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Item C03 C3 BOARD OF COUNTY COMMISSIONERS COUNTY of MONROE Mayor Craig Cates,District 1 The Florida Keys Mayor Pro Tern Holly Merrill Raschein,District 5 Michelle Lincoln,District 2 James K.Scholl,District 3 m' David Rice,District 4 Board of County Commissioners Meeting September 20, 2023 Agenda Item Number: C3 2023-1366 BULK ITEM: Yes DEPARTMENT: Fire Rescue TIME APPROXIMATE: STAFF CONTACT: James K. Callahan, Fire Chief AGENDA ITEM WORDING: Acceptance of the Monroe County Length of Service Award Plan (LOSAP)Actuarial Valuation Report for the Plan Year 2023 and $0 transfer of funds for Plan Year 2023 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, 2023,plan year and the accounting results and required supplemental information for fiscal year ending September 30, 2023. 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 2023. Based upon Gallagher's findings, $0.00 will be transferred into the LOSAP Trust Fund for Plan Year 2023. 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: STAFF RECOMMENDATION: Acceptance of actuarial report and transfer of funds for Plan Year 2023 into the LOSAP Trust Fund in the amount of$0.00. DOCUMENTATION: 2023 LOSAP Actuarial Valuation- Final.pdf 98 FINANCIAL IMPACT: Effective Date: 09/20/2023 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 99 11?600 AI i u I IcIII Iflh 1 I'M V iu1, II,00 90 IY!I,h WAy.d',1 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 July 19, 2023 Monroe County Board of County Commissioners Fire Chief James Callahan 490 63rd Street Marathon, FL 33050 Dear Plan Administrator: Enclosed is the January 1, 2023 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, 2023 plan year and accounting results and required supplemental information for the fiscal-year ending September 30, 2023 under GASB Statement No. 73. IFi Aindling iir,esi.AIII't The minimum required contribution for the January 1, 2023 plan year is $0. Below is a summary of the results for the prior three years: Plan year: 2021 2022 2023 Participants 35 22 21 Required contribution $0 $0 $0 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. . I1, iir,esi.A lll't The expense for the fiscal year ending September 30, 2023 plan year is $35,295. Below is a summary of the results for the prior three years: Fiscal year ending: 2021 2022 2023 Expense $31,200 $24,570 $35,295 Total pension liability $604,351 $488,859 $352,370 Sincerely, Stephen Toepke, FSA, EA, FICA Senior Actuarial Consultant Enrollment Number 23-08144 Enclosures ©2023 Arthur J.Gallagher&Co.All rights reserved. 100 Monroe County, Florida Volunteer Firefighter and Emergency Medical Services Length of Service Award Plan Actuarial Valuation for the Plan Year Beginning January 1 , 2023 and Fiscal Year Ending September 30, 2023 July 2023 Fir"r Gallagher Insurance Risk Management Consulting 101 III III, Table of Contents Monroe County, Florida Volunteer Firefighter and Emergency Medical Services Length of Service Award Plan ActuarialCertification................................................................................................................... 1 ExecutiveSummary.....................................................................................................................2 Special Disclosure Information Required under State of Florida Statute 112 ..............................4 Exhibits Contribution Information 1. Summary of Results: Development of Actuarial Assets and Actuarially Determined Contribution by Department.....................................................................................................5 2. Summary of Valuation Results.................................................................................................6 3. Reconciliation of Unfunded Actuarial Liability and Present Value of Accrued Benefits............9 4. Reconciliation of Assets......................................................................................................... 10 GASB Disclosure Information 5. Reconciliation of Total Pension Liability................................................................................. 11 6. Pension Expense................................................................................................................... 12 7. Summary of Deferred Outflows and Inflows........................................................................... 13 8. Schedule of Changes in the Total Pension Liability and Related Ratios (last 10 fiscal years)..................................................................................................................................... 14 9. Schedule of Contributions (last 10 plan years) ...................................................................... 15 III Basis of Valuation 10. Census Summary and Reconciliation .................................................................................. 16 11. Actuarial Assumptions, Methods, and Models ..................................................................... 17 12. Summary of Plan Provisions................................................................................................21 III Supplemental Information 13. Risk Assessment.................................................................................................................23 County of Monroe, Florida U.,.[ Arthu.ir,.J �,u I aq I or rt ( All n gI N ro orvo:9. Monroe County, Florida Volunteer Firefighter and Emergency Medical Services Length of Service Award Plan Actuarial Certification January 1, 2023 through December 31, 2023 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, 2023 for the Monroe County, Florida Volunteer Firefighter and Emergency Medical Services Length of Service Award Plan (the "Plan") for the following purposes: • To satisfy the requirements of Part VII, Chapter 112, Florida Statutes (FS) for the plan year beginning January 1, 2023 • To provide disclosure requirements under Governmental Accounting Standards Board Statement ("GASB") Number 73 for the fiscal year ending September 30, 2023. 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, 2022, meaning that financial and economic information is gathered through this date. Census information is gathered as of January 1, 2022 and January 1, 2023. Except as noted in this report, we have not reflected information after this date and are not aware of any 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 in 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 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 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 (if any) specifically identified here. Stephen Toepke, FSA, EA, FCA Edwin L. McNamara Jr., EA, FSPA, MAAA, FIRM, CFA Senior Actuarial Consultant Senior Actuarial Consultant Enrollment Number 23-08144 Enrollment Number 23-06568 July 2023 County of Monroe, Florida /,V:3 Arthim,.I.�',ulluqhor& All righil,i r,irri d 103 Monroe County, Florida Volunteer Firefighter and Emergency Medical Services Length of Service Award Plan Executive Summary January 1, 2022 and January 1, 2023 A summary of principal valuation results for the current valuation follows: Summary of Valuation Results Valuation date January 1, 2022 January 1, 2023 Normal cost ($78,239) ($115,032) Present value of expected benefits 443,027 365,206 Market value of assets (no receivables) 813,330 775,234 Actuarially determined contribution (ADC) 0 0 Normal cost as % of covered payroll' Not applicable Not applicable ADC as % of covered payroll' Not applicable Not applicable Summary of GASB Accounting Results Measurement date December 31, 2021 December 31, 2022 Costs: Pension expense/(income) 24,570 35,295 Total pension liability 488,859 352,370 Summary of Data Census date January 1, 2022 January 1, 2023 Number of participants in valuation Active employees 3 3 Terminated vested 7 6 Participants receiving benefits 12 12 Total 22 21 Active Participant Statistics Covered payroll' Not applicable Not applicable Average compensation' Not applicable Not applicable Average age 51.5 52.5 Average service 22.0 22.3 Commentary Funding Contribution The actuarially determined contribution remained at$0 from January 1, 2022 to January 1, 2023 due to the funded status of plan. 1 Compensation for active plan participants was not provided since the Plan benefit is not based on compensation. County of Monroe, Florida /,V:3,rthijr,.I.�,,u[kjqhor& All righil,i r,irri d ..I° 104 Monroe County, Florida Volunteer Firefighter and Emergency Medical Services Length of Service Award Plan Executive Summary January 1, 2022 and January 1, 2023 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 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. Changes in Actuarial Assumptions Funding only-The long-term expected return on plan assets (which is also used to discount plan liabilities) was revised from 1.84% as of January 1, 2022 to 3.60% as of January 1, 2023 to better reflect the expected future anticipated experience. Accounting only-the discount rate was revised from 1.84% as of the December 31, 2021 measurement date to 4.05% as of the December 31, 2022 measurement date 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. County of Monroe, Florida /'V:3 Arthim,.I.�',ulluqhor& All righil,i r,irri d 3 105 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 12/31/2013 0.22% 1.50% 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% 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% 12/31/2022 -0.35% 1.84% Investment return was determined by assuming contributions, benefit payments and administrative expenses were paid in the middle of the year. Allocation in assets in plan portfolio 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. 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. Amortization of Unfunded Liabilities The Plan does not have unfunded liabilities, but rather a surplus. The surplus is amortized over the same period as unfunded liabilities, offsetting the expected administrative expenses in the calculation of the actuarially determined contribution. Required Actuarial Certification 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 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. Signature / July 19, 2023 Date 23-08144 Enrollment Number County of Monroe, Florida /,V:3 Arthim,.I.�',ulluqhor& All righil,i r,irri d ^f� 106 II Ovi��������������������������gpp�����������������������������������qpl IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII County of Monroe, Florida 107 co 0 O O O O O O V O In Cl) 0) Cl) c 0 N O (C r- to Cl! R R O It In N N In W 0)ay+ 0) In V a) N f- } M N f- 3 d r U 16 a V) EA QU® 0 Q III":8 Q W N O O O O O O N 0) In N N V7 C a) (0 a) O 0) 00 d) O a x V) j M M O coO Q C O E O - (rj W 63 C ER .i O 20 y O O O y N r N (O U) R N 76 O 0) O NE W V (3) N (C y R M V a) N ®N U) O �Q E Z U a) O F a) O_ L ` O) N O 1- 0 N w (� O M N O a) (O R U w d) M O d) 1n 0 a) O In 00 O N •` (p �2 V - to M j �Q r O O a) Nt Cl! >L y J N 00 N V wQ N > y R (? y m N O O O O O .� N N O w E LL y 7=w 00 to d) V a) 0 a IL V1 J 63 (0 N N O V U) ItN 00 I- Cl) O O 3 00 Cl) a) 00 In N M o0 I� 00 Q L R V N ( d) W C O d R:® coCl) O N 00 (0 It (0 f- 0) d 7 —wr O U)} M N f- N 3 C N N In O O O N ER EA d R 7 0 0) (0 (O U O U.Z N C) a y a> va 60) m �Q E 70 W U) O O y R N t O In Cl) 00) M 63 V C O N O a) r- N N U N O V In N N w >' N 0 O N d) to V a) N f- a) 'p M M (O o0 U M N t- o r Cl) 0) N I- O a Q Q V) EA w M r 00 y--� `'O _ ` N O � w r R O) O O 00 N O a) w � = N O O (Q0 V 00 N C (U .�.- C (� 0 00 It In � cw 0 F N In It � O)w a) 3 L :O O O O O O O (6 N U a C y (0 0) N O 00 y� m wti (0 M 0w0 N ` ._ M O N co (O y Q U V M f� 7 N R U) w a) W 70 LL 6) C 0 a) O -O V r- O O O - O 2 w C\l d) N r � 0 O -0 3 R a) =0 O O O O N 0 m r t V M f� >. d) 0 00 a) N > N V Cl) N O_ O R Cl) O O a) N N U U U) a N l� O N 1n c > 0 O _ O) d V) V3 d ~ a) a) N _ c a Q (6 m y o 0 o (D axi 3 > M M O () Q (� U 000 000 - 3 O O O O O O Q EA (1) O U) ER EA U) �_ y (� O C a) Q 7 p 6) U a) 0 y--/ V y0 r N V In N O � 63 O y LO N N C O 00) co to Cl) -a N 2i 63 Q 0 y (C In 00 1- 01 N d) M w to N V O O)N 2 a) N ((D N Cl) ® 7 C U) M N 00 Q > C Q 6% EA w a) O_ >� m R R y � � � O' N Cl) w a) 3 11 L, to °` ~ m U) 'S O LL N N N C o M M 0 CC O d y >� Q Q A N }� L N U. W Y 7 w U 0 (� C O O O O - .D ) 2) rn o `w O O a) U �+ x y U O) O) 7 R O 7 >.O) >.cn O)>. 7 0 3 a) N "�- 0 2 Y Y V) F 2 y V 0 0) N 2 7 0/ t>p O O 7 t W u) 0 a> YeE YW V)Y F �U QLL H V 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 Assumption Changes Changes Plan Year Beginning January 1, 2022 January 1,2023 January 1,2023 1. Participant Data a. Active members 3 3 3 b. Terminated vested 7 6 6 1. Total annualized benefit $18,900 $14,940 $14,940 c. Participants receiving benefits 12 12 12 1. Total annualized benefit $32,940 $33,660 $33,660 2. Assets a. Actuarial value of assets $813,330 $775,234 $775,234 b. Market value of assets $ 813,330 $775,234 $775,234 3. Liabilities Present value of future expected benefit payments: a. Active members 1. Retirement benefits $ 96,021 $ 98,035 $79,369 2. Vesting benefits 0 0 0 3. Death benefits 1,180 0 995 4. Total 97,201 98,035 80,364 b. Terminated vested 161,580 186,777 107,974 c. Participants receiving benefits 184,246 124,438 176,868 d. Total present value of future expected benefit payments $443,027 $409,250 $ 365,206 4. Actuarial present value of accrued benefits Statement of actuarial present value of accrued benefits a. Vested accrued benefits 1. Terminated vested and participants receiving benefits $345,826 $ 311,215 $284,842 2.Active members 62,799 65,409 55,037 3. Total value of all vested accrued benefits 408,625 376,624 339,879 b. Non-vested accrued benefits 11,190 11,096 8,592 c. Total actuarial present value of accrued benefits $419,815 $ 387,720 $ 348,471 County of Monroe, Florida 109 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 Assumption Changes Changes Plan Year Beginning January 1,2022 January 1,2023 January 1,2023 5. Actuarially Determined Contribution (ADC) under aggregate cost method a. Total present value of future expected benefit payments $443,027 $409,250 $ 365,206 b. Actuarial value of assets 813,330 775,234 775,234 c. Present value of future employee contributions 0 0 0 d. Present value of future employer normal costs(a. -b. -c.) $ (370,303) $ (365,984) $ (410,028) e. Present value of future years of service' 4.733 3.564 3.564 f. Normal cost(d. /e.) $(78,239) $ (102,676) $ (115,032) g. Expected administrative expenses paid from plan assets 5,200 49,500 49,500 h. ADC at beginning of year(f. + g. , not less than 0) 0 0 0 i. Interest to end of year 0 0 0 j.ADC at end of year $ 0 $ 0 $ 0 1.As% of payroll N/A N/A N/A 6. Actuarial accrued liability under entry age cost method a. Terminated vested and participants receiving benefits $ 345,826 $ 311,215 $284,842 b. Active members 77,881 81,408 70,209 c. Total entry age actuarial liability 423,707 392,623 355,051 d. Unfunded actuarial accrued liability(UAAL) $(389,623) $ (382,611) $ (420,183) 7. Actuarially determined contribution under entry age normal cost method a. Normal cost 1. Retirement benefits $2,731 $2,662 $ 1,685 2. Vesting benefits 0 0 0 3. Death benefits 42 47 30 4. Total 2,532 2,709 1,715 b. Amortization of UAAL under entry age normal cost method 2 (62,178) (70,273) (77,174) c. Expected administrative expenses paid from plan assets 5,200 49,500 49,500 d. ADC at beginning of year(a.4. + b. +c. , not less than 0) 0 0 0 e. Interest to end of year 0 0 0 f. ADC at end of year $0 $ 0 $ 0 1 Future service for districts with active participants and remaining life expectancy(of benefit payments)for all other districts 2 UAAL is amortized over average future service of active participants and determined on an aggregated basis for the Plan(not individually by district) County of Monroe, Florida /,V:3 Arthim,.I.�',ulluqhor& All righil,i r,irri d 110 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 Assumption Changes Changes Plan Year Beginning January 1, 2022 January 1,2023 January 1,2023 8. Actuarially determined contribution a. ADC under aggregate cost method $ 0 $ 0 $ 0 b. ADC under entry age normal cost method 0 0 0 c. ADC(greater of a. and b.) $ 0 $ 0 $ 0 1.As% of payroll N/A N/A N/A County of Monroe, Florida /'V:3 Arthim,.I.�',ulluqhor& All righil,i r,irri d 8 111 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 Based on Present Value of Future Benefits Total unfunded actuarial accrued liability for the immediately prior actuarial valuation $ (370,303) 1. date (January 1, 2022) 2. Plan sponsor normal cost for this plan year 0 3. Interest accrued on 1. and 2. (6,814) 4. Plan sponsor contributions for this plan year(including amounts expected to be paid) 0 5. Interest on 4. 0 6. Changes due to a. Assumptions (44,044) b. Funding method 0 c. Plan amendments 0 d. Actuarial (gain)/loss 11,133 e. Net increase/(decrease) (32,911) 7. Total current unfunded actuarial accrued liability(1. +2. + 3. -4. -5. + 6.e.) $ (410,028) Reconciliation of Actuarial Present Value of Accrued Benefits 1. Actuarial present value of accrued benefits at beginning of year $419,815 2. Increase(decrease) during year attributable to(where applicable): a. Benefits accumulated 3,371 b. Plan amendment 0 c. Changes in actuarial assumptions (39,249) d. Decrease in discount period 4,055 e. Benefits paid (35,295) f. Actuarial (gains)/losses (4,226) g. Net increase/(decrease) (71,344) 3. Actuarial present value of accrued benefits at end of year(1. +2.g.) $348,471 Reconciliation of Present Value of Future Expected Benefit Payments 1. Present value of future expected benefit payments at beginning of year $443,027 2. Increase(decrease) during year attributable to(where applicable): a. Plan amendment 0 b. Changes in actuarial assumptions (44,044) c. Decrease in discount period 7,827 d. Benefits paid (35,295) e. Actuarial (gains)/losses (6,309) f. Net increase/(decrease) (77,821) 3. Present value of future expected benefit payments at end of year(1. +2.f.) $ 365,206 County of Monroe, Florida /'V:3 Arthim,.I.�',ulluqhor& All righil,i r,irri d 9 112 Monroe County, Florida Volunteer Firefighter and Emergency Medical Services Length of Service Award Plan Exhibit 4 Reconciliation of Assets Plan Year Ending: December 31, 2021 December 31,2022 Beginning of Year $841,817 $813,330 Accrued Contribution- Employer 0 0 Beginning of Year-adjusted 841,817 813,330 INCREASES Earnings on Investments 847 (2,801) Unrealized Appreciation (Depreciation) 0 0 State Insurance Contributions 0 0 Employee Contributions 0 0 Employer Contributions: 0 0 Accrued 0 0 0 0 847 (2,801) DECREASES Expenses Professional Fees (4,764) 0 Professional Fees 0 0 PMA Fees 0 0 (4,764) 0 Paid to Participants Retirees (24,570) (35,295) Survivors 0 0 Disabled 0 0 Overpayment due to City 0 0 (24,570) (35,295) (29,334) (35,295) Net Increase/(Decrease) (28,487) (38,096) End of Year $813,330 $775,234 County of Monroe, Florida /'V:3 Arthim,.I.� dl 7h,r& All righil,i r,irri d 1 113 Iliiiiii`iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiidiiiiiiiiiiiiiiiliiiiidllildoiiiiiiiiiiidiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii Exhibit 5 Reconciliation of Total Pension Liability Total Pension Liability 1. Balances at September 30, 2022 $488,859 2. Changes for the year: a. Service cost 2,772 b. Interest on the total pension liability 8,721 c. Changes of benefit terms 0 d. Difference between expected and actual experience (66,343) e. Changes of assumptions or other inputs (46,344) f. Benefits paid (35,295) g. Other changes 0 Net changes (136,489) 3. Balances at September 30, 2023 $ 352,370 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 4.05%%, as well as what the plan's total pension liability would be if it were calculated using a discount rate that is 1-percentage point lower(3.05%) or 1-percentage point higher(5.05%)than the current rate. Current 1% Decrease Discount Rate 1%Increase 3.05% 4.05% 5.05% Total pension liability $ 375,994 $352,370 $ 327,525 County of Monroe, Florida /,V:3 Arthim,.I.�',ulluqhor& All righil,i r,irri d 115 Exhibit 6 Pension Expense Fiscal Year Ending September 30, 2022 2023 Pension Expense 24,570 $35,295 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. County of Monroe, Florida /'V:3 Arthur,.I.� dl 7h,r& All righil,i r,irri d h I° 116 Exhibit 7 Summary of Deferred Outflows and Inflows Deferred Deferred outflows of Inflows of Fiscal Year Ending September 30, 2023 Resources Resources Differences between expected and actual experience 0 0 Changes of assumptions 0 0 Net difference between projected and actual earnings on pension plan investments' 5,920 0 Total 5,920 0 1 Calculated based on expected interest at 1.84%(the beginning of year interest rate)on net pension liability, if the assets set aside for the plan were to be recognized under GASB No.73 County of Monroe, Florida /,V:3 Arthim,.I.�',ulluqhor& All righil,i r,irri d 13 117 co m � e_ 0 0 o nW - / 0 1 / / / 8C zz C Q ~ / / m r o 0 04 \ \ J Go Do r » o w o 2 0 W) W 3 0 g 0 \ g 0 m Cl) z z [ § / ® E 6 \ CD Do � \ \ J Go Do r % G g ° 0 ° e ° R R § y y § 0 m = - / o n n z z � Q ~ - ® \ ® \ Go \ � \ \ J Go a) e / 2 + ° e ° e ° ^ @ -4 y y § RDo _ 0') - 0 \ \ o z z k / \ ^ f / G / Do = a � w % G@ ° 2 ° e ° e � y y o w e 2 $ z z \ m / � § J Go Do = a _ 'I- o 0 0 o y y � �_ 00 8 / 7 N / \ W) z z n o \ y / % ± co 0 ¢ 4 § Go Do e 2 m 0 ° m ° e ° « CD q y y U) o o \ - @ 7 2 Cl) z z O 2 \ \ 7 ^ / / / § / � � m 0 m = c R c m = R n y y \ 0 \ 00 \ \ E Cl) W) z z § § e © w $ 0 � z— § J 7 J - I-- w k ® / ry 2 § 0 / \ ° / / / ° 0') § k § § k § 0 - 3 / / 7 / 4 Do a 0 \ § m J J co - y s 70 % n g 0 \ \ ° / / / ° / m m y y § § e ® _ / / / / A 7 z z 0 § n 2 ® ] n � E ° .@ .§ C CL (1) a 0 _ E± k � _ . E _ \ \ § 8 ' > m Ex / > > - R E k / M \ E \ - _ � ® ® 7 = = i n E & e k \ t \ .� § q E $ 2 CO m e f \ ) S 0 m § & f » f o z 4 E § & 0 o - ) § 1 - 0 § E E / $ } ° ) Ea ® ƒ ( \ a ) ® 2 2 ° + : ° 0 2 a ƒ f § § I § z# d 2 k 0 : 2 k / J § \ 5 > ¢ 2 § » / a a d e a _ _ . . 3 \ 7 _ W c/) ƒ / 3 w Ne \ � _ _ cm) y y - @@ z z a C4 .0 0') 0') y y k « § _ _ 0 e k // 0 5 / - [ E eco © 33 z z \ ) / 04 { § & \ a 7 E 00 00 ° y y k g 2 � \\ z z � ) \ \ 04 ± \ ° 'r 0 \ __ / rro y y 7 ® q � \ \ z z } \_ / ) ) 04 7 0 cm) cm) o 00 z z § 04 / 7 0 _ < 0 -0{ \ H rro y y E S ) { G q \\ z z °_ ƒ ! 2 f CCDmw } m \ a)- e E ` 00 o y y ) \ ) 7 k \ _ \ /§ z z / \\ ~ { S t $ \ 0 \ _ » - 0 0 o y y ± _ q � � / e � \ \ j 2 o = = y y 2 - - \ U \ / \ § 2 2 j 0 _ \ 3 E § ~ \ 2 < 0 / s \ m \ \ ~ \ m k > 2 ] - 7 m \ S ) k - ) 7 2 ) § 7 m )_ § - 200\ 0 q ± 6 \ ® 2 / .-0 - . m$ o a \\ \ j Cc: /§f \ c \\ } \ f �g § \ / §_ 7 \ -C ) ) ) 0 g\] ƒ $\ - - ® / \ ƒ.�o S \ / \ k f 2� 0 a og§= 0 ) ) �) \ / N� o 8 (n E 7 $ ƒ7 \ ] \[ 7 § {a- / [ f o [ § � \ (D ) % 0 \ §/\ \ m § \ z m k.CL [ƒ$ U) 7 \ 2 ) a E E « E 0 ■ U) k ƒ ±\ 2 0 U Q 0f } j )/ L ) \. \ 2 \ k k 7 \7 0 ) 4 t ) { » \ $ y »y s # / / / } § : %_ -2 § § : § \ w U ) ) 2 [ *) U ) § \ \ } § \ oa/ / 0 .2 } ° .22 / f ± k 0E _ - § § 4 § a- § - - § ) w 2 $ o 0 0 0 $ 0 8 $ z # 5 p z \ ¢ S x w w e a a z , W m U \ County of Monroe, Florida �'V:3 Alt I I g j �"u I aq I or&(:I:� A I I rig I N rosor/od Monroe County, Florida Volunteer Firefighter and Emergency Medical Services Length of Service Award Plan Exhibit 10 Census Summary and Reconciliation January 1, 2022 January 1, 2023 Number of participants in valuation Active employees 3 3 Terminated vested 7 6 Participants receiving benefits 12 12 Total 22 21 Active employees Total compensation Not applicable Not applicable Average compensation Not applicable Not applicable Average age 51.5 52.5 Average service 22.0 22.3 Terminated vested Total annual pension $18,900 $14,940 Average annual pension $2,700 $2,490 Average age 57.3 58.1 Participants receiving benefits Total annual pension $32,940 $33,660 Average annual pension $2,745 $2,805 Average age 65.0 65.2 Terminated Actives vested Retirees Total January 1, 2022 3 7 12 22 During the 2022 plan year: -Terminated vested - - - - -Terminated non-vested - - - - - Lump sum paid - - - - - Retired - (1) 1 - - Benefits ceased - - (1) (1) - Rehired - - - - - New entrants - - - - - Data correction - - - - January 1, 2023 3 6 12 21 County of Monroe, Florida /'V:3 Arthim,.I.�',ulluqhor& All righil,i r,irri d 16 121 Monroe County, Florida Volunteer Firefighter and Emergency Medical Services Length of Service Award Plan Exhibit 11 Actuarial Assumptions, Methods, and Models Assumptions Discount rate Funding —3.60% GASB—4.05% Investment return (net Funding —3.60% of investment expenses) Inflation 2.5% Compensation 2.5% (required for entry age normal cost method); equal to inflation assumption, as increases prescribed by GASB No. 73, since benefits are not based on compensation. 2022 Salary $30,000 The plan is not pay-related, so salary information was not provided by the County. This assumed pay is used for the entry age normal, level percent of pay cost method. Measurement date Funding —January 1, 2023 GASB—December 31, 2022 for the fiscal year ending September 30, 2023 Census date Funding —January 1, 2023 GASB—January 1, 2022 Mortality Male— Pub-2010 Headcount Weighted Below Median Safety Employee Mortality Tables, set forward one year, with fully generational projected mortality improvements using Scale MP-2018 Female— Pub-2010 Headcount Weighted Safety Employee Mortality Tables, set forward one year, with fully generational projected mortality improvements using Scale M P-2018 Retirement rates Ultimate rates from Godwin's Table 1, V Select& Ultimate Table Termination rates Godwin's Table 1, V Select& Ultimate Table, w/50% termination probability for years of service < 1 Benefit commencement Age 60 age for Terminated vested Administrative $49,500 expenses Funding policy The County's funding policy is to contribute at least the actuarially determined contribution, as mandated by ordinance. County of Monroe, Florida /,V:3 Arthim,.I.�',ulluqhor& All righil,i r,irri d 17 122 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 1.84% as of January 1, 2022 to 3.60% as of January 1, 2023 to better reflect the expected future anticipated experience. Accounting only-the discount rate was revised from 1.84% as of December 31, 2021 to 4.05% 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. Assumption Rationale Discount rate Funding —based on the long-term expected rate of return of government securities as of the valuation date 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 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 rates Administrative expense The administrative expenses assumption is the plan sponsor's estimate of expenses paid from the trust during the plan year. Methods Funding cost method A variation of the aggregate cost method is used to determine the normal cost for the plan. Under this method, the normal cost is the shortfall/surplus of the actuarial value of assets over the actuarial present value of projected benefits, allocated based on the present value of a level annuity for the average future working life for districts with active participants or average remaining life expectancy for inactives for districts with no actives. The normal cost is determined individually by district and aggregated for the Plan. Assumed administrative expenses are added to this normal cost to produce the actuarially determined contribution (ADC). A district's ADC is not allowed to become negative. Any negative ADC for a district will first be reallocated pro rataly over present value of projected benefits to reduce any positive ADC from other districts, before being reduced to zero. The total ADC for the Plan calculated above shall not be less than an ADC calculated for the Plan using the Entry Age Normal, Level Percent of Pay cost method (described in the Accounting cost method section below). Any excess will be allocated pro rataly over present value of projected benefits to each district, except as noted below. County of Monroe, Florida /,V:3 Arthim,.I.�',ulluqhor& All righil,i r,irri d 18 123 Monroe County, Florida Volunteer Firefighter and Emergency Medical Services Length of Service Award Plan Exhibit 11 Actuarial Assumptions, Methods, and Models Key Largo (Fire and EMS) terminated from the Plan effective October 1, 2006. The vested participants as of that date remain in the plan. No costs have been allocated to these districts. Assets have been allocated to these two districts to cover the estimated remaining liability. Any excess assets are allocated to the other districts. Should these assets not be sufficient to cover the remaining liability, a recapture of assets may be needed. Any recapture will made in the same ratio as the reallocation was determined. Accounting cost method Liabilities and contributions shown in this report are computed using the Entry Age Normal, Level Percent of Pay 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 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: 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 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 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. Accounting method 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. Valuation assets Market Value Changes in methods None since the last valuation County of Monroe, Florida /,V:3 Arthim,.I.�',ulluqhor& All righil,i r,irri d 19 124 Monroe County, Florida Volunteer Firefighter and Emergency Medical Services Length of Service Award Plan Exhibit 11 Actuarial Assumptions, Methods, and Models Models Actuarial valuation Liabilities shown in this report were determined using third-party actuarial valuation system software. This software is designed for the specific purpose of modeling pension plan liabilities and costs and is the standard pension 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 Arthur,.I.�',ulluqhor& All righil,i r,irri d 20 125 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 Effective Date of Plan January 1, 1999 Plan Year January 1 to December 31 Eligibility The Plan Administrator shall, in its sole discretion, determine those Volunteer 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. Normal Retirement Age Age 60 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. Normal Retirement (a) Eligibility: Completion of 10 years of service prior to age 60. Benefit (b) Benefit: An annual benefit based on the following schedule: Years of Service Monthly Benefit Annual Benefit 25 $375 $4,500 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 17 255 3,060 16 240 2,880 15 225 2,700 14 210 2,520 13 195 2,340 12 180 2,160 11 165 1,980 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 Arthur,.I.�',ulluqhor& All righil,i r,irri d 21 126 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 B. was eligible for and received reimbursement of expenses for nine or more 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 No Years of Service shall be earned for any year of volunteer service after the Participant has attained age sixty (60). Vesting (a) Eligibility: Completion of 10 years of service prior to attainment of Normal Retirement Age (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 with 10 years of service. 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 Vested Interest Upon Years of Service Vested Interest Termination of in Accrued Benefit Employment Less than 10 Years 0% 10 Years 100% Optional Forms None Changes since the None Prior Valuation County of Monroe, Florida /,V:3 Arthur,.I.�',ulluqhor& All righil,i r,irri d 22 127 � , ,zelllll Monroe County, Florida Volunteer Firefighter and Emergency Medical Services Length of Service Award Plan Exhibit 13 Risk Assessment January 1, 2023 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 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: 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. Interest rate risk—that future interest rates will be different from expected rates 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 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. 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. County of Monroe, Florida /,V:3 Arthur,.I.�',ulluqhor& All righil,i r,irri d 23 129 Monroe County, Florida Volunteer Firefighter and Emergency Medical Services Length of Service Award Plan Exhibit 13 Risk Assessment January 1, 2023 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 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. 1/1/2022 1/1/2023 Retiree liability/Total funding liability 41.59% 48.43% Benefit payments/Market value of assets 3.02% 4.55% Contributions/Benefit payments 1 0.00% 1 0.00% Duration of plan liability 1 6.05 1 5.44 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 2021 or 2022 plan years. 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 understanding of the risks specific to the plan. County of Monroe, Florida /,V:3 Arthur,.I.�',ulluqhor& All righil,i r,irri d 24 130