The Punta Gorda City Pension Board on Dec. 19 approved its annual actuarial valuation from Foster & Foster and declared a 7.25% investment-return assumption in a unanimous vote.

Patrick of Foster & Foster told trustees the city/state required contribution for the plan is $1,155,000 for the current year and $1,898,000 for the next fiscal year, and that recent salary increases for police and fire drove a material rise in liabilities. He said the valuation showed an actuarial loss of roughly $2,400,000 tied primarily to higher salaries but also recorded an investment gain: “we expected to earn $1,800,000 and we actually earned $2,500,000 on our investments,” producing an actuarial gain portion of $671,000 for the year.

Patrick explained the plan uses five-year smoothing of investment gains and losses. Because of the salary-driven liability increase, he said the board is amortizing that loss over a 15-year schedule structured like a mortgage; that amortization will raise the city’s contribution schedule. He summarized the result: “our new total unfunded actuarial accrued liability is $6,426,000,” and the plan will pay roughly $828,000 next year (plus interest) toward that amortization.

Trustees did not adopt any benefit changes. Instead they voted to accept the valuation so the required documents can be filed with the state. The board also approved sending the state a letter declaring the plan’s investment-return assumption; during that exchange Patrick said, “I feel like 7.25 is a reasonable assumption for the next year, the next several years, and the long term thereafter.”

Why it matters: the valuation increases the listed dollar amount the city and state must contribute next year and sets the amortization schedule that will determine how quickly the plan reduces its unfunded liability. The report ties the largest single driver to local salary decisions (pay raises for police and fire), which the board noted are outside its authority and therefore a key factor the city will need to address in budgeting.

The board voted unanimously to accept the valuation and the related administrative actions. No board member raised an amendment to the valuation report. The next scheduled pension board meeting is March 19 at 8:00 a.m.