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Item C06 C.6 County of Monroe P W ;� w 1rJ� BOARD OF COUNTY COMMISSIONERS r,�� Mayor Craig Cates,District 1 The Florida Keys Mayor Pro Tem Holly Merrill Raschein,District 5 y Michelle Lincoln,District 2 James K.Scholl,District 3 Ij David Rice,District 4 County Commission Meeting March 22, 2023 Agenda Item Number: C.6 Agenda Item Summary #11772 BULK ITEM: Yes DEPARTMENT: Emergency Services TIME APPROXIMATE: STAFF CONTACT: James Callahan (305) 289-6088 N/A AGENDA ITEM WORDING: Acceptance of the Monroe County Length of Service Award Program (LOSAP) Actuarial Valuation Report for the Plan Year 2022 and $0 transfer of funds for Plan Year 2022 into the LOSAP Trust Fund. ITEM BACKGROUND: The Actuarial Valuation report was prepared and completed by Steve Toepke, FSA, EA, on behalf of Gallagher Benefit Services, Inc. (Gallagher) for the Monroe County Florida Volunteer Firefighter and Emergency Medical Services Length of Service Award Plan (Plan). In compliance with GASB Statement No. 73 and Part VII, Chapter 112, Florida Statutes (Actuarial Soundness of Retirement Systems), the report includes the State of Florida funding results for the January 1, 2022, plan year and the accounting results and required supplemental information for fiscal year ending September 30, 2022. According to Gallagher, the LOSAP Trust fund has sufficient assets allocated to the Plan to support the anticipated beneficiaries of the Plan. As a result, there is no contribution required to the Plan for 2022. Based upon Gallagher's findings, $0.00 will be transferred into the LOSAP Trust Fund for Plan Year 2022. PREVIOUS RELEVANT BOCC ACTION: On June 9, 1999, the Board adopted Ordinance No. 026-1999,providing for the creation of a Length of Service Awards Plan,providing benefits to eligible volunteer fire fighters and emergency medical services volunteers. CONTRACT/AGREEMENT CHANGES: Updated Actuarial Report for Plan Year 2022 STAFF RECOMMENDATION: Acceptance of actuarial report and transfer of funds for Plan Year 2020 into the LOSAP Trust Fund in the amount of$0.00. DOCUMENTATION: Packet Pg. 371 C.6 2022 LOSAP Actuarial Valuation FINAL FINANCIAL IMPACT: Effective Date: 03/22/2023 Expiration Date: N/A Total Dollar Value of Contract: N/A Total Cost to County: N/A Current Year Portion: N/A Budgeted: N/A Source of Funds: N/A CPI: N/A Indirect Costs: N/A Estimated Ongoing Costs Not Included in above dollar amounts: N/A Revenue Producing: N/A If yes, amount: N/A Grant: N/A County Match: N/A Insurance Required: N/A Additional Details: N/A REVIEWED BY: Christina Cory Completed 02/24/2023 10:31 AM RL Colina Completed 03/06/2023 11:54 AM Brian Bradley Completed 03/06/2023 12:08 PM Purchasing Completed 03/06/2023 12:12 PM Budget and Finance Completed 03/07/2023 8:03 AM Lindsey Ballard Completed 03/07/2023 9:21 AM Board of County Commissioners Pending 03/22/2023 9:00 AM Packet Pg. 372 C.6.a '600lAiiu I Ic ui Iflh 1'Pia u1, II',00 9 0 IY!I,h WIM Ili, flru III i,I i1,1 „4'ia. "+ania I ,xoiil t �ry l..l lA Gallag-hler Insurance I Risk Management I Consulting February 23, 2023 Monroe County Board of County Commissioners Fire Chief James Callahan 0 490 63rd Street CL Marathon, FL 33050 Dear Plan Administrator: c� Enclosed is the January 1, 2022 Actuarial Valuation report for the Monroe County, Florida Volunteer Firefighter and Emergency Medical Services Length of Service Award Plan ("Plan"). This report includes State of Florida funding results for the January 1, 2022 plan year and accounting results and required , supplemental information for the fiscal-year ending September 30, 2022, under GASB Statement No. 73. IFi Aindling it,es i A ll't The minimum required contribution for the January 1, 2022 plan year is $0. Below is a summary of the results for the prior three years: i 4- 0 Plan year: 2020 2021 2022 Participants 33 25 22 CL Required contribution $0 $0 $0 c� As long as Monroe County continues to fund the actuarially determined contribution and the assets allocated to the Plan will be sufficient to support the benefits promised by the Plan. 0 The expense for the fiscal year ending September 30, 2022 plan year is $24,570. Below is a summary of the results for the prior three years: Fiscal year ending: 2020 2021 2022 Expense $34,680 $31,200 $24,570 Total pension liability $718,133 $604,351 $488,859 c� CL Sincerely, 0 -* N N Stephen Toepke, FSA, EA Senior Actuarial Consultant E Enrollment Number 20-08144 Enclosures ©2023 Arthur J.Gallagher&Co.All rights reserved. Packet Pg. 373 C.6.a Monroe County, Emergency Medical Services Length of Service Award Florida Volunteer Firefighter and Plan0 Actuarial Valuation for the PlanBeginning and Fiscal Year Ending September 30, 2022 February 2023 4- 0 CL r , CN CN CN E wkk Gallagher Insurance Risk Management Consuffing Packet Pg. 374 Table of Contents Monroe County, Florida Volunteer Firefighter and Emergency Medical Services Length of E 0 Service Award Plan ActuarialCertification................................................................................................................... 1 ExecutiveSummary.....................................................................................................................2 Special Disclosure Information Required under State of Florida Statute 112 ..............................4 U- U) Exhibits Contribution Information 1. Summary of Results- Development of Actuarial Assets and Cost by Department...................5 0 i 4— 2. Summary of Valuation Results.................................................................................................6 0 0 3. Reconciliation of Unfunded Actuarial Liability and Present Value of Accrued Benefits............8 4. Reconciliation of Assets...........................................................................................................9 GASB Disclosure Information 5. Reconciliation of Total Pension Liability................................................................................. 10 6. Pension Expense................................................................................................................... 11 z 7. Summary of Deferred Outflows and Inflows........................................................................... 12 8. Schedule of Changes in the Total Pension Liability and Related Ratios (last 9 fiscal years). 13 .2 9. Schedule of Contributions (last 10 plan years) ...................................................................... 14 III Basis of Valuation 10. Census Summary and Reconciliation .................................................................................. 15 11. Actuarial Assumptions, Methods, and Models ..................................................................... 16 12. Summary of Plan Provisions................................................................................................ 19 (L III Supplemental Information 0 i 13. Risk Assessment.................................................................................................................21 N N Q N E County of Monroe, Florida /V:3 Arthim J �,u I aq I or& All ng I I s rosorvod C.6.a Monroe County, Florida Volunteer Firefighter and Emergency Medical Services Length of Service Award Plan Actuarial Certification January 1, 2022 through December 31, 2022 This report has been prepared by Gallagher Benefit Services, Inc. for County of Monroe, Florida (the "County")to present the results of the actuarial valuation report measured as of January 1, 2022 for the Monroe County, Florida Volunteer Firefighter and Emergency Medical Services Length of Service Award Plan (the "Plan") for the following purposes: CL • To satisfy the requirements of Part VII, Chapter 112, Florida Statutes (FS) for the plan year beginning January 1, 2022 • To provide disclosure requirements under Governmental Accounting Standards Board Statement ("GASB") Number 73 for the fiscal year ending September 30, 2022. c� Determinations for other purposes may be significantly different from those contained in this report; the results in this report should not be used for other purposes. The report may not be relied upon by any other party or for other purposes than as stated above. The funded status , disclosed in the report is produced on the bases as listed above. Also, the asset and liabilities are measured at a point in time according to the data, assumptions, and methodologies as disclosed in this report. The valuation is based on employee and financial data which were provided by the County, and are summarized in this report. The information date for the report is December 31, 2021, meaning that financial and economic information is gathered through this date. Census information is gathered as of January 1, 2021 and January 1, 2022. Except as noted in this report, we have not reflected information after this date and are not aware of any 0 subsequent events which will materially impact the results included here. Except where specifically stated in this report, all costs, liabilities and other factors under the Plan were determined inCL accordance with generally accepted actuarial principles and procedures and in accordance with the provisions of applicable financial accounting standards. In our opinion, except where specifically stated in this report, each actuarial assumption is reasonable, taking into account the experience of the Plan and reasonable expectations, and which, in combination, represent our reasonable estimate of the anticipated experience under the Plan. Future actuarial measurements may differ significantly from the current measurements presented in this report due to such factors as the following: plan experience differing from that anticipated by the economic or demographic a assumptions; changes in economic or demographic assumptions; increases or decreases expected as part of the natural operation of the methodology used for these measurements (such as the end of an amortization period or additional cost or contribution requirements based on the Plan's funded status); and changes in Plan provisions or applicable law. Due to the limited scope of this engagement, we did not complete an analysis of the potential range 76 of such future measurements. To the best of our knowledge, the information contained in this report is complete, accurate and in accordance with generally accepted actuarial principles as recommended by the American Academy of Actuaries. The actuaries indicated below are Enrolled Actuaries and meet the Qualification Standards of the American Academy of Actuaries to render the actuarial opinion contained in this report. We are not aware of any conflicts of interest which would impact the objectiveness of our work. There are no constraints or disclaimers pertaining to our work other than those J (if any) specifically identified here. N �. N f.. ' Stephen Toepke, FSA, EA Edwin L. McNamara Jr., EA, FSPA, MAAA, FIRM, CFA Senior Actuarial Consultant Senior Actuarial Consultant Enrollment Number 20-08144 Enrollment Number 20-06568 February 2023 County of Monroe, Florida /,V:3 Arthim,.I.�',ulluqhor& All righil,i r,irri d Packet Pg. 376 C.6.a Monroe County, Florida Volunteer Firefighter and Emergency Medical Services Length of Service Award Plan Executive Summary January 1, 2021 and January 1, 2022 A summary of principal valuation results for the current valuation follows: Summary of Valuation Results 0 CL Valuation Date January 1, 20211 January 1, 2022 Normal cost ($128,410) ($78,239) Present value of expected benefits 550,300 443,027 Market value of assets (no receivables) 841,817 813,330 c� Actuarially Determined Contribution (ADC) 0 0 Normal cost as % of covered payro112 Not applicable Not applicable ADC as % of covered payro112 Not applicable Not applicable U) Summary of Accounting Results Measurement date December 31, 2020 December 31, 2021 CL Costs: LO GASB Pension Expense/(Income) 31,200 24,570 1 GASB Total Pension Liability 604,351 488,859 0 c� Summary of Data Census Date January 1, 2021 January 1, 2022 CL Number of participants in valuation Active participants 3 3 Terminated with deferred benefits 11 7 Retirees and beneficiaries 11 12 _ Total 25 22 0 Active Participant Statistics Covered payrol12 Not applicable Not applicable Average compensation2 Not applicable Not applicable 76 Average age 52.1 51.5 Average service 22.0 22.0 CL Commentary i N Funding Contribution N The actuarially determined contribution remained at$0 from January 1, 2021 to January 1, 2022 due to the funded N status of plan. The County reviewed the records for the inactive participants and determined four participants valued as of c� January 1, 2021 were not vested in their benefit. As a result, there was a significant liability gain for the January 1, 2022 valuation. 1 Prior year results are from the January 1,2021 valuation prepared by prior actuary. 2 Compensation for active plan participants was not provided since the Plan benefit is not based on compensation. County of Monroe, Florida /'V:3 ArVIII[,.I.� dI ughor& All rigI N i r,irri d ,w Packet Pg. 377 C.6.a Monroe County, Florida Volunteer Firefighter and Emergency Medical Services Length of Service Award Plan Executive Summary January 1, 2021 and January 1, 2022 Plan Reporting Under GASB The resources in the LOSAP fund have been set aside to pay future obligations of the LOSAP but are not held in a trust that meets the criteria outlined in GASB Statement No. 67, paragraph 3 and GASB Statement No. 68, paragraph 4. Therefore, the plan accounting contained herein is reported under GASB No. 73. The financial statements of LOSAP are prepared using the modified accrual basis of accounting. The contributions CL are recognized when they become susceptible to accrual; when they become both measurable and available. Benefits are recognized in the accounting period in which the related fund liability is incurred in accordance with the terms of LOSAP. Administrative costs are paid by the Board.Actuarial valuation costs are paid by LOSAP. All plan investments are reported at fair value. c� Changes in Actuarial Assumptions Funding only-The long-term expected return on plan assets (which is also used to discount plan liabilities) was U, revised from 1.00% as of January 1, 2021 to 1.84% as of January 1, 2022 to better reflect the expected future anticipated experience. Accounting only-the discount rate was revised from 1.00% as of December 31, 2021 to 1.84% as of December 31, 2022 based on a 20-year, tax-exempt general obligation municipal bond index with a rating of AA/Aa or higher, as required by GASB No. 73. 4- 0 Accounting only- a 2.50% inflation assumption was added to be used as the salary increase assumption for the entry age normal actuarial cost method for the GASB valuation. A mortality assumption was added to the valuation, and as required by Florida Statutes, it is based on the most CL recent mortality assumption used in the Florida Retirement System valuation for the covered population with similar attributes: • Pub-2010 Headcount Weighted Safety Below Median Employee Male and Female Mortality Tables, set forward one year, with fully generational projected mortality improvements using Scale MP-2018. CL c� N N N c� County of Monroe, Florida /'V:3l I'VIII[,.I.� dI ughor& All rig N i r,irri d 3 Packet Pg. 378 C.6.a Monroe County, Florida Volunteer Firefighter and Emergency Medical Services Length of Service Award Plan Special Disclosure Information Required under State of Florida Statute 112 Investment Return Actual Assumed Year Ended Experience Factor 12/31/2012 0.40% 2.00% 12/31/2013 0.22% 1.50% CL 12/31/2014 0.31% 1.00% 12/31/2015 0.16% 1.00% 12/31/2016 0.29% 1.00% 12/31/2017 0.66% 1.00% cy 12/31/2018 1.53% 1.00% 12/31/2019 2.92% 1.00% 12/31/2020 1.92% 1.00% 12/31/2021 0.10% 1.00% CL Investment return was determined by assuming contributions, benefit payments and administrative expenses were paid in the middle of the year. LO Allocation in assets in plan portfolio 0 c� We are aware of no investments during the previous five years (other than U.S. government-guaranteed and U.S. government obligations) which represent more than 5% of net assets available for benefits. CL c� c� Salary Increases Benefits for the plan are not salary related. Therefore, salary is not collected and a salary increase assumption is not used for the purpose of this valuation. 0 Amortization of Unfunded Liabilities The Plan does not have unfunded liabilities. > Required Actuarial Certification c� This actuarial valuation and/or cost determination 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 VI1, Chapter 112, Florida Statutes. There is no benefit or expense to be provided by the plan and/or paid from the i plan's assets for which liabilities or current costs have not been established or otherwise taken into account in the N valuation. All known events or trends which may require a material increase in plan costs or required contribution N rates have been taken into account in the valuation. . � %__— Signature February 23, 2023 Date 20-08144 Enrollment Number County of Monroe, Florida /,V:3 Arthim,.I.�',ulluqhor& All righil,i r,irri d ^f� Packet Pg. 379 O Count, of Monroe, Florida O (pod(podea leiien4oV punjsni -1 10 3u d oo ) ml uopenleA l la rtP -1 :4u8wW T _ 0 O O O O 0 co 0) In 00 O d) n I� p = C r n M d (0 In (3) N 0) Cl) v R 00 I- (O V In M U a U W n. O) y 0) (0 In (O N } M N 00 O y R EA W Q = N NLO n. E R a Q Q O O W G V M N M V3 p 7 01 M O n C EO 2 6% } 00 O O (O N (O O (� R® 0) N Cl) (M Lr Cl! Ur N E W r 01 00 0 0)R O N .M.i .M.i t N m Z O R Q•E U N ~ w 0) O In Cl) Cl) Cl) N O I- 00 0) co y J_, O1 00 In to r In to 00 V In r R 7 w•7 I- N - (O O o0 0) In to N O)j V C aN+ N to d) O O >LL ` a Q O)Q 7 w L2 co LO a to R � � y R v> C m w0) O O O 0M0 000 Ln w y L to to to to r U N R `J (B ` y•E In O M d) N a U In r N � fn C _ AIL N Q co a� N In N d) O lf1 M � L In (3) (3) Nt V M R 0) Cl) 00 It (0 Cl) O O N M O) O O)aN+ 0) (0 In (O N N d) 00 O C } M N 00 C ® 9l R�= Cl) I- Cl) (j7 O N V) HT 0) d 7 E d o0 d) N O y �Q djLLzm -O 0) In 00 r O �, C y R y O 0) In to co _ C (0 In 01 N 0) M T 0 N (O (O (O U R N 01 (0 In (O N Cl) (B w V N 00 O N M N O) R a Q Q V) EA r= e O} (nLO LO 00 C (B O (� rl 00 0) In N M N 0 R N to 01 O O 0 O LO (0 LO a O O U O (O r N V In W y R EA U l� (� a (0 N (O r LO (O 0 r •w O (LS w O) ER EA O) N It ® 00 It 0 w In to 0) (B U m N to O 0) O In N O Q U) N 0) r- N U N d) 4 y x y--. Q to N In M 00 N w 7 0 U) LL _ O 'O O O O O O O O) In O O V 00 N i� O O O I- O f- 7 O) � N V 00 Ln a V N V d) (O 1n R > r to M N N N (0 V U 0) It (O _0 (0 U m a o 0 Q o 0 0 o c j O N (6 (6 4-- O O O O O O I- r a) 0 0 S U E (B N O U e I— LO It LO N � O F 1 0) Cl) I- O 00 P U N 0 N � OM1 M In 00 Q 0) 00 I- 1- 00 d Cm O (0 (0 (0 N •C t N ItC 1i C U) It 00 O R EA O) a O) �N R > to L N . R N LL V Q 0 a M M 0 U w co U. W Y 7 O J L c O O W u) rn rn o E w a Q V O R R - '�" Y N J J ` 1= O O > > O) 0 Y Y co F > J R E > c co w c H U > rn > O 0 Y Y W co F U C.6.a Monroe County, Florida Volunteer Firefighter and Emergency Medical Services Length of Service Award Plan Exhibit 2 Summary of Valuation Results Before After Prior Valuation Assumption Assumpti, Changes Change! Plan Year Beginning January 1, 2021 January 1, 2022 January 1, 0CL 1. Participant Data a. Active members 3 3 a4 b. Retired members and beneficiaries 11 12 '. c� 1. Total annualized benefit 28,440 32,940 32 < ) d. Terminated vested members 11 7 ' 1. Total annualized benefit 29,880 18,900 18 ) U) 2. Assets a. Actuarial value of assets 841,817 813,330 813 ) b. Market value of assets 841,817 813,330 813 0 ) 4- 0 _ c� 3. Liabilities Present value of all future expected benefit payments: CL a. Active members c� 1. Retirement benefits 112,155 108,414 96 2. Vesting benefits 0 0 ) 3. Death benefits 0 0 1 )_ 4. Total 112,155 108,414 97 _M b. Terminated vested members 263,065 173,314 161 ,2 ) c. Retired members and beneficiaries 175,080 189,370 184 i d. Total present value of all future expected benefit payments 550,300 471,098 443 ' — 4. Actuarial present value of accrued benefits Statement of actuarial present value of all accrued benefits a. Vested accrued benefits 1. Inactive members and beneficiaries 453,413 362,684 345 i 2. Active members 94,618 68,934 62 -J ) 3. Total value of all vested accrued benefits 548,031 431,618 408 � i b. Non-vested accrued benefits 2,269 12,844 11 N ) c. Total actuarial present value of all accrued benefits 550,300 444,462 419 i c� Prior year results are from the January 1, 2021 valuation prepared by prior actuary. County of Monroe, Florida /i1['lrtlnor,.I. dl 71i;ru, lII"i'�7hil, ,tri=,3 6 Packet Pg. 382 C.6.a Monroe County, Florida Volunteer Firefighter and Emergency Medical Services Length of Service Award Plan Exhibit 2 Summary of Valuation Results Before After Prior Valuation Assumption Assumptio Changes Changes Plan Year Beginning January 1, 2021 January 1, 2022 January 1, 20 L CL 5. Contribution under aggregate cost method a. Total present value of all future expected benefit payments 550,300 471,098 443,1 b. Actuarial value of assets 841,817 813,330 813,: c. Present value of future employee contributions d. Present value of future employer normal costs (a. - b. -c.) (291,517) (342,232) (370,3 e. Present value of future years of service/life' 6.263 4.733 4.' f. Normal cost (d. /e.) (128,410) (72,308) (78,2 g. Expected administrative expenses paid from plan assets 5,200 5,200 5,; h. Expected plan sponsor contribution at beginning of year (f. + g. , not less than 0) 0 0 i. Interest to end of year 0 0 0 - j. Expected plan sponsor contribution at end of year 0 0 1. As % of payroll N/A N/A I CL c� c� Prior year results are from the January 1, 2021 valuation prepared by prior actuary. 0 76 c� CN cN cN c� ' Present value of future service/life is determined individually by District. The value shown here is the single value which produces the same normal cost as the sum of the individual normal costs determined by district. See Exhibit 1 for more details. County of Monroe, Florida /,V:3 Arthim,.I.� dl 7h,r& All righil,i r,irri d Packet Pg. 383 C.6.a Monroe County, Florida Volunteer Firefighter and Emergency Medical Services Length of Service Award Plan Exhibit 3 Reconciliation of Unfunded Actuarial Liability and Present Value of Accrued Benefits Reconciliation of Unfunded Actuarial Liability Total unfunded actuarial accrued liability for the immediately prior actuarial valuation date $(291,517) 1. (January 1, 2021) 2. Plan sponsor normal cost for this plan year 5,200 3. Interest accrued on 1. and 2. (2,863) 4. Plan sponsor contributions for this plan year (including amounts expected to be paid) - 5. Interest on 4. - 6. Changes due to a. Assumptions (24,647) b. Funding method - c. Plan amendments - U) d. Actuarial gain/loss (56,476) 7. Total current unfunded actuarial accrued liability 1. + 2. + 3. -4. -5. + 6. $(370,303) 4- 0 Reconciliation of Actuarial Present Value of Accrued Benefits c� 1. Actuarial present value of accrued benefits at beginning of year $ 550,300 CL 2. Increase (decrease) during year attributable to (where applicable): a. Benefits accumulated 3,834 b. Plan amendment 0 ®a c. Changes in actuarial assumptions (24,647) d. Decrease in discount period 5,418 e. Benefits paid (24,570) f. Actuarial (gains)/losses (90,520) g. Net increase (decrease) (130,485) M 3. Actuarial present value of accrued benefits at end of year $419,815 c� CL N N N c� County of Monroe, Florida /'V:3 ArVIIII[,.I.� dI ughor& All rigI N i r,irri d 8 Packet Pg. 384 C.6.a Monroe County, Florida Volunteer Firefighter and Emergency Medical Services Length of Service Award Plan Exhibit 4 Reconciliation of Assets Plan Year Ending: December 31, 2020 December 31, 2021 Beginning of Year 858,354 841,817 Accrued Contribution - Employer 0 0 CL Beginning of Year- adjusted 858,354 841,817 INCREASES Earnings on Investments 16,162 847 c� Unrealized Appreciation (Depreciation) 0 0 State Insurance Contributions 0 0 Employee Contributions 0 0 , Employer Contributions: 3,265 0 Accrued 0 0 CL 3,265 0 LO 19,427 847 DECREASES 4- Expenses o Professional Fees (4,764) (4,764) Professional Fees 0 0 CL PMA Fees 0 0 (4,764) (4,764) Paid to Participants Retirees (31,200) (24,570) Survivors 0 0 Disabled 0 0 Overpayment due to City 0 0 (31,200) (24,570) (35,964) (29,334) > Net Increase/(Decrease) (16,537) (28,487) c� End of Year 841,817 813,330 CL N N N c� County of Monroe, Florida Packet Pg. 385 O a CL CN CN CN County a, Monroe, Florida o C.6.a Exhibit 5 Reconciliation of Total Pension Liability Total Pension Liability 1. Balances at September 30, 2021 $604,351 2. Changes for the year: a. Service cost 1,819 b. Interest on the total pension liability 5,939 c� c. Changes of benefit terms - d. Difference between expected and actual experience (65,332) e. Changes of assumptions or other inputs (33,348) U) f. Benefits paid (24,570) g. Other changes - Net changes (115,492) 0 4- 3. Balances at September 30, 2022 $488,859 0 0 c� Sensitivity of the total pension liability to changes in the discount rate. The following presents the total pension liability of the plan, calculated using the discount rate of 1.84%%, as well as 0 what the plan's total pension liability would be if it were calculated using a discount rate that is 1-percentage point lower (0.84%) or 1-percentage point higher(2.84%) than the current rate. Current Discount 1% Decrease Rate 1% Increase 0.84% 1.84% 1.94% > Total pension liability $522,458 $488,859 $458,696 c� N N N 0 c� County of Monroe, Florida Packet Pg. 387 C.6.a Exhibit 6 Pension Expense Fiscal Year Ending September 30, 2021 2022 E Pension Expense 31,200 $24,570 0 CL 76 The financial statements of LOSAP are prepared using the modified accrual basis of accounting. The contributions are recognized when they become susceptible to accrual; when they become both measurable and available. Benefits are recognized in the accounting period in which the related fund liability is incurred in accordance with the terms of LOSAP. Administrative costs are paid by the Board.Actuarial valuation costs are paid by LOSAP. All plan investments are reported at fair value. U) 4- 0 c� CL c� c� 0 76 c� CL N N N c� County of Monroe, Florida /i1['lrtlnr,.I. ill i 71i;r u,i lII i"i'�7hil,i ,tri=,,3 `h`h Packet Pg. 388 C.6.a Exhibit 7 Summary of Deferred Outflows and Inflows Deferred Deferred Outflows of Inflows of Fiscal Year Ending September 30, 2022 Resources Resources 0 CL Differences between expected and actual experience - - Changes of assumptions - - Net difference between projected and actual earnings on pension plan investments" 2,356 - c� Total 2,356 - U) 4- 0 c� CL c� c� 0 c� CN cN cN c� Calculated based on expected interest on net pension liability, if the assets set aside for the plan were to be recognized under GASB No.73 County of Monroe, Florida h I° Packet Pg. 389 (pod(podea leiien4oV punjsni -1 10 3u d oo ) ml uopenleA l la rtP -1 O :4u8wW c �p M c2 o M c co z z �- O N V N a N O N 00 N CO r 00 00 le O LO O O N M CO L cO 00 00 V V LO I- r CO Q Q �O ON V O M O N V Z Z N \ 00 W LO W O W N a 00 00 O Q Q co �O ON M 00 ' O— ' O M M Z Z N CO 00 (CD CO O h h N �a M M M 00 0) 00 T N CO O co Q Q Z Z O N N M N h 00 N M N O N N — h N (V O) m 00 M M M i r Q Q r o v a^i Z Z O N N n 00 h N I-- co (� N N M p 00 00 U 00 Q Q � 00 O N � Z Z �. O N r Ln O O) W (n N O a0 N (D V to Cl) (� N _ M_ LO O W O O O O M Q Q Oco `n M Z Z N O O N r 00 ONO O CO � N \ N - O O W 00 h O Q Q N m M _0 CDN N M CO O M co M 00 O Z Z a n w O O T Q Q N M LO N 0 00 O) N 00 O O) M ao Z Z (� N N M Ln M M O W J a LO M N w le O � a) N _ Q 75 a) O m L T o (D C m = T M s Q L O m R •� Q a) E U C a) U) al C O Q '� Q al O al E Q N Q. _T _T O a) O Q Q O L s m E N C Ul O R R >, m O N C m '� Q V N O N — n c_O � EN N O O Co O O aT� M - Q � c c a) c O a) Q c+,r N aac O - E °� �O�+ _ v A � c ? gy m g :1i c � N ii m w °� co U 0 Q m 0 Z H H Q x U > O Wcn � � U (V M (pod(podea leiien4oV punjsni -1 10 3u d oo ) ml uopenleA l la rtP -1 O :4u8wW T LO LO t0 (y I— r Z Z M U CD co c N co co N n. U) w N — J4 O O Z Z c O i N O O O E .N U N � L) C U O) U) Q Q t T 6) 0 O 0) Z Z > Q W 0, w N N CD M M (6 (6 > tl) >> O C Q Q UA Q N 7 (o rn rn Z Z > W 0, N N CDU) Q 0 m N M M 0 N > 22 Q Q N � O 0000 000 Z Z N 0 M M O CDN N N N Z6 (.0 0 L) N i Q O N N N Q Q _ Ln Ln C N pp CO CO Z Z O � N N CDC ; 0 (h M N Q U) N Q Q U a) N 0 0 Z Z L 3 .C 3 L_0 N N LO _° N m N > (p N U N N N N N O O N N CDN N z z 0 3 O O C N 6 (p Q O N M M N O U > E Q N 7 U1 E N 6 3 Q U N Q Q U OU Q vj N N N Z Z > cn E mOD a� CD N O w Q N i > m N U. N O T a- Q Q O C (°p O N w N O N O O Z Z c ° E.� N o UM)m N m m O i O N U o � 0 -° t C OU a N N (6 >N 7 O O N 'O O N N N Q > ) >, U O w � Q N N U) N O E °- O E -6 U m Q U N N 0 0 >' N t N N 0 N Q N r U Q N N O 3 0 N N w 0 �• ° > C ° N > 3 N O = C ° `i O N E 6) >` U c 0— E O N M Q O U r x N O op z aE N O 0 Q 3 °U E L O V ,� O O O 3 O N N O .� ,� N U) L O t aNi g m m C U M C O X O C O C N O L O U N p N O p _ O- N C �t, O 6 O >' > i _0 0 ° O _0 E C G N c m ° m c m e ° m a) a� O a E E a '5 m > 0 m_0 E a) m _0 E E ° c c E °-o E O aL c c o m m �T m LU Cn o m m V L (6 N N N (p (6 N O E m E m m U 3 � a� Gl U O O O O O U O V U N tl) U) '-' O O > Q U U U U Z Q co) (m Q Q' Q S 0 Z N (M V 0 O � Packet . 392IIII C.6.a Monroe County, Florida Volunteer Firefighter and Emergency Medical Services Length of Service Award Plan Exhibit 10 Census Summary and Reconciliation January 1, 2021 January 1, 2022 Number of participants in valuation Active employees 3 3 Terminated with deferred benefits 11 7 CL Retirees and beneficiaries 11 12 Total 25 22 Active Employees Total compensation Not applicable Not applicable Average compensation Not applicable Not applicable Average age 52.1 51.5 Average service 22.0 22.0 Inactive Participants Total Annual Pension $29,880 $18,900 Average Annual Pension $2,716 $2,700 Average age 54.0 57.3 c� Participants Receiving Benefits CL Total Annual Pension $28,440 $32,940 Average Annual Pension $2,585 $2,745 Average age 64.4 65.0 Deferred g Actives Vested Retirees Total January 1, 2021 3 11 11 25 During the 2021 plan year: -Terminated vested (1) 1 - - - Nonvested Terminated - - - Lump sum paid - - - - - Retired - (1) 1 - - Benefits ceased - - - - - Rehired - - - - i N - New entrants 1 - - 1 Q - Data correction - (4) - (4) `� January 1, 2022 3 7 12 22 E c� County of Monroe, Florida /'V:3 ArVIIII[,.I.� dI ughor& All rigI N i r,irri d 15 Packet Pg. 393 C.6.a Monroe County, Florida Volunteer Firefighter and Emergency Medical Services Length of Service Award Plan Exhibit 11 Actuarial Assumptions, Methods, and Models Discount Rate 1.84% Investment Return (net 1.84% of investment expenses) CL Inflation 2.5% 76 Compensation Funding - N/A Increases c� GASB—2.5% (required for entry age normal cost method); equal to inflation assumption, as prescribed by GASB No. 73, since benefits are not based on compensation. U) Measurement Date Funding —January 1, 2022 CL GASB—December 31, 2021 for the fiscal year ending September 30, 2022 LO Census Date Funding —January 1, 2022 0 GASB—January 1, 2021 CL Mortality Pub-2010 Headcount Weighted Safety Below Median Employee Male and Female Mortality Tables, set forward one year, with fully generational projected mortality improvements using Scale MP-2018 Retirement Ultimate rates from Godwin's Table 1, V Select& Ultimate Table 0 Termination Godwin's Table 1, V Select& Ultimate Table, w/50% termination probability for YOS<I Benefit Commencement Age 60 > 2 Age for Deferred Vested Administrative $5,200 Expenses CL Funding Policy The County's funding policy is to contribute at least the actuarially determined 0 contribution, as mandated by ordinance. N N c� County of Monroe, Florida /,V:3,rtlnjr,.I.�,,u[kjqhor& All righil,i r,irri d 16 Packet Pg. 394 C.6.a Monroe County, Florida Volunteer Firefighter and Emergency Medical Services Length of Service Award Plan Exhibit 11 Actuarial Assumptions, Methods, and Models Assumption Changes Funding only-The long-term expected return on plan assets (which is also used to discount plan liabilities)was revised from 1.00% as of January 1, 2021 to 1.84% as of January 1, 2022 to better reflect the expected future anticipated experience. Accounting only-the discount rate was revised from 1.00% as of December 31, 2021 0 to 1.84% as of December 31, 2022 based on a 20-year, tax-exempt general obligation CL municipal bond index with a rating of AA/Aa or higher, as required by GASB No. 73. Accounting only- a 2.50% inflation assumption was added to be used as the salary increase assumption for the entry age normal actuarial cost method for the GASB valuation. A mortality assumption was added to the valuation, and as required by Florida Statutes, it is based on the most recent mortality assumption used in the Florida Retirement System valuation for the covered population with similar attributes Assumption Rationale CL LO Discount Rate Funding —based on the long-term expected rate of return of government securities as 0 of the valuation date 0 GASB—As prescribed by GASB No. 73, the discount rate is equal to the Fidelity 20- year GO AA Municipal Bond Index rate as of the Measurement Date CL c� Mortality Mortality assumption used are based on the assumptions mandated by State of Florida for local government plans, which requires the use of the mortality assumption in one of the two latest valuations. Retirement and Based on publicly available tables for populations similar to the Plan population. Termination g Administrative Expense The administrative expenses assumption is the plan sponsor's estimate of expenses paid from the trust for the plan year. 12 Methods c� Funding Cost Method The aggregate cost method is used to determine the normal cost for the plan. Under CL this method, the excess of the actuarial present value of projected benefits over the actuarial value of assets is allocated based on a level percentage, using the present 0 value of future earnings. The normal cost is then determined by taking this percentage N times the current salary for the active population that is younger than the assumed fully Q decremented age. Assumed administrative expenses are added to this normal cost. `� c� County of Monroe, Florida 17 Packet Pg. 395 C.6.a Monroe County, Florida Volunteer Firefighter and Emergency Medical Services Length of Service Award Plan Exhibit 11 Actuarial Assumptions, Methods, and Models Accounting Cost Liabilities and contributions shown in this report are computed using the Entry Age Method Normal Actuarial Cost method of funding. Under this method, the actuarial present value of the projected benefits of each individual included in an actuarial valuation is allocated on a level basis over the o CL earnings of the individual between entry age and assumed exit age(s). Entry age is the age at the participant's hire date. A description of the calculation follows: c� The individual's normal cost is the portion of this actuarial present value allocated to a valuation year. The normal cost is calculated by taking the present value of projected benefits divided by present value of future salaries to obtain a normal cost rate. The U, normal cost to a valuation year is the normal cost rate times the valuation earnings. An individual's actuarial accrued liability is the portion of the actuarial present value of benefits not provided for a valuation date by the actuarial present value of future normal cost. If multi-decrements are used, the actuarial accrued liability and the 0 normal cost for an individual are the sum of the component accrued liabilities and - normal costs associated with the various anticipated separation dates. Such accrued liabilities and normal costs reflect the accrued benefits as modified to obtain the probability of the individual separating on those dates. CL c� Accounting Method The financial statements of LOSAP are prepared using the modified accrual basis of c� accounting. The contributions are recognized when they become susceptible to accrual; when they become both measurable and available. Benefits are recognized in the accounting period in which the related fund liability is incurred in accordance with the terms of LOSAP. Administrative costs are paid by the Board. Actuarial valuation costs are paid by LOSAP. All plan investments are reported at fair value. Valuation Assets Market Value 76 Changes in Methods The GASB accounting method was updated from the aggregated cost disclosed in the Since the Last Valuation prior actuary's report. c� Models CL Actuarial Valuation Liabilities shown in this report were determined using actuarial valuation software 0 System designed by Winklevoss Technologies. This software is designed for the specific N purpose of modeling pension plan liabilities and costs and is the standard pension Q valuation software used by Gallagher Benefit Services, Inc. The results in this report are based on various inputs into the software model, including the plan provisions and assumptions shown in this report, and demographic and financial information provided by the County. While the results have been tested and reviewed for overall accuracy and consistency, we have relied upon the validity of the underlying software coding in preparing this report. Published Demographic The demographic tables described above are standard published tables developed by Tables organizations with the required expertise. County of Monroe, Florida /,V:3 ArVIIJ[,.I.� dI ughor& All rig II ,i r,irri d 18 Packet Pg. 396 C.6.a Monroe County, Florida Volunteer Firefighter and Emergency Medical Services Length of Service Award Plan Exhibit 12 Summary of Plan Provisions This summary has been prepared for valuation purposes only. It summarizes the plan provisions necessary to perform the actuarial valuation. Plan Sponsor County of Monroe, Florida 0 CL Effective Date of Plan January 1, 1999 Plan Year January 1 to December 31 76 Eligibility The Plan Administrator shall, in its sole discretion, determine those Volunteer c� Requirements Firefighters and EMS Volunteers ("Volunteers") eligible to participate in the Plan. Any Volunteer who was age 60 or older on January 1, 1999 shall not be eligible to participate in the Plan. In addition, any Volunteers who are age 60 or older at the time they commence volunteer service, or who commence service at a time that will not permit them to earn ten Years of Service by their Normal Retirement Age shall not eligible to participate. CL LO Normal Retirement Age Age 60 0 4- 0 Contributions Each Plan Year, the Board shall appropriate funds from the budgets of the various volunteer fire/rescue MSTU's to fund the accrued or prospective benefits for Participants on an actuarially sound basis. CL c� Normal Retirement (a) Eligibility: Completion of 10 years of service prior to age 60. c� Benefit (b) Benefit: An annual benefit based on the following schedule: Years of Service Monthly Benefit Annual Benefit 25 $375 $4,500 a 24 360 4,320 23 345 4,140 22 330 3,960 > 21 315 3,780 20 300 3,600 19 285 3,420 18 270 3,240 CL 17 255 3,060 16 240 2,880 15 225 2,700 1 N 14 210 2,520 N 13 195 2,340 N 12 180 2,160 11 165 1,980 E 10 150 1,800 Normal Form of Benefit payments are payable monthly for a period of ten years. Pension County of Monroe, Florida /,V:3 ArVIIII[,.I.� dI ughor& All rig N i r,irri d 19 Packet Pg. 397 C.6.a Monroe County, Florida Volunteer Firefighter and Emergency Medical Services Length of Service Award Plan Exhibit 12 Summary of Plan Provisions Year of Service Each year of volunteer service, a participant will accrue a year of benefit accrual if the participant was: A. enrolled as a member of the nonprofit corporation or MSTU; and 0 B. was eligible for and received reimbursement of expenses for nine or more CL months of the year. In the event that a non-vested Participant fails to accrue a Year of Service during any three consecutive Plan Years, the Participant shall incur a "break-in-service", and any Years of Service earned by the Participant prior to the break-in-service, shall be disregarded for purposes of the Plan. In addition, in the event that any Participant ceases to be carried on an active membership roll as a Volunteer Firefighter or EMS Volunteer and later returns to active membership roll, only Years of Service earned after the Participant's return to the active membership roll shall be counted for purposes of the Plan CL No Years of Service shall be earned for any year of volunteer service after the LO Participant has attained age sixty (60). 0 4- 0 Vesting (a) Eligibility: Completion of 10 years of service prior to attainment of Normal Retirement Age CL (b) Volunteer Firefighters: Attained the rank of Structural Firefighter, Non-Structural Firefighter and/or Emergency Vehicle Driver-Operator prior to being credited with 10 years of service. (c) Volunteer EMS: Attained the certification of Emergency Medical Technician or Paramedic or met all requirements by the State of Florida necessary to drive an emergency medical care and transportation vehicle (ambulance) prior to being credited a with 10 years of service. g Cost of Living Increase Not applicable after January 1, 2014 Death Benefit Prior to The present value of vested accrued benefits. Attaining Normal Retirement Age Death Benefit After Continuation of remaining payments to designated beneficiary Benefit Commencement 0 N Vested Interest Upon Years of Service Vested Interest N Termination of in Accrued Benefit N Employment Less than 10 Years 0% 10 Years 100% E c� Optional Forms None Changes since the None Prior Valuation County of Monroe, Florida /,V:3 ArVIIII[,.I.� ill ughor& All rig N i r,irri d 20 Packet Pg. 398 O Packet Pg. 399IIII C.6.a Monroe County, Florida Volunteer Firefighter and Emergency Medical Services Length of Service Award Plan Exhibit 13 Risk Assessment January 1, 2022 All intended users of this Actuarial Valuation Report should understand that there exist many risks that future experience may differ widely from that assumed by the Actuary. Assumptions are generally based on long-term , expectations of experience over the life of the plan, except where mandated otherwise. Fluctuations in experience 0 CL around these assumptions are expected and, when viewed over a long-term period, the impact on costs should generally balance out over time. However, in any individual year, there is the risk that deviations in experience from the assumptions may result in volatility of annual costs and the short-term financial condition of the Plan. Such risk includes, but is not limited to, the following: c� Investment risk—that actual returns will be different from expected returns The plan holds assets which are assumed to earn a specified rate of return each year. This assumption is based on the plan's investment policy and expectations of future earnings within various asset categories. To the extent that , the return on the plan's investments exceeds or falls short of the assumption, costs in future years may be lower or higher accordingly. CL Interest rate risk—that future interest rates will be different from expected rates LO Actuarial liabilities are measured using an interest rate assumption to discount the value of future payments to the measurement date. The basis for selecting the interest rate is different for different liability measurements. Funding 0 interest rates are based on the expected investment return are based on high quality corporate bonds, while GASB liabilities are based on a 20-year GO Municipal Bond Index with AA/Aa or higher rated bonds. CL Funding liabilities will change if the investment return assumption is changed. Changes in municipal bond rates from year to year will affect the GASB liabilities. Asset/liability mismatch risk—that shifting economic factors may affect liability measures more or less severely than asset measures To the extent that plan assets are held in investments that react differently to economic events (e.g. interest rate changes or market downturns) from plan liabilities, any such events could result in changes to the plan's funding level. The impact on the plan will depend on a number of factors, such as the nature of the economic event, the duration of plan liabilities and assets, and the allocation of plan assets among different investment categories (e.g. equities, fixed income, cash, etc.). Longevity/demographic risk—that demographic experience will be different from expectations Key demographic assumptions include mortality rates and future improvements in mortality, and retirement/termination rates. If people live longer or stay in employment longer than expected then plan costs will increase accordingly as more benefits are being accrued, and vice versa. i N N N c� County of Monroe, Florida /,V:3 ArVIIJ[,.I.� dI ug II;r& All rig N rosori rd 21 Packet Pg.400 C.6.a Monroe County, Florida Volunteer Firefighter and Emergency Medical Services Length of Service Award Plan Exhibit 13 Risk Assessment January 1, 2022 Contribution risk—that the plan sponsor will be unable or unwilling the fund the Plan , The plan sponsor contributes the actuarial funding contribution each year based on the plan's funding policy. While CL the sponsor maintains this policy, contribution risk is negligible. Maturity Measures Pension plan maturity provides another way to assess risk. Shown below are certain maturity measures for the plan and a high level explanation of each measure. 1/1/2021 1/1/2022 Retiree liability/Total funding liability 31.82% 41.59% CL Benefit payments/Market value of assets 3.71% 3.02% LO Contributions/Benefit payments 0.00% 0.00% i Duration of plan liability 8.00 6.05 0 c� Prior year results are from the January 1, 2021 valuation prepared by prior actuary. CL Retiree liability/Total liability—illustrates the maturity of the plan, with a higher percentage indicating greater risk. Benefit payments/Market value of assets—this cash flow indicator illustrates the portion of plan assets used each year to pay benefits. Contributions/ Benefit payments—this net cash flow figure illustrates how much is being contributed to the plan compared to how much is being paid to participants. No contributions were made during the 2020 or 2021 plan a years. .2 Duration of plan liability—this measure illustrates the approximate sensitivity of plan liabilities to a 1% change in interest rates. > An assessment of risk beyond what is presented here is outside the scope of this analysis. Additional analysis could be conducted upon request, such as include scenario testing or stochastic modeling, to help provide a better c� understanding of the risks specific to the plan. LO CL N N c� County of Monroe, Florida Packet Pg.401