Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Actuarial Valuation topic
No spam. Unsubscribe anytime.
Actuarial valuation shows higher near-term pension cost; board discusses multiplier change and unpaid reductions for retirees
Summary
Foster & Foster presented the 10/01/2024 valuation showing the city's required pension contribution rising to 32.7% of payroll and a funded ratio drop to 83.4%; the board discussed increasing the police multiplier, a proposed fixed multiplier, and a discovered retiree overpayment that the board proposed to address beginning June 1.
Foster & Foster presented the pension plan valuation snapshot as of Oct. 1, 2024, and told the City of Palatka Police Pension Board that the city’s share of the required contribution will rise for the coming fiscal year.
The firm’s actuaries said the total required contribution moved from 30.9% of payroll to 32.7% of payroll. Members contribute 6% of payroll; the combined city-and-state share rose from 24.9% to 26.7% of payroll under the new valuation. Foster & Foster reported the plan earned a strong investment return for fiscal 2024 (22.65% for the year ending Sept. 30, 2024), producing a $1.7 million gain above expectations; those gains are being smoothed over five years and offset earlier large losses in 2022 that the firm will continue to amortize. The valuation showed a funded ratio decline from 85.4% to 83.4% (10/01/2023 to 10/01/2024) and the report noted the plan uses a 7.5% long-term return assumption (compared to 6.7% noted as an external benchmark). The actuary said the smoothing process produced an actuarial loss net of smoothing of about $106,000 for the period but that the recent gain will help future years as the 2022 loss is amortized away.
Foster & Foster and staff also described a change to the police multiplier: because of recent investment results and state monies, the extra multiplier applied to police benefits would move from 0.55% to 0.63% effective Oct. 1, 2025. The actuary presented the board with an option to replace the current fluctuating multiplier with a fixed multiplier; the actuary indicated a fixed multiplier figure of about 3.13% could be set, which would lock retiree benefit levels and shift market risk to the city (the ordinance would need city-commission approval and bargainable benefits require union negotiation).
Board members raised a separate administrative issue: a reduction to retiree benefits that was scheduled to take effect Oct. 1, 2023, had not been implemented by the paying agent. The actuary told the board the cumulative overpayment to all retirees totals about $2,240 per month (roughly $30,000 annually). Board discussion considered waiving recovery for the prior 15 months and implementing the correct reduced benefit beginning June 1, 2025; a motion to start the reduction on June 1 and waive the earlier 15 months was moved and seconded. The transcript records the motion and the second but does not show a roll-call tally or final recorded vote in the provided excerpt.
Foster & Foster concluded by offering to provide the full valuation report electronically to board members; staff confirmed they would distribute the report.
