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Consultant urges five-year actuarial experience study; boards accept engagement
Summary
GRS Consulting recommended a five-year experience study to validate actuarial assumptions for Jacksonville Beach's three pension plans; trustees approved the quoted engagements and will review results at the May meeting.
GRS Consulting told Jacksonville Beach pension trustees on Feb. 25 that a five-year actuarial experience study would help validate assumptions used to value the city's three retirement plans and guard against drift from funding targets.
Brad Armstrong, representing GRS Consulting, said the Government Finance Officers Association recommends periodic experience studies and that the Division of Retirement periodically requests them to align plan assumptions with actual experience. "We haven't done an experience study in a number of years," Armstrong said, adding that the study would analyze six years of data to cover a five-year period.
Armstrong listed areas the study would examine: investment return and inflation assumptions, retirement and withdrawal rates, disability rates, pay increase patterns (merit/seniority/steps), the actuarial cost method, asset smoothing and amortization policy. He noted that mortality tables are governed by Florida's statutory framework and that the boards would adopt the Florida Retirement System mortality tables this year.
Fees and timeline
- Quoted fees presented at the meeting: general employees $6,500; police officers $6,000; firefighters (closed plan) $5,000. - Armstrong said the experience-study reports would be completed between the Feb. meeting and the boards' May meeting, where boards would consider adoption coincident with the 2024 actuarial valuation or possibly postpone until the 2025 report depending on results.
Why this matters: Experience studies can change actuarial assumptions that determine employer and employee contribution requirements. Armstrong warned that "if you use the same assumptions for too long, you could be deviating away from your funding target and not realize it." The boards voted separately to accept GRS's engagement quotes.
Speakers
- Brad Armstrong — Consultant, GRS Consulting (presenter). - Dustin (pension administrator) — Pension administration staff coordinating scheduling and follow-up.
Authorities
- Government Finance Officers Association guidance on experience studies (referenced by Armstrong). - Florida Retirement System mortality tables (referenced as the statutory mortality tables to be adopted).
Provenance (transcript excerpts)
- Topic intro: "So first up is, Brad Armstrong with GRIS Consulting presenting the, 5 year actuarial experience review quote" (transcript segment seg_33). - Topic finish: Roll-call approval of the police officers' engagement: "Madam clerk, roll call. David Cahill? Yes. John Patrick? Yes... Motion carries." (seg_106).
Ending
The boards accepted the engagements; final adoption of any assumption changes and resulting contribution impacts will be considered at the May meeting after the consultant delivers the experience-study reports.
