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FPUA retirement system: trustees report 82% funded ratio (Sept. 30, 2024); fund value about $270 million as of May 30
Summary
Keith Stevens, FPUA elected retirement board member and director of gas and electric, updated the FPUA board on the City of Fort Pierce defined-benefit pension system, reporting an 82% funded ratio at the Sept. 30, 2024 valuation, a fund market value near $270 million as of May 30 and changes to benefit formulas and DROP rules.
Keith Stevens, director of gas and electric and an elected member of the City of Fort Pierce Retirement Board, gave the board an annual report on the city retirement system at the FPUA meeting on July 1.
Stevens described the plan as a defined-benefit pension governed by chapter 13 of the city charter and said benefits are calculated using a final average salary (the top five years of the last 10) and a three-times multiplier. He summarized changes adopted in 2024: an increase in the maximum annual pension benefit from 75% back to 100% and an increase in the DROP (Deferred Retirement Option Program) participation window to six years. Stevens said the benefit changes increased actuarial accrued liability and reduced the funded ratio by about 0.45 percentage points in the valuation.
Stevens reported the plan’s funded ratio was 82% as of the Sept. 30, 2024 actuarial valuation and said the fund’s market value was about $270 million as of May 30. He said unfunded actuarial liability stood at about $71 million and that the plan recognized a 7.4% investment return on a four-year smoothing basis in the valuation; the market produced strong returns in the most recent 12 months, he said. On contributions, Stevens said employee contributions remain fixed at 6.16% while employer contribution rates vary by subgroup; he cited a projected employer rate of 21.8% for the utility group for the coming year.
Stevens described the DROP mechanism and explained that employees in DROP do not make active contributions while their DROP account accrues and that tax and early-withdrawal penalties can apply to lump-sum distributions taken before 59½. He said the retirement board and its consultant actively review money managers and occasionally replace underperforming managers.
Stevens emphasized stewardship and said he expected employer contributions could come down if investment performance continues; he cautioned that actuarial projections are not guarantees. "We're in really good shape and we're getting in better shape now," he said. Board members asked about outreach to younger employees and financial-education offerings; staff said new employee financial-training classes and optional defined-contribution vehicles (457/403(b) plans through MissionSquare) are available.
No formal action or vote was requested at the conclusion of the presentation.
