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Actuary: Atlantic Beach general plan 92.9% funded; police plan weaker after higher salaries and mortality update
Summary
Actuary Nicholas presented the 10/1/2025 valuations showing the closed general employees plan at a 92.9% funded ratio (smoothed basis) and the police plan’s funded ratio lower after salary increases and a mortality-table change. Trustees asked for more detail on a $120,000 administrative expense increase and accepted the valuation reports.
Nicholas, the boards' actuary, presented the valuation reports dated Oct. 1, 2025, for both the City of Atlantic Beach general employees and police officers pension plans and recommended keeping the investment return assumption at 6.25%.
For the general employees plan Nicholas reported a smoothed funded ratio of 92.9% (unchanged year over year after a required mortality-table update driven by the Florida Retirement System experience study). He said the liability rose slightly after the mortality change but that market-value assets would show the plan above 100% funded. The board heard that the gross contribution required rose modestly (line items presented included employer normal cost and payment on the unfunded liability) and that a net actuarial loss in the year partially offset asset gains.
Trustees pressed staff and the actuary for an explanation of a near-doubling of the administrative expense assumption used in the valuation (roughly $60k to $120k). The administrator said that finance reallocated back-office costs differently in the recent budget and that Britney (finance) will be asked to provide detail to the trustees on the change and whether prior years were underallocated. Nicholas reiterated the valuation mechanics: smoothing recognizes part of this year's gains and spreads large prior losses over multiple years.
On the police officers plan Nicholas said the contribution requirements rose more sharply. He reported a larger net city contribution after accounting for employee and state offsets (gross contribution presented ~ $1.39 million; net city contribution before state aid about $910,000). The police fund’s smoothed funded ratio was reported in the high 70s to low 80s with the new assumption; the actuary attributed most of the change to unusually large recent salary increases for police personnel and to the mortality-table update.
Board members asked about payment timing (pensions are paid on the 1st of each month), the size of the active and retired populations (about 12 active employees and roughly 83 retirees receiving benefits as of the most recent payroll run), and the plan’s long-term trajectory. Nicholas said that because gains recognized in coming years are expected to be positive, the funded ratio should trend toward 100% if future experience is consistent with assumptions.
Trustees moved to receive and file the valuation reports for both plans and to adopt the 6.25% assumed rate of return as part of the formal disclosures; both motions passed. Staff will follow up with finance to document administrative expense changes and to supply any requested backup for the assumptions used.
