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Pension board approves Oct. 1, 2024 valuation and orders mortality study
Summary
The Edgewater General Employees Pension Board approved its October 1, 2024 actuarial valuation, acknowledged a modest actuarial loss from smoothing, and voted to commission an advanced mortality-assumption study (estimated cost $1,600) to align with Florida Retirement System guidance.
The Edgewater General Employees Pension Board on June 9 approved the actuarial valuation report dated Oct. 1, 2024, and authorized an advance mortality-assumption study to model the impact of updated Florida Retirement System mortality tables.
The board voted to adopt the valuation after Doug Lozen of Foster & Foster summarized the report and explained that a four-year smoothing method reduced the reflected return to about 5% despite a roughly 20% market return net of fees. "We're not recognizing any of the incredible volatility that's gone on in the markets from October 1 till now," Lozen said, explaining that smoothing spreads gains and losses over several years and that the adopted bogey remains 6.25% net of fees. Lozen said the net actuarial loss on the investment side increased the city's 2024 cost by about $49,000 in the valuation.
Lozen directed trustees to the funded-status chart and reported the plan's funded ratio "around 66% or 67%," adding that contributions are set to move the funded status toward full funding over time. He noted that the state requires governmental plans to use the Florida Retirement System mortality assumptions and that the FRS actuary recently recommended changes based on nationwide experience studies. "I haven't run the numbers yet for Edgewater," he said, but warned that assuming longer life expectancy would likely increase plan cost.
Trustee discussion focused on timing and expense. Lozen said the board could commission an advance study for the September meeting to help trustees see the potential impact earlier than the annual valuation; he said the separate study would be billed in addition to the regular valuation and quoted an estimated cost of $1,600. A trustee moved to proceed with the analysis and the board approved the motion by voice vote.
The board did not change its stated long-term assumption of 6.25% during the meeting, and Lozen recommended keeping that assumption in place for now while providing education on how assumptions affect costs.
Next steps: Foster & Foster will perform the advance mortality-assumption analysis and present results at a future meeting (trustees requested the September meeting as an option). The board will incorporate any required mortality changes into the next formal valuation when implemented under the state's timing rules.
