Patrick Donlan with Foster and Foster, the actuary for the city of Brooksville police pension plan, presented a summary of the police department’s pension fund to the city council on Jan. 8, 2017.
He explained that that back in 1996, everyone was in the Florida Retirement system and then the state allowed cities/ municipalities to opt out of the Florida Retirement system. New employees went to the locally controlled retirement system and existing employees would stay in the Florida Retirement system if the municipality decided to maintain a local pension plan.
According to Donlan, there are still a couple city employees in the Florida Retirement System, but everyone else is in the local pension plan. Donlan explained that since the plan was created there has been a large funding credit balance from state funds.
In 2011 the funding credit balance was at $951,000 and in 2012 the city did not put in any money, lowering the credit balance to $715,000.
“That’s what was happening up until 2016,” said Donlan, inferring that the city chose to use the credit balance instead of paying the full contribution. Beginning in 2016, the credit balance was becoming depleted and the city started to contribute exactly what the real requirement was.
Vice Mayor Battista asked about the projection for 2018 and 2019 in terms of the city’s contribution. Donlan said for 2018 it would be about $278,000 and 2019 it would actually go down to $218,000.
He mentioned that the police fund has a 1 percent employee payroll contribution. It started out low, Donlan remarked because in the beginning there was a lot of money coming in from the state.
Donlan had a positive outlook over the performance of the pension plan. “Over the past 20 years if you would have… stayed in the Florida Retirement System, the city would have had to put in $2.9 million and instead they only had to put in $852,000,” he said.
“The pension plan has done very well for the city for the past 20 years,” Donlan remarked.
“Last year was a good year for investments, salary increases were lower than expected, we had more terminations than we expected, basically everything from the pension plan perspective that could go right, went right in 2017,” he continued.
Advocating for the pension plan, Donlan stated that the benefits are better with the city’s plan and the contribution is less in comparison to the state system.
According to the actuary, the pension plan has only one non-duty disability and less than $13,000 annually is paid to that one retiree. Additionally, two members are in the Deferred Retirement Option Plan (DROP).
The pension plan’s assumed rate of investment at 7.25 percent is conservative in comparison to the FRS assumed rate of 7.6 percent.