exceed eighty-
one and one quarter percent (81.25%) of Average Final
Compensation of the Member, but in any event the
minimum amount paid to the Member shall be forty-two
percent (42%) of the Average Final Compensation of
the Member. Effective October 1, 2021, the minimum
amount paid to the Member shall be no less than
fifty-five (55%) percent of the Average Final
Compensation of the Member. Eligibility requirements
for disability benefits are set forth in subsection 8.,
below.
* * *
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5
SECTION 4. That the City of Ocoee Municipal Police Officers' and Firefighters'
Retirement Trust Fund adopted by Ordinance No. 2010-019, as subsequently amended,
is hereby further amended by amending Section 27, Deferred Retirement Option Plan,
subsection 3, Funding, subparagraphs B.(2)(a) and B.(2)(b), to read as follows:
SECTION 27. - DEFERRED RETIREMENT OPTION PLAN.
* * *
3. Funding.
* * *
B. Transfers From Retirement System.
* * *
(2) Except as otherwise provided in subsection 2.D.(2), a
Member’s DROP Account under this subsection 3.B.
shall be debited or credited after each fiscal year
quarter with either:
(a) For Members who enter the DROP prior to October
1, 2012, interest at an effective rate of six and one-
half percent (6.5%) per annum compounded
monthly determined on the last business day of the
prior month’s ending balance and credited to the
Member’s DROP Account as of such date (to be
applicable to all current and future DROP
participants); or
(b) For Members who enter the DROP on or after
October 1, 2012 interest at an effective rate of two
percent (2%) per annum compounded monthly
determined on the last business day of the prior
month’s ending balance and credited to the
Member’s DROP Account as of such date (to be
applicable to all current and future DROP
participants); or
(c) Earnings, to be credited or debited to the Member’s
DROP Account, determined as of the last business
day of each fiscal year quarter and debited or
credited as of such date, determined as follows:
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The average daily balance in a Member’s DROP
Account shall be credited or debited at a rate equal
to the actual net rate of investment return realized
by the System for that quarter but not less than
zero percent (0%) for Police Officer Member’s.
Effective October 1, 2021, Firefighter Members
shall be credited or debited at a rate equal to the
actual net rate of investment return realized by the
System for that quarter, but in no event shall such
returns be less than zero (0%) percent. “Net
investment return” for the purpose of this
paragraph is the total return of the assets in which
the Member’s DROP Account is invested by the
Board net of brokerage commissions, transaction
costs and management fees.
* * *
SECTION 5. That the City of Ocoee Municipal Police Officers' and Firefighters'
Retirement Trust Fund adopted by Ordinance No. 2010-019, as subsequently amended,
is hereby further amended by amending Section 30, Supplemental Benefit Component
for Special Benefits; Chapters 175 and 185 Share Accounts, subsection 3., Allocation of
Monies to Share Accounts, adding subsection F to read as follows:
SECTION 30. - SUPPLEMENTAL BENEFIT COMPONENT FOR
SPECIAL BENEFITS; CHAPTERS 175 AND 185 SHARE ACCOUNTS.
* * *
3. Allocation of Monies to Share Accounts.
* * *
F. Allocation of Chapter 175 Contributions.
Effective October 1, 2021, the Chapter 175 base premium tax
revenues (i.e. $282,130.75) and the Chapter 175 additional
premium tax revenues (i.e. Chapter 175 premium tax monies
received in excess of $282,130.75) shall be allocated in
accordance with the statutory default methodology provided
for in Section 175.351, Florida Statutes, except that the City’s
allotted 50% of such annual premium tax revenues shall first
be applied towards reducing the unfunded actuarial accrued
liability of the Fund for so long as such unfunded liability
exists. Once all such actuarial unfunded liabilities are
satisfied, all premium tax revenues attributable to the City as
set forth herein shall be applied to reduce the City’s annual
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required contribution to the System as set forth by the Fund’s
actuary.
SECTION 6.Repeal of Ordinances. All ordinances or parts of ordinances in
conflict herewith are hereby repealed.
SECTION 7. Severability. In the event any section, subsection, paragraph,
sentence, clause, phrase or word of this ordinance shall be held invalid by a court of
competent jurisdiction, then such invalidity shall not affect the remaining portions hereof.
SECTION 8. Effective Date. This ordinance shall take effect upon second reading
and adoption.
PASSED AND ADOPTED this ____ day of _________________, 2023.
APPROVED:
ATTEST: CITY OF OCOEE, FLORIDA
By: By:
City Clerk Mayor
(SEAL)
ADVERTISED , 2023
READ FIRST TIME , 2023
READ SECOND TIME AND ADOPTED
, 2023
FOR USE AND RELIANCE ONLY BY
THE CITY OF OCOEE, FLORIDA
APPROVED AS TO FORM AND
LEGALITY THIS day of
, 2023.
By
City Attorney Scott Cookson
APPROVED BY THE OCOEE CITY
COMMISSION AT A MEETING HELD ON
,2023 UNDER
AGENDA ITEM NO. .
Page 371 of 392
13420 Parker Commons Blvd., Suite 104 Fort Myers, FL 33912 ꞏ (239) 433-5500 ꞏ Fax (239) 481-0634 ꞏ www.foster-foster.com
Douglas H. Lozen, EA, MAAA
Enclosures
February 16, 2023
Board of Trustees
City of Ocoee
Firefighters and Police Officers’ Pension Board
Re: City of Ocoee Police Officers' and Firefighters' Retirement Trust Fund
Dear Board:
Enclosed is the following material, which has been prepared in support of the proposed changes to the
Fund:
1. Three (3) copies of the required Actuarial Impact Statement, which outlines the costs associated with
implementing the changes.
2. Draft of transmittal letters to the Bureau of Local Retirement Systems and the Bureau of Police
Officers’ and Firefighters’ Retirement Trust Funds.
It will be necessary for the Chairman to sign each copy of the Actuarial Impact Statement as the Plan
Administrator and forward the Impact Statement, along with a copy of the proposed Ordinance, to the two
Bureaus prior to final reading.
If you have any questions concerning the enclosed material, please let us know.
Sincerely,
Page 372 of 392
Mr. Steve Bardin
Police Officers' and Firefighters’ Retirement Trust Funds
Department of Management Services, Division of Retirement
3189 S. Blair Stone Rd.
Tallahassee, FL 32301
Re: Actuarial Impact Statement
Dear Mr. Bardin:
The City of Ocoee is considering the implementation of amended retirement benefits for its Firefighters
and Police Officers. The changes are described in the enclosed material.
Pursuant to the provisions of Chapters 175 and 185, we are enclosing the required Actuarial Impact
Statement along with a copy of the proposed Ordinance for your review.
If you have any questions or if additional information is needed, please contact us.
Sincerely,
Page 373 of 392
Mr. Keith Brinkman
Bureau of Local Retirement Systems
Division of Retirement
3189 S. Blair Stone Rd.
Tallahassee, FL 32301
Re: Actuarial Impact Statement
Dear Mr. Brinkman:
The City of Ocoee is considering the implementation of amended retirement benefits for its Firefighters
and Police Officers. The changes are described in the enclosed material.
Pursuant to Section 22d-1.04 of the Agency Rules, we are enclosing the required Actuarial Impact
Statement (AIS) and a copy of the proposed Ordinance for your review.
If you have any questions or if additional information is needed, please contact us.
Sincerely,
Page 374 of 392
CITY OF OCOEE
POLICE OFFICERS' AND FIREFIGHTERS' RETIREMENT TRUST FUND
ACTUARIAL IMPACT STATEMENT
February 16, 2023
(Page 1)
Attached hereto is a comparison of the impact on the Minimum Required Contribution (per Chapter 112,
Florida Statutes) and the Required City Contribution, resulting from the implementation of the following
changes:
For Police Officer Members, effective October 1, 2012 accrued paid time off paid to such
Members at separation of employment shall not be included in their Average Final
Compensation calculation. For Firefighter Members, accrued paid time off paid to such
Member at separation of employment shall not be included in his or her calculation of
Average Final Compensation. There is no funding impact associated with this change as it
was incorporated in our May 16, 2013 Actuarial Impact Statement.
Up to 300 hours of overtime per year shall be included as pensionable for Firefighter
members, however, payments for accrued unused paid leave shall be excluded for pension
benefit purposes. There is no funding impact associated with this change as it was
incorporated in our May 16, 2013 Actuarial Impact Statement.
Effective October 1, 2021, the minimum amount paid to Firefighter members who retire with
a Disability In-Line of Duty benefit shall be no less than 55% of the Average Final
Compensation of the Member.
Effective October 1, 2021, Firefighter members’ DROP Accounts shall be credited or debited
at a rate equal to the actual net of investment return realized by the System for that quarter,
but in no event shall such returns be less than zero (0%) percent. While there is no immediate
impact on funding or liabilities associated with this provision, there may be in future years
when an investment loss is realized in any quarter with DROP balances.
Effective October 1, 2021, the Chapter 175 base premium tax revenue is increased to
$282,130.75, with 50% of amounts in excess of $282,130.75 allocated as a credit to the
Unfunded Actuarial Accrued Liability (UAAL). In absence of a positive UAAL, the 50%
excess will also be applied as a City funding credit. The remaining 50% of annual amounts
in excess of $282,130.75 will be reserved for additional Firefighter benefits, per a discussion
between the actuary and Union representative.
Page 375 of 392
Proposed Current
Minimum Required Contribution
% of Projected Annual Payroll 30.41% 30.35%
Member Contributions (Est.)
% of Projected Annual Payroll 8.00% 8.00%
City And State Required Contribution
% of Projected Annual Payroll 22.41% 22.35%
State Contribution (Est.) ¹ $508,658$619,158
% of Projected Annual Payroll 6.24% 5.13%
City Required Contribution
% of Projected Annual Payroll 16.17% 17.22%
¹ State Contribution based on amounts received in fiscal 2022. The Proposed
column reflects the latest Police and Fire Mutual Consent Agreements.
CITY OF OCOEE
POLICE OFFICERS' AND FIREFIGHTERS' RETIREMENT TRUST FUND
ACTUARIAL IMPACT STATEMENT
February 16, 2023
(Page 2)
The cost impact, determined as of October 1, 2021, applicable to the fiscal year ending September 30,
2023, is as follows:
Page 376 of 392
COMPARATIVE SUMMARY OF PRINCIPAL VALUATION RESULTS
New Benefits Old Benefits
10/1/2021 10/1/2021
A. Participant Data
Actives 146 146
Service Retirees 60 60
DROP Retirees 6 6
Beneficiaries 4 4
Disability Retirees 7 7
Terminated Vested 52 52
Total 275 275
Total Annual Payroll $9,917,401 $9,917,401
Payroll Under Assumed Ret. Age 9,917,401 9,917,401
Annual Rate of Payments to:
Service Retirees 2,699,308 2,699,308
DROP Retirees 329,726 329,726
Beneficiaries 83,844 83,844
Disability Retirees 181,068 181,068
Terminated Vested 341,549 341,549
B. Assets
Actuarial Value (AVA) ¹ 69,086,476 69,086,476
Market Value (MVA) ¹ 74,432,305 74,432,305
C. Liabilities
Present Value of Benefits
Actives
Retirement Benefits 46,577,455 46,577,455
Disability Benefits 1,375,474 1,340,317
Death Benefits 237,428 237,428
Vested Benefits 564,157 564,157
Refund of Contributions 196,304 196,304
Service Retirees 31,922,517 31,922,517
DROP Retirees ¹ 5,634,725 5,634,725
Beneficiaries 805,668 805,668
Disability Retirees 2,077,370 2,077,370
Terminated Vested 2,169,338 2,169,338
Share Plan Balances ¹ 638,485 638,485
Total 92,198,921 92,163,764
Page 377 of 392
New Benefits Old Benefits
C. Liabilities - (Continued) 10/1/2021 10/1/2021
Present Value of Future Salaries 81,958,323 81,958,323
Present Value of Future
Member Contributions 6,556,666 6,556,666
Normal Cost (Retirement) 1,926,904 1,926,904
Normal Cost (Disability) 109,213 102,533
Normal Cost (Death) 14,146 14,146
Normal Cost (Vesting) 69,974 69,974
Normal Cost (Refunds) 43,391 43,391
Total Normal Cost 2,163,628 2,156,948
Present Value of Future
Normal Costs 16,786,920 16,744,281
Accrued Liability (Retirement) 31,291,191 31,291,191
Accrued Liability (Disability) 564,964 572,446
Accrued Liability (Death) 131,609 131,609
Accrued Liability (Vesting) 139,915 139,915
Accrued Liability (Refunds) 36,219 36,219
Accrued Liability (Inactives) ¹ 42,609,618 42,609,618
Share Plan Balances ¹ 638,485 638,485
Total Actuarial Accrued Liability (EAN AL) 75,412,001 75,419,483
Unfunded Actuarial Accrued
Liability (UAAL) 6,325,525 6,333,007
Funded Ratio (AVA / EAN AL) 91.6% 91.6%
Page 378 of 392
D. Actuarial Present Value of New Benefits Old Benefits
Accrued Benefits 10/1/2021 10/1/2021
Vested Accrued Benefits
Inactives + Share Plan Balances ¹ 43,248,103 43,248,103
Actives 12,937,028 12,888,346
Member Contributions 5,760,202 5,760,202
Total 61,945,333 61,896,651
Non-vested Accrued Benefits 4,635,148 4,635,148
Total Present Value
Accrued Benefits (PVAB) 66,580,481 66,531,799
Funded Ratio (MVA / PVAB) 111.8% 111.9%
Increase (Decrease) in Present Value of
Accrued Benefits Attributable to:
Plan Amendments 48,682 0
Benefit Changes 0 0
Plan Experience 0 4,700,346
Benefits Paid 0 (3,687,005)
Interest 0 4,165,651
Other 0 0
Total 48,682 5,178,992
Page 379 of 392
New Benefits Old Benefits
Valuation Date 10/1/2021 10/1/2021
Applicable to Fiscal Year Ending 9/30/2023 9/30/2023
E. Pension Cost
$2,239,355 $2,232,441
22.58 22.51
105,606 105,606
1.06 1.06
671,791 672,585
6.77 6.78
3,016,752 3,010,632
30.41 30.35
793,392 793,392
8.00 8.00
Normal Cost (with interest)
% of Total Annual Payroll
Administrative Expenses (with interest)
% of Total Annual Payroll
Payment Required to Amortize
Unfunded Actuarial Accrued
Liability over 15 years
(as of 10/1/2021, with interest)
% of Total Annual Payroll
Minimum Required Contribution
% of Total Annual Payroll
Expected Member Contributions
% of Total Annual Payroll
Expected City and State Contribution 2,223,360 2,217,240
% of Total Annual Payroll 22.41 22.35
F. Past Contributions
Plan Years Ending:9/30/2021
Total Required Contribution 3,412,378
City and State Requirement 2,662,405
Actual Contributions Made:
Members (excluding buyback)749,973
City 2,177,762
State 619,158
Total 3,546,893
G. Net Actuarial (Gain)/Loss (514,798)
¹ The asset values and liabilities include accumulated DROP and Share Plan Balances as of
9/30/2021.
Page 380 of 392
CITY OF OCOEE
POLICE OFFICERS' AND FIREFIGHTERS' RETIREMENT TRUST FUND
ACTUARIAL IMPACT STATEMENT
January 24, 2023
(Page 3)
Unless otherwise noted, all data, assumptions, methods and plan provisions are the same as in the October
1, 2021 actuarial valuation report. It should be noted that changes to retirement benefits could potentially
affect participants’ retirement or termination behavior. We will monitor and advise of any recommended
changes with future experience studies.
Future actuarial measurements may differ significantly from the current measurements presented in this
report for a variety of reasons including: changes in applicable laws, changes in plan provisions, changes
in assumptions, or plan experience differing from expectations. Due to the limited scope of the analysis,
we did not perform an analysis of the potential range of such future measurements.
Please note that contents of this analysis and the October 1, 2021 actuarial valuation report are considered
an integral part of the actuarial opinions. In reviewing the results presented in this study, it should be
noted that there are risks that may not be inherently apparent to the reader that should be carefully
considered. For key risks, please see the Discussion of Risk section of the October 1, 2021 actuarial
valuation report.
In performing the analysis, we used third-party software to model (calculate) the underlying liabilities and
costs. These results are reviewed in the aggregate and for individual sample lives. The output from the
software is either used directly or input into internally developed models to generate the costs. All
internally developed models are reviewed as part of the process. As a result of this review, we believe that
the models have produced reasonable results. We do not believe there are any material inconsistencies
among assumptions or unreasonable output produced due to the aggregation of assumptions.
The changes presented herein are in compliance with Part VII, Chapter 112, Florida Statutes and Section
14, Article X of the State Constitution. The undersigned is familiar with the immediate and long-term
aspects of pension valuations and meets the Qualification Standards of the American Academy of
Actuaries necessary to render the opinions contained herein.
___________________________________
Douglas H. Lozen, EA, MAAA
Enrolled Actuary #20-7778
STATEMENT OF PLAN ADMINISTRATOR
The prepared information presented herein reflects the estimated impact of the proposed Ordinance.
___________________________________
Chairman, Board of Trustees
Page 381 of 392
ACTUARIAL ASSUMPTIONS AND METHODS
Mortality Rate Healthy Active Lives:
Female: PubS.H-2010 (Below Median) for Employees,
set forward one year.
Male: PubS.H-2010 (Below Median) for Employees,
set forward one year.
Healthy Retiree Lives:
Female: PubS.H-2010 for Healthy Retirees, set forward
one year.
Male: PubS.H-2010 for Healthy Retirees, set forward
one year.
Beneficiary Lives:
Female: PubG.H-2010 for Healthy Retirees.
Male: PubG.H-2010 for Healthy Retirees, set back one
year.
Disabled Lives:
80% PubG.H-2010 for Disabled Retirees / 20% PubS.H-
2010 for Disabled Retirees.
All rates are projected generationally with Mortality
Improvement Scale MP-2018. We feel this assumption
sufficiently accommodates future mortality
improvements.
The previously described mortality assumption rates
were mandated by Chapter 2015-157, Laws of Florida.
This law mandates the use of the assumptions used in
either of the two most recent valuations of the Florida
Retirement System (FRS). The above rates are those
outlined in Milliman’s July 1, 2021 FRS valuation report
for special risk employees, with appropriate adjustments
made based on plan demographics.
75% of active Police deaths are assumed to be service-
incurred. 90% of active Firefighter deaths are assumed
to be service-incurred.
Interest Rate 7.00% (prior year 7.25%) per year compounded
annually, net of investment related expenses. This is
supported by the target asset allocation of the trust and
the expected long-term return by asset class.
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Salary Increases
This assumption is based on the August, 2020
Experience Study.
Payroll Growth 0.00% for purposes of amortizing the Unfunded
Actuarial Accrued Liability. This assumption cannot
exceed the ten-year average payroll growth, in
compliance with Part VII of Chapter 112, Florida
Statutes.
Termination Rate
This assumption is based on the August, 2020
Experience Study.
Disability Rate See sample rates below. It is assumed that 75% of
disablements are service related for Police Officers.
90% of disablements are assumed to be service related
for Firefighters. These rates were established with the
August, 2020 Experience Study.
% Becoming Disabled
During the Year
Age Rate
20 0.07%
25 0.08%
30 0.09%
35 0.12%
40 0.15%
45 0.26%
50 0.50%
55 0.78%
60+ 1.05%
Salary Scale
Service Rate
0 15.00%
1-4 4.00%
5-9 3.50%
10+ 3.50%
% Terminating During
the Year
Service Rate
<5 6.50%
5-9 5.00%
10-14 1.00%
15+ 0.00%
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Normal Retirement Based on results of the August, 2020 Experience Study,
the below table reflects the assumed rates of retirement
once a member attains Normal Retirement eligibility.
% Retiring During the
Year (>= 25 Years of Service)
Service Rate
25 66.7%
26 66.7%
27+ 100.0%
% Retiring During the
Year (10-24 Years of Service)
Age Rate
55 80.0%
56 25.0%
57 50.0%
58 75.0%
59+ 100.0%
Early Retirement Based on results of the August, 2020 Experience Study,
the below table reflects the assumed rates of retirement
once a member attains Early Retirement eligibility.
% Retiring During
the Year
Age Rate
45 5.0%
46 5.0%
47 5.0%
48 5.0%
49 20.0%
50 20.0%
51 5.0%
52 5.0%
53 5.0%
54 5.0%
Actuarial Asset Method Each year, the prior Actuarial Value of Assets is brought
forward utilizing the historical geometric 4-year average
Market Value returns, net of fees. It is possible that over
time this technique will produce an insignificant bias
above or below Market Value.
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Funding Method Entry Age Normal Actuarial Cost method.
Administrative Expenses $102,035 annually, based on the average of actual
expenses incurred in the prior two fiscal years.
Amortization Method New UAAL amortization bases are amortized 15 years.
Previously, new UAAL amortization bases were
amortized over the following amortization periods:
Experience: 10 Years.
Assumption/Method Changes: 20 Years.
Benefit Changes: 30 Years.
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SUMMARY OF CURRENT PLAN
(Through Ordinance No. 2020-002)
Eligibility Full-time employees who are classified as Police
Officers or Firefighters participate as a condition
of employment.
Credited Service Total years and fractional parts of years of
employment with the City as a Police Officer or
Firefighter.
Salary Total compensation reportable on form W-2,
plus tax deferred, tax sheltered, and tax-exempt
items of income.
Effective October 1, 2012, Salary shall not
include overtime pay in excess of 300 hours per
calendar year. Additionally, any unused paid
time off at the time of termination of
employment is not pensionable.
Average Final Compensation Average Salary for the 5 best years of the 10
years immediately preceding retirement or
termination.
Member Contributions 8.0% of Salary.
City and State Contributions Remaining amount required in order to pay
current costs and amortize unfunded past service
cost, if any, as provided in Part VII, Chapter
112, F.S.
Normal Retirement
Date Earlier of Age 55 and 10 years of Credited
Service, or 25 years of Credited Service,
regardless of age.
Benefit 3.5% of Average Final Compensation for each
year of Credited Service. For firefighters hired
after September 30, 2015 and Police Officers
hired after May 16, 2017, the benefit accrual rate
is 3.25% for each year of Credited Service.
Form of Benefit Ten Year Certain and Life Annuity
(options available).
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Maximum Benefit For Members hired before October 1, 2012,
100% of Average Final Compensation. For
Members hired after September 30, 2012, 91%
of Average Final Compensation. For members
hired under the 3.25% benefit accrual rate, the
maximum benefit is 81.25% of Average Final
Compensation.
Early Retirement
Eligibility Age 45 and 5 Years of Credited Service.
Benefit Accrued benefit, reduced 3% per year to age 50
and actuarially reduced from age 50 to age 45.
Vesting
Schedule 100% after 5 years of Credited Service. For
firefighters hired after September 30, 2015 and
Police Officers hired after May 16, 2017, 100%
vesting occurs after the completion of 7 years of
Credited Service.
Benefit Amount Member will receive the vested portion of his
(her) accrued benefit payable at the otherwise
Early or Normal Retirement Date.
Disability
Eligibility
Service Incurred Covered from Date of Employment.
Non-Service Incurred 10 years of Credited Service.
Exclusions Disability resulting from use of drugs, illegal
participation in riots, service in military, etc.
Benefit Benefit accrued to date of disability but not less
than 42% of Average Final Compensation
(Service Incurred). Additionally, the benefit
cannot exceed a percentage of Average Final
Compensation as outlined above under
Maximum Benefit.
Duration Payable for life (with 120 payments guaranteed)
or until recovery (as determined by the Board).
Optional forms of payment are available.
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Death Benefits
Pre-Retirement
Vested Monthly accrued benefit payable to designated
beneficiary for 10 years.
Non-Vested Refund of accumulated contributions
without interest.
Post-Retirement Benefits payable to beneficiary in
accordance with option selected at
retirement.
Board of Trustees a. Two Commission appointees,
b. One Member from each Department
elected by the Membership, and
c. Fifth Member elected by other 4
and appointed by Commission.
Deferred Retirement Option Plan
Eligibility Within 12 months following satisfaction of
Normal Retirement requirements.
Participation Not more than 60 months.
Rate of Return At election of Member (may change once during
DROP period) either: 1) actual net rate of
investment return (total return net of brokerage
commissions, transaction costs, and
management fees), or 2) 6.5%. Earnings are
credited each fiscal quarter (2% for Members
entering the DROP after September 30, 2012).
Form of Distribution Cash lump sum (options available) payable at
termination of employment.
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BAC-DROP
Eligibility After first eligibility for Normal Retirement.
Participation Retroactively applied to date chosen by
Member, but not prior to the date of first
eligibility for Normal Retirement.
Rate of Return Fixed 2.0% effective annual rate.
Form of Distribution Cash lump sum (options available) payable at
termination of employment.
Supplement Benefit (Police only)
Initial Crediting Pursuant to a Mutual Consent Agreement
between the City and PBA, $193,673.55 from
the Excess State Monies Reserve is allocated to
eligible Police Officers.
Annual Crediting 50% of annual Chapter 185 Premium tax
revenues received by the City in excess of
$223,377.02 shall be allocated based on a
method to be determined.
Investment earnings Eligible Share Accounts shall be credited or
debited annually, based on the Plan’s net-of-fees
investment performance for the immediately
preceding Plan Year.
Expenses Allocated annually in proportion to individual
Share Account Balances as a percentage of total
plan assets.
Vesting 100% upon completion of five years of Credited
Service, unless eligible for payment of benefits
upon termination of employment.
Eligibility for Distribution As soon as administratively practicable following
the valuation date after termination of
employment.
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