Trustees report stable funding, steady contributions for village general-employee pension

Trustees Ben Ward and former Vice Mayor Stone presented the Village of Tequesta’s annual general-employee pension update, describing the plan’s funding, investment performance and contribution drivers.

Trustees explained the plan uses a 2 percent multiplier — "every year of employment they get 2% of their final compensation," a trustee said — and noted that pension liabilities are driven by the multiplier, the number of employees and total payroll. Trustees said the actuarial assumed rate of return is 6.5 percent and that trustees are comfortable with that assumption for now.

Key numbers and features the trustees reported include: - Employee member contribution: 5 percent of salary. - Village contribution: roughly 8 percent of payroll (presenter calculated total employer+employee cost around 9 percent when administrative and investment expenses are included). - Administrative and investment expense: about 1 percent, paid by the village. - Plan asset level: staff said market value had been around $10,000,000 at the time of the presentation and that the plan’s size and membership have grown (participants reported to have increased from about 25 to about 52 members over time). - Funding level: trustees described the plan as being in a strong funding position (presenter characterized it as approximately 96 percent funded).

Trustees also noted recent portfolio housekeeping changes, including reductions in the plan’s real-estate allocation and modest moves into small-cap investments. Trustees said they are not concerned by short-term market fluctuations because pensions are long-term investments and that the plan ranks well compared with peers (presenter said the plan is in the top roughly 25th percentile of plans for investment performance since inception).

Benefits and eligibility: Trustees said members are eligible for normal retirement at age 62 or after 30 years of service. Disability benefits described included a minimum of 42 percent for line-of-duty disability and 25 percent for off-duty disability, as presented by trustees.

Council response: Council members thanked the trustees for their volunteer service and asked clarifying questions about the board’s authority and state statutes. Trustees and council said they expect to comply with forthcoming state requirements and that they did not anticipate material new costs from that compliance.

Ending: Trustees recommended continuing current actuarial and investment practices and indicated they will bring any material policy or assumption changes back to council for consideration.