Winter Springs trustees accept actuarial valuation; funded ratio rises to about 90.8%

The City of Winter Springs Board of Trustees voted unanimously May 8 to accept the actuarial valuation as of Oct. 1, 2024, presented by Shelley Jones of Gabriel, Roeder, Smith & Company (GRS). The valuation reports a smooth-value funded ratio of about 90.8% and a reduced minimum city contribution for the coming year.

The valuation “sets the contribution that needs to be made at a minimum by 09/30/2026,” said Shelley Jones, the actuary who presented the report. GRS put the plan’s minimum prefund benefits at $1,184,793, member contributions at $211,570 (5% of payroll) and the city’s minimum contribution at $973,226 (about 23% of payroll) on the valuation date.

The consultant attributed the improvement primarily to investment returns. On a market-value basis the plan returned about 23.74% for fiscal 2024; GRS uses a five‑year smoothing method that produced a smoothed return of about 9.38%. The report noted the plan’s assumed rate of return is 6.75%, and that the strong investment year produced unrecognized gains that will be phased in over five years.

Shelley Jones told trustees the active employee headcount declined roughly 7% from the prior valuation while aggregate active payroll rose about 3%, a dynamic that increased the normal cost as a percentage of payroll. GRS reported the plan’s market-value assets ended the valuation period at about $78.9 million and estimated the unfunded accrued liability on a smooth basis at roughly $7.3 million.

Holly Queen, the city’s finance director, told trustees the city had contributed about $822,000 year to date toward the valuation’s required amount for the current fiscal year.

Trustees asked several technical questions about the smoothing method and experience gains and losses. Jones reiterated that smoothing spreads unusually large market gains or losses over five years so a single strong or weak year does not immediately drive the full contribution change.

The trustees moved to accept the valuation “as presented with thanks to GRS.” Board member Michael Blake made the motion; a trustee seconded. The roll call vote was recorded as: Board member Michael Blake—Aye; Board member Brandon Fair—Aye; Board member David Withy—Aye; Vice Chair Fareed—Aye; Chair Marco Santoro—Aye. The motion passed.

Jones also notified the trustees that the Florida Retirement System has updated its mortality assumptions and that the trustees’ plan will be required to adopt those mortality assumptions in the next valuation cycle. GRS estimated that change will increase liabilities by roughly 3% for police and about 1% for general employees, increasing next year’s reported liabilities when the assumption is applied.

Trustees did not change any plan provisions or actuarial assumptions at the meeting; they accepted the valuation report and directed staff to forward it to the City Commission per routine process.