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Actuaries: Englewood pension plan’s funded ratio improved; city’s recommended contribution falls to about 19.8%
Summary
GRS actuaries told the Englewood Employee Pension Plan Board that the plan’s actuarially determined contribution and funded ratio both improved in the 01/01/2025 valuation: membership held steady at 59, the city’s share of payroll-funded contributions falls to 19.8% for FY2026, and the actuarial (smoothed) return was about 7%.
At a meeting of the Englewood Employee Pension Plan Board, actuaries from GRS presented the plan’s 01/01/2025 valuation and reported an improved funding picture and a lower employer contribution for the coming fiscal year.
Alex, an analyst with GRS, said the actuarially determined contribution (ADC) “last year was 26.3, and now it's just under 23%,” and that, because employees contribute a fixed 3% of pay, “the city’s portion” falls from 23.3% to 19.8% (the 01/01/2025 result to be applied in fiscal 2026). The board packet shows the active population remained at 59 members.
Why it matters: the ADC is the actuary’s recommended employer contribution rate to keep the plan on a long‑term funding path. GRS presenters emphasized that the ADC is composed of the normal cost (the cost of benefits accruing this year), an amortization payment to pay down any unfunded accrued liability, and a small expense load.
GRS explained the difference between market and actuarial (smoothed) asset values: the plan’s market return for the measurement year was reported around 10.3% while the actuarial value of assets — which smooths gains and losses over five years by recognizing 20% per year — produced a return near 7%, above the plan’s 6% actuarial assumption. That smoothing approach, the presenters said, reduces short‑term volatility in the ADC.
The valuation highlights included: - Active membership: 59 (unchanged from the prior year). - Actuarially determined contribution: decreased from 26.3% (prior valuation) to just under 23% overall; the city’s payroll contribution portion moves from 23.3% to 19.8% for the fiscal year following the valuation. - Funded ratio: increased (GRS reported a funded ratio rising, on the actuarial value of assets, to just under roughly 89%). - Investment performance: reported market return ~10.3% for the measurement year; actuarial (smoothed) return ~7% against a 6% assumption.
GRS said the plan’s recent gains were driven in part by retiree mortality and favorable investment results. Presenters warned that layered amortization bases remain, and that future years may see temporary increases in the ADC as older amortization bases drop off; GRS said its projection work — to be shared later — shows the plan could approach full funding in roughly 10 years if current assumptions and contribution policy hold.
Board members asked about the assumptions and the amortization schedule. GRS said the plan uses a layered (closed) 10‑year amortization for recent gains/losses and applies 5‑year recognition of asset gains/losses to the actuarial value of assets.
The board did not take a binding vote on benefit changes at the meeting; GRS committed to provide projection scenarios at a follow‑up session so members can evaluate the trajectory of contributions and funded status.
