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Tequesta public safety pension reports healthy funding but warns of actuarial changes
Summary
Trustee Chris Cowles told council the public safety pension fund is well funded (98.3% smoothed; 104.9% on an un-smoothed basis) but actuarial mortality changes and rising payroll pressures could increase future village contributions; trustees modestly reduced assumed investment return targets.
Trustee Chris Cowles presented the annual Public Safety Pension Board update to the Village Council on May 14, saying the fund shows strong long‑term performance but faces pressure from actuarial changes and payroll growth.
Cowles reported there are 41 participants in the plan and assets approached $32 million as of the end of the most recent quarter. He said the board modestly lowered the assumed rate of return by five basis points per year, targeting 6.75% by 2028, a change intended to align the plan with state guidance and long‑term expectations. Cowles also noted mortality-table updates — reflecting longer life expectancy — which reduced the plan’s smoothed funded ratio to about 98.3%; on an unsmoothed, immediate valuation the plan stands above 100% (about 104.9%).
Council members asked how recent payroll increases and the underperforming real‑estate allocation affect the village’s contribution obligation. Cowles replied that above‑average payroll growth raises the village’s future contribution needs and that the board is seeking to exit a low‑performing, illiquid real estate fund whose distributions have been limited.
Council thanked Cowles for the update and had no further action at the meeting.
