CITY OF TITUSVILLE GENERAL EMPLOYEES' PENSION PLAN
ACTUARIAL VALUATION AS OCTOBER 1, 2019

CONTRIBUTIONS APPLICABLE TO THE
PLAN/FISCAL YEAR ENDING SEPTEMBER 30, 2021
GASB 67/68 DISCLOSURE INFORMATION AS OF SEPTEMBER 30, 2019


Foster & Foster Actuaries & Consultants

 

Foster & Foster Actuaries & Consultants

January 31, 2020
 
Board of Trustees
City of Titusville
General Employees' Pension Board
 
Re: City of Titusville General Employees' Pension Plan
 
Dear Board:
 
We are pleased to present to the Board this report of the annual actuarial valuation of the City of Titusville General Employees' Pension Plan. Included are the related results for GASB Statements No. 67 and No. 68. The funding valuation was performed to determine whether the assets and contributions are sufficient to provide the prescribed benefits and to develop the appropriate funding requirements for the applicable plan year. The calculation of the liability for GASB results was performed for the purpose of satisfying the requirements of GASB Statements No. 67 and No. 68. Use of the results for other purposes may not be applicable and may produce significantly different results.

The valuations have been conducted in accordance with generally accepted actuarial principles and practices, including the applicable Actuarial Standards of Practice as issued by the Actuarial Standards Board, and reflect laws and regulations issued to date pursuant to the provisions of Chapter 112, Florida Statutes, as well as applicable federal laws and regulations. In our opinion, the assumptions used in the valuations, as adopted by the Board of Trustees, represent reasonable expectations of anticipated plan experience. Future actuarial measurements may differ significantly from the current measurements presented in this report for a variety of reasons including: changes in applicable laws, changes in plan provisions, changes in assumptions, or plan experience differing from expectations. Due to the limited scope of the valuations, we did not perform an analysis of the potential range of such future measurements.

In conducting the valuations, we have relied on personnel, plan design, and asset information supplied by the City of Titusville, financial reports prepared by the custodian bank, and the actuarial assumptions and methods described in the Actuarial Assumptions section of this report. While we cannot verify the accuracy of all this information, the supplied information was reviewed for consistency and reasonableness. As a result of this review, we have no reason to doubt the substantial accuracy of the information and believe that it has produced appropriate results. This information, along with any adjustments or modifications, is summarized in various sections of this report.

 
 
13420 Parker Commons Blvd., Suite 104 Fort Myers, FL 33912 · (239) 433-5500 · Fax (239) 481-0634 · www.foster-foster.com


 
The total pension liability, net pension liability, and certain sensitivity information shown in this report are based on an actuarial valuation performed as of October 1, 2018. The total pension liability was rolled-forward from the valuation date to the plan’s fiscal year ending September 30, 2019 using generally accepted actuarial principles. It is our opinion that the assumptions used for this purpose are internally consistent, reasonable, and comply with the requirements under GASB No. 67 and No. 68.

The undersigned are familiar with the immediate and long-term aspects of pension valuations, and meet the Qualification Standards of the American Academy of Actuaries necessary to render the actuarial opinions contained herein. All of the sections of this report are considered an integral part of the actuarial opinions.

To our knowledge, no associate of Foster & Foster, Inc. working on valuations of the program has any direct financial interest or indirect material interest in the City of Titusville, nor does anyone at Foster & Foster, Inc. act as a member of the Board of Trustees of the General Employees' Pension Plan. Thus, there is no relationship existing that might affect our capacity to prepare and certify this actuarial report.

If there are any questions, concerns, or comments about any of the items contained in this report, please contact us at 239-433-5500.

 
Respectfully submitted,
Foster & Foster, Inc.
 
By:    _/s/___
Douglas H. Lozen, EA, MAAA
Enrolled Actuary #17-7778
 
By:    _/s/___
Tyler A. Koftan, EA, MAAA
Enrolled Actuary #17-8685
 
DHL/lke
Enclosures

 
 

TABLE OF CONTENTS

  1. Introduction​

    1. Summary of Report - Page 5

    2. Changes Since Prior Valuation - Page 6

    3. Contribution Impact of Annual Changes - Page 6

    4. Comparative Summary of Principal Valuation Results - Page 7

  2. Valuation Information

    1. Reconciliation of Unfunded Actuarial Accrued Liabilities - Page 13

    2. Detailed Actuarial (Gain)/Loss Analysis - Page 15

    3. Actuarial Assumptions and Methods - Page 16

    4. Glossary - Page 19

    5. Discussion of Risk - Page 22

  3. Trust Fund - Page 25

  4. Member Statistics

    1. Statistical Data - Page 30

    2. Age and Service Distribution - 31

    3. Valuation Participant Reconciliation - 32

  5. Summary of Current Plan - Page 33

  6. Governmental Accounting Standards Board Statements No. 67 and No. 68 Disclosure Information - Page 37

City of Titusville General Employees' Pension Plan                                  FOSTER & FOSTER | 4
 

SUMMARY OF REPORT

The regular annual actuarial valuation of the City of Titusville General Employees' Pension Plan, performed as of October 1, 2019, has been completed and the results are presented in this Report. The contribution amounts set forth herein are applicable to the plan/fiscal year ending September 30, 2021.

The contribution requirements, compared with those set forth in the October 1, 2018 actuarial valuation report, are as follows:


 
Valuation Date 10/1/2019 10/1/2018
Applicable to Fiscal Year Ending 9/30/2021 9/30/2020
Minimum Required Contribution $2,029,042 $2,630,881
Member Contributions (Est.) 350,305 335,002
City Required Contribution $1,678,737 $2,295,879

As you can see, the Minimum Required Contribution shows a decrease when compared to the results determined in the October 1, 2018 actuarial valuation report. The decrease is attributable to net favorable experience and the expiration of a charge component of the Unfunded Actuarial Accrued Liability.

Plan experience was favorable overall on the basis of the plan's actuarial assumptions. The primary source of actuarial gain was an investment return of 9.16% (Actuarial Asset Basis) which exceeded the 7.75% assumption. There were no significant sources of actuarial loss.


City of Titusville General Employees' Pension Plan                                  FOSTER & FOSTER | 5
 

CHANGES SINCE PRIOR VALUATION

Plan Changes

Since the prior valuation, the plan was amended with respect to in-service distributions and to establish a “DROP II” program. These changes did not result in a change to the plan’s funding requirements.

Actuarial Assumptions/Method Changes

There have been no changes of actuarial assumptions or methods since the prior valuation.

City of Titusville General Employees' Pension Plan                                  FOSTER & FOSTER | 6
 

COMPARATIVE SUMMARY OF PRINCIPAL VALUATION RESULTS

A. Participant Data

Participants 10/1/2019 10/1/2018
Actives 293 289
Service Retirees 329 321
DROP Retirees 0 0
Beneficiaries 36 35
Disability Retirees 2 3
Terminated Vested 146 132

Total
 
806 780
Total Annual Payroll $13,367,477 $13,080,766
Payroll Under Assumed Ret. Age 12,845,902 13,080,766
Annual Rate of Payments to
Service Retires
4,325,824 4,055,261
DROP Retirees 0 0
Beneficiaries 219,109 215,628
Disability Retirees 15,096 39,155
Terminated Vested 394,546 407,386

B. Assets

Asset 10/1/2019 10/1/2018
Actuarial Value (AVA)1 62,315,479 58,660,023
Market Value (MVA)1 61,671,199 61,691,922

C. Liabilities

Present Value of Benefits 10/1/2019 10/1/2018
Actives - Retirement Benefits 22,648,467 23,191,942
Actives -  Disability Benefits 434,547 385,311
Actives - Death Benefits 146,471 137,954
Actives - Vested Benefits 602,236 626,649
Actives - Refund of Contributions 253,924 233,086
Service Retirees 42,742,223 40,139,221
DROP Retirees1 0 0
Beneficiaries 2,068,397 2,070,191
Disability Retirees 107,423 265,628
Terminated Vested 2,847,611 2,797,675
Total 71,851,299 69,847,657

City of Titusville General Employees' Pension Plan                                  FOSTER & FOSTER | 7
 

COMPARATIVE SUMMARY OF PRINCIPAL VALUATION RESULTS (Cont'd)

C. Liabilities (Continued)

Liability 10/1/2019 10/1/2018
Present Value of Future Salaries 81,534,970 77,930,976
Present Value of Future Member Contributions 2,038,374 1,948,274
Normal Cost (Retirement) 826,742 795,497
Normal Cost (Disability) 22,196 19,984
Normal Cost (Death) 7,782 7,579
Normal Cost (Vesting) 53,964 (192,821)
Normal Cost (Refunds) 50,880 233,086
Total Normal Cost 961,564 926,325
Present Value of Future Normal Costs 5,464,961 5,151,175
Accrued Liability (Retirement) 17,826,709 18,664,300
Accrued Liability (Disability) 296,929 260,829
Accrued Liability (Death) 103,189 95,510
Accrued Liability (Vesting) 336,710 403,128
Accrued Liability (Refunds) 57,147 0
Accrued Liability (Inactives) 1 47,765,654 45,272,715
Total Actuarial  Accrued Liability (EAN AL) 66,386,338 64,696,482
Unfunded Actuarial Accrued Liability (UAAL) 4,070,859 6,036,459
Funded Ratio (AVA / EAD AL) 93.9% 90.7%

City of Titusville General Employees' Pension Plan                                  FOSTER & FOSTER | 8
 

COMPARATIVE SUMMARY OF PRINCIPAL VALUATION RESULTS (Cont'd)

D. Actuarial Present Value of Accrued Benefits

Vested Accrued Benefits 10/1/2019 10/1/2018
Inactives1 47,765,654 45,272,715
Actives 10,894,518 12,715,107
Member Contributions 1,823,359 1,703,897
Total 60,483,531 59,691,719
 
Non-vested Accrued Interest 10/1/2019 10/1/2018
Total Present Value
Accrued Benefits (PVAB)
62,296,205 61,214,518
Funded Ratio (MVA / PVAB) 99.0% 100.8%
 
Increase (Decrease) in Present Value
of Accrued Benefits Attributable to:
10/1/2019
Plan Amendments 0
Assumption Changes 0
Plan Experience 1,011,591
Benefits Paid (4,499,667)
Interest 4,569,763
Other 0
Total 1,081,687

City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 9
 

COMPARATIVE SUMMARY OF PRINCIPAL VALUATION RESULTS (Cont'd)

E. Pension Cost

Valuation Date 10/1/2019 10/1/2018
Applicable to Fiscal Year Ending 9/30/2020 9/30/2020
Normal Cost2 $1,048,866 $1,007,926
Administrative Expenses2 112,334 96,843
Payment Required to Amortize
Unfunded Actuarial Accrued
Liability over 26 years
(as of 10/1/2019) 2
867,842 1,526,112
Minimum Required Contribution 2,029,042 2,630,881
Expected member Contribution2 350,305 335,002
Expected City Contribution 1,678,737 2,295,879

F. Past Contributions

Plan Years Ending: 9/30/2019
City Requirement 2,628,056
Actual Contributions Made - Members
(excluding buyback)
323,634
Actual Contributions Made - City 2,628,066
Actual Contributions Made - Total 2,951,700

G. Net Actuarial (Gain)/Loss

Net Actuarial (Gain)/Loss: (462,347)

¹ The asset values and liabilities include accumulated DROP Plan Balances as of
9/30/2019 and 9/30/2018.

² Contributions developed as of 10/1/2019 displayed above have been adjusted to
account for assumed salary increase and interest components.


City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 10


 

COMPARATIVE SUMMARY OF PRINCIPAL VALUATION RESULTS (Cont'd)

H. Schedule Illustrating the Amortization of the Total Unfunded Actuarial Liability as of:

Year Projected Unfunded
Actuarial Accrued Liability
2019 4,070,859
2020 3,529,081
2021 3,205,903
2027 1,485,733
2045 0

I. (i) 5 Year Comparison of Actual Assumed Salary Increases

Year Ended Actual Assumed
9/30/2019 4.52% 4.96%
9/30/2018 5.96% 5.00%
9/30/2017 5.32% 5.00%
9/30/2016 10.13% 5.00%
9/30/2015 4.86% 5.00%

I. (ii) 5 Year Comparison of Investment Return on Market Value and Actuarial Value

Year Ended Market Value Actuarial Value Assumed
9/30/2019 2.66% 9.16% 7.75%
9/30/2018 9.29% 8.44% 8.00%
9/30/2017 14.08% 9.34% 8.00%
9/30/2016 10.92% 9.53% 8.00%
9/30/2015 -0.02% 11.72% 8.00%

I. (iii) Average Annual Payroll Growth

(a) Payroll as of: 10/1/2019 10/1/2009
Amount $12,845,902 10,560,520

(b) Total Increase: 21.64%
(c) Number of Years: 10.00
(d) Average Annual Rate: 1.98%


City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 11
 

STATEMENT BY ENROLLED ACTUARY

This actuarial valuation was prepared and completed by me or under my direct supervision, and I acknowledge responsibility for the results. To the best of my knowledge, the results are complete and accurate, and in my opinion, the techniques and assumptions used are reasonable and meet the requirements and intent of Part VII, Chapter 112, Florida Statutes. There is no benefit or expense to be provided by the plan and/or paid from the plan's assets for which liabilities or current costs have not been established or otherwise taken into account in the valuation. All known events or trends which may require a material increase in plan costs or required contribution rates have been taken into account in the valuation.

By:    _/s/___
Douglas H. Lozen, EA, MAAA 
Enrolled Actuary #17-7778

Please let us know when the report is approved by the Board and unless otherwise directed we will provide a copy of the report to the following office to comply with Chapter 112 Florida Statutes:

Mr. Keith Brinkman
Bureau of Local
Retirement Systems
Post Office Box 9000
Tallahassee, FL 32315-9000


City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 12
 

RECONCILIATION OF UNFUNDED ACTUARIAL ACCRUED LIABILITIES

  1. Unfunded Actuarial Accrued Liability as of October 1, 2018 = $6,036,459
  2. Sponsor Normal Cost developed as of October 1, 2018 = 618,444
  3. Expected administrative expenses for the year ended September 30, 2019 = 89,003
  4. Expected interest on (1), (2) and (3) = 519,204
  5. Sponsor contributions to the System during the year ended September 30, 2019 = 2,628,066
  6. Expected interest on (5) = 101,838
  7. Expected Unfunded Actuarial Accrued Liability as of September 30, 2019 (1)+(2)+(3)+(4)-(5)-(6) = 4,533,206
  8. Change to UAAL due to Assumption Change = 0
  9. Change to UAAL due to Actuarial (Gain)/Loss = (462,347)
  10. Unfunded Actuarial Accrued Liability as of October 1, 2019 = 4,070,859
Type of Base Date Established Years Remaining 10/1/2019 Amount Amortization Amount
NO DATA 10/1/1990 1 (51,198) (51,198)
NO DATA 10/1/1992 3 (54,790) (19,642)
NO DATA 10/1/1993 4 715,873 199,476
NO DATA 10/1/1995 6 841,563 161,670
method change 10/1/2004 15 1,085,814 115,940
prior losses 10/1/2004 9 868,412 127,678
actuarial loss 10/1/2005 9 975,393 143,307
actuarial loss 10/1/2006 9 59,609 8,764
actuarial gain 10/1/2007 9 (648,559) (95,354)
method change 10/1/2008 9 892,362 131,200
assumption change 10/1/2009 10 2,140,524 292,727
benefit change 10/1/2009 20 37,816 3,508
actuarial loss 10/1/2010 1 293,040 293,040
actuarial loss 10/1/2011 2 457,115 237,084
benefit change 10/1/2011 22 (2,358,687) (210,370)
actuarial gain 10/1/2012 3 (150,605) (53,992)
assumption change 10/1/2012 13 527,687 61,113
actuarial gain 10/1/2013 4 (316,457) (88,180)
actuarial gain 10/1/2014 5 (1,272,041) (293,730)

City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 13
 

 
Type of Base Date Established Years Remaining 10/1/2018 Amount Amortization Amount
actuarial loss 10/1/2015 6 (955,817) (190,434)
benefit change 10/1/2015 26 (73,698) (6,190)
actuarial gain 10/1/2016 7 (226,982) (40,116)
assumption change 10/1/2016 17 1,362,476 136,321
actuarial gain 10/1/2017 8 (740,335) (118,431)
actuarial Loss 10/1/2018 9 34,611 5,089
actuarial change 10/1/2018 19 1,090,080 103,456
actuarial gain 10/1/2019 10 (462,347) (63,228)
TOTAL= NO DATA NO DATA 4,070,859 795,608

City of Titusville General Employees' Pension Plan                                  FOSTER & FOSTER | 14
 

DETAILED ACTUARIAL (GAIN)/LOSS ANALYSIS

  1. Unfunded Actuarial Accrued Liability (UAAL) as of October 1, 2018 = $6,036,459
  2. Expected UAAL as of October 1, 2019 = 4,533,206
  3. Summary of Actuarial (Gain)/Loss, by component:
  4. Actual UAAL as of October 1, 2019 = $4,070,859

City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 15
 

ACTUARIAL ASSUMPTIONS AND METHODS

Mortality Rates Healthy Active Lives:
Female: RP2000 Generational, 100% White Collar, Scale BB
Male: RP2000 Generational, 50% White Collar / 50% Blue Collar, Scale BB

Healthy Inactive Lives:
Female: RP2000 Generational, 100% Annuitant White Collar, Scale BB
Male: RP2000 Generational, 50% Annuitant White Collar / 50% Annuitant Blue Collar, Scale BB

Disabled Lives:
Female: 100% RP2000 Disabled Female set forward two years
Male: 100% RP2000 Disabled Male setback four years

The assumed rates of mortality are mandated by Chapter 2015-157, Laws of Florida. This law mandates the use of the assumption used in either of the two most recent valuations of the Florida Retirement System (FRS). The above rates are those outlined in the July 1, 2018 FRS actuarial valuation report for non-special risk lives. We feel this assumption sufficiently accommodates future mortality improvements.
Interest Rate 7.75% per year compounded annually, net of investment related expenses. This is supported by the target asset allocation of the trust and the expected long-term return by asset class.
Salary Increases See table later in this section. This is based on the experience study dated August 20, 2018.

For Members eligible for Normal Retirement as of August 26, 2013:
Projected salary at retirement is increased 25% to account for non-regular compensation.

For Members not eligible for Normal Retirement as of August 26, 2013 with at least 10 years of service as of that date:
The projected frozen benefit as of August 26, 2013 includes a 25% load for the final year included in the averaging period.

City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 16
 

Salary Increases (Cont'd) For Members with less than 10 years of service as of August 26, 2013:
No load is assumed.
Payroll Growth 0.00% for purposes of amortizing the Unfunded Actuarial Accrued Liability. This assumption cannot exceed the ten-year average payroll growth, in compliance with Part VII of Chapter 112, Florida Statutes.
Administrative Expenses $102,984 annually, based on the average of actual expenses incurred in the prior two fiscal years. Previously, the actual expense in the prior fiscal year was used. Using a two-year average results in a less volatile estimate than the prior method.
Amortization Method New UAAL amortization bases are established according to the following amortization periods:

Experience: 10 Years.
Assumption/Method Changes: 20 Years.
Benefit Changes: 30 Years.
Retirement Age See table on the following page. This assumption is based on the experience study dated August 20, 2018.
Early Retirement See table on the following page. This assumption is based on the experience study dated August 20, 2018.
Disability Rate See table on the following page (1202 times 50%). This assumption is based on the experience study dated August 20, 2018.
Termination Rate See table on the following page. This assumption is based on the experience study dated August 20, 2018.
Asset Valuation Method Each year, the prior Actuarial Value of Assets is brought forward utilizing the historical geometric 4-year average Market Value return. It is possible that over time this technique will produce an insignificant bias above or below Market Value.
Funding Method Entry Age Normal Actuarial Cost Method. The following loads are applied for determination of the Sponsor funding requirement:

Interest – a half year, based on the current 7.75% assumption.

Salary – a full year based on the current 4.75% assumption.

City of Titusville General Employees' Pension Plan                                  FOSTER & FOSTER | 17
 

Funding Method Entry Age Normal Actuarial Cost Method. The following loads are applied for determination of the Sponsor funding requirement:

Interest – a half year, based on the current 7.75% assumption.

Salary – a full year based on the current 5.01% assumption.

ASSUMPTION TABLES

Table 1: % Terminating During the Year
Service Rate
0 to 1 20.0%
2 to 4 12.0%
5 to 9 7.0%
10+ 4.0%

Table 2: % Becoming Disabled During the Year
Age Rate
20 0.03%
25 0.03%
30 0.03%
35 0.03%
40 0.06%
45 0.11%
50 0.21%
55 0.45%
60 0.81%

Table 3: Salary Scale
Service Rate
0 9.00%
1 to 4 4.50%
5+ 4.00%

  Table 4: % Retiring During the Year (at least 10 years of service as of August 26, 2013)1
Age Rate
48 to 57 10.0%
58 50.0%
59 to 61 20.0%
62 to 66 40.0%
67+ 100%

Table 5: % Retiring During the Year (less than 10 years of service as of August 26, 2013)2
Age Rate
52 to 61 10.0%
62 to 66 40.0%
67+ 100%

¹ 100% is assumed as 28 or more years of service.
² 100% is assumed at 30 or more years of service.

City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 18
 

GLOSSARY

Total Annual Payroll is the projected annual rate of pay as of the valuation date for all covered
Members.

Present Value of Benefits is the single sum value on the valuation date of all future benefits to be paid to current Members, Retirees, Beneficiaries, Disability Retirees and Vested Terminations.
 
Total Required Contribution is equal to the Normal Cost plus an amount sufficient to amortize the Unfunded Accrued Liability over no more than 30 years. The required amount is adjusted for interest according to the timing of contributions during the year.
 
Entry Age Normal Cost Method - Under this method, the normal cost is the sum of the individual normal costs for all active participants. For an active participant, the normal cost is the participant’s normal cost accrual rate, multiplied by the participant’s current compensation.
  1. The normal cost accrual rate equals:
    1. the present value of future benefits for the participant, determined as of the participant’s entry age, divided by
    2. the present value of the compensation expected to be paid to the participant for each year of the participant’s anticipated future service, determined as of the participant’s entry age. 
  2. In calculating the present value of future compensation, the salary scale is applied both retrospectively and prospectively to estimate compensation in years prior to and subsequent to the valuation year based on the compensation used for the valuation. 
  3. The accrued liability is the sum of the individual accrued liabilities for all participants and beneficiaries. A participant’s accrued liability equals the present value, at the participant’s attained age, of future benefits less the present value at the participant’s attained age of the individual normal costs payable in the future. A beneficiary’s accrued liability equals the present value, at the beneficiary’s attained age, of future benefits. The unfunded accrued liability equals the total accrued liability less the actuarial value of assets. 
  4. Under this method, the entry age used for each active participant is the participant’s age at the time he or she would have commenced participation if the plan had always been in existence under current terms, or the age as of which he or she first earns service credits for purposes of benefit accrual under the current terms of the plan.​
 
City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 19
 

SPECIAL ACTUARIAL ACCOUNT ACTIVITY
10/1/2018 to 10/1/2019

Growth Assuming 7.75% Return

(1)

Item Amount
10/1/2018 Beginning Balance 70,988,340
Contributions1 2,951,700
Investment Earnings 5,437,080
Non-Investment Expenses 116,965
Investment Expenses 254,745
Distributions 4,499,667

1 Excludes Member Service Buyback

(2)

09/30/2019 Ending Balance = 74,505,743

(3)

09/30/2019 Actuarial Assets = 62,315,479

(4)

Excess Earnings: (3) - (2) = (12,190,264)

(5)

09/30/2019 Actuarial Gain (Loss) = 462,347

* Share Account Allocation:
Lesser of [(4) or (5)]x50% = (6,095,132)

Share Account Activity:

Date Item Amount
10/1/2018 Account Balance (107,560,159)
NO DATE Interest @ 7.75% (8,335,912)
10/1/2019 Addition (6,095,132)
10/1/2019 Benefits "Purchase" 0
10/1/2019 Account Balance (121,991,203)

10/1/2018 Adjusted Actuarial Assets

(6) 

Actuarial Assets (3), above = 62,315,479

(7)

10/1/2019 Account Balance = (121,991,203)

Adjusted Actuarial Assets
Lesser of: (6) or [(6) - (7)] = 62,315,479

*Per Ordinance No.25-1999


City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 20
 

SPECIAL ACTUARIAL ACCOUNT

History of Benefit "Purchases" and
Actuarial Gains and Losses​
Plan Year Ended Benefit "Purchases" Notes Net Actuarial
Gain (Loss)
9/30/1990 298,200 AIS dated 1/25/93 (revised 9/14/93) (291,699)
9/30/1991 769,309 AIS dated 12/8/93 350,282
9/30/1992 0 NO DATA 517,853
9/30/1993 0 NO DATA 948,397
9/30/1994 151,939 AIS dated 6/28/96 170,962
9/30/1995 676,000 AIS dated 1/27/97 372,601
9/30/1996 1,051,055 AIS dated 1/26/98 845,165
9/30/1997 0 NO DATA 1,623,510
9/30/1998 1,181,867 AIS dated 8/26/99 2,155,885
9/30/1999 1,093,450 AIS dated 5/4/00 1,997,227
9/30/2000 131,451 AIS dated 2/23/01 83,693
9/30/2001 0 NO DATA (361,917)
9/30/2002 0 NO DATA (1,374,030)
9/30/2003 0 NO DATA (755,227)
9/30/2004 0 NO DATA (2,509,682)
9/30/2005 0 NO DATA (1,530,576)
9/30/2006 0 NO DATA (92,489)
9/30/2007 0 NO DATA 1,050,783
9/30/2008 0 NO DATA (1,725,825)
9/30/2009 0 NO DATA (3,318,088)
9/30/2010 0 NO DATA (2,438,237)
9/30/2011 0 NO DATA (2,073,660)
9/30/2017 0 NO DATA 483,166
9/30/2013 0 NO DATA 813,750
9/30/2014 0 NO DATA 2,668,364
9/30/2015 (88,773) AIS dated 1/6/17 1,605,480
9/30/2016 0 NO DATA 315,334
9/30/2017 0 NO DATA 924,468
9/30/2018 0 NO DATA (40,985)
9/30/2019 0 NO DATA 462,347
Total 5,264,498 NO DATA 876,852


City of Titusville General Employees' Pension Plan                                  FOSTER & FOSTER | 21
 

DISCUSSION OF RISK

ASOP No. 51, Assessment and Disclosure of Risk Associated with Measuring Pension Obligations and Determining Pension Plan Contributions, states that the actuary should identify risks that, in the actuary’s professional judgment, may reasonably be anticipated to significantly affect the plan’s future financial condition.

Throughout this report, actuarial results are determined using various actuarial assumptions. These results are based on the premise that all future plan experience will align with the plan’s actuarial assumptions; however, there is no guarantee that actual plan experience will align with the plan’s assumptions. It is possible that actual plan experience will differ from anticipated experience in an unfavorable manner that will negatively impact the plan’s funded position.

Below are examples of ways in which plan experience can deviate from assumptions and the potential impact of that deviation. Typically, this results in an actuarial gain or loss representing the current-year financial impact on the plan’s unfunded liability of the experience differing from assumptions; this gain or loss is amortized over a period of time determined by the plan’s amortization method. When assumptions are selected that adequately reflect plan experience, gains and losses typically offset one another in the long term, resulting in a relatively low impact on the plan’s contribution requirements associated with plan experience. When assumptions are too optimistic, losses can accumulate over time and the plan’s amortization payment could potentially grow to an unmanageable level.
City of Titusville General Employees' Pension Plan                                  FOSTER & FOSTER | 22
 

DISCUSSION OF RISK (Cont'd)

Impact of Plan Maturity on Risk

For newer pension plans, most of the participants and associated liabilities are related to active members who have not yet reached retirement age. As pension plans continue in operation and active members reach retirement ages, liabilities begin to shift from being primarily related to active members to being shared amongst active and retired members. Plan maturity is a measure of the extent to which this shift has occurred. It is important to understand that plan maturity can have an impact on risk tolerance and the overall risk characteristics of the plan. For example, closed plans with a large amount of retired liability do not have as long of a time horizon to recover from losses (such as losses on investments due to lower than expected investment returns) as plans where the majority of the liability is attributable to active members. For this reason, less tolerance for investment risk may be warranted for highly mature closed plans with a substantial inactive liability. Similarly, mature closed plans paying substantial retirement benefits resulting in a small positive or net negative cash flow can be more sensitive to near term investment volatility, particularly if the size of the fund is shrinking, which can result in less assets being available for investment in the market.

To assist with determining the maturity of the plan, we have provided some relevant metrics in the table following titled “Plan Maturity Measures and Other Risk Metrics”. Highlights of this information are discussed below:
It is important to note that the actuary has identified the risks in this section as the most significant risks based on the characteristics of the plan and the nature of the project, however, it is not an exhaustive list of potential risks that could be considered. Additional advanced modeling, as well as the identification of additional risks, can be provided at the request of the audience addressed on page 2 of this report.

City of Titusville General Employees' Pension Plan                                  FOSTER & FOSTER | 23
 

PLAN MATURITY MEASURES AND OTHER RISK METRICS

Support Ratio 10/1/2016 10/1/2017 10/1/2018 10/1/2019
Total Actives 285 289 289 293
Total Inactives 1 416 421 436 444
Actives/Inactives 1 68.5% 68.6% 66.3% 66.0%
 
Asset Volatility Ratio 10/1/2016 10/1/2017 10/1/2018 10/1/2019
Market Value of Assets (MVA) 53,281,168 53,318,169 61,691,922 61,671,199
Total Annual Payoff 11,735,047 12,394,932 13,050,112 13,367,477
MVA / Total Annual Payoff 454.0% 470.5% 472.7% 461.4%
 
Accrued Liability (AL) Ratio 10/1/2016 10/1/2017 10/1/2018 10/1/2019
Inactive Accrued Liability 44,739,379 43,987,195 45,272,715 47,765,654
Total Accrued Liability (EAN) 61,454,320 62,003,867 64,696,482 66,386,338
Inactive AL / Total AL 72.8% 70.9% 70.0% 72.0%
 
Funded Ratio 10/1/2016 10/1/2017 10/1/2018 10/1/2019
Actuarial Value of Assets (AVA) 53,430,781 55,984,620 58,660,023 62,315,479
Total Accrued Liability (EAN) 61,454,320 62,003,867 64,696,482 66,383,338
AVA / Total Accrued Liabillity (EAN) 86.9% 90.3% 90.7% 93.9%
 
Net Cash Flow Ratio 10/1/2016 10/1/2017 10/1/2018 10/1/2019
Net Cash Flow 2 (2,319,762) (2,327,235) (1,965,218) (1,640,730)
Market Value of Assets (MVA) 53,281,168 58,318,169 61,691,922 61,671,199
Ratio -4.4% -4.0% -3.2% -2.7%

¹ Excludes terminated participants awaiting a refund of member contributions.
² Determined as total contributions minus benefit payments and administrative expenses.


City of Titusville General Employees' Pension Plan                                  FOSTER & FOSTER | 24
 

STATEMENT OF FIDUCIARY NET POSITION
SEPTEMBER 30, 2019

ASSETS -
Cash or Equivalent
Cost Value Market Value
Short Term Investments 1,739,832.00 1,739,832.00
Cash 2.96 2.96
Total Cash and Equivalents 1,739,834.96 1,739,834.96
 
ASSETS  -
Receivables
Cost Value Market Value
Investment Income 57,107.88 57,107.88
Total Receivable 57,107.88 57,107.88
 
ASSETS -
Investments
Cost Value Market Value
Fixed Income 8,528,001.16 8,673,003.03
Equities 24,861,047.60 37,010,402.27
Pooled/Common/Commingled Funds:
Equity
2,200,000.00 6,610,481.34
Pooled/Common/Commingled Funds:
Real Estate
4,623,041.21 7,598,006.63
     
TOTALS Cost Value Cost Value
Total Investments 40,212,089.97 59,891,893.27
Total Assets 42,009,039.81 61,688,836.11
 
LIABILITIES - 
Payables
COST VALUE MARKET VALUE
Refunds of Member Contributions 17,510.66 17,510.66
Administrative Expenses 126.55 126.55
Total Liabilities 17,637.21 17,637.21
 
NET
(Total Assets - Total Liabilities)
COST VALUE MARKET VALUE
NET POSITION RESTRICTED FOR PENSIONS 41,991,395.60 61,671,198.90



City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 25
 

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FOR THE YEAR ENDED SEPTEMBER 30, 2019

Market Value Basis

Additions:

Contributions Amount
Member 323,634.02
Buy-Back 24,202.00
City 2,628,066.00
Total Contributions 2,975,902.02
 
Investment Income Amount
Net Realized Gain (Loss) 582,578.78
Unrealized Gain (Loss) 88,399.10
Net Increase in Fair Value of Investments 670,977.88
Interest & Dividends 1,203,773.87
Less Investment Expense Note 1 (254,745.19)
Net Investment Income 1,620,006.56
Total Additions = 4,595,908.58

Deductions:

Distributions to Members: Amount
Benefit Payments 4,418,878.48
Lump Sum DROP Distributions 0.00
Lump Sum PLOP Distributions 36,404.31
Refunds of Member Contributions 44,384.03
Total Distributions 4,499,666.82
Administrative Expense 116,964.50
Total Deductions 4,616,631.32
Net Increase in Net Position = (20,722.74​)

Net Position Restricted for Pensions

Beginning of the Year = 61,691,921.64
End of the Year = 61,671,198.90​


Note 1 Investment related expenses include investment advisory, custodial and performance monitoring fees.​

City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 26
 

ACTUARIAL ASSET VALUATION
SEPTEMBER 30, 2019

Actuarial Assets for funding purposes are developed by increasing the Actuarial Assets used
in the most recent actuarial valuation of the Fund by the average annual market value rate of
return (net of investment related expenses) for the past four years. Actuarial Assets shall not be
less than 80% nor greater than 120% of Market Value of Assets.​

Details of the derivation are set forth as follows:

Plan Year Rate of Return Note 1
09/30/2016 -10.92%
09/30/2017 14.08%
09/30/2018 9.29%
09/30/2019 2.66%
Annualized Rate of Return for prior four (4) years: 9.16%

(A)

10/01/2018 Actuarial Assets = $58,660,023.23

(I)

Net Investment Income: Amount
1. Interest and Dividends 1,203,773.87
2. Realized Gains (Losses) 582,578.78
3. Unrealized Gains (Losses) 88,399.10
4. Change in Actuarial Value 3,676,178.14
5. Investment Related Expenses (254,745.19)
Total 5,296,184.70

(B)

10/01/2019 Actuarial Assets = $62,315,478.63

Actuarial Asset Rate of Return = 2I/(A+B-I): 9.16%

10/01/2019 Limited Actuarial Assets = $62,315,478.63

10/01/2019 Market Value of Assets = $61,671,198.90

Actuarial Gain/(Loss) due to Investment Return (Actuarial Asset Basis): $815,242.40

Note 1 Market Value Basis, net of investment related expenses.

City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 27
 

CHANGES IN NET ASSETS AVAILABLE FOR
BENEFITS SEPTEMBER 30, 2019

Actuarial Asset Basis​

Revenues

Contributions: Amount
Member 323,634.02
Buy-Back 24,202.00
City 2,628,066.00
Total Contributions 2,975,902.02
 
Earnings from Investments: Amount
Interest & Dividends 1,203,773.87
Net Realized Gain (Loss) 582,578.78
Unrealized Gain (Loss) 88,399.10
Change in Actuarial Value 3,676,178.14
Total Earnings and Investment Gains 5,550,929.89

Expenditures

Distributions to Members: Amount
Benefit Payments 4,418,878.48
Lump Sum DROP Distributions 0.00
Lump Sum PLOP Distributions 36,404.31
Refunds of Member Contributions 44,384.03
Total Distributions 4,499,666.82
 
Expenses: Amount
Investment related Note 1 254,745.19
Administrative 116,964.50
Total Expenses 371,709.69

Change in Net Assets for the Year = 3,655,455.40
Net Assets Beginning of the Year = 58,660,023.23
Net Assets End of the Year Note 2 = 62,315,478.63​


Note 1 Investment related expenses include investment advisory, custodial and performance monitoring fees.
Note 2 Net Assets may be limited for actuarial consideration.​


City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 28
 

CITY CONTRIBUTIONS IN EXCESS OF MINIMUM REQUIREMENT FOR THE FISCAL YEAR ENDED (FYE) SEPTEMBER 30, 2019

  1. Required City Contributions = $2,628,056.00
  2. Less 2018 Prepaid Contribution = 0.00
  3. Less Actual City Contributions = (2,628,066.00)
  4. City Contributions in Excess of Minimum Requirement Applied to Reduce Unfunded Actuarial Accrued Liability as of September 30, 2019 = ($10.00)
City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 29
 

STATISTICAL DATA

Actives

Data Point 10/1/2016 10/1/2017 10/1/2018 10/1/2019
Number 285 289 289 293
Average Current Age 46.2 47.1 47.5 46.7
Average Age at Employment 38.3 39.0 39.0 38.6
Average Past Service 7.9 8.1 8.5 8.1
Average Annual Salary $41,176 $42,889 $45,156 $45,623

Service Retirees

Data Point 10/1/2016 10/1/2017 10/1/2018 10/1/2019
Number 306 309 321 329
Average Current Age 66.8 67.3 67.7 68.2
Average Annual Benefit $12,816 $12,852 $12,633 $13,148

DROP Retirees

Data Point 10/1/2016 10/1/2017 10/1/2018 10/1/2019
Number 9 2 0 0
Average Current Age 62.7 63.3 NOT APPLICABLE NOT APPLICABLE
Average Annual Benefit $14,932 12,882 NOT APPLICABLE NOT APPLICABLE

Beneficiaries

Data Point 10/1/2016 10/1/2017 10/1/2018 10/1/2019
Number 25 28 35 36
Average Current Age 65.4 67.0 65.0 66.1
Average Annual Benefit $5,874 $6,414 $6,161 $6,086

Disability Retirees

Data Point 10/1/2016 10/1/2017 10/1/2018 10/1/2019
Number 3 3 3 2
Average Current Age 67.7 68.7 69.7 69.5
Average Annual Benefit $13,052 $13,052 $13,052 $7,548

Terminated Vested

Data Point 10/1/2016 10/1/2017 10/1/2018 10/1/2019
Number 96 127 132 146
Average Current
Age Note 1
51.6 47.0 51.9 52.6
Average Annual
Benefit Note 2
$5,202 $5,648 $5,291 $5,124

Note 1 The Average Current Age excludes participants awaiting a refund of contributions.
Note 2 The Average Annual Benefit excludes participants awaiting a refund of contributions.


City of Titusville General Employees' Pension Plan                                  FOSTER & FOSTER | 30
 

AGE AND SERVICE DISTRIBUTION

AGE 0 PAST SERVICE 1 PAST SERVICE 2 PAST SERVICE 3 PAST SERVICE 4 PAST SERVICE 5 TO 9 PAST SERVICE 10 TO 14 PAST SERVICE 15 TO 19 PAST SERVICE 20 TO 24 PAST SERVICE 25 TO 29 PAST SERVICE 30+ PAST SERVICE TOTAL
15 TO 19 0 0 0 0 0 0 0 0 0 0 0 0
20 TO 24 9 2 1 2 0 0 0 0 0 0 0 14
25 TO 29 7 5 2 1 3 2 0 0 0 0 0 20
30 TO 34 5 0 4 2 1 6 6 0 0 0 0 24
35 TO 39 6 2 4 2 2 6 2 3 0 0 0 27
40 TO 44 2 2 3 2 4 2 5 5 0 0 0 25
45 TO 49 3 2 4 2 4 10 10 6 3 1 0 45
50 TO 54 1 6 2 1 7 10 5 1 5 1 0 39
55 TO 59 4 5 4 3 5 8 9 11 6 4 1 60
60 TO 64 2 0 2 1 4 7 8 2 1 2 0 29
65+ 0 1 0 1 4 4 0 0 0 0 0 10
TOTAL 39 24 27 16 31 55 49 28 15 8 1 293


City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 31
 

VALUATION PARTICIPANT RECONCILIATION

  1. Active Lives
    1. Number in prior valuation 10/1/2018 = 289
    2. Terminations
      1. Vested (partial or full) with deferred benefits = (3)
      2. Non-vested or full lumps sum distribution received = (7)
      3. Refund of member contributions or full lump sum distribution received = (12)
    3. Deaths
      1. Beneficiary receiving benefits = 0
      2. No future benefits payable = 0
    4. Disabled = 0
    5. Retired = (14)
    6. DROP = 0
    7. Continuing participants = 253
    8. New entrants = 40
    9. Total active life participants in valuation = 293
  2. Non-Active lives (including beneficiaries receiving benefits), see table below:
Category Service
Retirees,
Vested
Receiving Benefits
DROP Benefits Receiving Death Benefits Receiving Disability Benefits Vested (Deferred Annuity) Vested (Due Refund) Total
a. Number prior to valuation 321 0 35 3 77 55 491
Retired 15 0 0 0 (2) 0 13
DROP 0 0 0 0 0   0
Vested (Deferred Annuity) 0 0 0 0 3 0 3
Vested (Due Refund) 0 0 0 0 0 7 7
Death, With Survivor (1) 0 1 0 0 0 0
Death, No Survivor (5) 0 0 (1) 0 0 (6)
Disabled 0 0 0 0 0 0 0
Refund of Contributions 0 0 0 0 (1) (7) (8)
Rehires 0 0 0 0 0 0 0
Expired Annuities (1) 0 0 0 0 0 (1)
Data Corrections 0 0 0 0 0 0 0
b. Number current valuation 329 0 36 2 77 69 513


City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 32
 

SUMMARY OF CURRENT PLAN
(Through Ordinance 41-2019)

Original Effective Date

December 30, 1966.

Credited Service

Years and fractional parts of years of service with the City as a General Employee. City Manager, City Attorney or Assistant City Attorney may opt out within the first year of employment.​

Salary

Prior to August 26, 2013 (and for Members eligible for Retirement as of that date): Total compensation reportable on Form W-2, plus all tax deferred, tax sheltered, and tax exempt items of income. Expense reimbursements or payments of expense allowances are excluded.

For the calculation of the frozen accrued benefit as of August 26, 2013: Salary shall include any payments of accrued leave that would have been included in Salary if the Member retired prior to August 26, 2013. However, the accrued leave balance shall be reduced by the amount of vacation or sick leave used subsequent to August 26, 2013 and the frozen accrued benefit shall be adjusted accordingly.

On and After August 26, 2013: Base pay, excluding overtime and all other forms of compensation.

Average Final Compensation

For computing benefits based on Credited Ser-vice on and after August 26, 2013: Average of Salary during the five highest years of the last ten, but in no event less than the highest three-year average of the effective date.

For computing the frozen benefit or for Members eligible for Retirement or who terminate employment prior to August 26, 2013: The Average Final Compensation is the average of the five highest years of the last ten years as of Au-gust 26, 2013.

For Members eligible for Normal Retirement as of August 26, 2013: The average of the highest 5 years of Salary of the last 10 years.

City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 33
 

Normal Retirement

For the frozen accrued benefit for all Members and for all benefits for Members with at least 10 Years of Service as of August 26, 2013:​
Date First of the month coinciding with or following the earlier of: 1) age 58 and the completion of 7.50 years of Credited Service, or 2) the completion of 28 years of Credited Service, regardless of age.
Benefit 2.482% of Average Final Compensation as of August 26, 2013 times Credited Service through August 26, 2013 (Members who are eligible for Normal Retirement as of August 26, 2013 continue to accrue benefits under the old benefit structure).
Form of Benefit Life Annuity (options available).

For the benefits accrued on and after August 26, 2013:​
Date First of the month coinciding with or following the earlier of: 1) age 58 and the completion of 7.50 years of Credited Service, or 2) the completion of 28 years of Credited Service, regardless of age.
Benefit 2.00% of Average Final Compensation times Credited Service on and after August 26, 2013.
Form of Benefit Life Annuity (options available).

For the benefits accrued on and after August 26, 2013 for Members with less than 10 Years of Service as of that date:​
Date First of the month coinciding with or following the earlier of: 1) age 62 and the completion of 10 years of Credited Service, or 2) the completion of 30 years of Credited Service, regardless of age.


City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 34
 

Early Retirement

For the frozen accrued benefit for all Members and for all benefits for Members with at least 10 Years of Service as of August 26, 2013:​
Date Later of age 48 and the completion of 7.50 years of Credited Service.
Benefit Same as for Normal Retirement but reduced 3.00% for each year that Early Retirement precedes Normal Retirement.

For benefits accrued on and after August 26, 2013 for Members with less than 10 Years of service as of that date:
Date Later of age 52 and the completion of 10 years of Credited Service.
Benefit Same as for Normal Retirement but actuarially reduced for Early Retirement.
 

Vesting

Schedule 0% for less than 10 years, 100% after 10 years.
Members are 100% vested in their frozen accrued benefit as of August 26, 2013.
Benefit Vested accrued benefit (determined as for Nor-mal Retirement) paid beginning at the otherwise Normal Retirement Date.


Disability

Eligibility Total and permanent (as determined by the Board) after completion of 10 years of Credited Service.
Benefit Accrued Benefit (determined as for Normal Retirement).
Form of Benefit Paid until earlier of death, recovery, Normal Retirement Date, or election by Member to receive Early Retirement benefit.
Maximum Total of Plan, Workers Compensation, and Social Security benefits shall not exceed 100% of Average Final Compensation.


City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 35
 

Death Benefits

Prior to Vesting None.
Vested Beneficiary receives a monthly benefit which is the actuarial equivalent of 50% of the Member's accrued benefit at the date of death.
Post-Retirement According to option selected, if any.

Contributions

Members 2.50% of Salary.
City Remaining amount necessary to pay the Normal Cost and fund the accrued, past service liability over 30 years.
 

Board of Trustees

Three full-time General Employees of the System elected by the membership, one General Employee appointed by the Board and con-firmed by the City Manager, one citizen selected by the Board and appointed by the City Council as a ministerial duty.
 

Deferred Retirement Option Plan

Eligibility The original DROP is closed to any new participants after August 26, 2013. A subsequent program “DROP II” is available to participants effective November 26, 2019.
Participation Not more than 60 months.
Rate of Return The Account is credited with the actual net rate of investment return (total return net of investment management fees, brokerage commissions and transaction costs) minus 2% after each fiscal year end. The annual return is subject to a minimum of 0% and a maximum equal to the current valuation investment return assumption as adopted by the Board.
Form of Distribution Cash lump sum (options available) payable at termination of employment.

 

City of Titusville General Employees' Pension Plan                                  FOSTER & FOSTER | 36
 

GASB 67 STATEMENT OF FIDUCIARY NET POSITION
SEPTEMBER 30, 2019

ASSETS -
Cash or Equivalent
Market Value
Short Term Investments 1,739,832
Cash 3
Total Cash and Equivalents 1,739,835
 
ASSETS  -
Receivables
Market Value
Investment Income 57,108
Total Receivable 57,108
 
ASSETS -
Investments
Market Value
Fixed Income 8,673,003
Equities 37,010,402
Pooled/Common/Commingled Funds:
Equity
6,610,481
Pooled/Common/Commingled Funds:
Real Estate
7,598,007
     
TOTALS Cost Value
Total Investments 59,891,893
Total Assets 61,688,836
 
LIABILITIES - 
Payables
MARKET VALUE
Refunds of Member Contributions 17,511
Administrative Expenses 126
Total Liabilities 17,637
 
NET
(Total Assets - Total Liabilities)
MARKET VALUE
NET POSITION RESTRICTED FOR PENSIONS 61,671,199


City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 37
 

GASB 67 STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FOR THE YEAR ENDED SEPTEMBER 30, 2019

Market Value Basis

Additions:

Contributions Amount
Member 323,634
Buy-Back 24,202
City 2,628,066
Total Contributions 2,975,902
 
Investment Income Amount
Net Increase in Fair Value of Investments 670,978
Interest & Dividends 1,203,774
Less Investment Expense Note 1 (254,745)
Net Investment Income 1,620,007
Total Additions = 4,595,909

Deductions:

Distributions to Members: Amount
Benefit Payments 4,418,879
Lump Sum DROP Distributions 0
Lump Sum PLOP Distributions 36,404
Refunds of Member Contributions 44,384
Total Distributions 4,499,667
Administrative Expense 116,965
Total Deductions 4,616,632
Net Increase in Net Position = (20,723)

Net Position Restricted for Pensions

Beginning of the Year = 61,691,922
End of the Year = 61,671,199


Note 1 Investment related expenses include investment advisory, custodial and performance monitoring fees.​


City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 38
 

GASB 67 NOTES TO THE FINANCIAL STATEMENTS
(FOR THE YEAR ENDED SEPTEMBER 30, 2018)

Plan Description

Plan Administration

The Plan is a single-employer defined benefit pension plan administered by the Plan's Board of Trustees comprised of: three full-time General Employees of the System elected by the Membership, one General Employee appointed by the Board and confirmed by the City Manager, one citizen selected by the Board and appointed by the City Council as a ministerial duty.

Plan Membership as of October 1, 2018

Inactive Plan Members or Beneficiaries Currently Receiving Benefits = 359
Inactive Plan Members Entitled to But Not Yet Receiving Benefits = 132
Active Plan Members = 289
Total = 780

Benefits Provided

The Plan provides retirement, termination, disability and death benefits.​
A summary of the benefit provisions can be found in the October 1, 2018 Actuarial Valuation Report for the City of Titusville General Employees' Pension Plan prepared by Foster & Foster Actuaries and Consultants.
Incorporated are the benefit changes for measurement date 09/30/2019 as noted under the Notes to Schedule of Changes in Net Pension Liability and Related Ratios.

Contributions

Members: 2.50% of Salary.
City: Remaining amount necessary to pay the Normal Cost and fund the accrued, past service liability over 30 years.

Investments
Investment Policy

The following was the Board's adopted asset allocation policy as of September 30, 2019:
Asset Class Target Allocation
All Cap Value Equity 27.5%
Broad Growth Equity 27.5%
Foreign Equity Securities 10.0%
Broad Market Fixed Income 20.0%
Global Bond 5.0%
Real Estate 10.0%
Total 100.0%
 
Concentrations:
The Plan did not hold investments in any one organization that represent 5 percent or more of the Pension Plan's Fiduciary Net Position.

Rate of Return:

For the year ended September 30, 2019, the annual money-weighted rate of return on Pension Plan investments, net of Pension Plan investment expense, was 2.66 percent.

The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested.

Deferred Retirement Option Program

Eligibility: Closed to new entrants effective August 26, 2013.
Rate of Return: At election of member (may change once during DROP period) either: 1) actual net rate of investment return (total return net of brokerage commissions, transaction costs, and management fees), or 2) 6.5%. Earnings are credited each fiscal quarter.
Participation: Not more than 60 months.

The DROP balance as of September 30, 2019 is $0.



City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 39
 

GASB 67 NET PENSION LIABILITY OF THE SPONSOR

The components of the Net Pension Liability of the Sponsor on September 30, 2019 were as follows:

Total Pension Liability = $65,413,423
Plan Fiduciary Net Position = $(61,671,199)
Sponsor's Net Pension Liability = $3,742,224
Plan Fiduciary Net Position as a percentage of Total Pension Liability = 94.28%

Actuarial Assumptions:

The Total Pension Liability was determined by an actuarial valuation as of October 1, 2018 updated to September 30, 2019 using the following actuarial assumptions:

Inflation = 2.50%
Salary Increases = Service based
Discount Rate = 7.75%
Investment Rate of Return = 7.75%

Mortality Rate Healthy Active Lives:

Female: RP2000 Generational, 100% Combined Healthy White Collar, Scale BB.
Male: RP2000 Generational, 50% Combined Healthy White Collar / 50% Combined Healthy Blue Collar, Scale BB.

Mortality Rate Healthy Inactive Lives:

Female: RP2000 Generational, 100% Annuitant White Collar, Scale BB.

Mortality Rate Disabled Lives:

Female: 100% RP2000 Disabled Female set forward two years.
Male: 100% RP2000 Disabled Male setback four years.
The assumed rates of mortality are mandated by Chapter 2015-157, Laws of Florida. This law mandates the use of the assumption used in either of the two most recent valuations of the Florida Retirement System (FRS). The above rates are those outlined in the July 1, 2016 FRS actuarial valuation report for non-special risk lives. We fee this assumption sufficiently accommodates future mortality improvements.


The most recent actuarial experience study used to review the other significant assumptions was dated August 20, 2018.

The Long-Term Expected Rate of Return on Pension Plan investments can be determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of Pension Plan investment expenses and inflation) are developed for each major asset class.
For 2019 the inflation rate assumption of the investment advisor was 2.50%.
These ranges are combined to produce the Long-Term Expected Rate of Return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation.

Best estimates of geometric real rates of return for each major asset class included in the Pension Plan's target asset allocation as of September 30, 2019 are summarized in the following table:


 
Asset Class Long Term Expected Real Estate Rate of Return
All Cap Value Equity 7.50%
Broad Growth Equity 7.50%
Foreign Equity Securities 8.50%
Broad Market Fixed Income 2.50%
Global Fixed Income 3.50%
Real Estate 4.50%


City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 40
 

Discount Rate:

The Discount Rate used to measure the Total Pension Liability was 7.75 percent.

The projection of cash flows used to determine the Discount Rate assumed that Plan Member contributions will be made at the current contribution rate and that Sponsor contributions will be made at rates equal to the difference between actuarially determined contribution rates and the Member rate. Based on those assumptions, the Pension Plan's Fiduciary Net Position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the Long-Term Expected Rate of Return on Pension Plan investments was applied to all periods of projected benefit payments to determine the Total Pension Liability.

 
Item 1% Decrease
6.75%
Current
Discount Rate
7.75%
1% Increase
8.75%
Sponsor's Net Pension Liability $10,317,507 $3,742,224 $(1,826,131)


City of Titusville General Employees' Pension Plan                                  FOSTER & FOSTER | 41
 

GASB 67 SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS - Last 10 Fiscal Years

Total Pension Liability 09/30/2019 09/30/2018 09/30/2017
Service Cost 991,001 989,921 933,328
Interest 4,836,266 4,831,550 4,718,214
Changes of benefit terms NO DATA NO DATA NO DATA
Differences between Expected and Actual Experience 399,357 (355,627) 411,551
Changes of assumptions NO DATA 1,044,973 NO DATA
Contributions - Buy Back 24,202 28,879 NO DATA
Benefit Payments, including Refunds of Employee Contributions (4,499,667) (4,575,782) (4,830,173)
Net Change in Total Pension Liability 1,757,159 1,963,914 1,232,920
Total Pension Liability - Beginning 63,656,264 61,692,350 60.459.430
Total Pension Liability - Ending (a) $ 65,413,423 $ 63,656,264 $ 61,692,350
 
Plan Fiduciary Net Position 09/30/2019 09/30/2018 09/30/2017
Contributions - Employer 2,628,066 2,358,577 2,293,318
Contributions - Employee 323,634 312,111 296,609
Contributions - Buy Back 24,202 28,879 NO DATA
Net Investment Income 1,620,007 5,538,971 7,364,236
Benefit Payments, including Refunds of Employee Contributions (4,449,667) (4,575,782) (4,830,173)
Administrative Expense (116,965) (89,003) (86,989)
Net Change in Plan Fiduciary Net Position (20,723) 3,373,753 5,037,001
Plan Fiduciary Net Position - Beginning 61,691,922 58,318,169 53,281,169
Plan Fiduciary Net Position - Ending (b) $ 61,671,199 $ 61,691,922 $ 58,318,169
 
Liability 09/30/2019 09/30/2018 09/30/2017
Net Pension Liability - Ending (a) - (b) $ 3,742,224 $ 1,964,342 $ 3,374,181
 
Net Position 09/30/2019 09/30/2018 09/30/2017
Plan Fiduciary Net Position as a percentage
of the Total Pension Liability
94.28% 96.91% 94.53%
 
Detail 09/30/2019 09/30/2018 09/30/2017
Covered Payroll Note 1 $ 12,986,665 $ 12,485,720 $ 11,864,349
Net Pension Liability as a percentage of Covered Payroll 28.82% 15.73% 28.44%

Notes to Schedule:

Note 1 The Covered Payroll numbers shown are in compliance with GASB 82, except for the 09/30/2015 measurement period which includes DROP payroll.

Changes of assumptions:

For measurement date 09/30/2018, amounts reported as changes of assumptions resulted from the following changes:
  1. The investment return assumption was reduced from 8.00% to 7.75% per year, net of investment-related expenses.
  2. The assumptions for salary increases, withdrawal, disability, Early Retirement, and Normal Retirement were updated to better align with anticipated future plan experience.

City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 42
 

GASB 67 SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS - Last 10 Fiscal Years

Total Pension Liability 09/30/2016 09/30/2015
Service Cost 821,468 738,499
Interest 4,552,082 4,573,039
Changes of benefit terms (88,592) NO DATA
Differences between Expected and Actual Experience 5,321 (870,999)
Changes of assumptions 1,589,756 NO DATA
Contributions - Buy Back 11,869 NO DATA
Benefit Payments, including Refunds of Employee Contributions (5,201,251 (4,192,511)
Net Change in Total Pension Liability 1,690,653 248,028
Total Pension Liability - Beginning 58,768,777 58,520,749
Total Pension Liability - Ending (a) 60,459,430 $ 58,768,777
 
Plan Fiduciary Net Position 09/30/2016 09/30/2015
Contributions - Employer 2,659,078 3,260,781
Contributions - Employee 274,825 234,781
Contributions - Buy Back 11,869 NO DATA
Net Investment Income 5,382,430 (10,393)
Benefit Payments, including Refunds of Employee Contributions (5,201,251) (4,192,511)
Administrative Expense (64,283) (66,386)
Net Change in Plan Fiduciary Net Position 3,062,668 (733,728)
Plan Fiduciary Net Position - Beginning 50,218,500 50,992,228
Plan Fiduciary Net Position - Ending (b) 53,281,168 $ 50,218,500
 
Liability 09/30/2016 09/30/2015
Net Pension Liability - Ending (a) - (b) $ 7,178,262 $ 8,550,277
 
Net Position 09/30/2016 09/30/2015
Plan Fiduciary Net Position as a percentage
of the Total Pension Liability
88.13% 85.45%
 
Detail 09/30/2016 09/30/2015
Covered Payroll Note 1 $ 10,993,097 $ 9,798,102
Net Pension Liability as a percentage of Covered Payroll 65.30% 87.26%

Notes to Schedule:

Note 1 The Covered Payroll numbers shown are in compliance with GASB 82, except for the 09/30/2015 measurement period which includes DROP payroll.

Changes of benefit terms:

For measurement date 09/30/2016, amounts reported as changes of benefit terms resulted from presuming passage of a proposed ordinance which clarifies that the normal form of payment for the benefit accrued on and after August 23, 2013 is a life annuity instead of a life annuity with the first 120 payments guaranteed. An Impact Statement was submitted for this proposed clarification.​

Changes of assumptions:

For measurement date 09/30/2016, as a result of Chapter 2015-157, Laws of Florida, the assumed rates of mortality were changed to the assumptions used by the Florida Retirement System.
The inflation assumption rate was lowered from 3.00% to 2.50%, matching the long-term inflation assumption utilized by the Plan's investment consultant.​


City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 43
 

GASB 67 SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS - Last 10 Fiscal Years

Total Pension Liability 09/30/2014 09/30/2013
Service Cost 751,425 695,764
Interest 4,541,119 4,491,722
Changes of benefit terms NO DATA NO DATA
Differences between Expected and Actual Experience NO DATA NO DATA
Changes of assumptions NO DATA NO DATA
Contributions - Buy Back 4,201 NO DATA
Benefit Payments, including Refunds of Employee Contributions (5,577,127) (3,674,232)
Net Change in Total Pension Liability (280,382) 1,513,254
Total Pension Liability - Beginning 58,501,131 57,287,877
Total Pension Liability - Ending (a) $ 58,520,131 $ 58,801,131
 
Plan Fiduciary Net Position 09/30/2014 09/30/2013
Contributions - Employer 3,318,730 2,696,739
Contributions - Employee 217,529 401,924
Contributions - Buy Back 4,201 NO DATA
Net Investment Income 6,042,957 6,162,982
Benefit Payments, including Refunds of Employee Contributions (5,577,127) (3,674,232)
Administrative Expense (63,273) (56,20)
Net Change in Plan Fiduciary Net Position 3,943,017 5,531,207
Plan Fiduciary Net Position - Beginning 47,049,211 41,518,004
Plan Fiduciary Net Position - Ending (b) $ 50,992,228 $ 47,049,211
 
Liability 09/30/2014 09/30/2013
Net Pension Liability - Ending (a) - (b) $ 7,528,521 $ 11,751,920
 
Net Position 09/30/2014 09/30/2013
Plan Fiduciary Net Position as a percentage
of the Total Pension Liability
87.14% 80.01%
 
Detail 09/30/2014 09/30/2013
Covered Payroll Note 1 $ 7,528,521 $ 11,751,920
Net Pension Liability as a percentage of Covered Payroll 86.52% 137.45%

Notes to Schedule:

Note 1 The Covered Payroll numbers shown are in compliance with GASB 82.

City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 44
 

GASB 67 SCHEDULE OF CONTRIBUTIONS
Last 10 Fiscal Years

Fiscal Year Ended Actuarially Determined Contribution Contributions in relation to the Actuarially Determined Contributions Contribution Deficiency (Excess) Covered
Payroll Note 1
Contributions as a percentage of Covered Payroll
09/30/2019 $ 2,628,056 $ 2,628,066 $ (10) $ 12,986,665 20.24%
09/30/2018 $ 2,358,554 $ 2,358,577 $ (23) $ 12,485,720 18.89%
09/30/2017 $ 2,293,207 $ 2,293,318 $ (111) $ 11,864,349 19.33%
09/30/2016 $ 2,659,078 $ 2,293,318 NO DATA $ 10,993,097 24.19%
09/30/2015 $ 3,260,781 $ 3,260,781 NO DATA $ 9,798,102 33.28%
09/30/2014 $ 3,318,730 $ 3,318,730 NO DATA $ 8,701,160 38.14
09/30/2013 $ 2,696,739 $ 2,696,739 NO DATA $ 8,550,218 31.54%

Note 1 The Covered Payroll numbers shown are in compliance with GASB 82, except for the 09/30/2015 measurement period which includes DROP payroll.

Notes to Schedule

Valuation Date: 10/01/2017
Actuarially determined contribution rates are calculated as of October 1, two years prior to the end of the fiscal year in which contributions are reported.​

Methods and assumptions used to determine contribution rates:
Mortality Rate: Healthy Active Lives:
Female: RP2000 Generational, 100% Combined Healthy White Collar, Scale BB.
Male: RP2000 Generational, 50% Combined Healthy White Collar / 50% Combined Healthy Blue Collar, Scale BB.

Healthy Inactive Lives:
Female: RP2000 Generational, 100% Annuitant White Collar, Scale BB.
Male: RP2000 Generational, 50% Annuitant White Collar / 50% Annuitant Blue Collar, Scale BB.


Disabled Lives:
Female: 100% RP2000 Disabled Female set forward two years.
Male: 100% RP2000 Disabled Male setback four years.
The above assumption rates were mandated by Chapter 2015-157, Laws of Florida. This law mandates the use of the assumption used in either of the two most recent valuations of the Florida Retirement System (FRS). The above rates are those outlined in Milliman’s July 1, 2016 FRS valuation report for other than special risk participants. We feel this assumption sufficiently accommodates future mortality improvements.
Interest Rate: 8.00% per year compounded annually, net of related expenses. This assumption is supported by the Plan’s investment policy and expected long-term returns by asset class.
 

City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 45

 

Retirement Age: Those with at least 10 years of service as of August 26, 2013: Earlier of: 1) age 58 and 7.5 years of service or 2) 28 years of service, regardless of age. Also, any Member who has reached Normal Retirement is assumed to continue employment for one additional year. Those with less than 10 years of service as of August 26, 2013: Earlier of: 1) age 62 and 10 years of service or 2) 30 years of service, regardless of age. Also, any Member who has reached Normal Retirement is assumed to continue employment for one additional year.
We consider the above rates reasonable for the associated Plan provisions.
Early Retirement: Commencing at eligibility for Early Retirement, Members are assumed to retire with an immediate benefit at the rate of 5% per year. This assumption was adopted with the 10/1/2009 valuation as the result of an Experience Study.
Disability Rates: See table below (1202). These rates are consistent with other Florida municipal general employee plans.
Termination Rates: See table below (Mod T-3). This assumption was adopted with the 10/1/2009 valuation as the result of an Experience Study.
Payroll Growth: None.
Asset Valuation Method: Each year, the prior Actuarial Value of Assets is brought forward utilizing the historical geometric 4-year average Market Value return. It is possible that over time this technique will produce an insignificant bias above or below Market Value.
Salary Increases: 5.00% per year until the assumed retirement age. This assumption is consistent with long-term Plan experience.
For Members eligible for Normal Retirement as of August 26, 2013:
Projected salary at retirement is increased 25% to account for non-regular compensation.
For Members not eligible for Normal Retirement as of August 26, 2013 with at least 10 years of service as of that date:
The projected frozen benefit as of August 26, 2013 includes a 25% load for the final year included in the averaging period.
For Members with less than 10 years of service as of August 26, 2013:
No load is assumed.
Funding Method: Entry Age Normal Actuarial Cost Method. The following loads are applied for determination of the Sponsor funding requirement:Interest – a half year, based on the current 8.00% assumption.Salary – a full year based on the current 5.00% assumption.
Amortization Method: Level percentage of pay, closed.
Remaining Amortization Period: 28 Years (as of 10/01/2017 Valuation).

Termination and Disability Rate Tables:

Age % Terminating During the Year % Becoming Disabled During the Year
20 38.0% 0.051%
30 24.0% 0.058%
40 13.2% 0.121%
50 7.0% .0429%


City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 46
 

GASB 67 SCHEDULE OF INVESTMENT RETURNS
Last 10 Fiscal Years

Fiscal Year Ended Annual Money-Weighted Rate of Return Net of Investment Expense
09/30/2019 2.66%
09/30/2018 9.29%
09/30/2017 14.08%
09/30/2016 10.92%
09/30/2015 -0.02%
09/30/2014 12.97%
09/30/2013 14.89%


City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 47
 

GASB 68 NOTES TO THE FINANCIAL STATEMENTS
(For the Year Ended September 30, 2019)

General Information about the Pension Plan

Plan Description

The Plan is a single-employer defined benefit pension plan administered by the Plan's Board of Trustees comprised of: three full-time General Employees of the System elected by the Membership, one General Employee appointed by the Board and confirmed by the City Manager, one citizen selected by the Board and appointed by the City Council as a ministerial duty.
Each person employed by the City as a full-time General Employee becomes a member of the Plan as a condition of his employment. All General Employees are therefore eligible for all plan benefits, as provided for in the plan document and by applicable law, except that the City Manager, City Attorney or Asst. City Attorney may notify the Board and the City, within the first 12 months of his employment as City Manager, City Attorney or Asst. City Attorney, of his election to not be a member of the system. In the event of such election, he shall be barred from future membership in the system.

Plan Membership as of October 1, 2018:

Inactive Plan Members or Beneficiaries Currently Receiving Benefits = 359
Inactive Plan Members Entitled to But Not Yet Receiving Benefits = 132
Active Plan Members = 289
Total = 780

Benefits Provided

The Plan provides retirement, termination, disability and death benefits.
A summary of the benefit provisions can be found in the October 1, 2018 Actuarial Valuation Report for the City of Titusville General Employees' Pension Plan prepared by Foster & Foster Actuaries and Consultants.
Incorporated are the benefit changes for measurement date 09/30/2019 as noted under the Notes to Schedule of Changes in Net Pension Liability and Related Ratios.​

Normal Retirement:

For the frozen accrued benefit for all Members and for all benefits for Members with at least 10 Years of Service as of August 26, 2013:
Date: First of the month coinciding with or following the earlier of: 1) age 58 and the completion of 7.5 years of Credited Service, or 2) the completion of 28 years of Credited Service, regardless of age.
Benefit: 2.482% of Average Final Compensation as of August 26, 2013 times Credited Service through August 26, 2013 (Members who are eligible for Normal Retirement as of August 26, 2013 continue to accrue benefits under the old benefit structure).
Form of Benefit: Life Annuity (options available).
For the benefits accrued on and after August 26, 2013:
Date: First of the month coinciding with or following the earlier of: 1) age 58 and the completion of 7.5 years of Credited Service, or 2) the completion of 28 years of Credited Service, regardless of age.
Benefit: 2.00% of Average Final Compensation times Credited Service on and after August 26, 2013.
Form of Benefit: Life Annuity (options available).
For the benefits accrued on and after August 26, 2013 for Members with less than 10 Years of Service as of that date:
Date: First of the month coinciding with or following the earlier of: 1) age 62 and the completion of 10 years of Credited Service, or 2) the completion of 30 years of Credited Service, regardless of age.

Contributions:

Members: 2.50% of Salary.
City: Remaining amount necessary to pay the Normal Cost and fund the accrued, past service liability over 30 years.

Net Pension Liability

The measurement date is September 30, 2019.
The measurement period for the pension expense was October 1, 2018 to September 30, 2019.
The reporting period is October 1, 2018 through September 30, 2019.
The Sponsor's Net Pension Liability was measured as of September 30, 2019.
The Total Pension Liability used to calculate the Net Pension Liability was determined as of that date.​

Actuarial Assumptions:

The Total Pension Liability was determined by an actuarial valuation as of October 1, 2018 updated to September 30, 2019 using the following actuarial assumptions:​

Inflation = 2.50%
Salary Increases = Service Based
Discount Rate = 7.75%
Investment Rate of Return = 7.75%



City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 48
 

Mortality Rate:

Female: RP2000 Generational, 100% Combined Healthy White Collar, Scale BB.
Male: RP2000 Generational, 50% Combined Healthy White Collar / 50% Combined Healthy Blue Collar, Scale BB.
Mortality Rate Healthy Inactive Lives:
Female: RP2000 Generational, 100% Annuitant White Collar, Scale BB.
Male: RP2000 Generational, 50% Annuitant White Collar / 50% Annuitant Blue Collar, Scale BB.
Mortality Rate Disabled Lives:
Female: 100% RP2000 Disabled Female set forward two years.
The assumed rates of mortality are mandated by Chapter 2015-157, Laws of Florida. This law mandates the use of the assumption used in either of the two most recent valuations of the Florida Retirement System (FRS). The above rates are those outlined in the July 1, 2016 FRS actuarial valuation report for non-special risk lives. We fee this assumption sufficiently accommodates future mortality improvements.

The most recent actuarial experience study used to review the other significant assumptions was dated August 20, 2018.
The Long-Term Expected Rate of Return on Pension Plan investments can be determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of Pension Plan investment expenses and inflation) are developed for each major asset class.
For 2019 the inflation rate assumption of the investment advisor was 2.50%.
These ranges are combined to produce the Long-Term Expected Rate of Return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation.

Best estimates of geometric real rates of return for each major asset class included in the Pension Plan's target asset allocation as of September 30, 2019 are summarized in the following table:

 
Asset Class Target Allocation Long Term Expected Real Estate Rate of Return
All Cap Value Equity 27.5% 7.50%
Broad Growth Equity 27.5% 7.50%
Foreign Equity Securities 10.0% 8.50%
Broad Market Fixed Income 20.0% 2.50%
Global Fixed Income 5.0% 3.50%
Real Estate 10.0% 4.50%
Total 100.0% NO DATA

Discount Rate:
The Discount Rate used to measure the Total Pension Liability was 7.75 percent.
The projection of cash flows used to determine the Discount Rate assumed that Plan Member contributions will be made at the current contribution rate and that Sponsor contributions will be made at rates equal to the difference between actuarially determined contribution rates and the Member rate. Based on those assumptions, the Pension Plan's Fiduciary Net Position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the Long-Term Expected Rate of Return on Pension Plan investments was applied to all periods of projected benefit payments to determine the Total Pension Liability.​


City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 49
 

GASB 68 CHANGES IN NET PENSION LIABILITY

Increase (Decrease in parenthesis)

Changes in Net Pension Liability Total Pension Liability (a) Plan Fiduciary Net Position (b) Net Pension Liability (a)-(b)
Balances at September 30, 2018 $63,656,264 $61,691,922 $1,964,342
Changes for a Year: Service Cost 997,001 NO DATA 997,001
Changes for a Year: Interest 4,836,266 NO DATA 4,836,266
Changes for a Year: Differences between Expects and Actual Experience 399,357 NO DATA 399,357
Changes for a Year: Changes of Assumptions NO DATA NO DATA NO DATA
Changes for a Year: Changes of benefit terms NO DATA NO DATA NO DATA
Changes for a Year: Contributions - Employer NO DATA 2,628,066 (2,628,066)
Changes for a Year: Contributions - Employee NO DATA 323,634 (323,634)
Changes for a Year: Contributions - Buy Back 24,202 24,202 NO DATA
Changes for a Year: Net Investment Income NO DATA 1,620,007 (1,620,007)
Changes for a Year: Benefit Payments, including Refunds of Employee Contributions (4,499,667) (4,499,667) NO DATA
Administrative Expense NO DATA (116,965) 116,965
Net Changes 1,757,159 (20,723) 1,777,882
Balances at September 30, 2019 $65,413,423 $61,671,199 $3,742,224
 

Sensitivity of the Net Pension Liability to changes in the Discount Rate.

Liability 1% Decrease
6.75%
Current Discount Rate
7.75%
1% Increase
8.75%
Sponsor's Net Pension Liability $ 10,317,507 $ 3,742,224 $ (1,826,131)

Pension Plan Fiduciary Net Position.

Detailed information about the pension Plan's Fiduciary Net Position is available in a separately issued Plan financial report.​

City of Titusville General Employees' Pension Plan                                    FOSTER & FOSTER | 50
 

GASB 68 PENSION EXPENSE AND DEFERRED OUTFLOWS OF RESOURCES AND DEFERRED INFLOWS OF RESOURCES RELATED TO PENSIONS

For the year ended September 30, 2019, the Sponsor will recognize a Pension Expense of $1,759,552.
On September 30, 2019, the Sponsor reported Deferred Outflows of Resources and Deferred Inflows of Resources related to pensions from the following sources:

 
Item Deferred Outflows of Resources Deferred Inflows of Resources
Differences between Expected and Actual Experience 266,238 118,542
Changes of assumptions 348,324 NO DATA
Net difference between Projected and Actual Earnings on Pension Plan investments 457,277 NO DATA
Total $1,071,839 $118,542

Amounts reported as Deferred Outflows of Resources and Deferred Inflows of Resources related to pensions will be recognized in Pension Expense as follows:
Year ended September 30: Pension Expense
2020 $(98,530)
2021 $(36,764)
2022 $(469,083)
2023 $619,508
2023 NO DATA
Thereafter NO DATA


City of Titusville General Employees' Pension Plan                                     FOSTER & FOSTER | 51
 

GASB 68 SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS - Last 10 Fiscal Years

Total Pension Liability 09/30/2019 09/30/2018 09/30/2017
Service Cost 991,001 989,921 933,328
Interest 4,836,266 4,831,550 4,718,214
Changes of benefit terms NO DATA NO DATA NO DATA
Differences between Expected and Actual Experience 399,357 (355,627) 411,551
Changes of assumptions NO DATA 1,044,973 NO DATA
Contributions - Buy Back 24,202 28,879 NO DATA
Benefit Payments, including Refunds of Employee Contributions (4,499,667) (4,575,782) (4,830,173)
Net Change in Total Pension Liability 1,757,159 1,963,914 1,232,920
Total Pension Liability - Beginning 63,656,264 61,692,350 60.459.430
Total Pension Liability - Ending (a) $ 65,413,423 $ 63,656,264 $ 61,692,350
 
Plan Fiduciary Net Position 09/30/2019 09/30/2018 09/30/2017
Contributions - Employer 2,628,066 2,358,577 2,293,318
Contributions - Employee 323,634 312,111 296,609
Contributions - Buy Back 24,202 28,879 NO DATA
Net Investment Income 1,620,007 5,538,971 7,364,236
Benefit Payments, including Refunds of Employee Contributions (4,449,667) (4,575,782) (4,830,173)
Administrative Expense (116,965) (89,003) (86,989)
Net Change in Plan Fiduciary Net Position (20,723) 3,373,753 5,037,001
Plan Fiduciary Net Position - Beginning 61,691,922 58,318,169 53,281,169
Plan Fiduciary Net Position - Ending (b) $ 61,671,199 $ 61,691,922 $ 58,318,169
 
Liability 09/30/2019 09/30/2018 09/30/2017
Net Pension Liability - Ending (a) - (b) $ 3,742,224 $ 1,964,342 $ 3,374,181
 
Net Position 09/30/2019 09/30/2018 09/30/2017
Plan Fiduciary Net Position as a percentage
of the Total Pension Liability
94.28% 96.91% 94.53%
 
Detail 09/30/2019 09/30/2018 09/30/2017
Covered Payroll Note 1 $ 12,986,665 $ 12,485,720 $ 11,864,349
Net Pension Liability as a percentage of Covered Payroll 28.82% 15.73% 28.44%

Notes to Schedule:

Note 1 The Covered Payroll numbers shown are in compliance with GASB 82.

Changes of assumptions:

For measurement date 09/30/2018, amounts reported as changes of assumptions resulted from the following changes:
  1. The investment return assumption was reduced from 8.00% to 7.75% per year, net of investment-related expenses.
  2. The assumptions for salary increases, withdrawal, disability, Early Retirement, and Normal Retirement were updated to better align with anticipated future plan experience.

City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 52
 

GASB 68 SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS - Last 10 Fiscal Years

Total Pension Liability 09/30/2016 09/30/2015
Service Cost 821,468 738,499
Interest 4,552,082 4,573,039
Changes of benefit terms (88,592) NO DATA
Differences between Expected and Actual Experience 5,321 (870,999)
Changes of assumptions 1,589,756 NO DATA
Contributions - Buy Back 11,869 NO DATA
Benefit Payments, including Refunds of Employee Contributions (5,201,251 (4,192,511)
Net Change in Total Pension Liability 1,690,653 248,028
Total Pension Liability - Beginning 58,768,777 58,520,749
Total Pension Liability - Ending (a) 60,459,430 $ 58,768,777
 
Plan Fiduciary Net Position 09/30/2016 09/30/2015
Contributions - Employer 2,659,078 3,260,781
Contributions - Employee 274,825 234,781
Contributions - Buy Back 11,869 NO DATA
Net Investment Income 5,382,430 (10,393)
Benefit Payments, including Refunds of Employee Contributions (5,201,251) (4,192,511)
Administrative Expense (64,283) (66,386)
Net Change in Plan Fiduciary Net Position 3,062,668 (733,728)
Plan Fiduciary Net Position - Beginning 50,218,500 50,992,228
Plan Fiduciary Net Position - Ending (b) 53,281,168 $ 50,218,500
 
Liability 09/30/2016 09/30/2015
Net Pension Liability - Ending (a) - (b) $ 7,178,262 $ 8,550,277
 
Net Position 09/30/2016 09/30/2015
Plan Fiduciary Net Position as a percentage
of the Total Pension Liability
88.13% 85.45%
 
Detail 09/30/2016 09/30/2015
Covered Payroll Note 1 $ 10,993,097 $ 9,798,102
Net Pension Liability as a percentage of Covered Payroll 65.30% 87.26%

Notes to Schedule:

Note 1 The Covered Payroll numbers shown are in compliance with GASB 82, except for the 09/30/2015 measurement period which includes DROP payroll.

Changes of benefit terms:

For measurement date 09/30/2016, amounts reported as changes of benefit terms resulted from presuming passage of a proposed ordinance which clarifies that the normal form of payment for the benefit accrued on and after August 23, 2013 is a life annuity instead of a life annuity with the first 120 payments guaranteed. An Impact Statement was submitted for this proposed clarification.​

Changes of assumptions:

For measurement date 09/30/2016, as a result of Chapter 2015-157, Laws of Florida, the assumed rates of mortality were changed to the assumptions used by the Florida Retirement System.
The inflation assumption rate was lowered from 3.00% to 2.50%, matching the long-term inflation assumption utilized by the Plan's investment consultant.​


City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 53
 

GASB 68 SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS - Last 10 Fiscal Years

Total Pension Liability 09/30/2014 09/30/2013
Service Cost 751,425 695,764
Interest 4,541,119 4,491,722
Changes of benefit terms NO DATA NO DATA
Differences between Expected and Actual Experience NO DATA NO DATA
Changes of assumptions NO DATA NO DATA
Contributions - Buy Back 4,201 NO DATA
Benefit Payments, including Refunds of Employee Contributions (5,577,127) (3,674,232)
Net Change in Total Pension Liability (280,382) 1,513,254
Total Pension Liability - Beginning 58,501,131 57,287,877
Total Pension Liability - Ending (a) $ 58,520,131 $ 58,801,131
 
Plan Fiduciary Net Position 09/30/2014 09/30/2013
Contributions - Employer 3,318,730 2,696,739
Contributions - Employee 217,529 401,924
Contributions - Buy Back 4,201 NO DATA
Net Investment Income 6,042,957 6,162,982
Benefit Payments, including Refunds of Employee Contributions (5,577,127) (3,674,232)
Administrative Expense (63,273) (56,20)
Net Change in Plan Fiduciary Net Position 3,943,017 5,531,207
Plan Fiduciary Net Position - Beginning 47,049,211 41,518,004
Plan Fiduciary Net Position - Ending (b) $ 50,992,228 $ 47,049,211
 
Liability 09/30/2014 09/30/2013
Net Pension Liability - Ending (a) - (b) $ 7,528,521 $ 11,751,920
 
Net Position 09/30/2014 09/30/2013
Plan Fiduciary Net Position as a percentage
of the Total Pension Liability
87.14% 80.01%
 
Detail 09/30/2014 09/30/2013
Covered Payroll Note 1 $ 7,528,521 $ 11,751,920
Net Pension Liability as a percentage of Covered Payroll 86.52% 137.45%

Notes to Schedule:

Note 1 The Covered Payroll numbers shown are in compliance with GASB 82.

City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 54
 

GASB 68 SCHEDULE OF CONTRIBUTIONS
Last 10 Fiscal Years

Fiscal Year Ended Actuarially Determined Contribution Contributions in relation to the Actuarially Determined Contributions Contribution Deficiency (Excess) Covered
Payroll Note 1
Contributions as a percentage of Covered Payroll
09/30/2019 $ 2,628,056 $ 2,628,066 $ (10) $ 12,986,665 20.24%
09/30/2018 $ 2,358,554 $ 2,358,577 $ (23) $ 12,485,720 18.89%
09/30/2017 $ 2,293,207 $ 2,293,318 $ (111) $ 11,864,349 19.33%
09/30/2016 $ 2,659,078 $ 2,293,318 NO DATA $ 10,993,097 24.19%
09/30/2015 $ 3,260,781 $ 3,260,781 NO DATA $ 9,798,102 33.28%
09/30/2014 $ 3,318,730 $ 3,318,730 NO DATA $ 8,701,160 38.14
09/30/2013 $ 2,696,739 $ 2,696,739 NO DATA $ 8,550,218 31.54%

Note 1 The Covered Payroll numbers shown are in compliance with GASB 82, except for the 09/30/2015 measurement period which includes DROP payroll.

Notes to Schedule

Valuation Date: 10/01/2017
Actuarially determined contribution rates are calculated as of October 1, two years prior to the end of the fiscal year in which contributions are reported.​

Methods and assumptions used to determine contribution rates:
Mortality Rate: Healthy Active Lives:
Female: RP2000 Generational, 100% Combined Healthy White Collar, Scale BB.
Male: RP2000 Generational, 50% Combined Healthy White Collar / 50% Combined Healthy Blue Collar, Scale BB.

Healthy Inactive Lives:
Female: RP2000 Generational, 100% Annuitant White Collar, Scale BB.
Male: RP2000 Generational, 50% Annuitant White Collar / 50% Annuitant Blue Collar, Scale BB.


Disabled Lives:
Female: 100% RP2000 Disabled Female set forward two years.
Male: 100% RP2000 Disabled Male setback four years.
The above assumption rates were mandated by Chapter 2015-157, Laws of Florida. This law mandates the use of the assumption used in either of the two most recent valuations of the Florida Retirement System (FRS). The above rates are those outlined in Milliman’s July 1, 2016 FRS valuation report for other than special risk participants. We feel this assumption sufficiently accommodates future mortality improvements.
Interest Rate: 8.00% per year compounded annually, net of related expenses. This assumption is supported by the Plan’s investment policy and expected long-term returns by asset class.
 

City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 55

 

Retirement Age: Those with at least 10 years of service as of August 26, 2013: Earlier of: 1) age 58 and 7.5 years of service or 2) 28 years of service, regardless of age. Also, any Member who has reached Normal Retirement is assumed to continue employment for one additional year. Those with less than 10 years of service as of August 26, 2013: Earlier of: 1) age 62 and 10 years of service or 2) 30 years of service, regardless of age. Also, any Member who has reached Normal Retirement is assumed to continue employment for one additional year.
We consider the above rates reasonable for the associated Plan provisions.
Early Retirement: Commencing at eligibility for Early Retirement, Members are assumed to retire with an immediate benefit at the rate of 5% per year. This assumption was adopted with the 10/1/2009 valuation as the result of an Experience Study.
Disability Rates: See table below (1202). These rates are consistent with other Florida municipal general employee plans.
Termination Rates: See table below (Mod T-3). This assumption was adopted with the 10/1/2009 valuation as the result of an Experience Study.
Payroll Growth: None.
Asset Valuation Method: Each year, the prior Actuarial Value of Assets is brought forward utilizing the historical geometric 4-year average Market Value return. It is possible that over time this technique will produce an insignificant bias above or below Market Value.
Salary Increases: 5.00% per year until the assumed retirement age. This assumption is consistent with long-term Plan experience.
For Members eligible for Normal Retirement as of August 26, 2013:
Projected salary at retirement is increased 25% to account for non-regular compensation.
For Members not eligible for Normal Retirement as of August 26, 2013 with at least 10 years of service as of that date:
The projected frozen benefit as of August 26, 2013 includes a 25% load for the final year included in the averaging period.
For Members with less than 10 years of service as of August 26, 2013:
No load is assumed.
Funding Method: Entry Age Normal Actuarial Cost Method. The following loads are applied for determination of the Sponsor funding requirement:Interest – a half year, based on the current 8.00% assumption.Salary – a full year based on the current 5.00% assumption.
Salary Increases: Level percentage of pay, closed.
Salary Increases: 28 Years (as of 10/01/2017 Valuation).

Termination and Disability Rate Tables:

Age % Terminating During the Year % Becoming Disabled During the Year
20 38.0% 0.051%
30 24.0% 0.058%
40 13.2% 0.121%
50 7.0% .0429%

City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 56
 

EXPENSE DEVELOPMENT AND AMORTIZATION SCHEDULES

The following information is not required to be disclosed but is provided for informational purposes.

City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 57
 

GASB 68 COMPONENTS OF PENSION EXPENSE
FISCAL YEAR SEPTEMBER 30, 2019

Component Net Pension Liability Deferred Inflows Deferred Outflows Pension Expense
Beginning balance $ 1,964,342 $ 3,338,778 $ 1,645,679 NO DATA
 
Total Pension Liability Factors: Net Pension Liability Deferred Inflows Deferred Outflows Pension Expense
Service Cost 997,001 NO DATA NO DATA 997,001
Interest 4,836,266 NO DATA NO DATA 4,836,266
Changes in benefit terms NO DATA NO DATA NO DATA NO DATA
Contributions - Buy Back 24,202 NO DATA NO DATA 24,202
Differences between Expected and Actual Experience with regard to economic or demographic assumptions 399,357 NO DATA 399,357 NO DATA
Current year amortization of experience difference NO DATA (118,542) (270,303) 151,761
Change in assumptions about future economic or demographic factors or other inputs NO DATA NO DATA NO DATA NO DATA
Current year amortization of change in assumptions NO DATA NO DATA (348,324) 348,324
Benefit Payments, including Refunds of Employee Contributions (4,499,667) NO DATA NO DATA NO DATA
Net change 1,757,159 (118,542) (219,270) 6,357,554 
 
Plan Fiduciary Net Position: Net Pension Liability Deferred Inflows Deferred Outflows Pension Expense
Contributions - Employer 2,628,066 NO DATA NO DATA NO DATA
Contributions - Employee 323,634 NO DATA NO DATA (323,634)
Contributions - Buy Back 24,202 NO DATA NO DATA (24,202)
Projected Net Investment Income 4,717,546 NO DATA NO DATA (4,717,546)
Difference between projected and actual earnings on Pension Plan investments (3,097,539) NO DATA 3,097,539 NO DATA
Current year amortization NO DATA (1,080,939) (1,431,354) 350,415
Benefits Payments, inlcuding Refunds of Employee Contributions (4,499,667) NO DATA NO DATA NO DATA
Administrative Expenses (116,965) NO DATA NO DATA 116,965
Net change (20,723) (1,080,939) 1,666,185 (4,598,002)
 
Item Net Pension Liability Deferred Inflows Deferred Outflows Pension Expense
Ending Balance $ 3,742,224 $ 2,139,297 $ 3,092,594 $ 1,759,552


City of Titusville General Employees' Pension Plan                                     FOSTER & FOSTER | 58
 

GASB 68 AMORTIZATION SCHEDULE - INVESTMENTS

Increase (Decrease) in Pension Expense Arising from the Recognition of the of Differences Between Projected and Actual Earnings on Pension​

Plan Investments
Plan Year Ending Differences Between Projected and Actual Earnings Recognition Period (Years) 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
2019 $3,097,539 5 $ 619,507 $ 619,508 $ 619,508 $ 619,508 $ 619,508 NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA
2018 $ 752,126) 5 $ (150,425) $ (150,425) $ (150,425) $ (150,425) NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA
2017 $ (3,194,832) 5 $ (638,966) $ (638,966) $ (638,966)  NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA
2016 $ (1,457,740) 5 $ (291,578) $ (291,578) NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA
2015 $ 4,059,238 5 $ 811,847 NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA
 
Details 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Net Increase (Decrease) in Pension Expense $ 350,415 $ (461,431) $ (169,883) $ 469,083 619,508 NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA


City of Titusville General Employees' Pension Plan                                     FOSTER & FOSTER | 59
 

GASB 68 AMORTIZATION SCHEDULE - CHANGES OF ASSUMPTIONS

Increase (Decrease) in Pension Expense Arising from the Recognition of the Effects of Changes of Assumptions​
Plan Year Ending Changes of Assumptions Recognition Period (Years) 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
2018 $ 1,044,973 3 $ 348,325 $ 348,325 NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA
 
Details 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2028
Net Increase (Decrease) in Pension Expense $ 348,324 $ 348,324 NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA



City of Titusville General Employees' Pension Plan                                     FOSTER & FOSTER | 60
 

GASB 68 AMORTIZATION SCHEDULE - EXPERIENCE

Increase (Decrease) in Pension Expense Arising from the Recognition of the Effects of Differences between Expected and Actual Experience​
Plan Year Ending Changes of Assumptions Recognition Period (Years) 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
2019 $ 399,357 3 $ 133,119 $ 133,119 $133,119 NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA
2018 (355,627) 3 $ (118,542)  (118,542) NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA
2017 $ 411,551 3 $ 137,184 NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA
 
Details 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Net Increase (Decrease) in Pension Expense $ 151,761 $ 14,577 $ 133,119 NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA NO DATA




City of Titusville General Employees' Pension Plan                                   FOSTER & FOSTER | 61