HomeMy WebLinkAboutIR 9868 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9868
To the Mayor and Members of the City Council April 5, 2016
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*a SUBJECT: EXPERIENCE STUDY RESULTS FOR THE PENSION PLAN
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On March 23, the Fort Worth Employees' Retirement Fund Board received a briefing from their
actuary. The preliminary report included the results and recommendations regarding fund
assumptions based on a recently-concluded three-year experience study. In addition, they
received the updated valuation for the period ending December 31, 2015. The Board continued to
discuss their investment strategy and risk-tolerance with their investment advisor following a
recent asset-liability study. The key results are outlined below.
• Upon the actuary's recommendation, the Board reduced the rate of return assumption from
8.00% to 7.75%.
• Reduced assumed inflation from 3.0% to 2.75%.
• Lowered overall payroll growth assumption from 3.25% to 3.00% after reviewing six years
of data and reviewing current labor agreements
Actual 12/31/2014 Preliminary Preliminary
Valuation Results 12/31/2015 12/31/2015
Valuation Before Valuation After
Assumption Assumption
Changes Changes
Unfunded Actuarial $1 ,271 ,153,104 $1,359,142,042 $1 ,355,190,200
Accrued Liability
% Funded 62.2% 61.3% 61 .4%
ARC (30-year $123,959,546 $132,632,725 $131,862,262
Amortization)
Effective 55.7 years 62.7 years 70.1 years
Amortization Period
The final report will be published by the ERF Board in April and will be distributed to the City
Council at that time.
The Pension Committee that I assembled last year continues to review data and has developed
study scenarios. I will provide an update on that effort to the City Council on April 19, 2016 or May
3, 2016. In addition, we will be scheduling a required joint meeting with the City Council and the
ERF Board in early summer.
Please let me know if you have any additional questions.
David Cooke
City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS